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Welcome, silicon salad. 
Hey everybody. 

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Welcome to Dead cat. 
Eric newcomer here, very 

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excited. 
I have Jeremy Levine an investor

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partner at best summer on the 
board of what Pinterest Shopify 

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are you still on the board of 
Yelp. 

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Also, not, not anymore. 
You stepped off on run button. 

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14, 14 years years time but you 
still Pinterest and Shopify, 

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right? 
I'm getting that right, chaos? 

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Best summer. 
Last year announced 4.6 billion 

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sort of sweet of funds including
780 million dollar buyout funds.

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So we'll be interested to talk 
about that later. 

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The downturn but really have 
Jeremy on because I feel like 

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you know, someone who's been at 
Bessemer for over two decades or

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real sort of VC who's willing to
be honest in skeptic sort of 

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Nails, the, the line between 
skeptical about some of the 

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Euphoria while being sort of a 
long-term optimists in the 

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technology industry. 
Do you think? 

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Is that a fair characterization 
Jeremy? 

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Yeah, I like that a lot, 
actually, I think that I'm a 

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semi borrow that, so I just, I 
just wanted to start off since 

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you're sort of, you've seen it 
all, could you? 

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And this is like a, I don't 
know, business school type 

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question, but could you just 
sort of chart out from the view 

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of, like, the It markets, like 
the 2000, 2008, 2008 to this 

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moment sort of, because, you 
know, we're going to be 

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searching for metaphors in what 
this moment is. 

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But can you just sort of chart 
out sort of the startup hype 

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cycles that we've experienced 
starting with the 2000? 

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Boom. 
Well that's like trying to teach

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a history course without having 
prepared any lecture notes not 

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you don't have to hit every you 
know this sort of you live 

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through it. 
Yeah I so well I joined 

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Bessemer. 
In 2001, and really, chew 

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bubbles. 
I guess had burst within a year 

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of each other. 
Just before I became a venture 

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capitalist or actually, what 
happened? 

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Just before what happened, just 
after the first was the internet

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bubble, people refer to that, as
the.com crash of the.com, boom. 

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And that were less came to an 
end in April 2000, precipitated 

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by a massive fall in the Nasdaq,
all of a sudden. 

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And then a little more than a 
year later. 

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There was a second. 
One that Two men, a lot less but

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it was essentially the end of a 
telecom boom. 

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And so those two Trends, the 
development of the consumer 

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internet and this massive 
Telecom boom, which was actually

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driven largely by a regulatory 
change in 1996. 

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The Telecom deregulation. 
Act in 1986 create two huge 

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trends, that Venture capitalists
and entrepreneurs capitalized on

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by funding for the Reese's and 
building to the entrepreneurs, 

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all these great companies. 
But it got in both instances. 

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Euphoric, as you said, and 
people started you Crazy things 

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build companies that had no, no 
Traer had a gravity's invest in 

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companies at crazy valuations, 
despite the fact that there is 

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no prayer having revenues in 
both the internet, boom, and the

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Telethon being. 
And eventually as happens over 

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and over and over history, 
people came to their senses and 

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said, wait a minute. 
There's some really great stuff 

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here but there's a lotta stuff 
that isn't so. 

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Great, was there a key trigger 
to people coming to their 

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senses? 
You know, it's funny, it's I 

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don't having lived here. 
I'm not sure what the trigger 

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was. 
It was sort of like somebody 

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woke up and said, wait a minute 
and then everyone else like, oh 

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yeah, wait a minute. 
And it's there wasn't a sudden 

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interest rate pipe or the 
beginning of some interest rate 

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hikes like there were in 2021 
2022. 

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So I'm honestly not sure I think
eventually maybe some fatigue, 

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finally, enter the picture but I
don't know. 

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Good question. 
Okay. 

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So then.com this sort of double 
And boom sort of unwinds and 

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people really like there are 
questions of whether the 

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technology industry is really a 
thing, or what was this sense of

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pessimism at the bottom of that 
bus? 

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I mean, it was it was wild. 
It really shuang dramatically 

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the other way to the point where
they were at, it won't take more

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than two seconds of Google 
searching, but there were 

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multiple cover stories of like 
Amazon being a sham, right? 

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And that the thing was going to 
go to zero and by the way, at 

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some point I can't do the math 
in my head on, like a split 

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adjusted basis, but the stock is
trading at like $2 a share and 

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that's tree splits, that would 
be relative to like several 

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thousand dollars or shared 
today. 

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I think the people just 
basically threw in the towel or 

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the proverbial baby with the 
bathwater and no one wanted to 

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touch anything. 
It was kind of funny. 

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Actually, there's this, you 
know, there's there's virtue 

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signaling all over the place and
as the.com build-up was 

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increasing, people literally 
started adding.com to the end of

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a random. 
And that's some had doubled 

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evaluation. 
I think, at one point, even 

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like, Barnes & Noble became 
barnesandnoble.com. 

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And then as the bubble bursts 
people did the opposite, they 

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just remove.com from all the 
names. 

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It was like the most she would 
obvious kind of Shameless thing.

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I one day I'm in a company or 
what am not the next. 

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I am in the next. 
I'm not again. 

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Well that's like with crypto 
today as the x-rays. 

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He really thought XYZ it was it 
was it was really hot sure the 

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minutes but I will say after 
when the despair Are got got 

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deep, that's when the real, 
that's who the true art of 

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nerves began to merge, they 
didn't give up on it at a out of

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the ashes of the.com implosion 
came three really valuable and 

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important companies. 
One was Amazon one was eBay and 

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then one was Yahoo which quickly
got eclipsed by Google, they all

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all existence so maybe good for 
now. 

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Obviously, Google remains 
important today. 

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Yahoo not so much but then a 
whole bunch. 

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Bodybuilders who were truly 
passionate about building 

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something new capitalizing on 
these new Talons and trends, 

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like the fact is millions and 
millions of consumers in the 

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United States, were not 
connected to the internet. 

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That wasn't true in 1996. 
I was sure in 2001 the speed of 

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these connections use increasing
dramatically the power of these 

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web applications also proved 
like in the early days of the 

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internet, you could just get 
kind of checks and basic images 

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on your website. 
There was no interactivity this 

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Was about Ajax which allowed a 
little bit of interactivity. 

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Inside the web browser came and 
that allow all these new 

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applications of like true 
entrepreneurs despite the affair

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started building things. 
I remember in 2001 2002 and my 

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first year, so Adventure 
Capital, there was not a lot of 

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activity and the pace of new 
Investments and engage meet with

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conduct charges quite slow, 
right? 

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But those who were doing it back
then, like boy, oh boy, they 

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were really serious. 
And really passionate because 

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they were not deterred. 
By all the naysayers and it was 

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very unpopular to be an 
entrepreneur particularly the 

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internet in 2002 2003 2004 and 
then 2008. 

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So then what I guess what? 
2003-2004 people start to regain

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their confidence and then 
2008-2009 is sort of the next 

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dip. 
Yeah, I think let's show it a 

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true except that the 2000-2001 
crashes, you know, until a 

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couple. 
But we're really tech industry, 

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specific issues and then Then 
slowly things started to build 

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from 2002, to 2007, you know, 
TechCrunch emerged, I think in 

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2005. 
Hmm, and we start to meet really

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compelling entrepreneurs, folks 
like Jeremy, stoppelman who 

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would have dropped out of 
business school in 2004 to build

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Yelp, that was a very unpopular 
thing to do. 

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That's some serious guts. 
And obviously, he was, he was 

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passion driven to do it, but by 
2007, 2008, funding had started 

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to increase. 
These companies are getting 

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publicity notoriety and fame 
through New Media. 

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Outlets like TechCrunch that 
emerge. 

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I should replace predecessors 
shower gel. 

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It offline things like, you 
know, Fast Company magazine and 

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Wired Magazine which were at, 
like 300 Pages, thick mostly ads

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at the peak of the.com bubble, 
and then became 15 pages if I 

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change the name, right? 
Non-existent so funny Chris but 

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there are no exits literally, no
exits. 

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I think the only notable exit 
during that period in the 

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consumer, internet was Maybe 
YouTube, I can remember exactly.

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They are. 
Which appeared is this? 

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This is from 2001 to 2007 2008. 
Yeah. 

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And so the funding and those 
startups, the creation of 

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startups, in the willingness, 
should people to take chances 

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and be entrepreneurs and build 
something steadily increased 

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during that period. 
But there wasn't yet a lot of 

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evidence that he was working, 
right? 

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Companies were starting to work.
Consumers were engaging, 

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software was a version but there
are no exits. 

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The Venture industry in general 
had very few compelling exits. 

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When you sold a company to the 
company public, And generated 

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three or four extra turn, that 
was noteworthy. 

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Wow, you know, congratulations 
that's impressive. 

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There wasn't a lot of it. 
And then the financial crisis 

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happened and everything kind of 
pause for a brief moment and 

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those who were building 
companies, kept building 

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companies really smart acquirers
like Google got aggressive and 

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said, wow, like everything is 
cheap. 

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Maybe we can buy a bunch of 
great stuff and they made 

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overtures and try to do things. 
Like they dance with the up 

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further to get, trying to buy 
you. 

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Hmm. 
Each didn't ultimately work out 

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but it just sort of put a pause 
on things, but it was kind of 

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had nothing to do with the tech 
industry. 

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Like nothing had changed inside 
Russia. 

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Had kept by me so he's like a 
reset because everyone's like 

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wait a minute is my bank 
account? 

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Even gonna allow me to withdraw 
cash tomorrow. 

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Money market funds started 
locking up, the government 

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intervened and came in with 
these, you'd rescue packages, 

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right? 
I mean, it's sort of, this is a 

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very easy simplification, but 
2000. 

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There were real valuation 
questions. 

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Like what is the opportunity for
the tech markets? 

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It was 2008. 
It's like what happens if we 

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have a recession and just you 
know there's less consumer 

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spending on what's the effect on
the technology industry and I'm 

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going to skip ahead. 
You know, I think that is sort 

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of a big question now where some
people are worried about 

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valuations and some people are 
worried about the recession. 

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I'll let you respond to that in 
a bit, but I want to, I want to 

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get there. 
So we have this 2008. 

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Not specific to Tech but you 
know, the markets generally are 

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pessimistic. 
We dip a little bit and then we 

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sort of enter You know, in this 
is where, you know, Facebook's, 

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you know, emerges and everything
like that. 

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Sort of bull period up to like 
2015 2016. 

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Or yeah, get us there. 
Yeah. 

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Well, so the financial crisis, I
view as a pause and basically 

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the public market prices dropped
precipitously, things started to

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walk up. 
And that was on after seven 

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years of slowly gradually 
building confidence, building, 

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valuations, building Ontario, 
activity and building d.c. 

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investment. 
It's a during that pause 

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basically because the public 
market price is adjusted, 

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tyrannically entrepreneurs and 
investors were like, we're not 

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sure what you do entrepreneurs, 
like, hey, is going to bounce 

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back up at best destroy. 
Hey, we're not so sure. 

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And so, it was just kind of 
waited for a little bit. 

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In the meantime, those who are 
out there building folks, like, 

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you know, Jeremy stop my Yelp or
rehab, but I like to damaged 

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building and they're like, you 
know what? 

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This is a bomber. 
Maybe we can't raise Capital the

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same price as we thought we 
could. 

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It's okay. 
They just kept building and the 

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ucg kept increasing and no 
quality business kept 

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increasing. 
NG but they weren't affected so 

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much directly by the financial 
crisis and the very brief 

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recession except that they 
realized they couldn't spend 

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quite as freely because money 
wasn't as available. 

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But within almost 18 months, 
that kind of reversed, I think 

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government, Regulators did a 
politicians even did a really 

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nice job, preventing a total 
tailspin and injecting a bunch 

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of money into the economy. 
Not too much money, and it picks

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back up again. 
And so if you almost ignore In 

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00:12:00,400 --> 00:12:04,500
2009 time period and just take 
it out its history, you could 

229
00:12:04,500 --> 00:12:08,700
probably just draw a straight 
and steady line and then 2010 

230
00:12:08,700 --> 00:12:13,000
came people relax a little bit 
and even more her company. 

231
00:12:13,000 --> 00:12:16,100
So you get started folks. 
Like I think Geoff Lawson, truly

232
00:12:16,100 --> 00:12:18,500
was 2009. 
Toby hiki. 

233
00:12:18,600 --> 00:12:21,700
Started shop, quite like in the 
middle of all that nonsense. 

234
00:12:22,000 --> 00:12:24,000
He was unable to raise much 
money. 

235
00:12:24,000 --> 00:12:27,400
I think he Factory favor sir, is
he you went to Silicon Valley 

236
00:12:27,400 --> 00:12:31,500
from Ottawa Canada, raised 
money, he was Is so Scrappy that

237
00:12:31,500 --> 00:12:35,100
and bowed, there's no boober, 
yeah, in 2 thousand, drag 

238
00:12:35,100 --> 00:12:38,100
whatever a when he went. 
There is no, it's impossible to 

239
00:12:38,108 --> 00:12:43,100
get a taxi and how out to, he 
bought a bicycle on Craigslist 

240
00:12:43,300 --> 00:12:46,200
and he bites up and down Santo 
Rey's to meet with Venture 

241
00:12:46,200 --> 00:12:48,300
firms. 
And everyone told him no, no 

242
00:12:48,300 --> 00:12:51,400
Ray, no way, no chance. 
He went back to aw that are to 

243
00:12:51,400 --> 00:12:54,300
keep doing it the hard way 
folks, I just started to notice 

244
00:12:54,300 --> 00:12:57,300
him in 2010 and start investing 
is so who's a lot of building 

245
00:12:57,300 --> 00:12:58,800
going on? 
And then I think a breakthrough 

246
00:12:58,800 --> 00:13:00,200
moment happened. 
I think it was two Thousand 

247
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Eleven when LinkedIn went public
and that was a like, oh, my and 

248
00:13:05,300 --> 00:13:08,000
Linkedin had a it was a 
multi-billion dollar market cap,

249
00:13:08,000 --> 00:13:11,800
but it was it was definitely 
south of 10, but that was a huge

250
00:13:11,800 --> 00:13:15,200
deal, the most notable internet 
BC exit. 

251
00:13:15,200 --> 00:13:17,300
Before that, I think, like I 
said before, was YouTube to 

252
00:13:17,300 --> 00:13:19,500
Google, that was maybe one and a
half billion dollars. 

253
00:13:19,500 --> 00:13:22,300
This is a multiple of that. 
And people like wow, maybe this 

254
00:13:22,300 --> 00:13:25,400
internet thing, is it thing? 
And it just took a little while 

255
00:13:25,700 --> 00:13:27,700
it means I'm Amazon, you know, 
it recovered. 

256
00:13:27,700 --> 00:13:29,800
It was a two dollar stock and 
was bacteria. 

257
00:13:30,000 --> 00:13:33,100
Significant business eBay, 
continue to generate massive 

258
00:13:33,100 --> 00:13:37,000
profits and I kind of skipped a 
Google story but they also what 

259
00:13:37,000 --> 00:13:40,300
public you know I appreciate the
best more portfolio. 

260
00:13:40,300 --> 00:13:43,200
Are the main. 
It was in my Milestone. 

261
00:13:43,200 --> 00:13:45,700
Those are my markers, totally 
fair, just flagging. 

262
00:13:45,700 --> 00:13:48,500
That twilio. 
LinkedIn Shopify. 

263
00:13:48,700 --> 00:13:51,100
Yeah. 
I mean in the sort of Bull Run, 

264
00:13:51,100 --> 00:13:53,200
I guess I got to live through 
covering Silicon Valley. 

265
00:13:53,200 --> 00:13:55,200
It feels like we were 
incorrectly worried or what's 

266
00:13:55,200 --> 00:13:58,500
been amazing about this period? 
Is that it was actually a very 

267
00:13:58,500 --> 00:14:01,300
long period. 
Of optimism, right? 

268
00:14:01,300 --> 00:14:05,700
Or, you know, you think like, 
whatever skepticism in 2015, 

269
00:14:05,700 --> 00:14:08,600
2016 was just sort of missed 
place. 

270
00:14:08,600 --> 00:14:11,800
Now, where I was just looking 
back at my old stories and I 

271
00:14:11,800 --> 00:14:15,500
had, you know, the fuzzy insane 
math of valuations basically 

272
00:14:15,500 --> 00:14:18,300
warning about, you know, 
preferred shareholder perks, 

273
00:14:18,300 --> 00:14:20,600
which is much more relevant 
today than it was. 

274
00:14:20,600 --> 00:14:24,100
Then I think Bill girly, tweeted
out an old blog post of his, 

275
00:14:24,100 --> 00:14:27,500
it's sort of flagged, you know, 
some warnings that weren't 

276
00:14:27,500 --> 00:14:31,400
really app then but now No 
matter about debt and sort of 

277
00:14:31,400 --> 00:14:33,400
the risks of the debt. 
I mean, do you think we were 

278
00:14:33,400 --> 00:14:37,600
just worried in that period 
because it seemed about time or 

279
00:14:37,600 --> 00:14:41,900
do you think we saw sort of 
behavior that led to today? 

280
00:14:42,400 --> 00:14:44,300
I think two different things 
happen, they're interrelated. 

281
00:14:44,300 --> 00:14:48,100
The first is that historically, 
the economic cycle is between 5 

282
00:14:48,100 --> 00:14:51,700
and 10 years over and over and 
over again and while there's 

283
00:14:51,700 --> 00:14:55,800
that blip it with 08-09, like I 
said, if you took it out, you 

284
00:14:55,800 --> 00:14:58,200
could just keep drawing a 
straight line where I wouldn't 

285
00:14:58,200 --> 00:15:01,300
say there was like enthusiasm 
and Demelza minnow fiber or six 

286
00:15:01,300 --> 00:15:05,400
or seven, but it was starting to
build from the despair of 2001 

287
00:15:05,600 --> 00:15:08,100
by 2010 or 11. 
We're kind of back to normal. 

288
00:15:08,100 --> 00:15:09,900
Now we're seeing really 
significant exits. 

289
00:15:10,600 --> 00:15:13,000
Like I said, linked in public. 
I think he'll probably likes 

290
00:15:13,000 --> 00:15:15,700
your Facebook was emerging and 
growing it eventually and 

291
00:15:15,700 --> 00:15:17,700
public. 
And so we're starting to see 

292
00:15:17,700 --> 00:15:20,100
like the fruits of the labor 
while these hard-working 

293
00:15:20,300 --> 00:15:25,400
entrepreneurs and lucky BC is it
just kept going and by 2015 2016

294
00:15:25,800 --> 00:15:29,000
it's like oh my yes, there was 
this blip of the financial 

295
00:15:29,000 --> 00:15:31,400
crisis, which is More or less 
independent check, but it's now 

296
00:15:31,400 --> 00:15:35,400
been like 14 or 15 years, right?
Everything is moved up into the 

297
00:15:35,400 --> 00:15:36,800
right year after year, after 
year. 

298
00:15:37,000 --> 00:15:38,600
And so I think some people were 
just freaking out. 

299
00:15:38,600 --> 00:15:40,900
Saying, I, of course, it's 
coming because it's come every 

300
00:15:40,900 --> 00:15:44,100
time in history once these 
cyclists get Beyond five or six 

301
00:15:44,100 --> 00:15:46,600
years, and then other people 
were just looking at 

302
00:15:46,600 --> 00:15:51,400
fundamentals and saying, wow, in
the despair of 01:02. 

303
00:15:51,600 --> 00:15:54,500
We thought everything was worth 
nothing including amazing 

304
00:15:54,500 --> 00:15:58,600
businesses, like Amazon, and 
we've gained increasing copies 

305
00:15:58,600 --> 00:16:02,300
every year since then, some It 
were by 2015, 2016 things were 

306
00:16:02,300 --> 00:16:06,600
valued really well and you saw 
multiples for software companies

307
00:16:06,600 --> 00:16:09,200
and other companies, get you a 
really healthy levels. 

308
00:16:09,600 --> 00:16:14,800
They were massively higher than 
what they were in 2002 but a 

309
00:16:14,800 --> 00:16:16,600
bathing in hindsight would 
benefit has it. 

310
00:16:16,600 --> 00:16:18,600
They were probably about rights.
Hmm. 

311
00:16:18,700 --> 00:16:24,000
And then from 2015 to 2020 one, 
they just kept going up by 20 or

312
00:16:24,000 --> 00:16:26,600
25 percent every year. 
And as things get bigger and 

313
00:16:26,600 --> 00:16:29,600
bigger and bigger, it encourages
more people to start building 

314
00:16:29,600 --> 00:16:30,800
it. 
Hers is working and start 

315
00:16:30,800 --> 00:16:38,400
investing and by 2021, it had 
gone so far beyond rational that

316
00:16:38,400 --> 00:16:41,500
you eventually, when the first 
sign of a, oh my goodness, maybe

317
00:16:41,600 --> 00:16:43,100
there's something else you can 
use your money. 

318
00:16:43,100 --> 00:16:47,100
But speculate happens, which was
the initial interest rate, jack 

319
00:16:47,100 --> 00:16:50,500
up everyone freaked out, right? 
And I think if you look at where

320
00:16:50,500 --> 00:16:54,300
we are today, in the sort of 
post adjusted world, I think is 

321
00:16:54,300 --> 00:16:56,800
kind of back to where it was in 
2015-16. 

322
00:16:57,000 --> 00:17:01,800
I have actually gone to run the 
bat but I suspect Multiples that

323
00:17:01,800 --> 00:17:03,900
people are willing to pay the 
wiki or value companies. 

324
00:17:03,900 --> 00:17:07,000
Today is about where was that. 
And so those, you were freaked 

325
00:17:07,000 --> 00:17:10,000
out that it had kind of started 
to get too hot were probably 

326
00:17:10,000 --> 00:17:13,800
right in 2015, 2016, because now
that we have a bit more 

327
00:17:13,800 --> 00:17:16,200
perspectives, I think we're more
or less right back to where we 

328
00:17:16,200 --> 00:17:21,000
were right. 20:21 was sort of a 
uniquely insane. 

329
00:17:21,000 --> 00:17:23,599
You're right. 
I mean, we had, we sort of 

330
00:17:23,599 --> 00:17:26,099
skipped over the covid head 
fake, where people thought, 

331
00:17:26,099 --> 00:17:28,099
okay? 
Maybe it's all going to unwind 

332
00:17:28,099 --> 00:17:31,100
and covid you saucer? 
Okoye warning, people. 

333
00:17:31,300 --> 00:17:34,100
But then because of covid, you 
know, the bank's lowered 

334
00:17:34,100 --> 00:17:36,400
interest rates and people were 
working from home, all of a 

335
00:17:36,400 --> 00:17:39,300
sudden, it was a boon to Tech. 
So then that helped actually 

336
00:17:39,300 --> 00:17:43,400
fuel growth and then we really 
sort of saw everything on wine 

337
00:17:43,400 --> 00:17:47,900
starting maybe, you know, 
December 20, 21, and onward, did

338
00:17:47,900 --> 00:17:49,600
you as sort of as an investment 
firm? 

339
00:17:49,600 --> 00:17:51,900
Try to do anything different in 
2021. 

340
00:17:52,500 --> 00:17:55,900
I mean, like a phenomenon. 
I see specifically is just like,

341
00:17:55,900 --> 00:17:59,700
you know, firms return so much 
too good. 

342
00:17:59,900 --> 00:18:02,400
You know, if you were a good 
investor, I think you were 

343
00:18:02,400 --> 00:18:05,300
quoted in the information. 
Basically saying, like anybody 

344
00:18:05,300 --> 00:18:08,000
who is anybody should have 
returned in this bull market. 

345
00:18:08,200 --> 00:18:11,000
The thing is, people would 
return a ton of money but then 

346
00:18:11,000 --> 00:18:13,200
they're like, well, if I'm 
returning it, I'm also going to 

347
00:18:13,200 --> 00:18:16,700
deploy a similar amount of money
in 2021. 

348
00:18:16,900 --> 00:18:19,500
So the question is, you know, 
how did you play it and do you 

349
00:18:19,500 --> 00:18:23,000
think it was a mistake for 
people who sort of basically 

350
00:18:23,000 --> 00:18:26,500
tried to deploy as much as they 
were returning to investors? 

351
00:18:27,100 --> 00:18:30,200
So there's no doubt that I think
that are very Very few 

352
00:18:30,200 --> 00:18:34,100
Investments that will have been 
made in 2021 that weren't very 

353
00:18:34,100 --> 00:18:37,800
early stage companies that 
people want with hindsight from 

354
00:18:37,800 --> 00:18:39,700
rent. 
Because they paid such a crazy 

355
00:18:39,700 --> 00:18:42,100
price, there will be exceptions 
for sure. 

356
00:18:42,600 --> 00:18:47,100
But up until from 2015, to 2020 
one, the winner of the game. 

357
00:18:47,100 --> 00:18:50,500
So to speak from an Investor's 
perspective, was he who invested

358
00:18:50,500 --> 00:18:53,700
the most is when things go up by
25% a year, you just want to get

359
00:18:53,700 --> 00:18:56,300
as much of everything as you can
and a bunch of folks, literally 

360
00:18:56,300 --> 00:18:58,700
Embrace that trying to do as 
much as I could. 

361
00:18:58,700 --> 00:19:02,300
This was like the and Model then
the SoftBank model and the tiger

362
00:19:02,300 --> 00:19:04,000
model. 
You know, there's sort of a game

363
00:19:04,000 --> 00:19:07,200
of who can be sort of the top 
price sticker. 

364
00:19:07,800 --> 00:19:09,800
I mean, I don't think anyone was
out there trying to pay the 

365
00:19:09,800 --> 00:19:11,800
highest price possible. 
But a lot of people are like, oh

366
00:19:11,808 --> 00:19:15,100
wow, these Trends are amazing. 
They're powerful. 

367
00:19:15,300 --> 00:19:17,900
We want to get as much of these 
Trends as we possibly can. 

368
00:19:18,300 --> 00:19:21,300
And so people got really 
aggressive and there's nobody 

369
00:19:21,400 --> 00:19:23,600
who didn't get aggressive 
because it was impossible to 

370
00:19:23,600 --> 00:19:26,000
invest if you weren't going to 
be really aggressive. 

371
00:19:26,300 --> 00:19:29,200
When that changes, all of a 
sudden, like I said, I think 

372
00:19:29,200 --> 00:19:32,600
people regret a lot of the 
decisions they made in 2020 or 

373
00:19:32,600 --> 00:19:35,900
2021 because the pricing would 
have been objectives besides it 

374
00:19:35,900 --> 00:19:39,700
was really really high and so I 
think might my simple rubric is 

375
00:19:39,700 --> 00:19:44,700
that valuations for a she takes 
a somebody's as an example, 

376
00:19:45,100 --> 00:19:49,100
they're down about 75%. 
So insane. 

377
00:19:49,200 --> 00:19:54,700
If you are a 10 million dollar 
Revenue SAS company, in 2021 you

378
00:19:54,700 --> 00:19:59,100
can raise money at a 500 million
dollar valuation. 

379
00:19:59,900 --> 00:20:03,800
Growing very quickly today. 
I think you could raise money at

380
00:20:03,800 --> 00:20:06,100
about 100 billion dollar 
valuation so that's actually 

381
00:20:06,100 --> 00:20:08,700
80%. 
So in order to get if you did 

382
00:20:08,700 --> 00:20:11,100
raise money at a 500 million 
dollar valuation, in order to 

383
00:20:11,100 --> 00:20:15,500
get back to that level, you need
to grow your business almost 

384
00:20:15,600 --> 00:20:18,600
five times and so that will just
take time. 

385
00:20:18,800 --> 00:20:23,600
If your SAS company and you you 
had 10 million dollar of Revenue

386
00:20:23,600 --> 00:20:26,000
under management. 
In 2021, you could raise money 

387
00:20:26,000 --> 00:20:29,700
at a 500 million dollar 
valuation and many did today. 

388
00:20:30,100 --> 00:20:32,500
Assuming you're growing really 
quickly and have a high quality 

389
00:20:32,500 --> 00:20:34,300
business, you're probably 
raising Capital at. 

390
00:20:34,300 --> 00:20:36,000
We're like 100 million dollar 
valuation. 

391
00:20:36,400 --> 00:20:39,100
So to get back to the 500 
million dollar valuation that 

392
00:20:39,100 --> 00:20:43,000
you had in 2021, you roughly 
have to increase in size of your

393
00:20:43,000 --> 00:20:45,400
business. 
By fivefold, get from about 10 

394
00:20:45,400 --> 00:20:48,700
billion, dollars Revenue, 250 
and there are a lot of really 

395
00:20:48,700 --> 00:20:52,000
high quality companies that will
in fact, do that and that when 

396
00:20:52,000 --> 00:20:54,700
they go to raise Capital, next 
when there are 50 or 60 million 

397
00:20:54,700 --> 00:20:58,300
dollar Revenue business, there 
is nice up rounds and the folks 

398
00:20:58,300 --> 00:21:01,200
who invested even at these 
Really aggressive valuations in 

399
00:21:01,200 --> 00:21:04,400
2021, will feel good about 
themselves on average? 

400
00:21:04,400 --> 00:21:07,600
However, it's really hard to do 
that, not that many companies 

401
00:21:07,900 --> 00:21:10,900
grow their businesses by 5x in 
relatively short periods of 

402
00:21:10,900 --> 00:21:13,400
time. 
So I think most will regret the 

403
00:21:13,400 --> 00:21:16,400
prices that they paid, but we'll
get a boon to the other peers. 

404
00:21:16,400 --> 00:21:19,000
You were smart enough to raise a
capital and they can get it. 

405
00:21:19,300 --> 00:21:22,700
And now if they invest it 
wisely, even if it takes a while

406
00:21:23,100 --> 00:21:26,700
to get to a larger scale. 
It's okay, they have the cats to

407
00:21:26,700 --> 00:21:30,200
get there and in park has a 
raise so much money. 20, Anyone,

408
00:21:30,400 --> 00:21:34,100
I mean, there's a flip side to 
this, which is people also 

409
00:21:34,100 --> 00:21:37,800
needed to seize the bull market,
right? 

410
00:21:37,800 --> 00:21:41,100
Or it was a time to harvest 
wins. 

411
00:21:41,300 --> 00:21:44,700
I mean, I look back you know, I 
did it in a big profile of best 

412
00:21:44,700 --> 00:21:47,300
summer while the boom times were
going. 

413
00:21:47,300 --> 00:21:50,300
I think I gave you guys a little
bit of a hard time, just how big

414
00:21:50,500 --> 00:21:54,400
Shopify and twilio are. 
And it was the moment when, you 

415
00:21:54,400 --> 00:21:56,900
know, Sequoia was out there sort
of beating his chest about 

416
00:21:56,900 --> 00:22:01,100
holding public stocks and then 
With the benefit of hindsight. 

417
00:22:01,100 --> 00:22:02,000
It's like, okay. 
Yeah. 

418
00:22:02,000 --> 00:22:05,300
Makes sense to sort of sell down
your position in cash and 

419
00:22:05,300 --> 00:22:07,300
winners. 
Even if you have these 

420
00:22:07,300 --> 00:22:11,300
generational companies, I mean 
at the same time, what author 

421
00:22:11,300 --> 00:22:13,300
zero was a big one of yours, 
right? 

422
00:22:13,300 --> 00:22:17,000
That you they got sold when 
things were way up. 

423
00:22:17,000 --> 00:22:20,000
So, yeah, I don't know with a 
little bit of distance from it. 

424
00:22:20,200 --> 00:22:24,100
How would you score yourself on 
sort of getting the most out of 

425
00:22:24,100 --> 00:22:27,200
the bull market, while being 
sort of, well, situated for the 

426
00:22:27,200 --> 00:22:29,600
downturn? 
We've made every mistake? 

427
00:22:29,800 --> 00:22:32,100
Possible. 
But we've also got some things, 

428
00:22:32,100 --> 00:22:33,300
right? 
And so with the benefit of 

429
00:22:33,300 --> 00:22:37,000
hindsight, we distributed our 
stock and Shopify way too early.

430
00:22:37,400 --> 00:22:41,800
And the same time, we held onto 
some stocks in 2021, a bit too 

431
00:22:41,800 --> 00:22:44,600
long. 
I think, if you're were not all 

432
00:22:44,600 --> 00:22:47,600
that focused on getting that 
exactly right, of course, we're 

433
00:22:47,600 --> 00:22:50,800
always trying to do better, but 
the real win, if you will. 

434
00:22:50,800 --> 00:22:53,700
And the excitement of what 
motivates us is to invest in a 

435
00:22:53,708 --> 00:22:58,600
company, like Shopify or 0, 0, 
when it's really small and 

436
00:22:58,600 --> 00:23:01,300
nurture, it and help that, 
Company become really big. 

437
00:23:01,600 --> 00:23:05,700
And if you manage to top ticket 
and exit your position, exactly.

438
00:23:05,700 --> 00:23:08,700
When the market cap is really 
all the power to you, that's 

439
00:23:08,700 --> 00:23:11,200
just not that interesting of a 
game and made a sure. 

440
00:23:11,200 --> 00:23:14,300
It might improve your returns a 
bit, but the real energy if you 

441
00:23:14,300 --> 00:23:17,900
will the real effort into 
generating investment returns. 

442
00:23:17,900 --> 00:23:20,900
And finally, the reward of 
playing in The Venture game is 

443
00:23:20,900 --> 00:23:22,800
going to work with the 
entrepreneurs when they got 

444
00:23:22,800 --> 00:23:26,200
something really compelling and 
small and Healthcare dozen or 

445
00:23:26,200 --> 00:23:28,000
less focus on. 
Like, how do we get out at 

446
00:23:28,000 --> 00:23:30,900
exactly the right time. 
And in fact, We invested in 

447
00:23:30,900 --> 00:23:35,400
Shopify had 2010, I'm still in 
the board in 2022. 12 years 

448
00:23:35,400 --> 00:23:37,900
later, we're even though 
Bessemer doesn't own a 

449
00:23:37,900 --> 00:23:40,400
significant position. 
It's incredibly rewarding to 

450
00:23:40,400 --> 00:23:43,300
partnering these entrepreneurs 
when they have a mission and 

451
00:23:43,300 --> 00:23:45,000
stick with it for a really long 
time. 

452
00:23:45,500 --> 00:23:49,400
So, okay in our search of, you 
know, this downturn, what's the 

453
00:23:49,400 --> 00:23:53,200
right metaphor and you know what
can we learn from the past? 

454
00:23:54,100 --> 00:23:58,800
What's Your Gut read on the 
percent of like bullshit right 

455
00:23:58,800 --> 00:24:03,200
now or like I In judging whether
we're similar to.com or not, it 

456
00:24:03,200 --> 00:24:06,400
just like we had all these 
companies that got out via spax,

457
00:24:06,500 --> 00:24:08,700
you know, on demand. 
When crazy, there's a lot of 

458
00:24:08,700 --> 00:24:14,000
stuff outside of like pure SAS. 
That to me, looks questionable, 

459
00:24:14,000 --> 00:24:17,800
but I guess from your read, just
like how much bullshit is there 

460
00:24:17,800 --> 00:24:19,300
out there? 
How many companies are there 

461
00:24:19,300 --> 00:24:20,900
that? 
That have no path. 

462
00:24:21,000 --> 00:24:23,700
I know that's hard to calibrate.
Yeah, I don't. 

463
00:24:23,700 --> 00:24:27,600
So I think it's really different
from the.com explosion in the 

464
00:24:27,600 --> 00:24:29,600
sense that one when that was 
over. 

465
00:24:30,000 --> 00:24:32,400
As I mentioned before, there are
like three or four really strong

466
00:24:32,400 --> 00:24:36,600
internet companies left standing
and they've all endured even 

467
00:24:36,600 --> 00:24:38,400
Yahoo is still worth billions of
dollars. 

468
00:24:38,400 --> 00:24:41,500
Generates, lots of Revenue, I 
believe Apollo owns it today but

469
00:24:41,500 --> 00:24:43,100
only three or four atoms 
hundreds. 

470
00:24:43,300 --> 00:24:45,500
I mean hundreds as a brief 
aside. 

471
00:24:45,500 --> 00:24:48,000
So why and I'll come back to 
what I think of today in a 

472
00:24:48,000 --> 00:24:50,400
moment. 
But when I joined the Venture 

473
00:24:50,400 --> 00:24:53,700
industry in 2001, I looked at 
these entrepreneurs and 

474
00:24:53,700 --> 00:24:56,300
businesses and these venture 
capitalist who funded them from 

475
00:24:56,300 --> 00:25:01,200
96 to 2000 and I was jealous. 
Oh my Lord. 

476
00:25:01,200 --> 00:25:05,900
Like they generated enormous 
value and enormous wealth in 

477
00:25:05,900 --> 00:25:08,900
such a short time and I said, to
myself, the world is never going

478
00:25:08,900 --> 00:25:12,900
to get this crazy again, right? 
Like, like that the entire world

479
00:25:12,900 --> 00:25:16,700
smoked a giant joints and I was 
high as a kite like what fun, it

480
00:25:16,700 --> 00:25:19,100
would have been to be part of 
that, but I and I missed the 

481
00:25:19,100 --> 00:25:22,700
party but I thought you know, 
it's really rewarding and fun 

482
00:25:22,700 --> 00:25:25,600
and challenging to find 
compelling entrepreneurs, invest

483
00:25:25,600 --> 00:25:27,600
in startups. 
So even though it's never going 

484
00:25:27,600 --> 00:25:30,900
to get as good as it was in 2000
again, I'm gonna try to make 

485
00:25:30,900 --> 00:25:34,600
this my career because I think 
I'll find it fun and well holds 

486
00:25:34,600 --> 00:25:38,200
20 years later it happened again
like they someone passed a joint

487
00:25:38,200 --> 00:25:40,900
around the party a second time 
and no one remembered what 

488
00:25:40,900 --> 00:25:43,000
happened the first time and 
things got crazy. 

489
00:25:43,400 --> 00:25:46,100
So in that sense it's really 
similar and enormous wealth was 

490
00:25:46,100 --> 00:25:49,300
created, enormous companies are 
created, but the difference is 

491
00:25:49,300 --> 00:25:53,800
when that party ended at the end
of 20 21, it wasn't three or 

492
00:25:53,800 --> 00:25:58,800
four companies left standing, it
was dozens and dozens of strong 

493
00:25:58,800 --> 00:26:01,300
public companies. 
And hundreds of religion in 

494
00:26:01,308 --> 00:26:04,600
private companies. 
Now not every unicorn and not 

495
00:26:04,600 --> 00:26:07,600
every company that raised a lot 
of money will be successful, but

496
00:26:07,600 --> 00:26:12,100
the industry is I don't say two 
orders of magnitude larger than 

497
00:26:12,100 --> 00:26:13,600
it was. 
Yeah, 2008. 

498
00:26:14,400 --> 00:26:17,800
Obviously I'm not saying that 
this period could be a total 

499
00:26:17,800 --> 00:26:19,900
invalidation of like technology,
right? 

500
00:26:19,900 --> 00:26:23,600
And in the way that the.com bust
was. 

501
00:26:23,700 --> 00:26:27,000
So I feel like, you know, you do
sort of have to distort the 

502
00:26:27,000 --> 00:26:30,800
metaphor slightly and that it's 
not everything but it's just, I 

503
00:26:30,800 --> 00:26:36,500
guess to me, the question is Was
there so much optimism that you 

504
00:26:36,500 --> 00:26:40,000
know, the next round will be 
higher than the last that sort 

505
00:26:40,000 --> 00:26:44,900
of any sort of cash flow 
modeling or real rigor was 

506
00:26:44,900 --> 00:26:48,700
thrown out the door and 
therefore we can't really trust,

507
00:26:48,700 --> 00:26:52,100
you know, even like Deca core 
and level valuations. 

508
00:26:52,100 --> 00:26:56,000
There were granted in 2021. 
Yes and no I think clearly the 

509
00:26:56,000 --> 00:26:57,700
valuations are often. 
You can see it in the public 

510
00:26:57,700 --> 00:26:59,300
markets. 
The public valuations are down 

511
00:26:59,300 --> 00:27:02,700
by three quarters, not every 
single company but we're less 

512
00:27:02,700 --> 00:27:05,100
across the board. 
So, you can basically apply that

513
00:27:05,100 --> 00:27:06,600
to the private companies, just 
the same. 

514
00:27:07,000 --> 00:27:09,800
And so, if you had a private 
company valuation of 10 billion,

515
00:27:10,300 --> 00:27:13,000
a rule of thumb is assume it's 
two and a half billion today. 

516
00:27:13,100 --> 00:27:14,300
Yeah, I come in. 
Yeah. 

517
00:27:14,300 --> 00:27:17,100
But that, and that doesn't mean 
you won't get back to 10 billion

518
00:27:17,100 --> 00:27:20,100
that just means you got to grow 
the business is essentially two 

519
00:27:20,100 --> 00:27:22,900
doubles, if you can double your 
size this year and double 

520
00:27:22,900 --> 00:27:24,900
yourselves. 
Again next year, I'm not that 

521
00:27:24,900 --> 00:27:27,900
good at math, but two times, two
is four I believe four times two

522
00:27:27,900 --> 00:27:29,900
and a half million, you're right
back to 10, right? 

523
00:27:29,900 --> 00:27:33,200
So the best case scenario or I 
should say that there's probably

524
00:27:33,300 --> 00:27:35,200
Better case. 
But a really good case scenario,

525
00:27:35,200 --> 00:27:38,400
is, you still have a great 
company still growing quickly. 

526
00:27:38,600 --> 00:27:41,900
You can double two more times 
and in Chu, here's your back to 

527
00:27:41,900 --> 00:27:45,400
a ten billion dollar renovation.
No one is crying for those 

528
00:27:45,500 --> 00:27:48,000
writer, printers are investors. 
That's a pretty table album. 

529
00:27:48,000 --> 00:27:51,800
And by the way, if you fall 
short of that and because you're

530
00:27:51,800 --> 00:27:54,400
trying to be a little bit more 
conservative with your Capital, 

531
00:27:54,800 --> 00:27:57,600
you don't have access to quite 
so much and therefore, you can't

532
00:27:57,600 --> 00:28:02,200
be as aggressive in your growth.
Maybe you grow your business, 40

533
00:28:02,200 --> 00:28:04,800
percent this year, And forty 
percent next year. 

534
00:28:05,100 --> 00:28:09,300
Well, 40 percent growth followed
by 40 percent growth will make 

535
00:28:09,300 --> 00:28:12,200
you about twice as big as you 
are today. 

536
00:28:12,600 --> 00:28:17,100
And so if you translate that to 
the value in the mock exercise, 

537
00:28:17,100 --> 00:28:18,700
you're doing here. 
That turns a two and a half 

538
00:28:18,700 --> 00:28:21,900
billion dollar company. 25 
billion, is it a decade Corner 

539
00:28:21,900 --> 00:28:25,400
know there's 25 billion dollar 
Equity that's pretty amazing. 

540
00:28:25,400 --> 00:28:28,400
I was dunking on lift for being 
exactly like four to five 

541
00:28:28,400 --> 00:28:31,900
billion dollars and somebody I 
think it was Jason lemkin 

542
00:28:31,900 --> 00:28:34,500
tweeted at me like that. 
There was a time where it was 

543
00:28:34,500 --> 00:28:37,500
cool to be a four or five 
billion dollar company and to 

544
00:28:37,500 --> 00:28:40,300
some degree we've just totally 
lost perspective, like lots of 

545
00:28:40,308 --> 00:28:42,800
people get rich at a four to 
five billion dollar company. 

546
00:28:42,800 --> 00:28:45,500
It's not, it's not the end of 
the world, it can still be a 

547
00:28:45,500 --> 00:28:48,900
good return for VCS if they got 
in at the right price. 

548
00:28:48,900 --> 00:28:52,900
So some of it is just resetting 
how much wealth is supposed to 

549
00:28:52,900 --> 00:28:55,100
be created and in a win 
scenario. 

550
00:28:55,200 --> 00:28:56,200
That's right. 
And I'd argue. 

551
00:28:56,200 --> 00:28:58,800
It's not just a good, it's a 
phenomenal outcome, it's a 

552
00:28:58,800 --> 00:29:00,600
phenomenal. 
Come to be part of something 

553
00:29:01,200 --> 00:29:03,200
earlier, even in the middle 
stages, up becomes worth. 

554
00:29:03,700 --> 00:29:05,400
Two or three or four five 
billion dollars. 

555
00:29:06,200 --> 00:29:08,800
It's about it doesn't happen 
that often but what's amazing is

556
00:29:08,800 --> 00:29:11,300
that there are actually hundreds
of examples that we can point 

557
00:29:11,300 --> 00:29:13,100
to. 
But it's still his hundreds out 

558
00:29:13,100 --> 00:29:17,900
of tens of thousands or more 
attempts and so it still is so 

559
00:29:17,900 --> 00:29:20,900
long odds. 
Do you have a view on what 2023 

560
00:29:21,000 --> 00:29:25,300
will look like here? 
So in the end of 20 21, I was 

561
00:29:25,300 --> 00:29:29,600
optimistic about 2023 and I felt
like the imbalance in the system

562
00:29:29,600 --> 00:29:33,700
will start to work itself out. 
Now, there were in 2023 I'm a 

563
00:29:33,700 --> 00:29:36,800
little bit less optimistic as to
how quickly that imbalance work 

564
00:29:36,800 --> 00:29:39,500
itself out. 
But we're still seeing a lot of 

565
00:29:39,500 --> 00:29:43,600
really interesting entrepreneurs
much like we did in 2002 and 

566
00:29:43,600 --> 00:29:47,400
2003, say, forget, I don't care 
about the capital markets, like,

567
00:29:47,500 --> 00:29:50,900
I have an idea, I have a vision 
for what I want to build, and I 

568
00:29:50,900 --> 00:29:52,500
want to build it. 
Now, I don't want to wait five 

569
00:29:52,500 --> 00:29:54,600
years before it's trendy again, 
right? 

570
00:29:54,600 --> 00:29:57,000
And many ways, I think they're 
playing to an advantage because 

571
00:29:58,300 --> 00:30:01,800
I think today, Google announced 
it was laying off. 12,000 

572
00:30:01,800 --> 00:30:04,700
people, you know? 
Was understand, significant 

573
00:30:04,700 --> 00:30:06,500
Cuts. 
Stripe, has none to give me a 

574
00:30:06,500 --> 00:30:09,200
call at ShopRite and significant
has, these are all really great 

575
00:30:09,200 --> 00:30:12,300
companies with phenomenal people
and teams. 

576
00:30:12,600 --> 00:30:14,700
And I'm certain that not 
everybody. 

577
00:30:15,100 --> 00:30:17,900
They've let go is an amazing, 
you know, wildly, talented 

578
00:30:17,900 --> 00:30:20,800
person, but many of them are. 
And if you were trying to build 

579
00:30:20,800 --> 00:30:23,000
a company over the last five 
years, you couldn't get access 

580
00:30:23,000 --> 00:30:25,000
to those people because they had
these amazing jobs that 

581
00:30:25,000 --> 00:30:27,100
fantastic companies. 
Now, all of a sudden you can 

582
00:30:27,100 --> 00:30:31,100
recruit and build teams at a 
quality level for a really young

583
00:30:31,100 --> 00:30:34,400
company, that was fun. 
Heard about five years ago. 

584
00:30:34,400 --> 00:30:37,700
I'm so while yes, it's much 
harder to raise capital and 

585
00:30:37,700 --> 00:30:39,100
there's just less of it out 
there. 

586
00:30:39,700 --> 00:30:43,800
It's also much easier to find 
great people and I'd argue and 

587
00:30:43,800 --> 00:30:46,300
now that big you might even be 
able to recruit them and lower 

588
00:30:46,300 --> 00:30:48,800
the mature company and pay them.
Less rice means, you don't 

589
00:30:48,800 --> 00:30:51,900
actually need as much capital 
and so the - stop me really 

590
00:30:51,900 --> 00:30:54,800
helpful. 
Sure company formation and idea 

591
00:30:54,800 --> 00:30:56,900
generation. 
And it's also the case that, you

592
00:30:56,908 --> 00:31:01,300
know, maybe the mood at a 
company like Google or Facebook 

593
00:31:01,500 --> 00:31:05,000
Isn't So cheery. 
So, But out to people who were 

594
00:31:05,000 --> 00:31:07,700
just having a blast for a few 
years now like, hey, this isn't 

595
00:31:07,700 --> 00:31:10,000
so much fun anymore. 
Much more fun to go. 

596
00:31:10,000 --> 00:31:11,600
Start something were to go build
something. 

597
00:31:12,100 --> 00:31:15,100
Part of being a successful 
investor is you have to have a 

598
00:31:15,100 --> 00:31:19,700
sort of Divergent thesis or it 
just feels to me like right now,

599
00:31:19,700 --> 00:31:24,300
like every VC is evoking, this 
sort of metaphor that great 

600
00:31:24,300 --> 00:31:29,200
companies were built out of the 
aftermath of a bust and that 

601
00:31:29,200 --> 00:31:33,000
it's like a good time to start 
and some of what we're seeing 

602
00:31:33,000 --> 00:31:35,000
there. 
N is that seed in series a 

603
00:31:35,000 --> 00:31:39,000
prices, just haven't fallen, any
certainly anywhere near the 

604
00:31:39,200 --> 00:31:44,400
super late stage yet. 
And so I guess my question is 

605
00:31:44,400 --> 00:31:50,000
like are those rounds priced 
appropriately given the risk and

606
00:31:50,000 --> 00:31:53,800
like isn't it? 
If, you know, even a coat or 

607
00:31:53,800 --> 00:31:56,800
whatever with all this money is 
rushing to series a because they

608
00:31:56,800 --> 00:31:59,700
need to do something. 
Are there really going to be 

609
00:31:59,700 --> 00:32:01,700
great deals and series a this 
year? 

610
00:32:01,900 --> 00:32:04,600
If it's so competitive? 
Because a lot of people have a 

611
00:32:04,600 --> 00:32:08,300
similar intuition. 
Yeah, I think it's AI mean. 

612
00:32:08,300 --> 00:32:11,900
I think when you're making a 
seed or a series a, or even a 

613
00:32:11,908 --> 00:32:15,400
series be investment. 
What's most important is that 

614
00:32:15,400 --> 00:32:19,100
you're filing a great company, 
great entrepreneur, great idea 

615
00:32:19,100 --> 00:32:22,700
that can grow for a while. 
If you overpay, and by the way, 

616
00:32:22,700 --> 00:32:25,600
like, I'll go back to our 
LinkedIn invest in, which was a 

617
00:32:25,600 --> 00:32:31,000
series C investment in 2006. 
At the time we wildly overpaid 

618
00:32:31,000 --> 00:32:34,600
Lincoln was maybe a ten billion 
dollar Dollar Revenue company we

619
00:32:34,600 --> 00:32:39,100
invested at a 225 ish million 
dollars hundred thirty million 

620
00:32:39,100 --> 00:32:41,200
dollar valuation that was 
unheard of AG. 

621
00:32:41,200 --> 00:32:46,000
Nobody paid 25 times Revenue to 
invest in coming 2006 so much so

622
00:32:46,000 --> 00:32:49,500
that linkedin's existing 
investors both invested zeroing 

623
00:32:49,500 --> 00:32:51,300
a financing. 
They thought we had overpaid by 

624
00:32:51,300 --> 00:32:54,800
such a dramatic amount but it 
was a phenomenal company and 

625
00:32:54,800 --> 00:32:58,000
maybe we did overpay relative to
what the court Market was or we 

626
00:32:58,000 --> 00:33:02,200
should have paid by 20 or 30 or 
50 percent but the company still

627
00:33:02,200 --> 00:33:04,300
grew to the point. 
Where I think our position was, 

628
00:33:04,300 --> 00:33:06,300
right at 100 x by the to a 
company. 

629
00:33:06,300 --> 00:33:09,100
And they said, and so, when 
you're investing at a relatively

630
00:33:09,100 --> 00:33:12,500
early stage, there's so many 
ways to get bailed out. 

631
00:33:12,500 --> 00:33:15,100
If you've caught a tiger by the 
tail and of back, somebody truly

632
00:33:15,100 --> 00:33:18,300
phenomenal, as you get to a 
later later, stage, your 

633
00:33:18,300 --> 00:33:21,000
opportunity to get bailed out, 
shrink dramatically and so I 

634
00:33:21,008 --> 00:33:23,500
think that's why we're seeing 
the price adjustments at the 

635
00:33:23,500 --> 00:33:26,600
later stage in today's market, 
have been much more dramatic of 

636
00:33:26,600 --> 00:33:29,100
the earlier stage. 
That said, I think there's 

637
00:33:29,100 --> 00:33:31,600
another shoe to drop. 
I don't think it will be as 

638
00:33:31,600 --> 00:33:34,300
dramatic, I think will happen. 
In in some slow motion. 

639
00:33:34,900 --> 00:33:37,000
But there's another challenge 
that the whole industry is 

640
00:33:37,000 --> 00:33:40,100
facing, as everybody gets a 
little bit more conservative and

641
00:33:40,100 --> 00:33:43,400
a little bit more concerned and 
the challenges as an investor. 

642
00:33:44,400 --> 00:33:48,500
When I see someone else's 
series, a investment become a 

643
00:33:48,500 --> 00:33:50,700
series be company or someone 
else's Series, be investing 

644
00:33:50,700 --> 00:33:53,500
become a serious C company and I
may have an opportunity to 

645
00:33:53,500 --> 00:33:55,900
invest in it. 
I want to feel like I'm 

646
00:33:56,400 --> 00:33:57,700
investing in a phenomenal 
company. 

647
00:33:57,700 --> 00:34:00,400
I'll stretch really 
aggressively, but I also like 

648
00:34:00,400 --> 00:34:03,100
understand there's a market and 
I Don't Want to Be Wild. 

649
00:34:03,300 --> 00:34:05,800
Out of line with the market, I 
want to be sort of at the full 

650
00:34:05,800 --> 00:34:06,900
end of the market. 
If you want to make sure 

651
00:34:06,900 --> 00:34:08,900
everyone feels like they got a 
good deal, right? 

652
00:34:09,000 --> 00:34:12,199
And what is happening is that if
there are no opportunities to do

653
00:34:12,199 --> 00:34:15,000
that and I'm a little bit more 
skeptical or a little bit more 

654
00:34:15,000 --> 00:34:17,400
cynical. 
The existing ambassadors will 

655
00:34:17,400 --> 00:34:20,300
feel like we need to support our
company because it's hard to 

656
00:34:20,308 --> 00:34:22,300
find a lots of right outside 
interest. 

657
00:34:22,600 --> 00:34:25,100
And then when they do that, they
realize that wait a minute. 

658
00:34:25,400 --> 00:34:28,600
We can't be aggressive in 
investing in someone else's 

659
00:34:28,600 --> 00:34:30,600
portfolio company, right? 
Because we need to save more 

660
00:34:30,600 --> 00:34:33,100
money for our own portfolio. 
This is super real. 

661
00:34:33,199 --> 00:34:35,199
Anon if you like, yeah, 
everybody's doubling down on 

662
00:34:35,199 --> 00:34:38,199
their own, but it become 
self-fulfilling because if you 

663
00:34:38,199 --> 00:34:40,600
feel like you need a reserve or 
Capital to your own companies 

664
00:34:41,000 --> 00:34:44,100
even more tight, right, what it 
comes to evaluating some new 

665
00:34:44,100 --> 00:34:47,000
company, which means those 
investors have to be even 

666
00:34:47,000 --> 00:34:49,400
tighter with their Capital 
because the end and so just 

667
00:34:49,400 --> 00:34:51,000
Aspire. 
And so I think we're in a little

668
00:34:51,000 --> 00:34:53,300
bit of a spiral. 
And so I think what will end up 

669
00:34:53,300 --> 00:34:57,500
happening is if you've invested 
in a series a and price of Acts 

670
00:34:57,500 --> 00:35:01,900
today in a year you might say, 
gosh given how hard it is to 

671
00:35:01,900 --> 00:35:04,400
raise a serious me. 
Should be investing in a price 

672
00:35:04,400 --> 00:35:08,100
of each point 7 x naught X. 
So I anticipate it will continue

673
00:35:08,100 --> 00:35:11,900
to slip back inside down rounds.
Basically, I don't even know 

674
00:35:11,900 --> 00:35:14,100
that they'll be down rounds 
because it's it down. 

675
00:35:14,100 --> 00:35:16,200
Roads are really hard and really
destructive for private 

676
00:35:16,200 --> 00:35:17,000
companies. 
Yes. 

677
00:35:17,000 --> 00:35:19,100
Can you explain that? 
That was my next question. 

678
00:35:19,100 --> 00:35:22,400
So, as part of why is it that a 
series, a company, just can't 

679
00:35:22,400 --> 00:35:26,600
just raise at a lower Sirius, B,
if everybody's doing it. 

680
00:35:26,800 --> 00:35:29,500
So the reason why the math is so
tricky is because of the 

681
00:35:29,500 --> 00:35:31,400
structure of a typical Venture 
Capital deal. 

682
00:35:31,400 --> 00:35:34,100
And so the way it typical been 
Your deal worse. 

683
00:35:34,200 --> 00:35:37,500
Let's say someone invests in 
let's say a venture capitalist 

684
00:35:37,700 --> 00:35:40,800
leads the series a investment 
invests, five million dollars 

685
00:35:41,200 --> 00:35:43,700
and a 20 million dollar 
pre-money valuation, which is a 

686
00:35:43,700 --> 00:35:45,800
25 million-dollar post-money 
valuation. 

687
00:35:46,200 --> 00:35:49,400
And the investor essentially 
owns five twenty fifths or 20% 

688
00:35:49,400 --> 00:35:51,200
of the company. 
That's like a down the middle of

689
00:35:51,207 --> 00:35:55,900
the Fairway, series a deal. 
Let's say 18 months go by and 

690
00:35:56,100 --> 00:36:00,300
there's still promise for the 
company, maybe the market 

691
00:36:00,300 --> 00:36:03,700
feedback is like, hey, that's 
interesting at a Two million 

692
00:36:03,700 --> 00:36:05,500
dollar pre-money valuation 
today. 

693
00:36:05,900 --> 00:36:09,900
Not a 25, let alone 50 million 
dollar, pre-money valuation. 

694
00:36:09,900 --> 00:36:12,800
Why is it so hard to like, 
comment just accept that they 

695
00:36:12,800 --> 00:36:15,000
shouldn't raise money to 15 
million dollar valuation. 

696
00:36:16,100 --> 00:36:19,300
The reason is because number 
one, there's five million of 

697
00:36:19,300 --> 00:36:22,000
preferences in the company from 
the previous investors 

698
00:36:22,100 --> 00:36:27,200
investment and to almost every 
gaudio comes with what's called 

699
00:36:27,400 --> 00:36:29,300
a weighted average Auntie 
dilution protection. 

700
00:36:29,800 --> 00:36:32,200
And so if the company raised 
five million is initial 

701
00:36:32,200 --> 00:36:35,700
financing, And now needs access 
to ten. 

702
00:36:36,200 --> 00:36:38,300
First of all, if you were to 
raise 10 million out of 15 

703
00:36:38,300 --> 00:36:41,300
billion dollar pre-money 
valuation, you're selling 40% of

704
00:36:41,300 --> 00:36:45,200
the company because it becomes 
ten twenty fifths of the of the 

705
00:36:45,200 --> 00:36:47,400
company's value. 
Take the 10 of new capital, you 

706
00:36:47,400 --> 00:36:49,000
added to the 15 million dollar 
valuation. 

707
00:36:49,000 --> 00:36:51,600
We get your 25 post 1020 
business for yourself. 

708
00:36:51,600 --> 00:36:55,300
That's a huge chunk of the 
company to be selling and the 

709
00:36:55,300 --> 00:36:59,200
previous investor is going to 
get into delusion protection, 

710
00:36:59,200 --> 00:37:01,700
which means they're 
automatically issued more shares

711
00:37:02,000 --> 00:37:03,900
to compensate for the fact that 
Sit down. 

712
00:37:04,200 --> 00:37:08,300
And so, in addition to the 40 %,
UB Sally to a new investor, you 

713
00:37:08,300 --> 00:37:11,300
also have to give up more Equity
ownership to the previous 

714
00:37:11,300 --> 00:37:13,400
investor because of the terms of
the security. 

715
00:37:13,400 --> 00:37:17,300
And so you could suddenly find 
out that you've sold 50 or 60 

716
00:37:17,300 --> 00:37:20,300
percent of the company in a 
financing and it just doesn't 

717
00:37:20,300 --> 00:37:22,800
work like you still longer 
interesting for an entrepreneur 

718
00:37:22,800 --> 00:37:24,800
who just got recruited so 
dramatically. 

719
00:37:25,200 --> 00:37:27,200
And so, it's really hard. 
And then on top of that, you 

720
00:37:27,207 --> 00:37:29,700
have a massive communication 
challenge for all of your 

721
00:37:29,700 --> 00:37:31,600
employees. 
What are you telling all your 

722
00:37:31,600 --> 00:37:33,300
place? 
Like if they worked at the This 

723
00:37:33,300 --> 00:37:36,400
for two years and their stock is
now worth less than when they 

724
00:37:36,400 --> 00:37:39,000
join two years ago. 
That's really depressing and 

725
00:37:39,000 --> 00:37:42,100
it's it's hard to maintain 
momentum in enthusiasm. 

726
00:37:42,100 --> 00:37:46,100
Intermission if ass that ship is
slowly sinking but this logic 

727
00:37:46,100 --> 00:37:50,400
pushes Founders to pursue debt 
and structured Equity or 

728
00:37:50,500 --> 00:37:55,000
basically structures that allow 
them to maintain the illusion of

729
00:37:55,000 --> 00:37:57,800
their valuation. 
While putting the company at 

730
00:37:57,800 --> 00:38:02,500
Great risk, if they cannot 
continue to sort of justify it, 

731
00:38:02,500 --> 00:38:04,100
would you agree? 
That articulation. 

732
00:38:04,100 --> 00:38:06,800
And what what's your view on is 
for the, some of these structure

733
00:38:06,800 --> 00:38:11,000
Equity proposals being floated. 
I would agree that it's kicking,

734
00:38:11,000 --> 00:38:14,900
the can of taking painful 
medicine, down the road, and 

735
00:38:15,300 --> 00:38:17,800
there's a chance that it all 
works out, just fine. 

736
00:38:18,300 --> 00:38:21,200
But there's a bigger chance that
the company does well. 

737
00:38:21,600 --> 00:38:25,000
And the financing starts to 
become a serious problem or the 

738
00:38:25,000 --> 00:38:28,100
financing eats into all the 
equity value. 

739
00:38:28,500 --> 00:38:32,000
Subtly of all the founders in 
the employees because it has all

740
00:38:32,000 --> 00:38:34,500
sorts of crazy. 
And suddenly you realize that 

741
00:38:34,700 --> 00:38:37,400
you own very little of the 
company because you sold all 

742
00:38:37,400 --> 00:38:40,400
these graphs each term to be 
some investor to maintain a 

743
00:38:40,400 --> 00:38:43,500
headline price that seems good. 
So it's sort of like a wave. 

744
00:38:43,800 --> 00:38:47,600
Hiding the problems under the 
rug, eventually someone's going 

745
00:38:47,600 --> 00:38:51,000
to lift up the rug and see all 
the problems there and so it's 

746
00:38:51,000 --> 00:38:54,200
treacherous. 
What should happen is that you 

747
00:38:54,200 --> 00:39:00,100
should have an honest investor. 
Who says he I invested a year 

748
00:39:00,100 --> 00:39:02,400
ago at a 25 million-dollar 
valuation. 

749
00:39:02,700 --> 00:39:04,900
I got it. 
The company is worth $25 

750
00:39:04,900 --> 00:39:07,900
anymore. 
And so, let's own up to where we

751
00:39:07,900 --> 00:39:10,300
are. 
Let's work something out where, 

752
00:39:10,900 --> 00:39:13,500
you know, I made a bad 
investment, it shouldn't be the 

753
00:39:13,500 --> 00:39:15,400
entrepreneur that has to suffer 
all the pain. 

754
00:39:15,600 --> 00:39:17,900
Let's figure out together. 
Like we're business partners. 

755
00:39:17,900 --> 00:39:21,100
And so maybe I give up some of 
my ownership, maybe you give up 

756
00:39:21,100 --> 00:39:23,200
to me or ownership. 
Let's start this company off on 

757
00:39:23,200 --> 00:39:26,100
a clean slate and a 15 million 
dollar valuation. 

758
00:39:26,100 --> 00:39:28,900
If that's what we believe is 
sensible and we still believe in

759
00:39:28,908 --> 00:39:30,900
the vision and that the 
opportunity so forth. 

760
00:39:31,200 --> 00:39:33,500
But it turns out that that's 
like having a Really tough 

761
00:39:33,500 --> 00:39:36,000
conversation. 
You have to be really honest. 

762
00:39:36,000 --> 00:39:39,200
It's like no, you're great, 
you're great. 

763
00:39:39,200 --> 00:39:42,200
And then one comes to you and 
says, you're not as great as you

764
00:39:42,200 --> 00:39:43,900
think you are. 
Like, nobody wants to have to be

765
00:39:43,900 --> 00:39:46,700
the one to do that, even if the 
other board members, secretly 

766
00:39:46,700 --> 00:39:50,500
agree, and also, nobody wants to
like concede some of their 

767
00:39:50,500 --> 00:39:53,600
rights rise, like I bought 
something, I don't want to give 

768
00:39:53,600 --> 00:39:55,500
something up for nothing but 
guess what? 

769
00:39:55,500 --> 00:39:59,000
In the spirit of what's best for
the company you need to or there

770
00:39:59,000 --> 00:40:01,300
is no company and people are 
remarkably short side, he 

771
00:40:01,308 --> 00:40:03,200
better. 
So, the other way to do is Like 

772
00:40:03,200 --> 00:40:05,700
to kick the can down the road 
you pretend and to create all 

773
00:40:05,700 --> 00:40:08,500
these other structural issues 
that can come back to haunt you 

774
00:40:08,500 --> 00:40:10,100
later. 
Have you done this? 

775
00:40:10,100 --> 00:40:12,400
Like are you have you done this 
with a startup? 

776
00:40:13,500 --> 00:40:15,100
Like reset the cap structure, 
yeah? 

777
00:40:15,100 --> 00:40:19,000
Bessemer yeah absolutely. 
In the in this period. 

778
00:40:19,000 --> 00:40:21,400
Yeah in fact just in fact just 
yesterday I was on the bed on 

779
00:40:21,400 --> 00:40:24,200
the phone with with the not 
prove who had seated and the 

780
00:40:24,200 --> 00:40:27,900
company had raised maybe a total
of four million dollars and she 

781
00:40:27,900 --> 00:40:30,900
was a working and so has up to 
attend her. 

782
00:40:31,000 --> 00:40:33,900
I'm not going to name a company 
because I don't wanna embarrass 

783
00:40:33,900 --> 00:40:36,800
him but he cut costs 
dramatically. 

784
00:40:37,300 --> 00:40:39,800
It had been up to 30 or 35. 
People was trying to do a really

785
00:40:39,800 --> 00:40:41,600
aggressive lie. 
It didn't work. 

786
00:40:41,900 --> 00:40:44,300
Took us dramatically. 
But it is a still doing three 

787
00:40:44,300 --> 00:40:47,300
hundred thousand dollars or so 
a, what the revenue and with a 

788
00:40:47,300 --> 00:40:50,100
much thinner staff. 
Then I mix a little bit of 

789
00:40:50,100 --> 00:40:54,800
profit and so it's never unless 
the team invent something while 

790
00:40:54,800 --> 00:40:56,900
they knew, I don't know where 
which is always possible. 

791
00:40:57,100 --> 00:41:00,100
It's never going to be a 
multi-billion dollar company. 

792
00:41:00,100 --> 00:41:03,300
It probably won't be a 
multimillion-dollar company and 

793
00:41:03,300 --> 00:41:07,800
so we could insist that we just 
keep going to Bro, said by 

794
00:41:07,800 --> 00:41:11,500
admitting what, you've got and 
right-sizing it accepting your 

795
00:41:11,500 --> 00:41:14,900
current fate. 
You go from being on defense and

796
00:41:14,900 --> 00:41:18,500
worrying about running out of 
money or getting your team to 

797
00:41:18,500 --> 00:41:20,600
being an offense. 
Now, it's okay, we have d66 

798
00:41:21,000 --> 00:41:24,300
person company. 
It generates just enough regular

799
00:41:24,300 --> 00:41:26,100
every month to wash its own 
face. 

800
00:41:26,600 --> 00:41:28,600
Is that washing his cash? 
Cows, go down, and down, and 

801
00:41:28,607 --> 00:41:30,700
down. 
And now, the founders can sit 

802
00:41:30,700 --> 00:41:33,500
back and say, what do we want to
do, do you want to sell this 

803
00:41:33,500 --> 00:41:35,800
little company and try to move 
on to something else? 

804
00:41:36,000 --> 00:41:38,700
Or do you want to show you 
invent something new with what 

805
00:41:38,700 --> 00:41:41,800
we have as a company as a base 
and what I've sent name is 

806
00:41:41,800 --> 00:41:44,700
Ursula. 
In order to keep it interesting,

807
00:41:44,700 --> 00:41:49,300
while you cogitate and 
brainstorm ideas, every penny of

808
00:41:49,300 --> 00:41:52,500
extra cash. 
You generate, why don't you keep

809
00:41:52,500 --> 00:41:55,200
80% of it? 
Just pay yourself really nicely 

810
00:41:55,600 --> 00:41:57,900
and set it and 20% of it back to
the investors. 

811
00:41:58,300 --> 00:42:00,300
That's not the deal we have. 
In fact, the deal we have here 

812
00:42:00,300 --> 00:42:02,600
of preferred stock and turned 
Theory, the first four million 

813
00:42:02,600 --> 00:42:04,600
dollars as to all come back to 
the Avengers. 

814
00:42:05,300 --> 00:42:07,900
Let's not lie. 
I mean we can insist on that. 

815
00:42:08,500 --> 00:42:10,900
Let us say that's really short 
sighted and it's not very 

816
00:42:10,900 --> 00:42:13,400
partner. 
Like and so I would rather use 

817
00:42:13,400 --> 00:42:14,500
them. 
They just say we don't care 

818
00:42:14,500 --> 00:42:16,200
about the company more. 
We're going to do something 

819
00:42:16,200 --> 00:42:17,400
else. 
Yeah, exactly. 

820
00:42:17,400 --> 00:42:21,000
And by there's bitterness and 
they spent years of their life 

821
00:42:21,000 --> 00:42:22,400
honestly, yes, we lost the 
money. 

822
00:42:22,400 --> 00:42:24,100
That's a bummer. 
But they lost time. 

823
00:42:24,100 --> 00:42:25,200
Maybe that's an even bigger 
bomb. 

824
00:42:25,200 --> 00:42:28,900
And so you have to acknowledge 
everyone's position, you're all 

825
00:42:28,900 --> 00:42:30,300
business partner. 
See, I have to acknowledge 

826
00:42:30,500 --> 00:42:33,000
what's good day for everybody. 
Our employees, the ones getting 

827
00:42:33,000 --> 00:42:35,300
screwed in these deals or I 
mean, there's just like an 

828
00:42:35,300 --> 00:42:38,000
inherent there to the one, not 
at the table when these things 

829
00:42:38,000 --> 00:42:41,500
are being reset right? 
Or how do you think employees 

830
00:42:41,500 --> 00:42:44,900
should I don't know what's good 
news when they hear their 

831
00:42:44,900 --> 00:42:48,100
founder sort of announced some 
changes and what's bad news or 

832
00:42:48,100 --> 00:42:50,300
what do you think about the 
employee position here? 

833
00:42:51,000 --> 00:42:52,600
Look, it's really across the 
board. 

834
00:42:52,600 --> 00:42:55,700
Some Founders and leaders are 
great about taking care of their

835
00:42:55,700 --> 00:42:59,200
teams and some are less great. 
An example I was just 

836
00:42:59,200 --> 00:43:01,600
describing. 
There were 32 people who had 

837
00:43:01,600 --> 00:43:03,900
been recruited to the company 
who are working really hard. 

838
00:43:04,100 --> 00:43:07,600
There are all these six now and 
so 26 of them, no longer have a 

839
00:43:07,607 --> 00:43:12,300
job or they're working somewhere
else where they screw and I 

840
00:43:12,308 --> 00:43:13,400
don't know. 
What does that mean? 

841
00:43:13,400 --> 00:43:17,400
Like they worked hard, they were
paid Market rates and then the 

842
00:43:17,400 --> 00:43:20,100
job ended, that's a bummer. 
Like nobody likes to be in that 

843
00:43:20,100 --> 00:43:23,800
position but that's the nature 
aged entrepreneurial startups. 

844
00:43:23,800 --> 00:43:27,800
Like I don't always work, we 
hoped, but no one stole from 

845
00:43:27,800 --> 00:43:29,200
now. 
No one took anything away, 

846
00:43:29,200 --> 00:43:31,200
right? 
It just didn't work out like if 

847
00:43:31,200 --> 00:43:36,400
that's always a potential 
outcome and and argue Luck plays

848
00:43:36,400 --> 00:43:39,800
quite a bit of character and 
maybe those boys got unlucky. 

849
00:43:40,100 --> 00:43:44,100
Just like the employee happen, 
to joined Shopify, and you guys 

850
00:43:44,100 --> 00:43:47,200
intend as opposed to joining, 
you know, some other random 

851
00:43:47,200 --> 00:43:50,600
company got really lucky hmmm 
and I'm sure they contribute it 

852
00:43:51,000 --> 00:43:53,200
important things that company. 
But like, you know, all of a 

853
00:43:53,200 --> 00:43:55,400
sudden, they're making millions 
and millions diuretic. 

854
00:43:55,400 --> 00:43:57,100
Do they deserve? 
Yeah, I don't know. 

855
00:43:58,300 --> 00:44:01,200
So, look worked with words. 
But yeah, that but I'm not, I'm 

856
00:44:01,200 --> 00:44:03,700
not anyway, anti layoff or 
anything like that. 

857
00:44:03,700 --> 00:44:05,300
I'm just asking when they're 
these. 

858
00:44:05,400 --> 00:44:08,700
Relations where it's like, okay 
employees got their shares under

859
00:44:08,700 --> 00:44:11,500
an old regime and now there's 
like a new regime. 

860
00:44:11,700 --> 00:44:14,500
It's clear the negotiation sort 
of happening without them, for 

861
00:44:14,500 --> 00:44:16,700
sure. 
And then but it's much like a 

862
00:44:16,700 --> 00:44:19,800
Founder will negotiate an 
ambassador with the Venture 

863
00:44:19,800 --> 00:44:23,000
capitalists. 
Once that is done then the 

864
00:44:23,000 --> 00:44:25,500
founder has to decide. 
Okay, how do I want to apply 

865
00:44:25,500 --> 00:44:27,900
this to all my team? 
And some Founders are really 

866
00:44:27,900 --> 00:44:31,400
generous and issue. 
Lots of equity and bonuses, and 

867
00:44:31,400 --> 00:44:34,200
so forth to team, particularly 
when there's great performance 

868
00:44:34,400 --> 00:44:36,500
and others are a little bit, 
Tighter about it but they're 

869
00:44:36,500 --> 00:44:38,600
building a culture and every 
country has a different culture.

870
00:44:38,900 --> 00:44:41,300
Some company called Jews. 
Are you get nothing until you 

871
00:44:41,300 --> 00:44:43,100
are in it. 
Other company cultures are you 

872
00:44:43,100 --> 00:44:45,800
going to lat until you prove 
that you don't deserve it and 

873
00:44:45,800 --> 00:44:48,100
everything in between. 
And so in this instance, if this

874
00:44:48,100 --> 00:44:50,600
coming Swardson have to start to
grow, its revenues and start to 

875
00:44:50,600 --> 00:44:52,700
generate your profits founder 
could family. 

876
00:44:52,700 --> 00:44:55,500
Keep it all for myself or he 
could say, I'm going to share 

877
00:44:55,500 --> 00:44:57,700
with my team, my guess, knowing 
this one is going to show you 

878
00:44:57,700 --> 00:44:59,900
the seem right. 
And so I'm not going to I can't 

879
00:44:59,900 --> 00:45:01,900
negotiate with all six people. 
It's his company. 

880
00:45:01,900 --> 00:45:04,400
I like company but we'll set up 
a structure together and then 

881
00:45:04,400 --> 00:45:08,500
history had a role Or probably 
part of what happened in 2021, 

882
00:45:09,200 --> 00:45:13,100
you know, we saw the entrance of
like hedge funds, private Equity

883
00:45:13,100 --> 00:45:18,100
Funds, VC funds, do you think 
like the incentives of hedge 

884
00:45:18,100 --> 00:45:22,300
fund compensation and just some 
of how these managers made money

885
00:45:22,300 --> 00:45:28,100
outside of just like maximizing 
returns for the, LPS was a major

886
00:45:28,100 --> 00:45:31,900
contributor of the environment. 
We saw in 2021, I think. 

887
00:45:31,900 --> 00:45:34,400
Are you asking those are really 
bad behavior by investors to 

888
00:45:34,400 --> 00:45:36,000
help themselves to these? 
Spence of others. 

889
00:45:36,000 --> 00:45:40,100
Just like if I'm a hedge fund 
and I get paid on some of my 

890
00:45:40,100 --> 00:45:42,500
investments based on the 
performance in a year. 

891
00:45:42,500 --> 00:45:46,700
I have a strong incentive just 
to Mark things up and go wild in

892
00:45:46,700 --> 00:45:50,400
a year and make some returns. 
That's not the Venture model but

893
00:45:50,400 --> 00:45:55,300
there's also a I don't I'm just 
trying to maybe it's too big of 

894
00:45:55,300 --> 00:46:00,300
a question but the disconnect 
between how like investors are 

895
00:46:00,300 --> 00:46:05,200
compensated versus how funds 
flow to their LPS. 

896
00:46:05,400 --> 00:46:09,200
Like, do you think there have 
been any like poorly set up 

897
00:46:09,600 --> 00:46:13,000
compensation structures? 
That incentivize sort of 

898
00:46:13,000 --> 00:46:16,900
irrational, Behavior humans are 
remarkably creative and 

899
00:46:16,900 --> 00:46:18,900
inventive and it comes to their 
own compensation. 

900
00:46:18,900 --> 00:46:22,700
I've learned that and I think 
the holds back phenomenon had 

901
00:46:22,700 --> 00:46:24,900
some really interesting 
combination Dynamics to it where

902
00:46:24,900 --> 00:46:29,000
I suspect sponsor would get a 
significant chunk of the 

903
00:46:29,000 --> 00:46:32,000
combined company, they make even
more money, if the company 

904
00:46:32,000 --> 00:46:35,200
traded above the dese packing 
price, but even the Tres Beau, 

905
00:46:35,300 --> 00:46:38,200
Hello, they still walk away with
a good chunk of the company and 

906
00:46:38,200 --> 00:46:41,000
so there's no profit generated 
and yet the spectrometer makes 

907
00:46:41,000 --> 00:46:43,100
much money. 
That's, that's not well aligned 

908
00:46:43,100 --> 00:46:46,700
incentives, and I think it's no 
surprise that as more and more. 

909
00:46:47,400 --> 00:46:50,100
These stock companies have 
fallen below, their stock prices

910
00:46:50,400 --> 00:46:52,700
were seeing the stock market 
drives up entirely big. 

911
00:46:52,700 --> 00:46:55,400
All right, now is not great 
alignment here, let's not, let's

912
00:46:55,400 --> 00:46:57,800
not do it. 
In terms of people investing in 

913
00:46:57,900 --> 00:47:01,400
tech companies that are in the 
broader bencher Tech ecosystem. 

914
00:47:01,800 --> 00:47:04,800
I haven't seen much of that. 
I think most of the firm's that 

915
00:47:04,800 --> 00:47:07,900
were In any meaningful amounts 
of private capital and private 

916
00:47:07,900 --> 00:47:10,200
companies had separate private 
funds. 

917
00:47:10,200 --> 00:47:12,000
That worked exactly the way 
better Fun Works. 

918
00:47:12,000 --> 00:47:14,300
And look, I, I joke with my wife
from time to time. 

919
00:47:14,308 --> 00:47:18,100
She also works in business, but 
not in the investing world and 

920
00:47:18,100 --> 00:47:21,000
she has a family of academics, 
and so I get it working to make 

921
00:47:21,000 --> 00:47:24,000
money is somewhat some 
unappealing or distasteful. 

922
00:47:24,000 --> 00:47:28,300
But as I joke with early venture
capital is the noblest of the 

923
00:47:28,300 --> 00:47:31,900
finance professions because you 
can't really make any money as a

924
00:47:31,908 --> 00:47:34,000
venture capitalist. 
Unless you're part of creating 

925
00:47:34,000 --> 00:47:35,700
something that creates value in 
the World's. 

926
00:47:35,700 --> 00:47:37,900
Right? 
Because we generally get paid 

927
00:47:38,200 --> 00:47:42,400
when the investments in which 
determines, which we've invested

928
00:47:42,700 --> 00:47:46,800
become worth more. 
And then we return profits of 

929
00:47:46,800 --> 00:47:50,200
those companies back to our LPS 
and we keep a piece of it. 

930
00:47:50,800 --> 00:47:53,200
And so there's there's really 
good alignment between us now 

931
00:47:53,200 --> 00:47:56,300
Tanner, we do better as they do 
better and they're really good 

932
00:47:56,300 --> 00:47:58,100
on. 
But, you know, self is and 

933
00:47:58,100 --> 00:48:01,400
whereas in most other investing 
businesses, you can trade, you 

934
00:48:01,400 --> 00:48:04,700
can buy something when it's 
cheap and sell it when it's high

935
00:48:04,700 --> 00:48:06,700
or sell it. 
Designed by ownership and your 

936
00:48:06,700 --> 00:48:09,700
nest security, any value Europe,
making smart raids and there's 

937
00:48:09,700 --> 00:48:12,000
not a lot of that that happens 
in Venture Capital. 

938
00:48:12,300 --> 00:48:14,500
Yeah, so it's a noble 
assertiveness hangers. 

939
00:48:14,800 --> 00:48:17,300
I mean, I think a lot of the 
companies you mentioned our are 

940
00:48:17,300 --> 00:48:20,800
safe but there are lots of 
cyclical plays and Venture where

941
00:48:20,800 --> 00:48:25,300
people do make a ton of money 
career-making exits on companies

942
00:48:25,300 --> 00:48:27,100
that don't sustain, I don't want
to. 

943
00:48:27,800 --> 00:48:30,300
Yeah, it happens. 
It look at it happened even more

944
00:48:30,300 --> 00:48:31,900
over the past several years, 
right? 

945
00:48:31,900 --> 00:48:33,700
With all these crypto 
currencies, like the number of 

946
00:48:33,700 --> 00:48:37,800
people who made lots of money, 
Buying a new cryptocurrency at, 

947
00:48:37,800 --> 00:48:41,100
you know, for a penny and red 
spiked up to something huge. 

948
00:48:41,100 --> 00:48:44,400
It was never used in any 
material way in any application 

949
00:48:44,600 --> 00:48:47,200
and then it fell wildly back 
down to earth like that's and 

950
00:48:47,200 --> 00:48:49,100
trying to that was a little bit.
What happened in the internet 

951
00:48:49,100 --> 00:48:50,900
bubble? 
All these companies went public 

952
00:48:50,900 --> 00:48:54,600
with big values, until they 
weren't worth anything. 

953
00:48:54,600 --> 00:48:59,700
And so yes, it's not, it's not 
perfect, but it's generally hard

954
00:48:59,700 --> 00:49:03,000
to do really well financially 
unless you create something of 

955
00:49:03,000 --> 00:49:06,700
value that is durable. 
Not impossible, but it's hard. 

956
00:49:07,400 --> 00:49:11,200
I wanted to shift gears a little
to some of the themes that 

957
00:49:11,200 --> 00:49:15,600
you've been a big investor and I
mean like consumer and Market 

958
00:49:15,600 --> 00:49:19,700
places, particularly and just 
take stock of where they've been

959
00:49:19,700 --> 00:49:23,600
and you're, like level of 
optimism about finding new bets 

960
00:49:23,600 --> 00:49:28,200
in those areas and they're very,
very poorly defined categories 

961
00:49:28,200 --> 00:49:31,400
and maybe yeah, but I mean, I 
don't know, let's actually start

962
00:49:31,400 --> 00:49:34,800
with marketplaces. 
Like, what's your scorecard on 

963
00:49:34,800 --> 00:49:38,600
the Success of marketplaces, are
you still bullish on like 

964
00:49:38,600 --> 00:49:42,300
chasing Marketplace businesses? 
And I think the underlying 

965
00:49:42,300 --> 00:49:46,500
question is just like are there 
that many great Marketplace 

966
00:49:46,500 --> 00:49:50,700
outcomes to justify how much of 
a category of pursuit. 

967
00:49:50,700 --> 00:49:53,400
It is been for the Venture 
Capital industry. 

968
00:49:54,300 --> 00:49:56,800
Yes and yes. 
And so I remain very exciting 

969
00:49:56,800 --> 00:50:00,100
and I think there have been tons
of successful companies and I 

970
00:50:00,107 --> 00:50:02,400
think there's tons of 
opportunities still for growth. 

971
00:50:03,000 --> 00:50:06,400
I think it's not as easy. 
There's more Petition and the 

972
00:50:06,600 --> 00:50:10,000
remaining categories are 
smaller, but many of our best 

973
00:50:10,000 --> 00:50:13,200
investments, historically have 
been marketplaces and I think 

974
00:50:13,200 --> 00:50:16,900
that will continue for some time
and we have some great and 

975
00:50:16,900 --> 00:50:18,500
sizable Market places in our 
portfolio. 

976
00:50:18,500 --> 00:50:22,300
Today on StubHub was the example
and that's going to existed for 

977
00:50:22,400 --> 00:50:24,800
the better part of 20 years. 
Now, we sell flake. 

978
00:50:24,800 --> 00:50:28,100
There's fantastic opportunities 
for it to continue to grow and 

979
00:50:28,100 --> 00:50:30,500
expand into adjacent another 
areas. 

980
00:50:31,000 --> 00:50:35,200
The challenge though, is how do 
you one get something going? 

981
00:50:35,300 --> 00:50:38,100
From scratch, there's the 
classic chicken and egg problem,

982
00:50:38,500 --> 00:50:41,400
and you need to really creative 
and innovative ways of 

983
00:50:41,400 --> 00:50:45,600
circumventing that challenge. 
And then to particularly outside

984
00:50:45,600 --> 00:50:47,600
of China, which is where I focus
my investing. 

985
00:50:48,000 --> 00:50:51,300
There are small number of 
companies that really control 

986
00:50:51,300 --> 00:50:54,400
the consumer internet, both on 
your desktop and on your phone 

987
00:50:54,900 --> 00:51:01,100
and you start almost everything 
you do at Google Facebook, apple

988
00:51:01,100 --> 00:51:04,500
or Amazon and their massive 
companies with enormous 

989
00:51:04,500 --> 00:51:07,800
resources. 
And huge lovers of control and 

990
00:51:07,800 --> 00:51:10,700
it's very hard to get something 
in front of a consumer with 

991
00:51:10,800 --> 00:51:13,300
going through one of those 
companies, right? 

992
00:51:13,400 --> 00:51:16,000
And in the earlier days of the 
internet, they would let you get

993
00:51:16,000 --> 00:51:20,000
access to your their consumers 
sugar-free and as they've gotten

994
00:51:20,000 --> 00:51:24,600
more sophisticated, and what 
I'll call less evil or more 

995
00:51:24,600 --> 00:51:29,000
evil, they have been based, they
stuck their hand out of put up 

996
00:51:29,000 --> 00:51:31,900
more toll booths, which make it 
harder for you to get to get his

997
00:51:31,900 --> 00:51:34,400
room without paying. 
And so I can classic example, is

998
00:51:34,400 --> 00:51:37,000
in the early. 
Days, you could generate lots of

999
00:51:37,000 --> 00:51:40,300
free traffic from Google. 
And now in order to find a free 

1000
00:51:40,300 --> 00:51:43,700
link on Google, you got a scroll
way down past the fold to find 

1001
00:51:43,700 --> 00:51:44,700
the free links. 
Right? 

1002
00:51:44,700 --> 00:51:47,300
All the ones at the top, 
someone's paying for that wasn't

1003
00:51:47,300 --> 00:51:50,700
the case and the rest of your 
go-to just like Google gives you

1004
00:51:50,700 --> 00:51:52,500
the answer and you don't even 
have to leave Google. 

1005
00:51:52,500 --> 00:51:55,900
Yeah, even worse they push all 
the results back and they favor 

1006
00:51:55,900 --> 00:51:59,200
their own services or the his of
Apple you know in the beginning 

1007
00:51:59,400 --> 00:52:02,200
you'd find lots of stuff in the 
App Store. 

1008
00:52:02,200 --> 00:52:04,700
Now a lot of the App Store 
placement is paid. 

1009
00:52:05,300 --> 00:52:06,900
So, he won't admit there's a way
for us to make more money. 

1010
00:52:06,900 --> 00:52:09,600
So and they've all done this 
more and more and more Chi their

1011
00:52:09,600 --> 00:52:12,300
market caps and their own 
Revenue growth, and so it's just

1012
00:52:12,300 --> 00:52:14,600
harder. 
And so in fact, there's a good 

1013
00:52:14,600 --> 00:52:18,000
write-up about the forget. 
It's called temu, they're 

1014
00:52:18,000 --> 00:52:20,300
spending a ton on advertise 
right there, sort of running The

1015
00:52:20,300 --> 00:52:23,800
Tick-Tock playbook for Tick-Tock
spent billions and advertising 

1016
00:52:23,800 --> 00:52:26,700
to just force their way into the
consumer. 

1017
00:52:26,900 --> 00:52:29,300
If you think of the great 
internet companies that emerged 

1018
00:52:29,300 --> 00:52:33,200
up until 2015, none of them 
spent money on marketing. 

1019
00:52:33,700 --> 00:52:35,800
None of them they built. 
Massive you Your base to have 

1020
00:52:35,800 --> 00:52:36,600
doing it. 
Yeah. 

1021
00:52:37,500 --> 00:52:40,200
Companies like LinkedIn 
TripAdvisor, and Yelp and 

1022
00:52:40,200 --> 00:52:45,100
Facebook, and YouTube and so 
forth, Snapchat Pinterest, but 

1023
00:52:45,100 --> 00:52:48,800
since around you guys and 15 as 
the, what I call the oligopolist

1024
00:52:49,100 --> 00:52:52,300
started to get more aggressive 
about monetizing, everything and

1025
00:52:52,300 --> 00:52:55,700
limits redistribution. 
The only way that you could 

1026
00:52:55,700 --> 00:52:58,400
reliably get in trying to 
passive consumers is to buy your

1027
00:52:58,400 --> 00:53:00,300
way. 
And the problem with buying your

1028
00:53:00,300 --> 00:53:05,100
way is that often times you have
to pay the toll collectors say 

1029
00:53:05,300 --> 00:53:08,800
Two dollars to your consumer 
that you could only monetize to 

1030
00:53:08,800 --> 00:53:12,200
the junos 2005 sense, right? 
Worse. 

1031
00:53:12,200 --> 00:53:15,300
A dollar fifty and if you're 
only getting backed a little bit

1032
00:53:15,300 --> 00:53:18,200
more than you paid or even worse
less than you paid, you just 

1033
00:53:18,200 --> 00:53:20,200
can't sustain. 
And of course, the complicating 

1034
00:53:20,200 --> 00:53:23,700
factor is startups are telling a
story about their lifetime value

1035
00:53:23,700 --> 00:53:26,300
that they haven't validated yet.
So there's also just the mystery

1036
00:53:26,300 --> 00:53:29,500
of what the actual lifetime 
value is, and how much investors

1037
00:53:29,500 --> 00:53:32,600
are going to trust them in that 
bull market, environment that we

1038
00:53:32,600 --> 00:53:35,800
just experienced exactly. 
And during the Daisy Market. 

1039
00:53:35,800 --> 00:53:39,300
People said, yeah, sure. 
Now is everyone's done a bit 

1040
00:53:39,300 --> 00:53:40,600
more consideration for their 
cash. 

1041
00:53:41,000 --> 00:53:44,000
You're saying, wait a minute, 
but even if you believe it, if 

1042
00:53:44,000 --> 00:53:46,900
the way you get to, if you spend
$2 see, a consumer that 

1043
00:53:46,900 --> 00:53:48,700
generates six dollars in 
lifetime value. 

1044
00:53:48,700 --> 00:53:51,700
The way you get there is, you 
spend that you dollars today. 

1045
00:53:52,200 --> 00:53:55,300
Over the course of the next 
year, you get the two dollars 

1046
00:53:55,300 --> 00:53:57,100
back. 
And in the next year, you get 

1047
00:53:57,100 --> 00:54:00,800
another two dollars next year. 
Another $2 you do in fact have a

1048
00:54:00,800 --> 00:54:05,900
positive Unity comic equation 
but to get 100 million 

1049
00:54:05,900 --> 00:54:09,800
consumers, you got to spend two 
hundred billion dollars and you 

1050
00:54:09,800 --> 00:54:12,700
want actually even get that 
money back for a whole year. 

1051
00:54:13,100 --> 00:54:15,300
And in the meantime you have all
your employees and your 

1052
00:54:15,300 --> 00:54:17,000
internship knows other costs 
that you're spending. 

1053
00:54:17,000 --> 00:54:20,600
So to get to scale requires 
enormous amounts of money. 

1054
00:54:20,900 --> 00:54:24,600
None of the companies I 
mentioned Pinterest LinkedIn 

1055
00:54:24,600 --> 00:54:29,300
Yelp, they all built real user 
bases with less than 10 million 

1056
00:54:29,300 --> 00:54:32,300
dollars. 
And so the costs to go after 

1057
00:54:32,300 --> 00:54:35,900
large, consumers has gone up by 
12 Erza by G. 

1058
00:54:36,200 --> 00:54:40,400
And so far, there are two 
examples of really cash-rich. 

1059
00:54:40,600 --> 00:54:43,400
Chinese companies, not startups,
there are large, Chinese 

1060
00:54:43,400 --> 00:54:46,400
companies have said, oh, we see 
the game, this is amazing is 

1061
00:54:46,400 --> 00:54:48,300
great, trust is starts, can't do
it. 

1062
00:54:48,600 --> 00:54:51,300
These came instead of go and do 
what I saw Tick-Tock spending 

1063
00:54:52,000 --> 00:54:55,000
$60 to acquire a user. 
I thought they're off their 

1064
00:54:55,000 --> 00:54:58,100
rocker on righty but in 
hindsight he's brilliant and 

1065
00:54:58,100 --> 00:54:59,300
they built the massive user 
visiting. 

1066
00:54:59,300 --> 00:55:03,400
You got a 4.6 billion dollar 
fund advertising is cheaper than

1067
00:55:03,400 --> 00:55:05,100
ever. 
This would be true. 

1068
00:55:05,200 --> 00:55:08,000
Kareem is Amar, you should 
consumer investors, come to you 

1069
00:55:08,000 --> 00:55:10,900
and say, hey, I have a plan to 
blow five hundred million 

1070
00:55:10,900 --> 00:55:13,200
dollars. 
And at that point, I will be a 

1071
00:55:13,200 --> 00:55:15,900
legit consumers, start up, or is
this A playbook? 

1072
00:55:15,900 --> 00:55:17,700
You're willing to run with your 
own money? 

1073
00:55:18,100 --> 00:55:19,600
I'm not sure I'm comfortable 
with that. 

1074
00:55:19,600 --> 00:55:22,200
Just yet, that would take, you 
know, risk gods in part. 

1075
00:55:22,200 --> 00:55:25,700
Because even spending a lot of 
money, that chances aren't that 

1076
00:55:25,700 --> 00:55:29,800
great, right? 
And so, I had soft to chip both 

1077
00:55:31,100 --> 00:55:33,500
within Jojo. 
And, and by dance, or doing it 

1078
00:55:33,500 --> 00:55:37,500
in the u.s. from is Courageous 
and like there once or two may 

1079
00:55:37,500 --> 00:55:40,800
be heading two two for two and 
so maybe that Playbook become 

1080
00:55:40,800 --> 00:55:45,400
more mature, but I'm obsessed 
with our Founders who are way 

1081
00:55:45,400 --> 00:55:48,400
more creative than that. 
It doesn't take a great tivity 

1082
00:55:48,400 --> 00:55:52,100
to spend a billion dollars. 
It takes good execution, and a 

1083
00:55:52,107 --> 00:55:55,200
big piggy bank but not that much
inventiveness. 

1084
00:55:55,600 --> 00:55:57,600
And when I'm much more 
interested in is the inventive 

1085
00:55:57,600 --> 00:56:02,400
founder, who says, despite the 
fact that is a small number of 

1086
00:56:02,400 --> 00:56:05,000
really large internet companies,
that incredible control over it.

1087
00:56:05,200 --> 00:56:07,700
Vision. 
I'm going to find a way to get 

1088
00:56:07,700 --> 00:56:10,300
my product to Consumers and they
obsess about it. 

1089
00:56:10,400 --> 00:56:12,900
They don't just obsess about the
product itself but also how 

1090
00:56:12,900 --> 00:56:14,200
they're going to get it to 
Consumers. 

1091
00:56:14,800 --> 00:56:18,900
And, you know, my my favorite 
kind of modern era example, is 

1092
00:56:18,900 --> 00:56:22,900
Discord and we're really proud 
to be very small advisors and 

1093
00:56:22,900 --> 00:56:24,600
just great. 
I wish we were more significant 

1094
00:56:24,600 --> 00:56:29,000
investors and Discord Jason and 
cheap bills such a compelling 

1095
00:56:29,000 --> 00:56:34,200
service or utility that they got
influencers makers. 

1096
00:56:34,200 --> 00:56:38,200
Streamers He's called them super
humans, should embrace the 

1097
00:56:38,200 --> 00:56:41,000
service and use it to 
communicate with their fans and 

1098
00:56:41,000 --> 00:56:44,600
followers to the point where 
Discord has never spent any 

1099
00:56:44,600 --> 00:56:47,000
material money on marketing and 
hands, hundreds of millions of 

1100
00:56:47,000 --> 00:56:49,500
users. 
And so, while it's much harder 

1101
00:56:50,000 --> 00:56:53,000
to do that and if to be more 
creative and inventive today, 

1102
00:56:53,000 --> 00:56:56,800
and you did in 2005 to build 
massive distribution, it is 

1103
00:56:56,800 --> 00:56:58,900
still possible. 
And those are the kinds of 

1104
00:56:58,900 --> 00:57:00,400
companies. 
I'm obsessed with anyone. 

1105
00:57:00,400 --> 00:57:02,400
Who's doing anything like that. 
You please call me. 

1106
00:57:02,600 --> 00:57:05,000
Do you have any takes on the, 
the gas acquisition? 

1107
00:57:05,200 --> 00:57:09,200
You know, I feel free if not but
Discord, you know, just bought, 

1108
00:57:09,200 --> 00:57:14,100
you know, a very rocket ship. 
You know, Zeitgeist e lightning 

1109
00:57:14,100 --> 00:57:17,400
in a bottle teen app that I 
don't know questionable how long

1110
00:57:17,400 --> 00:57:20,000
it'll sustain Nikita, the 
founder, you know, sold a 

1111
00:57:20,008 --> 00:57:23,600
similar company to Facebook. 
I don't just just an interesting

1112
00:57:23,600 --> 00:57:26,700
model, I guess of a Founder who 
is like, okay I can achieve 

1113
00:57:26,700 --> 00:57:31,400
virality and then I'll just like
dive into the big consumer 

1114
00:57:31,400 --> 00:57:33,700
company the day or any 
observations. 

1115
00:57:34,000 --> 00:57:35,000
Yeah. 
Well they look the story. 

1116
00:57:35,100 --> 00:57:38,300
He is not yet rigging, but I 
think it's really smart a 

1117
00:57:38,300 --> 00:57:41,900
Discord because as you put it, 
capturing lightning in a bottle 

1118
00:57:41,900 --> 00:57:45,200
is very hard to do. 
And it happens very infrequently

1119
00:57:45,200 --> 00:57:49,300
and when you see that happening,
it's much smarter to buy it. 

1120
00:57:49,300 --> 00:57:52,300
And co-opt the wildly, inventive
and creative founder than it is 

1121
00:57:52,300 --> 00:57:54,800
to try to bring yourself. 
And I think that's what Discord 

1122
00:57:54,800 --> 00:57:58,200
is saying, like by their just, 
where did it itself create a 

1123
00:57:58,207 --> 00:58:01,300
lighting about for its own app 
and everyone is costly trying to

1124
00:58:01,300 --> 00:58:03,100
recreate that of create more of 
it. 

1125
00:58:03,500 --> 00:58:06,300
And now they're saying, but 
let's try We can leverage some 

1126
00:58:06,300 --> 00:58:09,400
of the power of what, as we 
create a gas that Discord, I'm 

1127
00:58:09,400 --> 00:58:11,700
not sure what the plans are, or 
how it's going to work, but it's

1128
00:58:11,700 --> 00:58:15,100
exciting, the average. 
And I'm saying, average, and 

1129
00:58:15,200 --> 00:58:22,700
median VC did better since 2008 
if they were in sort of SAS 

1130
00:58:22,700 --> 00:58:24,900
Enterprise World versus consumer
world. 

1131
00:58:25,200 --> 00:58:28,000
Do you agree with that? 
I think the hit rate is much 

1132
00:58:28,000 --> 00:58:31,100
higher. 
So the adage is the most giant 

1133
00:58:31,100 --> 00:58:34,400
outcomes come from consumer 
companies and that's no 

1134
00:58:34,400 --> 00:58:37,400
surprise. 
You know, but three of the four 

1135
00:58:37,800 --> 00:58:40,900
trillion dollar companies. 
So that's Apple Google 

1136
00:58:41,800 --> 00:58:44,400
Microsoft, and who am I 
forgetting? 

1137
00:58:44,400 --> 00:58:46,900
Amazon Amazon? 
Thank you through the for our 

1138
00:58:46,900 --> 00:58:50,800
consumer companies and one of 
them is a little bit more 

1139
00:58:50,800 --> 00:58:52,700
Enterprise but also consumer 
that, of course, being 

1140
00:58:52,700 --> 00:58:54,200
Microsoft. 
So, if you want to go for 

1141
00:58:54,200 --> 00:58:57,200
trillion dollars, you gotta go 
for a consumer company, but the 

1142
00:58:57,200 --> 00:59:01,600
number of really high-quality 
Cloud software businesses, 

1143
00:59:02,000 --> 00:59:04,700
outstrips the number of 
impressive consumer companies, 

1144
00:59:04,800 --> 00:59:09,300
but At least a healthy multiple.
And so if you're going for in 

1145
00:59:09,300 --> 00:59:11,700
baseball terms, you're going to 
church or slugging percentage, 

1146
00:59:11,700 --> 00:59:13,700
you go for Consumer companies. 
If you're going for batting 

1147
00:59:13,700 --> 00:59:15,800
average, you go for software 
companies. 

1148
00:59:15,800 --> 00:59:17,700
Yeah. 
Safer way to make a bunch of 

1149
00:59:17,700 --> 00:59:20,100
money, a bed in bed on SAS 
companies. 

1150
00:59:20,500 --> 00:59:23,500
The generative a, I like the 
buzz you things of the moment, 

1151
00:59:23,500 --> 00:59:24,800
like, what are you looking at 
it? 

1152
00:59:24,800 --> 00:59:27,900
The moment are you optimistic 
personally about generative Ai? 

1153
00:59:27,900 --> 00:59:30,900
And what are the things that in 
2023? 

1154
00:59:30,900 --> 00:59:34,100
You think you'll be looking at, 
I know you like to keep you like

1155
00:59:34,100 --> 00:59:36,400
to keep some, you got mad. 
To me because I think I skipped 

1156
00:59:36,400 --> 00:59:38,600
one of your Investments. 
You added me. 

1157
00:59:39,100 --> 00:59:41,800
Yeah, that was cambly other. 
There are doing great. 

1158
00:59:41,800 --> 00:59:44,500
So now you can talk about it as 
much as you want, but yeah, I 

1159
00:59:44,508 --> 00:59:47,200
liked it, I liked to see young 
companies, get your certain 

1160
00:59:47,200 --> 00:59:50,200
scale where they can handle the 
attention, the competitive 

1161
00:59:50,200 --> 00:59:52,100
pressures. 
And at a really small stage is 

1162
00:59:52,100 --> 00:59:54,400
no reason to embrace those 
things until you have to. 

1163
00:59:54,900 --> 00:59:58,000
So, the short answer to your 
question is I got so we as you 

1164
00:59:58,008 --> 01:00:00,900
might imagine in the in the 
Venture business we get to see 

1165
01:00:01,200 --> 01:00:04,900
lots and lots of product demos 
and in fact we get some somehow 

1166
01:00:05,100 --> 01:00:08,900
Almost done namjoo product demos
because we were previously get 

1167
01:00:08,900 --> 01:00:12,300
to see them all the time and 
it's really rare that we see a 

1168
01:00:12,300 --> 01:00:14,800
product demo or that I've seen 
your product demo in 20 plus 

1169
01:00:14,800 --> 01:00:18,300
years, doing this for my jaw, 
literally hits the table and 

1170
01:00:18,300 --> 01:00:22,100
when we had the Jasper team come
present to us my jaw. 

1171
01:00:22,100 --> 01:00:25,500
Literally at the table in part 
because I was so impressed by 

1172
01:00:25,500 --> 01:00:28,700
what they built. 
But also I was like an oh shit. 

1173
01:00:28,700 --> 01:00:31,700
Moment like the machines are 
coming to our me too. 

1174
01:00:31,700 --> 01:00:33,300
Right. 
So for a while, I thought like 

1175
01:00:33,300 --> 01:00:35,700
I'm pretty safe. 
I have a Sophisticated 

1176
01:00:35,700 --> 01:00:39,700
complicated job that requires 
high-level thinking it's the 

1177
01:00:39,700 --> 01:00:42,600
folks who are driving a car for 
a living that need to be 

1178
01:00:42,600 --> 01:00:44,000
worried. 
Because like we're going to 

1179
01:00:44,008 --> 01:00:46,200
driverless cars and like the 
machines are coming from now. 

1180
01:00:46,200 --> 01:00:50,000
But I'm relatively safe and then
I saw Jasper and I said oh my 

1181
01:00:50,300 --> 01:00:53,100
none of us is safe. 
There's a text generator, right?

1182
01:00:53,100 --> 01:00:56,100
Chad gbt competitor? 
Yeah, so the founders came in 

1183
01:00:56,100 --> 01:00:59,100
and they basically said, what do
you want Jasper to write about 

1184
01:00:59,100 --> 01:01:01,400
and I can't remember who said 
it, but I think someone said 

1185
01:01:01,800 --> 01:01:06,600
write an essay about why Hilton 
And is a good place to go on 

1186
01:01:06,600 --> 01:01:09,300
vacation if you like golf, huh? 
Like okay. 

1187
01:01:09,300 --> 01:01:12,300
That's kind of and they 
literally type that into Jasper.

1188
01:01:12,800 --> 01:01:19,000
And within a moment, Jasper spit
back that back the past, that's 

1189
01:01:19,000 --> 01:01:24,700
a spit and Jasper produced, 
eight paragraph essay, and we 

1190
01:01:24,700 --> 01:01:29,000
all proceeded to read it and I, 
my reaction was like, holy cow. 

1191
01:01:29,600 --> 01:01:32,400
I can write that and I could 
probably even write something 

1192
01:01:32,400 --> 01:01:34,900
that's better than that, but not
by much. 

1193
01:01:35,000 --> 01:01:37,600
Much and it would take me a few 
hours, right? 

1194
01:01:37,700 --> 01:01:40,000
And that's when I realized this 
thing is real. 

1195
01:01:40,400 --> 01:01:43,400
And so of course we begin best 
version Jasper and are super 

1196
01:01:43,400 --> 01:01:45,100
excited about it. 
But yeah. 

1197
01:01:45,100 --> 01:01:49,900
So I think the power egg, these 
large language models in 

1198
01:01:49,900 --> 01:01:52,600
generating, artificial 
intelligence that is 

1199
01:01:53,000 --> 01:01:55,700
indistinguishable and perhaps 
even better than human 

1200
01:01:55,700 --> 01:01:58,700
intelligence is Ramekin. 
I thought it would not happen in

1201
01:01:58,700 --> 01:02:01,900
my lifetime, I thought, when I 
heard about open a.i. several 

1202
01:02:01,900 --> 01:02:04,900
years ago, as a non-profit, I 
thought, hey, that's a cute. 

1203
01:02:05,100 --> 01:02:08,200
Experiment and it'll be relevant
to my children perhaps but not 

1204
01:02:08,200 --> 01:02:10,500
me and now I'm realizing no no 
it's here. 

1205
01:02:10,900 --> 01:02:14,300
I'm super excited about that but
you're someone you ate like 

1206
01:02:14,300 --> 01:02:17,400
bullshit and I feel like the 
text generators are very good at

1207
01:02:17,400 --> 01:02:19,400
it, right? 
I mean they, they say with 

1208
01:02:19,400 --> 01:02:21,300
confidence a lot of stuff, you 
know? 

1209
01:02:21,300 --> 01:02:25,800
And if they get maybe 90% of it 
right or do you worry that sort 

1210
01:02:25,800 --> 01:02:28,300
of just the self-driving cars 
have struggled with sort of 

1211
01:02:28,300 --> 01:02:31,800
perfection, the lack of 
perfection on accuracy for text 

1212
01:02:31,800 --> 01:02:34,900
generators will be in sort of a 
barrier to widespread. 

1213
01:02:35,000 --> 01:02:39,600
Widespread adoption in the short
chain for sure but it's a 

1214
01:02:39,600 --> 01:02:42,200
problem be worked on so 
gradually, I believe it will get

1215
01:02:42,200 --> 01:02:46,300
solved until it solves, they're 
a bunch of uses that you can't 

1216
01:02:46,300 --> 01:02:50,100
really take advantage of with 
these Technologies and or it 

1217
01:02:50,100 --> 01:02:53,000
creates purpose for humans. 
And so at a minimum like the 

1218
01:02:53,000 --> 01:02:55,600
human has to be to proofread her
and just because the machine put

1219
01:02:55,600 --> 01:02:57,400
it in the story doesn't mean you
have to leave it there. 

1220
01:02:57,400 --> 01:02:59,700
You got to go fix it and that 
maybe the role of humans and 

1221
01:02:59,700 --> 01:03:01,700
I'll make us wild and more 
productive right. 

1222
01:03:01,700 --> 01:03:04,900
Eventually when they figure out 
how to create ground trees for 

1223
01:03:05,100 --> 01:03:08,300
These large language models, you
will need the humans anymore and

1224
01:03:08,300 --> 01:03:11,200
that is kind of scary, but I'll 
give you an anecdote with young 

1225
01:03:11,200 --> 01:03:14,900
professional in our office, who 
was relatively new to excel, who

1226
01:03:14,900 --> 01:03:18,300
is working on a financial model 
and this person wasn't that 

1227
01:03:18,300 --> 01:03:21,200
familiar with how to transform 
some data in Excel. 

1228
01:03:21,500 --> 01:03:26,200
And so they asked chat GPT, they
describe the situation said, can

1229
01:03:26,200 --> 01:03:27,800
you write a macro Edge For Me, 
Right? 

1230
01:03:28,100 --> 01:03:31,800
A chat gbt produced the back row
in text, they copied it from 

1231
01:03:31,800 --> 01:03:34,900
Japanese GP T, paste it into 
Excel and it worked, yum. 

1232
01:03:35,000 --> 01:03:38,900
I said, wow, this is a mate like
dry productivity benefits from 

1233
01:03:38,900 --> 01:03:42,100
these tools are just incredible.
Yeah, it's amazing. 

1234
01:03:42,300 --> 01:03:45,400
I wanted to because you have 
this buyout fund and I was 

1235
01:03:45,400 --> 01:03:49,600
curious, we haven't talked about
that, what this strategy will 

1236
01:03:49,600 --> 01:03:50,900
be. 
Yeah. 

1237
01:03:50,900 --> 01:03:54,200
So what you're referencing is? 
We launched something new called

1238
01:03:54,300 --> 01:03:56,800
DVP Forge, which is about fund. 
Yeah. 

1239
01:03:56,800 --> 01:04:00,600
And at a high level, like, we 
believe, the way we succeeded by

1240
01:04:00,600 --> 01:04:03,000
being in great service to 
entrepreneurs and the 

1241
01:04:03,008 --> 01:04:05,400
entrepreneurs that Everyone 
likes to talk about The 

1242
01:04:05,400 --> 01:04:06,700
entrepreneur is you end up 
building? 

1243
01:04:07,100 --> 01:04:11,300
Massey businesses, they become 
household names and they quote 

1244
01:04:11,300 --> 01:04:12,600
unquote, go all the way with 
them. 

1245
01:04:12,700 --> 01:04:14,600
And so these are like the 
Jeremy, stoppelman, he's still 

1246
01:04:14,600 --> 01:04:16,900
running Yelp, you know almost 20
years. 

1247
01:04:16,900 --> 01:04:18,900
After you started here, Toby 
looky who's still running 

1248
01:04:18,900 --> 01:04:22,700
Shopify, almost 20 years after 
he started or Geoff Lawson and 

1249
01:04:22,700 --> 01:04:24,900
not on. 
And I, by the way, we love 

1250
01:04:24,900 --> 01:04:26,700
partnering with it goes out of 
burgers. 

1251
01:04:26,900 --> 01:04:29,100
At it's a lot of fun. 
It's really rewarding and we 

1252
01:04:29,100 --> 01:04:31,900
think we do a pretty well but 
they're not the only types of 

1253
01:04:31,900 --> 01:04:34,200
entrepreneurs out there. 
And so, as we thought about our 

1254
01:04:34,200 --> 01:04:37,200
mission to serve, Entrepreneurs,
we realize there any types. 

1255
01:04:37,200 --> 01:04:40,300
And now there's some types that 
were not yet ready or willing to

1256
01:04:40,308 --> 01:04:41,800
partner with. 
And so another type of 

1257
01:04:41,800 --> 01:04:45,100
entrepreneur is the one who 
opens up the Taco Bell franchise

1258
01:04:45,100 --> 01:04:47,600
the Nogales franchise and 
they're also entrepreneurs are 

1259
01:04:47,600 --> 01:04:50,800
not going to be the next to be 
geeky but they could go from one

1260
01:04:50,800 --> 01:04:52,900
chai's. 
Tajiri stores to five stores and

1261
01:04:52,900 --> 01:04:55,300
it's a really great business and
there are other sources of 

1262
01:04:55,300 --> 01:04:57,900
capital or partners that they 
can work with to do that. 

1263
01:04:58,200 --> 01:05:00,400
But there's this other 
entrepreneur that we started to 

1264
01:05:00,400 --> 01:05:03,300
come across more and more often 
in the course of our day jobs. 

1265
01:05:03,500 --> 01:05:06,100
And those aren't murderers, who 
might Say a cloud software 

1266
01:05:06,100 --> 01:05:08,800
company and we might have had a 
chance to meet them when they 

1267
01:05:08,800 --> 01:05:12,500
were a two billion dollar Cloud 
software company for one reason 

1268
01:05:12,500 --> 01:05:14,900
or another, it just wasn't a 
great fit and they're very 

1269
01:05:14,900 --> 01:05:18,100
quickly and maybe there will be 
strapped or maybe there is a 

1270
01:05:18,100 --> 01:05:20,300
little bit of money. 
And what we check back in with 

1271
01:05:20,300 --> 01:05:23,500
them or they reach out to us two
or three or four years later, 

1272
01:05:23,800 --> 01:05:25,900
it's a fifteen million dollar 
Revenue business which is like 

1273
01:05:25,900 --> 01:05:27,400
amazing. 
Like to grow your business from 

1274
01:05:27,400 --> 01:05:29,700
two million to 15 million. 
Like that is no small 

1275
01:05:29,700 --> 01:05:32,900
achievement but by the time it 
gets to 15 million in Revenue. 

1276
01:05:33,200 --> 01:05:37,400
It's now growing a year, right? 
And so if you do the math and 

1277
01:05:37,400 --> 01:05:41,200
even if 06 up a little bit, it 
takes forever to compound. 

1278
01:05:41,200 --> 01:05:44,500
A business, at 20 percent per 
year from 15 billion Revenue to 

1279
01:05:44,500 --> 01:05:46,600
get to what I'll call a venture 
scale outcome. 

1280
01:05:47,000 --> 01:05:50,400
And so we tend to rule those out
as potential fits for our 

1281
01:05:50,400 --> 01:05:53,200
Venture Capital business because
they can't have the kind of 

1282
01:05:53,200 --> 01:05:55,200
Outsiders outcomes that were 
generally looking for. 

1283
01:05:55,500 --> 01:05:57,200
But that doesn't mean you're not
great businesses. 

1284
01:05:57,500 --> 01:06:00,200
And in some instances, those 
Founders want a different set of

1285
01:06:00,200 --> 01:06:03,100
services and the ones that we 
offer as Venture capitalists. 

1286
01:06:03,100 --> 01:06:04,800
As Venture capitalists were 
almost always a minute. 

1287
01:06:05,000 --> 01:06:07,500
Ready investor. 
We provide all sorts of help 

1288
01:06:08,300 --> 01:06:11,400
access to other Executives and a
we know. 

1289
01:06:11,600 --> 01:06:15,400
But as a minority shareholder 
where we think of it as invited 

1290
01:06:15,400 --> 01:06:18,000
guests phenomenal it's your 
house entrepreneur. 

1291
01:06:18,300 --> 01:06:20,200
We have all these things that we
can bring over a chair, might 

1292
01:06:20,200 --> 01:06:23,000
help you take your pick from 
them, will give you ideas and so

1293
01:06:23,000 --> 01:06:25,000
forth but were a guest in your 
house. 

1294
01:06:25,000 --> 01:06:26,600
Hmm. 
Other entrepeneurs when they 

1295
01:06:26,600 --> 01:06:30,900
enter certain size they may not 
walk to be the host anymore and 

1296
01:06:30,900 --> 01:06:33,600
they may say gosh I built a 
business from nothing to 15 

1297
01:06:33,600 --> 01:06:37,600
billion of Revenue. 
If I could put 10 or 20 or 30 or

1298
01:06:37,600 --> 01:06:41,300
40 million dollars in my pocket,
that's the as a fortune, right? 

1299
01:06:41,300 --> 01:06:45,500
I don't need to go for the 
billion-dollar outcome or I 

1300
01:06:45,508 --> 01:06:47,600
might like to go for it with 
your help. 

1301
01:06:47,800 --> 01:06:51,300
So, you best were, you take over
and I want to stay involved or 

1302
01:06:51,300 --> 01:06:54,000
maybe I don't want to stay 
involved and I and and maybe 

1303
01:06:54,000 --> 01:06:56,300
I'll sell most of my stock or 
some of my stuff. 

1304
01:06:56,700 --> 01:06:59,300
And that, if it, if you can help
turn this into a billion dollar 

1305
01:06:59,300 --> 01:07:03,200
Venture, I'll benefit even more,
but I don't want to make it my 

1306
01:07:03,200 --> 01:07:05,600
only, you're my main thing 
necessarily any More or maybe 

1307
01:07:05,600 --> 01:07:07,600
you can help me recruit a new 
team or whatever. 

1308
01:07:07,600 --> 01:07:09,700
And so, there's a whole bunch of
entrepeneurs are in that 

1309
01:07:09,700 --> 01:07:11,700
category. 
It's not the Venture model of 

1310
01:07:11,700 --> 01:07:14,100
all that is essentially a 
software by, oh, and you'll 

1311
01:07:14,100 --> 01:07:18,600
bring in operators, or your, we 
will, we will we have internal 

1312
01:07:18,600 --> 01:07:20,800
folks, you have expertise in 
different domains. 

1313
01:07:21,000 --> 01:07:24,600
They'll get deeply involved even
more so than we will in a 

1314
01:07:24,600 --> 01:07:28,200
venture business because we will
own the company where were their

1315
01:07:28,200 --> 01:07:29,800
rent rolling shareholders? 
You will. 

1316
01:07:30,100 --> 01:07:32,200
And by the way, I think it's 
really interesting to be a 

1317
01:07:32,200 --> 01:07:35,700
controlling shareholder in one 
business went in Other business,

1318
01:07:36,100 --> 01:07:39,100
you're a minority shareholder 
because you know how a majority 

1319
01:07:39,100 --> 01:07:40,600
shareholder wants to be treated,
right? 

1320
01:07:40,600 --> 01:07:41,700
If that's how you are all the 
time. 

1321
01:07:41,700 --> 01:07:45,100
And so I think whether it's new,
so I can't say we're necessarily

1322
01:07:45,100 --> 01:07:47,700
proven to be great at it. 
I'm really optimistic. 

1323
01:07:48,100 --> 01:07:50,800
I think we understand. 
How would you treat a minority 

1324
01:07:50,800 --> 01:07:52,500
shareholder? 
Is your partner because we're 

1325
01:07:52,500 --> 01:07:55,000
usually wearing that pair of 
shoes, the biker. 

1326
01:07:55,000 --> 01:07:57,200
She's and so it's a new 
initiative, we're really excited

1327
01:07:57,200 --> 01:08:00,500
about it because we frankly, the
number of companies and 

1328
01:08:00,500 --> 01:08:04,100
entrepreneurs who fit that sort 
of characteristics actually out 

1329
01:08:04,100 --> 01:08:07,300
numbers. 
The number of companies fit the 

1330
01:08:07,300 --> 01:08:09,700
classic denture characteristics.
I want to build something 

1331
01:08:09,700 --> 01:08:11,900
really, really big and take it 
all the way to the finish line 

1332
01:08:12,500 --> 01:08:15,500
and we didn't want to just turn 
them away and say, Ray, sorry, 

1333
01:08:15,600 --> 01:08:17,600
nothing for you. 
Here, we wanted to be able to 

1334
01:08:17,600 --> 01:08:22,399
work with them to I wanted to 
end with an introspective 

1335
01:08:22,399 --> 01:08:25,600
personality question. 
I'm a reporter. 

1336
01:08:25,800 --> 01:08:29,899
Who's a dispositional e, 
skeptical and overtime, trying 

1337
01:08:29,899 --> 01:08:33,200
to shed a little bit of that. 
I watched the bull market in 

1338
01:08:33,207 --> 01:08:36,600
2021 and I laughed. 
People they you know next Bull 

1339
01:08:36,600 --> 01:08:38,899
Run. 
I need to just be like sort of 

1340
01:08:38,899 --> 01:08:41,300
Shameless like there are so many
people who made a bunch of money

1341
01:08:41,300 --> 01:08:44,899
just like forgetting their 
Scruples like go even if crypto 

1342
01:08:44,899 --> 01:08:46,600
implodes you could have made a 
ton of money there. 

1343
01:08:46,600 --> 01:08:49,500
You could have made a ton of 
money on spax, just like being 

1344
01:08:49,500 --> 01:08:51,700
like the booster in the good 
times. 

1345
01:08:51,800 --> 01:08:53,800
Like, how did I sit that out? 
I was right there. 

1346
01:08:53,800 --> 01:08:57,800
You know, I've seen Bitcoin so 
long, but disposition Ali. 

1347
01:08:57,800 --> 01:09:00,600
It's like everything I'm 
against, and obviously, I care 

1348
01:09:00,600 --> 01:09:02,300
about things, you know, beyond 
money. 

1349
01:09:02,300 --> 01:09:04,700
But, you know, I did sort of set
up in the beginning. 

1350
01:09:04,800 --> 01:09:09,000
And this idea that you're 
someone who's optimistic about 

1351
01:09:09,000 --> 01:09:12,800
technology, but sort of 
skeptical of some of the hype 

1352
01:09:12,800 --> 01:09:15,200
and I'm curious. 
Yeah. 

1353
01:09:15,200 --> 01:09:19,200
How do you keep your head when 
other people are losing theirs 

1354
01:09:19,200 --> 01:09:23,100
or what sort of the practice of?
How does one actually maintain 

1355
01:09:23,399 --> 01:09:26,000
sort of both sensibilities at 
the same time? 

1356
01:09:26,300 --> 01:09:28,899
It's not easy. 
And I honestly it's I think the 

1357
01:09:28,899 --> 01:09:33,100
benefit of working with Partners
is significant here because 

1358
01:09:33,399 --> 01:09:37,100
there are so many things one 
Keep get excited about and my 

1359
01:09:37,100 --> 01:09:40,399
personal style, or my personal 
taste is to try to find the 

1360
01:09:40,399 --> 01:09:42,899
stuff. 
I have high conditioner 

1361
01:09:42,899 --> 01:09:44,899
competition. 
The most people don't care 

1362
01:09:44,899 --> 01:09:47,100
about. 
I don't like to go where all the

1363
01:09:47,100 --> 01:09:49,500
cool kids are or all the popular
kids are. 

1364
01:09:49,800 --> 01:09:52,800
I like to kind of go off in a 
corner of the playground and 

1365
01:09:52,800 --> 01:09:54,600
find someone who's doing 
something over there. 

1366
01:09:54,600 --> 01:09:57,100
That's really compelling that 
most people are prepared to 

1367
01:09:57,100 --> 01:10:00,300
dismiss or aren't that. 
Excited about Partners, who are 

1368
01:10:00,300 --> 01:10:03,000
much more interested in like 
like what everyone's talking 

1369
01:10:03,000 --> 01:10:06,100
about and want to compete. 
Eat and chase after the most 

1370
01:10:06,100 --> 01:10:09,000
exciting, things are 
conventionally exciting. 

1371
01:10:09,400 --> 01:10:12,300
And for me, like the challenge 
is, how do you find something 

1372
01:10:12,300 --> 01:10:14,800
that today? 
Nobody thinks is all that 

1373
01:10:14,800 --> 01:10:19,200
interesting, but in three or 
four years, they will and you 

1374
01:10:19,200 --> 01:10:22,700
managed to find an entrepreneur 
or get excited about an idea 

1375
01:10:23,000 --> 01:10:26,000
before. 
And it's really rewarding when 

1376
01:10:26,000 --> 01:10:30,000
you're Vindicated or validated 
in that way and actually think 

1377
01:10:30,000 --> 01:10:33,200
most impressive results are 
returned. 

1378
01:10:33,200 --> 01:10:37,400
Your companies are Founded when 
there's someone out of favor and

1379
01:10:37,400 --> 01:10:38,400
funded. 
When there's someone out of 

1380
01:10:38,407 --> 01:10:43,700
favor and go back to your 
analogy about like wow I wish I 

1381
01:10:43,708 --> 01:10:46,600
didn't have his Scruples and I 
are so loaded up on Bitcoin. 

1382
01:10:46,600 --> 01:10:48,400
In 2021. 
The truth is that would have 

1383
01:10:48,400 --> 01:10:50,700
worked well not interested. 
Why do you know I was writing 

1384
01:10:50,700 --> 01:10:52,800
about it in 2014. 
Super skeptical. 

1385
01:10:52,800 --> 01:10:56,100
Yeah that would work that would 
work and so but it's in some 

1386
01:10:56,100 --> 01:10:57,900
sense. 
It's easier to jump on the 

1387
01:10:57,900 --> 01:11:00,700
bandwagon for something in 2021 
like everyone's doing right 

1388
01:11:00,700 --> 01:11:02,900
hard. 
So it's not so it's also 

1389
01:11:03,000 --> 01:11:04,900
honestly all a really useful 
exercise. 

1390
01:11:05,000 --> 01:11:09,700
You guys is to write down what 
you really think at a point in 

1391
01:11:09,700 --> 01:11:11,600
time. 
So if you wrote down what you 

1392
01:11:11,600 --> 01:11:15,200
really thought about good for in
2014, it could look back on it, 

1393
01:11:15,400 --> 01:11:17,400
I assure you, it would be 
different from what you think 

1394
01:11:17,400 --> 01:11:19,400
about. 
We thought about Bitcoin in 2020

1395
01:11:19,800 --> 01:11:23,500
and today and that we tend to 
alter our memories, right? 

1396
01:11:23,500 --> 01:11:26,300
Because it's like it's like I 
self-preservation check me to 

1397
01:11:26,300 --> 01:11:29,500
have liked the thing early that 
we know is great today and to 

1398
01:11:29,508 --> 01:11:31,000
have not like something early 
that we go. 

1399
01:11:31,000 --> 01:11:33,900
Isn't so great today and is 
really hard to be truthful about

1400
01:11:33,900 --> 01:11:36,100
what you really thought. 
And so, one of the ways that we 

1401
01:11:36,100 --> 01:11:39,200
do it is at best result. 
When we invest in companies, we 

1402
01:11:39,200 --> 01:11:42,500
each specify how much money week
personally, would want to invest

1403
01:11:42,500 --> 01:11:44,800
in a company. 
So that five years later when it

1404
01:11:44,800 --> 01:11:48,200
becomes really big, we can look 
back and like, oh my gosh, I 

1405
01:11:48,200 --> 01:11:50,300
only read a five hundred dollar 
check, I wish I wrote a five 

1406
01:11:50,300 --> 01:11:51,600
hundred thousand dollar check, 
right? 

1407
01:11:51,600 --> 01:11:53,700
And you can't miss A Rambler 
that that shows up on like a 

1408
01:11:53,708 --> 01:11:55,900
financial state, right? 
But having some way of keeping 

1409
01:11:55,900 --> 01:11:59,200
yourself honest allows you to, 
in theory get better at these 

1410
01:11:59,200 --> 01:12:02,100
over time because you're not 
working, you're marrying the way

1411
01:12:02,100 --> 01:12:04,100
most people do. 
Thank you. 

1412
01:12:04,200 --> 01:12:05,800
Jeremy Levine. 
Thanks for coming on the 

1413
01:12:05,800 --> 01:12:07,300
podcast. 
I really appreciate it. 

1414
01:12:07,500 --> 01:12:09,000
Such a pleasure thanks for 
having me here. 

1415
01:12:21,800 --> 01:12:23,100
Goodbye. 
Goodbye. 

1416
01:12:23,100 --> 01:12:25,500
Goodbye, goodbye, goodbye. 
Goodbye. 

1417
01:12:21,800 --> 01:12:23,100
Goodbye. 
Goodbye. 

1418
01:12:23,100 --> 01:12:25,500
Goodbye, goodbye, goodbye. 
Goodbye.