1 00:00:00,280 --> 00:00:03,520 What does it take to be a mega fund in the world of venture 2 00:00:03,520 --> 00:00:05,680 capital? Today, we're talking about a 3 00:00:05,680 --> 00:00:07,840 mega fund. You may never have heard of 4 00:00:07,880 --> 00:00:10,800 Lightspeed Venture Partners, who have done a terrific job of 5 00:00:10,800 --> 00:00:15,400 flying under the radar despite raising $9 billion alongside 6 00:00:15,400 --> 00:00:18,520 some strong exits this year. In this episode, we're going to 7 00:00:18,520 --> 00:00:22,360 dive into what makes a mega fund using the example of Lightspeed. 8 00:00:22,480 --> 00:00:24,720 We'll look at their business model, the startups they're 9 00:00:24,720 --> 00:00:27,760 invested in, the IPOs that they're leading, and how they're 10 00:00:27,760 --> 00:00:31,120 seeing significant growth while seemingly spitting in the face 11 00:00:31,400 --> 00:00:33,800 of the AI bubble. But first, we're going to 12 00:00:33,800 --> 00:00:37,040 discuss the new developments in the relationship between Amazon 13 00:00:37,040 --> 00:00:40,120 and open AI and the shifting allegiances in AI. 14 00:00:40,520 --> 00:00:51,880 This is the newcomer podcast. There, there, there was a time 15 00:00:52,440 --> 00:00:55,240 where you one of the most exciting things that could have 16 00:00:55,240 --> 00:00:58,440 happened but didn't happen in Silicon Valley would be that 17 00:00:58,440 --> 00:01:03,600 Amazon would buy Anthropic. Amazon, you know, a big cloud 18 00:01:03,600 --> 00:01:07,760 service provider invested in Anthropic doesn't seem to have 19 00:01:07,760 --> 00:01:12,280 figured out foundation models. But we've really put a nail in 20 00:01:12,280 --> 00:01:15,320 the coffin, I think this week of that idea. 21 00:01:16,320 --> 00:01:21,800 Amazon just turned around and struck a huge deal with open AI. 22 00:01:22,280 --> 00:01:27,040 Tom, you cover these cloud companies, the foundation models 23 00:01:27,040 --> 00:01:29,400 and the deals. They're striking, Yeah. 24 00:01:29,400 --> 00:01:33,320 What do you what do you make of Amazon's decision to strike an 25 00:01:33,320 --> 00:01:36,080 enormous deal with Open AI? Yeah. 26 00:01:36,080 --> 00:01:38,840 Well, we should have some caution here that it's just sort 27 00:01:38,840 --> 00:01:40,800 of in discussions right now. So I don't know if it's. 28 00:01:40,800 --> 00:01:43,040 In talks, it hasn't closed yet. Yeah. 29 00:01:43,160 --> 00:01:47,080 But I mean, the origins of this basically was a couple of months 30 00:01:47,080 --> 00:01:52,000 ago, Amazon and Open AI announced that they had signed a 31 00:01:52,000 --> 00:01:55,440 multi billion dollar cloud computing deal with AWS where it 32 00:01:55,480 --> 00:01:57,920 was going to be hosting some of Open AI models on AWS. 33 00:01:58,040 --> 00:02:02,200 And it was sort of the first big non Microsoft deal that Open AI 34 00:02:02,200 --> 00:02:05,120 struck once it got out of it it's exclusivity agreement. 35 00:02:06,080 --> 00:02:10,360 And, you know, in case you were worried after Amazon and Open AI 36 00:02:10,360 --> 00:02:14,280 struck a deal that it wasn't circular enough, fear not, fear 37 00:02:14,280 --> 00:02:16,560 not. And, you know, people always 38 00:02:16,560 --> 00:02:18,840 wonder with Open AI, how are you going to pay for it? 39 00:02:19,040 --> 00:02:21,600 The answer is more money from the cloud computing companies 40 00:02:21,600 --> 00:02:25,760 that they work with. So it looks like Open AI is in 41 00:02:25,760 --> 00:02:29,840 talks to get around $10 billion, maybe more from AWS. 42 00:02:29,840 --> 00:02:33,640 And, you know, just to, like, take some pride in the way this 43 00:02:33,640 --> 00:02:35,920 is all progressed. We did a story, I think it was a 44 00:02:35,920 --> 00:02:39,040 newsletter item a couple of weeks ago, where I talked about 45 00:02:39,160 --> 00:02:43,240 how Amazon had really started to shift away from its anthropic 46 00:02:43,600 --> 00:02:47,440 relationship, that for a time anthropic models were the Amazon 47 00:02:47,440 --> 00:02:49,640 bet, and that was the way it was discussed internally. 48 00:02:49,640 --> 00:02:52,920 I was told Jeff Bezos was going around talking about anthropic 49 00:02:52,920 --> 00:02:56,040 as the Amazon bet, and it's clear that they have shifted 50 00:02:56,040 --> 00:02:58,760 allegiances a little bit behind the scenes. 51 00:02:58,760 --> 00:03:03,160 When I wrote that, AWS was very upset with me and they said that 52 00:03:03,160 --> 00:03:06,240 to say that Anthropic is no longer, you know, our big bet 53 00:03:06,240 --> 00:03:08,120 and one we're committed to was absolutely wrong. 54 00:03:08,120 --> 00:03:10,800 And they pointed to all these press releases that Anthropic 55 00:03:10,800 --> 00:03:13,360 would make claiming that, you know, you know, Anthropic is 56 00:03:13,360 --> 00:03:16,120 still our primary provider. Sorry, AWS is still our primary 57 00:03:16,120 --> 00:03:19,680 provider and we use their chips. Yeah, that's clearly changed. 58 00:03:20,000 --> 00:03:21,240 That's that's no longer the case. 59 00:03:21,240 --> 00:03:22,480 There's been a. Shift there. 60 00:03:22,920 --> 00:03:25,200 Yeah. And, and I think as you wrote at 61 00:03:25,200 --> 00:03:27,640 the time, that newsletter item, like I think there's been 62 00:03:27,640 --> 00:03:31,600 shifting allegiances across the tech world where once Microsoft 63 00:03:31,600 --> 00:03:34,600 was the exclusive provider for open AI and then they've 64 00:03:34,600 --> 00:03:37,720 invested or planned to invest billions of dollars into 65 00:03:37,720 --> 00:03:39,800 Anthropic. Amazon obviously made their big 66 00:03:39,800 --> 00:03:41,920 play with Anthropic. Now they seem a lot more 67 00:03:41,920 --> 00:03:45,320 attached to open AI. Google is kind of relatively 68 00:03:45,320 --> 00:03:47,240 neutral, but more focused on their own models. 69 00:03:47,240 --> 00:03:51,360 And I think it just goes to show that there is just such an 70 00:03:51,360 --> 00:03:55,960 insane need for compute right now and an overall belief in AI 71 00:03:55,960 --> 00:03:57,560 that there's no reason to pick a horse. 72 00:03:57,920 --> 00:04:01,520 You really kind of just need to bet on the industry at large and 73 00:04:01,520 --> 00:04:04,160 just take as much money and give as much money to keep it going. 74 00:04:04,200 --> 00:04:07,440 Amazon's also trying to get Open AI to use its chips here, right? 75 00:04:07,560 --> 00:04:11,720 Yeah, that's part of the deal. Amazon is building chips that 76 00:04:11,920 --> 00:04:15,760 they want open AI to be using to diversify off of NVIDIA GPUs. 77 00:04:16,079 --> 00:04:21,519 Also in Anthropic deals of AI world too, they announced a 78 00:04:21,519 --> 00:04:24,480 couple months ago a deal with Google to use Google's chips. 79 00:04:24,480 --> 00:04:28,280 So Google is has a partnership with Anthropic as well in this 80 00:04:28,360 --> 00:04:31,360 even beyond, you know, focusing mostly on and their internal 81 00:04:31,360 --> 00:04:33,080 products they do have some ties to. 82 00:04:33,080 --> 00:04:37,000 Anthropic, maybe Anthropic somewhat jilted Amazon first by 83 00:04:37,080 --> 00:04:39,360 doing stuff. With Google, a Google deal. 84 00:04:39,640 --> 00:04:41,880 So then we have to circle back around here, yeah. 85 00:04:42,120 --> 00:04:44,160 Yeah. Well, but also keep in mind that 86 00:04:44,680 --> 00:04:48,080 Google had already invested money in Anthropic before that. 87 00:04:48,080 --> 00:04:49,600 They're they're they're a significant investor. 88 00:04:49,600 --> 00:04:53,840 And I actually, my understanding is that most Anthropic training 89 00:04:54,160 --> 00:04:58,840 and inferencing, at least training I know is done on TP us 90 00:04:58,840 --> 00:05:01,400 on Google's chips. So there was already like a deep 91 00:05:01,400 --> 00:05:03,720 relationship there. I mean, the fact with Amazon is 92 00:05:03,720 --> 00:05:06,000 that they're kind of like the rich kid that has to buy their 93 00:05:06,000 --> 00:05:08,000 friends. No one likes their chips. 94 00:05:09,080 --> 00:05:10,840 They just aren't very good. I'm sorry. 95 00:05:10,840 --> 00:05:13,200 I'll, I'll, I'll, I'll say this strongly on the podcast. 96 00:05:13,200 --> 00:05:15,360 I'll have anyone come in here and disagree with me, But every 97 00:05:15,360 --> 00:05:18,120 conversation that I've had with people in the space says that 98 00:05:18,120 --> 00:05:21,880 like the Tranium and Inferencia chips that that Amazon makes are 99 00:05:21,880 --> 00:05:26,440 like a huge tier below certainly Nvidia's chips, but also 100 00:05:26,440 --> 00:05:28,920 Google's Tpus. And so they got to, they got to 101 00:05:28,920 --> 00:05:31,240 get people to use them somehow. And $10 billion is not a 102 00:05:31,240 --> 00:05:34,800 terrible way to do it. And if there's a core financial 103 00:05:34,800 --> 00:05:42,000 engineering risk with AI, it's that I invest in you and then 104 00:05:42,000 --> 00:05:46,200 you use that investment to do me a partial favor by pretending 105 00:05:46,200 --> 00:05:50,440 like there's enthusiasm for my product, even though there isn't 106 00:05:50,440 --> 00:05:55,600 really enthusiasm, right? So in the case of chips I Amazon 107 00:05:55,600 --> 00:06:00,680 invest in, you open AI and then you turn around and use my 108 00:06:00,680 --> 00:06:04,240 chips, show a little enthusiasm, and then maybe I get a market 109 00:06:04,240 --> 00:06:06,880 premium on my stock. My stock goes up. 110 00:06:07,640 --> 00:06:11,520 That's great for everybody, you know, everybody involved and, 111 00:06:11,600 --> 00:06:15,120 and who cares, right? And similarly this, you know, 112 00:06:15,120 --> 00:06:18,640 this is the cynical case. The cloud companies benefit from 113 00:06:18,640 --> 00:06:22,160 open AI, anthropic, etcetera, spending on these enormous 114 00:06:22,160 --> 00:06:24,880 training runs, right? So they want to keep this 115 00:06:25,440 --> 00:06:28,680 foundation model game going and so keep the money going there 116 00:06:28,680 --> 00:06:33,240 also so it can turn around and spend, spend money on on us. 117 00:06:33,240 --> 00:06:36,800 So there's definitely, you know, this cynical argument that 118 00:06:37,160 --> 00:06:41,240 foundation models like Open AI and Anthropic are so valuable in 119 00:06:41,240 --> 00:06:44,880 part because the people investing them want them to be, 120 00:06:44,880 --> 00:06:46,880 you know, because they're, they're big, they're big 121 00:06:46,880 --> 00:06:50,160 customers and they're validating a lot of the products they're 122 00:06:50,160 --> 00:06:52,680 creating. And This is why to me, this is 123 00:06:52,680 --> 00:06:55,040 the bull case for Google, because Google's on both sides 124 00:06:55,040 --> 00:06:57,320 of it. If you think foundation models 125 00:06:57,320 --> 00:07:00,480 are going to be revolutionary and not only revolutionary but 126 00:07:00,480 --> 00:07:03,280 capture a lot of the economic value of what happens in AI, 127 00:07:03,640 --> 00:07:06,400 Google has Gemini. If you don't and you think all 128 00:07:06,400 --> 00:07:10,160 these models are sort of ludicrously spending on training 129 00:07:10,160 --> 00:07:14,200 runs that are just like lining the pockets of cloud providers, 130 00:07:14,200 --> 00:07:15,880 well, Google has one of those too. 131 00:07:15,880 --> 00:07:20,040 So I I think, yeah, good to be in both camps. 132 00:07:20,280 --> 00:07:23,080 Yeah, they have the chips, they have the models, they have the 133 00:07:23,080 --> 00:07:26,720 customers and they can force these AI models down the throats 134 00:07:26,720 --> 00:07:29,240 of these customers by putting it in all the different, you know, 135 00:07:29,240 --> 00:07:34,400 crevices of their products. Sorry as a gross image but I 136 00:07:34,400 --> 00:07:37,880 think like you know, this all leads to what I thought was a 137 00:07:37,880 --> 00:07:42,760 fucking hilarious video that Greg Brockman the Co founder of 138 00:07:42,760 --> 00:07:46,520 Open AI just made where he, I don't even know what it was for. 139 00:07:46,520 --> 00:07:49,440 But it's basically this video where he talks about the 140 00:07:49,440 --> 00:07:52,880 importance of compute and is like as time goes on we just 141 00:07:52,880 --> 00:07:55,920 need more and more compute. The funnier part of this video 142 00:07:55,920 --> 00:07:58,880 to me was him saying at first we tried other ways to build our 143 00:07:58,880 --> 00:08:02,560 models. Open AI did not set out with a 144 00:08:02,560 --> 00:08:04,800 thesis. The compute was the path to 145 00:08:04,800 --> 00:08:06,760 progress. It's that we tried everything 146 00:08:06,760 --> 00:08:09,040 else and the thing that worked was compute. 147 00:08:09,040 --> 00:08:12,120 We really wanted to find another way to grow our company without 148 00:08:12,120 --> 00:08:15,960 just demanding multi $100 billion of compute deals, but we 149 00:08:15,960 --> 00:08:17,600 can't. This is what it is. 150 00:08:17,600 --> 00:08:19,560 So please, it's like a, it's like APSA. 151 00:08:19,760 --> 00:08:21,640 It was like for only a dollar a day he was getting. 152 00:08:21,680 --> 00:08:26,160 Quirky with it, you know, he was doing like a oh, how do we do it 153 00:08:26,160 --> 00:08:27,680 kind of tone. I don't know. 154 00:08:27,760 --> 00:08:29,320 Yeah. It was for only for only a 155 00:08:29,320 --> 00:08:31,920 dollar a day. You too can keep Open AI afloat 156 00:08:32,200 --> 00:08:33,640 and give us the compute that we need. 157 00:08:33,640 --> 00:08:37,280 Please reach deep if you have GPUs, if you have GB 2 hundreds, 158 00:08:37,280 --> 00:08:39,799 if you have anything that you or your friends might have, please 159 00:08:39,799 --> 00:08:42,200 donate them to Open AI because that's what we need to keep 160 00:08:42,200 --> 00:08:44,039 going. I don't know what the fuck this 161 00:08:44,039 --> 00:08:45,680 video was. I don't know who it was for. 162 00:08:46,120 --> 00:08:50,240 I honestly, if you start to look back at this era from 10-15 163 00:08:50,240 --> 00:08:52,480 years from now, if it does happen to go sideways or doesn't 164 00:08:52,480 --> 00:08:54,960 turn out the way people expected, this video is going to 165 00:08:54,960 --> 00:08:56,800 be one of them. To me, that's just like, what 166 00:08:56,800 --> 00:08:59,120 were we thinking? How do we not understand that 167 00:08:59,120 --> 00:09:01,760 there was like something slightly concerning at the core 168 00:09:01,760 --> 00:09:04,640 of the way these companies run? To be clear, my point of view 169 00:09:04,640 --> 00:09:08,920 remains that we are imbuing everything with the capacity to 170 00:09:08,920 --> 00:09:11,840 be intelligent and there's going to be a huge market for that. 171 00:09:11,840 --> 00:09:14,320 And as they get more and more intelligent, they're going to 172 00:09:14,320 --> 00:09:17,560 get even more valuable. But what that what that means 173 00:09:17,560 --> 00:09:22,320 for the near term value of open AI, I've no idea, you know, glad 174 00:09:22,320 --> 00:09:27,160 that's not my job to figure out. But I do think these things all 175 00:09:27,160 --> 00:09:31,760 come back to the actual your belief on the value that AI is 176 00:09:31,760 --> 00:09:34,520 creating or not, right. If it's creating a lot of value, 177 00:09:34,520 --> 00:09:38,320 then makes sense to build chips and spend money on chips. 178 00:09:38,320 --> 00:09:41,200 It makes sense to to these huge training runs. 179 00:09:41,480 --> 00:09:46,280 But yeah, and I'll be fair to Brockman in his argument was 180 00:09:46,280 --> 00:09:49,440 that like, our products are so successful, they're in such 181 00:09:49,440 --> 00:09:53,160 demand that we need compute to be able to provide power to it, 182 00:09:53,160 --> 00:09:55,240 that, you know, we can build more of them because people want 183 00:09:55,240 --> 00:09:57,080 them so much. It's not that speculative. 184 00:09:57,360 --> 00:09:59,640 It's like we need this now. It's for our products to work. 185 00:10:00,080 --> 00:10:03,880 My only counter to that would be like what products outside of 186 00:10:03,880 --> 00:10:09,800 Chachi PT, you know, like you? Know you do these training runs 187 00:10:09,800 --> 00:10:12,560 and then everybody catches up with you tomorrow. 188 00:10:13,480 --> 00:10:14,560 Right. Well, I think that's also 189 00:10:14,640 --> 00:10:18,160 that's, that's the that's the business question that is 190 00:10:18,240 --> 00:10:21,280 completely separate from the value that AI, this technology 191 00:10:21,280 --> 00:10:23,360 creates and is transformational technology. 192 00:10:23,640 --> 00:10:26,960 I think we're all in agreement here that it is very useful and 193 00:10:26,960 --> 00:10:29,280 is very impressive and there is a ton of utility for it. 194 00:10:29,280 --> 00:10:33,880 But where the business Moat lands and how these deals as 195 00:10:33,880 --> 00:10:37,120 they are structured financially work out, that remains a little 196 00:10:37,120 --> 00:10:40,040 bit still murky. And and as you'll see in the 197 00:10:40,040 --> 00:10:42,240 segment coming up, that's why they need all the money. 198 00:10:42,240 --> 00:10:46,400 That's what the money is for, is to make the compute pay for the 199 00:10:46,400 --> 00:10:49,120 compute that open AI so desperately needs, and so 200 00:10:49,120 --> 00:10:51,680 everything has to be mega sized from that. 201 00:10:52,080 --> 00:10:55,000 Up next, we talked about Lightspeeds $9 billion 202 00:10:55,080 --> 00:10:58,680 fundraising as a venture capital firm, so we'll dig into that. 203 00:10:58,680 --> 00:11:01,160 Stay tuned. Hey folks, I'm Omar, product and 204 00:11:01,160 --> 00:11:04,400 design lead at Google DeepMind. Have you ever wanted to build an 205 00:11:04,400 --> 00:11:07,320 app for yourself, your friends, or finally launched that side 206 00:11:07,320 --> 00:11:08,640 project you've been dreaming about? 207 00:11:09,000 --> 00:11:11,920 Now you can bring any idea to life, no coding background 208 00:11:11,920 --> 00:11:14,760 required, with Gemini 3 and Google AI Studio. 209 00:11:15,560 --> 00:11:17,880 It's called Vibe Coding and we're making it dead simple. 210 00:11:18,040 --> 00:11:20,600 Just describe your app and Gemini will wire up the right 211 00:11:20,600 --> 00:11:23,320 models for you so you can focus on your creative vision. 212 00:11:23,600 --> 00:11:26,600 Head to AI dot studio slash build to create your first app. 213 00:11:28,360 --> 00:11:32,080 We're about to talk about the biggest, most important venture 214 00:11:32,080 --> 00:11:34,920 capital firm that maybe you've never heard of. 215 00:11:34,960 --> 00:11:37,360 Depends how much of an insider you are. 216 00:11:37,680 --> 00:11:44,880 Lightspeed Venture Partners just raised $9 billion, which even in 217 00:11:44,880 --> 00:11:49,400 the world of venture, where we get numb to big pools of money, 218 00:11:49,400 --> 00:11:52,560 this is a venture firm with a lot of money to invest in 219 00:11:52,840 --> 00:11:55,400 startups. Here at Newcomer, we have 220 00:11:55,760 --> 00:12:00,000 published some of Lightspeed old performance numbers, so we have 221 00:12:00,000 --> 00:12:03,120 a good sense of what companies they're investing in. 222 00:12:03,120 --> 00:12:06,880 That gives the limited partners that back venture capital firms 223 00:12:06,880 --> 00:12:09,360 the confidence to re up with Lightspeed. 224 00:12:09,680 --> 00:12:13,440 And Madeline has been doing some reporting on Lightspeed to 225 00:12:13,440 --> 00:12:16,800 understand this latest fundraising can help breakdown 226 00:12:17,080 --> 00:12:20,600 all the numbers. And Tom will weigh in with his 227 00:12:20,960 --> 00:12:23,480 spicy quips as. Tom can weigh in with his 228 00:12:23,680 --> 00:12:26,320 hottest takes. I can I can really dig in on 229 00:12:26,320 --> 00:12:29,400 Lightspeed circa 2016. Yeah, exactly. 230 00:12:29,400 --> 00:12:32,320 You cared a lot. I mean, so if you if you are not 231 00:12:32,320 --> 00:12:34,800 in the venture business, you might have heard of Lightspeed 232 00:12:34,800 --> 00:12:37,280 because they were a big investor in Snapchat. 233 00:12:37,880 --> 00:12:42,560 Jeremy Liu, who we all know invested in Snapchat then I 234 00:12:42,560 --> 00:12:46,520 think as Tom helped brake had a falling out with lightspeed 235 00:12:46,520 --> 00:12:47,640 right? Did you break that story? 236 00:12:47,680 --> 00:12:49,120 I. Actually didn't break that 237 00:12:49,120 --> 00:12:50,840 story. It was it was our departed 238 00:12:51,160 --> 00:12:54,080 former Co host on Dead Cat, Katie Benner, which is a real 239 00:12:54,080 --> 00:12:54,800 blast. Really. 240 00:12:55,160 --> 00:12:57,960 Oh my God, I forgot. Yeah, it was a very different 241 00:12:57,960 --> 00:13:00,600 era where the New York Times would have written a story about 242 00:13:00,600 --> 00:13:04,040 like a fallout between a founder and the whole. 243 00:13:04,040 --> 00:13:05,760 I mean, we can we should get to your story, Madeline. 244 00:13:05,760 --> 00:13:08,080 But if you really want to a trip down memory lane, the whole 245 00:13:08,080 --> 00:13:10,600 history between Lightspeed and Snapchat is a very interesting 246 00:13:10,600 --> 00:13:12,240 one. Not even just the falling out, 247 00:13:12,240 --> 00:13:13,760 but the, the way that they made that investment. 248 00:13:13,760 --> 00:13:16,600 So we can we can talk about that then, but it's like a very. 249 00:13:16,600 --> 00:13:18,960 Different circle back to that. Yeah, it's a very different 250 00:13:18,960 --> 00:13:24,320 light speed was and is mostly a firm that invests in 251 00:13:24,320 --> 00:13:28,320 enterprises, businesses selling to other businesses. 252 00:13:28,680 --> 00:13:31,280 There are exceptions. They're a big investor in a 253 00:13:31,280 --> 00:13:35,280 firm. Max Levchin's payment advance 254 00:13:35,760 --> 00:13:38,880 company, but a lot of the big investments are firms like 255 00:13:39,120 --> 00:13:44,360 Grafana and Navon and fair, you know, it's sort of are, are the 256 00:13:44,360 --> 00:13:48,440 backbone of or not consumer facing companies. 257 00:13:48,440 --> 00:13:50,280 Right. Well, Lightspeed, I think you 258 00:13:50,280 --> 00:13:54,080 know, wants to be known for their enterprise deals more 259 00:13:54,080 --> 00:13:57,440 their their ties to Snapchat, cover the press. 260 00:13:57,440 --> 00:13:59,920 And so people think of them as a consumer first fund and they're 261 00:13:59,920 --> 00:14:02,240 quick to tell you no, we do enterprise deals. 262 00:14:02,920 --> 00:14:07,240 And to their credit, they had significant IPOs in the last two 263 00:14:07,240 --> 00:14:09,240 years. They had, they were big backers 264 00:14:09,240 --> 00:14:13,200 of Rubric, Netscope and Navon, which all went public in this 265 00:14:13,360 --> 00:14:17,040 time of IPO drought recently. So they've had big exits in the 266 00:14:17,040 --> 00:14:19,560 last couple years, which is impressive. 267 00:14:19,560 --> 00:14:22,160 You know, if you say they're the firm that flies under the radar, 268 00:14:22,160 --> 00:14:24,960 they're returning money back to their LP's, which is great when 269 00:14:24,960 --> 00:14:26,840 you're fundraising. Madeline, you want to break down 270 00:14:26,840 --> 00:14:30,880 this $9 billion fundraise and give us a sense of where all the 271 00:14:30,880 --> 00:14:33,960 money's gonna go? So this $9 billion fundraise is 272 00:14:33,960 --> 00:14:36,680 broken up across six different vehicles. 273 00:14:37,240 --> 00:14:40,080 It's all kind of multiple funds under this one umbrella to hit 274 00:14:40,080 --> 00:14:43,640 the $9 billion total. But the two, the early stage 275 00:14:43,640 --> 00:14:48,440 fund is kind of split into Lightspeed 15-A and 15-B. 276 00:14:48,440 --> 00:14:50,560 And the way you can think about that is 15 A. 277 00:14:50,600 --> 00:14:53,240 What marketing geniuses? They've got a number and they've 278 00:14:53,240 --> 00:14:56,040 got a naming scheme like Sony headphones here. 279 00:14:56,040 --> 00:14:59,920 Yeah. Well, 15-A is 980 million and 280 00:15:00,000 --> 00:15:04,160 like the title says, it is for seed up to Series A, maybe a 281 00:15:04,160 --> 00:15:08,680 smaller B deal. Lightspeed B is for is $1.2 282 00:15:08,680 --> 00:15:12,720 billion and that is going to go to things that are more entering 283 00:15:12,720 --> 00:15:15,960 product market. 5th growth Series B onward side. 284 00:15:15,960 --> 00:15:17,960 However, it's not the growth fund. 285 00:15:18,160 --> 00:15:22,960 It's just like in the age of AI, these series BS and Series A's 286 00:15:22,960 --> 00:15:26,160 and billion dollar seed rounds, they wanted a lot of capital to 287 00:15:26,160 --> 00:15:29,080 be able to properly allocate in these rounds and double down on 288 00:15:29,080 --> 00:15:31,800 concentrated bets. And when that moves earlier and 289 00:15:31,800 --> 00:15:35,240 earlier with these AI rounds that everyone wants in, they 290 00:15:35,360 --> 00:15:38,840 wanted capital for those two, wanted capital back those. 291 00:15:38,840 --> 00:15:42,760 So that's how those are structured, the select those. 292 00:15:42,760 --> 00:15:45,000 Are two earlier stages. So those are the 2 early funds. 293 00:15:45,320 --> 00:15:49,080 There's also Lightspeed Select four and Lightspeed Opportunity 294 00:15:49,080 --> 00:15:54,160 Fund three select four, A $1.8 billion fund that is for 295 00:15:54,800 --> 00:15:58,960 doubling down on bets that they want to get a higher ownership 296 00:15:58,960 --> 00:16:02,280 share in that are more growth stage. 297 00:16:02,280 --> 00:16:05,240 So think of it as a kind of medium growth fund. 298 00:16:05,560 --> 00:16:09,240 And then opportunity funds have been actually the past 299 00:16:09,240 --> 00:16:11,920 opportunity funds was where they first backed Anthropic because 300 00:16:11,920 --> 00:16:16,280 they did not get into Anthropic until the Series D, but then 301 00:16:16,280 --> 00:16:20,200 they ended up Co leading and then leading later Anthropic 302 00:16:20,200 --> 00:16:23,080 rounds as they kept raising. So they did get a larger 303 00:16:23,080 --> 00:16:26,120 ownership share later on, but that's what the opportunity fund 304 00:16:26,120 --> 00:16:28,600 would be for to double. Right now seem like great 305 00:16:28,600 --> 00:16:30,560 investments. I know they've been marked up a 306 00:16:30,560 --> 00:16:31,920 lot. There's been, you know, this 307 00:16:31,920 --> 00:16:35,240 chatter in the zeitgeist right now about like, if you're not in 308 00:16:35,240 --> 00:16:39,400 these key AI deals, you're failing behind, but they're 309 00:16:39,400 --> 00:16:42,520 mostly mentioning, you know, Cursor Mercor, Open AI, 310 00:16:43,440 --> 00:16:49,080 Lightspeed is not necessarily in those companies, but they are a 311 00:16:49,080 --> 00:16:51,720 pretty significant shareholder in Anthropic, which for as you 312 00:16:51,720 --> 00:16:54,680 can tell by now on this podcast, we're kind of fans of anthropics 313 00:16:54,680 --> 00:16:58,760 style at this point, you could say in how they they do things. 314 00:16:58,760 --> 00:17:01,440 And it's a it's a strong growing business with top models. 315 00:17:01,440 --> 00:17:04,800 So the two new funds they raised with this fundraise are the 316 00:17:04,800 --> 00:17:08,760 Lightspeed Co investment fund, which is about $600 million and 317 00:17:08,760 --> 00:17:12,359 a single investor vehicle that was $1.25 billion. 318 00:17:12,640 --> 00:17:18,560 Those exist for existing LP's to tack on more money to double 319 00:17:18,560 --> 00:17:23,119 down on specific bets so in and those basically exist because of 320 00:17:23,119 --> 00:17:26,680 how big AI rounds are getting. There are certain LP's who want 321 00:17:26,680 --> 00:17:31,160 to have even more exposure to top AI deals and those funds 322 00:17:31,160 --> 00:17:35,360 exist so they can opt in to give Lightspeed even more money on 323 00:17:35,360 --> 00:17:37,800 ones that they think Lightspeed has an advantage of getting into 324 00:17:37,800 --> 00:17:40,480 further rounds on and getting additional ownership. 325 00:17:40,720 --> 00:17:42,960 So those are what those two additional structures are, which 326 00:17:42,960 --> 00:17:46,640 total it up to $9 billion, which is pretty hefty fundraising. 327 00:17:46,760 --> 00:17:48,920 What was one of them? So sorry, One of them is a 328 00:17:48,920 --> 00:17:52,480 sidecar. There are two kind of sidecars. 329 00:17:52,480 --> 00:17:55,680 Like are these real funds? These are real funds, but they 330 00:17:56,480 --> 00:18:02,040 basically exist because certain LP's wanted to double down more 331 00:18:02,040 --> 00:18:06,280 on later stage deals and it's a way of balancing the pro rata 332 00:18:06,280 --> 00:18:09,160 rights in those deals to where the LP's wanted to participate 333 00:18:09,160 --> 00:18:10,360 more. So all the. 334 00:18:10,360 --> 00:18:13,280 Different terms across some of the, you know, some of the more 335 00:18:13,280 --> 00:18:16,320 favorable. To but you have to be an LP in 336 00:18:16,320 --> 00:18:19,120 the early and growth funds if you want to get into these 337 00:18:19,120 --> 00:18:22,320 special two additional funds. So it's the same LP base. 338 00:18:22,320 --> 00:18:24,760 What's interesting to me with this and like I don't have the 339 00:18:24,760 --> 00:18:30,040 perspective, but like do other funds portion out their funds or 340 00:18:30,040 --> 00:18:32,560 do other firms portion out their funds in such a regimented 341 00:18:32,560 --> 00:18:35,000 segmented way? Or is this like basically a new 342 00:18:35,000 --> 00:18:38,440 marketing scheme for LP's where you're just like you can have 343 00:18:38,440 --> 00:18:42,320 access to the select fund, but if you want further exposure to 344 00:18:42,320 --> 00:18:45,360 later stage rounds, you can be select plus, you know, the 345 00:18:45,360 --> 00:18:47,680 sidecar, whatever they call it. Like, is this all just kind of a 346 00:18:47,680 --> 00:18:50,560 different way of divvying things up so you can essentially get 347 00:18:50,560 --> 00:18:52,800 more from an LP? Well, there's a lot going on 348 00:18:52,800 --> 00:18:55,960 that we don't know, but one reason you'd want separate funds 349 00:18:55,960 --> 00:18:57,720 is venture. How are venture capitalists 350 00:18:57,720 --> 00:19:00,480 compensated? I think that's that's worth a 351 00:19:01,040 --> 00:19:04,120 discussion here, right. So venture capitalists are 352 00:19:04,120 --> 00:19:09,200 compensated based on management fees and carry management fees. 353 00:19:09,200 --> 00:19:13,600 That's the two of the famous expression 2 and 20 means that 354 00:19:13,600 --> 00:19:19,280 they get 2% a year of the assets that they've raised. 355 00:19:19,440 --> 00:19:22,840 So you have bigger and bigger funds, you get larger and larger 356 00:19:22,840 --> 00:19:25,240 management fees. And so part of what's appealing 357 00:19:25,560 --> 00:19:28,480 about mega funds is that you have so much money that the 358 00:19:28,480 --> 00:19:31,720 management fees alone become very valuable. 359 00:19:31,720 --> 00:19:35,000 And who cares how well your investments do because you can 360 00:19:35,000 --> 00:19:38,680 make, you know, if you do the, we should do the math off 9 361 00:19:38,680 --> 00:19:40,160 billion. I mean, it depend not all these 362 00:19:40,160 --> 00:19:43,160 funds are the same fee structure and we don't they don't like 363 00:19:43,160 --> 00:19:47,000 announce the fee structure, but they're making hundreds of 364 00:19:47,000 --> 00:19:50,720 millions certainly in management fees alone. 365 00:19:50,880 --> 00:19:52,400 Now you have to run a bigger firm. 366 00:19:52,400 --> 00:19:56,040 You pay employees right The. Overhead goes up among you know, 367 00:19:56,040 --> 00:19:57,600 the number of partners that sort of thing. 368 00:19:57,600 --> 00:20:01,040 So it does get diluted out, but it's it's a pretty good market 369 00:20:01,040 --> 00:20:03,440 if you can make sums like this off your management fees. 370 00:20:03,440 --> 00:20:05,960 So if you're thinking about management fees, you want to 371 00:20:05,960 --> 00:20:08,400 have a big, you just want to raise a bunch of money, right, 372 00:20:08,400 --> 00:20:12,960 That's great for management fees on the carry side, you like 373 00:20:12,960 --> 00:20:18,440 having different funds, right. So if my venture fund does 374 00:20:18,440 --> 00:20:23,880 really well and I only get paid as a venture capitalist, if I, 375 00:20:23,920 --> 00:20:27,080 you know, double the value of my holdings or if there's some 376 00:20:27,320 --> 00:20:30,640 hurdle that I have to reach, I don't want that to be dragged 377 00:20:30,640 --> 00:20:33,840 down by the fact that then we double down later at bad 378 00:20:33,840 --> 00:20:36,520 valuations. And so we're not going to make, 379 00:20:36,560 --> 00:20:39,800 you know, we, we have a bigger and bigger pool of money we have 380 00:20:39,800 --> 00:20:42,040 to pay out until we reach our hurdle. 381 00:20:42,040 --> 00:20:49,000 So there to hit carry, it can be advantageous to split out funds 382 00:20:50,240 --> 00:20:52,240 so that. Meaning like having early, 383 00:20:52,240 --> 00:20:54,840 having late. Having right early could be in 384 00:20:54,840 --> 00:20:57,400 the money, but opportunity might not, you know. 385 00:20:57,400 --> 00:20:59,000 And so then it's like, oh, we make money off. 386 00:20:59,520 --> 00:21:02,920 Whereas if early and opportunity were the same fund, it's 387 00:21:02,920 --> 00:21:07,520 possible we don't make out and LP's know this. 388 00:21:08,080 --> 00:21:10,680 And this also could be in Lightspeed's case, they have, 389 00:21:10,760 --> 00:21:14,800 you know, 15-A and 15-B, which even splits the early. 390 00:21:14,800 --> 00:21:16,480 Level. Farther so there's like seed A 391 00:21:16,480 --> 00:21:20,080 and BC. So before you even get into 392 00:21:20,080 --> 00:21:21,600 growth, they're tearing it out that. 393 00:21:21,640 --> 00:21:25,880 Way it's possible they have some overall promise to LP's. 394 00:21:25,960 --> 00:21:31,160 I don't know like how much these things are operating stand alone 395 00:21:31,160 --> 00:21:35,560 versus they're saying overall we will make the money back. 396 00:21:35,560 --> 00:21:38,040 But but yeah, I don't, I don't think it's mostly about 397 00:21:38,040 --> 00:21:42,240 marketing and they're probably let you know some LP's 398 00:21:42,240 --> 00:21:45,640 concentrate in areas they like better and you know there 399 00:21:45,640 --> 00:21:47,560 there's, there's a lot of negotiating. 400 00:21:48,520 --> 00:21:51,320 But you don't think there's a way that you can, you know, get 401 00:21:51,320 --> 00:21:54,960 L like more money from an LP by offering them exposure to 402 00:21:54,960 --> 00:21:58,520 multiple funds within the firm? Like it just feels like it's 403 00:21:58,520 --> 00:21:59,800 like one. Yeah. 404 00:21:59,800 --> 00:22:02,760 It's just like 1 chunk of money going to 1 fun versus like, you 405 00:22:02,760 --> 00:22:05,360 know, it's just like a psychological thing of little 406 00:22:05,360 --> 00:22:08,080 bits will add up to a greater number, but it doesn't feel as 407 00:22:08,080 --> 00:22:11,560 psychologically, you know, like a huge chunk that's coming out 408 00:22:11,560 --> 00:22:14,040 of your fund like you're, you're I don't know you're. 409 00:22:14,040 --> 00:22:15,600 Doing different strategies, yeah. 410 00:22:15,600 --> 00:22:17,200 Yeah, yeah. It just feels like there's an 411 00:22:17,200 --> 00:22:19,120 appeal there. It also if you wanted to get a 412 00:22:19,120 --> 00:22:22,840 larger ownership share of one specific winning bet, which 413 00:22:22,840 --> 00:22:24,680 seems to be what everyone wants to do in the. 414 00:22:24,760 --> 00:22:26,960 AI. Race right, like everyone wants 415 00:22:26,960 --> 00:22:29,160 to be an open AI, everyone wants to be an anthropic with these 416 00:22:29,160 --> 00:22:32,560 kind of winner companies, you could have exposure as an LP 417 00:22:32,560 --> 00:22:35,440 from the growth fund, but you could also be in the Co 418 00:22:35,440 --> 00:22:37,360 investment fund and get more that way. 419 00:22:37,440 --> 00:22:40,160 So you could say, you know, they could sell it like, hey, if you 420 00:22:40,160 --> 00:22:43,800 want to get even more in Anthropic, you could opt into 421 00:22:43,800 --> 00:22:46,400 this additional fund. And it's doing so well. 422 00:22:46,400 --> 00:22:50,000 Why wouldn't you do that? You know, I think this new fund 423 00:22:50,000 --> 00:22:55,400 was broken in the New York Times and the way that the Times frame 424 00:22:55,400 --> 00:22:58,960 the story was like AI investment is going crazy right now. 425 00:22:59,000 --> 00:23:01,000 You need to be able to raise huge amounts of money in order 426 00:23:01,000 --> 00:23:04,280 to participate in these mega round seeds or you know, 427 00:23:04,280 --> 00:23:06,880 hundreds of millions of dollars and billion dollar valuations 428 00:23:06,880 --> 00:23:10,560 right off the bat. And this is just a response to 429 00:23:10,800 --> 00:23:13,680 the size of rounds that AI companies are are demanding. 430 00:23:13,920 --> 00:23:16,240 Is that basically what's going on here? 431 00:23:16,240 --> 00:23:19,520 When you see Lightspeed doing this, you know, astronomically 432 00:23:19,520 --> 00:23:22,480 large round comparatively to the other things just like this is 433 00:23:22,600 --> 00:23:25,000 AI, this is the bubble. This is just like the table 434 00:23:25,000 --> 00:23:27,480 stakes for participating. I I think, you know, there are 435 00:23:27,480 --> 00:23:31,000 two things going on in terms of why Lightspeed is able to raise 436 00:23:31,000 --> 00:23:35,080 this amount of money. 1 Limited partners, the the people and 437 00:23:35,080 --> 00:23:37,920 firms and institutions that invest in venture capital firms 438 00:23:38,320 --> 00:23:43,440 or sort of fleeing to the the best of the best related to the 439 00:23:43,440 --> 00:23:46,560 second phenomenon, which is companies are staying private 440 00:23:46,560 --> 00:23:50,640 forever and so there are these clear winners or apparent 441 00:23:50,640 --> 00:23:57,920 winners companies like open AI, Anthropic cursor clean data 442 00:23:57,920 --> 00:24:00,000 bricks didn't. Data bricks just raise like a 443 00:24:00,120 --> 00:24:01,720 series L. Recently, yeah. 444 00:24:01,720 --> 00:24:03,960 It's like a. 160. Billion or something? 445 00:24:04,640 --> 00:24:06,440 I'd never heard of a series L before that. 446 00:24:06,640 --> 00:24:08,760 Right. So they're staying private, 447 00:24:08,960 --> 00:24:12,600 which means that only sort of connected investors can really 448 00:24:12,600 --> 00:24:15,160 get access. And so firms like Lightspeed are 449 00:24:15,160 --> 00:24:17,720 well positioned to do those deals. 450 00:24:17,720 --> 00:24:21,040 And so they need way more than traditional venture capital 451 00:24:21,040 --> 00:24:25,800 money to invest. But what about AI specifically? 452 00:24:25,800 --> 00:24:30,680 Like is it just, I mean, is it, are we seeing rounds that are 453 00:24:31,080 --> 00:24:33,880 fewer and larger, like they're not really passing the hat 454 00:24:33,880 --> 00:24:36,880 around that widely? And so you just are entirely 455 00:24:36,880 --> 00:24:40,080 reliant on like you're saying these big name firms to give you 456 00:24:40,080 --> 00:24:41,520 allocation. You just don't have that much 457 00:24:41,520 --> 00:24:45,960 auction as an LP. Yeah, that's basically part of 458 00:24:45,960 --> 00:24:47,600 this too. There. 459 00:24:48,160 --> 00:24:52,120 He's hardly ever been, at least in my time reporting VC, just a 460 00:24:52,120 --> 00:24:55,760 clear kind of consensus view of what to invest in from all these 461 00:24:55,760 --> 00:24:58,680 firms, right? Like people have collectively 462 00:24:58,680 --> 00:25:01,800 decided that there are the winners in AI not for 463 00:25:01,800 --> 00:25:04,280 applications, the jury's still out there, but on the foundation 464 00:25:04,280 --> 00:25:06,440 model level, a lot of people think there's still a ton of 465 00:25:06,440 --> 00:25:09,200 value in these companies. There's not that many of them. 466 00:25:09,720 --> 00:25:13,200 They're very expensive operating companies, so the money they 467 00:25:13,200 --> 00:25:15,800 need to raise and keep growing is more. 468 00:25:16,000 --> 00:25:19,720 And so then the big players need more money to fund them because 469 00:25:19,720 --> 00:25:22,480 there's a sort of consensus view that these are the companies 470 00:25:22,480 --> 00:25:23,760 that we need to be backing right now. 471 00:25:23,760 --> 00:25:27,440 So it's kind of reinforcing. Yeah, I mean, you know, there's 472 00:25:27,440 --> 00:25:30,240 been some, it's almost like a meme at this point, but I've 473 00:25:30,240 --> 00:25:32,520 just seen it enough on on X to decide. 474 00:25:32,520 --> 00:25:34,880 This is like, I think people are discussing that. 475 00:25:34,880 --> 00:25:38,520 They're like only so many firms or or sorry, there are only so 476 00:25:38,520 --> 00:25:40,720 many start-ups that really matter right now in AI. 477 00:25:41,080 --> 00:25:45,400 And the ones that typically get names are like Anthropic cursor, 478 00:25:45,800 --> 00:25:49,560 open AI, Mercor for whatever reason gets gets Yeah, people. 479 00:25:49,640 --> 00:25:52,400 Love Mercor? Well, OK, I get it. 480 00:25:52,400 --> 00:25:55,320 I mean, you know, there's value in sort of, we basically do like 481 00:25:55,440 --> 00:25:58,720 reinforcement learning in human, like kind of they're basically 482 00:25:58,760 --> 00:26:02,480 like replaced scale as like kind of scale. 483 00:26:02,920 --> 00:26:04,640 Yeah, that's like the go to service. 484 00:26:04,640 --> 00:26:06,280 So sure, whatever. I don't really see those as tech 485 00:26:06,280 --> 00:26:08,440 companies, but they certainly have venture backing. 486 00:26:08,440 --> 00:26:11,920 But you basically if you're an LP, you want exposure to those 487 00:26:11,920 --> 00:26:14,400 companies and you're going to get pissed off if you don't get 488 00:26:14,400 --> 00:26:16,520 it. And so like the value that all 489 00:26:16,520 --> 00:26:19,320 of these firms basically have is say like, oh, we can get you in 490 00:26:19,320 --> 00:26:21,200 it, don't worry, don't worry, we'll get you in there and we'll 491 00:26:21,200 --> 00:26:23,680 get you in there in a big way. And it is incredibly 492 00:26:23,680 --> 00:26:25,720 concentrated. I mean, I don't know, Eric, like 493 00:26:25,720 --> 00:26:28,400 you were, you know, covering late stage venture in like the 494 00:26:28,400 --> 00:26:32,240 Uber era when there really weren't, you know, it was Uber 495 00:26:32,240 --> 00:26:35,360 and Lyft. I mean, was it the similar sort 496 00:26:35,360 --> 00:26:38,120 of competitiveness where there was just like a small number of 497 00:26:38,120 --> 00:26:41,360 firms that had access to these crazy Uber rounds? 498 00:26:41,360 --> 00:26:45,880 You know, in in the hedge fund world, people, you know, think 499 00:26:45,880 --> 00:26:48,800 it's sometimes crazy that it's like, you can raise this money 500 00:26:48,840 --> 00:26:52,440 with great fees and then you turn around and you invest in 501 00:26:52,680 --> 00:26:56,560 Meta, in Alphabet, you know, it's like anybody could do that. 502 00:26:56,560 --> 00:26:59,520 It's like what you're a genius. You like pick which one of the 503 00:26:59,520 --> 00:27:01,640 seven most important companies and go bigot it. 504 00:27:01,640 --> 00:27:03,240 And then you collect fees off of that. 505 00:27:03,600 --> 00:27:07,640 And I think there's a degree to which a only marginally more 506 00:27:07,640 --> 00:27:10,200 sophisticated version of that is now happening in venture 507 00:27:10,200 --> 00:27:14,280 capital, which is, oh, you're going to invest in open AI. 508 00:27:14,320 --> 00:27:18,320 Now VCs have the advantage of saying, well, you schlub can't 509 00:27:18,320 --> 00:27:24,320 get in open AI only I can. I, I don't totally, even though, 510 00:27:24,320 --> 00:27:26,440 you know, I follow this stuff very closely. 511 00:27:27,320 --> 00:27:32,200 I it's hard to come up with a non cynical reason why these 512 00:27:32,200 --> 00:27:35,160 companies, you know, gatekeep their investor base and 513 00:27:35,160 --> 00:27:39,400 therefore allow their investors to basically collect fees on 514 00:27:40,200 --> 00:27:43,120 what are, you know, you know, opening eyes desperate for any 515 00:27:43,120 --> 00:27:45,320 money can get right. So why does it restrict the 516 00:27:45,320 --> 00:27:48,360 investor base? I think the answer is just you 517 00:27:48,360 --> 00:27:52,440 create FOMO, you create this like sense that I need to get in 518 00:27:52,440 --> 00:27:55,240 by making it a little bit difficult by having prestigious 519 00:27:55,240 --> 00:27:58,560 people invest. And the people investing are, 520 00:27:58,560 --> 00:28:02,080 you know, bullish optimists who have an incentive to run around 521 00:28:02,080 --> 00:28:05,960 and say this is a great company. And so instead of just doing a 522 00:28:05,960 --> 00:28:09,160 fair market price, you sort of restrict the investor base and 523 00:28:09,160 --> 00:28:12,400 you create FOMO. And, you know, if you wanted to 524 00:28:12,600 --> 00:28:14,800 to to do it the normal way, you'd go public. 525 00:28:14,800 --> 00:28:18,240 So yeah, it's been this weird situation where, you know, 526 00:28:18,400 --> 00:28:20,920 insiders are getting a pretty good deal. 527 00:28:20,920 --> 00:28:22,560 Now, sometimes they get it wrong, right. 528 00:28:22,720 --> 00:28:25,920 If you dump all the money into the wrong one of these winners 529 00:28:25,920 --> 00:28:29,360 like, sometimes it doesn't work as well. 530 00:28:29,600 --> 00:28:32,000 There are, there are. Certainly concentration risk, 531 00:28:32,120 --> 00:28:33,480 right? And the traditional venture 532 00:28:33,480 --> 00:28:37,360 model was that you had a bunch of different bets that you've 533 00:28:37,360 --> 00:28:39,320 based on your research that could grow. 534 00:28:39,320 --> 00:28:42,680 But if a bunch of them didn't work, you had, you know, 535 00:28:42,720 --> 00:28:45,880 diversified and likelihood was that one or two definitely would 536 00:28:45,880 --> 00:28:48,120 go to the moon and become unicorns and exit for you and 537 00:28:48,120 --> 00:28:50,000 return your fund and make you rich and then some. 538 00:28:50,360 --> 00:28:54,120 And what's different now is you have really capital intensive 539 00:28:54,120 --> 00:28:56,960 businesses that also everyone wants to get in and it's 540 00:28:56,960 --> 00:29:00,400 mutually reinforcing to where there's this hype cycle and it's 541 00:29:00,400 --> 00:29:02,040 really exclusive to get in these deals. 542 00:29:02,040 --> 00:29:03,880 So you want to get on the cap table because it's going to be 543 00:29:03,880 --> 00:29:06,360 once in a lifetime company. And also if you're true 544 00:29:06,360 --> 00:29:08,200 believer, it's like, yeah, this is going to be maybe 545 00:29:08,200 --> 00:29:11,200 generational company and the highest technology and my LP's 546 00:29:11,200 --> 00:29:14,280 want to get it too. To bring it back to a earlier 547 00:29:14,280 --> 00:29:16,920 question of Tom's and to Lightspeed, This is why you have 548 00:29:16,920 --> 00:29:19,120 different funds. You know, you have traditional 549 00:29:19,120 --> 00:29:23,360 venture funds with diversified strategies, with premium fees 550 00:29:23,680 --> 00:29:26,920 that, you know, are looking for unexpected winners. 551 00:29:26,920 --> 00:29:30,040 And then you have these opportunity funds and sidecar 552 00:29:30,040 --> 00:29:33,000 funds that are basically like, yeah, we're gonna, you know, 553 00:29:33,000 --> 00:29:36,480 dump a bunch of money into the names that you know, and if 554 00:29:36,480 --> 00:29:39,400 you're a savvy LP, you already understand them pretty well. 555 00:29:39,400 --> 00:29:43,200 And the fees are gonna be lower, but still like you're, you're 556 00:29:43,200 --> 00:29:46,080 getting to make money by by getting your limited partners 557 00:29:46,080 --> 00:29:48,160 into pretty well known companies. 558 00:29:48,240 --> 00:29:50,880 It's almost like like a cable package or something, right? 559 00:29:50,880 --> 00:29:53,560 It's like if you're gonna get cable these days, it's like, 560 00:29:54,720 --> 00:29:56,440 yeah, it's like, I know I need ESPN. 561 00:29:56,440 --> 00:29:57,800 So like, that's a base level thing. 562 00:29:57,960 --> 00:30:00,280 If I'm gonna get a cable package, you gotta give me ESPN. 563 00:30:00,440 --> 00:30:02,840 Everything else on top of that is like, do I want the TBS 564 00:30:02,840 --> 00:30:05,120 package? Do I want like the Food Network 565 00:30:05,120 --> 00:30:06,520 package? All that stuff is just like 566 00:30:06,520 --> 00:30:09,520 spice on top of it that provides mild differentiation. 567 00:30:09,520 --> 00:30:13,000 But it's like you can't sell cable right now without ESPN. 568 00:30:13,000 --> 00:30:15,480 You can't get, you know, a VC fund without open AI. 569 00:30:15,480 --> 00:30:17,280 Anthropic. But you you also need to put 570 00:30:17,280 --> 00:30:20,800 your head more in that in the mind of the ultra rich, right? 571 00:30:21,000 --> 00:30:24,880 Their problem isn't, oh man, I just want ESPN and they're 572 00:30:24,880 --> 00:30:26,440 making me buy all this other stuff. 573 00:30:26,440 --> 00:30:29,160 Sometimes it's the opposite. It's like, I don't want to think 574 00:30:29,160 --> 00:30:31,160 about all this piddling little stuff. 575 00:30:31,160 --> 00:30:34,800 Like I want to write one huge check, you know, I don't know 576 00:30:34,800 --> 00:30:37,000 who the LP's are, but it's like, I'm Saudi Arabia. 577 00:30:37,000 --> 00:30:39,200 I don't want to see her worrying about like, oh, your venture 578 00:30:39,200 --> 00:30:41,640 strategy or I just want to be like, here's a bunch of money, 579 00:30:41,640 --> 00:30:43,080 like make me some money, you know? 580 00:30:43,120 --> 00:30:46,840 And like, part of the challenge, sincerely, of having huge pools 581 00:30:46,840 --> 00:30:49,520 of capital, even for professional investors like 582 00:30:49,520 --> 00:30:52,640 pension funds or sovereign wealth funds, is you, you want 583 00:30:52,640 --> 00:30:55,600 to put all your money in one place and get a substantial, 584 00:30:55,880 --> 00:31:00,520 reliable return. And firms like Lightspeed NEA, 585 00:31:00,560 --> 00:31:03,800 you know, is the sort of historical example of this where 586 00:31:03,800 --> 00:31:07,480 it's not necessarily aiming for classic venture capital 587 00:31:07,800 --> 00:31:11,320 performance, but saying we can do the market or better. 588 00:31:11,680 --> 00:31:14,720 And it's a huge amount of money, you know, don't worry, leave it 589 00:31:14,720 --> 00:31:17,520 with us. We'll we'll consistently return 590 00:31:17,520 --> 00:31:19,480 and. That's kind of what the mega 591 00:31:19,480 --> 00:31:22,640 funds are replicating. We talked a lot on this show 592 00:31:22,640 --> 00:31:25,080 before about the kind of maturation of venture as an 593 00:31:25,080 --> 00:31:27,080 asset class. And as it becomes more serious, 594 00:31:27,480 --> 00:31:33,040 these mega funds are functioning more like this mature asset 595 00:31:33,040 --> 00:31:37,440 class that these huge LP's, like you said, want a reliable return 596 00:31:37,800 --> 00:31:40,040 and put their money in. And traditional venture was of 597 00:31:40,040 --> 00:31:42,840 course, you know, moon shot ideas that make you really rich 598 00:31:42,840 --> 00:31:45,280 when they work. And when you're dealing with 599 00:31:45,280 --> 00:31:48,800 sums of money this big with institutional LP's with billions 600 00:31:48,800 --> 00:31:52,200 to park, they don't really want to risk losing all of it on the 601 00:31:52,200 --> 00:31:56,000 chance of like a 20X return. You know they would like 602 00:31:56,120 --> 00:32:00,880 reliable 3X4 X 5X which is not venture returns that 603 00:32:01,000 --> 00:32:02,280 historically people would be like. 604 00:32:02,600 --> 00:32:06,080 These are good but not like the crazy amazing returns, but it 605 00:32:06,080 --> 00:32:07,560 would be a great deal for your money. 606 00:32:08,160 --> 00:32:11,440 Well, the other evolution to that also seems to be Thrive, 607 00:32:11,440 --> 00:32:16,040 which, you know, I don't know how much they define this era of 608 00:32:16,240 --> 00:32:19,560 mega funds and acting as quasi private equity firms, but their 609 00:32:19,560 --> 00:32:23,280 involvement like fun to portfolio company is such a 610 00:32:23,280 --> 00:32:26,080 weird change from the way things were in the past. 611 00:32:26,080 --> 00:32:27,880 I mean, this, we weren't planning on talking about this 612 00:32:27,880 --> 00:32:30,120 in the episode, but just interesting to me that like I 613 00:32:30,120 --> 00:32:32,480 think it was this week or last week, you saw Open AI 614 00:32:32,840 --> 00:32:35,560 effectively taking some sort of a stake in Thrive. 615 00:32:36,040 --> 00:32:38,280 So like, you know, where one succeeds, the other one does 616 00:32:38,280 --> 00:32:39,760 too. The whole thing is hand in hand. 617 00:32:39,760 --> 00:32:41,480 I've been reporting on this a bit. 618 00:32:41,840 --> 00:32:44,840 It's through Thrive Holdings, their holding company vehicle, 619 00:32:44,840 --> 00:32:49,040 which Josh Joshua Kushner is also the CEO of, but is not the 620 00:32:49,040 --> 00:32:51,480 main Thrive fund, although it's under the Thrive umbrella. 621 00:32:51,680 --> 00:32:54,960 But it's like in a billion dollar holding company to double 622 00:32:54,960 --> 00:32:57,960 down on these AI bets. That's separate from the venture 623 00:32:57,960 --> 00:33:00,280 model. And this deal is structured to 624 00:33:00,280 --> 00:33:03,280 where engineers from Thrive Holdings and engineers and 625 00:33:03,280 --> 00:33:06,800 researchers from Open AI can be embedded with each other to 626 00:33:06,800 --> 00:33:11,000 learn how best to use the models to grow their other startups, 627 00:33:11,000 --> 00:33:12,880 like in their roll ups business for example. 628 00:33:13,160 --> 00:33:14,640 What? I'm sorry, engineers that 629 00:33:14,640 --> 00:33:16,240 thrive? What are their engineers that 630 00:33:16,240 --> 00:33:18,680 thrive? They have engineers at Thrive if 631 00:33:18,840 --> 00:33:22,360 that's what they say, and they're getting to learn from 632 00:33:22,360 --> 00:33:25,040 the best and brightest models from up in AI. 633 00:33:25,400 --> 00:33:27,400 And I guess the engineers of the company, yeah, I don't know. 634 00:33:27,400 --> 00:33:29,760 And the engineers? Go in and then work on these, 635 00:33:29,760 --> 00:33:32,040 you know, roll up companies where they're like figuring out 636 00:33:32,040 --> 00:33:36,320 how to use AI services to roll up, you know it. 637 00:33:37,520 --> 00:33:39,000 Makes sense for everybody involved. 638 00:33:39,000 --> 00:33:43,400 First of all, self dealing is the name of the game these days. 639 00:33:43,440 --> 00:33:48,040 Josh Kushner is running a great well respected firm with Thrive. 640 00:33:48,480 --> 00:33:51,760 He stood by Sam Altman when the board tried to go after Altman. 641 00:33:51,760 --> 00:33:54,480 He keeps betting on open AI successfully. 642 00:33:54,920 --> 00:33:56,600 Now. What does open AI want? 643 00:33:56,600 --> 00:34:00,400 They want fucking customers. And Thrive is like, oh, we're 644 00:34:00,400 --> 00:34:03,120 going to invest in a roll up vehicle of companies that could 645 00:34:03,440 --> 00:34:07,600 embrace foundation models and use them to revolutionize 646 00:34:07,600 --> 00:34:10,040 plumbing or whatever vertical it is. 647 00:34:10,360 --> 00:34:14,639 And so then Open AI wants those customers and wants to reward 648 00:34:14,639 --> 00:34:17,280 Josh Kushner for being a loyal ally. 649 00:34:17,280 --> 00:34:19,600 So they they share brands and partner. 650 00:34:19,960 --> 00:34:22,719 Yeah, I mean, this is this is how business gets done. 651 00:34:22,719 --> 00:34:24,440 Not even, not even necessarily cynically. 652 00:34:24,440 --> 00:34:27,800 I mean, it's just it, it makes sense for both parties. 653 00:34:27,880 --> 00:34:30,840 But yeah. All this sort of deliver on that 654 00:34:30,840 --> 00:34:33,280 end is I guess TBD, but it sounds. 655 00:34:33,280 --> 00:34:34,760 I know. Well, I'm interested to see this 656 00:34:34,760 --> 00:34:37,320 roll up story there. I mean, there's so much energy 657 00:34:37,320 --> 00:34:40,360 around rollups, but it feels like everybody's interested in 658 00:34:40,360 --> 00:34:44,120 the strategy. You know, we have to see it, you 659 00:34:44,120 --> 00:34:46,199 know, play it out in the the companies. 660 00:34:46,320 --> 00:34:48,880 Yeah, it's too early for a lot of these companies that were 661 00:34:48,880 --> 00:34:52,480 really formed in some cases by the venture with the venture 662 00:34:52,480 --> 00:34:55,760 firms as basically the creators who then bring in a CEO who are 663 00:34:55,760 --> 00:34:59,240 workshop this concept and then acquire an existing service 664 00:34:59,240 --> 00:35:04,080 business or ones where the they meet a founder that wants to 665 00:35:04,400 --> 00:35:07,520 expand their services and say here's some capital, why not do 666 00:35:07,520 --> 00:35:09,200 a roll up and buy this other business. 667 00:35:09,480 --> 00:35:12,160 So they, we will see how these do. 668 00:35:12,400 --> 00:35:15,720 It's only been really in the last year or two that these 669 00:35:15,720 --> 00:35:20,440 companies have started. So the jury's still out on how 670 00:35:20,800 --> 00:35:23,880 successful this will be. Although of course, investors 671 00:35:23,880 --> 00:35:26,400 I've talked to, granted ones who've made these kind of bets, 672 00:35:26,400 --> 00:35:28,680 say that they're doing quite well, but of course they'd like 673 00:35:28,680 --> 00:35:29,920 to. Say that I want to make three 674 00:35:29,920 --> 00:35:34,080 quick points on the mega funds and Lightspeed before we wrap up 675 00:35:34,920 --> 00:35:41,240 this this portion. One, the mega funds, certainly 676 00:35:41,240 --> 00:35:44,920 Andreessen Horowitz and Lightspeed did really well in 677 00:35:44,920 --> 00:35:47,440 the beginning like we published in February Lightspeed's 678 00:35:47,440 --> 00:35:52,640 performance and you know, their first couple funds are first 679 00:35:52,640 --> 00:35:58,760 quartile venture funds. You know, they 3X TVPI, their 680 00:35:58,760 --> 00:36:03,960 first fund, you know they're outperforming other venture 681 00:36:03,960 --> 00:36:06,440 capital firms. And so it is the firm's 682 00:36:06,440 --> 00:36:09,880 obviously you know what you'd expect that did well in the 683 00:36:09,880 --> 00:36:13,200 beginning that said, oh, give us a lot of money and we'll do it 684 00:36:13,200 --> 00:36:15,400 at scale. And then you know, they've had 685 00:36:15,400 --> 00:36:19,120 successful funds, but some of them are second quartile. 686 00:36:20,000 --> 00:36:24,120 But, but what's really important here is that these venture firms 687 00:36:24,120 --> 00:36:28,680 got really big and it takes a while to prove that the really 688 00:36:28,680 --> 00:36:31,680 big strategy works as well as the venture strategy. 689 00:36:31,680 --> 00:36:34,840 So I think we're still in a period we're waiting to see 690 00:36:35,040 --> 00:36:38,960 whether they can do as well with a lot of money as they did with 691 00:36:38,960 --> 00:36:41,120 a little bit of money. The one thing that's happened 692 00:36:41,120 --> 00:36:44,520 since February when it was like, oh wow, they're, they're raising 693 00:36:44,520 --> 00:36:48,320 on an old strategy, while their strategy is much bigger is they, 694 00:36:48,360 --> 00:36:50,160 they've dumped a lot of money into anthropic. 695 00:36:50,160 --> 00:36:52,600 Even at the time, I think it was like their second largest 696 00:36:52,600 --> 00:36:55,080 holding or sign. They're really escalating their 697 00:36:55,080 --> 00:36:57,280 anthropic position. And that's only gotten marked 698 00:36:57,280 --> 00:37:00,160 up. So the AI bubble in some ways 699 00:37:00,560 --> 00:37:03,480 has only supported he's mega fun. 700 00:37:03,480 --> 00:37:06,840 So that's that's one. I think 2:00 we're just going to 701 00:37:06,840 --> 00:37:09,080 be very interested in like, you know, general catalysts, like 702 00:37:09,080 --> 00:37:11,880 will it go public? Andreessen, you know, I think 703 00:37:12,880 --> 00:37:15,960 Ben and Ben and Mark Ben Horowitz and Mark Andreessen are 704 00:37:15,960 --> 00:37:19,800 very savvy marketers. I think they had an LP meeting 705 00:37:19,800 --> 00:37:23,160 where they they opened it up. We're not thinking about going 706 00:37:23,160 --> 00:37:26,360 public, which of course, you know, raises the like, right. 707 00:37:26,880 --> 00:37:28,040 Oh, was it you bring? Up. 708 00:37:28,440 --> 00:37:29,720 Right. You know, it's like we're not, 709 00:37:29,720 --> 00:37:32,280 we're not doing it, but oh, was it on people's minds, you know? 710 00:37:32,280 --> 00:37:34,880 Questions about my Not Going Public shirt are answered by my 711 00:37:34,880 --> 00:37:38,040 Yeah, I've answered. By not public shirt so so you 712 00:37:38,040 --> 00:37:39,800 know, they're all professionalizing, they're 713 00:37:39,800 --> 00:37:43,400 hiring, you know, people from, you know, Blackstone and big 714 00:37:43,400 --> 00:37:45,440 private equity. They're getting wealth managers, 715 00:37:45,440 --> 00:37:48,240 they're pursuing multiple strategies. 716 00:37:49,160 --> 00:37:52,160 And so it's just going to be interesting to watch this asset 717 00:37:52,160 --> 00:37:54,200 class grow up. I do think, you know, small 718 00:37:54,200 --> 00:37:58,880 venture capital firms are so important for the VC ethos that 719 00:37:59,000 --> 00:38:04,080 that the sort of power struggle between mega funds and and small 720 00:38:04,080 --> 00:38:06,000 firms will be interesting to watch. 721 00:38:06,280 --> 00:38:10,280 And then the final point is just if you're in Silicon Valley, you 722 00:38:10,280 --> 00:38:13,400 got to sort of breathe a sigh of relief that firms like 723 00:38:13,400 --> 00:38:16,480 Lightspeed have all this money because their job is to deploy 724 00:38:16,480 --> 00:38:17,760 it. And so even if we're in a 725 00:38:17,760 --> 00:38:22,320 bubble, if the public market bursts tomorrow, Lightspeed 726 00:38:22,320 --> 00:38:25,760 still has all this money pretty locked up now. 727 00:38:25,800 --> 00:38:29,600 You know, they can slow down for six months, but they're probably 728 00:38:29,600 --> 00:38:32,160 going to deploy it at a fairly steady pace. 729 00:38:32,160 --> 00:38:35,440 So the fact that all this money has been put into a venture 730 00:38:35,440 --> 00:38:39,040 capital firm is a sign that as much as people yelled out, yell 731 00:38:39,040 --> 00:38:42,160 about a bubble, at least on the private markets, there's plenty 732 00:38:42,160 --> 00:38:46,560 of money to keep investing in startups and keep keep some of 733 00:38:46,560 --> 00:38:49,680 the activity level. If you know Anthropic, Open AI 734 00:38:49,680 --> 00:38:53,240 or NVIDIA, you know, correct, Maybe that means, you know, 735 00:38:53,240 --> 00:38:56,480 Lightspeed and others shift more money to new companies or, you 736 00:38:56,480 --> 00:38:59,680 know, the big companies stay private and they gobble up a lot 737 00:38:59,680 --> 00:39:02,240 of the money and then not as much for startups. 738 00:39:02,440 --> 00:39:05,360 But it's it's a large pool of money available to the startup 739 00:39:05,400 --> 00:39:08,640 ecosystem, which gives some confidence that, you know, 740 00:39:08,720 --> 00:39:11,040 Silicon Valley's not going away anytime soon. 741 00:39:11,360 --> 00:39:14,080 At the very least, it kind of papers over this narrative that 742 00:39:14,080 --> 00:39:16,480 we keep coming across, which is that we're actually in a down 743 00:39:16,480 --> 00:39:19,440 cycle for startups. And you know, a lot of people 744 00:39:19,440 --> 00:39:21,720 are are like companies are struggling to raise funds. 745 00:39:21,720 --> 00:39:24,760 And we had Kate Clark on here a couple of months ago talking 746 00:39:24,760 --> 00:39:28,000 about, you know, the plight of a lot of these early stage, you 747 00:39:28,000 --> 00:39:31,480 know, a round funds, which is a real thing, but no one really 748 00:39:31,640 --> 00:39:33,920 pays attention to it. When you can see the light 749 00:39:33,920 --> 00:39:36,640 speeds of the world raising multi $1,000,000 funds and 750 00:39:36,640 --> 00:39:39,880 startups reaching these half trillion dollar valuations, it's 751 00:39:39,880 --> 00:39:42,240 like that's the recession right now. 752 00:39:42,240 --> 00:39:44,400 It's like companies worth hundreds of billions of dollars 753 00:39:44,400 --> 00:39:46,840 is a recession, which, you know, there's a very strong case to 754 00:39:46,840 --> 00:39:50,680 make that it is one, but it just doesn't compute with, you know, 755 00:39:50,680 --> 00:39:53,400 money still flooding into a small number of megaphones. 756 00:39:53,440 --> 00:39:56,520 Well, before we wrap up on Lightspeed, Tom, what's your 757 00:39:56,760 --> 00:39:58,680 Snapchat story? Sure. 758 00:39:58,680 --> 00:40:03,360 So famously Snapchat their first investor was was Lightspeed and 759 00:40:03,640 --> 00:40:08,080 the story actually goes that. It's the Barry Eggers see like 760 00:40:08,080 --> 00:40:10,640 one of the early kind of Cove Cove cofounding partners of of 761 00:40:10,640 --> 00:40:14,320 Lightspeed. His daughter was in high school 762 00:40:14,320 --> 00:40:17,000 and she was using Snapchat and she would come home and be like 763 00:40:17,000 --> 00:40:18,560 dad, dad, dad. There's this funny app that 764 00:40:18,560 --> 00:40:20,600 everyone's using where he message and it disappears and 765 00:40:20,600 --> 00:40:21,920 it's like he's like, isn't that for sexting? 766 00:40:21,920 --> 00:40:24,560 She's like, dad, there's this really cool app that everyone's 767 00:40:24,560 --> 00:40:28,480 using. And so they were begging Evan, 768 00:40:28,480 --> 00:40:31,000 who didn't he, he didn't like the Evan Spiegel. 769 00:40:31,000 --> 00:40:33,240 He hated VC firms. And so he never wanted to 770 00:40:33,240 --> 00:40:37,000 provide any sort of access to, to, to a lot of funds. 771 00:40:37,000 --> 00:40:38,600 But eventually they broke him down. 772 00:40:38,880 --> 00:40:42,480 And Jeremy Liu, who is now kind of somewhat associated with 773 00:40:42,480 --> 00:40:45,200 Lightspeed, but fairly not. He's he's mostly retired. 774 00:40:45,440 --> 00:40:48,800 Yeah, he was able to convince him to invest, but Evan hated 775 00:40:48,800 --> 00:40:52,640 the terms and he kind of felt that they had him like bent over 776 00:40:52,640 --> 00:40:55,680 a barrel and got too much control, which, you know, that 777 00:40:55,680 --> 00:40:59,120 whole mindset from Evan ended up being like kind of a horrible 778 00:40:59,120 --> 00:41:01,440 aspect of Snapchat. I mean, he maintains. 779 00:41:01,760 --> 00:41:04,160 The company public performance has been terrible, right? 780 00:41:04,320 --> 00:41:06,040 Because. He has total control over it and 781 00:41:06,040 --> 00:41:08,080 so basically. No one can do anything. 782 00:41:08,400 --> 00:41:10,520 Yeah, no. Shareholders, you can't fire the 783 00:41:10,520 --> 00:41:12,680 guy and he's running the company in the way that he's running. 784 00:41:12,680 --> 00:41:15,120 I'm not going to make a judgment, but but anyway, it's 785 00:41:15,120 --> 00:41:17,040 kind of like a seed of destruction anyway. 786 00:41:17,200 --> 00:41:20,360 It's worth it was once like, you know, one of the sexiest social 787 00:41:20,360 --> 00:41:22,760 media companies in the world. He could have sold it. 788 00:41:22,920 --> 00:41:25,280 It's worth $13 billion. He probably could have sold it 789 00:41:25,280 --> 00:41:29,680 for 13 billion. In like 2016 or 2017, yeah. 790 00:41:29,720 --> 00:41:32,520 I mean, Facebook was going to buy it for like a single digit 791 00:41:32,520 --> 00:41:34,840 billions at one point. But at the top, at, you know, at 792 00:41:34,840 --> 00:41:37,800 the top of the market during the, the, the pandemic, I think 793 00:41:37,800 --> 00:41:40,640 it was close to 100 billion. So it's it's a disaster. 794 00:41:40,920 --> 00:41:44,640 But anyway, you know, Lightspeed ends up having a huge falling 795 00:41:44,640 --> 00:41:46,440 out with Evan because he hated the terms. 796 00:41:46,440 --> 00:41:49,080 It was kind of like a Motown artist who, you know, felt that 797 00:41:49,080 --> 00:41:51,920 he was being taken advantage of by, you know, Berry Gordy. 798 00:41:53,360 --> 00:41:54,760 Good reference to anyone who cares that. 799 00:41:55,720 --> 00:41:56,880 Was a. Great reference. 800 00:41:56,880 --> 00:42:00,840 All the best references you know are good only to you, but yeah. 801 00:42:00,920 --> 00:42:03,240 Sure. But anyway, and so, but the 802 00:42:03,240 --> 00:42:05,880 funniest part of this whole story to me is that as a way of 803 00:42:05,880 --> 00:42:07,880 like saying thank you because this is 1 of Lightspeed's 804 00:42:07,880 --> 00:42:10,840 biggest early successes. Like it kind of puts them on the 805 00:42:10,840 --> 00:42:13,840 map and to a point that I think they're annoyed because they're 806 00:42:13,840 --> 00:42:16,960 not really a consumer tech company is they end up. 807 00:42:17,200 --> 00:42:20,360 So this is a high school Barry. Barry Edgar's daughter goes to 808 00:42:20,360 --> 00:42:23,440 this high school in Silicon Valley and they happen to have 809 00:42:23,440 --> 00:42:26,280 like some sort of an endowment or or some sort of fun 810 00:42:26,280 --> 00:42:29,360 associated with the high school. And so they actually give the 811 00:42:29,360 --> 00:42:34,400 endowment some equity into Snapchat from like an A stage 812 00:42:34,400 --> 00:42:35,960 round. And when the company goes 813 00:42:35,960 --> 00:42:40,280 public, that stake ends up being worth like 10s of millions of 814 00:42:40,280 --> 00:42:42,640 dollars. And so there's like random high 815 00:42:42,640 --> 00:42:46,040 school, relatively random high school at the. 816 00:42:46,080 --> 00:42:48,160 Time Snapchat. Yeah, it was 1,000,000 on 817 00:42:48,160 --> 00:42:50,360 Snapchat. Hopefully they sold at the IPO, 818 00:42:50,360 --> 00:42:52,520 but. Yeah, anyway, they made so some 819 00:42:52,520 --> 00:42:55,000 high school made a a shit ton of money off of Snapchat because of 820 00:42:55,000 --> 00:42:58,240 Lightspeed, which is a firm that Evan Spiegel hated. 821 00:42:59,160 --> 00:43:00,920 And it's, it was one of my favorite stories that I wrote 822 00:43:00,920 --> 00:43:02,640 covering Snapchat back in the day. 823 00:43:02,640 --> 00:43:04,760 So anyway, there's my Lightspeed Snapchat story. 824 00:43:05,240 --> 00:43:06,360 Cool. Well, that's our episode. 825 00:43:06,800 --> 00:43:08,960 Thanks so much. Thank you for tuning into this 826 00:43:08,960 --> 00:43:11,520 week's episode of the podcast. If you're new here, please like 827 00:43:11,520 --> 00:43:13,360 and subscribe. It really helps out the channel. 828 00:43:13,440 --> 00:43:15,680 Listen in for new episodes every week, wherever you get your 829 00:43:15,680 --> 00:43:16,240 podcasts.