1 00:00:00,640 --> 00:00:03,720 Hi, I'm Eric Newcomer. And I am Madeline Rinbarger. 2 00:00:04,120 --> 00:00:10,880 And this is the newcomer podcast each week. 3 00:00:11,040 --> 00:00:14,640 Eric and I discuss the VC deals and the drama that went down. 4 00:00:15,240 --> 00:00:16,800 Let's do it. Here we go. 5 00:00:17,280 --> 00:00:20,520 Welcome back and happy Tech Inauguration Week, Eric. 6 00:00:21,560 --> 00:00:25,720 Happy I I'm happy, but I don't know if I think the inauguration 7 00:00:25,720 --> 00:00:29,080 week is it's. A cause for celebration? 8 00:00:29,080 --> 00:00:31,280 Sort of. I'm happy despite everything 9 00:00:31,280 --> 00:00:32,520 that's going. On is it a cause for 10 00:00:32,520 --> 00:00:34,360 celebration? I mean, the image is really 11 00:00:34,360 --> 00:00:36,000 stuck with me. We've written a lot about, you 12 00:00:36,000 --> 00:00:38,160 know, tech and politics over the last few months. 13 00:00:38,160 --> 00:00:42,520 And we had all the tech CEO's sitting right behind the dais, 14 00:00:42,520 --> 00:00:48,160 as if you will, if as Trump was inaugurated, Elon Musk, Jeff 15 00:00:48,160 --> 00:00:51,640 Bezos and his wife Lauren Sanchez, Sundar Pichai from 16 00:00:51,640 --> 00:00:55,360 Google all lined up ready in the front. 17 00:00:55,520 --> 00:01:00,040 View you know, it's like the anti elite candidate, you know 18 00:01:00,040 --> 00:01:04,120 the the guy who doesn't who represents the masses has got 19 00:01:04,720 --> 00:01:06,600 you know all. His He's not the establishment. 20 00:01:06,600 --> 00:01:10,400 CEOs on stage with his cabinet secretaries and we've got 21 00:01:10,400 --> 00:01:13,160 governors sort of cast off to the side. 22 00:01:13,760 --> 00:01:17,640 You know, I feel like the the conservative critique of the 23 00:01:17,640 --> 00:01:22,120 left is always that, you know, where we have the left, which I 24 00:01:22,120 --> 00:01:25,680 include myself with such a hive mind, we're we're sheep. 25 00:01:25,680 --> 00:01:29,680 We're all sort of humming at the same tune. 26 00:01:30,240 --> 00:01:32,960 And then to watch the inauguration where like 27 00:01:32,960 --> 00:01:36,600 everybody's on message. It's like DI is over. 28 00:01:36,600 --> 00:01:40,400 My Twitter feed is like singular in its message of this new 29 00:01:40,400 --> 00:01:43,680 moment in time. Goodbye liberal groupthink. 30 00:01:43,680 --> 00:01:48,560 Hello conservative groupthink. I, I, my Twitter, maybe I need 31 00:01:48,560 --> 00:01:51,520 to get on blue sky. I'm sure some of the Democrats 32 00:01:51,520 --> 00:01:53,360 on here will be like, get off Twitter and you'll see a 33 00:01:53,360 --> 00:01:55,920 different world. But my Twitter is like so 34 00:01:55,920 --> 00:01:58,200 unanimous. It's like DI's over. 35 00:01:58,560 --> 00:02:01,200 It feels like the fight is whether it's like we're getting 36 00:02:01,200 --> 00:02:03,800 rid of DI or getting rid of, like, the Civil Rights Act 37 00:02:03,960 --> 00:02:06,360 itself. Yeah. 38 00:02:06,360 --> 00:02:07,680 And we. And then at the same time, 39 00:02:07,680 --> 00:02:10,960 you've got the sort of conservatives paying fealty to 40 00:02:10,960 --> 00:02:14,000 Trump. You know, you've got Sam Altman 41 00:02:14,320 --> 00:02:18,600 and Masayoshi Son doing the Stargate thing with Trump, 42 00:02:18,600 --> 00:02:22,440 though, obviously, you know, if it's a $500 billion deal or 43 00:02:22,440 --> 00:02:24,280 whatever, it didn't come together in the Trump 44 00:02:24,280 --> 00:02:26,600 administration. You could imagine that. 45 00:02:26,880 --> 00:02:29,920 Had to have taken a lot of time and effort to put together. 46 00:02:29,960 --> 00:02:32,680 This is clearly a, you know, Trump jumping on something that 47 00:02:32,680 --> 00:02:33,920 was already existing. Right. 48 00:02:33,920 --> 00:02:37,440 So you've got in the works, you've got, you know, at once 49 00:02:37,960 --> 00:02:41,040 sort of a collective decision that we're moving on from sort 50 00:02:41,040 --> 00:02:43,320 of the cultural moment of the woke years. 51 00:02:43,360 --> 00:02:48,160 And we're there's no resistance. All the elites are going to pay 52 00:02:49,000 --> 00:02:53,800 fealty to Trump and hope that sort of kissing up to them, 53 00:02:53,840 --> 00:02:57,120 he'll forget his hatred. You know, there was a point on 54 00:02:57,120 --> 00:03:00,480 one of the interviews just I have to say this where Mark 55 00:03:00,480 --> 00:03:05,000 Zuckerberg complained about how like Joe Biden had talked about 56 00:03:05,000 --> 00:03:06,480 him. I think Joe Biden may be called 57 00:03:06,760 --> 00:03:09,960 Zuck and oligarch where Trump has literally called for like 58 00:03:09,960 --> 00:03:13,080 Zuckerberg to be like jailed. You know, it's just like somehow 59 00:03:13,120 --> 00:03:17,640 it's like the tough talk from the Democrats was so mean. 60 00:03:17,640 --> 00:03:20,400 They mentioned that we're very wealthy, like. 61 00:03:20,720 --> 00:03:23,720 But in Trump, meanwhile, like, throws around the idea that he's 62 00:03:23,720 --> 00:03:25,360 going to, like, jail his opponents. 63 00:03:25,360 --> 00:03:28,720 And people are like, Oh yeah, like, you know, that's Trump. 64 00:03:29,320 --> 00:03:32,400 He's just talking. Anyway, it's yeah, it's a little 65 00:03:32,400 --> 00:03:38,640 too much groupthink for me. It's not just the ultra wealthy, 66 00:03:38,680 --> 00:03:42,440 you know, business owners of VC class that are really in the 67 00:03:42,440 --> 00:03:44,840 group think right now. I mean, there's a really good 68 00:03:44,840 --> 00:03:47,640 piece by Margo McCall and TechCrunch this week about all 69 00:03:47,640 --> 00:03:52,520 of the founders circling between David Sachs's crypto parties and 70 00:03:52,520 --> 00:03:55,680 the crypto ball and all of the different parties in Washington 71 00:03:55,680 --> 00:03:58,600 trying to get as close as possible to these bigwigs, but 72 00:03:58,600 --> 00:04:02,280 also the Trump administration themselves for deals, contracts. 73 00:04:02,480 --> 00:04:05,880 So it extends beyond just the people with the clearest 74 00:04:05,960 --> 00:04:08,560 financial incentive right now. Yeah, why do you? 75 00:04:08,560 --> 00:04:09,640 Think that is. Yeah. 76 00:04:09,680 --> 00:04:13,520 I mean, so you know, groupthink, natural human tendency, but this 77 00:04:13,520 --> 00:04:16,720 moment goes far beyond that. I think one, there are a couple 78 00:04:16,720 --> 00:04:18,120 things happening. One which you just sort of 79 00:04:18,120 --> 00:04:21,040 touched on is people want government contracts. 80 00:04:21,040 --> 00:04:23,520 I think for good, it feels like this is going to be a great 81 00:04:23,520 --> 00:04:27,240 moment for business. Let's do some business. 82 00:04:27,280 --> 00:04:30,920 I mean, I think both of our concerns is that this could be, 83 00:04:31,080 --> 00:04:33,200 I think we're calling it grit versus grift. 84 00:04:33,240 --> 00:04:35,960 You know, in the newsletter, it's like hopefully this is a 85 00:04:35,960 --> 00:04:38,840 moment of grit where everybody's building and doing real things. 86 00:04:39,000 --> 00:04:42,600 You know, for all Elon's faults, he does build rocket ships and 87 00:04:42,600 --> 00:04:45,880 great electric cars. Or it could be grift and the 88 00:04:45,880 --> 00:04:49,400 Trump token and just sort of instead of government contracts 89 00:04:49,400 --> 00:04:52,920 going to sort of boondoggle defense contractors now, they're 90 00:04:52,920 --> 00:04:55,520 going to go to startups with fake products that are still 91 00:04:55,520 --> 00:04:59,440 developing. So certainly here I you, we are 92 00:04:59,440 --> 00:05:04,480 cheering for grit over grift. But I think we've got both, both 93 00:05:04,480 --> 00:05:07,000 types of people sort of leaning in and hoping to get what they 94 00:05:07,000 --> 00:05:09,720 can out of Trump. Well, you look at some of his 95 00:05:09,720 --> 00:05:12,560 executive orders he signed this week, he repealed Biden's 96 00:05:12,560 --> 00:05:16,560 executive order on AI safety, which I mean, we've talked about 97 00:05:16,560 --> 00:05:18,360 there were good things and bad things in that order. 98 00:05:18,360 --> 00:05:21,880 But I think Marc Andreessen rightly pointed out that that 99 00:05:22,000 --> 00:05:24,720 really favored big tech incumbents with the reporting 100 00:05:24,720 --> 00:05:28,640 requirements and developments over startups in the AI field. 101 00:05:28,640 --> 00:05:32,480 So for AI startups, for people, you know, pushing technology, 102 00:05:32,480 --> 00:05:35,000 some of the regulations really did not favor them. 103 00:05:35,160 --> 00:05:38,720 So in some ways that there's moves already happening that 104 00:05:38,880 --> 00:05:42,320 could really be beneficial, yes, for the money makers, but also 105 00:05:42,320 --> 00:05:43,800 for. Everyone Trump's going to 106 00:05:43,800 --> 00:05:46,720 unleash energy development, but then seems to single out like 107 00:05:46,720 --> 00:05:50,440 stuff like what wind farms and some other renewables where it's 108 00:05:50,440 --> 00:05:53,080 like that's actually where technology could help. 109 00:05:53,360 --> 00:05:58,560 So I, I hope the energy sort of regulation, I, I hope if he's 110 00:05:58,560 --> 00:06:03,080 going to clear the way for reduce regulations on oil and 111 00:06:03,080 --> 00:06:07,920 gas that extends to new forms of energy that could take us to a, 112 00:06:07,920 --> 00:06:10,760 a better place. I mean, to me, though, the most 113 00:06:10,760 --> 00:06:14,640 shameless reversal is just the abandonment of like diversity, 114 00:06:14,640 --> 00:06:18,160 equity and inclusion. The problems with DI were it's 115 00:06:18,160 --> 00:06:19,960 sort of run through human resources. 116 00:06:19,960 --> 00:06:23,280 It's like heavy-handed. It's, you know, in some ways too 117 00:06:23,280 --> 00:06:25,600 bureaucratic. And now we have those same 118 00:06:25,600 --> 00:06:29,760 bureaucracies in the sort of big tech companies saying like, all 119 00:06:29,760 --> 00:06:31,560 right, we now we need to root them out. 120 00:06:31,560 --> 00:06:34,160 It's like you were the ones doing this in a super 121 00:06:34,160 --> 00:06:37,480 heavy-handed way. In the first place, I think 122 00:06:37,480 --> 00:06:40,080 what's most surprising to me, I guess that's surprising, but 123 00:06:40,080 --> 00:06:44,720 just a little shocking coming right around now is it always 124 00:06:44,720 --> 00:06:47,800 felt a bit like that could have been, you know, bureaucratic. 125 00:06:48,200 --> 00:06:50,400 Like for all of the complaints we've had about these programs, 126 00:06:50,400 --> 00:06:52,960 right? The swiftness in which every 127 00:06:52,960 --> 00:06:54,920 single one of these organizations dropped them, I 128 00:06:54,920 --> 00:06:56,760 feel like just revealed the game, right? 129 00:06:56,760 --> 00:06:58,760 Like it was like, OK, you literally did not care, right? 130 00:06:59,280 --> 00:07:01,720 I always. Thought like, oh, you know, I 131 00:07:01,720 --> 00:07:05,560 support the effort of more diversity, certainly the sort of 132 00:07:05,560 --> 00:07:08,920 ideas of uni role and like like you should think about sort of 133 00:07:08,920 --> 00:07:10,520 diverse candidates and your pipeline. 134 00:07:10,520 --> 00:07:13,440 That to me still makes sense and we shouldn't walk away from 135 00:07:13,440 --> 00:07:14,560 that. Obviously. 136 00:07:15,040 --> 00:07:18,640 I I felt like some of it, some of the talk moved away from 137 00:07:18,640 --> 00:07:22,880 meritocracy and meritocracy did sort of become a more taboo 138 00:07:22,880 --> 00:07:24,760 world and some of the more leftist circles. 139 00:07:24,760 --> 00:07:26,680 I think that it's probably a mistake. 140 00:07:27,960 --> 00:07:31,160 I will say besides Trump, I just think there's there's a reality 141 00:07:31,160 --> 00:07:34,640 that like when we were in peak DI, there was sort of like a lot 142 00:07:34,640 --> 00:07:36,640 of hiring. It was boom time, 2021 143 00:07:36,640 --> 00:07:39,160 valuations. Interest rates were really low. 144 00:07:39,160 --> 00:07:40,440 I was. Like, oh, we want to fire 145 00:07:40,440 --> 00:07:41,640 people. We've got AI. 146 00:07:41,640 --> 00:07:44,680 We don't need as many people. And so it's like, oh, we're just 147 00:07:44,680 --> 00:07:48,360 going to hunker down with like, our sort of elite tech workers, 148 00:07:48,360 --> 00:07:51,200 and we're a little less worried about who's getting on sort of 149 00:07:51,200 --> 00:07:54,760 the boat with us. It's also been a big shift in 150 00:07:54,760 --> 00:07:57,760 the media environment. I mean, Sam Altman was sitting 151 00:07:57,760 --> 00:08:00,760 with Dio Vaughn in the podcaster row at the inauguration. 152 00:08:00,760 --> 00:08:04,840 So this alternative media apparatus, especially on the 153 00:08:04,840 --> 00:08:07,320 right, is now getting equal credence to a lot of these 154 00:08:07,320 --> 00:08:11,480 wealthy tech donors right now. Eric, what do you make of, you 155 00:08:11,480 --> 00:08:15,240 know, this kind of thinking that is spouted on these shows that 156 00:08:15,240 --> 00:08:17,400 we've, you know, touched on occasionally in the newsletter? 157 00:08:17,560 --> 00:08:20,800 As the owner of a media company, I do love this meme that 158 00:08:21,080 --> 00:08:23,320 attention is the most valuable resource. 159 00:08:23,320 --> 00:08:25,120 It's like fuck money, you need attention. 160 00:08:25,120 --> 00:08:27,480 It's like, great, all right, I'm in the right business all of a 161 00:08:27,480 --> 00:08:29,240 sudden. I love eating impressions. 162 00:08:29,840 --> 00:08:32,000 Exactly. It's like, OK, we if you can 163 00:08:32,000 --> 00:08:34,240 worm into people's brain, that's that's worth something. 164 00:08:34,240 --> 00:08:36,960 I mean, it is worth something. But now, now people are saying 165 00:08:36,960 --> 00:08:39,960 it's worth a lot. So certainly cheering for that. 166 00:08:39,960 --> 00:08:41,799 I mean, I have no problem with like Theo Von. 167 00:08:41,799 --> 00:08:44,480 I mean, I've only really consumed him through his TikTok. 168 00:08:44,480 --> 00:08:47,720 But I, I, I enjoy some of these like podcasters. 169 00:08:47,720 --> 00:08:52,600 It's like, fine, you know, I'm very interested in beset, you 170 00:08:52,600 --> 00:08:55,360 know, there's so 1 meme is attention is everything now. 171 00:08:55,360 --> 00:08:57,520 And Trump won because he controlled attention. 172 00:08:57,520 --> 00:08:59,280 I think there's some truth to that. 173 00:08:59,280 --> 00:09:03,080 The other meme is like the open sort of oligarchy. 174 00:09:03,080 --> 00:09:05,920 I think part of what's happening here is, you know, the New York 175 00:09:05,920 --> 00:09:08,960 Times ran an interview. Ezra Klein, you know, conducted 176 00:09:08,960 --> 00:09:12,400 the interview with Curtis, Curtis Yarvin, who's sort of a 177 00:09:12,400 --> 00:09:15,840 monarchist, the type of person that the, you know, mainstream 178 00:09:15,840 --> 00:09:17,440 media would have said don't platform him. 179 00:09:17,640 --> 00:09:20,520 But now obviously that Trump's in charge, you know, he's 180 00:09:20,520 --> 00:09:22,200 getting interviewed. I think Marc Andreessen was 181 00:09:22,200 --> 00:09:24,360 like, just because you read somebody doesn't mean you agree 182 00:09:24,360 --> 00:09:26,600 with them. And I take him at his word. 183 00:09:26,600 --> 00:09:28,720 I do think there can be an overcorrection. 184 00:09:29,000 --> 00:09:31,960 But you, you know, you see sort of in the discussion people. 185 00:09:31,960 --> 00:09:34,920 He's clearly very influential and very well read within these 186 00:09:34,920 --> 00:09:37,320 circles. Tohrenberg, you know, was 187 00:09:37,600 --> 00:09:41,880 writing tweets basically riffing off some of Yarvin's points. 188 00:09:42,080 --> 00:09:46,560 So it's it's definitely in the air again, this sort of 189 00:09:46,560 --> 00:09:50,800 contradiction that Trump runs as the populace, the everyman. 190 00:09:51,040 --> 00:09:54,720 And now it feels like literally like the oligarchs are sort of 191 00:09:55,040 --> 00:09:57,880 suiting up to like be be in charge. 192 00:09:58,760 --> 00:10:02,200 And, you know, I don't know. Well, they're commanding fine. 193 00:10:02,200 --> 00:10:04,720 They're commanding money. They have government power with 194 00:10:04,720 --> 00:10:07,080 Doge, and they also have attention with this media 195 00:10:07,080 --> 00:10:08,200 apparatus. Yeah. 196 00:10:08,800 --> 00:10:14,520 And you know, I'm, I started off the Trump election by saying if 197 00:10:14,920 --> 00:10:17,200 we're gonna, and I think maybe I said it on the podcast last 198 00:10:17,200 --> 00:10:20,560 week, it's like if we're going to have a version of if Trump's 199 00:10:20,560 --> 00:10:23,320 in charge, the version I want is the tech elites running it. 200 00:10:23,320 --> 00:10:26,520 So in some ways I've come out in the pro oligarch. 201 00:10:27,080 --> 00:10:29,440 You can't, you know, like, oh. Yeah, if we're going to have you 202 00:10:29,440 --> 00:10:30,360 heard it here first, we're going. 203 00:10:30,960 --> 00:10:33,560 To have the a given that it's. Strong, Eric. 204 00:10:33,560 --> 00:10:35,520 Newcomer endorses tech oligarchy. 205 00:10:35,640 --> 00:10:38,200 I mean, I'm just saying like of the options, like, and the 206 00:10:38,200 --> 00:10:40,960 oligarchs all fight with each other and like, you know, I, I 207 00:10:41,000 --> 00:10:45,120 think there is sort of the yeah, I mean, obviously I wanted to 208 00:10:45,120 --> 00:10:46,840 mock. I want, you know, the American 209 00:10:46,840 --> 00:10:48,240 people to vote on the next person. 210 00:10:48,240 --> 00:10:50,320 I want as many Americans as possible to vote. 211 00:10:50,560 --> 00:10:56,080 And I am terrified by sort of the unilateral presidential 212 00:10:56,080 --> 00:10:58,880 power. I am somewhat annoyed with Biden 213 00:10:58,880 --> 00:11:03,720 pardoning his family and with Biden at the 11th hour trying to 214 00:11:03,720 --> 00:11:06,040 pretend like he could unilaterally pass a 215 00:11:06,040 --> 00:11:08,520 constitutional amendment. Like, why would you want to be 216 00:11:08,520 --> 00:11:11,000 seizing executive power right before you hand it over to a 217 00:11:11,000 --> 00:11:13,800 president that every Democrat is terrified is going to take too 218 00:11:13,800 --> 00:11:16,560 much executive power? So I I'm really worried about 219 00:11:16,560 --> 00:11:19,360 executive power. I am not supporting any sort of 220 00:11:19,840 --> 00:11:23,720 monarchy and oligarchy in terms of the president just doing 221 00:11:23,720 --> 00:11:25,800 whatever they want. And that is deeply troubling to 222 00:11:25,800 --> 00:11:29,480 me. But in terms of do I want Musk 223 00:11:29,480 --> 00:11:31,320 and people running around? Yeah. 224 00:11:31,320 --> 00:11:34,480 As long as they're not trying to find the way to make Trump, you 225 00:11:34,480 --> 00:11:37,800 know, the CEO of America, then then, yeah. 226 00:11:37,800 --> 00:11:42,800 I'm still right now think that's the best of sort of a nightmare 227 00:11:42,800 --> 00:11:45,040 situation that America finds itself in. 228 00:11:45,240 --> 00:11:48,160 Eric, I'm going to challenge your pro tech oligarchy stance 229 00:11:48,160 --> 00:11:51,520 here simply just because this first week of the Trump 230 00:11:51,520 --> 00:11:54,680 presidency, we've already seen in a crypto pump and dump scheme 231 00:11:54,720 --> 00:11:57,760 from the president. Certainly the regulators that 232 00:11:57,760 --> 00:12:00,280 he's been appointing around crypto, people are very excited 233 00:12:00,280 --> 00:12:03,040 about because they're looking to deregulate the industry. 234 00:12:03,280 --> 00:12:06,240 But this just sort of embodied everything that people criticize 235 00:12:06,240 --> 00:12:09,680 the industry about, right? And that's coming in week one. 236 00:12:09,720 --> 00:12:11,960 Yeah, I mean, so. The self dealing is going to be 237 00:12:12,000 --> 00:12:15,200 worrying. I mean, it's, it's clearly like 238 00:12:15,200 --> 00:12:16,800 lost. I mean, it's sort of like a lost 239 00:12:16,800 --> 00:12:19,560 cause. They're so like openly corrupt. 240 00:12:19,840 --> 00:12:22,280 I mean, I think part of the hope is that all the tech companies, 241 00:12:22,320 --> 00:12:24,560 you know, are ultimately competitive with each other, 242 00:12:24,560 --> 00:12:29,080 that Elon is dunking on Stargate and says they don't have the 243 00:12:29,080 --> 00:12:32,080 money, even though Trump was announcing it with Sam Altman on 244 00:12:32,080 --> 00:12:34,040 stage. I mean, that's. 245 00:12:34,040 --> 00:12:35,960 True. That's a one good place where he 246 00:12:35,960 --> 00:12:39,600 wasn't immediately, you know, kissing the ring and being, you 247 00:12:39,600 --> 00:12:43,760 know, immediately, like immediately subservient to, oh, 248 00:12:43,760 --> 00:12:45,520 this is so great. This is this great project. 249 00:12:45,520 --> 00:12:47,560 He is willing to say things where he feels like it's. 250 00:12:48,120 --> 00:12:50,200 Of course he has his own vested interest with you know what? 251 00:12:50,240 --> 00:12:53,040 I mean, like if they all, if they're all just sort of 252 00:12:53,360 --> 00:12:56,160 aligned, then we lose sort of all of capitalism. 253 00:12:56,160 --> 00:12:59,840 We need the big companies to be sort of racing each other and 254 00:12:59,840 --> 00:13:02,040 competing. I, I mean, I am very, you know, 255 00:13:02,040 --> 00:13:05,200 and I'm somewhat sort of tongue in cheek about the oligarch. 256 00:13:05,200 --> 00:13:07,600 I, I'm, I'm, I'm somewhat supportive of the oligarchs. 257 00:13:07,600 --> 00:13:10,040 I'm not pro oligarchy. I want that to be very. 258 00:13:11,240 --> 00:13:13,320 Clarifying point here on the newcomer. 259 00:13:13,320 --> 00:13:18,200 Podcast I do worry that the sort of like tech, the tech CEOs in 260 00:13:18,200 --> 00:13:21,080 some ways can lose sight of sort of what you're saying the 261 00:13:21,080 --> 00:13:25,160 importance of like our norms and like good business practices and 262 00:13:25,160 --> 00:13:29,360 all that and sort of this sort of running towards Trump and 263 00:13:29,360 --> 00:13:31,360 just saying, oh, we're gonna have a business bonanza. 264 00:13:31,680 --> 00:13:35,200 It's like we do need sort of, you know, like just my own 265 00:13:35,200 --> 00:13:37,160 psychology, right. It's like I'm building a 266 00:13:37,160 --> 00:13:39,440 business person. I'm building a business myself. 267 00:13:39,440 --> 00:13:42,480 It's like what you should want in America is to build a real 268 00:13:42,480 --> 00:13:45,600 business of substance. At the same time, it's like, oh, 269 00:13:45,600 --> 00:13:49,280 we should have a fucking token. If it's like like grab money, 270 00:13:49,280 --> 00:13:51,160 Well, it's like falling out of the sky, you know? 271 00:13:51,160 --> 00:13:54,400 And there is like you can see in your own personal psychology 272 00:13:54,400 --> 00:13:57,600 that sort of norms eroding, you know, I sound like a 273 00:13:57,600 --> 00:13:59,520 conservative. It's like we need character and 274 00:13:59,520 --> 00:14:01,400 values, you know, and we need. The rule of law. 275 00:14:01,840 --> 00:14:04,200 Right, exactly. It's like I, I do think a lot of 276 00:14:04,200 --> 00:14:06,880 the things the traditional conservatives believed in were 277 00:14:06,880 --> 00:14:08,840 important. You know, if we had Mitt Romney 278 00:14:08,840 --> 00:14:11,480 or his father, you know, talking about what America is about, 279 00:14:11,720 --> 00:14:15,600 those are the things that I really worry we're losing. 280 00:14:15,600 --> 00:14:18,120 Like, in some ways, the problem of Trumpism is going to be 281 00:14:18,400 --> 00:14:22,200 losing the conservatism of like, good business principles and how 282 00:14:22,200 --> 00:14:27,040 a business should operate in the sort of normal, the norms beyond 283 00:14:27,040 --> 00:14:33,000 just like, get cash, do whatever you know, And yeah, so I want. 284 00:14:33,000 --> 00:14:35,400 To bring up a point you've made in the newsletter before, Eric, 285 00:14:35,520 --> 00:14:39,880 the norms and laws and rule of law are help what make America 286 00:14:39,920 --> 00:14:42,480 the best place to practice business in the world, right? 287 00:14:42,520 --> 00:14:44,640 And we have set rules. We have. 288 00:14:44,720 --> 00:14:46,080 Lawyer. I know. 289 00:14:46,080 --> 00:14:51,040 Yeah, Lawyers love this. Lawyers love me. 290 00:14:52,360 --> 00:14:57,120 No, but seriously, the having the rule of law helps businesses 291 00:14:57,120 --> 00:15:00,720 flourish and conduct and grow. And if you don't have that and 292 00:15:00,720 --> 00:15:04,120 that's just immediately thrown out the door, that opens a whole 293 00:15:04,120 --> 00:15:06,800 can of worms around whether or not businesses will operate 294 00:15:06,800 --> 00:15:08,960 fairly under capitalism. But it's just straight to 295 00:15:08,960 --> 00:15:12,000 cronyism, which doesn't make for a healthy tech ecosystem. 296 00:15:12,720 --> 00:15:14,480 Right. Yeah. 297 00:15:14,480 --> 00:15:16,760 I mean, you know, we, it's competing interests. 298 00:15:16,760 --> 00:15:19,880 Clearly there's too much sort of bureaucracy. 299 00:15:19,880 --> 00:15:24,440 There are a lot of organizations that seemed designed to say no, 300 00:15:24,440 --> 00:15:28,640 some of them lawyers themselves. But. 301 00:15:29,400 --> 00:15:31,120 But yeah, I, I believe in the rule of law. 302 00:15:31,120 --> 00:15:34,800 And I think sort of Elon and Trump both represent sort of 303 00:15:34,800 --> 00:15:38,680 just a total disregard for the right way to do things and that 304 00:15:38,680 --> 00:15:40,600 we should have certain procedures. 305 00:15:40,600 --> 00:15:43,560 And it's deeply troubling. I mean, my, my high level 306 00:15:43,560 --> 00:15:47,760 message is like, I think the mood is way too optimistic about 307 00:15:47,760 --> 00:15:50,320 Trump. This is just sort of like kiss 308 00:15:50,320 --> 00:15:52,440 the ring. It's what makes sense right now. 309 00:15:52,480 --> 00:15:55,720 You know, I've sort of embodied the stance as sort of the the 310 00:15:55,720 --> 00:15:59,000 opposition that it's like we need to give them time to sort 311 00:15:59,000 --> 00:16:01,720 of fuck up enough without otherwise we just sound like 312 00:16:01,720 --> 00:16:03,640 whiners, right? It's like better for us. 313 00:16:03,640 --> 00:16:07,160 So like Duke, I mean, do a couple things have real, you 314 00:16:07,160 --> 00:16:09,520 know, real objectionable stuff that we can. 315 00:16:09,520 --> 00:16:12,880 Well, we want the future of the country to be good and for tech 316 00:16:12,880 --> 00:16:16,040 to succeed, so if things workout, obviously that would be 317 00:16:16,120 --> 00:16:16,720 great. Right. 318 00:16:16,720 --> 00:16:18,400 You're right. It's not even a it's not even a 319 00:16:18,400 --> 00:16:20,560 pose. It's like if you are great, like 320 00:16:20,560 --> 00:16:24,200 godspeed, but I'm skeptical. And when you fail, then we will 321 00:16:24,200 --> 00:16:27,840 seize on that as a good point of how this has been totally 322 00:16:27,840 --> 00:16:30,000 misguided. But until then, giving you a 323 00:16:30,000 --> 00:16:32,520 second, you know, it's like we're not even really, you know, 324 00:16:32,520 --> 00:16:36,240 the, the whole Musk hand gesture, like, I don't know 325 00:16:36,240 --> 00:16:38,800 what's in his heart, but I think it's a losing political fight. 326 00:16:38,800 --> 00:16:43,880 You know, it's just sort of like I, I want to do something that, 327 00:16:44,720 --> 00:16:50,440 you know, Nick Fuentes thinks is like a signal to to me, but 328 00:16:51,040 --> 00:16:53,040 right you. Know, but if certain audiences 329 00:16:53,040 --> 00:16:54,960 view it a certain way, that kind of tells. 330 00:16:55,360 --> 00:17:00,640 You exactly that it's a mistake, but but yeah, I I don't think 331 00:17:00,640 --> 00:17:03,280 it's the message that we should be fighting on. 332 00:17:03,280 --> 00:17:07,079 I mean, we're waiting for terrible treatment of human 333 00:17:07,079 --> 00:17:08,880 beings. I mean, I, I'm deeply worried, 334 00:17:08,880 --> 00:17:14,240 just like I hope that the left wing response to this is sort of 335 00:17:14,240 --> 00:17:19,240 that sort of love and taking care of our fellow person and a 336 00:17:19,240 --> 00:17:22,920 lot of honestly Christian values that, you know, are important 337 00:17:23,319 --> 00:17:26,040 and like that Trump doesn't embody any of them. 338 00:17:26,040 --> 00:17:30,160 I mean, that's sort of unfamiliar language to the left, 339 00:17:30,160 --> 00:17:33,880 but yeah, I think that's going to emerge eventually that we, 340 00:17:34,240 --> 00:17:36,240 you know, it's just so mean spirited to me. 341 00:17:37,160 --> 00:17:39,480 Yeah, that he's complaining about like the Bishop just 342 00:17:39,480 --> 00:17:41,760 saying, like, care about people like that. 343 00:17:41,760 --> 00:17:43,520 That would be so. That was just. 344 00:17:43,520 --> 00:17:47,440 Ridiculous. Yeah, yeah, that was that was 345 00:17:47,440 --> 00:17:49,920 just ridiculous anti Episcopal slander. 346 00:17:50,520 --> 00:17:53,400 But why? I don't know that I was raised 347 00:17:53,400 --> 00:17:54,600 Episcopal. Yeah, actually. 348 00:17:55,920 --> 00:17:58,120 I'm I'm an interior universalist, so I'm even more 349 00:17:58,160 --> 00:17:59,600 left wing. You're even more than this. 350 00:17:59,600 --> 00:18:00,600 Practice. Nice. 351 00:18:01,960 --> 00:18:04,840 Yeah, We want tech and tech business to succeed. 352 00:18:04,840 --> 00:18:07,800 We want the golden era of tech and venture returns. 353 00:18:07,800 --> 00:18:11,160 And on that note, let's shift gears to actually talking about 354 00:18:11,160 --> 00:18:12,720 business for once on this podcast. 355 00:18:12,720 --> 00:18:16,360 We'll do our jobs, not talk about politics and just just 356 00:18:16,360 --> 00:18:19,520 call balls and strikes on on business what's what's on the 357 00:18:19,520 --> 00:18:23,120 slate. Well, on the slate today jumping 358 00:18:23,120 --> 00:18:24,160 in. Let's jump in. 359 00:18:24,160 --> 00:18:29,720 Let's dive into the deals. No, on the slate is fresh data 360 00:18:29,720 --> 00:18:32,160 from you, Tim. We've got the data from the 361 00:18:32,200 --> 00:18:35,840 University of Texas and Texas A&M Investment Management 362 00:18:35,840 --> 00:18:38,640 Company internal rate of. Return, we've got, we've got how 363 00:18:38,640 --> 00:18:39,600 the venture. Firms are doing. 364 00:18:39,840 --> 00:18:42,160 Tracking over time. We have to reel down. 365 00:18:42,200 --> 00:18:47,080 Nerdy venture shit. This is real in the weeds. 366 00:18:47,080 --> 00:18:50,640 We have the we have the fund return metrics as reported by 367 00:18:50,640 --> 00:18:52,560 FOIA requests. Let's get into it. 368 00:18:52,560 --> 00:18:55,480 You care how GGV was doing pre China split. 369 00:18:55,480 --> 00:18:58,520 We have the answers. Right here. 370 00:18:58,880 --> 00:19:01,560 Subscribe Now No. Seriously, I mean, you should 371 00:19:01,640 --> 00:19:02,480 subscribe. This is good. 372 00:19:02,480 --> 00:19:04,920 This is the classic newcomer story you should subscribe for 373 00:19:04,920 --> 00:19:06,320 because we're going to touch on some of it. 374 00:19:06,320 --> 00:19:10,040 But ultimately we have, you know, charts of USB's 375 00:19:10,040 --> 00:19:12,720 performance. We have the actual filing 376 00:19:13,360 --> 00:19:16,560 screenshots so you can see what you Tim is telling people. 377 00:19:16,560 --> 00:19:19,840 This is definitely we're going to give you the themes here. 378 00:19:19,840 --> 00:19:23,520 But if you if you're want to get into numbers, you should become 379 00:19:23,520 --> 00:19:27,040 a pain subscriber to newcomer. What were your takeaways from 380 00:19:27,040 --> 00:19:30,280 digging into this report? Jumping in some top takeaways, 381 00:19:30,520 --> 00:19:32,200 the biggest things, I'll give you some high level stuff 382 00:19:32,200 --> 00:19:35,240 because again, you should subscribe to see the full charts 383 00:19:35,240 --> 00:19:37,960 and the full data. Thrive Capital was the biggest 384 00:19:37,960 --> 00:19:41,040 outlier in Utimco returns. They've only been in Thrive for 385 00:19:41,040 --> 00:19:44,040 a couple of years. So there it's a newer investment 386 00:19:44,040 --> 00:19:49,200 for Utimco, but they are rapidly outperforming a lot of other. 387 00:19:49,200 --> 00:19:53,560 Bricks Carvana open AI turns out invest in very valuable things. 388 00:19:53,560 --> 00:19:56,320 I mean I called them like the I give them the SoftBank Tiger 389 00:19:56,320 --> 00:19:59,840 Global award for top tick investing or whatever the end of 390 00:19:59,840 --> 00:20:01,280 this year. Now we're saying they're they're 391 00:20:01,280 --> 00:20:03,720 doing a great job because it turns out if you make 392 00:20:03,720 --> 00:20:06,880 investments at huge late stage rounds and they get marked up, 393 00:20:06,880 --> 00:20:10,280 you look like a genius and yeah, you get to skip the whole J 394 00:20:10,280 --> 00:20:11,040 curve. So. 395 00:20:11,320 --> 00:20:13,480 You do and one and one point also too. 396 00:20:13,760 --> 00:20:16,280 One piece I also got from talking to pitch book analysts 397 00:20:16,440 --> 00:20:20,720 for this piece was that because Thrive's portfolio is so heavily 398 00:20:20,720 --> 00:20:24,440 indexed in a lot of these later stage AI companies, these 399 00:20:24,440 --> 00:20:26,000 companies are hot. They've been going back to 400 00:20:26,000 --> 00:20:28,240 market multiple times a year sometimes. 401 00:20:28,400 --> 00:20:30,960 So the markups happen a lot quicker than traditional venture 402 00:20:31,160 --> 00:20:35,200 like that really is inflating their performance metrics just 403 00:20:35,240 --> 00:20:38,360 by the sheer number of times these companies that are in 404 00:20:38,480 --> 00:20:40,280 Thrive's portfolio are going back to market. 405 00:20:40,520 --> 00:20:43,840 That's one thing that helps them stand out, but otherwise there's 406 00:20:43,840 --> 00:20:46,480 kind of Thrive and then there's kind of everybody else is the 407 00:20:46,480 --> 00:20:48,160 other thing I'd say. From these attractions, 408 00:20:48,200 --> 00:20:51,240 literally if you look at it, it's like, you know, because old 409 00:20:51,240 --> 00:20:54,080 funds do well and then we look at newer funds and they take 410 00:20:54,080 --> 00:20:58,440 longer to to do well and thrive is sort of pretty new and in the 411 00:20:58,440 --> 00:21:01,440 positive where everybody else, if you look at the chart is sort 412 00:21:01,440 --> 00:21:03,600 of negative if they're a young fund, so. 413 00:21:03,800 --> 00:21:06,960 If they're 2020 or later, yeah. I mean, the other big theme that 414 00:21:06,960 --> 00:21:11,240 came out of this was just when as funds get older, you 415 00:21:11,240 --> 00:21:15,120 generally expect their IRR to improve, but that's not what we 416 00:21:15,120 --> 00:21:16,400 saw. What's going on there? 417 00:21:16,800 --> 00:21:20,600 Yeah, some are pretty steady. I will say Union Square Ventures 418 00:21:20,720 --> 00:21:23,600 only had mild declines in some of its older funds. 419 00:21:23,600 --> 00:21:28,040 So that, so if you have the strength of a portfolio, it's 420 00:21:28,040 --> 00:21:31,280 not guaranteed that you'll see big depreciation. 421 00:21:31,280 --> 00:21:35,560 However, across the board even some of these older vintages are 422 00:21:35,560 --> 00:21:38,720 their IRRS are going down, some are remaining positive. 423 00:21:38,720 --> 00:21:40,720 So that's great. And the lot haven't fully 424 00:21:40,720 --> 00:21:42,840 slipped into negative return territory. 425 00:21:42,840 --> 00:21:47,880 But it is looking overall like the curve from the downturn is 426 00:21:47,880 --> 00:21:50,640 very visible in the data in a way that it wasn't last year. 427 00:21:50,720 --> 00:21:53,120 Like we've now had about three years of the venture downturn 428 00:21:53,120 --> 00:21:56,400 and you can see it in the downward slope of IRR across all 429 00:21:56,400 --> 00:22:01,600 these funds, The only exception. Your portfolio companies in 2021 430 00:22:02,600 --> 00:22:06,240 the boat like that was the that was the exit opportunity moment 431 00:22:06,240 --> 00:22:09,160 and if you didn't do that, like your portfolio is going to keep 432 00:22:09,160 --> 00:22:10,520 getting worse. I mean, that's. 433 00:22:11,240 --> 00:22:13,800 Another exception I will give though, I have to give credit 434 00:22:13,800 --> 00:22:17,000 where credit is due. Sequoia we mentioned a lot and 435 00:22:17,000 --> 00:22:19,960 their returns not looking as great because U Temco only got 436 00:22:19,960 --> 00:22:22,800 in in 2020 and 2021. So again it's a recency bias 437 00:22:22,800 --> 00:22:25,400 kind of thing. But a lot of their US and 438 00:22:25,400 --> 00:22:29,520 European vintages that are the funds you know pre split before 439 00:22:29,520 --> 00:22:34,080 they pulled out their China and India holdings, those are now 440 00:22:34,080 --> 00:22:36,720 switching into positive IRR. So they're starting to see that 441 00:22:36,720 --> 00:22:40,160 typical J curve, the returns are coming in for those funds, so. 442 00:22:41,120 --> 00:22:45,120 They're good at what they do. So take away from this bullish 443 00:22:45,120 --> 00:22:47,640 on Sequoia, but for the rest of the data you should like and 444 00:22:47,640 --> 00:22:49,160 subscribe. Yeah, cool. 445 00:22:49,160 --> 00:22:51,280 And we're going to have more. Honestly, we have I think a lot 446 00:22:51,280 --> 00:22:56,160 of data coming in the next month inside venture, both macro and 447 00:22:56,160 --> 00:23:00,200 sort of at the firm level. So yeah, I feel bullish on. 448 00:23:00,200 --> 00:23:01,880 Stay tuned. You're going to want to pull out 449 00:23:01,880 --> 00:23:03,360 your checkbook by the end of the next. 450 00:23:03,880 --> 00:23:05,880 Month. All right, let's wrap up with 451 00:23:05,880 --> 00:23:09,200 our deal of the week. Madeline, you, you track these 452 00:23:09,200 --> 00:23:11,720 closely. What What was the big deal in 453 00:23:11,720 --> 00:23:14,240 tech this week? Divvy Homes property tech 454 00:23:14,240 --> 00:23:17,760 Company announced Wednesday that it is getting acquired by 455 00:23:17,760 --> 00:23:21,120 Brookfield Properties, the real estate mega corporation, for 456 00:23:21,120 --> 00:23:24,280 about a billion dollars. Divvy Homes is a property tech 457 00:23:24,280 --> 00:23:27,120 company. My understanding is that they 458 00:23:27,120 --> 00:23:31,080 help people with a rent to own model where they can rent A home 459 00:23:31,080 --> 00:23:33,720 and move in right away and then you know, build in savings for a 460 00:23:33,720 --> 00:23:36,920 down payment over time in that sort of zone of the property 461 00:23:36,920 --> 00:23:38,880 tech space. A good exit. 462 00:23:39,080 --> 00:23:43,000 Not a great exit considering its valuation in 20/21 was 2.3 463 00:23:43,000 --> 00:23:46,120 billion, but it's not 0. So that's good. 464 00:23:46,480 --> 00:23:48,360 Don't raise too much capital along the way. 465 00:23:48,480 --> 00:23:51,160 They also had a lot more debt than a traditional venture 466 00:23:51,160 --> 00:23:55,040 backed company has. They raised around 700 million 467 00:23:55,040 --> 00:23:59,000 total, but that's a combination of debt and equity they raised 468 00:23:59,000 --> 00:24:02,200 from the former GDD Capital, which has split, but also 469 00:24:02,200 --> 00:24:04,720 Andreessen Horowitz and Tiger Global. 470 00:24:05,280 --> 00:24:07,920 And their last big round was in 2021. 471 00:24:07,920 --> 00:24:16,080 So it's kind of a classic 2021. Story I would. 472 00:24:16,080 --> 00:24:23,160 Say Most likely not, but it is an exit I will say one part that 473 00:24:23,160 --> 00:24:28,000 has some you know some a little frustrated with this deal was 474 00:24:28,080 --> 00:24:32,480 after repaying its debt and transaction costs, no common 475 00:24:32,480 --> 00:24:35,920 shareholders in divvy homes will receive any consideration from 476 00:24:35,920 --> 00:24:37,960 this exit which. Brutal for the employees you 477 00:24:37,960 --> 00:24:39,400 build. Brutal for the employees. 478 00:24:39,640 --> 00:24:42,320 A billion dollar business, though, you know, I guess if it 479 00:24:42,320 --> 00:24:45,080 has all that, you know, very complicated to say that it's a 480 00:24:45,080 --> 00:24:48,240 billion dollar business, but still you build something of 481 00:24:48,240 --> 00:24:53,000 value to someone and you're not getting any money out of it, but 482 00:24:53,000 --> 00:24:54,880 you're paid in shares. That's brutal. 483 00:24:55,520 --> 00:24:57,200 Yeah. It's been a tough couple years 484 00:24:57,200 --> 00:25:00,360 for property tech as a venture backed category overall. 485 00:25:00,560 --> 00:25:04,760 So this exit, at least there's something there, but it does 486 00:25:04,760 --> 00:25:08,040 feel also sort of indicative of this being a tough category. 487 00:25:08,800 --> 00:25:13,320 All right, that's our episode. If you want us to publish more 488 00:25:13,960 --> 00:25:17,720 venture performance, you can be part of the solution. 489 00:25:18,720 --> 00:25:21,960 E-mail us at Newcomer at newcomer.co or. 490 00:25:22,040 --> 00:25:24,400 Send us your venture returns. You're gonna reach us both at 491 00:25:24,400 --> 00:25:28,360 our first names at newcomer.co. Yeah, send us stuff. 492 00:25:28,360 --> 00:25:31,200 We're always happy to take anonymously sourced. 493 00:25:31,280 --> 00:25:35,480 We prefer anonymously sourced information, so do your part. 494 00:25:35,720 --> 00:25:40,240 Keep the information flowing and we'll talk about business and 495 00:25:40,360 --> 00:25:42,240 not spend the whole podcast talking about Trump. 496 00:25:42,280 --> 00:25:46,720 Otherwise, I can't promise if we don't get the numbers, we might 497 00:25:46,720 --> 00:25:49,920 just talk politics all the time. Back-to-back to business on the 498 00:25:49,920 --> 00:25:51,800 Newcomer Podcast. See you next week. 499 00:25:52,080 --> 00:25:52,800 All right. Thanks.