E26: State of Venture Capital, plus fan questions on longevity, decentralization & quantum computing

sax is there something you object to here the poker one and net worth no i mean that's fine i don't give a [ __ ] about longevity or quantum computing but here's the good news david it's not all about you there's four people you could have two people who like the topic and then you could just ask them a probing that's fine it's fine just tell me when it's over i'll do you know hey everybody hey everybody welcome to the all in podcast i'm jason calacanis and with us today again the queen of quinoa david friedberg sans his dog in the background sorry for those of you who love his dog he's gonna walk he'll be back in like 10. he'll be back and he'll be in the seat uh and the rain man himself david sachs ultra focused on sas and marketplace startups

and involved in some illegal trafficking of red pills straight up from honduras to cuba and then through miami making the red pills making their way to california and finally daddy's back the spackmaster himself bestie see the dictator bank account replenished he'll be rebellionized by firing on all cylinders oh it's so so you know live by the spec die by the spec that's what they always say in this business but you know what we have been absolutely inundated with i kid you not hundreds of questions from you our loyal audience and when this thing is over we are going on world tour we'll see you in vegas we'll see you

uh in uh at the royal albert hall in uh london and miami all cities are on the agenda let's take our first question from you the audience to what extent are you guys waiting how's everyone doing all right answer the questions but it has a i mean look at this guy he got his ass kicked and he's back i'm doing really really great what about the rest of you guys you guys played poker this week who played poker it was a bloodbath well although you know it's so funny because like we played i played uh a very big game the week before and then we step into our game which is

like i think still quite big but i could not rub two cards together to make a hand and i uh i went off like a rocket ship i just lost it somewhere and just despite that despite that every time i chamath and i were heads up at hand he just smashed absolutely smashed me and then i was like you know what i'm not going to be bullied anymore and then i stand up to him and he's got the nuts each time uh i was down i did j cal i did run you over i mean the number of just complete bluffs i ran on you oh the first and i'm just like oh he's totally got my number tonight

after bluff after bluff after bluff and then i showed him the nuts five times in a row it was beautiful so i'm stuck a model y and i come back and i win a used prius i'm just leaving it at that i lost a mid-sized home in phoenix arizona i think you lost the bentley okay don't cancel us please uh sex did you play i wasn't there in that game but i played in uh la game a couple of nights ago and uh any celebrities yeah me me sacks and oh god you guys don't count names or podcasters no there was one there was one unnamed celebrity we can't say what what but

no we can't say but we all want we'll just give us a genre politician an athlete okay yeah i won in in that game but i lost uh i lost in a different game this past week and it wasn't pretty yeah wait sexy sexy are you what are you playing yeah i think he may be playing actually i mean beep that out would you nick beep it out but we could all laugh at him for being so precious oh you i'm sorry do your lps think you're supposed to be in san francisco investing in startups no no they they know i go wherever the deals are oh really miami what did you get a deal would

you get a deal on some croquettes and a cuban sandwich two for one there's no copies there when do you think you'll make an investment in the miami-based company do you think that'll happen any time what's happened already has it happened are you in i've invested in a miami company i've got like six yeah i well there's some companies that are moving to miami that i'm already in you know chamath and i are both in pipe right and and uh part at least the ceo the company just moved to miami so that's two of four two or four besties in pipe thanks by the way how did you miss that j cal they they advertise

on your show and you didn't think to try to access that the lp beep that we all share wanted everything and he couldn't fit me in and i was like how about a slice and he's like is that lp me no there's another lp that sacks and i share who got their beak significantly doused in that one but i'm just gonna i'm gonna get the kid to give me a 25 basis points and uh advisor share so i'm getting a slice no matter what yeah good good luck with that good luck with that good luck the train's off the station the train's off the station dude that that company's worth

a couple billion dollars in less than two years of its existence good luck with that jason okay well it's right we call it a making i don't know what you guys are seeing but my god early stage valuations went bonkers i had one company that raised that don't run it i have all kinds of data okay right so today we're going to do some audience questions and then we're going to do the state of vc we're running through a deck we're running through everything that is changing right now in venture capital and early stage investing and it is changing very quickly here's a question from leonard uh oh musics to

what extent are you guys interested in longevity in your opinion what technologies could help us live longer and healthier lives freedberg that's got your name on it why don't we start with you um on this one i would uh point folks to read the book lifespan by david sinclair who's a researcher at harvard and he's done a lot of kind of leading work on on basically calling aging a disease and life extension so the book lifespan highlights i think a lot of his research and findings and paths forward uh for um for improving uh longevity and basically you know it comes down to

what he defines as kind of an early switch that evolved in evolutionary biology in every cell in every living organism where the cell is either in growth mode or repair mode and the trick is can you get the gene to switch on that puts the cell into repair mode and if you do that the cell fixes itself and you and the cell lasts longer and the organism lives longer and so they've identified a number of genes that trigger this in a number of compounds that trigger expression of those genes and there's a number of things you can do lifestyle-wise

to trigger these genes basically to get yourself to live longer so fasting is a good one and then there's a bunch of compounds that you can take that mimic fasting on a cellular level like metformin and rapamycin i'm on metformin i think a couple of you guys are on metformin right yeah yeah and then and then the nad plus supplements um which you say mmn subs yeah nmn nmn and nad plus um so there's two there's two compounds nmn like nancy mike nancy and then nr and those you can buy a product called true niogen on amazon which which has those

compounds and you take about a thousand milligrams a day and um anyway all of this stuff's laid out in his books and it supports a lot of the research that's being done obviously fasting and exercise also trigger this gene expression and enable kind of um measures of longevity uh to kind of be showing up biologically but um i think i think it's a it's an emerging field and there's a lot of deep work going on and as people have highlighted the the process of aging is a biological process that theoretically we can stop and potentially reverse and there's a lot of new work that's

being done in stem cell therapy that may kind of elicit some new paths forward here so arguably someone is alive on planet earth today that could live past the age of 200. um so it's an exciting field and lots of kind of path forward i'll uh i'll tell you for what it's worth my regimen um and oh god here we go thirst trap photo coming in three no uh so so i i i do uh the following so um i take uh a statin now it was 10 milligrams now i'm at 20 milligrams um i take metformin and all of this i take sort of in a preventative posture um because my cholesterol wasn't super high

but it wasn't super low it's like sort of like in the 160 170 180 but now it's sort of like 120. um and then metformin i take preventatively as well i'm not pre-diabetic um and then a couple of vitamin d and some other stuff but then here are these things that i do that i think could be valuable for some folks listening uh there are these places now that exist they're popping up one company that you can check out is called pre-nuvo p-r-e-n-u-v-o um they are in vancouver they're in la they're in redwood city so mid peninsula for those in silicon valley

and what you can do is you can get a head to toe uh mri so you know there's no radiation you know you could do these things you know every other week if you wanted to it takes about an hour and what happens is they can basically uh look through your entire body um your musculature your organs um from the literally from the tip of your head all the way down to your ankles and they can spot a lot of stuff that may not otherwise uh be seen and so you know every three or four years to get one of these scans you could see a lesion um you could see the beginnings of a tumor

you know i did one a few weeks ago touchwood it was great nothing nothing so much does it cost um there's a range of prices um and i think those prices will come down the range of prices are from like 1500 to 2500 so it's not expense it's not cheap sorry um but here's what they're able to do they're building a corpus of all these images where they're running uh machine learning on it and they're getting better and better at identifying anomalies and so as a result of that they're able to actually take the mri images and they can do fewer and fewer scans

to get the equivalent resolution so two things will happen one is the scan time will come down right so it was an hour and a half now it's sort of right under an hour it can probably be as low as 40 minutes which is relatively tolerable for most people and then the cost will come down into the hundreds of dollars because you'll be able to very rapidly assess um so i do that and then the second thing is for anybody with heart disease in their family i really implore you one of my friends actually is flying down from toronto i'm taking him to my cardiologist in la

and there's a thing called heart flow and what heart flow is is a contrast ct which basically means they inject a dye and then they put you under a ct and they they map out your heart and you can literally see the calcium buildup you can see the state of your arteries um and you know what probably people don't know is when you have a calcium score you know most of us it's zero but when it starts to be non-zero it doubles every year and by the time it gets into the thousands you're basically guaranteed to get some form of cardiac issue um and so it doesn't seem like anything if your cardiac score is 20 except it goes to 40 80

160 and all of a sudden within five six years you're really in the red zone for a heart attack or something um i've done it twice now um every five years i do it um and touchwood you know my my calcium score is still zero um but in any event uh that's what i do for longevity i kind of preventatively at the cellular level with some drugs and then just trying to catch cancer and heart disease on the front end uh otherwise eat three balanced meals and exercise and sleep a lot sax uh you obviously don't care about longevity

uh any thoughts here i mean sax has looked like he's a thousand years old since he was seven no he was when he was in 12th grade he looked like he was a vice president united states yeah guys just just let just let me know when this conversation is over i've been doing my email oh it's so great all right end my life now i [ __ ] hate it you don't you guys like i just lost two years right now sax has got an early spot both on the rocket ship to mars and he's got an inside vip to peter thiel's blood boy project and so either way he's getting off the planet

or he's going to refresh his blood or both so he's good all right action bias asks please debate decentralization of monetary value ultimate threat for insiders power erosion i interpret this as a as a bitcoin question so yeah i think one of the most interesting things happening in the world today is this is what's happening with bitcoin right it's and and you're seeing the price go up because a bunch of institutional investors on wall street are all getting into it now it's gone from retail to institutional and the narrative basically it's a really profound

narrative which is it's the separation of money and state so if you think about like one of the most important events in human history was the separation of church and state where we no longer looked to the state to determine you know what religion everyone was going to be well what crypto is introducing is this idea that the government cannot control the money supply i think that's what he's talking about with the decentralization is that you could have a currency that everybody in the world believes in that no government can control that's the separation of money and state

now this is just really a narrative right now i mean and who knows if it will actually come true but the interesting thing is that if everybody does believe in it it will come true and so bitcoin's been sort of described as the bubble that never ends because if everyone kind of buys into this bubble it actually comes true so i think it's very interesting and you're seeing um because bitcoin is kind of perceived as the antidote to inflation and money printing by the government i think you're seeing it take on new urgency now because the government just keeps

printing trillions and trillions of dollars of of new money doesn't this threaten government so if government um doesn't have control over monitoring financial transactions and have control over the accounts in which the financial assets sit which is effectively the notion of decentralized anonymized wallets then um how does the government secure taxation which is requisite for their ability to fund well they're good to fund the state right and so what happens to the state well so there's an enormous amount of leakage that happens today in assets that actually

get financialized but in the gray market and i think the the beautiful thing is on the one hand you know we become less focused on like the m1 and the m2 money supply like the physical printable distributable money that we can see and touch and it gets replaced with virtual currencies that are tied to other things i think what the the the the person who wrote the question is asking really is more about defy and what's happening sort of like on the ethereum you know 2.0 erc20 contracts all that stuff which is sort of much more next-gen i think than bitcoin and i think at some point

we should deep dive into it but what i would say friedberg is all the leakage you have today goes away in a world of defy because you will financialize every single asset possible you know you'll financialize your homes you'll financialize your cars your watches your jewelry your art you'll financialize every random thing maybe even your career and how people will trade it absolutely your career and and the thing is by by monetizing it and financializing it you can borrow against it you can trade it you can pull forward value into the future against it but it'll

all be tracked and so as long as the government then says listen we're going to enable it all but there needs to be an off-ramp to taxation and that's pretty simple because a physical house exists in the world you can't hide the existence of a physical house but it's not anonymized right chamath and so i you know you want to track it i mean that's the challenge is if no i'm saying if it is anonymized then the government uh can't track it and the government i think these are these are two separate things some assets will live anonymously and those are the assets that

don't need to exist in the real world but i think what this will create is a world where all of these assets that actually really exist in the real world it'll be fine that it exists and that people get taxed on it but it'll be much more legitimate and i think it'll be simpler and so i think people will trade off incremental taxation for incremental monetizability i'll give you an example let's use real estate there is no reason why every single piece of land everywhere around the world isn't written into a ledger with knowledge of who owns it such that the person

that owns it could trade it could borrow against it um could sell it uh yeah yeah yeah could it fractionalize it even if you can't fractionalize in the real world because your neighbors won't let you set it up into four lots you could do that online online and so today what will happen is that you know that person has a level of wealth and what they do instead take the united states is they'd lobby lobby lobby to create all this convoluted real estate tax law to make their life simpler but if you actually unlocked the ability to focus on revenue versus expenses you just

wouldn't focus as much on the taxation because you'd say well i can make so much more money if you judge just to you know sort of answer the question here from the from the reader from the listener i think you can really judge this based upon how much it's being pumped by the people who own it and they are absolutely dogged religious about this it's like talking to and you know person who's you know met jesus and now everybody has to be a christian and you can also look at the people who are opposing it i don't know if you saw yellen um and then um christine lagarde she came

out against it yellen's come out against it india might ban it and then you have obviously china is coming out they're digital ones so i think it's gonna be there's going to be a dogfight here where governments are not going to easily give up their control of this and there's many ways they can make a bunch of red tape to slow this down and in countries that are authoritarian they can outright ban it let's take another question by the way there's like three outcomes here right i mean you could either see bitcoin for example you know being banned and that's going to be ugly

um and obviously there would be significant financial loss at this point i mean to sax's point at some point there's so much asset value tied up in bitcoin it's too big to fail sorry david banned by who oh that that's chinese government this this is what they're trying to do on some of the states right and they're trying to make it illegal for citizens to transfer money in and out of the asset class i think i think it's i think it's a bigger threat to countries that want to impose export or currency controls and export restrictions but but frankly if you're a country that's not

afraid of currency movements because you're not trying to do something oppressive to your people i don't think you have that much to fear here i mean there are other ways of trying to hide assets or hide money besides bitcoin and every transaction every bitcoin transaction is written into the ledger i think you have to be pretty dumb to try and commit a crime with bitcoin because there's going to be a permanent record in the blockchain forever of that transfer and then there's companies that that provide that do kind of uh sleuthing and try to you know unravel

you think tax evasion in the united states is going to be difficult um with bitcoin if i accrue a bunch of value in bitcoin am i going to be able to evade paying taxes on those gains and convert that bitcoin into physical assets by purchasing it from another bitcoin wallet holder i mean how realistic is tax evasion going to be uh and how much would because that's ultimately what the u.s government would mostly well so you would convert cash into bitcoin and then you want to sell your bitcoin at some point you're gonna have to sell it i mean there would be

a uh there'd be a a realization of what i'm saying transfer to a seller of an asset of another asset that's willing to accept bitcoin and receipt and so to anonymize wallets i don't know i mean that transaction is going to live on the blockchain forever and it's going to live in the books of whoever the seller is what are they selling you a car a house whatever i mean that that transit a watch i mean look if it's a personal item maybe but if we're talking about a substantial asset like a house or a company or something they're going to need to the other side of the transaction is going to need to report the realization event

so you're going to have to have two people collude to engage in tactics seems like a really stupid thing to do legally incorporated businesses are going to be mandated to do effectively identity verification much like we have to do under the patriot act with all the the financial totally totally buyer yeah ultimately how the compromise arises right yeah i'm not i i'm not that worried about i i feel like this whole like silk road type bitcoin will be used illegally thing is like kind of a old meme about it that i think that the fears are like greatly exaggerated

but the the thing that jumps out at me about all the critics of bitcoin and i'm i'm not like a pumper or whatever but i do i do own some um is that the thing that like all these like critics don't seem to understand is the technology that's the common denominator whether it's like howard marks or warren buffett or charlie munger or whoever they're they're all like great investors or whatever but they're not technologists and blind spot yeah it's a blind spot and the thing they don't understand about the technology is that bitcoin is the first digital asset to ever

be created that you can't create infinite copies of right so think about like a song or a photo or a video or whatever anything that's digital you've always been able to make an infinite number of copies isn't that what the word digital means is that it's infinitely copyable so how do you have digital money that can't just be infinitely copied but obviously that would destroy the value and that was the genius of bitcoin is that every transaction's written into this ledger the blockchain is decentralized and nobody over the last decade or so has figured out how to

counterfeit bitcoin how to make a duplicate how to double spend bitcoin as long as that remains true then bitcoin can serve as money if everyone believes in it um the day that someone figures out how to counterfeit a bitcoin how to double spend it it's all worthless but a lot of people have been trying over the last 10 years they've never figured out how to crack it by the way that's a great it's a great transition to the next question sorry i don't interrupt you but no it's a perfect transition and uh next up adil says can one of the besties explain the

power of quantum computing and how it can change industries like medical pharmaceuticals any good companies that are leaders in quantum computing uh i'll i'll i'll i'll take a cut at this one so um and the reason um i pointed it out is because a lot of people do talk about quantum computing uh potentially being a path to cracking the hashing functions in bitcoin mining and potentially overwhelming the network and effectively counterfeiting the the bitcoin uh ledger um and so uh technically a quantum computer is a computer that uses qubits

which is a a storage of a quantum state versus a storage of a binary state which is a a binary digit which is called a bit in traditional computing classical computing a one and a zero a one and a zero and a quantum or qubit a quantum state can uh be a much more dynamic function and so it's a it's a state that is a very analog and very representative of kind of a much more kind of broader condition than just a one or a zero it could be a one to zero or neither right it could have neither state as well about it as a wave function and um and so a qubit can only exist

in a in a piece of matter uh where you can hold the fidelity of a quantum state meaning it can't be disturbed so right now all quantum computing gets disturbed it all has some error-prone context to it and so in order to use qubits to do calculations we use what's called quantum error correction on those qubits and so we adjust the the qubits and the output to try and resolve it a qubit with no errors is called a logical qubit and the logical qubit has not been built it would require very very very low error rates um and there's a bunch of uh and and there's a bunch

of theories around when this is going to happen when are we going to have truly logical qubits um when does the error rate get low enough that these qubits are are truly kind of useful now there is an estimate that the number of logical qubits needed to crack rsa 2048 which is the big kind of encryption standard um which could kind of break the whole crypto currency model um it would require about 4011 logical qubits um today the largest um the largest quantum computer has about a hundred qubits that are very noisy and so it's less than one logical

qubit and so we would need somewhere between a hundred thousand and a million qubit computer to be able to have enough quantum supremacy to be able to tackle a project like cracking rsa 2048. and to and by some estimates and some people have tried to estimate when this would happen and the estimate currently by some researchers is that this there's a less than five percent chance this happens before the year 2040. so we're talking somewhere between the year 2040 and the 2060 when we get a quantum computer that has enough logical qubits to be able to crack a problem

like um you know rsa 2048 and basically make all crypto fail and between now and then a lot of people are working on quantum cryptography which is new methods of encryption that are kind of built for the quantum era and the quantum frontier now what's more interesting is that over the next 100 next 10 years or so the current super noisy super low fidelity quantum computers can be used to simulate quantum states which is the condition of atoms and molecules and use that to do better modeling of physiochemical properties of material that's where the breakthroughs

will happen in the next decade so all the hard discrete problems that we kind of theorize about cryptography and other stuff that's decades away in this decade we are already going to start to see quantum computers have breakthroughs in how material how atoms and molecules interact with each other for example finding proteins that can do a better job of having an enzymatic reaction in the physical world where we can now potentially pull nitrogen out of the atmosphere to make fertilizer or or drugs or um or specific protein targets that can go in the human body

and have specific functions by modeling what we can't do with traditional computers today modeling the quantum properties of those molecules and how they interact with other molecules and then building really cool predictive models that we can then turn into products and that's going to be chased really hard this decade everyone's going to be going after it and we already have enough compute power i don't think that there's any leader in quantum computing today these are all still science experiments they're all breadboards ibm

google microsoft a bunch of research labs a bunch of startups are all kind of basically doing the same thing with different types of qubit technology but they all have very high errors they all have very low qubit computers and so it's still unresolved who's going to come out with some companies two companies to follow are d-wave which was started in 99 so just to give you an idea of how long people have been working on this 22 year old company i know uh steve jervison's been backing it for now in its third decade and then ionic is that the other one i o

and q i i think like quantum facts right quantum computing is like fusion yes it's like it's like a technical problem that has attracted people who've had more money than common sense um and it's just basically a way to burn an enormous amount of money over 20 or 30 years and the problem with that is that you start to build in technical craft anything that is still in r d phase 20 years in needs to get scrapped and rebuilt from scratch because everything has changed including the people even the 20 year olds that started are now in their 40s and have kids

and just have a competitive it's a great point jamaat and so and so like you got to just scrap these projects and start all over again because the the problem is you need somebody completely naive to look at this problem in 2021 and say well okay how are we actually going to really solve like the coherence problem i don't know how are we going to build a gate array uh i don't know and you have these very um formulaic ways that we knew based on what technologies were available in 99 or 2000 to start with and i think that's probably part of why we framed the problem as largely sort

of this thing of like okay maybe there's like a integer factorization thing you can do and it's like i don't know i'm uh i'm deeply skeptical yeah well i agree and by the way this is why sorry can i just say one last thing this is why alpha fold beat quantum computers to the solution of protein folding uh and and the reason was they were just like ah we'll just take a different run at it completely different people a completely different technical framework and modality and a completely different risk profile and age as well a company to keep an eye on in the

fusion space commonwealth fusion systems um wait zach what were you gonna say what i was gonna say is that the main thing i was thinking about while you were giving that dissertation on qubits or god knows what is that is i would never invest in this that's all i was thinking is i would never invest in this yes you're exactly on sas and markets that's exactly what church yeah that's exactly what jamaa said definitely seven kings and five aces look these are science fair experiments you know with indefinite time frames this is basic r and d that should be done at

universities these concepts are not ready for commercialization exactly what they said about uh ai and then now it's infected in every company so no that's not true no because there completely disagree with you because okay there were there was a practical commercial revenue generating opportunity for ai and machine learning literally from the start of computing it it took several iterations there's no use case for fusion energy i mean of course there is no i'm not no but it's it's still at the basic r d stage basic yeah i will i'll partially agree with you jason in the

sense that i was not investing in ai 10 years ago because i thought at that stage it was still in the realm of science fiction but we just announced two deals the last two days two seed deals viable which is basically an ai voice of the customer it slurps in all of your customer feedback and then gives you answers and then the other one is a copywriting one it's a copywriting ai called copy dot ai which literally writes your site trying to get a slice right now yeah now yeah we we might give you a slice jason stop being so skeptical but yeah but but here's here's what's changed right is these are seed companies with just a handful

of employees they're built on gpt3 so you had this like basic like r d done it creates this platform called gpt 3. it's like aws that's right yeah you can now build companies on top of that so i mean look it you know what i invest in are the commercialization of of of new technology waves um those technology waves happen because of deeper r d what do you think about vr and ar because it is the same conversation with vr and ar like are these worthy investments or not i think i think sax's point is such a good one because what he's saying is um is what i think has

happened over the last century the government the best role the government can provide is to take on that technology risk that large capital intense technology risk this was the case with the manhattan project and we got nuclear energy out of it it was the case with apollo project we have the space industry as a result now and it's what happened with the human genome project and now we have an incredible genomics revolution and arpanet and and that extensive early stage de-risking requires an incredible amount of capital that's very low returning it doesn't

return anything it's what saks is saying is later is the the commercialization where do we have um uh a heuristic a theory a best practice around when something goes from a research project to being commercially viable they're signals i mean platform platformification seems like one that you pointed out david if it's a platform and you can use it easily yeah i think i i think i think you can tell when the amount of capital required to get it off the ground goes to something reasonable like a few million dollars as opposed to hundreds of millions of dollars whenever and

jason you've talked about this that any company that's trying to raise hundreds of millions of dollars or you know has a billion dollar plus like evaluation before shipping a product is presumptively fraud there's still too much r d involved i mean look venture capital is a miles milestone based investing model you take a little bit of seed money you create a prototype you get some proof then you raise a series a you get 10 million you get some customers then you raise 25 million and you scale the company and it's based on milestones it's actually a very efficient way

of investing and when somebody wants to skip over all those milestones they say no we need hundreds of millions of dollars to launch this thing you have to ask why is this is this idea really ready for commercialization what's your mother's response to that because you've done deep tech investing and you've done i mean virgin galactic would fall into that or no yeah so like how do you think about deep tech investing tomorrow in like where where like there's a role for venture capital private market you know dollars yeah i've done i've done a lot of deep tech investing and

my whole thing was i've always looked at at the point where something is completely de-risked technically and it's about then the exploitation of a market otherwise it's exactly what david said so i'll give you an example a company called relativity space is now the second most valuable private space flight company after spacex okay yc company i love the series a um what were they trying to do there they their their stated goal at the time was we want a 3d print the entire rocket and the entire engine and i said wow okay well when we did the math and we tried to figure this

out and have the same launch capability as spacex all of it comes down to okay well how do you want to de-risk this and what tim and jordan's first idea was well first we want to basically prove that we can actually get a certain printing capability done because you're talking about these extremely you know energy intensive extremely technical printers and effectively writing printer drivers right and to be doing it at a scale where you can hand that off to nasa and they can take that engine literally strap it down with chains called the hold down test

fire the engine and say it works doesn't blow up doesn't blow up and i said to tim how much does that take and tim was like i could probably do that on 10 million bucks i said you're done on 10 million dollars yeah and it was 100 million 100 the only person that would have written a 100 million dollar check to de-risk that doesn't understand what they're trying to prove at that point in time because what he was trying to prove was the the ability to use the printer he wasn't saying i'm trying to build a next generation rocket motor right

so similarly with virgin you know virgin got to a point where it's like it had flown demonstrably in the air so what did it prove it proved the flight profile worked it proved the engine worked it proved all the navigational componentry worked and it proved the safety envelope work which means that it could basically act as a glider under all kinds of boundary conditions that's an enormous amount of technical progress and then at that point there i'm willing to invest billions of dollars and so to david's point you have to have a new model early too

like that's one of the things about being an entrepreneur is figuring out how you stay alive while you answer these questions and you came up with a brilliant one or whoever was doing virgin galactic which is people will overpay but virgin was a 14 year process where richard branson to his credit did exactly what david said here's 10 million dollars get to milestone one here's 25 million dollars get to milestone two he did the exact venture capital model it's just that he did it by himself i think what david is saying which i agree with is you should never

short-circuit that and say here's 500 million dollars pre-series a yeah sure you'll be working at something for 20 years with nothing to [ __ ] show for it as in fusion as in quantum computing all right you'll end up with let you end up with a a magic leap or theranose theranose or it looks like it's a fraud but magic leap just looks like it's technically incompetent or it's too hard of a technical problem to solve in the amount of time and the amount right technical incompetence well i don't know if it's incompetent this might be

it might be a 20-year problem as opposed to a five but why are you taking this emotionally technical incompetence is the opposite of technical competence competence means you can do it technical income okay okay you were saying that that group of people is incompetent i'm saying the word followed by the word incompetence technical incompetence okay when you're saying it i'm think you're describing the person not the problem it could have been too hard to lift for them so yeah okay well the last question is about access to private equity but let's just go

into this stack here now one of the things we wanted to talk to today chamoth had a good idea venture capital is changing rapidly um the last decade has seen more change in venture capital than i would argue the four decades or five decades that venture capital has existed in other words more change um i'm gonna go through some of those changes how it affects the entrepreneur how it affects the investor chamath was nice enough to put a deck together and then i guess jason will figure out a way to post this into the youtube or something like

that yeah you know what we'll put in the show notes a link to this google presentation and nick can pull up the slides when working and also i think i think if folks can give us feedback this is kind of a new thing for us we're trying to experiment which is sort of this is like a half teaching half discussion on something we all wanted to talk about and hopefully you guys get some value from it but uh tell us if it's not so uh i i want to thank uh carmen collins on my team who helped put this together but let me just uh go through this state of venture capital um

so a couple of high-level points there's like some really important trends at play the first is that there really is now underneath a massive change in the players in this game founder demographics are changing slowly but surely we're going to go into that in a second traditional vc investors are getting disrupted we're going to go that we're going to go into that and then this model which i love of let me know how i can be helpful quote unquote basically eroding um and seeding ground to what we call solo capitalists and we'll talk about that which is probably the most disruptive trend in venture second we'll talk about the inflation in the

amount of money that's going into these companies which really means more money at higher prices and why that's good in some ways and actually bad in some other ways this goes back to david's point of you know not being forced to generate milestones sooner uh and then the third is that it's really now a founder's market and i think this is really important because you know you've seen an enormous amount of dilution and lack of control for uh founders and employee teams and companies and i think that there are some really disruptive new ways that completely usurp traditional venture

non-diluted forms of financing we'll talk about that so let me just level set for you guys i asked the following question what are the demographics of the united states and here's what they are in the united states today 59 percent of people are white non-hispanic 12 and a half percent are black 5.8 are asian 18.7 are hispanic and 2.3 are multi-race if you map that to vc founders 77 of vc founders are white 1 are black 17.7 are asian one point eight percent are hispanic and two and a half are multi-race so amongst multi-race asian and white you either are at

or over indexing your representative population and blacks and hispanics this is not anything new but massively underrepresented if you take it from a gender females have lower representation among founders but it's growing so the us is basically 50 50 male female female founded companies were 23 percent of all deal activity in 2019 that's that's pretty good um up from 12 in 2010 although racial diversity is still pretty lacking which we know and then the young tech bro stereotype is cracking uh which is this is incredible 2019 study in the times showed that the average age of a tech

founder is david sacks what do you think it is the average age of a tech founder median or average mean or a median average average well i saw i saw your deck so isn't it something like it was surprisingly 35 40. 42. for example no i'm seeing a lot i think i don't know just to pause here for a moment what do we still found a company you can what do we think is given we you had the longevity question earlier and then you have people you know generating wealth and starting companies in their 40s 50s and 60s who then underwrite it themselves right

until they get to product market fit and then raise money what do we think is the best zone for an entrepreneur in terms of having a great outcome i've always thought that the look i when i how old was i i was 31 32 when i started social capital i mean this is a multi-billion dollar enterprise i feel like i'm reasonably successful at it but i was preparing for the first 13 or 14 years of my professional career i learned some good things i learned some bad things i learned tactics that worked i learned strategies that didn't so thirties or forties or well literally in my 50s in my experience for me and i think it's

for personal for everybody i was best positioned to know what to do and at least iterate in my 30s and i think in the absence of an idea that has some network effect or something that's sort of like supernatural outside of your own control i think the older you are generally probably the better prepared you'll be yeah i agree i mean i did paypal when i was still in my 20s but i wasn't the the founder of the company i was recruited to it at a very early stage i didn't really start yammer until well i guess i started the predecessor company genie when i was 34 and then yammer pivoted into yammer when i was 35. i mean absolutely that's that's like

that's like a good level of preparation you know unless you have a spectacular idea for a startup you should probably get some experience first 100 percent free burger any thoughts there on what's the kill zone best time to launch companies in your mind or investing companies or where founders everyone's got their own path you know i mean zuck and sergey and larry and uh bill gates they started right out of college without any experience but um i mean i worked at i had two jobs uh in tech before i started my first company in yeah um and so i had a lot

to draw from and that really informed me but i think everyone's different i mean some people if you have the idea if you have the idea by all means do it in your 20s you know absolutely i mean by by far the the greatest kind of like measure of whether and when you're kind of prepared for this is your ability to continue learning you know continuous learning to me is one of the greatest predictors of entrepreneurial success and all the guys that have lasted for decades from bezos to zuck to you know larry and sergey you know they were continuously evolving themselves because

they were continuous learners bill gates is bill gates is the penultimate example of this right i mean this guy has reinvented himself a thousand times that what you said is so important i'm gonna change my answer i think i started social capital when i was actually the most able to get out of my own way and learn continuously yeah yeah you know one thing i'd add to this is it's so much easier to be a founder now today then i mean look i i remember i joined paypal in 1999 that was my first startup it was like really hard to get into entrepreneurship in the 1990s you know the vcs

had tremendous power and control they would routinely replace founders ceos you know everyone had to go to sandhill road to get capital it was hard to even know how to network your way to sandhill road it was just much much harder to be a founder it was much harder to raise money it was hard to know what to do and then i think actually one of the things that really changed things was with blogging emerging in the mid 2000s it led to a proliferation of information where now you know other founders started blogging investors started blogging and there became a

wealth of information out there so you could learn how to do it and then of course you had incubators and so on like yc so there became more of like a playbook for just like how you actually get a company off the ground when i graduated law school which was 1998 i i knew i wanted to get into business and entrepreneurship i really had no idea how to do it and if it wasn't for a phone call from peter thiel i'm not sure i would have gotten into it you know but now now everybody knows what to do can i ask you a question then so let me let me give you a stat and i'll ask a question

what do you think that story would be david for somebody that wasn't a white man so here's the step here is the data the percentage of female vc decision makers has grown by more than 2x uh what that means is about firms over a billion dollars about a quarter of them have at least two plus female decision makers but 61 of them have zero and 80 of venture firms still have no black investors how do you correlate or intersect that idea of ease of starting a company with the pattern recognition of those folks and the inability to sort of maybe map to people

with black skin or women i mean i think that what silicon valley and what venture capital represents is opportunity right and we have to extend that opportunity to as many people as possible i mean that's really the the key here is we do need to make it as widely available as possible by the way i mean one way to slice things is the percent percentage of uh diverse representation within the ranks of venture and private equity um but there is a equivalent scaling in the number of venture firms and the amount of venture capital since you know saks and and you and i and all

of us kind of entered the technology industry kind of early 2000 um and the number of firms that exist today that are kind of micro firms and scaled firms i think presents um a much larger set of opportunity you're right there are still uh standards um and there are still challenges in diversity and kind of having access but there is so much more access than there has ever been um and that's really changed the landscape i mean folks coming out of college can get a million dollars that was kind of unheard of back in 1999 or or the reality is like there's so many

incubators i mean it's not as if jason or yc or any of these folks give millions of dollars right jason like these checks are still really small so the point is you can build something if you have the skills to build something the the the the gap right now is that there's a lot of people who have ideas about what they want to do but they have no skills and i think what we found in a vibrant market like today i mean this is the most vibrant i've ever seen it there's at least three or four times as many startups to choose from at the earliest stages and what we're seeing is

the number of vcs has not grown at that level it has grown the number of players has grown but not at that level therefore the average quality of a deal has gone up the average quality of a funded deal has gone up but the average quality of a startup has gone down does that make sense yeah so the ones that get funded are better than ever but the one the average is lower because there's so many doing it and then just the best piece of advice i have is when we talked about continuous learning is if you are not building the product in some way

or selling the product in some way then what are you doing at this startup like you either build it or you sell it like there really isn't much more there and a lot of people just have ideas and no ability to execute you really have to be a developer designer ux person marketer something uh in terms of getting this product out to the world what uh what do you guys think about this other trend which i think is really important which is the atomization of these firms so you know we're moving from a world where people used to care about name the brand sequoia excel uh and then

now they they named the person right and they'll probably follow that person wherever they are so what do we think about that there's a really interesting tweet from eric taurenberg he said founders don't want to raise money from institutions as much anymore they want to raise money from individuals and then if you marry that with what's happening with angellist and all this other stuff isn't that the trail of breadcrumbs for how like vc just kind of in some ways just kind of gets blown up the way that it's normally been done i remember as a

founder um when i started my company in 2006 there was a lot of this conversation in as sax pointed out in the blogger community blogging community and with like various websites that rated vcs and there was generally a trend in the support network among ceos adventure firms of talking a lot about make sure you pick your partner don't pick the firm and so this i don't know if this is necessarily a new trench moth it's certainly something that i remember being top of mind 15 years ago when i started my first company and so much of it was about make sure you have the right partner because that's who's gonna be on your board that's

who you're gonna spend time with that's who's going to recruit executives with you that's who's going to be helpful in finding your next round of funding for you um and i feel like that's that's always been the case but you're right the brand value of a firm has certainly become less useful and folks have struggled to kind of figure out i think a solution here i mean you see what andreessen horowitz did they launched in 2009 and really focused on trying to be this kind of full service provider to startups and i don't know how much that matters as much anymore

as much as making sure you've got a great partner from the firm that's helping you with your business i i don't know it's actually you're right freeberg that's a continuing trend what i'll say is the top firms are still as attractive or more attractive to founders the loser in this i believe is the mid-tier firm or the lower tier firms that actually none of the partners there are all that great the performance is not that great their value-add is not that great but when you do get a sequoia or an andreessen when i put craft in this as well when you get one of those all-star

vc firms to join your board specifically that is the key when they join the board they own over 10 you are anointed in a way that is transcendent you will get pounded with inbound from the second tier and third tier firms who want to triple your evaluation and give you 20 million bucks it happens like clockwork in fact there were a couple of firms like was it dag the one sacks that would always follow on sequoia deals and so there were firms that were built around that was their lp pitch dags lp pitches we just we will mark up every sequoia deal exactly so

i mean one you know it was one page so it's like if you can't get into sequoia and you're willing to wait an extra round don't invest in tag well and then now i think the big trend here is those firms in dreesen and sequoia are now full stage where they have the late stage growth they have a scout program they have a seed program they have a series a program so it's a full life cycle it's not those guys also it's just it's all these other big crossover guys that have come down tiger co2 durable i think that's the biggest trend of the last uh 15 years chamac and i think it is what has

enabled the proliferation of early stage startups and enabled the valuation increments and the capital that flowed in the early stage is the um is the scale down from the big guys i just want to kind of do a quick walk down memory lane because when you guys said you wanted to talk about this i kind of remembered i got my series b term sheet in 2008 i guess it was and um and or 2009 and i had three venture firms uh andreessen was one of them that gave me a term sheet uh and the interesting thing about at that time with andreessen was they gave me a term sheet

i was trying to raise 30 million dollars and they said we want to give you 40 million and they up the valuation significantly and um and there was a i ultimately went with coastal ventures but there was this trend um that andreessen was kind of imparting and i heard about it a lot from other entrepreneurs was that they were going out and offering more money than the founder was asking for or seeking at higher valuations and it was this trend towards saying like go grab the market because the interesting thing about web scale economics and um you know web scale businesses

is you get so much leverage and you can get extraordinarily rapid growth i mean the rate of growth could be infinite um and and the leverage could be infinite and so if you do it at the right round i think that's but so much of this was and then obviously that so that was a huge step up and i remember andreessen horowitz beginning 2009 kind of started to build a reputation for doing this of of kind of you know putting larger checks out and saying go scale and then the big crazy thing was the crossover guys started coming in and offering bigger checks in kind of this proven

stage growth stage kind of funding and then obviously the big step up with softbank and softbank with the 100 billion dollar vision fund and and ultimately what exactly did that disrupt freeburg just hang on so when all these things happened those large chunks of capital became available and the valuation step-ups were so significant for these later stage startups that the money flowed down and more money was raised in earlier stage venture that enabled this proliferation of capital in this proliferation of new startups and enablement of startups at the

earlier stage because of all the crossover money that started to come in and the blitz scaling of proposals and lots of money that was being thrown at the later stage that to me felt like the reason all of the earlier stage stuff proliferated was because of the the amount of capital the later state you're absolutely right and now ten years later here's where we are in the early specs are the next step champ because like totally i think what you did is you know we pre-2009 there was 10 billion dollars a year in specs then when you started this in 2009 it stepped up to 2019 it

stepped up to 13 billion last year 80 billion was raised in specs this quarter 100 billion in specs and stacks are that you cross over investing it's taking you know growth stage private equity style risk in the public markets with this proliferation of capital and we're seeing the benefit in the early stage and founders and entrepreneurs are seeing the benefit because there's so much access to capital on the back end you can take more risk on the early end and you can make more bets and and i think you know i think it's the next step up and we just keep seeing these step ups

yeah i tend to think that the growth stage is the most troubled and challenged because at the early stage you can get a guy like saks or jkl on your board and you can grind and i think that that's really important to get the product market fit and at the public stage you can get somebody like me and you know we can help transact and actually help optimize and run the business for scale and value but in the middle you have all these weird dynamics that no longer maybe not don't make as much sense so just to give you a sense of it the average deal size okay so the typical round

is up 3x over the last 10 years 3x that that is absolutely anecdotally in my experience uh in late stage investors are doubling and tripling down on these mega deals so that that average round size is up 5x in the last decade um the the typical pre-money on a growth stage deal in 2010 was 100 pre this is for the top quartile uh and it's now or sorry for this is for the average it's now this is for a growth stage yeah growth stage 100 pre is now 570 free wow yeah it's getting crazy it's really it's really really getting crazy tiger it says here

in the notes tiger global has announced the deal according to pitchbook every 48 hours in 2021. that's fabulous that's [ __ ] fantastic what tiger i think has figured out is there they started as public market investors and worked their way down the stack right so they're very familiar with the public market valuations they're seeing that these sas companies are you know we i remember 10 years ago when i was doing yammer we thought that the best outcome that you could have as a sas company was like a one to two billion dollar exit that's why when microsoft

offered us 1.2 billion in 2012 we took it right we're like we could work five more years maybe get to a two billion dollar outcome well now you're seeing what slack just got acquired by salesforce for close to 30 billion it's pretty routine to see sas companies ipoing it now 10 20 30 billion and up and so the exits are just so much bigger than anybody thought 10 years ago and we were the optimists by the way there's a good tweet on this by um it was jay malik basically he gave some stats he said that uh if you're wondering why everyone wants to invest or be a vc today

the stats from pitchfork provide an answer we had 43 billion in exits in 2010 we had 290 billion in exits in 2020 so we had about 7x roughly greater exits over the course of a decade now the average deal size has grown 3x and there's a lot more money going into venture capital but the reason why you're having all this money go in and all these new players is because the outcomes are so much bigger and then he said and i agree with this wouldn't be surprised if vc hits 1 trillion by 2030. so we're seeing just the i mean i remember 20 years ago when i first got

into the business you know like silicon valley was a small little um concentric circle around stanford and now it's spread to san francisco and the entire bay area and to other cities and it just keeps getting bigger and bigger it's the digitization of every market right i mean every traditional business every traditional industry is being digitized in some way or another and so it's no longer a tech enabler of other industries it is the industry itself we know that this the brand really matters in the early stage because they anoint you and

they bring so much value in terms of working with you to solve problems we know with spax whoever and ipos whoever is anointing that really matters right the sponsor but in the middle is all that cash now move to a a game of who will pay the most for the least rights in other words series b to you know when you get involved tomorrow is that just it's such a good point you're so what you're now teeing up jason is this next big category which is if it's undifferentiated capital at some point you're going to go to the logical conclusion which is

i don't want any dilution from this i'm happy to take dilution in the series a when i get you know craft or sequoia or benchmark i'm happy to take dilution in the ipo because that's sort of the necessary process of you know diversifying the stock ownership getting you know my users and my customers to be able to own the stock etc etc but in the middle now you have these companies like pipe and clearbank where now all of a sudden you can grow jason in your bcd rounds and you have zero dilution so if you're a founder you know the best formula is going to be take series 8 and seed

capital from an expert single you know gp brand person who knows that business category so well right if you're starting a sas company you should probably get your seed from saks you know raise your a from some expert or what let me say differently seed from j cal a from sax and then go to pipe and clear bank and fund it all based on your recurring revenue growth and then go public via spec so just to give you some uh data that i got from piping which means you would just to give people an idea of what the cap table would look like there you would dilute ten

percent in your your seed round twenty percent in your a now you still have seventy percent of the company and you just sell your yearly contracts ahead of time to pipe and you're done by the way can i can i tell the story about pipes so pipe um yeah that's kind of grateful thanks for including free break david david can i can i give the stat from pipe and then tell the story go ahead sorry you guys are all investors in this company no not me and you david they let us our beaks my beak is so wet can we get a profile that beak let's see i don't know why it is it is oh my lord it is people don't realize it really is hold on let me compare it to this

okay it's a beautiful pretty i'll tell you let me tell let me tell the pipe beak wedding story because harry harry the founders told the story he came in to meet with me my office at kraft this is pre-koved when people actually met in person um our our principal who's based in la michael tam you knew harry from his previous startup and brought him in i i heard the pitch which is basically to advance the the full value of these contracts for sas companies and others but it was so obvious right because if you're a sas company you spend roughly about a year of of uh revenue on cac customer acquisition costs but the customer only wants

to pay you monthly and so you have this huge negative cash flow cycle so what if you could just take that contract and monetize it right away get the full value of the contract advance then you can plow it into the next the next um you know customer acquisition cost and you don't need to dilute yourself with venture capital i said yes to harry in like 15 minutes i think it's the quickest i've ever given a term sheet we invested 2 million in the company in a 12 cap and we did the deal that day so within nine months of launch pipe has connected

3 500 customers and over a billion plus of ar to investors willing to purchase that revenue uh to be clear it's a marketplace they're not buying the debt anybody can go on the marketplace and say i will buy slacks revenue for 91 cents on the dollar but something more speculative they might pay 85 so this is a brilliant thing is that they're not they're not providing the lending off their own balance i suppose a clear bank which does in charge of six percent i'm talking about your book unless you guys share it i'm going to go to the video

yeah let's do it freeburg hey freeburg let's launch a bio company together and we'll block out these beaks go work on your life extension we're working on our monetary extension right here yeah you need more money you need more money so clearbank works with e-commerce companies so what you do is you stitch in your connections to shopify and stripe etc they're able to monitor how well you do and then they'll basically help finance you again non-dilutively so clear bank companies captured 55 more growth in 2020 than the prior year so even in the midst of covet these companies did really well they have revenue based financing they've invested a 1.6 billion dollars to date and it turns out that you know their investor composition eight times more women funded than traditional vc by

the way i want to be clear i was also a series a investor in clearbank i mean i am such a believer in this middle section of venture disappearing like when you have these growth rounds they're undifferentiated and they shouldn't be dilutive in any way shape or form the founders should figure out how to grow non-dilutively the minute that they have some semblance of product market fit so then the dilutive the dilutive points are the bookends yeah this is kind of the idea with like indiegogo and some of the gofundme types or not gofundme the other uh things where you could

basically pre-sell consumer products too right where you could get funded in a similar way and you could see the same transitioning into kind of hardware businesses and other and other consumer businesses right there's an even bigger there's an even bigger trend that happened that i can talk to which is equity crowdfunding cf but i don't want to take you off your deck so do you want to keep going on the deck or you want the only the only last thing i say is that uh the other big thing as friedberg says is like um so let me just summarize so it's kind of like i think where we're

all going to is we see the venture capitalists changing the financial stack yeah um it's going from organizations and these amorphous amorphous financial orgs down to individuals as that happens i think what we're all kind of stating is it's incredibly valuable at the earliest stages to align yourself with a person that knows your business or your market right and that's worth some amount of dilution it's almost like getting a quasi co-founder right so in the seed in the series a but i think so that's one really important point of what's happening in the market

the second thing that i think we're all saying is why are we deluding ourselves to grow in these middle rounds if you don't have to it's unnecessary and there should be really clever ways of non-dilutively financing yourself and as as the market becomes more and more sophisticated there will be more companies beyond pipe and clearbank to be clear but the point is that every kind of company that has product market fit should be able to finance themselves non-dilutively in the b all the way to the d and the e and then the third thing which is sort of what friedrich says is this

last book end is then you have sort of the path to going public and this is where the spac makes a ton of sense because you have a very certain cost of capital you can now architect a cap table where the founder remains in control where they and the employees are still more than 50 and you pull in the time of the ipo why is that important typically today these companies were taking 12 plus years to go public now with spax they've come back in and they're closer to seven and eight years the reason is back to that argument of like if you want to be a winner take

most outcome the most important thing you need at scale is money and the way that you get money is by opening the kimono on your finances and showing people who have lots of money why they should give it to you and not something else and so by going public in years six seven and eight that's where you pull in the billions of dollars so you can dominate what we're seeing is massive competition in the financing of massively competitive startup scenes in other words the entrepreneurial ecosystem has never been this vibrant and i want to point out one thing that the sec has done that has is going to change things dramatically i believe when syndicates first

came out everybody said they were stupid nobody would ever do it first one we ever did famously was com.com we put in 328 thousand dollars became worth over 100 million we're on track this year to do five deals a month 60 deals and we'll put 50 million to work this year at the syndicate.com think about that my fund is 44 million that's over three years so now the syndicate's gotten so big um that she's just on the syndicate well exactly so i i'm gonna tell my lps the next time around let's have a discussion about this but anyway i want to point out what republic.co happened this

week republic.co is equity crowdfunding this means civilians can invest there used to be a cap on an equity crowdfunding of one million dollars every year and there's a lot of auditing and financial review you have to do and you pay six percent to whoever raised the money but it's it's um there is no sponsor involved in this so as an investor you don't get me as a lead or chamath as your sponsor or sax on your cap table but you can go on to republic now which has a hundred thousand investors on it and gum road which is doing 10 million a year just raised 5 million in one day

sahil who was also running a rolling fund with angellist and he has 8656 investors which means people are putting in under a thousand dollars each amazing and it's capped at 5 million now then arlen hamilton who runs backstage capital did a very non-traditional i'll say raise she's not raising for her fund she sold 10 ownership was in the process of selling 10 ownership in her venture capital fund startup studio at a 50 million dollar valuation she's selling 10 of it if you buy shares in that you don't get carry but you get 10 of her carrying management fees forever so it'd be like

buying 10 of craft or whatever the point is you the vcs get uh boxed out of this and this imagine if airbnb or uber decided [ __ ] it we're going to let our drivers buy shares through this and they said we're starting this crowdfunding for 5 million and they did it every year because you can do the 5 million every single year so every year you just allow folks who are in your stakeholder pool you email them and then they buy in it's just absolutely extraordinary can you explain the arlen thing so she's sorry she sold 10. it's a little complicated if you page down future earnings

yes so if you go to the flow of funds and that link i sent for public.com backstage she is took all of her different funds and said you can buy ten percent for five million dollars you own ten percent of essentially sequoia capital or y combinator whatever you want to refer to her um you know company as her holding company then every time she gets management fees every time she has distributions from her carry she's going to give 10 of that to these folks forever i don't know if that's a great idea but it's a a new idea um i don't know if the investors in

that are going to get a massive return or they're doing it because they want to support the cost that's that's incredible my gosh it's so weird it's so disruptive it's so disruptive wow it's incredible well because it lets anybody really spin up a new venture firm basically because there are some startup costs to spinning up a new venture remember she's been in it she's been doing this for 10 years and really has gotten good for have to say not a lot of traction um you know from the the classic lps of the world um but now just like we saw at gamestop just like we see with

bitcoin just like we see with nfts and robin hood day traders there are new entrants here and i think there's going to be a world where i will be able to fire up a syndicate and say i would like to raise 10 million but i'm limiting it to 1 000 per person and 10 000 people invest or i'm limiting it to five hundred dollars so instead of you know going away for the weekend or going to vegas and blowing a thousand dollars somebody could say you know what i'll go to vegas and blow 500 but i'm gonna put 500 in the next startup i see and this is a democratization that

could change everything and make america so much more competitive with what we're seeing in china with jack ma disappearing and looking like i've said i've said this before like like what's what's crazy is like if you talk about like systemic inequality and poverty it's like the government loves to give poor people casinos sports betting and lottery tickets yup but the idea that they could invest a hundred dollars into a startup is illegal even though startups generate 15 of your caker so even if what you did was you gen you invested in the market beta of startups

let's just say that degrades it would still probably be close to ten percent and the markets yeah you'd be you you'd be out of the s p returns you know over many many years eight percent so 25 percent better it's it's it would be incredible with by the way 25 better chamath with the outside chance of hitting a home run a grand slam and and that's why i love this um all right so do we want to wrap here or anybody have any closing thoughts well i just think it's like if you think of like that thing of like all the money flows changing the other thing is like all the people are

changing and then what sac said before it's much much easier because the technologies are changing you put these three things in a soup and it just seems like our best days are ahead of us i think it's going to be amazing for entrepreneurship all the answers are out there if you want to start a company all the skills are freely available to you uh you can learn anything online i think the message i really want people to understand is you know you may you may believe that the world is filled with inequality and racism and bad actors and you would be right but what's also right is that every skill can be learned capital is available now more

than ever and there is a clear path for you if you just stop watching television and learn to be a ux designer a sales executive a marketing or growth executive or a developer you can change the world and change your lot in life and be really [ __ ] rich don't buy into this victim mentality it's complete utter nonsense that crazy lefties are saying everybody's stupid and nobody can learn and i got a bag of red pills here and i have been pounding them the world is a giant opportunity for all of you i just i think it's time to announce friedrich and i would like to announce that um

we've started a combination uh incubator and uh early stage venture firm we call it paunch draft and uh it's play on the words launch and craft i think the punch is the punch is more just a just what do you want so when we're going to launch our first syndicate we got to get a deal here somebody's got to find a deal i just i i never get a million dollars you guys are doing deals left and right jason you need to assign somebody to figure this the [ __ ] out because i think there's there are people there there are there are there are folks listening to this podcast

who have great businesses what we should commit to them is we will help you be the least deluded and we will try to share the beak wedding amongst all the other folks listening to this so if you have a great company and you're thinking of raising capital come to the one of the four of us and we will hand roll a solution for you yes okay let's just do it it's like it doesn't just do this go to wet your beak okay hand roll hand rule we will handle a solution that will allow the four of us plus everybody else in the syndicate to invest and then we will help you non-dilutively

grow your business for as long as possible and then take it public okay i am setting up wetyourbeak.com which is currently redirecting to the all-in podcast it's going to be a typeform and the typeform is going to let you i will dilute your business but uh the rest of you guys can do it anyway go to wetyourbeak.com and fill out the form tell us a little bit about your business and what and it will go to all four besties in the database we'll share it what your beak is the new database i bought the domain but your beak.com from one of the yeah just said it now

this is the tenth time you've said it i get it we can collectively we own it i i sh this podcast is rapidly turning into a commercial for uh i think we have good information now this is this is jay cal's attempt to divert and steal my deal flow yeah so it's talking about we're partners you're who did i just bring six seven companies to the other day craftventures.com do not that's the that's a website that's the website all right yeah okay don't email me give me a break man come on man we're gonna go how many deals are we in back all right listen we love all of the audience and

uh we love our besties love you bestie chamoth love you guys love you free birthday i gotcha love you sexy poo when are we playing cards come on let's play cards every monday it's monday done done i'm sending the invitation alright everybody it's another all-in podcast if you want to rate and subscribe or do anything like that sure why not uh and uh shout out young spielberg thank you for making all of our great tracks uh do a search for young y-u-n-g spielberg in europe uh in spotify buy his songs like his songs and uh he's the greatest uh if you want series a funding

or seed funding david sachs if you want a spec chamoth and if you want to fold some proteins and um qubits yeah you want to do some cubits uh get email freedberg somebody told me that the quality of the show he calls it the friedberg index if freeberg talks a lot it's a great episode when freeberg demers and doesn't talk a lot it's a [ __ ] episode it's french for sleep it just means your wet took a nap you're just it's french for sleep you're just such a heathen more as in more day a day as in sleep day more you could say

demure yeah he demured okay everybody we'll see you next time on the olympics i love you guys and they've just gone crazy with it we need to get