The Compound and Friends - The Great Reset

Episode Date: June 24, 2022

On episode 52 of The Compound and Friends, Howard Lindzon and Packy McCormick join Michael Batnick and Downtown Josh Brown to discuss fintech and the future of web3, venture capital, and much more! This episode is sponsored by Direxion. Visit https://www.direxion.com/product/breakfast-commodities-strategy-etf to learn more about Direxion's new Breakfast Commodities Strategy ETF. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/disclosures/ Inclusion of advertisements by podcast sponsors does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers: https://abnormalreturns.us5.list-manage.com/track/click?u=f8843b0fc6f0ed7d35e67dcf5&id=33b07916d1&e=4e0f612ef0. Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Howard, I got stuck on a jet ski last week. They're fun. You got one? I see pictures. Did you get one? I jet ski responsibly. They're like boats now. This guy gets on his thing like Mr. Bean and just starts crashing into shit. Dude. You have to learn the waterways, man.

I was... F*** respect the sea. I was absolutely panicking. Young man in the sea. I don't think you respect the water. The tide went out so fast. Dude, there was people clamming. There was people clamming.

You may have a word for that, goyim. Yeah, seriously. We call them goyim. Look at the goyim on the beach. But he doesn't know what the buoys do. Well, now I know. No, do you really know? Yeah.

Because the reason they're there is to keep you out of too shallow water. No, I know. No, but do you really know? Yeah. Because that's what... The reason they're there is to keep you out of too shallow water. No, I know. I know, I know. And the tide was going up. Listen, I've gotten stuck places too, so I'm just saying you have to respect the sea. Respect?

You can't even tip those now. They're not fun. Yes, you can. They're boats. Oh, I'll tell. No, I mean, you can tip them, but you've got to try to tip them. You have to try and tip them.

It takes effort, but... know actually there's a great analogy Between being stuck out that see it's like being stuck in some shitty companies at higher prices. It's almost hard to all right No, it's hard to be Cathie Woods now. It's actually hard to do what she's done. Nice can't leave hard to beat daily decay All right guys how we guys how we looking what's up in Brooklyn how's life

it's good have you guys wait have you guys not met before it's third fun time now oh my god third fun have you guys met before

yeah oh okay we met once in person at Solana or at same thing but you met on chain

we met at the top we metchain? We met at the top. We met on-chain. We met at the top. We did, it was fun. That was the happiest room of people I've ever been in. Yeah, some of these NFT assholes are acting like IRL parties, or they're like disrupting...

They're dumb as fuck. They're like disrupting life. You know, I'm doing an IRL party tonight for my NFT. You are, right? Yeah. But my NFT makes sense. No, oh my God, it's revolutionary we're getting together in person here's what's revolutionary the fact that it isn't revolutionary oh it's a

feature that's what it is i like nfts but come on nfts are the deal but it's just a feature i got i got this i got this theory that the people that have sold nfts to the public like at this point have to come up with something in the physical world before they get deemed securities. So they can say, no, it was really like, no disrespect, Gary Vee, whatever, but like he- He has a squirrel that sold for 300 grand.

Right, but then he threw an event and he met all his fans and he's great with his fans and he took photos with them. Nobody can go back to Gary Vee and be like, you sold a f***ing scribble on a piece of paper and it's a security. Because he can say,

no, it was admission. It's not art. It was admission to my event and here's what you got for it. Therefore, there was function. Therefore, it's not a security. That's what I'm doing with the comedy thing. There's function. So cover your ass if you sold an NFT.

Go take pictures of people who bought it. Or just tweet something nice to Gary Gensler. I don't know if that's going to work as well. What are we doing tonight? Oh, I can talk a little bit about it. Tonight is mainly a fun stand-up night, professional stand-ups. And I'm explaining this NFT concept that we're launching around comedy.

It's like a class pass for comedy. And the NFT powers all the rewards. So it's just a simple idea. So it's going to be a Chappelle and Seinfeld that are coming tonight? You have Seinfeld? Someone may show up. That's amazing.

I can't, I don't know. The agents are all friends and we don't know who's going to show up. Oh, wow. So the NFT is – We're not on right now. Yeah, we are. We are.

All right, so don't say anything. We'll keep it in stealth mode. No, I'll explain it live because I weren't packing it. Oh, we're on. We're live. We're live. We've been taping you since you got in the elevator. I've been picking my nose for the last five minutes.

Okay. The NFT, to me me is a feature. The NFT to me, forgetting all the – I mean we've named this stuff so bad, Satoshis, Bitcoins, NFTs, but an NFT to me is like a card. As much as I didn't get NBA Top Shot, that's what it is. It's a membership card. I think it's like a membership. You show it like the Copacabana.

Remember in that long scene when he's walking to the bar if you need velvet ropes yeah okay and to me an nft is is something that will make the internet brighter faster lighter it's your way into more stuff and especially on a blockchain that's public the more information I input into my NFT. I tell you my age, the type of comedy I like, where I'm from. The more information I load into this NFT theoretically, the more I could personalize comedy for them or their experience. Stop nodding your head, Packy. I love it. So I'm saying I've had to watch all this happen and make fun of it for two years,

even though I'm investing in it. But now I'm just so fed up. I wanted to show people what I think they are. And the only way to do this is to learn by doing. Well, two things about that. Number one, like you have been building communities since I've known you. Not well, but building them. No, no.

But you don't just build a community. You've built like a series of communities and then have found ways to have them overlap. Yeah. And they've always sucked at being a business. So the worst business to be in pre-Web3, this is why Web3 pisses me off, is because everybody's putting the cloak of community around something and says come to my Discord room, the most Web1 place on earth, which is fine. Discord's a cool product, but I don't want to use Discord.

And I don't want to use Discord because it sullies the word community to me because I've built communities. Yeah. But we finally have a way to build a great business around community. It doesn't have to be a billion dollar business, which is the second problem. And Greeson and the VCs have come in saying, web threes, we're not going to have the next Facebook, but here's a billion dollars to build the next Facebook. And that's not what Web3 is.

Web3 is like – remember when they had a car and it rained and you crashed because there were no windshield wipers? So Web3 is just like windshield wipers. It's like a feature that goes on the car, which is the car is the internet. And if you use Web3 well, there'd be new business models for small businesses to create giant businesses the art of web 2 what made web 2 so amazing was instagram you won't remember this but as an entrepreneur i was like holy they have 12 employees and sold for a billion dollars that was the last company that did that other than whatsapp then every company raised billions of dollars and hired thousands of people that they didn't need to build public companies. Okay.

It worked. Dude, I started on Instagram. Now they are – I started on Instagram. He's not done, Josh. He's not done. Hold on. I started on Instagram because you were tweeting –

Pack it. We're not going to get it working. Your Instagrams. You were. And back then, they let you. Twitter allowed the photo itself. And they should have kept doing it. They should have kept doing it.

But I was like, oh, I follow this guy on Twitter. I'll follow him on Instagram too. It was 2009, 2010. Yeah. but I was like, oh, I follow this guy on Twitter. I'll follow him on Instagram too. It was 2009, 2010. Yeah. And I was doing golf pictures. But the point is the art of a company like what you guys are doing at the compound. Remember I said you guys should get out of the wealth management business and just be a YouTube channel, right? And now you can do both because you can truly monetize.

And you don't have to leave YouTube to do it. That's the lie. It's like let's have to leave YouTube to do it. Yeah. That's the lie. It's like, let's go build a YouTube on the blockchain. Okay, good luck. YouTube's pretty damn good. You know what would be good with YouTube? A way to take my community off YouTube and give them extra stuff.

And the more information they give me on a public blockchain, the more shit I can give them. And that's where we need to go. And so the art is, wouldn't it be cool if everybody could build an Instagram? That should be the art. How do I get to a billion exit with four people? That should be the new game. How few – it's like Kerplunk. The more – Good game.

The more you could pull out without the – there was always a guy like Trump who would just pull out everything at once and see all the marbles crash to see what the world looked like. I won. He would pull out – like you can imagine Trump as a kid. He'd play Kerplunk and he would just pull them all out on the first turn. He goes, you're an idiot. And he goes, like, I won. He would pull out, like, you can imagine Trump as a kid. He'd play Kerplunk, and he would just pull them all out on the first turn. He goes, you're an idiot. And he goes, no, I won. Look at all the marbles.

And then there was the other kid, like me, who would, like, fight with people because I didn't want to be the one that would have one marble fall, okay? And I think we're at that phase of Kerplunk where you should try and just elegantly not knock marbles off. And cut.

Does that make sense? You got it. Is that today's title? I'm so wasted. Let's get the show started, John. What do you think? We love you. All right.

Let's click it up. Wait a minute. That wasn't on? No, we're on. Don't worry. No. That was a pre-show. You just did that.

That was a pre-show. Does that make any sense? Yes. It's good. It's great. Marbles. Marbles. Trump and Kerplunk. Does that make any sense? Yes. It's good. Marbles. Marbles. Kirk Plumb.

Trump and Kirk Plumb. Welcome to The Compound and Friends. All opinions expressed by me, Michael Batnick, and our castmates are solely our own opinions and do not reflect the opinion of Ritholtz Wealth Management. our own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Today's episode is brought to you by Direction. Duncan, did you know that they've got a new ETF, the Breakfast ETF? I've heard about it. So today's episode is brought to you by Direction. Duncan, did you know that they've got a new ETF,

the breakfast ETF? I've heard about it. You've heard. Okay. So inside of that ETF, you get access to commodities, which are one of the few bright spots of 2022. In that portfolio, in that fund, you've got things that you would find at your breakfast table. Bacon. I know you don't eat that, Duncan, but you drink some OJ. I do. You're a grains guy. Yep. Coffee? Yep. Milk in your coffee? Oat milk.

Oat milk, okay. That's not going to make it. But anyway, inside of this ETF, this breakfast ETF, that's what you get. So if you are interested in learning more for yourself, you can go to direction.com, of course. That's www.direction.com. Yo, the compounded friends. Buckle up for this episode.

Two fan favorites. Two of our good friends. Paki McCormick is here. I know you don't know that yet because he hasn't had a chance to jump in. Howie Linsen's in the house. We wrote, we professionalized this a little bit since the last time you were here. Linsen's in the house. We wrote, we professionalized this a little bit since the last time you were here.

Howard is the co-founder and chairman of StockTwits and the founder and managing partner of Social Leverage, an early-stage VC fund. Paki McCormick is the founder of Not Boring Capital, also an early-stage VC fund. Paki writes a sub stack called Not Boring. If you've been listening to the show, you are already subscribed. If you are new to the show, stop what you're doing. Subscribe to Not Boring. If you've been listening to the show, you are already subscribed. If you are new to the show, stop what you're doing, subscribe to Not Boring on Substack. Paki talks about early stage investing,

Web3, and other finance-related topics. Aren't we on to Web4 yet? We're on to Web5. Did you see Jack Dorsey came out with Web5? So catch, I'm not on Twitter. Catch me up. So Web3's dead. Okay. It died two weeks ago? It died, I think two. Doesn. Catch me up. So Web3's dead.

Okay. It died two weeks ago? It died, I think two. Doesn't have to live. It was still born. It never was born in the first place? It was born with a leg. Now I know these things get clipped and shared and whatever.

So Web3 is not dead, but Jack and crew at Block. Oh, no, we're just going to use that part. Of course. Jack and crew at Block came out with Web5, which is their now. Jack's whole thing has been the VC's own Web3. We skip Web4 as you leave your house? It's irony. It's irony.

It's Web2 plus Web3, Web5. Web4 is when you reorganize Twitter and Square. Right. Did that happen yet? No, he just wants to pass that part. All right. So it's Web5. Now what?

I mean, I would presume 6. So Web5, I think, is there's no tokens. Presume 6. there's no tokens. Presume six. There's no tokens. Everything's built on Bitcoin, kind of, which is not something that you can really do, but they're figuring out how to build it on Bitcoin. And you have identity and different...

I don't really understand Web5. Oh, you just need a layer above Bitcoin. You could use Bitcoin. Okay, so it's a layer above Bitcoin. To solve the challenge of Web3 being owned by VCs, Web5 is being owned by Block, which is the public company that Jack Dorsey runs. Oh, so they have their own blockchain. Yeah.

Their own something on top of Bitcoin. He's on centralized decentralization. Centralized decentralization. And Jay-Z is somehow probably involved. Jay-Z is probably involved with decentralized identity. He did the blueprint. Why is Web 6 afraid of Web 7? Because Web 7, Web 9.

There we go. What's so funny is it's just more web. Let's be honest. The internet's amazing. Yeah. Only Google can be. Let's just have some groundwork. People like in a world where we can all just shoot each other up right now with AR-15 because I have one,

the fact that we're trying to break up Google in a world that has AR-15s in schools is silly. So the only thing that can beat Google is Google.15s in schools is silly. So the only thing that can beat Google is Google. We have to admit that. Google is the only thing that can destroy Google. Therefore, Web 3 is stupid. It's just the web. Web 2 is kind of stupid, but at least I'm loyal to Web 2 because Twitter, YouTube, Facebook, LinkedIn all came out at the same time. This part of it made sense to me. The simple example of Gangnam Style, right? Okay, there was a billion views. The consumers of his video helped for it to go viral.

Gangnam Style produced the content. And who made the money? YouTube. No, I hear what you're saying, but it doesn't mean Web3. There's just new ways to use the web. Counter-point. Yeah, I agree with you there. So he puts his video on the blockchain, which is inaccessible.

He'll never do that. To nobody other than like 12 people who rush it. We're still so early. He doesn't know. He doesn't know. Time out. It doesn't get discovered by five-year-olds who play it eight million times each. And it never becomes anything because it's so obscure.

So the Web3 is just web. And tucked away. You should use YouTube. each and it never becomes anything because it's so obscure. So the Web3 is just web. You should use YouTube, but if you're the compound, I'm not saying you should have an NFT, God forbid, because it's too hard. There's an animal spirits NFT though. Well, we raised $100,000 for charity with NFTs. That's Web3.

That charity was Doquan. Is that go to Kathy Woods, Endangered Traders? No Kid Hungry. Endangered Traders on CNBC? Endangered Traders. She's a genius. Only she could beat Daily Decay.

Where were we? Wait, should we break up Apple? What about that? Again, over my pay grade, I will just say Apple's a tough one because they're just executing so well, and everybody's playing checkers to their chess, and I'm long long Apple and I hate that Warren Buffett owns 42% of it. So, yeah, I'd like to break it up just to f*** with him. The old f***. How many?

That's two f***s. But it's tangible products versus break up Facebook, break up Google. And I trust Apple more than the government. Let's just – like all these people who are railing on Apple, I trust them more than my government. I trust Google more than my government. So starting there, I don't need them broken up because I want my wallet on Apple. Because if I'm going to sell an NFT or have an NFT product or have an NFT community, I would like to tell my clients who are different ages, who all love the same thing,

that they can get it on an Apple or Google wallet. They don't have to buy Ethereum to get into my community because I've just lost 80% of the people that could actually enjoy my NFT. I asked that question. Nobody gave me a good answer. I asked that question six months ago. It's like, okay, let's say you fall in love with a particular NFT, right? You just, you love the art or the artist or what it's connected to. No, no, no.

But like, why can't I just buy this with a credit card? You can. Why the f*** around with Discord? But it should be easier. On NFT Gateway, you can. You can. On NFT Gateway, you can. And wallets and moving money. And flow blockchain. You can, Josh. Yes. You can. Why the f*** around with Discord? But it should be easier. On Nifty Gateway, you can. And wallets and moving money and I just don't want to do it.

You can, Josh. Yes, you can. But they're not, but those wouldn't be public blockchains. That would be a private blockchain. I'm buying a secret decoder ring

then from the back of a comic book in 1950. There's really no difference. Almost. I'm in the Beatles fan club. Like, that's what I bought. But that was static. Yeah.

I agree with you. That was static. In my comedy example, let me try and give you one other example. Why does there have to be a secondary market for it? What was the best thing of WebTube? We won't remember until I tell you you won't remember it. What was the best thing pre-Web was QVC. You go on QVC, and if your product hit, you were a billionaire.

You sold schmattas to a million blue hairs and they put it in their garage. It was like Raiders of the Lost Ark. Okay, Web 2 comes along. Let's call it Web 2 for now. And what were the best business model? Twitter, Facebook, LinkedIn, huge social media network selling ads. The worst business idea.

What were the most interesting companies? We hated them. Groupon, flash sale sites. What was so interesting about Web 2 was you could take everybody on the internet and push them to Fred's Sandwich Shop at a specific time. That was Groupon's business model. Almost genius. But that was Web2, the power of turning the whole internet on a thing. YouTube could do it.

Everybody could do it. But what happened was everybody went to Fred's Sandwich Shop at 1. He hadn't done enough bread. He ran out of thing. YouTube could do it. Everybody could do it. But what happened was everybody went to Fred's sandwich shop at one. He hadn't done enough bread. He ran out of meat. Everybody took a piss on his door and gave him a one-star Yelp review. So what happened is, no, but hang on, that's web two. So what happened was everybody lost except Groupon. So the traffic was sent, terrible experience. The guy went out of business because he got a one star. But that was so close to Nirvana. Web3 would be, in my vision, sending the right people to that place all the time and not charging for you to send them to that person all the time because I run a lean business and I don't need to own the email. He owns my NFT, so I don't care where he goes.

My job is to make that member happy, Amex Platinum, and to create millions of Amex Platinums for very different verticals. And that's Web3, which is taking the best part of what Web2 turned out to be a mess, Groupons and the flash sale sites and class passes, and reverse it and make them elegant versions. But again, if I buy a membership to something like that, so let's say you and I agree Fred's Sandwich Shop is amazing. I want to eat here forever. I want preferential treatment when I come. Yeah, like Foursquare Mayor a little bit. I want the ability to flex.

Like if I go there with all my friends, I want to show them that like I'm – all right. So all the good stuff that you would theoretically get from an NFT in the real world. Why does there have to be a secondary market for that? Why can't I just buy it from Fred? Should it be. But there can be overseas. Why does it have to trade on its own currency?

It doesn't. But hang on. But that's non-fungible. And a non-fungible, theoretically in my view, and you'll tell me if I'm wrong because I'm learning myself. That's why I'm excited because I'm finally understanding this. As soon as you tell me it's a token, I'm out. But even though a non-fungible token is a token, my comedy thing is not meant to trade. If I do my job good as a company.

So it's not an NFT. It's a non-fungible NFT. It's whatever it is, a card, art, whatever you want to call it. It's sitting digitally-fungible NFT. Whatever it is, a card, art, whatever you want to call it, it's sitting digitally on a blockchain. When they flash that, I don't want them to trade. I don't want it to be a security. The number one thing I did when I started this company is hire a securities attorney, the best, Ethan at Lowenstein,

said, keep me out of jail. This better not be a security. Make sure this doesn't have the expectation of a rise in price. But the goal of creating a great community is to create such uncommon value to the limited amount of members that you hand out. And they have to trust you're not going to keep printing these. That they do trade because someone who loves comedy has to bid it up to get another comedy person to part with the uncommon value that that person gets from the card. Now, there's different levels too.

So in comedy, for instance, my idea, sharing it because it's all open source, is I like comedy, you like comedy. We know we don't want to put in the work to go on stage every night, but we know we're pretty funny and we know we wouldn't kill, but we could theoretically kill. Like if, like Friends didn't do well until it was positioned, or Seinfeld didn't do well until it was positioned before Friends, right? Guess what? That helped. So couldn't you kill if you went on five minutes before Dave Chappelle? If you knew the audience was there to laugh and knew you only had to do two minutes and get off the stage before Chappelle, how much would you pay for that right?

And that's another level of NFT, meaning Howard Linsen will pay $100,000 to own a comedy black card that allows him to go on stage certain times before certain people. A power card that allows it. What comic? That's a cool NFT. I'm in. I love it. What comic wants an amateur? I love it.

What comic wants an amateur? I'm not joking. Exactly. It makes sense. And my job is to make sure that the right people who want that. is to make sure that the right people who want that. No, I've got to create governance to make sure Liv doesn't buy all the tokens and send Saudi sheiks to do comedy

because that wrecks the community. So you still have to have governance. And that's where community comes in. How can you control who buys the token? They're not going to stop. What? How can you control who buys the token? You can't, but you can set governance up

to know if the club calls and said, your member who we let in took a piss on the stage, they take away their token. That's how you call it. Whoever has the Chewbacca is talking. Paki, tell me why this stuff has to be a – why does it have to be a token? Why can't it just be a membership? I think if it's just one particular use case, it could certainly be a membership. I think there is value to the hype.

In this example, when you asked why Chappelle would want Amtrak to go on ahead of him, there's some value to the early hype of like saying it's an NFT. And then Chappelle's like, okay, that sounds cool. Actually, I'll let the NFT holder come up on stage. I think we're still, I mean, I'm going to say we're still so early, but we're in that point where like, you know, the classic Carlotta Perez, like there's all this excitement, a bunch of money attracted to the space, people trying a bunch of things, a million of those things are going to fail. And the excitement's like part of the thing right now. Howard's out there trying something that he probably wouldn't have tried otherwise

if this new technology weren't here. A lot of these use cases are going to wash out and then there's going to be things with utility. There's not going to be people selling secondary versions of this for a million dollars. But let's say I just had a kid and I'm not going to be able to go to comedy shows for the next two years instead of like building up all of –

It's like more than 10 years, I would say. Packy, the problem is – let me just tell you real quick. The problem is I think – Here, do you want the tobacco? Thank you. People are – people have little patience for this bullshit because of all of the predatory scams surrounding Web3, crypto. Because I think – Buyer beware.

No, I agree. I'm saying it's not – In a world where you can get a bullet at Walmart like people. I agree that we're so early and that we have yet to see real use cases. And I'm saying the reason why people have no tolerance for the bullshit is because of all the scams. One of the biggest challenges of this thing, right, is that like any other new technology, you can't typically invest in like the most cutting edge technology unless you're a venture capitalist or unless something goes public really, really early. What was the point you made in your blog today? That's exactly this point, that you're combining this really early technology.

Smart contracts, which is kind of what all this stuff is built on, were developed seven years ago. It was the first time they were mentioned in a white paper, and we're seven years in now. And it's a pretty new technology. People are trying things. And anybody in the world with a wallet can go invest in these things. And so of course people are getting ripped off. People are probably, you know, the fact that, you know, just like the internet and YouTube and people are putting videos of little kids up on YouTube, same challenge that people are just like kind of shitty in a lot of different ways. And so all the shitty people are coming and doing scam projects.

So hold on, we have to pause here. This is very important. A lot of the cutting edge technology, whether it's new proteins or airplanes or whatever, the average person had no way to get exposure financially to them. Right. Right, that's what makes this so unique. Yeah, and I think, right, like in- Right now you-

For better and for worse. Cutting edge things fail all the time. Most things are not successful. So that is what protects the average person from getting wiped out from every great idea that they don't understand and want to buy into. to look for all of that kind of stuff, that there are more scam projects than there will be, that there's not good platforms that kind of filter out. And these can be open platforms and you can take your data anywhere so they don't have the same lock-in as traditional platforms,

but not things that filter out all of the scams and that that stuff will certainly come. I mean, like you can swipe a credit card now to buy an NFT. Soon there'll be wallets that actually you kind of plug in like you normally would, but buy with your credit card, but it's the same kind of like you own the NFT. So a lot of this like infrastructural stuff is being built, but yeah, people can invest in like the really, really, really early version of that. And a lot of those things are going to be scams,

which is why my advice is always only either earn your tokens or buy things that you just kind of like, and you want to be a part of the community and don't do it for the speculation. When's the end date where we could all look at each other and say, you know, we tried, we tried. Is it 2025? How much time do we get this? Well, hang on, hang on. Let's just go early. We tried. Is it 2025? How much time do we get this? Well, hang on. Hang on. Let's just go back one step. Because remember, we do live in America. And you make the good point about is this a security or not.

Like, that's the first thing. Get a goddamn lawyer. Because this is like not, this is not a, this is gray. Yeah. And if you live in China, gray means go. If you live in the United States and you're dealing with financial things, gray means slow the f*** down. If you want to take that risk and people are out there firing off fake securities

I think they're securities, personally. Not every NFT, but I think all that s*** that's trading is a f***ing damn security. But, again, I'm a big boy and I avoid them. Or I pay 2% in 20 and get professional to do it. The most important thing about Web3 is it's been overhyped Or I pay 2% in 20 and gets professional to do it. Right. Okay.

The most important thing about Web3 is it's been overhyped. It happens. Like everything else. Okay. Let's go back to 2012. Go look up Fortune magazine, Google Glass Fund. You'll see a picture of Mark Andreessen and Ben Horowitz on a cover of Fortune wearing Google Glass. Didn't work out so well. Yeah.

Okay. Web3 so far is Google Glass. Okay. Oof. Tough. Web3 so far is Google Glass. Tough. No, but I'm just saying, if you had a Google Glass fund in 2012, your returns are not very good. If you had a BlackBerry, if you were running the BlackBerry fund in 2010, your returns sucked. If you have a 2020 to 2022 late stage growth fund or a seed fund, likely your returns are going to be below the last 20 years. OK? The jury is out.

But the expectations were high. The amount of capital flowing in were excessive. It's a lethal combination. And the valuations were ridiculous. Too much money and too much excitement. And at the same time, you had shrinkage at the top end. You have multiple compression going on at the same time. It's bad.

The valuation – so you have multiple compression coming this way. Earnings. Startup valuations over here and interest rates, NPV, which every accountant has a spreadsheet and plugs in 4% instead of 0%. So there's such a disconnect. Like for years I'd come on this show and go, what's cool is private markets are connected to the public markets. What we found out is these idiots aren't reading the data. Like founders who should be watching the stock market are still pricing their startups as if the public markets are still at all-time highs. I never thought that would happen.

I never thought that would happen. Jason Kalkanis tweeted, the experiment of overfunding startups, especially crypto projects, has been an unmitigated disaster. Yeah, but he's reading my tweets. I've been saying this for two years. Come on. You can't give a founder $5 million because he says that's what will make him feel comfortable. Okay? That conversation happens every day.

I go, when did a founder get it right to feel comfortable to do a startup? It's supposed to be so uncomfortable. When there's 50 people trying to give them money and they get picked. So we became price. It went backwards. Seed investors were them money and they get to pick the top five. It went backwards. Seed investors were all guilty a little bit, some more than others. We became price takers, not price makers. There was price discovery, the Fred Wilsons. Up until 2008, 2009, we were in a price making world. This was the price. Then YC came along and all tech stars and then this abundance of everybody should have a startup.

And guess what? We lost our way. We became price – basically, Tiger and all these are like Citadel, right? Like except they're on the other side. They just became price takers. And if you're the taker of a price in 2022, you should just trade options on Robinhood. You got the same odds because – by the way, you're now sitting with 10-year options that may not be worth something. You don't even know the outcome for 10 years. But really, at least with trading options, you know right away you lost the whole YOLO.

So I just think that's really scary. And there was really sloppy behavior in the last few years. But everybody's to blame. And that's where we're at. Doesn't this seem like, though, we we're fast forwarding a typical down cycle and like we're going to have three years worth of pain in six months? No. If the VCs wise up and talk to the founders

and explain to them the reset, but if we continue to fund startups at 2020 prices- Isn't that what Twitter is now? Isn't Twitter basically VCs- You guys think it's bigger than it is. Sub-tweeting their- Hang on, hang on. You can't have a reach test.

But Howard, there's five DJs that are playing the music. It's Tiger or it's... No, it isn't. How many is it? Guys, seed investing has to reset. Public markets have reset already. If you ask me what I want to do with my capital today, if I was running $200 million, I wouldn't say start a seed fund.

I'd say, go trade public stocks. At least I know how to trade them because at least risk reward wise, I can get liquidity for the risk I'm taking. In 2006, I would say you'd be nuts not to fund a startup when there's Twitter, Facebook, LinkedIn, and you could build on top of those platforms and they didn't know how to price their customer acquisition. Like there were so many ways to grow. StockTwitch built itself on Twitter without ever spending a dollar in marketing because we were using Twitter as our lead gen engine. You don't think the reset has been very widely telegraphed by

almost every voice in VC? I need $5 million out of 15. No, forget those people. You need that reset. Otherwise, the returns get muted for 10 years. So the pre-IPO stuff is getting reset. That already got reset.

So where are we in the chain? Are the Cs and the Bs getting reset? Yeah. They're not happening. So until we get a seed reset, though, I'm out of business. But seeds are so tiny. What if they don't get reset? They're so tiny.

Well, that's bad because then you have these overfunded startups that never make it to the next level. And then eventually you have a supply glut. It's just moving stuff through the system. I'm not saying it should be perfect, but if you ask me what needs to happen, the seed investors, the YCs of the world, instead of writing their blog posts saying now it's different, repriced their rounds. So the seed round is the asshole.

That's the asshole of the snake. We're not there yet. If you zoom down 80% and your video startup is still priced. That is such a lovely visual. Well, you know, the rabbit moving through the snake. No, but listen. If Zoom's down 80% and your video startup is still priced at 20 million pre because you're not checking the public markets

and VCs are willing to fund it at 20 pre, we're f***ed. Meaning that should be down 80% too. How much dry powder is still out there though? So much. Too much. That's what I'm saying. So you're asking when this gets reset, if there's dumb money still putting money to work

in the early stages, we're going to have muted returns for years. Well, you know there is because you see it. Yeah. I'm on the sidelines. This is your opportunity. No, I mean, I actually agree. I mean, I think late stage is not even happening.

And if it does happen, it's happening at much, much, much lower prices than it would have happened. And there's some companies who just, you know, everybody was guilty to your point. Some companies are unlucky enough to have to go out now or go under. And so those companies are getting reset already. I think you're right. At the seed stage, I think we're certainly seeing fewer 100 pre seed, you know, that I think has gone away at least. 100 pre-seed. That, I think, has gone away at least.

It should never have existed. Of course. But I also think, I don't know, there's like a big founder psychology that needs to change at the early stages where it just feels... It's not founders. Yes, it is. These guys were taking money off the table during rounds.

That's true. That shit was sick. Only a dumb VC would allow that to happen. Come on, guys. Come on. They're dumb nails. These are guppy fish, okay? We've turned them into monsters

because we treated them like they're kings, okay? They're the same. I hear... Well, Andreessen said in any given year, there's only five that matter, and your job is to make sure that you're in one of those five. And they get that. That's their game. and your job is to make sure that you're in one of those five. And they get – that's their game.

That's their game. But everybody can't be in one of the five. They can afford to do that because they can raise money the next fund. Packy and I, if we don't perform, we can't – there was a period where you could – let's be honest. There was a period for the last three years you could raise your second and third fund without returns on your first fund. That's gone. Would you admit? We'll find out.

That's over. God bless if it isn't, but that's just bad behavior. You got to see returns before you- The word is sloppy. You're right. Sloppy. And it's not the founders. No discipline. Founders, if you hit them over the head once and go, you're an idiot. 10 times sales doesn't exist anymore, let alone 40. Shut up for a second. Howard, look at this chart. In the fourth quarter, $180 billion of venture funding happened globally.

And even still in Q1, it was $142 billion. So where does this money go? It's got to get deployed. What is this? That's what I'm saying. We're going to have muted returns for another two, three years. It's so much f***ing money. Yeah, but it's still coming in.

That's my point. It's still coming in. So you stay out. I mean, I don't know what to say. If a tsunami is coming, it doesn't mean it lasts for just 30 seconds. A tsunami could just stay around for three months or three years. Don't your investors pay you to invest? Okay, this is a great question

because we, internally at Social Leverage, my partner Tom would come to us last year and go, I don't think we're working hard enough. I go, Tom, I don't think I've ever worked harder. Saying no to these idiots is hard work. And saying no to 20 pre, no, but I mean,

isn't saying no part of the job? Wouldn't Kathy Woods be happy right now if she'd said no more? I like how he keeps calling Kathy Woods. Well, I mean,

actually what I'm competing against and you're telling me... It's wood. It's wood. Oh, whatever. Oh my God, the marbles. John, the marbles.

John, I'll play you after. Hang on, I know I'm being animated here, but I rarely get to come on here. Go, go, go, go, go. You are saying everything right. But what it means is the money's the money. It's going to stay in the game.

People get paid to deploy. Marc Andreessen's not writing checks. You know who's writing checks? His venture partners and the young kids that they hire. You know who he's going to throw under the bus in two years? Paki. Them. Them.

And he'll say, ah, we were wrong. It was a Google Glass moment. And he's going to go on to raise his next fund, just like there was green funds in 2020 or 2000. Remember all that? They were early. And that's all Andreessen's going to say. We won't have that luxury.

Therefore, I had to sit on the sidelines because I know my LPs will yell at me. They're going to yell at me either way, but I'd rather try and do the right thing. And it felt like valuations were ridiculous. And we've talked about this and I couldn't, when you're putting money into work for 10 years and I've seen what a Robinhood looks like or a customer looks like on the end game, if I had paid triple for that deal, my fund returns would have been stock market returns. And what's the point of doing it if I'm going to get stock market returns?

So you have to say no at certain valuations. You don't think the message has gotten out yet? Not even close. Because that's all I hear about is rescinded offers, people predicting down rounds. People predict, like, that's all I read about now in the tech press. I don't believe it. Howe, to your point about things being ridiculous. You also need a new platform.

By the way, 2006 was magical. Cat videos and this, YouTube, Twitter, Facebook, LinkedIn. What we have right now is Ethereum. How much are the gas fees? We're all making fun of it. There's no platform and go away. Try and launch a company today. Where are you going to buy users?

How much are you going to pay for that user? It's a disaster. So there is no way to grow a business. Hence, Web3 should be about being the next Instagram. How do I build a $200 million company with two employees? That would be cool. And that's where you... But how do you track capital?

That's that money problem. That's that money problem. How do you track capital for that though? Those people are making up things to put $10 million into a company that only needs $1 million. And that's a problem. So, Paki, you're deploying money quickly. What are you seeing out there? Not anymore. They're making up things to put $10 million into a company that only needs $1 million. And that's a problem. So, Paki, you're deploying money quickly. What are you seeing out there?

Not anymore. But, I mean, even me have slowed down. But I'm talking to a lot of founders still. I'm seeing early stage prices not come down nearly as much. But I do think – my point on the founder psychology here is that if you say like, look, we're giving you two at eight, founders are just not – they've never grown up in a world where they have to sell 25 percent of their company. They won't take it. Yeah. I agree. I think that's the hard part more than just like not having –

So they won't take it. I think it's less – I think it's less maybe the headline price and more the dilution that they're going to have to give up early when they're just not used to that. I think that's the tricky part because it feels irreversible. That doesn't mean the VC should write the check because the founder – No, no, no. I'm not saying that's the case. Oh, you're saying they thought like a year ago, I'll sell 10% of this. Right.

But hold on. If you're selling two at eight, what do you even have? An idea? Maybe a product? Well, you've been trying this too. When I did Twitter at the time in 2006 or 2007 was three on 17. That was absurd to me. And if we think about what Twitter was back then.

Wait, it's valued at $17 million and they were raising three. So what percentage of the company were they selling? 15%. But the product was built. They had tons of users. It was already fail well. And I still couldn't get my head around $20 million valuation this week there's still deals getting done in 40 million revenue still though also it doesn't matter pre-revenue they had tens of they had hundreds of thousands of users

yeah it was viral and people i couldn't get my head around the 20 million so i'm not i'm not right a lot but i'm i'm i definitely have seen things and twitter if that, I'm like, guys, you don't remember what Twitter was like. Everybody was using it and complaining about it. That's why it had traction. It had a product market fit. So we're going to talk about fintech in a second. But I'm seeing some deals where it is $70 million pre and not knowing anything. I'm like, wait a minute.

At your A round, this would seem like a wonderful exit. If somebody would one day pay you $70 million, that would be phenomenal. I sold Wallstrip for $5 million cash. My investors made eight times their money in a year. I did the deal at a 600 Grand Prix. We have people writing you checks for like 10 Gs. Yeah, 10 Gs.

In 1936, that was a lot of money. It's so great. No, but I'm just saying there was the art of returning capital has been lost. The idea is to not – it's not all about the founder. The LPs are taking risk. The VC has to think about their LPs. Well, you know what became the headline? The amount of money raised and the people that were in the deal.

That's it. It's all just for vanity and ego in between. But don't you think when institutional money came in to see, like, then there's like so many steps removed from the end holder of the money. It's a cycle. You don't even know who

the investor is. It's like eight layers in between. A great investor's job, which Cathie Woods isn't, a great investor's job is a great investor's job job is to recognize the macro and to say, I got to stand aside. It was not easy for social leverage. Credit to you. It's not credit.

It is. It's just our job. It is. Sometimes you get paid. And I learned by the best. Fred Wilson used to take a year off, two years off. And he was like, nothing inspires me. Hang on.

It is credit to you, dude, because the music was playing and inspires me. Hang on, it is credit to you, dude, because the music was playing and you weren't dancing. So it is credit to you. But we still got hit. All the companies that were late stage, Robinhood was $60, now $7. Obviously, I sold on the way out. You could have collected a lot.

You could have collected a lot of fees and done a lot of deals just for the sake of creating motion. Here's how far behind that. I am still investing out of our fourth fund. It's two years old and we've deployed 18% of our capital. Here's how far behind that. I'm still investing out of our fourth fund. It's two years old, and we've deployed 18% of our capital. Wow. Okay? So instead of being down 50%, I'm not down.

And I think that's part of my job. And that's not you being lazy, because you're constantly meeting people. But here's the problem in the industry. The risk to me, sorry to hog this, but people should hear this. The risk to me is that my LP's gold broke investing in other industry, the risk to me, sorry to hog this, but people should hear this. The risk to me is that my LP's gold broke investing in other shit. And then when I finally make a capital call,

they can't make my capital call. Wait, hang on. You know what we haven't spoken about? We haven't talked about any of that. That's the risk I'm taking, Josh. Do you get that risk? We get it. That's why people rush to put money to work. Because you're not going to be somebody's only fund. Call it all. Call it all. Call it all. Here's what we haven't spoken about. Stop calling. One of the growth of venture and all of this stuff was because interest rates were at zero for so long and people needed to make returns.

So bonds went into dividend stocks. Dividend stocks went into growth equity. Growth equity went into venture and crypto and so on and so on. This is John Street Capital. Yeah. Right, right, right, right, right. He'll be at the event tonight. Oh, cool.

So now we're on the other side of that and it's been a minute. Yeah. Right, right, right. He'll be at the event tonight. Oh, cool. So now we're on the other side of that, and it's been a minute. Yes. And by the way, I have a little money. I like T-bills. Not to brag. People used to say, you know, I'd guess on my podcast, oh, Jack. I didn't even know what Jack was. It's T-bills.

I love Jack. And the thing is, we're at a price in the market where bonds aren't paying me enough. So cash was good. Like for the last the market where bonds aren't paying me enough. So cash was good, like for the last year, and stocks aren't low enough. So we're kind of in a tween zone. Rates take up two more percent. Have you considered municipal bonds? Yeah, lately. Dude, they're not bullshit anymore. Let me quote you. I can get 5% on what I'm doing. Yields are too low when stock prices are too high. We're getting to the point, though, where yields are getting interesting. I mean, Yields are too low when stock prices are too high.

We're getting to the point, though, where yields are getting interesting. I mean, I'm looking at real estate. Howard, 5% to 5.5% on muni bonds is equivalent. I just bought my first set. 10% interest. I just bought my first. My money manager, Freddie, my money manager, who I got on Groupon, calls me one day and goes, I got a sandwich for you in an opportunity zone. Well, the hurdle goes higher, though.

I'm f***ing buying a Muni bar. I'm 56. I'm like my grandfather at this point. But the hurdle on stocks, if you can earn 10% income, tax equivalent yield, so no federal income tax on Munis. It's not that high. Yes, it is.

No, it's not. 43% tax bracket, 5.5%. Oh, because you're buying with leverage. So close then munibond fund. Okay, fine. All right, here's the pitch. Here we go. Here we go.

Hold on. Category A, here is a technology stock trading on the NASDAQ, came public as a SPAC two years ago. It's $4 a share. It's a billion-dollar market cap doing $9 million in revenue. Is it a small SPAC or is it a regular SPAC? Whatever it is, de-SPACed. Kathy SPAC.

It's a company. And you have to hope that at some point the revenue growth will go up, the market cap will have stopped going down, and there's like an opportunity for capital appreciation the next three to five years. That's category A. Category B, you're a New York State resident. You're at a 43% tax bracket, which is the top.

You can buy a fund that owns munis. Maybe there's some leverage to juice the yield and you could basically net out at, you're taking risk, price go up and down, but you're earning about 10.5% interest. The hurdle to buy that piece of shit stock is now so much higher than it was even a year ago. And that is what changes the psychology. I am the most – you know me. I'm pretty aggressive.

There's no contest. I'm literally looking through individual munibond. I can't believe I'm saying that. That's ridiculous. If you told me I would be saying that a year ago, let alone 10 years ago. You need like a broker named Seymour just calling you all day.

I'm friends with Gertens. Oh, yeah. What's the most attractive munibond right now? I'm a revenue guy. There's an NFT munibond. There's a California NFT munibond. Arizona Water and Power. NFT Water and Power. It's a mining company.i bond. Arizona Water and Power. NFT Water and Power.

It's a mining company. It's a digital mining company attached to the water. I'm bullish on LaGuardia. All right, Tevye, you know what? I have a chart. Cathie Woods put it up. Oh, my God. Give me a three Woods, a three Cathie.

Cathie Woods should have a Callaway line of clubs that just go down and to the left. What are we showing here? Horrible. Howard. No, you know what? Let's talk about some of my charts. Could you believe this? This blew my f***ing mind.

Not this. Throw my Facebook chart, John. Howard. Look at me. I'm the captain now. All of Facebook's outperformance since its IPO is gone. Relative to the NASDAQ 100. All of it. One of the best companies of all time.

Every last dollar. Back to inception. Back to its IPO price. Okay. What's the problem? It blows my mind. That doesn't surprise you? But tobacco did this a few times.

Like I've been buying Facebook down here finally and I don't use the product. But I'm scared because you don't know if the best days are behind it. It's a screaming buy. Next to a municipal bond, that seems like a good buy to me. We were talking about this morning. I think Facebook is a screaming buy.

I don't know about screaming. So what are we missing? I own it. 11 times earnings. The meta name change is terrible. It was a trillion dollar market cap at its peak. It's about $450 billion now. It's lost a ton of money.

Let me adjust my statement. It's a buy. When it stops going down, it's a screaming buy. Does history suggest that a company like this comes back, though? Yeah, listen. It does? They can do a wallet. They have so much opportunity.

They just have to wait and see. Like I said, crypto has been a disappointment at scale. If you live in Venezuela, again, not to steal the mic, but we live in America. Crypto doesn't make as much sense to us here, nor should it. Visa MasterCard, Chamath, all these guys saying short Visa MasterCard, sorry. They work pretty damn

good here. It's too easy. Okay, so it's hard for Americans or at least someone like me who's used to making investing at two or three pre and living in the YouTube era still to look at crypto and be honest about really understanding it enough and see enough users in this to go make a difference. And so in that world, that's a world that I believe we live in and we're not there yet. Hey, look at this chart. Look at the free cash flow yield of Facebook.

Oh, my god. 9% free cash flow yield of Facebook. Oh my God. 9% free cash flow yield. But it's not working. It's not working? Okay. No, of course not. But come on. That's what I'm trained to buy that. It's attractive. Yeah. I mean, I have to buy that. Let's do some crypto stuff because... More? Well, I think... By the way, I'm an investor

in Packy's fund. He's an incredible writer. I want to hear from Packy. I want to hear from Packaki's Fund. He's an incredible writer. I want to hear from Paki. I want to hear from Paki on this. He's about to call you Paki Woods. He's like five seconds away. He's not Paki Woods. Oh my God. He's Paki McCartney.

No, but I'm saying, I discovered, I felt like I was early to the Paki train in Fund One. Dude, I bought Paki pre-accio. I knew him when he was at his old company. Like we talked way earlier. Oh shit. Michael was bullish Paki. I passed on his old company. Like we talked way earlier. Oh shit. Michael was bullish. Michael was bullish packy. I passed on his last company,

which was having sex in a random room. What was the name of the company? Breather. Really? It was not having sex in a random room. No, I wanted to.

I would have been a user, but no one would have used it with me. I was a driver down of market price. I was breathing and there was no breather. So I would say, breathing, breathing. We have to talk about stablecoins and what's been going on in the last week or so

because I think most of our listeners are not hardcore crypto people, but they probably all have dabbled, as have I, in the last two years, five years, whatever. What do we think, where do we think we are in this particular crypto crash? I know the next one is always around the corner. Historically, the crypto crashes have led to higher prices every time. So it's not a bad thing that it has these crashes. But what are you thinking in terms of like, how much has enough damage been done yet in this particular episode?

I've seen estimates that go as low as $10,000 Bitcoin and $400 Ethereum. We're probably sitting at $1,100 ETH and $21,000 Bitcoin right now. So there could be 50% down. Even from here? From here. And this could be the bottom and we could be slowly, I think, just churning here for the next year. I don't think we come out – kind of to Howard's point. There's not a ton – there's maybe 30 million people have a MetaMask wallet and that's kind of the passport.

It's small, right? I don't think you come – I don't think we come out of this bull cycle on financial – or out of this bear market into the next bull cycle on financial and speculation only again next time. I think there need to be things that have relatively broader, at least fast-growing kind of regular person adoption where a lot of the crypto fades into the background. It's still there, but you have like a decentralized social product where just like Twitter in the old days, people can come in and build clients on top of it and there's this kind of shared user base that anybody can build on top of.

I think there's going to be experiences like that that even just kind of seeing the early stage market. The 2022 episode was almost 100 percent – NFT is fine, but almost 100 percent about hedge funds, speculation. Leverage. Betting, trying to front-run institutional adoption, trying to front-run Wall Street. The whole thing though was about – like there are no products. The price run right now in this last cycle was, to your point, zero percent interest rates, right? Like where do you put the money? But it was 5,000 Bitcoin to 70,000.

It was like the big one. It was the big one, right? And some people were going – Carvana had the same percentage move, and that's worthless. Again, you're putting too much on Bitcoin. And by the way, Kathy probably owned it all the way up and all the way down. Kathy Woods with an S or a Z. No, but I'm saying Carvana had the same percentage move, if not worse, and that was full of crime.

So as much as I like to make fun of crypto and the people – Wait, what was full of crime? Carvana is full – Carvana is like a scam. There was a dead person in every trunk. You're not going to put his car in the house. It came with dead people Max has burned holes in it

Why isn't it On to the internet And sell it for more Than it's worth That's not what they're doing And that's a good business model That's not what they're doing Okay

Have you looked at the stock price Yes Have you looked at the way They dealt with their debt Oh I know the stock price Has collapsed Dude it's a crime The guy's done the same business

Six times Okay Whether they pin it or not Is like the capital attacks Okay Like We haven't done a good job of enforcing the law. So, like, why aren't we talking about Carvana?

The guy's done the same scam for six times. Why aren't we talking about Wayfair? Why aren't we talking about the f***ing Galloway representing, telling you to buy restoration hardware at $700 to $200? Because not everybody's aping into Carvana. Yes, they are.

No, they're not. Come on. Dude Because not everybody's aping into Carvana. Yes, they are. Sorry. No, they're not. Come on. Dude. Do you know anybody that owns Carvana? Yeah, anybody who owes an index fund owns it. Well, come on. Eric Jackson.

Who? Eric Jackson. Eric Jackson just started buying it. I'm just saying, they're down just as much as Bitcoin. That's true. And so I'm just like, enough. But it is up to founders and VCs to price things right so everybody can reset and get returns. In the end, you have to have returns.

Otherwise, we're going to buy muni bonds. And if everybody wants to buy muni bonds, great. I do think – I mean because I've never been a Bitcoin maximalist or price on Bitcoin anything. Not to brag. Not to brag, but I do think one of the interesting things about just crypto as an investment over this past cycle is that when there's all of that money slashing around, you have to put it somewhere and you have this one asset class that has no agreed upon valuation metrics or, you know, way to value it. It is a really interesting receptacle for all of that money.

But why do we have to lever it up a hundred times? But who's we? You and I wouldn't even know how to do that. Well, here's the difference. Criminals doing their thing. The difference, the interesting thing about this crash is that it is institutions blowing up. It's not retail. Retail are not dumping. They're accumulating.

It's all institutions blowing the fuck up. It's been a few, right, like three hours capital is like on the run somewhere abroad. No, but Pappy, that's a serious question. I can't get a good answer to this one either. This is the most volatile asset class on earth. Why also does it have to be the most leveraged? Why can't people just accept the one-to-one volatility and try to make money there?

I've never bought crypto leveraged. Not you. Explain yourself. Not you. No, no, but- What is that mentality? To Howard Swinton, it's a wide open marketplace. Like why are people who shouldn't be trading options trading options on Robinhood?

And then also why are they blaming Robinhood? Like confetti is the problem that we have a bubble? Confetti was a bad idea, but it's not the reason we have trouble. You're probably part of the confetti gang. We are mad about confetti. I don't team confetti. Come on, people. I'm not a libertarian by any stretch of the imagination. Grab your AR-15 and let's keep the confetti i'm team confetti i i'm come on people i'm not a libertarian by the stretch of

the imagination grab your ar-15 and let's keep the confetti i mean i'm not a libertarian but i do think that there's some like there is some personal responsibility here when like people talk about retail getting blown up in crypto i agree most retail doesn't know how to get into a 10x levered whatever in crypto and so i think there is this like degenerate set that got blown up and that is Priyara's capital, that is Celsius, that is, the Luna one is tough, but like,

if you're trying to get 20% yield on a stable coin that's backed by another coin, like, that is risky and you shouldn't assume,

like, you shouldn't move all of your life savings into that. So I do think there is a degen set. Luna's down? I gotta go to better.

Yeah, I know. I'm just amazed that Luna's down? I got to get a better interview. Yeah, I know. I'm just amazed. Howard DM'd me last, what was it, two months ago and said, Anchorage, you can get 20% yields. These things are stable coins, risk-free. I looked at the market. I looked at the macro. He was a great investor. And I said, I don't know.

I publicly said that. That's how I publicly said that. Listen, I have made so many mistakes. We should look back at this. And luckily, these mistakes are made by kids in their 20s, okay, with $300. We joke about this all the time. It's not pretty. There has been financial crimes going on.

But they've been going on forever. You know who pays the price? Honest people. Listen, I'm not perfect. But like cost of raising capital just went up for my firm times a billion. You know what I mean? Like I'm pissed too. We all should be pissed. It all went up for everybody. times a billion. You know what I mean? Like I'm pissed too. We all should be pissed.

It all went up for everybody. The same as the Bernie Madoff tax. You don't trust a hedge fund. This is another moment where good guys get screwed. And that's why I joke about Cathie Woods. I'm like her one job is not to be down 80%. God bless her. She was up and she bought into her own bullshit.

Let's be honest. You can't be down 80%. You can't call yourself a professional and be down 80%. It's almost hard to do. And Call Out Tiger 2, it's just crap. It was just they were trying to like index the world and that blew up. At least they had a strategy. They were trying to index the world and that was kind of a cool strategy.

I mean they were a victim of their own success, right? Because everybody played their game. They were also trying to corner the market on create like an ETF for late stage growth and it blew up. Okay? The market's not big enough for it.

It was like the seven minute abs to six minute abs. Okay. It was a good effort. Cassidy's believed her own, like the Garrett Vaughn Wagners of this era. Remember they were like,

in 99, you would look up your mutual fund on Wall Street Journal and it would be up 8% a day. And like Garrett Vaughn Wagner became a celebrity and all the other names. Yeah, and we would be – they were our gods.

Yeah. And there was only one that got out at the top, Andy Kessler. Those are the people I like. You can go read Andy every week on Wall Street Journal. Like I like to follow people who have been through a cycle, the Fred Wilsons, the Brad Felds, the Bill Gurleys, the Andy Kesslers. Like we should be – but you can't find them on the internet. You actually have to go look for them. Even though it's free, you got to go look for them.

Shame on us for not making those people the people that we should see. Fred writes a free blog. People who are most willing to constantly be sharing their opinions on everything are also, it's not coincidental, but they are concurrently the people who have accomplished the least and are most insecure, which is why they don't shut the up. Like if you ask who I read, I've always said the same thing. Fred Wilson. Well, what does Fred think about Bitcoin?

I don't know. I hope sure he'll write about it on his blog when he changes his mind. He doesn't change his mind every day. And he could be wrong, just like Marc Andreessen was wrong with the Google Glass Fund, just like the people who started a BlackBerry fund. Tech needs platforms. If there is no platform, there is no growth. And right now, YouTube, Twitter, Facebook, LinkedIn, we make fun of them. They are your best ways to get customers. And TikTok, guess how expensive it is, though, to grow on their backs? Expensive. So, Howard, long-term capital management, you were around back then.

They lost $4.6 billion when it almost went to zero. They were bailed out in 1998. Tiger, I think, has taken the crown for the largest dollar declines, estimated on $19.7 billion. So it's probably larger now. Yeah, it's probably 30 billion. I mean— Yeah, it's real money.

Anything over $29 billion is real money didn't we did we relearn this this time around or some people didn't need to relearn it but just like didn't we also relearn that the more something has to be promoted probably the less good of an investment it is this is like yeah i mean youtube we sat in our room and you you probably love youtube too I'm a little older than you. How old were you when YouTube came out? 20? When did YouTube come out? 2006?

05 is when it flew up. I didn't know anything about the internet. I'm trading the stock market, miserable, running a hedge fund. And it was just cats, women pointing their cat. And I knew it was big. You didn't have to. Remember? And we were like, oh.

And the internet was like, oh, it's all fake content. And it's people filming their TV. And it's takedown. But you knew it. It was just fine. And everybody was copying you. The SNL video. And there was VO. And there was like, it was a thing.

The SNL video, Lazy Sunday, is what put YouTube on the map. Because everybody, for the first time ever, could share a video via a hyperlink. There's no way to do that prior. So crypto hasn't had that moment. There was the Netscape moment. There was the YouTube moment, and we haven't had a moment. Ethereum paying $100 gas fees, whatever that means for a $3 thing is not a moment.

We're having a moment now. The crash is a moment because it hopefully resets thing that will create some reasonable expectations is why i'm finally starting another company you think it's fun starting a company in my age but i feel like i am so excited finally again because i understand what an nft is i don't understand the token part i don't buy into the platform part i don't like a lot of things about it but I can finally go back to my roots in comedy, biking, and golf, the things that I love, and build something that actually could be lean, could be profitable, and could be exciting and a win-win-win. That's the greatest thing ever.

I'm finally off the bench again. I'm finally off the bench. Do you remember when you tried this with Twitter? You built a comedy Twitter? Yeah. And I was on there. Laughster. And I've tried it a few times. It was great. You had comedians tweeting jokes. Here was the problem with that. Not all comedians are good at tweeting.

Okay? Well, also, if they were really good, they went to regular Twitter. But again, Jim Carrey's the funniest guy in the world, but he's not funny on Twitter. You know, so, Ricky Gervais is good on both, but you're either funny or not funny. There's no folk comedy or this.

Okay. Comedy also needs a stage. We've learned that. Zoom comedy wasn't great. YouTube comedy is great, but Zoom comedy isn't great. He's an audience. He's an audience. Even Norm's Zoom is fun.

Doesn't necessarily, but comics want a stage. And digital could be great because there's all kinds of benefit. So it's the perfect time and guess what comedy has been just shat on for the last 10 years. We need American culture. Basically all we have is comedy. We need more George Carlin. Did you watch the Bob Saget thing on Netflix? It was great.

Jim Carrey? I haven't seen him on stage in 20 years. Chris Rock said I wish, Chris Rock had the line of the day. He said I wish he had died five years ago so Jim Carrey would have come out of the economy. Jim Carrey killed. He was so funny. So comedians are ready to come back. They're taking your phones away when you go into a club. Clubs are busy.

And guess what's wrong with comedy? The comedy club owners are generally, if you watch the Mitzi Shore documentary, you see it's controlled by one person. So there's certain industries that need this. Music, I'm sure, needs it too. The problem with music, it's so big. Everybody's certain industries that need this. Okay. Music, I'm sure needs it too. The problem with music, it's so big. Everybody's trying to recreate Spotify on the blockchain. That's just not going to work. Spotify is amazing. Okay. Like if you were going to tell me a stock to buy other than Facebook, I'd say Spotify. They got like 400 million users, stocks trading at $20 billion. It's worth more than 20 billion. So there are values in the market.

I'm not saying it's a screaming buy. I'm just saying that's a brand that you can't recreate on the blockchain or anywhere else. They're competing against Apple. They're competing against Amazon, Tencent, and they're still growing. The founder, the original founder, I don't know what it's worth, but that ain't going away. And crypto ain't going to destroy that. Don can cut his mic. Sorry. No, that was, I mean, Spotify was the one where the first time, I remember we were on a party bus from the beach back to the city and we had Spotify. And before we had had to like bring CDs onto the thing. And then somebody had Spotify – or maybe we didn't have to bring CDs. But like we had download songs, album music, and then we just had this thing in our hand.

We were like, you, name a song. And the song was just there. Like all of us, I remember that conversation. We're like, how do we invest in this? Still magic. Although – I still use that app more than anything in terms of attention. name a song and the song was just there like all of us I remember that conversation we're like how do we invest in this yeah still magic although I still use that app more than anything

in terms of attention their video product though has killed the performance of the app killed it I don't use the video so if you're listening to a podcast

with their video on why would you watch a video it's like they're like Joe Rogan you could watch and a lot of them do it now and any of any time you have a video up it comes up automatically unless you turn that setting off, which I've now done.

I don't think you can turn it off when you're on Wi-Fi. But if you open the app in the middle of listening, it will just pick a random spot earlier in the episode and just go back to that. That's the picture. It's retention mode. If you think about Spotify and Web 2, Web 3, Web 2 is still strong. Like Spotify brings so much joy to my life. The guy has had to compete against monopolies. He's still the original founder.

He's in 100 countries. Daniel Ek. Yeah, bet on that guy. I mean I'm just saying Web 2 is awesome. Like let's help Web 2 companies compete against Apple and Google. Let's not worry about the little guy. Let's make spot it. Let's like embrace some of these brands that are undervalued or not able to compete in a Web 2 world. That's where you say break up Apple or Google. I mean, at that level, it pisses me off. But you own Apple as your hedge. Like there's at least a way to play that game. The Web 3 world, we need the Packies

and Michael Dudas and certain guys who are coming tonight to the event. We need them writing checks. But we need – because they understand the tech. They talk about it. They play with it. They use it. Like we need them. But we also need something that actually can explode like a YouTube or a TikTok. So that has not happened, but that hasn't stopped the amount of advertising and marketing.

Returns will be terrible. but that hasn't stopped the amount of advertising marketing. Well, no, I'm saying like the industry itself is spending tons of money to make this a thing, but it's still a thing with no point other than speculating on the prices. Yeah. So the real spending is the brokerages, the exchanges. There's nobody like, look at this thing I made

and it's here to bring joy to regular people. Someone will ask me what should I buy if I got crypto. I go, why don't you buy Coinbase? Treat it like it's trading at 2017 prices. I got 92% of all US retail revenue goes through Coinbase. I know prices are going to zero, but that's why the stock's $50, okay? So you can go speculate on Bitcoin right now in the public market. It pays zero commission.

Yeah, it could go to zero Coinbase, but that's what investing is. But you got almost venture like returns. Go put $200 on Coinbase today. Yeah, you could lose $200 if it goes to zero. But I also think it could be $800. OK, so there's ways to treat your – there's ways right now to play the public market that are almost as good as VC market. There are ways right now to play the public market that are almost as good as VC market. Because I can go buy Zoom at six times sales, but the startup version of it is 100 times sales.

That's amazing to me. It's amazing to me. So I'm saying like we could use our heads. It's the opposite of what it used to be. Are these crossovers crossing back over into public markets? I think they are, but this whole subject is fascinating to me. Like what Paki and these guys did in Substack and creating blogs. Because I was writing checks into you guys. So I wasn't writing checks through our fund but I was writing personal checks into guys like Paki and Niv and Banana Capital.

And I'm like – I was firing off my own YOLO checks as schmuck insurance not because I think they're right or wrong because I wanted to be in the game. I'm reading Paki's blog. I don't get what he's doing and I don't begrudge him because I can take that risk. Was I willing to put my LP's money in that? No, right? Because I'm like – if I want to blow up $25,000, $50,000 in my own money, that's my speculation. That's how I learned. I think what happened is we have people of stewards of capital doing that, and that's a mistake.

And Tiger shouldn't be doing that, right? Like they knew what they were doing. And that's why I make fun of Tiger. Tiger's doing that for insurance companies. Go back to your Fed thing. Go back to your Fed thing. If you would, let's look back at when SoftBank did WeWork. And when SoftBank blew up with WeWork, we thought that was the top.

If you had told me that SoftBank blowing up with WeWork would lead to soft banks? Yeah. That was a bet no one made. And that's what we're living with right now. Is that 2017? We're living in a world. So let's think about how far this bubble went. That was the top. Let's face it. That was the top of Web 2. Okay?

We are still above those prices with nine more soft banks in market. We have a lot of capital. Like you said, when's it going to end? We got to get below. more soft banks in market. Yeah. We have a lot of capital. Like you said, when's it going to end? We got to get below, like that money's got to burn somehow. And not to be bearish because I'm bullish, but like don't, you got to know what the playing field looks like. And there was so much capital. How does that process take place though over such a long period of time?

Because let's say a company, let's say a company weighs money at 5x the valuation they should have. Now they have 11 months worth of capital in the bank. So they're not going to give up. They have 24, 30 months. 24, 30 months of capital. Every single company in the portfolio

is emailing now and saying, we're at 18 months runway. We're at 24 to 30 months runway now. Because they cut expenses stopped hiring and that doesn't mean it's a good thing

no no but my point is it's not instant it's not like oh shit we f***ed up it's over they have years to either

wait for the environment to turn or young companies don't they don't have a lot of money let me give you an example my own mistake let me just talk about

my own journey okay stock twit okay yeah because we haven't really heard much from you today They're going to run out of money. Let me give you an example. My own mistake. Let me just talk about my own journey. Okay. Stock Twitch. Okay. Yeah, because we haven't really heard much from you today so far. I don't come on every day and I don't have my own podcast. Yeah, you do. You still have a podcast.

We're going to plug it. That's true. I love your podcast. The point of my podcast is not to talk. Fair. Okay. So, and you can edit this out. He comes on our podcast to have his own podcast.

I'm trying to educate. Your audience needs education. So listen to this. I'm just trying to be honest. So Stocktooth comes along. I sell Wallstrip. Everybody's throwing money at me. And for a minute, I thought I was smart.

And let me tell you, I'm the living proof of how long a cycle could go on. I love Stocktooth. I love Rishi. All the people that have been Justin. They'll be at the event. Phil, if I could do it over again, the smartest thing I would have done is not take – Well, yes, not hire Phil, of course, and save spit. Go right to Weezy.

Lucky there wasn't COVID back then. Skip right over to Weezy. Skip right over to Weezy. Lucky there wasn't COVID then because Phil would have given it to everybody in the city. He's seeing him. He's coming. The guy was spitting before spitting was cool. The fact that we overfunded StockTwits for its era has led to 12 years of us trying to grow into a valuation based on the business model.

Do we want all – there's not a lot of – like that's not a journey that I want to send kids. Are kids really prepared to be at something for 12 years? Hell no. Exactly. And VCs need to ask that question. When we're sitting in a board meeting in 10 years, are you going to be just as excited about this? And are you going to find a board member

that wants to sit with you making 8% IRR over those 10 years while you grow into that valuation? We've sent a lot of founders out in the world that look like StockTwits way more than I was. We've sent 1,000 times more StockTwits out in the world that look like StockTwits way more than I was. We've sent a thousand times more StockTwits out into the world with this money. So now they raise too much and a too high evaluation. Because at least with StockTwits,

I could go on Twitter and get users and not spend money. Now these kids have money. Should they burn it on overpriced customer acquisition or should they just give it back? I have founders calling me saying, I'm just going to wind down and give everybody 70% of the money. What happens to all that money that's been raised in subprime companies? What happens to them? Well, good founders will give it back and just say, I'm going to move on. They're not giving it back. I'm saying good VCs will go to their guys

and say, we should reset right now and reset the table stakes. The ones that are later on are harder. I'm just saying as investors, we got to be patient. Like I would say to Packy, say no to a lot more deals, which it sounds like he's doing on his own. Because just because you shouldn't say yes just because the price was set by somebody else. Because you've got to think about your long-term IRR and you've got to think about your DPI. And DPI is the cash on cash return.

And we have to start thinking about that or LPs are going to get pissed. And then this whole cycle gets worse and worse and worse because we need venture capital in the system for the public markets to work. And that's what got me so excited about the last cycle. I knew there were hundreds of companies coming. And so it was a great run. Now I'm worried because we haven't primed the pump with anything good because we don't have platforms to launch them. There's no YouTube, Facebook, LinkedIn.

forms to launch them. There's no YouTube, Facebook, LinkedIn. And there's over expectations and the public markets are basically shut because of interest rates. So there's a real dilemma. How long do you, I mean, like this is the question, how long do you think it lasts? And then what do you think? I mean, like obviously no crystal ball, next cycle looks like, because every crash has come back higher. This doesn't stop until the Fed stops raising rates. I think it's that simple. Eventually, politics, the regime will change. The way the Fed has been politicized is you – it's hard to bet that the Fed won't switch eventually. At least they're in a position to cut soon.

Your companies have to make it to 2024 when the Fed cuts rates and then we're back. Then we're back. I go to this Fred Wilson thing. Go read Fred's post like a month ago. He said it's going to take 18 months. Until we cut. If you ask me today, I said go read read Fred's post like a month ago. He said, it's going to take 18 months. So we cut. Yeah. If you ask me today, I said,

go read Fred Wilson's post from two months ago when he's wrong. We'll know. But like smart people. We also go past legislation that made it easier for regular people to invest in pre IPO companies. And I think that opened the floodgates to a lot of crowdfunding and the jobs act specifically was about, hey, this shouldn't only be for billionaires.

Regular people should have the opportunity to invest in pre-IPO companies and capture more of the upside. So that was, I think, one of the defining characteristics of this cycle. And a lot of people either became angel investors or started angel funds. And it was good. I think on balance, it was a good thing. And now it's the educational part. Like, oh, not everything goes straight up.

I wanted to ask you guys about down rounds because it seems to be the entire premise of this is you can't have a down. If you have a down round, it's almost like, which is obviously bullshit because in the stock market, stocks go up and down. Why can't, why can't we have down rounds that aren't a mark of shame in the private markets? Is that something that's about to happen where that gets normalized and people are like, yeah, I raised higher before I need more capital. I'm raising lower. No big deal. Are we going to get to that point? I mean, I guess one is that employee options are underwater, and employees end up being the ones who get hurt the worst, I think, when things like this happen. Even founders, if the VCs like them, can kind of renegotiate their packet and do all that. But the employees are the ones who end up getting hurt.

And so I think retention becomes a challenge in this market. With a down round. That's part of the stigma. Right. Part of the stigma is that. And part of the stigma is if everything's going up and you do a down round, then – OK. So that's not the problem right now.

So in this market, I think we'll see a bunch of down rounds if people need to raise money. I don't know. Your point on preemptive down round and just getting it out of the way now, have you seen anybody doing that? That seems trickier. I do think that in 12 months, eight months, six months – Somebody has to be first. It's trickier. I do think that in 12 months eight months six somebody has to be first It's trickier because they had these party rounds It's not trickier if you have professional investors on your cap table like so I've done it twice did it with stock twits?

That's not one where you tell your friends that were investors that they gotta put more money in or they're gonna get recap But it's an adult thing that happens, right? Right like you but you didn't yell at me. Like, we had a recap. I'm still mad. Yeah, but you didn't yell. There's a difference between yelling and mad.

No, you know what I did? You're passive-aggressive. I called Ian Rosen and I made a list of demands. He won't be there tonight. Okay. So, we have to get through this part of it, okay?

Like, it happens. No, but here's what... I did it. I'll pack. I've done a recap. I don't of it. Okay? Like, it happens. No, but here's what, here's- I did it, Alpac. I've done a recap. I don't want to, I'm not a private equity guy, so I've been through it twice. I won't invest in an overpriced round because I don't want to go through a recap.

Here's what I want to ask you. New money doesn't come into a down round. A down round is almost always people who are already trapped, basically, trying to make the best of a good situation. It just depends who the founder is. And when we did Alpaca, it was all new money after we squeezed out Y Combinator and a bunch of people. Like I remember with Yoshi, and I've talked about this story.

He came to me, pitched me his YC deal, three on 17. I said, pass. Like, I love you. And then he came back six months later, and it was a $6 million round. And I said, go fall on your sword. Go clean up the cap table. I told him what to do. Guess what?

He did it. And so when he came back, we honored our term sheet and we did a $3 million round at six. Now it's a $500 million company. How are you passing on deals that like on companies that you, that you really like? What's like mean? Companies that you think are very attractive. Just fundamentally. What is it?

It has to, again, I work for my LPs. So this is what I'm trying to tell other, because we have an emerging manager fund right now. And I'm like trying to say, like, do you like it as an 11% IRR? Because you can go buy the S&P index on. You have to think about what this looks like at the end of 10 years.

What's the IRR could look like? And what could my ownership look like? That, liking it is why we're in a problem. Not understanding how cap tables look and what exit looks at a certain valuation went away. But you can go look at Bill Gurley or Fred Wilson, and they talk about portfolio construction, right? If you invest at seed stage rounds at 3 million or 6 million and get out at a billion versus a 20 million and get out at a billion, just go look at the math. And you'll say, shit, I might as well put my money in the QQQs or something else. If people just looked at those cap tables that have been, those guys have built

those things out on the open web, go look at it and just run your own numbers. And then you, that's what, then decide what liking is. So there's liking, and then there's liking where everybody can make money. Like the company but not like it as an investment. Correct. Right. Well, it's hard because what initially – It shouldn't be hard.

They're math. But what initially attracts you to that investment is that you like what the company is doing. So this goes to Twitter. This is what makes Fred Wilson the best investor. He still did Twitter at 20 because I couldn't see it being worth $400 million in 2007 because I was like, how am I going to make 20 times more money? And he owned a lot. He understood that $400 million, this is going to be $4 billion. I don't have that ability.

I'm not Fred Wilson. So if you're not Fred Wilson, be honest with yourself and realize that price does matter. To Fred Wilson, it may not matter because he's seen patterns that we don't understand. And there's other Fred Wilson. I'm just saying I'm not that good. So I have to worry about price. Hard pivot. Sergey Brin is going through a divorce.

Net worth is $93 billion. I don't think there's a point up there. It seems like this could be the biggest divorce of all time dollar-wise. Chris Rock says it's 70%. Chris Rock was doing a podcast.'s not 50 it cost me 70 all right he's gonna lose 60 billion how long have you been married for five years okay how long how long you and ellen 25 500 four or 500 years no 26 years so this might this is my theory here and we talked to high net worth uh. They're not $93 billion, but there are divorces.

There are separations. And from what I've seen, I think, and I don't know what the number is, but there comes a certain dollar amount where you no longer have to make any compromises as a couple. And you could almost live separate lives because you never have to say no to anything. Like, I don't know what the number is. I'm sure 90, it doesn't mean 93 billion. Let's say it's a billion. I could do whatever I want with my time. Any hobby I pursue, I could buy everything,

boats, you name it. And then my wife, same thing. She could do whatever the hell she wants. We never have to struggle. We never have to have a compromise with each other. We never have to sit down and say, look, I know you really wanted to do this, but we have to do that, right?

I know you really wanted to go to Paris, but I promised the kids I would take them to London. In these cases, it's, f**k it, let's do both. And let's actually buy a house in both cities, right? So if you never have to do that with your spouse, the question is like, can any marriage survive billions and billions of dollars? It seems like in the last five years – I'm willing to try that.

Every famous hedge fund manager, every famous tech billion – they're all divorcing like literally within the last five years it appears to me. Let's hear from you. What do you think? Should we hear from Alan? Let's call – let's get Alan on the phone. We have a caller. We have a lif from you what do you think? let's get Alan on the phone we have a caller, we have a lifeline what do you think? picture yourself in that situation

how do you survive that much money? I can't even imagine I'm giving it to you hypothetically right now you and your wife never have to make a joint decision on anything, you can both do whatever you want to the point of living separate lives. You have people watching

the kid all the time. It feels like the family just gets less. Once you get to a certain number, you're a public figure. If you have a billion dollars, probably literally every single person in your vicinity surrounding the area knows that you have a billion dollars. You can't hide a billion dollars.

You have unlimited choice This is not good You have Women chasing you Anytime Try writing a newsletter professionally This is my life I know we're getting very close to reality

You should see my DM You should see the type of creeps that come into my DM None of them women. But so you have unlimited choice and it's not good. And you think you're God on top of that. By the way, Ellen and I do have – Forget what it does to your personality. Totally.

Ellen and I, we talk about money all the time. Like let's be honest. Like you talk about with your wife money all the time. I am told about money from my wife. It's different. We talk about it. And I always said like what's the number? Like what's the number that like – we all need – we said, like, what's the number? Like, what's the number that, like, we all need, we all stress out.

Wait, what's the number that what? That you feel comfortable where you just don't have to argue over every little purchase. You're not there. You're there. You've been there. You've been there. That's what I'm saying. We talk about it all the time.

Right. Because in the end, as soon as you make money, guess where it goes? The government or your kids. So in the end, my kids have all my money because that's how the government works. I had a choice to put the money in a slat or a trust. And you guys do this for people. Unless that's the real honest discussion. We don't know.

His money is given away already. So their fight will be different because guess what? They may not have the money hopefully in their kids' names. And their lawyers, when they set up those slats, were like, you know, when you do this, guess what? Like, are you sure you want to do this? You've given up your access to this money. Yeah, so I'm saying these are different type of arguments. We need slots on the blockchain.

They're immutable. Yeah, I don't even still know what a revocable, irrevocable thing is. I just feel like it's America set up that you give it to your kids or you give it to the government. That's not a hard choice. You give it to your kids or you give it to the government. That's not a hard choice. You give it to your kids. Or you give some away. People give some away. Yeah, they set up these donor funds or whatever.

Bezos divorced a couple years ago. Bill Gates the last year. Johnny Depp. Elon Musk is on his third divorce, brand new one. Murdoch just got divorced. These are all billion in Murdoch this week. One other thing. But that's just math. 50% of people or 60 just got divorced. These are all billion in Murdoch this week. One other thing. But that's just math.

50% of people or 60% get divorced. Sergey Brin got married in 2018. God bless. They made it four years. Why even bother? Oh, you're definitely more likely to get divorced at higher incomes or net worth. There's no doubt. Right.

So I think they're close. I don't know what the number is. Where's the line? Probably not that high. I feel like the less the number is. Where's the line? Probably not that high. I just – I feel like the less friction there is surrounding money, the less opportunity there is to actually have a marriage based on like that kind of – that universal like we have to do this together. We have to be on the same page. If you don't have to be on the same page about anything, then – and you have so much money that you have just endless choice, then why even? I don't have that problem yet, but it would be a nice problem to have.

I just think if you have money young, it is harder because you go spend it on stupid stuff. And in a pre-cloud world, there was just so many bad ways to spend money. In a cloud world, it's hard to spend money. You don't need a plane. You don't even need to fly business class anymore. The point is, you can put up with seven hours and coach if you have to.

I like flying business class to Europe. At 12 grand, I'll do coach and stay at a nicer hotel. The prices will determine and that's why inflation and interest rates really are the discussion because the one thing I like doing when I made a little money was going business class to Europe.

And then when I saw recently I went to Amsterdam, 12 grand, two Ambien and a better hotel. When are you going? Are you going to Europe this summer? Yeah. When do you leave? September. Oh, you're going late. Yeah.

Okay. Where are you all summer? San Diego. San Diego. Yeah. But prices, you know, flying is crazy right now. I'll go to Italy this summer. You'll have a ball.

Forget about flying. Hotel prices. Crazy? Holy shit. Yeah. So that's inflation. That's really the discussion, right? Like we've really – there was inflation in travel already.

They were really bad. This morning I noticed my coffee was $3.40. I got a 12-ounce from Starbucks. I said, wait, what? I remember paying $2.12. $3.40 for a small coffee. That's the real problem. Max, who lives on a budget, our son,

he's a good kid, doesn't spend a lot of money. He called me a couple months ago, dad, I'm way short because he drives a lot. He didn't realize that like $200 a month became $800 a month. You know what I mean? And he was short.

And so if my son's short $500 a month, like out of the blue, he now knows about the economy. So it was a good lesson. But luckily we can afford to help our kid. Multiply that times millions of families that can't afford that. Like we should be,

that's why we're in trouble. And we are talking about goofy stuff when my son is the people that can't afford to do that, or my daughter living on the Upper East. She has an education. I'm like, we have to support her. She feels bad. But I'm like, treat it like a university. I'm sure New York's always been this way. But four grand for Upper East? That's crazy money. It's always been that way. Okay. But I'm saying,

like, oil is the first time that my son got woke to, like... Put him on the Upper East, he won't need gasoline anymore. He'll just need... But kids are going to figure this out.

They're going to live... They live experiential lives. They figure out how to get by. But the oil is a big one. When I was Max's age, we were living through 9-11. So every generation has their shit they have to live through. Did you see the video of the people in the long line for the apartment, like shithole apartment in New York?

The line was, I think, three stories of people waiting. That's two years after New York City is dead, by the way, which is really incredible. That was the greatest, I think, the greatest essay ever. Yeah. What a dick. Where is he? I think he meant to,

no, I haven't talked to him forever. Who are you talking about? You know, he means to provoke. That's what I'm saying. Who are you talking about? I did that on purpose. Where Jerry Seinfeld, New York City is dead forever. But that was a hell of a blog post

to get everybody to comment on it. Right, so he won. That's all he wants to do. He's a good troll. He's coming back for web 4 something tells me he has a comedy club a physical one

I know that alright I think we're gonna wrap we're gonna do favorites though we're gonna do you've been on the show before books movies

TV shows whatever you're into these days doesn't even have to be that podcasts like what do you what do you what do you got for what do you got for us on favorites I'm not a podcast guy i love smart list for whatever reason yeah because i'm not

even fans of them i just love the guests and the way yeah they're good who they had on recently they had on the guy um i have so many senior moments the good-looking guy from what no no good-looking guy he's good good looking. Michael Batnick. He was just on. From the wedding movie where they all go You're so old. Bradley Cooper.

Yeah, they have Bradley Cooper. Oh my God. I'd be so bad on Pyramid Square or wherever it was. Wedding Crashers. On good times

with Jimmy Carter. You'd be terrible on Pyramid Square. My memory is gone but but that was phenomenal. What else can't you remember that you liked? The Peaky Blinders is okay, season seven or six. Did they put all the episodes out? Yeah, Peaky Blinders.

I've got to watch that. It's my favorite show. Yeah, it's very good. I now feel like smoking again after watching Peaky Blinders. That's all they do is smoke and kill people. And then the Top Gun movie wasn't bad. Oh, come on. It was so good.

It was so good. I said it wasn't bad. That's a good rating by me. That's an A+. Packy, what do you got for us today? I am on a Mars kick a little bit right now. So I'm reading Red Mars by Kim Stanley Robinson, same person who wrote The Ministry for the Future. All kind of like nearish sci-fi.

This one, they go to Mars in 20 years from now and they're debating whether to terraform it or keep it the same or super interesting. And watching For All Mankind on Apple. Is it good? Apple TV. I really like it. It's old, right? It's an old show. It's actually – I think we're on season three.

Oh, so it's like keeps going. It just like it. It's old, right? It's an old show. It's actually, I think we're on season three. Oh, so it keeps going. It just keeps going. I just heard about this. But this is like The Man in the High Castle. That was if the war had turned out differently. This is if the Russians beat the Americans to space. Oh, I love shit like that. And then we just kind of kept competing.

And then we actually just, for the past 50 years, continued to go to space. That one's really, really cool. Did you read Project Hailary uh read project hail mary they're making a movie out of that who's gonna play the spider rock how's that gonna work i swear to god they're making a movie i think it's probably it'll be the dinosaur from the dinosaur show that's kind of what i was picturing the whole time i was reading it wait what's project hail mary it's by the same guy did the indian yeah the same guy did theian. Those books are cool because the guy's like, somebody wakes up on a spaceship.

Martian's the movie with Matt Damon. Exactly. And so this one, somebody wakes up on a spaceship and they're trying to figure out, their memory is gone, and they're trying to figure out using math and physics, what the hell is going on, and then he meets an alien. It was a really good book. I didn't know they were making a movie.

I think Ryan Gosling's playing the character. Badnik, what do you got for us? The handsome guy from the movie with the... I saw the first two episodes of The Old Man on Hulu with Jeff Bridges. And John Lithgow. I'm intrigued. I'm going to... I like where they're going.

Too early to say. Too early to say. I don't want to... I don't want to say one way or the other. But The Bob Saget Tribute. That's good. So on stage was – Was that on?

Yeah, Netflix. So Jeff Ross and I forget who else was hosting. But at one point, Chris Rock and Jim Carrey were on stage together just bullshitting. And it was – just seeing that was sort of surreal because you never see them together like that. So that was good. Did you see the Netflix Hall of Fame? They created their own comedy Hall of Fame too. And they put in Richard Pryor and George Carlin and Joan Rivers.

What, they put the old videos up of? No, they elected four. They created their own rock and roll Hall of Fame for comics themselves, which again is part of comedians pushing back. And they picked four great people to be in the first one. Did you watch that yet? The George Carlin documentary? Yes, loved it.

How good was that? I'm going to watch it again. Loved it. Judd Apatow did that. Like obviously, but it was so well done, wasn't it? We need more. That's another thing that I say. We need more Judd Apatows, right?

He's one of a kind. But there's more. Like that's part of Web 3.2. We need more people like that. They're out there. We should be crowdfunding movies. that they're out there we should be crowdfunding movies but they're out there

there's Judd Apatow's out there who has great domain experience like you guys with finance like you and I did a documentary it's phenomenal when is that coming out? we have one coming out when is that coming out?

the guy did such a great job what's the latest on this? a month or so okay what are you talking what the f*** are you talking about? I funded a documentary that Josh came and did.

Produced a documentary. About what? And it's called This Is Not Financial. It's about my early childhood. No, what is it about? It started out about GameStop and ended up being a movie about a kid trading Dogecoin. And it's going to be, it's like reminiscence of a stock operator 2.0. There's so many lessons from this movie.

It's going to be dope. It's dope. We showed the nine minutes at Palooza at my event. Okay. The audience went bananas. Come on. Really? Was I in any of that?

You left. You worked hard. You will not be thrilled. But you were the only one who was not cut a lot. Okay. Because the story turned. The story turned. Why won't I be thrilled?

Did I say anything that turned out to be wrong? Because you spent such amount of time helping us. Okay. And you got cut a lot. I have a friend. But that's how movies work. I had to learn how it works. But this arc of what Doji, like what Doji did.

Who the fuck says Doji? I've heard Doge, Doggy. Whatever. You're a Doji guy? What Doji did is what the market did. You know, it's like, and follow a couple of the arcs of some of these people. Wait, all these people that commented to the movie got caught out? Yeah.

And they're all mad at you? No, they're not mad. I'm just saying that's how – I don't know how a documentary works. No, me either. Because the story changes. Right. But the story is – it's just been such a learning experience funding a documentary. I don't think I would do it again because they take too long.

But like – As I say, when did we film this? Last summer? Yeah. They got to put this up on YouTube. No, but because stories take time to develop and that's – movies are – documentaries are amazing. But like being involved in it, not as fun because it takes two years. Totally.

It's like a startup. Yes. Totally agree. What are you watching? I just finished Obi-Wan Kenobi. It sucked. So disappointing. I don't like the way they used Darth Vader.

So disappointing. I feel like he should be on the big screen only. You're stealing my take. That's my take. No, but you're right. Yeah, thank you. They were very casual with him, almost like he's taking cell phone calls.

He's too big for the small screen. It's Darth f***ing Vader. You don't put him on a... It's disrespectful. But he's not even an important character in the show. Although the last fight scene with Obi in episode six was good. It's just, I don't love how they did that. It's cheap.

They're also forging all these connections between the characters. No, they're ruining it. They're ruining it. It's too convenient. It shrinks the universe that all these people knew each other. Am I allowed to ask a question to each one of you? Yeah. Yes.

So what's that one idea that's got you fired up? Oh, man. I mean, I got to know you're here. I'm going to talk to you after, but we should have asked. Because we've been bearish, so let's hear what you're saying. I got one. I'll let you think. The one thing that-

Unibonds. Right. The two idiots. And by the way, high five. We're right. But let's hear what the youngins say. So this is a shameless plug. I'm excited for our conference, Future Proof.

I can't be there. I think I'm going to be out of town. We have 2,000 financial advisors there. All the fintech demos, the stuff that Howard won't be funding, but we will. We're super excited for that. Yeah. What do you got? Well, I'm excited for you.

I just can't be there. Next time. I'm super bullish on your industry. Send what's his send uh tom or don uh don yeah and matt send them both of course yeah so let's just talk because i like what yeah like uh for me i think so i brought on these two guys part-time one who's doing kind of biotech and one who's doing kind of space and and deep tech side of things and one i think both of just those broad, broad, broad areas are super fascinating. But two, just getting to learn from these like young guys who are, you know, the one guy is a PhD candidate in genetics at Stanford right now.

And so he's like in it doing the science, but also has a little bit of an investing background and just getting to kind of learn from him in real time what's going on there, what's happening with kind of people starting to use rna as as kind of you know a therapeutic for a whole lot of things like there's a lot of fascinating stuff going on in you know we'll stick with biotech on this one in particular um so just learning about that world which i had very little exposure to has been a lot of fun what do you what are you most fired up about what i'm working on myself. Comedy.

Okay. Can we tell people what it's called? Yeah, Laugh Lounge. Laugh Lounge. Yeah. Okay. It's just a comedy,

NFTs, and it'll... Are they for sale yet? No. Okay. And it's not that they're for... They'll be... It's a membership thing,

and I think we're just going to just have so much fun with it. It's for people who love comedy, and it's for goofballs that maybe want to be in comedy and closer to the comedians and hopefully not offend anybody. But like truly build community around comedy and hopefully launch a club because it's like building a church. Like we'll raise money and hopefully build a club one day and we'll show people what it's like and it's like WeWork or some kind of club for comedy. It's one each for you.

So your kids who I watch on Instagram with you, are they just TikTok? Like what are they? Is it YouTube TikTok? Like what do you find them spending? So they use Snap the way you and I use text. They don't text or they'll text a little bit, but all of their groups are set up in Snap

and they will never leave. Not iMessage? No and they will never leave. Not iMessage? No. They will never leave Snap. Snap is, to them, what SMS text is to us. Instagram, they don't post at all. Right. They follow celebrities on Instagram, but it's almost – they will put up stories,

but their timelines are empty. Kids are not leaving stuff up, and they're just not – they're not that into the likes that they get from putting up posts. So they're putting up stories, and they're talking to each other back and forth via story. And then TikTok. Yeah, TikTok is like just mindlessly just – But they're on it the most. All the time. You know, I want to –

Just scrolling up, up, up. Do you use TikTok? Yeah, I have like a – I'm a verified TikTok user. No, but do you use it? Like do I sit on up. Yeah, I have like a, I'm a verified TikTok user. Like, do I sit on it? Yeah, and scroll. That's not that interesting to me. Your kids are too young.

No, but I want to amend my answer. I'm fired up about raising my kids. I've got a five and a three. Five, man, enjoy it. And this is like the most amazing time ever. And credit to you, again, what you wrote on your blog the other day about Ellen and you guys are over the hump and you did a good job. That was very sweet.

I don't know if we did. I was saying more that we, we don't have a choice anymore. We did what we did and they're gone. You did a good job. Yeah. We did a good job. Cause I still traveled a lot. Like she had to do her more than me for years, but like they like us. Let me quote you. Let me quote you to yourself. You said my kids are out of the house

and most of my opportunity to be a great father is gone. I had my time based on how they treat me, Ellen, each other and other people. I think we did great. That was very sweet. Yeah. And by the way, like my daughter was, you know, she'll DM me sometimes.

She goes, you're on fire today. I mean, how great is that? Like, not like you embarrass the fuck out of me when you get off Twitter. Like almost like I'm like, she's too nice to me. Where is she? Like, not like you embarrass the fuck out of me when you get off Twitter. Like, almost like I'm like, she's too nice to me. Where is she? She's following you on Twitter? Well, she uses, she does Twitter for Raleigh and she gooses and stuff.

But she doesn't like doing it. But she gets me a little bit. And she's not embarrassed by me. And the same with my son. Like, I don't embarrass him. So, I mean, that would be horrifying. Like, I get yelled at on the internet. I'm talking too much today or whatever.

But, like, to not embarrass him is cool. Oh, Paki, you have a two. How much comfort was he the rough week a couple of weeks ago? Oh, my God. So, yeah, he was in the hospital a couple of weeks ago. Three days, totally fine. It was bronchiolitis. So, like, we knew the whole time he was fine.

He's the best. I mean, he's just sitting in the bed, IV in, oxygen in, just laughing and trying to get out of the bed. And he's the absolute best. I feel like we're in a spot now, kind of from 18 months on, where he's saying full sentences and he's just becoming this little person. It's the absolute best. What are you, two and six? I've got a three and a five.

And it is just beyond joy. It really is person. It's the absolute best. What are you, two and six? I've got a three and a five, and it is just beyond joy. The four till 14 is heaven. Rachel never went through anything. Rachel always liked me. I was going to say zero to 12. For me, Rachel's been perfect the whole time, meaning she's like me. And Max went from 14, wanted to see me dead until recently. But getting over the hump with Max has been heaven. I think I'm in the toughest.

I think I'm, other than when they're infants and you can't put them down. How old is Tara? 15? This is the hardest it's ever been for me. It's tough. 16 and 13. Yeah. They f***ing hate me, hate my wife, hate each other, hate their friends, hate school, hate camp. COVID was tough for that age.

I mean, they just, their negativity feeds. When they get silly, they get silly together and it feeds on and it's adorable. And I love seeing them like happy, but then it works the other way. If one of them is going through some shit or is in a bad mood, it's infectious. And then the other one becomes like sullen and, well, don't, close my door. Don't look at me. Don't talk. Stop asking me questions

and I get it because I was that until about like three years ago but it's hard I'm on like so many different sides of this I have friends that are in their late 50s who are doing it a second time later for that shit oh my god

and they'll complain to me hang on I didn't advise you to get married a second time and I'm not coming to your bouncy party for your one-year-old in my 50s. That's right. I'm manscaping by myself in the dark. That's right. We did that already. Holy f***er, there's some mistakes being made by people my age. Sloppy behavior.

Sloppy behavior. So enjoy the two-year-old, whether you're happy with your wife or not, and enjoy your 13 to 15-year-old and do it once. Yeah. And be the f*** done, which is what my blog post is about. Like, man, I'm so happy that I don't have to do it again. Oh, no, no, no.

There won't be. It's medically impossible. But I say you have one chance to do it. I'm hanging out with my nephew today. Like, I love my niece as a nephew. And in the end, we're all going to be in the recruiting business because in the end, we're all going to know enough companies and we all have these great networks and we all want our smart kids working for our smart companies. So, really, we all end up in the recruiting business because in the end, we're all going to know enough companies and we all have these great networks and we all want our smart kids working for our smart companies.

So really, we all end up in the recruiting business, which is what the joy of my life is right now. It's like, these kids are smart.

These 20 to 25-year-olds are actually smart and they want to work hard. So we're basically all in the placement age. It's like, I can't believe how many opportunities

there are for kids our age. And so part of our job is making sure we just get them to this age, right? Because it gets better because there's so many great jobs. Like seeing Rachel work in Soho and seeing Max in Montana, like they're very different kids and there's just so many opportunities for kids if we just get them launched, right? So like watching you guys raise your kids, it's hysterical to me because I know you're kind of enjoying it, but I also know the hell that's going on. I'm in love right now.

I'm in the sweet spot. At any given day, it's one or the other or some combination of two, but that's what we're doing. So we're going to, we're going to leave it there. Do you guys have fun today? You guys have,

yes. This is the best. This was transformative for you, I feel like. I'm never gonna do another investment again but wait i'm waiting for three he's gonna sit in cash for the next cycle that's okay with you still at that hey shout out nicole duncan john you guys did a great job this week thanks so much um for those of you who are listening to this episode and have always wished that they could actually watch it, we do that.

YouTube.com slash The Compound, RWM. All of our The Compound and Friends episodes also become videos late in the day on Friday. So make sure to go ahead and look for that. New Animal Spirits Monday. New Animal Spirits Monday. New Animal Spirits Wednesday. New Portfolio Rescue with Ben Carlson every Thursday. Duncan's on that show too. My bad.

Every Thursday, 11 a.m. Eastern. And what we're doing on Portfolio Rescue is we're answering your questions. Ben Carlson is answering your questions. Duncan is asking them. And we'll usually throw a couple of other experts in there too. So make sure to look for that. Okay. We're going to wrap up like and subscribe. We love you guys. We'll see you next week.

Thanks to Howard. Thanks to Paki. Two of the best. We really appreciate you guys. Thank you so much. Thank you. All right. Let's wrap. That was the best. Now none of the listeners want to have kids or make investments