This Week in Startups - Alumni Ventures charged by SEC + What Germany got wrong about nuclear power with Mark Nelson | E1402

Episode Date: March 8, 2022

First, Jason and Molly cover the news of Alumni Ventures Group getting charged by the SEC for misleading investors about their management fees (1:56). AVG had to repay $4.7M to investors and paid $800,000 in a settlement. Next, we briefly touch on Index Ventures stopping their investments in Russia (24:56). Then, Radiant Energy Fund Managing Director Mark Nelson joins to make the case for nuclear power and explain why many countries have chosen to decrease their nuclear capacity (40:03). (00:00) Jason and Molly intro the show: AVG pays 800K in penalties, Index halts Russian startup investments, interview w/ Mark Nelson on nuclear energy (01:56) Alumni Venture Group pays 800K in penalties to SEC (10:42) Ourcrowd - Check out the deal of the week at https://ourcrowd.com/twist (11:49) Jason's prediction for what happened at Alumni Venture Group (23:33) Mercury - Banking built for startups. See more at https://mercury.com/twist (24:56) VC Firm Index Ventures halts startup investments in Russia (38:35) Assure - To get 20% off your first Special Purpose Vehicle (SPV) visit https://Assure.co/twist (40:03) Nuclear activist Mark Nelson on the future of nuclear energy (@energybants) (56:41) How Germany abandoned nuclear (1:03:31) Are Nuclear reactors aged beyond repair? (1:10:49) What France got right (1:29:41) Ways you can get involved with This Week in Startups & Launch FOLLOW Mark: https://twitter.com/energybants FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Okay, everybody, we have got a great Monday show for you today. First, we're going to talk about Alumni Ventures Group getting charged by the SEC for misleading investors about how their management fees were collected and doing some co-mingling. This is Dishy. They had to repay $4.7 million to investors, $800,000 in penalties and a settlement over fund fees. There's a lot going on here. That stinks. $800K in penalty stings. And then we're briefly going to touch on.

index ventures, stopping their investments in Russia and some of the assorted big tech voluntary sanctions with regard to Russia. And then related to Russia and ripple effects from the war we're seeing now and how they relate to energy, we have nuclear activist Mark Nelson on to make the case for nuclear and help explain this kind of long history, all these reasons that you would never have thought of in terms of why most countries have moved or are moving away from. nuclear power. There's a lot in there. It's going to be a great show. Stay with us.

This week in startups is brought to you by Our Crowd helps you invest early in pre-IPO companies alongside professional VCs. If you're interested in investing, you can join Our Crowd for free at OUR-C-R-O-D.com slash twist. Mercury. Question, how much time have you wasted managing your company's money? The answer? Too much. Switch to Mercury at mercury.com. And Assure is the leading provider of special purpose vehicles and fund administration with over 5,000 completed transactions and $2.5 billion under administration. Twist listeners can get 20% off their first SPV at ashore.com slash twist. That's assure.com slash twist. All right. It's Monday and we're back back here on this week

And startups. How was your weekend, Molly? It was good. I'm not going to lie. I unplugged hard. Things are, you know, like, you know, in the mid, the sort of midst of the pandemic when just the sort of psychic burden of everything felt like so much. This feels like that all over again, but maybe worse. And I just tried to like keep it as quiet and local as it good. Plus my kid turned 15. I know. I know. Almost as tall as you. Yeah. I'm terrified. Like to be clear, everybody who's listening to this and has never seen me in real life, I'm six feet tall or like a millimeter under. And he is creeping up on me at 15. He's like at his like head is at eye level now.

Did you play basketball in school or volleyball and anything like that? You play volleyball. Are there positions in volleyball? Is it like somebody the setter and the spiker or is it? There's like a yeah, there definitely are setters and hitters and then they're kind of and servers. I mean, the sort, you know, there are people who play them all. I was a hitter.

Got it. I would prefer striker. I think they should call them strikers than hitters. Maybe they do. I don't even know what they're calling any. Volleyball has changed a lot since I played. Let me just say, I watch it now and I'm like, Jesus, it's like a full contact sport. All right.

So, well, yeah, it's kind of hard to think about anything else when there's a war going on. And we haven't had one of these, thankfully, in a while. Certainly not a ground war like this, I guess, since I understand. I mean, these never-ending wars, I guess we're going on, but they weren't like a full-on assault. of another country. No. Somebody made the point to me that there have been, that there have been,

just reported deaths, right? Just reported deaths among soldiers, either on the Russian side or the Ukrainian side, far exceeded within a week. The number of soldiers lost in 20 years in Afghanistan. U.S. soldiers lost. Yeah.

I mean, it's just, it's so, the sheer horror and violence and death is just really hard to absorb. Yeah. And war is bad. Like, I know it sounds like really trite, but war is really bad.

People die and they suffer and like they're traumatized for life. And yeah, hearts go out to and prayers, thoughts, everything. And containers filled with supplies for refugees. I mean, that's the other thing. Got a million refugees on borders. Heartbreaking. And donations, yeah. Carry on and continue to talk about tech and start up.

So there's a little disclaimer there. But we are thinking about the Ukraine every day. And yeah, we'll have a lot to talk. We'll actually be talking about it a little bit today as we talk about what happens when an entire industry is unplugged, right? I mean, it's just fascinating to see. But let's start with some venture news. I thought this one was particularly interesting.

You've probably heard advertisements online for alumni ventures group. It's a pretty clever idea. It's a syndicate group. and a venture capital group. And I remember meeting them at some point in New York City. I was speaking at an event. And what they did was they, I believe they took colleges and they said,

hey, if you're in the alumni group at Stanford or Harvard or whatever, and I guess you don't need their permission to do this when you're talking to alumni, you could join a group that networks and invests in alumni from that college. Pretty good idea, right? And I think they raised funds and all this stuff.

But I saw across, actually I saw it at Inside, dot my other startup and that they have to repay $4.7 million to investors and they paid $800,000 in penalties according to the SEC. So I think I'll tee this one up, Molly since. Yeah, hit it. I kind of know what's going. I think I understand what's going on here. So they have all of these elite universities. They do ads for it. Probably heard them on the radio like I hear I'm on Sirius XM all the time, like those inserted automatic programmatic ads, I guess. And so, according to their website, they have 900 portfolio companies, 600,000 members and over 175 full-time staff members, which is

just colossal. Wow. And I guess a couple of good companies. Yeah, code is a good company, or OpenGov. Number one most active U.S. venture investor, according to Pitchburg, pitchbook in 2020. This is like a huge operation. Yeah, it's a platform. If you put all of Angel's together, all the syndicates on Angelus. So it's a collection. So it's a collection. of syndicates. It might sound familiar. And so when you have a collection of them and they all start cranking, you know, we do whatever, 50, 60 deals last year, I think,

something like that. I don't have it in my fingertips. But imagine you had 10 of them and then all of a sudden you're doing 600 companies a year. So this can go pretty fast, obviously. The other number that makes you go fast in those kind of rankings is if you have an accelerator at scale like Techstars and what commoner do. Putting that aside, they started doing this aggressive advertising to get people to invest in these funds.

And, you know, it's a minimum of 50K. You got to be an accredited investor, all that kind of jazz. And this is where it gets interesting. The FCC on Friday charged AVG with, quote, making misleading statements about its management fees and engaging in inter-fund transactions in breach of fund operating agreements. So these are two different things.

The SEC also charge AVG, CEO Michael Collins, with causing violations. In other words, I guess he was responsible for it. So an individual charge in addition to, a charge against the fund, yeah. Yes. So I think this is how the SEC likes to work. You know, the company was responsible for some set of things, but whoever was in charge

or whoever set it in motion, I guess, as well. According to SEC, AVG's website and marketing material said its management fee was, quote, the industry standard, two and 20. For those of you don't know, 2% management fees when you have a fund, let's just make it a $10 million fund. You would get 2% of that every year to pay for the staff of the fund. A $10 million fund might be a solo GP. They would get 2%, 200K a year.

Maybe, you know, helps them keep the lights on. kind of situation. But obviously, if you have a billion dollar fund or a hundred million dollar fund, you're starting to get a hundred million dollar fund, then would have two million dollars, they could have a collection of staff, you get the idea. So, here's where it gets interesting. This led investors to believe that AVG would collect 2% management fees during each year of its funds on a 10-year term, which is typically how this happens. A little nuance here. You don't get 2% every year. It usually slides down. 2% for the first three or four years, then 1.5, then 1. Why do funds do this? Well,

all the work is front-loaded. So there's something called the harvesting phase. That's when there's the like seeding phase and the harvesting phase, the planting phase, the harvesting phase. So when you're deploying the capital, man, that's a lot of work. Then you get to year three. Now you're just shepherding whichever companies survive. So let's say a third of them survive.

For the last five years of the fund, you're just making sure that those get across the finish line. You need a little less money. And then fund stack. So if you have three or four funds, they're going to overlap, right? Yeah. And that's where the management fees can start to add up. You could imagine if, and when you see big venture funds with $300 million funds and one's in crypto, one's in SaaS, one's growth, one's early stage, my lord, the funds can

just, the fees can get crazy. Now the fees are not free. The fees get paid out or they kind of get tacked on to the principle that's being invested. So if you were to take this million dollar in fees over the life of the fund and the theoretical $10 million fund, you have to return $11 million to investors. And then if you made $100 million on top of that, $11,11,000. million dollar fund. The VCs would get 20% up the $100 million gain, $20 million. So that still has to

be paid back. It's like a little advanced to keep the lights on. Well, I think from what I understand, they were taking all the fees up front. They were, it sounds like they were taking two percent, the full 20 percent. Like they would not standard. So right, investors thought this is going to work like it's supposed to. They're going to get this two percent management fee, possibly on a declining scale, most likely, like it's going to work like normal funds. But according to the SEC, instead, what ABG did was take the 20% performance fee that firms would normally collect on returns above break-even. And instead,

ABG collected that upfront. And that and I have come to understand in just my brief time here that there are that each fund is set up as a legal entity that is not supposed to interact with the other ones. You can't just move some money into here and take some money out of here and do this between the this thing. So in addition to taking this 20% fee from investors up front, the SEC also found that ABG made these interfund loans and cash transfers between funds and then made loans to certain funds in violation of the funds operating agreements. All around the world, tech companies are innovating and driving returns for investors and our crowd is an investment platform that analyzes many of these companies. companies across the global private market.

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That's O-U-R-C-O-W-D.com slash twist. Doesn't this feel a little bit to you like what happens in an Enron or a Ponzi scheme where like maybe they were running out of money and they kind of had to dip and double and quadruple dip here? This tends to be like a gambler who is, you know, stuck and they're chasing it. So chasing it is a term in gambling. Like you're stuck 100 grand at, you know, whatever, a poker. And then you go to the blackjack table. We put 200 grand in the table. We're trying to get back the original 100.

So this is really weird behavior. and non-standard. Now, if you said to the folks, hey, getting into this fund, we're going to take your 20% management fees. We're going to do 20% management fees up front. It sounds like they were taking, it's unclear from the press release

or the statement from the SEC. I don't know if they raised 100,000 from an individual, if they asked them for 120, which is like the fees could come on top of it, or if they took 20K out of the 100, putting that aside, it would be okay theoretically if the folks knew that they,

were doing this if it was disclosed up front, but it wasn't disclosed. So they said industry standard, then they did not do the industry standard. Then this idea of co-mingling funds, this could happen many different ways. I didn't see an example exactly of how it is. So maybe somebody can email producers at if you want to be an adjunct producer producers at this week in startups.com. I'm trying to figure out did they have, I don't know why if they had five funds set up, Harvard, Stanford, Yale. Why would you move the Harvard money to the Yale fund? I don't understand or were they taking a deal vetted by Harvard and then having the other two funds invest in it?

I don't know what's going on here. But there's also those rules of like, hey, if you have multiple funds, you need to make sure that you're not using the next fund to make up for the sins of the previous fund. So how would that occur? Now, I'm not saying that's what happened here, but this is another one I've been alerted to. let's say you have funds, you know, A, B, and C. Fund A invests in a company. It's struggling.

It's got $2 million in. Can't raise money. So Fund B puts a million dollars into it. Fund A is fully deployed. And then it struggles and it's almost there. And then Fund C puts a million dollars into it. So the company never dies. It can't raise money from outside investors and fund B and C are doing that.

Now, if you said, hey, funds B and C will get the prorata of funds A and you were clear with investors. That would be fine too. You'd say, hey, listen, this was a small fund. We're going to do some additional funding from those. The problem is when it's making up for mistakes. So we don't know if that happened here either. Right.

But you need to take this stuff seriously. The SEC didn't put anybody in jail. So that's good. And they're a very serious group of people. Presumably, it sounds like actually they had multiple investors in AVG funds had complained to AVG when they learned about this fee practice. and yet they continued this unusual fee structure for years. And it's also just sort of interesting because AVG seems to have,

on the regular, co-invested with larger, more established VC firms, including Andreessen Horowitz benchmarked Sequoia. And so it's surprising that at some point no one noticed this, at least I'm reading from this article at Observer.com, saying, you know, over four years,

they easily touch tens of thousands of people. At least 3,000 investors plus would be investors. Did no one ever notice? I think I know why. That this was happening. They were soliciting new to venture investors. So they were going after high net worth individuals, not, you know, people who'd been in funds before. If Harvard's endowment invested in the Harvard Alumni Fund, they'd be like, they would read the documents.

What happened here probably is these investors had never been in a document. Then they found out later what happened. And somebody told them, that's weird. That's not how it's supposed to work. And so, yeah, very strange. Yeah. And you don't see the SEC dip down into venture all that often because venture is usually very small amounts of money with very sophisticated investors.

You can only participate if you're accredited with great lawyers all around. So that says to me that they did this with a lot of intentionality. I have another theory. I mean, we're spending a lot. We do you also have a new SEC chair. Like, let's not forget the, you know, the administration turnover. So there's that too. Maybe this case was going on for.

two years. Well, it sounds like it's been sitting there for at least two years. Yeah, from at least according to this article, there have been complaints made about this structure as far back as 2018. It's been sitting on the commission's plate. Yeah. So when I listen to Prit Bahara, on his awesome stay tuned and cafe insider, he always explains how like these things can cross administrations and take a long time. And then there's like a handoff process. So sometimes that is smooth sometimes it's not. So yeah, who knows there if this person maybe was a catalyst to get this going

or if it was just the normal course of action because it does take years to investigate the stuff. My theory on this is they were spending heavily on marketing. They were using the market. This is just a theory, just to be clear. Because they were spending so much money on marketing, they and wanted to get so big, maybe they needed the money to keep the marketing machine going.

In other words, management fees were going to the marketing, the customer acquisition. So they would spend $1,000 to acquire a new LP. That $1,000 came out of the LPs management fees, which isn't necessarily terrible, but I think that might have been the catalyst here. I mean, as opposed to our syndicate where I do Angel University, I tweet about it. Sometimes I'll mention the syndicate.com here, but I don't like do a big commercial for it. If you want to join our Angel investing club, you can. but we're not doing marketing for it right now

because we don't do enough deals and the sizes of our deals are so small because we do early, say, it's $750, I think is the average size. Sometimes we've done $2, $3, $4,000, $6 million, I think we did a $6 million deal per rata deal once. So we're typically oversubscribed because the allocation is small.

Yeah. It is interesting. There seems to be a question about whether the SEC is going to get a little more aggressive toward funds and fund advisor compliance. But I would also say, let this be a lesson to you kids,

just because you see like an Ivy League logo on something does not mean that the people involved are, just because they're elite, doesn't mean that they're following the rules or should be automatically trusted, not to mention the fact that they weren't even actually associated officially with any of these universities. They just were sort of like borrowing that halo effect

and then screwing it up. Interestingly, I just realized there's a case study on me. at Stanford. So I'm going to start the syndicate.com slash Stanford. I'm going to start the Stanford Syndicate

and I spoke at Harvard Business School once or twice. So I'm going to start a Harvard Business School syndicate. Boom, might as well. Just slap those logos on there. Join the Harvard syndicate. I did think it was pretty funny

that that piece in The Observer was like, this is kind of been a trademark lawsuit waiting to happen for a long time. Well, it's very interesting. If you say it's an alumni, It's an alumni group. I don't think that they, as long as they say, not affiliated with.

Like, I could literally start a Google alumni or I could start a Fang alumni. This would actually be a really good idea. I could start a Fang alumni, you know, Facebook and alphabet and Netflix, Google, Apple, whatever. Apple, yeah. Apple. Facebook, Apple, Netflix, Google. Yes.

Sorry, I got the alphabet. I got to Apple Mix. Thank you. It's Monday, people. So Monday. I can start a Fang one and just invite. people, you have to have worked at one of those companies to join it. Yeah.

Yeah. I can start a white combinator and Techstar's alumni. And then it does not follow any rules at all. No, I'm just kidding. It would follow all the rules. I well, no, I mean, it would be weird, I would think. It would feel. It's just like, it's just fraternity-ish, right?

It's just the kind of thing that's like, yeah, where it's cool because of where we came from, even though we're not necessarily doing the right. I don't know. It's very, it's very interesting. I think there's like lots of different layers, not least of which I think from a policy perspective is, is the SEC getting involved in fund, you know, operations to that degree? Like, that is sort of a Gary Gensler change. And I'm sort of curious to see where that's going to lead or end. Because for all we know, I mean, when you look at the amounts of money that are being raised, right?

The sheer amounts of capital that funds are managing right now, yeah, have to assume that sometimes things aren't always going precisely according to the law or even the spirit of the law. And so to what extent Gary Gensler like comes wading in here and it's just like, I'm going to clean up the venture industry. That could have some pretty far reaching ramifications, I would imagine. Yeah. The good news is, like I said, you know, you're so, you know, experience this inside of our firm. We are so advised by legal counsel.

Mm-hmm. And like really high quality legal counsel that have been doing this for multiple decades. If you were to do something wrong, your lawyer should be like, probably not, they're very conservative. Let's put it that way. They're hyper conservative. But this is like a Harvard, Yale, like elite, you know, alumni fund and some lawyer, like, you can always ignore your lawyer. I'm just saying that if you should.

So that's what I'm saying is I think that if the SEC does go down, you know, like the, let's check in on every VC. I think what they're going to find is like pretty buttoned up. Absolutely. It's going to be super buttoned up. But if you come in with a fine tooth comb, you're always in a fine side. Yeah. Like if you go looking, you're always going to find something. We all know that. Like, it's like you were saying, the reason that tight is right is because then once you screw up, everything that you have done is under scrutiny and they will find something. So somewhere there's a fun that's doing shenanigans. And usually the inadvertent stuff, you will get a warning, I think. So if this was inadvertent, let's say the nature of this in some way and it was minor and there was nobody complaining, They might just say to you very quietly, you know, hey, this needs to be done differently.

Fixed. And you're like, yes. I, I can. No problem. No problem. Yeah. No problem. Fixed.

This is not that. Yeah. This feels like, yeah. People did complain and then waited and waited. Yeah. When people start complaining, that's when, yeah, I think the SEC gets involved. And I've seen this.

I, you know, I don't want to talk about any specific cases, but I've gotten an SEC notice, not about venture, but on the company side. And, you know, one time a company, uh, the, the, made a claim and then somebody said, I don't believe this claim, and they complained and the SEC found out about it, and then all of a sudden, you know,

here we go. And we're on it. And in fact, I mentioned this previously as well, the DA of San Francisco's office, Chesa Boutin's office, and I think in an act of intimidation because I had,

you know, complained about, you know, the crime situation in Chesa Booden kind of publicly called me to talk about a startup. And they wanted, to have a conversation with me about a startup we had invested in.

And I was like, yeah, I'll just, I'll decline to talk to you about that, but here's my lawyer's phone number. If you want to depose me, you can. I'll have a lawyer with me. Thank you. Chesa Boudine.

Nice try to intimidate me. This is the part of the show where Molly doesn't say a word. It was interesting. Well, that's before my time. Anyway, next up on program. Here we go. According to a,

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MercuryRase connects founders to quality investors from PreCeed to Series A. So head to Mercury.com to get started in just minutes. All banking services are provided by Evolve Bank and Trust. Well, speaking of venture capital firms and the global situation, obviously, of the global situation, and the war in Ukraine, index ventures has halted startup investments in Russia-based companies,

won't do deals with Kremlin-linked investors, and plans on excluding Russian investors from future funds. This feels like a big deal in a string of big deals. This is the first major VC firm to stop Russian investments and engagement, at least publicly. None of the firm's funds contain money from Russian investors and index committed to keep it that way for future funds. Now, according to Pitchbook Index is of a good size, over 1,100 investments since inception, $4 billion in assets under management.

And its major investments include Slack, Discord, Notion, and Dropbox. This, I think, is just, this is a big deal because there's a lot of Russian money everywhere. And I think that people have not realized the extent to which there's Russian money everywhere. And of course, in this case, we're not talking about a fund that has a bunch of big Russian investors. In it, an index is saying, even if you come to us with these giant amounts of money, we're not going to take them, but also saying we're not going to enable any kind of innovation ecosystem or entrepreneur ecosystem in Russia while this is going on. I wonder how big of an impact this will have.

There aren't that many people investing in Russia in terms of startups there. Esther Dyson in New York famously, I think, was super involved in investing in Russian companies. She's been on the show before. Index, from what I understand, has no money from Russian investors. And I think some of them... Yeah, they can keep it that way. I think some of them grew up in communist countries, the founders. So maybe they're sensitive to it.

And I, you know, I had Sarah Cannon on the program, and she had talked a little bit about this in a new segment, but I don't remember all the details. So I'll leave it at that. But I think they might be particularly sensitive to it, having grown up in a communist country. Interesting. I just wonder if it would be a, I think it's a big deal for a firm of this size to say

we're not going to do any of these deals with Russian-based startups. But I also wonder if you started polling, much like the Gensler thing, if you started polling VC funds and saying, would you be willing to make sure that there aren't any big Russian investors? like on the LP side in your fund. What was starting to happen there, you know? I don't think.

I would say if you went to American company, American venture capital firms, I would think very few had any Russian oligarch money or certainly not, you probably couldn't take, you certainly couldn't take Russian money into a venture fund directly. In oligarch's money,

you probably would get a call. We talked about this previously. I think Chmach talked about it. Yeah. Different countries. with K-YC. I know your customer rules would probably get stopped.

And I think there are funds of funds. I met with a fund of funds, and I asked them explicitly like, you know, where does your money come from? And they explained that I said, do you have any like Saudi money as an example or Chinese money? And they said, no, not from the government.

And I said, well, what does that mean? So we might have, I think we have like one family that is of Saudi origin, you know, that is in the fund. And, you know, they're less than 1%. So then you're left with as a edge case, if you disagreed with taking money from a authoritarian country,

and there was a family from an authoritarian country, that was well to do. And they were in a fund of funds and they were less than 1% of it. Would you take that fund to funds money if the other people in the fund were good people? So that's where it gets a little dicey and do you even know, right? And so, and then because of various clauses, you know, in these kind of arrangements, you probably don't have the right to disclose to anybody who's in the fund for privacy reasons.

So, you know, you're kind of left with this awkward situation of like, hmm, do I fund my fund or not know who's in it kind of thing. I think this is actually on billions right now. Billions are the hedge fund. Michael, I think his name is Michael Prince. He creates something called the Prince List, a little spoiler here, but not major. And he says, instead of just taking money from anybody, I am going to create a list of who's approved to give me money.

Right. And he creates the Prince list, which is these are good people in the world who I want to make money for. Which, by the way, as I talked to Doug Leone about, Sequoia's funds, I think, 90 cents on the dollar or something are non-profits, giving scholarships and doing work in the developing world and all that stuff. So they get to pick and choose. So why wouldn't they, if they had an ability to add LPs or give LPs a bigger chunk, start with the Ford Foundation or, you know, some scholarship foundation.

So I think totally. And that's what I really wonder is less about investing, right, less about what's being invested, but who who is on the LP side and whether we will start to see more big firms say, you know, we want to clean that up or we have clean that up or we have no Russian money there. It's kind of like this question of how deep the, you know, the purge is going to go. And Yuri Milner came into this, because. because he famously had an oligarchs money. And that's how he did his first two funds, I believe, and that's how the Facebook investment happened. And now subsequently, I think he doesn't take any Russian money after that point. So then you have to be like, hmm, there's a former Russian person or Russian citizen who had invested oligarch money,

but hasn't for seven funds. You know, is their money tainted? Are they going to get canceled in all of this? And then I thought, this is all very interesting. We talked about this last week. I think we're economically creating a massive impact on Russia. I mean, I think, and we talked about this being painful. And so really hard to be like, wow, the citizens of Russia can't use PayPal or Visa or Netflix.

I saw a note maybe the big tech companies that are leaving Russia are leaving 1% of their revenue, maybe 2% of their revenue on the table. So it's pretty easy to do. it's also the right thing to do so we can kind of make a decision if they're virtual signaling because it's convenient and they're only losing one or two percent

if it was 20 percent or 10 percent it might be a little bit bigger of a sting I'm curious if you think you know Netflix had to pull out of a market where it was 10 percent of the revenue if they had done it. Do you think they would? Yeah, I don't know. I mean, I don't want to be cynical.

I do think this is a new like we've seen throughout history these kind of Like, I'm trying to think of a better word. I'm trying to think about less loaded word than McCarthyism. Like, we're seeing an extreme, you know, we're seeing a huge reaction, a lot of public pressure to make these moves. And yet we've definitely seen companies stay. Companies and investors and all kinds of people stay in uncomfortable relationships, let's say, with human rights abusers, you know, with the like Saudi funds.

I would like to think so in the case of these companies, because this really is like, kind of an all-hands-on-deck response to Putin's aggression so that it doesn't spiral out of control, if that's even possible. So I would hope that those companies would have made that choice no matter what simply for the fact of not wanting to enable any further aggression. It's, um, but it's hard to say. This is where I think what we're seeing is unique. Um, you know, people talk about the nuclear option that Putin has. I think this is the economic version of that. We've gone nuclear with these sanctions, and it's beyond just saying we're not going to let you export oil or people can't buy your oil in the West and the free

world, it's just not going to buy stuff from you. This is saying the West is no longer going to participate in your economy. So it's like an economic nuclear bomb. And the fact that corporations are doing this proactively and that universally, the Twitter world, war is pro-peace, it is to me like a new phenomenon. I don't know if this feels different to you than other times in history, but if the United States went into Iraq again or other places and, you know, did a little bit of, you know, maybe unjust wars, if we consider Iraq an unjust war, and maybe Afghanistan was just since they attacked us, you know, so it's a hard discussions to have, I know. But if the entire world says, listen, we're not going to do commerce with people

who start wars. This could be a beautiful new approach to humanity and how the world works. And it does feel qualitatively different. I'll give but one example that was shared with me in a group thread. And again, this is a tweet. So who knows what the whole circumstances is here, but I'm sure that this is happening more than once. And this is from Commander underscore Ivy. Lena apparently is her name. Commander underscore Ivy is a Twitter handle. So PayPal has stopped working in Russia today

and Twitch will no longer pay Russian streamers. Thank you very much for cutting my only source of income. I'm sure this will solve the world's problems. So here is an example of what we talked about last week, Molly, which is the Russian people are going to suffer. Here is somebody who makes their money. I'm assuming streaming video games on Twitch. I read some of her other tweet streams

and after this she said, well, now I can't make money and I can't use my visa card. I guess I will have to work for food. And I think as, and I don't know if Coca-Cola Pepsi McDonald's are still operating in Russia, but I think they'll pull out eventually.

So now we're going to be left with this concept of hey, the Russian people are going to suffer, and that's going to make them look on the internet and figure out why this war is occurring. From what I understand, the Russian people don't actually have clarity on this war. They think that the Ukraine is run by Nazis and white supremacists and that they're going in on a noble mission.

So I think that this could break the information barrier. Yeah. I mean, that's the theory of sanctions. I would actually, the only thing I would push back on is I don't think, I actually don't think, we have gone nuclear on sanctions just yet. Like, you do have companies pulling out, but it's a small part of the Russian economy overall, right? It's a small part of their business. You are absolutely seeing the war is hell impact on ordinary Russian citizens of economic sanctions.

There's no question. But I would only say that I think so far we have not, we haven't come close to going nuclear, right? like there are still Yassen. I'd say Visa and MasterCard and PayPal pulling out. That's a big deal. I mean, from a government perspective, from a government sanctions perspective, also, there was the argument that Visa and MasterCard by pulling out are primarily hurting people who left Russia because what they can't do is the international transactions.

And then Visa and MasterCard still works inside Russia. Like if you're just Russian going to a store, that's like an unverified tweet. So we should find out. But in terms of U.S. government sanctions, it has actually been even globally, a slow and steady increase in pain. I mean, yeah, we're still,

I think they want to save some bullets, right? There is still, so we're not to nuclear yet. We're to more like, you know, we're like attacks, but also, and as with any drop,

any, any bomb dropping, whether it's metaphorical or literal, you don't know what collateral damage you're going to cost. Right. And so the,

the least bad of the bad options is to do massive sanctions and hopefully this thing ends. I just have this my gut sense. Maybe it's just I'm an optimist. I think that taking NATO off the table is going to give a path, you know, for a decade or something, is going to give this maniac a path to an exit ramp. I just don't, I don't know his other exit ramp.

Like, there's got to be some exit ramp for this guy. And he's not the kind of guy who likes to lose. I think it's a different show. I also think NATO is a giant red herring. Well, I mean, that is the big debate. Is he doing this because he wants. to reunify or is, you know, the NATO thing. So it's nobody knows, right?

Because Putin is a black box. I hope that there is an off ramp. And I think there's probably a lot happening with governments that we don't get to be party to and don't need to be party to because we have a representative democracy in which we elect leaders to take care of this stuff and the stuff they're doing behind the scenes and stuff we haven't seen. The only people who don't seem to be affected by the fog of war right now, thank God, are the Biden administration. It's not like they're coming out here, stomping and making a bunch of noise and saying all this absurd, right? Like, they're behind the scenes doing their jobs and hopefully there's a diplomatic off-ramp that we don't know about and we'll find out about it later. Yeah.

I hope that is the case. Quietly doing that while other people are saying, like, we should whack Putin. And it's like, don't know if the crazy guy you want to threaten him. I think that kind of plays into his hand that. Yeah. Yeah. Like maybe let's not talk about assassination. If you're an accredited investor, you need to know about special purpose vehicles.

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available to us, Molly, do your transition. Actually, because one of the things that is happening, of course, in the sanctions department, but also in the actual war is this question of energy, how we're going to get energy in the future, what energy we get from Russia and what Russia is doing internally to basically try to turn off the lights in Ukraine up to and including seizing nuclear power plants. So here to talk about the future of energy and nuclear in particular is Mark Nelson, managing director of the Radiant Energy Fund, which is so. such a good name. The fund advises non-profits and industry groups about nuclear energy. And Mark has

been a source of a lot of calming news with respect to the taking of those nuclear plants, but also a fount of information about the future of nuclear energy. Welcome, Mark. Thanks, Molly. Good to be here. What is the Radiant Energy Fund? You're consulting with people or you're making investments? So there's a group called Environmental Defense Fund. We can argue about what they do, but they take in a few hundred million a year and they go make alterations to our nation's energy mix, like cutting New York City off of clean power and switching it out with natural gas a few years ago. So the Radiant Energy Fund is a new sort of response to environmental defense fund where effectively it's my vehicle for doing charitable work.

I'm an LLC, but I get to stay really flexible as long as I'm as long as I'm an LLC. So that's where I do my charitable work. And then I have a for-profit advisory, too, that I run with a group of my talented colleagues. You invest in companies and do consulting and advocacy for what? So not investing, not deploying capital yet. Radiant energy funds stops endangered nuclear plants from closing. Got it. Okay.

So that's your abortion race. What makes it a for-profit is that most of the time, when nuclear plants are being closed, we're fighting the owners. Ah. Yeah. Wait, I don't get that. You're fighting the owners.

How do you get paid? Who are trying to close their plants. Right. Why are the owners of nuclear power plants trying to close them? Well, first of all, first thing to know is that there's no such thing as the nuclear industry. Okay. It's really important to know there's an oil industry, a gas industry.

There's some internal squabbles, but it exists. There's no nuclear industry. Most nuclear plants already exist. and they're operated by utilities. Those utilities have certain ways of making money, and if nuclear doesn't fit that, they'll scrap their plans. It doesn't matter how devastating that is to a nation's security, doesn't matter what it does to climate change.

If politicians who want nuclear closed give a pay and an off-ramp combined with a proper threat against the utilities, utilities are regulated beasts. They'll do whatever you want. So, for example, by far the most important energy source for New York City, for its security and for price, was Indian Point Nuclear Plant. The governor didn't want it. $200 million a year environmental defense fund didn't want it.

And Robert F. Kennedy didn't want it. So they worked together to kill the plant. Now there's 40, 50 percent price increases in it. A good, long blizzard should be able to destroy a lot of lives in New York City now that Indian Point is gone. And it only went away a year ago, less than one year, right? right before the gas crisis. Anyway, so, Rating Energy Fund fights Entergy if Entergy is trying to close the plant. We make sure reporters have accurate information, good, clear analytics that show exactly

what's going to happen if you close a nuclear plant. And then we work to find volunteer allies around the world who will go with us and go out in public and advocate for nuclear. Since a bunch of us are nerds, it's been really awkward and difficult to get our faces out on the street and to organize and play well with others to demonstrate, we've learned to do it. The stakes are really high, so we forced ourselves to. So you gave the example of New York right now, I believe PG&E in California has applied to close its California nuclear plant Diablo Canyon. Talk to me about how this would work

tactically in terms of trying to fight that specific closure. In California, the nuclear plant is the rate payers already paid about $800 million to upgrade the plant for the next 20 years. It could probably go for another 40 to 60 after that if it's kept in good condition. So, and the plan is profitable. So let's get that out of the way. It's in great condition, beautiful condition. NRC would license it on an emergency basis. No problem there. Even if they had 10 inspectors on site until you finish your license, right? They could get that done. So this is strictly, strictly only a political play by a relatively small number of people in California's society. And the problem is, it's a, it's, uh, it's, you know, a giant chunk of the remaining,

like, self-produced energy of California. And it's one of the only power plants of California, not affected by heat waves or fires. What I mean by that is, it's right at the ocean. So, it's not going to run out of cooling water and it's not going to be forced off by, by a fire unless it takes down the transmission lines. So what's happened here is that some permits that the plant needs have been retracted strategically or withheld to force the utility to come to the table and meet with the then-Lieutenant Governor Newsom so he could tell them, we're going to kill your plant, I need this to run for office, you've got to get it dead. And then the utility's like, well, if you pay us enough, we'll just destroy it.

So then Environmental Defense Fund works to buy off or get one of the four unions. They get one of the unions to sign on and say, well, we'll just. remove all our workforce in Sackamol, so that'll work. So they get the union head involved, and now it's a deal between environment, labor, business, and politics, right? Fighting that means getting the word out of this dirty deal, making it clear that the grid in California is in a death spiral and that losing Diablo would be a coup de grace. Forget carbon. Like, carbon is just, the people who say carbon at the point that they're getting rid of a nuclear plant, they're not, it's not, whatever they're doing, it's a different

project. Don't want to speculate. It's just different. We show that it's not just carbon that's gone, but it's the stability of the grid, and it's the cost of power that will skyrocket if Diablo's lost. So Diablo is equidistant, basically, between Los Angeles and San Francisco. It's been operating since the 60s or 70s? It's pretty new, actually. It's about as new as the German plants that are being forced offline in favor of gas from Russia. So it's about, it's about 35, 36 years old. Got it. So it's a totally safe plant.

And there's a group of people who have a motivation to get rid of it. Their motivation, in your estimation, is they're super green people and they think it's an actual Fukushima Chernobyl-like danger to California because of its proximity to the ocean and they're scared of that? or is there something more nefarious at work? Are there people lobbying and using, as we have heard, maybe the Green Movement in the EU might be being used to get people to maybe fight against, you know, fracking, for instance,

which I'm not necessarily in favor of. But is there some manipulation going on here by other parties in your estimation, or are these useful idiots? Or are they just really principal green green? people? What are you up against? What I'm trying to say? Really principled green people mean something specific. Green in political context is it precedes carbon or climate change or anything like that. Like, the original green said, don't build nuclear. That'll just make too much cheap energy. Instead,

you should build coal or you should have smaller power plants close to people's homes. You should have buckets of fuel oil and apartments buildings. That was the Amory Lovin's thing. He was against big utilities or big wasteful power plants. His organization is now for big power plants as long as they're not nuclear, right? So it's, it was a switch over time. Climate change was considered a nuclear energy talking point by the environmental movement. They're like, oh, nuclear companies are just saying that climate change is coming because their plant doesn't produce carbon, but we know that that's just an excuse. Is it a subset of the green movement? Because I think a lot of green people I talk to say, hey, nuclear is going to lower emissions and, you know, change climate change.

So is there like a group from the 70s or 80s that are holding on to this idea that nuclear is a bad idea because of Fukushima and those other problems? And they're just misguided in your estimation? And not, to be fair, not just Fukushima. And I'm not trying to parrot these talking points. I'm just trying to put a finer point on all of this, which is that the argument is sort of like twofold, right? They're also concerned about what you do. when you hear people argue against clean nuclear energy, the thing they're worried about is what you do with nuclear waste.

Right. So let's put a pin in that one for sure because that seems to also have been answered. So is this like New Green versus Old Green? Or like there's two parties in the Green Party. One is saying, hey, nuclear actually isn't dangerous. And then there's a group who's like it is. There's like a big central international green thing. It's kind of centered around Germany green.

because that's the majority of the money in the international green movement. And splinter parties or young people all over the world are saying, well, of course I'm in the green party. That's the party for me. And of course, nuclear is good. And it's causing internal little civil wars like nation per nation. Like a lot of the far northern European countries have young greens who grew up just always thinking, you know, nuclear of course is green.

Why would, why are we even voted? Like, it's really confusing for them. They're like, wait, excuse me, 30% of our, the. cleanest part of our power that isn't the big hydrodams. It's all nuclear. Why are my parents? Why are the older people against it? And they don't understand the historical context that came out of the soul like worry about population bomb and the international anti-weapons testing movement that weirdly had a crossover with the energy. So that's like big green international network green. Of course, if you're looking at it from carbon, nuclear wins. On the waist,

The waste concern was, I mean, the way I put it to people, if I'm working with one-on-one or two-on-one at a time, and I just say, hey, I hear your worries about nuclear waste. Could you just, could you draw, like, on a piece of paper, what waste you're worried about? And they realize that they've got this phantom that they've been told to worry about, and they don't quite know what it, and then so they start to struggle and they're like, well, is it something that comes out of the reactor? And then finally, it's a physical thing and you can talk about it. there was an intentional strategy to make the tiny, like,

it's been a tessimally small amount of waste coming out of nuclear, be a problem for nuclear. So, once that's a problem, you say it demands a solution, then if you can politically block the construction of a solution, you can block the construction of nuclear. So that's, for example, what they did in California. They said, no more nuclear until you have waste depositories, and then they fought and successfully defeated the waste depositories.

So hang on. So I want to go back to like fundamentals here because I feel like we jumped right into the middle of the conversation. It is your opinion and advocacy that nuclear represents the most carbon neutral and most promising future of energy around the world. And that your organization is working to stop plant closures and also the construction of new plants. Right. So that takes me actually a little bit more to my, my, the work. that pays as opposed to the work that's painful and is just, so for example, 50% of Chicago's power was going to shut off a few months ago right into the teeth of the new gas crisis, yeah?

And it was like the owner didn't get enough money and they didn't feel supported, so they wanted to bill. Anyway, that entire project was just fought out of a few of our homes and fighting against misinformation. Then there's the stuff I do that's on new nuclear. and that's where it's kind of interesting because nuclear startups are a weird environment. How do you do a nuclear startup when your first, say, electricity sales are going to be optimistically a decade away at any given time, right? And you need maybe a billion or two to start your first reactor.

What does it even mean to have a startup? It would mean that only the biggest industrial groups or the biggest backers could do a nuclear startup as a labor of love. And so if you're interested, I wanted to frame the current Russia moment as a particular kind of opportunity that I'm involved with in nuclear. I'm interesting. Yeah. So almost every.

Continue. So anti-nuclear groups, anti-nuclear proliferation, anti-nuclear energy groups in America were really successful. We have almost no nuclear energy projects anymore. Congrats. But that didn't stop the world from needing energy, of course. And then South Korea, they elected an anti-nuclear president. He successfully stopped all nuclear exports from Korea.

They have one project incredibly successful in UAE under his predecessor. President Moon has managed to put a stop to nuclear exports from South Korea. France is a mess. They have one project really going in Britain, but anyway, almost every country has stepped out. China is just barely getting exports going, a project in Pakistan, a project that should start soon in Argentina, almost every nuclear export project in the world is Russian, Bangladesh, Iran, India, Egypt, Turkey, Uzbekistan, all of these are projects that should have been going.

Belarus, Hungary, Finland. Like, we just keep going all the places, and internally, they're the most aggressive and innovative company in nuclear, the state Russian energy company. Now we have a different world. You guys had a brilliant discussion about what I meant, especially the private companies or public, you know, but what does it mean for state to state trades? Some heads of state have already said no, we're keeping our Russian reactor project like Victor Orban in Hungary. Good luck to him. It'll be interesting to see how Rosatom like navigates this currency problem and trade sanctions, right? So how do you get

and why did they go with Russia? Because they, one, they had their act together. And two, they had prices and terms that worked for developing nations. Their costs were cheap enough. UAE, even being incredibly rich, still went with the lowest cost bidder. Now, it was lowest cost partly because Korea absolutely had its act together, had a great bid. That's why I got chosen, but it was also the cheapest. How do you industrialize a developing world where even in the current panic environment where Europe's going back to coal. Are they going to do coal for Africa? Is that what we're going to see? International Capital going to fund coal for Africa instead of just emergency coal for Europe? Because that's, it's hard to believe. How do, if they do, we cook. So,

hopefully not. How do the, you said a lot of this is like the nexus is the German green movement. And I find that kind of perplexing because all the Germans I know pretty sophisticated. and also pragmatic. And the French are 80% nuclear-powered and the Germans are shut down three of their six last year. They're going to shut down the next three, supposedly. If you were to tell me one group was going to shut them down and one group was going to double down,

I would have picked the reverse. What is the psychology, what is the history here of the Germans getting this so wrong? In that, you know, you would think that they... And the U.S., to be fair. Also, yes. I think we, yeah, the U.S., I think we know why, yeah, but explain it to us. Like, why do the Germans, and they also seem to have outsized influence.

And if they're so green, how can they not look at the fact that they're burning coal again and so much gas? Or are there, is there some schism there between the general populace and some maybe vocal minority? And then we'll get to the U.S. because I think Polly's punchup is actually kind of good, too. Because I don't know anybody in the U.S. Who's anti-nuclear at this point? I mean, except for Environmental Defense Fund in the 200 million a year and presence in the White House.

Again, a vocal minority. A lot of them. A vocal minority. I think if you asked any, if you ask the general populace of adults in the United States, do you want, you know, cheaper power and do you want to be independent? Do you want to burn a hole in those zone? That's carbon neutral.

Yes. So there seems to be this giant schism between what the public now wants, public sentiment and the reality of what's happening. So maybe start with Germany and then go to US. Sure. In Germany, what I'm going to say is not going to sound like what most people would say if asked. I did a lot of weird, dark, really dark research on this with my ex-boss and mentor Michael Schellenberger, where we basically had to, we were some of the only folks in the world trying to stop these closers rather than just concentrating on new reactors or innovation or whatever.

And so we had to ask ourselves as a research project. We filled up a library in the offices of our nonprofit in Berkeley with books on Germany, on nuclear weapons, on the Cold War, on the environmental movement, on deep green ideology, everything we can get our hands on to figure it out. To sum up a lot of research, both on the ground in Germany, rural Germany, Berlin, Munich, we've gone everywhere to try to figure out this thing. As far as we can see, it's this. Germany lost a war they'd started. In their shame and in their defeat, not only did they rebuild their country without a military and without nuclear weapons, but they were divided dramatically down the middle

with the Cold War seam right going through their capital, right? Where nuclear weapons were pointed at two halves of the world against each other over Germany, and Germany, previously, one of the mightiest countries on earth was humiliated and threatened with forces far outside their control and no ability to defend. Now, if you asked a German, could you explain why you're against nuclear? You're not going to get that. You're going to get things like, well, when I was a child, we read a traumatizing book in school. It was an assigned reading text for all of us, which is true. Or, oh, there were movies that really scared me and made me very sad. All of those things came out of this

psychology that is an inability to defend and need to write a new story for Germany, a better Germany that acknowledges a painful past but moves beyond it. And like, when I talk to Germans, the emotional tenor of the argument about nuclear energy is unchanged if I switch the conversation of nuclear weapons. They see it as it's like the same thing. Carnegie Endowment for an international peace keeps a Germany nuclear weapons news tracker where they track, for years they've been tracking dozens, hundreds of publicly published debates and conversations and articles for and against Germany getting nuclear weapons when everybody was fine

with Germany getting rid of nuclear energy, right? Interesting how this works. If you boil it down even further, nuclear is fundamentally new. It's the newest energy we've discovered. It's newer than discovering fusion energy. It's way newer than discovering the photovoltaic effect and wind power is as older than the engine, right? So nuclear is the most powerful force in the world, and people can't decide in their heart fundamentally, whether they think it's a powerful force for good or for evil. And Germany, and at least the loudest Germans,

came down on the side of evil. And they don't really acknowledge a difference between the power and the defense. And I think you would say that in the U.S. too, that it's hard to separate for people, the question of nuclear weapons and nuclear energy. there is also the, there are so many layers to this, right? Because there's also the part where Bill Gates, for example,

was very far down the path of inventing potentially a brand new type of nuclear power plant that would be easier to maintain. It's still going. It's still going. Fukushima said it was a setback, right? And then that raised this question of, is the problem that most of the plants that we're familiar with now are potentially slightly aging, even though they're new, they're 30 or 40 years old, they haven't maybe been maintained the way

they should be. They seem more vulnerable to natural disaster and might be more vulnerable to natural disaster than new plants would be. Well, there's a lot of complicated things in here. I'm very happy to deliver the news to you that concrete domes can last for thousands of years. We know this from Rome. If you protect a concrete dome and the containment, that's one of the only things we haven't quite figured out how to replace or redo or we haven't justified it yet. Then, within the reactor, we haven't quite seen a reactor vessel. It's the heart. It's the beating heart of the plant, right? We haven't seen anybody replace that, but we also haven't seen it be needed. Every other part, every other person in the plant is replaceable. So when I talk to, when I talk

to metallurgical experts, I say, give it to me straight. And sometimes it's when I'm visiting a nuclear plant, I say, how is your steel? What? The steel in your reactor vessel walls, how is your steel? In your reactor vessel head, not so worried. That can be replaced. The steam generators, that can be replaced. And what I always hear is, oh, yeah, yeah, it's been 45 years, it's been 50 years. Our steel's doing great. Then where's the aging, Molly? Where's the, aging? You replace the staff. Grandparents see grandkids start to work at the plant they help built. This is real. That's not, I've run into that situation. I mean, I believe you. They're actually I believe you. Let me just jump in here and say, I believe you. I think if we had stayed on or switched to nuclear in the 70s, we wouldn't be in the climate crisis that we're in now, and those are very clear projections. And also, nuclear meltdowns are really scary. So you can acknowledge that without. Absolutely. I don't, right? Like, it feels a little condescending to say, you should just know that this is the case and these issues aren't real. Like, I understand your job is to walk us through why they're not real.

and I really want to get there. Molly, two separate issues there. First of all, acknowledge, thanks for the, thanks for the critique. One was on, are the plants aging? So they're not aging as such. There's only one country on planet Earth with plants that are aging so bad they can't be replaced. That's just Britain. That's just the UK.

Every other nuclear plant, everywhere. Even this sounds crazy. Why is that? Do they build them cheaply? So what do we, you do a lot with startups and innovation. What do we consider an innovation and what do we consider a mistake or a dead end? Time tells, right? Looks like the Brits chose wrong. What happens is you can't get inside their reactor to replace parts that are aging.

You can't do it. They built it closed, assuming that we would go to the next generation. Well, yes, but we're going to the next generation with no next generation ready in Britain in the middle of a generational energy crisis. It's kind of a bad situation. All their plants can age. On the subject of meltdowns in Fukushima, absolutely, they're terrifying. They're horrifying.

But we have to say, are they horrifying because of the health effects of the physical things that come out of them? Or are they horrifying because of the learning to be horrified? So, I'm not just playing a word game. If I told you Chernobyl nuclear plant barely missed a day of operation and kept going for 14 years, what would that make me sound like, like a crazy person, right? Because we know it's the worst disaster ever. It was devastating. It blew up. There was a massive fire. You couldn't even go there or you die within minutes. But Chernobyl nuclear plant kept operating for nearly 14 years. But how? It's because

if you know where the radiation is and you clean it up and you manage it and you take care of doses, then you can deal with it, right? And Chernobyl didn't close because it was old. It closed because the European Union made Chernobyl closing a condition of support for helping clean up the reactor number four that had blown up. And Ukraine, for what it's worth, demanded help completing another one of their nuclear plants and a big cash payment to do so. So for the Ukrainians who were most hurt, most wounded, most devastated by Chernobyl, it wasn't even a reason to shut down Chernobyl nuclear plant, right? Which means that we should respect the Ukrainian experience and say, why is it that they didn't even shut down the nuclear plant? And why is it that

under Russian attack today, they still won't shut down their nuclear plants? And in that, in that moment, you find a little seat of truth that helps you understand, ah, because they believe nuclear is their best chance for survival, in which case, it makes a different kind of conversation about the risks of meltdowns and other kinds of disasters. Is that fair enough? I didn't want to dismiss the seriousness It feels pretty accurate. I'm kind of floored, but not surprised by the, I never heard the theory that you had for the Germans, which is, if I were to summarize it,

they're conflating nuclear weapons with nuclear energy. And perhaps there's a branding problem here. Like, nuclear weapons designed to annihilate people, nuclear power designed to be safe and to empower people, but they're both called nuclear. But Jason, that branding issue became an issue because of very successful work to make it an issue.

Fusion bombs are real. Most fusion startups are planning to use tons, metric tons of material that are extremely highly secured because they're used for the biggest bombs in the world, right? But people don't say, oh, fusion startups, that's like fusion bombs, right? We don't, even though the supply chain

and materials is going to be, I'm not saying don't do fusion, just saying that the marketing issue is not something you can escape with any energy source powerful enough to make the future as beautiful as you want to see it. So we have this weird history of nuclear weapons being conflated with nuclear power. And then we now have global warming as a vector in people's thinking. and now we have energy independence and dictatorships. For some reason, we've got a couple of dictatorships that happen to have been formed on top of a bunch of dead algae and compressed dinosaurs for fossil fuel. So this is like one of the most complicated systems that you have to unpack.

It takes a lot of discussion like we're having here where we're even being introduced to new information like the Germans historical. I don't know if I can't speak from Molly. I never had heard that. Jason, can I give your your. listeners, one more little anecdote that's illuminating. Because you said a couple things, the mistake between nuclear weapons and nuclear energy, the carbon thing which got stacked on top of that, uncomfortably in Germany, because they

can't figure out how to make it both at the same time. And they're just... It causes a little dissonance, for sure. But then there's one more thing. The energy security. When I was a stupid little grad student in Cambridge in the UK, I went to a conference and it was on the energy trilium, how nobody can figure out how you could both have low-carbon energy, cheap energy, and secure energy. And they're like, it's a great mystery. And you

had these brilliant economists just theorizing which of those three you'd have to give up, right? The security, the price, or the dirtiness. And I, you know, I was like, excuse me, France is cheaper energy than almost anywhere else in Europe. And they're already clean and it's also really secure. And they're like, no, no, no. Later, one of the guys came up to me as like, son, you can't just say that France is a model for decarbonization. I said, why not? And he said, well, they didn't, they didn't switch to all nuclear to save the climate. They did it to not have to burn fossil fuels. Jesus.

Okay, so we're having a really interesting discussion here. Like, those things can be separated. Right. But they can if you start saying nuclear isn't allowed in your conversation. Then you add a whole tower on sand, right? A policy. It feels, though, like there is something that could be a tipping point here. Perhaps this is a positive thing to come out of a horrible situation,

which never a waste of crises and, you know, sometimes you get a silver lining, you know, on a really dark cloud. These metaphors and colloquialisms exist for a reason because it can be true. Is this going to be the tipping point where people realize France doesn't have to deal with Russia? The Germans are building a pipeline from Russia, a dictatorship. And for some reason, Germany, which has all kinds of security issues and cognitive dissonance around this issue, is now was tying themselves to a mad dictator, my opinion, a murderous mad dictator who invents other countries. I think it's pretty objective description of what's happening with Putin and Russia. Why on earth would they pick? And there must be some discussion here because I did hear that

the Germans are now talking about not turning off the remaining three plans. I don't know if they've gotten to, maybe we turn back on the other three. And they've also talked about they're now saying the pipeline's off the table. Are the Germans, given this situation with Russia, given the cognitive dissident, is the cognitive dissidents going to break to, yeah, we need to follow France, as hard as that is for them? And then I want you to also tell us, what is France, what was the secret to France getting it so right? If you got all these books on the Germans and you figure that out, maybe you could align us on how the France got it so right.

Was it just pragmatism or luck? Sure. So let's start. Yes, this is the break. point. People whose entire ideological drive, their entire life path, has been eliminating their country's nuclear. And that's how they rose to politics. And it's how they ended up in government now in charge of energy, right? They are saying, oh, well, this is kind of scary. We got to rethink nuclear. Meanwhile, everybody who's in the center gets radicalized. We've got massive, incredible

statements of support from folks polarizing, but incredibly important folks like Elon Musk. And And I saw Mark Andreessen also going on and saying, now, now is the time for nuclear. We have a network of folks we work with from around the world who are trying to do the same thing, stop the nuclear closures in their country from everywhere, around the clock since the war started. We're getting messages showing that things are cracking, changing. People whose lives were dedicated to just running down their own country's energy supply that was already there in front of them and just destroying it.

They're saying, oh, actually what I mean is it's the most important. So something is breaking and it's not clear that the fear around the capture of Zaporizia nuclear plant, potential capture of South Ukraine if that occurs in the next few days or even the occupation of the Sheroble cleanup site, it's not clear that that's really broken through to stamp out the enthusiasm. Yes, it's the turning point. Now, you asked me about France, right? Yeah.

France won World War II in the most embarrassing and shameful manner if you were a young French person who put your life on the line to go underground and the resistance. The generation that built nuclear France, they watched as their fathers and their grandfathers gave up their country, sold out their neighbors, rolled over and died to keep the peace and keep France from being destroyed. Whatever. They lost against Hitler. Meanwhile, the French generation that rose up, fought back. They marched back in with the free French of Charles de Gaulle. They fought in the underground. They went and they shot Nazis as teenagers,

which really gives you a different idea about energy security. It just does. And in an environment where energy security is the same thing as carbon-free because that's where energy comes from, it means there's this one big direction. The famous quote that described the launch of the French effort to suddenly build out as many nuclear plants as possible was in France, we do not have coal, we do not have gas, we do not have oil, but we have ideas.

So, nuclear is the only energy source powerful enough, we're mere ideas and a tiny little bit of uranium you can get from anywhere, get a 10 or 20-year contract right there. Like, it's easy. It's not of this, oh, we can't get off the pipeline. No, no, no. Uranium's really easy. You just get it a little bit. You only need one truck per year per reactor for a million people. It's nothing, right? Nothing at all. So, they said we have ideas. They were, they knew what it felt to be humiliated and broken, and they never wanted to see it happen again, and they needed to restore the grandeur of France. Now, you could say, oh, well, that's imperialist. Their grandeur was having a bunch of colonies. Well, whatever. They lost a bunch of colonies, too. How do you restore greatness? You go for great energy,

and you make it to where you're not dependent on the mercy of others. So they did that. And they built them all out. Then it was just about good management. Very good management of the EDF heads in the 70s and 80s. They made good technological decisions. They executed well. They had an ultra-experienced workforce. They had a lot of buy-in from local communities. I'll get some pushback on that. People like, did the local communities have a choice? Yeah. Well, so the local communities got super rich and they love their plants. So there you go. That's what happened. Then when that generation passed on, and it was seen as good to be like Germany and to be EU-oriented, not Paris and French pride. That's the generation of admins who went to business school and went to econ departments.

They came in to try to, like, destroy the French fleet. So the reason that France has been in a very weak position this winter is because they've just wasted their fleet. They throw away about 30% of their potential power generation. They failed to operate their plants. They've paid billions from one side of the government to the other to trash working, upgraded nuclear facilities for no reason. So France has not been a very loud voice during this event because they are not doing well. They can do well. They can turn it around. But that's the tipping point you just asked about. I think this is the tipping point for France. Yeah. And then what about the US, right,

where we are unquestionably mired in these politics where the sort of disinformation machine has worked, where it seems extremely obvious to anybody who pays attention to energy that a mix of nuclear and wind and solar is the way forward to get us out of the climate crisis. And yet we're, you know, a little too lazy in America? I don't know. I mean, what does it get to get the boots on the ground to get the new nuclear plant designs approved and the construction started? So, first of all, we could have like a three, four, five hours show on nothing other than

the weirdness of electricity, electricity markets, electricity politics, utility politics. Let's stay away from that and just save it. In order, even if nuclear is not so expensive to build, it's almost never marginally justified. It's always cheaper to build a little bit more like solar or wind, even though it doesn't, the solar doesn't go at night and the wind. So you have to build out the whole system anyway. The electricity markets were designed based on an economic theory. It's not working very well.

Like, all the markets have either giant catastrophic breaks because they were poorly administered or badly theorized like in Texas. But like, in order to build nuclear, you'd have to adjust some things. Now, I think we can. The question is, when we do attempt to build nuclear, why does it go so wrong? We have one nuclear project in Georgia. The stories that you can hear from engineers and others involved in that project about what a mess the prime vendor was, what a... There were so many things that went wrong with the rotting away of experience base.

You had companies in whose proud history they'd built many nuclear plants, right? but nobody there had ever built a nuclear plan, but they won the bids. And then they failed and it like snowballed into this colossal mess of network bankruptcies and forced sales. And then we're going to finish those plants. It's just been really painful. Eventually, the rate payer is going to get a good deal in Georgia, but it was not a good experience. If we, if we are going forward, we may need a slightly different direction, both on creativity on how we recruit and and manage talent in the industry and also a very dedicated regulatory environment that wants to see innovations in the way of working and wants to see competency return to the American nuclear sector.

I think I agree with you that the attitudes are good. They're going to get even better. I don't think people quite are aware of what's being done in their name to get rid of their nuclear plants, their local plants like in California. People don't really understand what that's going to mean. New York City, everyone's going on Twitter and saying, my bills are so high. And And then they read the fine print and the utility says, well, your cheapest power got removed last month. So tough luck. Well, we've got to get over that. But this, this ends in 2019. I can assure you that that similar polling is showing really strong results. So this is a chart that ends in 2019. We had a peak in 2008. This is a Gallup poll that 62% of

Americans felt they strongly somewhat favored nuclear power, only 33% in that 2,000. 2010 period, strongly somewhat oppose it. And in 2019, 50-50, kind of a weird chart because it really wasn't even part of the discussion here. I guess Fukushima had an impact here. Now, what do you think it's at?

And what do you think it'll be at post this Russia, Ukraine excursion slash war? The numbers I've seen don't know exactly. I've been slightly more paying attention to either states in America where we've got battles to say plants or countries in Europe where it's like hour by hour times of the essence to say, what I feel in that similar poll would do a few months ago, it's about maybe 60, 40, where men are something like 70, 30 or 75, 25,

and women are 50-50 or a little worse. Fascinating. And when we look at the countries with the highest percentage of power, another chart here, this one's from 2020, France, at 70.6. I've heard estimates of up to 80%, so I'm not sure exactly what's true. They passed a law. You'll love this. So they decided their biggest problem.

And since their energy was already cheap, already secure, and already clean, they decided the biggest problem is that it was nuclear. So a few years ago, they passed a law to force the closure of nuclear plants. They said that only 50% of electricity come from nuclear. So they stopped doing upgrades, stop taking a, yeah. They've won so much, they now want to lose. They said it's what the Germans are doing. It's cool.

It's EU. It's not like, dad, you can't tell me what to do. Your energy, dad. Almost every French, old French person I met is like, of course, nuclear is the very best energy source. I don't even know why it's a discussion. The young, like 40 to 50, they follow the politicians that are like, well, it's good to get rid of it. We needed nuclear in the past. We got to get rid of it so we can be ecological.

That's the, they just, they must learn that exact line in school because I've talked to super elite French students from the best. colleges and universities with engineering educations and they all they all sound exactly the same we used to need nuclear but now that we have ecological energy we got to switch so they passed a lot of force

nuclear to decline and they were successful so they got it down from like 7580 now 70 and now it's dropping even further because they can't keep their plants up so just looking at this I think it might be an interesting place to end as a lesson here we pull up this percentage I sent it to the chat room the percentage

of countries that are powered by nuclear with France at the top, 70.6% to Slovakia's 53%, Ukraine, 51%, Hungary, 48, Bulgaria, Belgium, Slovenia, Chechnya, Armenia, Finland, Switzerland, Sweden, all above 29% and that 30 to 40%. What are these countries have in common that they are so pro-nuclear? I haven't. I have a guess. Well, in many cases, they just don't have really great access to fossil fuels, but that's not good enough because you can find it. For example, Bulgaria has giant lignite coal resources, right?

So I think some of them have in common. You have a few Eastern economies where if those economies had successfully grown their industrial base after acceding to the EU, the EU would have been able to make sure they didn't add nuclear. In fact, a lot of these countries would have a lot higher percentage of nuclear. They were forced to kill one or two nuclear reactors as a blood sacrifice to Germany and Austria in order to get permission to join the EU. So, partly it was state planning in the old days, but that's long gone. I mean, long forgotten in many ways. They love their nuclear plants and they've kept them. There's countries that should be on this list, like Germany had 35, 36 percent

coming from nuclear, not that long ago. Japan had 35 headed up to 40 from nuclear, not that long ago. So you're seeing something about which countries didn't get rid of them. But if you'll allow me, I've won one thing to mention in terms of nuclear startups. All right. And then just, last thing on this chart, proximity to Russia authoritarian sources of fuel have anything to do with it, you think, or is it just the EU influence? So it helps, but it's not the whole story because why doesn't Poland?

Poland's rushing as fast as possible to get nuclear, obvious reasons, but it doesn't have it. You also don't see Baltic states on there. Lithuania by far the highest nuclear percentage of all time, 90, 95%, but they had to shut it down to be a part of the EU too. So yes, partly it is the energy security. There's just weird historical trends. If you looked at which countries are building nuclear, a lot of times. times there it's not that they trust Russia it's just Russia has the best price and is familiar with the nuclear program already in the country because the Soviets built it so that's that's an weird

little thing energy security is there from nuclear no matter who seems to be um building it or providing the uranium because you need almost none of it so at any point you can be on your own fortress bulgaria right this is a stupid question uh perhaps why is Russia in the nuclear business if their money comes from oil and gas. Are they battling themselves or are they just care about money? No, well, okay, so there's a big brain on top and he kind of sees the whole picture, which is you fight nuclear power in the countries that you need hook to your gas and oil, and then you build nuclear in the countries that aren't rich enough to pay you that much

and you extend your soft power. Until this weekend, I guess, there was so many students from around developing countries, countries in Africa, getting educations in Russian language and nuclear engineering in Moscow, or the various other skills that are involved. They just feel that nuclear energy is by far the best energy source. It works for them that by them, I say, works for Putin that Europe denies itself nuclear, right? Because not all of Europe, the other European countries are buying nuclear from, for example, Russia, right? In terms of Gazprom versus Rosatim, yeah, there's really big competition. You could see it play out.

on Twitter where Rose Adam would sub-tweet gas prom and mock countries for getting hooked to gas and advocate for getting their nuclear plans instead. There's about a 10 to one difference in revenue between gas prom and Rose Adam. Rose Adam has to be phenomenal. They have to be excellent. You have to be the best of the best to go work at Rose Adam. Very high morale. Again, till the war, they just were able to recruit the absolute best and they were put under very tough demands to deliver projects at a profit for the state while also taking on projects and trying to make the best of it

when you just had to for political or diplomatic reasons. Okay? So the West is being spun. They are kind of against each other. The West is being spun and, you know, in civil war over this issue. And then Putin is absurdly pragmatic

and strategic, giving, creating dependencies with one group of people on oil that he needs leverage over while building soft power with the group of people who can't afford his oil. I mean, the guy's playing, like, I hate to give him any credit, but these KGB guys are pretty good. And there's like, they're pretty strategically, they're pretty brilliant.

It's different advanced nuclear projects running on at the same time with almost not quite competing institutes, but Russia's weird on the inside. We'll just leave it there. They are doing innovation and they're doing an incredible and innovative job at this at the boring old fashion nuclear too. That's what I put in. Yeah. Well, I think if you, we, there's so much to try to digest here and the best place to go back to is probably Mark Nelson's Twitter feed. So I would encourage you all to go follow them there because there's so much history wrapped up in this. There's so much politics.

There's so much policy. But I think that we, we at least in most of the YouTube chat, have landed in the right place, which is like, can I say if people put up questions and complaints and whatever, my DMs are always, open. We didn't quite get to the only advanced nuclear business I've ever been willing to join and the one that I think is going to change things here in a few years, but contact me on DM. What? Which one is it? You said you had one more point. Yeah. Yeah. Clean core thorium energy. Thorium has become such a meme that people forgot why it became so exciting in the first place. In the case of clean core, they're not needing to invent their own reactor. They already have a universal nuclear energy platform they're working with. So it should only take two or three years to

substantially change the operating economics of the heavy water reactor systems in use in South Korea, Canada, India, China, Argentina, Romania. And at that point, if you're using India's supply chain and Canadian designs with American fuels, you can undercut everyone on Earth on reactor price because of the special aspects of the design, you can undercut China on reactor price. But you need something to bring the deal together, bring the USA in, get the USA and India to cooperate on nuclear technologies, get the Canadians to relaunch the reactor building. Anyway, so that's definitely people can ask me why that's the one. That's the one that I like, even though most people in nuclear think that Thorium isn't

the future. Anyway, so. So then that's a, that's, that'll be our part two is. Yeah, exactly. If we do deploy nuclear. Yeah, what is the way forward? We'll save that for part two. Thanks so much for just really drilling down with us, so to speak, on nuclear because

my head's spinning, and I've been down this rabbit hole for a decade, and I really hope that our cognitive dissonance around this can be clarified by the cost of these crazy wars and empowering dictators and being in business with them, which I think at this point, we're learning some hard lessons and you know god forbid something happens with Taiwan and look at the relationships with the Middle East and the and the death and murder and suffering on all sides that that's created by empowering people by sending them trillions of dollars or oil and destroying the environment Taiwan's been stripping out its nuclear because of green ideology yeah okay uh part two

coming soon folks yes the path forward two three five 10 and 100 coming soon we're keep double-clicking on this one because it's so good. Absolutely. And send all your hate mail to my to my Twitter, everybody. Hey everyone. Producer Nick here. I want to tell you about the SaaS Syndicate. If you're a founder of a SaaS company with a product and market, our investment team wants to talk to you. Head over to the syndicate.com slash SaaS, S-A-A-A-S to apply to raise from the SaaS syndicate. And you can join Jason's Syndicate of over 9,000 accredited investors at the syndicate.com. Producer Justin here, know a cool startup? Check out OpenScouting.com,

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