This Week in Startups - Crypto Updates: Voyager files bankruptcy, Celsius pays debt, + Jason Q&A | E1501

Episode Date: July 7, 2022

Molly is out today, but don’t worry- we still have crypto news to cover. Crypto firm Voyager Digital filed for bankruptcy (2:14), and crypto loan company Celsius paid some debts (10:43). Finally, Jason takes some questions in today’s Ask Jason segment (25:35)! Voyager Bankruptcy Filing: https://cases.stretto.com/public/x193/11753/PLEADINGS/1175307062280000000036.pdf (0:00) Jason introduces today's show! (2:14) Crypto Update: Voyager Digital filed Chapter 11 bankruptcy late last night (9:31) Embroker - Get an extra 10% off insurance for your business at https://Embroker.com/twist (10:43) Celsius just unlocked 2000 “wrapped Bitcoin” (~$40M worth) by paying down ~$183M of debt to another crypto lender (24:21) Thorne - Personalized, science-back wellness. Get 10% off your first order at thorne.com/u/TWIST. (25:35) Ask Jason: Jason answers your questions (26:27) Would you ever apply to Shark Tank as a judge or create your own version with the besties? (29:23) Trying to bootstrap as long as possible, but when is it ok to quit your day job? (34:16) Indochino - Get $50 off any purchase of $399 or more by using code TWIST at checkout https://www.indochino.com (35:34) When a previous investment asks for more money, how do you decide whether or not to double down? (41:56) I’m about to raise a seed round… should growth be the target or generating positive cash flow? (45:04) What current FAANG CEOs would you like to interview? What insights would you look for? (48:00) What are “pre” and “post” money? (48:43) Do you entertain pro-rata multiples? (58:31) How is the electric bike effort going? (1:04:00) What Gen Z startups have excited you from the OK Boomer segment or your staff? (1:11:31) Outro + Plugs

Hey, everybody, welcome to Wednesday. Yes, we're almost halfway done with the week. And Molly's out today. So I'll be doing a solo, Dolo. I'm going to do a bunch of crypto news at the top, and then some Ask Jason's at the bottom, CryptoFirm Voyer Digital, as you may have heard, last night filed for bankruptcy. This is on top of crypto loan company Celsius being in the news again. Today, they paid back almost 150 million to a decentralized lending platform maker. That released $40 million with the Bitcoin as they posted collateral. all these shell games and loans are starting to get worked out as crypto has collapsed. So we're seeing a massive shakeout and chaos continuing in the crypto space.

We'll talk a little bit about why this is all happening and then my predictions of where it winds up. And then I'm going to answer questions from our Twitter community, which lives at This Weekendstartups.com slash TC. That'll give you a link there. And I'll take some live from the audience at YouTube.com slash this week in. It's going to be a great show. Stick with us.

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scientific science-based approach to health. Through a variety of at-home tests, Thorne teaches you about what your body needs and provides the right, high-quality, certified nutritional supplements for you. To get started and take 10% off your first order, head to thorn.com slash you slash twist and Indochino. Indochino makes custom-fitted suits, shirts, and casual wear at affordable prices. prices. Shop for your next best look or book of virtual style consultation at Indochino.com. Right now, you can get $50 off any purchase of $3.99 or more by using code twist at checkout. All right, Voyager Digital filed for Chapter 11 bankruptcy last night. Voyager follows 3AC as the second major crypto firm to file for bankruptcy over the past couple of weeks. If you remember,

Voyager has two businesses essentially. They are in exchange, just like Coinbase. or others where consumers can buy and sell crypto. And then two, they had a lending business where they offered really high interest rates and this easy access to loans for crypto holders so you can loan out your Bitcoin or take margin against it, I suppose. 3AC was a crypto hedge fund. So they were making trades to try to get returns for their investors. And they were placing bets on, you know, really speculative, crazy stuff like Luna,

which was a stablecoin known as Luna Terra. and that algorithmic stablecoin, as you know, basically blew up, it went to zero. So you have 3AC, the crypto hedge fund, Voyager had it loaned money to them, and the whole thing has now become what we call in the industry a contagion. So 3AC also borrowed money from the land of BlockFi, and they weren't able to meet a margin call on their loans. This stuff is really confusing because we don't have total clarity on it. But when there is a bankruptcy proceeding or there are lawsuits, this is something we'll learn

for people who are going through a downturn, a market collapse for the first time. This is my third major one, Docom Boom, and the 2008 crisis with the other two for me, at least as a professional. I miss the 87-88 one. That's when I graduated high school in 1988. But I did see it as a young adult, and it was pretty gnarly, the financial collapse in 88. So back to Voyager, they estimate in this filing that they have over 100,000 creditors. Were those creditors?

It's going to be a lot of civilians who were trading crypto on the platform. They also state they have between a billion and 10 billion assets and a billion to 10 billion in liabilities. This is a big, wide swath and a range of what's going on in the company. So in a downturn, things that go bankrupt have to essentially go in front of a judge and work out this bankruptcy, which means the kimono opens and we see everything. And we really basically do a post-mortem on what happened. If the company completely fails, there'll be lawsuits in all likelihood, and there'll be lawsuits all over the crypto space, that's the next shoot to drop. And there'll be actions from attorney generals,

the Department of Justice, the SEC, and then all the information comes out. This is a very slow, painful process, and it's just starting. I would say we're in the second or third inning of this pain and this assessment of exactly what happened in crypto. So if you dig through Voyager's financials like Economic Blogger Francis Coppola did, he found that almost 50% of Voyager's total assets are loaned crypto assets, right? So of the assets on Voyager's books, a bunch of crypto assets that have been loaned, and 3AC, the company, the hedge fund that had gone bankrupt, made up 58% of its loan book, according to Francis Coppola. So they obviously gave a firm, a counterparty, and we're going to learn about counterparty risk today, and a lot of people are waking up to understanding

that there is another person on the other side of these loans, and they may not fulfill their obligation, this is where things get dangerous. There is no regulation. There's no DNA or scar tissue or lessons in crypto yet. They're all being formed now. And so the lessons about counterparty risk are very real. Of course, you understand them from other things that have happened in history, and we'll get into that in a minute. So if you are holding crypto in Voyager, I am going to guess you're going to lose most or all of your money. That's just a guess on my part. Usually when these things come apart, this very little leftover for the actual shareholders. I could be wrong. Who knows what's in these assets? Again, they listed between a billion and 10 billion assets and a billion and

10 billion liabilities. Voyager CEO, Stephen Ehrlich tweeted the following to that question of like, what does it mean for people holding their crypto on Voyager? And if they don't have their keys, they don't own their cheese, right? If in crypto, the whole idea was you would own the keys to your crypto. If you own the keys to your crypto, and they're on your wallet, or you've got them in cold storage or wherever you're hosting them, this can't happen to you. But people went for ease of use. I have some Dogecoin on my Robin Hood account. I don't have the keys to that. I don't, they're the custodians of it. If something happens to them and they're holding it for you, things can go wrong. That's what's happening to the Voyager bagholders, essentially.

So here's what Stephen said. Customers with crypto in their account or accounts will receive an exchange, a combination of the crypto in their account or accounts, proceeds from the three AC recovery, common shares in the newly reorganized company and Voyager tokens. So working backwards of Voyager tokens, that sounds like they're giving you like mileage points, Chuckie Cheese tokens. I guess they'll probably be worthless is what I would think. That's not the actual crypto you bought and you made the decision to buy. They're going to give you common shares in the new company. So I guess this means they think they're going to be short giving you back your crypto. and instead of just giving you back your crypto,

they're going to give you some proceeds from the 3AC recovery. I would assume those would be cash, and then they're going to give you shares in their company. This would be as if Coinbase went out of business, and that's highly unlikely for Coinbase who had a business, they got a lot of cash. But if they did, and then they said, hey, you know what,

how about some shares of the company instead? A really weird turn of events. Now, remember, Sam Bankman, Fried, who is going to come on the program later this week or next week, the crypto billionaire. He's been backstopping and buying failing crypto exchanges from, and this is from Reuters. Bankman Freed's crypto trading firm Almeida Research gave crypto lender Voyager Digital a $200 million cash and stable coin revolving credit facility and a facility of Bitcoin as the company faced losses from exposure to crypto hedge fund, three arrows capital. That's the three AC I've been

referring to. AC stands for three hours capital. So a complete disaster. And then just as we were getting on air, I noticed in the 3AC filing, a couple of my friends of mine were kind of digging through it. And they have on their loans, if you look at this image, you'll see that there is a certain amount of money loaned from Voyager to Almeda. So Sam is giving a loan to the company that gave him a loan, if I'm understanding this correctly. Again, it's hard to know exactly what's going on here. But in the data, they say Almeeter Research Limited. I'm assuming that's Sam Bankbin-Fried's firm has a borrowing rate of 1% to 11.5% on $376 million in loans. Three hours capital had $654 million.

And you can see that in the chart here in their bankruptcy filing. So there's a lot to unpack here about what's going on. I'm not saying there's anything to Ferris going on, of course. it's quite possible that companies were doing business with each other and Voyager gave a loan to Alameda or Sam personally is backstopping Voyager with his own money. He has talked about doing it with his own money. But this does all mean that there's going to be a lot to sort out. Somebody's going to have to figure out what's going on here. Yeah, this is on page 12 of their filing. We'll put the filing, the Voyager bankruptcy filing in the show notes. I'm going to be very quick today. You need to understand. what cyber insurance is. Obviously, this covers hacks, which happen more than you think, especially in these crazy times. You want to be protected, so you want to have your cyber insurance set up. If you don't have business insurance, you've failed one of the first steps of being a founder

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Twist, TWIST. All right, moving on, Celsius just unlocked 2000 wrapped Bitcoin. That's about 40 million worth. And they did this by paying down some of their debt. Again, people had Bitcoin, they had taken loans against them. You could call these margin loans is what most people would commonly refer to them. So a quick explainer if you don't know what WBT is. wrapped Bitcoin, very simply.

You take a Bitcoin and you wrap it on the Ethereum network as a token and then you can trade. Well, why would you just trade the Bitcoin on the Bitcoin blockchain? Well, Ethereum is faster and it's cheaper. So, clever idea, right? So you might remember Celsius was the first major crypto player to pause withdrawals on June 12th and transactions on their platform when the 3AC hedge fund collapsed. So they had exposure as well as Voyager.

Celsius has not resumed service to its. 1.7 million users almost a month later. So as of May 2022, the firm had lent out more than 8 billion to clients. And it had 12 billion in assets under management. Since pausing on June 12, you know, and again, very hard to understand what's going on. There's not a lot of transparency. There's not a lot of filing going on here. There's not a lot of disclosures or regulation in this space. And we talked for years, hey, if you want to play in crypto, you're playing in an unregulated casino. know, you're playing a very dangerous game with very sophisticated players and it's not transparent. That means you don't have an information edge. You're at an information disadvantage. And,

you know, some people might be doing corrupt, criminal, fraudulent things and you might have a hard time knowing about it. And so as we watch this contagion happen, what you'll find out is who was doing things that were either highly risky or illegal. And there's going to be a wide range there and there'll be a debate of was any of this illegal or just stupid or high risk? And, you know, people in crypto wanted outsized returns. So up and down the stack of people participating from civilians, retail investors, people, you know, who were bus drivers or Uber drivers or teachers or doctors, everybody was wanting to get in on this. They were having high pressure on them. Hey, have fun staying poor. They were, you know, had the FOMO of NFTs. And so,

They just opened up accounts and started participating without really knowing what they were getting into, right? And so they are responsible for their behavior, but then up the stack, you're going to have other people responsible for maybe creating the environment in which people made these bets. And this is going to be the mess of all messes to clean up. So since pausing on June 12th, so they've been basically closed for close to a month. Celsius has hired restructuring consultants. They laid off 150 employees and regulators have opened investigations into the company. In other words, it's not good.

legs all over the place. But according to CoinDesks analysis, Celsius has paid down 183 million of its collateralized debt to a decentralized lending platform called Maker. So, okay, here's another counterparty who is lending the money and lending money in the space. The debt payments released 2,000 wrapped Bitcoin. We talked about those before, which is 40 million worth. Celsius posted that as collateral, collateral. Now Celsius still owes 41 million to maker, but if they repay those loans, that would unlock 22,000 more rapid coins, which at today's price is worth well over 400 million. So the bottom line here is there's something called counterparty risk. And it's a pretty basic term. It basically is the probability that in a transaction that the other party will not

fulfill its part of the deal or they'll default on their contractual obligations. So in a loan, you know, the person who takes the money doesn't pay it back. This could be a credit card. It could be your home. It could be a business loan. How do we deal with counterparty risk, right? We want to be able to loan people money to do productive things in the world. Well, traditionally, it's information-based, right? Your credit score determines what size loan you can take out the terms of the loan.

Also for your credit cards, you know, you might have a credit history score. And they'll look at your history. Hey, have you defaulted on your Verizon payments in the past? I had that. I didn't know. I had a phone number. I had some Verizon stuff on my reports. I had to go get that cleaned up.

You know, little things happened. happen in life. And it's usually based on information. Well, in a hot market, people loosen their standards. They get loosey-goosey. And they want to make money. So if you want to make money, you might turn a blind eye. What's an example of this? Well, you remember the housing boom? For those of you who were around in 2008, you might have had a friend who was making $50,000 or $60,000 a year and they bought a million dollar home. And you say, well, how's that possible? you know, the payment on that home is going to be $5,000, $6,000 a month and you make $50,000 a year and you've got $50,000 a loan payments plus, you know, the maintenance of the house and

taxes on the house. I don't understand how you bought a million dollar house. Well, they were doing loans at that time where they didn't investigate what information they could have, your scores and your savings and your salaries. They basically would just not vet you. Well, then, what happened, the 2008 financial crisis, because people were buying these homes and then they would flip them. So they'd never have to worry about it. And if a house was going up 15% year over a year, if you bought it for a million, you could sell that next year for $1.15 million. And that's essentially how the housing financial crisis happened in 2008. They basically took the last five or 10% of people in society who were not credit worthy of buying a home. In other words,

they didn't just have the income to pay for those loans, and they let them buy homes. And this is things get dangerous. There are people who have tons of assets. You know, if you're, I don't know, a billionaire and you've got a billion dollars in stock and you want to take, you know, 10 million dollars in loans to buy, you know, whatever, 100 million of loans, you know, you have enough collateral there to pay for it and you maybe have a salary and a history of making money. And if you give these loans to people who don't have a history of making money or collateral, bad things can happen. So crypto was actually supposed to solve this. In DeFi, decentralized finance, This was all supposed to be on smart contracts.

And if your Bitcoin went below a certain amount, it would get liquidated. And that's why we saw the cascading of liquidations in Bitcoin, where people were getting liquidated because they took loans against their crypto and they were automatically being liquidated. Well, there's other people who were giving these kind of loans in crypto. And I think that's what we'll see with this whole Musuggana with Voyager and 3AC. They were giving big loans without maybe having it be programmatically paid back. In other words, through a smart contract where it just instantly happened on the blockchain,

you covered your loan, and maybe they didn't have the right information. Now, here's another rub. It can get even more dangerous. In that housing bubble, there were people who would maybe get three or four loans for three or four homes and they would lie on the paperwork. And they would say on the paperwork, this is my primary residence, because your primary residence, you get a little bit of a better deal in terms of interest rate. And people want to see you get your primary residence.

So there's kind of different standards for that than the second or third home, which would be looked at as income properties or a second home like a vacation home. You would get different terms on that. Well, now if you shouldn't have owned the first home, but you did four homes, and then you take out loans against the homes. So you take out equity lines. So the home goes up in value from a million to a million five over two or three years in a housing boom. You take out $500,000 in a home equity line. And then you put that out as a down payment for two other homes. And you try to rinse and repeat this. This was working for people, they were flipping houses. And in that 2005 to 2008 period, there were people who would be at dinner, you know, I'd be in Los Angeles, which is a booming market. And I'd say, what do you do? Oh, I flip houses. And it was like literally, like people in crypto, we're flipping NFTs. Well, that's what's going to come out, I believe, is that there'll be a bunch of people who had massive counterparty risk across multiple different loans and none of them were reconciled with each other. So, you know, the third person you took a loan from didn't know about the first two people, just like in this housing bubble, they didn't know you had those other two homes. People lied.

Just like when I grew up in Brooklyn, there were loan sharks, there were people who would loan people money, there were bookies who would take your action. People might take action in Bay Ridge, Brooklyn. They might also, you know, place a bet in Queens and one in Manhattan and one in the Bronx from four different bookies. And it took a while for their network to let people know, hey, this person went south on 10K and bets on the Jets. This person also went south on $20,000 and bets on the Knicks. And the bookies then would obviously have to let each other know, hey, don't give this person any more action.

Don't give them any more loans. That's what we're going to see. My take on all this is everybody knew what they were doing. It's hard to have any sympathy here. It's fine if Sam wants to backstop everybody. That's his choice. but I say let it all burn, let it all come straight down to zero. There should be no bailouts here.

Everybody was an adult. Everybody was greedy. Everybody lowered their standards. Everybody believed that this stuff was going to the moon and it was never going to stop. And they were making bets that were highly volatile. They knew they were volatile and they didn't have basic diversification in their accounts. I mean, I feel bad for the people who lost their money in one. way, but I don't feel bad from in another way, which was they knew this was crazy. All the warning

signs were there. Now, there'll be different levels of copability and different levels in which people are responsible for what happened. If you were actually creating the casino and creating this environment in which people could gamble their money and you were encouraging them to do it, I think we'll see a lot of that happen where maybe people weren't getting good information about how risky this was, yeah, there could be a bunch of lawsuits. But people knew this was super risky. They were buying tokens. They were buying coins, NFTs, things that they knew didn't have value.

They were taking loans to buy more of those things. And you're responsible for your own behavior, period, full stop. And, you know, feel bad for people who've been hurt. But on the other hand, I think people were taking risks they didn't need to take. I'm curious what you think. I'm at Jason on Twitter. You can add mention me and tell me if you think people deserved to lose their money for making these risky bats or if you have sympathy for them if you think they should be belled out. Honestly, I think this is going to be super healthy. 95% of crypto is worthless, never had a use case, never had customers, never had completed

projects. The coins were worthless and it was a pump and dump scam. And the bagholders typically were the consumers. That's all terrible. But this is all going to get flushed out. I see people talking about Bitcoin 5,000, 10,000, and that this is going to be a two or three year process. And you're probably wondering, well, how did people let this happen? Well, the regulators and the enforcement in the United States, at least, is generally, we trust people to do the right thing. And then if they do the wrong thing, well, then we will take legal action, we'll investigate them. We assume good faith when people are running companies. We're not going into companies and saying, give us all your paperwork and we're going to audit you. I mean,

there are some segments of society where audits take place on a regular basis, public companies, etc. But generally speaking, in startups, and, you know, it's based on trust. And the United States system is, you know, innocent until proven guilty. People can go, build things. And that's what's great about the economy. We don't want too much regulation, but this is an area where I think people got very frisky. If you were to look at other areas, people got frisky, you know, you may look at an Airbnb saying, you know what, we're going to bend the rules and let people rent out their rooms or are we going to interpret the laws around how many days you can rent your own house or apartment if you're a renter, can you be on Airbnb? They might have taken an aggressive

stance at different points in times, at different points in time, but remember, Airbnb was providing fundamental value. People needed a place to stay. People wanted to make money renting their extra space and a marketplace was created and there was actual value going on. Here, you have to ask yourself, was there actual value going on? And the answer is, in 99 out of 100 projects, there was no value. It was pure speculation. It was pure gambling. So it's going to be another, I would say, 12 months of just chaos in crypto. And then we'll see if there's an Amazon or a Google in there. And that's what I'm really looking for. I do think there are real projects in crypto. And I think now companies are going to try to actually delight users with products that actually work and use the Web 3 stack, crypto, blockchain, defy. And we'll actually, there's going to be so much cynicism about crypto over the next two to three years that anybody who operates in crypto is got to be a true believer and not a charlatan and not a grifter because there's not going to be a quick buck to be made.

I think it's going to be so highly regulated that people are going to find it painful to be in the crypto space. I think the defaults are going to be never-ending. I think the pain and suffering is going to be a deep and widespread. and I think the rebuild is going to be three to five years of rebuilding this space. And then we might actually see something come out of it, which is exactly what happened in the dot. Boom and bust.

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health and wellness. To get started and take 10% off your first order, I want you to head to thorn.com slash the letter you slash twist. That's thorn.com slash you slash twist. Thanks for supporting the show, Thorne really appreciated. And thanks for making such an innovative product. Okay, now we're going to do some Ask Jason questions. It's the summertime. I could talk about crypto all day long. But you all have questions for me. I would like to get some timely questions and some timeless questions. So if you're watching live right now, go ahead and ask a question. We'll cue you up.

We also have a program called Founder University. Founder. Dot University is a 12-week program, and it costs $700. If you come to all 12 weeks, we give you the $700 back. So it's basically a way to incentivize people to come every week. Every week you come, you get back like essentially $50 or $60 of the money you put up. This is a little interesting device we did. this has led to 95% of people finishing the program, which is super awesome.

And we're now doing our third cohort. You can go to founder. University to apply. But folks from the program ask me questions all the time, and I'm backed up on some questions. So here's the first one. It's kind of a fun one. Graham Caro asks, would you ever consider applying to Shark Tank as a judge to grow your

brand or create your own tech-centered version with the besties? Or are you too old, too tired, and too talented? That last clip is something that the star of, what's the HBO show, Secession. Yeah, the lead actor on that said that at some point when they asked him a question, and it was a pretty funny one. So I actually was approached by the Dragons Den, which was the precursor to Shock Tank. So it started actually in the UK as Dragons Den. When they came to the U.S. Mark Burnett's people called me. they called Mark Cuban a bunch of other people.

And then they went with like people who weren't in tech. Tech wasn't super popular at that point. And then they circle back around with Mark Cuban. And he was actually under investigation at the time, quite unfairly by the SEC for this mama, which was like a search engine or something. Once he got cleared of all those charges where they were kind of essentially saying that he was trading on insider information or something about when he wasn't. He, uh, he wound up doing it.

Yeah. And then maybe later on I got contacted actually. again where they were just kind of putting out feelers. But I am, I just, uh, am in the process of putting the final deal points on another, uh, reality TV contract with another, you know, I'd say, yeah, what most people consider the top reality TV production company. And so we're in the final like negotiation there. And I had previously done, uh, an NBC pilot about the incubator, was called the incubator and it was going to be on NBC. But my partner on that was Harvey Weinstein. Uh, and then when all that information came out of, um, and then when all that information came out of,

about Harvey Weinstein, it basically killed the project. So most people don't know that story. But I have dabbled in reality TV. Yeah, this will be the second time, basically. I get contacted every year a couple times, but usually it's for shows that I think are corny. This new deal I'm doing is to develop a show alongside them. I also did on this very channel something called the syndicate, where I would have a bunch of syndicate investors come together and basically vote with their dollars on companies we were presenting. And so I might do something myself around the syndicate. And I think reality TV is great if it inspires people to go on and get excited and invest. And in fact, Chimov was on my reality show. He was one of the guest stars and it never made it to air,

but I have the, I have the pilot on my phone. I can't show it to anybody because it's all under NDA and stuff like that. But I do, I do have it on my phone. But I don't think the other besties want to do reality TV. I think they just, it's enough work to just try and get all in out every week. So we're just, as you may have heard with all the controversy, we're just not making all in a commercial enterprise. It's just a weekly podcast with four friends. Okay, here's another question from Isabel, again, from the founder. Dot University first cohort. I think we had maybe 95, 100 people went to that first cohort, and I think 85 or 90 graduated, and I invested in maybe five of them. So Isabel asks, trying to bootstrap as long as possible, well, when is it okay to quit your day job?

And so she continues. I was thinking that in this scenario, the best time to raise is when speed is needed to compensate users and profits are scaling. But would it look bad to start raising while working the day job? Great question. So investors are not going to give you money unless you quit your day job. Because they want you, and this is going to be like, I'll tell you what they say behind closed doors. I've had situations where people were working at like Google. They had a side project and they're like, you know what? It's a really cool project, but these are cowards. Like literally, this is how Frederick Queenie looks at the people who will not quit their day job. It's unfair, I know, but I'm just telling you what they think. We have people who are risking it all. They have massive skin in the game, and they have burned the boats. In other words, they got to the new world, and instead of having the boats there where they could go home, they would burn the boats. And burning the boats, as you probably heard Elizabeth Holmes say, you know, in that TV series about, you know, her time at Theranos, burning the boats as a concept means you're all in. You are walking across that tightrope without

a net. And it's that type of pressure that the venture community believes makes the diamonds, right? And if you're hedging, and listen, people have kids, they have families, they have bills to pay, I understand why you wouldn't quit, but you're just not going to raise money. So the best thing to do is to take your day job and eventually make it a consulting gig. And so nine times out of 10, I think, or four times out of five, if you were really valuable to the company you're at, you could say, hey, listen, I want to pursue this startup. Would it be okay if I went down to three days a week as a consultant? Here's my hourly rate.

You can take me off the books. I don't need benefits or whatever. I'll use my cobra for the next six months. And you come up with some deal. That actually worked for me and other people in terms of that. Then when you go to folks, you can say, yeah, I'm consulting two days a week or three days a week, but I'm all in on my startup, and I'm just consulting to keep the lights on. Once I raise a little bit of money here, or I get the revenue started, then I'm going to even

stop doing the highly lucrative consulting. But I'm using that highly lucrative consulting to fund the business. So that's called framing. Framing is how you present a piece of information, and you can present the same piece of information two or three different ways. If you framed it as, yeah, you know, well, I don't know if this startup's going to work, so I still kept my job. That's one way of framing it. And that's like the worst possible framing. But if you said, I get overpaid to do this consulting because I'm so valuable to the company that I used to work at and they didn't want to let me go. So I basically tripled my rates and I took my hourly rate and I tripled it and now I work for them, you know, one third of the time, but I get paid the same money and I'm using

their money to fund this startup. Man, now you look baller. Now you look savvy. Now you look in demand. Same information. But presented in a different way could have a majorly different result. So, but bootstrapping is the best thing you can do. Bootstrapping means It comes from the phrase pulling yourself up by your own bootstraps, which doesn't make a lot of logical sense. But people who are bootstrappers or doing their startup through sweat equity, those are the most attractive founders in the world. Why? Because they didn't wait for permission from investors to get started and build something important in the world. They just did it.

And that sense of inevitability in a startup is very attractive. That is like nectar to the honey peas that are venture capitalists. They see that you're going to do this startup, come hell or high water. you're going to do it, whether you have to be a consultant three days a week and do this four days a week, and you're just dogged and driven and visionary and you will not stop. Man, now it's like, well, that's the person I want to place the bet on. The person who's like, I'm doing this, you know, on the weekend, that's the person you don't want to place a bet on. In a venture capitalist mind, not saying it's fair, not saying people don't have different needs in life and, you know,

you could be a single mom or dad with three kids in private school. And listen, startups are going to be impossible. There's nobody who's going to fund a startup. With three idea founders, all who need to take 250K a year, it just very rarely happens in our industry. And it's the nature of venture capitalists and they're signaling and what they've seen work before. And the reality that there's not enough money in an early state startup to pay for the big salaries. Early state startups need to conserve cash. Most of the founders in early state startups I see will take a 5K draw a month, 60K a year, sometimes 7 or 8K,000 a year. They'll take just as much money as they need to cover their nut. Just cover their mortgage, rent, their food, and they're all in

on the equity. So make sure that you're giving the impression that you're all in on your own equity. And if you're not all in, why should somebody take a bet on you when they have other people they can bet on? Remember, it is a competition. So they have other choices of who to invest in. They're going to invest in the person who's all in, not the person who's hedging their bets. Great question, Isabel. Weddings are back in full swing this summer. You know that. You need to look great, Whether you're the groom, maybe you're on the wedding party, or you're just a guest and you want to look your best. This is what you need. You need to go to Indochino. They make high quality, custom fitted suits, shirts, casual wear, and more. Maybe you're going to the minions premiere and you need a great suit. I don't know, whatever your bag is.

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Indochino, 50 bucks off any purchase of $399 or more by using the promo code twist at Indochino.com. I-N-D-O-C-H-I-N-O dot com. Use that promo go twist so they know I sent you. Okay. Should we take one from the audience? Do you have a good one from the audience so we can keep the audience engaged? All right. Ev, V, asks when a company you already invest in comes back, asking for more money, how do you decide whether or not to double down? What a great question. So, but we are very clear with our founders. We like to get to a 10 to 15% ownership position in growing companies in our portfolio. If the company is growing and growing is typically double digit percentage is month over month. If you're growing 10% a month, that means every

seven months, the rule of 72, look it up. When you grow 10% a month, you will double your revenue or users, whatever you're counting, every seven months. And you really, in the early stages of startup, you're looking for triple, triple, triple, tripling your revenue every year for the first three years. So you started with 150K in revenue. You got to 450, then you got to 1.4, 1.5 million. That's a high growth startup. Very easy for me as an investor and the syndicate, which is a group of 11,000 angel investors making their own independent decisions to invest on average $7,000. saying six or seven thousand dollars is there are, you know, bet and our average deal, I think is 750K to a million at the syndicate.com. So I'll invest a little bit for my fund and then from

the syndicate. If you're not growing, the syndicate doesn't perform. The syndicate doesn't want to invest in things that are sideways. So what we do is we invest in a bunch of companies, say 50 new companies a year, and then some number of them hit that goal. If we see you hitting that goal, you're tripling your revenue year over year, we will then invest more money until we get to that 15% ownership position. Once we hit the 15% ownership position, if you continue to grow, we will take our pro rata, which is a legal term, it's a right for investors to maintain their ownership percentage. So if I own 15% in your company, now you're worth 500 million and you decide you're going to raise 50 million. Okay, I need to come up with 15% of 50 million to maintain my 15%

ownership position, which means I got to come up with 7.5 million. We actually had this happen with the unicorn. We own 6% of it. It was a billion. company, they were raising $100 million, and the syndicate did its largest deal ever and put in $6 million. So we actually got to put $6 million into a company that we had invested in when it was only worth $4 million. So we really love to keep investing in growing companies. Now, what if a company is not growing? Well, you are then, as a founder, it's up to you to go find new investors. You cannot as an investor keep becoming the sole source of funding. So you have to understand, as a founder, you get money from a group of angel investors. They typically only invest

once. Some of them, maybe 10, 20%, will double down, triple down on winners. But they're not going to double down and triple down on sideways companies. So then you have to then sell your story to another group of investors. The other qualities we look for, and so generally, we don't do bridge fundings. We like when a round is priced. What does it mean for a round to be priced? That means a new investor came in and said, you know what? J-Cal invested when it was a $10 million company. And he put a million dollars in and he bought 10% of the company. The company tripled its revenue. I think it's worth 30 million. We want to put in 5 million. We want to own approximately, you know, 15% of the company. Well, depending on that lead investor now has done the work for the

entire investment community to mark your share price up. You've proven to the market that you can find another person who wants to buy your shares. If you can't prove that, then maybe your company is not increased in value and you need to do what's called a flat round, which means you take that $10 million, and you say, hey, anybody want to put another 500K in, that's a bridge, okay? Or sometimes I'll call it C-plus. And that's the hard truth about Silicon Valley. It is a milestone-based funding system at its best.

And so what that means is you have to perform, and if you perform, you get more money. If you don't perform, you may not get more money. Or you may have to convince another group of people to take a flyer on you, or you may only be able to raise at your last valuation and do a flyer. that round. So those are the hard truths about our industry. And for me, I communicate that as honestly as I can with founders. And sometimes they do not take the news well. You know, I've had founders say, like, I don't understand. You believed in us. And I said, okay, but we are not a charity. We have to have a betting strategy in order for us to raise our next fund. We never intend to

invest in 50 companies in a fund and then keep investing in all 50. We intend to invest in 50 very high-risk companies and then invest in 10 of them more money. In other words, the top 20% will get more money from us. That then lets our portfolio shine. We're putting more money into the most high-performing companies, as opposed to other times when you're just not performing. And, you know, there's a lot of reasons why you didn't perform. It could be bad luck. It could be a competitor. It could be your own execution. It could be there's not a big market there. And then the healthy part of that discussion is when the venture community will not fund a startup, that founder then has to either prove it to the venture community through revenue growth, which means they cut their staff,

they find customers, they do a consulting gig to keep the company going, whatever it is, or they shut the company down. People take the loss. So, okay, we lost a million dollars, but we made 10 million here. We take them one million loss against the 10 million gains. You know, and that's part of the game as well for investors, is they can take those losses and put them against gains. And that's the beautiful part about capitalism in the United States. This is a is not an industry where everybody's supposed to win. It's not participation trophies. Sorry. Not everybody's supposed to win. There's supposed to be a small handful of winners. If your company doesn't win, we kind of want you to shut it down and start a new one and then

have a fresh cap table with a new vision and move on. And that's a very hard discussion to have. And it typically happens when the money runs out. And, you know, it's now I am very philosophical about it. It didn't work out. You did your best. You know, go work at Facebook for two or three years. If you have personal debts, pay them down. Recollect your energy, rest and invest on the roof of Huli or Google or whoever wants to give you an overpaid job. And then when you have your next best idea, come back to the venture capitalist and to the angel investors and to the incubators and take their money again. I hope that answers your question. Okay, let's take one more from the audience. Great job, Rachel. That's a great question. Okay, Kumar asks, I'm about to raise a seed round.

congratulations, Kumar. Funding has been arranged. I don't know what that means. Just need to finalize the paperwork. Should growth be the target increasing the user base or generating positive cash flow? Great question. Okay, I'm going to assume you're going to wrap up your funding and then you're saying, hey, once I have the funding, should I be growing the user base or making money? Okay, this is highly dependent on the market you're operating in. In the high growth boom days of the last five years, most people would say, don't worry about revenue as much as the user growth, especially if you're in a consumer startup. In other words, Instagram, YouTube, Twitter, you just want to get a large number of people. And then once you have tens of millions of people, then you turn on advertising.

Turning on advertising with 100,000 people, it generally is going to have moderate results. And you're going to be serving two masters, the advertisers and the users. So it's better to just go after the users. If you look at the All In podcast, there's no advertising on it. And that actually became a big feature. And now it's very big. And now we're forced to say with All In, hey, maybe we should add some ads or people are offering us various large sums of money. I mean, we decided not to, but even this week in startups, we started having advertising in the early days. We just did it because people were asking. And slowly over time, we were able to raise the rates, etc. It also, it depends on what market you're in. And it also depends on the market

you're operating in. So if you're a B2B SaaS company or you're a marketplace, why wouldn't you take the transactions? It's kind of built into the system. If you're Uber, why wouldn't you take your 25 percent? If you're Airbnb, why wouldn't you take your 10 or 15 percent? You should take it. You don't want to train the customers to not do that. So if you're a consumer product, I could understand putting it off. But if you're B2B marketplace, SaaS company, why would you not charge for your product? If you charge your product, you get better feedback. And the number one piece of feedback you get, is your product worth paying for?

You need to know that as a founder. If you put that off as a SaaS company, it's a really dumb decision because now you never know if people will pay for Slack. But Slack was never free. You always had to pay. Now, they may have free versions, but if you wanted their top tier, you had to pay, that gives signal back to your team. So there's the vertical you're operating and in your business model. There's also the market conditions. In a market like today's, where the market is down, people don't want to invest in money-losing startups that have no path to profitability or no path to break-even.

Whereas just six months, 12 months ago, they did. So the market has changed. I would say, try to, if you're not an advertising-based company, I would try to turn the revenue on. And think about it this way. If you do get to, if you're burning 50K a month, and all of a sudden you get 25K in in revenue, now your burn goes down and your runway doubles. So your burn went down by half, which means your runway doubled. If you had, you know, 500K in the bank, you had 10 months of runway. Now you make 25K a month. Now you've got 20 months of runway. That's a big competitive advantage. And that means you're getting close to, as Paul Graham would say, default alive. Default alive means your break even are profitable. So in this kind of market conditions, conditions, yeah, where it's going to be hard to raise money and money's going to be expensive. I would, yeah, certainly try to turn on revenue if you can. Okay, let's take another one from the audience. All right, Bob G. O.G. Bob G. What current Fang CEOs would you like to interview? What insights would you look for? It's really interesting. You know, Sundar and Satya are incredibly boring and they

just really don't talk too much about controversial stuff and visionary stuff. You know, when you're a hired CEO of a company, as opposed to the founder, you've got to be careful because you're a hired gun. You report to the board. And so doing an interview, they tend to stay on message

and they don't have that founder authority to be bold and crazy and honest. So Zuckerberg would be a really interesting one. I would totally interview Zuckerberg. I'd love to get why he made certain decisions. We interviewed Elon at the Allent Summit. He's amazing, right? he's super honest. So there's that founder authority. So, uh, I would love to do read Hastings from

Netflix. Oh my God, that'd be great. I've asked him a couple of times. I don't think he even knows who I am. Uh, and so, and he could care less. Uh, I mean, he, I've seen Reed Hastings a couple of times give interviews. He's a really good interview. I'd love to interview him. I'd love to interview Zach. Uh, that'd be interesting, especially since I've been such a long-term critic. Google, I did interview Sergey when it was like year one of Google. I got to find the tape of that in like 2000. I guess for Amazon, you know, Jeff Bezos would be an all-time great interview. For sure, I'd love to do that, but I'm not sure the current CEO, again, might fall into the bucket of being on message and maybe reluctant to say anything too bold in an interview. So, but I would

interview any of them, of course. And the insights I'd be looking for, I would really like to talk to read Hastings about their philosophy around original content. because they really have done some great niche content. They stood behind Dave Chappelle. They stood behind Ricky Jervais and certain controversies. So I'd love to talk about that. Like, how do you deal with comedy? It's like such an incredible draw to the platform.

But some people are triggered by, you know, certain topics in comedy and comedy at its best is pushing the envelope and challenging people. So that would be a great discussion. And then how do they compete when there's so many different people trying to do what they're doing at Netflix and they're up against that. So that, you know, Disney and and HBO Max, how do they deal with the competition? I would also like to ask Reed Hastings about dropping the whole season versus releasing each week, which is the better idea. I think we saw with Obi-Wan and some other series, if you let them breathe, Apple TV, letting it breathe with

severance, you kind of get this buildup and you have this, like, nice thing to talk about every week with your friends. Did you see the latest episode? Like the Sopranos kind of burned in all of our mine. So yeah, I would love to talk to read. I guess it seems like Reed Hastings would be the most interesting at this point in time. And that's what I would say. Okay, let's take another question. Pre and post money. Great. Okay. So let's say, this is from somebody named Bill McCain, pre and post money, if you value a company at $8 million, and then you're going to invest $2 million in the company. The pre-money evaluation before the money went in was $8 million, you determined. Now you give them $2 million. Well, now the $8 million,

enterprise value of the company is a company that's still worth $8 million, but they have $2 million in cash. So 8 plus 2 equals 10, post money. It's really that simple. So before we give you the money and then after we give you the money. And then you obviously can calculate the number of shares that we're given, et cetera, to understand ownership percentage. Okay, let's take one more question.

I'm in a zone right now. Give me another question. Do you entertain pro rata multiples or not? We ask for two to three on most deals. I think what Brandon is talking about here is, hey, can I, if I put in a small check, like say 100K at a $10 million valuation, I own 1%. In the next round, because I'm taking the risk early, can I put in 500K? And so somebody check with Brandon if that's what he's talking about.

So in the next round, can I buy up to 5% of the company? So I have one, and I think most people would call this super pro rata, or pro rata multiple would be another way to say it. I've never heard it said like that. I call it super pro rata. that's what I've always heard. There's a controversial right. We actually have it from our accelerator.

So when people graduate from our accelerator, we have the right to put 500K or do half the round because we have the syndicate. So part of the value proposition of coming to the launch accelerator is, if you do a reasonable job, we're going to, in all likelihood, syndicate you. I think we did this, we do this five or six out of seven times. Jackie, who runs the program can tell me.

Sometimes the reason we don't do it is because they don't raise another round of funding in the six months after. they're doing so well or they don't want to raise money. And so that can be controversial for the next set of investors who are trying to slurp up as much equity as possible. So if you give that right, make sure it's with somebody who you really want to own a large percentage of your company. And it typically happens when things are small. The problem with this right is how do you execute it when you do the next round if it is a big right? So if the person is putting in 5%, let's say they put 500k in a $10 million valuation company, they own 5%. Now let's say, they say, I want to be able

to put $3 million in the next round. Well, let's say the next round is $3 million. Well, then how do you do that? They have the entirety of the next round. If the next round is 15% of the company and they get to put $3 million and somebody gave you a term sheet, they get to steal that term sheet out from under them. So it really is the scale of it. I think if it's really tiny and you're saying, hey, I own 1% I want to go to 3 or I own 2% I want to go to 5. I don't see much of a problem there. If it was, hey, I own 5%, I want to go to 20% guaranteed or 15% guaranteed, that could screw up the entire round. There's no room for a new investor. So you just have to be careful, consult with an attorney, obviously in these cases. If you don't need to give that right and you're oversubscribed, then don't give it. If you're a venture firm in your seed stage, I like the idea of you going for a brand. And I think it's a clever idea. And for the founders, if you got early support and the person said, hey, listen, it will really help me if in the next round, I can increase my ownership percentage. Can you just give me 72 hours to give you a yes or no? It's very little skin off your back. And you can just say to the new investors, listen, Brandon or

J-Cal gave me a ton of support. They owned 2% of the company. I told them they could go up to 4% in this round. I'm going to, you know, live up to that obligation because we wouldn't have gotten here if it wasn't for them. So if that's what he's talking about? Yes, he said that that's what he was talking about. Perfect. Thank you. All right. I'll take one more since we're doing so good with these questions. These are great questions, everybody. Wow. Oh, it's from Bob G. Hey, Jason, I am a marketing intern. What marketing strategy do you advise companies to avoid? And which you're personally like most. Okay. So the most important thing with any marketing strategy is that you're iterating on it and you're taking an iterative approach. What do I mean by this? Well, you're

kind of testing it. So as but one example, inside.com, the other company I run in addition to this week and startups and launch, launched a job board. So, I said, it'd be pretty interesting if we mix the news at inside.com slash crypto or inside.com slash AI with jobs and questions. So I just had this vision. What if like LinkedIn, Quora, Reddit and, you know, a job board had a baby? What would that look like? That's inside.

And it's my topic. So really interesting, right? Inside.com slash real estate or RE could have real estate jobs, could have questions about real estate, the industry I'm talking about, and news stories. kind of an interesting, you know, popory of items. So I told my team, when we launch us two weeks, let's try a couple different strategies.

One of them is we're emailing people directly and saying, hey, you're an HR manager at this startup. You can post your jobs for crypto here free. And so I just ask people, hey, can just email 10 people a day and report back to me what happens? And after you get to 100,

tell me how many of them replied to you and how many of them clicked the link and how many of them went there. So the best marketing are when you would look at that and say, hey, we emailed 100 people who were in HR, and two of them posted a job, 2% response rate, and 10 of them hit reply. Okay, that's one strategy.

I took another strategy where I told them, hey, go and find really interesting jobs that relate to Disney, because we have a Disney topic, or relate to NFTs, and post those jobs ourselves. So we would post the jobs on behalf of the companies. And then the next thing I'll try is email them and say, hey, we posted your job over here because we thought it was interesting. So if you think about it, like a news story, you could post it. to Reddit a news story or to hack or to hack or news. You can also post a job. Well, why does the person

posting the job have to be the person to work there? So I'm trying three or four different marketing strategies and then iterating on each one and we'll drop some that don't work. So it's really the philosophy at which you go forward with this. PR is another one. Some people just give 25K to a PR firm and they don't get any response. A better thing might be to say, you know what, I'm going to hire a great writer to work with our founder and CEO. And I'm going to have that writer. I'm going to pay them $2,000 for each blog post they write. And I'm going to ask them to write two blog posts a week. So we're going to spend $100,000 a year.

We'll have three different writers. We'll write 100 of these. And then for $100,000, we'll have all this great. Is that right? No, $200,000. It was $2K. Let's say it's $1,000 for blog post. That would be more realistic.

So $2,000, $2,000, $2,000, $52 weeks a year, $10,000. You take two weeks off, $100,000. That $100,000 versus $300,000 for a PR firm, I bet you the $100,000 spent on 100 articles at $1,000 each would do better than the PR if you picked great topics. So there is like a really good debate you can have internally. Hey, if we want to get press, how are other people getting press? Are they getting a PR person to email me?

When a PR person emails me and says, I want to have my person on this weekend startups, I have a canned response that says, oh my God, thank you so much for thinking of us. There's like a really nice, you know, piece of bread. And then I say, but we don't take any pitches for the podcast. Can you please take us off your, can you please note this in your database? And please do not offer us any more clients. Thank you so much. Then, you know, that's the ish in the middle of the sandwich. And then a really nice, oh my God, thanks again for thinking of us. And then people are like, okay, thanks. But how do people get on your podcast? And we say, we select them. That's it.

So just so you know, like PR firms don't work for getting people on the really good podcast. What works? You having a really interesting opinion and you doing work in the world. And so, you know, somebody like Pomp, as an example, he does his podcast himself. And then after 100 episodes, it's kind of hard to ignore Pomp. He's doing good content on Twitter. He's doing good content on his podcast. If I am going to have somebody on to talk about Bitcoin, yeah, I'd love to have pomp on. He's great. He's good at being on air. He's got strong opinions. He's educated. That's actually a better way to become, to get press. So I think you have to look at each of these different attempts you're going to make, whether it's Facebook ads or social media.

and then you have to iterate on them and iterate on them and learn something as a group. And it almost never works the first try out. So you have to have a certain resiliency in marketing to do 10 iterations. So we had Rachel do meetups. The meetups worked really good. Then COVID hit again. And then it inspired me to think about meetups. And we're going to relaunch the meetups and have a really cool format that's going to be

Twist Live that we're going to start doing in the fall. And it's largely based on what Rachel learned, which is people want to hang out and meet other founders. So we're going to do a founder only meetup. And then we're going to do one for investment. investors as well, and we're going to cross-pollinate. So that was one of the big learnings. If you do an invite only or people apply to come to an event, like these meetups, if it's only founders and investors, it creates like this very weird atmosphere where it's like, wait a

second, everybody hears on the buy and sell side of the cap table. Ooh, interesting. I like it. So that's my best advice, is to iterate and you look at your last experiment and you say, how could we have done that better? Anybody have any theories? Let's try the next thing, the next thing. and it is super arduous and painful. So you have to accept that pain and accept that it might take you three to six months to get good at something, but if something does hit,

oh my lord, double down, double down, double down, into you can double down no more. In my career, it happened to be podcasting. Why? Because I'm a world-class shi-talker, and so here we are, I can talk all day long. Podcasting work for me. Most people are terrible at pocket. You listen to the Andreessen Horowitz podcast.

It's like unlistenable. Why? Well, the smart people, but they're just not entertaining and they're not well-spoken in most cases. So most people shouldn't do podcasts because they're not good at talking. They're good at other stuff like investing in companies.

They're building them. So everybody followed me down this path of like, oh, if you're a VC, you have to have a podcast. You don't. You could write blog posts or you could host at conference or at dinner. Or you could host dinner parties at your house. There's other things you can do to increase your profile. You can go on CNBC.

Different people are good at different things. And so really also think, what do you love to do on a marketing basis, right? Some people like to do big events, some people like to do small events. Jeremy Allaire just invited me. He's going to do a big crypto event in San Francisco. He's like, hey, you want to moderate something. I'm going to have 3,000 people there.

Like, okay, Jeremy, that sounds like an interesting opportunity. Sure, maybe I'll get involved in that. Other people might want to do a three-person dinner or a 30-person dinner instead of a 3,000 person event. So you got to think this through yourself. What are you good at? And then are you willing to iterate, iterate on it? Great question.

Okay, I think I've done a ton of question. Okay, did you have wildcore question? Okay, Zen Prof, guest, how is the election? bike effort going. This has been amazing for me. Life changing. I have a rad power bike. That was amazing. My 12-year-old could jump on the back of it. It's got like one of those flat seats. So I got the rad power like the crew. It's like a general bike. I don't know what the name of it is. But then I got the wagon. Now the wagon has a cage on the back where I can put my two six-year-olds in. So I take them down to ice cream. I got this giant like motorcycle kind of ride. Beautiful.

But then I was like, you know what? I got the mountain house up in the Tahoe. Lake Tahoe area. I'm 51. I want to be in the best shape of my life this year. I lost the 40 pounds since the peak weight. I did 40 days of skiing. Now I want to use this bike. I think I want to get 20 rides in the summer. That's going to be a hard thing for me to do. I did my first one yesterday with Brian Block, who is one of the co-founder of Engadgett and also the co-founder of Begin.com, a company I'm an investor in and on the board of. And we went out and I got this turbo-levo, specialized monster of an electric mountain bike. Holy cow, is it mind-blowing to go off-road,

but to have this extra power. And I did like an intermediate trail, and I got little mountain kisses. Like I got scrape on my arm here. I scuffed my leg. I went down on the bike twice. Not like crashes, but like I went up a big boulder,

and my bike went backwards, so I had to just like lay it down kind of thing. Rip my leg up. It was fucking great. And then you can go up these hills, and you're outside in nature, and it actually is just like skiing. I realize those are both incredible flow experiences for me. Skiing, I put on that, like I put on a little music.

I got a little dad speaker. I put on my jacket, and I just have dire straits, concerts from the 80s and 90s playing, and I just zip, zip, zip, do two or three hour skiing in the afternoon. And man, this e-bike, you're out in nature, and if you need a little extra power, you got it. So when we came back, there was this huge uphill. It just do-do-do-do. Put this thing in turbo mode, zip right up the hill. and my body feels great today.

I got a really hard workout, but I didn't have to destroy my body. And my friend, Ryan, was on a non-e-bike. He had one of Los Santa Cruz non-E-bike mountain bikes, and he was wiped out on this five or six-mile ride. The other interesting thing about this mountain bike is, there are these crazy maniacs who make the trails. So, like, the trails got, like, bridges

and I don't know what they call these swervy parts where you go up on the edge. It was awesome. I have to say, like, I literally am sitting here. I have two staff meetings today, but I'm on vacation. So I told everybody I'm going to, instead of taking full day vacations anymore, I take half days of work somewhere around 1230, like right now. Then I take the afternoon off. So this works better for me.

Work the mornings, take the afternoons off. Instead of taking two weeks of vacation a year, take four. But do half and half. That just personally works better for me because then I get out on the mountain, skiing or biking. I have all these amazing ideas. I have all this extra energy. So I don't like turning it off for two weeks. Does it work for me as a business owner?

Does it work for my brain chemistry? But the half and half? Ooh, yum, yum. And I am loving this specialized bike. It's super expensive. I mean, I dropped. I told my chief of staff presch, go find the best bike. Money is no object.

Because I'm going to be dead soon. I'm going to spend it on my health. That's my new view for my health. $9,000, I'm embarrassed to say, this bike cost. I was like, I could have bought a motorcycle or two. I mean, it's kind of crazy when you think about it. But the resale value of them, you know, goes down like a thousand a year based on my research and what I was told.

So if I use this bike for three years, then it's worth $5,000 or $6,000. If I use it for three years, you know, $75 a month to have the best bike in the world seems quite reasonable to me. And if it makes me healthier and it gives me joy in my life, well, you know, I go to dinner for 500 bucks or 300 bucks, I can go for a bike ride. You know, I think if I would have netted out, if I spend $1,000 a year on this and I go for 50 bike rides, it's $20 a ride. Who cares? You know, if I go for 100 rides, if I use it casually, not just from mountain biking, but for, you know, going to the store, which I have been using it to go for coffee,

10 bucks a ride, well, that's what an Uber would have cost or what, you know, owning a car would have cost. So I think e-bikes are going to change the world. I think we can reconfigure cities based on e-bikes. I am super inspired by them. I don't think it's a great investment. I'll be honest, because I think it's a dog and fight, but if you have not bought an e-bike yet, you absolutely have to go rent one, and it's a different experience because you get a workout when you want,

and you get transportation when you want, or anything in between. So going to a dinner, like, I like riding it to dinner. And then I ride home, and I'm like, you know, I had a lot to eat, I had dessert, but I'm going to get 20 minutes of workout at the end, but it doesn't have to be ridiculous, and I'll be sweating when I get home.

It could just be like a nice little, it's like the difference between going, running and going on a hike or going for a walk around town. You get to pick just by going boop, boop, you just pick what mode you want to be in. It is awesome. And so I highly recommend it. Mountain biking seems to me to be pretty dangerous. And I think there's going to be a lot of injuries. So I am taking the same approach I took with skiing, which is I'm just going to do 30% less than what I'm capable of. And I'm going to keep it safe and keep myself on the road. So thanks for the question. All right. That's a lot of questions. Do we have one that's

really great. Any other ones that are really great? Noah, Wagman asks, when Gen Z run startup has gotten you excited from the OK Boomer segment or from your SAV? You know, a lot of them have been smaller ideas, and so I think a lot of the founders have niche ideas,

and then they'll open them up. And so what I like to do is meet the founders, get the energy heat check, get the chip on your shoulder, the heat check. And then I like to see what their second startup is or where their pivot is. Because I think a lot of times young founders, and I'm seeing it in Gen Z, and I saw it in Gen X, we start with a smaller idea, right? Something that feels safer,

it's more intimate, it's personal. But then you're like, eh, I did that. How can I make something bigger? How can I make something bigger? I'm actually been thinking about this with the podcasting. Okay, I did this weekend startups. I created a, you know, a startup that's a podcast that's six days a week that have an incredible like world-class co-host, Molly Wood, left NPR to come work with me. It's a big F-end deal. And then I started another one All In, and that became top 25 some weeks on the global charts. And it's, you know, incredible. So now I'm like, wait, I'm pretty good at this. So I have two more podcasts I'm going to launch in the coming weeks. One of them is going to be kind of a roundtable format like All In or like when I do a, the All In roundtable format originated with our News Roundtable.

So I used to have something called The News Roundtable here before I had the co-host concept with Molly. and the news roundtable would I just bring three people together, sometimes founders, sometimes journalists. So I'm going to watch another version of that. It's not All In. It won't be the All In Guys. The All In Guys, we don't have guests that often.

I think we've had three or four in the history of the pod. But there are people in my orbit from the All In Summit, from This Week in Startups, who I would love to do, you know, maybe have them in a rotating. So if you think about it, it might be like a little bit of a jam band for me

where I could have, I don't know, think of like Glenn from Redfin, who I really like, or Edina from Divi Holmes or Brad Gersner or, you know, pick people who you see me have on the show on a regular basis, Keith Rabeoy. There's all these other people who are like, if there's a core Avenger team of All In and This Week in startups, me, Molly, Chamath, Sacks, and Friedberg, you know, that's like this really hardcore group that, you know, are a good foundation. but then I got all these other people who are like the extended X-Men universe or the extended Avengers. So the next podcast I'm going to launch is going to be a weekly roundtable, but on a specific topic. So all in is about all topics. This next one is going to be, okay, we're going to do three people talking about real estate, three people talking about crypto, three people with me talking about energy, right? So imagine like topical, but one topic, three people. What do you think

of that idea? Tell me, rated on a scale of one to ten. And then I've got another idea that I'm not really to talk about yet. That'll be, well, actually, I could just say it. The We Live in the Future segment that we love doing here so much, I want to make that its own standalone show. So we live in the future.

You guys love it so much. I would like to have Molly or myself or Friedberg or somebody go out and do on-site visits where we talk to, we go to a nuclear power plant or we go to Jobi and we experience the VTOLs.

And I'm thinking about we live in the future, which I've, you know, got W-T-I-L-F. No, we live in the future. W-L-L-T-F.com. I have that and I have the IP around it. So I'd like to either do that on TV, like a Netflix series or an HBO series with me as the host. Or I'm going to just, I'll pay the bill myself and I'll make my own kind of go visit a cool company. So what do you think of my two ideas?

The other one is like the roundtable, let's call it. topical roundtable or topic-based roundtables is idea one. And the other one is we live in the future, but with like a visit to the actual place that's making the future. Which of those ideas do you like? Which of those ideas do you like? And rate each idea on a scale of 1 to 10. I just want to see the audience reaction here.

I'm going to take a look at which one you like better and what you think of my ideas. Positive forward looking. I'll take out a loan to help with the startup costs. Maybe some health or biotech topics. That would be great. Yeah. We Live in the Future is brilliant, encompassing J-Cal Brand. Oh, thanks.

is it a problem that not even you can get letters straight in your brain? Yes, it is. And what about an underrepresented podcast? Brandon, you should launch that. Or, yeah, for me as a white dude to launch it, I don't know how you would feel about that. I sometimes get criticized when I do something in diversity and inclusion and people are like, how come the white guys doing that? And the white male, cis white, white, and people start yelling at me and they call me a cis white male. I don't know what that means exactly. I know the white part. And I'm like, okay, maybe you should do that.

Maybe a person of color should do that, a woman of color, somebody who's not cis, I don't know. So we need both sides to the table. Yeah, I mean, okay, let me ask you this way, Brandon. People of Color version of All In or This Week in startups. Executive produced by Jason Kalakanis. How does that float? Is that opening me up to a bunch of people just

totally savaging me or they're like, hey, J-Cal, here's a cookie and a star. You're really great. But anyway, I think, you know, if you find out you're good at something, I think keep pulling that string. I found out I'm kind of good at creating brands, like Engadget, this weekend startups, Mahalo, inside.com, joystick, all-in, launch festival, TechCrunch 50. I just like making brand. I also enjoy making brands. So I want to create two brands a year, I think. would be enough for my brain. So all in last year, inside. This year I got the two new podcast ideas.

And I did it all on Summit. That was a new idea. Just had people of color to the already popular platforms. I do that already. Yeah, we do that already. And we actually made some progress on that with All In as well with the Summit. So all right. Great job, everybody.

That's enough show for today. Rate the show on a scale of one to ten. How did I do solo Dolote? We're back to the future. Remember I used to do this solo every day? It actually gets my energy going some solos. So I think when I launched these new products, I may do a solo day once a week and let Molly do one of the other shows so she can stay focused.

A three. Okay. Well, thanks. I guess that's on a scale of one, two, and three being six, 12, 10. Okay. I'll take it. I'll take it. Tell me how to improve it.

Great work producers. Yeah. We were a little short staff today, if I'm being honest. Rachel, you did a great job. Rachel and Alex did a great job. I knew you could do it. Bill McCabe gives it an 11. I don't know if that's my cousin, Billy.

If it is my cousin Billy We were like best friends When we were kids We used to be really into Star Wars And starting businesses And hanging out So love you cousin Billy If that is in fact my cousin Billy

If it's another Bill McCabe It just got weird So I love you too It is my cousin Billy Okay Who's uh Wait one of his kids is interning Which of your kids is interning

Cousin Billy We got a two week internship for my For one of them I guess he's kind of like my nephew I don't know what you call it second cousin or a nephew. I guess Bobby is working here for two weeks. So you better give him a hard time. Make that kid work. If he doesn't cry to his dad, then I didn't do my job. So you better give him some work to do after he's done with work. Give him some homework to do after work.

We've got to break that kid. Okay, everybody, thanks for listening before I go. I wanted to let you know about the 12-week Founder University. Founder University is a program. We put together to guide you through the early stages of company building. If you have an idea, you want to build an MVP, maybe you started building an MVP, you don't have to be incorporated, you don't have to have raised money, you just have to be somebody who wants to be a founder. That's why we call a founder.com. So we're going to help you get your MVP live, maybe help you win some of your first customers, and gear up for fundraising and future growth at adding team members. This third cohort, the third time we're doing it starts on July 11th, 2022. You go over to course.

founder. Dot, university to learn more and apply. Or you can just go to founder. Dot university. I'm sure it's linked to from there. And we basically do it for free if you come to 10, 11, 12 of the 12 weeks. So if you pay the 700 bucks to come to this class and you come to 10, 11, 12 weeks of the program, you can have an excused week or two.

You've got kids or you get sick. It's totally cool. But we want you to finish the 12 weeks. When you finish the 12 weeks, we give you the $700 back. So we, Shreight must think we're crazy because we have literally hundreds of thousands of dollars come in for the course and then hundreds of thousands of dollars flow out when people finish the course. And it's just a way for you to have a little skin in the game. So I really love this program. If you can't afford it, find a friend who will give you their credit card

for 12 weeks. And then you have skin in the game. So I want to see you take some risk here. But it's a great program. I spend two of the weeks with the folks to take pitches. And we invest 25K and typically five to 10 of the graduates. So it's a way for us to meet just future founders. We give them 25K at a $1 million valuation to set up their company, like 2.5% of the company for 25K. That's a great deal for us. It's a great deal for you. We take all the risk of giving you money to set up your incorporation, et cetera. It'll be just a great time.

I guarantee you're going to love it, founder. Dot University. And don't worry, Molly, we'll be back tomorrow for another amazing episode of This Weekend Startup. See you later. Bye-bye.