This Week in Startups - Google weighs $23B for Wiz, startups in a second Trump admin, and Sequoia's Stripe sale | E1980

Episode Date: July 15, 2024

Todays show: Alex Wilhelm joins Jason to discuss the role of social media and rhetoric in spreading conspiracy theories in the wake of the attempt on Trump (5:43), Silicon Valley's political landscape and views on Biden and Trump’s policies (20:14), Sequoia's strategy with Stripe shares, secondary markets, and private investments (50:00), and more! * Timestamps: (0:00) Jason and Alex kick off the show (1:57) Reflections on the assassination attempt on Trump and media cycles (5:43) The role of social media and rhetoric in spreading conspiracy theories (10:02) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at http://www.Squarespace.com/TWIST (11:19) Political implications of post-shooting events and allure of conspiracy theories (20:14) Silicon Valley's political landscape and views on Biden's policies (22:31) Intercom - TWIST listeners can get 90% off Intercom’s platform at https://www.intercom.com/twist (25:03) Trump's policies and their impact on Silicon Valley and startups (33:31) Lemon.io - Get 15% off your first 4 weeks of developer time at https://www.Lemon.io/twist (35:00) Market conditions, Google's potential acquisition of Wizz, and cybersecurity (47:02) State-sponsored hacking and the complexity of cybersecurity (50:00) Sequoia's strategy with Stripe shares, secondary markets, and private investments (1:01:02) The evolving role of secondary markets in venture capital and problem-solving in capitalism * Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com/ Check out the TWIST500: twist500.com * Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * Mentioned on the show: Check out Polymarket trading data: https://polymarket.com/event/will-biden-drop-out-of-presidential-race?tid=1721076355768 Don’t miss the WSJ’s big Wiz scoop: https://www.wsj.com/business/deals/google-near-23-billion-deal-for-cybersecurity-startup-wiz-6 Alex’s take on the deal https://www.cautiousoptimism.news/p/why-google-may-spend-23b-buying-wiz The Axios piece on what Sequoia is cooking up for Stripe shares: https://www.axios.com/2024/07/15/sequoia-capital-stripe And you can find the OneStream IPO docs here: https://www.sec.gov/Archives/edgar/data/1889956/000095017024083395/onestream_s-1a.htm * Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm/ * Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis * Thank you to our partners: (10:02) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at http://www.Squarespace.com/TWIST (22:31) Intercom - TWIST listeners can get 90% off Intercom’s platform at https://www.intercom.com/twist (33:31) Lemon.io - Get 15% off your first 4 weeks of developer time at https://www.Lemon.io/twist * Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland * Check out Jason’s suite of newsletters: https://substack.com/@calacanis * Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com * Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

This also leads to a lot of questions about the failure of what happened in all of this, because now you have all this information. Like, how did this person get on the roof? Is the Secret Service qualified? Why did they let Trump get up three or four times to pump his fist when, like, there could be a second shooter? Like, all of this is, are all valid questions that will be answered in time. But the idea that this person is the vessel of a grand conspiracy theory is kind of hard

to believe. I mean, maybe it's a 1% chance or 0.1% chance. But this is the world we live in. Everybody wants to process information. Just if you're listening to this and you're wondering how to manage media, understand that you get to watch citizen journalism and conspiracy theories figure it out. Sometimes they'll be right and split the arrow like a miracle. And 99% of time they're going to just be totally jumping the fence and making no sense and being complete lunatics.

Other times they're going to win a Pulitzer and they're going to break the news. So just be media savvy folks. This weekend startups is brought to you by Squarespace. Turn your idea into a new website. Go to Squarespace.com slash Twist for a free trial. When you're ready to launch, use offer code Twist to save 10% off your first purchase of a website or domain. Intercom. Intercom's AI First Service is the best thing to happen to your customers since you.

Twist listeners can get 90% off Intercom's platform at intercom. slash twist. And lemon.io. Higher pre-vetted remote developers. Get 15% off your first four weeks of developer time at lemon. at lemon.io slash twist. All right. Everybody, welcome back to this week in startups.

It's July 15th on a pretty consequential day. Alex Wilhelm is with me again. Welcome back to the program, Alex. Hey, yeah, not much going on. Not much happened in the last couple of days. So I don't even know how we're going to fill the show today, Jason. I just, like, there's a real dearth the things to talk about. I mean, there's so much to talk about. And I think maybe talking about this assassination attempt on President Trump is

something we just got to say at the top of the show here. Obviously, this is incredibly tragic, horrible day for America. I remember the assassinations of John Kennedy, the attempted assassination of Reagan, Ronald Reagan. And this is just horrific. And the rhetoric and the politics, obviously a lot's got to change here, but we've been through this before as a country many times. I remember growing up and my parents and grandparents telling me about JFK, RFK, Malcolm Max, Marley Luther King, and all of those horrific moments in time that they live through.

I just want to say up top, you know, incredible tragedy, this father who was killed protecting his family. And of course, the president almost just by an inch, missing, being murdered and assassinated. This is absolutely horrible. There's no place for this kind of violence. And we live in a very fast processing media cycle. The time between Alex, something horrific happening and memes being spread and jokes being

spread is instant now. Like, literally, when I found out about this and I pulled up X, formerly known as Twitter, which is like the place to kind of get, you know, the first. pulse of what's going on instantly, at least. It was literally a third jokes, a third partisanship, and a third conspiracy theories. I mean, it's just everything. It's everything. And when you run a platform based on freedom of speech and that has anonymous accounts like Reddit, like X now, you're going to have a lot of sorting to do. And so I have a lot of thoughts on the rhetoric and how to change this, but I just want to say, thank God he wasn't killed. It's just so horrible that somebody was

killed and, you know, there's a lot of patients that is required in a breaking news environment that no longer exists. We've opted as a society to just go full bore into investigation mode. I want to talk about that as well and conspiracy theories. And then this one is just custom built for conspiracy there is. But yeah, where were you when you found out and how are you feeling today and what do you want to talk about in terms of this story? Yeah, I was logging on to play Xbox with a friend. It's how we stay in touch. Like, we play Xbox once in a while and just chit-chat.

And I was on Reddit and I saw something that was like, someone just tried to kill the president Trump, former President Trump. And I was like, huh, well, I've only seen it once on some random somebody, it can't be true. And then I put it on my headset and played video games for an hour and a half, came back to everything. And you know what I did?

I didn't say much. I didn't do much. What I tried to do was what I considered not to be my, own emotionally mature response to whenever breaking news has happened, emotions are running hot. People are popping off a little bit, which is sit back, wait. I've been through enough live shooter, Twitter moments, schools, now politicians, et cetera, to know that things tend to get a little weird before they settle down and the facts come out. So I hung back and didn't comment.

I waited until I think Obama condemned political violence and he had a relatively reasonable middle of the road. statement. I'm like, good, that's good for me. Reach me that, re-x that, repost that, whatever. But I was trying to make sure that I didn't stick my foot into, I mean, gun policy, the current state of democracy. It just didn't seem like the right moment for me.

No one was waiting for Alex to come out and make a statement about this. I hung back. Things have calmed down a little bit, it seems. I think that's kind of where we are today. There's two ways to approach this. I think there's the social media conspiracy angle that we're going to get on first, and then everyone, we're going to talk a little bit about

what this means for the election because it's going to impact startups. We have a couple notes about that. But Jason, I want to start with you on the conspiracy theory, citizen journalism side. Yeah. Let me just give a statement on rhetoric and get right into that because it kind of dovetails. On the rhetoric side, you know, both candidates now and their parties are playing a bit of a game now of whose rhetoric was serious and an instruction manual. And then whose rhetoric was, that's just a first. phrase in common English language, right? And when we talk about rhetoric, you and I could have a

reasonable conversation and say something like, this person's in the crosshairs, you know, I don't know, somebody who is, you know, Elizabeth Holmes is in the crosshair of prosecutors. And it's a phrase and nobody in their right mind. And that's a key word there in their right mind. Yeah. I would say either of us or anybody is advocating for the assassination of Elizabeth Holmes from they're in this. And if somebody says, like, they want to be a dictator for a day, and then another person says, he said he wants to be a dictator for a day. And, you know, you start to have everything escalate, escalate and become weaponized because people are trying to build a case against each other for who should run the country. There is another small group of people in the world who are mentally

ill. And when given inputs, they don't interpret them like a normal person. The idea of comparing somebody to Hitler is such a trope on the internet that there is a law, Goodwin's law, which basically states you can tell when an online community hits any amount of scale when somebody refers to somebody as Hitler. Literally, it's a known phenomenon that eventually everybody gets referred to as Hitler in an online debate. Okay. But when it comes to sick people, they will interpret things. Their dog, totally. them something, a celebrity told them something, and they're sick, right? They're literally, their mind is sick.

And so if we want to actually have this rhetoric come down, and we want to address the fact that adults can have conversations that use language in a certain way, rhetoric, sometimes it's violent in nature, we use it in startups all the time. It's a war. We're going to go to war. Time CEO, Peace time CEO, etc. Peace time. See, all this stuff is just, you know, there flourishes of language that, you know, nobody, again, right mind would take seriously. But if we want to try to not inspire people who are

suffering from acute mental illness, which is a very small percentage of the population, and it's a very small percentage of that population that would ever act on it, but in aggregate with 300 plus million Americans, even if it was 1% of people are sick, and it's more than 1%, but let's just go with a number 1%. That's 3 million people. And if 1% of those people would actually act on it, that means we have 3,000 people who might actually do something in the world.

Now, then this is called the law of big numbers. And that's the reality we face here when we have a situation like this. Where are you going with this? Because you're walking me in a direction. And I'm curious where this train gets off. I'll land the plane. Which depot?

Yeah. Here's the depot. Leadership. Okay. If Trump and Biden want to show leader, They have to say, I am no longer going to use any of this rhetoric. My opponent in this race is agreed with me, and we both agreed that we're not going to use certain rhetoric. And that the people who are on our team are surrogates, people who work for us, down to the intern, if they use any

rhetoric that falls into these categories, they're immediately not going to be team members anymore, i.e. they're going to be fired. Yeah. And that would actually be true leadership. But I have not seen that for either of these leaders or their surrogates or their teams. What I've seen is them dig in and say, you started it. You're wrong. You called him Hitler. You said you wanted to be a dictator. So do you want to be a dictator? And they're just going back and forth and back and forth. Okay, the internet has never been busier. Everybody's creating new websites, new products, new services. And search is changing. Search engines want to keep visitors captive. And AI generate content is creating so much noise that you're going to have to be.

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go to Squarespace.com slash twist to get 10% off your first website or domain purchase at Surespace.com slash twist. Let's stick to prayers for a minute and to focus this down because who counts as a surrogate can be a squishy thing. It's like, what's an AI startup? Well, it's people who say they're an AI startup, sending the surrogate to some degree. So when it comes to the post-shooting rhetoric, Democrats have been very Biden gave a speech,

paying this is terrible. Everyone came out and said, this is terrible. Yeah. Have you been reading Trump's through social posts? When it comes to both sides, to me, in the wake of this tragedy, it's not exactly a level playing field between the two when it comes to rhetoric. Now, I'm not going to say, who's right about, you know, whose surrogates were worse. In the case when you're the victim of the attack, I think a political operative would say, now you can use this to win the election. And a political operative, at least the ones I've heard, you know, who are willing to speak on it.

A political operative would advise the people who were being accused of creating the red. rhetoric to be silent because there's no upside in talking. And then the other side would leverage it to get as many votes as possible. So I think that's the that's the that's the and so there we are. We're back in strategy. I don't think this is going to change if I'm being totally honest because I don't think people are aware enough. No. And humble enough and ethical, moral enough in politics. I think partisans are built different. They look at every tragedy. every horrible thing that happens in the world that's an opportunity.

Yeah. And so this whole expectation that this is going to change and the rhetoric will change, I don't think it's going to. Because they are going to use this to the health to win their election. Both sides.

Well, I think the Democrats are seizing this moment by giving up, as far as I can tell. But this is also showing up inside of the technology community. Yes. Owen McCabe, who we had on the show recently,

I know because I wrote that notes docket. I'm not going to share his conspiracy tweet about the shooter revving handlers. I think we all know what he means by that. But I do think that as we sit here and discuss this, it's a good moment for some introspection. And if we can't expect much from our elected leaders, current, former or future, we can at least do it a little bit more from ourselves. Yeah. And I got to say, we're doing poorly so far.

Yeah, for sure. bit of a mess. And it's usually a mess. This takes us to the conspiracy theory. So what do you? Why does this, I'll ask you a question. Why does this situation evoke so many conspiracy theories in your mind? Take a moment to think about the question.

There's a lot of history here. Why is this one making people who are completely intelligent, thoughtful, immediately go to conspiracy theories, this moment in time? I think one thing that's different about the modern era compared to the old. day is just the amount of information people have to process on their own. And we're going to get to your video here in a second. I think that it kind of makes this point. But it's pretty easy to create conspiracy theories when you have 84 angles of every single thing that happens and you can say, well, I think that thing. Bingo. Also, I think a lot of people feel very plugged into the

world and very much not able to have an influence against it. And one of the best ways conspiracy theories were ever explained to me was it's a way for people to feel like they have control, that they can see behind the curtain and then they are in on it. And so with something like this is going to, with the amount of information we have about their images, videos, etc., is going to engender quite a lot of less than salubrious takes.

And I don't think anyone is immune from falling prey to this type of thinking. I think we need to be rigorous against it. But let's watch your clip to make this point. Well, and the Sapruta, you make, to make it a really good point, does a Pruda tape of the JFT

K assassination was studied frame by frame. And now you have 100 iPhones, 100 media angles. So now there are, and it's in 60 frames per second, 120 frames per second. So now you have even more source material. Yes, and more platform. And more platforms, yes. The cranks had to send out literal physical newsletters. They had to mail people their cranks views.

Now you can get on Twitter or TikTok and you can get paid for it. Correct. So anyway, here's a clip of people who are, are wondering, and this has been seen over 20 million times. Watch. She sits down. Yep. Watch us.

If you want to put the sign up. Take a look at what happened. Shots for us. She's completely normal. And then watch. And then she's got her. What the fuck? Okay.

People are freaking out. And she's building. And she's just like right there. Okay. So what they have here is nothing. And they've spun it into this woman is a collaborator. A plant, collaborator. She's like a what, a shop?

Like, why would you put a collaborator right next to the guy you're shooting? And this is what happens in a vacuum. I think when you don't understand what's happening and you have like a desire to resolve a situation, this is why true crime has become the like number one category in podcasting on Netflix. They can't get enough of it is because the human mind likes to solve puzzles. We're like puzzle solving primates. And here we go. This woman ducks.

is confused and then immediately reacts by taking a video. By the way, that's like you have somebody in your family who's that same person, who their first reaction to everything is taking their phone out and documenting it. And all you need to know to understand this phenomenon is to look at like one of these videos when some crazy person jumps the fence and goes into a lion enclosure. And then you look and there's 30 people videotaping a person being bald by a lion. Right. And you're like, what's wrong with you people? It's just some natural instinct. I have to capture this.

Whether it's my kid being cute or a lion-mulling a person, it's a human instinct to document this for whatever reason and become famous. But this also leads to a lot of questions about the failure of what happened in all of this, because now you have all this information. Like, how did this person get on the roof? Is the Secret Service qualified? Why did they let Trump get up three or four times to pump his fist when, like, there could be a second shooter? like all of this is are all valid questions that will be answered in time but the idea that they used a 20 year old mentally ill clearly loner bullied child who is now 20 years old who is just father tragically bought on the AR 15 apparently the fact that like this person is the vessel of a

grand conspiracy theory is kind of hard to believe i mean maybe it's a 1% chance or 0.1% chance but this is the world we live in everybody wants to process information just if you're at listening to this and you're wondering how to manage media, understand that you get to watch citizen journalism and conspiracy theories, figure it out. Sometimes they'll be right and split the arrow like, you know, like a miracle.

And 99% of time they're going to just be totally off the, like totally, totally jumping the fence and making like no sense and being complete lunatics. Other times they're going to win a Pulitzer and they're going to break the news. So just be media savvy folks in a breaking situation. Be able to take a break. That's another thing. I think, I think especially people, if you're listening to Twist, you are a person who likes the news.

Jason and I love the news. Honestly, the first thing I do every morning is I read the news. And the last thing I'm doing before I go to bed is I read the news. I love it. I love being plugged in. I love to know what's going on. But even for me, who is someone who's so broken in that way, there are times that I'm like, honey, you need a break.

Because right now you are feeling all the feels about a thing that you cannot impact at all. So sit down, go hug a dog, go hug your children. Yeah. Take a walk. Come back and sit down. I think it's a great time to touch grass, I think for everybody out there. Jason, there's another angle that we're going to discuss here, which is that in the wake of the shooting and the president escaping with only very minor injuries, his chance of

being reelected has gone up according to the betting markets. You and I both watch Polly Market rather carefully. Two data points for you. First one is that the chance that Biden drops out seems to be trending down. I'm going to give you a pass on hotswop summer, given that no one saw this coming. But people now definitely, definitely expect that Biden's going to stay in much more than they did before. And then the second chart we have here, it's a table, actually, shows that Trump's chance of winning, again, according to polymarket bettors, has risen to 72% compared to Joe Biden's currently 18. And then the balance there is smaller and more fringe candidates.

So the reason I bring all that up is that folks think that there's a much higher chance now of Trump getting the second term and kind of a good time to dig through what the policies are. And I tried to do some of that for us today. But one thing you have that I have less of is some friends who are big fans of the president for President Trump. Yeah. So I'm curious when they're combatsy over barbecue and chatting with you in Austin or in Cali or wherever, what are the policies that they're hoping to see come into play? because that's kind of the positive case here, if you will. So I'm curious what they say. Yeah, I'll just speak frankly of it and tell you what is said in the room where it happens,

so to speak. So I won't speak for anybody else, but I'll tell you the vibes. The essential vibe is Silicon Valley is a libertarian place more than anything, less regulation. And if they worship at an altar, it's the altar of innovation and entrepreneurship, capitalism, products and services, making the world better for humanity. And that science, technology, and entrepreneurship can all make the world better. And that politicians generally make it worse. Generally, how people feel.

No, no, no, I think that's correct. I just like the way you phrased it. But yes, that is, that tracks. Right. And I'm sure politicians might feel the opposite, right? And some politicians might feel the opposite. You can, of course, make your own judgment as to what's done better for humanity. The relentless pace of new products and services available to you for,

everything from Ozzympic and Wagovi to air conditioning, you know, to the internet. And then government's role in the internet and creating it, you know, I go ahead have a great debate about it. But on a pragmatic level, most people would like a moderate who stays out of the way of business, whose pro-growth, lower taxes, lower spending. Now, which party defines that depends actually on where that party is in a moment of time? If you look at Clinton and Obama, I think these two presidents were very pro-capitalistic presidents. You took the two Bushes in there. I think they were also very pro-capitalism and maybe even more, less regulation, less environmental controls. If you put those four in and you looked at their policies, Obama, Clinton, and the two Bushes,

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love startups and innovation as much as we do. So go to intercom.com.com slash twist. to apply. Or if you prefer, you can just do an email at startups at intercom.io. That would be a fun game, actually. Right. Because I know what you're saying, and I agree with it directionally. I would quibble a little around the edges, but now I kind of want to see how well I would do. Anyways, keep going. So if we were to look at that, you know, they were not extreme, right? And I think the Silicon Valley diaspora, you know, and all the entrepreneurial enclaves in the country now, because it's really kind of split up and gone everywhere.

You know, their basic feeling is Biden is anti-capitalistic. He's pro-union. He's high taxes. He's more regulation, more spending, an anti-MNA. And they're just generally look at the current situation as a John Galtz, Atlas shrug situation. People in Silicon Valley believe what we're seeing under Biden is Atlas shrugged. That's what they believe. And to just to refresh anybody, it means capitalists and creators of jobs are diminished and

held back and the state is getting bigger and bigger and controlling and mitigating more your life. That's actually how they feel. That's interesting. Yeah. I guess I would get that. They see Trump as a sledgehammer and RFK. Those are the two that resonate most with people here. They see them as a sledgehammer, a cudgel, a weapon to break the system. Now, previously, Trump was untenable because of his style, abortion, Roe v. Wade, a bunch of issues, immigration. But Trump 2.0 has pandered to them, adopted their philosophies. And, you know, essentially Trump has embraced this group of people, technology, entrepreneurs, hedge fund managers in a major way to win the second election. So that's why they're all in on Trump.

So that's basically what I thought. That is a great summation. And I appreciate that you're pointing out that Trump's positions have catered in a certain direction. And my favorite example of this is crypto. Sure. Very opposed to crypto. And now he's all aboard. Yeah.

Trump is, one, the election he did because he was surprisingly good at speaking to certain audiences, and that I think remains a asset of it. The thing that I struggle with is when I compare what you say there, and I think it's, again, a correct summation of Silicon Valley thought. And what the party's positions are, to me, I don't see the connection. Because if you're worried about the state getting too big and taxes being too big, You have to be anti-tariff. And Trump is advocating for not only 10% tariffs around the whole nation, but 60%

tariffs on everything from China, which is going to be expensive and difficult and lead to a lot of trade disruptions around the world and such. And it seems to me, from where I sit, having prepped today looking for the, what's the positive side of this? I struggle to make the connection between the expectations and then the current statements of reality. Yeah. So what they also realize about Trump is he says bombastic.

things to pander to get votes. And that's, I think, part of, you know, his genius as a politician is he is incredibly good at telling you what you want to hear. A famous moment on the All-On podcast when Trump was on. And I asked them, hey, would you promise us that we could report to people? And he's like, I promise you. Like, boom. And he gave the caveat, because I happen to agree, but I promise you, we're going to get more people there. I wouldn't say it if I didn't agree, was the quote. I wouldn't say if I didn't agree. And so, you know, and then crypto people, the Winklevye's, uh, twins, Winklevye is plural for Winklevoss. Um, the Winklevye gave him a million dollars each or attempted to. I think they, they over donated even. And he just realized,

hey, crypto gets me, what, 3 million votes, 2 million votes. There's some number of Americans who feel passionate about this young people, millennials. Oh, TikTok is very popular amongst young people. Hey, maybe I'll switch my position. Um, and then I'll start using TikTok and I'll have Vivek, who is also anti-Tiktock. He started using it. So this is just a level. of savvy that they happen to have, and Biden's inner circle doesn't. The tariff stuff, they look at that and they're just like, that's just him saying he's going to, like, you know, blow up Russia if they invade Ukraine and he'll end that war. He's just being bombastic. That's the way he negotiates is with a crazy starting position, and then he works his way backward. So I think that's how Peter Thiel trained people

to take Trump statements, not literally, but seriously. Is there any value then for startup founders to read through the GOP platform. I guess I'm struggling then because it does mention tariffs and such. So what parts of it should founders think about? I think they should think about the fact that he will allow more M&A, he will lower taxes, he'll make rich people richer. And if rich people feel richer, they will take their risk capital and they will bet more on startups.

That's basically what's going to happen. So I tried to find anything on the FPC. And the current GOP platform that Trump's running on, by the way, it's called Make America Great to Get. It's his platform. It doesn't mention. Wow. Great brand. And yeah, well, I've been using that for a minute.

Pretty genius. So I went ahead and I went back through Project 2025, short day today. So I didn't get to do as much research as I wanted. But it was not nearly as opposed to an active hand preventing very large. companies getting larger as I thought it was going to be. So I wonder, and this is just me thinking ahead, if there's two camps that support the president, there's the conservative social right, the people who are very opposed to abortion rights and so forth.

And then there's the business lobby. And I wonder from which camp the next Lena Kahn is going to come from. If it's from the business community, Katie Borgor, Eminem and they all the, yeah. 100% business. The conservative Christians are very, very unhappy with social media, corporate power, and they want to make the internet a place that is much less freewheeling because they want to ban pornography and whatever they think counts as that and so forth. He'll just make those all state issues. That's his approach to it, which is he'll just appease them and say, you make a decision in your state kind of situation and keep. So he'll just appease them.

But it's all business all the time for Trump. You know, all business all the time. You're very confident. Yeah. That's where the donations come from. and he's already won the primary. So in primaries, he needs evangelicals on a strategic basis. He doesn't need to win primaries anymore.

He's the incumbent. So that's why you saw him say, I'm for all these exceptions. I did a great thing in overturning Rovi Wade. I gave it to the States. So he can change his position now. Now, if that was during his first attempt to win the nomination, he did not say things like that. He said things like how amazing it's going to be. when I stack the Supreme Court and overturned Roe v. Wade.

He's literally said that. He's not saying that kind of stuff anymore. So shocking, politician is telling people what they want to hear, and he's using different constituents to solve different problems at different moments in time. This election will be determined by moderates and women in swing states. And he has flipped on all of his policies on abortion. And he's flipped for, you know, 2.0 his business approach,

which is, I'm going to settle everything down. I'm going to be more presidential. I'm going to give you what you need to make things going. And everybody knows Lena Khan's not making it into the next administration. So for startups, it's going to get dramatically better. Well, in M&A turns, yes. And investment. And in rich people getting richer and then rich people having more money to put in risk capital.

The thing I'm going to say is a lot of people have thought that they were going to get what they wanted out of Trump historically. And they don't tend to. Example? Well, I mean, we just discussed the evangelicals. who have been backing him tooth and nail. And if you read coverage of the current GOP platform, there's a lot of angst, real anger from people who he turned on once he got their vote in the thing he needed.

And so my point is the very trend that you're saying is savvy also applies to the Silicon Valley libertarian right. Because once he gets their money, once he gets their votes, do you think he cares? I don't think so. I think he cares about business and money and fame above all else. Yes, but.

I think he cares about his business, his money and his. Sure. But it doesn't matter how I think about it. I'm going to be curious to see what if he wins. And as we said, current betting seems about a three to one chance. I'm curious to see how this plays out for people who are now backing him. And if they end up getting what they want and if the cost to other people ends up being worth it. Because one way that people expect Trump to balance the numbers here is to dramatically curtail spending on Medicaid.

Right. So it may get better. for certain wealthy people, but it's going to get assuredly worse for a lot of four people. And by the way, everything I'm explaining here is not necessarily, and I know people in the comments will say I'm endorsing any of this. I'm just telling you the actual strategy I've heard from people inside the halls of power in the group chats. You know, somebody added me to like a 200 person group chat of all these people. I took myself out of it just because it was becoming so distracting, a thousand messages a day.

But like, wow. And it was all the most powerful people in Silicon Valley, you can imagine, not the all in guys, but like the other group of people who you're very vocally on social media. And, you know, they're looking at this saying, hey, this is going to be great for business, great for business. And at the end of the day, entrepreneurs, capital allocators, whether private equity, venture capital, public market investors, they just want the conditions to make more money and pay less taxes. Right now, startups have to do more with less.

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visit lemon.com.com. The stock market's at an all-time high. Inflation is down. The U.S. economy is growing faster than any other development. And they just want to keep it that way. Add some M&A to that. I think really this entire election is going to boil down to. Lina Khan won't let us buy stuff or sell our stuff to bigger companies. And I want to have pointed this out so explicitly so many times. No, but I think it's incredible to me that even a even what I would consider to be a halfway mark towards how aggressive you could be on antitrust. Like, we're not saying we're going to break apart these companies.

We're just saying you can't buy things that are quite large also. That is enough to swing, I mean, a combined net worth of several trillion dollars in one direction. That's very interesting to me. And I think it says a lot about humans. But I think we can leave it there for now. Yeah, I think that's a pretty good half hour on what's happening politically and how it affects startups and venture capitalists. And we do this because it matters.

And this is what's going on. And these are the conversations. And now we're going to go back into just full tech mode. But the background of all the stuff is the rules of the road. And this is how they're set. So, Jason, Google might buy WIS for $23 billion. And I got to say, that is an enormous amount of money. and I knew about this much about WIS.

So I'm curious, have you ever seen a deck from WIS? Have you ever seen anything from the company itself? I didn't know the company WIS existed before I saw this headline. Got it. Okay. I feel a little bit less behind that. Which tells you something about the scale of venture capital and startups. You know, 10,000 startups get funded every year, you know, like serious funding from, you know,

serious people, like some level of funding. And maybe 1,000 to 2,000 of them are like really, really. you know, Silicon Valley type company. So you're going to start compounding that over time. There's tens of thousands of viable startups in the world in the United States specifically at any given point in time. And here's one that I wasn't

even aware of. So Wiz is an Israeli American cybersecurity company. Now headquartered it in New York, but with Israeli talent. It was founded in 2020 and it scaled to $100 million in ARR in 18 months. And then as most recently,

yeah, I was looking forward to that. And it's crossed the 350 million AAR mark, I think some quarters ago. So this is one of the fastest growing software companies of all time, period. And that's why people bid this up really, really fast. So December 2020, Series A, $100 million, Sequoia Insight Index. Then 2021, a two-part series B, quarter billion dollars, same names at Green Oaks and Salesforce. course, October, sorry, October 2021, $6 billion valuation, more capital. February of last year, $10 billion than this year, $1 billion at a $12 billion valuation,

Thrive, Lightspeat, and Dresen. This is a company that has raised $1.9 billion in the cloud cybersecurity space, scale super fast, and Google might drop, roughly, 64x ARR for this company, which I think says growth can still be profitable if you're the fastest growing company of all time. And also, well, Google has a lot of money, needs to do better in cybersecurity. So I can see why this deal makes a lot of sense. I'm just shocked that you can go from a $12 billion valuation earlier this year to 23 now. It just doesn't seem like time of the time. Yeah. And if you think about that investment, the IR, the internal rate of return is 100%.

Right. So the stock market makes seven, 10% a year. So this is why people do love venture capital. That last billion dollar a bet, although it's only a 2x. It's a 2x in 12%. months, which is 100% IRA. It's pretty juicy when you think about it, right? And venture capital firms tend to do 15, 20% IRA over the life of a fund, which is really juicy as well in terms of compounding. But this is like really great. Sometimes the last bet is the best bet in terms of IRR because of the time horizon, right? So you shorten the time horizon.

So it doesn't look like an angel bet where you do 50x, 100x, 200 times your money. It's only one X, but it's one X in one year. Pretty amazing. You know, cybersecurity is like one of these very boring, but essential and growing areas. When you see the AT&T hack that happened the other day or other hacks that have occurred, the fallout from those hacks is measured in hundreds of millions of dollars, typically. Some of them can be existential, could really damage a company. And so, yeah, I think it's an easy purchase for, you know, somebody with a company.

cloud business like Google Cloud, I think is the group that's buying it internally or Amazon Web Services. There was probably many suitors for this company. And in order to get a company growing that has plenty of cash in the bank to sell, you have to make an offer above market. So this is the wonderful thing about, you know, having a high growth company is great companies are bought not sold. Google wanted this before it IPOed. I'm sure there were other suitors like Amazon Web Services or Oracle Cloud, you know, which is coming on pretty strong or Azure and Microsoft. And this is the perfect example of a tuck-in acquisition, a mere $20 billion acquisition.

Put that under your arm. Yes, and carried along. I mean, the fact that $20 billion is considered like a medium-sized acquisition now, it just tells us something about the market. And let's see if some agency tries to stop it. I don't know why they would. Who cares is a $20 billion acquisition for a security company. If this company gets out to more users, more cloud computing providers,

that's arguably good for everybody. It's not like somebody can't compete against this product if it's bought. You know, it's going to be included in the Google Cloud package probably. Yeah. And be better for everybody. So M&A can be great for consumers. And that, back to our previous discussion, do you view the lens as like now all competition's going to end because of this acquisition?

No, of course not. And do our consumers harmed? Of course not. So this one is not going to harm consumers. It's not going to be a big deal. There's nothing to worry about. Boom. It's not like, gosh, you know, Facebook buying the two largest footprints of a social network

at the time, Instagram, and WhatsApp, you know, or, you know, an attempt to buy Twitter. It's not Adobe buying Figma. Come on. And even in that case, like, is Figma such, all due respect, such a unique product in the world that it can't be duplicated for free or very quickly by AI? And the features that are in Figma, could they not be done by an AI? in this next paradigm shift, of course it can. So, you know, this is where blocking, let's say, transactions under $100 billion, doesn't make much sense.

Under a Hyundai. Oh, I like that for any. On the price point, well, actually, I'm going to double click on that. I agree with you in this case. I think this is a fine acquisition and should be allowed through because Google's third place in cloud. And Microsoft announced last year that they had reached $20 billion in cybersecurity revenue in their last 12 months. So Google is fighting for relevancy here. And that's actually a place where acquisitions can make some sense.

Now, they might limit downstream competition in cybersecurity, but they'll increase competition in the cloud space making Google more competitive. Fine, I'm fine with that. The price point, though, I just pulled up some data of all the public software companies today in the market, in the top 10, at least three are cybersecurity, as measured by the most expensive forward revenue multiples. And so right now, if you're buying a company and you're buying a cybersecurity company, you have to pay top of market plus. It isn't like you're buying a SaaS company that would sell at 5x.

Now you're going to buy it for eight. You're going to have to pay up quite a lot for this. I think this is just tremendous. Yeah. Good sign for the economy. Good sign for venture capital. Good sign for the ecosystem that people don't want to just buy H-100s with the cash they have sitting on the sidelines. And so this is a very large acquisition.

I mean, it's a different moment in time. the economy is much bigger. But, you know, it has a lot of revenue. If you look at that bubble chart that shows, you know, the size of acquisitions. And so if you're not watching go to YouTube and type in this weekend startups, but you can see like the Nest acquisition and looker, Fitbit for $2 billion, YouTube for $1.7, $5 billion, 20 years ago. Oh, my God, that was 20 years ago. I know. So, you know, today, you know, we've been three times as much.

It would have been a $6 billion YouTube. you know, this is a pretty, it's a pretty juicy one. And the Motorola one was for buying a patent library that they subsequently sold. So just keep that in mind that that was like a collection of assets that got broken apart. So you probably would make, you probably look at that as like maybe half the size. But, you know, Google used to do a lot of these. Google used to do a lot. They used to be very acquisitive.

And they just, I think the last couple of years because of the EU specifically. And then Lena Kahn, that one, two punch has made them less. acquitted. But their last acquisition was Mandi and which was cybersecurity. So this is a theme now from the Alphabet Empire. I want to go and move to a tweet that we have pulled up from my friend, my friend Anshu. He says that cloud security is probably the biggest, the single largest TAM and software today. And that just got me thinking about where the biggest problems are in software, because I'm shocked that this company grew as fast as it did. Are cybersecurity deals like the dark horse of venture capital investing today?

Because oh my gosh, I'm blown away by it. You know, I think you're going to see a rush of venture capitalist taking meetings in cyber security. I thought I'd get away from this. It's like, huh, these things sell. People buy them. You don't have to go through an IPO or a SPAC and have the stock collapse. People pay a premium for it.

It's kind of like doing an off-market real estate transaction for a high-end home. Like, it doesn't make any sense. Like, how did this home go for so much in Malibu? it's like they're not making any more beachfront properties in California. There's a limited number of them. And this has to do really with two things that you have to keep in mind. One, our reliance and trust in online services to put so much of our trust in them. And so you look at something like that AT&T hack, imagine if everybody's text messages

were at least the damage that could cause. I mean, explosive. There could be, you know, 100,000 lawsuits that would emerge. from that. And so, you know, and the fact that AT&T is keeping text messages, like should you trust AT&T? Absolutely not.

You should be using some more secure, you know, messaging platform than AT&Ts, apparently. And then the second piece is the coordination of state-sponsored hackers, specifically from certain state. And that is why this industry is doing so well, because our government is not bombing the countries who perpetrate these, it's kind of hard to imagine, you know, us sending bombs into a country

that has nuclear weapons because they sponsored some terrorists to do something, essentially hackers, terrorists, to go do something like this, these things are arguably more damaging, not psychologically than a terrorist attack, but they're more damaging in terms of cost than an attack. So it's hard to frame a physical response to a virtual attack. The only way to do with it is with software and companies. We're not too far from that. I can't find the exact quote right now, but I was watching the Danish Prime Minister recently discussed this exact thing. She just says, you know, well, right now we're under cyber attack every single day from Russia. Yes. And China's been very active in this way as well.

North Korea's famous for its hacking prowess. And just to be clear, democracy's hacked too. I'm not trying to say that, you know, where our hands are clean here. Yeah, we have God on our side. Remember that famous Bob Dylan song with God on our side. We have God on our side. No, they're doing it for money. Or they're doing it to disrupt power systems and so forth. There's that too. Would you be in favor of? Asymmetric responses to state-sponsored hacking. Yeah, that's a, this is a question that nobody's been able to answer yet, because what if you do a physical real-world response, an asymmetrical one? And the other party says, oh, great, we'll respond too. We'll go kill some American soldiers.

So my gut tells me no. If I was president, would I do it? But I would invest deeply in cybersecurity, and I would do counter measures where we hacked the phones of their general. etc., which I'm sure we're doing in real time. I mean, we were doing it. I remember we got busted having spied on other leaders. It's in Germany? We had Merkel's phone. The Americans had, it came out

in the Snowden papers that we had to act Merkel's phone, I believe. I think Obama had to have a very awkward conversation with his German peer. Yeah, it's like, sorry we looked at your text if I've got it right, but yeah, that was super awkward. That was an awkward state dinner. Can you imagine?

How do you prep for that? Sorry about hacking your phone and cheating this entire time. I know we're supposed to be friends, but can we just let it go? We've got your nudes. Oh, no. I like who we got through the whole Trump section, I think, in good shape. And then when it came to Angela Merkel, go right off the world. I mean, it's literally, I think, what a lot of the compromise concept is,

is to try to get, you know, folks. And, you know, to bring up. The documents case, I think, was overturned today or something. I just saw the list go by. There's going to be quite a lot more coming there. I mean, there's going to be appeals. But even in that case, one of the things that they were saying was a certain French politician has a file. And Trump has that file and likes it to show it to people.

That's one of the accusations and that the file is about personal behavior of a certain state leader or something. A French politician who is. Yeah, maybe having a good time on the weekends. Yeah. I mean, that would be the first time in the history of the ground. There might be a couple of a. Italian politicians also known for having a good time on the weekends in their personal life. I think this reminds me that famous Buffett Munger quote when they're on stage at the

Berger Hathaway yearly. Bring their Stattler and whatever from the Muppets. I love that. And, um, great stick. Munger's like, well, then there was that, there was that country in Europe where they just threw all the mail away to get the mail, you know, delivery times down. And Buffett's like, oh, let's not go there. And then Munker goes, it was Haley.

Just shouts over the top. Oh, gosh. Yeah. Pretty great. It's like, hmm. Okay. Let's move on. This is a very important moment in terms of explaining the importance of mid-market acquisitions

in the ecosystem because venture capital right now is so, what's the word when you have, it's so constipated. It's got so much backed up here that I saw a headline that Sequoia was offering early investors in Stripe, I think a $70 billion valuation to buy out their LPs in secondary. These are called like these funds exist in private equity. There's a name for them, a strip funds where they'll go in and buy a strip of assets from a venture fund that's 10 years old and then, you know, basically push the can down the road, let another set investors take that off your hands.

Oh, absolutely. I wanted to talk about this next because I think it's such a great dovetail to what we're discussing. Stripe has not gone public. It is not sold. It is just sitting there, this diamond on the private markets. And so what Sequoia did this morning was they emailed their L-PATO, piece from funds from 2009 to 2011, and they're going to buy up to $861 million of

Stripe shares with more recent funds. And the reason for this is, if you've been sitting on your paper markup since 2009, and it's 2024, you probably want to see some liquidity. So Sequoia is saying, hey, we'll pay you 27.50 you want to share. That's from Stripe's most recent 409A valuation, according to Axios. So their 409A is now at 70, up from 50 last year, down from 95. at the peak, and then Stripe gets to stay private. Sequoia gets to keep its LPs happy-ish, and this deals with only about 10% of Sequoia's overall stake in the companies. So,

Sequoia still has, by my math, about $7.8, $7.7 billion left of Stripe stock to deal with. But, Jason, this to me seems like a financial engineer into a problem we didn't use to have. Correct. It's a solution to a problem that didn't exist because we had a more fluid IPO market. We had a more fluid M&A market. And so this is, what is it, nature finds away. What did Malcolm say in Jurassic Park? Life finds away. Life finds away. So venture finds away. Capital markets find a way. It's one thing that you were so busy figuring out if you could do it. You never asked if you should say, if you should do it. Okay, so here we are. So the if you should do it in this case, I got to work on my, what's that guy's name, Goldblum, Jeff Goldblum? Yeah, you're Jeff

So a problem accident might need a little bit of work. I need a little bit of work. I'm just workshopping it here on air. We're going to workshop it live. Why not? Working on live. Do you ever think maybe you should have done it? Anyway, here's the problem.

Set of LPs who are getting liquidity, new LPs getting to buy Stripe. You just have to make sure everybody's copacetic with this. That's the key. So now, let's say it's a new growth fund. They would love to get their hands on some pre-IPO stripe, right? late stage investors, we talked about the one X in one year, or maybe they get a 50% up, because this is that a 70 billion valuation? If it goes out at 100, where it hits 100 or 125 in a year, those people would be pretty happy with that, especially if they're public

market investors who are used to getting 7% or 10% or 12% a year in an actively managed fund. So you've got to find LPs who understand the trade they're making here. And then you have to make sure these folks don't feel like you gave their last. double up for their last 50% increase to somebody else. So I think, you know, I don't have any inside information on this, even though I'm associated with Sequoia and, you know, I have a relationship with them on a business level. I'm not involved in this in any way. I have no data on it. I do know when you have a transaction that has the potential to be conflicted, there's a very simple solution.

Everybody's got to sign off. Everybody has to be fully informed. That's why the price is released in this. That's why this story is being released. It's because, they want everybody to know they're doing this, why they're doing it, and those people understand the bet they're making. So if the people selling it think there's a double up here, they're not going to sell unless they need the money. And the people who are buying it, if they don't think there's a double up here, they're not going to buy it unless they think they've got a good opportunity here. So that's what you need to understand. If you are a neophyte, and you're not inside the venture or the capital allocation community, you would think,

Oh, they're just moving like a shell game. A shell game would be you don't know which shell the P's under. This is literally the P's on the table. We're weighing it on a scale. We're moving it. We're going to take your P and we're going to move it over here if you want to. So you can move your P from this cup that's upside down. The cups now not turned over.

Would you like to move your P? We're not going to move it. You have to move it. But you have this opportunity to sell the P if you want to. That's what's actually going on. here. It's not a shell game. It's a trade with the cups up. Everything fully documented. And I've been through this before myself, which is, could the same venture fund want to invest in a late stage deal and having done the seat? Well, if you have a full life cycle company,

when I had done the Uber investment as the Sequoia Scout, there were late stage investment opportunities for Sequoia for Uber as well. So now you have to be thinking about like, How does the Scouts program deal with the Heritage, Sequoia Heritage, which was their family offices business, their growth fund. And Idris and Harowitz has the same set of issues, easily solved when you have full transparency and full optionality and people have to make their own decision. Yes. And I think that's a great point to make.

We have a tweet here from John Collison, one of the Colson brothers discussing this. Co-founders. Yeah. And he says here, lots of firms say that they're long-term oriented, but Sequoia actually is, 14 years after their first check and stripe, they're making their largest investment yet because Strap's going to buy those shares with their other funds. But you know that if someone drops,

if a co-founder quote tweets Bloomberg or Axios, who broke a story and endorses it, that's a pretty clear point that they really wanted this information out there, to your point about transparency. But the question I have for you, Jason, is, let's say you are a LP back in that 2009 Sequoia Fund, you're sitting on enormous returns off your managed investment into Stripe,

you're offered this liquidity chance. Do you take it? Yeah, so this is a personal question of how much it represents of your net worth. If it was 90% of your net worth, you would certainly want to sell 20% of it, 30% of it. This happened to me,

very specifically in the Uber transaction where Uber's acceleration started to, which I had a net worth there before having sold Weblogs Inc and done pretty well in some other investments. And then, you know, as it accelerated, I'm just sitting there with my partner, my wife, and we're like, okay, as a percentage of our net worth, this is getting a little scary.

Yeah. And you got to remember, it was not, I mean, I knew it was going to work, but there were other people saying Uber's toast because it's illegal. It's going to get banned. You know, all this stuff, all the hand-wringing. Travis is too aggressive, you know. And I was like, oh, that's why it's going to succeed. Putting it all aside, you know, I did make secondary transactions along the way, 10%, 20%, here or there. just to be fully transparent. I bought real estate that my family could enjoy.

Skihouses, primary residence, all this kind of great stuff. So then I kept trying to rebalance my portfolio to be a certain risk asset that doubles every year, every 10 years, as opposed to one that might double in three years or four years when it hits scale or not. I'm sitting on a large amount of Uber shares, but my philosophy has always been to sell as you go. If you were a $50 billion endowment like Harvard and you had access to this. And you're looking at it and you're like, okay, it's a difference between getting $100 million now and $200 million. Yeah, just let it ride. We know Stripe's stable. So it really becomes the most personal decision to make.

Two factors go into it. Percentage of your overall net worth or fund holdings, percentage of your overall holdings, let's say. Yeah. And then the second piece is, how confident are you in management in the business? In this case, an endowment, a sovereign wealth fund, a high net worth individual, probably not selling at this price. because I think they believe this will be a, you know, someday a trillion dollar company. And if you could have bought Google at the IPO or Uber at the IPO and held it or Tesla, you know, pick the company, I think the best is yet to come for strike.

I know not all people think that. So Google's valuation, I just literally Googled this. So I haven't fact check it, but about $23 billion at its IPO. So the value of whiz companies used to be cheap. Yeah. Things used to be for sale. They used to go public earlier. Yeah.

Yeah. And so here we are. Well, that's my question, because what if all of this conversation has been predicated on the idea that Stripe will eventually go public? 14 years. I mean, what are they waiting for? What if they just don't? What if they just say, we're going to do 20 years as a private go. Yeah.

They're not going to do 20 as a private company. I don't think. I mean, in the secondary market that does exist today, it is possible. It's just not probable. Well, I'm saying, if it's a money printing business, they could create their own secondary market and just keep buying So if it was truly a money printing business where they threw off massive cash flow, they could just do a tender every six months and just keep buying shares back and retiring them and lowering the number of shares.

It is possible. It's just not probable because I think the founders and everybody would like to have the tool of being a public company to do other acquisitions and to reward employees. But, you know, hey, maybe it's an interesting point you bring up. Like, maybe the founders, a pair of iconoclassic founders could say, you know what? This thing is a money printing machine. We're going to just buy back our shares over time. And we're not going to tip people off to how good this business is.

Other people think this business is easily disrupted. I'm not one of those people, but other people think it's a commodity business, a low margin business that will get, the profits will be abstracted away over time. If you want to go back to IPOs that gave away too much information, Google. I mean, I don't think people were fully aware of how great of a business search was until Google said, look at all of our numbers. And then everyone went, excuse me?

That's one of the best S-1. And then Facebook stole Sherrissomberg and other executives. Yes. There you have. Well, I would love to see Stripe's numbers. And then I have one more question on this that I want to get to before we wrap, which is, are there any other companies of sufficient scale putting space X to one side? Because I kind of put it in a different category now that could have a similar amount of

market pull to put off their IPO, demand that their earlier investors, do complex transactions to create liquidity. Is this a one-off or a sign at the, There's only two. This is like one of two. I think there's only two companies that are in, you know, getting close to, you know, at SpaceX, I think the last was $200 billion, I heard, I think. So, yeah, $200 billion.

Then this is, you know, $75 billion or whatever the secondary market is that. So yeah, it's really just those two. I don't think there's anything even close to this. That tells us that then no other company can avoid an IPO by going this route. And this means that this is a stripe story, very interesting, but not one that other founders should kind of expect to lean on, which means that the IPO pressure should still be on for everyone else, though, you know, election years. One thing that I think has changed things is the companies that are pre-IPO or could

IPO at any point in time, the liquidity of secondary markets and the ability for legal teams, accounting teams, operating teams to manage an orderly transfer of sales on a regular cadence like SpaceX has done and Stripe has done. I think that's like a new art. Remember second market bought by NASDAQ, other people, Uber did it, you know, before the IPO with Masayoshi-San. And so like those kind of things didn't exist as a discipline 10 years ago. And now they are like people have invested in the infrastructure for those things. So I know this sounds banal and tedious.

But I do think the fact that there is an infrastructure to keep your company chugging and keeping shareholders liquid is an interesting. turn of events. And private equity has this. Private equity is constantly flipping assets, you know, from one private equity firm to another. They kind of just throw these hot potatoes and forth and trade them like trading cards. And maybe in venture will get to that point where people will just trade their stakes. There's a fund of funds called industry ventures are not RLPs, but I know them. And they were, I think, Chris Sock is original LP and Zach Colius is LP. So they are doing these strip funds and they had reached out to me about it and they're reaching out to all venture firms. Dave McClure of 500 startups. Now he has a strip fund.

So they'll look at, let's say launch fund one and two and they'll say, oh, superhumans in there. That's but one example or com. Okay. And you bought it, you know, at a $5 million valuation or a $10 million valuation. We like these five assets in that fund that's 10 years old. We'll buy them for you at a 30% discount, kind of like this thing is occurring. You get your LPs get their DPI, you get to raise more funds. And then one was pitched to me as, we will put money in your new fund. So we'll put money into launch fund for, and we'll buy some of launch fund one. So we'll solve two problems for you. You're illiquid. Your LPs need DPI. Great. We'll get those people from launch fund one. It's going to look good. You're going to turn

TVPI to DPI. You're going to get actual not paper returns. And you know what? We'll put a little bit. We'll spice it up. We'll put a little bit into your most recent fund. So these are the kind of things that are trying to keep, you know, nature finds away. Is that what it is? Nature finds away. I think it was life, but I have not too much. Life finds away. It's life finds away.

So capital finds away. Life finds away. And capital finds away. Well, that's literally, I mean, that could be the summation of why I'm a capitalist, like right there is because capital is capitalism demands finding solutions versus tamping down problems. I keep comparing the U.S. system versus the Chinese system right now as we look at the two economies in contrast.

though I will say we don't have to do all this extra work stripping a fund is timing intensive there's lawyers involved if everyone just went in public imagine Jason how great it would be to have all its information on the public no one has to do out of the extra work

but it's... You start to sound like Bill Gurley it's not a banal point that you built that framework because if we built it, we're going to use it and so I think you're right that some companies are going to get very good at this I'm just...

By the way, thank you. I'll echo Bill Gurley all day. That's great. If you're sounding like Bill girlie. He's a very thoughtful guy. His podcast is... His podcast, BG2 is wonderful. He talks at this speed. And Brad Gerson

talked at this speed. It's like listening to a 45 and a 33 on your record play, you skip back and forth without ever looking at the size of the disc. But, you know, hey, I guess that's your option. I love that show because they are always like 10% more casual than I expect they're going to be. And it just converts very well to camera.

Yeah, they should go public. I'm tired of this. And just to close off, one last thing. One stream, a corporate financial software company, KKR, bought a majority stake in 2019, going public. And I do think that there's some interesting numbers there. We'll get to that on the next news roundup. But just a note for everyone, IPOs are mostly dead, not entirely dead. Do we have a question from our amazing live audience? We have one question from YouTube. That's not a political one. Hopefully, it would be great if we had one. Someone from YouTube, HBOU, or Haboo, I believe you pronounced that, made the point that.

the Figma and LinkedIn acquisitions were larger than some of the deals that we have seen go through. How much was the LinkedIn deal for Microsoft? 20? That's a great question. I think it was in the 20 area, yeah. Yeah. Yeah, yeah, yeah. So that's another example.

Like, so if you think about what LinkedIn was worth in your mind, that's what Google is saying, WIS is worth now. Now there's some time difference there. I understand. But they're in the same ballpark financially. And Google's about to pay 23X. what Facebook paid for Instagram. Wow.

Yeah. I mean, Instagram was a small company at that time. I think they only had a couple dozen employees and 100 million users. The question always is if Facebook hadn't acquired Instagram and Google hadn't bought YouTube, would those things have become multi-billion user franchises? It's impossible to tell. That's why Lena Kahn's future competition, you know, pre-cog concept is kind of, I don't know, I don't want to say D-O-A, but it's a mental exercise.

that I think is impossible to, it's like trying to guess like, you know, oh, if we both go all in and we only know one of our cards and two of the flot cards and the flop, like,

are we going to be able to guess the outcome here? It's like so many possible things can happen. It's so situational. You know, I don't know. Instagram could be bigger than Facebook right now as a public company and is a worst sale ever

in the history of technology, potentially. YouTube probably would have gone out of business. So, you know, if you were asking me what I thought at the time and what I think now, I actually think YouTube would have gone out of business.

I think they would have gotten crushed under the legal bills because that was a time when startups didn't have the ability to do a five year, 10 year lawsuit. And I think Instagram, the opposite. I think Instagram selling for a billion was the worst transaction in the history of venture. Yeah. I think that they didn't need to sell. But at the time, don't forget, the era was, billion dollar deals didn't happen. I remember when that deal hit, it was a bombshell.

It was back to our war references earlier in the show. It was a massive splash. there you go. People couldn't get over how much money was being spent on this little social app. Now we know better. And think of this. It was a situation where there wasn't a big secondary market to dovetel RLS story. There wasn't this ability for the founders of Instagram to, you know, sell, you know, 300 million or let's just say 100 million of their shares and take 50 million each off the table, get a jet card, buy a ski house, you know, pave down their mortgage, whatever, on their primary.

put some money into their kids 529s, whatever. Now that exists, you know, it's founders can go long. The Colson brothers have no problem with liquidity. I can tell you that for certain. If they want to sell some shares, if they want to, if they want to do what, you know, the guy from WeWork did and Adam Newman and just, you know, have a big credit line against their shares, they can do that as well. There's no bank that wouldn't give them each a billion dollar, you know, credit line

against their stripe shares. Right. And that's how you avoid paying taxes. Exactly. For as long as you can. Yeah. Well, Jason, we're going to have more shows this week. Lots coming up here on Twist.

In the meantime, don't forget to like us on YouTube, subscribe on your podcast app. We are also going live on LinkedIn X and YouTube whenever we do news. Well, one idea for you. Do like three 20 minute interviews and it's just Alex interviews, you know, the Alex interviews. And then pick the favorites from the 500, Twist 500. And you just do a solo interview or release it like as a little one-off for the channel. What do you think of that idea? I love that idea.

I'll do that. Pick your favorites from twist500.com. Yes, and we're going to be adding more companies because we added a bunch yesterday, sorry, last Friday and more today in the newsletter. So, lots to get there, everybody. See you soon. Bye-bye.