This Week in Startups - M&A Mania, Palantir Meme Crash + Office Hours with Hookhub | E2105

Episode Date: April 1, 2025

Today’s show: Circle gears up for its IPO and the stablecoin wars heat up, Palantir’s meme stock status gets a reality check, and they riff on a possible Uber + DoorDash merger and whether AI should train on Substack content. They react to Sequoia partner Andrew Reed’s inside take on fund dynamics, laugh at a brutal VC meme, and wrap with “Office Hours” featuring Caylee Harrington, founder of Hookhub — the Airbnb for RV parking — to talk vanlife, growth, and building in an unsexy market.*Timestamps:(0:00) Alex and Jason kicks off the show!(1:29) Palantir's stock and market dynamics(5:43) Meme stocks and reversion to the mean(6:57) X and XAI merger(10:01) Squarespace - TWiST listeners: use code TWIST to save 10% off your first purchase of a website or domain: https://www.Squarespace.com/TWIST(12:05) M&A trends in tech and AI content acquisitions(17:22) Valuation strategies for acquisitions(22:05) Oracle - TWiST listeners can try OCI and save up to 50% on your cloud bill at ⁠⁠⁠https://www.oracle.com/twist⁠(23:31) Circle's IPO and stablecoin regulations(30:46) Fidelity Private Shares - Visit ⁠https://www.fidelityprivateshares.com⁠! Mention our podcast and receive 20% off your first-year paid subscription.(32:26) Crypto community and anti-money laundering in stablecoins(37:43) IPO and SPAC updates in tech(41:20) Deep tech investment risks and lessons from SPACs(44:03) Hookhub's journey and RV market insights(49:27) Growth and challenges in RV market(52:01) Hookhub's social media and content strategy(58:48) Hookhub's investor pitch and growth strategy(1:04:11) Van life business model potential(1:06:16) Sequoia's internal culture and investment strategy(1:13:03) Sequoia vs. Andreessen Horowitz and VC indexing(1:15:32) Venture capital humor and closing remarks*Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.comCheck out the TWIST500: https://www.twist500.comSubscribe to This Week in Startups on Apple: https://rb.gy/v19fcp*Links from the show:Hookhub: https://www.hookhub.co/*Follow Caylee:X: https://x.com/Mariano_APOLinkedIn: https://www.linkedin.com/in/mariano-apodaca-45b07a16a/vFollow Alex:X: https://x.com/alexLinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm*Follow Jason:X: https://twitter.com/JasonLinkedIn: https://www.linkedin.com/in/jasoncalacanis*Thank you to our partners:(10:01) Squarespace - TWiST listeners: use code TWIST to save 10% off your first purchase of a website or domain: https://www.Squarespace.com/TWIST(22:05) Oracle - TWiST listeners can try OCI and save up to 50% on your cloud bill at ⁠https://www.oracle.com/twist⁠(30:46) Fidelity Private Shares - Visit ⁠⁠https://www.fidelityprivateshares.com⁠⁠! Mention our podcast and receive 20% off your first-year paid subscription.*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/TWiStartupsYouTube: https://www.youtube.com/thisweekinInstagram: https://www.instagram.com/thisweekinstartupsTikTok: https://www.tiktok.com/@thisweekinstartupsSubstack: https://twistartups.substack.com*Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

I'm going to throw some out there. You love talking about Uber and DoorDash kind of joining up. All right. Instead of paying for Reddit, which, by the way, 18.8 billion today. So what, 25 to take it off the table, probably, Jason? Yeah, you got a 30% premium when you take a company, yeah, maybe even 50% sometimes because it spikes when the rumor comes out and then you have to beat that number after it. Yeah.

So call it 22, I don't know, $3 billion. Sure. Or, or you could buy substack, right? But, yeah, no, everyone's going to freak out. Oh, my God, don't train against my data. So here's what you do. You buy substack. and then you tell everyone, you can keep your current deal with substack,

no training off your data, we're taking a 10% cut. But if you let us train off of your substack, no cut at all. Yeah, or how about if you let us train against it, we'll give you 110% of whatever your scriptrution revenue is. So you've got a million and it's a $100k on top of it if you publish on this regular schedule and we like your content. So, yeah, that's a great idea. This weekend startups is brought to you by Squarespace.

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Save up to 50% on your cloud bill at Oracle.com slash. twist. Hey, everybody, welcome back to this week in startup. I'm your host, Jason Calcanus, with me, my co-host, Alex, Alex. Wilhelm. Hey, hey. He's X.com slash Alex. I'm X.com slash Jason. We have a full docket. It's Monday, March 31st. The first quarter is about to end. Yes, sir. My lord, that went quick and with it, my ski season, 33 days, didn't hit the 41. I guess there's always a chance I might be able to jump on a last minute ski trip, but it's seeming like it's over. Everything's starting to melt. What do we got in the news today? Man, there's so much going on. I thought we talked about Palantir just for a hot second. Oh, sure. We have rift on this company

ad nauseum, especially back when it was at or near all-time highs. And what's changed is that the company is now in a bit of retreat. As you can see here from this chart made by the fine folks over at Sherwood, we were covering the company when it was doing this right here, taking a look at it and going, what's going on? And people told us that we were... And this would be the stock going from $100 to $121. It went parabolic sometimes. I guess, you know, when Trump started his, as Trump's inauguration, it looks like, literally January 20-ish, it went from $60 a share up to $120. It doubled. It doubled. And essentially, what is that? Jason, less than a quarter, about a month, month and a half looking at that chart. Yep. And so it's come back down to Earth. Now we're trading at about 80.

Yes. And the 50-day moving averages. Yeah. I mean, there seems to have been this incredible hope that the stock market would rip under Trump. then Trump said, remember I said those things about tariffs. Wasn't joking. I'm going to literally create market chaos until April 2nd, which I guess is our new Independence Day. It's not going to be whatever one hopes, I don't think. Okay, so Palantir's, I think it's Wednesday, April 2nd. And so Palantir is a great company.

They have great products. I think they were growing 30 or 40% year over year, if I remember correctly on a two or three billion dollar run rate. So this is a legit company. Alex Karp is just goat level CEO. They're doing important work in the world. But sometimes a stock becomes a meme stock.

And I can tell this because anytime we talk about it, hundreds of accounts will come into my replies. And now they're even paying the $3 donation to charity to reply. If I were to mention, Palantir has the highest price to sales ratio we've ever seen, right? I think it was something. something like 80 at the peak, 70 or 80 price to sales ratio?

It was incredibly high. Yeah. If it's doing two or three billion in revenue and it's worth 80 billion dollars, you know, you start to figure out what did that price to sales ratio? Is that with 40 if we were to do that? Exactly.

Just for fun, Jason, I just pulled up the Bessemer Cloud Index for folks on audio, and I sorted it by essentially its current revenue multiple. It's actually enterprise value divided by annualized revenue. But at the absolute peak of all the cloud companies is that decimal tracks. Palantir is at 59.3x. The next highest is 21.3.

So even though it has come down, it's still incredibly expensive. And the average looks like it's 12, right? So here's what happens in markets. I'm not a market expert, a private market expert, but public markets, generally what happens is

if a market retreats like we're seeing because of the tariffs and just the general, non-predictable market we're in, I would say, is a gracious way of saying it. Like, It's hard to know what is going to happen.

Yeah. Because of that lack of predictability, the market constricted, the chances of a recession went up. Everybody's just a little bit on edge. And the Trump bump went to companies that were, you know, in his orbit or military, etc. This was already a meme stock like company or a meme stock and a real company. So who's going to take it on the chin first?

When a market retreats, the highest valuations get correct. at first. Yep. And the ones that might be the lowest will lose the least because, I mean, if you compress to three times, four times, five times your sales, people are going to be like, huh, there's no compression left. That's actually a buy. So that's all this is.

It's just reversion to the meme. If you see, I always do this when I'm in a basketball game because of the threes. If you see a team shooting 50, 60, 70 percent from three, you can be sure it's going to come back down to the league average of 35% or whatever it is on a team basis. If a team is shooting 10% from three, you know, at halftime, yeah, it might go back up to 35%. Reversion to the meme, the mean is a known thing. So I think reversion to the meme should actually become part of our lexicon because at some point, I presume Pallingerer will go back up due to market enthusiasm. So perhaps we're going to need both terms, frankly. Or maybe sometimes people go, okay, that was fun.

let's go on to the next meme stock or let's make another stock into a meme. Either way, you know, if you owned a bunch of shares of a stock that becomes a meme stock, what your best bet to do, as far as I can see, is to sell it and then to buy the ones that are the great companies that are at the lowest enterprise value by run rate or just price to sales ratio. Sure. And so if there were people who were lower on the list that you felt as strongly about the management team and the product and the growth, maybe that's a better buy. So the market giveeth, the market takeeth away. Let's keep going.

Yes, it does. Well, the biggest news that came out in the last couple of days, Jason, I think definitely was the combination of X and XAI. Two private companies, one social media, less talked about category for startups in the last, I don't know, 10 years. And then, of course, the other hand is the AI company, which is all we've been talking about for a while. I thought it would be good to just touch on this, the mechanics a little bit.

And I think people might be curious about an all-stock deal between two companies and how valuations are kind of sorted out. Now, here we do have kind of one person and the same collection of investors taking two companies that they've owned and putting them together. But the all-stock transaction, Jason, to me, just seemed like a great way to get these two companies brought together quickly and without excess fath on the transfer of money side between individual investors. For folks who don't know, Elon Musk, who owns both companies, said over on X that XAI

has acquired X, so the AI company is buying the company formerly known as Twitter. And the deal values XAI, the AI company, at $33 billion, so essentially $45 billion minus debt. Jason, your first thoughts. Yeah, I mean, we knew this was going to happen. I predicted it on the show that we would start to see AI companies buy content companies. So if you were Sam Altman looking at this, why not buy Reddit? I'm not sure Reddit's market cap right now. It's probably $15 billion.

I know it had peaked and it was, I think it went public at $7 or $8 billion. And I said back then, why hasn't chat GPT, Gemini, clawed with these sky high valuations, just gone on a purchasing spree? They should buy Quora, and they should buy Reddit, and then make it unique to that platform. Yes. When you are using XAI or using X.com,

formerly known as Twitter, and you hit that rock button, and it gives you context, my lord, it is a great experience. I frequently will come across some, term I don't know. Somebody's tweeting about something. I don't know any of the context.

Click on that button, get the context. Having that real-time data and then blocking that real-time data from competitors, it's going to be a massive advantage to X.a. So it's a great, you know, it's a great combination. In terms of the mechanics of taking two private companies and putting them together, there's a drag-along feature. A certain number of shareholders have to vote for something. And then everybody gets dragged along.

So I think once you hit, and it could be different for every company because it's in the sort of bylaws of the company that everybody agrees to. When you get 60, 70, 80% of people to agree, then the companies can merge. And the 20% of people who don't sign off or don't agree, well, they signed an agreement that these kind of transactions are subject to the majority wanting to do it. So obviously, the majority wanted to do it in both cases. and I think this just locks in XAI as a top, call it three or four player in the marketplace instantly. There'll be top three player in the market instantly. This is the power of M&A,

and this speaks to the end of the wrath of Lena Khan. All right, founders, let's talk about your website. Yes, I know it's embarrassing. Yes, I know you're too busy to upgrade it. Well, if you're going to launch something new or you need to give your brand to refresh, which I know you do, you need Squarespace. It's the all-in-one platform that makes building

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And when you're ready to launch, go to Squarespace.com slash twist to get 10% off your first website. or domain purchase that's Squarespace.com slash twist, the longest running partner for this week in startups, because they were a startup and they still build their product with the enthusiasm and the cutting edge technology of a startup founder. We love you, Squarespace. I don't think that these kind of private market transactions come up on the radar of the government typically anyway, because there's no public company involved in such a fragmented market, but I do think we're going to just see M&A, M&A, M&A, and I talked about mid-market M&A countless times,

in the last year, that that would be the big win. Because when you have mid-market companies merge, what do they do? They challenge the max out. So this is great. This is exactly what I was thinking. You know, Reddit getting bought by chat GPT, Quora and Reddit merging and then creating a chat GPT competitor even better. This is what you want to see in the market, DoorDash and Uber merging or, you know, Amazon spitting out Zooks and merging it with Uber or Lyft. You know, you know, some combination of those will make for, you know, 250 to 500 billion companies with real revenue. And it's just great for investors as well, because now the investors in each of these companies have a greater chance of success.

They wouldn't have voted for it if it wouldn't increase the chances of success. So that's what you have to think, what's going through their minds. And I guess they just didn't want to have the fair market value that Twitter went through go down when it got purchased right for $44 billion. And then XAI has been on a chair and the way you value these things is what are they able to raise money at? And I think they said X.com was raising money at the previous valuation. So probably what happened was you had money being raised at certain valuations. If the market says those valuations make sense, 80 and 45 billion or whatever it is, you put those two together. The market has said the market participants have pinned them at those numbers

and then it's a go, right? Everybody feels comfortable with it. I think also an important thing to keep in mind here is how the companies were already operating almost as a conjoint entity. I mean, having GROC on X makes perfect sense if you think about them both in the perspective of Musk. But they were distinct companies. So to see that kind of tight integration, super interesting, clearly XAI wants a distribution mechanism and a data source.

X supplies both. But XEI was paying part of X's bills because XAI was able to raise more money more recently than X has been. So that would be for servers, you're saying? They were paying its servers or something? I think actually the reporting was helping it stay current on its bills. So it could have been as much as helping it service the debt. So this is another interesting wrinkle in all of this. If the other thing to look at is the downside, if you don't do this, what's the impact

on both companies? Well, META is going all in on using their customers and their communities data to inform Lama, I would think, right? like meta now has an AI search box. So if you're using Instagram or Facebook, they kind of force you to use it even if you don't want to. Yep. So then that means for XAI,

Claude, or any other independent language model, if you don't have a social network to feed you real-time news, you're at a disadvantage. I mean, this is, I hate to keep bringing up the same couple of talks from the liquidity summit last April. But like, I think it was Antonio Gracies who said, like, look, X has a unique data source in the world.

That's why his company was backing XAI. And so, like, I do think that X by itself had a relatively low ceiling for how much it could become worth because I think Snap's trading has something like three times sales, Jason, going back to your price sales ratios. But AI companies can be valued at billions of dollars. So there's a lot of good stuff here. I'm curious to see how much enterprise adoption GROC gets. Because when we think about the two, the leading model companies in the U.S., GROC's models are often up towards the top of, you know, LLM Arena and all those of the ranking lists. But I don't hear about as many companies using them in production, Jason. Yeah, I don't know that they have really pushed their enterprise efforts.

I think that's something that maybe chat GPT has been way ahead of since Sam worked with the startup community at YC and comes from that sort of space. So it's a $33 billion deal, essentially for X, which means that it has surpassed the $32 billion that Wiz sold for, bringing us another pretty enormous deal. Sure, it's all stock. sure it's Elon's companies, but like, I don't know, we wanted more M&A, we wanted to see more dollars in flight. Well, here you go. Yeah, I retweeted. I saw somebody had a chart about M&A so far this year. Yes. Which I guess is from CB Insights or charter. And we're at 54 billion for

Q1. Last Q1, we were at two or three billion, Q1 before that, two or three billion. Q1 before that we had a must have had something big in 2022. That was 38 billion. So, you know, this chart kind of speaks volumes. We're going to have, at least in the last four years, a record first quarter by, yeah, looks like 50% almost. So this is trouncing 23 and 24 and greatly exceeding. Yeah, I think the important thing to keep here is that sure, it's fun to see the X deal be worth slightly more than the, uh, the WIS sale. But the WIS deal was a pure startup play. It was a venture backed upstart company from this really tech scene that had a lot of, private capital into it. You love to see it. Whereas X had also like some Saudi money and

it was slightly less venture and more private market. So I think the WIS deal is full. We should just take all of it as a yes in that chart. So I love that data point. Enough Jason to actually change the tune amongst venture capitalists regarding liquidity or just a good taste to start the feast. There were a lot of VCs in X.com, I believe, Sequoia and some other ones, Joe Lonsdale. So they're all going to be now in XAI. I think that's a nice. update to send to your LPs. So in a private market transaction, being able to say like, hey, look, we had a social media investment that's now an AI plus social media investment. That's awesome. What this also does for freedom of speech and, you know, all the challenges that X has had

with advertising, this now eliminates that business model because you have the business model people paying 20 or 30 bucks a month for GRO. So this is one of the, you know, if you double click on this a bit, one of the great things that could come out of the large language model era of consumers paying 20, 30, 40 bucks a month, you know, and executives paying that amount for a large language model is some amount of that could go towards content creation and will. So we've already had the, you know, people who are doing reinforcement training, but now why not just buy the New York Times? Why not buy the New York Post? Why not buy Vox? Like, Vox's value has always been like, I think they probably haven't increased in value in five or six years, probably.

No. And then we see like, you know, Yahoo's selling TechCrunch for spare parts and it's becoming, it's probably going to be like an SEO play. It's kind of like the end of the, the brand in my mind, if it's going to be part of like the PC mag, Zip Davis, Diaspora. All of this means there is actually a viable future for content. If you can get a language model to say, you know what, hiring 30 journalists to work on TechCrunch and feeding that to the LLM, okay, that's only $5 million a year for the whole group. in their office space or whatever. Seems de minimis to me.

So content as a front for LLMs is a really interesting idea. What if, like, TechCrunch were to break even while feeding? If you bought the Vox collection of sites or Penske's collection of sites, all of those collections of sites could actually wind up being worth something to a large language model. All right. I'm going to throw some out there. You love talking about Uber and DoorDash kind of joining up. All right.

Instead of paying for Reddit, which, by the way, 18.8 billion. today. So what, 25 to take it off the table? Probably, Jason. Yeah, you got a 30% premium when you take a company, yeah, maybe even 50% sometimes because it spikes when the rumor comes out and then you have to beat that number after it. Yeah. So call it 22. I don't know, $3 billion. Sure. Or you could buy substack, right? But yeah, no, everyone's going to freak out. Oh my God, don't train against my data. So here's what you do. You buy substack and then you tell everyone you can keep your current deal with substack, no training off your data. We're taking a 10% cut. But

If you let us train off of your substack, no cut at all. Yeah, or how about if you let us train against it, we'll give you 110% of whatever your scriptriction revenue is. So you got a million and subscription revenue. We'll give you 100K on top of it if you publish on this regular schedule and we like your content. So yeah, that's a great idea. So this is one of the great things about M&A becoming vibrant, and this is where regulation kills innovation. You start thinking about like, gosh, I wonder what DoorDash is trading at price to sales.

It's probably like low single digits, four or five, six percent, right? And then what is a self-driving company like Waymo trading for? What is Uber trading for? These things are probably trading for, you know, Airbnb three, four, five times their revenue. If they're trading for three or four times their revenue, man, somebody with a Waymo valuation could come in and be like, hey, Waymo plus DoorDash and Uber equals the winner trillion dollar company. Whereas the three of them together might be worth $250 million. Yep. You put those three companies together, I think their value doubles or triples immediately,

because the market would give them a premium for winning the market. Okay, so this is really interesting, actually. I know this is not a public market show, so we'll keep it short, but DoorDash's current price sales ratio is 7.3, whereas Airbnb's is 7. So they're very, very close, actually, in terms of how the market has ended up netting them out in terms of a revenue multiple. Uber, by the way, a little bit lower 3.6, but that's still,

Yeah, it's a lot lower, yeah. Yeah, I'm just trying to think about if I agree with that. That's the self-driving hand-wringing. If the self-driving question got answered, definitively, it would spring back up to seven. So I think that's all you're seeing there is people are like, okay, are cybercabs and Waymo's going to how quickly could those possibly be rolled out and what impact would it have? Yeah, what's amazing is at Uber's three and a half X price sales trailing, by the way. The company is still worth $150 billion.

And so if there is a 2x hiding in there, Jason, it's not just a billion and $2. It's $150 billion, which is an enormous sum. Yeah, that's what it should be, actually. I think that's, you know, listen, I'm speaking in my own book here. I have exposure to DoorDash as well, by the way,

so it's not like I'm completely, and I have exposure to Waymo because I'm a Google shareholder. So I have exposure to all of them. I do think this is the era of M&A that's going to be really interesting, is just let people under 250 billion merge with each other, create better products and services.

America wins, you know. Yeah, salute. I'm here for it. Hey, founders, I want to tell you about an expense that's eating into your profits. Here's a hint. It's not salaries. It's not travel and entertainment. No, it's your cloud computing bill. You probably got some sort of deal when you started off with your cloud vendor. But now your spend has increased. Maybe it's sky high. Maybe you haven't looked at it for a year or two or more. Well, what if you could cut your cloud bill in half? That's right. cut it in half and improve your performance at the same time. Well, if you act by May 31st, Oracle Cloud infrastructure can help you do just that. OCI is the next generation cloud designed for every workload.

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See if you qualify for half off at oracle.com slash twist. That's right, oracle.com slash TWIST. Circle, the company behind the USDC stablecoin. We've had Jeremy Aller on the show a bunch. We have heard that this company's going to go public back in 2021 and 22 via SPAC. No. Filed privately to go public last year. We waited.

Nothing happened. Well, Fortune reports, Jason. That Circle is now going to work with JPMorgan Chase and City on its long expected IPO. Thank God. Timing not entirely clear right now, but Circle, I'm going to quote here, quote, aims to publicly file paperwork for the offering in late April. So that means we're less. than a month away from finally getting our admits on Circle's Public S1 filing.

Two things to keep in mind, you're just in one. Crypto is enjoying a deregulatory spring, you might say. People are being forgiven, charges are being dropped, cases are being left behind. That's good. The other thing is we've been talking about the stable coin boom here on Twist every month for as long as I can recall. And so I think right now the market is hot for exactly this type of company looking towards the future of finance.

So even though the market's choppy right now, I think it's a great. time to list. I think this is the right time. It's a perfect timing for them. They are a trusted, audited, U.S.-based. I don't have any exposure to the name, so just to be clear, like, I'm not talking to my book or anything here. And Jeremy O'Lear is, you know, a serial entrepreneur who's well known. There is something called the Genius Act, which you'll be hearing a lot more about. The question is, who will be able to create stable coins in the U.S.? This is going to become the big question. When this stablecoin act gets a initiated, if it happens, we're going to need to look at, should Tether be allowed to service

American companies or go public here? I don't think Tether should be even allowed to buy treasuries. Now, I know that's a controversial statement, but if they have a sorted past where they've been banned in many regions and people have all these claims of, you know, the attestation as supposed to an audit. If you are going to have billions of dollars of treasuries and you're going to allow people to magically move money around, I'm going to go with, let's make sure that this operation is extremely tight. Tight is right. And so financial markets should not allow, this is my personal belief, outside actors to operate at scale in markets that should require audits. So this is going to become, I'm just giving you a little heads up of what we'll

be hearing people talk about in the coming months. It's going to be whatever world liberties, stable coin, circle, stable coin, all the domesticated ones, all the ones that are audited and above board, maybe even Stripe will, you know, instead of just having that pool for them, will have their own. Is Robin Hood and Coinbase, both of them are going to have stable coins or not? I'm not sure. Coinbase is very close with Circle and USDC. It's kind of their house stable coin, if you will, so I don't think there. Okay. So, you know, I did a tweet about this the other day, you know, and the tether truthers who, you know, believe there are some shenanigans going on with this company. And then the tether long people, which I don't know how you're a long tether of it all just equals a dollar.

Yep. You know, these companies are going to need to be regulated and taxed or have audits. They don't have audits at tether. I think they have attestations or if they call them audits. I'm not sure we would consider them audits to the, you know, definition of American. companies and this stuff all needs to be onshoreed and the companies need to be registered here. You should not have people introducing financial devices in this market back to tariffs. There should be a massive tariff on anybody who wants to bring a financial product into the U.S.

that's not a U.S.-based company. And that's not a U.S.-based company as best as I can tell. So get ready for a big showdown. So the Genius Act is the guiding and establishing national innovation for U.S. Coins of 2025 Act. Okay. So there you go. I've not read this, Jason,

but I will know that you brought it up to me. Is this coming up in your conversations that you're having on the group? I just hear people buzzing about stable coins a whole bunch. So I won't, you know, I won't get into it too much. But people see stable coins as a massive opportunity because when you buy a stable coin,

if you buy $10,000 in stable coins and you just hold them, I'm making the interest on your stable coin. So I'm making the 5% on your stable coin. So you're giving me $500 a year for being your custodian. Okay, seems fair. But if you have a billion in stable coins and you're like some, you know, giant company like Coinbase, let's say they, let's say Coinbase kept a billion stable coins.

Uh-huh. Should Coinbase be giving $50 million a year to somebody for that? Or should they create their own? Yeah, I think they actually should create their own. I mean, the number of stable coins out there of scale is not that high. I have a chart here, Jason. I'll just throw up on the video for everybody who's, watching. This is a chart from the block. They have a great data service showing kind of the

current scale of stable coins. There's two main players. There's Tether. And then there's USDC. But if you look at the top of the chart, Tether is blue. USDT. And they have how much? About $145 billion. Wow. So $145 billion, 5% of that. It's an insanely good business. But it is, it is dependent on interest rates. So essentially, you could think about the value of Circle's business being its net interest margin, which is predicated on essentially tight monetary policy, the looser the Fed gets probably the less profitable circle of costs. If it goes down to 2%, 2% of $100 billion is $2 billion a year. And this is where Tether, there were all these claims against Tether because Tether wasn't

showing where the money was and that they might have had Chinese paper as in private loans to Chinese real estate companies. That was always the big rumor. Maybe they cleaned it up. maybe it never happened. Nobody knows because you don't have Ernst & Young or KPMG or some notable firm here in the U.S. signing off on it. But they were probably getting paid 15% on that Chinese paper. They at some point wouldn't say if they had Chinese paper, then they said they didn't. So what I read into- Got rid of it. Cleaned it up, maybe. Maybe cleaned it up. But if they were making

15% on $100, $15 billion, and they have been making claims like a public company, quarterly, and they're on Twitter, but they're all in different weird jurisdictions. That's the other thing that, you know, Coffeezilla and other folks who have investigating it, there's a, a tether person on Twitter. I forgot his name. I had him on the program. No, Palo is like, is he the CTO or something? He's one of the bosses, yeah. Yeah, he's one of the top five or something. No, there is a anti-tether person who has been investigating them for a long time. And this kid's been like deep into it. He's part of that tethered. truther. I've seen them in my ads. Yeah. Yeah. So he's, you know, like, they basically have been

really studying like, where are these people based? And like they went into like their previous companies and like a lot of people in crypto, uh, colorful backgrounds. Colourful backgrounds. Previous companies, color backgrounds, you know, different interesting things they did previously. This advertisement is paid by Fidelity Private Shares. All right, founders, we all know. Cap tables, due diligence. And of course, managing investors is a huge headache. But there's a very simple solution for you. Today we're talking with Kristen Kraft, an old friend of mine.

And she works at Fidelity Private Chairs, a new group over Fidelity. You've heard of Fidelity before. And they have a mission to help startup simplify equity management. They're going to save you money. They're going to give you better service. Welcome to the program, Kristen. Thank you so much, Jason. It's great to see you again.

Yeah, great to see you as well. Maybe just from a product perspective, what are you trying to accomplish, with the product. So, Jason, we are super excited about our cap table management and data room platform. We want to make it super simple for founders and startup operators to manage all sort of ownership and equity in the company and essentially prepare to raise. We want to make sure that everybody goes into these fundraising conversations well prepared. They're ready to share their cap table and that they're ready to go through due diligence as they're trying to close their around. So from a product perspective, that is where we're laser focused. And that product is

really well built, really strong attention to detail in the way that Fidelity is known and beloved for. So if you want an all-in-one equity management platform FidelityPrivate shares. They've got you covered. Visit FidelityPrivatechers.com. That's one word. No spaces, no dashes. FidelityPrivatechairs.com. And hey, mention this week in startups. They'll give you 20% off your first year subscription. once again, FidelityPrivate shares.com, and tell them that you heard about it here on this week in startups. I have actually a slightly more generous take now on crypto people. And it's because I've been playing a little bit more poker lately than I had been before.

And I just realized that the crypto crowd is just the poker community with the keyboard. I mean, there's something to that. Yeah. Well, there's a lot of that. There's a lot of people in it who are actually anarchists. There are people in it who are libertarians. There are people in it who believe, like, you know, the state shouldn't be involved in currency. They don't believe there should be speed limits, you know, all this kind of stuff. So,

and then there's the big cleanup. So I think what's happening in crypto is the big cleanup. And circle going public will be part of the big cleanup where it's like, we're going to replace the players who are below board or who aren't doing the proper dotting the T's and crossing the T's and dotting the eyes. We're just going to replace those folks over time in this administration with people who are above board. And so that's the opportunity is to be an above board. player and it's going to increase people buying treasuries, which is one of the things this administration has a concern about. So stable coins, I think tether is one of the largest buyers of treasuries right now. If that was a house of cards, let's say like there's a 1% chance that tethered truthers,

you know, are correct or a 0.1% chance. You know, it's like, pull a card out of a deck and let's see if this thing crashes or has problems, what would happen to one of the large buyers of treasuries? Well, it dries up, but also they dump. And so there's a flooding of the market, and that breaks the supply demand balance and then lowers prices. Jason, just to kind of back up what you said, in its 2024 kind of report, if you will,

a tether said that it had $13 billion in profits. I mean, that's unbelievable. That is a staggering amount of money. I hope, by the way, that all the concerns here are over. blown. I agree with you on the need to be regulated. But holy crap, that's a profitable business. You want to kill Tether? You want to just totally annihilate the company in 10 seconds. Hit me. Very simple. Circle says, if you own USDC, you get 80% of the interest that we get passed through. So basically every year for every X number of circles you have, we'll issue you

another one because of the interest. Yeah. And we'll take 20% of that. So if we're making 5%, we'll take a point. You take four. That's the end of tether. Boom. And you know what?

If you're second to tether in the market right now, why wouldn't you do something aggressive like that? You know, it's kind of like Robin Hood. If you move your money into Robin Hood, they give you this incredible bonus. You have to keep it there for a couple years. Like maybe you have to keep it for three, four or five years. But they'll give you like some two percent.

3% bonus for moving your money from, I don't know, Goldman, Morgan, Fidelity, Fidelity, wherever, to them. Wow. That's kind of interesting and aggressive. So, and those kind of things have always existed, but it doesn't exist in stablecoins. It's kind of nuts that people use these stable coins and don't get the interest on their money. So somebody out there will launch a, somebody out they should launch a stable coin that

distributes the money to the people who own it minus a Vig, a reasonable Vig. There are crypto rewards. And I know there's some, there's some. some nuance here with Coinbase that I'm sure that I've forgotten the details of, but no one's being that aggressive. I do think, though, that as Circle tries to go public, it's probably not going to be working on new ways to give away 80% of its revenue. But if I was someone who wanted to take down Signal and Tether, sorry, Circle and Tether, my bad, then I think that would be a great way to go about it. I will say it's going to be one hell of an IPO. Let's go. Isn't it

good to be excited again about debuts, Jason? That's great. The thing I would encourage of a look at is also anti-money laundering and terrorism, human trafficking. Those three should be looked at deeply with any offshore stable coins. If they don't have those, and I think, you know, the thing about this Genius Act, really great name, I love the way they name these things. I would say we should have incredibly high requirements around anti-terrorism, money laundering, human trafficking. If you get caught with your stable coin, not doing KYC, not having really tight controls, I think you should be banned. So I think Tether, if the GOJ and some of the investigations are in fact correct, I think they would be banned day one, not allowed day one. And I think that

would be the right decision for this administration to make. I'll make a prediction. I think this administration is going to have to make a difficult decision. here because Howard Lutnik is involved with Tether. Yep. World Liberty Financial is onshore. Circle is onshore. We've got a lot of people here who are in and around this administration and family who have exposure to stable coins.

And then you have this genius act. Who's putting the Genius Act up? Mr. Haggurdy and Mr. Scott of South Carolina on the Senate and then also Jilla Brand and Lummis. So four senators, two from each side of the aisle. So let's see. Let's see what their donations are, how they're conflicted. where this is all coming from.

So I think we'll maybe put that on the docket for Wednesday is to double click on all this. All right. Elsewhere in IPO land, just very briefly for everyone out there who cares about equities, Jason Serbis Systems, the maker of massive chips for AI inference associated with G42, and that AI push in the Middle East has tinkered with its IPO. Now the G42 company is going to purchase stock in it that will not have votes, and therefore it's not going to run a file of the committee on foreign. investment in the U.S.

And reporting says that the IPO is going to go ahead. Love to hear that. Cor Weave, when public last Friday, we talked about it live on the show. Yeah, how did it do? Well, it was about flat on its first day. And right as we were starting this show, it was down about 8.8 percent, and it's now down 9.5. So the stock market is selling off today, but a pretty crappy day for Corweave to endure.

So that's not so good. It means that they top tick their sale. Remember, when they sell their shares, you want to get the highest price. possible. Having a bump on your IPO might feel good emotionally, but if it's terrible for shareholders, if the stock were to double on the first day, it means you sold a bunch of shares at half off. Here, they sold their shares at a 10% premium. So good for them. They got 10% more than the shares are fairer market value. So the shareholders now have to make up that 10%, but they get to deploy that capital and do interesting things with it. And then they got a free 10 cents on the dollar.

They're going to pay out some of their debt. They're going to keep investing and growing. I don't think it's the end of the world when a company's IPO doesn't go quite as planned. But we do hear a lot about people leaving money on the table. Well, here's the opposite. They stole the table when they went public. Good for them. Finally, E. Toro, don't forget, has filed to go public.

Stubhub has filed to go public. And if you care about niche media in the United States newsmax went out with a reg A plus listing, which is very interesting. I just got to look into this a little bit, Jason, clearly going public on the back of an election cycle, which is good for politically changed news. But always fun to see more companies getting out. We love seeing more total public companies. So that is the rundown there.

Reggae is basically you can offer up to $75 million. It's incredibly expensive if you don't hit tens of millions of dollars because you have to start filing and do a little bit more reporting. So generally, it works for people who have a good relationship with their customer base and their customer base wants to invest in it. reggae is, it's kind of needs, it's one of these things that if we could allow an accreditation test, you wouldn't need reggae.

And so it's, it's kind of like, gosh, how do I say it? It's kind of like split the baby between public offerings and private offerings, and it just doesn't work as smoothly as it should. I mean, I feel like that's also true about SPACs. And so my immediate vibe when I saw this was, because it just seems like kicking open the back door to go around to the front of the building. It feels like an unnecessary complication on a thing that already works for companies that are mature and ready to go public. I've always felt like SPACs, and I said this at the time, because a couple of my friends, a lot of my friends were doing them.

And I always felt like those were dipping down into being an aggressive VC betting on crazy things. And if you're a VC and you're betting on crazy things, you're expecting 60, 70% to go to zero. We're not return capital. Yeah. And you're expecting your returns to be in the one in ten. So if you were to look at spacks through the lens of a venture capitalist, if one in 10 performs greater than 10x over, you know, some period of time, it was worth doing. If they don't, you know, and you're buying only one or two SPACs as a retail investor,

that's the problem, you know, like Joby is this flying car company. And, you know, some of my friends were investors in it like Sky Dayton, et cetera. always had an affinity for that company. One of our companies, desktop metal in public radio printing. It was, desktop metal was worth over a billion dollars in private markets.

It's worth 150 or 250 million. 164. Yeah, it's like, it's worth 85% less. Joby would be worth 10, 20, maybe worth 20 billion as a private company. I don't know what it's worth as a... 4.7.

So it's also 75% off. The public markets don't know how to do deep tech, crazy hellmerry, you know, binary outcomes. And I think that's the lesson of SPACs, is retail investors are looking at quarterly reports. They're not taking a five-year view of these things of what if it works.

I also think didn't one of the, I think one of a couple of actually, maybe more than one of the quantum computing startups went public. So you start going public with flying cars, space tourism, 3D printing, and quantum computing. This is like high risk investing folks. those are the things that SPAC and I think the people who took them out I mean I think the CEOs of those companies

are probably sitting there going you know maybe should have been private maybe should have stayed private Quantum SI I believe went out with the SPAC and it's currently worth 220 Jason and it's worth a dollar 20 shared down from an all-time high of over 20 so another similar kind of story of

95% off Yeah or 95% off the P and that's the other problem is people go oh quantum computing I'll give it a premium. This is the naivete of a retail investor. I'm super realistic.

Nine out of ten companies go to zero. Doesn't change my pulse. I go to those founders. It didn't work out. What do you got next? Because I know that every 100 companies or so, I'm going to hit a Robin Hood or a, you know, a calm or a grin or some company that's going to pay off 50, 100, 200 to one.

And then, you know, what if I hit it? Uber and it does 5,000 to one. What if I hit a Robin and it does three, four, 500 to one, you can really make up for a lot of zeros. The retail investors started to think, well, of course it's going to be worth a hundred times this because it's deep tech. They didn't realize is one out of a hundred of them might become worth 1,000 X or 500X. Sure, that's possible. Maybe it's even probable. But you only made one bet. Or you made three bet you don't have enough surface area to hit one. I mean

accredited investors, sophisticated folks let them play, keep the people who don't know what they're doing out. You and I are on the same page here. Just a little bit frustrated and to see history constantly repeating itself. Jason, I want to move on to a segment that I'm very excited about because we have a guest dropping in today. So today, for office hours,

we are going to meet with Haley Harrington from Hook Hub. They are building the Airbnb for RV parking. You can find them at hookhub. dot co on Instagram at at hookhub RV or over on X at hookhub underscore RV. Please welcome to the program. It's Kaylee. Kaylee, how you doing?

I'm great. Yeah, it's good to see you again. So you went through the launch accelerator. Which cohort? 33, the most recent. The most recent one. And before that, did you happen to do Founder University or did you come directly? Nope.

I did the university right before that. Awesome. And we invested in you, obviously, for the accelerator. I'm not sure if we did the Founder University, 25K bet, did we? Not at the university, but the accelerator, yes. Did you ask us for that bet? Did you request it and we said no? Or did we offer it and you said no? I'm just curious. No, I actually didn't know it was an option for the university. Yeah, the university. So this is Alex. The thing we're doing is sometimes we meet people who are pre-incorporation or

they're just figuring it out. And so you are Airbnb for, explain the pitch. Absolutely. Yes. I'm the founder of Hook Hub. We are Airbnb. for parking your RV. So we're a marketplace where you rent out unused land space for RV parking. Got it. So if I happen to have some land in the hill country in Austin, and I had a couple of spare acres, people could come and park their RV there. And I could charge them for doing so. Is this for people who want to live in the RV there or store the RV or both? Both. Yeah, that's what we're all about is every form of RV parking. Got it. And what are people's current choices to park their RVs? So for short term, there are a couple apps, just vacation, and there's RV parks.

But for long term, there is no apps right now. So pretty much people are going on Google calling RV parks. That's the option. And this doesn't exist on something like Airbnb. They don't offer air parking on Airbnb? No. Got it. So you have to build up supply and you have to build up demand.

There are RV parks. There must be marketplaces or directories of RV parks, no? There is. Yeah, there's apps out there where you can just, you know, find locations of RV parks. Got it. So what you provide is another option. I can see here it's $60 a night to park an RV. Is that about right? Is that the average price in America? What's the average price in America to park your RV? Yeah, so actually depends on area. It can range from $20 or $40 a night up to $150. We do have lower rates when they stay longer. But yeah, just nightly tends to be higher. Does it need to have electrical hookups? Does it need to have Internet?

Does it need to have water hookups? How does all that work? So that's optional. The host can list with no hookups and get bookings. Of course, if you offer those, you can charge quite a bit more. So let me just back into the math here. If you were living the RV lifestyle and you needed a place to park in America for a month, you would be, what's the average monthly?

About $750 would be average. Yeah. That's pretty dope if you think about it, Alex, from a, the perspective of like somebody who doesn't have a home. They live in their mobile home for $10,000 a year. They can basically park all around the country. What a national parks charge for your RV parking? I'm curious. Oh, I haven't looked lately. The rates are getting really high. If you're just doing nightly, there's like 100 plus. Really? So several times as much. Yeah. Yes. So you can be spending $3,000 a month if you're parking in premium places. Oh, yeah. So it's not necessarily if people are thinking about van life,

which is another wrinkle to all of this. There's a new category, Van Life, that I want to get into. Because I'm always following trends. I'm like a trend guy. And Van Life is different than RV Life. RV Life, a lot of boomers. They're retired. They decide, hey, I'm going to go out for three months a year.

And instead of staying in hotels, I like to have my stuff. And I think a lot of it is socialization. You get to meet people, other retirees, and you can go to cool places. And it's kind of like, I don't know, it's kind of like a Harley Davidson, kind of like Americana, you know, being on the road thing. I kind of dig that. But tell me, is Van Life playing any role here yet? Because that seems to be young people who are white collar workers, digital workers, knowledge workers, who want to have their cake and eat it too. They want to have the beautiful retirement, but they might be on like a fire, financial independence, retire early kind of hybrid.

So that's another trend, Alex and I have been attracting. So how does Van like play into any of this, if at all? Oh, it definitely does. Shockingly, it's almost half of the RVers now are the younger generation. They're the 35 to 54-year-old remote workers. Okay. So yeah, every year it's getting larger for the younger generation. And tell me about that cohort.

Does that mean like the entire space has doubled or you're just getting a greater percentage of them? And how many people in the United States, let's say, are living this lifestyle, I don't know, half of the time or more? So it's 1.2 million Americans are living full time. There is more when you consider the snowbirds, you know, doing the six-month thing. So the 1.2 million is just the 100% of the timers. And so each year we are seeing growth still just overall in the RV market, more people switching to that life for all ages. but we are seeing the percentages based on age groups is shifting more and more to the younger. So it's the opposite of the Harley Davidson problem.

When their coverage customer gets a half year older every year, you're going the other direction. Right. Jason just underscored the thing you're talking about. In 2024, there were 310,000 RV wholesale shipments up 6.5% from 23. So even in the post-COVID world, we're still seeing this track up over, over time. So it seems pretty bullish as an overall just market to sell into, Kaylee. Yes. So how is the business going?

How is fundraising gone? And any challenges you're having, you're an early stage startup here? Maybe how's it going? How's the traction? Where are you strong? Where do you need help? Yeah, traction's good. So that's good.

We keep going up in the right, about 20 to 30% growth each month. So things are looking good. Yeah. Yeah, things are looking good. 20% month over month growth is what we consider high growth. Yeah. that means you're doubling every three months. Right. Yeah. Rule is 72. Yeah. So that's been good. It's still, we have a lot of challenges as a small startup. So fundraising has been difficult due to the fact that

we're not in a sexy market, you know. Everybody's looking at AI. We're in the RV industry. Most people in the VC world don't really understand that industry. Got it. Okay. So you have to educate them like we just did. Now, we're cool hunters here, Alex and I, so we understand van life and financial independence and we're tracking this kind of stuff. So you have to educate VCs on the opportunity. But there are VCs who love a good marketplace, yeah? Right. And have you been able to identify that subset and talk to them about, hey, here's the vision and why this is worth the time? And amongst the people who understand marketplaces, what's their objection? Is their objection? They're unsure of the growth rate. They get a small tam. Well, let's double click into that group

of that subcategory of VCs, the ones who get marketplaces like me. Yeah. No, you're exactly right. So we've talked to a couple of marketplaces, investors, and they're excited by the idea, but it does come down to that. They don't understand the market still. They're unsure the growth potential. Got it.

And they've told us that blatantly. So I keep sending updates showing them, you know, the market. Well, you know, I think this is where maybe sharing the growth of the market and having a vibrant build in public or social media. So have you gotten to the point of having a really tight social media designed around van life, designed around featuring your customers, featuring your host yet? Because that would, for a lot of investors, prove there's something there. Right.

You know, tapping into the Reddit, the subreddits, tapping into the Instagram tag, Van Life. If I were to pull up your Instagram right now, would you be ashamed or would you be proud. Both. I would be proud of the content, but I just started. I mean, very recent. And I'm also getting a consultant. I'm getting a call with later today, and they're going to help with our two-year strategy.

Okay. And I see you've got 600 followers there, and you're just starting. I'm going to give you a piece of advice. I believe that if you, the founder of the company, can master TikTok, YouTube shorts, and Instagram reels, which is all the same thing. If you can master it, I think that you're going to solve maybe three or four problems all at once. Number one, you're going to solve investors because they're going to go to your social media and they're going to start there. And they're going to see, oh my God, there's a there there.

There are people interacting. Number two, you're going to solve supply because people, if you start featuring your supply on your social media, will want to be. feature. Number three, you're going to solve demand because people who are looking for supply are going to find it there, right? Right. And number four, you could solve for employees and team members who are, you know, the best team members for this startup are going to be people who love living an event. So if you found a marketing person who's a social media marketer who would join your team who lives in a van, you could probably hire them for a thousand dollars a week, probably the expectation of a social media manager who knows how to edit short videos,

who works remote might be 50 or 60 or 70K. That's probably their expectation. And then, if you told them, here's your job. I want you to go to each of our customers and take pictures of them and to go interview them and to make shorts out of them, and then interview people who are also living the van lifestyle, their brains would explode.

Now you've got somebody who's living van life who gets to have a job geeking out about van life. And that person's waiting for you at the van life tag on Instagram or TikTok, and they're already making these videos.

And when you come to them, they're going to think, Haley's an idiot. She's going to pay me for what I'm already doing. How do I know this? Because when I was running, weblogs, we hired a guy named Ryan, who was an incredible commenter. And he would comment underneath Peter Rojas's, Ryan Block would comment under Peter Rojas's posts and annoy him by fact-checking.

And he would write longer comments than Peter Rojas had written in the blog post. So we said, hey, you're writing 12 comments a day. How about we pay you 10 bucks to write, you know, five posts a day? He was like, are you an idiot? And I met another kid who was doing Apple blogs at the time. Blogging was not a paid pursuit. We did the same thing with him, and we created a blog called TuA, the unofficial Apple web blog, T-U-A-W, and we got Tu-A-W. And we got Tu-a-W. It was like a phenomenon for three or four years.

It was very popular blog. And again, somebody was writing about it on their Tumblr, and we hired them. And they were like, Jake House, an idiot. And at that time, we offered $250 a month to do a little. 100 posts. Oh, wow. So it was three posts a day. This was our first deal because people were doing it for free. And in fairness, people were writing three sentence blog posts. You know, here's a cool video of somebody, you know, making, doing something with their MacBook Pro. I think that if you had my money and you said, hey, J-Gal, could I spend it on this? I'd be like, I wonder if that would be the

best use of proceeds solving all those problems at once. Yeah, that's a great point. I've kind of, I've thought, I'd be honest, it's crossed my mind, but I've never just went all in on that. And I think it's time I just do that. Here's an experiment for you. Offer three different people you find. One on TikTok, one on Instagram, one on YouTube, a thousand dollars. Do ten videos over the next month and whichever one you like best. I love that. I'm going to do that. I'm going to keep you update on how it goes. Well, I mean, then you're and but you have to learn these techniques at well, so as well. So you have to, you know, be watching Van Life and say, who does the best Van Life videos? I just found this over on Instagram. This is the current rundown of how popular the Van Life and Van Life

Associated tags are. Van Life Diaries 2.8 million. Hashtag Van Life 17.8 million posts. I had no idea, Kaylee, that this was such a big deal. I thought this was just Jason and I dweeying out about not having to pay property tax anymore. Actually, and so that observation, that's very well done. The observation that you don't have to play property tax, you should make, I kid you not, a post a week on that one topic.

One of the things I learned about shorts is that you're not going after subscribers, you're going after the algorithm. So doing tax hacks or property tax, now you can hijack property tax and tax optimization people. There's a whole expatriate thing and leaving America or leaving your country to go to the people who treat you best on a tax basis. That's a whole other genre. And so there was a concept called New York. news hacking, which sometimes became distasteful. People would be like, here's my SaaS product talking

about, I don't know, Russia's, 9-11, Russia's invasion of Ukraine. Like, you can do news hacking in a very dark, bad way. But there was news hacking of, you know, I am a security expert and Andrew Weiners's phone got hacked. Boom, the day that hack happens, we're sending a short article with five bullet points to 100 journalists, Alex and I would get those. What we're doing here is trend hacking. We're doing tag hacking. And the tag hacking and trend hacking, you know, subreddit hacking is a very powerful pursuit. I wish you great luck with that. Any other problems or challenges I can help you with today? Well, that was wonderful. But we are wondering too, should I focus more on adding features for the user base or should I focus more on adding team members focused on growth, kind of like you brought up?

you're currently growing 20% month over month, which means you have product market fit. And you apparently know how to find customers, right? So you could go crazy and try to grow 40 or 50% a month. The only problem with that is you might not have the customer support. You might get a low NPS score, et cetera. And you're having a challenge with raising money. You know, not a challenge. It's, you know, this is actually what you're experiencing is the normal process.

how many investor pitches have you done not just pitching to the people we introduce you to in the accelerator we introduce you to hundreds of investors you get to pitch them i'm talking about direct one-on-one zoom calls for 20 30 minutes with an investor how many of those have you done ballpark dozens four or five oh four or five okay great so i want you to add a zero to that and report back so that would be the much better thing is to take this segment share with people hey i was just on, you know, this weekend startups with Alex and Jason. Here's the clip. Here's the deep link. We talked about a lot of the issues. I was wondering, you're a marketplace investor. If I could talk to you about my business and get some great advice from you. We're growing 20% a month. So I don't want

you to give your live storage of them. I was on this weekend. We're a startup. We're a marketplace. I know you're a marketplace investor in these three other marketplaces. We're growing 20% a month. We're dealing with a lot of challenges because of that growth. Here's a link to me on with J-Cal and Alex would love to get 20 minutes to get some advice from you about marketplaces. So you're not asking for investment. You're just asking for advice. And you're sharing two bullet points, two main points. And you're going to try to say it in a short, as least words as possible.

Number one, we're growing 20% a month. We're growing 20% among, among five words. I was just on twist with J-Cal and Alex, eight words. So you have two sentences. One's five words. One's eight words. And there's a link in each. And then we'd love to get 20 minutes of your advice since you're an investor in, A, B, and C.

That's another 10 words. So we've kept the email to under 50 words. We've done it in three bullet points. Then I want you to ping the person if they don't respond every 72 hours. Moving this up to the top of your list. Moving this up to the top of your list. Okay. On the fourth one, I want to say, don't mean to be annoying.

I just really respect your track record in marketplaces. And that'll be the last one you do, the fourth one. Ping one, ping two, ping three. And then the fourth one, I want you to say, sorry to be a bother. Just I really could use your counsel since you have done so much great work in marketplaces. Is there anybody else at your firm?

I could do a first call with. And then we'll let it go for now. Every three days, you're going to be annoying. How uncomfortable do you feel about those four follow-up emails? I don't. I didn't realize the follow-up that often. I like wait like a week and a half. I had no idea.

I want you to create a sense of urgency. So I want you to create 20 targets. I want you to send 20 emails. And I want you to follow up on them with a personalized follow up. Jason, moving to the top of your rib box, enjoyed you on this other 20 minute VC podcast. So you're kind of showing it's personalized. It's not like a thing. Any chance I could get 15 minutes of your time from 6 a.m. to midnight, any day of the

week, Saturday, and Sunday included. Right? you're kind of, what you want to do is show that you're not, you're going to be relentless. And you know what? Relentless founders is what we like to invest in. So some, there's some VCs or like, yeah, I'll respond if they ping me two or three times or they go through somebody who knows me. So, um, that would be, but I think you got a great growth rate. I think mastering the social media piece with people, because how many people full time in the company now? Two, three? Two full time. Perfect. The third person, if they were somebody living van life, which serve as a

proof point, you could have them get on the phone with investors. They would serve as a ambassador. They would serve as an SDR sales development rep. They could warm up leads. They could be customer success because they visit somebody. Man, if you were like, the more I think about this idea of tapping a van life couple or an individual, and it has to be somebody who's an extrovert. So somebody like, Press, who worked for me, who, I don't know if he's an extrovert actually, but he plays an extrovert on social media. He's out there building his products in person. He's going for runs,

videotaking himself, sharing his friends. You need somebody high energy like that. They might skew younger, but they don't necessarily. So they just have to skew that they're already doing the job. Hanging somebody to do a job they're not doing already is hard. You're kind of pulling teeth. When I hired Alex, he was already doing podcasts and writing and geeking out about S-1s. I didn't have to be like, Alex, read this S-1, read this 10-Q.

He's like, I'm sorry, I can't talk right now. reading a 10Q. That's why I'm still fun at dinner parties. Or maybe he doesn't get invited to that. I don't know. It could be either. I want to jump in here, though, Jason, this employee, this number three, this Van Life SDR ambassador, content creator, how much equity should a startup give to an early

hege hire who's a non-founder? I think this comes up a lot. And while we're here, let's take a moment. You can give them a point if they stick around for four years. One point. Okay. That's great. It'd be generous, right? You could be generous with the third employee. Now, if they were the

CTO and they were joining and they had done two other marketplace startups, they probably asked for 5%, 10%. Oh, wow. If they were getting like less than market salary. So let's say the CTO who worked at another marketplace, not Airbnb, obviously, but, you know, maybe they did work at Airbnb and were one of the first 50 employees. They made a little bit of money. They may not want, you know, 150K 250k salary as a CTO, they may want to take a 100K salary or a 5K a month draw, you know, 60K a year. They might want to invest 250K, you know, to own 5% of the company at a $5 million valuation and get 5% equity in, you know, over five years and get to like a 10% ownership position. So that's what you're kind of dialing in here. This person probably

doesn't care about the equity. I'll be totally honest. If it's a van life person, and they're optimizing for fire, they would look at the equity as icing on the cake so you could probably get away with 25, 50, 75 basis points or a point. If they're savvy,

they might want two points. And they could, if they were like chief marketing, officer, CMO level, Alex, to your point. Yeah. And chief marketing officer might ask for two points,

three points, four points. And then here's the great news. They're on a one-year cliff, Kaley. If they suck, or if you say, conversely, and they don't want to waste any more time because they don't think that you're all going to make this happen

and the equity is important. They quit. You quit them. Or if you can't quit each other, that means something good's happened. And they get that nice 20, 25% of their equity, you know, on 12 months and one day. So we've built that protection into startups.

It's called a cliff. And the cliff exists for a reason. I think this is fantastic. If you want to learn more, like I said, it's hookhub. com launch accelerator class 33. Kaley, thank you. Thank you guys.

It'll be interesting to see if in time, then life becomes so big, thanks to things like Starlink and Project Kiper and so forth, that people do kind of do the mass Airbnb strategy, but for RV spaces. I can see that becoming a small business. Anyways, I think the company is great. I'm curious about their splits, though. I didn't get a chance to ask that, but I wonder if they have like Airbnb level revenue splits with hosts. We'll see over time. All right. So this is a clip from Andrew Reed.

He was on, I believe it's the tech bros podcast. Oh, yeah, tech bros. They're the ones who do like the ESPN thing where they put the logos of the sponsors along the bottom. Yep. So here is Andrew Reid from Sequoia on the podcast talking about how the Sequoia partnership works and how founders interact with it and how they get sometimes surprise. Here we go. Well, I hear often like, oh, Sequoia, I've heard it's really tough internally, like really sharp elbowed. The stakes are really high.

It's a small team. Expectations on performance are insane. It's a consensus investment process as well where you don't need to just basically close you. You got to close if you're a. an entrepreneur, you've got to close all your partners, correct? Exactly. And the partner meeting, I've seen some founders really rise to the occasion in the Sequoia partner

meeting room. I've seen people just totally wilt. It's actually an amazing culture inside the building. Because of that, I think, like, because the expectations are so high, the team is so small, right? I think this is one of the things that Doug has this presentation, he calls it the laws of physics, where

one of the laws of physics is that fund returns are inversely proportional to team size. And also fund insurance inversely proportional to fund size. You know, we've been very disciplined about keeping the number of people on the team and keeping the funds to like a relatively stable size and then working together to kick ass. All right. Yeah, great clip. That range true. Having pitched the Sequoia partnership, having them invested in one of my companies,

you know, that I ran a CEO and spending time with them and, you know, them being an LP in my funds. and me being an LP in their funds. I've got a great deep relationship with them. It is true. The two important points there that Doug Leone, the goat, uh, points out, if you have too many people, fund returns go down. If your fund size is too high, fun returns go down. Sequoia is a large organization, but they have a seed fund and, you know, like series A, they have a growth fund. They keep the team's small, high expectation culture. And I do remember at one point going into a equanim, I was like, hey, where's flying? And they're like, oh, yeah, he wasn't invited back to the next fund. Which is how you get fired as a venture capitalist. No, you don't get fired. You were not invited into the next fund.

So you nailed it. It's like, and you know, that's it. That's just the nature of the business is you do get a lot of runway, but then you might not be invited back to the next fund if you don't hit the notes that you need to hit. Yes. Now, Jason, on the on the pitching point of this, founders, Wilting, founders rising to the occasion. What does a Sequoia partner meeting feel like? It sounds like they're all there at once, and you're pitching literally all the partners for the fund that you're looking at. I would say big ear, small mouth is how I would describe pitching to them. They are not going to say a lot. You might get one or two questions from one or two people, and then they will follow up. And I think, you know, they are looking for a certain archetypal founder or founders. Now, a great market size, great early execution, track record. Those things can play into, you know,

any of this, you know, in terms of decision making. But, you know, they're looking for very specific, you know, Peter T.L. Elon, Chad Hurley, Max Lev Chin, you know, go down the line of, you know, intense founders who are super driven, Reid Hoffman, you know, I'm going through the logos in my mind, Steve Jobs, the Cisco founders back in the day. So they're looking for highly driven, tankerous, chip on their shoulder, hardcore founders. And I think because they have such a high number of people applying, that they probably are okay leaving some good investments

to other firms and going for the great, going for the Larry and Sergey, Drew from Dropbox. They're looking for really hardcore folks. And you know what? Hardcore folks also, myself, Sam Altman, probably didn't get great returns for them, but still hardcore folks who they identify, who they know have a certain amount of pride and doggedness. They don't expect every investment to work out, but they do want, you know, Tony Shea in the

building. You know, Alfred Lynn, you know, who is now a partner there, or Ruloff was on PayPal. They're looking for hard driving chip on the shoulder entrepreneurs. And so having a bit of a chip on your shoulder probably is an asset. Zuckerberg famously showed up to pitch them in pajamas and did a whole pitch of why they shouldn't invest. You know, that kind of stuff. That takes stones. Well, I mean, it was also put up to it by Sean Parker. But the whole the whole four quadrant thing that Don Valentine said there famously, competent, incompetent, can, you know, easy to get along with difficult to get along with or sometimes difficult or challenging individuals. Highly competent, challenging individuals.

are the outliers in our business. So, you know, pick somebody, Travis, Elon, you know, that may not be easy to get along with at times, but they're highly, highly capable. That's what you're looking for. That doesn't mean, you know, you have to be difficult in every decision, but sometimes that is a flag.

And, you know, we have that sometimes. Sometimes we'll have somebody who comes to the accelerator, like we, you know, have people here come on office hours you meet them. And they want to make five changes to the standard document. documents. And we're like, yeah, we don't, for the accelerator, we don't do that. But for a direct investment, we very well might change some standard documentation. Because, okay, you know, we,

we generally will advise them, like, these are the standard docs. You're going to make it more different for the next time. Right. So, you know, we suggest you do that. But if they want to have in there that they can, you know, keep running or be on the board of this other company or they want to be an advisor to this venture firm, you know, Raoul has a venture. firm he set up. Not that we were like, he didn't have that when we invested. But if somebody like Raoul was like, I also want to do this venture firm with my brother or whatever, my friend. And I, you know, that's, you know, a no go. If I can't spend five hours a week on it, I'd be like, okay, fine. Right. Sure. Sorry, Josh Wolf from Lux Capital says, chips on shoulders puts chips in pockets. I think is his

summary of this. He cribbed it from Sequoia. Yeah. Sure. Yeah. But I, I, can I, just say there's a little note of, shade in what Andrew is saying there, because if I think about who's raising the largest funds, and who has... He's talking about Andreessen Horowitz, yeah. Yeah. I think all of those funds are going for the average venture returns. And so what you'll see...

With the most capital. Yeah. Yeah, I mean, it lets... The average venture return should be double the public markets. If that does, or even if it's 50% on the public markets, and your Mark Andreessen and Ben Horowitz, and you index the entire space and you're putting $2 billion, $3 billion to work a year, and you've got $20 billion under management. You know what the management fees are on that.

It's just a money printing machine. So that is a strategy to be essentially Vanguard funds of venture. Sure. In a way, why Combinator and what I'm doing at launch, they're doing 500 investments a year and they're accelerator. I'm doing 100. We'll probably get to 200 in our next fund. That in a way is taking pre-seed or seed and making an index of those.

Well, it turns out the pre-seed and seed index, if you actually succeeded in that and you indexed it, you would be the greatest fund of all time because they typically do 2x what venture does. So you might actually be able to establish a 3x fund, 4x fund, like that would be, or 3.5, that would be pretty juicy. So, you know, there you have it, folks. If you could institutionalize a 20% year-over-year return and you can keep making the number go up, pretty great. Yeah, Warren Buffett will be calling you at that point in time because that would be. you get no liquidity, right? So that's what you're giving up, right? So if you get the Vanguard fund and an average is 7 or 8% or 8% or like whatever, if it's a tech fund, it does 8 or 9% like and you can, you can come in and out of it as you please. That's a feature in venture. You can. And in venture, you have to have a group of people who get the allocations from 10 different people so that you're in 10 different seed funds and that's what a fund to fund is for. So there are fund of funds that try to accomplish that test. But you are. and going to not see your money for five, 10, 15 years. 15, yeah, it's, it, that's going to quite.

You start seeing some, maybe if you're lucky at 5, 6, 7, you'll start seeing most of it between, you know, 8 and 12, and you might see some stragglers at 13, 14, 15, 15, 15, 15, endowment, or the Ford Foundation or a sovereign wealth fund, who care? Like 15 years, 10 years, 20 years, all the same. You just, you don't need access to it because it's only 5, 10, 15, 20% of the portfolio. So, speaking of venture capitalists and returns and LPGs, Jason, can I show you the funniest comic I've seen recently about venture capital? Sure.

This is just for fun. If you're on the video version, you see this. If you're not, it's a two-panel comic. There's a man in a suit talking to a guy in a hoodie. And the guy in the suit's labeled VC. And he says to the founder, you're just a rapper on an LLM. And then the founder turns around and says, well, you're just a rapper on an LP. And this is niche humor, Jason, but it had me absolutely rolling.

I loved it. It's true. I mean, it's sort of like saying YouTube is a rapper. around S3, you know, story. Sure. It's a, yeah, okay, sure. You know, Netflix is a rapper around, uh, negative cash flow,

or, you know, whatever, like, sure. All right, everybody, this has been another amazing episode of the speaking startups. He's X.com slash Alex, cautious optimism on, uh, substack. And, uh, go spend a hundee. Pay for his news. Is it a hundy a year? It's a hundy a year or 10 bucks a month or whatever.

10 bucks a month. Go get it. And we'll see you all next time on this week of startups. Bye-bye.