This Week in Startups - Spotify x Barcelona, ex-Disney CEO joins Genies, AMC gold mine + D.A. Wallach: music and bio-investing | Angel S6 E10 | E1410

Episode Date: March 17, 2022

We wrap up Angel Season 6 on First Time Funds with Pharrell Williams-signed rocker turned investor D.A. Wallach of TimeBio Ventures (32:23). But first, we do 4 rapid-fire news topics: Spotify spent ~$307M on FC Barcelona naming rights (2:56), AMC acquired a 22% stake in gold miner (10:29), Ex-Disney CEO Bob Iger joins the NFT avatar company Genies’ Board (16:14) and we break down the anatomy of two alleged NFT grifts (22:35). (00:00) Jason and Molly intro the show: Spotify & FC Barcelona, AMC goes for Gold, Bob Iger joins Genies, NFT Grifts, Angel interview w/ DA Wallach (02:56) Spotify drops reported ~$307M on FC Barcelona stadium naming rights (09:18) Ourcrowd - Check out the deal of the week at https://ourcrowd.com/angel (10:29) AMC goes for Gold (16:14) Bob Iger joins Genies board (21:19) Embroker - Get an extra 10% off insurance for your business at https://Embroker.com/twist (22:35) Anatomy of NFT Grifts (31:03) LinkedIn Jobs - Go to https://linkedIn.com/angel and post your first job for free. (32:23) Angel S6 w/ DA Wallach of Time BioVentures Check out Time Bio Ventures: https://www.timebioventures.com D.A.'s Blog: http://www.dawallach.com FOLLOW D.A. Wallach: https://twitter.com/dawallach FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Hey, everybody, we have a great show for you today. We're wrapping up Angel Season 6 with our 10th episode. We focused on first time funds this season, and we are going out with a bang in episode 10. My good friend, D.A. Wallach of Time BioVentures is with us. He's a musician. You may have seen him in La La Land. And he's a bit of a polymath, also doing capital allocation and biotein. Yeah, no big deal. Just like some hardcore life extension, awesome stuff. This is a legendary angel season, I got to say. But before we get to this interview, we do four rapid fire news topics. Absolutely. And we do these each in under five minutes.

People are really responding to this new format where we try to get through the news quickly so you can get on with your day. The first story we're going to talk about is Spotify spending over $300 million on the naming rights to FC Barcelona. Jason and the producers tag team on some amazing back of the envelope math there. Then the AMC CEO explains why that company, the movie, chain acquired a 22% stake in a gold and silver mine. Red flag.

Nevada didn't have that on the bingo. Exactly. New, new segment, red flag. Red flag. And then ex-Disney CEO and author of the amazing ride of a lifetime and guest, my producers have not been able to get on the show yet. Zingpaw CEO Bob Iger has joined the NFT avatar company, Genies. Maybe if we talk about why he might have done that.

Maybe if we make an NFT, he'll come on. Then, though, we talk about what is. quickly becoming the playbook for NFT grifts so that you can be on high alert. Absolutely. And we have all the receipts and all the details of how this painting of the tape and the flipping and finding new bagholders is working in NFT land because people are revealing the inside secrets as they leave crypto companies and failed projects, hopefully because of a crisis of conscience in some cases.

So it's going to be a great show. Stick with us. Season 6 of Angel is brought to you by OurCrow. Our Crowd helps you invest early in pre-IPO companies alongside professional VCs. If you're interested in investing, you can join Our Crowd for free at OUR-C-R-C-O-W-D.com slash Angel. Our crowd helps you invest early in pre-IPO companies alongside professional VCs. If you're interested at investing, you can join Our Crowd for free at O-C-R-C-O-W-D.com slash Angel. Angel. Embroker's startup insurance program helps startups secure the most important types of insurance at a lower cost and with less hassle.

Save up to 20% off traditional insurance today at imbroker.com slash twist. And while you're there, get an extra 10% off using offer code twist. And LinkedIn jobs. A business is only as strong as people and every hire matters. Post your first job for free at LinkedIn.com slash Angel. All right, everybody. It is a news day and an interview day. And so we're going to try to jam through a bunch of stories with our new favorite technique. The Lightning Round. Producers are taking this up a notch, by the way. I highly encourage you to go and find this video on YouTube.

YouTube.com slash this weekend and see how they're going to basically give us like a nightmare flashing red timer. So that the end of our lives approach and we can see it happening. It's very MacGyver. talking. Trailer. Yeah. The bomb is going off. It's a count on clock.

So today we're going to try to get through, what, four stories in five minutes. Each. We're going to race through them. Each. Oh, we get five minutes for that. That's like an hour. Are you kidding me? I came from radio time.

We're going to be bored of these stories in five minutes. I love it. It's like podcasting time. It's like dog lives. It's like seven times what you do on terrestrial radio. So when you do that three minute hit, that's 21 minutes. It really is. It really is.

And people like it that way. Yeah. Let's go. Yeah. First story. Okay. here we go. So Spotify, so start the timer. Spotify has signed a four-year deal for FC Barcelona stadium naming rights going full football. ESPN sources said the deal was $307 million in total,

which is a lot. Although, as of April 2021, you could consider this a good investment in some ways. FC Barcelona's total value was $4.76 billion making them the most valuable soccer club in the world. So if you were going to pick the stadium, I guess that's the one. But what do we think about Spotify like feeling its oats here, splashing cash around? Yeah, it's very interesting. You know, I always like to think about the math behind these things. And so, you know, if a user pays 10 bucks a month, 100 bucks a year for their Spotify account, I'm just picking a number here. You know, I don't have the blended number. We'll pull that. But if you say $100 a year, and let's say the average person keeps it for, I don't know, three years.

Nice and easy math there, $300. You've got to get a million new subscribers to make this break even. Now, I don't know how many people are going to watch football over that three-year period, but I don't think they make the million dollar. I don't think they get the million new subs from this. So then you would say, well, why do they do it if it's a money-losing thing? Well, you know, and actually they did. some of it here. Q4, Spotify is 180 million premium subs at $4.82. So it's actually cheaper than I

actually put it at 10. This generates $867 million per month in subscription revenue or $2.5 billion per quarter. So yearly ARPOO, average revenue per user, if you've never heard that term, $58. So Spotify user six around for three months, it'd be $174 lifetime value, LTV. How do you calculate LTV? Well, you look at the churn rate, how many people leave every month, and then you can, there's a formula basically to figure out based on churn, if 5% are leaving every month, you get an idea of how long the average person staged. So they would need to acquire, like I said, you know, over a million subs. Paid, paid subs, right?

Not free subs. I mean, the counterpoint to whether they can get a million free subs, I just looked up the numbers. I mean, granted, this is not just for FC Barcelona, but FC Barcelona is one of the most popular clubs in the world. Sure. And when you look at global audiences for football, football, for example, in 2010, and that's like a while ago, and this is just what my quick duck duck shows up, 3.4 billion people watch the World Cup soccer championship.

So, like, assume that Barcelona hosts even one or five games at the World Cup, like the, you know, if you measure impressions, which are a sketchy metric, we all know, but the impressions that Spotify is going to get as a result of this, are like many, many multiples of what you would get from sponsoring an NFL stadium or even an NBA stadium. I mean, this is like a massive global audience. So even though a lot of times these stadium plays are really just about awareness and they don't necessarily make any of these companies any money, we do this story. Every time there's a big one like crypto.com, you know, taking over Staples. They don't usually make any money back for the company. But this is the rare case where I could imagine

if you're talking about an audience in the billion, and it might not even be that hard to pull in a million pay sums. It's a global audience. So think about that. And if there were 3 billion people watching it, you know, 1% would be 30. 10 basis points would be 3 million. So talking about less than 10 basis points, you'd be becoming a paid subscriber of the global football audience. That is one way to look at it.

It's not intellectually correct. But it is, you know, interesting back of the envelope math. I would take this and I would say put it as one-third actual ROI. So take one-third of the cost, $100. million and say we're hoping to get that 100 million back in subscribers. I would take one third of it and call it brand building and blocking competitors. In other words, people just know Spotify is the lead. And so it's cementing your lead. You're spending $100 million, you know, $30 million a year to just cement your lead as, you know, we're the winner of the space. And then finally,

I would put a third towards the advertising business. In other words, marketers who work at agencies go to football games, the CMO of, you know, some consumer brand that might be an advertiser on Spotify's music network globally or Coca-Cola, Pepsi, I'm thinking, you know, Marvel, some Disney movie that goes around the world. Yeah, they're watching this. They see Spotify, keeps them front and center, and then maybe they make a $10 million ad buy that they weren't going to make. Right. Because somebody kept saying Spotify over and over again. So that's one of the things you can think about with an ad buy like this. There's somebody saying to Daniel, to the CEO of the company.

Here's how to, here's how we're framing this opportunity. Or, and I don't think we can discount this, it's a giant vanity play. Which it definitely could be. Spotify is also committed to being a global brand. They get added exposure in FIFA, the video games.

Like there's, you know, there's a lot of reasons that this could improve their awareness. But like people know what Spotify is. Ding. Wow, that little red line really worked. It did. It did. Okay, we're moving on.

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and got to ride in one of the giant dump trucks that they keep showing. all of the pictures of this. However, let's get to the news. AMC, meme stock, and now apparently a diversification play, AMC, the movie theater chain, has now acquired a 22% stake in Highcroft mining, a Nevada gold and silver mine,

a junior mine that could be best, I would say, not very charitably described as a penny stock. They got a nice big bump from this. My earpiece went out there, Molly. I thought you said AMC, the movie theater chain, invested in a penny stock of a mining company. Just something went wrong with my headset. Go ahead one more time.

You can go ahead and tap yourself on the side of the head one more time. So what happened is AMC, the movie chain, bought a 22% stake in a golden silver mine. Okay. That's a penny stock, yeah. Explain to me the synergistic nature of this investment. Because if you're in the entertainment business, maybe you buy a, I don't know, a movie production company or something related to movies,

a popcorn company, a candy company. I don't know. I'm sure this is what the Redditors had in mind, right, when they pump this stock. So, Mudrick Capital, I'm just going to cut straight to the chase here. Okay. Mudrick Capital, a hedge fund, took high-croft mining public in a SPAC last year. Okay. and is a huge holder in this mine.

And this evidently is very common with these what are called junior mining operations is that to raise capital because mining is so capital intensive, they go public via SPAC or some other means and trade as effectively a penny stock so that they can just sort of keep a flow of capital going until they hit the gold and silver. So they can lose a lot of money and sometimes they need a big bump. So this murder capital, which took Highcroft Public in us back last year, temporarily injected $230 million of money into AMC last summer. Got it. Okay. So there is some crazy incestuous nature here, the same hedge fund bet on these two things and then AMC bet on this. So that to me seems like some sort of a weird... Up depending on how you look at it or no.

I guess that would be the worst interpretation. Mudrick no longer... holds. MADC, maybe. No longer holds. Yeah. So maybe they made money from the AMC pop and then they put it into this. Anyway, this is, we need to get red flags.

So you and I can just hold up a red flag while the other person's talking. We do. Just a visual red flag. So when something's red flag, red flag, we can just hold up the red flag. This is like crazy red flags. I don't know why you would do this. But the guy who is the CEO of this company was previously, this guy Adam, who I'd love to on the pod, by the way.

And I think he got back to me at some point on Twitter and said he would do the show. He was previously the CEO of Starwood Hotels, which I loved. Big fan of Starwood Hotels, the WI used to use all their points. I was really into Starwood points for a long time. Great, great points program. And then I went all Bonvoy and United. So I'm just got the crazy Bonvoy and United Points. But he also ran Norwegian Cruise line.

Everybody knows how I feel. I have a no cruise, no buffet, no all you can eat rule. I never touched those three things. but he also had Vail Resorts, which is the epic pass, which changed the entire industry. I'm not sure if he was there during that. And then finally, he was the CEO of the Philadelphia 76ers. So he's super qualified. I don't know why they would do something like this, but he actually commented on it and said he just thought it was a good investment.

And so our strategic investment, I mean, Adam Aaron, Aaron, Aaron. Adam Aaron It's probably Aaron but I want to call him Aeron now No it's Aeron Shout out to C and Bill Adam Aeron

said quote Our strategic investment Being an essay As a result of our Having identified a company In an unrelated industry No joke That appears to be just like AMC

Of a year ago In other words Undervalued It too has rock solid assets But for a variety of reasons It has been facing A severe and immediate liquidity issue Okay

They have no cash And they're going to go under back to the quoting. It shares, its share price has been knocked low as a result. We are confident

that our involvement can greatly help it to surmount its challenges to its benefit and to ours. Get it. Rock solid.

Yeah, people are really dropping a lot of puns here. It's kind of our job, but okay. This is crazy. Don't do these kind of things. It just puts up red flags.

I mean, I never liked this whole AMC, you know, And then what was the other one? GameStop. I never liked these pump and dump, you know, fighting the hedge things. Well, now that it's just like, there's no real business. Now that it's hedge fund bro deals, it's even sketchier. The end.

I just don't like market manipulating tactics. For me, I'm just like, I'm so old school. I'm turning into an old man. I'm like, well, what's the revenue on this thing? And who are the customers? And what's the product roadmap look like? And how do we expand margins? I don't sound like some old dude all of a sudden,

but I just kind of like the old signals of quality. Yeah, totally. Not battling the shorts. It just seems very weird. But if you're into it, go for it. Shout out to the Nottis saying they're maybe going to become an investment holding corp and not a movie theater chain. And this would seem to be a step in the right direction, but still red flag.

Bob Iger, hardest man in Hollywood book. Like, Bob Iger is not just like dropping into your party and joining any old board that he wants, I don't think. So it was very notable when former 15-year CEO and chairman of Disney, Bob Eiger, joined the board of of Genies, a digital avatar and NFT accessories company, backed by Mary Meeker's Bond Capital. Its last reported round was a $65 million series being made 2021. What? Bob Eger's a hodler.

There we go. We're showing a video of Bob Eiger as, like, it's kind of like hip-hoppy. kind of swaggered up in an avatar. Wow. I don't like that cool in my avatar. So, okay, from our production team's research, this appears to be the first board he has joined since stepping down at Disney.

Jeannie's secured an exclusive partnership with Warner Music Group to make avatars for all their artists, including Ed Shear and Cardi B, Bruno Mars, daft punk, Fleetwood Mac. I really want to see like Fleetwood Mac, NFT. is not a thing I ever thought I would say before. Or sorry, digital avatar. Okay. Does it real now?

I mean, now is it real? I guess these avatar, I don't understand the business of avatars because avatars are built into every game, built into like every platform. They've existed forever. So I'm not sure why this is a business except the accessories, I think is why. Well, yeah, I guess you can buy these accessories. And then I think there's going to be some cross-platform nature to avatars at some point. like there'll be an HTML standard for avatars.

So when you say your eyes look like this or this is a hat or this is a skin tone, whatever, this is the height, these are the dimensions, that they would be portable to different games. So I do think that vision is kind of interesting that, you know, if I have an avatar that they make, I could use it on Medis platform or Facebook and Oculus or I could use it in, I don't know, a video game or Minecraft or some other. And it would somehow translate between all of these. But the first, I guess, use case, because this was built on the flow blockchain, which was built by Dapper Labs, and I guess they used it for Topshop. So there's some connection here between the NFT community and then I guess selling these as NFTs.

So maybe Cardi B, every album will have a thousand NFTs of her singing different songs in different outfits and they'll be collectible like trading cards. And, you know, it's, you only need to get a thousand. of your fans to buy those VIP tickets at a, you know, or even 500 of them if they buy the VIP experience for $5,000. It's kind of like the first class tickets on a flight kind of subsidize everything else. Right. And that's why these courtside seats, you know, for $5,000 at the Lakers and the Warriors are $7,500, I think, for the Knicks now, these things pay for a lot of seats.

If you think the seats that are in the upper deck are $50 each, the $7,500 court side seat represents a lot of seats, like $150 of those. a whole section. One seed equals a whole section. Exactly. Yeah. So I think that that's what's going on here is, I think they're going to, whoever the thousand Fleetwood Mac, Dyerstraits, you know, Cardi B fans are who want to spend $1,000 on something when the new album comes out, we'll buy this and maybe that'll make them happy. Or even $100,000 buying them for $2 and getting some kind of a benefit.

I mean, you know, this is a long-term bet, of course, on digital goods and the digital goods marketplace, has been pretty successful so far, right? I think, like, you interviewed the CEO of Genies back a while back here last summer, and he pointed out that Fortnite sold a billion dollars in Avatar skins in 2020. So, like, I think there is value here. I think what really makes it interesting is this idea that this is where Bob Iger, of all people, is going to put his future energy.

Like, I think there's an, I would have love to hear the pitch that they made to get him on the board. Well, it's very simple. He's out of there. He wants to work lightly. They give him one percent of the company. They let him invest. And it's a billion dollar company. He gets, if he gets one, that probably probably costs one, two percent to put him on your board is what I would guess. He could get us a board member and he makes the company five percent more. Look, we're talking about right now. Right. So he's going to be on CNBC. So the company becomes, I think, five, ten percent, more valuable with Bob Eiger on the board, a celebrity board member. So let's just pick a number, five percent. Let's say they gave him two percent. Well, that means the founders and the rest of the

company are getting that 3% split. 2% if the company's worth, what do we think the company's worth? Did they say the valuation? Is it a billion dollar company, a $2 billion company? $65 million. Was their last round, but we don't know the valuation. We don't know.

But it's probably a $500 million to billion dollar company. 2% of a billion dollar company is $20 million. What did he get paid per year at Disney? Probably something similar. And if the company 10X is from hearing, it gets a $200 million hit. That's significant, even for Bobiger. All right.

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And get that extra 10% off by using the offer code twist and not let them know you, listen to them on the show. All right. Great job, in Broker. All right, we have, speaking of NFTs, though, and whether Bob Eager himself is getting scammed, two examples. No, I don't think he's getting scammed. He's not getting scammed.

He's not getting scammed. It's a nascent company. It's just like, of all of the choices, right? That's the choice he made. And that makes it super interesting. He does IT with character. It's almost in a way. I mean, it really is actually pretty appropriate.

And they understand the value of merch. Like, that is a company built on the empire of merch that he in part created. I just don't know if digital merch is going to be as good as real merch. Like, you got the Kanye speaker. Anyway, we're over time. But you got the Kanye speaker. I think that thing is going to go up in value. That thing is so weird and cool.

Weird is cool. It's like it feels like a little mole. It's a really strange texture. It's kind of like soft and squishy. Okay. So anyway, this one probably not a grift. However, examples of NFT grift abound. We, we meaning our producers, came across an interesting Reddit post in R slash cryptocurrency from someone claiming to be a former crypto employee. Apparently, they worked at a no-name crypto company from late December to a few weeks ago. Here are some of the highlights. Quote, the level of

disorganization and chaos was absolute madness. Each morning we had a a different objective based on the most recent trend in the market. NFTs are becoming popular. Let's do NFTs. This particular token is performing well. Let's buy it even if it's an ATH or at ATH. Sorry, yeah, at ATH, all time high. And then, quote, we cheat it.

What I mean is that we bought bots for our TG channels. We faked users in our Discord and we partnered with dubious influencers. Yeah, that's the underbelly that I find really crazy. 100%. And then here's the, this was like, oh, I'm pretty sure I heard Jason say this word for word. Quote, the founders didn't care about the crypto ecosystem at all. Their main objective was making as much money as quickly as possible.

We were acting like an evil hedge fund. Precisely the type of institution crypto is supposed to fight. I mean, this is what's happening in crypto because the strength of crypto is you've now added money and incentives to, you know, the base level technology of the internet. That's the promise of it. But when you do that, that means an incentive now exists. to build out the infrastructure and to exploit the infrastructure. So if we had made the World Wide Web a penny for every page load or a hundredth of a penny for every page load in your browser, you could be sure that when browsers came out,

there would be all kinds of hijacking software that like Drudge Report, if you ever have Drudge Report up on your screen, it reload your page every minute. And then they're like, oh, we have the most pages of any news site. It's like, yeah, I wonder why. So just as a thought experiment, what if every email you sent was a penny or a hundredth of a penny? What if every page load was a penny or a hundredth of a penny? Well, then there would be incentive to make these things go wild. And so then people would be sending you emails on purpose that were confusing so you'd hit reply to make more money.

And so show me an incentive. I will show you a behavior and an outcome. Exactly. And so that's what we are experiencing right now. And I 100% take the note that reading an anonymous post from somebody on Reddit is not in itself proof of malfeasance or wrongdoing or even that that person is. real and those things are real. However, in the Twitter thread responses to this, and this is what's so interesting, a sleuth from Twitter and Reddit, Zach XBT, put up a long thread revealing some of the internal documents for an NFT project called Soul Chicks. And effectively, S-O-L-Chicks.

And effectively, it's all the same stuff. Right. Here, they admit to buying fake Twitter followers, and you can see other promos that they've paid for. They take money from a VC that they quote unquote blacklisted on Twitter. They used bots to flood Discord servers and DM and spam people. Here are some screenshots of more fake marketing on Reddit. Here are some buying undisclosed shills from random botted accounts and so on and so far. Like lots and lots of money was a partnership. Yeah, go ahead.

The super interesting one here to me is the purchasing of high karma Reddit accounts to promote the subreddits. Yep. So, you know, this is a thing. when you don't use real names on a system, you get to give anonymity to people, which can be beautiful if the person is a whistleblower. But then you also introduce manipulation. And one of the great manipulations that's occurred

is people building up high value accounts, whether it's on Twitter or Reddit or Instagram, and then selling them. And so this is why any account on Quora, Reddit, Twitter, you know, any place that doesn't have a real name's policy, You should be hyper, hyper sensitive to the fact that it could be a malicious account that's manipulating you.

And so that's why real name services, Facebook, LinkedIn, have more value per user. Now, of course, you can't whistleblow on LinkedIn and you can't whistleblow on Facebook easily. I mean, you could, but it's harder. And so you get to go with the bad here, but I do think this market for high karma credit accounts is something definitely to follow. Reddit's amazing. But you should look at a Reddit thread with a, a lot of,

what's the word, skepticism. And so just be careful out there forks, especially when you add finance to it. All of this would be fine if we were talking about the next episode, you know, of Game of Thrones and people were doing Star Wars spoilers. The problems that come from a bad spoiler or somebody doing something silly is low.

Here, people might actually place bets. Yeah. And that's where like the finance stuff, you know, on a Reddit maybe should be regulated and maybe that should be real names only. Yeah. And this is, and what we mean to point out is that this is effectively a playbook.

I mean, there's even a tweet that says that they bought a cameo, a paid cameo with Ice Cube and used it to pretend it was a paid partnership. Which would be the easiest thing in the world. If you could go on Cameo right now and say, let's say we came out with JMO coin. We could literally be like, hey, you know, it's Ice Cube here. want to congratulate Jason and Molly on the launch of JMO. We are so excited for your future. Congratulations and happy birthday and continued success. And then we just clip out the happy birthday part.

Boom, we start sharing it. Totally. So it's so easy. I mean, somebody was getting people to do like Nazi, you know, slogans and Hitler speeches, you know, the classic troll. You get somebody, you just take some Hitler quotes and you put it in between a happy birthday message. This is why I would never do cameos or anything like that.

It's just a setup. I mean, I have done a happy birthday wish to somebody DM to me and was like, hey, can you say happy birthday to my husband? It would be really cool. And I was like, oh, you're a great wife, like totally. And I just did it for free. You know, we taped it here. And now 20 people are going to ask me to do that.

I know, I'm like, why would you say that? We could clip that out. We could clip that out. No, you'll leave it in. It's fine. I'm not going to do it anymore. Yeah, the playbook is the problem. It is.

You see the pumping up rooms on telegram. That's what TG stood for before. I was going to check out. Telegram rooms. they're literally called, if you go on telegram signal these places, you search for pump, or pump and dump or pump,

pump, pump, you'll find those rooms where they're like, the coin of the day will be announced at 4 p.m. And then here's your instructions, buy 100, by 50, by 25, and don't sell until tomorrow. And it's like, don't sell until tomorrow?

What are you doing? The person running the pump room. For the sake of my algorithms, I'm never typing the word pump into a search engine on any site whatsoever. Yeah. Yeah, you could be the algorithm could take you in all kinds of different directions.

Yes, it definitely can. Yes. So that's just something to be on the lookout for everybody. We are not, again, like, there could be potential in this universe, but right now it is being dragged down every single day by these perverse incentives. There's too much money to be made, and so you cannot trust any of it. Show me an incentive. I will show you an outcome.

The incentives here are to cheat, to front run, to paint the tape. We've described all the techniques, and now here's even more of them, buying Reddit accounts, using cameos, they're going to do everything they can to get you to buy what they bought last week for a dollar for five or ten dollars. And, you know, it's market manipulation, and that's why these things need to be regulated as securities. And that's why securities regulation exists.

I don't want to be like old grandpa, you know, here, but, you know, there's a reason why regulation exists and buyer beware. Listen, because of this great reshuffling, the great resignation, a number of employees are considering switching jobs. You know that. You're seeing it inside your company. You're seeing it inside your friends' companies. Well, now is your chance to try and recruit them.

If people want to switch jobs, you can take advantage of that and fill your open positions. And LinkedIn Jobs is here to help you connect with the best candidates faster than your competitors. And your first one is free. We love using LinkedIn Jobs over here at launch and at inside.com. We recently hired an awesome video editor who found us on LinkedIn jobs. Again, we keep finding great people on LinkedIn jobs. And it's so easy to use. You create a free job post in minutes,

and you'll reach the world's largest professional network of over 770 million people. And now, when you add your job post, you're going to get that purple hiring ring around your LinkedIn profile avatar. You know your little photo on your profile page? Well, that lets your network know that you're hiring, huh? LinkedIn jobs will help you find the candidates you want to talk to

and you're going to find them faster. And again, you've got to go on offense in a market like this. Did you know that every week there's 40 million job seekers that visit LinkedIn? I don't know if you knew that, but I'm telling you right now. So no excuses. Get a free job post right now. LinkedIn.com slash Angel. LinkedIn.com slash Angel to post your job for free terms and conditions, of course, applied because they're giving you a free job posting. All right. I think we did an admirable job staying on time with our stories. Two minutes over. I think we did. Two minutes over on that last one. We did fine.

Next up though, the reason that we're trying to keep this short is because we have a great interview for you today. We're rounding out Angel Series 6 first time. funds with. Ah, my good friend, D.A. Wollick, who is running time bio-investors. He's a musician, rock musician. You may have seen him in the movie La La Land. We talk a bunch about the music industry.

He's a bit of a, what are they called? That a polymath when you have multiple disciplines. And so he's a bit of a polymath, science, investing, and music. And it's just a great free-flowing conversation. You're really going to enjoy it. And what a great season. If you take these 10 episodes, I would suggest you download them, you listen to them twice.

You're going to get a lot of value out of these if you're considering ever going into the venture capital space. It's maybe three or four incredible nuggets in each. You listen to all 10. You're going to get basically the playbook of starting your first fund, which was the goal. And if you're on the other side of the table and you're a founder, well, now you can know how they think and you can come into a meeting with these investors with a deeper understanding of their motivations, which is always helpful for closing a deal.

That's great. Have a listen. Enjoy. Hey, everybody. Welcome to This Week in Startups. And this is our Angel series season six. And we thought we would for this series talk to new fund managers, give their first time fun, second time fun, that kind of thing,

and talk to them about why they got into venture capital, how it's going, and what they love about being a capital allocator. We've had quite a season, Molly, Mack the VC from Rarebreed, David Rosenthal from KindergardeVentures, Pachie McCormick from Not Boring, Paige Finderty from behind Genius Ventures, Money Wooder of Kay Ventures. the list goes on and on. Did you have a favorite episode out of all these, Molly, so far? I mean, my God, we have learned so much in the course of this.

I think, like, it's become a masterclass in all the varying ways that exist now to raise funds, whether it's in public or, you know, old school LP hopping from pension fund to pension fund to sort of raising it from your friends on Twitter and then funding hardware, which was our last one. So, yeah, I mean, I know I dodged the question. but obviously everybody's favorite episode was Jason. Oh, no. No, just kidding. Honestly, it was Jay Malick.

That guy was fascinating. Ah, Jay Malick. I think he's a spy. That was our last one. Until today, our new favorite episode. Our new favorite will be number 10, the cherry on top. That's right. There we go.

It's going to be D.A. Wallach of Time BioVentures. D.A., did I say your name correctly? You sure did. Thank goodness. And D.A., I guess I could met him, I guess, sort of my book agent. Oh yeah, that is how we met. I think that is how we met. But we would have met eventually

through different LPs and friends in L.A. Because we were both based in L.A. Oh, you're still there, I was there. But D.O.R. You're also a solo artist, a musician. Can't not bring that up. Your view of, I think we're looking at your studio, your piano here.

So you're a musician who somehow got into biotech. This is a, there must be some background story here. Tell us, how did you, go from being a musician to a capital allocator in of all verticals, biotech? I'll start at the very beginning. I'll give you the four chapters of my life. So the first chapter of my life is growing up in a small town in Wisconsin with a really badass mom who built and ran mutual fund companies. So I was surrounded by investing from a young age. And I always thought it was interesting. And then the sort of second chapter my life was getting into music when I went

to college and I started my band freshman year of college. And we lucked out and got a big record deal right when we graduated. So had it not been for that record deal, I may have gone into investing as my career. It's sort of the fancy version of waiting tables while you're working on your art. But we got lucky. We got this record deal. So I had this phase of my life as a professional musician, which was awesome. And then 10 years ago, the third phase began, which was desiring to become a venture capital investor. And I followed the inspiration of those like yourself into that world, but with no real focus thematically. And then the fourth chapter was about seven years ago starting to do health care and biotech and deciding to focus on that. And that

culminated in starting our firm. And it's all we do is health care and biotech. and then just randomly I'm watching La La Land and I'm like, wait, that's my pal D.A. Wollig. How do you wind up in La La Land singing Tainted Love and I ran and Take On Me and that amazing famous pool scene? Well, it was actually you're singing that, right? It's me singing. So it was, it was so good, by the way. I just want to say, like, just as a friend, like, you actually pull off singing 80s covers. That cannot be easy. Well, there must be some fire in me that brings those 80s covers to life. But I don't know if I should be proud or ashamed of that.

But it was kind of a weird moment in my life because I was in this transformation, this transition, if you will, from being a musician to being a business person. And in the midst of that, my old friend Damien Chazelle, who wrote and directed La La Land, Damien had been the drummer in our band in college. Wow. And so he reached out to me and he said, look, I think you'd actually be the perfect person to cast as this douchy singer of an 80s cover band. And you're like, thanks, friend.

Thanks. I thought, you know, this is both going to undermine my cred as a rock musician and as an investor, so let's do it. So let's go. Yeah. I mean, I want to stay on your music career for a minute because it's not just like, I mean, you lucked out by getting discovered, is this true, by Kanye West and Ferrell Williams? And that eventually becoming...

The Jason Calacanus of hip-hop. That's right. Exactly. Almost the same personality. It's amazing. Very similar. I can see some commonalities, yeah. Wait, but you met him when he was in that very early, just absolutely in the zone,

making those incredible albums. What is? Late registration, graduation. Yeah. Those were perfection, right? Is that when you met him? It's like, you know, imagine you've just started a little company and you send out a bunch of pitch decks and Mike Moritz and John Doer call you.

That's what happened to us in our dorm room. We had this band and I was sending out, it was burnt CDs at the time, so we had built our audience on MySpace. And that was part of the story of our band was we were really early to social media. And we were at Harvard, so we by default were early on Facebook. I was like user 2030 on Facebook. I was on it the night it came out. And so we figured this is a great way to not need to tour, which was how you used to have to do it.

You had to get in a van and drive around the country and play shows at sorority houses or whatever. And instead, we said, look, we can just build the audience virtually. So we had this kind of following on the internet. And then I was sending out copies of burnt CDs with these very self-confident notes. handwritten notes saying this is the number, best album of the year, you have to listen to this, whatever. And I was just throwing crap at the wall. And then in a one week period, Kanye's manager called my cell phone. And then we heard from Farrell Williams audio engineer that he also had gotten our demo. And both of them tried to sign us. And it was like, it was crazy.

It was, I mean, I had a game theory, a final exam that I finished. I came back to my dorm and that night flew to L.A. to meet Kanye. And he changed our life completely. And oh, you know, I know how we, we might have met before my book agent put us together because you were working with Sean Parker at some point in Spotify. And I'm friends with Sean Parker. So maybe with Sean Parker who introduced us. That could be, yeah, I mean, that was the, that was the breakout for me because I, I mean, it's a weird story. I'll give you guys the details because it's kind of fun, you know, music, tech, gossip. But when we got this record deal, a guy named Jimmy Iovine signed us to Interscope records. I might have heard of him. Yeah. Yeah. And Jimmy at the time had not started beats yet,

which then Apple bought. But Jimmy was interested in getting really rich. He was already rich, but he wanted to get mega rich. And so he knew he had to start something else. And he was interested in tech. So he knew Steve Jobs and he knew people in the valley. When we got signed, I thought, you know, one of the only things I can possibly do for this guy to get him to care about our band is introduce him to Zuck. So I flew up to San Francisco and I brought Jimmy and Mark together for a meeting. Jimmy was 20 minutes late to the meeting because he was meeting with Steve Jobs. Shows up at the meeting and it's me, Mark and Jimmy and Dave Morin then, who was at that Facebook.

And Dave came in and Dave. and Dave at the end of the meeting told me about Spotify. And I said, are you kidding? Like, I've got literally dozens of hard drives. I collect music like a fanatic. And if this is real, like if you can really stream everything, this is going to be massive. I mean, I'd followed Lala and all the other products that people had try Rhapsody.

People have been trying to do streaming music for a long time. And so Dave told me about it. And then I met Daniel Ack and Sean. And I basically said, look, I'm just this weird. rock musician, but I love business. I love technology. I want to be a part of this. And Sean and Daniel, to their credit, gave me a chance. And so that was probably how we met. Sean and I were for two years flying around the world trying to convince everyone's Spotify was a good idea. Yeah. And so it was. Well, and it's so interesting because it, you know,

then that experience. It's so interesting how all of this converges for you. It's literally doing, being on the inside of developing startups as a musician and now being a musician developing startups in some ways, right? How much did working with Spotify at that time give you even more push to want to go into venture capital? And certainly I would imagine empathy for people building companies. Well, I'd say a few things.

One, these connections always shock me, right? Now I'm in biotech. I use audio engineering concepts all the time. I mean, I'll tell you later about a company. we just invested in that's essentially a microphone company, but it's an ultrasound medical device company. But it's all this audio engineering crap I knew from 10 years ago. Being involved in Spotify was like it was a way of being spoiled, right, as your introduction to the world of investing, because the company couldn't do anything wrong. I mean, no matter how many mistakes we made,

it just kept growing at this unbelievable rate. And so there were so many lessons for me in it about what it looks like when something's really working. I mean, watching Facebook from that very early moment was another one. So I think, you know, people talk about pattern recognition, whatever. I think that can be kind of a bullshit term. But in my head, I started with such a high bar because I knew what it felt like to watch those companies explode. And so if I saw other little companies and they weren't doing the same thing, you

could kind of tell. Like, you sort of knew when that lightning was in a bottle. I'm sure you guys have seen that over and over again. But it's a very, it's like a magical thing. It's like a hit song, by the way. Same thing. I hit song. Everything has to go right.

The melody has to be great. The lyrics have to be great. The sounds have to be great. Unless it's all coalescing in that magical way, it's hard to make it happen. Yeah. There's something about interdisciplinary or cross-disciplinary innovation and being able to take. And I think pattern recognition. is an actual real thing. Sometimes it can lead to biases and blind spots. But if you did have a pattern

you recognized in music and you apply it to biology or a biologist applies it to computer science or computer science applies it to chemistry, yeah, you can start to see patterns. And then that's really where innovation comes from. So just before we get off the music industry, which is super fascinating, what is the state of the music industry today? And are you jazzed about it? Or are you absolutely absolutely disenchanted with it. Because I hear from musician friends of ours and other folks, like this varying like this thing is terrible or it's never been better because you can go direct, you can build this really tight relationship, the touring money, you know,

post-COVID, hopefully it all comes back. It seemed like people were starting to before COVID figure this out where you could just give your music away for free and then somewhere between merch and events, you could just have an incredible career and not need to be discovered by a record label and it was completely open and all the sounds are out there and people can collaborate. So what is your personal feeling on it? Well, it's in a much better place than it was when Spotify got started. Right. I mean, Spotify entered the industry when it had been decimated by 15 years of downloading. Steve Jobs unbundled the album. You know, remember, you used to have to buy a $22 album just to get the one

song you wanted. Right. Right. So Apple got rid of that. And, established a new model where you could just buy the one song you liked for 99 cents. So the revenues in the industry, when Spotify found the industry, were like one-tenth or one-fifteenth of what they had been in the 90s. And so that was hard times. What Spotify has done and what we thought it would do was it has progressively brought millions and millions of people back into a paid model of consuming music. And so now almost everyone you know has a subscription to one or more of the services. They're paying $120 a year.

It's about two to three X with the average music consumer spent before. So you've taken the average music fan, you've elevated their annual spend by a lot. But to your point, Jason, it's just like journalism, right? The competition is much, much more intense than it used to be because anyone can make stuff, anyone can distribute. And so, you know, we've lost the ivory top.

model where 10 lucky artists get to convince a huge record label and a huge radio station to make them stars. Now it's full wilderness. Everyone for themselves, hand-to-hand combat on the internet, building your fan base, one fan at a time. It's very hard. But you got to zoom out and view it all in historical perspective. I mean, being a musician is something that only for a brief window of human history made you a hundred millionaire that didn't have to really work that hard, could be addicted to drugs. Basically, like the 80s, 90s and 2000s, musicians became just incredibly rich. Yeah.

This chart tells the story. I remember when I worked at Sony Music, which was 2003. It was basically the CD had just, no, I'm sorry, it was 1990. And the CD was just taking off or had taken off in the 80s, but it was peaking in profitability. But if you look at this chart, I'll have them pull it up here. You just see that red bar is, you know, how much is made off of physical music. And then the blue bar is streaming. and essentially we've now gotten to the point we've caught back up

without having to have factories and destroying the environment and taking up all of our shelf space with sleeves and plastic DVDs. So I guess all as well, that ends well. I think so. Look, I think it's in a better place than it was 10 years ago. And I think, you know, these periods of significant industry transformation, they can take a couple decades, two, three, four decades. So we'll see.

I mean, I don't want my two-year-old daughter to go into being a recorded music artist, probably. But there are a lot of reasons for that. Well, yeah, I would imagine. I mean, it wasn't part of your job. I know. We got to move on to. We literally have to move on to the part where you're going to have one more music questions. I've got to get one more music question because, you know, this is what I talk about with DA.

I know, totally. Capital allocation with me. Yeah, yeah. And I know, we just want to know what the music industry. You go ahead. You go ahead. I just want to go all the way back to like, did. in the music industry just like shoot itself in the foot for nine years by not allowing

downloads and then they just let Steve Jobs come in and disrupt it with a 99 cent download. And to me, that is a lesson in chasing innovation, right? And never kind of resting on the business model that you know and thinking that's going to last forever. I mean, they were suing music fans for having illegal day. It was very stupid. Individuals. To their credit, they learn their lesson.

And I have to give credit to the folks who, they are pretty much all guys who have run the major music companies through this streaming transition, they did a great job stewarding an industry through a very difficult period. And they did so in a way that didn't let any of these new distribution platforms become the unilateral winner. That was the lesson they took. Steve Jobs took over their industry and he didn't even need them because it was always a loss leader to sell hardware. It's the worst position you could be in as a content owner. When streaming came along, they said this has to be an oligopoly, basically. You know, we have to have Spotify and Apple Music and a couple others so that we can play

them off each other. They did a great job. That's my. Yeah. All right. So music today in terms of technically making beautiful, amazing music, I liked it when, maybe I'm getting very old, but I kind of liked it when people played the instruments that are behind you and had like the ability to make the music and I don't mean to be a Luddite

here. You're old now. You just need computers. Yeah. I mean, I don't mind computers being involved. I like electronic music, but I find myself, like, having a hard time finding great musicians making really great music. So, like, for me, Dyer Straits or Steely Dan, or some of these are Pink Floyd, some of the technical. Donkey white guys.

Okay, yeah, I mean, it was that period of time. But I like songwriters with the lyrics, like you said before. I like people who know how to play the instruments in a very precise. kind of way and the sound is very, you know, crisp. Yeah. I've only found like one band that kind of hits that no for me is one called War on Drugs. I don't know if you like these kids. Yeah, they're good.

Pretty damn good. Like when they play the music, what should I be listening to? Like, what's great music today? I think there are a lot of great folks out there. I mean, look, I love the Punch Brothers. They're great. Instrumentalist. Check out the Punch Brothers.

They're great. Check out Grizzly Bear. I love that band. Check out James Blake. I think he's a genius. There, but it's like, you know, there's so many people writing great journalism today. How do you find it? They're all on substack.

It's the same exact thing. There's just so much music and it's very difficult to filter. That's what I'm looking for is I just need a concierge. This is what I still find. Actually, I will say Spotify, sometimes I will do their mix for you where they mix them in. Yeah, it's pretty good. And it's not bad. They had a country music, like modern country.

music and that's how I found Jason Isbell. Okay. And that became like one of my top five discoveries of last years. I went to see him and I was just like, wow, this guy writes his own lyrics, plays guitar, he's got things to say. Jason Isbell in the 400 unit, absolutely extraordinary. And I'm not even like a country guy, but man, I was just taken by them. So I can't wait to get back on the road and start seeing folks. Who's the best live band then? Best live band for you today. Like, you go, see them live and your mind just goes, wow. I think all three of the ones I just mentioned to you, I've seen all three of them live.

They're all great live and that's part of why I think they're awesome. The recordings are excellent, but the live performance is maybe better. That's why I fell in love with Dire Straits. Yeah. As technically perfect as they were, they just crushed it on, you know, the live performances. Well, you know, it's funny though. You think about Steeley Dan or something. You know, those guys were so precise in the way.

they made records in the way they played. They had the best session players in the studio. In a sense, they were trying to sound like computers. Yes. They were doing, they were trying to come as close to computers as you can. And now that everything's on computers, everything's perfect. We kind of wish it were a little messier. Grass is always greener.

Well, you know, it's very interesting. You say that. The war on drugs feels so technically perfect, but with a little bit of distortion in there, a little bit of creativity. and that's what I love about watching all the old Dyer Straits concerts, which the thing that's great about YouTube is somehow they figured out how to get all these bootlegs online and let you enjoy them.

But Steely Dan actually had Mark Knopfler play on one of their songs, and they made him play this intro so many times that he walked out. He was like, enough. I can't work with you guys. And that's Mark Nosser who's a crazy insane perfectionist. Okay, we got to go over to your investment career. Sure. Why biotech?

How did you get into that? Well, the first few years, as sort of chapter three as I laid it out, was me investing in any tech company that I thought was awesome, but I didn't have a lot of money. So I could only do three or four a year. Got it. And so, you know, Warren Buffett has this thing. If you wanted to make any investor better, you'd give them a punch card with 10 punches. Every investment, you've got to use one. And you only have 10 for your whole life.

He said, if every investor were operating under that constraint, they'd be 10 times better. And so it was kind of that. And so, you know, I had some great early picks, box.com, SpaceX, Ripple. I was a seed investor in the cryptocurrency company. Wow. So it was, but it was anything that to me felt really fresh and exotic. Memphis Meets was an early investment of mine. Nicely done.

Before this kind of lab grown meat thing took off. But I realized at a certain point, hey, I'm out here competing not only with Sequoia and everyone. I'm competing with Jason, the king of clubhouse, some would say. And in investing, right, you always have to be aware of who your counterparty is or who your competitor is. And I just realized, you know, that early stage generalist tech investing game, it's all driven by network. It's all driven by, you know, who's hopping on more flights to be at this thing to meet the guy, who's the next guy, who's the next girl, who knows the next whatever. There's no real advantage for me to build here. and the other people who I'm in this game fighting against are incredibly talented.

They're all smart. They're all hustlers. And I realized the investors I most valued the opinions of were specialists. There were people who went really deep in some vertical and they actually knew more than other people about that vertical. So I made my first healthcare investment about seven or eight years ago. And it just struck me, this is a space that's so screwed up. so interesting. It's got real barriers to entry as an investor because you have to understand the dynamics of it to even know what you're looking at. It's a whole other language. And when

things work, you're really touching people at a very important part of their life. You know, when they're sick, when their family's sick, when they really need technology to get them through the worst thing that has ever happened to them. And so it's a very fulfilling area to invest in. And so I just went into it. And, you know, I'm still learning. It's like, what's so great about health care and life sciences in particular is there's an endless amount of learning that you can do in addition to the learning that is always happening around just investing as a general practice. It's not an easy area to just sort of dance into in some ways I would imagine. And yet, it seems to have resonated with your LPs, you raised a $100 million fund. Tell me about

selling this pitch and making this pitch to LPs and raising this fund and saying, We're going to do this. We're going to do this really hard thing, as you described, with lots of barriers to entry and lots of points of failure and regulatory concerns. But we got this. Well, look, it's, it is a part of the economy, part of the global economy that everybody should have significant exposure to. It's the second or third largest industry in the world, right? And for various reasons, it's probably quite uncorrelated with the rest of the economy as well, right? people get just as sick in recessions as they do in good times.

And in the backdrop, you've got this endless, amazing innovation that's taking place in the basic technology of medicine. So there are a lot of good reasons for investors to be exposed to this area, but yet it's an area that's very difficult to invest in yourself. So what we offer people is we are a service business that enables them to outsource the purchase of a portfolio in this part of the economy that they really should have exposure to, but that they would be making a mistake to try and build on their own. And we think of ourselves as that kind of a service provider.

So our investors are very smart, families, individuals, institutions. It's not that they don't understand investing. It's just that they're smart enough to know that they need to hire someone else to work on this part of their portfolio. And that's what we do. How did you learn it all? Like it seems like you talked before about being a specialist. I don't think you went to school for biology.

Correct me if I'm wrong. So how do you get that massive education? Well, you know, the smartest thing I did in building our firm was teaming up with my partner, Tim, who's a physician scientist, who's got, you know, decades of expertise beyond what I have, and who spent a lot of his career in Big Pharma. He was at Pfizer and then Novartis. And to give you an idea, Tim ran all of drug development at Novartis for several years. So what he has experienced in his own career is hundreds of new drugs, new diagnostics being developed for human usage and commercial approval and regulatory approval.

He's had a bunch of wins, but I'd say more importantly, he's seen a lot of things fail. And the only way that you really learn in the space where it is to live through those sorts of failures. because this is an area that is riddled with very particular types of risk. And really what we do as investors is we try to help manage that risk and mitigate it in all the ways that we're able to. So partnering up with someone who had that depth of experience scientifically, medically, commercially was a really smart move, I think. I'll give myself credit for making that very good decision.

But in terms of learning the discipline myself, I'd say there were sort of two major components to it. And I really think of healthcare as an entire economy at its own right. So there are a million little niches you could play. And you could have a fund that only does medical devices in orthopedics. You know, you can pick any slice of health care and it's massive. But I have within healthcare tried to cultivate a fairly broad knowledge. And the areas that are really integral are, one, understanding the science itself, the technology of medicine. And so I've just done that being a non-scientist by reading textbooks, chasing down smart people, convincing professors to have lunch with me and teach me what their work is about. And then the other side of it,

which is almost as complex as the science, is understanding how our crazy screwed up healthcare system works. I joke that after the music industry, I was looking for the only business that was more messed up. And healthcare is it. More dysfunctional. I mean, it's just a hornet's nest of complexity. And so it's taken me eight years to really understand how the parts interact in our screwed up health care system. And I'm still learning every day. You're pretty early stage, right? What is your check size? Yeah, we try to invest between, call it, two and six million dollars at the first check into a company. So with 100 million, we're running a relatively concentrated portfolio. We want 15 to 20 companies. And we want a lot of diversity across

the types of risk that come with those companies. So we do drugs, diagnostics, research tools. We do things that are really early. Then we also do things that have been around for a few years that we think are right on the precipice of a major value inflection. The thing I hear a lot and you have an early stage fund and you're making early stage bets is that the, you know, the arc here in terms of time to a return and exit and IPO is very long. and the success rate is very low. So really hard to be in this space. Number one, is that actually true today?

And then, you know, if that is true today, how do you think about managing a fund that, hey, you know, instead of the exits starting in year 6, 7, 8, and crescendoing in years 9, 10, 11, how do you think about the arc of the fund? So is it true? And then how do you manage if it is? Well, I'll make a couple comments.

Some of that has to do with the technology. how hard it is to actually commercialize products. But it also has to do with the nature of the capital market. And it's just like you've seen in tech, there are changing dynamics in the capital markets. So companies that used to not go public for eight years are now going public two years into their lives or three years into their lives. Other companies on the other side of the coin are staying private much longer because

capital has moved into the private market. And so you have an appetite among investors that didn't used to exist for these later stage more mature private companies. The other thing that has happened is, you know, we all just lived through it with COVID, right? Drug development, I think, is what you're alluding to. It has this bad reputation. It takes 10 years. Very few things work.

Historically, that is true. But yet what we all just witnessed was we went from no drugs for a new disease to like five drugs that all work really well. I assume you guys and I have received those drugs. Yeah. And they were brought from concept to CVS in like 18 months. So that gives you an idea of what is now possible technologically in drug development. Now, obviously, there was the force of every government in the world and a lot of capital behind that.

But it just shows you that the lines have moved a little bit. Should it be that way? Should it have always been faster? What do you think now that you're inside the industry? We've seen this. Did we go too fast? because I've heard from smart people like, you know, that antiviral,

that changes your DNA a little bit, like maybe I wouldn't take that. And this isn't like an anti-vaxxer. This is like somebody with a masters or PhDs who is in the industry who told me like, yeah, I'm not sure I would be the first person. To take that, I might just, you know, I'm vaxed, but I would ride out my COVID and not take that.

So do you, when you look at it, we obviously moved as fast as we needed to to stop a global pandemic that was killing hundreds of thousands of people. Should that be the path forward that we go much faster, the same speed or maybe somewhere in between? What do we learn from that on a go forward basis, I guess, is what I'm trying to get at? One thing that is a testament to the quality of the work that everyone did on these vaccines is that now they've been given to billions of people and we haven't in mass seen any kind

of huge problems. I mean, that was a real possibility because we did sort of rush these things. We were pushing the limits and you could have been giving these vaccines to billions of people and it could have turned out that millions of them had adverse reactions that were significant. And thankfully, it appears that the clinical trials that were done, that the regulators imposed on this process were predictive of what we would see. So the reason drug development takes a long time is, one, it's hard to develop drugs. And two, the regulators, namely the FDA in the U.S., wants you as a drug development company to prove in rigorous scientific ways that your product is both safe and effective. And as customers or patients, we all should appreciate that because by and large,

the drugs that you will receive if you're sick are safe and they do work. And so there's always a question of like how risk averse should the FDA be. Are they too hard on these companies or are they not hard enough. I would say as a participant in the industry, by and large, I have a lot of respect for what the FDA does. I think they're a relatively uncorrupted bureaucracy among bureaucracies. I think they do a quite good job ensuring that the products we get are safe and that they work. And, you know, if we didn't have it and we were just relying upon the regulators in India or somewhere else, you'd think twice before you filled that prescription many times. One thing that I had an observation about that might have been somewhat controversial, but I don't think need be controversial, is challenge trials. We send young people off to wars, sadly, they risk their lives. Young people do all kinds of dangerous things like scuba, deep sea scuba diving, riding motorcycles, whatever it happens to be. And challenged trials would have gotten us the vaccines probably six months or 12 months earlier.

but challenge trials are considered unethical. But what is more unethical? Having a bunch of people die while they wait for a vaccine or a series of 100 young people saying, you know what, inject me with coronavirus. I'm relatively healthy. I want to make this decision to make a sacrifice potentially for the greater good of society, just like somebody who goes out into space or somebody who goes and rescues somebody in the middle of the ocean, like a Coast Guard person is risking their lives.

And most people would argue it's much less. you could do this in a way that was equitable. It wouldn't necessarily be harvesting organs from people who were poor in an emerging country. You could have all kinds of rules set up about it. And so much so I saw that a group of scientists in the UK started, and I don't know where this is at now, a petition to maybe reevaluate when challenged trials would make sense. Is this a major point of discussion? Or am I just obsessed with what I see as a possibility for getting important drugs to people earlier and using people's brave, you know, goodwill to solve problems. Yeah, look, I, in the case of COVID, I agree with you. At a certain point,

when we knew that if you were young and healthy, you had a relatively low risk of serious disease if you got COVID. I think it would have been reasonable to do challenge trials. You know, since you bring up the ethics of drug development, I will say it's a fraught space, right? And often the, you know, the participants we leave out of the conversation are the literally tens of millions of animals that we kill every year. I mean, we do, in fact, enslave and kill millions of animals every year in the pursuit of breakthrough medicines. And that's a, you know, it's a difficult conversation to have because we always are needing to consider what those lives are worth and what it's saving us in terms of human suffering because the alternative would be humans

do all those early trials. We also got to give credit to the, you know, hundreds of thousands of humans who do every year participate in clinical trials. And, you know, we see it every day in cancer, drug trials. You've got patients who are putting their lives on the line to take experimental drugs that have limited evidence behind them. And, you know, the heroism of those individuals is the only reason that we ever get these amazing products on the market. So there's a huge amount of sacrifice, you know, both willing and involuntary that takes place in the industry. I wonder how you see some of that changing as we see the field of medicine advance so quickly. I mean, you happened to, side notes, start raising this fund in January 2020, right?

Before, like, right as COVID was hitting, it's sort of fortuitous timing, I would imagine, to be in that place exactly as we're talking about all these achievements. And not to continue to derail us, but I wonder, like, as you see companies, are you looking at the ones who are saying, we can do modeling, we can do artificial intelligence, we can do, because there is this conversation about drug discovery now, potentially being able to happen so much faster and so much more efficiently because we know so much more about genomics and the body and how things might interact. Everything you just said is true.

And there's just this explosion of creativity right now as computational technologies are brought to bear on problems in medicine. So it's a great time to be in this area. It's sort of a Cambrian explosion in the space. And, you know, the beginning of our fund and its coincidence with COVID was really interesting because, you know, I was out here telling people about what we do. And it went from being very esoteric to being stuff that people talked about around the dining room table, you know, PCR tests and antigens and vaccines. And these were all terms of art. and now everyone knows what they are.

So there's a much greater public literacy increasingly around our industry, just as you saw in computer technology over the past 30 years. I mean, people didn't know what cloud computing was 20 years ago, and now my dad has Amazon stock and knows what AWS is and all that. So same thing. Yeah. What is the most promising area of technology in your mind in terms of life extension and quality?

of life in later years. So asking for our friend. Well, the greatest technology in terms of quality of life across the board is exercise, probably. You know, and it's like you can wear all your continuous glucose monitors and fit bits and all this crazy awesome stuff. But at the end of the day, sleeping, exercising, eating decently will do a lot more for us than any of those things in the near term. And then there are two ways to think about aging or, you know, longevity, which have it's kind of become a field in its own right. One is what we really do, which is there are a bunch of bad diseases that we're very well

acquainted with that kill most people, heart disease, cancer, neurodegeneration, and we can try and one by one pick off those diseases and find cures for them. And if we do that, it will mean that people are living longer lives. The other view, which is kind of the more pioneering one, is to view aging as the common cause of all those things. And to say, wouldn't it be great if we could just target the quote unquote root cause, anti, you know, aging itself, I'm hopeful, as we all should be, that it will be a simple fix. And there's one knob we can twist that just, you know, causes age reversal or age extension,

life extension. My guess is that that's unlikely. You know, we don't put a lot of our focus. as investors into the longevity field because we don't think it's going to be easy. We think, you know, aging, the natural lifespan of humans is a very complex set of biological processes. And, you know, it's going to be hard to find a silver bullet. We'll be able to do targeted drugs that cure cancer. It feels like that's, because we already have people managing cancer forever. Yeah, that's right. Decades. Both my parents are cancer

survivors for decades. I think those would have been death sentences and they both would have passed at 50 and 60 years old, I guess. But now we have this incredible, you know, way to manage it. But when do you think the majority of breast cancer, prostate cancer, you know, the ones that we seem to be making tremendous progress on in terms of managing, when do we just eradicate those? Is it five years, 10 years? We've had some early cures. And now the community would say these are real cures, patients who seemingly have no disease decades out. And that, you know, to your question, is rolling out to more and more types of cancer. Cancer is a very complex disease, right? And what we call cancer, we used to call one disease, is thousands of diseases. One of the trends that's

fascinating to me that crosses so many different parts of the economy, certainly media and commerce, but also healthcare, is personalization. And that really is one of the big themes in health care. So today, if you, you know, God forbid, get cancer, we will diagnose your cancer in specific molecular terms that are particular to you. We will do DNA sequencing on your tumor, will identify the specific genetic mutations or epigenetic alterations that are driving the cancer, and the treatments that you receive will be treatments that are specifically intended to interfere with those drivers of the disease. So it's like going from using sledgehammers to using, you know, laser-sighted sniper rifles, you know.

I was about to say it feels like a sniper rifle. And that is, and that's happening. Like it's like we're literally, our generation is the generation that will be the first to really benefit from this, it looks like. Yeah. Yeah. Yeah. I wonder how you think about investing. I'm looking at some of your portfolio companies, Neurrelink, DeepSight, which is this ultrasound sensor company.

because there's sort of a tension, you know, I do climate tech investing, so I have a little bit of a similar tension between the parts that are venture appropriate and the parts that are research and government appropriate. And I'm sure you sort of feel that split. Like, how do you look at a company and decide this is a venture company that will give me the kind of returns that, you know, my LPs want without a government coming in and saying this drug is too expensive, for example, versus something that needs to be funded as a, you know, private public. partnership? That's a, it's a really profound question, something we think about all the time. I would say we have a sacrosanct mission to our limited partners, which is to try and generate high quality risk-adjusted returns for them. And so we're not out here doing crazy moonshots just because we want to save people's lives and revolutionize medicine. We do want to do those things, but we want to do it within the confines of an investment strategy.

that is responsible. And so unfortunately, to your point, there are many worthy projects in health care and biomedicine that are more appropriately funded by the government or pursued within academia. What we look for are those projects that have gotten to the point where they are ready for what we would call translation, commercialization in a company in such a way that will bring them to patients in a matter of a couple years. So we're trying to make bets that we think are going to change patients' lives in a time horizon

that's consistent with the fund. Like two to five years, we would really like a drug that we're investing in to be on the market, to be something patients are receiving. And that is a difference between us and some other investors. We're very practical. We, at the end of the day, want to generate a great return for our investors, and we want to bring products to patients. I think these companies are going public too early.

We talked a little bit about the special. back stuff. And we had Ginkgo Bioworks on the on the pod. I'm not sure if you're an investor in that, but that seemed to be a bit of a disaster. And other companies and Zybergen, yeah, comes to mind. We had a company of ours, desktop metal go public, you know, and it was, I felt like maybe that was too early, but they're, you know, bouncing around. And it felt like, well, maybe what we do in the private markets is a little too, takes a little too much patience than, you know, you know, the day trading crowd, the stonks crowd on Reddit. And so maybe you could give me your thoughts.

I mean, we're just getting into this. It's only year two or three of this trend. But do you think it's a good idea for these private companies to go out early and give access to the public? Or do you think it's creating chaos in terms of the variableness of the stock prices and what that does to employees and then, you know, taking them out of the venture race? Well, I'll tell you one thing I learned from Daniel and the Spotify team. you know, and they were pioneering company and doing the direct listing,

was the go public moment is best thought of as another financing event. You know, it's not the finish line. If you're developing medicines, the finish line is impacting patients when your product actually gets on the market and is saving people's lives. So we try to keep that as the North Star, and all the financing that happens along the way is just helping you get there. So I think what's really important both in the private phase and then in the public phase is that the investors who are around the cap table are aligned around a common vision that is the right vision. And so, you know, these companies take a particular amount of time.

What we're always asking the companies is can they go faster? Can we make more progress with less money or in a shorter period of time? Because, again, there's an urgency. You want to get these drugs to patients. and they have patents that are expiring, right? So one thing that my partner Tim brings up that's a great sort of factoid is in Big Pharma, the average drug sells $360 million a year. So every day that you can speed up its arrival to the market is in principle worth a million dollars.

Now, a blockbuster drug will sell $3 million a day. So every day that you can speed up that approval and go to market launch is worth $3 million. So we impress that upon founders. Like time is money in this business and we want you to move as quickly as you can within the regulatory and the technical and ethical confines of what you're doing. And so, you know, if that requires you going public because that's where the capital is to support this, fine. If it's staying private, that's just as good to us.

And for us, you know, we all be at a private venture fund are happy to hold public equities if the companies do go public, we want to keep supporting them through their journey. It's immaterial to us, whether it's public or private. I wonder, though, does it give you, I mean, because at the end of the day, we're, you know, yes, you're having that sort of business conversation. You're also talking about, like, you keep coming back to patients. And public markets may be less tolerant of mistakes in when it comes to, you know, drug discovery and treating patients and maybe having things go wrong with respect to treating patients.

So, like, I just, I wonder how you're treating. that we're all in this industry and we are all trying to deliver those returns to our LPs. And also, it seems like there could be a higher level of responsibility around rushing when it comes to. No, I think that's true. And I want to be clear, I'm not saying rush into the public markets. I guess what I'm saying is you want to develop your products as quickly as you can. If that requires capital from the public markets, that's fine. There are fortunately many really good public market investors in our field. And I'm talking about firms like RA Capital or Perceptive advisors who have dozens of PhDs.

And so they're investing in public stocks, but they're doing so with a level of technical and scientific research behind it that is much more reminiscent of what you find in the private biotech venture market. So when a company goes public in our space, again, it's paramount that the right investors be around the table. You want that IPO to be bought into by the right investors who are a lot of. long-term who understand drug development, to your question, who understand that there are bumps in the road and whose investment thesis might be three, five, ten years. Yeah, it's, it is an interesting

phenomenon. Like, we're racing to get this stuff out there and to solve these problems. And there's there's capitalism and the confines of that. There's ethics. There's the approval process. But, I mean, we have to remember there is a patient at the end of this who is suffering and who needs you know, some support. And I think that's what makes the work so rewarding is at the end of the day, yes, we're playing this incredibly complex chessboard of how to get these things funded and sustainable. But, you know, we do have people out there who are suffering. Is there, are there things on the margin that are super controversial, you know, obviously stem cells comes to mind, you know, previous decades? We talked a little bit, uh, or,

you brought up testing on animals. Are there things where, you know, CRISPR and testing on humans that you feel there is an ethical or moral component that we've yet to resolve? And then how do we get to that point? I mean, there are, there are so many of them. Yeah, which one's top of mind? Well, I'll give you one that I'm very passionate about. I started a nonprofit with a couple friends called the Franca Fund. And what we advocate for is preventive genomics.

And all this means is we believe that every newborn baby in the world should have their whole genome sequenced at birth in order to profile that person for their lifetime risk of different diseases. Turns out there are some diseases that develop very early in life that if you're aware of them, you can treat with very simple nutritional supplementation, for example. But if you don't know they're there, will result in long-term cognitive disabilities for a child. So we think this is an ethical imperative. We now have this technology. You can sequence a baby for $1,000 and know a number of lifetime disease risks. And yet, the medical community does not believe that that yet has surmounted the bar of evidence that they would require in order to standardize it. So that's one fight we're having. It doesn't even seem that crazy. I mean, I bet you guys have

done 23 and me and all that. But this is still controversial in medicine. You can zoom forward to things like gene editing embryos. And, you know, those are questions that society is going to sort out. I don't think it's for the scientists to make those choices on behalf of different societies. But, you know, these are questions that are increasingly at our doorstep. And, you know, I think it ranges from, you know, an embryo that's got a very obviously bad disease, right? They're going to 100% get cancer because of a gene mutation. You know, who would be against fixing that? Seems crazy.

But when you start talking about, oh, I want my, you know, my brunette kid to have blonde hair, yeah. Yeah, the luxury component of it's crazy. But we have, I'm just looking here on Google, 385,000 babies born each day, $385 million a day times. 365. I mean, we're not talking about a huge bill here, $140 billion a year, that if we actually had that data and it could be studied, and it could be studied across, you know, different regions or ethnicities or genders, environmental conditions, socioeconomic status, you could actually

start to maybe find, you know, trends that could be solved, you know, there could be malnutrition problems in some part of the world or a vitamin shortage in part of the world, to genetic issues around, you know, genetically modified food or something that we could solve. And we should acknowledge that we do see why this could be controversial, though, right? Like, you are sequencing a baby's entire genome and then storing that data somewhere and, you know, potentially saying, like, because of this possible outcome, this kid can never get insurance or will be shunted into like this track of life or like, there are, we all, we have to at least acknowledge that you can see why those conversations set, when we set us,

peer technology do get complicated. Oh, these are, these are, Jason's like very, these are, look, I mean, I was thinking anonymizing, but so great. It's never anonymized, but yes. Well, no, I would just say, look, you know, Jason, you share your book agent, John, with David Deutsch, who I really admire,

great physicist in the UK. He wrote a wonderful book called the beginning of infinity. And he says something in that book that's always stuck with me, which is that, you know, we use technology, to try and solve problems. And in doing so, we inevitably create new problems. Right.

And those are problems for the next generation to then solve. And this is how history works. So, you know, it's not a reason to run away from the development of the technology, but at any moment in history, society, legal scholars, ethicists, scientists all need to be talking to each other about how we use it. What's good, what's bad, you know? I have tried to read this. Do you have that?

Do you have ethicist and stuff? Like, how do you think about that when you're doing investing? I generally, Jason's my ethicist, I would say. Oh, we're screwed. Yeah. Well, it's interesting you bring up this beginning of infinity. I've tried to read this book. Like, I literally have started 10 times.

And it's so dense that, like, I get through the first three chapters and I start over because I don't even understand half of what I've read. I mean, the book is. Well, that's the irony is that it's the beginning of infinity. You will be reading this book forever. It is definitely. I'm going to finish this book. It's so hard to get through.

We can do a book club on it. We definitely need to do a book club on it. So you were so gracious. You said you would take any of our request for cover songs. So I went with Toto's classic Africa. I thought you could just absolutely nail that. And Molly went with Take On Me. Aha.

So, T.A. will be taking us out with, I'm joking. He's looking at me terrorizing. I'm like so nervous. I can barely play piano. You're going to realize I don't play any of these instruments here. Yes, these are a simulation. Window dressing, yeah.

Listen, DA, if somebody is in the space, they want to get in touch with it and pitch you, what's the best way to do that? Go to our website, TimeBioVentures.com. My email address is on my Twitter and everywhere else, DA at DAWalloc.com. You can chase me down.

And, you know, we love looking at great entrepreneurs who are starting interesting stuff in our space. So if you got an idea for how to change medicine, let us know. And you've been pretty clear about your Goldilocks zone. You want to meet people early. And then if it could be commercialized in, you know, that three to seven year window, it seems like that's your window if I were to reflect back a number. That's about right.

Okay. Awesome. All right, everybody. What a great hour with DAA. Thanks, guys. Yeah, I really appreciate you taking the time. A lot of fun. We'll see you soon, brother.

See you. Bye. Hi. Hey, everyone. Producer Nick here. I want to tell you about the SaaS Syndicate. If you're a founder of a SaaS company with a product and market, our investment team wants to talk to you. Head over to the syndicate.com slash SaaS, S-A-A-A-S,

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