This Week in Startups - $TSLA earnings breakdown & 2022 IPOs to watch with TechCrunch's Alex Wilhelm | E1371

Episode Date: January 28, 2022

Alex Wilhelm from TechCrunch joins Molly and Jason for a full episode. First, they breakdown Tesla's Q4 2021 earnings including its consistently increasing Model 3 production, profitability and charger network growth (3:08). Next up, they discuss why Alex thinks the IPO window is closed for most startups. We wrap with a review of some of 2022's most anticipated IPOs including Discord, Reddit, Stripe, Impossible Foods, Chime and Instacart (24:45). (00:00) Jason & Molly intro the show (01:49) Welcoming Alex to the pod (03:08) Tesla's Q4 2021 earnings (08:45) Eight Sleep - Go to https://eightsleep.com/twist to check out the Pod Pro Cover and get $150 off at checkout! (10:14) Tesla's growing supercharger network (14:34) Comparing valuations and EV offerings of automakers (19:56) Odoo - Get your first app free and a $1000 credit at https://odoo.com/twist (20:59) Long distance road trips in EVs (24:45) Is the IPO window closed? (30:41) Assure - To get 20% off your first Special Purpose Vehicle (SPV) visit https://Assure.co/twist (32:19) Do public market investors have the ability to stomach speculative companies? (36:09) Stripe - Potential 2022 IPO (40:49) Discord - Potential 2022 IPO (47:46) Reddit - Potential 2022 IPO (57:33) "Yes, No, IPO" Impossible foods, Instacart, Chime, Gopuff FOLLOW Alex: https://twitter.com/alex FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Hey, everybody, we've got an amazing show for you today. Friend of the pod, Alex Wilhelm is with us from TechCrunch in his sixth appearance, and we're going to cover Tesla's unbelievable Q4 earnings and the IPO window is a closing opening. And then finally, since we have Alex, we break down all of the most hotly anticipated IPOs of 2022. We talk about whether they're going to happen, how they're going to go, what our favorites are, and what we think is going to be in the dumpster. and those specifically are? Well, we can give it away now.

No, no, but we should tell them what companies we're going to go over without. So we're going to talk about the IPO, the potential IPOs of Stripe, Discord, Reddit, Impossible, Instacart, GoPuff, and Chime. Who we think's going to win, who we think's going to lose, who we think's just going to bail on IPO completely. It's going to be an amazing show. Stick with us. This weekend Startups is brought to you by 8Sleep. The first bed engineered to improve your sleep through dynamic cooling and heating, detailed sleep tracking and more. Try the pod for free for 100 days at 8Sleep.com slash twist.

Odo is a fully customizable and fully integrated suite of business apps that lets you build and scale your stack as you build and scale your business. Your first app is free forever and right now Odo is offering $1,000 off your first implementation pack at Odo.com slash twist. That's ODOO.com slash twist. And Assure is the leading provider of special purpose vehicles and fund administration with over 5,000 completed transactions and $2.5 billion under administration. Twist listeners can get 20% off their first SPV at assure.co slash twist. All right, everybody. We have Alex Wilhelm, senior editor at TechCrunch, host of the equity podcast, and I would say not even just a friend of the pod, more like a fave of the pod. Sixth appearance on Twist.

There is nobody better to break down the financials. The man is an S-1 wizard and the master of IPO dissection. So we brought him on to talk about obviously Tesla earnings, an amazing quarter, an amazing year for the company. Welcome, Alex. Thank you for having me back on. I didn't know this was my sixth time showing up. I think it just goes to show that I say yes to Jason whenever he asks.

Maybe I should tighten up my rules a little bit. Everyone does. I talk to my team, but I would like to have the Blazers. I would like to send people a blazer or a, what, a quarter zip with like fifth appearance, you know, twist five and then like a twist 10. I just think it would be cool. I think so, too. I was just thinking that like Saturday at Live. They have the five time, like the smoking jacket.

Yeah. I think that would be hilarious, a smoking jacket would be even funnier. I was going to actually wear my usual tank top that I figured. for you two, I would dress up and wear sleeves. So this is my attempt. It's a good call. We don't get the adult label on our content. Yeah, we don't want to show any shoulders here.

Thank you. And everybody follow Alex, of course, on Twitter. Part of the first name club, Alex. So Tesla, I guess, is the big news, an amazing company, obviously, and an amazing quarter. 2021, full year revenue, $53 billion. Up 71% you're over here.

That's just bonkers. Q4 was a juggernaut, $17 billion, up 65% year over year. This was driven by their 71% increase in total deliveries. Model SX production was down 19% year over year. I think that is because they're so busy building the other cars, because everybody I know who's put down deposits for their S and X plaid, you know, this like with the yolk, is telling me they have like six months to a year wait time. Wow.

So I think my guess is I don't have inside information. I always got to do that little disclaimer. Well, look at the chart. I mean, Model 3 and Y production up 79%. Yeah. What you really need to pay attention to there is they moved essentially their production over to the Model 3, and they actually still had expanding automotive gross margins. That's insane to me.

I thought when they moved to the cheaper cars, they were going to have. Ah. So you buy a model less, you pay a lot of money for it. You buy a Model X. You're paying a lot, a lot of money for it. Generally speaking, more expensive items have higher gross margins. They're kind of higher quality revenue. And so I thought when Tesla moved to,

to more Model 3s, their revenue quality would go down as their volume went up. But if you actually take a look at the numbers, if I recall, when I read through this last night, their automotive gross margins are actually better. And so that, to me, is just a coup for the business and just goes to show how well it's run. It's very, very impressive. I'm kind of blown away, frankly. How do you do that? What is the efficiency that you could do to make sure that those margins stay the same?

Is that a manufacturing efficiency? Is it a hiring efficiency? Like, how do you pull that off? I think it's manufacturing and sourcing a lot. And I think Tesla has shown that with scale, they will improve. I mean, that's the concept of operating leverage that VCs, like y'all, love to see in businesses, that their profitability increases as their revenue scales. I just thought it was going to struggle when they moved to cheaper cars. But, you know, Tesla has been a shocker.

You have nailed it. I remember visiting the factory when they were first building some of them. And there was this tension of like what in the car would be built by Tesla and then what would be sourced. and I've had many conversations Elon about this. He likes to build the stuff himself. He's a bit of a builder if you haven't noticed. And so you look at their monitors, you look at their HVAC unit as just one.

They have built their own essential HVAC. What puts the heat and the cooling in the car is their design now. And if you watch the guy, what's his name, Monroe, who breaks down the cars and rips them apart, when he did the breakdown for the X and the Y, he started looking at what they're building versus what they're sourcing. and when you build everything yourself, that's incredibly expensive,

requires factories, and you have a couple of years of iterating on it. Well, all of that iteration from the last decade of Elon saying, like, we can build a better HVAC unit for this. We could build better wiring harnesses.

We could build a better display. All of that now has come to fruition. Yeah. Because it's the same monitor now in all the cars. So when they did the refresh on the Model S and the X, they took that landscape monitor, no, I'm sorry, the portrait monitor, and they flipped it landscape, right? And so that's exactly what you're seeing here.

And then, of course, the big story is batteries. And the fact that they make their own battery packs and they have the gigafactory, if they can just make the batteries a couple of percentage points cheaper every year, they can expand the range and then they make them more efficient with software and science, that's going to be the killer thing. And I think the big news here, which isn't anywhere in any of this reporting is, what happens when they have the $25,000 car? If they can show this level of efficiency,

what happens when there's a, what's the cheapest car you could buy now? Like, is it a fit, Honda Fit, or a Ford Focus? I don't know this category very well. It's probably in the Honda Fit range, don't you think? I mean, that's not that. 25K? No, it's cheaper than that.

Honda Fit. I'm just going to go over this. Oh, Honda Fit is 18,000, 17,000. I happen to be in a long-term relationship with a Honda Fit fanatic. I'm a 16,160. That's incredible. There's a $16,000 car. It's not a lot of car.

I know people who spend $16,000 on Uber every month. No, it's like mysteriously gigantic on the inside. This is Honda's magic thing is those cars are like a TARDIS. They're bigger on the inside than they are on the outside. It's the weirdest phenomenon. Anyway, we're slightly up. If you put a little bit of like features into it, I see it quickly goes up to 25. The real question, though, I want to know is like, what is the cost of a Chevy Bolt?

Right. Because that's where, like right now you've got the leaf, you've got the Chevy Bolt. Like you do have cheaper EB options that have less range and less infrastructure. And if price is your consideration, you're probably still going to make that trade off or the Kia Nero is a really popular one that I think maybe now has an all electric but is a popular hybrid. 22 Chevy Bolt starts at 315. That's cheap. That's cheap. That is super cheap.

Nobody's buying them, right? They're not popular. Oh, I see them everywhere. Really? Yeah. I see Teslas. I mean, so my rule of thumb is... I see a lot of bolts.

Well, if it makes it to Rhode Island, I consider it kind of mass market. And I see a lot of Teslas, and I see a handful of volts at most, or bolts, whatever. 20-21 sales for Q3 in the U.S., 25,000 total for the Bolt EV and the Bolt EUV. That's not bad. That's not bad. A thousand of them are in Oakland. Yeah, I think they're all in East Bay.

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podcast. I was like, I got it like, it's part of the story and the whatever. What am I going to get? And I was like, oh, I'm totally going to get the bolt. And then I was like, wait, I need range and infrastructure. And that brings me back to Tesla's earnings, actually, because when you look at another area of growth, the silent, like the secret deadly one. weapon of the Tesla in the Tesla universe is this. Supercharger stations up 36% year over year.

What? Supercharger connectors up 35% year over year. Uh, the number went from in Q4, 2020, Q3, 2021, 29,000 281 supercharger connectors, 3,254 stations up to 3476 on stations and 31, 4998 connectors. That right there is why you, why Tesla cannot be beat right now, even if the cars are better. Yeah. And it did all of that while generating the max free cash flow that it ever has in data that we currently have available to us. So free cash flow in the last quarter was $2.8 billion. A year ago is 1.9 went down as far as to $293 million. So like this company is just, I don't know, I forget Jason, can we swear on the show? What are the rules? Yeah. I don't totally get it. It's so fun. I've been on some shows that, you know, anything.

Anyways, Tesla is shitting gold all over the place while also managing to build out its supercharger network and drive. Going back to my point from earlier, its automotive course margin from 24.1% a year ago to 30.6% this year. That's 6% or 25% of its prior total. It's an enormous improvement in revenue quality. When does the dividend come is my next question for this company? Not will it survive? Like, when does it have so much cash? They're default alive now.

It would be horrible if they get. of dividends, I would much rather see them invest in that 25K car, maybe even not have great margins on it, but increase the number of those cars out there. And I'd like to see them keep doing the supercharger. The other thing people don't realize is

they're going to have a subscription revenue business. I just turned on because I was at a charging station on the way to Tahoe two nights ago, and I realized, oh, my free high speed, you know, connection was over. Yeah, so that they have this premium service and you know like I could connect it to my Verizon LTE but I just don't want to deal with that because the connections are never great. So I was like 20 bucks a month, 240 a year, sure,

here it is. And I just in my app just clicked okay. And they're like, we have your credit card already. Mr. Gallaghanis, boom. You now have that. And so I was watching Book of Boba Fett while supercharging with my daughters in the car and they were thrilled, right? And now think about that, a million cars paying 20 bucks a month for connectivity. And then maybe there's going to be a 30 or $40 package where you could have the remote viewing of your camera. So it becomes like a security camera thing, like a remote dash cam. They could just keep charging, upselling people. And maybe that becomes they have a million people someday subscribed to a 20 or $30 a month

service. Yeah, but its stock is still really expensive. Like you have to buy into that entire growth story to make the multiples work out. Like Tesla is, I think now you're right, default to line. Great company. The proof is really in the pudding. It is consistently improved. its overall business for so long now, I'm kind of blown away.

But I will say, would I like take, if you gave me like 10K, I'm like, pick a stock, I wouldn't, I wouldn't pick Tesla today. I feel like the upside's priced in because people are enthusiastic about the company and especially about Elon. And that's fine, fine. It's not, no sweat off my back. But I mean, I'm not like, oh, God, it's so cheap. Buy it.

No, I think it's an and and and. Right. It's like, yes, they are killing it. Yes, they are default alive. Yes, right now, if you are really looking for a day-to-day driver right this second, And that picture is going to start to change rapidly, right? Like, every manufacturer is now legitimately in the EV game. I have started to drive a couple of them just to sort of see what the difference is

between carmakers who are switching to EVs and EV makers who are, you know, I mean, he's reinventing the car. Not everybody's going to want that. There's going to be a, I think the competitive landscape question is going to be really interesting over the next year or two as it relates to that stock price. right now price to sales so the price of the entire company and the sales,

$53 billion, is $16.2, which is pretty rich, maybe $5 to $10 would be what you would expect. And then based on their price to earnings, $156, I think is right, $5 billion. So, yeah, it's fully, I would say fully valued would be a kind way of saying it.

It's expensive is another way of saying it. Crazy expensive is, yeah. Let's play a little game. Jason and Molly, guess what GM's current price to sales ratio I was on a trailing. I was just going to look that up. No, no, no, no.

On a trailing or four, a trailing, I would say three. Jason, Molly? Oh, yeah, Jason stole my answer. I was going to say three. Okay, it's a 0.7. Oh, dear God. Right. So that's probably that company's probably saddled with debt, right?

Okay, but what's Ford? Let's look at Ford, which has actually had a super strong, like, series of EV announcements. I'm just going to become the data. Literally sold out of that new pickup. You know, like they're going to have to delay. What does that new? The Raptor?

Oh, gosh. It's worse. It's 0.64. Yeah. What? I mean, basically people are looking at the, those companies have lots of debt. And a lot of the, they lose money on most cars. They make money on trucks and they make money on their finance divisions.

So one of the things that happens with these companies is they get so old that the way they kind of operate them is with this crazy debt structure and then this finance business. And I think that's part of the story here. is that Tesla is a much cleaner cap table. That doesn't not have a finance business, though. Thank you. Yeah. Right.

But they have that whole offset. They will eventually. They have the carbon offset, the carbon credit sales business. They will have a finance business, I'm sure. The carbon credit sales is declining in importance. In fact, that's one of the things I've been checking for a long time is the regulatory credit income as a percentage of overall automotive revenue. And the last quarter was super modest.

Like the company is no longer cheating to appear, quote, profitable. just is profitable. And it's, this wasn't the case four years ago and everyone was still shouted at me on Twitter. Like, ah, Elon's going to do it. And I'm like, maybe, but not yet. And here we are at the yet point. And it worked out. Can you imagine you were part of Tesla Q?

Like those crazy conspiracy there, so we're like, they're faking the deliveries and these cars are not, don't exist and we're shorting the stock at $100. Oh, my Lord. Well, you don't hear from them because they all ran out of money and couldn't pay their Comcast bill. So, whoops. Oops. Yep.

And also, there was some weirdness early on. And we should give, frankly, we should give both credit and honesty to this. There was some weirdness, right? Like, be honest and say that Tesla was doing every goddamn trick in the book to stay in business. There was a time. And that is to be. Near death moments. Yes.

And then there was a lot of cover up for that, not cover up in the like criminal sense, right? But it was just like, just keep running, just keep running until you get. where you want to go. And it is fair to say both that Tesla has gotten where it wants to go and probably will only continue to do that. And that for a while there, like, it was a little bit of house and cars a little bit. Model three almost took the company down. Yeah.

That was a distinct moment in time where if they didn't hit that $5,000 production a week and building the tent and stuff like that and just getting those cars out. The quality issues that came from that still stick out in my mind because folks bought those cars and had some issues. but most people don't have the gut oh, sorry, Molly. Oh, no, I have a, no, no, no, I have a Y now that I have quality issues with.

Yeah, the gap panels were an issue. And then, you know, once in a while, like, I mean, if you're going at that speed, yeah, you're going to have some quality issues, but I think it's gotten a lot better. I see less and less of that. Because the people who do, you know, with social media, if people get a car that's not good,

they're just like every day they tweet it, every day, you know, until their problem is solved. And you heard a lot of that with the gap panels. Yeah. You know, I've considered tweeting about it, but it does not seem worth. Frankly, the transaction cost of tweeting about a Tesla at this point is just too high for me. Yeah. Please send all your tweets to at Molly Wood, if you have comment for me.

Exactly. I'll just keep talking to the company about it. I don't need it. On a last note on this one, I'm just going to say that I'm not going to buy Tesla. I think I'm going to buy an XC40 recharge from Volvo because it's like the perfect mini-sub. Yeah. I know. What is that?

XE recharge. I will say I'm going to give up my lease for the BMW. Huh. Ooh. Really? Oh, hell yeah. Okay. 100%.

I mean, I'm a BMW girl all the way. The infrastructure thing still is an issue. Like when it's your only car, the ability to supercharge nearby wherever you are really cannot be overstated. So like I'm just waiting for, you know, the results of the infrastructure bill, some of that EV charging to get built. You really have no choice but to go with the Tesla now. You do not want to get.

Yeah. When I was talking, I was like range infrastructure. Are you going to go on road trips, Alex? Are you road trippers? You like to go to New York? You like to go to the Cape. I mean, do I like to go to New York? No, because New York's full of people and people are icky.

Yeah. Gosh, I've been inside for two years, guys. I don't even know what I like to do anymore. I feel like my entire personality has changed. I know, totally. I know. It's over for me. I'm just skiing every day.

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You're going to just want to get a Tesla because once you start using it, once you start having to stop to charge, like a slow charger, like back in the day when you were getting 150 miles an hour and you needed to charge the full 150 and there was not as many charges available, it became like, you know, I'm talking about maybe seven to 10 years ago. You really had to think things through now with the Tesla, you get in your Tesla and you have no anxiety. You're just like, I'll drive in any direction until I hit the Atlantic Pacific or the Mexican border or Canada, and I'm good.

Yeah. There is no, no doubt. But if you're a local drive, if it's your second car, for example, like, I think second cars, you can get any EV you want and not have to stress about range. And, but if it's going to be your only car, that supercharger network is like, it's killer. So I didn't come on the show today to actually talk about the stock market. I came on the show to record a long segment convincing my spouse to not make. us buy a Volvo X-C-40 recharge. So now thanks to this, I can get a Tesla. Thank you guys. I'm going to send her to this place. No, I mean, that Volvo is so pretty though. It's so-

It is. I'm looking at it now. It's actually, I love that car. Usually they make them so ugly, like I think they seriously made the bolt and the vault and all those cars ugly because they didn't want them to be popular. They just wanted to like a, the BMW I-3.

They were like, let's just sell them. Well, they knew they couldn't, they knew they couldn't sell them profitably. So they didn't make them mainstream. They made them, they knew they were losing money on them. They had to do it for the, what I was at, the cafe standards or whatever to kind of hit the number they needed to hit. So I think they purposely were just like, yeah, do something wacky, who cares? But now you're seeing people who are making them indistinguishable from their existing product lines or better. That is a major turning point.

That means they see this as the future. My counter argument to that is, do you remember the first Prius? It came out looking like a small pinched bug? And that became a consumer hit. You know, they managed to make it less bugly over time. Yeah. True. And that was all about that was the ultimate.

It was all about price. Yeah. I mean, it was an inexpensive car that got, you know, killer gas mileage, and people were like, okay, yeah, that's a win-win. I don't, and if I'm being completely honest, and now I will get yelled at even more, it was for people who don't care that much about driving, like, not like car people. No, it drove like a milk carton. It was not fun to drive.

The gear shift was a little knob on the, it was in the wrong spot. Like, I mean, so we drive a Volvo sedan four-cylinder manual because we're super cheap. Because you're so cool. No, because we're just cheap. But eventually we're going to swap it out. So I appreciate this particular dialogue. My favorite back in the day, and I almost considered getting this when I moved to L.A., I wound up getting the, what did I get, the Mini Cooper?

Like the second year of the Mini Cooper, I love that car. But I almost got the Honda Insight because I saw all these people online on message boards had the original Honda Insight hybrid from like, I don't know, maybe 2000 to 2010 era. they were getting some of them like 60, 70, 80 miles to the gallon. Because they learned how to drive it perfectly or behind a big SUV. They looked super weird, but they were like having these competitions to see how much gas they could save. And then gas became $2 a gallon again. And people didn't care anymore about gas mileage.

It's interesting. No of these. Hypermiling? Hypermiling. Yeah, that sounds like it. Yeah. If not, it's a great term. I think that's what it's called when you're trying to get every single possible miles per gallon of a car,

which to me just sounds like torture, like hard paths. I'd rather just work more and make more money and afford fuel than do that. I mean, I do honestly, I find it kind of annoying that the Tesla's always like, your battery life will be way better if you go slower. I'm like, but I don't want, you're not made to go slow. Why would I have to go slow? All right, should we stop Cart Talk and move on to IPO talk? Yeah, well, I like Cartagos.

Me too. All right, you wrote a great story, Alex. The IPO window. Is it closing or not? And people forget because we've been in IPO frenzy land since, I guess, Uber and Airbnb went out. I think those were the two big ones everybody was waiting for. And now everybody in the founder community is like, yeah, of course you can go public

anytime you want, not realizing that we have IPO windows that are shut. Maybe explain to the young ins in the startup community about the concept of IPO windows and then what your premise of this piece was. Critically, Jason just didn't include me in the young end category. which is evidence that my hairline receding is accelerating as I age into my 30s. I mean, you are talking about buying a Volvo. So. Yeah.

I mean, doing IVF, getting a Volvo. Yeah. All right. Fair enough. It's, this is middle age. It's been great so far.

It's fine here. Yeah, no, the water is great. Welcome. An IPO window, Jason's question, is a period of time in which you can take a company in public. And there are exceptions to this. People will say that you can always take a good company. public. And that's true. But most people care about when is the time period in which many companies

can take their company public at a reasonable price and not get absolutely hammered by public investors. And essentially, it's a moment in which you can translate a business from the private to the public markets with minimal intrigue and bullshit. And these come and go based on market conditions. Usually when the market is more risk on, the IPO window is open. And when the market is more risk off, the IPO window is closed. So if the value of software stocks is at an all-time high, the IPO window is open last November. If the values off our stocks takes a huge dive, now the IPO window closes. And so we have noticed through the JustWorks IPO and the We Transfer IPO both being delayed,

kind of put off, that the moment for taking companies public was actually last year and wrapped up around Christmas time. Wow. That's very definitive. Okay, so when you say wrapped up, what does that mean? Like, let's spin that out a little bit. You're a hot company or maybe a medium hot company. You were considering a SPAC merger.

What is this like, you know, lay out the ripples in the pond here for us? Yeah. So a lot of SPAC deals are being called off because essentially companies were announcing a spec deal, you know, back in June 2021, getting a lot of hype. And by the time the deal came together, no one wanted the combined entity. A lot of redemptions on the cash that was going to go into the new business. And then they begin to trade and they drop like a rock. Very few SPAC combinations of tech companies have performed well.

And frankly, it's been pretty embarrassing for a lot of folks who were promoting these in the media, in the investing community. It's kind of dicey. On the traditional IPO side, if you're a medium-hot unicorn, say, let's say you're worth $1.5 billion, you've done pretty well. You probably got a lot of built-in hype from your private investors who expected you to keep doing well. But if you're all kind of medium-hot, you may struggle to match that same price when you do go public, if the IPO window, isn't wide open. So currently, because companies don't want to see their valuation declined in an IPO, which is messy for a bunch of reasons, they're just going to hold off and not go public. And, you know, at some point, we're going to have to get some of these unicorns out.

There's nearly a thousand now in the private markets. And with a closed IPO window, that's only going to keep going up. And I'm really worried about a unicorn indigestion to pick a horrible metaphor there. It is exactly accurate. If you look at what happened, just to give you like from the insider view, it is the case that you'll have a private company, somebody really wants to own shares in it, there's competition. So, you know, you have a bunch of competitors

who want to make that last, let's call up the Yuri Milner, the Kleiner Perkins, the SoftBank final bet before public. In other words, a large amount of money that you're pretty sure is going to double or go up 50% in the next two years, like Yuri Milner famously did by overpaying for Facebook and Twitter. Kleiner overpaid for Twitter.

It's kind of like a classic late stage bet. Now, a bunch of people get in on that, and you got other people, and you've got 10 people doing the same thing, prices go up. So now maybe you're going to get 20% pop. You overpaid for the company. The IPO window is not great. The fundamentals of the business are not great. You go out by a SPAC.

It doesn't perform. And now, what was a $4 billion company in the private market It shoots up to $10 billion in the public before crashing down to two. And you look at that as a private market investor like myself, I'm just like, why did we take this out? Why didn't we just quietly build without the distraction? I would have much rather certain companies that went out by these IPOs didn't. I don't need the liquidity. And, you know, desktop metals, perfect example.

We had a small bet on that company. It went way up, way down. If you look at their stock price, I would have been totally fine with them not going public. And then the public markets don't understand how to be patient. The people buying SPACs were day traders. Spacks are earlier inventory. They're companies that are more nascent. So you have to have a venture, private market investor mindset, or at least a public

market mindset with a long-term angle. And what did we get? We got day traders on it, the worst possible situation of who should not be trading a stock that is trying to figure out how to scale their revenue and what their exact product market fit is, which I said over and over again, like, you really as a private public market investor want to be investing in Nicola, Rivian, you know, whatever company, Virgin Galactic. Like, do you actually have the appetite to wait five or 10 years and then look at the stock price? You don't.

That's the challenge here. If you're an accredited investor, you need to know about special purpose vehicles. Well, it's an investment vehicle that allows up to 250 investors to invest up to 10, million dollars in one entity on a founder or startup's cap table. And you could start your own syndicate and you can power it with an SPV. That's the magic of it. And here at launch, we love working with the team at Assure. That's spelled A-S-S-U-R-E. They power my syndicate, the syndicate.com, which is the largest angel syndicate in the world with well over 9,000 members. And we've had thousands of them do a deal with us. Asure is the leading provider of SPVs and fund

administration with over 2.5 billion of AUA assets under administration and over 5,000 completed transactions. Let that sink in. They've got over 5,000 they've done. They've developed an innovative software platform called Glassboard that automates the entire investment experience from the entity formation all the way, hopefully, to an IPO. Ash and Hyde on my team love Glassboard. They love working with the Shore, so not only do investors love it, but founders love it as well because it keeps their cap table clean. No messy party rounds used in SPV. They also manage the entire process over the entire life of the investment for you. So if your startup takes five, six, seven, eight, nine, ten years to be realized, they're going to be with you that whole time and they've

been with me for years, my whole career, in fact, as an investor. So to get 20% off your first special purpose vehicle, visit ashore.co slash twist, a ss, u.s, u.s.s. u.s.s.s.s.s. That's a sure.com slash twist to get 20% off your first SVV and tell them your uncle Jason sent you. But so then why was there such a push? I mean, like, you're saying you don't need the liquidity. You might not. There may be other people in different positions. But also, it does feel like nevertheless, there was a big push to put out half bait.

I have my own there, but I want to hear you to guess. I know the answer, but I want to hear you two guess. Molly, I think you asked the question, so I think you should answer it first. What, that's ridiculous. Why do you think everybody? All right. I'll find fun. I mean, they just take some money, right?

It was a hot market. There's a ton of money in the market. Why wouldn't you? Because there's a lot of like day traders and retail investors and, you know, people making bad decisions. So like when there's blood in the streets by property, the corollary of that is like if somebody's throwing money out the window, go toward the window. Yeah, get a bag and collect it all.

And I think that's exactly what happened. We saw the value for software revenues in particular scale, dramatically in the back half of 2020 as the market realized that everyone wasn't going to stop buying software. And so startups and other tech companies were in a great position to essentially grow quickly while their cost went down. You didn't have in office anymore. You could hire wherever you want. And so these companies really became not only a safe bet because they weren't like a consumer cyclical that was going to fall out of style, you know, people just kept putting money into them. It made startups look more valuable. It made public companies look more valuable. So why wouldn't

you take your company out then. It was essentially a free pass to getting a great IPO pricing and therefore an enormous fundraise, a lot of hype. I mean, going public isn't just the bad stuff that Jason's talking about, you know, the day traders and the haters and so forth. I mean, you know, Tesla's public and that worked out great as a fundraising mechanism for the company. It was enormously important. So, you know, to me, timing, money, liquidity, many things came together. It's just now kind of behind us, if you will. Yeah, you guys got it perfectly. We, if you remember just two years ago, Dave Portnoy was trading stocks

and his rallying cry was stonks go up. Stonks only go up. And if you literally are in a world where everybody's saying stonks go up, then why wouldn't you go public? Because stonks go up. It was just no realization that they could actually go down

and what would it be like to be trading at if your SPAC was at 10, what would your stomach be like at 3? What would, you know, if Robin Hood was trading in the private markets at $30 a share before I went public and now it's trading at 12, how can people stomach that? You know, like I'm sitting here. I could have sold my Robin Hood shares in the public, in the private market for probably $20 to $30. I'm sitting here at the $12 stock. I distribute them to my LPs and I tell them, listen, I'm holding. I'm in it for the long term, but you have to make your own decision and I am in it for the long term.

So this is like very complicated stuff. And people just got a little greedy. You know? Yeah. One more thing to throw in there is how quickly this happened. So in December, we saw Reddit and VIA both filed privately. JustWorks was going to go out. It pulled this IPO only for nothing sense from anyone else. So this went from kind of hero to zero pretty quickly. And essentially it was, what, 45 days of software stocks shedding value on the public markets that ended this. And so that means the liquidity cycle for 2022. I keep forgetting what year it is, amazingly enough, for this year, it looks kind of crappy. And I'm worried about VCHAs. who do need the liquidity, Jason, whose funds are closing and whose LPs are tired of paper returns and want some paper, if you will. We are going to, this is a nice place to tease ahead to Sunday, to BC Sunday school, where we're going to talk a little bit about what this does mean for this industry. But we want to run through, because there is a nice little list here that our producers have compiled of the most anticipated IPOs for 2020. The NOTES are already asking, what does this mean for some of these IPOs? And so let's run through this with Alex.

Let's start with Stripe. What do you think? Hotly anticipated. Yeah. I mean, that's exactly right. Stripe is, you've talked to VCs about Stripe who don't have money in it. They talk about it like the one that got away back in college. Like, they are wistful at the discuss of this company.

So to me, everyone knows that it's hot. Everyone knows that it's huge. Everyone knows that it's doing well. I just want to know if that's actually true. And so this IPO filing is, the one that's going to really, I think, de-offuscate the business. And Stripe has been very aggressive in certain ways to control its market positioning, you could say. In a mafia way? I was trying to align the entire break-out. Day three of the mafia. I'm thinking about Finnex

and Sequoia in that particular saga in which they kind of bullied one of the most legendary investors in the history of technology into giving up $21 million. Cool. Well done, Stripe. But now I want to see the proof. And I feel like it's been in the wings for so long, Jason and Molly. They're like, it's about time. It's a huge company. They have been, it's not a startup at all. It's not even a unicorn.

It's just a huge business. Yeah, and just to look at it, if they're at $7.4 billion in 2020, that was the number in the Wall Street Journal. Let's say they either went up 40% year over year, be a high growth company. But who knows, maybe we saw, you know, other companies have grown faster. You know, and they hit $10 billion to get to the $231 billion. dollar market cap record of Alibaba, that'd have to be at 24 times their valuation, you know, sales to their valuation, which is pretty rich, as we've seen. Well, that would have been rich for a payments company last year, actually.

Yeah. I think it's much harder this year. A question about this, going back to my favorite topics I'm boring, is gross margins and how high quality this revenue is, because 7.4 billion at 40% is not nearly as good as 7.4 billion at 75%. And no one's given me hard numbers on their revenue quality. So I'm curious. And it's not a cheap business to run.

They've hired all the smart people they can get their hands on, which is expensive. So let's pull a number out there. It's a great, 30% margin. And they're making $10 billion. They got $3 billion in earnings, $3 billion in earnings times 50 price earning would be $150. Whoa, whoa, whoa, whoa, sorry, 30% gross margins would be $3 billion in gross profit, after which we would deduct operating costs. So like, if it's 30% there, there's. they're,

right. Okay, so let's, what would you guess they're turning? So, when it comes to beating Alibaba.

Oh, the latter. They're fine. Yeah. Um, okay, got it. I want at least 50%

margin doesn't sound to me. Like, I'm new here, but that seems fine. Well, if you want a 24x sales ratio,

that's, yeah. I mean, should we just assume, though, that at this point beating that record is like, it's not the year for it.

Like, sorry, you missed a chance. Things turn around. Jason, I mean, think about March, 2020. Everyone was, everyone was, everyone decided in March 2020 that the stock market was over. The economy was done. Venture capital was going to set up shop for five years. How long did that last?

Three weeks. Yeah, it was about three weeks. I think this time's different. I think this time is a fundamental repricing of assets that got out of control. And I think it's like a crash for some people, a correction for others, and then neutral for, you know, people with strong, predictable revenue. You agree? Or index funds like I have. So, yeah. I'm just going to keep on buying through the downturn here. Yeah, I mean, index funds are going to be least impacted. And you can just keep, you know, it's not about timing the market. In that case, it's about time in market.

I put their value. I'm going to take about, I'm going to set an over under, $135 billion after one week of trading. So we'll take out a little spikiness. So on the five days, you know, whatever day they go public, the next week, you know, that day, $135 billion market caps. at the close of business on the sixth day of trading. What do you got? Over or under?

Alex. Over. Okay, Molly? Over. I mean, that long pauses me thinking about what Alex is saying, which is like, what's it going to look like when we really get a look behind the curtain? But, like, look, the scuttle butt around the valley is that they just print money. So I got to go over.

I don't think it's not going to be a wee work situation. I should have set the line at 170. Then you guys would have had to work. That would have been a tough line. Yeah. That would have been. Yes, I might have taken the under on that. I said a bad line, being honest.

I just thought if they're making 10, 13.5 times price to sales ratio after a week in a choppy market. But who knows? Things could be better. All right, Discord's the next one. And you also have Reddit in this. But Discord and Reddit are really enigmas as well to try to understand. We did see Microsoft wanted to buy Discord for like $10 billion was the rumor, maybe $15 billion. Who knows?

And their last private market evaluation was $15 billion in. September 2021. Revenue in 2020, I have 130 million, so tiny revenue, but a lot of users, so kind of like a Facebook story in the early days, and Twitter story in the early days, and in fact, Google story in the early days, low, high users, low revenue. What's your take on this company, Alex? I'm pretty bullish on Discord in general. I don't know exactly how I would stock up its current valuation to its current revenue, but I

will say as a as a regular discord user, I'm amazed they haven't taken money from me yet. And frankly, I presume they will. And I presume there's a lot of folks out there like me who like to play video games, have friends, bring them together. And that demographic has money. We're buying stuff. And so to me, I can't believe they haven't said, Alex, come on, come on, five bucks a month for high quality audio. Come on. And I'll, I would just say yes instantly. I spend hours on Discord. It's amazing. And Discord has really become the messaging platform of choice for a lot of young people, a lot of Gen Zs who are not necessarily even using it for games. Like maybe they got introduced via games, but now they're using it to talk about homework.

I mean, that is really happening. And so they have built a pipeline, you know, for the same reason that like Apple used to be in schools and Google and Microsoft now are. They've built this pipeline of future paying customers that is super loyal and has an entire friend base and community existing there. Like, I do think that there's, it has a lot of value and growth potential as a product. I just wonder if it is in the category of a, what did I call a medium hot unicorn?

Like in terms of, it would Discord Risk and IPO this year. It's massively under monetized. So lots of users, not a lot of revenue. If you got 150 million monthly active users, but you're only making $150 million a year. Exactly. What's going on here?

Like 10 cents a year? I mean, what's going to be making a year? Yeah, 10 cents per user per user. per month is insane for the amount of quality of providing. You know, Facebook's making, you know, in the U.S., what, $75 a year per user? I mean, it's massively monetized. Yeah. So that means a lot of upside.

If the team can think of a business model and a lot of people are using it as their go-to for, like, group chats, like, you know, as opposed to signal or Facebook messenger or whatever. So I wonder if it's more like Twitter in that they'll never be able to figure out the monetization or more like Facebook and Twitter's doing well. Fine. Twitter's doing fine. I'm paid to do every month now. I'm on Twitter. I'm on that $3 blue. I don't necessarily like,

I don't want to encourage this because Discord has a lot of data and it would just be like, and it could get ugly in a hurry, but like, Discord does not have ads. Right? So it has this super, I mean, Discord could literally turn on ads tomorrow.

Kill it. And kind of kill it. Yeah. Can you imagine like the next Netflix or Disney movie or Book of Boba fat advertising on Discord? I mean, it would kill it. Or like your new computer, you know, peripherals, Apple ads, it would kill it.

That's the second mention of this. I'm sorry, what the hell is Book of Boba Fett? Jason keeps dropping this like I... Boba Fett was like a super fans... How far? How basic do we have to go? Do you know who Boba Fett is? Bobfut had like three lines in the whole original trilogy.

Yes. Boba Fett then became a nerd geek out, you know, enigma. And then they decided to do massive fan service and build. out the concept of the Mandalorians, which is the armor he wears, and build out his character arc. And so there's a new series after the Mandalorian.

John Favreau is now building the world of Boba Fett post being a bounty hunter, and it's awesome. Is the Mandalorian over? The origin story. No, the Mandalorian continues. Mandalorian's a religion based on weapons and armor. Boba Fett is a

bobafebett is a bounty hunter who had acquired Mandalorian armor. Okay. You know, there's an entire world of... Oh, they're world building big time. Literally based on this like throwaway character who got built out in the Clone Wars. Yeah. And now it's like we go from Car Talk to Star Wars nerdery like this.

I just want to say that there's worlds of science fiction out there that isn't trash. They're trying to recycle it to make money from Disney. So if you want to read something better, just hit me up for some book wrecks. Absolutely. Well, what's your best? What's your best sci-fi book of the last five years? Most... A memory called Empire.

Oh my God, that's what I was going to say. You stinker. I was like waiting for it to come around to me so I could be like a memory called empire. I don't am not even aware of this. And a desolation called peace. Yeah. Those are fantastic. Or the salvation sequence is tremendous.

Ada, Ada, Tara Incognita's. This is all by an author named Arcatty Martin. Yeah, she's a wizard. She's amazing. Oh, really? Wizard. These books are beautiful. They're like fascinating.

Where would you put them? Are they dune, Star Wars, Lord of the Rings? Where do they sit in the... It's more duneish than Star Wars, for sure. It involves a lot of discussion of culture in a future context, and also the definition of civilization as it will evolve into the space age. Right. Because you have an empire that is colonizing planets and absorbing them,

which is kind of a classic, you know, classic thing in sci-fi. But these stories are told from the perspective of essentially, and immigrant into that empire who's like in love with the empire and the culture that they've built, but also trying to maintain her own. I mean, it is, they are just so great. Good. Yeah. Oh, wow.

I'm, I'm in. I can't believe we recommend the same one. I'm so excited. I feel like nobody else knew about these books. It feels like we got a this week and service book club. And then we can get the author on too. All right. So we did Discord.

We did Stripe. Yes. Let's do Reddit because this is crazy. Reddit. Talk about that patient capital up in here. Well, I mean, it was bought by Condon asked for like a case of like peanut butter and, you know, like a couple of old VHS tapes of the Hobbit animated movie. And then they spun it out and then it became a juggernaut. Revenues over 350 million from advertising according to the information in 2021.

It's one of the largest sites in the world. 430 monthly active users, again, massively under most. monetized at that rate, 430 million monthly active users, again, according to the information. So the price to sales at $15 billion would be something like $42. And it's business model as ads, which ads is a tough business model. I can't believe they don't have like a better subscription revenue. But what do you think broad strokes about Reddit? Yeah, I'm bullish on this one.

I just looked up my Reddit account. I've been on since June of 2008. And actually, I was a user before, but didn't sign up. So I've been on Reddit really since it was like the lesser dig if you go back in time far enough. Sure. Yeah. Absolutely.

And what's amazing to me about Reddit is how much I still freaking love it. Now, to be clear, that's because I found communities that I'm a part of. Like, there's a progressive metal community on Reddit. That's fantastic. There's a stop drinking community that I've been on for years. And so to me, it has managed to find a way to scale microcommunity. in a way that is inherently sticky, and they have been tinkering with different ways

to make money off at advertisements, Reddit gold. I gave them money when that first launched. Now they've got other little coins you can give out. They're going to figure it out. I'm just, they found a way to keep us, and that to me is their magic. Any crossover between the sober metal heads? Is there any opportunity there with those two?

The sober metal community is small. It's the latter day straight edge. Remember that movie? Oh! Guys, you're killing me. Sorry. I am the only guy at the metal show who can actually see more than four feet, but I will say that it's okay because I remember shows now.

Like the last time I saw Slayer, it's just a blur. Are you down with the Reddit or, you know, is it just too, like, toxic masculinity? And I'll say it again. Reddit is the only new source I trust these days. You love it. Okay. I love Redd. No, I like, I sincerely love Reddit.

I think that Reddit has figured out so much of this like BS that's happening everywhere else, this whole conversation about like what moderation should. should look like. And yes, Reddit did step in and introduce more moderation than it had, but what it has is communities who moderate each other. And I think that that is... That is the magic. Phenomenal. And that's why Reddit and Wikipedia are literally my go-to. Yes, are there errors? Sure. Are there mistakes? Absolutely. Is there virality that can like make things go awry? Absolutely. But for the most part, the community moderation on both of those sites makes them to me

fundamentally trustworthy. Yeah. And you're seeing to agree, Alex. Yeah, Reddit is like public discord and discord's like private Reddit, if you will. So to me, hold on a second. Say that again? Reddit is like public discord and discord's like private Reddit. And essentially what they've done is they've found a way to scale community in two different ways. But we used to joke that content is king, and that's still partially true.

But I think community is king is a much more trendy thing to say. And if you want to think about who's actually built communities at scale and maintain them, well, there's those two companies right there. And they're great at it. So I don't know exactly $15 billion. And you make money on community has been the ongoing question of the internet, right? And unfortunately, the only one who's figured it out is Facebook so far. So I think there is an open.

I think I am less bullish on Discord and Reddit as long-term business plays. I think like Discord, Microsoft probably should have bought it. Reddit, I don't know what happens if it goes public because it's hard to, because it's, one, there's the perception of toxicity. That is, right? Bad stuff exists. like in humanity. They seem to have gotten a control of that, though, right?

Like they got rid of some of the more extreme groups when Alan Powell was there. Oh, sure. But like perception drives markets. And so the question is like, do everyday investors want to be in this? Do pension funds want to be invested in Reddit with Reddit IPOs? And I think that's still kind of a problem. Probably a no. Probably a no.

I think what Reddit represents is all of those people who buy stonks who believe in it are now going to get to vote with their dollars to buy one to 10 shares of Reddit and then put that on their profile and then say they're a Reddit shareholder and you've got 430 million users there, it could become the most diverse share base of any company. And I think Tesla and Apple are probably in that group of, you know, they just have a lot of fan boys, fan girls, fans of their products. Can you imagine if 10% of Reddit users or 5% decided we should own the stock to support the company. I mean, it could become like an AMC type situation for that reason of the first three companies. I think it's got the most upside, not because of fundamentals, but because of the crazy

fan base. Maybe Reddit should ICO bring back the ICO. But coin offer, yeah, no, it would be worth 10 trillion. It would literally be the number three traded cryptocurrency. I mean, think about it. What if Wikipedia went public? What would it be worth? Yeah, Reddit, make a token. A trillion dollar company, maybe. Make a token, bro. No, don't, don't listen to Molly. Molly, put $5 in the bad idea, Dr. Don't bring ICOs back. I can't take it. Just one, one ICO,

a true unicorn in the oldest sense of the word. Jason, Alex was trying to do, I remember this. Alex was like, I like to look at the fundamentals. I like to know the numbers. Hey,

show me the geeking out to the earnings, the quality of the revenue. And then they're like, hey, somebody at Tech Crunch or Crunch base is like, hey, Alex, can you tell us, do the same thing for this? And he's like,

this is a white paper with seven spelling errors per page. and there's no product, there's no employees. You can't do any fundamental analysis on a poorly written novella. Yeah, you can't even do textual analysis. It was brutal. I will say, though, the ICO boom was hilarious. Sure. Super entertaining.

Super entertaining. So, Jason, real talk, no BS, no hedging. Did you put any of your own money into ICOs in the 2017 ICO boom? $0.0. Hey, there you go. $0.0. I knew a scam when I see it. And I just said, you know, show me every time I met with at least 25 for investment because I was like,

all right, listen, if this is getting this popular, I have to have to do my diligence here. I said, okay, can you show me the product? And they're like, yeah, yeah, no, here's the white paper. I was like, oh, yeah, that's the white paper. Where's the product? They're like, oh, no, we're going to raise 100, you know, Tesla. Oh, we're going to raise 100 million and then we'll build the product. And I had them on the podcast.

I was like, this is crazy. It's like, we're giving everybody the IPO reward for writing a poor version of a potential perspective. So that was the framework that I, it just clicked at my head immediately. I was like, I saw this during the dot-com era. There was a company, there were company, there was one company that went public based on a plan to build 20 internet companies. I forgot the name of it. It would come to me. And then there were companies like internet capital group or something like that and vertical net. And they became worth all this money because they were going to build a website in every category. And people just were like, okay, well, that makes sense. So it's going to be like 100

IPOs in one, here's $100 million. And when you give people the reward before they do the work, bad shit happens. Whether it's an NBA player who gets some huge contract, like, you know, Zion Williamson is like, you know, getting huge contracts and, you know, endorsement deals. But he hasn't done anything in the NBA yet. That's a really bad thing because then the person gets fat and doesn't work hard and has no work ethic. That's what happened in ICOs.

People got fat, no work ethic. If you're a New Orleans Pelicans fan and you don't agree with Jason's analysis there of NBA player weight movements, no, I don't think you're wrong in the large part. I mean, think back to the 90s. People would raise money to go really raise money and buy servers. And it was a really risky proposition. We've de-risked a lot of startup building because you can now, with $48 in an Amazon account, build something, test it out, get some data.

That's the magic of today's startup market. You can do so much more with so much less. before you need to raise money. The ICO boom was the inversion of that mixed with cocaine. And it was hilarious. I miss it. Pretty entertaining. I'm just saying,

except for the part where everybody lost their money. Tidy it up. Tidy it up. Attach some fundamentals to it. Yeah. Reddit. Or have a fundamental. You know, just one.

Like, you know. Have a fundamental. Sorry for being boring. My job is to be a buzzkill, Molly. Like, that's, you recently had that job. I mean, it is kind of fun to just basically be like, Hi, I'm wildly irresponsible now. You know, there is a balance between these two.

If we have a world where we have specs, a world where we have NFTs, and a world where you have Reddit, and Reddit is literally the meeting point for all of those, and why would we ever expect Reddit to do a traditional IPO? Yeah, but yet they are. Do something cool. You're Reddit. No, no, no, no. Do the IPO.

You've got 350 million in revenue. That's real money. You got 400 million people using the, the product, that's a real user base, like just continue on. But, you know, in fairness, like Molly, we just had a discussion about a company and you were enthusiastic and I said, let's make, let's think about doing the investment when they have one customer we can talk to just one. Because that is like this incredible chasm to cross.

Forget about zero to one like in the Peter Thiel sense. I like zero to one in the customer sense, like a paying customer. The amount of work it takes to get one person to take a credit card. out is phenomenal. Yeah. The second and third is like 1% of the work. Once you get one person to pay for superhuman or slack, the second and third are like, oh, well, I've already proven somebody will pay for it.

I still recall the one time I did that. I built a little teeny company, but I was between high school and college with some friends, and we launched it. TechWrench covered it, ironically. And I recall the first time people gave us some money. I was like, we did a thing. And I still remember that moment. It was awesome.

Like putting your first dollar on the wall. And then you start to get that customer feedback that changes how you operate. Yeah, no, 100%. That's why Jason. You get actually actionable feedback. Like, skin in the game feedback is so much different than, you know, your cousins, fraternity brothers, feedback on some free software. And they're like, this is incredible, it's going to change the world.

It's like, okay, give me $10 a month. And they're like, yeah, no. Should we do, we've got a bunch of other. I mean, the IPO slate is false. Should we do like a lightning round? Like yes, no IPO? Yes, no IPO. Sure.

All right, yes, no, IPO, impossible foods. No. Beyond meat is losing money. Impossible foods has to be losing money. Not the right time for them to go public. Also, commodity business, overplayed market category. Everyone's going to pile into it. Like, if they had pulled off a Tesla and vented the category and also scaled and owned most of the market share, I might have more faith.

But, I mean, it's soy in a little package. It's not hard to redo. Not defensible. No. All right. So that's a solid no. Yes, no. IPO.

Instacart, Pandemic, darling, saved a lot of people's bacon. Pandemic saved their bacon. It's got to go public. It's going to be a mess. Yeah, I say no on this one. I know it has to go public because it's worth so much money and so much has been plowed into it. But Instacart versus Amazon GoPuff, DoorDash, Uber Eats, and Whole Foods owned by Amazon. It's like, I don't think they own, I don't think there's any real value here to the company.

Like, what is their actual value? They just have relationships with stores. And relationships with customers. And so what they're trying to do lately is move into kind of like the blue apron space, which to me... The worst possible business you could be in? It's not great. Oh, yeah.

Does that make them okay, well, then corollary, since our lightning round to slow down, acquisition target? Oh, no. Who can afford that? Cost of money in the Eiffel fucking Tower. When it collapses down to $5 to $10 billion, yes, acquisition. target like Peloton. Oh, there we go.

Like, right. Like, oh, no, no, I'm saying Peloton crashed. I know. I got you. You can talk about that. Uber could, you know, just like DoorDash. DoorDash bought, what was the European cup?

Oh, just eat. Just eat. And then Uber bought Postmates. Both of those were, you know, whatever. When you're number three, four, five, six, seven, your acquisition bait when the valuation comes to reality. Yeah. That's what's going to happen here.

Yes, no IPO, go puff. Quick Commerce. 15-minute deliveries of snacks, household goods, et cetera. We have an interview coming up. We'll go, go. Okay. So when you get to that, ask them about their overall economics because I love it as a consumer. So I hope it's a great business.

I'm going to go, yes, IPO, because I want them to keep bringing me Advil and orange juice when I'm sick. It's just amazing. It's so fast. I'm going to say yes, because I think that they know how to pick categories that are profitable and markets that are profitable based on our interview that Molly and I did with the founder. I think they have discipline and they understand that they need to be

convenience store margins, not grocery store margins, which is the opposite of Instacart. So it's the anti-instacart. I don't think they want to try to make money off of your cereal and bananas. I think they want to make money off your vodka and Advil. And vodka and Advil are small, high margin, and you're going to pay for them when you want them,

unlike oranges. Like, you'll pay out the nose for vodka if you run out. Yeah. Bob Kenapel. Breakfast of Champions. And finally, yes, no IPO, chime. Just for Hunter Walk, I'm going to say yes. Okay, but what do you really think?

They told me that they were EBITDA positive, like in 2020, and I was like, okay, guys, we'll talk. Adjusted EBDA or like Big Kid EBITDA. And they're like big kid EBITDA. So theoretically, they have a history of material profitability. Chime, if you are not familiar, by the way, as a NeoBank. So this is a hot space. A neobank that offers no fee online banking services.

Well, it means new, but it also means basically, let's be real, a fancy skin over somebody else's FDIC insured product. So a Neo bank is not a real bank. You can't take the curtain down like that and should be able to behind the scenes. So instead of Neo, instead of saying new or Neo, we could say faux bank. Sure. A facade bank. A banking facade.

Yes. It makes banking nicer. It's actually just like the request for startup that we made vis-a-vis Amazon. like put a nicer friendly interface. And then they do nice things like they'll give you a little bit of a payday loan. Yeah. Got it. Yeah.

It's a banking front, if you will. If we're going to go down the facade, the analogy train. That's a good way to put it. But it's not a front in the mafia sense like Stripe is a mafia. Right, exactly. Stripe is a mafia. Chime is a front. No, we name the show.

Oh, God. You're going to get some emails for this show. Sorry. I know, right. Of course. Who cares. We can have fun. So, yeah, I don't know enough about.

about chime, except they have over 10 million account holders. That's kind of hard to fake. So when I look at an assessor startup, I look at what's hard to fake when I don't know enough about it. And I think faking, you know, whether it's, you know, when you start to get into tens, millions to tens of millions of people using a product, it's just very hard to fake or manufacture. So especially when it's a paid product or it involves a deposit.

So to open up a coin-based. account and actually trade something or a Robin Hood account and trade something. They were chime and make a deposit or wealth front. Shout out just got bought by UBS. Yum. Um, yum. Uh, all of that stuff takes real work in the real world. And so I, I say this is a yes for me.

I say IPO. I say go. Did you own wealth front stock? I tried to invest early on and they had closed around. I said, hey, can I reopen? And they just like, how much you want to invest? And I told them the number. And they're like, Jake,

for you, you're an advisor to the company. And they gave me the amount I tried to pay for, this early in my career, when it was like a one-year-old company in equity. So free, I got a free role. Good to be J-Cal. Yeah, you're buying me lunch next time I see you.

Jesus. Or more. Or more, you never know, Alex. Lunch is good. I don't want to be any further in your debt-in-a-cheasburger. I'll take you the same place I took Molly to lunch for ramen. It has a tendency to expand the possibilities of a person's... He's not going to throw you in the pool at the ARIA,

but he is going to take you to this one special lunch and everything isn't a change for you, my friend. As long as Clay Thompson's... Robin is for closers. I'll leave it at that. Robin is for closers. All right, listen, if you would repeat back to us, Molly, if you'd be so kind...

Yes. To repeat back to us all the IPOs, we did yes, no IPOs. And then I just want to go around the horn and pick our most favorite, our wild card and our least favorite. So most favorite, our wild card,

one that we just love for some weird reason, and then our least favorite. All right. So our list to recap is Stripe, Discord, Reddit, Impossible, Instacart, GoPuff, and Chime.

Let's do least favorite first. I'm going with Instacart as my least favorite because the valuation doesn't match reality and competition headwind. Least favorite. All right, Alex, you're next. It's a tie between Instacart and Impossible Foods for the reasons that Jason outlined. And I just want to say that people kept telling me that everything was going to be different this time with low margin, high cost deliveries, and I never believed it.

Yeah. This time is going to be different. What do you got? My least favorite in the IPO department, actually, is Discord. What? Why? Discord is my favorite in many other ways. I just don't necessarily see Discord going public in a down market.

Okay. All right. Okay. Yeah. Now, let's go for our favorites. Our favorite in all of this, the company, I'll define our favorite, the strongest IPO. And what do you got, Alex?

Strongest IPO. If it's strongest IPO, not favorite, it's Stripe. If it's favorite, it's Discord just to piss Molly off. And wait, so favorite would be, well, let me rephrase that. The one that will be the best investment if you hold it for 10 years. Oh, Stripe. Yeah. Okay.

So I'll go with Stripe, too. Yeah. It's kind of obvious. Right now we go with our wildcard, the one we love for some weird reason. And for me, that's Reddit. And I gave my reason before, which was, I think that it is the slow juggernaut that just is going to keep growing 10% a year. They never change the interface, and it's under monetized, and they could go buy things

and expand with that currency. And I think the stock is going to run up ridiculously because of the stonks user base who know how to manipulate stocks. Okay. Yeah, Reddit became my favorite when you said that. Like, it would have been my favorite anyway because I absolutely adore Reddit, and I think the smartest people on the entire planet are on that platform. And I am grateful to have access to them, but also the idea that every single one of them might buy Reddit stock is just beautiful.

Weird. I love it. All right. I'm going to go with GoPuff because, don't forget, it is called GoPuff. It is designed to take care of people who are consuming cannabis-based products, which are becoming more and more illegal around the world. and there is no one more likely to order a bag of chips and pay an enormous delivery feed than someone who cannot move off the couch. And so I'm making a long-term bet on college students existing all around the nation,

stoned off their ass, ordering from GoPuff. Also, it would be cool to see a Vision Fund company do well, you know, one of them. Oh, nice wildcard. That's a little dig slash high-file. Look at it. They back to Zoom, the pizza company that was going to make robot van pizzas. I'm a lot to make jokes about them. Give me that too much.

I ate a robot pizza. I almost invested in the company. Was it good? And I ate. The pizza was a six out of ten. I ate from the pizza truck. One night at our poker game, the pizza truck came because one of my friends was going to invest. And they had a mobile delivery pizza truck.

That was brilliant. Here's how it worked. There were 40 ovens in the back of like a tractor trailer, like big, big car. Each one of them had a pizza in it already. And I guess it was refrigerated. or they were frozen. I didn't ever got an answer to this, but this was their concept.

You order your pizza, Molly, and it's driving to your 100 Main Street, and you ordered two pepperonies. And then Alex ordered, and he's at 500 Main Street, and he ordered, you know, two veggie lover delights. It now knows the GPS location of the truck. It fires off ovens six and seven with the pepperoni on the way to your house,

and you're watching through a camera in the oven, getting shots of your pizza, and you see the GPS location. It gets to your house. They hand you the hot pizza. Alex is watching his veggie delight, and they could take the 30, 40, 50 minutes of Pizza Hut because it's mobile in a robotic thing,

down to whatever. That part I love. And I hate that. The part of the making the pizza in the store with a robot, it wasn't that much different than what Pizza Hut is already doing. And I like soup to nuts robots. robots that can go from, you know, do 100% of the job. That's why I did CAFAX.

It's 100% of the job. The pizza and the burgers got somewhere between 40 and 60% of the job, which to me is like doing zero. You got to get 100% done. You can't do 60% robotic. It's not helpful. When you play your private poker game with your friends, which we've talked about offline before, I forget what, like, what stakes do you guys play like 50, 100 or like? 100, 200 is the standard.

game. Oh, yeah. Lines, 5K buy-in. I was going to invite. But I would drop it down to a $500 buying game and play $10.20 or whatever if we did a smaller game. I mean, I'm my place. I mean,

like, currency. Oh, I can't just come? Oh, that. I don't know. You would not believe the extent I have had people offer me,

like, I'll pay for your buy-ins at the game if you can get me into the game. And I'm like, yeah, no, I can pay for my own buy-ins. I'll give you a hug. you let me come. That's all I'm never going to. I'd like to host a smaller game. I've been here. I've been here three and a half weeks and have gotten three emails requesting to be part of Jason's worker game.

Sorry. I'm like, I might put it in my Twitter bio like I cannot get you access to just. Those seats don't come up. I didn't say this. Molly, congrats on the on the career move and so forth. I didn't, I should have said that at the absolute top. You're an absolute treasure and it's a treat to get to hang out with you more.

And I just want to say good luck on all things that are new. I'm really proud of you and excited. You're the best, Alex. Thank you. All right, everybody. Thanks for tuning in. Thanks to Alex. Thanks to Molly, follow Alex at Alex.

And then go ahead and go into your podcast player and search for Equity, TechCrunch, and subscribe to his podcast. It's amazing. You get more of what you got here today. And follow at Molly Wood, follow at Jason, yada, yada, yada. We'll see you all next time. Bye bye. Bye bye. Hey, guys, Rachel reporting here.

On February 14th and 15th, we'll be hosting Founder University Intensive. This is a two-st, day program for founders. Now this course is only open to women founders. We'll be hosting a course open to everyone on May 9th and 10th. You can apply for both at founder dot university. And applications for the longer 12-week founder university program are due on February 14th and you can also apply for those at founder.com. Follow Jason and Molly on Twitter at Jason and at Molly Wood. If you're not a boomer and prefer TikTok, search for this week in startups to find the fan account at this underscore week underscore in underscore startups.

And our official account at TWA startups, but honestly the fan account is way better than ours. And if you're still not tired of hearing from Jason six days a week, you can hear a read his book angel at angelthebook.com slash audible.