This Week in Startups - What Elizabeth Holmes’s prosecution missed, Nike buys NFT studio, Tether, the power of equity, ISS tourism | E1345

Episode Date: December 15, 2021

All news show! First Jason gives an Elizabeth Holmes trial update and reveals the key point the prosecution missed (2:12). Then he covers, Nike acquires an NFT company (14:17), $USDT becoming an official currency of a shadow government in Myanmar (31:55), how “The Hangover” director Todd Phillips made $150M on the trilogy (36:58) and the Japanese billionaire who delivered UberEats to the international space station (44:55).

Okay, everybody, it is a full news show for you today. I know you guys love when I do all of the news. I'm going to talk about the Elizabeth Holmes trial, and I have an insight that the prosecutors have totally screwed up her case. I think she has a 20% chance of getting off, even though I believe she's super guilty. And the prosecutors missed calling this one set of witnesses that would have made this a slam, dunk, open and shut case

and Silicon Valley Colombo himself, Jason Calacanis, has cracked the Elizabeth Holmes case. And I'll explain in detail then. We also have a tether update and Nike has acquired an NFT company and I explain why that's so brilliant and why NFTs plus fashion equals brilliant. Plus an Uber eats delivery occurred in space. Go team Uber. And finally, some insights over the hangover series and how. Equity participation made that team secure the bag in a major way and how that relates to your life. Stick with us. It's going to be a great episode.

This week in startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a sock to report fast. Twist listeners can get $1,000 off for a limited time at Vanta.com slash Twist. 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-O-WD.com slash twist. And Fiverr Business is a modern workplace for the digital world. Their team of dedicated business success managers help match you with the best freelancers for your team. Right now, you can sign up for Fivera business free for the first year and save 10% on your purchase with promo code, Jason.

That's F-I-V-E-R-R dot com slash business and use promo code Jason. All right, everybody, the Elizabeth Holmes trial is coming into the end game portion. And I did an interview with a podcast about the Theranos trial, and I realized something that could be incredibly material. And this all happened because the journalist from ABC News, who does a great job on this particular podcast, was asking me questions about, oh, my God, what does this mean for Silicon Valley and oh, Silicon Valley? And the name of the podcast is the dropout. It's an exceptionally good podcast. So the dropout had me on, and we did like an hour-long conversation. It got a little confrontational because she kept saying, like, well, what does this mean for Silicon Valley?

What does this mean? And how is Silicon Valley responsible? you know, like that kind of line of questioning about Theranos. Okay, fine, I understand. And I said, listen, if we look at who got duped by Elizabeth Holmes, a bunch of old generals at Henry Kissinger, who, by the way, got, I think, $500,000 in stock and 150K cash per year to be on the board of a startup.

By the way, that doesn't exist in real startup land. So she paid them off, apparently. And then a bunch of, like, old non-traditional investors got duped, right? like Rupert Murdoch put $100 million in famously. Then some VC firm you never heard of, I think put money in a late stage, a bunch of angel investors. And who else got duped by Elizabeth Holmes?

Well, a bunch of Walgreens executives, apparently, according to bad blood, felt a lot of pressure that they were going to lose the deal and they didn't do their diligence. Who else did Elizabeth Holmes pull the wall over their eyes? Journalists. They put her on the cover of magazines. They made her the second coming.

Now, the same journalists are coming back and saying, hey, Silicon Valley failed here. And I said, excuse me for one second, how did Silicon Valley fail? He said, well, you know, you created this crazy company and put people's lives at risk. I said, did we create that? Because the top 100 venture capital firms I know didn't put money into that. Top 500 venture capital firms did not put money into Theranos. They all laughed about it.

And they talked about Tim Draper, obviously. And I said, Tim Traper's daughter was besties with Elizabeth Holmes. according to what I read. He was giving her a character support, but his venture firm did not invest. He may have put a little money in personally. So anyway, the trial began in early September. It's a federal trial.

So my understanding is federal trials are not broadcast, unfortunately. So we had to sit through that written house trial, which was just horrible to watch, I'll be totally honest, like just bad people doing bad things, stupid people doing stupid things. And then the trial I really want to watch and that we all want to watch is Elizabeth Holmes, who is in all likelihood, I think, I'm going to be careful saying this, but I think that she is suffering from some mental issues around either being a pathological liar, narcissistic personality disorder, delusions of grandeur. I don't know what would lead somebody to lead what I think, based on the evidence, is one of the greatest frauds since Madoff.

It's like right up there with the Madoff fraud in my mind. So anyway, it was a real little cantankerous on the podcast there, and she's like, I thought this was going to be a friendly discussion. I was like, well, I got to stand up for the home team here in Silicon Valley because we didn't have any part in this. But one thing that came up was I asked the interviewer, did they, did the prosecutors in the Theranos case? And I think this might be a very material thing that I stumbled upon here. I said, can I ask you a question? Because I've been reading about this and I can't find it. They talked to people who invested in Theranos.

Did they talk to anybody who passed on investing in Theranos? And she said, no. I said, are you sure? She said, absolutely. we've been covering this, 50 episodes in, whatever. They did not. And I said, do you realize what a dereliction of duty this is on the part of the prosecutors? To not get the dozens.

There must be dozens of VC firms, the top VC firms in the world, must have met with Elizabeth Holmes multiple times over the years as her company got the Walgreens client, and she made these crazy claims, and they were on the cover of magazines. all that buzz will lead an investor to at least meet with the company. Even if they don't believe in it, you have an obligation if a company is getting escape velocity. In other words, it's taking off and getting to a place where you don't think it's going to come back down.

It's your responsibility to meet with the person. It is your responsibility to meet with the person. And they never met with the people who turned her down and asked them on the stand. Hey, Andresen Horowitz, Kleiner Perkins, Sequoia, whoever met with her. I don't know who met with her, but I'm just picking three top names. Did you, when you met with her, what did she say? Do you have any emails? Do you have any documents?

Do you have the debt? Do you have any internal discussions that you documented about why you turned her down? And can you tell me, why, in fact, did you turn her down? And they would all say the same thing, which is the back channel I got, and everybody knows. which is, and it's a key part of the case. She is claiming that the technology, the Edison, whatever this Bacaca machine that didn't really exist or work, or existed as a concept or a mock-up essentially, like a prototype.

She wouldn't show the technology to people because she said it was proprietary. She said it was a trade secret. This flies against everything that we know here in Silicon Valley. And the press doesn't understand this. And they're spitting this and circling the wagons because they, on the cover of these magazines in, honestly. And Elizabeth Holmes' defense gets a free pass because everybody knows in Silicon Valley

is you always show everything to a venture capitalist during due diligence. That's how it works. If you're a battery company, if you're... You go open kimono is the term for it. You open up the kimono, you get to see everything inside. Everybody does diligence and sees these things. So she tried this on.

on the world's best venture capitalist 100%. And in fact, Bill Maris was on the pod. We'll pull up the Bill Maris quote in a moment, but he kind of said something like he left her out of the room or something because she wouldn't show him the tech. Okay. The prosecutors in the Elizabeth Holmes case did not put the most successful venture capitalists in the world on the stand

to explain why this was so bizarre that she wouldn't let them diligence the company for money. Oh, my Lord. Oh my Lord. I may have just stumbled upon if she gets off. What would have been the kill shot? This would have been the absolute, there is no way to defend yourself against this.

We've been covering this forever on the pod, and the prosecutors have not called additional witnesses. The government rested their case back on November 19th, and then Elizabeth Holmes took the stands for, I think, seven days, so like two weeks. But VCs did not invest in this because they saw this happening. jurors are expected to begin deliberating after closing arguments, which are December 16th to 17th, and today is the 14th Tuesday. So on Thursday and Friday, and then the week of December 20th, I'm going to guess, I'm just going out on the limb here. I think she's guilty. I think this was premeditated. I think that she is as guilty as Bernie made off based on the evidence I've seen.

And I have pretty good radar for this. I don't know. I'm not in the jury room. I didn't see all evidence. So I will just tell you my guess. I'm just guessing here. I think there's a chance she gets off. I think it's like a 20% chance. I think she's so obviously guilty. But you need but one juror in our system

to object and okay, the person gets off. We know that is built into our system. We would rather have people go free who are guilty than have an innocent person go to jail. SAC to compliance is critically important. Why? If you don't have your sock two tight, you can't close major customers.

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who pay on time and who pay a very large contract. Don't screw it up, folks. Get that Sokto compliance done with Vanta. And you're going to unlock bigger sales and give your employees time to work on more business critical assignments. Vanta's giving twist listeners, I kid you're not, a $1,000 discount on their subscription. You just have to claim it at V-A-N-T-A-D-A-com slash twist. That's vanta.com slash twist to get 10-hundies, $1,000 waiting free at vanta.com slash twist. Go get it. And Bill Morris said, this is the quote, don't talk about it, show me the thing, like open up the machine. If it smells too good to be true, it's vaporware. Those are his quotes. Morris is on episode 1236.

Go back and watch that episode. Bill Morris, super talented guy. And we have a clip that I'll play in a moment. There are, there must be 20 other Bill Morris is out there who met with Elizabeth Holmes and had the same exact reaction. So again, who did you pull the wool over? You guys passed on Theranos. You met Elizabeth Holmes.

you and I both called it. If you have the technology, you would show it. What are the lessons we can learn there and what was it like meeting with her? I mean, there's so many, right? That's a great example of the media just deciding we like a story. This will be a good story because the parameters of it look nice. It looked good on the cover of a magazine. But doing no research, like not actually taking the test and then taking the quest or lab core test and comparing the results.

That's all we did. That's all you needed to do. You literally asked her, can I see the. results and compare them? What was her response? I didn't even take the meeting. No, the answer, here are the lessons. When a startup has, in science or in life sciences, has a board full of government,

former government officials, no one experienced in the life sciences, former generals, great people, but they know nothing about what's going on when they've got armed guards at the entrance, literally like armed guards, when they won't answer any questions. Like, they were all of the signs. This should not have been a surprise. And that's why there are no life science investors. Because those of us in the know know that, like, it's not just the technology. There's regulatory issues.

There's all kinds of things. And it's like, if it smells too good to be true, come on, this is vaporware. It's like so obvious to us. And these prosecutors, I mean, they may have dropped the ball royally. And I think it's a one in five. Pretty good at handicapping this. They think one in five, she gets off. because, you know, she's trying to spin this as like she had good intent,

and she would have gotten, she would have succeeded at some point. She was just doing what everybody does in Silicon Valley, according to her, which is like, you know, you fake it to you make it or you hype it up. And the rest of us, it was completely obvious. If you don't show us the technology, you don't have the technology. Come on. We're born yesterday. Promising you going to show us the technology to us next week if we invest in your company this week.

Get out of here. Come on. Get out of here with that garbage. Such garbage. All right, listen, in a totally non-related story, Nike just acquired an NFT studio, pronounced artifact. It's spelled RTFKT, but it's pronounced artifact. The terms haven't been disclosed, but in May, the firm had raised $8 million in a seed round at a $33 million valuation from Andresan Horowitz.

They were behind the NFT project, Clonex, with famed Japanese artist, Takashi and Murakami. His most expensive piece sold for $13.5 million in 2008. So here are the Clone X NFT avatars. And compared to board apes and Cryptopunks, Cryptopunks look like they were made by a computer and aren't finished. They look terrible. Sorry. Board apes are kind of goofy, and I would say these are, you know, pretty nice.

TechCrunch call ClonX, one of the most popular NFT drops the past few months. And since it dropped three weeks ago, the project has already seen, 84 million in transaction volume according to Crypto Tractor, CryptoSlam. I don't know if you can trust any of this, to be honest. I think a lot of this stuff is people painting the tape and flipping these things and insider trading. We've seen some evidence of that.

The average clone X NFT is selling for around 4.7E in December or $18,000 for painting, I guess, of an individual. So if you like art and you think this is worth $18,000, there you go. I don't know if in this case you get to own the I, IP of these ones. I think that, you know, the intellectual property. In other words, you could make it into a TV character, a comic book, or a t-shirt. But here's a chart from Yahoo Finance, tracking the price and volume of Clonex NFTs over the past two days. And when the news of the Nike acquisition

broke, volume and price both spiked. According to the TechCrunch article, Artifact has collaborated with other crypto creators to design items like physical shoes that utilize imagery in other NFT projects, including Cryptooms and Port Abe. So I think you know what's happening here. I think Nike likes to be part of the avant-garde. They like art. This is a convergence of art and commerce. And so I think what we'll see is when you buy your shoes, and we talked about this before on other episodes, the idea of pairing an NFT with your physical object is kind of interesting. It's almost like the label or the certificate that comes with it.

So let's say you bought some really cool pair of sneakers, easies, whatever, or whatever the Nike equivalent is. and you got the NFT with that, well, you could kind of trade the NFT with the shoes, or maybe the shoes are kept in storage somewhere if you're a collector of these shoes, and then you have the NFT. If you trade the NFT, the shoe gets transferred to a person. I think that's actually kind of interesting. I know people in the wine space who collect wine, you know,

where investors in underground seller, people just leave their wine at underground cellar, or other people who are in the wine market will buy in fractionally to a wine collection, to a vintage, to cases of wine. And so if we all wanted to buy a million dollars in a certain vintage, which, you know, put in $10,000 and a hundred of us do that. We corner the market on that one. But we don't want to take custodianship of it. You want somebody else to be the custodian, to be the responsible party.

So I could see that happening here. And I think people will start because there's so much money in the world. And there's so many affluent people. They're not buying shoes anymore to walk places. They're buying shoes as art, as collectors. as items of status, as things that bring you joy aesthetically, just like wine brings people enjoy. So this is completely, I think, a legitimate purchase by Nike to do something interesting and extend their brand into this new digital world. I've never really got people spending

huge amounts of money on art. I do understand that it has value to some people. And I, you know, also with the wine thing, like for me, like some crazy expensive wine, that doesn't do it for me. but, you know, maybe a really expensive house or expensive steak does do it for me. So I will spend money on a Kobe or a Miyazaki beef. That's, I seem like an idiot because I spent $200 on eight ounces of, you know, beef when I could have bought the whole cow, you know, or half a cow that wasn't from Japan and massaged and fed milk and cream and whatever else to make them super fat. So a very interesting purchase and related news earlier in December,

Adidas announced a partnership with the Bored Ape Yacht Club. Adidas purchased a board ape NFT and will create a character around the NFT. The NFT was purchased in September for 46th, just over 156K at the time. And so, you know, you're going to see Nike create a thousand limited edition versions of the Jordan 1 or Air Force 1 or other legendary shoes that you're not going to get your hands on that are too hard. Or maybe, you know, you buy the NFTs and it gives you the ability to come to those drops. they do in the physical real world. So instead of people lining up, you got to have an NFT in your wallet

and you show that in your, you take out some sort of wallet and QR code and they scan you and you get to go into the store, right? So the stores are open three days a week to one group of people, four days a week to the public, right? And so this NFT apparel thing

seems reasonable to me. I talked here about doing this with tickets. So if NFTs, because they're one of one, because they're traceable, resellable, and they have rule sets in them, kind of the exciting part about this. I think it's silly and ridiculous when they start trading for tons of money and there's all this painting of the tape and all kinds of shenanigans that occur.

If one of my friends was advising me, should I buy these things? I would say only if you don't like money or don't care about losing money, you'd be making a crazy lottery-style bet to buy these board apes or crypto punks, whatever. I mean, this is like this is a new avant-garde. I mean, this isn't like taking some. something like a Dolly or a Picasso or a Warhol or Bosquiat, you know, those have some decades or centuries of trading that you can look back on. In fact, MasterWorks I own does that for a living. If you're buying into this cohort of NFTs, realize you're buying in in the first

year or two of this trend, it could just as easily be be Beanie Babies. The Ford A Yacht Club could go down in history as like the stupidest Beanie Baby thing ever, or it could be Warhol, right? who knows. And so buyer beware, if you're doing this, please be careful. And only invest money you can afford to lose. All around the world, tech companies are innovating and driving returns for investors. Well, our crowd analyzes many of these companies. They search across the global private market. Then they select the ones with the greatest growth potential.

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in the fastest growing, venture capital investment community at our crowd.com slash twist. Once again, that's our crowd.com slash twist. And you can sign up for free and start reading all those deal memos. And you can read those deal memos and get super smart. And then place a bet if you're so inclined. All right. Nike is a massive company and they're able to make big bets. They are a $261 billion company with $44 billion in revenue and $5.7 billion in income.

So this is a very big company. that can make crazy bets, and they do not want to be on the other side of somebody else taking these NFTs. This is what they're thinking inside Nike when they make a purchase like this for, I'm going to guess they had to purchase it for 10 times, what Idrisen paid. So I'm going to guess a $300 million purchase, perhaps. And that would be something that would get the founders to sell because the founders own 60, 70% of the company.

You know, they sold it for $300 million. Wow, big payday. Or maybe more. Who knows? But here's the thing. Nike's looking at this. and saying, hey, you have this giant company, this giant franchise, what if the board ape yacht club decides to partner with a sneaker company like they have, right, Adidas, and start

making board ape yacht club sneakers, and those sneakers become the dope thing that people want? You just can't take that risk. And so super defensive play. So when you look at acquisitions, sometimes people are making a defensive play, and sometimes they have a thesis on how they're going to grow something 10x. As but one example, when I sold Weblogs Inc to AOL, and they bought it for $30 million reportedly, we had only $100 or $200K in previous revenue. We had maybe two or $300 in contracts for future revenue.

We had basically no revenue, and they paid 100 times revenue or something like that. They looked like idiots at the time. But what people didn't know was they were getting $50 per thousand views in revenue per page on AOL because they were sold out of cars and gadgets. and consumer electronics, and we had Engadget and AutoBlog and joystick and video games. They were getting $50 to $100 for their pages. We were getting like $5 because we were just starting our sales process. So they looked at our inventory and said, we can 10x the inventory, therefore we're paying

one-tenth of the price. So that's what you don't see sometimes as the public when these purchases happen. And they also said, we can drive 10 times as much traffic to Engadget and to joystick and to auto blog because we have this giant funnel of traffic. So that's when an acquisition becomes what's called accretive. It accretes. It grows some incredible value. And so should every apparel company have NFTs?

Well, certainly if it's a collectible type thing, and we think that NFTs become the new bridge into a brand, that's a really good idea. I'll give you another example. There are items inside of incredibly expensive stores where I, I might not be able to afford the Tiffany diamond necklace, but the Tiffany Charmberry slit, right, I could afford. Or I might not be able to afford at the Ford showroom GT, Ford GT. So there was this Ford GT, and I was like going to buy a Ford GT

when I made a little bit of money after the Weblogs think so. And I saw it and that is like a showroom object of art that brings everybody in, and then they wind up buying a Fort Torres, or a Mustang or whatever, is reasonable. there are other things that work the other way around. So instead of being super expensive and drawing you in to buy something low, you can't afford to buy Chanel stuff or you can't afford to buy an Hermes bag for $4,000, but maybe you could buy the little wallet for $500, right? So they like to have items that kind of get you started on the brand in case you become rich later

and let you participate in it. So there are these items that are like the entry point for people. And I think that NFTs could be that. that. So if you could not afford a Bugatti, you could buy a Bugatti NFT. If you could not afford a Chanel dress, you could buy a Chanel NFT and put it on your, you know, avatar on your Twitter page or share it somewhere as your avatar on Instagram. It's just a way for you to affiliate yourself a brand. So yes, I do think that these NFTs serve that purpose. In the same way, I explain some of those entry level items do, or sometimes people will just have like a Ferrari

poster in their room, right? Or they'll have a Ferrari keychain. And by the way, there's also this concept of burning NFTs, which is also kind of interesting and weird. So the idea is you burn it to unlock an asset. So imagine you bought these NFTs and it was either a sweepstakes or 10,000 NFTs equal to a pair of elite Air Jordan signed by Michael Jordan himself. And, you know, they burn all the NFTs but one and you keep it. Or you buy an NFT that let you get one pair of shoes from Nike in the next 10 years when you burn it. you get to pick from their collection, right? So there's all kinds of interesting things to do in the burning of NFTs,

which are just different features in the smart contract, smart contract, just a rule set that's inside of the code of the NFT. And then another concept that I was talking to producer Nick about was, hey, what if you bought a pair of these elite Air Jordans, and Michael Jordan had assigned them, whatever, and you own them.

But then every time you sell that NFT and the ownership in it. Nike makes another 10% and hey, maybe Michael Jordan makes 10% or whoever it is. And 80% of the money you get back. So I bought them for $1,000 and now worth $10,000. Somebody buys them for $10,000. I get eight.

Great. I feel pretty good. I'm 80 times my money. And then Michael Jordan gets $1,000 that he doesn't need like craps. And Nike gets a thousand bucks that they don't need to build a bigger headquarters or whatever it is. Then when it's burned, the shoes are delivered. So you might have something trade hands like

an antique car or a case of wine, like I explained earlier. But at the burn point is when the object is delivered. This is super interesting as a concept. It could be done today, obviously, with contracts, but legal contracts are hard work and the lawyers and the amount of money the lawyer would have to spend would be greater than the ability to do that. What's interesting about this permissionless society and these contracts is that you can do this hopefully at a very low cost. Obviously, the gas fees on Ethereum or a disaster, supposedly they're going to fix those and Salon and other competitors are going to fix it. Once those gas fees get down to close to zero or very small numbers.

And de minimis, it could be even more interesting. So, as I've said many times on the program, store of value, not very interesting to me. Bitcoin, I get some by some people who are into it if you're in some crazy country where you have runaway inflation, like 8% a month. You know, I'm just theoretically speaking here. I'm joking about America, obviously. But Bitcoin seems to be correlated with America and our futures when the stocks go down. Bitcoin is correlated. So store of value, not very interesting to me. Money transfer. There's so many

better ways to transfer money than crypto. Cryptos terrible at it. Just on like a first principles basis, like the actual core technology sucks. It's just too expensive. It's great if you're trying to do it semi-anonymously or get out of a country. So yeah, on the margins, if you were a dissident or a dictator or a terrorist, yeah, it's pretty phenomenal for money transfer. But for legal people, there's much better ways for like Venmo or, you know, cash app or PayPal or whatever. Third, NFTs, kind of interesting, right? I've been saying that from the beginning, there's something here.

This is kind of interesting, and you've got a lot of creativity going into it, but like anything else, when money's involved, anonymity, there's going to be scammed. So, again, beware. Just because I like NFTs, doesn't mean I think you should go crazy on them.

And then finally, Dow's, everybody knows. I got the Dow bug. I've been talking to people about it. The legal framework is still screwed. I can't do anything anywhere near the gray area because I got LPs, and I don't want to go to jail, and I care about my reputation, and I would never do anything as a quick money grab.

I'm not saying people doing Dow's as a quick money grab or NFTs is a quick money grab. It's a quick money grab. In a lot of cases, it's a quick money grab. Like, I don't want to be associated with quick money grabs. I want to be associated with slowly making large amounts of money off of non-consensus bets. But first two not interested in, next two super interested in. Here we go. Crypto in the second decade is getting very real.

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USDT is now the official currency for a shadow government in Myanmar. This is very complicated international stuff, but basically what you need to know here is this isn't a good sign. In May of 2020, the Central Bank, they're decreed all digital currencies illegal, and they have a national currency called the Kiat and the government. threatened to imprison anybody or find anybody who violated this rule. They want to keep control of their currency. Totally reasonable. You may not agree with it if you're in crypto, but certainly a country that's in this kind of

situation really does need to have control over security and the financial system. In February of 2021, Myanmar's military overthrew the country's ruling party. And after the military coup and opposition government of supporters formed, and the opposition group calls themselves the NUG National Unity Government. So, quoting the Bloomberg article here, while they don't control territory, a whole positions of power in Myanmar, the group has declared war

that has led to an escalation of battles between the military regime and local resistance groups. Obviously, this is a messy, complicated situations, but the NUG is now accepting tether as its legal currency for domestic use. Why? They want to make transactions easy and speed things up,

is what they're saying. Who knows what their covert reasons are? Maybe they have some funding coming this way. Maybe they have some sort of special deal. No other details were given. Interestingly, Tether has minted 3 billion of new tokens over the past two weeks according to Crypto Slate. Again, you know, as much as there's open metrics inside of crypto, for every aspect of the crypto ecosystem that is more open like a blockchain, there are an equal number, if not more shenanigans. that can occur and opakness in other areas, i.e. who is actually making these trades?

Is it one person with 1,000 accounts? Is it 1,000 people with 1 account? Is it 500 people with 2 accounts? On average, who knows? Tether's total market cap is now the fourth largest in crypto, $76.5 billion. Here's a chart of Tether's market cap over the past three months, and you can check out the spike in growth since late November. You know, what could go wrong, what could go right?

Just another reason to be concerned about Tether. And there are some lawsuits that I see have been filed. And they didn't show up for some of these hearings where people are trying to get a deeper. Our government's trying to get a deeper understanding of these stable coins. Stable coins are competing directly against the U.S. dollar, let's be honest. And it's going to give a lot of power to the companies and the people that control it. It is going to compete in a way and destabilize the dollar if these things get really big. If it's easier to transact in tethers or Ethereum or Bitcoin or Solana or even circles,

USDC, any of these things become easier and more stable, right? The other things fluctuate so people generally don't want to use them if they want to know how much money is going to get there by the time they send it and the transaction goes through. These stable coins represent a challenge to the sovereignty of countries, much to the cheering of independent, free thinkers who want less government, much to the chagrin of people who believe in the power of central authority. The truth lies somewhere between the two. People should be able to do what they want with their money,

and they should have privacy, of course, and they should have sovereignty over their wealth. And then on the other side, you really don't want people to be able to anonymously fund terrorist activities or not pay their taxes or otherwise not contribute to society. So this is a very nuanced discussion. And basic, long story short, if you're going to be creating your own currency, you better have a lot of safeguards in place.

And tether doesn't. USDC does. I don't have a horse in the race. I own neither of them. I have no financial interest. But I do think that the stable coins should be absolutely regulated to the help. And when I say to the held, I mean, seriously regulated. Like people are going to go to jail.

If they screw it up, audits, making sure there's dollar for dollar, money in the bank, that there's insurance. and that there's a limited number of people who can create them. I know that sounds like I'm being an okay boomer, but some things are very powerful, and there should be a process of getting them. I kind of feel that way about guns. I know some people with different opinions on this.

I believe in sensible gun control. Like maybe you can buy a certain number of guns with a certain capacity, and after that you have to have insurance for guns. Like everybody could have two guns and have no insurance for, you know, rifles, pistols, whatever, 10 rounds or less. But then when you get over that and you have more than three guns or whatever, maybe you have to have insurance, right? Seems reasonable to me. Or maybe you have to take a really thorough test. So this falls into the regulation that I think they should have. So be careful.

My producers had a really good insight the other day. They found out that director Todd Phillips made a massive amount of money on the hangover movies. And they brought this to me that he made $75 million, according to reports on the first hangover movie and $150 million overall on the trilogy and the people who were involved in the film got the biggest paydays of their lives, apparently, and all because of equity. This is funny because I've played cards with and I have mutual friends in the L.A. scene with Todd Phillips, and he's a really fun, sweet guy, super talented. I thought the film he did The Joker with Joaquin Phoenix, one of my favorite actors, was a masterpiece.

I know some people didn't vibe with it. For me, it was just chef's kiss perfection. and style and substance in what it had to say about society and the media and psychology and weird people. I thought it was a unique vision that built on cinema from the 70s that I love like taxi driver and Scorsese and, you know, King of Comedy and just any number of great callbacks, wonderful film, just tremendous. And the hangover was hilarious as well.

So according to an article that they found on the internet from Celebrity Net Worth, which has got to be like the most wrong site in the world based on what I read about myself and other people on it, I think they kind of just pick a number. The first hangover film made 470 million worldwide became the highest grossing R-rated comedy of all time. And it started the three film franchise that grossed $1.4 billion. But in 2007, what eventually became the hangover, was originally a script called What Happens in Vegas, according to the story, and multiple studios passed on the script because R-rated comedies don't have a great track record at the box office. Obviously, Todd had a different vision here.

He thought that adult fair would work at the box office. So the highest grossing R-rated comedy was Beverly Hills Cop. I didn't actually realize Beverly Hills Cop was R-rated, but did have some choice language, and that did $316 million. But that was back in 1984 at the height of Eddie Murphy's popularity. They were also a little worried. That would be hard to license that title from Las Vegas. Eventually, Phillips got the script, loved it, and decided to pursue it at all costs.

He had to deal with Warner Brothers and convinced the studio to Greenlight the hangover with a $35 million budget, really tiny. He pitched the studio, the trio of Bradley Cooper, Zach Gallifanakis, my Greek brother, and Ed Helms to start in the leading roles. All three actors were relatively unknown at that point, and the studio wound up paying the three actors under $1 million combined for the movie. What? Warner Brothers was still hesitant to give an R-rated comedy with no-name actors, essentially, a $35 million budget. So Phillips made them an offer. He would forego a $6.5 million salary, his salary, in exchange for 16% of the film's gross, their top line. The movie was released in June of 2009.

It was a huge hit, hilarious. Phillips wound up making around $75 million off the first hangover, according to this source. Who knows if it's true. And 150 in total for the Trility, one less thing. Lead actors also got taken care of eventually. Cooper, Helms, and Galafinacus all signed $5 million salaries and 4% of the gross each of the next two movies.

According to this, back of the envelope, who knows if it's true, each took home close to $30 million, $28.4 million from just a second hangover movie. And this really goes to show you what ownership does. Very proud to announce that a number of members of my team who've been with me are going to be getting carry.

And everybody who is on the podcasting team and who works for me at launch in the swing startups is also included in our carry pool. And we just sold some shares in a company. Can't say which. And last night, from my former chief of staff and now managing director Ashley, sent me the waterfall.

And so not only am I getting my carry as I do as a GP, my entire team is going to get a little tasty poo. We're going to get their beaks wet. And the great part about that, I was talking to a friend of mine, was who is concerned that I work too hard.

He said to me, you work so hard, Jake, Howl, let other people do some work and, you know, get back some of your time. And being able to have upside equity participation really makes people feel appreciated. And nothing is going to make me feel better than having this great funnel of my carry flowing in, not just to me. but to the rest of the team. So they all get a little taste. And hopefully I get to buy everybody on my team eventually, a condo or a house. And my guy, what a great legacy. That'll be when I retire if I bought all their houses.

That is my intent. So for everybody on my team, I do appreciate the hard work. And you make me look real good every day. And this Todd Phillips story is also heartwarming because he took a bunch of actors who were making less than a million combined. And then they got to get a $30 million dollar Leonardo DeKalip. Caprio level payday. That's George Clooney money for Zach Gallifanac, it's life-changing money. So if you're not getting equity or upside in the company you're at, you don't have equity

participation. If we learned everything over the last couple of years, equity participation changes you from being a wage slave, maybe a little bit of charged language there, but if you're just getting a wage, you can pretty much define your trajectory. Six percent raises. You're making 20 bucks an hour on your first job and just six. percent a year for 20 years, figure out where that puts you an hour, and that at some point it caps off. I'm writing about that in my new book, actually, as I talk about equity as the path to being self-reliant. So fight for equity, get equity, and earn the equity, right? So understand equity, fight for equity, and then earn your goddamn equity. Put in the work, do the work,

and make your boss really incentivize to give you equity. I am absolutely thrilled to give equity to my teams because it keeps them around longer and it's vested over time. So what happened here with the hangover was if they did not get paid well and didn't have this equity participation, the studio would not have got hangover two and three and had that money printing machine. What they did was they insured the band would stay together and the band in fact stayed together. That trio did all three movies. You can't say that for Jaws or other films. It's really hard to keep the band together sometimes. And so one of the great things about venture capital firms is everybody gets their carryover investing schedule. So you can't just pop in, hit a winner, and then bounce. You got to stick around

for a couple of years. I think most GPs, their agreements are seven years or 10 years, basically the life of the fund. You leave early, you lose that percentage. If you stay for seven of the 10 years, you get 70%. Say, for five out of 10 years, you get 50%. So you got to stick around. And that's good. Sticking around, if you're appreciated, and you got equity to participate, Really smart move for people in their careers because now you've moved from being just, you know, a person who has to make a wage and the only way to really be to make it as somebody getting a wage is to be what I call a virtuoso. If you hit that virtuoso category, Steph Curry, LeBron James, Todd Phillips as a director, Stevens Billberg as a director in charge 20. The virtuosos do get paid incredibly well, we would all agree. But that's the top two percent of it. any field. The other 98%

it just goes downhill from there. And then once you get past the top 30%, if you're in the bottom two thirds, you're fungible. In other words, they can, the seventh actor in the film probably doesn't make or break the film. They can put anybody in there. That's why they can pay them whatever the day rate is, if you catch my drift. So you either have to be a virtuoso, you've got to have equity participation. So just let that sit in your mind as you work on your career. All right, Uber Eats was

advertised in space. Uber. Uber Eats is awesome. Uber One membership, if you don't have it, I'm talking my book here, folks. I still got a lot of Uber shares. Uber 1 is like Amazon Prime. I ordered from Walgreens the other day. It came in under an hour. It was unbelievable. I needed

soap for a load of laundry, and I ran out of soap, and I ordered it, and I had the soap before the next load went in. And I had it on. I did have it on, and heavy duty cycle. It was like a 64 minute cycle or something. But point being,

I got the soap before the next low... I do my own laundry sometimes, yes. I like doing laundry, actually. I find it like cathartic for some reason. This Japanese e-commerce billionaire, Usaku Mezawa, Yusaku Mezawa, also known as MZ.

He's a fashion, you know, internet billionaire out of Japan. He just went to the International Space Station and delivered an Uber Eats order. Let's play the 25 seconds. and clip and I'll see you on the other side. All right, there you go. Congratulations to the Uber Eats.

MZ is also going to be doing a ride on SpaceX. I think he's doing the ride around the moon, which is like a big, big deal. And I don't think that, you know, it's different than the one they did, the four-day one. I think he's going to be, he bought all nine available passenger seats. on the first SpaceX starship light around the moon. And he opened up a public application process to give away eight seats for free

in a project called Dear Moon. That flight depends on when Starship is done. And we know Elon's hard at work at that in Boka. So if you want to keep up with MZ and his space adventures, you can follow him on Twitter. You suck MZ. I kid you not. MZ is his title is You Suck MZ. So congratulations to him.

Okay, everybody, thanks for watching. Do me a favor and subscribe to our YouTube channel, YouTube.com, such this weekend, and write a review, and then take a screenshot and share it on social media and at Jason Me. You can write that great review on the iTunes, Apple, podcasting app, or wherever else you can write reviews. Thanks so much.

We'll see you tomorrow. Bye-bye.