E308 | EUVC | Michael Smith, GP of Regeneration.VC Fund II on going from DJ to VC with the backing of DiCaprio, Martin Gore & more

30:00I mean, this is a human who's truly connected to what we do, which is the earth and climate. But he also puts his money where his mouth is. He's a very active investor. You see him in a number of climate-related deals in the media. He wants to know everything that's going on. He wants to be kept up. He's excited about it. This guy could be doing anything. He really, really cares and has a team around him that we work very actively with. So that's a really cool asset. and we've won deals because of that. A lot of companies want to be affiliated with that. We've gotten attention. When you're in a B2B deal and you have Leo as a co-investor or advisor, he directly advises three of our portfolio.

30:41So it's just a powerful relationship. Some of the other ones, we were even talking a lot about music. So having Martin Gore from Depeche Mode is probably the most amazing, such a cool LP to have and such an amazing spirit. I've been a massive Depeche Mode fan my entire life. And being able to go on walks with him and talk about the future, so cool, so powerful as a personal experience. Mike Bryan, we have the tennis champions, the Bryan brothers. I was a tennis player growing up and actually played with them, so to have a childhood friend in the fund and that can communicate in that way, that's quite cool.

31:22But look, we've got Stephen Badger, who's one of our advisors, was the chairman of the Mars Corporation. Mars owns more food products, one of the third or fourth biggest private company in the world. I mean, just have huge insight. And then you have Segar Foundation as well and the founding CTO of Bloomberg, which is like, yeah, this is a pretty cool roster. If we focus on the first on the ones that come from the non, like because Stephen Batchel, chairman of Mars, founding CTO of Bloomberg, you know, that's like the profile we see more often in funds. And we should talk about how you leverage your corporate relationships for sure.

32:05but I'd love to just like you spoke about how you're working with Leo Laudero and Martin Gore but I'd love to ask you kind of what do you think enabled you to be able to get this type of profiles on the team and maybe in this regard advice for other GPs that are like want to because ideally you have a pitch deck with a page that says, these are LPs. You've got the corporates from your world. You've got the sovereign funds. You've got the big pension funds, all that stuff. And then you have, oh, and then we have these four celebrities. If you want to add that crowning jewel of celebrities, what would you say is this is what you really need to think about?

32:54And don't do it if X, but definitely do it if Y. Yeah, I think it's so critical as you think about who the right partners are for you and what you're doing. Your LPs are your partners, right? And I think that gets forgotten a lot. And who you associate and affiliate with will drive you in a different direction. for us being an environmental fund having leo as our core partner and early supporter is massive because he's highly regarded highly respected he's made this his you know piece de resistance that he's gonna he's gonna win on this and we want to be a part of that and he wanted us to be a part of that and he really felt what he loved about what we were doing is it is our work touches all these different people consumers at the end of the day and he liked that it could enable more to get into the climate fight and be a part of it.

33:47And so when you are approaching celebrity, understand what moves and motivates them. Make sure it aligns with where you're going and that you're authentically lined up, not just that they get a lot of followers or attention or otherwise, or really make sure that you connect on a human level and that you want to be in this relationship with them because these are long-term relationships. And so you don't have to have someone like that in but if you do make sure they're really in and make sure that you know you build strongly with them is there a lot of ego in terms of dealing with leo no not with leo specifically but with uh talented artists in general they're they're they're candy i mean artists are you know they're they're like snowflakes they come in every you know shape color size always always align with people that you want to work with always because it's like life's too short you know even if they can help you a lot or even if someone's got a huge amount of money we've turned down some massive lps because we didn't feel they were aligned with our mission and people look back and be like why did you do that or that's crazy but it's like if they're not going to back you or they're going to second guess you or they're not going to be like you've got too much just dealing with solving big problems and scaling them to have those kind of internal issues.

35:08So part of what you mentioned, there is LP greenwashing. And is there some of that? Do you see that? Yeah, I mean, there's many cases of well-known celebrities that will affiliate with funds or projects, and they're not really doing the work. They've got teams behind them. They're just kind of lending a name. They usually don't turn out that well. The ones that seem to do well are ones where it's genuine, it's on their mission. And so it's like, of course they're doing that. And that helps it become successful. So that's the norm. And when I asked that, it was just as much on the corporate side, because I imagine that there's some going on there as well.

35:51That's even more complex. With corporates, you know, and look, we realized something early on that corporates are the ones making the majority of the global emissions, right? And so our theory of change is not to point our finger at those corporates. Our theory of change is to partner with them to help them. Many of them have already made commitments by 2025, by 2030. They're going to hit these agendas on the environmental side in particular, and they're way off hitting them. And they're not alone. So many are off hitting them. So, hey, how can we work with you as a fund? How can we enable you to do what you said you were going to do?

36:29Maybe we invest together. Maybe we use your labs. Maybe we get a techno-economic assessment from you. Is this viable? How can you get in the trenches and how can we work together? And then how can we convene other competitors to do it too? Because oftentimes, if you're a big corporate, you're not controlling a supplier. You're one of a few people in a supplier, maybe dozens or hundreds. So we need to get multiple competitors together to move a supply chain. But it's not simple. Sometimes some of these corporates would rather see projects go away or they'd rather acquire the competition before it gets too big.

37:05And you see it in the governments, you see it in the checks they write. And so you really need to be thoughtful and evaluate what's happening here and get a pressure check on some of the things you mentioned earlier. How do you own that part with corporate partners that oftentimes their incentive will be to at some point acquire, especially when they're as big as the ones that you have? They're conglomerates and they have so many applications across the Mars empire, as an example, right? So buying something before it gets too big might often be a good route for them. If you just look at their pure own strategy.

37:44How do you kind of navigate that and make sure that your LP base is aligned with the overall ambition of the fund to make the companies grow as large as possible while in the portfolio and also with the founders? We are an environmental fund. We want to get above market returns, right? That's important to us because if we make a lot of money, we get to keep doing what we're doing and we can raise more funds and good things happen. But we also want to measure environmental impact and hit targets and goals. And so if that acquisition leads to a better outcome for the company overall, if it gets our investors money back, if it unlocks more impact, we love it.

38:26if it's to shelf something or to make it go away, you know, that's when we're going to fight and really try to get a better outcome for the innovation. And that's something that we want to empower so that when you have a diversity of a customer base, when you have, you know, more in the capital stock or on the board and no one's, you know, really controlling governance in an improper way, that gives it the best chance. But at the end of the day, some things are going to get acquired. They're not going to be as big as they possibly could be. As long as we're getting good returns, we get to keep doing this.

38:57And that also matters. Let's shift gears a bit and go into the shout out section.

39:10Michael, I'd love to ask you to give a shout out to someone in the ecosystem that you just absolutely love and tell us the story behind that. So Simon Vandenberg is my guy of Impact Equity. We were fundraising, I mentioned, during COVID on Tonic. And one of our LPs came to us. They're like, you should go on this Tonic platform. I'd heard about it. I met the founder, this guy, Charlie Kleisner, amazing guy. All these family offices that care about impact, but I'd never pitched online. I was like, what is this? I'm like pre-internet dating. It's all kind of funny. So I get on this and all of a sudden on this webinar, there's like 10 people there.

39:53And this one guy's asking really good questions and he's super interesting. And so we have a follow-up and he's like, look, I want to become an LP, but I need you to go through a process. And we hadn't been through like institutional rigorous process. So he hired a third party called Commenda. They did a really tough screen. And then he ended up sharing all that has findings with the Tonic Network. And it led to all these LPs that we had in Europe. Simon became a friend out of that. And he's a real inspiration. He also does a lot of philanthropic work on the climate side with his firm Carbon Fix.

40:27And he supported amazing funds like Catapult and a lot of Rubio, a lot of our other partners in crime in Europe that we love collaborating with and investing with. So I'm sending that shout out to Simon for being bold and for willing to take a chance on some kids from California.

40:51And to the Tonic community, because that's quite unique. There's always the land and expand strategy of LP fundraising. Nearly one can really open up a network, but having it more systematized is incredible and definitely one of the characteristics of the climate space that's quite well-developed considering the size of the community really. Are there any other in that type realm that you would mention, like the Tonic community, that you'd say these guys are really doing a good job? One is, as an example, the Uplink team that we're helping out sometimes from the World Economic Forum. They're also trying to do it a lot.

41:35It's always, problem is always everyone has a difficult time dealing with LPVC relationships because it's so much playing friends and favorites. And, you know, it can get really messy for anyone that has a corporate structure and reputation that they need to look out for. which is why I see so many struggling with it when it's larger organization and it's typically larger organizations that have those very high powered networks that actually would be able to do this. Yeah, so to your point, Tonic was incredible. They ran a really tight process. They engaged, they shared information, they brought others to bear and when they see success, they really know how to lean in around it.

42:18If you're in an impact related industry and our fundraising, I highly recommend reaching out to Tonic. There's a handful of others within climate that are doing interesting things. You know, the Creo community is quite strong in climate tech. They're a group of big family offices that share a lot of deals and look at things together. If you can figure your way into Creo, that's usually a good way to scale capital, also somewhat global. And then there's a handful of others. we don't have as much experience with on a personal basis. But I think it's always about making sure that you're going to be featured appropriately, that there's real support, that it's not just another email spam, that there's humans behind it that are engaged.

43:09Now I want to ask you, because you've lived a life. You've been an artist, you've been a DJ, you've been a founder and an operator building a large business. And now you're an accomplished investor. I'd love to ask you, then what are the three biggest learnings from that life? Don't be afraid to move on. I could still be a DJ right now. And in a lot of ways, I may even be making more money, maybe even having more fun. But I got to a point where I was doing the same thing. And so that's why I started doing the streaming music service. And I went, I had to entrepreneur. And from there, when I sold it, I didn't want to just do another streaming music service.

43:50I wanted to do something different. So I started investing and constantly pushing yourself is important. When I did sell my company, all my mentors told me 10 years ago, don't go into climate. Like that's the worst idea. Just failed. It was called clean tech. And I was like, what if no one's investing in these solutions? Like how do we solve the problem, right? So don't be afraid to move on. understanding complexity and making it simple so you know i i was lucky to take an early mentor dr julio friedman from the department of energy lawrence livermore labs who really knows how to take the most complex environmental issues and put them into just genius simple sound bites and so that thinking set and i'm always like okay there's this like crazy technology it's doing amazing things.

44:41I'm like, I can't believe it's possible. But if you can't explain it to your seven-year-old and your five-year-old, and if they don't get it, it's probably going to be really challenged to get too far. And I even, you know, working in deep tech stuff, like I even think it applies. So being able to like really understand something at a simple level is important. I think the third point would be to understand the kind of impact you want to make in the world. What matters for you? Because that's what you're going to get up and fight like hell for. It's going to be hard. I mean, there have been way more days that are challenging than that are easy.

45:16These are amazing days right now. I had a big announcement yesterday, right? This is so fun to be on with an incredible pod host that I really respect. I mean, the other people that have been on this show are incredible, right? So what an honor. These are the highlights. but you know if your north star isn't there if you're not like you know when i when i really went deep on the climate emergency i was like oh my god if we all don't do something like we're done so we have to and that moment i i didn't just talk about it and move on to the next interesting news clip like i had not moved from that point i anchored at that point and i will not move until i feel like we're moving in the right direction and you know bad news flash we're moving in the wrong direction.

46:01Even today, even with all this capital, trillions of dollars and all these technologies and all this commitment, we're going the wrong way. But if you have that defined point in time that you know, I really want to get to this outcome of turning the tide on a problem, I'll be there no matter what. You'll put in the hard work. You'll take the hits. You'll work from a lower place. You're not always going to be the star, but you'll build towards that and that's okay and you know it's been a challenge i was not taken seriously for for quite a lot of time i i hope i'm taken seriously now but like we're doing stuff and and that took a lot of a lot of work and so defining impact and where you want to be in the world is important and now the quick fire

46:54then if we say okay so these were the the three biggest learnings if you look back and say okay what core advice would i really give myself if i met this younger bloke called michael smith uh He's a DJ. Now I'll give you some advice. Look, I think it's so tempting to follow trends, right? Like every day there's a new shiny object and it's so exciting. It's fun. It's the hot new thing. You know, it was crypto. Today it's generative AI or AI. Next, tomorrow it'll be other things related and whatever. And this is great. Know about it. Learn about it. current. But one piece of advice I would give is to avoid the crowds.

47:44Just jumping in where everyone else is and being late to the game with no edge is not going to be a recipe for success. And when I started being a DJ, it wasn't that common. There weren't tons of DJs making money doing it. And I found a niche. I wanted to be a background music DJ. I didn't want to be a star. I wanted to be wallpaper around celebrities and big names. All the other DJs wanted to be stars. So I was like a perfect opener. And that was my wedge to get in. And then we started doing music for restaurants and stores like the Four Seasons and the Gap and all kinds of crazy Michelin restaurants.

48:23And my competition was this terrible, cheap, generic music. And I was charging five times more to bring you a virtual DJ experience. It was like, what are you doing? And so when I started doing climate tech, you know, now it's like sexy in the valley, but it was, I mean, people were like, that's stupid, right? And having that fortitude to just say, you know what? I don't mind being out in the cold. I don't mind being wrong. And that leads me to point two, which is like finding your tribe. So even though you're not in a crowd, there's still people. For me, you know, that's people meeting people like you.

48:58That's meeting people like Kampus. You know, we met on stage with the Planet A guys and Kristoff. Like, those are just amazing humans. Catapult, right? There's this cohort of people that I feel like really get us. And with them, we want to go all in. We want to build. So make real time and make real relationships. Don't just make it superficial and like a like here or there. Like, invest. Meet them at these conferences. Like, read their stuff. Like, show that you care. Like show them how that actually influenced you. That's the kind of stuff that matters. So find your tribe is important. And yes, you know, because of my DJ skills, I can read a room really well.

49:40And life is always pivoting. It's like, you know, we're talking here and then some crazy news event cams that just changes everything. Right. And like the only constant in life is change. And so that is something I knew then. And that is something that I use now. I don't, you know, you're asking me questions, some of which I'm like totally up on others. I'm like, wow, I hadn't even really thought of that right now. You have to be quick on your feet. You have to pivot. You have to be comfortable with the uncomfortable. You know how to read a room well. Could you talk about, and I'm sure you also know how to stage a room well.

50:17So prepare for it. Could you tell me a bit about, and it might be completely wrong, but I imagine that you have a good design around your AGMs. and ADMs are like the day where you get to bring your whole community together. Oftentimes you have, of course, you have your LPs there. Oftentimes you have some of your breakout founders. You have maybe some of your trusted co-investors because you want to highlight them and bring in the perspectives of partners. So I'd love to ask you, how do you think about orchestrating an ADM so that it really works to you? You know, whenever you have an opportunity to bring team, advisors, LP, founders, others in the community together, it's really important and special.

51:05And so thinking about it, I kind of think about it like a music festival. Yeah, I imagine. So it's like, who are the openers? Like, how do you set the stage? How do you inspire? How do you open up people's minds? Who are you featuring? So last week in Amsterdam, we had our entire team here effectively like an UGM. We had Invest and I'll make their announcement. The CEO made it on stage. We had one of our founders. We had a keynote. And so, you know, really think through that flow. These aren't just like accidents happening. It's like, who's passing you the next person? How are you hosting it? How are you introducing them?

51:41How are you humanizing it? Right? Because it's like, no one wants to be pitched to all day. Like think about yourself in the other position and like, what do you want to learn from this? What do you want to get out of it? What do you want to get back from it? That's all important in any kind of event design and really making the most out of the time together. It's funny. I'm sure you thought about it as a music festival. Top tips, Michael, to other emerging VCs that are fundraising. Yeah, you got to specialize today. Just being a generalist investor, you're done. Like what's your edge, right? What do you know?

52:18What do you have unfair advantage around? Specialize. You have to. Experience, right? Play to your strengths. Generative AI is as hot as it gets. That's where the money's going. That's where the deals are getting done. Blah, blah, blah. If you don't know it, and if you haven't been working in it for five years or 10 years, don't read a bunch of media and plug blog posts and think like and watch podcasts and think you got this. It's like, do the work, play to your strengths, because it won't hold up. It won't be repeatable. And that's something that a lot of investors are looking for. It's like, is this a one-shot deal?

52:56Is this something I can last? I alluded to the third, second ago, which is the mirror. Remember that you are dealing with other humans and you don't know what's going on in your mind. You might be thinking like, hey, this guy's got so much money or this woman is so powerful. Like, all I got to do is get her to say yes to me and like, I'll be there. You don't know what's going on in their day. You don't know what's happening. Maybe they're not getting back to you in the right way or communicating to you in the right way. Like, just have compassion. Even if someone's in a position of power over you or whatever, like, you just got to roll with it.

53:32You're going to get a lot of no's. It's going to be really hard, but that's okay. Like, again, if you have that North Star anchor and you're in a position to persevere. the game of venture last thing it's a it's a marathon i think it's a i think it might be closer to an ultra marathon it is not a sprint if you're looking for quick money if you're looking for like oh isn't this a fun sexy job like it's hard you know it's a side hustle at best for most to start you're like working something else you don't have fees how do you need to pay for anything You actually have to go out of pocket. You're really a founder.

54:11You're an entrepreneur in starting a first fund. So expect for it to be painful. Expect for it to be hard. Expect for things to be celebrated just in getting through the race that you didn't even think mattered. Yeah, it's a marathon, not a sprint. It's actually probably an Ironman, right? Because you've got cycling, which is probably foot racing. Then you've got the deal flow sourcing, taking care of your existing portfolio, looking at deals actively running. And then you've got the swimming, which is the side hustle many have to do during raising a fund one to kind of try and see if they can actually live.

54:54Now I'm borrowing your line. It is definitely an Ironman, not a sprint. And funny side story. I ended up becoming friends with the CEO of Ironman. company owns all the marathons and i he asked me to do a playlist and i came out of retirement to send him a playlist for his birthday and that was quite a fun one but it's a it's an ultra man it's not a sprint yeah ah fuck that is cool nice okay so most counterintuitive learning that you've had since you've started investing in venture yeah so let's see it's these are marriages right these are your lps your founders your partners this is like not a quick hit so make sure you like them like make sure you expect stuff to go wrong just like you have your partner or your wife or whatever your husband whatever it is like you need to expect it to be challenging and make sure these are people you want to be aligned with so you know it's a marriage and And I didn't know how much of a marriage until you actually really start doing it.

56:01The more you give, the more you get. I always say this. You're not going to win every negotiation. You're not going to get the best price. You're not going to like, you can fight and fight for perfection. It's not going to happen. And sometimes when you give a little bit, you learn something on the other side and you get something back. Trying to find deals that are aligned, that are win-win is going to be incredibly helpful for you along the way. Last thing I'd say counterintuitive learning is that finance people aren't always the best early stage investors. With all respect, and it's something we've added, we have an incredible partner, David Levine, who was at Canyon Capital.

56:42He did 10 billion of climate deals at Paulson and Company. He's my guy for underwriting. It's unbelievable the work he does. So you have to do it. But at the same time, if you're talking to a venture fund and somebody came from an accounting firm or just came out of business school or whatever it is, like trenches matter. Like having that real close touch from an early stage, especially standpoint, what do you do when it hits the fan? Because it's like it's a sure it's going to hit the fan. It's like, it's a hundred percent guaranteed. And so what do you, how do you gather the pieces? How do you put them together?

57:18How do you help these founders like get through it? You can't financially engineer your way out of a problem. These are humans and people and you have to like do it and get in it. And so I think that's been an important part of our success is having that, but also, you know, bringing a human touch to it and experience.

57:40You said something that for some reason made me think of something. It's a weird one. You said that LP relationships are, it's a marriage, 10, 20, 30 year marriages. and that surprised you a little bit just how long it was. And that's what made me think, why did that surprise you? You know, thinking back to your DJ times where you then had an agent. And something that's always been puzzling me is, you know, obviously me investing from an LP angle, but also wanting to help our VCs as much as we can. We're always also very much in that broker position of trying to kind of help them get to other people that might be interested and so on.

58:23And in a way, I imagine signing as an artist with Philip Morris as your agent is somewhat like a similar relationship. There are some that take it as a shorter term and shift between agents. But I've listened, and this is probably because some of the other, you know, one of the guys that helped set up A16C back in the days was also very close with an agency or was the founder of one of the very large Hollywood agencies. So my mindset is already in this, what are the likeness between VC and building VC firms and working with LPs versus being an agent and broker there, right? Because what he realized was that there's a very different dynamic in being a good agent if you're aligned with your artists, your stars, your talent, versus being one where you're in a more transactional relationship.

59:25And for that reason, they retained their clients for much, much longer. Typically, you had the same one once you were signed with them, you stayed with them for years on years on years. And then you had the alignment around the agent getting a percentage of the gig, slash fee, slash whatever you call that, which in a way is very much similar to an LP. You're invested in the success being my point here. But in BC, we don't have many good brokers. We have so many that want to be your friend and want to help you raise capital, but not too many are successful in that. I'm curious because you've seen how Philip Morris represented you.

1:00:10If you think that there's some learnings from them and how you as an artist engage with them, how you diligence, whether they're doing their job, whether they're the right match for you, that type of thing. Any overlap? My first and most brilliant and insightful comment of the day is that I did not work with Philip Morris, the cigarette company. but I did work with William Morris now William Morris Endeavor the talent agency so I got to have a little bit of fun with you there and that's maybe the 100th time I've heard that mistake made and yeah I didn't mean the cigarette company I know 100 % when you said it I was searching because I was like I've seen this what the fuck because I was like I've seen the movie with uh human record and i was like was that was that an agency or what was that is that exactly exactly so yeah so william morris is now called endeavor it's the biggest so i'm very bad with names so that's just me i love it it's hilarious like tell me what it's like working with the biggest cigarette company on earth um that's not what i meant well no i love it so So I'm trying to find LPs that are very aligned with me.

1:01:29So like trying to get style. Amazing. Amazing. Yeah, let's do it. Let's do it in reverse. So basically, I was with William Morris for over 10 years as my agent. I never changed. They were really good to me. They opened up so many different opportunities for me. And even though I had some turnover and who was my point, they always had you know a really positive way of bringing me forward and to be honest I was one of the smallest artists on their label right I mean they had Swedish House Mafia they had David Guetta and Avicii and I mean I was like who was I but they really saw that I could play a role I ended up playing all their events right they're all their Oscar parties and everything else so I was like part of the family and I gave back to that relationship and I think that did inform you It wasn't so much that I was surprised these are long-term relationships.

1:02:26It was more like I didn't have the perspective as much that I do today, which is you want to find the right long-term capital partners and people that believe in you. Because right now, venture is ice cold. In 21, when we were raising, in 20, it was the hottest. You were the bell of the ball. It was like you're getting the best returns. And then rates changed and all of a sudden money's safer and getting probably as good or really good returns as a venture and no risk. And that may shift. And so, again, everything's always changing. But you want partners that see your vision, that are there to help you, that understand, that can give you insight.

1:03:04And that's what we're really building. So taking great LPs from our first fund with us in this new fund, but also bringing in incredible sovereign partners and corporates and banks and people that can bring insight to us that we don't currently have. That's how we want to build a future firm and a really strong partnership. And we'll make mistakes along the way. You don't get everything right. But I think intention setting and interviewing back, like, why do you want to give me money? Like, why is this important to you? And it's not just about a sale and a close. It's like, it's real. You gave me my strike of genius today.

1:03:42I think I will, everyone stay tuned. I might be launching a Hollywood agency for European VCs. And I think there must be something to how they build and scale that business that could actually be transposed into venture. So now, Michael, on a completely different note, this is the probably, I've looked so much forward to everything of this conversation, but this is the one where I'm like, I'm going to be like overjoyed for the next 10 minutes or so that we have left, because I'm now going to ask you to give me some real-time feedback on my attempt with Suno.ai. I think everyone who's listening to the podcast lately know that I have been putting together some songs that act as the soundtrack for each episode.

1:04:35So with no further ado, of course, I've done that for this episode as well. And now Michael will give us some real time feedback as to whether that's complete shit or it's actually good.

1:05:27I like I'm like making a crank in that

1:05:37let's stop with there classic classic swap the surfboard for the raincoat that was that was hilarious uh this ai has humor um and it's obviously highly relevant to me uh look it's it's fun i i don't know if we have like a chart topping hit here but i think i think we're moving in the right direction uh feels good uh i think it brings in you know more people to the movement so why not let's let it fly i think if we could make it maybe a little bit more avici maybe a little more aloe black on the vocal that would be quite cool like uh like and that's what annoys me with suno uh because like i do 50 versions of each right because i want basically a specific voice or like, but you can't really direct it that much.

1:06:32You can't take, like with ChatGPT, you'd get your output and then you'd say, that's good, but could you maybe change the tone of voice so it gets a bit more satirical? And then I would say, yes, please. Yeah, or yes, of course I'll do that. And then it would give you the same output, but with that second iteration. You can't do that on Suno right now. So now it's like just hitting 20 times. You know, you just kind of, it's a lottery. You don't know quite what you're going to get, but it's in the game. Yeah, it's coming, but like I wish we could like swap out and really refine. Also, there was just a lot of words.

1:07:12So like spacing of it and making sure you hit and really like hit a hook. But yeah, hilarious. Does it surprise you, Michael, or has it surprised you as, you know, both you've done, I think you've done two AI investments. And so you know the tech a little bit. You know, obviously, also the musical side of it. Does it surprise you that generative AI can do this? So, look, we have made two investments in AI. One incredibly exciting news came out recently about our company, Gray Parrot, which is a camera system that goes in a material recovery facility, a recycling center, and it identifies billions of objects right now in real time.

1:08:03It tells the robots what to pick up to make more money, but to have a better environmental impact. We get all this data, and then we can share and sell that data back to brands, to municipalities, to understand where all this stuff is flowing. So it's amazing how that AI is using ML. I think a lot of what we are just hearing right now is more in the machine learning standpoint, which was existing back, you know, 10, 15 plus years ago, Pandora was pretty early on creating the music genome and meta tagging all the songs and tracks when you put on a, get, you know, a song, play me something similar.

1:08:39I feel a bit like this is, is doing that, but it obviously is significantly more powerful tool. what it's not doing is it's not like taking the brain of rick rubin or a great you know producer and saying like okay through the lens of you know um pick your you know pick your uh favorite sort of like mind how would they approach this song and like so it doesn't really have ai it feels a bit more like ml to me but it's getting there don't you think that that part is a little bit also because this is one of the real places where we have a battle being fought out between the tech side and the old guard, meaning the real artists.

1:09:28And for that reason, because I imagine that if it can do this, it could probably also say, train on everything great, which it probably has, but it's limited from being able to understand, please give me something that sounds like great. Because that in there, it says, I'm not allowed to do that. I can't do it. If you give me a name, I will not understand. But I imagine that you could easily say, well, Drake would lend his IP, which is them allowing it, unleashing that it can actually do Drake songs. Do you think that's the next step? Do you see that happening? Do you think that that's doable?

1:10:11Well, there were huge lawsuits related to AI taking voices and making new songs out of it. And where the IP is and how it travels is a huge issue that's being figured out in Hollywood and courtrooms right now. But to me, I'm super excited about the potential of tools like this. It's a great creative idea. We could just so quickly jam on something and then I could just go make a real track out of it if I know how to do that. Use it as a guide. When I sold my business 10 years ago, I was convinced that AI was just going to crush else and that it was going to happen seven, eight years ago. And it still hasn't happened.

1:10:52I mean, get on Spotify and let it run wild. I don't know what's coming most. It'll be made for me and it's probably a collection of most of the things I'll listen to. And I know it's supposedly getting better, but I don't really feel it. And I'm very rarely like, oh, wow. Like I'm not mind blown yet. Killer DJs or curators. I'm just like, I never know what's coming next, but it just kind of works. And it's like, so it hasn't figured itself out yet, but I did believe 10 years ago. And I do believe today it's coming. I just don't know why it hasn't happened yet. Completely. Discoverability is bullshit.

1:11:26like you say play radio on the back of this this song and then you get like 20 songs that you've listened to before i'm like well i didn't ask you to just exactly it's like you want your coolest friend that has killer taste in music bringing all this together and in this curational ability as well i do think it's highly relevant to vc because it's like you have to choose of a cohort like you probably can't invest in all of the things which one why what has the best resonance and story? What do you want to sit with? How will it hit? How will they fundraise? How will they attract customers? Is this too niche-y?

1:12:03Is it too mainstream for you? Making sure it's the right track for you at the right time. So cool. Michael, this has been so much fun. I'm so happy that I got to meet you up at Go West back six months ago-ish. No, I actually own much less, only three months ago. I'm so happy we met there. I'm looking forward to everything we've got in tour for us in the future. Thanks so much for jamming with me. I guess that's what we can say today. Absolutely. And such a huge fan of EUVC. Honored that you had me here and any more cool things to do together. For sure. Now let's cue the music for another version.

1:12:41That's how we'll close this. This is the Regeneration Blues instead of the Regeneration Deep House.

1:12:53you know circular's the buzz not just a fancy word left sunny county for the ego energies just have to fight you see the other half stuff like your tvv drowning in stuff we're drying in thirst going back when i fall into words Spin those bottles, cash those cans Circulate the euros, crap in those hands Invest in trash, it's the latest craze In the rain we recycle the craze Climate cool tech, that's the hype From your snack pack to your stripe Regenerations are made, investing's the game Circular stuff, no to the same From Cali to Iverscope Circular dreams give us hope Building bridges, cash in motion Across the ocean, cause a commotion

1:14:01Spin those bottles, cash those cans Circulate the euros, crap in those hands Invest in trash, it's the latest craze In the rain we recycle the praise Why the change? It's the evil chase From sunny days to a rain place We got plans big and bold In the rain we're circular, bold Rain will shine, we're on the beat Chasing circles, feel the heat Joy to dance from shore to shore In the rain