20VC: Why VC Returns Will Get Worse, Why LP Incentive Structures are so Broken, What is the Answer to Liquidity with No M&A or IPOs, When to Sell vs Hold Your Winners & Turning $5M into $250M with The Trade Desk | Roger Ehrenberg, Eberg Capital

27:23They're not doing select asset by the LP and the top continuation fund and then you manage the continuation fund to buy assets underneath. Well, you're operating that portfolio that's already been deployed. You're now managing a static pool. Right, so there's no net new asset coming into that pool. It's Continuation Fund Investor, WorkSwip Manager, To Higher Fund, To Value Portfolio. So there's a third party that's valuing the portfolio. Buyer and seller need to agree on a price around that third party valuation. If price is agreed to, Remember, existing manager, not existing manager, is still managing these assets.

28:04They have LPs, they're GP. So for them, they want to get the highest price possible for their LTs to be happy and for their crystallized GP interest to be worth as much as possible. Obviously, continuation upon manager wants that value to be as low as possible, so their basis and that portfolio is low. It's that dynamic that creates if you can find a market clearing price for the portfolio that is both fair From the existing manager perspective and represents and track investment opportunity for the net new continuation quite advanced Speaking of fairness of price and we really haven't stopped to schedule here, but I'm loving this I think every LP in the universe would also be going this is great There's a lot of chasm in how managers are valuing their books today Do you think that the way managers are valuing books today is fairly reflective?

28:53Or do you think it still has a way to come down? That is a very manager -specific question. I can't give you a plight of answer. Harry and I are honestly, I'm kind of out of a game, so I'm not really speaking to these firms. You're much more in it than I am. I would pause it from what I know when I am and I'll pay a lot of funds, that they have been very slow to adjust down. And it's been happening. Everything is always with a lag adventure. Right, it's slow to adjust to down markets. Down markets is being observed in the public arena and very slow to reflect up markets. It's just everything is like this.

29:32Public markets are like this and private markets are like this. Which is why, honestly, I think, this whole continuation fund discussion is so interesting and topical because you've got these two very different utility functions because there has been so little liquidity for so long, some managers are desperate because they're under tremendous heat from their LPs to get blood from a stone. And then you've got continuation upon managers that are deeply aware of the phenomenon I just mentioned. And they're like, oh yeah, public markets have recovered. Public markets are near highs, but private markets are still really low.

30:05Now's the time for me to get in and take advantage of that desperation on the liquidity front. And that's what makes the magic right now. So, I did love you. So if you were a large scale L .E. And I was like, you know what Roger, I've heard you, you are the man to lead our continuation fund strategy. Day one, what do you do with that strategy? If you're head of strategy for the continuation fund program, what does that look like? It's a very interesting challenge because on the one hand, the very best firms and funds will do it, right? Because, well, there may not be liquidity today. They've got free portfolios.

30:41They've had tons of DPI in the past and they're like, I don't give a shit if we don't distribute anything for five years and neither do RLPs because they've already made so much money. They're off the table. Then you've got a bunch of MEP managers who don't have that much interest in the portfolios, have a delivered DPI and they're just kind of fucked. Right, and I think there is a whole swath of the industry. It's like a slow motion train wreck. They are not going to be able to raise new funds. they're going to struggle, but the firms have so many funds behind them in so many assets that they are eventually going to wither, but they're not my target either, Harry.

31:18So, you know, what I'm looking for are honestly the most promising early and mid -stage firms that started in an unfortunate time. Just as their companies were hitting their stride, the IPO market shut. The M &A market became increasingly challenging with Lina Khan and the FTC getting much, much more But they've got really great portfolios, but they haven't had a lot of DPI. That's where I would focus my energy is on those funds that are new -ish, meaning past decade, have some great stuff, but started a little late to miss the IPO wave of the 2016 -2020 era. You mentioned missing the IPO timing and you mentioned the very small windows of liquidity and venture which you need to take advantage of.

32:10Horsey Bridge have got some amazing data on really why Ventures is shit asset class unless you take advantage of these very finite windows where then it can be an amazing asset class. Roger, when you're advice on how you think about when to get out, what have been some of your biggest lessons on when to get out and what it takes to do that successfully? I think we need to distinguish between IPO liquidity versus secondary market liquidity. Those are two very different things. If we divide the world between secondaries in private and then IPAs, how do you think about that? We at IAA would work on our companies to plan probably two years before a planned IPO, in terms of undergoing an IPO readiness process.

32:53And being in a position to be opportunistic, when both the company was done with our preparation and literally were public markets ready from an infrastructure, a legal compliance, and an org structure and org structure perspective. And that takes time. So literally it's like a two -year lead time. Then, yes, once you're ready and let's say it takes nine to twelve months to get that done, then it's okay, let's find the best time and then do it. But I find that framework of when a company is on that trajectory to be an IPO two to three years forward to undertake this IPO readiness show you can be opportunistic based upon a market environment.

33:32That's one. The private side, the secondary side, that is much, much harder for the reason that clearly in this particular bubble, in the same way when we were in 99, 98, 99, you had companies that had these stratospheric valuations that made no sense on any objective basis. Clearly, with 2020 hindsight, it would have been great to sell something. Sell some part of a position, sell 10 or 20 % of a position. It's hard. It's very, very, very hard to do that. But I think the mindset needs to be almost the same as the public company readiness for aim work, because it forces you to be objective. Is this company a public market candidate if you had taken deep breath?

34:20looked at and offer said, from an IPO readiness perspective, where is this company? The objective answer to that question is, no fucking where, light years away, then maybe that would have prompted you to say, I really believe in that, but maybe I should take 20 % of the position off the tube. Something. And you know who's done that really well is USB. Fred, very selectively. And they've obviously had big IPO winners, and they've had some IPO winners were they sold some in advance? Have you sold someone in advance, Roger? We did. Yes. So we sold a little bit of wise in the series E. Was that the right time, we did it?

35:05Was that the right decision on reflection? And I guess why was that the one time? You know, we had such an enormous position in the company. We wanted to distribute something from fun to and to generate some recycling dollars. And it was what we considered to be a fair price at the time. And it was part of this process and why's did this brilliantly actually? They made money. Like they generated actual money way in advance of going public. So they held these annual employee tenders where we basically cleaned up the cap to it. We brought in the super sophisticated great pre -IPO investors to then buy out some early investors and to give employees a measure of liquidity.

35:49And so it just basically continued to concentrate the cap table and shrink the number of holders, which makes life easier. We sold into one of those. For the reasons I said, we ended up being able to return half of fun to and generate recycling capital. Fun to is $105 million, which obviously has done extremely well. That was great. We had a similar result from a very different situation in fun one when we sold simple to BVA because that generated the liquidity that we then invested in the trade desk series big. So this is what worries me there, which is you spoke about recycling there and the ability to reuse those dollars and make every dollar as optimally efficient as possible in that fund deployment.

36:34I don't think we're going to see recycling possible due to the lack of M &A. We used to have the, remember the small M &A kind of eight, ten years ago when I ate 50, 60, $50, $70 million amnesty that would generate the recycling quickly for you. And you could use dollars more effectively. We don't have any recycling now, most often. Does that concern you? And do we see the end of kind of effective recycling, really? It's a very sure point, Harry. Yeah, I think really the only way to get that recycling now is similar to what we did in WISE, like the BBA simple thing. You're right, that was like $117 million amnesty.

37:10Yeah, we don't see very many of those these days and honestly, I just chalked that up to dumb luck like the timing I ended up working out for us there. No, I'm we're holding our breath it recycling for a very early stage bond is a struggle a Real struggle just because of how how earlier investing how long it is before some of those companies have these opportunities Where I want to invest in that, but where am I gonna get the capital from? It's like you've deployed, you need to reserve for your fees. Well, where do I get the money from? And that, which is why a lot of firms try and solve the problem with SPVs, we never would do that.

37:48So we forced ourselves into finding solutions for recycling. We got bailed out with the simple acquisition in Fund 1 and in Fund 2, we addressed a proactively through the sale of a little bit of our wise position. So that's on the secondary side. Going back to the public side. We've seen funds believe that they know more and have asymmetric information to public markets and to LPs, which they literally do, having been investors before. But believing that they should be able to hold and maintain management of that position. How do you feel about that? And I guess when you look at Tata Dog, when you look at the trade desk, you have many absolute bings.

38:28How did you think about whether to distribute versus whether to hold and sustain? That is one of the hardest questions that Brad just and I have dealt with. And we talked to tons of friends and mentors about us to try and develop our own philosophy. And I would say our behavior shifted post -trade desk. Trade desk was idiosyncratic in that that was our first grand slam. Right? Like that was the franchise making investment. Our first IPO in 2016 enabled us to return many, many, many, many, many multiples that were postponed. But because of that, we got out of that position much faster than we would have otherwise.

39:20Because it was such a franchise making deal. So if you look at our average distribution price on TTV, it's probably two and a half million. It went IPO at a 700 million. That's, it was valued at 700 million on the day I went public. So we ended up doing two public secondaries within the first six months and then we distributed shares over the next 18 months. That was one where because it was our first, we got out quick. So you think, well, what could have been early seed stage funds, $50 million fund, first big win, return, five, six X net on that one position? We'll chalk that up as a win, but a lot of money left on the table, obviously.

40:07Now, personally, you know, we distributed shares, I held shares for a very long time. I personally, in those LPs who didn't sell immediately, may way more than that because the stock just rocketed. But as a firm, what I told you is what happened. Then when you think of our other IPOs, data dog, wise at DOCN, those we've been much more measured and Systematically distributing, not doing public secondaries for cash, but actually just distributing shares over time. When you look back at the trade desk, it's actually very rational. As you said, 700, 2 .5, you're like, okay, do you regret it and do you look back and go that was silly?

40:46Or do you actually go, no, I still see it, but I can understand all rational and thinking. I'm not a regretful person, Harry. That's just not that's not the way I'm wired. You can always look back at 2020 hindsight and Overfit a curb and say well, this would have been the optimal thing to do, but that's not real life real life is we discussed in Great detail what our strategy should be we discussed the balance between what happens if the market goes to shit and we had this franchise making Position well, how would we feel that what about our brand? We're going to be in this thing for the long run.

41:19So I think we behaved incredibly rationally. If it had been not IPO 1, but IPO 2, 3, 4, we would have behaved differently, and we would have generated greater returns. By the same token, you could say the same thing for wise. And we've done very well on that. So it's kind of like, you know, dude, as long as you're thoughtful, and as long as you go through the process of analyzing the context and the trade It kind of is what it is. I lose no sleep over there. How much of an impact does it have to have an IPO company, a fund maker in the earlier years of a fund life cycle? Like there it was your first.

42:00That was a real flag bearer for you in those days. I feel like we had a ton of respect in the market even before the IPO is by then, we were just starting to deploy fund three, right? fun too had wise and digital ocean, fun one had data dog, and we had a bunch of other stuff in there that was really great stuff. So I think that we had the respect in the industry both by peers in our LPs, but I'm sorry there is nothing like taking a company, public, where we owed 17 % on the day of IPO. How much money did the trade desk make for IA? I think that we ended up returning 5 to 6x net on that one trade that was $250 million fund.

42:46So 5 million, 5 .2 million turned into net, 250 to 300 million, DPI, net. Was it a consensus agreement deal? Did everyone want to do it? Oh jeez, remember we met Jeff Green before I'd even set up the fund. We met in the fall of 2009 and I incorporated IA in December of 2009. Brad was a consultant for me. He hadn't even started. And Ben Siskivick was there who had worked with me on my angel portfolio. And yeah, I think we all felt very passionately about Jeff. He hadn't yet onboarded his co -founder Dave Pickles, the CTO. We literally committed on the basis of a PowerPoint. We worked on that deal with Fatter Collective.

43:31So Eric Paley and I both sat on the board and so we literally co -led the seed round together and then I .A. bridge them three times before raising their series. I do love you guys. I don't think it's said enough that like a gen - what I didn't know about every now and then I was like I looked up to you and found the collective for so long as like the poster charts of the boutique artisan style of venture which is so special to me. The fanboy moment there but move on and you can see my arm. It's just like getting worse and worse. So, I end up with a sleeve. I wrote it up to the sea of the largest salt and wealth on the other day.

44:09And he's like, oh, you have tattoos. I'm like, no, no, it's just notes. You're one of a kind here. Jeno, he said, you're not normal. I said, I think that's a compliment. Will you give me $10 billion now? That's the minimum check. My question to you is, and this is a blunt one, do rich investors make better invested decisions on liquidity? because as you said there, on the other ones, you didn't need it as much, the money didn't mean as much. You know, you could look at Sequoia and say like, hey, they just see upside, which means they ride the winners, they absolutely capitalize on them and they get captured as much value as possible, because they don't need it.

44:45Sometimes desperation causes less good returns. Do rich people make better investments? You could say it that way. I would say it a little bit differently. I think about it more as have you made the franchise. Now, it's a coin made the franchise 40 years ago. For them to set up this evergreen structure makes all the sense in the world. I want to be precise. We can say like rich investors, it's not so much that when TTT, when public, we were then rich, what it meant is we had actually done our job and returned significant capital to our LPs. They all had a thesis that we were great stockpickers, a great partnership, and had keen insight into which sectors would ultimately be fruitful.

45:30This was the first objective validation that they were right and that we were right. So to me, Harry, it's less about the rich and more about we proved it. And once we proved it, then the level of confidence that we had in ourselves that, huh, maybe we're not this rag tag bunch of geeks, But we're actually really good fund managers and really good stock pickers and really good partners to founders That I think gave us the opportunity to take a deep breath and then say okay What is the optimal liquidity strategy for public markets positions once we have the freedom? That's the way I would say it that validation my question to is that can have a flip side Which is one can become overly confident?

46:21Investors' psychology is one of the most under -discussed aspects of our industry, and it's really fucking hard. And I think there's a lot of young investors today who are going, my portfolio that look great on paper three or four years back, or that I built over the last three or four years, is actually taking a hammering the companies and getting down -ounds. How do you manage investors' psychology? What have been your biggest lessons first? Well, firstly, acknowledging that it's a super -hard job and that we're all human and and subject to frailty and bias all over the place. And I think one of the amazing things about my partners is that we were able to talk about all this stuff, like very openly.

46:59So having a strong partnership and that deep respect and intellectual rigor and honesty helps to deal with that. And I think if you're a solo GP, then you really need mentors that can kind of help serve in that function. because we process this stuff a ton. So I think we're always very grounded, Harry, but when it comes to the psychology of missing something great, we could have invested in platinum, like our anti -portfolio, or we had the opportunity to take liquidity off the table when a company was high -flying and then it crashed. Well, how do you deal with that? And then there's the issue of, well, we could have held on to TTD and returned another five to 10X of the fund, are we stupid?

47:41just processing these things very honestly and then learning from what happened was one of our superpowers, which didn't mean that we always made the best decisions. It certainly meant that we tried to make the best decisions and that we had the logic for our decisions. But that suffered from did work out because life is not in your control. I come back to the Clubhouse example of, well, even though you believe, even though it's crazy, What I'm seeing here evaluation is divorced from objective reality, just sell something, so I take that schmuck factor off the table if the thing goes to shit. That kind of drove a lot of the thinking around TTD.

48:23There was the franchise making aspect, and then there was the, if we don't do it, and things go south, and we could have made the whole fucking franchise. But we didn't do it. How would we feel then? Let me tell you, the downside regret versus the upside opportunity cost. We made the right trade. It's not even a question. Does success get easier to attain adventure the more you have? Is it cyclical? Because IA has amazing bangers, wise data dog, the trade desk, great founders come to you, LPs come to you, success is this cyclical snowball down a hill or bullshit. You still have to fight like a dog every day on the field.

49:02The answer is yes, it's yes to go. Because venture in the best of circumstances is hard as hell and I am sure your pal Doug Leoni would say the exact same thing He said it on the show people think that like great entrepreneurs just rock up every day and be like oh We're only coming to you bullshit. It's as successful as he's been he fights like hell and this comes back to The conversation that we had before we even started recording about Well motivation. What do you need to make you happy? Doug, he's richer than Chris's. My sense of him is he wakes up every morning, puts his feet on the ground And he's like what's fucking go?

49:41I'm not as rich as Doug Leone, but I'm in a pretty good place When I put my feet on the ground I wake up in the morning and I say what's fucking go? Do either of us need to do this from an economic standpoint? Of course we don't do we need it for for ego and validation, that's not really it. At least I can't speak for dog, that's not really for me why I do it. I do it because I just fucking love to work and I love working with founders and I love building stuff. To answer your question, is it easier if you've actually done a bunch of really good stuff and you have a ton of respect and awareness to the market for both investors and founders?

50:16Yes, do you still need to hustle like hell and work as hard as not harder than everybody else to leverage that? But little advantage you have over net new manager? Yes, apps are fucking lootly. It's both. You mentioned that the element of wealth, and I did want to talk about it, because it's something I think we don't discuss enough. When you think about kind of, it sounds weird, but you would kind of journey in relationship with wealth. What was the biggest needle moving moments in terms of your relationship to money? The first million, the first ten. What were those needle moving moments that changed your mindset on wealth?

50:49So it's I think I had told you once before for me the most the time when I realized wow I can make a lot of money is when I was 20 28 on Wall Street 29 Got a 320 thousand dollar bonus in my 95 thousand dollar base So I made 450 thousand dollars and that 320 thousand dollar bonus check Harry was like the most exciting amount of money I've ever received and it was just such the vast difference from what I ever thought I could make. Was that happiness or was it short term joy? Was it like, yes, amazing you got for a lovely dinner, but the next day it's like, ah, or were you actually happier as a person?

51:31And I didn't think it shallow to be happier. I think we wrongly assigned that. No, I understand, I think. It made me feel different. In the way that I talked about the TTD IPO giving us this measure of confidence and validation that bonus gave me something similar. And that was the first time I felt something quite like that. It felt durable. It felt like it validated my skill as a Wall Street transactor, as a partner to customers, and I was really valued. And that did change something inside of me. I'm good. I can do this. That was the first inflection point. Second inflection point was, and that was its city, at Deutsche, five years later, when I was on the equity management committee, I had rebuilt the equity drift, structuring and marketing business thereafter.

52:27They blew out all the BT people in the wake of that acquisition. And I built a great fucking business. Great people, super profitable, low risk profits. And then my boss at the time ran the equity division, he got this special pool to give to 20 people and he gave it to me. It was a special equity program on top of what was then my largest bonus. Just tell you, order of accuracy. So like the $320 ,000, $2 ,000, $29 ,000, or whatever. This was six million plus this other thing, this special thing that only 20 people got and when he communicated that to me like I was in shock. It was like not something I was expecting.

53:06It was that next level of wow. You could draw a line from the day that I got that $320 ,000 dollar bonus in my position at city, at that point, to where I was at Deutsche Five years later. It was a whole other level of, wow, like, it almost like the imposters in Rome Harry. And I've said this a bunch and it is true. There is still a sense of disbelief in how I've gotten to where I am. I couldn't have imagined it. Certainly wasn't forwarded. And as I told you when my wife and I got married at 27, we had less than zero. We had her student loans. I worked all the way through Columbia B School to pay for myself.

53:43We had not. We had our love and three years later, we're here. And it's still to this day dizzying. Like I don't quite understand it. And I'm incredibly grateful for it. But it's these moments. And I guess TDD was kind of the next one. If there have been like three in my life, those are probably the three. And I'm excited to see what the four will do. Do you think that will be a fourth? Respectively, you've used a term before being post -economic. Once post -economic, is there like no more flags to put in the ground on it? No, that's another 50 million. It's like, okay. It's not money. I've never worked harder.

54:19I'll know it when I feel it. I'll give you an example. I've now invested multiple sports teams, and that's exciting. But that's simply because I have money and people value me around the table. That's not it. What's it is going to be one of my venture investments that I seeded or preseated, becoming a widely successful company. It's going to be the same thing that I did 13, 14 years ago at IA or eight years ago with TTD. It's going to be something like that in the future. It could be that. It could be some of my economic development work that I'm doing in Detroit. It could be something there. Like, I don't know what it is.

54:58There'll be a fourth and there'll be a fifth. I'm in this for a long time, my friend. What's been the most surprising thing about accruing such wealth? You did not expect Probably how little of an impact is that hobby? In terms of what the life you live the way that you approach the world I think the way that I approach the world obviously it's like we have nice things I mean the place that we raise the boys in New York we have this house and calling you from today New Jersey a little house in Ann Arbor Okay, well there's people with a lot less money than us that have those things married to the same woman, never been happier, knock on wood.

55:34Something I do know is at this age and stage is all about health. Getting to this age and just friends and family and stuff like that. Honestly, Harry, I feel like the same person as when I met Karen at a bar in Ann Arbor in 1987. I don't feel that different. Yeah, there's the feeling of waking up in the morning and not worrying about money, right, like not worrying if somebody gets sick or if God's will bid something, you know, one of my kids needed something or whatever. And it's like, we don't worry about that. So that like that whole thing is off the table. But in terms of like my drive and motivation and excitement and I think humility and desire to learn and do new things, that's really lusting unchanged.

56:18The universal truth that I speak to many and many successful people about, I speak to that has a new bank about it, just in short, short capital. And it's that it's so challenging to bring children up in a world of financial abundance and make them feel ambitious and hungry and hustle. What have been some of your biggest lessons on how to create children with ambition and hunger in a world of financial abundance? That is probably the question I get asked the most by people who have known me and know our family. I'll first say it's hard as hell, really hard, especially raising in a place like New York City where they went to school with kids whose parents might have different values than ours and needing to remain true to ours and for our kids to respect that.

57:04So our kids are young men 26 and 23. It's still constant vigilance. This is an ongoing conversation. So thankfully, I think Karen and I just because of who we are and how we lived life, there is not a disconnect between what we say and what we do. We walk the talk, we work hard, we care about other people, we believe in investing in your community, we believe in humility and grieffulness. This has been pounded into our kids heads from day one and they lived with it. It hasn't been words I've been present no matter how high -powered a job I had. I coach their teams. I never missed a birthday. I was at every school performance.

57:45I optimized for my family. Thankfully, I was able to do that given my career choices. Karen, clinical psychologist, has her own practice. Could shape her schedule to be a full -time parent, active in the kids' schools, active in our activities, coached their baseball team, was Commissioner of the Baseball League. We have done everything to align our actions and interests with what we want from our children. We have kept them grounded because we ourselves are granted. And it's not just we're jetting off doing this and that, and they're sitting back with a baby sitter and 10 grand on the counter.

58:19Oh, go have a good weekend. So it's a very long answer, very short question. It's a very nuanced question. And again, it's an ongoing conversation or family, even it's our boys or adults. Have you ever felt like you fell as a parent, and how did that change your mindset? No, which doesn't mean I haven't made mistakes. But like I didn't have kids now, because I don't think that I could be there in a way that I would want to be like you said, and that would be a failing of parenthood to me. Yeah, well, no. I don't feel that way at all. I mean, again, my wife and I were together for a decade before we ever had kids.

58:52We had kids when we were ready, both in our personal relationships and our relationship with ourselves. We embraced it and invested and engaged in it as the priority in our lives. So even with all of my business activities and achievements, I never didn't optimize for a family. I just want to finish on actually Karen. You mentioned having such an ongoing and continuous incredible force in your life, being your partner. What's most non -obvious secret to having such a brilliantly successful sustaining marriage? That's not respect and trust. picking your battles. And what I mean by that Harry is as long as we've been the gathering as well as we know each other, they're wasting which we still bug the shit out of each other.

59:40That's just natural. We're humans. There's stuff that used to irritate me that I would call out and she would get angry and vice versa earlier on our relationship. And I think what has happened over time is a bunch of those things, stupid things, but annoying things. A bunch of stuff is hardwired, that's very, very hard to change. And unless it's really important, biblically important in terms of the way it makes you feel about your partner, just fucking let it go, just let it go. So that'd be one, and there's one other enormous one, and maybe even the biggest one, which is it's not about winning.

1:00:23I used to feel that if we disagreed or had a fight and I knew I fucking knew I was run but she didn't agree. When I was younger, I used to feel like if I didn't win the argument I was weak, like I was being a pushover. And what I came to realize is that it's almost exactly the opposite. You should never have the mindset of winning or losing versus your spouse, your partner. Neckrot. That's just the wrong frame. You can have a disagreement. You can argue. Fight. Firstly, you should always fight fair, words matter, and not being very conscious of saying hurtful things because you're hurt and you want to lash out.

1:01:01Sometimes it's important to just take a breath and pause and not say that thing that you want to say because you're so red -hot. Just don't say it. Take a deep breath. Because I guarantee you that next moment will be better than had you set that thing. It's always better to have hard conversations later after things have cooled down. If things get really hot, the best thing to do in that moment is just to say, let's stop. Let's pick this up when we're both calmer. And again, I'm saying these things, it's very, very hard to do. This is like level 10 ninja shit. But I'm also speaking to you as somebody that's been with this person for 37 years and we've been working on this for a very long time.

1:01:40And we still fuck it up, believe me. But we largely get it right. I love that. And I agree, I tend to just go for it. I always used to believe that, hey, when you've got a problem, radical candor, let's go now. And that was the worst piece of advice that I got. Never, never a good idea to go now. And Harry, it's not always right to be as honest as you want. It's how it's heard, not what you said. It's a retreat. Listen, I want to do a quick fire. This has been fucking amazing. So I say a short statement, you give me your immediate thoughts. That sound okay. Okay, so what have you changed your mind on most in the last 12 months?

1:02:14That I'm not insane for going back in the seed stage venture after having gotten that. I actually love it. It's my calling. What's the biggest surprise of owning a sports team? They are not managed as well as you would think. There's a lot of room for improvement. Have we reached asymptote in terms of pricing of sports teams? Every P E firm is in sports now. It's crazy prices. Have we reached a cap? No, because of something we talked about earlier, which is with this tremendous influx of institutional capital and with pro teams, pretty soon the NFL I would guess, becoming PE investible, return expectations are going to come down and prices are going to go up.

1:02:54What's the best investment advice you've ever been given? The ability to withstand short -term pain for long -term gain is the superpower. So being able to manage your own internal stress and to let the thesis play out even if it's unpopular and unconventional can lead to amazing compound returns. You just need a long enough time horizon. When do IPO markets open again? I think we'll see some green shoots in 25, but probably 26 is when it's really going to come back. Will Trump win? I hope not. If he won, would he open up M &A environments? Yes, certainly with the different head of the FTC. I mean, the pendulum has swung all the way in the other direction.

1:03:34I think you could argue that antitrust was extremely weak for a generation and now it's swung all the way in the other direction. I would expect it to come back the other way, yes. You've got C, pick, and win three cool tenants pre -investing. Where are you weakest and where are you strongest? I would say I am weakest today on C and strongest on win. C because my energy is much more focused on my current company's tremendous energy. on having them be their best. I am not outgoing to conferences and doing all the things that I did in my younger days because I'm just fucking tired, but that's what I have my kids for.

1:04:20They are going to scaffold this sea. The only reason you have kids is to blame your faults on them and to send them to conferences, okay? Ha, ha, ha. It's such an awful existence, Harry. It's so terrible for my world. Honestly, I feel so bad. If you need a third adopted child, I'm right here, baby. Karin, you're like right to the family. Yeah, great. Most people meet me and they're like, wow, you're really quite big. We expected you to be like Harry Potter. And like, thank you. I grew up about 10 years ago, but that's wonderful. So, yes, what's the biggest advice that you have to manage or outraising today?

1:04:56Be different. Take risk. Don't play it safe. Have a deeply help, Vistas, and just play it out there. Be shocked. Don't be a sheet. Don't follow the playbook. Penultimate one do the best founders need that VC a lot of VCs like to pretend like we have this mythical value founders Funds say hey the best founders don't need you don't mind. I think the best founders are Depend I think the best founders benefit from Really good VCs to act as a sounding board especially in those earliest days and to give them honestly Empathy and psychological support because that is often the hardest thing to get when you're struggling at the beginning and trying to get to product market fit.

1:05:36Again, like the very best companies that we've been involved with, the founders were all amazing. They all were highly self -motivated and independent. Like they didn't want to lean on us as a crutch and didn't. But I would say to a person, they all benefited from us as strong, stable, say partners to process hard feelings and hard business problems in those early days. 90 % of VCs detract value, Vino -Costola, agree or overstatement? There is something to the general view that VCs think a lot of themselves and probably attribute more skill to themselves than they actually have. I think unless a VC is proactively unconsciously humble and aware of the limitations they can have on the outcome of a company, than a probably value -destructing.

1:06:30Because of these fucking podcasts they go on these days. What? Souls. No wonder, tell me why you're so brilliant. Final one, Roger. Where are you in 10 years? That's a classic, but like, where do you want to be? Like, doing this with Andrew and Ethan, want to be handing it over to them? What does that look like? 10 years is a good time horizon. So in 10 years, I'll be 60, We pay, they'll be 36 and 33. I would aspire for them to be day -to -day running pieces of our family business, with me really serving more in a chairperson's capacity, but with them being the principal operators. We talk about venture and that's where we spend most of our time, but there's lots of other things I do too.

1:07:18I've got this pretty significant real estate business, and I have this deep interest in affordable workforce housing and investing in Detroit. I've got investments in food and beverage. I'm like very invested in the rejuvenation of Detroit. Not something I'm very, very passionate about. And it's not just in Detroit, kind of the great lake states and believing that that is a great place to do business and ultimately with the intersection of climate change. Do you manage that yourself? Do you have a family office to do that? I do. I do. I do. I do. I do. Do you know what my advice to you would be?

1:07:46you do too much. You're doing too much. I'm actually doing like four, but the difference is, it doesn't stress me out. Roger, you've been amazing. Thank you so much for being so fantastic. I've absolutely loved this. Well, I hope we can see each other in person soon and have probably those 28 mojitos that you want me to buy now. I have to say, I think that's one of the best shows we've ever done. The combination of venture, marriage, bringing up children. Roger really is one of the most incredible people in this business. I want to say a huge thank you to him for being so brilliant. If you want to see more and watch the show, you can watch it on YouTube by searching for 20VC, that's 2 -0 -VC.

1:08:25But before we leave you today, Hyve is the marketplace for private stock. Whether you run a fund, lead an investing syndicate, or invest solo, Hyve gives you unparalleled access to some of the most exciting companies in the world, all before they go public. Think Flexport Reddit and AirTable, alongside many other companies I've featured on the show. Secondaries are so much easier with Hive. Stay on top of the private market with free access to volumes of real -time market data, and enjoy Hive's automated trading experience with thousands of trades across hundreds of unicorns. Hive is the fastest growing pre -IPO marketplace in the world.

1:09:01Create a free account day at 5 .com forward slash 2 .0 VC that is hive with 2 eyes .com slash 2 .0 VC and see why over a thousand institutions and 10 ,000 accredited investors have joined hive. And if hive provides incredible levels of access secure frame secure frame provides incredible levels of trust to your customers through automation secure frame and powers businesses to build trust with customers by simplifying information security and compliance through AI and automation. Thousands of fast -grown businesses including NASDAQ, Angel List, Doodle and Coda, Trust Secure Frame, to expedite their compliance journey for global security and privacy standards such as SOC2, ISO 2701, HIPER, GDPR and more.

1:09:48Backed by top tier investors and corporations such as Google, Client and Perkins, the company is among the Forbes list of top 100 startup employers for 2023, and business insiders list of the 34 most promising AI startups of 2023. Learn more today at Secureframe .com, it really is a must. And finally, a company is nothing without its people, and that's why you need Remote .com. Remote is the best choice for companies, expanding their global footprint where they don't already have legal entities. So you can effortlessly hire, manage and pay employees from around the world, or from one easy to use self -serve platform.

1:10:24Plus, you can streamline global employee management and cut HR costs with the remote's free HR IS. And hey, even if you are not looking for full time employees, remote has you covered, with contractor management, ensuring compliant contracts and on -time payments for global contractors. There's a reason companies like GitLab and DoorDash trust your remote to handle their employees worldwide, go to remote .com now to get started and use the promo code 20VC to get 20 % off during your first year, remote opportunity is wherever you are. As always I sir appreciate this port and stay tuned for an absolute banger of an episode this coming Wednesday.