All Star Investor Panel! Sophia Amoruso and Ryan Hoover | E2158

27:00Keith Reboi sees it. Sophia sees it. You see it. I see it. Alex sees it. Or people put out like the Clue Lee video or the response video to it. Like all that stuff, you just wind up seeing it. So now you're aware of it. And it's part of the overall trend. I would say there's like two trends here, going direct and then the for you page surfacing nobodies, you know, like outsiders being able to get in front of insiders. Those are actually two very interesting things we've surfaced here. But I like the idea that signaling is changing and that people are looking for, you know, if you have revenue and then the next thing will be profits.

27:38So you will see, I'm starting to see some founders. We don't, we don't care about profits. I've had two founders this week when they sent their note, say we have 20 % margins right now. Two different ones. One's a media business and the other one is like a SaaS business. And they were like, I'm like, we're reporting on profits now. I'm like, how are we deploying the profits? Are we paying taxes this year? Or are we investing in that, you know, in something because that's what we want to do. But signaling is super critical for founders to understand and for investors to understand because it kind of creates a shared dialogue.

28:14What you were talking about before about the product velocity, Sophia, I like to come up with terms and the term we use internally. So we actually have our own vernacular is product velocity. When we see a founder with product velocity, that means something. And then we have a specific criteria for follow-on investments to Alex's original, really good question. The other thing you didn't mention, but by name, but that you insinuated was, hey, they raised money. And then I saw that that company, Nectar Social, had raised money from True Ventures and Google Ventures. Our criteria is revenue growth, lead investor joining the board, and the track record of that lead investor.

28:56And so if we're going to follow on, if you have 3, 4, 5x revenue growth, we're following on. That's rare. And if you have a lead investor who I know or we know who's notable, who's invested in a great company before, how did you convince them? Now, there's two possibilities. Either your company's great and they recognize that and decided to lead it and join the board. So joining the board is a subset of that criteria because a drive by 250K check from a large fund, not really good. So in that case, I'm guessing True Ventures is either joining the fund or put in more than 250, 500K. Every time you turn on the news, it's about AI getting smarter and smarter.

29:41These models are writing perfect code. They're acing the world's most difficult exams. And it turns out they're also pretty good at making money. That's why there's public.com, the investing platform for people who take their money seriously. What really sets public apart are their AI-powered tools and features. Check this out. You can ask public a question about any stock in plain language and get a straightforward answer. If you want to see why a particular stock's price jumped or crashed, they've got a clickable AI-generated summary right there in the performance chart. You can build multi-asset portfolios on public stocks, bonds, options, obviously.

30:16But hey, maybe you want a little crypto in there, some ETFs. I will advise you to try public.com and access industry-leading yields like 4.1 % APY on your cash with no fees or minimums. Plus, for a limited time, earn 1 % match on all IRA deposits, IRA transfers, and 401k rollovers. Never too soon to get that retirement dialed in. So go to public.com slash twist today to fund your new account in five minutes or less. That's public.com slash twist. Disclaimer, paid for by public investing. Full disclosures in podcast description. Yeah, they co-led. And is one of them joining the board? Yeah, I think Tony didn't.

30:55And Frederick may have. But as a first-time fund manager, there was some random Texas firm had leaned in and wanted to preempt something. And I was like, guys, who are you talking to? They don't have relationships in the Valley. And I was like, you guys should talk to the big boys. Let me introduce you to Frederick and Tony. And then I introduced them to one other top-tier firm that's a dream firm. And all of them wanted to lead. And GV and True were basically like, OK, we'll co-lead. We're not going to get, you know, the 20 percent allocation that we want, but we'll each get 10 percent. And it was like they just showed up and were like, who are these freaks?

31:32What is this? This is so amazing. That was it. It was just like on the merit of what they had built. And it wasn't their relationships or anything. I certainly can't convince anybody to invest. It's not like I don't have that kind of influence to be like, oh, you know, but for me to be like, I don't I don't know what I'm you know, I haven't invested in that many pre-seed companies, even as an angel, but to be able to send it upstream and have like, you know, the gods of venture capital. The massive advantage you do have and the value you're providing to those is you validated them with your time and skin in the game.

32:05So therefore, when Tony looks at it, he says, well, Sophia's got 22 bullets in her fund. I heard this week in startups, she used one of her 22 bullets. That actually skin in the game means something. And I think that's a massive advantage that pre-seed funds provide to seed funds or seed funds provide to series A. And that's kind of what makes the ecosystem work. The other notable thing, I don't know if we have more data to bring this, to reground this, Alex, but the other thing you mentioned, the series Bs were massively up. This makes sense to me, Ryan, because you have so many of these mega funds with billions of dollars.

32:44And for them, they have to put more money to work and that is going to lead to valuation increases. So then that leads us to the discussion. We had a company this week we invested in two years ago, maybe call it a$15 million valuation. Two, three years later, maybe three years later, they're at a$500 million valuation. Do we sell 20 % of our ownership and send distributions since that investment is now theoretically 30X? That would be 32X. Do we trim 10%, 20 %? Or do we take our pro rata? Or do we do both? Syndicate our pro rata. What do you think, Ryan? How do you think about when you trim a position?

33:34Because distributions are rare and the opportunity to distribute is rare. What's your current philosophy on that? Yeah, so we've done this once. We did this about 18 months ago. We invested in the seed round of deal in the first fund. And that was a 10 mil post. It's gone on, I think the last round was on$12 billion valuation. And 18 months ago, we're like, well, okay, we have an opportunity to sell 14 % of our position to return the fund. And that's a 400X return, roughly? Yeah, yeah. It's like 10X fund returner on paper. And we'll see. It doesn't count until it's true DPI. But we're like, well, let's get one DPI, one X DPI.

34:11If I think it isn't going to sink your DPI, you'll be OK. Yeah, yeah, we'll see. No, I'm bullish. I'm bullish on the company. I was bullish back then. I'm bullish now. And granted, we did sell lower than the$12 billion number back then, because this is also when the market was also in the slumps a little bit. But the thought was, OK, one, our LPs, they've been, you know, they're going to be so happy to see some liquidity. No one's getting liquidity like 18 months ago. Two, we're still going to have 84%, 83 % of our position remaining. So even if we make a mistake and 10x is from here, we're still good.

34:42So we did make that decision and it was the right one, even though today it would sell for more than 2x in the market from what we sold back then. So anyway, to answer your question, Jason, I don't know. It's so subjective. I think it's wise for early stage funds, maybe after five, six, seven, eight years in their positions to start thinking about liquidity and take 20, 30 % off the table. Even if they have high confidence that, you know, it's going to go up from there. My best advice. Recycling, recycling, teach me about recycling. I actually have thoughts on that too. My best advice is if you have an opportunity, since they're so rare, take it, sell 10 to 20 % twice, maybe three times.

35:22And then by the end of the story, you have 70 % of what you could have had. No LP is going to be upset about that. And they're quite the opposite, because if you gave them that money 18 months ago, and then they put it into Sophia's fund, they're looking at it as, okay, there's a time value to money too. And then what if that company implodes? And that specific company had a lawsuit and a couple of challenges, if I remember correctly, with their competitors. And so I had a company that got to a billion dollar valuation. We sold 18 million of our position. we kept 80%. That company's now worth three or 400 million.

36:02We look like, and that was two years, three years ago, we sold it. We look like geniuses, return the fund. Our syndicate got a bunch of money. And we did it with Calm. I personally did it with Uber right when Masayoshi-san was offering to buy shares in the 30s. Now it seems crazy with Uber at 90 that I sold in the 30s. I feel great about that trade because I bought a house that doubled in value during that time. So then the truth is with the time value of money, maybe I left a third of 15 % of my investment. It just doesn't matter. What does matter is downside protection. So that's my sort of take on it.

36:38And man, I have only really two regrets. I was offered to sell some Robinhood at$30 a share, and we wound up distributing at, I think,$14 a share. When we distributed, I told everybody, hold your shares because it went public, and we were pre-seed investors, some people sold it, some people held it, that$14, now it's at$100. So that fund, the difference would have been like a, I don't know, 10X fund versus a 3X fund, if you held your shares or whatever, 4X fund versus 10X. I don't have the math in front of me, but it's significant. So I was like, oh, maybe I should have held my shares in Robinhood and held onto the public shares and distribute them two years later, which is what Sequoia has been doing quite effectively.

37:23Yeah, it's at 107 right now, Jason. Oh, what am I doing on this podcast? I'm rich. I buy. I'm going to go mountain biking. What am I doing here? No, it's like I woke up one day and hundreds of thousands of dollars in Robinhood shares that I got as my carry turned into millions of dollars in Robinhood shares. It's a great thing about being a VC. If you love the company when it was private and it makes it to public, why would you sell it when it's public? like unless the founders aren't there or something dramatic happened. I mean, obviously you have to re-underwrite it every year or every six months, but man, let your winners ride.

37:59And Jason, answering your question about Q2 Series B valuations, I have that for you right here, which is, you can see they are going up much like every other round, but the biggest gains that we're seeing are in the super late stage, the D plus era of venture. Does that match, Jason, what you expected to see? Yes. There's so much late stage money available because companies aren't going public until LPs and GPs see companies going public earlier. They're going to keep making these late stage investments out of their, what would have been their public allocation. They'll just be like, okay, I'll buy Stripe, SpaceX, Andro here before they go public because those companies probably should have gone public already.

38:49So on the point you made about profitability earlier, Jason, is that what happens when we have smaller team sizes and just faster revenue growth? Because to me, it sounds like startups are just getting more efficient overall. I'm curious if it's more of a mindset shift or if it's more just this is what happens when you spend less money by hiring fewer people. I mean, we've seen this step function happen, I think, three times in my career, like client server, cloud computing, slash mobile, that time period, and then now with AI. So if you keep lowering the time it takes to get a product to market and the amount of money, it used to be a year or two to get a product to market and$5 to$10 million.

39:27Then it became like a million dollars in six months. And now it's six weeks in an accelerator and$50 ,000 to get a product to market. I mean, it's not even comparable. So many more startup bets to make. That's why I'm trying to increase the surface area. That's my big, if I have any realization this year compared to last year is that surface area really matters because there's just so many more companies. So you have to take many more meetings, place many more bets. To your point, Ryan, like how did I not know about that company? That was Sequoia's experience when Techstars, Y Combinator, and AngelList came out.

40:04They were like, how do I not know about these companies? And they're like, I guess we can't know about them. There's just too many companies. Now it's, I think we're going to see, I don't know what Cambrian explosion means other than a big one. So somebody educate me, what is Cambrian? But whatever Cambrian, it sounds good, sounds intelligent, but I think it's like a 10X. I think we'll be sitting here in two years and have 10 times as many startups hitting product market fit than we did five years ago. The Cambrian explosion, Jason, was about 500 million years ago, and it was a rapid diversification of types of life.

40:36And the main hypothesis is that there's more oxygen, so more life got started. Yeah. So I knew that. I was testing you, Alex. I knew that came brain and plush. I only knew half of that. Now anyone, and it's going to get better and better, can use software to build their solutions. And so historically, you'd have some accountant in the Midwest maybe who really understands their space, understands their customers, understands their own problem. They can at least build like an MVP. And yeah, maybe the vibe-coded tools are not production ready. Call back to T perhaps. I don't know if it was vibe coded or not, but you know, I had some security issues, but it's gonna get better and better And so I think the number not think it's pretty clear to me that the number of builders are going to increase Now whether those are all startups and like venture backable companies is another question But we're gonna see a lot more building and creating and shipping So speaking of this I just invested this is the first angel check I've written since I started the fun because I just have been really focused on the fun But the founder of Lovable DM'd me like a week ago and was like, hey, we should do stuff together.

41:36And we got on a call and they were like, we want you to angel invest. And it's like, I think, you know, it's not going to be like a huge check. But, you know, they're the fastest, fastest growing startup ever. They just reached 100 million in ARR eight months after launching the product. They're at like a$1.8 billion valuation. Anton from Lovable. Yeah, I had him on the pod. It's a very impressive piece of software for this vibe coding. It really is. And this is kind of exactly what we're talking about. People are creating software in 48 hours and generating like tens of thousands of dollars worth of revenue on it.

42:10These aren't even necessarily startup founders. So I'm curious. I mean, I don't know. How much time have you spent thinking about something like Lovable? And as an angel, I think that's probably, I don't know if it's the highest. you know the it's not a late it's not late but it's probably maybe the most expensive um you know check i've ever written do you think i mean you're basically looking uh what's the sale price to sales ratio price being the valuation of the company sales being the revenue of the company price the sales should really just be valuation to revenue would be a cleaner way to say it so people would understand it.

42:50So is it a billion dollar company now or a 10 billion dollar company? It's 1.8 billion, but in eight months, they've reached a hundred million in ARR. So it's 18 times sales. So the velocity is like... So the question is, will that sales continue? And the thing I'm hearing against this, Sophia, is people are sampling these products at an extraordinary rate. I would say similar to when apps came out. Remember you'd buy a flashlight app for a dollar or you buy a game for$2.99 and like play it for five minutes and then never do it because you're like, well, it's only three bucks. Paying 20 bucks for lovable or any AI product, you'd use it for a couple of hours and then you cancel it or you use it for three months, you cancel it.

43:30That's gonna be the question is, is that quality revenue or is it brittle revenue? What's the revenue? Is it durable revenue? I think is the way I would say it versus brittle. Yeah, what's their turn? And the way you can determine that is when you talk to the customers, is this an essential part of their workflow? Is anybody here ripping out Slack or Notion or Coda if you use those things? I can't imagine ripping that out of my company or Google Docs ever. Have you seen Craft? Oh, use the glue? Is that glue or? No, no. It's like Notion, but easier to look at. Oh, really? I don't know that one.

44:10Craft it's called? I use Notion Coda, but once you get deep. I use it for the last LP update. Oh, fantastic. I read that. It looks great. It was very well designed. So I guess, Ryan, what are your thoughts on brittle versus resilient revenue? I mean, there, well, obviously, churn matters and retention matters and everything. But also there's this interesting time where, so Vatican, my partner on the phone, and I have chatted a bit about this more recently. And she wrote a blog post about this. Maybe I'll share the show notes or something later. But we're in an interesting time where the foundational layer, the foundational models that everyone is building upon are just getting better and better.

44:47And so without you as a builder, founder, doing anything, theoretically, your product is just getting better. And there are certain use cases where it hasn't reached that tipping point where the utility has met consumers' needs. But it will over time. And you building on top of these foundational layers, you don't need to do the heavy work. Not that it's difficult to build everything around it, but there's so much opportunity coming. And it's almost more about being in position and capturing users so that when the foundational models and AI is good enough to solve the problem that you're promising, then you're there.

45:20And so that's actually a shift. It's very different than cloud infrastructure. When cloud infrastructure came around, that shifted cloud computing, SaaS, all of that shifted dramatically. But that was more binary. It was like you put it in the cloud or you didn't. Maybe got a little faster, maybe got a little bit cheaper, but didn't foundationally change your underlying product and offering. And so this is something that we're looking at. This is a profound insight, Ryan. It's so good to talk to you. I haven't talked to you in a year, but you always have these like really good insights. So what you're saying is imagine if your AWS account, your S3 storage made your product better while you didn't ship any new product.

45:57that's like a really interesting thing because there's you improving your product and then there's your underlying technology improving your product so you could argue like aws got cheaper where the storage got cheaper or maybe it got marginally faster but that's not the same as what element llm's advancing is doing um sofia are you going to make that outside of your fund or inside of your fund outside of the fund i mean it's it's not in it's not with you know i'm investing at like sub 20 million. You got to talk to your LPAC, make sure as you, as one of your LPs, I'm saying, put it in the fund and make an exception.

46:31And it's a learning experience. I haven't done it yet, but I think it's like, I don't think it's, I don't think it would be a challenging 10 X. And I think if I was, you know, I do it in the fund. You don't want to get relationships with founders, even though I'm not like a lean check, I've found it pretty easy to contact a founder when they like, you know, subsequent fundraising and be like, Hey, anybody you want to buy? Can I sell some secondary shares? As an LP, I would say, do it in the fund and say, this is an experiment. We have 22 bets we're making. One of the bets, we thought we'd try a later stage one and see what we learned there.

47:07Obviously, we don't think this could be a 200X, but we think it'd be a 10X and that could be accretive to the fund. It would be a single or double and it would be lower risk. So we're going to maybe experiment in this fund and the next fund and having a couple of those, if it's a special circumstance where I have access. I did that with Cloud Kitchens. I have access to, and I'm friends with Travis. I had the opportunity to invest in his fund and my third fund for Cloud Kitchens. It was an extraordinarily high out of our normal investment zone, but I put 10 % of the fund in because I was like, I can bet on Travis to 10X, 10 % of the fund and return the fund.

47:44If he doubles it, great. If he triples it, great. It's all accretive and I have unique access. So that's like the unique access carve out that as an LP in your fund, I would be really upset if you didn't take it. I mean, it's a tiny check. It's just the ownership, like all of it. Don't worry about ownership. Just worry about what you think the return is. If you think it's low chance of not returning and it's high chance of returning low single digits, it fills in the fund. It may not be a fund. I feel good about it. I wouldn't be considering it as an angel check if I didn't. In order to return the fund, if you have 22 bets in the fund, it has to be 20X.

48:20So that's going to be hard to do. But 5X would be impossible. Wix is worth like 20 or 30 million or something like that. Billion. It's like billion, yeah. It's so funny you bring up that company because I was in a meeting with Kelly, who's running our syndicate. And I was asking for an update. and she said, yeah, I'm building a new portal. And I'm like, oh, okay, that's interesting. We hired a company to do that or we got a freelance developer. She's like, no, no, I'm building it. I've been vibe coding and lovable. Wanted to show it to you. It's a little early, but here's what it is. And I was like, oh, you could build a portal like AngelList for our private syndicate without being a coder.

49:04Okay, interesting. It feels like there's something big there. So Sophia, we had a hanging question about recycling. Do you recycle 10 % of your fund, Ryan? What's in your docs? What do you do? So both recycling and follow-on is flexible. So we don't have anything that's strict in our LPA or anything like that. My position with follow-on, and that kind of flows into recycling a bit, or it's related, I should say, is on the follow-on side, it's like, if we believe in this company, all things is being equal, even if we're not an investor, would we invest in this company at this valuation today, knowing what we know now?

49:39With regards to recycling, we recycle within a certain time period generally. So if we get returns, sometimes companies shut down, they return the capital, we recycle that capital. But if it's year six of a fund, year five of funds, we tend to distribute from there. I mean, by then we're also on another fund entirely. So that's how we've approached it. Yeah, I've recycled, I think, 10 % And I think in a couple of the funds that we've done, you know, it's, you have to play the game on the field. I think Sophia, since you were asking for advice. And for me, the game on the field is if there's no DPI and that provides the ID, you know, to your LPs, that's the more important thing than recycling.

50:19If you're already returned the fund, you're in the black, and it's just a matter of how much you're going to return. Yeah. then it feels like maybe recycle it if you have the opportunity. If Lovable's available and you had a million dollar return, putting a million into Lovable in a$10 million fund, and now it returns 5X, and now you're at 15 million returns of the fund. It could be whatever, really accretive. Jason, for founders out there who are listening and may not be familiar with capital recycling, can you just break that down for the folks out there? Super simple. In fund documents, when you get the first returns back, if you had a$10 million fund, you might say, we're going to recycle the first 10 % of funds that come back.

51:00So if you have any early wins, instead of distributing the million dollars, which LPs probably don't want a quick win of 10 % of what they put in. If somebody put in 100K, getting a 10K check is nice, but not life-changing. Hey, maybe we take that million. We know there's a winner in this portfolio. It's that Nectar company. And hey, let's put the million into Nectar and we'll be alongside True Ventures and we'll have even more ownership in what we believe is a really high conviction bet. So it's just a way to goose the eventual returns of the fund. Now, if you didn't have any winners in the fund or breakouts yet, and you couldn't identify them, then you probably would want to just distribute those returns to your LPs.

51:43Just because they probably don't want to take on extra risk at that point in time? Yeah, they would probably want you to work towards doubling or tripling the money. As an LPN 21 funds right now, I... Yeah, it's too many. I've been saying no to a lot of people. I said to everybody, if you double the money I gave you, and it's just basically like stock market returns, I'm happy because I don't need access to this capital anyway. It doesn't need to be liquid. It's like a wealth bomb for my daughters down the road. But if you quadruple it or 5X it, then it's meaningful for me. And I'm stoked. And if I can get bill relationships or get intelligence from Sophia, you know, she's got this great company, Nectar and what was it?

52:30Nectar Social? Yeah. Nectar Social. Like, okay. Like if I ask Sophia, can I get an intro? She'd be like, sure. You're an LP. Of course I'll give you an intro. Like, and Marc Andreessen specifically does this. He was an LP on my first fund, but we had a mini micro falling out because he wouldn't come on the pod. Then why are you an LP? And he's like, well, do I have to come on the pod to be an LP? And I said, you know, now that I think of it, yes. And he's like, okay. And I was like, okay. We haven't really spoken since. I mean, we had a couple little back and forths. That's even a little petty than why he blocked me.

53:03Okay. Well, on that note, Sophia, I think it's very interesting that you brought up Lovable because they are such an amazing breakout company from Sweden, if memory serves. And you're based over in the UK. So I'm curious, are AI startups in the European area performing as poorly as some American VCs think? Because there's been quite a meme lately of, you know, America builds, Europe regulates, Europe's dead, et cetera. But Lovable seems to break that mold. So I'm curious. I'm right here, Alex. You could just say Jason. So Jason hates Europe, especially France. No, I just don't think I'm going to find the next unicorn there in all likelihood.

53:36That's all. certainly not in france is that is that correct sophia or are we being a bit too um freedom fries over here i've been here four months right so i mean you're an expert you know you should speak with us definitely not an expert people you know i think you know i've spent a bunch of time with like brent holberman and founders forum and went to the founders forum event a couple months ago and spoke at london tech week and whatever so i'm like just immersing myself in the ecosystem But, you know, I think, you know, Founders Forum was really exciting. There were some exciting companies.

54:09The founder of Lovable spoke, founder of Prodcutty spoke. But in terms of Europe, I feel like Estonia is, there's like the concentration of startups in Estonia and the, you know, how it lends itself to being, you know, founder friendly or whatever. I read about it and I forgot the details, but it seems like Estonia is kind of having a moment. Isn't that where Skype was from originally? Am I crazy? Jason, back me up here, Skype? No, I think they were Swedes, but they might have been from an Eastern Bloc country. You might be right. There were three founders. So - We're both right. It was founded by Sweden, people from Sweden and Denmark, but was primarily developed in Estonia.

54:53Got it, yeah. So, you know, the Nordics are special because those people have a design aesthetic that is really high. and it's really cold and there's nothing to do for six months of the year. So they just work. Whereas in France, Italy, Spain, it's lovely. Why would you spend 12 hours working on your startup, 14 hours? Why would you give up a weekend? If I lived in Italy, I would not be working on my podcast and I would be out and about. I would be getting pasta, Branzino, know, whatever. And the lifestyle does drive. I've seen this in every single local market. If the lifestyle is amazing, you got rich parents, cost of living is low, people are going to go out and just have fun and live their life.

55:39If the nightlife sucks and there's nothing to do with like San Francisco, like literally if you're in Palo Alto, your last meal is 9 PM, unless you're going to like the 24 hour Denny's. Like there's like two choices, Denny's and like an Arby's by the airport. Like that's it. You know, even in an Outburger closes like at midnight in the Bay Area. This is why I never actually believed the VCs who said that Miami was the next big startup town. I'm like, it's way too much fun. I think it's kind of boring. I think San Francisco, I'm way more social. I have way more fun in San Francisco than Miami. That's because you like to go to hackathons.

56:11That's about you, Ryan. Yeah. Ryan's not going to the club or surfing. Are you surfing in LA? What are you doing? I went surfing the first time this year in Costa Rica. So you didn't get the bug. If you got the bug, you'd be out there surfing four days a week. That's when you know you're fucked with your investment is when the founder is surfing four or five days a week. L.A. is amazing for lifestyle. Sophia knows that. It is. I have zero company in L.A. I mean, getting people to work hard is my, like, I've developed strategies around it. But I have now realized like working hard and putting in 10, 12 hour days and effort is for 10 % of the population.

56:58Like having a career, I think is for 20 % of the population. I think just everybody else's live to work to live now. The number of people and it's a generational thing and it's no judgment. It's just the observation. I think that's changed. Big time. I just hosted Trust Fund's first founder residency in Mallorca for a week and so invited all my portfolio companies out. I was like, I rented this. I mean, the management fees on a$5 million fund aren't very high, but I dropped like it was probably a$20 ,000 expense. And I got this like seven room villa and was like, if you want to come out here, I've got this.

57:36I'll feed you. I ordered a chef one night. We went out to different restaurants. We went to the beach once. We went on a boat, which was like amazing. Did people co-work? They co-worked. Yeah. And I sat with them. I'm like, oh, cool. I get to be in Spain, be under the ocean. These guys get to sit in our pool. We had to talk about like, you know, whatever latest thing they're paying attention to or reading and all educate each other. I get to sit there and mentor them like on my time zone and everybody kind of gets what they want and like get to build relationships. So I'm really excited to institutionalize that into the fund because it's like a selfish - You know, it's - No, no, it's genius.

58:15It's just like no talks, no totally unstructured. What I love about your idea is that's going to inform your follow on investment. It's also, they're going to help each other. So we call them jam sessions. We do something similar, but it's just a jam session or a pod. So we have our companies get together and do a pod where they meet every month. and we have 11 investment team members. So they have about 30 potential founders in their pod. They get five to 10 to show up every month. They share what they're working on, what their challenge is on. You go around the circle and they help each other.

58:47And we're just facilitators. And founders love meeting with other founders because my thesis, Ryan, is founders are mutants. And I get to be Professor X. We're the school for mutants. and they feel uncomfortable around humans, but they feel very comfortable when they're with other mutants. When you see those great scenes from the X-Men movies when they're in the school together, they're like joyful and fun and nobody's being judged because like I can make an ice cube, you can light something on fire, I can walk through the walls. Yeah, we all have something we can do that's an incredible skill, but then you put them with humans and it's like they're misunderstood, and they're just, it's not fun.

59:29They don't trust. I mean, there's a lot of empathy and like trust that that's uh we used to actually do this at a weekend fund we just opened it up to the portfolio saying hey we're gonna do a zoom hang there's gonna be max five seven of us and we're just gonna chat about like what we're working on what challenges you have and uh yeah there's more trust and of course you put that same person in front of like a vc uh especially or their team like they're gonna act different they gotta they have to look confident they can't be honest uh it's a totally different it's an environmental thing is there a way that ongoing you guys do you have like a slack channel for your founders is there we have a slack instance Do they use it?

1:00:02It's unbelievably popular. We have 400 portfolio companies in the 12 years I've been doing this from a Sequoia Scout and AngelList syndicate to now. And we even have the failed companies in there that are shut down and we let them stay there and we have an accounting tax channel, a growth channel, and we have their channels and we have our entire investment team in each of the private channels for their companies and we'll talk to them there. And they help each other. It's not us leading it. They lead it. And then there's book phase. I think it's a great thing to do. Persistent, great place to do it.

1:00:39You have to also staff all these things. So as a fund, especially a small one, you gotta pick, like you can't start 20 programs. You gotta pick the three most effective that you enjoy. So what's great about the one you chose, Sophia, is you like to be in a great Airbnb in a city and try new food. You're like me. You're a foodie. You like to travel. Ryan likes to be on his computer. You can watch product hunt. He's obsessed with being on his computer. No, Ryan's a surfer. No, he's a surfer. Ryan has surfed once. I have. I have once. But Ryan really likes to be online. He's addicted to being online in online communities.

1:01:16He created one of the great online communities of all time, product hunt. You can always tell it's a great community if it still exists. Product hunt still exists. So that means it's a great community that got product. So that works for you, Ryan. You like to co-work. Sophia or I co-working for five hours on a Zoom might be death. Like we might be like, oh, it's draining to be on a Zoom. It's so draining, you guys. I have to go. Sorry. No, that's why we came here for an hour. All right. What are the news stories? Let's do a lightning round news stories. This has been great, guys. It's just great to catch up with you two and share notes.

1:01:48I was so intimidated. I still get so intimidated about joining podcasts for whatever reason. Unless, you know, most people just want me to babble about my life. And it's like really easy to talk about yourself But talking about smart people things I'm like am I smart? I'm just always asking myself if I'm smart So full of it I know you're shtick You're like I've only built a$350 million company It was overvalued Not your fault You've nailed it Like self-deprecating Imagine being inside my head It's fucked That's why I always send you I always send Sophia a thumbs up or a heart on her social just to let her know, like, you're doing good, girl.

1:02:33Keep going. You can do it. All right. You know, I always like to give everybody the ability to plug a startup or two or an investment or two that they're super excited about. What do you got, Sophia? Maybe, Alex, we could show it. Yeah. Somehow, you know, when you were talking about portfolio companies working together, one thing that's really cool is one of my portfolios, portfolios, well, Nectar Social is a customer of Agree.com and Agree are another one of the breakout companies that invested in Precise. They're basically going to replace DocuSign. And what they're creating is a signature to payments flow where when somebody signs an agreement and there's an invoice associated with it, they pay before the flow is over.

1:03:11So you don't necessarily have to send an invoice. And so they have a lot of SaaS companies. They work with beehive yeah i made a tick tock about them and i guess like they got like a four million customer with like four million dollars a year in revenue like who like found them on my tick tock which is like really cool um but yeah they've got like 40 000 customers um and they they came to me through i literally like look through the you know the pitches that come through the website and most of them are like consumer just like off thesis and i like i looked at this and it was like agreed up comment like what's this so they just literally like cold pitched me they could have gotten to me like we we know mutual people but they cold pitched me and I was like this and they just raised like a 10.2 million dollar seed round like a year after their pre-seed so yeah and Sophia you also mentioned baton yeah so baton market I invested at seed they just raised their their series A from Obvious Ventures.

1:04:14And so they are building a marketplace for SMBs to find qualified buyers and for people who want to buy mostly like local kind of ugly businesses, I guess, is the trend. You know, profitable businesses, someone who might be doing like a roll up of like dry cleaners or, you know, yoga studios or coffee shops. And so Baton Market makes it really easy for people to acquire companies. They're doing an amazing job. Awesome. Now, Ryan, you sent in three companies of yourself. I believe one of them was Deal, which we've already talked about. But you also mentioned Atlas, which is a very interesting company that I did not see coming.

1:04:53Yeah, Atlas is a, so I met Mohawk. We invested in the C round. It's gone on to raise a series A and B. And what they're building is a sort of a layer to apply for a visa, particularly starting with Indian travelers. Us in the U.S., we sort of have an advantage. We don't need to apply for visas for a lot of different places to travel. But for Indian consumers, they need to apply for visas. They have to go to these janky government websites and wait a long time. And they basically created this really clever wrapper, not in the negative sense, but a wrapper around this entire experience where you can actually apply and do everything within the mobile app.

1:05:26And it also shows your tracking and everything. And it's just a really interesting space. It's a massive market that I favorite part about Atlas is Mohawk in the very beginning, he was just like effectively building APIs on top of government websites. Web scraping was how they started. So it's like, all right, these government websites don't have APIs. They're not like modern. Let me just like effectively build our own API and build on top of that. And, you know, this is also a time like right before COVID hit, which is also an interesting time to be building a business like this. So anyway, I love the CEO Mohawk and what he's building there and just creating like more flexibility and And convenience with traveling is just, I think, a net positive for the world too.

1:06:05Okay, Jason, what do you got? So we just wrapped up launch Accelerator 34. And two companies that really got a lot of attention. One was Autolane, which is by a serial founder. He previously had a company called Neighborly, which rented storefronts. and neighborly was this great idea that died during COVID, victim of the COVID wars. But you would take a storefront and people could go there and rent it by the hour for a book club, for a rehearsal dinner, for an offsite. And people loved it. And there was all this extra, if you live in LA and you've been to like, I don't know, West Hollywood, there's all this storefronts or Montana, or there's all these storefronts everywhere.

1:06:54And so imagine taking one of them and making it an Airbnb essentially. Anyway, that failed. He came to me with this new idea, Auto Lane. He said, self-driving's here. And I said, yeah, I'm aware. I got a couple of investments in that space. And he said, people are going to be doing self-driving deliveries and pickups. I said, say more. He said, imagine your Walmart, HEB is the big chain of grocery stores in Texas where I live. And you have a Tesla coming to pick stuff up, a DoorDash car, an Uber. I'm like, well, they have all those coming. He's like, yeah, it's chaos already. Now imagine you add 10 different fleets of automated cars.

1:07:34So they're building the operating system to manage that. So they sell into a Walmart or to these other places. You can pull up the website. And that gives them software to know, hey, these are the parking spots for the automated vehicles. And Ryan owns a Tesla Model Y. Ryan, you might send your car to the central market and, or this Whole Foods. That's a distinct possibility. So instead of ordering from Instacart, imagine Ryan, you ordered from Whole Foods and then Whole Foods brought it out to the curb and put it in the back of your car. Autonomously, without me being there. Without you doing it, but it's your car.

1:08:19Yeah, right. So now, Sophia, imagine like, oh, you get dropped off at work, and then it goes and picks up your Erwan lunch and your team lunch, and then brings it back to your office and parks in your parking spot. How does that whole handoff at Erwan work? Then imagine Erwan or, I don't know, pick a company, Domino's Pizza decides they want to own the fleet. So Domino's Pizza says, okay, we're going to have five Model Ys, or Waymo is selling their technology to Toyota now, and Volkswagen has their own thing. So they buy five Volkswagens, and they decide they're going to send these Volkswagen IDs out to deliver pizza.

1:08:57Well, they still need an operating system to manage all that. So anyway, he's building that operating system and all the handoff, and he's super early. But what was amazing is this founder is a fundraising machine. And that's a new criteria for me. We have 13 criterias for investing. Product velocity is one of them, world-class design, serial founder, and alumni of our programs. This person has all of those, but he's also a fundraising machine. So I added that as one of our 14th fundraising machine as a tag for like a founder we love. Because we have some founders who are great at product velocity and great ideas and great at recruiting, but for some reason they can't raise money.

1:09:37Infuriating and frustrating because it's like they have all the other qualities. So anyway, I love that one. And then another one that's really interesting, this team I think came out of Google or Uber, I can't remember. And it's called Doctors. And you may have heard people are doing self-directed healthcare. And where you're seeing self-directed healthcare most of all is in travel, elective surgeries. I don't know what they call those, but elective surgeries and traveling to places where you have the highest rated providers and the lowest price - Medical tourism? Medical tourism. Thank you. So medical tourism is part of a subset of a bigger theme of self-directed healthcare, which I think like superpower, whoop, or eat sleep, that's all like self-directed healthcare.

1:10:31This is different. This is like elective. So people are going for dentistry to Mexico, stem cells to Panama, all types of augmentations and facelifts in South Korea. So they started with hair transplants in Turkey. And then their secret that they figured out that nobody else did is this is all happening on TikTok. And there was this fear that people had, is this safe? Should I do this? And then there's the people who have these centers in Turkey, and they're trying to convince people it's safe. And it turns out TikToks help people bridge that gap. And so that's their first one. And then the next one I didn't know was in Spain, Portugal, France, freezing your eggs and doing IVF is like$5 ,000.

1:11:21And in the United States, it's$30 ,000. So now people are going to two harvest cycles for 60 days. And it's like, so I asked them, like, when people do that, are they doing it because it's that much cheaper? Or are they doing it because they want to have a two-month vacation in Spain or Portugal or France?

1:11:44And can spend$5 ,000, get an Airbnb for$5 ,000, have an incredible, relaxing 60 days in France, harvest your stuff, but you need to have some marketplace between them. And so they're the marketplace between them. So there's two that just graduated last week, or this week, actually, from the Launch Accelerator. If you want to come to the Launch Accelerator, launch.co slash apply. We've done 34 cohorts. It's been really fun. All right. Well, friends, that brings brings us to a wrap for today. And Sophia, thank you so much for coming on. Where can people find Trust Fund and where can people find you on the great wide internet?

1:12:20Trustfund.vc and then I'm Sophia Amoruso pretty much everywhere. Pretty much everywhere. Instagram is, you're big on Instagram. TikTok? I don't spend as much time. I don't always cross post, but yeah, I'm just focused on Instagram. I'm an elder millennial. Yeah. Elder millennial Instagram, right, yeah. I'm a Gen X, so I'm on x.com slash Twitter, yeah. Where are you, Millennial Ryan? Millennial Ryan. I'm on Twitter. That's where I spend most of the time. RR Hoover. And yeah, I'm not on TikTok. I mean, there is a TikTok. You'll find it if you search, but I'm not going to say it's good content. And the website is weekend.fund, I believe.

1:13:00That's right. We're at launch.co. There you go. With no M. I'm still trying to get the launch.com, but I'm fine with the launch.co. Founder.university, which is our pre-accelerator where we teach people how to start companies, which will be coming to Saudi. Press release went out. I haven't really talked about it too much probably, but Founding University's second city in the world will be after the United States is going to be in Saudi. And then I'll probably bring it to two other countries in 2026 or announced two countries in 2026. And I'm at Jason on Instagram and at Jason on the Twitter X.

1:13:34All right, well, we're back on Friday. Thank you all very much. We'll see you then. This has been Twist. Thank you.