Logan Allin and Neil Datta on which startups AI puts at risk, tech regulation, and H-1B reform | E1975

0:00We have a number of companies that have filed to go public or in the IPO queue. they look like public companies and they just won't get out i love dan premac's piece the other day where he's like hey just a reminder the ipo windows open people right let's go you're going to need the team in-house to be able to separate from the roadkill and the disruptive companies right so you know obviously like the aspect of ai washing that we're seeing in startup community um the same thing we saw with kind of greenwashing and in the climate space uh it's important for VCs to have the technical skill set in-house to be able to determine when their startups are actually building good technology and in a position to do what they said they'll do.

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1:35Visit Venture.com today to schedule an HR evaluation and learn how they can help you. Welcome back to this week's Liquidity Podcast. With me today, I have Logan Allen from FinCapital. Next, we have Neil Data from NKD Advisory. Of course, we have Jason Calacanis from The Launch Fund. I'm your moderator, David Weisbert, co-founder of 10x Capital. Today, we have several interesting topics to discuss. Vinod Khosla sounds off on AI developments and regulation at the Collision Conference. Trump weighs in on H-1B visas and green cards. And Carter releases data showing how long it actually takes to succeed in a startup.

2:15We'll end the show with the latest three investments from the guests. Let's dive right in. And hey, as we start here, I just wanted to say thank you for a moment to some of the amazing partners we had at the Liquidity event in June in Napa. David, a great event. I think you had a good time. Yeah. Yeah, it was a great time. So thanks to some of the folks who sponsored dinner and lunch, Aventus Advisory. They're a leader in on-demand finance and accounting support venture. They provide end-to-end solutions for payroll, HR benefits, and risk management. and Forge Global, which provides investors and shareholders a transparent view of the private markets.

2:50Thank you so much to our partners. All right, big docket. Let's go. Yeah, let's go. So Benoît Khosla spoke at the Collision Conference in Toronto and discussed several pretty interesting topics. He's not very interested in dealmaking, hasn't personally taken a single dollar of fees since starting COSLA 18 years ago, his concern of the U.S. going the way of the EU, which has regulated itself out of leading technology innovation, and the implicit nod of confidence that Apple and Tim Cook has bestowed on Sam Altman through the Apple OpenAI deal, which he believes expresses confidence into Sam Altman's ability to lead developments in AI over the next five to 10 years.

3:35Neil, you got a chance to listen to the talk. What did you think about the notes talk well it's not surprising to hear a prominent venture capitalist push back against regulators i think at a high level i do agree with his premise that the the passage of the act is going to have a profound impact on the industry but however i think it's much more nuanced than the standard argument of government overreach in terms of regulating new technology may or may not fully fully comprehend and i think uh the act itself if you look at it there's two prime areas is a focus, right? There's the privacy section and the kind of risk section.

4:10And the privacy section, it mentions things like deep fakes and social scoring systems, and it creates controls around that. And I think stuff like that, we could all agree about and get behind. The area that I think is concerning for hardware makers and software makers is the inclusion of, you know, companies based in America trying to sell product or software to the EU. However, you know, if you look at the history of the EU, the EU historically has taken a leadership role in regulating technology. The two instances I could think of is in 2002, the ePrivacy Act, which effectively forced websites to disclose cookies and tracking, which we all enjoy today.

4:48The other thing that is GDPR, which ultimately led to things like CCPA and other privacy laws around the world. So ultimately, you know, the EU has, you know, historically taken the kind of first mover approach in terms of regulating technology. But, you know, a lot of it is TBD. So I think it's super nuanced and, you know, worthy of, you know, regulation playing out. Jason, you've talked about kind of the side effects of EU regulation, how some businesses may avoid the region. What are your thoughts on EU and its position on a global scale? Yeah, I mean, it's a pretty tight filter. I think most of the companies in M &A that are most of the, let's say, ticky tacky, you know, what would we call them tactics that companies are getting dinged by in the EU are manageable and other ones are seismic.

5:45right and so it's very early to start regulating ai i think it's all regulatory capture and generally we just need to use existing laws and maybe keep an eye on it so i don't mind like an exploratory committee and that kind of stuff i do get a little concerned when they want to regulate something so early on because we don't even really know what we got yet now when we look at something like um usbc cables and iphones and versus lightning in a free market one might suspect like you could pick whatever charging cable you wanted for your device the eu put so much pressure on apple they uh moved to putting a usbc uh inside of every device which has been great for consumers right so you know i get the free market person in me says like they should be able to use whatever cable they want and the environmentalist and as a consumer it's just so much better that everybody's on a usbc it's better for the environment so i don't know where to stand on that one um i do think opening up an interoperability that's a really great speeding ticket to give a company like apple where you know they're so heavy-handed oh you can't even tell people about a better deal they could get in buying direct from you um so i like those kind of actions i don't like the blocking of M &A it's killing the industry it's taken an entire swath of returns away from our LPs away from founders and you know it's just so important to have M &A back on the table you know blocking Figma because you know some regulators in the UK don't want it to happen seems crazy to me and so I do think there's this possibility eventually where people will say you know what i'm just not going to launch my products in a region that's 10 of my revenue but that's just too onerous to deal with and that's where the eu might overplay their hand and i think we're we're kind of getting towards that area where people might just say it's not worth even launching my product in the eu or i'm going to launch this like sub product it'll be like here's my salesforce or hubspot or figma for eu under some shell company or something you know unnatural apps to get around.

8:04Regulators could be coming for Europe, I think. Logan, you're nodding your head. You've built quite a big franchise at FIN. How do M &As play out in your portfolio? How critical are they to the success of your funds? Critical, and I'd agree with Jason just on certainly the Justice Department and antitrust environment here in the US, but also in the UK and EU. I was just in Europe for two weeks and And actually, AI regulation was certainly a hot topic. The other topic was tax, right? So Labor Party looks like they're going to win here in London. And my colleague in London is sitting there looking at taxes that are going to go from 28 % on his carried interest to 50%, right?

8:46And I had a dinner for about 40 VCs and half the room raised their hand when I asked them if anybody was thinking about leaving as a result of the tax issues. I think that's a huge problem. And so you think about just the regulation environment, the tax environment, those are spelling challenges just in terms of trying to be constructive about investing in the UK and EU where we have 35 companies. On the M &A side, we just announced an exit a couple hours ago with a company of ours called Salt selling to Chime. M &A is the lifeblood of venture capital, certainly in terms of our early stage book.

9:20Our PE book, where we invest from growth to pre-IPO exclusively in fintech software, we're underwriting to an IPO, but inevitably there's a dual track process. So M &A comes in place there as well. So to Jason's point, we're concerned about the uncertainty and certainly the timeframe that it requires to be thoughtful and diligent and check all the boxes in terms of making sure a company will actually successfully prosecute an acquisition. As related to AI and Vinod's comments, we fully agree. There's just going to be a ton of companies that will become roadkill here as they're trying to wrap existing LLMs and they're not really building any true IP or defensible moats around their business.

10:03We're focused on vertical applications in AI and then orchestration of AI in the enterprise, which is particularly important to the end customers we serve that have to deploy AI in many cases on premise. So very excited about our investments in AI. We have 20 companies there and certainly more to come. It's interesting you mentioned taxation. Some of the forward-looking LPs that I talk are rebalancing some of their portfolios towards venture capital with the assumption that all these things interplay with each other, specifically on the national debt in the US. their assertion is that in five to ten years we're going to have to increase the capital gains on everything including long-term gains and with exemptions like qualified small business stocks allows investors in the venture ecosystem to essentially pay no federal and sometimes no state income tax on their gains so a lot of people are kind of thinking one step ahead in the u.s in terms of investing into asset classes that are going to be much more tax advantaged well just to that point david jurisdiction matters and if you start putting your thumb on the scale too much people in today's era are very willing to move jurisdiction this is something new i remember when i was starting my career in the 80s 90s you know you're like you have to be in new york or you had to be in you know the bay area and now people are in salt lake city doing great work they're in austin they're in houston they're in miami they're in la they could be in any jurisdiction and then people are now starting to move to singapore or to uae abu dhabi dubai and these places are giving incredible incentives why would a venture capitalist in a large firm ever want to live in a jurisdiction that just killed them on the you know with 50 taxes on capital gains and when you could move to dubai or you could move to florida or you know pick a location i think you're going to see a lot of young people and maybe even some of the oldsters who are at the end of their career saying hey how do i manage this wealth transfer just pick new jurisdictions you saw the texas stock exchange coming uh so this is serious momentum and i think there's the you have covid in some way and remote work as the accelerant right if you can manage people and you could have a couple of people on the ground in europe but have your headquarters in dubai or have your headquarters in miami and your analysts or you go to broadway shows every now and again in new york for a couple weeks you kind of can get the best of the city and the best of the proper jurisdiction for running your business what person wouldn't do that a person with kids in school maybe you know that would be the only reason to not do it i can think of it is interesting we just ran the simulation as you mentioned and covid one of simulations was moving to miami we had so many people move from new york to san francisco and some people came back but the people that really remain in miami are investors and i think governments should be thoughtful in terms of the regulations that they make for investors versus startup entrepreneurs many of the top startup entrepreneurs have decided to now go back to San Francisco, especially AI entrepreneurs, because there's such a ecosystem there.

13:21But I think governments that overregulate investors will find it to be a slightly different story. Hey, startups, you've probably heard the saying better, faster, cheaper, pick any two. Well, AI has changed that equation. And Intercom is all in on AI. Intercom built its first AI customer service platform so that no company has to compromise when it comes to caring for their customers or saving money and controlling costs. These things are important. Intercom's AI tools are so smart that 50 % of their customers have their issues resolved in just seconds. That's thanks to FIN, an AI co-pilot. Yes, Intercom has an AI co-pilot.

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14:43That's right, 90 % off because intercom and the team over there love startups and innovation as much as we do. So go to intercom.com slash twist to apply. Or if you prefer, you can just do an email at startups at intercom.io. Logan, you also had some thoughts on what the note was saying around the other topics. What are your thoughts there? Yeah. So I think, you know, thematically, we're all seeing some frothiness in AI, where you've got, you know, several very, very smart PhD researchers founding a company with no use cases in mind, right? They're founding a company to found a company, and then they're backing into, you know, hopefully some use cases and monetization over time, we have to remember, open AI was founded in 2015.

15:28First use case launched in 2022. to. Obviously, there were some non-for-profit aspects to that and some pivot, but that was a very lengthy period of time. We're now starting to see founders emerge from the mistrils, the open AIs, the anthropics, right? Because they're seeing real pain points and real use cases out in the market and spinning out to start their own companies. And our view being a financial services and fintech investor is that there's got to be application verticals within fintechs that could be CFO tech stack tools, it could be compliance automation, it could be KYB, KYC, AML automation, could be operational and docs processing, it could be improving your cyber capabilities in terms of deep fakes, which we think is a huge problem, particularly in the bank and the wealth management worlds.

16:16Or two, you could be helping people orchestrate, right? So we've invested in several companies on the orchestration side, like Articulate and Liminal, and we're going to announce another one in September that's just focused on how do I deploy on-prem because everybody has to remember less than 8 % of bank data is in the cloud. The banks have not adopted the cloud. And so they can't just ship their data outside of their four walls and expect to leverage SaaS tools for all the regulatory reasons that are familiar to all of us and only getting more constrained. So I liked his comments. And I frankly think he was pointing out some of the pretenders and those that will get consolidated or be roadkill in his words versus ones that will have sustainable long-term advantages.

16:57On the Apple side, the OpenAI partnership was interesting, but I think as we all know, they're going to look at additional partnerships much like Microsoft has. And in addition to that, just on the European comments, Apple announced that they're just not going to turn on AI capabilities in Europe, to Jason's point. It's like we're going to have like subversions across different countries because of regulation, and that's going to be to the detriment of small businesses and consumers ultimately. Yeah, you know, it's globalization is really interesting. And I remember when Airbnb and Uber were going around the planet, you know, sometimes you'd want to fight the good fight in a region.

17:32Other times you just said, you know what, we don't need to be in Austin. We don't need to be in Vegas. We'll be everywhere else. And then you know what happened? People in Austin and people in Vegas were like, we need Lyft. We need Uber. We need Airbnb. Like we want these opportunities. Why are you? And then you all of a sudden as a politician become pretty unpopular. popular so if you're in europe and you can't use certain ai features then you're going to get a vpn and you're going to vpn to get those features you'll ride around the government if you have means or intelligence and if you don't you're going to start complaining uh and what are they going to do like you i have a vpn and i'm you know like i can watch bbc with a vpn uh because it's free and they can use microsoft's co-pilot or apple's co-pilot because they use a vpn i mean it's just we're getting to the point of silliness here uh with too many restrictions now it's your decision in a society to do that but aren't the politicians supposed to work for the benefit of their citizens and like i don't see how this benefits it and if you don't adopt ai man your country is going to get decimated how are employees you know for knowledge work companies in france or in germany going to compete against knowledge workers in manila in the philippines or singapore or portugal or you know south america if they do have the tools the answer is you're not going to compete and then you're not going to get work and then work will go to places where it's most efficient cost and skill you're going to lose on both not not a great idea neil how do you look to navigate ai world when it comes to investing into venture managers i mean i think the jason's point just like you know these companies need to uh uh adopt ai into their processes the same as true of venture managers and lps are are becoming cognizant of this and incorporating this into their their diligence process and ultimately i think you know what it does is it creates a significant advantage for um vcs who historically have used data and have been quantitatively focused and you know over time have been collecting this this this proprietary data whether they're focused on a particular sector or a particular space in the market, I think, you know, to the extent you're not doing this, you're going to get left behind.

19:50The other thing I think is really critical to Jason's point as well is you're going to need the team in-house to be able to separate from the roadkill and the disruptive companies, right? So, you know, obviously, like the aspect of AI washing that we're seeing in startup community, the same thing we saw with kind of greenwashing in the climate space, it's important for VCs to have the technical skill set in-house to be able to determine when their startups are actually doing, building good technology and in a position to do what they said they'll do. Just on the one point about the Apple deal with OpenAI, they went through great lengths to talk about that deal being swappable, hot swappable.

20:33I think they're going to swap it out the second they get a chance and i think it's going to get swapped out in one of two ways either to the highest bidder like they did with google and search uh in which case your apple stock's going to go up because that's going to be a pretty penny to be the default llm on there and these are cash rich companies so can you imagine you know claude uh grok and open ai and gemini all fighting it out to become the default or not to mention microsoft's version of open ai and their co-pilot fighting it to be the co-pilot on apple's devices with those high-end consumers man that could cost 10 20 billion dollars a year who knows i mean that could be just a huge check every year and then the other possibility is they they work on the open source projects and build their own and have complete control which i think they plugged a hole because they didn't want siri to be completely embarrassing and have their phone fall behind and then have other people saying look look what you can do on an android phone that you can't do on an iphone so it was existential for them to plug the siri embarrassment and have the ability for you to say like hey can you you know start my order in doordash or can you call my uber and have siri actually be able to do that correctly with ai but yeah this is too core to their business they're not going to give up their their iphone franchise to anybody i bet they have their own version that they'll slot in there or they will buy a company or they'll charge the highest bidder i i give like open ai almost no credit for this i think it's like an instant swap out i don't give them any credit they just happen to be six months ahead of everybody else right now i would almost i would place a bet in five years they do not have the default or if they do have the default they're paying billions a year for it yeah i was going to jump in and say i i think that they'll rather than being one winner there'll be multiple winners right so there may be somebody in the kind of the the you know financial market space where bloomberg gpt does plays one role in kind of the medical space and you know so i you know i i take the view that the data is so differentiated the folks that have the best data in their sectors mail to mail-to-mail winners so you think siri fires off the bloomberg when you ask a stock question sure sure it's off like the web md or whoever's version gemini if it's better for health that's actually a really clever idea i was thinking of it more like the search engine swapping or your browser swapping but what you're saying is there this might be so important there you might have 10 defaults who do i want for medical who do i want for entertainment who do i want for news who do i want for financial news that's actually a really good idea the data sits in different places so it'd be more efficient from a rather than having it centralized and a better user experience i think most importantly it is wild that it seems like we're living in two different decades you take your phone and you're like in 1990 and then you put on your computer and you're like in 2030, and you're switching between these different data sources.

23:30So it's wild to see that two of the largest consumer brands, Amazon, Apple, have basically been playing defense this entire time. It's a very predictable problem set that they haven't gone in front of. All right, you might not realize this, but we're all producing and consuming more voice data than ever before. What is voice data? That basically means any audio recording, like the one you're hearing right now of human speech, or it could be video content, like the library of video content you have at your company or startup. If you're building a product that uses voice data, you need to check out Assembly AI.

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25:28Since the episode aired, the Trump campaign has had to walk back the statements a bit, clarifying that it would not automatically be given to anyone that graduates any program and that there would be further vetting. Several conservative groups, such as the Conservative Immigration Accountability Project, have criticized the policy, saying that U.S. immigration policy must serve the interests of all Americans, not just the interests of elite business leaders who seek cheap labor. Logan, what are your thoughts on this? So I was at Stanford Business School graduation in 2013. I was graduating and Mike Bloomberg was speaking and he said emphatically, and I totally agree with the statement that we need to staple a green card or visa to every single diploma in this football stadium.

26:11And it's done at the Stanford football stadium. And he meant that more broadly, obviously, than the cohort that was graduating that year. And I think we do such a poor job retaining talented immigrants in this country. And obviously, the NVCA, PitchBook, there's been a ton of data supporting the obvious, which is immigrants are founding amazing companies, particularly in technology in this country. And we treat them like second-class citizens when we should be bear-hugging them. And so we, for example, pay for all Visa and green card sponsorships within our own firm. We're sponsoring several now, and it's one of my kind of favorite things to do as a leader.

26:51And I think other VC and PE investors and certainly companies and technology should be advocating and pressing on this. And immigration policy in this country is broken. This administration has tried to make strides to fix it, but they focused on the border immigration versus, I think, what is more low-hanging fruit, which is the H-1Bs. and the talent that is leaving this country to go either back home or to other countries that are more accepting of them, like Canada, for example. So I think Trump was hopefully leaning into saying the right things and then walked it back a little bit. But I'm hopeful that we continue in that direction.

27:31I agree 100 % with both Logan and Mike Bloomberg. I think, you know, one thing that both parties, I think, get wrong is that this belief that, you know, immigrants themselves want open borders. And I think it's just not true, right? Immigrants, particularly, you know, my family's from India, and, you know, I speak to immigrants all the time. And all the immigrants I speak to are fiercely patriotic and really like the first in terms of, you know, being pro-America and being kind of the concept of being an American. The concept of, you know, as Americans, we have the best universities and institutions in the world, and it's just silly that we force them out after training them and educating them.

28:13So, you know, 100 % agree, and hopefully it's something we can pull off. and neil's got a great insight there about immigrants they understand the value of immigrating to the country they understand you know in how hard it is to do that and if they came in legally it feels profoundly unfair at least the ones i've talked to when somebody you know crosses the border illegally and you know they also understand the pain and suffering because they might know somebody who did make that really difficult journey so you know this is a highly charged issue the reason i pushed trump on it is i've been trying for close to a decade now to change the dialogue and reframe it reframing in psychology is just you know like how you perceive the world how you perceive a challenge or you know uh something bad that happens to you etc so if you reframe it from immigrants coming across the border to commit crimes and to take our jobs and take lower wages let's reframe it as uh recruiting okay if we were going to recruit for this great country if we are a sports team who would we want to recruit well we'd want to look at the current team and say hey what are we missing do we need a center do we need a point guard do we need three point shooting do we need a wing what do we need on the team what do we need on the team we know that we need people to work in health care we don't have enough of those we need people who are nurses and doctors we got a shortage we need labor to work in restaurants we have a shortage of the of that specific type of labor we also need people who want to create companies and be competitive do we want people going back to india to saudi to china to australia and creating their great company here or would rather they be building the companies here and we get the tax and we get the the jobs so there's a big picture you know that you kind of have to reframe here there's recruiting there's illegally entering the country and then there's compassionate immigration let's separate these things and make them less politicized and then put numbers on each one compassionate immigration that could be you know whatever a hundred thousand people a year from countries where they are absolutely going to be politically prosecuted if they if they stay uh workers well that should just be based on our unemployment rate if the unemployment rate is low single digits we're going to accept a million people if it's 10 we're going to accept nobody right we're going to keep it we're going to turn it off until the unemployment rate comes back down you could actually have a very thoughtful logical mathematical you know and recruiting based discussion on this and you know when he when when i saw them walk back my question and me pressing him on it what i saw was there's a base of people who lost their jobs when you know bush clinton globalization obama we we gave jobs to china we moved factories out of here that's the people who are there i don't want to say pandering but they're trying to address there and they're also trying to address the issue of terrorism yeah of course we don't want this to be a back end for terrorists to come to the country yeah some basic vetting obviously and um yeah we don't want people to hack the system so it should be you know people with green cards are tracked in a way that americans aren't tracked like you will get pulled into an office with a green card you will get stopped at customs with a green card anybody who has a family member or friend who's had a green card understands the anxiety they go through just going home can i get back in are they going to stop me so that's kind of built into the system i think that's what the trump campaign was doing is just making sure that those constituents don't feel like he's talking out of both sides of his mouth and i i actually like the clarification because i didn't even think oh yeah some terrorist group's gonna send 100 people here to go to university of phoenix shout out university of phoenix no offense and get some fugazi degree or something and you know they blow up a building god forbid so i kind of like the walk back in a way.

32:08And Trump was, I think Trump 2.0 is being very thoughtful, and he's winning a lot of moderates. So maybe Democrats need to take some notes. I don't think this is a partisan issue. I think this is a messaging issue. There's not enough people really advocating for immigrants, specifically highly skilled immigrants. The NVCA is really taking a leadership role here, but it's just one smaller group that's pushing for Just to give you some stats, 44 % of Fortune 500 companies were founded by immigrants or their children. This isn't new tech companies. These are the Fortune 500, the bread and butter companies of the economy.

32:4976 % of patents awarded at the top 10 universities have at least one foreign-born inventor as well. And one of the interesting things about this policy is that we actually are able to A-B test it. Trump alluded to it. But there are people that were not given green cards that go back to India or go back to China or even go back to Canada or Europe and start these multi-billion dollar companies. And that has enormous multiplier effects on those economies. And that really robs us of the next generation of great companies. And one of the reasons the US has really incentivized entrepreneurship is because entrepreneurship and the benefits of it don't just accrue to the founder.

33:37It's not just the founder getting rich and getting a tax break. It's also the employees. It's also the employees' taxes, the goods that they buy. All that effect goes into the economy. So I think if people really were educated on the multiplier effect that every highly skilled immigrant came in the country, I think it would go from a partisan issue to just more of a question of nuance. Do you want to really bring in everybody from a two-year degree? Or maybe we should start with PhDs. Why is it that we have a single PhD in the United States that doesn't automatically get a green card? To me, that's a very low hanging fruit.

34:15Or maybe we start with four year degrees. So I think we really need to continue talking about it and continue, you know, leading with data on this issue. And I think it's going to be something that over time, just like anything that's kind of an obvious policy over time, it'll continue to gain steam and hopefully either in the Trump or Biden second term, something that we could get passed through. I mean, did you guys see the interview? Do you guys have any questions for me on it or any thoughts on it? Jason, what was your biggest surprise? a surprise um you know the h-1b visa was a really great moment i think for him to you know show hey it's not just all xenophobia and you know that was kind of what that first administration his first term felt like and if he has a second term i think maybe lowering that rhetoric and just having a more pragmatic approach to immigration would settle down a lot of the i think tension about his presidency and his personality i think overall his tone is on at least on the on a business program like all in was very um what i put in that trump 2.0 not insulting people not that like rhetoric that makes everybody go oh god here we go again it's gonna be chaos and i think he's running against himself i think trump is in 2024 is running against trump's chaotic presidency the first time around and i think people are going to make the decision a lot of moderates of do they believe this time will be more or less chaotic than the last time january 6th the you know trying to overthrow the election results you know depending on how strongly you feel about those two instances and just the general chaotic nature of it and so if he can come across as presidential and refined and less chaotic and more and less name calling and less i'm going to be your retribution that kind of stuff i think turns off the moderates and they're going to flock to biden if he's moderately cognizant so to answer your question he did a really good job um and i didn't expect him to be so presidential and focused and deft at speaking to the business community and he's not my preferred candidate but boy does he come across better in that interview than biden does generally speaking to moderates and i'm just watching those moderates and women and wondering i think women aren't going to vote for him but moderates might and i think he's got a pretty good chance of winning this i don't know if you saw nate silver and other folks coming out today they think he's got like maybe a two-thirds chance of winning yeah 66 percent two there it's maybe jason you're still officially undecided what are your top two issues top two issues um you know number one i think we have to cut spending you know freeberg and i are both you know concerned about that and we talked about it here earlier you know this existential spending is crazy so we need less government um so that's definitely number one for me um i'm not too worried about the foreign wars i'll be honest i think actually they're pretty contained wars are terrible there's always wars and these two seem to be somewhat contained right uh you know given how horrific wars can be um and i do think we need to have a very pro-business environment so i'll put taxes mna you know uh antitrust and immigration recruitment all in that bucket of just being pro-business.

37:56We have to keep pushing our advantage in building these next generation of companies like we all do here as capital allocators and founders do because the world is getting decided by how good your companies do. It's really that simple. If you have jobs, if you have the best companies, you have the best tax base, you can basically win the global competition with your balance sheet. And I'm worried about our balance sheet. So I guess both of those issues are balance sheet related revenues coming in incentives to build great companies it's like a uh an rand novel right now what are your number one and two issues everybody since we're we're already here in the deep end of the political pool issue one issue two i i think for me immigration is is important um just having young children living in new york and and you know the the crime piece is is something that i worry about and then the economy You know, inflation, jobs, just general feeling, consumer sentiment, you know, the way people are feeling obviously has a lot of effects on spending and business activity and startups and things like that.

38:58on my end definitely spend and and business environment as well jason i think um your spends out of control we're now getting notified by other countries including the eu and uk uh banks uh respectively central government saying hey look us are spending way too much money and we continue to to do that particularly given interest rates uh our servicing on the existing debt is is uh is incredibly high approaching a trillion right so that that can't persist. On the business environment, we continue to see laws around carried interest adjustments, and that's just going to create really bad negative incentive loops.

39:37We saw what happened when the California government in the middle of COVID was going to pass a surcharge on carried interest. And we're all emailing Gavin and saying, hey, if this happens, we're out. We're all searching for homes in Tahoe, Miami, and Austin around those times, and many left, and many have not come back. I think, you know, third is on defense and what we're doing there. I do agree. Hopefully these wars are contained. I agree with some of the, hey, we need to fix our own problems at home versus sending money out, but we have a global role to play as we always have. And that will ultimately reap the benefits of stability globally that we've had long-term.

40:17And so, it's going to be a very interesting election. I think the challenge is that it's creating uncertainty alongside of obviously interest rates on the IPO environment. And between that and the antitrust issues, DPI is a huge question mark for so many. And that's that flywheel effect of LP return, and then commitments, and then deployment is broken for many of us. And I think that's going to continue to create meaningful challenges in the fundraising environment and create challenges and extended round dynamics for the portfolio companies. It could basically take this incredible flywheel we have and we're literally throwing junk into it.

40:56It's like, let the flywheel go. Stop throwing sticks and rocks and wrenches into the flywheel. We have the best capitalistic flywheel ever created in humanity and we're somehow trying to, you know, muck it up. We should be doing the opposite. We should be trying to accelerate it, make it an even more well-oiled machine. We should have more company formation, more exits, more IPOs, more winning. And all of it trickles down. All of it results in that lowest unemployment of our lifetime. Right. And if we keep screwing with it and there's less companies and less M &A and less capital allocation, you know, a lot of people are retiring and you're not going to have a lot of productivity in the economy.

41:41And that's what we want. We want a productive economy where people are spending and they're clenching it up. don't clench up the machine i think the math on on the national budget and on the economy in general is very simple it's revenue in and costs and the only non-zero-sum aspect of that is company creation is entrepreneurship it's it's the thing that makes everything else possible and although people argue about lower taxes versus more entitlements you know that money has to come from somewhere so i think if we just refocus the debate on how we can make it a better economy it would be a rising tide that lifts all boats.