Reddit’s IPO, Consumer vs. Enterprise AI, and Sam Altman’s New Fund and more! | E1903

29:50The round size has got crazy the last two years. There's so much money, so many investors. Everyone's raising too much money. Founders have too much money and it becomes an issue. So I think it's just the best of the ecosystem. I think it's actually okay to raise less and to need less capital. It's not only okay, it's preferable. because man when a founder is sitting on 100 million or 200 million in cash in their bank account michael you're shaking your head like i think you've experienced this as well like it it f's with your head oh yeah i mean look at that deposit and then you see five percent you see 10 million dollars in interest a year you know 800 000 a month in interest coming in and you're like oh wow i can do crazy things with large piles of cash unnatural things Yes.

30:37You feel like you have to. The crazy off-sites and offices and hiring, and then it's time to get fit. And it's like, wait, we just cut all these things out. And we're actually, not only are we okay, we're actually better. We're moving faster. So it does feel like a drug. Raising too much money can be a real negative. This is back when we had offices. I always knew when a startup was in trouble, when the founders were meeting with architects and, you know, designing the lobby or like the open office areas and stuff like that. I'm like, what does this have to do with the business? Like just find an office space and no, no, we're creating a culture.

31:21We need to have these like pods and we're going to have this area. We have a ping pong table area. We're going to have this room and that room. And I was kind of like, this seems like an awful lot of cognitive load. And you know what? I see it with VC friends. They make some big win. And now they're meeting with architects to build their dream home. And I'm always like, you know what would be really good? Is to just build a home that's already finished. And it may not be my dream home, but close enough. And I can get back to work and back to my family. So prioritization and focus is so key. Yeah, absolutely.

31:51And we just went through so much of that as well. Just too much money in the system and so much questionable judgment. I mean, we feel like we're going to be kind of living through that for at least another quarter or two here. And we certainly see from LPs and institutional LPs, they're still living through the kind of ugliness of that. So it's definitely a challenge. Ryan, you've seen companies kind of get bloated. Have you seen any companies recover or is that kind of just, you know, psychologically they're addicted to the money and they can no longer recover? I've totally seen recoveries. And it's amazing, but it's also frustrating that, you know, that it kind of took, you know, a forcing function of the markets to do it.

32:39But I do think, though, there are some teams and some founders where the money kind of hid the issues. And they weren't able to kind of build an efficient business. Like there just wasn't true product market fit. You know, you have to keep in mind during this like Zerp era, it was just easier to sell. And so, you know, I've definitely... There are startups where maybe we didn't invest, but they were growing like crazy. And then the market turns and not only are they not growing, like they're shrinking. but certainly there are companies that had to get more efficient that did and they're better for it and they're growing into a valuation that was high but won't be that high in another year or so.

33:21How do you have that conversation, Jason? Because a lot of these companies are very hot and you want to get into the next round, you want to get your pro rata. How do you have that conversation with companies around facing reality? Yeah, you know, people who select me as an investor and a partner you know they know that they're getting jacal not to talk about myself in the third person but they know my brand is like candid kid from brooklyn i'm going to give it to you straight and so i tell them like i've seen this movie before and if you start blowing money this quickly and you take that 100 million and you divide it by 18 months we're going to be sitting here a month 12 or 14 and you're going to be regretting this decision instead of saying this is what i need over the next 18 months to accomplish these tasks and then putting the money out of your mind.

34:10And it was the same conversation I had with people about venture debt. Now, sometimes I'm successful. And during this, I would say two out of three times I was not. And so I'll give you the perfect example. Every founder of a company without product market fit wanted to add one to $5 million worth of venture debt on their round. And David Sachs and I had long talks about this on all in and previously i'm just like what is editing boards we were on together why are we doing this before we have product murky fit we got cash in the bank what is the seventh million dollars do we have six million in the bank we're going to add one or two million in venture debt why why are we doing this because somebody called us up and offered it to us i saw venture debt go go really wrong during the great financial crisis and i started go wrong during the dot-com era and And when the covenants start getting broken, even if you have a no covenant thing, when you can't pay back the bills, man, your whole life becomes trying to negotiate with a bank.

35:13And, yeah, you know, I think it took two years in some cases to convince people. And in many cases, we were not successful. They ran the car off the cliff. We told them, that's a cliff, not a bridge. If you keep going that fast, you're going over the cliff. There's not going to be another round of funding for you. We certainly can't do it. We're seed investors. You raised your Series B and you're racing towards a cliff like them and Louise. Like, is this wise? It's not wise. You know, take your time. You know, what's the rush here? And man, I don't know about you, Brian, but it's the ultimate frustration in the last couple of years is watching people blow through cash piles.

35:55And they're like, what did I do? I wish I had the incremental$5 million I blew on nonsense. Yeah. And especially with venture debt, when teams and founders confuse the venture debt as more runway, that always, again, it's another drug. So yeah, for all the reasons you and David talked about on All In, we advise founders to be very cautious with it. And, you know, there are some businesses and times where it may make sense, but for the most part, you know, founders need to know their bank account, their burn. They need to manage it really, really carefully. And I think founders who grew up in the Zurb era, like they didn't realize that until they kind of got smacked in the face with reality.

36:40Yeah. If you have a CFO, like a legit CFO, and the CFO tells you, yeah, you know, we should have a little bit of venture debt. I've worked with these folks before. I negotiated it. This is standard. That's non-standard. But when a 15-person company adds$3 or$4 million in venture debt because they think, well, I'm spending$500 a month, that's an extra six, eight months of runway. That's not what venture debt is for. You have to have profits or the ability to pay back that debt. That's why you would do it. Founders always ask me for pitch deck punch-ups. Well, I have some great news. We worked with the team at Miro, that awesome whiteboarding software, to create an amazing pitch deck template for founders, which you can see if you're watching the video.

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37:57And remember, faster inputs equals faster outcomes, and product velocity is how startups win. So here's your call to action. To access our new Miroverse template and thousands of others, sign up today for a free Miro account at miro.com slash startups. That's miro.com slash startups, M-I-R-O dot com slash startups to sign up for free. moving on there's a new corporate venture capital fund in town we've been talking about ai the fund is none other than sam altman's open ai fund axios reported that the open ai fund which was set up in 2021 has already invested 175 million dollars in commitments which includes startups like descript and harvey noteworthy is that open ai's fund has outside lps which include none other than Microsoft.

38:43Brian, what do you think about OpenAI's corporate fund? Well, I mean, for them, it's a no-brainer. They have maybe the best access to developers and founders building within AI. They know the space probably better than anyone. And unlike a lot of corporate VCs, I mean, they have a leader and CEO in Sam who has a proven track record of being a really good investor and picker of people. So I think it's huge. I mean, they also, obviously, they know their product roadmap. So they have this unique insight into what they're building and what they're not building. And they're going to use that knowledge to decide what to invest in or what not to.

39:25I mean, every AI investment decision, I think at every firm, people are going to talk about is, are they going to build this? Is Sam and is OpenAI going to build this, but OpenAI knows that answer and gets to invest based on that. So I think it's a no-brainer for them. I'm sure we would, as a firm, we'll be co-investing with them. And I think, as you said, I don't think they're really raising outside capital, but I'm sure if they were, there'd be a line out the door of a ton of demand. Michael, corporate VCs date back to the early 90s until Capital famously was one of the most active investors in Silicon Valley.

40:02and then corporate VC really evolved with GV, originally called Google Ventures. What's the pros and cons of taking corporate VC for your startup? Yeah, I mean, from the LP position, but also just from being a former operator, I think too often you see founders at too early a stage say, gosh, wouldn't it be great to get validation by having this strategic investor come in this corporate and be part of the cap table? And I think what people forget all too often is, you know, the problem with strategics is they're not going to lead a round. They'll probably require a blue chip, you know, lead to be in the round.

40:42They're only going to come in once. They're rarely going to follow on in any rounds. and you know for the most part except for perhaps google ventures and others you know they're very seasonal meaning when the market is pumping you see a lot of corporate vcs when the market is going into a tough macro cycle you see a lot of those corporate vcs just you know lock the door and and shut down as we're seeing right now and so you know there can be some challenging and awkward moments in board meetings when you have a big strategic if i was right now in this ai space I mean, me personally, and looking at the funds we invest in, I'd rather have founders who are pirates, not people pleasers, meaning go out and scare the hell out of the open AIs.

41:28Don't go partner and take money from them, especially in a market where they're going to eat up a lot of little application companies along the way. So that's how I look at it. A lot of VCs get afraid that having a strategic scares away other potential acquirers. What are the pros, though, of taking corporate VC money? I mean, does it provide validation early on? It absolutely can. And I think that's why a lot of entrepreneurs, a lot of founders, you know, love to have that big name on their cap table. um so i think there there's certainly positives um in my experience the negatives outweigh positives generally especially in such a hyper competitive market like ai and it's the biggest ai company you know in the market who's gonna likely be very acquisitive going forward yeah if you want to have a large sustainable business you want the best venture partner in the world so if you could have your choice and if you think that um um i don't know microsoft's the greatest partner in the world would you rather have microsoft give you your series a series b would you rather have sequoia do it you'd rather have sequoia sequoia is aligned with building a large legendary company that goes public and is sustainable and becomes the next microsoft and competes with microsoft and you know with strategics and we saw this with open ai what it when open ai had problems what did microsoft do microsoft went in and said we'll take the entire team we'll gut it so there is the perfect example we're talking about you know sam's uh open ai fund which is open ai it's not sam's i think axios was kind of playing a little gotcha that it was under sam's name and not you know officially open ai's you know like journals will do it's it's fine um you know i think this they probably just didn't finish paperworking it properly um in the case of sam altman i will say no conflict no interest if i could put money into that fund i would do it immediately uh for the reasons bryant states and more number one they have access to proprietary data they know which apps are getting traction they also have the ability to give you access to software before they give it to anyone else and there was an instance with one of the companies we had invested in and they were like hey we can't compete against this company that um sam waltman and open ai had invested in and they're giving them early access so they can get early access now you'd be like oh that's unfair you know what life's unfair if that startup got that deal and that part of that deal is to get early access and they're giving them equity as we say in the industry no conflict no interest this is conflicted 18 ways to sunday which is why it's awesome you know um now and and who's going to complain about it you know who's getting hurt here i mean i guess arguably some startups that compete and maybe it doesn't feel fair and somebody might call that out at some point the descript competitor right and let's say descript you know can call sam altman up and say hey you know we have this problem with tokens or whatever can i talk to an engineer so yeah talk to joe talk to susan i cc'd them on this email you know and i have a descript competitor in my portfolio i don't but i'm just saying what if i did that company you know uh can't even get access to anybody over there and then those the folks there might be like you know what yeah we don't own shares in your company we're not obligated to give you you know um some competitive edge against the one we have equity in now if you were to think about this well why wouldn't apple do this with their ecosystem why wouldn't google do this with their android ecosystem well the reason is they don't want to have this kind of problem so open ai and chat gpt are too small to have this unfair playing field issue but as it grows, you know, maybe it will become pronounced.

45:13And people will be like, imagine Apple was like, yeah, we're going to invest in Spotify, but not title. We're going to invest in Uber, but not Lyft would invest in DoorDash, but not Instacart, right. And they started picking winners and they own 10 % of them. AOL did that back in the day as well. And Nvidia is doing that now. So conflicts exist in our business, they can lead to great returns. They can also lead to, you know, developers and people feel they can lead to a lot of bad feelings so be careful brian you mentioned you would be an lp in open ai if there's an opportunity would would you counsel your companies to take money from open ai why or why not some of the reasons michael mentioned like what why corporate bcs could be bad i mean what comes to mind to me is if they're asking for these weird special rights they want a rofer on acquisition you know potential mna or they say you have to use us as your preferred vendor.

46:05But if they're coming in with no special rights and they're not going to control the company, they're a minority investor, I think it could be interesting. And I think the companies that they've invested in, like Harvey, I think they may have seeded it, but Sequoia led the A and I think another big firm did the Series B. So I think the way I'm thinking about them is not as like they are the largest shareholder, they're just a part of the cap table. I'll tell you, if you're investing in a company in the legal tech, doing something with a co-pilot for legal, and that company is raising money and raising a Series A and you have a competitor, and OpenAI is going to invest in one of them, would I want OpenAI to invest in my company or the competitive company?

46:52I'd probably want them on my side. They're a special company. I think this is unique. This is different than if it was like Visa, MasterCard sort of thing. OpenAI, I think, just has such a lead and could be such a kingmaker that it's really strategic to have their involvement, even if it's more from a defensive standpoint. You look at the ecosystem, you have OpenAI, you have Kroc, you have Anthropic, you have Google. What's your view on the overall ecosystem and who will be the winner in your eyes? Well, I mean, OpenAI clearly looks like they have the lead, but I think the players you just mentioned, it seems to be like those are going to be the players and there's wild cards.

47:37Obviously, what Elon's doing with XAI would be a wild card. I think with Antropic, Amazon is a huge investor in that. So time will tell, but this kind of goes back to what I was saying before. It's really hard to predict the future. But OpenAI right now has a huge head start. They're releasing so much product so quickly and have such a talented team that it'd be hard to bet against them. What do you think, Jason? I am long open source, especially because of the controls that these players are putting on some of these models. um so you know if you want to i was asking gemini today like just give me a list of trump's legal cases i kind of did this in a trolling way on the all in pod and then i said i asked chat to me give me a list and gemini was like uh you know elections are complex presidential kinds blah blah you should use google search and then you know chat chapti was like here are the six cases where anyone here's a link to a story about each one with citations um i think people are going to want to know how these things work.

48:44And in order to make really elegant applications in verticals, you're going to need to understand how these models work. So I believe if you're going to build something in accounting and tax, you're probably not going to use ChatGPT. I think you're going to wind up using some open source model with some proprietary data. And that's going to be a better solution for that verticalized app. And then I think there'll just be just like there is a long tail of open source projects that do really interesting things. I think there'll be an open source of these models and they'll be faster and better and i think that's why apple you may have seen apple has an image uh open source uh maggie i think it's called so apple just released it it's terrible but i opened my apple uh photos just the other day and i had a picture of my bulldogs and there was that that little ai you know stars and i pressed it and it was like bulldog click here click bulldog it takes me to the wikipedia page for bulldog or the definition.

49:37So even Apple moving slowly, they have an open source image project. And it's basically to edit, manipulate, understand what's in images. And they're going open source. Now, if you're going to build your next app, you're going to use that or you're going to use, you know, Dolly, I think you're going to go open source. So I'm just a big proponent of open source in this case. And I also licensing of data is very much an active discussion between the lawsuit with New York Times and OpenAI, Reddit licensing to Google. So I think a lot of the paid models will have issues that the open source ones won't.

50:10Michael, what do you think about that? You're talking to all the early stage GPs that are investing in AI. What are the models for the future? How is AI going to monetize itself? Yeah, it's interesting. We had a little get together a couple of weeks ago with some of the managers who were investing in AI. And we actually had Blake Samick from OpenAI, who's the head of product operations, come and talk. And some of the kind of interesting things that came up that I wasn't aware of, I mean, if we think about it for a second, ChatGPT just launched in November of 22. So it's only been out there for what is that 14, 15 months total.

50:49One thing that I wasn't aware of, and I think is driving a lot of the investment activity for our managers, is of the$1.7 billion in revenue or so that's happening, in and around open and AI right now, the majority of that is consumer-driven, which was a little surprising to us. We just figured it was enterprise business, people starting to build tools, etc. And so I think that's a filter that a lot of our managers are applying and thinking about, you know, is this first wave going to be more a kind of consumerization of the enterprise type cycle where individuals are going to perhaps adopt tools, start to use them, and then eventually those tools will infect their broader organization or business.

51:41But that data was pretty surprising to us, and we think it likely is going to be important in just how things develop in the market. What does that say about the space? Is the opportunity a consumer or is it still an enterprise well in this case i think it's not so much it's consumer because all these are productivity tools or you know ways to kind of manage multiple applications or create a single pane of glass to you know various various applications that you use in your life and so um the way it got filtered in this discussion and we're talking about it is that you know more and more of these applications may have a kind of yammer-esque approach to the market where they get individuals to sign up for them and start using them first as a kind of life hack.

52:29And then they make their way into the enterprise. Brian, your partner, David, obviously founded Yammer, sold it for a billion dollars to Microsoft, another actor in this player. What percentage of your opportunities are you seeing in consumer versus enterprise when it comes to AI? I mean, we're really focused on enterprise B2B. So it's definitely more in that world. So it may be a little skewed because that's really what we're doing. But, you know, I have been a bit surprised by how few interesting opportunities I've seen in consumer. I do think that's going to change. Elad Gill had a good article.

53:07I think it was him today. But he made the point like chat GPT, it's still fairly new and it's changed a lot of things. And it takes oftentimes it takes six to 12 months for an employee at Google or wherever to decide like they're going to quit their job and go all in on AI and start building. things. So I think the next year is going to be really interesting to see what types of companies get built. I think we're still super early there. Jason, you're looking at startups at the very infancy. Sometimes it's just a couple of people and an LLC. Are you seeing more opportunities today, 2024 in consumer and enterprise?

53:43Yes. I mean, it's, you know, you have second and third time founders really like to go enterprise because they probably did something in consumer and they realized consumers lightning in a bottle one in a hundred figure something out and it becomes really big and then enterprise you know probably you know i don't know one in four or five have a great outcome so i think that's why a lot of people rushed into it it got a little bit too crowded that's why there were too many project management you know you'd have 20 different people going after some narrow SaaS vertical. But I love consumer and we are a power law investor.

54:23We do 100 new investments a year. We'll do 200, 300 names in our fourth fund. And then we'll reserve capital, half the capital for the top 5%, which will be 10 to 15 names. So we'll be super concentrated in those names when they break out. And so we can deal with consumer. whereas most vcs because they're placing 30 bets on a media craft you have 40 bets in a fund i'm guessing you have a billion dollar fund now and they also have multiple vehicles but you know if you're a classic uh 400 million dollar 600 million dollar fund i think you probably have 40 names in it most typically and michael you might know actually um what the the the numbers are now but thinking like um you know mark schuster at up front or fred wilson at um flat iron uh no i'm sorry union square now um and so you know what are the chances of hitting a one in 100 hitting a twitter uh you know listen fred hit it so a lot of people just go for for that for the enterprise ones because the hit rates are so much better but you're not hitting half court shots you're not hitting threes so if you think about this you know maybe enterprise is the layup of venture and uh consumer is the three-point shot and you get paid a much bigger premium if you look at my biggest hits uber robin hood com um those are all consumer thumbtack consumer and then if you go uh thanks for knowing my portfolio no but then i have data stacks and you know grin and uh density all unicorns like and those are in b2b so you know you can play either game i i let the founders tell us where the world is going that's i have that humility in the second decade of being a capital allocator.

56:05It's not about what I think. It's about what these founders think they want to build, how passionate they are about and how well they know the customer base. Brian, Jason called you out on portfolio construction. So let's talk about craft portfolio construction. How do you look at that and how flexible is your portfolio construction? It's flexible. And it changes based on the market. There are times where it makes more sense to be more focused on series A or series B. And sometimes it doesn't. We are always looking at the risk-reward based on the market, based on the space right now. So for example, with AI, personally, I'm probably more excited at the earliest seed stage for growth when there's a lot of more proven metrics.

56:51The Series A and Series B, we're going to do them, but they're harder. Because they're overpriced and without traction. very little traction um overpriced lots of hype everyone has an ai fund everyone's investing in ai it's you know it's it's the craziness again um and it's hard like it's really it's really hard like you know i think the more we learn about ai every day i think i create there's like more and more questions um that that come up it's very different than a lot of other you know areas and sectors where we are we're getting smarter and smarter every day i feel like we're literally there's more questions every day.

57:29So it makes it really hard to pick that Series A stage, especially right now. But when you look at your portfolio construction, are you still kind of general as a billion dollar fund? Are you still looking for one company to return the fund? Do those metrics change with fund size? Yeah, definitely. Because there are companies that sometimes I will see where I like the founder. I think they're going to have a good outcome, but it's not going to be big enough to return the fund. We don't invest in a company unless we think it has the potential to return the fund. So we will pass on things that could be good outcomes for the founder or for smaller funds, but they're not deals that we will do.

58:15Our sweet spot, we will lead C deals, Series A, Series B, and anything beyond that will go into the growth fund. Michael, you're working with much smaller managers. Some of your managers are 20, 30, 40 million dollars. How does that change your portfolio math on your managers? Well, we have a pretty specific approach and a specific strategy that we apply here. You know, we're going into approximately 24, 25 of these small funds. They're all 60 million or or less. Many of them are$20 million,$30 million. They average right around$30 million in size. And there is the allocation to those fund managers.

58:59And then specifically, we have the kind of opportunity fund for the broader community of managers as well, which is basically a direct investment fund for the follow-ons into the outliers that come out of those portfolios. And so for us and for our LPs, it's the combination of these two things that create the opportunity, a really steady, predictable, call it three and a half X return on the emerging manager funds and what we kind of underwrite at a four to six X return on the direct investments that go into the outliers from those portfolios. i'm curious what what is the name for that your type of fund michael because i know a fund-to-fund is and we know what a yeah you know a gp is and we what do you call these funds specifically designed to be a you know we kind of changed it up a little bit because the the fund-to-fund part of it meaning the capital that goes into the small emerging measure funds we charge no fees on.

59:58No management fee, no carry. And so when LPs come in, part of their capital is going to that and part of their capital is in this kind of direct allocation that's just going into the outliers that come out of the portfolio. We're only charging fees on the direct investment part of it. And the reason why we did that is we had feedback from LPs from the beginning. It's nobody likes doubling up of fees or seeing them stack since the managers themselves charge fees. And And so it is a little bit of a different approach. I'd like to say that we invented this, but actually there's a handful of single family offices in Silicon Valley who have been doing a form of this for a number of years where they basically equip an army of small specialist fund managers out there to go find great deals and invest in companies and then they will selectively invest more capital.

1:00:51Go invest, yeah. Yeah, exactly. And they do SPVs for these typically, or you do SPVs for these and then pass the hat, or you have the funds dedicated? So we have dedicated funds for the directs. But the one thing that we do that's kind of unique here to try to create a little bit of a network effect is when a manager comes to us and says, hey, I've got this company, it's doing a series A or series B now, and it's growing fast. And we give them$5 million to do that deal. We actually split the carry with the manager. And so we're helping that$20 million fund manager act like he's a$100 million fund or be able to invest further into the lifecycle of the company.

1:01:29And so a big part of that is, how do you help the small fund managers punch above their weight and get more value out of those companies that they identified early on? so they vet the companies early on they get you a foundation of bets and then you have to then re-underwrite them the best of those and it's the top one percent top ten percent yeah it's like two per fund generally you know they come out and these small funds you know they're making 10 or 12 investments a year so maybe there's 30 in total in that fund and so there's probably two or three that are going to be the real you know significant kind of high trajectory company so So you have to stay in touch with those fund managers pretty tightly to not miss opportunities.

1:02:13We do. I mean, speaking of AI, we kind of built out an analytics system to track those underlying portfolios. So we don't just wait for the manager to tell us how the company's doing. We also try to collect external signal and track the company. And oftentimes, we're approaching the manager and saying, hey, looks like this company's doing really well. Should we talk about a direct larger investment into the upcoming round? and that's how we'll get that entry point. Jason, I'm going to put you on the spot. You were early in Robinhood, Uber, Thumbtack. What was your pro rata? If Michael was around, how much could you have deployed before that?

1:02:49Large amounts because I was also friendly with each of those teams and they would have probably let me go super pro rata as well. So yeah, painful. It was a painful discussion. I mean, that's why after doing a$10 million fund, $11 million fund, I did a 44 and then I'll have this one, which will be 50 or so. um and you know now i have the dry powder to do it um and we could always fire up an spv if we need to to capture that with our lp pool um if there was a huge opportunity yeah i mean we we hear that all the time yeah you've done some you've done some empirical analysis on this what what's what's the opportunity so like uh well so if you if you look at this universe of small emerging manager funds and you look at the last 15 years i mean the really interesting data is if you take the entirety of unicorn successful companies that have come out of the market over the last 15 years 92 of those companies had a small fund like yours jason early in you know the earliest days they were investors there but then if you look at how much did they invest beyond the seed stage yes it is less than almost none less than five percent of the time did they ever even participate beyond the c stage which is just you know i mean with some of these companies it's it's hard to imagine in our first fund it was four point it's 4.9x on paper right now 5x or something and we did an analysis of the four unicorns that came out of it if we had just hit one or two of them with one more bet not two bats not a crazy bet it's like an extra half million or extra million um they would have been 15 20x fund so yeah you i think the way you get those outlier funds is a second there but brian how do you look at second and third bets it's hard to find these big winners and when you when you do you you pile in um but i do think it's could be a trap too um especially for for emerging managers who think like you just have to pile into any any prorata round um so i do think you want to look at it you know you you do want to look at it as a new deal and make sure the excitement level matches like what's actually happening at the company.

1:04:53There's very few companies that are special. And so the bar is really high for when we pile in, but we often will do pro rata and more than that. Speaking of pro rata, we're going to go from the theoretical to the specific. Let's look at everybody's last three announced investments. Brian, let's start with you. Sure. So I'll share a company, Solus, that we invested in. Solace Health. It's a marketplace connecting individuals with healthcare advocates to better their own or their loved one's healthcare outcomes. So the idea is pretty simple. Navigating the medical hospital landscape as a patient is a show for everyone, especially if you're helping an aging parent or a loved one who lives in another city.

1:05:40So these advocates are individuals who have a background in healthcare. They know how to play the game and navigate the system of getting the right referrals to the correct type of doctor, the right treatment, and they match you. So we led their seed. That was recently announced. I'm really excited about what they're seeing demand-wise from consumers, advocates, and health systems. The other one, Agentio, it's an ad platform connecting brands with YouTubers to create sponsored content. The idea being to make it as easy as it is to buy and purchase ads on Facebook, Google, Twitter, Reddit, but for creator-led marketing.

1:06:22I used to work in radio and the best performing ads in radio was when the radio host who had a following would actually do a host-read ad and it was authentic and it worked. So that's what these guys are trying to do. And there's been a bunch of these in the past, but this one got us really excited because the founder built Cameo's business and understands how to work with an onboard talent. The CTO worked on Spotify's ad platform. And then the third one, I'll do a wild card, is personal investment into a VC fund, which is Jack Altman's new fund that he recently announced called Alt Capital. Jack was the founder CEO of Lattice Unicorn in the SaaS, HR SaaS space.

1:07:08I love backing operator-turned-investors and really excited to invest in his fund one and excited to see where this goes. Michael, you're up. Okay, great. Yeah, last three investments we made into funds. The first one is Recursive Ventures, a manager named Idmar Novik. awesome small fund his fund number one was all of one million dollars uh out of that fund he wrote a 50k check into a company that is now doing over 100 million in arr and just yeah yeah and so it marks got a really unique background in that he's been an operator who took a company public but he's also been in the venture world and was briefly with morgenthaler Ventures and just an incredibly smart and scrappy guy who continually finds great deals.

1:08:00The other funds that we've announced, Original Capital, which is actually a generalist fund, but a team with a super interesting background and amazing track record and kind of a unique skill set. I'm glad it popped up even on the screen because that's one of their unique investments that's done really well. But Sumit Ghajri and Ryan Snow are the main partners there um both of whom spent time at carta um sumit uh chief strategy officer over there he was also a chief strategy officer at a company called instabase you guys might be familiar with which speaking of ai tools and fast growing companies and one of the reasons why i love these guys is the special kind of value add that they bring to their portfolio companies is they roll up their sleeves and basically run the financing process for their companies.

1:08:55Meaning when it's time to do a series A, when it's time to do another round, they will step in like investment bankers and run that financing process, which I know for so many portfolio companies is just a massive time-sucking challenge. And so they're an awesome fund. And then lastly, Silent Ventures, which is one of our, who notably doesn't have a whole lot on their website, but this is a really unique manager, Jackson Moses, who has been, aside from having a biblical name, has been investing in the aerospace and defense tech area for eight years. So as we like to say, he was country before country was cool and has developed very under the radar, one of the most amazing defense tech portfolios out there.

1:09:47And in the process has established a really unique point of view on what's happening in that market. And so these were the last three that we've done, all pretty different. Jake, what do you have for cooking? All right, Recall is a toolbar that allows you to take the various web pages, podcasts, YouTube videos, etc, that you visit and then put them into your own language model so that you can use it in the future and search it. So you can think of this, it reminded me of Delicious back in the day or Yahoo bookmarks, a lot of cool Web 2.0 products, Evernote-ish, if you think about that. So we think this is, and it's a paid product and people love it already.

1:10:27there's a lot of nerds out there who like to organize stuff so i could see this really helping people uh figure things out micro one is one of the fastest growing startups we've invested in recently they use ai to vet developers around the world so they can skim the cream of the top one or two percent and then package them up and handle um uh you know pairing them with companies that need projects done and because they use ai they can figure out really who's really good and who's not. And it's growing very quickly, micro one. And then Malengo came out of our last accelerator and got a massive amount of interest from investors and is very successful right now.

1:11:10What they do is they've taken the entire process of designing a hoodie, for example, and they will let you source, develop with AI what you want your hoodie to look like. I want a hoodie with bulldogs on it, blah, blah, blah. It makes the hoodie and then they will help you pick the fabrics etc because they have all of that stuff abstracted in the data from the factories they'll help you finance it and then they'll actually pair you manufacture it and get it to your distribution center so anybody who wants to create products and merch or even a whole business they're going to be like your soup to nuts uh platform for doing that powered by AI.

1:11:50Those are my top three for this week. Excellent. Well, it's been another great episode of the Liquidity Podcast. AI has truly taken over everything. For Brian Rosenblatt, Michael Downing, Jason Calacanis, this is your host, David Weisberg. Thanks for listening.