Howard Lindzon Tells Us Why He Launched His Own SPAC

where this all came from. I was just thinking, if we, uh, if we timed our all thoughts back episodes for every time a new SPAC entered the market, we'd be doing what like two or three episodes per week for each SPAC. It's been insane the number that have come to market. No, it would be way more than two or three episodes per week. Tracy. You know that last Friday, so we're

recording this on I think it's Tuesday, February. Last Friday, there were thirteen SPACs filed in one day last Friday, and then I think there were like another five that like we're out by like Monday morning the next week. So we would never we would just be all SPACs all the time. There's no way our producer Laura would be able to handle the handle the long, our long suffering producer. So here's one thing that I always think

of when we talk about SPACs. I get a little bit nervous when the focus is on a particular capital markets tool, Like it's never a good indicator for where you are in the cycle. When people start talking about the actual packaging of the product versus the content. Yeah, that is a pretty I agree. I mean that is kind of weird. People are more interested in the phenomenon of SPAC than like the companies. The other question that I have, and this is something it is like where

do they come from? Because one of the things that we've see is that a lot of them like are associated with a very well known name, like for example, you know, like Colin Kaepernick for example, the quarterback um has a SPACK. And what I was like, did he reach out to someone say I want to do a SPAC or did someone reach out to him and say, Colin, you should really be involved in our spect There's like a bunch of names like I saw, Like I swear

to god, it's so weird. Like the former editor in chief of Cosmo, the magazine is involved in a spack that to take the clearing company behind, like we will like it's it's just there's a bunch of weird stuff. But I like where did these come from? And who like brought in the where did he? You know, whose idea was it to bring in the former editor in chief of Cosmo to do a spec our former Bloomberg News colleague Betty Lewis doing a spec Like where did

that come from? I have all these questions I want to know, like wh was that? It was it over some zoom, Like how did this happen? Well, when a venture capitalists loves a company very much, they get together, right now, that's not where spacts come from. Um, yes, I agree, Like, obviously this is a hot phenomenon in markets right now. It does feel like a bunch of people are jumping on the bandwagon. But how does the

actual process work? Who approaches who? And then of course, like how does the actual process of raising money and finding a company to acquire or merge with work? So I'm very excited about our episode today because I think we might at least answer some of these questions and where they come from. What the opportunity is with someone who it's very, very open and honest, and I think will be really help us demystify the whole thing. We're going to be speaking with Howard lenz In. Um. He

has a VC. He's a founding partner at the venture capital firm Social Leverage. Bunch of big winners, right. He was an early investor in robin Hood and stock twits and Toro and a company called Manscape dot com, which

will learn more about. But I basically like know Howard lens In and a lot of people do because he's been on Twitter for a long time talking about tag and investing, extremely open and when I he's always sort of one of these people that I think just has this sort of uncanny intuition about where the puck is going,

as they say in hockey. And it's like sometimes I see him and he's talking about stuff and I'm like this is crazy, but he always ends up sort of being right and sort of has this just sort of feel of where the market's going, where stocks are going, where VC is going, where tech is going. And now he is the CEO of a spec and he is uh recently, I think late January filed the S one for Social Leverage Acquisition Corps, and we're going to learn more about his process and why he's doing it and

how it came about. Here all the wisdom of Howard Linsen. So, Howard, thank you so much for joining us intro. I totally mean it. I mean I followed you online. We've talked for probably a decade now, over a decade, I think probably like two eight. You were probably one of the first people that thought Twitter was good to be a really big thing, and you thought Twitter was going to be a big thing for markets, which it turned out to be in particular. So I've always sort of enjoyed

following your stuff. But you know, like, where did this come from? Like let's just start like where did one Where did the idea of the light bulb come off? To launch us back? So it's a great question because there is an origin story for everything, and you get the I'm from Toronto, so you get as back when you're born. It's like it's like a Tim Horton's doughnut that you you're entitled to a spack that goes to

zero and record time. The So I think, you know, growing up in Toronto with the the mining and Saskatchewan and drilling for oil and belize, and that was Canada. Like I mean, you didn't call your broker and asked for a tech growth stock. You got served as back and you didn't have a good experience with them spacks. So I have to say I had a very twisted I would curl my mustache. If I had a mustache, I would play with it all the time. Color me surprised.

I was My last pre COVID memory of a fun time was that this incredible dinner at Carbones, which is like an institution, you know, for some reason in New York, hard to get into Italian place. And I was sitting at a table with Adam Bain as a friend and really amazing entrepreneur and former CFO of Twitter, former CEO or CFO. He's had every every job there. He's kryptonite, this man. You know, I'm kind of cousins with him. I'm actually like fourth cousins. You're like the Adam Baine

of media. You're like me, are you really looking for a compliment right now? We're going to do our own sac No, but keep going. But I am actually very weirdly related to that guy. And you know me because it's funny because you talked about some stuff. One of my favorite companies that ever was a seat investor was

your company that you worked for with Henry. I was one of Henry's first investors at Ali Insider, Business insider, whatever the hell they call it these days in the trade n f t S. And you'll probably have me on in six months to talk about n f t s. But anyway, so I'm sitting in February and Carbones, and there was two things that you talked about at the time. With Adam Bain. We were talking about what the hell is going on with this COVID thing, what are we

gonna be doing? We didn't know it would be locked down a week later, two weeks later forever. And uh, what is this spac that you speak of? Like everybody was very Everybody was talking about Virgin Collactic, which was an Adam Bain production with Chama that was done by Spack, and as a Canadian, I was very I looked at him and I was like, oh God, what are you doing to people, Adam Bain, You're supposed to be a nice guy. He took the time to to walk us

through how Chamath was thinking about Spacks. So we're kind of like ground zero because you know, if you had told me that COVID would strike two weeks later and the country would shut down, I would have said, yeah, I saw that coming kind of But if you said it would lead to stocks only go up and barstool Dave and Chamath being the new Warren Buffett and spacks backs back discussions on your show by the following year, I would have laughed. I would have giggled like a

like a child. And so so he explains to us what a what a spack is and how they were

using it more importantly for growth ideas. Right, So spacks have been around an elegant really an elegant feature, right for a punch of entrepreneurs that have influenced right, kind of like they talked about director, consumers these days are around the influencer network and so in in the most simplest term, I understood the edit that the wedge the pivot of a spack to be still about the promoter slash creator slash influencer, but more about how they were

going to use it. They weren't just going to use it to go speculate on a mining uh. Discovery facts have always been this elegant feature. It's been around for a long time, and much like the swipe became an important thing on the iPhone with Tinder SPACs, subtle chain was the fact that we had the cloud, we had this growth, and for ends, we had zero interest rates.

We have these new influencers like Chama, we have a lack of I p O s. And then I think one of the most important things was you also had this late stage money in the hands of what we found out where some empty suits let's call them, or like promoters themselves and weren't creating any value like we work like soft Bag story and like t row price and fidelity, So that late stage money, all these things were combining together for a perfect moment for spects. But

we didn't know that. But you know, along the way, like we're soft Bank was writing four or five million dollars checks based on an Uber ride, you know, based

on their feelings about a CEO at the Uber. And I think that whole concoction, that whole moment in time back last year, guys like me learning from Adam Bay in a ground zero how they were you know, tinkering with the with the back towards growth and towards uh big ideas versus drilling a hole in the ground and you know, rolling up something in real estate or something in finance. Was this, Oh my god, if soft bank

can do this, we can do this, you know. That was my epiphany, was like, we would make fun of soft Bank and there and their silly investments in the way they folded money into the market, And how is that different than us back, Like it's it's it's really just an expression on how you feel about the the person running this back. So so you have this epiphany that you can start your own spack do whatever soft Bank does. How do you actually get the ball rolling? Like,

what does that inception process look like? Well, for me, that's a good question for me, it was like, well, I'm not going to do this. I'm like, the last thing I want to do is go through the process of hiring an expensive law firm, uh, to do an S one, going on a road show, uh, and pitching people you know in a room about you know, because this is still about raising money. You know. It's back is all fancy term and it looks so sexy because we're a public company and we have a lot of cash.

But really behind all that. It's just a lot of boring and very detailed and careful disclosures about what this you know entity will do and you know what is its purpose? Who is on the team, Why did you assemble this team, what do you plan to do? What are your high level of focuses? So so you need a quarterback for all this, And lucky for me at that dinner was my friend Doug Horlick, who's an next Goldman guy, and he just his ears perked up when he was listening to Adam Bain and he was like

taking notes. We're all like joking around and and enjoying our our last meal. It turns out pre COVID. But he came out of that meeting dog and he said, Howard, you're the perfect guy to be the CEO of a spack. You have this huge audience of which you can talk to. People trust you. You've got all this uh trust built up. You know, why shouldn't you quarterback back? And I said, you know, I don't want anything to do with this, with the regulatory and in the hoops and the detail. Um.

But he said, I got your back. I know how to do this, and off we went. So Now I had a partner, Doug Horlick, who really had a lot of experience in markets. He also knew who to call in the banking side, just pitched the idea and see if they would be as excited as he was about this idea that than that. So that was the first step that we needed someone too that I felt there's no way I was going to go down this road with just Doug. We needed someone who had public market experience, right.

So sure the media hasn't having a field d and say oh anybody should have us back, right, and we all we all fall prey to that. It's just whatever whoever's got the hot tape. But really I would say, do not do this unless you have someone at your

side who has tremendous public market experience. And for me, that was Paul Grimberg, who happened to be an LP and was president of Encore Capital, which is, you know, a global financial lending business, and also the chairman of Axos Bank, which is a large public bank, profitable public bank. So what a perfect moment for me to know someone

like that, and I called Paul. Has raised money around the world his jobs and overseeing audits of public companies and overseeing, you know, the growth of profitability of a public bank. And I said, is this is this something you can help me with? And you got really excited, he says, oh, man with your network. And so we got Paul Grimberg on. So now we have the makings of a band. As you would say, it's like the

traveling willberrys of finance. I've got a Goldman person, I've got a public market chairman of a of a great bank in the New York Stock Exchange. And now I just got to keep filling out the band. And so my next piece of the publics how to find some partners that have targets. So so now if you are going to do its back, you've got to, like I said, find someone to put the banking relationships together and and ensemble a road show. You also need someone to get

you through the s process. And I would say, don't just hire scattering or some expensive attorney, which we did, but you need someone to guide these attorneys, and you need someone who understands how to do all the filings. And that I found with Paul Grimberg. We had the core of a SPAC team pretty quickly. But there's still

so much more that you have to put together. So I want to go back to a point you made, and you you know, it's like, we look at all these SPACs run by public figures, and there's like, you know, the the Use back and the Colin Kaepernick spack and the founder the co founder of Facebook's back or the co founder of Dell's back or the Betty Loose back, and you mentioned and then of course the spacks we're

going to get. And you mentioned the importance of that public network the promoter someone who's kind of basically an influencer. Can you articulate specifically why in this current iteration of the SPACs, whatever the SPAC cycle, what exactly your network, your platform allows you to do and really allows you

to sort of contribute to the spec value creation. Okay, this is all high level because I can't even explain it, like, and you're asking me to explain something that I laugh because I wish I could film the whole processes from the eyes of a Larry David of finance. Right, I look at this is all rather silly. I mean, it's very important and I take this thing extremely seriously. Hopefully

the origin story helps with that. It's not like I woke up, had lunch with Adam Bain and said, well, like I joke and I said, well, Adam Bank can do a spec. I can do a spec. Like that's an easy, funny joke. But reality is Adam was explaining, and that's the genius. It's just not a one minute It's a very complicated process that people need that people generally take seriously. I have to imagine because sec and lawyers,

and it's expensive. It's not free. So so getting to the to the next part of it is um The key thing here about the markets to understand is we talk about the creator economy, right, Like, for there was all these years where I was like, man, people like my writing and they respect my work, but like, should I set up a Shopify store to like, how do I monetize all this daily writing on my blog and my tweets and all these people that think I'm funny or smart so so so I felt, as someone who

writes for free and gets all the feedback that maybe I should have, I'm not monetized singing myself properly, right, Like everybody has that feeling someone tells them they're great. You know. Spacts are basically a perfect tool for financial you know entrepreneurs, right. You know I have a farm with two great partners, Tom and Gary. But when we commit to a fund, we have to commit to twenty

five investments over three to five years. Together. We have to go through the money raising process and you're in it. You got to write an album. It's like Bruce Springsteen in the East Street Band. If I would just say, you know, music is like the closest thing to it with a spack, I could put a separate band together, like I said the Traveloy Wilbury to just try and produce one hit. Okay, And there's a lot and something more elegant about that, right when you consider how many

people can I just ask a real specific question. Is it on the fundraising side that the platform helps, as in, okay, we want to back the Howard Linson spac is either from the people who buy into the I p O or the pipe that's part of the process. Or is it on the deal acquisition part that people wanted that a company thinking about going public wants to be part

of it? Like, what specifically is the brand the Howard Lendson What part does it help with the most that you know Joshmo would have a harder time with That's a good question. It really helped with all of them and color me as surprised as everybody else because I had Doug tell me, how are they're going to love you that you don't understand they know what stock twitches and they know what Twitter is, and I would laugh,

I said, I don't think so, right. So it was, you know, it was very you know, it was very much curby R exuberant I call it versus curb your enthusiasm. I was. I was saying, guys, we're gonna go here, and these headphones are gonna laugh us out of the room because they don't even know what Twitter is. But

I think I guess they do. From the road show, I learned that I actually have a little bit of cashet in that world, and I think it helped the game stop at Wall Street bets and and and read it and Twitter and TikTok and social media and investing things that you know I was talking about with you and Henry Blodgett, you know, fifteen years ago, all of a sudden, I am someone with some grab a toss

in that space. And I can't explain why it's now, but it's just that perfect kind of moment that I might have gotten lucky or you know, the people that talk me gently said, Howard, this will be this. You'll you'll kill them on Broadway, which is like you're going to kill them on a zoom road show. And they're gonna be prepared and they're gonna know what stuck to its is and and to be honest Rail, you know they did like the hedge funds that and the asset

managed from black Rock on down below. They know that public companies have two things to sell. They have the company itself, the product where the widget, whatever that company is. And then when you're public, you also have your product is the ticker. And you have to tell this story. Right, There's there's Tesla the company, and then there's Tesla the men's right, and some people are saying they're interchangeable today, but the narrative is become And again this isn't just timing.

And this some time in market and spacts might not have happened if COVID, you know, hadn't happen, or if if there was only two ways to really go public, which is Goldman and Morgan Stanley, right, like, there's only

two pipes that get you onto the onto the stage. Well, of course all this going on SPACs became interesting, but the most important thing to me was like the reception was very strong for someone that understood social media, for someone that understood the importance of helping a company that is does choose to go public through respect how to build a narrative, right, how our team can help just as well as hero Price or Fidelity or soft Bank

or any late stage VC. How our team that we assemble can help a company actually accelerate themselves post going public, because the SPAC or the I p O is just one day in the end, right, Like, how you choose to go public, and you've probably heard this a hundred times, it's just one day and then the bell gets wrong, the stock gets traded, and the next day no one remembers if you were public through an I p O

or through a spack. And I started seeing that happen with drafting, you know, as someone who started stock to it, I was seeing this happen with Virgin Galactic. I'm like, I was just as surprised as the next guy. The draft Kings was a successful spack, so you know, you start seeing a few successes and you start trying to

glean from podcasts. You know, I've had Jason Robinson on my podcast We Found It Um Draft Kings, and I'm asking him questions, you know, with him not knowing that I'm in the middle of doing a back and I'm listening and I'm getting his his brain explaining to me how this whole process went down. So there's all these ways to quickly learn and draft behind other people that do it as well, which is different than any other

moment in time. So, Howard, one thing I've always been curious about is what this s back road show actually looks like in terms of the fund raising process. So, you know, normally, when you have a road show to I don't know, do an I P O or to sell a bond or something like that, you have a specific product or company that you are pitching to investors. But of course, in this case, you have the shell of this fact that you are launching and a sort of mandate or idea about the kind of companies that

you're interested in buying or merging with. How do how do those conversations actually unfold and what do they look like? And also how did you decide on your acquisition um target industry? All good questions, the the and all the

important things that have to happen. So I was learning in real time, you know I call I say it learned by doing, by seeing other people that were contemporaries or mind doing it, and having the lucky ability to talk to these people, and having the capital in the network to be able to form a team to go do this. The road show was mesmer you know, it

was staggering to me. It's like, wait a minute, we don't have to get on a small plan and go to Toronto in the middle of the day to do one meeting in Montreal and then I back up to New York to do this. And I think the bankers have discovered this too too. It takes two to tango. Let's do math and say your raise three d million, Well banks charged two percent. So on a three million dollars, Remember who makes six million dollars risk free? Are the banks? And so the banks have a new toy of which

of that six million. In the olden days, let's call it pre COVID. The olden days of road shows, you it was very expensive for a bank to put on a road show. You know, flights had to be made, schedules had to be made, meetings had to be canceled, Pineapple how to be ordered for the food room, and occasionally, you know, a little booze, a little steak. So you know, the bank's margins have gone from on a road show

to ninety eight point nine percent. And so the banks, you know, we can make fun of zoom and oh it zooms the next day. I'll have heard some very smart people saying I look back and go, I don't think they've ever been on a banking zoom road show. You're not going to put that genie back in the bottle. So, banks, if you told me that I could raise three million over Zoom amongst some of the top financial hedge funds and investors in the world, I would have laughed you

out of the room. On top of laughing you out of the room for all the other things I've told you about today, that would have been the one I really would have had a good chuckle at. But yes, Zoom and the road show is an incredible, magical, weird, very useful way to raise capital and tell stories. And I think that would be one of the most incredible long term financial effects of COVID will be Yeah, kids should go to school, of course, they should go to

school and socialize. You know who shouldn't go anywhere and socialize or hedge funds and they found their toy. Uh, and they're using social networks to do their due diligence because hey, it's a lot better than going through customs New York Toronto or Toronto to London. Uh. And by the way, we have LinkedIn and we have social networks, and we have UH, we'll have more tools to to

background check people. And there's a lot you can get a lot more meetings done and a lot more capital raised over zoom if everybody is is committed to the process. And that's that's where we have so many stacks because both the suppliers and the demand on both sides are exploding. The marketplace is getting endless supply and endless demand right now because both sides want the product. So what does

the pitch actually look like? Though? In the road show, so you say I'm starting it back, I'm Howard Lindson. We're thinking of buying these types of companies and like, what's the value proposition there? Well, I mean the value proposition is do these First of all, we're in a zero rate, We're in a low interest rate environment. So the that's not they're not stupid people of the hedge funds. You know a lot of the enticements, the warrants which are now quickly coming down to zero as we're seeing.

But the other thing is do I trust this group of people to get a deal done? If we give this group money, will they go out and do a good job finding a target and finding a company and getting out of their way or getting in their way and making the change that happen that create uh, you know, market beating returns out of the out of the target that they find. It comes down to performance and can I bet on this team to get a job done. And so we put together a team that really exuded

this ability to get it done. You know, we brought on a board of executed as we brought in you know Ross Mason who founded Mule, saw the six and a half billion dollar company that was acquired, a sixteen year overnight success that was acquired by Salesforce. You know, Ross knows open source software, Ross knows enterprise software. Any CEO in that space would be thrilled to have Ross chatting with them about how to build an open source

or enterprise company. So so just like a like a like a team in sports or uh, you know, a perfect band. You know, our job was to assemble a team that could get a deal done, not just get a deal done, but then help that company really become you know, uh uh you go from two to ten months, they go from a two billion dollar valuation and the private markets to a ten billion dollar valuation over a few years in the public markets. So this is exactly

what I was curious about. Next and it is and I think this is really helping me understand this even further, is how much of the pitch is about not just the ability to identify and get a good deal done, but about you, Howard Lindon and your team being part of this public company that exists and as you say,

tell its story and essentially sell the stock ticker. And what is the sort of the structure of the deal such that you are incentivized to not you know, okay, it's public, I'm gonna wash my hands of it and go launch the next SPACs, but actually have some skin in the game so that it does outperform over the long term, and you do use your network and your skills to help it up do well. Yeah, that's I think another ultimate question. I think for us, first of all,

it was completely our money. So maybe in the olden days and I say this in someone who's been burned by winning spacts when they were younger in Canada, but we didn't know how the sausage was made. So you know, some broker called you and said this is going public and it's uh f ME Drill Incorporated, and you're going to buy the stock. It's how the product was sold

that was probably shady. You know, the product hasn't changed that much, but I said, like the tactics of which they were put together and sold have so you know, I believe what's something that's different And it's up to the investors to read the s ones and ask the right questions. Is who owns the stock? Like who put up the money to get this band together? And for

us it was all our own money. So the the almost ten million dollars that there's a pay to play here, and I think some of the ones you have to be careful. One where that ten million dollar comes from, not the group involved, but maybe some retail investors or some shell that was put together with creatively from a pile of old shells that already has all the filings, etcetera,

started from scratch. That we've got to invest in the law firm, the the s one, the the who's going to pay the two percent to the bank, the D and O insurance? You know, are there going to be salaries? This could take two years of time and that so you've got to set aside eight to ten million dollars depending on what you're going to raise for those two

years that you've got to operate this public company. So there's no free lunch, and the returns if you don't have to negotiate down your your your fees can be fantastic, you know. But the risk is still there, you know. And I think what good allocators are capital asked for is like who put that risk capital together? And how long is that risk capital going to be tied up? How do you align the spack operators with the public company.

And and a good board at a good public company is gonna put the clamps down on all the stuff that happened. And I think where Chamath and Adam Bain and this new batch of of good intentions backs like people that are going to be great band leaders and people that know how to put together a symphony. And by a symphony, I mean a great public company that grows faster in the public market than ever do in

the private markets. It's going to come down to, you know, intentions and execution, and the more risk capital and the more alignment that the back operator has with the long term goals of the public company, the better. So it's up to both sides to kind of tie each other into the long term here. So for you, though, just if I can follow up real quickly, what is the requirements or what is the expectation on the part of these hedge funds that you're going to be with it

for a while? Good question, I mean, until you find the target that the sharp knives probably don't come out right where everybody really puts the screws to each other and says, we'll agree. This deal happens if you guys lock up your shares for two years. Right, there's no nothing's written in stone. Everything's up for negotiation. Now. Some maybe Chamath has more power because he's done more and

he says no, we're only gonna lock up. I can only speculate, but you know each deal will be different. You know, as the clock takes back towards two years, if you haven't found a deal, you're going to lose a lot of your negotiating power as a spack operators. So so so many things can can change, and I think the media has had a field day just kind of putting everything neatly compartmentalized. But there's a very complex,

very elegant product. But with all kinds of complex ways that they will in each one will be structured differently when they're finally expressed as a public company. Got So, how is the acquisition search actually going at the moment, because in previous podcasts on the subject of SPACs, Joe and I have heard the competition is pretty intense. Uh, spacks are starting, you know, every week, if not every

day at this moment in time. We've heard of spack offs where you know, multiple spacts will compete for one target. How's it going? Woo doesn't like spacking up, So that was keyed up. That was so teed up. I don't even know if that could run on Bloomberg. The The ultimate question is what you just asked, is like, what's it like out there on the gridiron, And let me just tell you that I'll give you the same answer if I can be a venture capitalist and I say that, yeah,

loosely or whatever. I mean. It's a bull market and we've had our winds and we've got a great track record, so we're very proud of that. But we are in a software boom, bull market and zero interest rate economy. So I'd like to pat myself on the back, but remind myself that pretty good tail wins out there. It's all about, you know, and you get something done. What's important here is that you move, you know, quickly. We

have we have just legally gotten through the process. And this is the end of my quiet perier where we actually can talk two companies about our spack and prepare you know, explainers about what we think we can offer and send that around. But I never worry about the competition. And and the world is big. We've gone through this very long period of indexing and like set him forget, and we're coming out of this period where every American

is basically holding the same portfolio. Right. We came out of this long period where you should you should only index, and you should buy Vanguard, and you should put your retirement money in Black Rocks SMP index, and you should have a seventy thirty portfolio or sixty forty portfolio like Tony Robins. All of a sudden, it is the is saying that's the way to manage your money. And guess what.

I think what we've seen in the last year is the what we saw with Uber and transportation is what we're seeing with Robin Hood and e Toro and trading. Is when you put a beautiful button on top of a very complex thing. Uh, this next generation likes to push the button and spin the dice or roll the dice, and so we have this incredible unbundling of the indexes. And so I think there's hundreds of new public companies that can survive. And when you and that may not

sound like a lot, but it really is. I'm talking about good public companies. Right where we we the market could support probably a thousand new public companies, of which there will be two hundred great ones or a hundred great ones, and so are we don't think it's that competitive if you know where to look. And just as VCS they told you that unless you're in Silicon Valley, you can have great returns well social leverages in Phoenix and San Diego. And we're tough, you know, performing venture

capital fund. So I've never really boughted to that competition. America is a huge country. I say it's an emerging market in many ways because you can do investing outside of San Francisco and New York right now. So the flyover states are emerging markets, just like Malaysia's an emerging market. So I think the targets are way more than people

estimate or gu estimate. Just like most people can't analyze and tell you where stock's going to go, I don't believe that the media or the analysts can say how many public companies there can or should be. So I think we're in this like wild West, where um, if you find a great company, you can get support for that great company, and you can find shareholders for that great company because everybody has a brokerage account in the

palm of their hand. I just want to point out while we're having this conversation February seven am Eastern time now, as the extent three and a half percent. So maybe this is the top. Maybe this is the this is this would be perfect. No, I don't really I don't really think that there's no way at the top. I

think that you think so well. No, I I personally think that if I can do us fact, that would you know, it's that old saying, you know, as if they're gonna if this club is going to accept me, and then you know, why would I join the club? I think, you know, it's easy to just yell out, this will be the top of that, the top. There has been so much speculative behavior. And I was writing about today and n f t S because I can't get enough uh you know, I can't get enough action

in the real markets. I got to develop a digital card market. We've seen all the signs right that there should be a pullback. And it's not just you know, a year ago is just Tesla, and today it's not just Tesla. It's like ethereum, it's bitcoin and it's alt coins, it's n f t s, it's you know, game stop. I mean, there are so many reasons why you could say it was the top, and eventually somebody will have a tweet that they hold up five years from I'm

saying I called the top. But you know, it's just not a very practical way to go through life yelling out bearish statements, you know, I mean we joke about this all the time. It's like, it's just stupid idea to just run around yelling looking for the top or looking for the bottom. Right now, to participation economy, some of us are luckier than others, and there's a lot

of supply. The way I look at it is there's gonna be some vicious sell us because there's a lot of smart people creating products for the investing world, and there's just a lot of supply. So sorry, can we just dig into the froth idea of a little bit more? Because you on your blog have been like slightly critical. I mean you've praised facts as a graceful product and efficient product and all of that, but you've also been sort of critical of some of the stuff going on

around it. So I think you said something like the stock market has its own fantasy sports SPACs. So just how crazy do you think everything is at the moment. Well, I'm I'm very much an investor trend faller. I call eight to eight companies I like to own. I like to invest in public companies that I really feel I understand,

maybe not to corraly financials. I'm not listening to all the conference calls, but you know, when I wake up and I call them eight to eight companies and I think about Google, I can compartmentalize Google and say, you know, if you believe the Internet is growing, uh, then you know Google is fine and there's going to be as

growing too. And so in the spack world, what's so unique is there's so many different ways to express a SPAC and so for me, I don't like the SPAC ideas that are in these very nascent markets like e like electric vehicles, where the revenues five years out. It's

just not my style. So I can be cynical of of of SPACs, but still want to create a spec because for our spact, we're looking down the middle of the road of enterprise and at e commerce, mainly where we think big, profitable, cash flowing companies can be built in the next you know, shopifies, in the next Twilios and they're out there. You know, when we invested in robin Hood along the way and it got to a billion dollar valuation, which wasn't that long ago. People still

we're like making fun of it. And you know, in in many other eras that a billion dollar Robin Hood company would have been a public company. And now it's you know, give or take a few billion, they're saying thirty billion dollars in the private market. Like that thirty billion dollars, it still was locked in the private markets. That that moved from one to thirty billions. So I think the investors need more choice. Wall Street in the

main street or the advertising. Wall Street got away with telling this story about passive investment and cut your fees, and we all ended up with the same product, and we all ended up with Wells Fargo and Verizon in our portfolios. And we hate those companies. I can tell by the media writing poorly about their practices that we hate those companies. So why do we own those things if we hate them? That bothers me and SPACs even if you make fun of them. We have a chance,

and I call it fantasy. We have a chance to align our capital with people that aren't gonna get us into the next Verizon or Wells Fargo. We're gonna take people to space, or we're gonna build an electronic vehicle or We're gonna get a the next Twilio public and

bet on us to do that. So I think there's that fantasy part where you can you can actually not just be an armchair quarterback, but you can feel like you have some skin in the game, whether it's one thousand shares or ten thous and shares, and you have access because you you talked to Howard Linson on Twitter, so maybe you with your your your your tweets can subtly influence how the game is going to be played.

So I think that's part of the fantasy part of it is that, um, the people making decisions are on Twitter and on stock twits and and sharing their insights, and you feel like you have some kind of say in the game. And I think that's coming back to the markets, and I don't think there's anything wrong with that. I want to talk a little bit about Robin Hood, but before we do that, I have one more sort

of SPACs question. This might be a little speculative, but you know, like you hang out obviously and very impressive circles, and you go to Carbone with Adam Bain even though he has like a fifth This is kind of back to haunt me, even though he is like a fifth cousin of mine. I don't think you know, he didn't

invite me there. So, but you know, we look at all these SPACs and you know kind of joke, it's like, oh, the editor a chief of Cosmo head us back and Colin Kaepernick had us back and all these like we're in your from your sense are these coming from? Is someone approaching them out of the blue at places? I don't know. I guess no one's going to Carbone now because the viers. But is someone Are there like groups of deal makers out there who it's like, you know what,

we have everything we need. We have the lawyer, we have the operations guy. We have the guy that knows the cloud, we have the goldman guy. What we don't have is the person with a big Twitter following as like, you know, who would be great, Colin Kaepernick? Whatever it is like, is that kind of how is that your sense of how these are coming about? Are they more like the conversation do you had, like what's you must

have some feel for what's going on. Absolutely, I did not call Colin Kaepernick, um or any athletes to get involved in our spack or entertainers because not that they shouldn't be right. It's a free country. And this is just another financial tool. And we've seen this with tokens, and we've seen this in in in advertisements for products.

This is just another product. If some if a promoter slash creator of a spec is thinking that a celebrity will make their spec better, you've just for sure turned me off to deal. I can't. I'm not going to tell other people what to do. But if I'm reading an S one, the last thing I care about is if an athlete or a celebrity is involved, unless that athlete or celebrity has incredible domain experience or investing experience

around what I think they might target. So when we put together our team, it was more about how will founders it very fast growing companies respond to us, right like, you know, what do our trading card? Like? If they have a quick one page or about social leverage acquisition corps, how do we make sure they take our call? And if there's four other bidders around the table, why would

they go with us? And that's how we thought about the team, and that's why Ross Mason is involved in Mike Marquez and Brian no regard from Tinder and Mike Lazarow started by the media. You know, when we put this team together, and it was mostly orchestrated by me.

Is I wanted to be able to when we we want our founders to light up and be ecstatic that they have Brian Norgard in there to help around product and growth, or Mike Lazzaro who sold his company for eight million to Buddy Media, or and worked as chief strategy officer for a few years and under Mark Bennioff, and so so you know, we we thought about our facts. Like I said, it's an incredible band that we're trying

to put together to to produce one incredible hit. And obviously we'd like the band to stay together and do two and three and four. But I think it's very elegant that you put it together and do one company. The idea that you can even do more than one company seems crazy. So I think it's just so interesting that you can expand all your energies to go create that one great hit. And if you watch any of

these music documentaries, it's kind of the same thing. When they go back and tell you how they made the song, it's like, Wow, I didn't know that person was involved in the in the lyrics, and I didn't know. But generally it's not some fluke that a great song get built. There's a backstory, and I think it's important for investors to really understand the backstory and how long that team has been put together, because maybe the Colin Kaepernick one has a specific I haven't read the s one but

has a very specific reason they're using calling Kaepernick. So again, there's more than one person. But I am what I am a little bit leery of things that get promoted as it was with someone famous, because behind the scenes, you need someone great in the boardroom, and you need people that help guide through quarterly earnings and earnings missing and let's be fair that even I'm not good at that stuff, so you have to put people on your

team that know how to do all these things. Well, uh, let's let's real quickly and sort of running out of time. But you know, I'm curious obviously now too many people investors in Robin Hood, which everyone knows all the contra versas and everything that's going on right now. So first simple question, um, has the recent controversy do you think it derailed it or slowed it down at all because the downloads are still huge, Like, is their trajectory for

this company still as good as it was? And I'm not. I don't have a seat inside the border, man. I will say that we did try and invest, even though you know we're early seed investors, seed investors, you know, A bunch of our LPs and myself got around, you know when we thought through at the end of the day, we decided to try and invest a little in this round because we I look at it from a very high level, Joe, I mean forgetting about the communications and

who called who um, there was an incredible security. And by security this time, I mean everybody pushed the exact same button, give or take. You know how they pushed it and how much leverage they decided to put once they pushed the button. Everybody decided to push kind of the game stop button at the same time in the same direction. There's two camps. It happened at internet scale,

and I don't think anybody had seen this. Anybody developing models for a hedge fund had their models and I said, oh three standard deviation move would put game stop at eighty. So we're not you know, so at eighty they felt like, oh my god, the world's never seen this. Well, guess what. Once the world hasn't seen something, the model doesn't count

for anything. And a lot of great people that shared a game Stop at eighty ended up with Game stop at three hundred dollars like an hour and a half later or a day later, meaning the models that they were basing their their their trade on imploded, and it imploded an internet scale. And I think that, combined with the middle of the night phone call for probably more deposits um just the game went tilt. And I think the three and a half billion that was used to

patch this, you know, security breach. Let's call it, you can call it what you want, but really it's a security breach by a lot of people doing the exact same thing at the same time. It's kind of like, uh an attack that they'll say, bots will attack a site and you have cloud flare to protect your site from something like that. Yeah, do do o S attack?

This dodos attack happened, and there's a it was just basically a run on the bank and not on purpose, let's say, but it just happened, and we can we can pitch a moan about how the game rules were changed, and I totally have empathy for people that have been feel that they got screwed over here because it's happened to me in other trades. Is that owning game stuff at three, even for an hour, is a little bit risky after it was you know, let's just be honest

with themselves. The people that were playing in that game. We're looking for trouble, even if and they may not have deserved it, but they were looking for it. I think what robin Hood comes out of this, and and just brokerage in general is much stronger to see Internet

scale into. And yes, people got hurt for sure financially, but I'm glad it happened over in this corner of the market, not you know, everybody pushing SMP was we saw in March everybody selling their five stocks at the exact same time to some incredible volatility and some scary moments. And I think the system will get stronger. And so I think for robin Hood, the risk is always when you're a leader, is if there's a number two, there's a lot bigger risk of getting stuff wrong than if

there's no clear number two. And I think what we found with robin Hood and color me surprise that I've been saying this for years, like why is there no lift to their uber? It's very rare that you find a leader like robin Hood go from one to thirty

billion if there's intense, true competition. And what we found with robin Hood and post robin Hood is their products so good that um and so much clearly better than any adventure backed competitor, any incumbent, that they got through this rather well and should come out stronger, both financially and from understanding what the hell just happened with game stoff, because now there's something that they can put in their models. So it's it's in the end, you know, love it

or hated it's it's a strong wind for robin Hood. Howard, that was fantastic. I swear, I swear that was Actually. I feel like I have such a better grasp of specs now than I did an hour ago. After having listened to you walk through the mechanics, I think exactly what I needed looking for. And I really appreciate you coming on out lot. Yeah, I figured, you know, learned by doing I appreciate you. Let me tell the story. You know, I didn't know. I didn't know anything myself.

I was skeptical when I talked to Adam Pain and I was like, oh my god, I can't believe you're doing that. Well, looking forward to seeing how it goes. Maybe we'll have you back after after the process is all complete, all right, see a Tracy or to talk about wait, what was it the N phase? The token NONN? There we go and take care of heart. You know, I swear, like I said at the end there Howard, that really did actually answer a bunch of questions in my head. Are you going to talk about doing an

all thoughts back? No? No, because no, because we don't have you know, what would we do. I don't have like those connections or anything like that. So if anything, I feel more confident that I probably couldn't launch us back. But but I just sort of get I think a little bit better, like what the premises now now And you know you said the point in the beginning. It's always a little um dicey when people start talking about

like the vehicle more than the company. And actually I don't disagree with that at all, but in terms of um, even after listening to it, but in terms of like why now, why they're coming together, why they're coming in together in the way they are, why they're coming together with the speed that they are, Like that actually really did help out clarify a lot of things. So one thing I thought was really interesting, and it sort of ties together the Spack conversation with the Robin Hood and

game Stop that we were discussing at the end. But Howard mentioned this idea of SPACs as a sort of rebellion against the index world or you know, the tyranny of passive investing. And I think that we are seeing that to some extent with the text stocks and this idea that you know, people are buying companies that they

like to use, you know, the Reddit joke. They like game Stop, they like AMC, they like Tesla for whatever reason, and uh, SPACs are kind of unlocking a whole new group of those types of companies that people could potentially invest in. I think that's interesting, and I do think like people are getting frustrated with this idea that they're just going to pour their money into an SMP five hundred fund and wait for you know, forty year, sixty

years until they retire. That's boring and also a little bit sad it is Borg and said, I just feel like it's kind of like Big told the eatar spinach. And I do think that eventually this is good for you, but you're not going to enjoy it too. Yeah, and I get it. It's like you're not supposed to enjoy It's it's tough because you're not really supposed to enjoy investing, and investing isn't supposed to be fun. On the other hand, this is this impulse that is latent and exists in

all markets throughout time. So it's kind of almost like how long can you suppress it? Like gambling the earth to speculate has been part of respectable financial markets and for all time, and so we can write articles and say just passively index and rebalance and jack Bogel and low fees and stuff like that. But it just because we say it doesn't and just because it's the maybe right doesn't mean that people are going to accept it.

And we're clearly seeing that, especially over the last few years. And game Stop was part of that. Robin Hood is part of that and uh spacks are party. Yeah, that's a good way of framing it, all, right, Shall we leave it there? Go ahead, Yeah, I was just gonna say one more thing though. You know what I was just thinking about with Howard. It's like there's like a famous quote that of George Soros or something. He said like when I see a bubble, I don't get scared

of it. I run towards it. And I kind of think that's like Howard's approach. It's like he can recognize that there's some maybe some disturbing stuff going on with spacks. He can recognize that there's some disturbing stuff, etcetera. But as an investor, I've always thought of, like the thirteen years I think I've been following him now, he had a good nose for like which bubbles to run towards, uh, as opposed to you know, the sort of like typical

mentality of like I'm gonna stay far away from that. Yeah. I mean, people get rich during bubbles if they're able to time their exit. Um, so there's definitely opportunities there. All right, shall we leave it there, Let's leave it there. This has been another episode of the All Thoughts podcast. I'm Tracey Alloway. You can follow me on Twitter at Tracy Alloway and I'm Joe wi Isn't thal. You can follow me on Twitter at the Stalwart. Follow Howard Linson

on Twitter. He's at Howard Linson. Follow our producer Laura Carlson. She's at Laura M. Carlson. Follow the Bloomberg head of podcast Francesca Levi at Francesca Today, and check out all of our podcasts at Bloomberg under the handle at podcasts. Thanks for listening one