If you look at the longevity of Reddit, what are the takeaways for you as the co-founder? The power of community was able to sustain Reddit after the sale to come and ask. In those four or five years when it was just a part of Kandai, they didn't know what to do with it. It kind of just languished, but the community kept it alive. The community kept growing and engaging and there aren't many products that should get away with basically doing nothing for five years and still succeed year after year after year.
Reddit managed to and I think it's a testament to the community and those users and we got just enough things right early that it endured. Yeah, it's like you set this foundation somehow that was so stable that even a giant media corporation could knock it over. This week in Startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for Startups to win new business. Vanta makes it easy for companies to get a sock to a report fast.
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All right, everybody, I'm back. I'm back. I had an amazing time last week. I went to this conference. You may never heard of it because it's for VCs and the people who invest in VC funds limited partners VCs. It's called the I connections global all 2024 conference. It took place in Miami, which is the light. I was lucky enough to have a podcast studio there and I was able to interview two folks.
One, my old friend Alexis Ohanian, the co founder of Reddit and we talked a lot about the Reddit IPO. We talked about what he's doing as a VC. We talked about anonymity and pseudonym's a popular topic going on now because Twitter now is gone full. Hey, you can have pseudonyms and you can't be doxed or people can't reveal who you are.
Sort of really interesting discussion and then I got to have the I connection CEO Ron Biscardi somebody had to come friends with over the last couple of years, really thoughtful guy. And we talked about the state of the market, how LPs and GPs general partners and venture firms like myself who invest in startups.
How that's all going on. Listen, it's a recorded outdoors. You might hear a little wind or some sirens in the background, but it gives it a little more charm. Enjoy and thanks again to the I connections team for hosting us. Everybody welcome to the speaking startups frequent guest and friend of the pod Alexis Ohanian is here founder of Reddit legend friend and just while I'm smart guy. I want to talk to you about two things.
Obviously, I want to talk about Reddit going public mind blowing. Yeah, that's my love for all of us. Crazy 2005 we started that thing. It's nuts is the last years what's the lesson of Reddit if you look at the longevity of Reddit, what are the takeaways for you as the co-found. You know, the power of community was able to sustain Reddit after the sale to come and ask in 2006. Yeah, Stephen, I left around 2009, 2010 respectively.
And then I came back in 14 as chairman in those four or five years when it was just a part of conde. Yeah, they didn't know what to do with it. It kind of just languished. But the community kept it alive. Yes, the community kept growing and engaging and there aren't many products that should get away with basically doing nothing for five years and still succeed year after year after year and read and managed to and I think it's a testament to the community and those users.
And we got just enough things right early that it endured. Yeah, it's like you set this foundation somehow that was so stable that even a giant media corporation could not destroy it. Yeah, and then you were able to somehow wrestle it out. I think for it. Thanks to Sam Alden. Yeah, that's a funny story. Go ahead. Not for me to tell. Not for you to tell. I mean, I know the periphery of the story, but to the extent you can.
He was pretty instrumental Sam Sam and I were in the same batch in Y comedy that batch YC. Looped, looped, looped. And he was pretty instrumental in bringing a lot of folks around the table from a number of different venture firms to do the first investment that really brought in outside capital to dilute, conidast and let reddit be an independent company again. Yes, that was around 14 maybe.
And then joined the board and yeah, it's been I mean, it's wild like the certainly the education that I got between 2014 coming back and then 2018 when I went back to doing venture full time showed me so much about how to actually grow business how to actually as a first time CEO, first time out of college, starting this thing, I got so many damn things wrong.
And then the second time around was an education, Caitlin, who was our head of people now started 7776 was me. We worked together a decade. I've learned so much from her and it's funny. I don't know. There were so many of us who were kids. If you think about from that era, building these social media platforms. And I have to give him his flowers.
So it was really was in a league of his own. Yes, understanding just this level of gamesmanship and how to build an execute a company in a way that the rest of us. I thought to speak for myself just didn't have. Yeah, another level. It was like there were people doing it in a bespoke way. And then he came in and did it in a methodical thoughtful like just yeah, perfect way.
So you're going public allegedly allegedly going public. Yeah, no comment on that. But they got to be great for Reddit to go public. For the valuation ones that being doesn't matter. It's what matters is it'll be recognized for the juggernaut of a business. It is actually makes tons of money in terms of revenue. And where is it in terms of traffic in the United States and traffic in the world. I know it's a top top top site.
It's like people will cherry pick that like based on Alexa data versus mobile data. Got it. But let's say top. 20 15. 15. Yeah, I mean, you could take out the Chinese sites. Right. If you just were doing the Western world, speaking world like it's kind of a big deal. But what's surreal to me is I don't know. We're entering this new era now where I think finally community is getting its flowers.
And there's a thing. So did I mean, and community were the two things that I begged people to believe in in 2005. And they're a handful of people who did most people were like that's nuts. Today, I think the durable businesses. I know you've talked a lot about Mr. Beast on the all in pod. Yeah, the all in pod as an example of this. Yeah. People who are able to build near fanatical community. Yes.
Are able to endure in a world where there's going to be a million distractions and a million different ways to steal your attention. And I think we're going to see the durability of real brands versus fake brands that people like maybe would have been happy to have a subscription to in the past, but didn't truly love. Right. And you know, today someone can build it directly. And I think reddit the one thing we did get right was not making about us.
Per se we built it for communities. You know, even the follow model we probably missed out on building Twitter before Twitter. We did launch a few years before they varies very, very wisely made a follower model around individuals. So you can say, hey, I'm Jason, follow me if you want more of my stuff. Right. We didn't have a follow button. And we actually used to have product discussions about this internally because reddit was about follow the community.
If you love, you know, follow that community. And so mods had a very different role there. But individuals didn't really have a place to put their content because they couldn't tell people. Yeah. You know, even if you were a web comic artist like XKCD, which was like right down the fairway of beloved early reddit content creator. It was weird to post your own content on the XKCD subreddit because it felt too self-promotional. Yes. And so they stay out of the all and thing because it's like.
That's not my place. Right. That's your place. But that's the fans place. And it's it's magical for that. Right. Then it also makes my job really hard for a decade and a half to try to convince the creators to spend time there. Right. Because there's no obvious way for them to do it. And where Twitter got it so right was they could just say like, yeah, if you got cool content posted here, stream and consciousness.
And if you dovetail pseudonymity and the ability to be anonymous but thoughtful or anonymous but clever, that's kind of how it washed out over there. It wasn't vicious, but it was candid. And there, even yourself, you know, like they'll come after you. I mean, if you go into your own subreddit, that is like prepare yourself. Bring armor. It could be full contact. It is in the best case scenario. You still have identity. Like people, it's not pure anonymity.
Pure anonymity has no consequences. Right. If you're fluffy bunny 12, it may be a made up name, but you still have identity. Where if you're consistently an asshole, people know they see that reputation reflected in you. There's a cost to being a consistent asshole. And so pseudonymity, yeah, and that was not any kind of brilliant thinking. That was just grow up playing video games. You always use a pseudonym. You had a hand. You have to handle exactly.
And what I love though was you would see what people really felt. And probably the best lesson I got was two, three months into starting red. We're talking 2005. The site would go down. And the number one, one number one post would be, hey, nothing, which is my username. You're naffing idiot. Why was the site down and you're like fair and and but it was I should have put more memory in the servers.
You didn't load balance. So exactly you had to take responsibility for it. So it's like show up in the comments, explain what's up. And I think that endeared in the early community to what we're doing and how we're doing. And it gave me the best education for how to handle those types of situations. I have to say I've been perfect. But generally speaking, being the front, like the face of a community driven platform and Elon is experiencing this.
Yeah, is a very, very different dynamic than building a business as a CEO in a physics based company. Yes. And it's almost it's part political as much as it is just business. Right. So the greatest education that I could have gotten was being a CEO in the internet age was having my own users shit on me two months into creating this thing. Yes. And knowing that that was just the norm, we'd have to hold ourselves to that standard.
Well, but you know what I see in that now it's every what I've learned over time is if they didn't care, they wouldn't have made a comment. Very true. So here they care enough to roast you. And then you like take the roasting. And there's like, Oh, and here are two really good points. Yes. And then here's a lot more roasting. And so what you have to do is just be like, OK, OK, your fact you're ugly.
This is a great podcast. You disappointed me. I'm publishing this week. I'm talking about me. I'm talking about me. But like literally, this is before I lost the way. They're like, you fact week. Wow. I didn't publish this week. That was on Reddit. So whatever it is. And then then they're like, because I really love the pot. And I'm like, thank you mom. I always come back with something joke like that.
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But what I want to talk to you about is venture capital investing in companies because you and I have had like a little dovetail career experience. We both created properties on the internet that were loved whatever and that we started investing in companies and we had great success there and innovating in what we do. We both started our own firms and we're both trying to innovate a bit and then I watch what you do and you created cerebro and I'm a huge X-Men fan.
And I'm like, I didn't think of that and I thought of a lot of things. I have a lot of little secret things I do as an investor, but I never thought to create cerebro where you track the mutants like Professor X and then you track how you're helping them at professors. So here's school for gifted mutants. That's good. That's canon. Yeah. That's right. And so tell everybody about what cerebro is to the extent you're willing to talk about it.
I really should do a better job of talking this more. It's not like it's secret. It's just lack of whatever interest. I think you're focused on actually being Professor X not promoting the X-Men. Yeah. It's reasonable. There you go. Focus on my core work. To your point, I think there has always been and there's certainly this new era of venture will be a type of investor that is truly differentiated through just the ship they do.
And by consistency, this is what I tell younger folks at the firm. It's like the best way to build a reputation is do dope shit consistently. Like do the things you say you're going to do consistently for founders and that builds your reputation slowly at first and then gradually increases. And as a product designer, I think I've wanted a version of this for my entire career, not just as an investor, but also as a founder because so much of work gets lost.
Like there's even rebuilding the Reddit revenue business in 2014. I think it was an 8 million revenue business when I came back today. 9 revenue that year turning that into 150 a few years later was actionable because we could hire a sales team that would use sales force and we could see very clearly. Okay, here's the effort here. The dollars. How are we doing? Who needs to improve? Who's doing well? What do we learn? There's a feedback loop. You measured it.
It was obvious and easy to measure, right? That's probably the easiest part of any business to measure, but you can still unlock so many things by learning more. But adventure most folks have no idea. And you don't even know if you did well as an investor until 5, 7, 10 years later. Yeah. So how do you create the feedback loop with your team, with your founders? And so I wanted this notion of receipts for myself as well as for the team and for the founders.
You could hold your team accountable and make it hold themselves accountable and creating that culture of accountability that like you need in a business. But frankly, I think a lot of traditional venture firms were not built by operators in a business lightweight, right? They're lean back financiers who wires some money wearing their what's the what are the sweaters? What are the sweaters that schmufflakes? Oh, Loriana. Loriana sweater is leaning back type of stuff. Yeah.
It's a different energy. And I do think this new era is going to be won by builders and folks who are hungry for that kind of accountability to founders to themselves to their team. Right. So what do you track? What do you track? I know. I know. I know. We'll do even if I so founders can actually use your votes to draft tweet storms as an example. Almost like a hoot sweeter a tweet deck for me to then edit and approve sweet then we track the impressions the click through rates. I can say on
equifically like the tens of millions of impressions we've generated the idea that we can do distribution and then have accountability back to the founders to say here's what it is and then gamify it. Yes. So the top five companies shout out intro, which is one of the best at doing this. Now set a standard and we have a leader board because I fucking love a leader board.
Of course that other founders can see like oh wow like here's an amazing tool. Here's a resource. Now that competitive fire that's in most of our founders makes them say okay. Why are we getting more out of this? Let me talk to my social team and try to do things that frankly I don't know if other.
The institutional venture folks have done and I also want to scale my time right I want the time spent not to be thinking hey who do I know it company X to make the intro I want a founder to run a search through my role at X find the person they're looking for right. Draft the email so that all I'm doing is it to in the morning looking at a push note of yeah clicking.
Like that's a way better use of time of course than a 20 minute phone call to like pick my brain about who I know it Disney but I think what we learned as entrepreneurs was there are these as rule of a call miss a Cuisible moments there are just little pivot points sliding door moments butterfly effect moments where you know you tweet something the right person sees it they
Lead the next round change everything the right person right celebrity sees it boom they use the product and they organically tweet about it or share it on Instagram and those sales go 10 X and it really is that blocking
Tackling what what have you learned through this latest boom bus cycle we both live through dot com error we both lived an experience Stopped close and personal great financial recession now we're here third time we've been through this it's like that scene where they're both in the News and the guy looks over the other guys like first time first time yeah what did you learn this time around and we sort of clashing and arguably now 20 24 we're starting to come back it feels like
How did you handle it this time what did you learn I I barely admittedly I was in high school during the dot com one but the hitting the recession when I did I was very lucky Because I was an executive a common asked we certainly felt the revenue drop but I didn't feel the existential dread because you know we had exited I had a salary I wasn't
Worried about you know losing my job and we were a team of four so it wasn't like we were a big burden on their balance sheet so this time around it has been I Think I keep thinking about that meme about hard times create great men or in this case hard times create great companies the sobering up and I will say this I it's funny I have such a I have such a tormented relationship with the all-in podcast oh you do because I love listening to it okay I
Favorite bestie so that's there are times there are times I wish I could teleport into the conversation you can I'll give it a link no I but like there's and that's why I'm tormented by it because I'm like oh but and I think part of the magic of it I will say to it gives me it gives me a view into the brains of people like David that I normally wouldn't want to spend a lot of time in sex yeah that yeah not free
Bergs brain is it's a beautiful mind but it's a helpful it is such a it's such a very helpful extra perspective to get the You know on a commute in South Florida I can like get into my brain yeah but the sobering reality of how drunk everyone got and how I mean you all have been one of the few voices
Actually talking about like hey everyone's gonna have to come to Jesus pump them once again it's been it has been take action so Helpful and even thinking about the kind of council that I'm giving the founders and look sometimes it's validator because sometimes I'm like yes like we were telling
Our founders this two weeks ago and now they're talking about it on all in or other times it's like damn all is got a point here I really should take this more seriously well great conversation amongst people who are in the field doing the work yes
Are invaluable and you think about how we grew up and it really ducked out with what you created and went Steve as well with reddit you know you give a voice to counterbalance other voice where the other voices we have mainstream media that we grew up with Me if we have government and then academia then oh this is community and they have a say to them and then people type in the name of the movie review reddit
Oh yeah right through red every Google is like you know what there's experts in the field I could read this tech publication or I can listen to these guys Guys, guys, people this podcast that podcast where their social media or their sub stack or their email newsletter and get another perspective from experts and I think adding the community bottom up and then adding experts to your media mix will get you to
Truth absolutely traditional media it's plenty to dig them about but there's something about the age of expertise and you know you should be doing I need to get sold with you on the pod strategy it's I have wondered though it's funny you I'm sure you all have noticed there's been a handful of other folks in and around tech that have tried to do what I feel like is there a version of all in
Oh my god five of them six and they're all and it's I don't know what it reminds me of it feels like I think it's so cliche but like they're not attacking it from like first principles thinking They're just saying like okay, we're gonna exactly. It's like a it's a duplicate with different people. That's the formula. Yes, but it's they're not open Right and then edit it and it's just like it's not quite there and it's so funny to me because I would have expected at least one or two others
That would be inspired by y'all that would have started to get some traction because I want that right I don't know I want more operators maybe Okay, we've got a great roundtable of investors slash company builders, but like where's the version of that around Developers or developers or marketing or community. Yeah, there's and so I'm excited to see that I think it's starting like I there are people Are you just gonna do it as part of the all in empire?
You know here's the thing about empires like be careful because when you try to build an empire that's maybe when it falls indeed You know, I'm a big fan of like if you have something that's working here's an idea make it 10% better every time you do it 5% better Every 7 point to each or every 15 weeks it doubles in value which is the lesson of running like you guys made very small changes
You kept growing it you didn't eth it up and I'm a big fan. I'm not fucking things up. Yeah, so I told the guys like we did a podcast we didn't event Like okay, and that's in three years. So that means every 18 months on average we drop something Let's stick with that and let's just make every week fantastic and you know, maybe we'll get there
7776 is the fund. Yes, sir. You're on your second or third fund now and we're your third fund and you invest in seed series A Yeah, the two little incubation to now so incubation precedes your seed still the sweet spot But been been messing around a little bit on the incubation front. It's fun. I think it's a great thing for you to do
I we're doing about 100 investments a year for more programs. Let's go well, you know, I think watch out Why see well here's gauntlet thrown 99% of people don't get into YC So you have to ask yourself if we do 100 more that's like 1.25% of this of the population getting into a program And so you know if you had your program and another 0.25 or 0.5% of the applications to a YC and catch cars
Get accepted. It's not really competition. That's fair. You know, it's fair. It's like it would be like if Harvard is so good Why aren't they accepting 20% more students every year? Right? Except some more students and make it more available if it's that good
And that's why I think you should just do your own and don't worry about it. Like very terribly gauntlet thrown Well, I still want to see when I and do it if you enjoy it five companies that you enjoy and that you want to spend time with You have to optimize for what you enjoy We'll see so I'm I am so sadistic or no, masochistic I want to incubate like I'm incubating some idea that I have getting the like V1 built
Yeah, a little bit more studio. But not like not full on studio, but like we'll probably do one or two incubations that way this year Because I'm a masochist who loves that and it's getting dude the rate at which you can get something to market now That's good. I mean it's it is not this whole pilot so whatever. I mean it's like you could have the idea and six weeks later you're in market
You're actually testing it. You've got I mean everything from copy I mean so much of this stuff is now getting accelerated To stand up content customer support payments AI whatever it's old button. It's like everything's extracted and so what's left community brand you know and solve
And problems for people all right listen you got to go you got more meetings to do less is our meetings. Thank you Jason 776 if you want to have one of the greatest investors of this generation I think what you're going to do if you keep at it for the next 20 years
No quit brother. No, I mean honestly you are just getting started and I think what you're doing with Sarri bro is really when a founder is making a decision about who to pick I think the best way to do it is to just talk to existing portfolio companies once that failed especially once that succeeded once that were in the between And then you know everything you need to know and I think that's why you're going to be tremendous success while I'm taking notes good to see a brother
Thank you. Congrats on reddit. Yeah, I appreciate you too. And we'll see you all next time on this being started. Bye-bye Hey, when your business gets to a certain size the cracks start to emerge we know that's all that stress from your amazing success things you used to be able to do in a day now it's taking a week
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Hey everybody welcome back to this week in startups. I am here at the eye connections global all conference with the founder of the patriarch Ron Scardi how are you sir very well good to have you
Here for people who don't know you run a conference. It's called global all it's in Miami thousands of people come here yeah and then there's an app called i Connections where they all get together set up meetings for these people why have thousands of people come to Miami to take meetings excellent question
I can actions assembles the alternative investment industry so there are about a thousand institutional investors so thank family offices endowments foundations pension sovereign wealth funds all those entities that put money into hedge funds venture funds private equity private credit real estate That's the other side of the event collectively 4362 people are registered here for global walks amazing and I got to speak at your New York
Version of the event I came to Miami Miami's much bigger and for a fund manager like myself I didn't even know this existed you wish to be at some point you know my bestie Chimath it was really incredible for me as I'm racing a fourth fund there's so many people interested in alternative investments and what you've done here is really magical I think
You have a little bit of content a lot of night life and parties and you know events people network but really the meat and potatoes the foundation is people have boots or Rooms and the app people can request meetings and the LPs the limited partners get to take 30 minute meetings with the GPs and you run some sort of algorithm at the last minute and it just sends people to
Rooms yes exactly so it's too cumbersome for 4,000 people to calendar all of this so everyone just picks a time slot or they tell us where the open time slots are in their calendar and then our Algorithm runs about a week before the event and it plugs in all the meetings and we do that so that we can cluster the meetings for the LPs because the LPs are the ones who are doing the walking the GPs are stationary
In a booth or a room and this way we don't have the LPs walking and and you can see we're here the found blue and the Eden Rock Hotel it is a massive campus yeah and the only way to navigate that is if we keep those meetings close Together yeah, I have experienced that because I went to the wrong building I had to go double back but once you get settled and you get into your rhythm it's great so maybe to talk about
We went from a Zerp environment it was insanity the market collapse you're running this conference for the two years during this market turmoil 2022 2023 here we are in 2024 and the vibes seem different as somebody who coordinates all this activity what are the vibes telling you going into 2020
So there is no question the alternative industry went through a lot of turmoil in 23 especially in Q3 and we saw it in clients just telling us the war story of trying to raise money in an environment where in 23
Mainly because as interest rates have gone back up allocators are now rejiggering their portfolio because for the first time in 15 years you can actually have a bond portfolio places in the portfolio where they probably used hedge funds in particular they're now rethinking does it make sense to put this capital on that kind of vehicle
Should we be in more of a traditional fixed income vehicle as a lot of that change took place things really slowed down and fundraising was much much tougher for all in the middle of the year but November the market did well December took off we have been
Inundated in the last two months with sign ups on both sides LPs and GPs we have over a thousand LPs in this event it's up about 100 to 150 over last year on the GP front we're up about 25% in terms of the funds that are over a billion and about 20% overall So the activity in all is not slowing down but it is always shifting traditionally long short equity was always our biggest category in this event this year it's about 20% versus in past events it was probably more like 30-35%
Private credit absolutely huge everyone wants to meet with private credit they are getting more than their fair share of meetings because LPs really want private credit
Credit so attractive at a time like this well the interest rate moves have had a huge impact on private credit and the rates that these funds are able to charge and the market opportunity has just exploded because banks are still really difficult to do business with especially if you're like a small business even approaching the mid market
There is still if you don't have real assets to lend against collateral that the bank can identify they are very tentative and not moving quickly at all so these private credit funds come in they are going to charge you a much higher interest rate 15% 15% 16% absolutely those kind of numbers but if you're growing business and you just need the capital it's still a lot better than raising equity and probably much much faster
Yeah so the interest rates go up people are questioning private equity venture those portfolios are being cleaned up you know obviously I'm in the venture industry so I've been watching that I'm early stage so I get a little bit abstracted from the later stage where that mess was you know in the process of being popped up
Yeah clean up I'll aid you know growth funds just everything fell off the shelves but as the rates went up hey if you're if you're sitting you're a sovereign fund you're an LP you're an endowment give somebody you know a hundred million dollars and they guarantee you 15% a year that's pretty great I mean that's spectacular yeah it hasn't existed in a long time existed so for the private credit funds the interest rate move is absolutely
middle-wind yeah but now hey they say three four rate cuts this year and you know maybe mortgages leveled off maybe start going down so then you'll see that maybe taper down and then maybe people get frisky and want to be back in equities back and private companies yes
Oh absolutely I mean I've been running of these types of events for a decade now and there is just a constant shift in strategy focus for the LPs and they're just adapting their portfolios to whatever the market environment is so for sure I mean I think we're probably if we're not at a top in private credit we're probably close
it feels like this is the top because hey we're going to have an interest rate cut sometime in the spring or summer is like I think hopefully yeah that's what people are saying but hey the economy could heat up again so overall when you look you know let's go to a 10 year of you we're just if we're sitting here in 2034 and we're looking at the markets what what things do we know will be true about the friends that you're seeing now what can you extrapolate out and say
you know what we know this trend is going to continue and we know this trend is going to continue I don't know that I'm qualified to give you a 10 year projection with any accuracy but I will tell you the one talk that really resonated for me was Brad Kirsten or yesterday yeah right right I think Brad looking at the venture market your market and how companies have had to become fit you know I think his term is is
our for capital efficient would be a translation to what he means exactly exactly companies have had to operate probably in a more traditional form than they had been operating leading to the peak in 21 I think this is probably one of the best markets in a long time for venture money to be put to work
however venture funds have been having a really hard time raising money you know the last two years have been tough I think a lot of that has to do with the lack of exits because LPs are saying look we need the exits from your last couple of funds to be able to fund the commitments you want to make in your future
yes so the and those have been delayed a bit for sure because public markets are a little bit tight but hey we have read it and hey well there's a you know story that is almost 20 years old 15 16 17 year old company I think it started 2006 or 5 or 6 and now they're going public here he almost 20 years later so absolutely it can take time and it will take time and again I can't predict the markets but I can tell you the sentiment I'm
hearing is the people are very optimistic that the IPO market will begin to loosen up and and open up ultimately yeah I'm hearing second quarter third quarter I think red it will obviously be a big indicator yeah stripe red it was a whole cohort waiting to go out and that could open things up it's hard to balance hiring top tier developers and keeping your burn rate under control but these days I see a ton of founders successfully doing this by hiring
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here's the best part twist listeners get 20% off their first month if you're ready to scale your dev team and your business check out scalable path calm slash twist once again that domain name scalable path calm slash twist 20% off I think globalization might be a trend that we can both agree is not stopping you have sovereign wealth funds that you know we're kind of on the periphery you know you might have some
sovereign wealth fund in the Middle East or you know in Asia that puts money into a fund of funds okay fine they're getting access to some private equity fund you know that maybe get access to step removed or two steps removed but now we're starting to see those same I think sovereign wealth funds show up here in person yeah so I had a great conversation with you know somebody from Abu Dhabi last night is about one example
this isn't just an arms line transaction where maybe you could speak to what you're seeing in the numbers of attendees coming from the Middle East out of the Asia China India what we're we're coming in we go we have sovereign wealth funds from all over the world at this event I think the total attendee count from sovereign wealth funds is
somewhere between 20 and 30 but they are super active and there are some sovereign wealth funds who absolutely went through fund of funds vehicles who are now taking direct meetings with fund managers and also doing direct deals you know obviously at a at a larger size but there is huge interest among sovereign wealth funds they are I mean we can get you the meeting count it's hundreds of meetings happening a
set collection of sovereign wealth fund attendees so and by the way across all categories they're meeting with venture funds private credit private equity you name it yeah I mean obviously they have huge portfolio so they kind of have a need for everything yeah and then when we look at the classic
endowments here in the United States it feels like those classics their dance cards are filled up so to speak maybe they don't come to an event like this maybe they're you know been doing it for 50 60 years are not adding new managers or maybe kind of locked into a system of investing and they don't need these new alternatives in my correct in that assessment so I'll say this they are definitely slower to deploy capital they're
incredibly selective and they may select just one or two managers a year if that in a ten billion dollar portfolio but they are coming to this event in big numbers we have about 70 in down in foundations here because they're using this event to keep funds that are interesting for the future on their radar they will meet you and they will track you and then of course this is not a quick sale cycle as you I'm learning
yes because my business has always been oh we're friends you know wrong wants to be an LPM I you know tiny 10 million dollar 40 million dollar fund okay no big deal but once you get about 50 million you may have to have a process here you may need to expand the pool yeah and they do take years years literally here so I had to talk earlier with Ted Cites here and a capital allocator's podcast he's amazing great podcast and we were talking about how Ted
asked can we track the results of this event and we do a lot of things to try and get a sense as to what happens after the event but the reality is for a lot of funds especially emerging managers you have to be in this for the long haul and you have to expect this is a multi year sale cycle you're not going to meet you know or Princeton or he'll it and expect you know next month they're going to be cutting check that does not have a family office if you meet the principal perhaps perhaps
high net worth individual certainly yes you're you're meeting with the direct decision maker but there's an entire class of people in this capital allocation field refer to as LPs limited partners they are answering to different constituents internally yes and they have to build up a case and the way I heard it recently was hey you never got fired for investing in X
you used to say in technology hey you nobody ever got fired for choosing Microsoft or I be it was IBM originally then became Microsoft so there is like sort of safety in brands you know if they're going to take a new brand on they need to check some boxes what are those boxes they need to check to get comfortable you are advising somebody like me or another VC fund manager I know she had so
the Amaro say here in some Nicole wish off like some emerging managers very small funds five twenty million dollars funds what's the advice for how do you nurture those relationships with LPs and one of the check boxes they're looking for well I can tell you when we run our investor surveys one of the top issues related to this is your investment process and how much business risk do they think they're taking when they make a commitment to you
so for emerging managers the business risk is really the number one issue right there is an English business risk we know what a risk is we know it's a risk in business what does that mean practically so what they don't want to do is making a commitment to a two hundred million dollar fund run by let's say it's two or three individuals who got together for this fund and they've only worked together for a few years and you know what they don't like each other that
break up they break up the band breaks up the band breaks up and now I've got you know I've made a 10 million dollar commitment who's managing it what happens what happens to this fund yeah no no secession planning what happened well what happens is some form of a wind down and hopeful hopefully capital return frankly it's much easier when it's a
hedge fund because you know the portfolio is more liquid you sell the assets you return the caps not a 10 year window right when it's a new venture fund or a private equity fund it's a much bigger issue because someone has to watch over this sophisticated person yes exactly so I've been on the other side of this call there was a there was a high profile collection of startup investments I'll leave it at that and it kind of imploded and I got the phone call hey would you take this on yeah and
well I didn't make any of these bets I don't know who these founders are thank you I'm flattered but no like that sounds like catching like 200 knives like that catching one knife hard enough you know there are circumstances where it could benefit you to do it but from the L.P. standpoint if you are inside of a large institution and you're part of the investment team and you made this
recommendation and then this happens oh I got the fish not great so now if it's a family office you dealt with the principal at least it was the principal's decision yeah it's their capital they made the bet they made the bet it was a risk they took it but for this reason larger institutions want to track
emerging managers for long periods of time get to know them three or four funds absolutely three or four funds now not to say that it never happens you'll certainly see spinouts from brand new firms with someone who they've known for a long time as part of a bigger person was a partner at Sequoia or Cliner or they work for Chimoff at social capital then they started their own fund exactly okay I I watched you do this investment I know your
fingerprints were on it hey we're going over here and they've spent time with these people yeah you know if you're inside of a fund and you have visions of starting your own fund one of the most important things you can do is meet the L.P.s who are in the fund working for because those will probably be at least some percentage of your initial seed capital
brought people don't know this but you're done incredibly well for yourself you're allocating your own capital I'm fighting the fight every day you're you're out there it's I think so going very well for you I could see here where do you allocate your capital you see all this and so hey you know well what what how does the dot what medicine is the doctor take you know for for us I would say we're allocating to strategic partners primarily that's a big focus for us if it's a fund that's an interesting
spin out like I'll generally we don't talk about our portfolio investments but one that we invested in because we thought it was a really interesting new area that's that we think will absolutely crush it is taking manage of social media influence and Kim Kardashian
I got to interview Kim and her partner Jason and they just in their private equity firm I guess did their first deal as a hot sauce yep exactly a hot sauce and the truck founders were here for the truck is it called yeah truck T.R.U.F. truck hot sauce truffle hot sauce oh I understand it yeah there you go truck hot sauce all right free plug so when you think about what an entrepreneur is looking for when they source capital they want of course they need the capital itself but they also want
business experience and relationships and assistance because as we all know building these companies isn't incredibly hard when you go to a firmly sky partners and you partner with Kim and Jay and now you have Kim's influence and prominence in the marketplace and ability to drive customers towards a consumer
yeah at least to try it yeah so that'd be good people in the world who can do that yes Kim can drive so that's an example of an investment we made and of course we love having Jay here yeah taking meetings with investors and the truck guys here doing you know and talking him for the so do you think
that we look at it we look at deals that will help increase the visibility of our event and the prominence got and so so there's a strategic and then there's the uniqueness that's one of the what things you look like you look for exactly and then of course you have guys like
Brad Gerson or adultimeter yeah another firm that we invested in you know Brad's in the Hall of Fame adventure investing yeah I said pretty great snowflake is you know you and it only takes one right and that's one of the that's an example of one where we're really appreciative that Brad was willing to let us join yeah yeah and so where does this all go next I mean it my army's great you got New York where are you taking this all it's a little confusing to you got the global all
brand you got the i-connections brand I know I know Brad actually suggested I just changed the company named the global all he said I can access to confusing what do you think I think i-connections is the global all tap I'm always a fan of like less brands yes yeah so I think you could solidate it that's right I know global all sounds more like what we are which is true it is true i-connections is an awesome app you guys have been racing to keep that app up and running I see updates every day
I know a lot of updates it's hard to build an app great app isn't it it is and the whole thing is custom built so yeah but here's what the future is for us especially you know the first half and 24 we're taking the app and expanding it outside of events you know it and pretty much everyone knows it as the app they use to coordinate 20 30 40 meetings when you come to an event yeah we support about 20 events throughout the year this being the biggest we're going to take the app and add a road show
module so that when you go to New York and you do 20 meetings in New York and you have to coordinate schedules and travel time and all that stuff wow bro we're going to help you do that and back that up with a concierge team so you'll be able to call our concierge team and say book my hotels book my car book my plane and if anything goes wrong during the road show you'll be able to call the concierge to rejigger your schedule the concierge is a great idea but the
introductions is really the power like I have an assistant to help with that I mean for us that's the power for me the things of the concierge will be new but the relationships of the LPs we already have those yes so if
theoretically let's say I'm going to Boston New York whatever would you be able to then I say to you just find me 20 interesting people in the city you enter your road show into our system and it would message all of the LPs who've downloaded the app and tested that they are accredited investors
qualified purchasers they would see oh Jason's coming to town on September 25th yeah I'll take a meeting with you so that make that starts putting you into this like broker kind of category but you don't can't be a broker so we're definitely not a broker you're not trying to charge a commission on
that it'll just be part of your membership or something exactly it is in a sense like calendar on steroids I'm just trying to ease the logistics of all of these people who are members of our community but no we absolutely like Davos has a membership exactly you have a membership of global all to get meetings it's the same exact thing I love this I love this vision for it because you know I've been making these trips and trying to meet folks and you don't know who you don't know
right and that that's always the hardest part is like if you're in a down from a college and you're on this list of the top 50 or 100 you're getting hammer yeah now you're I met a couple of really interesting family offices here that don't have websites they don't have they don't tell you
their email address is everything is you know very a cloak and dagger yes but you have those folks and yeah I think that's like a really special thing especially if they can double opt into it hey I'm gonna be in town and this person's in Baltimore Philly and New York maybe a why not go have
uh dim sum or something absolutely and the remember in especially uh when you get to a few hundred million of AUM and a family office there's generally a team of people so someone's job is to know who's coming through town hmm what are the funds that are out there actively raising money so
and you're going to them in this circumstance so it's pretty easy you're gonna pop in oh right you're going to their conference room easy breezy they're there anyway it's a coffee in their conference room for a half hour yeah they get an update if they've already met you or they're
learning about you for the first time but it will it will make everything more efficient because all of your information will be contained in the system the same way it is for this event so the LP will just have as part of their allocator portal your information that you choose to
share with them yeah because I didn't notice that too like I share my phone number I'm just like hey whatever yeah let's go um I could always block you if you get weird um it hasn't got weird sometimes and uh oh hey how did you like the did you notice the business card exchange that we added
yes I had a bunch of people go scan yes exactly so we exchanged 22,000 business cards whoa before we got to Miami sweet it was all the we did you know we're doing 15,000 meetings here in two days the parts that have been decided you know what yeah let's let's exchange our information
so if anything comes up I can call yourself like an email you wonderful yeah that was something we had talked about I was like hey I mean it's okay I can't find me on my booth or that I stepped away from the booth can I just put the phone number in here and you were like oh yeah so I was
giving you a little product my product team to get upset with me but you may have had something to do with that idea yeah well I was like hey it's supposed to contact people like I mean I'm okay with it I don't know and I think 90% of people are okay with it most people are you know the I
would say the allocators dear earlier point who are inundated with calls it's hard to be emails yeah I mean they these are people were literally getting two 300 emails a day from funds that are trying to get to them I'm they are more protective I mean that I mean that I think I get that but with
founders and I think the way you have to look at it is that's a sign of success that people want to participate with you so whenever I see a VC you'll see a VC lose their mind once in a while and they'll go on Twitter don't email me if I blah blah blah if you you should always do your
research first and know that I do this sector and I'm not in that sector and then I do this stage of and I just think oh that's the end of their career like they really don't care like here's another idea you get a hundred emails in the morning feel blessed and then delete the ones that
you can't respond to or just archive them and you'll get to them someday if you want to and then the ones you do provide them or here another crazy idea you having a system or an associate have them read your email boxes or at them I do a first level sword for you but don't under any
circumstances be upset that the world wants to be with you wants to meet with you yeah people get weird no well I think they're just overwhelmed and I know like I'm terrible at organizing my inbox so it would drive me crazy for sure but in general everyone has to just like take a breath we're
all lucky enough to be in this industry we are super fortunate everyone at the conference is super this is incredible yes I mean to be worse than my email box is a little overloaded oh yeah I know it's pretty hard are trying to overload it less I mean this is like people who complain that
like their Apple TV it's like three or four clicks to get to the movie they want to watch and when we were growing up it was like wow I wonder if this star wars is ever going to come out on VHS or it's ever going to be on TV we have to watch it with commercials I have to watch it with
commercials they added out all the good scenes if you were giving a piece of advice or just assessing what are the qualities that make a great LP two or three and what do you think the great qualities are of jeepies if you think about those two things take a minute to think about it because
there's two sides of the table here it is but I'm I'm actually going to give you the same answer both here we go it is build relationships and you build relationships by paying it forward I have done really well in my career mostly because I was nice to people I helped people I didn't
ask them for anything and all of those favors came back to me and droves I think it's basically the same idea if you're an LP a great way to make sure that you're in the best stuff is to build relationships right if you know the right people if you have the right network and by the way this
is all super long term stuff this is not a business if you are a naturally like super transactional person I don't think this is really the best for you it's it is such a long term play if you're an LP and you want to build great relationships you have to make a lot of friends along the way
and being helpful and doing favors and not asking for anything return is a great way to do that and if you're on the jeepie side it's all about deal flow right it's like I want to get access to the best deals it's it's the same concept it's helping people that are going to help bring you
into deals send you deals in the case of a GP it's really about the service provider network right yeah making friends with the lawyers the accountants the investment bankers when you know it's such a simple thing but people do business with people they like and like they don't teach you
this in school but it does like also they don't teach you this you know the our relationship is based on the fact that you just when you met me you were like hey I think I could be helpful with the couple of things here and I really appreciate what you do and I was like oh my god that's literally
one out of a hundred interactions I have the other 99 are okay and I was one out of a no the other 99 are hey you know this person can you get me a meeting with him or hey you do and I'm like oh yeah sure well let me just check my punch list here oh yeah let me just put you right
on the top going on it's just crazy listen Ron your a bench thank you so much for inviting me you treat me so well when I come here I really do appreciate that I appreciate all the best these obviously I'm really really partnering with you yeah well you uh sax and freeberg and tumult it's been a great relationship so thank you guys continue to success your team is amazing awesome and we'll see you all next time for this week in starters bye bye