VCs Would Bet on Open-Source AI Over OpenAI and Anthropic | E2341

This Week In Startups is made possible by: Northwest Registered Agent: https://www.northwestregisteredagent.com/twistdomain Odoo: http://Odoo.com/twist Rippling: http://Rippling.ai/twist Plaud: http://Plaud.ai/twist Harmonic: http://harmonic.ai/ Today’s show: Anthropic and OpenAI released cheaper models on the same day with Claude Opus 5.5 and GPT-6, and these VCs would still bet on open source. Jason brings on Dave McClure of Practical Venture Capital, Jeff Clavier of Uncork Capital, and Jenny Fielding of Everywhere Ventures to discuss the argument for open-weight models over the frontier labs. Learn why median seed valuations have more than tripled since 2017. Why does Dave say it's a buyer's market for secondaries right now? PLUS, does Meta's Muse leave any room for Instinct, and why are fintech and healthcare suddenly out of favor? Guests: Dave McClure on X: https://x.com/davemcclure?lang=en Practical Venture Capital: https://practicalvc.com/ Jeff Clavier on X: https://x.com/jeff Uncorked Capital: https://uncorkcapital.com/ Jenny Fiedling on X: https://x.com/jefielding Everywhere Ventures: https://www.everywhere.vc/ Relevant Links: Instinct reportedly seeking $1B at a $10B valuation (report via The Information) → https://cryptobriefing.com/ai-assistant-startup-instinct-targets-10b-valuation-in-new-funding-talks-report/ Meta's Muse, the agent the panel sees as Instinct's biggest threat, now on Mac → https://aiweekly.co/alerts/meta-ships-muse-for-mac-agent-now-acts-in-native-macos-apps Trump calls Jensen Huang onstage at the All-In Summit → https://thenextweb.com/news/trump-phoned-jensen-huang-onstage-at-the-all-in-summit-to-call-ai-fear-a-hoax AI-assisted intel error nearly triggered a US intercept of a Chinese ship (CNN via gCaptain) → https://gcaptain.com/ai-error-nearly-triggered-u-s-intercept-of-chinese-ship-cnn-reports/ Bernie Sanders' 50% AI sovereign wealth fund bill + Altman meeting (Fortune) → https://fortune.com/2026/06/18/bernie-sanders-ai-fund-bill-sam-altman-1000-payments/ Stanley Druckenmiller's AI-written WSJ op-ed (Axios) → https://axios.com/2026/08/26/stanley-druckenmiller-ai-writing-wsj-op-ed Claude Opus 5.5 and GPT-6 Sol/Luna launch the same day with price cuts (SiliconANGLE) → https://siliconangle.com/2026/09/22/anthropic-releases-claude-opus-5-5-and-openai-counters-with-two-cheaper-gpt-6-models/ Zipline: LAUNCH's "miss," later backed through the syndicate → https://www.flyzipline.com/ Micro1 → https://www.micro1.ai/ Founder University → **https://www.founder.university/** [VERIFY] The Syndicate: angel invest alongside LAUNCH (apply, waitlist) → **https://thesyndicate.com/** Timestamps: 0:00 What seed rounds looked like then: Fitbit's $2M seed 2:38 Jenny's Techstars NYC years and the two-unicorn mug 6:10 Plaud: If your work depends on conversations — interviews, meetings, calls — you need a Plaud NotePin S. You can check it out at https://Plaud.ai/twist and use code TWIST for 10% off! 7:51 All-In Summit: Trump calls Jensen Huang onstage. Staged or not? 8:56 P(doom) roundtable + Dave's AI sovereign wealth fund prediction 10:08 Northwest Registered Agent - Got a new business idea? Northwest Registered Agent helps you bring it to life. Get a free domain, email, phone number, and more - with no purchase required! Learn more at https://www.northwestregisteredagent.com/twistdomain 13:35 The AI intel error that nearly triggered a US-China incident 17:44 "McClure's Law": a human with AI is the real risk 19:59 Odoo - The all-in-one business platform. Your first app is free! Get started today at https://Odoo.com/twist 21:37 Stripe + OpenRouter: an anti-fraud play, not a routing play? 23:07 Seed valuations: median $8M (2017) to $28M today 23:58 Instinct: $2.5B to a reported $10B in weeks 29:49 Rippling - Thanks to our partners at Rippling! Head to https://Rippling.ai/twist and get the only AI built to give you full visibility across your startup and take complex actions across your entire business. 44:01 Opus 5.5 vs. GPT-6 Sol: the same-day price war 46:51 Gun to your head: open-weight models or frontier labs? 51:00 Secondaries: the top 30 names vs. everyone else 52:30 Why fintech and healthcare are unloved (and Jason's Robinhood bet) Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp Follow Lon: X: https://x.com/lons Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Thank you to our partners: (0:00) PARTNER - AD BLURB (0:00) PARTNER - AD BLURB (0:00) PARTNER - AD BLURB Check out all our partner offers: https://partners.launch.co/ Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland Subscribe to our Substack Newsletters! 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Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Jason Calacanis?

  All right, everybody. Welcome back. This week in startups slash this week in VC. We are every week trying to do a this week in VC panel.

• 0:07Speaker 01

  This week in startups is brought to you by Rippling. Don't settle for AI. That's all talk. Head to rippling.ai/ twist and get the only AI built to give you full visibility across your startup and take complex actions across your entire organization. That's R I P P L I N G dot AI slash twist. Sign up for exclusive access today. Odoo, the all in one business platform. Your first app is free. Get started today at O D O O dot com slash twist. Northwest Registered Agent. Got a new business idea? Northwest Registered Agent helps you bring it to life. Get a free domain, email, phone number, and more. With no purchase required. Learn more at W W W dot NorthwestRegisteredAgent dot com slash twist domain.

• 0:45Jason Calacanis?

  And my Lord, we've got an incredible panel here. I'll call this old school. Jeff Clavier is here, my old friend, founding partner, Encore Capital. Jeff, how are you doing?

• 0:58Speaker 02

  I am good. Thanks for having me. How are you doing?

• 1:00Jason Calacanis?

  It's been a while. Gosh, it has been a minute. You and I have known each other for three decades, I think, since the early 2000s. You started in venture capital when?

• 1:09Speaker 02

  In 2004. I mean, 2000 as a traditional VC, 2004, I kind of started the whole seed craziness.

• 1:18Jason Calacanis?

  Yes, you were you were there early. I think it was you. Let's see. First round capital came after you?

• 1:26Speaker 02

  Uh, they

• 1:27Jason Calacanis?

  In that same zone?

• 1:27Speaker 02

  We sort of started around the same time with Josh. They were they were raising like vintage funds every year. I raised one of the first seed funds in history in 2007 after being like what they called at the time a super angel for three years.

• 1:42Jason Calacanis?

  Yes. So there was super angel, which meant you did more than a couple of checks a year and you might have had LPs. Then we had the, I think we called it micro funds or micro VC early. Some people did.

• 1:55Speaker 02

  For a few months, they called us super angel funds. And then Maples, Mike Maples came up with the term seed. I think he kind of invented it. And starting, I guess, 2007 or 2008, they called us like seed funds.

• 2:11Jason Calacanis?

  What size was the first fund?

• 2:12Speaker 02

  Well, the first fund was $15 million and you made fun of me on the TechCrunch 40 stage because we announced it together on September 12th of 2007.

• 2:25Jason Calacanis?

  Here.

• 2:26Speaker 02

  Yep.

• 2:27Jason Calacanis?

  I think I'm the elephant in the room.

• 2:29Speaker 03

  He's got receipts, baby. Better watch it.

• 2:31Speaker 02

  And and you were like, who the hell sort of raises a $15 million fund makes no sense, but good luck to you. I mean, it's not exactly what you said.

• 2:39Jason Calacanis?

  At the time, you were an innovator.

• 2:41Speaker 04

  What were the sizes of the rounds at seed back then?

• 2:44Speaker 02

  When we invested, you know, 250K in a million dollar round, it was actually a pretty standard round. Fitbit in 2008 raised a $2 million seed round. It was massive, massive.

• 2:58Jason Calacanis?

  And that was at what kind of valuation, like an eight million post, a seven million convertible note?

• 3:04Speaker 02

  It was five pre.

• 3:05Jason Calacanis?

  Five pre. There you go. Right in that zone. Jenny Fieldling is here. Also been in the business for a while. When did you make your first investment?

• 3:15Speaker 04

  It's a good question. I was a founder and I did a little angel investing and then I was working on my third company and I ran into the founders of Techstars, David Cohen, Brad Feld. And they said, what do you think about being on the other side of things? So I thought, oh, maybe I could like incubate my company, learn a little bit on the other side. And I ended up really loving early stage investing and stayed there for seven and a half years running Techstars New York.

• 3:41Jason Calacanis?

  Yes. And this was in the time period where each of those tech stars had like really amazing leadership. And they ran like in this affiliated network. I think sometime during COVID, they consolidated, put in a CEO in charge. It didn't work out. They may have broken up that federation and it got a little dicey. But tell us about the the golden age there of tech stars.

• 4:09Speaker 04

  I started like 2013, 14. And actually, this is so funny. I have my little mug from my accelerator. I had two unicorns in this class.

• 4:17Jason Calacanis?

  Oh, my. Wait, it has the logos of each one?

• 4:19Speaker 04

  Yeah, it has the logos of the 10 companies I invested in and I still use it. And this was from, I think, like a 2014 or 15 batch. But it was the golden age. I mean, Dave could tell you as well. There's just weren't a lot of folks doing, I guess, pre-seed. So kind of before the Jeff Claviers got involved. And yeah, that was incredible.

• 4:39Speaker 02

  We did SedGrid together.

• 4:42Jason Calacanis?

  Oh, SedGrid. That was your big one too, Dave. That one, you were very early in SedGrid. Yeah.

• 4:46Speaker 02

  Yeah. And SpotHero, which actually just got acquired recently, was also Techstars.

• 4:50Jason Calacanis?

  Oh, only 17 years later. What are you doing SpotHero for? I mean, SpotHero, I

• 4:56Speaker 02

  That was a rough eye.

• 4:57Jason Calacanis?

  I haven't heard in a long, long time.

• 4:59Speaker 02

  That revenue went down to pretty close to zero during COVID, but came back. Yeah.

• 5:05Speaker 04

  Well, I mean, it is an interesting point, though, about the time, right? So this class was, I think, a 2014 class, 2015 class. And here we are, you know, and, you know, those unicorns have not exited, right? So here we are 11 years.

• 5:18Speaker 02

  Topic of the day.

• 5:19Jason Calacanis?

  Well, this is going to be two. I'm going to make two notes here. Number one to my team, I want mugs. Copy Jenny's idea. I want these mugs.

• 5:29Speaker 04

  This was a splurge. This was literally a splurge. I was like, okay, can we find the budget to make mugs?

• 5:34Jason Calacanis?

  $600 in mugs. I want to do this for the last three classes because I have one class, hit two unicorns as well recently.

• 5:40Speaker 04

  Yeah.

• 5:40Jason Calacanis?

  Which will be a topic here, but really interesting, when you look at that mug of, oh, let me introduce Dave as well. And founder of 500 startups, now called 500 Global, a long term friend of mine.

• 5:55Speaker 03

  Now the founder of Practical Venture Capital because it isn't.

• 5:59Jason Calacanis?

  Yeah. And now doing, yes, as he self-introduced himself, managing partner, Practical Venture Capital, also has a great podcast. And I am one of the 12 listeners. What's the name of the pod again?

• 6:10Speaker 03

  Jason, when are you going to be on our pod, baby?

• 6:12Jason Calacanis?

  Well, have you sent an invite? I mean, I invite you to my pod.

• 6:15Speaker 03

  I've been sent an invite now. You're you're done with All In? You got some time on your hands?

• 6:19Jason Calacanis?

  Am I done? Did All In break up? Oh, thank God, it's over.

• 6:25Jason Calacanis?

  That is, you try being in a, you try being in a rock band.

• 6:30Speaker 03

  You've been busy.

• 6:31Jason Calacanis?

  Oh, my.

• 6:31Speaker 03

  You've been busy.

• 6:32Jason Calacanis?

  Last week was a was a crazy week for me, yes. But we have a full docket here today. I don't want to hijack the show, but I, Dave, I assume you got to see some of the All In Summit drama. Did you have anything that stuck out to you from the amount of things that you brought it up?

• 6:47Speaker 03

  I I don't think there's massive drama, but like, you know, the call in from Trump, I gotta ask you, that seemed staged. That was not dynamic, was it?

• 6:57Jason Calacanis?

  Okay, here's, I would, I'm always a straight shooter here. And let me just start my, hold on, before I do that, I'm gonna give the answer. I'm gonna start my Plod pin. If you don't use Plod, they're a sponsor of the program. You put this little pendant on, it's got a red light. Everybody knows you're recording. Boom. You can wear it on your lapel. You can put it on your wrist. Records everything. And then you are all set. You have your entire, you have your entire day recorded if you want to, or just a meeting like I'm doing right now. And I'm addicted to this. We now do our show notes. So pull up the show notes, gentlemen. We take the entire podcast, we put it in there and they have templates, 20 different templates that we use, but there's hundreds of other ones.

• 7:34Jason Calacanis?

  And you can do a summary. You can do all of the top insights, the funny moments, the hot takes from this very episode will be in the show notes. So check the show notes in your favorite podcast player. You'll find a link to Plod, plaud.ai/ twist and use the code TWIST for 10% off. I always applaud Plod, one of my favorite devices. So to answer your question, Dave, briefly, I did not know he was going to do that. I found out subsequently that he asked his assistant to hold his phone. And that he had just texted Trump, he was going on stage with Saks.

• 8:06Speaker 03

  You're talking about Jensen.

• 8:07Jason Calacanis?

  Jensen, thank you. And Jensen, then his assistant comes running out and I think he's putting on a bit. I thought it was a bit. So I said, tell President Trump, J. Cal says hi. And he's like, oh, Mr. President, J. Cal says hi. And I'm like, okay, so it's totally a bit. He wouldn't do that. And I'm like, put him on speaker if it's really President Trump. And he goes, how do I do that? And I just picked up, I always have a spare microphone in case there's some problem. I said, here.

• 8:30Speaker 03

  That was genius.

• 8:32Jason Calacanis?

  And then it actually was. President Trump. We did have J. D. Vance scheduled and Elon was scheduled, even though I pretended he called in. But, you know, he's, it's, you know, independent of what you think about Trump, you know, as an individual, as a president, politician, whatever. He is super engaged with the tech industry, which is, you know, a good thing, I think.

• 8:54Speaker 03

  Or better for worse, my friend.

• 8:56Jason Calacanis?

  Yes, you could. That's a one way to say it. I think it's great that he's P doom zero and all you need is a high IQ president. Dave, where's your, let's go a little more, I'm running here with your P doom. Wish your P doom, your prediction for doom. Are you 10% chance of the world?

• 9:13Speaker 02

  No.

• 9:13Jason Calacanis?

  Everybody, 7 billion people dying?

• 9:15Speaker 02

  Yeah, 90% full. We actually talked about this a lot on our podcast. So I think what's going to happen is there's going to be a AI fund, sovereign wealth fund that'll get cut next year sometime the next six to 12 months. Trump wants piece of the action. Democrats want regulatory oversight. Sam and Dario want product liability shield. So hey, 10%, 20%, I don't know what the number is, but.

• 9:40Jason Calacanis?

  So you're saying there's a negotiation slash shakedown about to happen. This is a Dave McClure prediction.

• 9:47Speaker 02

  Not about to happen. It's been happening. Bernie wants 50%. Sam offered 5 to 10%. Like, we're just trying to figure out what the negotiation, what the number is.

• 9:55Jason Calacanis?

  So they give 10% and then they get a section 230 like law that says, hey, if you're,

• 10:01Speaker 02

  Yes.

• 10:01Jason Calacanis?

  if your large language frontier model hallucinates, you can't sue. That's what your prediction is, Dave. Interesting prediction. I like it. Regular listeners already know that if you've got a great idea for a new business, our friends at Northwest Registered Agent want to help you bring it to life. They're going to be the most amazing partner you've ever had. Even if you're not ready to form an LLC, you still need to take care of some basics. So Northwest Registered Agent is now offering free identity services. That means a free domain name, open source website hosting, a business email and a phone number and everything else that's going to make your new startup look and feel like a professional company, all with no purchase required.

• 10:41Jason Calacanis?

  And you know, you can rely on Northwest because they've been helping people like you start businesses for nearly 30 years. If you have an idea, you can't get out of your head, or even if you're already building something amazing, you already got started. Northwest Registered Agent is the best way to establish your new company. Learn more at northwestregisteredagent.com/twistdomain.

• 11:03Speaker 02

  I think you can follow sort of the, you know, the cigarette companies, uh, you know, structure as a very similar model. I, I think the number would be like between 10 to 20%. Like if you just did, I actually would think an equity swap would be better than a tax or revenue deal.

• 11:20Jason Calacanis?

  Okay. Jeff, what's your thoughts here on, I guess, one, you know, independent of what you think of Trump, just having an engaged president who's this engaged? And then is your P doom high here? You've been in this business. You've been looking at machine learning, AI expert. What do we call them? Expert systems? Was that the original term we used in the seventies and eighties?

• 11:40Speaker 02

  Super, super intelligence is the new term now.

• 11:43Jason Calacanis?

  So now we're down to, okay.

• 11:45Speaker 02

  I will.

• 11:45Jason Calacanis?

  I'm calling it Trump intelligence. Trump intelligence is the new term. Trump intelligence. I've just rebranded it. But Jeff, as an elder statesman here, expert systems.

• 11:57Speaker 02

  Actually, I actually, uh, learned about neural networks back in 1987, Billy Donut. So, um, P of doom is non-zero, unfortunately. Uh, I don't know if it's like 5%, 10% more, whatever. There's, there's a lot of, of drama, the sort of, uh, people trying to make themselves important by claiming, you know, all those things. At the end of the day, the way to sort of make AI safer is to get the CEOs and their teams accountable for any of their mistakes. And as they've sort of said, they're going to try and figure out a product or personal or company sort of liability shield.

• 12:39Speaker 02

  Whatever they do, uh, they will sort of get it because at the end of the day, they don't spend enough time to figure out how the AI can be safer. And based on how they actually build the AI now, it's less and less possible. And so, um, the, the issue I see personally for the world is like, it's not that they want for this thing to go, you know, sort of sideways, but because of the way they build them, because the AI built itself, uh, 26% of, uh, Anthropic is building, you know, the, the next generation of Anthropic, uh, as of yesterday. It's actually just not clear how they can actually protect us.

• 13:19Jason Calacanis?

  And what is your thesis? And Jenny, I'll go to you next for your P doom, but you said your P doom is not zero. Uh, I'm going to say it's probably low single digits or below teens, whatever. You can correct me if you want.

• 13:29Speaker 02

  I'm an optimistic. So yeah, I'm going to try and, and hope that this is as low as possible. So.

• 13:33Jason Calacanis?

  What do you predict could happen? What concerns you? If you were going to get more specific?

• 13:38Speaker 02

  Oh, uh, I think it's basically the AI just going wrong. Like there was an example reported recently where, um, uh, an agent or a bot or whatever misidentified the content carried by a Chinese ship. And the Pentagon was about to either intercept it or bomb it or whatever, which obviously wouldn't have sort of gone really well if it happened. And thank God, you know, the, uh, the human analyst sort of stopped it. Uh, we don't know whether it was one second before, one minute before, or one hour before. But that's the kind of thing where we know AIs just tend to just make up things, right?

• 14:21Speaker 02

  It happens all the time. Um, and when it's applied to critical infrastructure or military applications, the fact that it hallucinates may just happen. It's par for the course. We just use it in instances where the effect of an hallucination could be dramatic.

• 14:38Jason Calacanis?

  So this is on the human using it and human brains. Jenny, this is the concern I have. Humans are having their brains atrophy because they trust this technology far too much. And so they have it write their essay like Druckenmiller did recently, which means like, was their brain actually engaged in the act of writing? And when your brain gets, and they've done MRI scans now of people using AI to write essays, using AI to do research with essays and then doing it acoustically. You know, find your own research and then actually write it pen to paper or, you know, at hand speed, typing speed.

• 15:19Jason Calacanis?

  We have to slow down and use your own words. Your brain activity is incredibly low in the first situation, pretty low in the second situation and extremely high in the third. We're having people's brains atrophy. Like in this case where they were looking at the ship, they're just going to assume the AI is right? That is, without checking it? This is crazy. Where's your P doom, Jenny? Where's your P doom, Jenny? We're playing this week in P doom. Let's go.

• 15:45Speaker 04

  Mine is actually quite low. I think that this will be kind of the golden age of entrepreneurship and that we're going to just find incredible solutions to all of these problems. I mean, I don't know what your inboxes are like, but I'm seeing so many startups that are working on resilience, right? And that is around all the infrastructure, you know, that we have. So I'm actually quite optimistic. This is going to, you know, open up lots of opportunities. Um, in terms of the education, I think that's also an interesting, you know, it seems that everyone's, you know, very nervous about the younger generation. But the way I think of it is, you know, I work with a lot of technical founders, you know, I help them, you know, build business models and, you know, spreadsheets, things that they don't necessarily know how to do. So I find that these tools are just like total unlocks

• 16:30Speaker 04

  for people that don't know how to use Excel or they don't know how to do it. And, you know, I agree with you that you need to, um, be thoughtful. You can't just like, um, you know, relinquish all control to, to the AI. But I think it like democratizes access to, um, abilities actually that many of us don't have any. Like, so I'm more optimistic that, you know, people that don't necessarily have inclinations to be math people or science people, you know, can use these, um, skills to, to catch up. So I think it's, um, more positive.

• 17:00Jason Calacanis?

  I, I think that's the right way to look at it. The guide on the side, the ability to fill in, hey, you know, my grammar might not be perfect all the time. I learned it over a lifetime of, you know, undiagnosed dyslexia. I just did it. Uh, dyslexia over all that time. And now I know where to put the commas. Now I know the difference between then, then and, or, you know, two, two and two. Like it just took a little coaching on the side and, and that's where AI actually can fill those things. But you got to be thoughtful about it. Speaking of being thoughtful.

• 17:31Speaker 02

  I think we're.

• 17:32Jason Calacanis?

  Go ahead.

• 17:32Speaker 02

  A little bit too worried about AI killing everybody. I, I think way more likely is that, uh, to paraphrase the statement, you know, AI is not going to take your job. A human enabled with AI is going to take your job. AI is not going to kill us all, but a human enabled with AI might kill us all.

• 17:48Jason Calacanis?

  Yes, there you go. That's, uh, the original statement is Jensen's law. And then, uh, the end, uh, yeah, of, uh, humanity is then McClure's law. We've defined it. You're, the end of humanity will be a human with a, I mean, it's, you're not false. I mean, I hate to bring this up, but if you were to look at, you know, uh, terroristic attacks and then play the game of like, you know, uh, you know, master's degree terrorists, which there have been some of those terrorists have had like master's degrees in Germany in, you know, the UK, uh, or they've been flipped. Like somebody with a master's degree could do master's degree, uh, level executed AI of,

• 18:31Jason Calacanis?

  insert bad scenarios here. I don't want to actually say them and inspire mids to go give it a shot. But this is where monitoring is such a powerful dynamic, Jeff. Like they're monitoring the, the example you cite is because Claude is monitoring.

• 18:46Speaker 02

  Yep.

• 18:46Jason Calacanis?

  the usage of their products now. And so this was my reaction to it. Uh, if your software is that dangerous and has that, and is, and isn't crisp in terms of, you know, hallucinations yet. Why don't you know your customer? Why aren't you tracking their usage? Like, that would be standard operating procedure for something like a hacking tool, right? Like, even if it was a positive hacking tool, you can't go use the Pegasus software from Israel, which, you know, hacks phones or whatever and breaks, you know, all kinds of backdoors. You have to have a license. You have to have a social security number. You have to be approved to use it. And there's a log file that they keep of your usage of it.

• 19:28Jason Calacanis?

  So like, if Claude's that dangerous, like, put in some safeguards, bro.

• 19:32Speaker 02

  But then you have to, like, how do you monitor something that executes, you know, so many things in parallel and so fast? Well, you get the eye to monitor itself, but then we've seen incidents where the agents just started hacking, you know, websites and companies and so forth, and all of them did, right? It's not only Claude or OpenAI or Gemini or whatever. They all did, right? And how does the agent know that it's wrong and should be doing this?

• 19:59Jason Calacanis?

  When you're an early-stage founder and you're just starting out, you're probably going to rely on a few different tools to run your business. And then you're going to try to duct tape them together. Yeah, and that might be a fine placeholder until you finish your MVP. But this will get expensive and messy fast. When you're scaling, that's when you need Odoo, O-D-O-O, Odoo, the all-in-one management software that already has 16 million users across more than 170,000 companies. Odoo is bringing everything you need into one platform. That means your CRM, sales, your accounting, manufacturing, inventory, and of course, point of sale, if you have retail. All of that is right where you need them.

• 20:44Jason Calacanis?

  And these tools are in constant communication with each other. So you don't have to log out of one system into another and then reconcile the information by using different apps and spreadsheets. Ugh, when you make a sale, you want that invoice created instantly. And then you want your inventory to get an update. If you're still cobbling together your back office across five different apps, get started today at Odoo.com/twist, and your first app is free. That's O-D-O-O dot com slash twist. Speaking of SendGrid, I think you would do what SendGrid did, which was, hey, when you first get your Mailchimp SendGrid account, you can send X amount. Then, after a certain period of time, you can send Y amount. Then, if you've built a trusted relation, you go to Z.

• 21:27Jason Calacanis?

  Now, that doesn't eliminate it, but it at least eliminates somebody coming in, like, you know, Russian hackers would go into Mailchimp or SendGrid and send, you know, a million spoofing accounts. And they're like, yeah, you know what? First 24 hours, you can send 100. Then you can send 1,000, you know, whatever.

• 21:42Speaker 03

  This is kind of interesting. There was a comment by one of the OpenRouter investors that suggested the Stripe acquisition of OpenRouter wasn't about lowest-cost routing to open with models. It was about trust relationships and monitoring untrusted use of AI. And that was actually what was going on.

• 21:59Jason Calacanis?

  Because they want to be good citizens or they see a business opportunity?

• 22:02Speaker 03

  Because they see a business opportunity, because Stripe is not a payments company. Stripe is a anti-fraud company. And so if you think about, like, fraud happening in payments, well, you could have fraud or bad actors happening in AI token usage. And OpenRouter would be able to monitor, hey, unauthorized.

• 22:22Jason Calacanis?

  This is an incredible thesis in theory that answers the question I had like a month ago when this happened, Jenny, of why were they buying this? What do you, what's your take on that, Jenny?

• 22:29Speaker 04

  Yeah, I mean, I think, you know, you were in Europe this summer, and I'm sure you heard that word sovereignty and defense tech a gazillion times. That's what everyone is trying to figure out over there. And I, you know, I feel that, you know, defense tech is really what we're talking about here. We're just not thinking of it in terms of, you know, the typical defense. But we all just have to, you know, get resilient and figure out, you know, how we're going to protect our institutions. And I think, like, cyber is going to be just this massive space. So that's my take away from this and why all these companies are trying to, you know, build solutions that are going to protect them and their users.

• 23:07Jason Calacanis?

  Hmm, wow, very interesting concept going on here. All right, let's take this first story. Speaking of valuations, we all grew up in an era where, you know, $3 to $10 million pre- seed, seed, then 20, 30 million dollar seeds.

• 23:21Speaker 02

  My first investments were like a million pre, 2 million pre. Like, that was the standard back in the day.

• 23:27Speaker 03

  Yeah, but Jeff, that's because you're an asshole.

• 23:29Speaker 02

  No, that was the market. That was the market.

• 23:31Jason Calacanis?

  No, the market for, I mean, the first three or four investments I made, DataStax, Thumbtack, Uber, you know, Comm, these were all $4 or $5 million valuations.

• 23:43Speaker 03

  Wait, Jason, you were an investor in Uber?

• 23:45Jason Calacanis?

  I think. Let me check. I gotta, I gotta check my distributions. It's somewhere on there, it might be.

• 23:52Speaker 03

  I think our average pre-money for 500 was below 5 million for the first two funds at least. I don't know about the third fund, but for most of them.

• 24:00Jason Calacanis?

  Yeah, and so entry price matters because 80% of startups, 90% of startups at that level fail to return any capital. Here's a crazy company. Instinct is an AI assistant that works through your iMessage. They seeded it with the VC community. And allegedly, according to reports, they're looking to raise a billion dollars at a $10 billion valuation. It's not open to the public yet. There's a waiting list. Noah Shin mentioned, he's a 23-year-old founder, who people speak incredibly highly of, says, you know, that they are in talks to raise money.

• 24:44Jason Calacanis?

  Business Insider reports, and they get things wrong all the time, so take this with a grain of salt, that they now have 100,000 users. According to Harmonic, our partner here, Instinct went from founding to $2.5 billion valuation in under five months. Oh my lord, that is crazy. The seed, April 2026, 25 million on a 50 million post-money valuation. We'll have to check that. Series A, August 2026, 75 million, 500 million. Series B, 250 million. Benchmark Index Ventures, 2.5 billion. This is a fast ramp to the panel, super fast ramp.

• 25:26Jason Calacanis?

  And Sequoia Benchmark reportedly circling right now and that they've raised roughly 350 million of the 1 billion.

• 25:35Speaker 03

  Series A and B happened in the same month?

• 25:37Speaker 04

  Yeah.

• 25:38Jason Calacanis?

  Yeah, I'm going to have to check that. I think that data needs to get checked, yeah.

• 25:41Speaker 04

  I think it was the end of August was the last round, so less than a month.

• 25:44Jason Calacanis?

  Oh, no, no, it does say April, August, August, yeah. So I think this latest Series B, we're going to have to check this because...

• 25:51Speaker 03

  Maybe a whole 30 days between rounds.

• 25:53Jason Calacanis?

  Yeah, I mean, but this is, the craziness of this is people are doing multiple valuation rounds within very short period of time or, in fact, concurrently. They, they get the investor they want, then they pop the price up with their names, Sequoia Benchmark, Klein, or whatever the top name you want to use is. And then they pop it up, you know, as part of a two-stage, you can take out the screen, guys, two-stage process. So my question, I guess, Jeff, when you're looking at this, entry price matters, obviously a very promising startup. But I do get a clubhouse vibe right now in terms of the playbook here, which this may or may not be as valuable or more valuable than Clubhouse was.

• 26:37Jason Calacanis?

  But they also had the same VC-baiting playbook. So let's talk about that VC-baiting playbook, why it works, other people who did it. I think, you know, Evan, the team, Biz, they did this with Twitter as well, seeded it with VCs. Those were part of the big thing. So maybe you can talk about the valuation here, these valuations ramping up so quickly in succession and the fairness and/or strategy of doing that. And do you get a little bit of that clubhouse vibe with an unrealistic valuation?

• 27:08Speaker 02

  I mean, look, I'm not an investor in Instinct. We, we have a couple of people who've used Instinct and the experience was just not great. And the, the feedback we got was that it had access to so much information, there was concern that they would actually sort of screw it up, right? So people stopped using it. Look, the, the investors that you showed are amongst the best investors in, in consumer internet and consumer AI. So they know what they're doing. And if they think that by paying 2.5 billion, they can still make a return, we're going to wish them luck. I think the big, the, the big question to me is,

• 27:47Speaker 02

  so what does Instinct look like after Muse launches as the top downloaded app in the App Store? And from what I hear, because I haven't, I don't have time to just test everything. It's just like, it's literally a full-time job to test all those things. So I haven't used Instinct or Muse or any of the other personal assistants.

• 28:06Speaker 03

  You can just hire an agent to test all the other agents, Jeff. That's how you get that done.

• 28:10Speaker 02

  I'm old school. I do it myself. I trust myself. And so, like, what are they thinking where? And that's sort of the issue is the rate of innovation from all the major companies is so high that when you invest in a startup, you don't know whether you're going to be crushed by... You know, whether it's OpenAI or Anthropic or Meta, but because they're really something that you haven't heard of and boom, suddenly you're dead. And so I don't know what's going to happen to Instinct, but if I'm them, I'm really worried about Muse.

• 28:42Speaker 04

  Yeah, I'd say like they're like, we shouldn't, you know, the audience shouldn't confuse, you know, a fast funding round with like a real business or a signal around that, right? Just because there's a markup, it doesn't really tell you much about the business, right? So it does tell you about the competitive, you know, tension among a small number of funds, right? Who believe that agent products are kind of, you know, the next platform shift and they want to get in it. So I think that's, you know, what the message is. And that was kind of your question, Jason, is like.

• 29:11Speaker 02

  And we haven't seen anything sort of super interesting in like consumer for a while. And so I think it's just that when you add FOMO, fear of missing out, and the fact that for once there is something which seems to be so interesting and the founder seems to be very compelling. They're just deploying a bunch of money and Clubhouse is a great analogy, right? They go to one billion valuation, then four billion valuation, and then crickets, right?

• 29:35Speaker 03

  But I think this is different. I mean, I, you know, I think we were all around for like Clubhouse and Meerkat was another one that was in this category of like super big flash in the pan. But the valuation for Instinct, I think people are underwriting a major acquisition.

• 29:49Jason Calacanis?

  It happens to every business at some point. You're nearing the end of the month, or maybe it's the quarter, and your sales team is at risk of missing their quota. You could waste days pulling together data from across the entire organization, or you could just ask Rippling AI. Rippling's already built on your real time people and business data, obviously. So Rippling AI can pull metrics from both Rippling and your CRM into a meeting ready dashboard. See exactly how close you are to hitting that quota. Break down your revenue by region or sales rep or more, all in just seconds with Rippling AI. Look, you're running a company, you're busy, you have critical questions that you need immediate answers to, and you can't just pile a ticket and wait a week for your team to get around to sending you a report.

• 30:32Jason Calacanis?

  And you don't want to sit around waiting for reports. You need an actionable insight right now. So if you're ready to rule your business, head to rippling.ai/twist to get the only AI built to give you full visibility and let you take complex actions across your startup. Is that a good way to be an investor? Is to invest at an incredibly high valuation, hoping for, I don't want to say greater fool, but a desperate acquirer?

• 30:57Speaker 03

  No, no. In this particular scenario, yes, as long as you believe that Instinct is a real product. Because the competitive, you know, options there are ones that are already owned by major distribution platforms like OpenAI, Anthropic, or.

• 31:12Jason Calacanis?

  So OpenAI can't, doesn't need to buy this. Meta doesn't need to buy this. Grok doesn't need to buy this. Anthropic doesn't need to buy this. So we're leaving Apple, Google, Amazon. Microsoft.

• 31:26Speaker 03

  Microsoft, Google, and I would say Apple.

• 31:29Speaker 04

  But at what price? If you're coming in at a 10 billion valuation, I mean, you think they're going to buy it?

• 31:35Speaker 03

  You pay as a percentage of your own distribution, if it's good enough. Well, as long as there's one other buyer out there, then you have a competitive.

• 31:41Jason Calacanis?

  See, I think Jenny, you're making a very important point here. Give it to me one more time and explain your thinking behind this acquisition price and the distance between these two things.

• 31:52Speaker 04

  I mean, everyone's squinting when the market's like this and says, well, the exit opportunities are just that much bigger. But we haven't really seen that. So if you come in at a 10 billion valuation.

• 32:02Speaker 03

  Yes, we have. We've just. We're two examples. Cursor.

• 32:06Jason Calacanis?

  Cursor had two or three billion and they got valued at 60. This has zero and is at 10.

• 32:12Speaker 03

  Again, you're going to be cursing this on the acquirer's distribution and ability to monetize. And I think you can see that Meta's already got a shit ton of usage. And it's, you know, it's a pretty decent product right out of the gate.

• 32:25Jason Calacanis?

  Jenny does Muse's success and Zuckerberg's unique ability with his giant ad network

• 32:34Jason Calacanis?

  to monetize this with advertising and never have to charge for it. What does that say about the business model for Instinct here?

• 32:43Speaker 04

  I mean, to Jeff's point, I would be worried, right? I mean, Threads, weren't there, aren't there like 500 million people that use Threads? And that's not, you know, a great product, I would say, or, you know.

• 32:53Jason Calacanis?

  It's a derivative product, yeah.

• 32:55Speaker 04

  Yeah, exactly. So I think, you know, just the ability to reach eyeballs is pretty strong here. So I would be, I would be worried about the long term if I was going in at a 10 billion valuation.

• 33:04Jason Calacanis?

  See, I think the way I.

• 33:06Speaker 02

  The other, the other worrying thing that we heard is that they're burning so much cash on compute. And you wonder why, because the product is fairly simple. They're bringing so much cash on compute that they need to raise, you know, on this next round,

• 33:20Speaker 02

  almost like a few weeks after closing the previous round, right? And they're stage gating and they're limiting the number of people who can use it. And so I don't know whether it's an engineering issue or it's a really complex, set of complex tasks that they're getting the agents to perform. But it's really surprising that they're leaving money on fire the way they do.

• 33:39Speaker 04

  Well, I think the founder came out and said that he just didn't want to charge people. So I guess that leaves advertising, you know, down the road.

• 33:46Speaker 02

  That's the issue with, with consumer internet. It's very hard to get people to pay.

• 33:50Speaker 03

  I know. I don't think anybody's worried about like getting money out of this right now. I mean, WhatsApp was acquired 10 years ago. Is it still, is it monetizing yet?

• 33:58Jason Calacanis?

  They did actually have, they were advertising a dollar per user and had 600 million at one point, right? They had a really clever use thing there. Here's what I think. You know, when you look at this, a couple of things can be true. And looking in the history, it does rhyme. This is a smart move by the founder to make hay while the sun shines. If you can take a billion dollars and put it in your bank account, then you will be the consolidator of the people who run out of money. And you have, what, three pivots in you, two or three, like major pivots in you, or brand extension. So you can play the long game, even if you're burning a lot of compute. But number two, when a price gets this high, to Jenny's point,

• 34:42Jason Calacanis?

  if Instinct is at 10 billion now and you have Muse in the market, then you're going to push the potential acquiring folks to say, build or buy. And Twitter offered 4 billion for Clubhouse, I believe was the rumor. They did not take it. Huge mistake in the history of Silicon Valley, like one of the biggest mistakes ever. It was an 18 month old company at the time or 12 months?

• 35:06Speaker 03

  Friendster, Friendster acquisition by Yahoo.

• 35:09Jason Calacanis?

  Okay, listen. We got really old people on this podcast. So Dave's got 30 year old opinions here. He's got the receipts from 30 years ago. Greatest non-acquisitions, like fab.com was a, I remember Sherwin or somebody's like, I own 7% of Fab. It's worth 2 billion. They got a $140 million position, if my memory serves me correct, back in the day. Went to zero, I believe. It was like part of the fast fashion, fast commerce category. So the issue here is at 10 billion, you have to be purchased for 20 billion at a minimum. That would then lead Apple's board, Microsoft, Satya Nadella. They would just say, well, wait a second, what can we build for that amount of money?

• 35:54Jason Calacanis?

  Let's offer, you know, people 10 million dollar, you know, salaries, 25 million dollar salaries, and let's just build this ourselves and go long on it if we actually believe in this. It's not, entry price matters and this is now breaking entry price metrics, but I wish them well. Anybody can think of a big, a big miss? I gave Fab, you gave Friendster, and I also gave Clubhouse.

• 36:16Speaker 02

  I mean, Fab never had an acquisition offer.

• 36:19Speaker 03

  Google, Google itself.

• 36:21Jason Calacanis?

  It just had a crazy valuation. Were you also an investor?

• 36:23Speaker 02

  Yeah, I was, I was, you know, I was in the seed round, so they went from zero to a billion in like a couple of years and it was the darling. But the problem is that the economics just didn't work, right? They never had.

• 36:35Jason Calacanis?

  And if you had sold that, what would impact would that have on, on Cork?

• 36:39Speaker 02

  I mean, it would have been great.

• 36:40Jason Calacanis?

  Two or three, whatever it was in.

• 36:41Speaker 02

  It would have been great, but like we never, we never got to that position because investors just looked at the numbers and they said, this is just not sustainable. That's the issue when you actually have numbers to look at. In the case of Instinct, they don't have any revenue. They barely have any users. They're 100,000 and therefore it's all about dreams, right?

• 37:03Speaker 04

  And if they're raising like three weeks after they raised before, you don't really get the retention data either on those 100,000, right? So I'd say that's an issue as well.

• 37:13Jason Calacanis?

  Yeah.

• 37:14Speaker 03

  I'm a skeptic on this one. I think there's real value in the table here. And it's just based on the monetization or potential of the acquirers. And the acquirers are substantial, like Apple, Amazon, Google, Microsoft are all potential acquirers. And they definitely need the product.

• 37:29Jason Calacanis?

  The rumor I'm hearing with Google is big frontier model news coming and some other consumer products coming. They've been kind of laying back because they're conservative. They don't want to release broken products, given lawsuits that they get from large governments and just their reputation. They, they kind of moving slow, but there could be significant things dropping. And if you think about the Muse opportunity, they have it sitting right there in our data. Like calendar docs, they have it sitting right there.

• 38:00Speaker 03

  Google might be able to build it themselves. Google might be able to build it themselves or modify Gemini, but I think Apple and Amazon are definitely, you know, they have to have an agent product and they don't right now.

• 38:12Jason Calacanis?

  I had an opportunity to invest in fab.com Jeff, when it was a gay social men's dating site.

• 38:18Speaker 03

  Oh, okay. I was waiting for that one.

• 38:21Jason Calacanis?

  I said to Jason, I forgot Jason's last name. I said to him.

• 38:25Speaker 03

  Jason Goldberg.

• 38:26Jason Calacanis?

  Jason Goldberg. I said, Jason, I'm on your gay dating social network. I created an account and a profile. This thing is the best designed social network.

• 38:35Speaker 03

  That was why it was interesting. That was why it was interesting.

• 38:38Jason Calacanis?

  This is incredible. And I'm getting a lot of pings here and, and I am gay kryptonite. According to one of my gay friends, it's dubbed me as gay kryptonite. Gay guys would be like, they would lose their gay power if they were in proximity to me. I know that was the funniest line ever. I said, if I can do this well on a thing. And then I, I offer him 50K, you know, whatever 10 million, $20 million. I'm actually comes back to me, Jacob. I got a better idea and he gives me this idea and I said, yeah, I don't want to do e-commerce, not my wheelhouse, but I wish you well. And I, I.

• 39:10Speaker 03

  Transition from gay dating site to fashion design marketplace.

• 39:15Jason Calacanis?

  It was furniture.

• 39:16Speaker 03

  Actually, not, not quite a stretch. Yeah. Not, not as much of a stretch.

• 39:20Speaker 02

  But. Well, they had, they had an amazing, an amazing taste. That's for sure. And the website, and the website was stunning. It's just the, unfortunately, it's the business which wasn't sustainable. It wasn't the concept. They just had to sort of figure out a way to make this, you know, kind of venture work.

• 39:35Jason Calacanis?

  Vant Privé was the French one.

• 39:37Speaker 02

  Yeah. Vant Privé was the big one and they, and they were, you know, Jacques-Francois Gange was extremely successful. I don't know where they are now, but they became like.

• 39:44Jason Calacanis?

  Fab.com. And then there were two or three others in the United States that were in this fast fashion flash sales. What were the other flash sale ones? They all went to a billion. Guilt. Yes. Guilt. There were other flash sale ones. Incredible.

• 40:00Speaker 03

  Jason was always a snappy dresser.

• 40:03Jason Calacanis?

  No, I wasn't always. My wife sat me down.

• 40:05Speaker 03

  No, no, no, no. Jason Goldberg. I meant, sorry, the fab.com founder. Not your Jason. Sorry.

• 40:10Jason Calacanis?

  Not gay kryptonite.

• 40:14Jason Calacanis?

  My, you know what my wife did? They said, she said to me, Jenny, we, we need to get you a look here in black tee. You know, you're out of New York, black tee shirt, black jeans, you know, black blazer. Like it's, it's a little bit repetitive. I said, okay. And she said, you gotta find like a style icon and somebody. I said, yeah, you know, I found my style icon. She said, who's that? I said, Daniel Craig. She goes, yeah, perfect match. That's it. So then I went and got Tom Ford and I literally found every single thing he wears in the James Bond. I just bought all of them.

• 40:42Speaker 04

  And did you also?

• 40:43Speaker 03

  Shaken, not stirred.

• 40:45Jason Calacanis?

  Yes. I lost 40 pounds and I gained 10 pounds of muscle. And yeah, I mean, I'm not, listen, I'm not coming out of the ocean. In like mannequin, like him with a knife on my side. Yet, yet, but next summer I may be in Saint-Tropez with Jeff Claudio.

• 41:00Speaker 04

  There we go.

• 41:01Jason Calacanis?

  And we might come out in our dueling, um, yeah, do not make, I'm just going to warn my super fans. I don't want to see a video, AI video of me on Daniel Craig's body coming out of the ocean.

• 41:14Speaker 04

  I think that's great. Um, I actually have a question for you, Jason. Um, you're a big open claw guy. So are you guys going to move to Muse? I mean, isn't.

• 41:23Jason Calacanis?

  We gave up on open claw.

• 41:24Speaker 04

  Oh, okay.

• 41:25Jason Calacanis?

  Gave up on it. Well, what happened was we had four people, three or four people in the organization who were technical enough to do it. And then all of a sudden Claude cowork perplexity computer. We started having other options and those were easier to use. They were delivering faster and we went from three people in the organization using them to, uh, you know, have like 20, 25 people here. You know, um, so all of a sudden it went to like eight or nine people. So the ease of use took over and now nobody's even thinking about open claw anymore. I have three or four people who are addicted to Grokbot and the restaurant Claude code. I use perplexity computer, uh, I use perplexity as well. And then now, uh, lovable.

• 42:10Jason Calacanis?

  We're actually building internet software. So we've built what, what was the, Jeff, do you remember what was the VC? Like SaaS software. I think Joe Lonsdale created it. Atapar maybe. Atapar, was that it? There was a bunch of VC software. For fund management.

• 42:29Speaker 02

  Which is the reporting. Yeah.

• 42:31Jason Calacanis?

  Atapar was reporting and I thought he had another one, which was like deal flow management, all that kind of stuff. My guys in like three weeks, we get 20,000 applications for funding. We have everything organized now, Jenny. We have AI so we can go into it and say, what are the companies in defense tech that we met with, didn't invest in, who subsequently raised a series B and please put them on a list. I'm going to email them and talk to them about the syndicate and try to make up for the missed investment we did. Give me the notes of who met with them in the firm. No, I'm seriously doing this. We're doing the misses. So we missed ZipLine 10 years ago.

• 43:08Speaker 03

  That's a great use case. That's a great use case.

• 43:10Jason Calacanis?

  We missed ZipLine. Keller came on the podcast multiple times. I was in absolutely enamored with him. And then I have the syndicate and we invested in their last round. It was a couple billion dollar.

• 43:20Speaker 03

  Look for all the emails that I didn't respond to where there was an institutional round that happened after I got the email. Wow. So that would just be like the most painful, like analysis.

• 43:32Jason Calacanis?

  Oh my God, wouldn't it be?

• 43:33Speaker 03

  So many companies that I go back and like, oh yeah, that founder emailed me and I didn't.

• 43:36Jason Calacanis?

  All right. Let's go, let's, let's keep moving here. The docket. OpenAI and Anthropic both shipped new models yesterday. They did it hours apart, but here's the important part, Jeff. We always talk about profitability. Is there a business there vis a vis our discussion on fab.com? We're going to build on that. They both cut prices meaningfully at the same time. OpenAI is GPT six soul and Luna came in about 50% cheaper. With soul at $2 per million tokens. Anthropic's Claude Opus 5.5 matches Fable 5.1 while costing 40% less to run than Opus five. Uh, neither a big capability jump, but, uh, both of these are massive price cuts. And what are your thoughts here, Jeff, on selling tokens to token selling business in the age of

• 44:22Jason Calacanis?

  open source models?

• 44:24Speaker 02

  Well, it's, it's a race to the bottom. That's, that's sort of the, the issue. So you have all the funding that they raised that essentially is sponsor, sponsoring all those, uh, all this usage, right? And they basically sort of predicate their future to their ability to raise the next round. So that they can continue sustaining like the fact that they're losing a bunch of money as soon as someone uses their product. And unfortunately, like they are getting to a point of like the, the cash needs that they have are such that you, you wonder if they're going to be able to raise, you know, more capital. I'm sure they will, but it's just insane. So it's a race to the bottom. Um, at, at some point you wonder what, uh, token price is going to be.

• 45:10Speaker 02

  And that enables our startups to basically sort of use that compute at a much lower artificially low kind of price. But we try and figure out, okay, when we invest in something, what is the true cost of compute? Because you can't find yourself sort of upside down, because if ever for some reason your compute costs are increasing by, you know, two, three, four, five, you may have a product which was actually generating margins and, and made sense that no longer makes sense.

• 45:38Speaker 04

  Well, your margins go up temporarily, but your competition goes up as well. So I think that's the, the problem with this. I mean, it's like, it sounds like a great thing, but, um, you know, ultimately your barrier to entry, other barrier to entry goes down as the costs come down as well. So.

• 45:56Jason Calacanis?

  What are your thoughts on this business, Dave? Is it a great business, a good business, a TBD business here with all this headwinds? One of the routing companies, I won't say which, I don't like to give these plugs for all these people now doing data. And then pitching my people constantly producers, you get free ads on the program. So now I just abstracted. And one of these, uh, web providers, 80% of tokens being tracked by this one, uh, you know, web players, uh, routing companies, uh, open source now, Dave. So you want to be in this business or not? All right. So here's your open versus closed token volume, open weights, open models, 78% closed weights, 21%. Dave, tell me what you think about.

• 46:42Jason Calacanis?

  Open source and the impact on frontier models. And let me ask it to you in a very direct way. With your own family office money, with your own money, would you put a bet, if I had to put a gun to your head, you know, $2 billion frontier model company like Anthropic, let's say, you know, 20, 30 times revenue? Or you could just put the money into an index of Nvidia, AWS, you know, and the infrastructure companies? Where would you put your money? Which is a way to say, open source, open tokens, infrastructure versus frontier models? Where would you want to put your entire net worth? If I put a gun to your head?

• 47:20Speaker 03

  Probably 50% index on open weight models and then split my closed models, a third, a third, a third, between Anthropic, OpenAI.

• 47:29Jason Calacanis?

  If you could only pick one side of the bet? I put a gun to your head.

• 47:32Speaker 03

  Dude, I don't have to fucking play by your rules. I'm a venture capitalist. I could make diversified bets.

• 47:37Jason Calacanis?

  Way to kill the momentum of the show. Jenny, let's see if Jenny.

• 47:41Speaker 04

  I go all open source.

• 47:43Jason Calacanis?

  Jenny goes open source, I go open source too.

• 47:45Speaker 04

  I go. I think they're gonna get crushed.

• 47:49Jason Calacanis?

  Say more Jenny, here we go.

• 47:51Speaker 04

  Well, there's no rules around open source. You can, you know, the existing models can say they want to slow down. They can change their pricing. The open source guys can do whatever they want. And they're just gonna, at the end of the day, consumers don't care. They just care about price and quality. And they're so close to catching up that we're gonna go all open source.

• 48:09Speaker 02

  Most applications don't need the latest and greatest features of those latest models. And so when you have, and the problem is that the model has to figure out, well, is this a complex task? And I need to actually send it to like this model, expensive tokens and so on and so forth. So can I send it to a lower cost, easier, you know, kind of routine? I don't know how they do that because I'm sure that they, it's a genuine issue for them. Like, not that many people need those kind of latest models. They needed to compete against themselves. But most applications are fairly benign.

• 48:44Jason Calacanis?

  Okay, Dave, you're my cleanup hitter here. I always put you right there in the fourth slot there. Does my, no, seriously, a home run hitter. You have lots of bangers. So you heard all of our positions. I would go 100% into the hardware stack. I think the frontier models are trouble because I'm basing it on what I see on the field vis a vis my startups are all going open source, do not want to invest in the frontier models anymore. And then I talked to Eleven Labs, I talked to Loveable. Those CEOs indicated to me that they are also following suit. Figma as well. They don't trust the frontier models. They think they're gonna be competitors. What do you think closes this conversation up for me?

• 49:22Speaker 03

  I think you're right that there's gonna be growing revenue coming from open web models. Right now, there's already, you know, open weight models have taken over a majority of token usage. That's been clear since earlier this, I think, second quarter, but definitely.

• 49:36Speaker 02

  Yeah, 72%.

• 49:38Speaker 03

  Yeah, but, but I don't necessarily feel like OpenAI and Anthropic are gonna slow down and generate revenue. They might have margin issues. They might, you know, in particular, I wonder if OpenAI's, you know, bets on, you know, their spending in the future, which is a lot of debt. They do have to worry about who's gonna be able to pay that debt, even if, you know, Papa Jensen is backing them up. But I think, you know, if you're making a bet on open weight, you're probably just making a bet on Nvidia, right? There's, there's not a single bet that you're able to make right now at a company that's like, hey, let me play the field. So I still think, you know, and actually, actually, I might even wonder if, you know, SpaceX becomes, you know, that platform for open weight models. So maybe your picks and shovels, you could have two bets.

• 50:23Speaker 03

  You could bet on Nvidia because they're dominating the market, but you could also bet on SpaceX being, you know, a little bit to step up the ladder from just Jensen's play, if you believe in open weight. But I still think that both OpenAI and Anthropic are gonna do fine. They're gonna be growing revenue. They're both gonna go public for, my guess is Anthropic at least two, two and a half trillion and probably OpenAI one and a half trillion. Whether they keep growing at that rate and whether the growth in the future, I do wonder maybe the growth of market cap slows down.

• 50:56Jason Calacanis?

  See, this is interesting Jenny, because we do have a corollary here, which is SpaceX's IPO, which had a major bump, a pullback, and then it came back. So it's kind of was priced to perfection, I think, would be, you know, what Bill Gurley.

• 51:11Speaker 03

  Only because he pulled a rabbit out of his ass there.

• 51:14Jason Calacanis?

  Well, you're talking about the Cursor acquisition perhaps? And the E-Law Web Services, EWS? Where he's got 20, 30, 40 billion dollars in compute revenue?

• 51:23Speaker 03

  Whatever you want to call that, that business did not exist nine months ago. Like, that is the most fucking crazy shit is that a 23-year-old company does a massive pivot and in less than a year, you know, a business that didn't exist becomes the majority, a portion of their revenue. Like, that's just insane.

• 51:41Jason Calacanis?

  It would be like, it would be as if Amazon in one year added AWS or something, you know? They were just selling books and cables Jenny, and then all of a sudden just fell in their lap, the AWS, which, you know, it took them a decade to build up that AWS revenue. But in all seriousness, these valuations are 20 to 30 times top line revenue Jenny. These things will be priced to perfection. They won't be a very good bargain for public market investors. How many years will it take them to fill in that valuation? If they go out at that 20 times top line revenue in your mind? And would you advise family members who might be calling you? Like, should I buy Anthropic and OpenAI? Like, what's your instruction to them?

• 52:22Speaker 04

  I'm a seed stage investor. I'm a pre-seed investor. What do I know about the public markets, Jason? No, it seems, it seems crazy to me. Gotta, gotta get in early, right? So I would not advise people to buy right now, even though I do think, you know, there is potential there. I, you know, I think we're gonna see ups and downs.

• 52:40Jason Calacanis?

  Jeff, what are your thoughts here? You know, you're, you're in the family office stage of your life as well, having done particularly well over the course of 30 years in venture. So what are your thoughts here in terms of owning these incredible companies with incredible leadership, with incredible products, with incredible growth? But man, they are pricing certain public stocks, whether it's Palantir, Tesla, SpaceX, OpenAI, and now, you know, Anthropic. They're pricing them like venture investors would.

• 53:12Speaker 02

  Yeah, I'm still looking, I'm still looking for my entry and entry price in SpaceX. So I haven't bought SpaceX. I want, I want to own SpaceX, but it's too expensive right now, right? Like, I don't know what my buying price was. It was like probably 1 trillion I would, I would buy, like 2 trillion? Nah, it's probably ridiculous. But like, the goal of the family office is not to make bets that are potentially money losers. The goal of the family office is to not lose whatever we've made so far, right?

• 53:42Jason Calacanis?

  Preservation, yeah.

• 53:43Speaker 02

  That's why we have a financial advisor who goes into, like these days, invest in energy. Like, energy is interesting, right? We invest in, in things which are a bit more sort of peasant and predictable because everything I do at UnQuark is still sort of pretty insane. Because we have to deal with this, you know, environment where every valuation we look at is absolutely insane.

• 54:07Jason Calacanis?

  Interesting chart from a company that tracks cap tables. I'll leave it at that. I won't tell you which one. No free ads for these guys anymore, enough. But here's seed valuations according to a source. It's a limited data set, but it is a data set nonetheless. Man, 2017, you had seed round valuations, you know, 50th percentile was 8 million. 50th percentile is now 28. And then you get into the, you know, 75th percentile, we are going from roughly 12 to 54X. And in this elite 95th percentile, going from 25 to 209X, or 8X exactly, sorry.

• 54:51Jason Calacanis?

  So is it possible, Jeff, in your experience, to make money in this environment as a seed stage investor? And if so, what do you have to do in terms of discipline to not overpay and wind up being 1X as a fund, which is death?

• 55:10Speaker 02

  The way we have adjusted to this environment is basically continue investing at higher and higher valuations. And we don't want that, but that's what we have to do in order to win those deals. When there is a company that we believe is interesting, that the founders are exceptional, that the product is very differentiated, and we think there is an opportunity to build an iconic company, then we're gonna say, well, we want to own 10% or 12% of that business. And I'm gonna write the check that allows us to do that. And the.

• 55:43Speaker 02

  The good news is, having been around for so long, we rarely sort of lose deals. The only few times we've lost deals recently is when a multi-stage fund, so someone who has, you know, multi-billion dollar kind of pockets that can invest at seed stage, Series A, Series B, and so on and so forth, come in and write up, you know, 10 or 15 million dollar seed check at 100 million or more valuation. And in that case, in that case, we just go out, right? Because as you said, the big issue is, you know, for us and our economics to work, we need to be able to return, you know, ideally, the entire fund or half of the fund, our fund is 300 million, 150 million on that one single investment,

• 56:29Speaker 02

  which means that if we plow five or six million dollars into it, we need to make a 30x. And 30x on the valuation, which is already pretty high, means, oh, this is a multi-billion dollar outcome. Like, right now, unless you sell something for 10 billion, you barely sort of make money, which is insane, right?

• 56:46Speaker 04

  Yeah, at the seed stage. So if you come in at a 24 million post, which I think was the new number for seed, like, you're expecting Decacorn exits.

• 56:55Speaker 02

  Yep.

• 56:55Speaker 04

  So that seems like, if you do the math, that's pretty shocking.

• 57:00Speaker 03

  I think we also have to consider timeframe here. It's not just multiple, but what timeframe does it take to get that multiple?

• 57:05Jason Calacanis?

  This is, you know, a very, I think, challenging time. And I look at my investments during that SaaS peak zerp. And we tried to be net sellers during that period. And we had a couple of great exits. We were able to sell in secondary to the TPG, Tiger Cubs, whatever, the people who dipped down. But man, if I could replay that, I would have pushed harder to sell more at that unreasonable peak, which means if you were to fast forward that to today, Dave, you would want to do that at this moment in time, based on your new business, which is your, as I jokingly said, the last time you were on, a strip miner. You like to pull the strips out of our previous.

• 57:49Speaker 03

  We buy used cars in good condition. They just happen to be startups or funds.

• 57:52Jason Calacanis?

  You buy collections of used cars. Let's be clear. You find the, you find the rich old guy who's got a barn collection of Ferraris and Corvettes. You go to his widow and you try to get them to give you a really good deal, knowing there's like a Ferrari, like, from 1965 in there. That's the big winner. And the rest might be, you know, just one X or two Xes.

• 58:12Speaker 03

  I don't think we're trying to take money from widows. That's not our general game plan. But I would say, but no, the point is well taken that there are assets. Again, the top 30 names, it's a seller's market for those assets. If you have positions in Anthropic or any of those companies, even not Anthropic, let's just say, you know, Andurals and, you know, Stripes and Databricks and all those companies, they can set the price, right? If you go outside the top 30 names, there's not necessarily a market for the names. And some of those companies are doing a couple hundred million in revenue, growing 40, 50%, profitable. There should be a market price, but there's no data on that company for the average retail investor. And there's not people going to buy those companies.

• 58:57Speaker 03

  So it's a buyer's market for a lot of the names that are outside the top 30, if you know what you're doing.

• 59:03Jason Calacanis?

  How do we get companies 31 through 250 to get on the radar? Because the opportunity is probably in that group, is it not, Dave?

• 59:15Speaker 03

  It is, but the challenge again is transparency and liquidity, because most of those companies are not publishing their numbers, you know, maybe.

• 59:23Jason Calacanis?

  Should they? Should they create a market?

• 59:25Speaker 03

  Well, that's a really interesting question. Yes, there's an interesting question there. Theoretically, cost of capital would be lower if they were more transparent. But you have to play that against the cost of being public, and that's expensive. And so that's why companies aren't going public until they have half a billion, billion dollars in revenue. I talked to a CEO the other day who, you know, I won't name the company, but they're doing more than half a billion in revenue. And I said, when do you think you would consider going public? He said, not until they're doing 10 billion in revenue. And I was like, wait, did you mean, did you mean 10 billion in market cap? And he said, no, 10 billion in revenue, because, and, you know, I actually think he's not being insane because he probably can get there. But he was basically suggesting it'd be another five years, you know, before he goes public.

• 1:00:10Speaker 03

  For a company already doing half a billion in revenue, profitable, you know? So that's the market conditions we have is all these companies, we talked about this last time. All these companies would have gone public 10 years ago at 50 to 100 million in revenue. Now they're not even going public until they have at least a half a billion to a billion in revenue. You have all these now private companies, which, like you said, are great opportunities, but there's no reporting. There's no disclosure or reporting unless you can get access to their numbers. And so that's the arbitrage is, yeah, there's a lot of bargains out there as long as you know what you're buying.

• 1:00:43Speaker 02

  And the problem is that because the market is not ready to get anything below half a billion dollar in revenue. And, you know, even that, that question of whether they would actually go public today, then you have thousands of companies which are kind of stuck in the middle, as you call it. And unless you're lucky and someone sees the potential and comes and acquires you for like 10x revenue, that's what happened to us with Drone Deploy, which is a company I invested in 13 years ago. And we had like a great exit, return half the fund to investors. That's how we make money as venture investors, right? But like for one, that we managed to exit at a great multiple,

• 1:01:25Speaker 02

  you look at Bending Spoons, average like 2x revenue multiple that they pay when they buy something which is making like 400, 500 million dollar revenue. It's a disaster for the investors who were involved.

• 1:01:38Speaker 03

  Those companies are getting written down by 80 to 90% from their last round mark.

• 1:01:41Speaker 04

  But do you guys think this is going to change when Anthropic and OpenAI go public? Do you think they're going to be, the floodgates are going to open?

• 1:01:48Speaker 03

  What do you mean, for other, you know, secondary startup purchases?

• 1:01:52Jason Calacanis?

  Well, you take the top two out. The top two represent 50% of the demand. I'm picking a number out of the air here.

• 1:01:59Speaker 03

  No, you're right, Jason. It's pretty big. Half the market is five companies.

• 1:02:03Speaker 02

  Remember that SpaceX, Anthropic, and OpenAI will essentially raise in the public market more than all tech companies have raised in the last 45 years.

• 1:02:12Speaker 03

  More than 5 trillion, more than 5 trillion.

• 1:02:15Jason Calacanis?

  That is.

• 1:02:15Speaker 02

  The number is all just insane.

• 1:02:17Jason Calacanis?

  Insane. And what's really interesting.

• 1:02:20Speaker 03

  But there's still going to be, there's still going to be 3 to 5 trillion of other assets that are private. It won't be concentrated in as many companies. There will be not more, but I still don't think we're going to see everybody start buying, you know, company number 140. Like, they're going to be looking at Andurall and Stripe and Databricks next. Maybe they'll expand their aperture to like 20 or 30 companies. But again, there's no disclosure of information. The average retail buyer is not going to be looking past, you know, company number 30, maybe number 40. And that's where the buyer's market is, if you know what you're doing.

• 1:02:58Jason Calacanis?

  We, we've started a process here. If you go to Twist100 to try to address this. So I'm having my team just make our take on the top 100 companies here. And we're going to keep editing this as a list and come up with some ways for the community to participate in them and try to find the latest prices and have discussions. So if anybody has any ideas, we've vibecoded Twist100. We're also using that for our topics as a way to get the topics going.

• 1:03:32Speaker 03

  Hey, I love that idea, Jason. We did a very similar exercise as well.

• 1:03:36Jason Calacanis?

  Oh, did you really? And that's at Practical?

• 1:03:38Speaker 03

  We used Augments numbers, but yeah, we re-host the top, I think, 40 companies.

• 1:03:44Jason Calacanis?

  Got it. Okay, there you go.

• 1:03:46Speaker 03

  But it's interesting. It depends on how you do that rating and, you know, could be based on revenue, could be based on growth.

• 1:03:52Jason Calacanis?

  Valuation, total amount raised, likelihood to go public.

• 1:03:55Speaker 03

  Demand in the market, action in the market.

• 1:03:57Jason Calacanis?

  That's a good one, yeah. Yeah, secondary is.

• 1:04:00Speaker 02

  I think right now, what the key question is, will there be sort of acquired? What will be sort of the potential multiple? We've seen quite a few early-stage acquisitions. And for the old farts on the podcast, that sort of reminds us the early days of Web 2.0. Because, I mean, Jason, you were acquired early, right, by OL?

• 1:04:24Jason Calacanis?

  And. Weblogs Inc., 30 million, which at the time was a lot of fricking money.

• 1:04:28Speaker 02

  Back in the day, back in the day, like 2004 to 2008, 9, we saw a ton of companies being acquired for like really good multiples, didn't have much revenue, but those acquisitions, the $30 million for Userplane or for Weblogs Inc. or the $50 million.

• 1:04:47Jason Calacanis?

  Delicious Flickr.

• 1:04:49Speaker 02

  Delicious Flickr, all those, you know, at that time, because we were investors.

• 1:04:54Speaker 03

  Trip down memory lane.

• 1:04:55Speaker 02

  Yeah. In the early days at low valuations, we made a bunch of money, right?

• 1:04:59Jason Calacanis?

  Yeah, 10, 20, 30x.

• 1:05:01Speaker 04

  Yeah, you didn't come in at 24 posts.

• 1:05:04Jason Calacanis?

  Mark Cuban invested 300K for 15% of the company. And he gave us 300K and under 18 months later, we gave him back 5 million. So he was pretty excited about that. Didn't move the needle for him, but I went to him and I was like, I was like, we just got a $30 million offer. He said, take it. He said, how much money did you have in the bank? I was like, negative $30,000. I just bought my wife a $20,000 engagement ring and I've been floating the sales guy's salary for Weblogs Inc. on my corporate card. And he's like, what is the question again? I'm like, are we selling? He's like, what's our revenue? I was like, 125,000. And we have like two other contracts coming in for another 125K. And so they paid.

• 1:05:49Jason Calacanis?

  Uh, 300 times revenue and there were all kinds of headlines at the time. AOL is the stupidest company in the world for buying 95 blogs from J Cal.

• 1:05:59Speaker 03

  Take the money, buddy.

• 1:06:01Jason Calacanis?

  And I was like, you know what? I'm negative 30. I said to my wife, I'm taking this money. It was me, Brian, and, um, you know, Peter Rojas out of P's and we, we splashed some cash around for the rest of the group, just as like a mitzvah kind of situation.

• 1:06:14Speaker 03

  We had some great deals, SlideShare, Mashery and Mint.com. We're all great, you know, only 100 million, 200 million exits, but they happened within five years.

• 1:06:23Speaker 02

  We're starting to see those kinds of early acquisitions again in an era, the valuations aren't the same because the entry price is higher. We don't always sort of make the same money, but at least we've seen, you know, more acquisition, like we've, we've sold about $1.5 billion worth of stuff in the last three, four months, which hasn't happened for a while.

• 1:06:43Speaker 03

  Three, four months?

• 1:06:44Speaker 02

  Yep.

• 1:06:45Speaker 03

  A billion dollars in the last three months?

• 1:06:46Jason Calacanis?

  And it's been a pause for five years. So.

• 1:06:48Speaker 03

  No wonder Jeff is starting a new wine company.

• 1:06:51Speaker 02

  It has nothing to do with it, but.

• 1:06:54Speaker 03

  Oh yeah, right. Sure, sure it doesn't.

• 1:06:57Jason Calacanis?

  Sure it doesn't. Jeff is, Jeff is now in his 50s. He's got a certain amount of time left and he says, hey, third act, I want to be able to have my own, uh, my, my own side quest and that's wine. And I think it's fantastic. Jeff, tell us a little bit about it. Tell us a little bit.

• 1:07:12Speaker 03

  Cheers, bitch.

• 1:07:14Speaker 02

  Well, it's, it's, it's not exactly that, but basically, um, after 21 years running Uncork, I've asked my awesome co-managing partner, Andy McLaughlin, to take over the firm. So I'm no longer running Uncork. He is. I'm now the founding partner, which means nothing, which means I can do whatever the fuck I want. Um, and that means I continue investing in deep tech, which is awesome. I'm, I'm heading, you know, an absolute blast, but my wife and I decided to leave California, uh, which we did five months ago and we moved to a small town called Walla Walla, Washington, which is an incredible place, uh, lots of wineries, uh, awesome people.

• 1:07:55Speaker 02

  They don't care about tech. Um, and we've opened a, um, a small winery called Clo Clavier, after one name. I didn't name the firm, you know, us, but, uh, we named the winery after us. And, uh, we just put our first couple of wines on the market and they're absolutely fucking delicious. I'm super proud of what we've done.

• 1:08:15Speaker 04

  So great.

• 1:08:16Jason Calacanis?

  Which, well, give us, tell us which bottle we should buy.

• 1:08:19Speaker 02

  Oh, um, so go to wines and you will see we have, so we named our, um, uh, wines after terms of the VC history. So we have series B, our red wine.

• 1:08:31Speaker 03

  Hey, you want some liquidity? Jeff's got liquidity.

• 1:08:34Speaker 04

  And reasonably bright.

• 1:08:36Speaker 02

  And wait for it. The next one, the next one is called Carrot Interest. So you'll be able to buy our Carrot Interest later, uh, and it will be an exceptional wine.

• 1:08:46Jason Calacanis?

  On the left, we have, um, you're big fans of Spanish wines and you decided to recreate that flavor profile. Is this a, uh, it's a Cabernet?

• 1:08:56Speaker 02

  It's a Grenache, it's Grenache, Cabernet Sauvignon and, uh, 2% Syrah. Typically it's Carignan, but Syrah is, uh, we decided to use.

• 1:09:05Jason Calacanis?

  What's the, what's the flavor profile? What am I going to get on the tongue there? And then what would I parent with?

• 1:09:10Speaker 02

  It's very Grenache, it's very Grenache-y. So, uh, lots of red fruits, uh, sort of a lighter, very easy to drink, um, awesome sort of wine. Very, very pleased with.

• 1:09:20Jason Calacanis?

  You put that with some chicken or something or roast chicken or a steak?

• 1:09:24Speaker 02

  Chicken or pork. Uh, no steak, steak. I would, I would still use something like heavier, uh, like, uh, Cabernet Sauvignon, like typically our, our Carrot Interest will be perfect for that. And then, um, the inspiration for the white wine, which is 100% Duonier is, uh, French Condriere. So.

• 1:09:45Jason Calacanis?

  Wow, fantastic.

• 1:09:45Speaker 02

  This one is slightly acidic, uh, extremely pleasing. Again, like we, we just started to, um, ship the bottles to our customers and I'm starting to see on social, people are enjoying our wines. Um, it's really awesome. But to be clear, um, 95% of my time is deep tech for Uncork.

• 1:10:04Jason Calacanis?

  Got it. Okay. Well, to my team, I want a, I want a case of each, please, to my team, order it immediately. And then I want everybody on the staff to get to take a bottle. Okay? From the office. Thank you.

• 1:10:13Speaker 02

  Thank you.

• 1:10:14Jason Calacanis?

  I'm, I'm, I'm ordering this for the staff and when we'll have our staff dinner on Wednesdays, we have our management team meeting. I am, uh, maybe we'll crack one of these open, do a little taste test there.

• 1:10:22Speaker 02

  So do, do me a favor, just, uh, decan the series B for at least an hour so that it opens up because it's still very, very young. So you, you will enjoy it a lot more if you decan it.

• 1:10:33Jason Calacanis?

  Love it. This week in wine is, uh, now it's our first episode here. All right. As we wrap here, I want to talk about investing, I'm going to dovetail two things, investing in unpopular categories here. Maybe, um, you know, people are obsessed with agents right now. They're obsessed with, uh, on-prem models. We have a great investment in GoAI, et cetera. Training data, got a great investment in Micro One. We've got some great investments there, but they were made three years ago. Um, but today, Dave, uh, and Jenny, where are you looking? Where there's not a lot of people looking that are not the obvious categories, Dave? Is it possible to invest in 2026 into 2027, the year of our Lord, my brother in Christ?

• 1:11:18Jason Calacanis?

  Whether you believe in Christ or not, we are still brothers in Christ. Um, it could be a lowercase c, if you like, but, uh, my brother, where, where, where can we find value in going into 27?

• 1:11:29Speaker 04

  Well, Dave just told me that fintech and healthcare were, you know, no goes. These are not sexy categories. That was news to me as a fintech and healthcare investor.

• 1:11:38Speaker 03

  Well, they're not no goes for us. I'm just saying that other people don't seem to care about them.

• 1:11:42Speaker 04

  I know. It's insane.

• 1:11:43Speaker 03

  Yeah.

• 1:11:43Jason Calacanis?

  How could they not care about fintech when like my Robinhood investment, I may have wake up as a, I own more Robinhood shares now than I did when it was a private company because when it hit like eight or $9 Jenny, I was like, wait a second, this stock is mispriced. I'm going to low, I'm going to back up the truck. I bought a bunch at eight or $9 now at over a hundred dollars a share. I, without getting into details here, but I, I, I'm making a, a significant percentage of my gains in Robinhood as a public market investor now, like double digits on my returns. And I invested before it was released as a product. So maybe talk to us about why people are missing fintech specifically.

• 1:12:21Speaker 04

  Well, get this, I talked to one of our portfolio companies today at the intersection of fintech and healthcare. Um, they raised us like a 2 million pre-seed and they've been, you know, just crushing it. They're doing about 3 million ARR and they kind of tested the waters on a series A and that was like no go. Everyone said, um, they didn't like the margins, the categories. There was a million reasons. Um, and so now they're going to kind of raise like a, you know, a 3 million seed. And actually, I mean, they just started that, but they don't think it's going to be as easy as they thought. So that's pretty surprising, right? A company that's done really well in the last two and a half years has, um, gotten to like a pretty significant runway, run rate. So it hasn't been like an endless

• 1:13:04Speaker 04

  amount of time, um, in a category that, I mean, may not be sexy now, but I think, you know, we all agree, these are massive markets, fintech and healthcare and great founders, technical founders. I mean, literally check every box. Um, and no one was interested because they weren't growing at, you know, 500X, right? And they weren't in a category that everyone loved. And I, I mean, I was surprising. I think the, the founder even said 18 months ago, I would have gotten a series A done. Um, and now, you know, they're, they're kind of just like, ah, we'll raise 3 million and then, you know, we'll get to a real significant.

• 1:13:36Jason Calacanis?

  So bridge, they're just bridging it, internal team, uh, internal investors doing the majority?

• 1:13:41Speaker 04

  They'll get one, one new investor, but that's pretty shocking to me to be doing, you know, 3 million ARR in great category.

• 1:13:47Jason Calacanis?

  What's the lesson for founders? What's the lesson for founders here?

• 1:13:49Speaker 04

  The lesson is timing. They should have raised 18 months ago, honestly, because they were kind of the darling. Um, and people wanted to give them money and they thought, okay, we want to get from 1 million to three. Um, obviously, you know, that Jesus evaluation and, you know, that was a personal milestone that they wanted to hit, but you know, timing is, is everything in this business. So that was the learning.

• 1:14:09Speaker 02

  In this environment, if someone wants to give you money, take it. It's sort of the lesson. And if you're not raising, then you know, sort of figure out how to raise, whether it's a, it's a safe, whether it's whatever. But the, the issue that we have is as, as the people who help founders figure out their fundraising strategy, it's never been harder for us to figure out when and how much to raise because of what Jenny just described. We have, we've had a lot of fundraising happen at series and series B, but it's sort of unpredictable. Meaning like it happened awesome, but could we have sort of had the foresight of saying,

• 1:14:52Speaker 02

  yes, this will happen. It's easier when the company sort of, uh, raise a, a growth round, like, uh, today, Numeral, one of our companies is announcing a hundred million dollar kind of series C from insight. I mean, it was clear to us that they were going to raise, we just didn't know the valuation and, and, and the actual size. But given the company's progress, which is very, very quickly sort of growing to, uh, uh, tens of millions of dollars in, in revenue, like it's predictable. The issue for, uh, most founders is if you show up with a triple, triple, double, double, double, which guaranteed you, uh, financing three, four years ago, right now, nobody cares.

• 1:15:31Jason Calacanis?

  Nobody cares.

• 1:15:32Speaker 04

  It's kind of pushing founders to teeter on the edge of profitability or at least, you know, being able to get there. And so that, you know, also isn't great. These are seed stage companies. We want them to invest and grow and they feel nervous because, you know, the, you know, the ground is so, um, shaky.

• 1:15:48Jason Calacanis?

  Here's my best advice to founders. I always tell this to founders, Jenny. Are these good terms? Is this a good investor? I'm sorry. Is this a good valuation? Is this a good investor? And are these clean terms? Take these three circles and overlap them. And in the middle, I write these three words, just do it. Good valuation, good investor, clean terms. Just effing do it. What are we talking about here? What are we optimizing for? And I would like to thank Gemini for making me graphics that I would have paid an illustrator $300 for and waited six weeks. I mean, it's crazy, right? Like I just made that while you were talking, Jenny. I was like, I need to like write a blog post on this or explain this

• 1:16:32Jason Calacanis?

  to founders. I literally had this with, uh, my friend Ali at Micro One, who's been on This Week in AI a couple of times, one of our, you know, like literally it's my next Uber here in terms of we were able to invest in a $12 million valuation. He hits hundreds of millions of dollars in revenue. He's been public about this. He's massively profitable. He's like, yeah, people want to put more money in, uh, but we're not going to take it because we're profitable. And I was like. Um, good terms? He's like, great terms. I'm like, good investor? He's like, great investor. I'm like, is it a good valuation? He's like, yeah, great valuation. Uh, good investor? No, great investor. Okay. And the terms clean? He's like, yeah, they'll do whatever, you know, like standard paperwork. And if you, if you look in the news, you'll see a news story. He just, I think, announced he raised a hundred million dollars, or four billion,

• 1:17:15Jason Calacanis?

  which is unbelievable and absolutely fantastic. Congratulations to them. And, uh, and they were like, had more money potentially coming in. And I'm like, hey, son. Hey, son. Hey, son. Make hay when the sun is shining. Uh, but Ali is young and a force of nature, 25 year old. There he is.

• 1:17:42Speaker 02

  Wow, nice. Congratulations.

• 1:17:45Jason Calacanis?

  I mean, we own 6% of the company. It's, uh, gonna be a fund returner and the syndicate's gonna be quite happy. Um, you know, if things keep going according to this. All right, we gotta wrap, guys. You have been amazing. Jenny, you got a favorite company right now you wanna give a little pluggy poo to? And how can founders reach you?

• 1:18:03Speaker 04

  Uh, you can reach me, uh, over email, [email protected]. Pretty easy.

• 1:18:09Jason Calacanis?

  I love it. And what should they include in their email? You know, in terms of like a chart, short, long, deal memo?

• 1:18:17Speaker 04

  I just want, I just want, I just want companies that fit our thesis. So we do all pre-seed. We're one of the last surviving 250K. I think what Jeff did back in 2007 is what we do. 250K pre-seed rounds are usually like a million, um, all B2B, um, across categories. So if you set something like that, that's focused, I'm happy to chat.

• 1:18:39Jason Calacanis?

  So you're the last lady standing in this very important pre-seed space.

• 1:18:43Speaker 04

  I mean, it's, it's, it's pretty, yeah. I mean, there's like 10 of us left.

• 1:18:48Jason Calacanis?

  Trust me, I'm on the boat. I'm on the raft. I'm like, why doesn't anybody like this boat? It's incredible.

• 1:18:54Speaker 04

  They hate the boat.

• 1:18:55Jason Calacanis?

  They hate this boat. Like, the boat's not moving fast enough. It's not big enough. I'm like, but the fish, look at, look at the, the, the view. It's great. Jeff, you got a favorite company you wanna give a little pluggy poo to? And how can people reach out to you with their deep tech? Deep tech?

• 1:19:11Speaker 02

  Sure. I mean, Uncork does pretty much everything. So happy to get people's email, [email protected]. And I'm happy to route to all my partners, cause as a firm, I invest in deep tech, but win best in a bunch of different categories. So if you have exceptional founders building something really interesting, new, different in a market which is gonna become, you know, monstrous, send it to me and I will, you know, get back to you. Uh, plug to Loft Orbital, uh, which just announced a billion dollar investment from Abu Dhabi in a constellation that, uh, they're building, which will be the largest AI compute constellation in space.

• 1:19:53Speaker 02

  They already have more compute in space than any other company that, uh, manage missions for others, uh, investing in the company and, uh, being on the, on the, on the board for about seven years now. Loftorbital.com, super exciting.

• 1:20:07Jason Calacanis?

  Did they start in, um, computing space? Or did they start in another area? Because this has become a new opportunity, I believe.

• 1:20:13Speaker 02

  They started as shared missions. So they basically sort of get a bunch of sensors on satellites that are shared across a bunch of customers. And so as opposed to forcing you to launch your own satellites, you just give them your sensor, your camera, your, uh, infrared sensor, and they sort of launch it and manage it for you. So they make space look at like a data stream. They, they hide the complexity of, of space and they basically plopped GPUs up there. And that gives them the ability to like, take an image, run the, um, the AI models and send you down a, uh, the information, the, the action that you have to take, as

• 1:20:55Speaker 02

  opposed to waiting for a, you know, multi-gigabyte image to actually stream down to the planet.

• 1:21:02Jason Calacanis?

  Okay. Very good. And Dave, uh, what's, uh, what's exciting in your world? And how can venture capitalists who need to raise their fifth fund and would like to clear some positions in fund one, two, and three? Not that I'm thinking of anybody with the initials JC, but you know, uh, I'm raising my fifth fund next year.

• 1:21:21Speaker 02

  By the way, to be clear.

• 1:21:23Jason Calacanis?

  It's not Jeff Clavier, nor is it Jesus Christ, nor is it Julius Caesar. It could be another JC.

• 1:21:31Jason Calacanis?

  But Jeff understands what I'm talking about here. We get put into these, this, these short lists all the time.

• 1:21:36Speaker 03

  Jason, both you and I are gonna be at the Sidecar SPV Summit in New York next Tuesday. And I'm gonna be speaking about liquidity vehicles for fund managers, uh, what I call a single asset continuity SPV. And basic concept is just selling a piece of some of your winners into the SPVs that you might be using to raise per rata, so that you can generate DPI for your own fund and for your LPs.

• 1:22:01Jason Calacanis?

  Interesting. And you would manage that? Or you would be the LP in that?

• 1:22:06Speaker 03

  Well, uh, we might be helping to price those, but I would say that a simple way to do this is after a Series B or after a Series C, within three to six months, you can use the post-money price on that round as a legitimate, objective transfer price for the asset from your initiating fund to an SPV. If your LPs want liquidity, they can keep that. If they wanna roll with the position, they can roll into the new vehicle. But it's a way for fund managers to generate DPI, probably in years five to eight. Um, and the important part of this is they're not necessarily selling to somebody else and maybe having a disadvantageous price or missing out on the upside. They can lock in some of the gains in their initiating fund to generate DPI, but they can still manage the position in the SPV going forward.

• 1:22:51Speaker 03

  Um, we'll talk more about that at the Sidecar Summit, uh, coming up on Tuesday.

• 1:22:56Jason Calacanis?

  I will be there. And I'll be going from onstage to then talking to you and being, well, no, I'm gonna be in the audience for this. I want to, uh, yeah, I wanna, I wanna ask some questions.

• 1:23:06Speaker 04

  And Dave had to explain it to me like three times for me to like really understand it. So I will also be in the audience trying to absorb it again, but it is a very smart idea. So.

• 1:23:16Speaker 03

  Uh, well, the other thing I wanna be pitching to people, especially for anybody who has 2026 taxable events, is donor advised funds. And Jacob, if you could show practicalvc.com/DAF or DAF, uh, we're actually gonna be doing two, uh, education webinars on this, uh, one tomorrow morning and one Monday morning, which you can sign up for on our site. And this is really about how to donate illiquid assets, which could be, uh, stock in a startup company or GP or LP interest in a fund, even carried interest in a fund. Um, instead of, you know, donating your cash, you should really be donating the assets that you haven't already been taxed on. And not all donor advised funds accept, uh, these assets, but UI charitable, which

• 1:24:01Speaker 03

  we work with out of Utah, does. Um, so you can get a third-party fair market value assessment for assets that you're holding, whether those are startup company equity or fund interests. You can donate them to your own donor advised fund and you get a tax deduction immediately upon donating, whether or not they're liquid or could be liquid in the future. And you can use that to deduct against your taxes for this year and up to five years in the future. This is really important, uh, when you have a liquidity event. So for any employees who are selling secondary, uh, instead of selling a million dollars worth of stock and paying three to $500,000 in taxes, you can donate a portion to your DAF and instead of sending money to the IRS, you're sending it to your own philanthropic pocket.

• 1:24:44Speaker 03

  Um, you can also do that with, um, assets that are illiquid. And let's not say that any of us are sitting on busted unicorns from five years ago, but you might be able to get a favorable valuation for that asset, which is highly illiquid. Donate that to your own donor advised fund and cut your tax bill, even if you don't have a liquidity event in the current year. But important to get that stuff started and do it now. You need to get that stuff done by December, but probably take you about 30 days to get a fair market value opinion and do the donation process.

• 1:25:12Jason Calacanis?

  Amazing. I just wanna give a shout out to, um, TaxGPT. This is a surging company from, uh, our pre-accelerator, we call it Founder University. We now do Founder University in the US and globally, um, twice a year. We do it twice a year in Saudi, uh, and we'll be doing our next edition in November, and twice a year in Japan. Founder University's pre-accelerator, you just need to have a team. You don't have to be even, um, incorporated yet. Hopefully you get incorporated while in the program. And, uh, Founder University is a 12-week course, just helping you get your product finished to market. We invest in some of the graduates and one of them was TaxGPT. They went on to our accelerator.

• 1:25:54Jason Calacanis?

  We invested and we invested, then they got into Y Combinator. So they went to Founder University launch and then Y Combinator, all in like the same, uh, 12, 18-month period. And, uh, they've now hit, um, tens of millions of dollars in revenue, thousands of, uh, tax and accounting firms using it. And it is a fantastic startup that I am enamored with. So check out TaxGPT if you're an accountant. And, uh, yeah. If you want to angel invest alongside of our firm, our best companies will sometimes syndicate at thesyndicate.com. You have to apply and you have to do an onboarding call now. We have too many members. I say this with peace and love, there are too many members.

• 1:26:39Jason Calacanis?

  So you cannot invest in, with the syndicate out of the gate. You have to do an onboarding call, then you put on a waitlist and then we invite you to join. So get that process started now. We have over 4,000 active members and, um, thesyndicate.com. We do early stage and we do late stage barbell strategy. This has been This Week in Venture Capital. We'll see you all next time. Bye-bye.