Jake Paul & The Chainsmokers: Turning Fame into Funds, Jake Enters Politics? & Venture Bubble Signs

(0:00) Jake Paul joins the Chamath! (6:41) Turning an audience into businesses, the boxing playbook & coming for the UFC (11:54) Attention as capital, investing without the celebrity label & why politics is next (20:46) Drew Taggart & Alex Pall join the Besties! (30:35) From artists to investors: picking deals, playing the sixth man & what fame buys (37:33) Advice for famous investors, whether fame helps or hurts & the non-obvious bets (46:10) Riding winners, getting cash back to investors & spotting bubble behavior Thanks to our partners for making this possible! IREN is a vertically integrated AI Cloud platform, delivering data centers, compute and software for AI training and inference. https://iren.com/ Oracle connects the data, applications, and infrastructure that turn AI into business outcomes—with the flexibility, choice, and control to optimize as AI evolves. http://oracle.com/ai EY helps tech innovators scale from startup to exit to megacap. You build the future. We'll handle the rest. http://www.ey.com Meta believes the future is for everyone. We're focused on giving every person the tools to reach their full potential and making sure the benefits of technology are distributed to all. http://www.meta.com Keel Infrastructure owns the power, land, and connectivity that HPC and AI run on - backed by secured energy assets and established grid interconnections across North America. https://keelinfra.com/ Airwallex - Agentic Global Business Accounts. Open local accounts in 70+ countries to accept payments, earn yield, pay globally, and manage spend. http://airwallex.com PayPal has been revolutionizing commerce globally for more than 25 years. Creating innovative experiences that make moving money, selling, and shopping simple, personalized, and secure, PayPal empowers consumers and businesses in approximately 200 markets to join and thrive in the global economy. For more information, visit https://www.paypal.com Google for Startups connects founders with the right people, products, and best practices to help startups build faster and go further. https://startup.google.com/ Explore ideas, industries, and technologies worth understanding with Chamath every week on Learn with Me: https://research.socialcapital.com/allin Follow the besties: https://x.com/chamath https://x.com/Jason https://x.com/DavidSacks https://x.com/friedberg Follow on X: https://x.com/theallinpod Follow on Instagram: https://www.instagram.com/theallinpod Follow on TikTok: https://www.tiktok.com/@allin Follow on LinkedIn: https://www.linkedin.com/company/allinpod Intro Music Credit: https://rb.gy/tppkzl https://x.com/yung_spielburg #allin #tech #news

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

  Jake Paul has got to be the dumbest, cockiest, stupidest, most egotistical person in the social media sphere.

• 0:09Speaker 01

  Mr. President, what an honor.

• 0:11Speaker 00

  That's what makes him so damn successful.

• 0:14Speaker 01

  The world has shifted to attention being one of the most valuable currencies.

• 0:19Speaker 02

  He is the multi-talented superstar who brings the cap between social media and professional boxing. He is a boxer, a content creator, an entrepreneur, a philanthropist.

• 0:31Speaker 01

  I have two main goals, definitely becoming world champion, and I want to exit a company for $1 billion. I never was like, social media is the new wave. I was the wave.

• 0:46Speaker 03

  Please welcome Jake Paul.

• 0:58Chamath Palihapitiya?

  What's up, man?

• 0:59Speaker 01

  What's up?

• 1:00Chamath Palihapitiya?

  How you doing?

• 1:00Speaker 01

  Good. Hey, don't fall asleep. When I say "all," you say "in." All! All! Let's go. Come on, guys. We're at the summit. Get that energy up.

• 1:11Chamath Palihapitiya?

  Jake, let's actually start where I think Nick and Clavicular ended, which is,

• 1:19Chamath Palihapitiya?

  in this weird way, all of you guys have grown up in this social media generation. And you're maybe at the tail end of it. You're almost 30 now.

• 1:29Chamath Palihapitiya?

  Talk to us about your journey, because your journey started very similar to a lot of these guys, which is, you're there, you started Vine at the time, so it wasn't even really TikTok and YouTube. And then this success begets success, and then just walk us through what that does to you as an individual trying to find your way in the world.

• 1:49Speaker 01

  Yeah, it's a good question. You know, I don't remember a time where like I wasn't already getting followers and people following me and coming up to me since I was super young. And I think, for me personally, I was doing it before it was cool and because it was a passion. I think a lot of people now are trying to become influencers and trying to figure it out and seeing if they can go viral and create a team and build businesses around them, because it's the cool thing to do and it seems like the best thing to do. But I think the people that authentically are actually entertaining and have a take

• 2:32Speaker 01

  and are filling a niche in the entertainment space and specifically on social media are the ones that succeed. I was doing it because I loved doing it and I was good at doing it.

• 2:45Chamath Palihapitiya?

  What did you love about it when you first started posting?

• 2:47Speaker 01

  I loved creating. I loved having a story and an idea in my mind and seeing it come to life and to be able to put it out there into the world and to make people laugh, to change their lives, to maybe make their day a little bit better. You know, people go through hard times and all these things on a daily basis. So if I could inspire someone, in my messages every single day in my vlogs, I would say, "Make sure you're working hard. Make sure you're smiling. Make sure you're chasing your dreams." And I think those simple reminders on a daily basis are why I was able to grow a really big audience.

• 3:21Chamath Palihapitiya?

  Does the pressure change your approach to the business as you started to become more and more successful? There's millions of people, and then, in this weird way, the platform underneath you goes away. And so how did that change when you're like, "Oh my God, I have to restart all over again. This business that I'd invested so much time in isn't there anymore." This is Vine specifically, wasn't it?

• 3:39Speaker 01

  Yeah, I wasn't too worried about it. So it's actually a funny story, and it's a good lesson for business owners, but we told, the top 20 Viners told Vine, "Hey, you have to start paying us, otherwise we're gonna stop posting on here." Because they weren't paying us, and we knew we were getting ripped off. We were bringing in all of the content, all of the views, all of the fans. And we were like, "Hey, we need a million dollars." They went back to Twitter and they were like, "Hey, they want a million dollars." They came back and were like, "Yeah, we could pay you the million dollars."

• 4:10Chamath Palihapitiya?

  A million each or a million amongst?

• 4:12Speaker 01

  Exactly. So they said, "We'll pay you a million. How do you guys want to divide it between you 20?" And we were like, "No, we need a million dollars each per year." And they said, "No." We all stopped posting on the platform, transitioned to posting on Facebook, YouTube, and Snapchat. And within a couple of months, Vine died out.

• 4:31Chamath Palihapitiya?

  Tell us about the evolution now of streaming and popularity and attention. How has it changed from when you started this 15 years ago? And what do you think happens to society and these generations of young men and women who now really aspire to be famous and have, you know, the things that you've built, which we'll talk about in a second. But what happens like sociologically to these people?

• 4:54Speaker 01

  Yeah, you know, it's a weird world to grow up in, and I don't think we have the answer to that of how, you know, the iPad kid generation grows up and they're able to access so many more things than we ever even able, you know, were able to do. I still was in an era where I had to go knock on the door of my friend's house to go hang out with him. And so I got the technology, but also the analog real life. And so I have that balance, but I don't know what it looks like. I think there's a lot of, you know, not good streaming content out there and people doing things for clickbait, for views, just to generate attention.

• 5:37Speaker 01

  And I used to do that when I was a kid, you know, because I wanted to make it and I wanted to, you know, build a business and I wanted to build a following. And so I call it the YouTuber disease, that people can fall into a lot of times where they're just saying absurd things to generate more press and clicks on a daily basis.

• 5:58Chamath Palihapitiya?

  Should YouTube take more responsibility in filtering some of this stuff and actually having more of a, maybe a moral view on what the spectrum of things is that they should support?

• 6:08Speaker 01

  Well, I think they're just one platform, and I think the problem is, and it's very similar to the AI race that's happening between the United States, Russia, China, is if YouTube stops it, then their viewership and people going to their platform go down. And then Twitch, Kick, Twitter, Instagram, whatever platform is still going up. So if they don't come together to solve the problem, then I don't think the problem will be solved.

• 6:39Chamath Palihapitiya?

  You've had to evolve from making content and you've started to be, I mean, a very successful businessman.

• 6:48Chamath Palihapitiya?

  The evolution of content creator tends to be you go from content creator, you're doing sponsorships, maybe you start to roll your own products, and then ideally if there's cash flow, then you can start to actually own assets. Give us your version of that. How would it happen for you?

• 7:01Speaker 01

  Yeah, so I'm an entrepreneur at heart, and so even before I blew up on YouTube, I went to SF in the valley and fell in love with startups and seeing all of these big companies. I got to go to Google, Twitter, Uber. I saw, you know, people and hacker houses building all of these insane apps, and that's when I started angel investing. And I started my own startup at the time, which was a social media label. And so I always saw vision in people and the potential in people. And so I'd find talent, sign them to my company, Team 10, and help them blow up. And I created 20 or more, you know, people with millions and millions of followers

• 7:46Speaker 01

  and revolutionized like the content house. And that was my first startup that I did. And so I've always been in the business of startups, investing, and being in the valley since I was a young kid.

• 7:58Chamath Palihapitiya?

  One of the things that happened at one point is you had a, you started boxing, and you had this incredible moment with Mike Tyson. I think it was 108 million people watched.

• 8:09Speaker 01

  138.

• 8:10Chamath Palihapitiya?

  138 million people watched on Netflix. And where did boxing come and why did you feel like you had to put your body at risk, I guess, maybe? And was it because you were passionate about the sport? Or was it that you felt like that was an unexploited way in which you could continue to build awareness and attention?

• 8:33Speaker 01

  Yeah, so it started off because these two brothers from the UK were talking [BLEEP] to me and my brother. And we were like, "Yo, let's just glove up and settle this." And I actually, we signed a contract to fight them in like three months it was. And I was like, "I'm not gonna lose." And I went to a professional boxing gym the next day, and it was very grueling. But I grew up as an athlete in Ohio and just started training. And within that three-month period, got to be pretty good. Went into Manchester to fight them, enemy territory, and got a knockout. And that was one of the greatest feelings in my life. It felt very accomplished, and it was very fun.

• 9:17Speaker 01

  And I don't know if it's like a little sadistic, but it was like cool getting punched in the face and beating someone up.

• 9:25Speaker 01

  And from that moment on, it was the, you know, it was the biggest pay-per-view in amateur boxing ever. And I saw the numbers. I loved it. And I wanted to double down and become a professional boxer, and I took it very seriously. Moved out of Los Angeles to go and train in a secluded area in Puerto Rico where there's less distractions and knew that I could take over the sport of boxing because, and saw the vision, because most boxers build their record up. They fight easy fighters, then all of a sudden, the first time you hear about a boxer is when they're 20-0. But I had this built-in audience of 100 million followers that followed along through every fight

• 10:09Speaker 01

  and that I could also grow and build fighters underneath me, similar to my original startup, Team 10, where it was influencers. So I just replicated that model, and now we have 400 fighters boxing MMA under MVP. And we're going after Dana White, Sufa Boxing, and the UFC.

• 10:30Chamath Palihapitiya?

  Yeah, tell us about that. What's the, where is UFC failing? Why is there an opportunity to rebuild MMA?

• 10:37Speaker 01

  Yeah, so first and foremost is they don't put fighters first. So they pay their fighters roughly 15% of their total revenue, which in other professional sports leagues, it's 50%, 5-0. And so the fighters are pissed. They want to leave. They want to go box. They want to go find and make money somewhere else. Sean O'Malley got paid 600K on the White House card. And so... Because of that, the big fights aren't happening. They're not willing to pay for the big fights and people don't want to risk it. They're not putting on the fights that fans want to see. They're having trouble creating-

• 11:13Chamath Palihapitiya?

  So very classic, your margin, my opportunity, kind of an opportunity where-

• 11:17Speaker 01

  Exactly.

• 11:17Chamath Palihapitiya?

  You attract the talent because you're just willing to give them a very significant part of the gate and the ref share and all of that stuff.

• 11:23Speaker 01

  Exactly, and letting them have sponsorships and not shelving them. There's a lot of drama between the fighters and a lot of them want to move into boxing as well. And so, in every industry, there's a Coke and a Pepsi and a Nike and Adidas and never before has it been possible to compete with the UFC until my company came into the fold and we just merged with PFL and it's going to be a very exciting next couple of years.

• 11:51Chamath Palihapitiya?

  How, and when did you start Angel Investing? Because you're an investor in OpenAI, Cognition, SpaceX, I mean, it's an incredible portfolio. How did that start?

• 12:00Speaker 01

  So I started Angel Investing when I was 18 years old after I went to the Valley, made a ton of mistakes and then formalized a fund.

• 12:08Chamath Palihapitiya?

  Jeff is your partner-

• 12:09Speaker 01

  Yeah, Jeff Wu.

• 12:10Chamath Palihapitiya?

  Jeff Wu.

• 12:10Speaker 01

  And so, we believe that we're in the attention economy and that capital is a commodity and I think this is part of, you know, Elon buying Twitter is, you know, when you make a new account on Twitter, the first suggested follower is Elon, pumping all of his companies through that, very smart, obviously, but bringing attention to a company and to a cap table is something that we've found to be extremely valuable and something that founders need and want.

• 12:40Chamath Palihapitiya?

  Jake, what's the downside of an attention economy? Like, what is the downside when popularity is how things first get arbitrated?

• 12:49Speaker 01

  Yeah, no, I think the, uh, the problem is if people forget to build great things and are focused on just building something to gain attention and to have eyeballs and to make it seem like they're doing something big, that's where there can be downside and I think the inauthenticity that can come with trying to gain views is a massive problem I see in journalism, in reporting and in people making content online. A lot of times

• 13:30Speaker 01

  there's these crazy hot takes that people are coming up with because they know that it's going to garner a lot of views and make them money. At the end of the, at the end of the day, they're using that attention to try and make money. I think money runs the world. So in an attention economy, the inauthenticity will come through and it's not a-

• 13:52Chamath Palihapitiya?

  So your, your attention mechanism, meaning the followers you have, the reach that you have, is a differentiator when you're investing in these businesses at some level because for some of these businesses, you can help them cut through the noise and be, generate a level of awareness that they wouldn't otherwise get?

• 14:11Speaker 01

  Correct, but also my years of experience in marketing and branding, behind the scenes, we help with a lot of, a lot of that, specifically with OpenAI, Sora. I actually was the one that told them like, hey, this could be a good idea for you to launch a social media app and were, was involved in the whole process of building out the app-

• 14:33Chamath Palihapitiya?

  Really?

• 14:33Speaker 01

  With them.

• 14:34Chamath Palihapitiya?

  Oh, wow.

• 14:34Speaker 01

  Yeah, and then granted them my NIL to, you know, people can make videos with it.

• 14:41Chamath Palihapitiya?

  Name, interest, likeness?

• 14:42Speaker 01

  Yes.

• 14:43Chamath Palihapitiya?

  You just raised a hundred million dollars for that fund? You call it the anti-fund? So is this, you're going to compete more aggressively with the traditional VCs or do you, do you want to be sort of a compliment? How do you see this evolve?

• 14:55Speaker 01

  No, like, that's what I hate about this like celebrity VC thing. That's, it's, it's just annoying. Like, if a lawyer is an investor, they don't call him a lawyer investor.

• 15:04Chamath Palihapitiya?

  Sure.

• 15:05Speaker 01

  So that, like, I'm a celebrity, but they call me a celebrity investor. It's like, no, compare me to the Sequoias of the world, our DPI and IRR, and let's see who does better. Over the next five years, those are the people I want to compete with. We're super ambitious and that's, that's the ambition set and where we want to go. And so, we, thank you. I'm ruthless out here.

• 15:29Chamath Palihapitiya?

  Yeah.

• 15:30Speaker 01

  But yeah-

• 15:32Chamath Palihapitiya?

  Multi-stage, multi-sector, or how do you, how are you sort of evaluated?

• 15:35Speaker 01

  Yeah, we have a barbell approach. So we already deployed that fund. We are raising and deploying at the same time. So we're on to Fund Four now and we have a barbell approach. First check in, helping founders build their company from the ground floor, identifying talent, or going in growth stage and, in companies that have the proven track record, best founders in the world, with the Sams of the world, Palmer's of the world, et cetera. And so, we diversify on both sides.

• 16:07Chamath Palihapitiya?

  There's, there's a natural evolution as you age, which is the things that you did before stop working or they just need to stop. Obviously, like, you know, boxing, you're not going to be able to do forever, but you, but you've been very creative in getting to the next lily pad. So just as we wrap, tell us, what is, how do you see the next 10 or 15 years? How do, give us the sense of like, media, fame, attention, business opportunities? How are you organizing Jake Paul Industries?

• 16:32Speaker 01

  Yeah, look, I think it's a flywheel that feeds itself. You know, when I'm fighting, it brings attention to all of my other businesses and when I'm, you know, investing, it's growing my, my business brand, but it's something that I'm super passionate about, that I'll do forever. When I'm making content, it also helps me grow my following to funnel things into fighting. Then I can also push my businesses, help more people. I have a foundation that we've opened up 40 gyms for kids to go and box in for free with, you know, sending kids to boxing events and tournaments, sponsoring them. So it's this whole flywheel and ecosystem

• 17:14Speaker 01

  that kind of feeds the, the whole empire and completely grows it and-

• 17:20Chamath Palihapitiya?

  Where's 40, where, as we wrap, where's 40-year-old Jake Paul? Where do you see him?

• 17:23Speaker 01

  I think politics.

• 17:24Chamath Palihapitiya?

  That's a great answer. Why?

• 17:29Speaker 01

  I believe that the best way to, it's one of the best ways to make change in the world. I've already done so much and accomplished so much and where I get the most satisfaction is out of helping people. And where I'm doing that right now is in women's boxing and with young boxers and giving them a pedestal and the biggest paydays of their career. We've completely revolutionized women's boxing and basically made it to WNBA. And before they were underpaid, underserved and barely on any fight cards. So I get the most satisfaction actually out of doing that and then, you know, the appreciation I see from them. And I think the next step of that for me is, is helping the world. And I believe the best

• 18:14Speaker 01

  way to do that is some form of politics and actually being ground floor, making change. And I believe that the future people in office will have a natural built-in following that they can talk to. I think, I've been saying that for five years and then recently Spencer Pratt comes along and is the first example of someone who is-

• 18:39Chamath Palihapitiya?

  Or Trump was probably the first, yeah.

• 18:41Speaker 01

  But even, but even him, he's not like a, he didn't have that like social media native audience where he's making content. He was a traditional, he was a traditional celebrity and I think even the Nick Shurleys of the world, I think Nick should be in office doing something at some point. Like, these are the future leaders of the next generation will have that built-in following and be able to capture the vote.

• 19:06Chamath Palihapitiya?

  Jake Paul, thank you very, very much.

• 19:09Speaker 01

  Thank you.

• 19:10Chamath Palihapitiya?

  Bravo.

• 19:10Speaker 01

  Thanks, brother.

• 19:12Chamath Palihapitiya?

  Yeah, that was great.

• 19:13Speaker 00

  Who are you performing for? There's nobody here.

• 19:16Speaker 05

  You have to envision it, man. You have to manifest your destiny. If you don't envision your success, you'll never achieve it.

• 19:22Speaker 06

  Their music has gone platinum 25 times.

• 19:31Speaker 00

  These are the Chainsmokers. They're to my right, Alex and Drew. They are one of the biggest DJ groups in the world.

• 19:36Speaker 06

  You shared a quote when you started Mantis. You know it's the end of the days for VCs when the Chainsmokers start doing this.

• 19:44Speaker 07

  Music to venture capital, whole different game.

• 19:47Speaker 05

  Are you legally allowed to say invest in Mantis?

• 19:49Speaker 08

  Tech investing, you just get a front seat view of the future. It's the most stimulating show you could watch.

• 19:58Speaker 03

  Please welcome Drew Tigert and Alex Paul.

• 20:14Speaker 09

  What's up my guy? Good to see you, great to see you brother.

• 20:17Chamath Palihapitiya?

  What's up brother?

• 20:17Speaker 09

  Good to see you.

• 20:18Chamath Palihapitiya?

  Good to see you man. What's up bro?

• 20:19Speaker 09

  Man, last time I saw you guys, me and Friedberg were in the pit. 1am, we're dancing our asses off.

• 20:28Speaker 08

  You guys threw down, we were impressed. I didn't expect you guys to stay.

• 20:31Speaker 09

  I mean, I'm there to the sunrise. When you guys stop playing, I got another 20 minutes, I'm good. Friedberg was high as a kite, he was... Somebody gave him a pill in Ibiza, he just popped this little thing and he was dancing like a fool. I'm kidding, I'm kidding.

• 20:46Speaker 05

  I like the pre-party, pre-parties are more my scene.

• 20:49Speaker 09

  Oh, that was the other great part. You go and you're VIP for Chainsmokers? They have a suite and you go in and there's like...

• 20:56Speaker 05

  Jason, come on, let's start.

• 20:57Speaker 09

  Fifty guys and then all these famous people are there and then they walk you through the tunnel with the Chainsmokers? Boom, and then there's 10,000 people in Vegas losing their fucking minds? How long you been doing that? What do they call it?

• 21:11Speaker 08

  The residency?

• 21:12Speaker 09

  The residency?

• 21:13Speaker 08

  We've been at The Win in Vegas for eight years. We've been in Vegas for 10 years and I think we are gonna be, we're gonna die there. As long as we stay relevant. I want to be buried at EBC personally, I like the Beach Club better.

• 21:26Speaker 09

  So The Win is your LP? That's your anchor LP in your fund?

• 21:30Speaker 08

  Exactly.

• 21:30Speaker 09

  Yeah.

• 21:30Speaker 08

  Exactly.

• 21:32Chamath Palihapitiya?

  Can you guys talk about your evolution in making music? How did you find each other?

• 21:40Chamath Palihapitiya?

  How did you guys first figure out the genre of music that was gonna work? And then, you know, this first little burst of success, what did it feel like? Like what were you, what were you thinking would happen? Probably not this, but just...

• 21:53Speaker 08

  Yeah, well, we met through, kind of, I guess it's a friend of a friend. And weirdly, we didn't know each other at all before. Alex had started The Chainsmokers with a different guy. And they had a falling out. And he was like, okay, we put all this work into it, you know, we're DJing all these shows around New York City. This is like 2011, 12? And then I was in, I went to school at Syracuse and was just finishing up around that time. Alex was like, I wanna find, you know, Chainsmokers is two people, I need another person. And I was just making music at school and we got introduced and weirdly, you know,

• 22:32Speaker 08

  didn't realize at the time, the biggest decision of our life, basically met and said, "You seem cool, let's start a band." And here we are, 14 years later, still best friends. And we've done a bunch of, you know, had a lot of success in music luckily. And yeah, and we're so like-minded in so many other areas, which is, it's the luckiest thing that's ever happened to me.

• 22:49Chamath Palihapitiya?

  Is it hard to make new music and feel like you're pushing new ground when maybe a lot of people want to hear the classics, so to speak? Or they have you kind of like in a certain vein of how you, your music should sound?

• 23:05Speaker 05

  We were just talking about that earlier, actually. And, you know, I think there's one side of the equation is like, you know, there's a sound that we created that people, you know, have become, come accustomed to hearing from us that we love making. And then you see that like one Twitter troll that's like, "You guys make the same song over and over again." And then suddenly you're like, "I'll show you." And you sort of, you know, get away from it a little bit. I don't think that one Twitter troll is responsible for the genesis of our music. But I think, you know, we like to challenge ourselves and, you know, I think more than anything, we just follow our creativity and wherever it goes. And we, you know, don't have a label on specifically what type of music we think we make.

• 23:45Speaker 05

  But I also think ironically right now, there's this like big yearning for nostalgia, just generally. And, you know, we find ourselves in this interesting position where, you know, there was this big trend in January around 2016, which was a pretty special year for us in our career. And, you know, now we're, you know, in 2026, coming to the end of it, sort of wondering like where do we find that balance between, you know, what makes our music exciting for us to make and perform? But also tap into that, I don't know, like that special feeling that...

• 24:18Chamath Palihapitiya?

  Why, why do you think there is this need for nostalgia? I mean, it's funny you say this because like I listen to the, I look at the Spotify playlist of my children who are in their, you know, teenage years and it's so much throwback stuff. They're listening to Elton John, they're, they're going all the way back and I thought, why is that happening?

• 24:36Speaker 08

  I mean, it's hard to say exactly, it's probably different from different segments of people. But I think everyone remembers the past, you know, more favorably than the present. And they want to existentially exist in a, in a time that they can kind of color and with their own memories and, you know, I don't know.

• 24:56Speaker 05

  There's like a simplicity...

• 24:57Speaker 08

  We just say like, maybe the music was just better back then.

• 24:59Chamath Palihapitiya?

  Yeah, I think there, well, yeah, I mean. Tell us about the business of music and then we'll talk about the business of business.

• 25:05Speaker 08

  Sure.

• 25:05Chamath Palihapitiya?

  Because you guys have done an incredible job of transcending, but just, you, you need a nut, you know? You need to start your first, something, the first thing has to work and you have to make it into a real business and you did that. Explain the business of your business before you...

• 25:19Speaker 05

  Do you want to say, I'm gonna be too negative about the music business?

• 25:22Speaker 08

  I can be positive.

• 25:23Speaker 05

  Yeah.

• 25:23Speaker 08

  Okay.

• 25:24Speaker 05

  Do it.

• 25:24Speaker 08

  I'll start, I'll be positive first. Yeah, I mean, and the music business is an extremely competitive landscape. And I mean, now there are 300,000 songs being uploaded to Spotify every day. Endless content.

• 25:37Chamath Palihapitiya?

  300,000 a day?

• 25:38Speaker 08

  That's right.

• 25:39Chamath Palihapitiya?

  Wow.

• 25:39Speaker 08

  Yeah. And so, I mean, when we started in 2012, it wasn't like that, it was pre-streaming. And, you know, I think if we started over today, I have no idea how would we, we would do it. But in 2012, you know, as we were kind of cutting our teeth in dance music and as producers and songwriters, we started doing remixes. We loved indie electronic music. There was this chart called Hype Machine, which was the first viral chart of the internet, this is way before streaming. And basically how you were charted on this, the algorithm was basically how many times a certain amount of blogs posted about you? And then that's how you entered the chart and then how many likes you got on that chart.

• 26:23Speaker 08

  So what we would do is we'd go to all these artists, because we loved all the music that was being posted on this chart, and we'd beg them to do remixes. And then Alex went in the backend of Hype Machine and he found every kid that wrote for every blog that they pulled music from. And, you know, we'd make this remix of a song they were already posting about. And then he would write them these hilarious emails, like super personalized, gave them shit about where they went to school. Because what he realized is all these kids are college kids that wanna be closer to artists. And, you know, all these labels that are sending these blanket boring promotional emails, it was uninspiring, so like they were really receptive to, you know, Alex's messages.

• 27:05Speaker 08

  And we went from in the first year of our career, pretty much being completely obscure, to having, we now have like 30 number ones on that site. Because we were remixing the right thing and he was, but I think within the first year of our career, Alex had developed like the most powerful promotional platform, probably more than any other label at the time.

• 27:25Chamath Palihapitiya?

  I mean, it's like content marketing, it's like you guys...

• 27:27Speaker 08

  Totally. I mean, that was just like our hustle at the time, like that's not applicable now. Maybe it's TikTok, maybe it's, I don't know if we had to start from that point. But that was kind of our first thing as we were, you know, what we did while we were learning to be, you know, good producers and songwriters, find our artistic identity.

• 27:42Speaker 05

  Yeah, like it feels a bit broken too, when I think about what the music model is right now. And I think there's a lot of parallels between what happens in venture and what happens on the label side of deals. You know, there's more channels for distribution than ever and to create your own audience and goes directly to your fans and create your own community. And I'm honestly like very interested to see who will be that like first brand new artist that sort of rejects all the typical, you know, customary things that like an artist does, like signing with a label and, you know, signing away your next five albums and things like this. And I think we're like on the precipice of that. But I do think there's this sort of like vicious cycle that happens in music where, you know, it's so hard to break through. And when you finally do break through, you're in this position where,

• 28:27Speaker 05

  A, you're probably being offered your first couple of million dollars that you've ever made in your life for something, you know, that you've poured your, you know, heart and soul into. And then you also think about all the people you've admired over the course of your lives. And they all generally signed with labels too. And so is this like the moment where you decide to like truly bet on yourself and go direct in every sense of the word? Or do you sort of like take the slightly safer route? But in the process sort of sell a part of yourself and future self to sort of the label model? And there's a lot of value that labels still provide, I think in different capacities. But I think it's like a completely new world out there right now. I don't think anyone really has a fucking clue what's gonna happen, particularly with like AI and music

• 29:09Speaker 05

  and streaming and YouTube and all these other platforms and people's attentions getting shorter and shorter. And, you know, it's, it's a kind of crazy time right now. Very exciting, but also just vastly different than the period of, you know, music we started 12 years ago.

• 29:25David Friedberg?

  On this music side of your lives, you guys do a lot of live performance. Is that where most of the income is then generated? Is that really the business today is live performance versus digital? And once you've kind of broken through there and you've got an audience, doesn't that kind of just keep feeding itself?

• 29:39Speaker 08

  It is for us, I mean, it depends on what type of touring you do. I mean, we, we have songs that we go and perform sometimes, we'll have a whole band and we'll do an arena tour. And there's crazy overhead. And luckily for us, like we came up in dance music, we were DJs before we were anything and that's a big part of, I guess, our touring business. And, and there's vastly better economics there, so for us, that is the case.

• 30:03David Friedberg?

  So then can we talk then about the transition to investing? How you got into it and how this part of your biz, your lives helped you kind of make that transition?

• 30:12Speaker 05

  Yeah, I mean Drew kind of touched on it. I mean, I think we've always had a really positive relationship generally with technology. I think we leveraged it in very clever ways throughout our career, like the growth hacking Drew was talking about. Our friend James created this like conference technology called Tilt that we used for touring data. You know, and this is like pre-cloud, pre sort of all this backend data that was available to us, is available to us right now. And so I think that like established sort of a positive relationship. And honestly, like our foray into venture was about as cliché as it gets. Like we were, you know, lucky to be a successful artist. We had this, you know, distribution and marketing platform via The Chainsmokers and thus we were sort of like catnip for consumer brands.

• 30:53Speaker 05

  And, you know, I think, you know, that was an interesting, exciting time for us to start investing. But I think what really struck us and resonated was like the relationship with founders and the ability to like add value back into the businesses. And I think that's what caught us off guard. Instead of kind of treating it like this like passive revenue opportunity, we wanted to be hands-on and like sort of take matters into our own hands. And then also like, I mean, I love creative people, I think it's so amazing to have this, you know, career in music. But there's something inspiring about working with an entrepreneur that's like putting it all on the line, sort of going 24/7 towards this like pretty, you know, big goal. And I won't lie, like... More water companies is not what the world needs. And, you know, we were like meeting great founders like Brian Chesky and Drew Houston

• 31:38Speaker 05

  and Michael Seibel and the Kahn brothers. And you sort of got to ask yourself, you're like, you know, what, where do we want to be spending our time and money like, you know, most of this stuff probably won't work out. At least let's invest in things that we think are like truly interesting, could actually have a positive impact on the world. I remember like personally, I invested in like the series like G of Uber or something like some, the final round. And, uh, and I thought it was like the smartest, coolest thing I ever done. I made, I've made like 25 bucks, uh, on that investment, uh, to date. But like that to me was like the sort of thing that we wanted to be a part of in the future. Um, and I think that led us down like a path to, you know, institutionalizing our access, becoming, you know, really great partners to, you know, companies in cybersecurity,

• 32:21Speaker 05

  AI, infra, deep tech, um, and taking it, you know, incredibly seriously.

• 32:25David Friedberg?

  How did you learn to assess your selection process? So, you know, these things are coming in. You've not seen a cybersecurity company before. I'm assuming the first time you saw one.

• 32:33Speaker 05

  Yeah.

• 32:33David Friedberg?

  You know, how do you start to make these choices?

• 32:35Speaker 05

  Yeah. I mean, I think like on some levels, that was the big question. It was like, we definitely have an interest here. I think like the most important piece was like, we're going to show up and we're going to be good partners. Like, I'm not going to do the traditional like, you know, song and dance to get what we want and then sort of disappear into the fray. But I also agree, like, we weren't super clear on like, what does a cybersecurity company need? But I think what was interesting is after speaking with a ton of founders that we've, you know, been lucky enough to build relationships with, it felt like the things that were keeping them up at night and challenging them as they built their modern business in the modern present day, were a lot of the things that like, we had a lot of experience with. And sort of what I mean by that is like, we make music almost the same way we did 15 years ago. But like, everything else around that business has completely changed in terms of how we

• 33:19Speaker 05

  distribute it, create community, sell it, tour it, and all these things. And I think building a company, obviously you still care about, you know, revenue, net dollar retention, customer acquisition costs, COGS, all those things. But the inputs by which you create them is different. And it felt like there was an opportunity to build sort of a differentiated type of firm that isn't necessarily supposed to be a substitute for a Kraft or Sequoia or whoever's out there, but be like a collaborative partner and sort of like, for lack of a better term, like, understand our role in the ecosystem and don't.

• 33:47Speaker 09

  Can you, can you unpack then, what, what does the firm look like then?

• 33:51Speaker 05

  Uh, I mean, we're, you know, uh, we have me, Jeff, Drew Milan founded it. We have, you know, a few great partners like in Grov. We, you know, specialize in or focus at least across cyber, AI, infra, deep tech and health tech. And we invested in series A stage companies. We don't take lead positions. We like being the sixth man of the year on these teams. It's sort of like, I, I think of ourselves as like Robert Horry. Like Robert Horry has a ton of championship rings, you know? And you could be really successful and you don't have to be, you know, Shaquille O'Neal on every team. And I think we've learned a lot by working with great firms and we've also learned a lot by working with great founders. And that's sort of getting back to your question is the, kind of the whole point, which is like, beginning to build that muscle, that pattern recognition on what greatness looks

• 34:34Speaker 05

  like, what are these firms doing to support these founders? And then I think we all over exaggerate like what everyone is actually doing for these companies. And I was surprised by like, you know, I get an email saying like, hey, do, is there any way you can get me in, you know, on the phone with this person? And it was like, actually, yes, we played their company party three days ago. That's no problem. And so we've been like extraordinarily helpful when it comes to like go to market relationships, brand, you know, sort of the brand building side of things, which I think is, you know, become really important nowadays when you talk about like the defensibility, indefensibility that AI has created around tech, you really need to like suck the oxygen.

• 35:09Speaker 09

  I mean, this is a, a critical point. You guys are just extraordinary entrepreneurs. To actually make a business work in the music industry is one of the most difficult things you could ever do. It's a magnitude more difficult than making software. And so you have, I think, a lot of credibility there and go to market and being able to support people in networking and then also knowing when to get out of the way. The, the great founders very rarely need help. And when they do, something like networking or, or something like understanding the business model, you, you are actually very well connected to do it. And deal flow is the hardest part of being a venture capitalist. We are blessed with this podcast, you know, gives us the ability to get a lot of deal

• 35:54Speaker 09

  flow and you're blessed with the fact that, hey, you guys are very well respected in your field and, you know, a lot of the people who are founders have probably come to see you play and, and might have jammed out to your music. And, uh, I think it's absolutely valid.

• 36:08Speaker 05

  Yeah.

• 36:08Speaker 09

  Um, and I, you know, for people to kind of goof on it or whatever, you're doing the work. It's very easy to goof on venture capitalists, but it's hard work.

• 36:15Speaker 05

  I love being the underdog.

• 36:16Speaker 09

  Yeah.

• 36:17Speaker 05

  Like, that's the best position.

• 36:18Speaker 09

  It's the best position.

• 36:19Speaker 05

  Um, and I think like, I wouldn't bet against us. And I don't think anyone that has it's worked out with.

• 36:24Speaker 09

  That would be a bad bet.

• 36:25Speaker 05

  But like, keep letting us, keep underestimating us. I'm happy to be, uh, in that position. But like, we love the hard work. We love showing up. That's always been in our DNA. Um, you know, for us, it's, it's, this is an incredible opportunity. I mean, I studied art history at NYU. Like, all of this is unbelievable to me, um, to be in this position, doing any of this stuff. Um, so we don't take it for granted, but like, it's, you know, these things are, are people's life work and, you know, life's dreams. And, you know, to be able to go, you know, play shows all over the world for our fans and see the experience that, what our music means to people. Um, I mean, it's the most fulfilling thing I can imagine doing with our lives.

• 37:02David Sacks?

  You know, as tech has gotten bigger and bigger, I mean, I've noticed that there's a tremendous curiosity from people in Hollywood. I mean, not just music business, but acting or the agencies. I mean, everyone kind of wants to get in it in some way. You guys have invested in like a ton of unicorns. I mean, you have a phenomenal track record of the companies you've gotten into. It's very impressive. I'm curious, like, what advice would you give someone in Hollywood who maybe has like huge stardom, you know, is very well known and they're like, who could get allocations and deal just based on their name, but they have no idea how to do it? What would your advice to them be?

• 37:37Speaker 05

  I mean, I would ask them if they paid off their mortgage first. Um, and if they've done all of that stuff, I'd say like venture is probably the last frontier to begin investing in, in my opinion. Um, cause it is long duration, illiquid assets generally.

• 37:52Speaker 08

  I mean, venture is also just extremely hard. I mean, you're talking about, you know.

• 37:56Speaker 09

  Extremely hard.

• 37:57Speaker 08

  We were looking at some, some chart yesterday in our chat, just like, you know, five, uh, top 5% generate 90% of returns. Like you have to just be in the best companies. And so when you're, it's, it's brutal out here to have success in two things, whether it's sports, Hollywood, music, um, and then venture. Like you just, you got to approach it the same way. Like you have, we, we dedicate all of our time to these two things. Like we work 7, 24/7. We are heavy in the streets. We've seen a lot of people that have asked us, you know, you know, we want to get into the venture game and, you know, it's very rare that those, usually when we meet with them, we meet with their teams and they don't show up for the call.

• 38:38Speaker 08

  And, uh, I don't think people realize like how much work it is.

• 38:43Speaker 09

  Does your fame help or hurt you?

• 38:45Speaker 08

  Personally, every deal we've had to get in.

• 38:48David Sacks?

  Cause there's a lot of noise, basically. You have to sift through that to find.

• 38:51Speaker 08

  I don't think people want to do that. Like, I really, I think the idea of venture is super exciting, but what it takes is extremely hard.

• 38:58Speaker 09

  Does, does your fame help, hurt or neutral?

• 39:01Speaker 05

  I think both. I mean, to be honest, I mean, I think there's obviously opportunities to connect with people that probably would, I mean, I'm on LinkedIn all the time leveraging my like name and getting in touch with people that I want to speak with. But then there's obviously like the fundraising side where, you know, you're speaking to a principal at a, you know, institution and they're just like, listen, I like what you're doing, but I'm not about to like invest in the Chainsmokers fund, uh, because like you'll be the first thing that will be pointed out to me if something goes wrong. And I understand that. And I think you need to be empathetic to that point. And I think, you know, we just are always been results driven guys. So it's like, all good, I'll be back next fund with numbers that will make you regret this decision and we'll try this again.

• 39:41Speaker 09

  I think you're saying something incredibly powerful. It is so, I think like, if I learned anything in that chapter of my life as an investor, the ability to generate consistent DPI cuts through all the noise because they could have issues with you or not. People have had issues with me and not, but what's undeniable are returns and the ability to convert whatever asset you have, attention, fame, track record, technical experience, whatever. Into results really does speak for itself because that's the one thing I think investors have a very good tendency to do is they have an extremely short memory for everything other than returns.

• 40:15Speaker 05

  And I think that's like one of the, I mean, we're still relatively, it's been seven, 12 years since our first check and seven years since we started the fund and, you know, I still feel like the new kid on the block and I feel like, you know, what's challenging right now, and I'm sure you guys have discussed it ad nauseam up here, is just like, there is so much liquidity going into everything right now that, you know, it's not just about riding in a company that you know is going to get marked up just by virtue of the people involved. And I think that like, that's the hard part, but also like the responsibility of being good manager, which is like, really investing in like, ideas, founders, businesses that feel real and tangible versus sort of like the hypey side of venture, which is, you know, very relevant. And you could honestly go out here, invest in a, you

• 40:59Speaker 05

  know, there's a ton of companies where you're like, I know this is just gonna get marked up, but I just don't see the vision long-term for where this company heads. And I think that's the challenge as someone that like, yes, I love those results, the TVBI always looks great, but like, you know, really betting on a bigger vision idea. Like, I mean, obviously Airbnb at the time, Uber, when you did it, Jason, like, that was a non-obvious decision.

• 41:23Speaker 09

  To your point, I introduced 21 angel investors to Travis and 19 said no. Three said yes. Me, Simon, Bannister, and First Round Capital.

• 41:36Chamath Palihapitiya?

  Why do you think they said no and you guys?

• 41:38Speaker 09

  I can tell you the reasons. They said, well, this is a dirty business in the real world. We don't want to be involved in it. We invest in software companies. If he will just sell the software, very famous venture capitalist told me, if you can convince Travis to just sell the software to the cap companies, we'll back it. But we don't want to be in that dirty, real-world business because somebody's gonna get hit by an Uber and die and, you know, then we're gonna be on the hook for it. It's just, it's too complicated, it's too dirty. And Robinhood was the same thing. I mean, they looked at Robinhood and they laughed at that company. And we were in that company before they.

• 42:11David Friedberg?

  I remember when that company was raising its seed, Series A, it was a total joke. People were like, this is the dumb thing.

• 42:16Speaker 09

  It was a huge mistake. I'll tell you what I made wrong in that, in Robinhood. It was purely my own ego. They had a signup list of like, some number of millions of people. And one of our principals was really adamant that we invest in this business. And what I couldn't get over was my own previous experience at Facebook and how I had helped architect its growth mechanism. And it violated too many priors for me. And I just couldn't get around it. And, you know, when you look at that, that's a billion-dollar mistake, which is horrible.

• 42:49Speaker 05

  By the way, I really resonate with that. Like, we don't invest in any music apps or anything related.

• 42:54Speaker 09

  It's almost too close.

• 42:55Speaker 05

  Because I have like, a very hard time sort of not being a pessimist about these opportunities. And I think you have to, I don't wanna call it like, blind optimism, but like, pragmatic.

• 43:06David Friedberg?

  Any investment you've made where you've lost money, you never invest in that space again. It's like so common.

• 43:11Speaker 09

  Or if you've had success. It's just too close.

• 43:13Speaker 05

  Like, oh, we're gonna get rid of the manager. And you're like, what? No chant? I'm like, you know, like these things you experience.

• 43:18Speaker 09

  The one thing that will cut through all of that biases is just understanding how capable this person is, you know, and how difficult and driven they are. And that is at the core, when I met Vlad and his partner, and they said, we're gonna get millennials to invest, and we're gonna do it because they're gonna invest for free. All I thought to myself is, these guys are extraordinary. They're so smart and they're quants, and now they're gonna build this app.

• 43:45Chamath Palihapitiya?

  Right.

• 43:46Speaker 09

  What if it works? And that is the hard question, is to just pause for a second and say, if this does work, what does the world look like? And now we're over 10 years in Robinhood. I've never sold a share. In fact, I bought a lot of shares when it was $9 a share on the public market again.

• 44:01David Friedberg?

  You've still not sold?

• 44:02Speaker 09

  Still haven't sold a single share. I mean, I've sold a lot of Uber over the years because I was, it was 99% of my net worth at one point, and it was no choice but to do that. But I still hold a lot. And Robinhood is a very special company because now you have two generations of people on it. And Vlad keeps launching the next vertical, the next vertical, the next vertical.

• 44:22David Friedberg?

  Totally.

• 44:23Speaker 09

  Until he's not running that company and he doesn't have the product vision and execution. Those things can't be faked. Execution cannot be faked.

• 44:31Chamath Palihapitiya?

  Here's an interesting observation, not sure if it's true or not. When you look at the great investors of an asset class, it is usually the case that they have no priors in that asset class. You know, Mike Moritz was a journalist, right? John Doerr was, you know, Intel chip sales. And look at the, look at the wood that they chopped on the, in the internet. No priors. If you look at this next current generation of people coming up that are like, super investors. So there is something to be said for being far away.

• 44:56Speaker 09

  Yeah.

• 44:57Chamath Palihapitiya?

  But having that curiosity and the ability to network and the ability to think critically about a problem, I think that's a very, that's a very good thing to do.

• 45:04Speaker 09

  Now thinking about, you know, when I pick venture funds to be in, it's, I have these like, four Ds. Deal flow, you guys got that. Decision-making, you're very sharp, obviously, and you're very astute in terms of your own careers. But then there becomes a doubling down, and when to double down an investment, and then when to distribute, when to sell shares in it. You're actually at that point now, if you're in year 10. How do you think about doubling down on an investment or not? And then, how are you thinking about distribution, selling too early, which is actually how you're successful in this business, in some cases?

• 45:37Speaker 05

  It's a really good question. And, you know, we're coming up on our seventh year. We actually just had one of our first proper liquidity events with Fund One Company. Shout out to Underdog Fantasy.

• 45:46Speaker 09

  What company?

• 45:47Speaker 05

  Underdog Fantasy. Sold to IG International, which was a great outcome.

• 45:52Speaker 09

  How great is that day to send your LPs?

• 45:54Speaker 05

  Amazing feeling. Amazing feeling. And I think like, partially, you know, we, we think about this a lot because in my mind, it's like, we've made 75% of the business model. But like, we really need to get, you know, the cash back to investors. Otherwise, none of this really matters at the end of the day. But I do think like, about, a lot about the profile of the people, and especially early on in Funds One and Fund Two, who invested with us. And then they're not here really generally to play it safe with us. So I think we have like, a little bit of more liberty to like, ride out the winners. But I think that's exactly that. It's like, you have to, you know, really be involved in these companies. I mean, you know, Dandy and Fund One, which is an amazing company that continues to double every single year, just started international expansion. You're just like,

• 46:37Speaker 05

  I'm riding this thing till the wheels fall off. But I think like, in the context of where, you know, AI is today and all the capital flowing into it, and then all the, you know, external conversations around it. I mean, I wake up every day and I'm like, you could probably build a business model about getting into super-serious competitive Series As, adding value and just getting out of the Series B or C. And just, that is like, your guaranteed rule. That's not what we're doing. But I think, you know, it's important to pay attention to those signals. And I actually think like, there's a few companies in our portfolio that I won't name, where I'm like, it's interesting to watch the demand before around, and then the price gets set, and then the, the feeling around that company at that new price. And then either the demand sort of builds again,

• 47:20Speaker 05

  or it kind of stays where it is. And it's very interesting to pay attention to the sort of signals, supply and demand feeling. Obviously, the secondary, I get setter emails every day, and these like, you know, secondary market opportunities to get liquidity. But I think that's where, you know, you need to spend a lot of time on the underwriting and try to, you know, really understand the potential of these businesses. On the follow-on piece, I mean, it's all about, you know, concentration, concentrating in your winners. I think that's a skill that takes time to learn and experience to have the balls to know what that is. I wanna credit Brian Singerman to like, lecturing me for like, two hours once, about the importance of follow-on. And I think we've gotten better.

• 47:59Chamath Palihapitiya?

  You can architect it into your fund, you know. I mean, Founders Fund, I think, what's brilliant about them on many dimensions, but one is, they force you to find the one in the portfolio and say, great, we're gonna put 25% of the capital in.

• 48:12David Friedberg?

  Every fund.

• 48:13Chamath Palihapitiya?

  Every fund. You gotta find one. Which, to your point, is incredibly scary if you're forced to sit there and you have to underwrite a deal, your deal, the other partner's deal, and cut everything else.

• 48:24Speaker 05

  Yeah. I mean, it's like, literally.

• 48:25Chamath Palihapitiya?

  It's scary.

• 48:26Speaker 05

  It's like saying like, I'm gonna go live at this Founders. I'm actually gonna become an employee of this company for the next three months. And, you know, figure out a way to have, you know, the leverage to convince them to basically put that size of check in. Which isn't like, something we've traditionally had a lot of, you know, experience doing in the past. But it's, I think like, when I look back, like, the signals were always there. Like, I always knew the ones that we should have been doing that with. It's just, I think, you know, we're just taking the steps, I think, one at a time to get comfortable to a place where you have the, you know, guts and sort of understand the intangible signals around these things that make it up.

• 49:02David Friedberg?

  Have you thought about doing like, a growth fund? Because some people do that where they'll have the sidecar, where they'll be able to put a ton of capital in versus concentrating the main fund?

• 49:09Speaker 08

  Yeah, we, I mean, we debate this all the time. We're, we're, we're growing into the idea of a growth fund, you know?

• 49:19Speaker 09

  I mean, the other option that is very elegant is SPVs. And I can trade notes with you on it, but it's worked pretty elegantly for us. And one of the things that's starting to happen, which you're gonna experience shortly, is you'll, if you do the job right, you'll curate a bunch of LPs. We have a bunch of family offices who wanna do late-stage. So they're very interested in the zip line deal, the VAS deal, the Adams deal that we did. And then I have early-stage investors. We had a company that broke out, go.ai, and we had early-stage investors who invested sub $10 million, who wanted some liquidity, and there was some liquidity. We were modest sellers. And then we had so many late-stage funds that wanted to buy it. We were also buying at the latest round at 500, 600 million.

• 50:01Speaker 09

  Sequoia is having this happen now, and so is Founders Fund. They are buying, they're investing in companies, whether it's Stripe or SpaceX, et cetera. And they're also selling at the same time. And because companies are staying long for so long, you can actually build both of those parts of the business into one. And I think that's where venture's going, is you could have a very nice late-stage business with just your top 10 people.

• 50:24Speaker 05

  Blown away by the size and scale of these companies now. I mean, saying the word billion, even like, 12 years ago or 10 years ago, was like, the thing you would said where you're like, you know, will you lick the pavement? And I'll give you like, a billion doll, you know, it was like, such a rational number.

• 50:39Speaker 09

  And now it's a billion in revenue. Like, I think being a unicorn now really should be redefined, not on the valuation, on the revenue. I consider unicorns a billion in revenue. I don't care about the paper value anymore. I wanna see, and we have one company that's just hit 700 million in revenue. I'm like, okay, 300 million more to go, you'll be a unicorn.

• 50:56Speaker 05

  Yeah. And I, I mean, that's, I think that understanding that is really important, going back to like, the secondary sort of question and when you get out. Because I mean, you know, at the end of the day, it's just another, you're just passing bags around sometimes in these instances. And, you know, these double, triple trench deals that are happening right now, which I honestly completely understand from the Sequoia Benchmark Index client or perspective. Because I don't feel like their cost of capital is the same necessarily as everyone else's. But like, the guy piling on on that second trench is paying a significant markup, sometimes two or three X what the company is initially valued at, for absolutely no change in underlying performance.

• 51:32Speaker 09

  That's bubble, that's bubble market behavior, by the way. When you see that, that's when you take a little.

• 51:38Chamath Palihapitiya?

  As we, as we wrap, maybe final question. Do you guys still perform?

• 51:40Speaker 08

  Still perform?

• 51:42Chamath Palihapitiya?

  Yeah, every now and then.

• 51:43Speaker 08

  For you guys?

• 51:44Chamath Palihapitiya?

  Yeah.

• 51:45Speaker 08

  Well, yeah, we'll make an exception.

• 51:46Speaker 05

  Yeah.

• 51:47Speaker 09

  What are you guys doing tonight? You guys, any plans tonight?

• 51:50Speaker 08

  We'll come by.

• 51:51Speaker 09

  Do you guys have a thumb drive?

• 51:53Speaker 08

  If Friedberg can tell us where we're going. I've texted you like.

• 51:56David Friedberg?

  I got tequila for you. It'll be great. We'll share a bottle of tequila.

• 51:59Speaker 05

  I wanna, I haven't tried you guys' tequila yet.

• 52:01Speaker 09

  Friedberg is gonna break it down tonight on the dance floor, so watch out, everybody.

• 52:06Chamath Palihapitiya?

  It's really impressive what you guys have done.

• 52:08Speaker 09

  Yeah.

• 52:09Speaker 05

  Thanks for having us.

• 52:10Speaker 09

  Well done, gentlemen.

• 52:11Chamath Palihapitiya?

  It's the same pattern over and over again, meaning like, you have some attention and fame, you develop some mastery, and then you gotta translate it into something.

• 52:17Speaker 05

  But I think, I'll leave it on this note, celebrities are so good at being like, oh, this is shiny, and like, I'm excited by this. But like, after three months, that shininess wears off. And all you're stuck with is the actual hard work that goes into making anything successful. And I think that's always been our difference, which is like.

• 52:33David Friedberg?

  Put in the work.

• 52:34Speaker 05

  We don't actually care about the first three months.

• 52:35David Friedberg?

  Put in the work.

• 52:36Chamath Palihapitiya?

  Yeah, do the work.

• 52:37Speaker 09

  You're an overnight 15-year success.

• 52:39Chamath Palihapitiya?

  Here we go.

• 52:40Speaker 05

  Yeah.

• 52:41Speaker 09

  All right, thank you, guys.

• 52:42David Friedberg?

  Good luck, guys.

• 52:43Speaker 09

  Give it up for the change!

• 52:44David Friedberg?

  Smoker!

• 52:45Speaker 09

  Yeah, we'll keep it a couple hours.