EP 7: Bain Capital Crypto, Bolt's Breslow back w/ Crypto Pharma, Alumni Ventures and Standard VC Fees, Tiger Partners Fund Seed Managers

(00:30) Nikita’s Family and first good use of Twitter (01:32) Bain Capital Crypto's self own (05:12) Ryan Breslow’s crypto pharma start-up will not feature psychedelics initially and that's a real sentence (07:50) Buying domains and trips to Oklahoma to meet website brokers (22:05) Alumni Ventures and the "standard" vc terms (32:32) Twitter’s podcast platform and the best social app creator (39:30) Tiger partners funding seed managers with $1b over next 3 years https://www.bloomberg.com/news/articles/2022-03-09/bain-capital-s-stefan-cohen-is-sorry-for-men-only-tweet-on-women-s-day https://www.theinformation.com/articles/bolts-breslow-teams-with-psychedelics-founder-on-crypto-pharma-startup?rc=kulqhd https://observer.com/2022/03/scoop-sec-fines-sketchy-ivy-league-vc-firm-what-took-so-long/ https://www.sec.gov/litigation/admin/2022/ia-5975.pdf https://techcrunch.com/2022/03/04/twitter-podcast-tab-spaces/?tpcc=tcplustwitter https://www.theinformation.com/articles/tiger-global-partners-commit-1-billion-for-early-stage-tech-funds?rc=kulqhd Executive Producer: Rashad Assir Producer: Leah Clapper Mixing and editing: Justin Hrabovsky Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 📱 X - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode of The Logan Bartlett Show, we sit down with the people behind today’s most important startups and extract the tactics, lessons, and frameworks they’ve learned the hard way. Conversations span hiring to GTM, product, growth, fundraising and everything in between - collectively forming the ultimate playbook to make you a better CEO, investor or board member. Tap follow and enable notifications to stay ahead of the game.

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

• 0:03Logan Bartlett?

  Welcome to the seventh episode of Three Cartoon Avatars. I'm your host, Logan Bartlett, and I am joined today by my esteemed co-hosts Nikita Beer and Zach Kukoff. How are we doing, guys?

• 0:15Speaker 01

  Portfolio's getting destroyed every day, but other than that, pretty good.

• 0:20Speaker 02

  So it's the end of the world for you, Nikita?

• 0:22Speaker 01

  Every day is.

• 0:24Logan Bartlett?

  Well, Nikita, you've had some good news recently. I saw on Twitter, your family got out of Poland or got out of Ukraine and to Poland. Is that right?

• 0:34Speaker 01

  Yeah, I tweeted, "Can anyone take them in?" And I had a bunch of followers in Poland that offered their place. And one guy in Warsaw, actually, I think he left his own place and got a hotel and gave up his entire apartment. They stayed there for like a week, almost. He brought them groceries. It was kind of incredible. Polish people have been super generous.

• 0:59Logan Bartlett?

  That's amazing.

• 0:59Speaker 02

  My Polish family thrilled to hear that. My grandmother is dancing right now when she turns her tunes into this podcast this week.

• 1:06Logan Bartlett?

  It's maybe the first good use of Twitter ever, is shitposting your way to humanitarian rescue is pretty impressive.

• 1:15Speaker 02

  It's like this and Arab Spring, back to back, the two top uses of Twitter.

• 1:20Logan Bartlett?

  Well, good. Well, that's minus the war that's going on and the public market's melting down. At least there's some solace in all of that. That's great to hear. So first topic this week that we were going to cover is Bain Capital announced a dedicated crypto fund. And normally Bain Capital or anyone announcing a $560 million fund wouldn't be newsworthy. But the reason, I guess, that this one was, is that it went totally viral on Twitter for all the wrong reasons. So Stephen Cohen, who's leading the initiative for Bain, announced on Twitter, saying,

• 2:03Logan Bartlett?

  "I feel privileged to introduce such a special team," a thread. And the pictures that they showed were seven men. And that, all wearing the same outfit, it seemed, just different colors of the same long-sleeved shirt. And so people...

• 2:22Logan Bartlett?

  Went to work and ultimately dragged them for, for both using the word privilege as well as the composition of their team. So Zach, any thoughts on this one specifically?

• 2:34Speaker 02

  I mean, listen, there's so much here. I actually like the team, so I kind of feel bad, but International Women's Day, a team of all men. As one of my friends said, it looked like they Googled men with their hands in their pockets and just picked out the Google Images page as their new team page. You know, I think they're good people. I like, actually, a lot of the people there. Just a hell of a day to go and make an announcement like that.

• 2:59Speaker 01

  I mean, I usually don't duck on people. Like, it seemed like they mean well, but what did they think would happen by posting just a bunch of men's photos?

• 3:08Logan Bartlett?

  That was actually the, the interesting part of all of it. Like, the, the timing was weird to do it on International Women's Day. That was, that was just like total ignorance. The use of the word privilege was definitely lacking some level of self-awareness. But in general, just posting a picture of seven men, you're totally missing just any self-awareness of how that's going to be perceived. And so I wonder, I mean, Bain's a big institution, right? They have to have, I mean, they certainly have crisis PR firms on, on retainer now, but like before then, they had to have some PR person around to sanity check something, right? That like they shouldn't tweet out that picture on that day specifically with those terms?

• 3:50Speaker 01

  Did they delete the tweet?

• 3:52Logan Bartlett?

  They did.

• 3:52Speaker 02

  Yeah, they did.

• 3:53Logan Bartlett?

  Which is a cardinal sin, which is our one rule is do not delete and do not explain. And they did both.

• 3:59Speaker 02

  I hate to say, the king of this, this is the Trumpian move. Never apologize, never delete, and just keep powering through and they can't get you. That's what, that's what we learned.

• 4:08Speaker 01

  What did you say, Logan? The only reason to delete a tweet is if it doesn't get enough likes?

• 4:12Logan Bartlett?

  Yeah, exactly. You don't delete tweets. You don't delete tweets because of like public dragging and shaming. You delete tweets just because like it's not a banger. You know, that's the reason you do it, right? No amount of PR outrage will make me delete a tweet, but like, you know, five likes in the first couple of minutes and I, that thing is going down.

• 4:31Speaker 02

  I, I kind of wish they had leaned into it a little bit. Like, there were so many funny memes that came out with that. So the image format, I think we'll put it in the show notes, but the image format they posted with all the people in the sort of like jigsaw collage-esque framing, there were so many funny memes afterwards that people did a photoshopping other things onto that. Like, it's kind of a missed opportunity to lean into the meme aspect of it a little bit and be a little tongue in cheek. I would have liked, they have a good sense of humor. I would have liked to have seen it.

• 4:57Logan Bartlett?

  I, yeah, I don't, I don't know if the same group that posts that is going to be the one that's going to be able to like capitalize on the moment and like, you know, with some self-awareness and a reverence. I'm not sure that's going to be the group that's going to do it. So, so the, the next thing, a recurring person that we've covered in the podcast, I don't know if we should call him like friends of the pod or something, but Ryan Breslow is, is back again in the news this week for teaming up with a psychedelics founder to start what was quote unquote, "a crypto pharma startup." So, he's planning to develop drugs initially based on food-derived substances that have health benefits to treat

• 5:41Logan Bartlett?

  sleep and pain problems. Breslow founded the company with J.R. Rahn, who's a co-founder of MindMed, which is a publicly traded developer of psychedelic medicines, and Ashwath Rajan, who co-founded, if people remember, the company Bodega, which ultimately be called Stockwell, it became Stockwell AI, an ill-fated vending machine that got, got dragged for appropriating the term bodega and, and culture and all of that. So, this is a Miami-based company that plans to perform clinical trials to seek FDA approval for drugs, which will focus

• 6:22Logan Bartlett?

  on solutions to the opioid crisis. Love will eventually expand to pharmaceuticals and has no immediate plans to use psychedelics, he said. So, they also bought the love.com domain. So, it's, yeah, interesting, interesting all around here. Of course, this company has to be based in, based in Miami.

• 6:43Speaker 02

  I will say, if we keep talking about him, one more week of talking about Ryan, we have to call him the fourth cartoon avatar. We've basically rolled out the red carpet.

• 6:50Logan Bartlett?

  Do you think we can get him to, to switch his avatar? I mean, if, I would be, I would welcome him on at some point if, if we can get him at least to switch his cartoon avatar.

• 7:00Speaker 02

  Ryan, make, we will make a cartoon for you and get you on the pod, please. First guest has to be.

• 7:07Speaker 01

  When you guys read this headline, like, did you double take? Like, it's felt like an AI bot wrote like

• 7:13Logan Bartlett?

  Totally.

• 7:14Speaker 01

  Joe Pharma stuff.

• 7:16Logan Bartlett?

  Yeah, Nikita, honestly, it felt like it was tech Twitter bingo, like almost Mad Libs of like filling in, you know, Martin Scrocker Kelly got the pharma thing and then crypto was all in and psychedelics. It was just like, you know, all of these terms. I guess you throw in Dow and NFTs and board apes or something and that would have gotten like all of tech Twitter there. But yeah, it was.

• 7:37Speaker 02

  It's the worst game of Clue of all time, right? It's Ryan Reslow in Miami with the candlestick, the whole thing, doing psychedelics.

• 7:45Logan Bartlett?

  So I saw that they bought, they also bought love.com, which I don't know who had that domain before and what purpose it was used for. But Nikita, do you have any perspective? I mean, you've, you've dealt in this world a little bit, what a domain like that would cost?

• 8:01Speaker 01

  Yeah, so for sure, it was like a seven figure domain. The interesting part is like the domain was previously owned by Yahoo, which what I, from what I gathered from the old DNS records. So, I mean, if they paid cash, it's definitely in the, in the millions.

• 8:17Logan Bartlett?

  How, how would you approach buying a domain like love.com? Like, how do you go about doing something like that?

• 8:24Speaker 01

  Well, when you look at the stories behind domain acquisitions, they're always kind of legendary. Cause like the owner could be literally anyone, like ranging from like a big company to like a farmer in Oklahoma. Side, side note there, like there is a farmer in Oklahoma, a watermelon farmer that owns most of the dictionary words. He bought them in the nineties. I actually met him in, in, I flew out to Oklahoma to try to buy one of his domains a few years back. But the, the second part is you're dealing with this like one of a kind asset that is really hard to appraise. Like the number of buyers is super finite. Only a handful of people will ever want that specific name. And, and the, and of those people, they, they can actually pay up.

• 9:10Speaker 01

  So like the negotiation process is always like a poker game. It's about like a battle of emotions and people trying to call each other's bluff. And so I, I actually tried to, I was in a similar transaction five years ago. I was trying to buy the domain teleport.com also from like kind of a legacy internet company, Earthlink. And I, I networked my way to one of the board members who then connected me to their VP of Business Development. And naturally, like as a startup, I had like zero money and I couldn't pay, you know, whatever, like six figures for it. Um, I'm sure they were getting that offered every year. Um, but here's how I made it work. It's, it's actually worked for me like multiple

• 9:51Speaker 01

  times. Uh, you offer them equity in your company, like around typically 1% or less. Uh, you draft up an agreement where they get the domain back if your company shuts down or pivots. In that way, the domain holder gets a payout if your company works out, but it also hedges the downside that they don't lose the asset if it doesn't work out. Um, the only trade off with that is like the asset, the domain gets locked up for a few years. Uh, but I, I imagine that's probably what they did instead of straight up pay just, you know, a seven figure price.

• 10:25Speaker 02

  But is it really worth 1%? And I, the reason I ask, I had a portfolio company recently that bought a four letter.com domain. And I have another that's, uh, going through the process right now. Apparently there's a, uh, there's a whole like sea of these brokers who have made very lucrative careers, just sitting between and doing all the creative stuff, Nikita, you mentioned, sitting between the Oklahoma farmer who bought all the dictionary domains 20 years ago and the, you know, 19 year old in SF who would very much like to start a company with that name. So is it, is it worth having? Like, is it worth going through all the rigmarole to actually get a hot domain now?

• 11:02Speaker 01

  So I don't think domains matter as much as they did like five years ago. Like, uh, even for consumer products, because, you know, most people have moved to mobile. If you're searching in the app store, it doesn't matter whether you own the dot com. Um, and people are getting more comfortable, like remembering kind of random, uh, extensions like dot XYZ, dot WTF. Uh, but I think there's a different kind of value and maybe this kind of is telling of how shallow sometimes investors are, but like if you have a high value domain, it's pretty strong signaling and it, uh, when I did a fundraise, uh, I did it with a four letter domain, uh, in 2013 and it raised our valuation significantly

• 11:47Speaker 01

  from what we were like originally fielding. Um, so, you know, you give up 1%, you get a 50% higher valuation. I think it's totally worth it.

• 11:57Speaker 02

  So you're saying the options to raise your valuation are go through Y Combinator or buy a four-letter domain, but either way, you're going to get a hefty bump. Because we know there's a group of investors who we know care as much about doing great deals as they do signaling other investors that they do great deals, right? And the short domain name is such an easy way to say, oh yeah, I got into the hot round recently, X, Y, and Z, and this company's sexy and yada, yada, yada. That's like, and we know there are many investors who care about that far more or as much as they care about actually investing in great companies.

• 12:29Speaker 01

  Uh, the, when our domain name was in the subject line of our intros, like we got responses like within an hour from every investor. Uh, that, that's when we were raised, we had a, we owned the domain five.com. Uh, and every investor wanted to be, you know, oh, we, we were in the five round.

• 12:46Speaker 02

  Oh yeah, I had to go to the dinner party. Oh, you didn't hear about the five round? Yeah, we recently loved that one. Yeah, it's a dictionary.com domain name. So we're kind of tiered right now with us and Sequoia.

• 12:59Logan Bartlett?

  I am surprised that, uh, domain names, I mean, Nikki, to your point, like they, uh, most searches, I, so many of these companies either have ending in dot something different or they have like go or try or something at the beginning of the domain. So I actually just can't even really remember these. And so I either start in, well, one, if I have the, the app, I'll obviously use that. But like even on web, I'll start in Google search, right? And that's like my first thing if I'm trying to go to the page. I never try to go directly, right? It's just like starting in Google search. So I, I'm amazed that these things still are retaining this level of, of value. But I will say to your point, one of, uh, one of my friends invested in a company, remote.com.

• 13:44Logan Bartlett?

  I don't know if you guys know this, uh, know this business, but, um, and one of his, part of his original investment was having them buy remote.com. And this is international payroll, right? And so it's enabling remote workers. And I was just, when he did that and said this, I was like, this business just is going to work. Remote.com, like it's just a perfect name for remote workers, international payroll. I was very simple and lizard brain in my thinking, just like, oh yeah, that's going to be a public company.

• 14:11Speaker 02

  Well, no comment on remote.com, which is a GC portfolio company. But what I will say is that like, it does strike me as a vanity thing to care about having the hot Twitter handle. Do you guys know how on Bloomberg, Bloomberg Journalism on Twitter, they own all of these like generic Twitter handles? Like @crypto is the Bloomberg crypto vertical, or like @business, I think, is the Bloomberg business handle? Like, they've clearly gone and bought out all of these generic handles. I actually think it's a really smart vanity play to own on Twitter, maybe even more or as much as a domain if you're in journalism or media or venture. People talk about this all the time. It's so smart to own the generic handle that people are talking about.

• 14:54Speaker 02

  It does kind of have the lizard brain like, oh, these guys must be legitimate crypto reporters. They own @crypto.

• 14:59Logan Bartlett?

  Yeah. One of my friends is the CEO of Shortcut, which was formerly Clubhouse. And so when Clubhouse launched originally, and I'm not going to share anything that's, you know, overly sensitive out of confidentiality, but when Clubhouse launched originally, they had the @clubhouse Twitter handle. And so their support was inundated and their Slack community was inundated with people just, hey, how can I get in? Hey, this feature in your bug, you know, or this bug in your product isn't working out. Like, I don't know. Clubhouse would have like some Alex Jones impersonator come on and like rant about some, you know, whatever, some conspiracy theory.

• 15:42Logan Bartlett?

  And then everyone would freak out and keep adding the Clubhouse Twitter handle. And so it became such a nightmare for the company. Like, they spent literally six months, I feel like, answering and triaging like, okay, no, that's a developer using our software product. That's an angry person trying to like, you know, get back at this Alex Jones person. It was like a total nightmare. And so the Twitter handles do have a lot of value in general, right? But I wonder if there's anything else right now. It seems like everyone was squatting on dot ETH as like something that was going to be the next one of these. I don't know if there's something that's like a burgeoning thing that people are going to squat on.

• 16:17Speaker 02

  Have you guys ever tried to buy a Twitter handle or a domain personally? Like, have you ever thought about being @nikita? Oh, you have?

• 16:24Speaker 01

  I bought it for a company or a product that I was building a while back. It was like 2014. I paid like a thousand dollars for it. But it's kind of a weird transaction because it's technically like against the terms of service. And I have like, I have a few other Twitter handles that I've bought for other products. And eventually they all get like attacked by people trying to recover the passwords. One guy went as far as like calling me and pretending to be Google and saying, "We've just sent you a code. Your account has been locked. Can you please read the code?"

• 17:07Speaker 01

  And they were trying to do two-factor authentication and they tried to hijack some of my, like one of my Twitter accounts that I own.

• 17:14Speaker 02

  They're getting pretty good now. I have @zak on Instagram. And I get like actually pretty sophisticated phishing attempts. Somebody recently sent me one and it was like, "We've detected an unusual login from Jiper India." And then I got the real notification from Facebook saying, "We've attempted an unusual login attempt from Jiper India." And they were asking me to text them back the like the two-step authentication verification code, right? But it was actually like, I could imagine that working. It was a pretty, a pretty good slick hack. There's a guy I know in tech who will remain nameless, whose goal is to be his first name everywhere. He wants to be the first Google result for his first name. He wants to own the domain of his first name.

• 17:58Speaker 02

  He wants to own his Twitter and his Instagram and yada, yada, yada. And given the weird way that I spell Zak, I sort of feel like I kind of want that too. I'm like, I'm like one, I have the Twitter, I have a .co. There's a zak.com, which is an arts and crafts company who I'd very much like to buy it from. But I can't, there's a guy who owns @zak on Twitter. And he's like some random Australian guy. I'm sure he's a lovely guy, but he tweets like just enough to know that he's still alive, but not enough to like actually care about giving it to me. And it's, it's a little bit frustrating to know that he's never going to get rid of that handle.

• 18:31Logan Bartlett?

  I, I, so I'm squatting on like seven of my friends domains because it was done to me. And so I just felt like I had, I had to pay it back to someone else. So my friend has loganbartlett.com and then I have like seven other people's dot coms. But the Gmail one is the one that there's some New Zealand guy who has [email protected]. And he gets like, people will just randomly add him to email threads and he'll forward them back to me and be like, "Hey mate, I think this is you." You know, and it'll be like fantasy football or like, you know, some party that I'm getting invited to. And he's like, "Hey," and I, I, I assume I'm the only other Logan Bartlett he knows. So he sends it to me all the time and we have like this very nice correspondence.

• 19:14Logan Bartlett?

  And if ever I go to New Zealand, I'm definitely going to look them up. But yeah, it's pretty hilarious.

• 19:19Speaker 01

  So Logan, you, you bought the domains of all your friends? You're squatting on them?

• 19:25Logan Bartlett?

  Yeah, I guess you guys have Nikita Beer and Zach Kukoff. I, I might be going to do that right after. Okay, both of you have yours, yeah?

• 19:30Speaker 02

  I'll be buying nikita beer dot XXX after this call is over, just in case, for, for venture capital thirst traps.

• 19:37Logan Bartlett?

  Yeah.

• 19:38Speaker 01

  In, in, in high school, I bought the valedictorians domain and I was going to extort him later for it.

• 19:46Logan Bartlett?

  Yeah, it turned out you actually had a far better career than he has, I assume.

• 19:50Speaker 01

  But I, I remember I, I was out at dinner and his parents were there. And somehow the conversation came up that I had bought his domain and they just were really upset about it.

• 20:01Logan Bartlett?

  I, I accidentally, just speaking of high school friends, I submitted one time that my buddy got engaged. This was like 10 years ago. We were still in college and our high school ran it. And I will tell you that, one, they didn't have a QA process of validating real or fake news at that point in time. And people's parents don't particularly like when their kids get fake engagement announcements running your high school newspaper. So, so that, that like soured our relationship for a little while, believe it or not. And I think his parents aren't, aren't big fans of mine.

• 20:36Speaker 02

  Did you guys have a senior superlative in high school?

• 20:41Logan Bartlett?

  Yeah, we had this, yeah.

• 20:42Speaker 02

  Yeah, what were you, Nikita?

• 20:44Speaker 01

  I got a future politician. I dressed up in a wig before the photo. I'll share it in the show notes.

• 20:53Speaker 02

  Yeah, I would love, I would love to see Nikita be your future politician, running for office one day.

• 21:00Logan Bartlett?

  Zach, I got most likely to work at our high school, which is just like such a hilarious random.

• 21:06Speaker 02

  That's like depressing.

• 21:08Logan Bartlett?

  Yeah, it was a pretty depressing. There was a run of like a bunch of football players that came back and coached. And, and so I think that was like the angle. I don't know. At least I'm telling myself that, but I got smoked. I, I really thought it was like neck and neck. I wanted to be most likely to succeed. And a guy, Adam Goldstein, who founded Hitmonk, who's a brilliant, you know, whatever. He actually, he was coding and writing books at like 15. And I thought it was close. And one of my buddies like actually counted the votes and it was like, you know, two versus like 90 or something.

• 21:44Speaker 02

  Not even close.

• 21:45Logan Bartlett?

  Yeah. What were you?

• 21:48Speaker 02

  Yeah, I'm pretty sure I was, I was least seen on campus, which spiritually felt correct to me. Like that was, that was, and I'm honestly, I'm not gonna say that I, I wasn't proud of that because I actually am like relatively proud of that one.

• 22:01Logan Bartlett?

  Yeah. Okay, well, so next up here in the news was Alumni Ventures. They were fined this past week $700,000 and their CEO was personally fined another $100,000 and they were forced to pay $4.8 million for interest that should have been charged as loans. So for people that aren't aware, Alumni Ventures is kind of a sketchy network of venture funds for alumni associations. So basically what they would do is they would say, hey, this is a fund exclusively, exclusively for Harvard alums, investing in, you know, Harvard-backed founders.

• 22:42Logan Bartlett?

  And so, and they would name it, that was called Yard Ventures, which I guess has something to do with Harvard, right? And Yale's also had a name, Blue Ivy. Ventures that has something to do with Yale. So when alumni would see it, they would say, oh, this is, you know, clearly associated with the university or about the university, even though it wasn't, wasn't associated with it at all. And so they had $425 million under management. And these fines came because they advertised in their fundraising material, fees as industry standard, two and 20, which is typically, that means there's a 2% management fee that you get every year of a fund. And then there's 20% carried interest,

• 23:26Logan Bartlett?

  which is the upside that happens when, when the portfolio companies are realized. And so it, for simple terms, 2% of $100 million would be $2 million every year. And then if they return, let's say, 300 from that, from that 100, then 20% of that incremental 200 would go back to the founders, or to the, to the venture capitalists. Now, what Alumni Ventures did was they actually collected, instead of the 2% every year, so you would get $2 million, $2 million, $2 million for eight to 10 years, they collected all 2%, or all 20% upfront, right?

• 24:11Logan Bartlett?

  And so in this case, $100 million fund would be $20 million collected upfront. And that was a little bit of a bait and switch, or certainly is an industry standard. And so their response was that, that, that this was, the low investment minimum enabled more inclusive people to participate in the capital. And this is actually better than more complex traditional VC models, which have high investment minimums, multiple capital calls, and hidden fees. So kind of a first venture firm I've seen in a while that's been sort of sanctioned for misrepresenting and fraud. Nikita, do you have any thoughts on this?

• 24:55Logan Bartlett?

  I mean, how many years does a fund typically collect fees? Usually it's, I mean, it can be whatever, but I would say industry standard is probably seven, eight to 10 on the outer end. And generally, they're not linear, right? It's some percentage, 2% upfront, or 2% each of the first couple of years when you're actually deploying most of the capital, and then it winds down. Maybe it's one and a half at year seven, eight, nine, 10, something like that.

• 25:26Speaker 01

  Is it of the original fund size, or is it based on how much is left?

• 25:31Logan Bartlett?

  Okay. It's of the original, of the original fund size, yep.

• 25:34Speaker 01

  I mean, I think I've heard of VCs taking like loans against their money, the money they've raised. That happens, right?

• 25:41Logan Bartlett?

  Yeah, that happens. And honestly, I would say, like, what they did of taking all, like, taking this all upfront, so some managers actually front-load some of their fees. And so instead of taking, you know, if you're raising a $10 million fund, instead of taking $200,000 every year, maybe they'll take $500,000 or $1 million upfront to get office space, to hire people on your team, to build out a website or something, right? And so they front-load the fees instead of spreading them out over time. I think what Alumni Ventures did wrong is, when you do that, you have to be very transparent, right? That that's what you're doing. And I actually think most people are comfortable supporting

• 26:24Logan Bartlett?

  that because, you know, at lowish dollars, you need to hire a team, and you need office space and all that. And so I think it actually can make sense, but that's not industry standard, right? That is very much not that.

• 26:36Speaker 02

  Well, it's become fairly standard for a lot of emerging funds, I think, who say, "Hey, Logan, to your point, we're gonna do, you know, 3.5% or 4% fees for two to three years." Because, like, the other thing that's happening too here is funds get deployed so much faster now that the sort of like 10-year lifespan isn't really how long funds take. So if you're raising a, you know, two or three million dollar fund, I mean, I see all the time, people say, "Hey, we'll take 3% fees for two years, and then zero fees thereafter."

• 27:08Logan Bartlett?

  Yeah, generally, they do. And so there can be small administrative fees in the in the outer years or something associated with it, for sure. But Nikita-

• 27:17Speaker 02

  The drop to zero is more representative of emerging managers, Nikita, than institutional managers.

• 27:23Logan Bartlett?

  Nikita, to your point, there are like SVB or other financial institutions that will lend to managers, right? Because this is an annuity that people are contractually signing up for once you raise the money. And so you can get loans against future management fees. And so, hey, you know, a $10 million fund is $2 million over the lifetime. If you don't want to collect all that cash upfront from your limited partners, right? Like, a bank will do that for you. Sophisticated ones will say, okay, this is an annuity. Over the next 10 years, we'll discount it back and we'll give you some amount upfront. And so, again, there's like a lot of ways to do

• 28:03Logan Bartlett?

  this that are different than the way they did. Now, they say that they disclosed it, but it was buried in the footnotes of subscription docs, which I don't know about you guys, but when DocuSigns come in, I am not the most rigorous reader of all the footnotes on stuff. And so, it was definitely a made in switch.

• 28:23Speaker 02

  That's an invitation, by the way, for anyone listening, just to send Logan DocuSigns. Anything you want Logan to sign, go ahead and send it to him, because apparently he's just not going to read it.

• 28:33Logan Bartlett?

  Do you read? I mean, in my defense here, will you read anything that you're signing your name to? Will you actually go through each document?

• 28:39Speaker 02

  I've read every line. The guy's like, I don't know how to read.

• 28:44Logan Bartlett?

  Yeah. Both of those answers are not particularly surprising to me, that Zach reads every word and that Nikita reads no words. And this one, I am on Nikita's side, but...

• 28:54Speaker 02

  You guys don't read every single term and condition you sign every single time? That's odd to me.

• 28:59Speaker 01

  When you guys do a small check into a company, are you reading anything? Because like, I've had kind of a dogmatic view. Like, if you're a small time investor, you should probably just sign the documents without even reading them. Because like, when I was, you know, selling and liquidating during the merger, of my 50 investors, like, three of them were like, no, I need more time to read this. And they literally held up the deal for a week over a 50K check. And so now I'm like, you know, at least in my mind, those investors are blacklisted.

• 29:33Speaker 02

  Yeah. To be clear, you should read, like, everyone should read things that are being sent. But if reading a document makes you hold up a financing for a week and you're a 50K check investor, or frankly, an investor of any size, maybe you're just not good at reading. That might be the answer to this.

• 29:50Logan Bartlett?

  Yeah, I do think there's a lack, I mean, again, this sort of goes back to one of the recurring topics here, but there's a lack of awareness, the role that like some people play in the venture ecosystem. And I think 15 years ago, Nikita, what was the age of these people that were doing this? Like, this sounds like a behavior of someone that's, you know, their peak time in the industry would have been 2005 or something and not, you know, not now?

• 30:13Speaker 01

  It was a 75-year-old in Boston.

• 30:16Logan Bartlett?

  Yeah, exactly.

• 30:17Speaker 01

  And he just was like, oh, I want to redline the merger agreement. And I'm like, your check was like, like 0.5% of the round. What?

• 30:27Logan Bartlett?

  Yet another drive-by Al for Boston on the pod, unfortunately. I imagine Facebook's lawyer is sitting down with this 75-year-old being like, what are you talking about? Like, no, you're not, we're not negotiating with you. Did this, what was Facebook's reaction to this old guy dragging this out?

• 30:43Speaker 01

  I mean, I just had to ask other investors to talk to him. I think that's what I, I mean, that's what I recommend most founders, if one of their investors is kind of giving them a hard time with signing some consents, just get another investor to call them. And I always volunteer to do it. I'm happy to get on the phone. But it's funny, though, because in contrast to him, so Founders Fund was our biggest shareholder. They turned around the documents in like, three hours and were like, congratulations. Like, no, they didn't even read anything. It was, it was awesome. I think it goes to show, like, if you're going to raise money, like raising from a big fund, and it's probably going to be the simplest liquidation process if you sell at the seed stage, because they just want to preserve their reputation.

• 31:27Logan Bartlett?

  Totally. Like, it's a life-changing amount of money to, oftentimes, to the founder. And like, the angel investor, it could be a really meaningful amount, but likely, if you're not investing, if you're not exiting for over, I mean, today, billion-dollar-plus, like, funds just want to stay in the founder's good graces if they're doing right and ethical in general. And so it's like, once you make the decision to sell, the incentive of the fund is just like, Keep, you know, keep everything amicable, pat you on the back, wish you well, and wait for you to go for your next bigger company. Because, I mean, some of the best founders that I've ever seen or worked with are ones that had like modest outcomes in their first exit, right?

• 32:10Logan Bartlett?

  And then they're just willing to go all out on the second one. And they're willing to take risks that, you know, because their bank account's padded. And so it's actually a very good thing as a VC, just to stay in, even if it's a small outcome, stay in the good graces of that founder, because that could be the person that's building the next 10, 20, 40, 50 billion dollar business. All right, well, next topic that we wanted to cover. So this is a little bit of navel gazing, but Twitter is actually working on a podcast part of their app, I guess. This came out because an engineer reversed, or someone went in and looked at the actual

• 32:51Logan Bartlett?

  codebase that was posted, and they were able to detect that there was an additional tab dedicated to hosting podcasts on Twitter. So Nikita, what are your thoughts on this as our resident social app expert?

• 33:06Speaker 01

  I mean, this, it might be weird to say on a podcast, but I think like everyone, like the retail investor market, like the commentators, I think we all overstate the size of the podcast market. I think, because it requires, like, listening to a podcast requires a huge amount of attention. It's, the content's pretty highbrow, so it's limits even, it becomes even a smaller market. And, you know, the internet does operate on this winner-take-all market, and with podcasts, they're especially in that kind of framework, because there are only a handful of podcasts that get real scale. Like, I mean, just look at our own viewers, I think we can see that.

• 33:51Logan Bartlett?

  Freaking outside of, freaking outside of Zach Kukoff's family has been a real slog.

• 33:57Speaker 02

  But there's a solution now, just have more cousins. You both, if you both could just marry Jews, we could really rocket up the listener account here very easily.

• 34:05Speaker 01

  But I, you know, I think for Twitter, the, the, the idea makes sense. I mean, their audience is, and their content's pretty highbrow, um, at least some of it. Uh, there's a lot of shit posts that are, but, um, so I think it makes sense for them to try to capture that entire market. And, you know, all their top accounts have podcasts, so you probably want to keep those users inside of the Twitter app.

• 34:30Logan Bartlett?

  So this seems like a logical extension of, of the Twitter Spaces, uh, part. I mean, as, as people probably know, Twitter made a run at trying to buy Clubhouse about a year ago now for, I think, $3 billion or something. And so this, this makes sense that, that you can record live or you can promote live audio. And then to extend that into the, the podcast space as well makes, makes sense for Twitter in my mind.

• 34:53Speaker 01

  It's, it's kind of interesting though, cause like they, they did not only lift the Spaces concept from Clubhouse, but Clubhouse has launched also a recording feature, uh, so you could listen to it as essentially a podcast. And I mean, it, it's a shame that like this has all happened to Clubhouse, like, over the last two years. Cause, uh, I mean, the product they made was pretty amazing. Like it was one of the few social apps that really, you know, got traction in the last few years. Uh, and I mean, I, I have great respect for Paul Davison. I think he's probably the most talented product developer in social, uh, like ever. He like the craftsmanship and design sense, he, from all the products he's built over the years.

• 35:35Speaker 01

  He's, I mean, he built, uh, Highlight, Rolls, uh, Shorts was another one. Uh, and then this was his magnum opus. It's, you know, it's not the first time that Twitter has done this.

• 35:47Speaker 02

  Yeah.

• 35:47Speaker 01

  They, uh, when Ben Rubin launched Meerkat, which was like the first mobile live video experience, uh, they quickly copied it with Periscope.

• 35:58Speaker 01

  So it, it's kind of a shame you have like, both, both these guys are probably the, the best in their craft. Uh, and they both got destroyed by Twitter.

• 36:07Speaker 02

  By the way, it's funny that Facebook has such a reputation for shamelessly copying. As you're going through these examples, Nikita, it makes me feel like Twitter, for all that people for years, sort of undercounted perhaps the ruthlessness of that team, has been pretty ruthless about copying great stuff too.

• 36:24Speaker 01

  Twitter is definitely faster than Facebook. I mean, it takes like two years for Facebook to notice something happening in the market and actually act on it. But at the end of the day, I like, it's not really such a like malicious thing. I think when big tech, big tech companies do it, it's just like, it happens almost organically. Because if you're a product manager inside of these companies, it's really hard to like propose a new idea that hasn't, that you don't have signals in the market already. Incentives aren't aligned to take those kind of risks. So the best thing you could do is say like, here's this app that has traction. It clearly is demonstrating latent demand for this particular use case, so we should staff it.

• 37:06Speaker 01

  So it's just, it's just the way the incentives are aligned when you have like a salaried job at, you know, a massive tech company.

• 37:12Logan Bartlett?

  Oh, I mean, it's interesting that, it totally makes sense. Like VC and startup basically subsidize all these ideas and we're basically running simulations of what actually can work. And so why would you at, at Facebook or Twitter be out there experimenting with thousands of different things? It's just not possible. Instead, just pick the cream of the crop of, of the, the best of them, right? So it's actually a very logical way to operate.

• 37:39Speaker 02

  I will say, poor LinkedIn gets no credit. They also launched a social audio product and no one is giving them the credit for the ruthlessness that those PMs have deserved. Did you guys see the video last year that went viral? It was like a day in the life of a LinkedIn PM on TikTok. And it was like, I wake up at 10 a.m. I drink my second cup of coffee. I meditate for 45 minutes. I go on a hike with my friends for two hours. It was like-

• 38:04Logan Bartlett?

  It was a joke, right? Like this wasn't someone actually reliving their day?

• 38:07Speaker 02

  Oh, no. This was like earnest. Unfortunately, I think it was a little bit like rage bait designed to go viral, but I, it's funny, my friend was unintentionally in the video because it was his roommate who posted it. And he was like, this isn't not correct about LinkedIn PMs. Like, it's not a particularly grueling environment.

• 38:24Logan Bartlett?

  Yeah. Well, it shows up in their product, I would say.

• 38:28Speaker 01

  I mean, they haven't really, they probably innovated the least out of all the big social networks. I mean, it's kind of ridiculous how-

• 38:35Speaker 02

  LinkedIn has pioneered new types of posting, Nikita. That's classic innovation. I'm sorry, but you don't see the kind of broitry innovation in the format happening on Twitter or Facebook.

• 38:48Logan Bartlett?

  Really? No laughs on that? I was trying to put together what that joke meant. Maybe we just get a laugh track for when, you know, we can try to splice it in for, uh...

• 38:58Speaker 02

  Anyway, it's a tough audience for me.

• 39:03Logan Bartlett?

  Zach's gonna get all our producers on just to, you know, have them as he's gonna spin off and start up.

• 39:08Speaker 02

  I'm a volume player. This is not a quality over quantity situation for me.

• 39:13Logan Bartlett?

  Yeah. It's funny, Nikita and I just don't suffer fools on this stuff. We're like, ah, you know, not for me, right? Let's move on.

• 39:19Speaker 02

  You benefit because I'm an easy laugh. I laugh in all your jokes.

• 39:22Logan Bartlett?

  It's true. It is true. You're really, you're like a point guard. You're just teeing it up and, you know, letting me dunk. But then when you go for it, I don't pass the ball. Okay, so another topic. Tiger Global, in an information article this week, it was stated that they were going to commit a billion dollars for early-stage tech funds. So this was actually going to be not out of their, not out of the $10 billion or whatever that they raised, but this is going to be personal commitments from Scott Schleifer and Chase Coleman. They said it was going to be a little over $300 million every year. And in terms of folks that they had already committed to, so they have invested in a few slightly more established funds.

• 40:06Logan Bartlett?

  Better Tomorrow Ventures, Moxie Ventures, Chapter One Ventures, as well as Maple VC as well. They actually had a quote in here from Maple VC who said that they asked Tiger to invest in a new $16.5 million fund, and Tiger agreed to invest $2.5 million, the largest check in the fund, in less than eight hours. So they're typical, the typical speed that Tiger operates with. So Zach, do you have any thoughts on Tiger investing in seed managers?

• 40:38Speaker 02

  I mean, it's interesting. We know that not just Tiger, there are a ton of big funds who have played this game, although interestingly, the split between funds who have done it out of the fund and funds who do it personally is fairly evenly split. Like, you know, I'm sure we've all seen their addition is a huge LP in a number of emerging funds and actually has a strong reputation for that. But also, we know that the Andreessen Partners have also personally seeded, right, a lot of venture funds. And that's not to say there aren't many others there, too. So I guess I was a little bit surprised that it was a story that they were doing it personally when we know so many other GPs at top funds do this

• 41:18Speaker 02

  to personally seed deal flow. But maybe this is an unusual volume of it. I couldn't figure out why it was a newsworthy.

• 41:25Logan Bartlett?

  Well, I actually, I mean, I found it interesting and I shared it. I had one of my friends that's a seed manager, I think they had roughly a $250 billion fund, and Scott and Chase committed, I think, $32 million in like 18 hours or something. And so, I mean, just that speed, and I think anything with Tiger gets some level of attention or clickbait out of it. But, I mean, a billion dollars is a lot of money for people to be doing it out of their personal, like their personal bankroll, and to do it over three years. And so I assume that was what it was. But what was interesting, and I don't know why the information went down this path, but they seemed, they said it's unclear why Tiger is doing this out of their personal pockets as opposed to out of their fund.

• 42:10Logan Bartlett?

  And I thought that, you know, that's not what they get paid to do. They can do this as kind of a side project to enable their business, but they're not a fund of funds. So I think it's pretty simple why they're doing it. But it just goes to show how much money these guys have, if they're able to kind of write $300 million a year to emerging managers.

• 42:27Speaker 01

  What, I mean, but what signal does it send to LPs when they're investing in these like smaller funds that are probably getting better prices because they're, you know, they're very close to the, you know, the pulse of the startup community? Like, you know, Chapter One is very early. I mean, if I was an LP in Tiger, I would be like, I want my money in those deals.

• 42:50Logan Bartlett?

  Yeah, and this isn't, I mean, people don't go to Tiger because they're looking for like, you know, 10x funds, right? They're not really looking for the real alpha in the market if you're giving money to Tiger. It's like, hey, where can I park $500 million because I'm a sovereign wealth fund and I, you know, I don't want to do it in the public markets. And so I don't think this can be broken down into chunks that will actually fit into, and they don't want to maintain the relationships. And so if Scott and Chase can just do this at a personal level, then I think it's, you know, it makes sense for them.

• 43:25Speaker 02

  Yeah, where can I get an index exposure to private, early-stage tech, right? And then, like a true index, right? Get a relatively decent return, but not need to have the editorial taste necessarily.

• 43:37Logan Bartlett?

  Exactly. So that'll do it for the seventh episode of Three Cartoon Avatars. Thanks, everyone, for joining. Feel free to share with any friends, family, anyone that you think would be interested. And for the first week, we're not doing Nikita outro because we all forgot to record the outro. So I am solo here. But thank you, everyone, for joining, and we'll see you next week on Three Cartoon Avatars.