#373: Matthew Dellavedova on Investing as a Professional Athlete

Matthew Dellavedova is a professional basketball player for the Cleveland Cavaliers of the NBA. Dellavedova won an NBA championship with the Cleveland Cavaliers in 2016 and has become a fairly active investor across various asset classes, including real estate and venture capital. In this conversation, we discuss Delly's basketball career, playing with Lebron James and JR Smith, how he got interested in investing, why he likes real estate and venture capital, which deals he has done, and what his current thoughts are on Bitcoin. This was a crossover episode with Matthew's new podcast, The Delly Podcast (episode 8). ============================ Athletic Brewing is re-imagining beer for the modern adult. We love beer. But we also love being healthy, active and at our best. No matter your motivation, if you want to keep a clear head and drink healthier, we are here for you. Athletic makes non-alcoholic beer that you don't have to compromise to enjoy. The beers are fully flavored, clean ingredients, and a fraction of the calories of full strength beer - they fit in any occasion. Check out www.athleticbrewing.com for more details and free shipping nationwide. ============================ Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

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

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Matthew Delavadova is a professional basketball player for the Cleveland Cavaliers of the NBA. Delavadova won an NBA championship with the Cleveland Cavaliers in 2016 and has become a fairly active investor across various asset classes, including real estate and venture capital. In this conversation, we discuss Deli's basketball career, playing with LeBron James and JR Smith, how he got interested in investing, why he likes real estate and venture capital, which deals he has done, and what his current thoughts are

• 0:42Anthony Pompliano?

  on Bitcoin. I really enjoyed this conversation with Deli, and I hope you do as well. Before we get into this episode, though, I want to quickly tell you about our sponsors. The first is BlockFi. BlockFi's got three separate products. You can buy and sell crypto, you can deposit crypto and take out a US dollar loan against your crypto collateral, or you can use my favorite product, which is their interest-bearing account. It earns you up to 8.6% interest using either crypto or a stablecoin. Both Deli and I are investors in the business. We're really big fans. BlockFi recently raised a $50 million Series C,

• 1:20Anthony Pompliano?

  and they're off to the races. Fast growth for a great company. So go check out blockfi.com/pomp. Again, blockfi.com/pomp, and start earning up to 8.6% APY in their interest-bearing accounts. Blockfi.com/pomp. Our next sponsor is a new one, Athletic Brewing. These folks are awesome. They're all about reimagining beer for the modern adult. They've got great tasting beer that happens to have no alcohol and be a mere fraction of the calories of even the lightest beers. Now, I know what you're thinking. The second you hear non-alcoholic beer, you're like, there's no way it can be good. I've had it, my brothers had it, my friends have had it. It literally

• 2:04Anthony Pompliano?

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• 2:47Anthony Pompliano?

  So go give them a try, use POMP25, the code P-O-M-P-2-5, for 25% off your first order at AthleticBrewing.com. I literally have a bunch sitting in my refrigerator right now. Be like me and go buy at AthleticBrewing.com and use code POMP25 for 25% off your first order. Lastly, don't forget that I write a daily letter to over 50,000 investors about business, technology, and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at POMPLetter.com. Again, POMPLetter.com.

• 3:32Anthony Pompliano?

  All right, let's get into this episode with Deli. This one was a lot of fun. I hope you guys enjoy.

• 3:37Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by POMP or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by POMP as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 4:04Anthony Pompliano?

  All right, guys. Bang, bang. I've got the man here himself. Deli, what's up, man?

• 4:09Speaker 02

  Thanks for having me, POMP.

• 4:11Anthony Pompliano?

  Absolutely. Well, I guess we should tell people right off the start, we're doing a joint podcast. I did this one time before with Jason Calcanis and people loved it. So we're doing a second one. If you listen to the Delly Podcast, go subscribe to the POMP Podcast. If you listen to the POMP Podcast, go subscribe to the Delly Podcast. But I just wanted to jump on and just talk with you. So thanks so much for doing it.

• 4:33Speaker 02

  Nah, I'm looking forward to it. I'm a bit of a rookie to the podcasting game, but I've been listening to yours and picking up a few tips along the way.

• 4:42Anthony Pompliano?

  Absolutely. So let's start maybe with your background. Most people know you as an NBA player, won an NBA championship and kind of have that side of your life. But what they don't know is you spent a lot of time thinking about investing and kind of being very intelligent, strategic on that end. Just help people understand, how did you get to the NBA first? And then we'll get into the investing stuff.

• 5:04Speaker 02

  Yeah, so I grew up in Australia in a small country town. I moved away from home when I was 16 to go to the Australian Institute of Sport, which is Olympic level training facility. From there, went to college in California for four years. And then I played for the national team. So I've been to two Olympics for Australia, which has been absolute highlights. And then tried out for the 2013 draft, did about 20 NBA workouts, went undrafted, got on a summer league roster with the Cavs, then training camp, and then eventually made the team.

• 5:44Anthony Pompliano?

  What is it like to go undrafted? Right? I think when people hear that, it's like this weird thing where they're like, wait a second, you end up winning an NBA championship. Like, how do you go from undrafted to that? So what's the feeling like when you put all this work and you met all the teams and then the draft comes and goes and no one calls your name?

• 6:01Speaker 02

  It's pretty crushing, really, because the, you know, the percentage chances of making the NBA after you go undrafted aren't very good at all. So, you know, it was, it was really disappointing. I was watching it with some close friends at my college coach's house, spoke to my agent soon after, and he said, you know, you've got, it's going to be okay. You're going to get another opportunity to go to summer league and try to prove yourself there. And then go to training camp again and prove yourself there. And teams bring in 20 players to a training camp. There's 15 roster squads. 13 of those roster

• 6:42Speaker 02

  spots are already taken. So basically, there's seven guys competing for two spots. You, it was funny, we were getting ready in a, basically a visiting locker room. So you knew you weren't on the team. Going into training camp and it was a tough grind, but makes me appreciate it every day.

• 7:05Anthony Pompliano?

  Yeah. What's the kind of culture or relationship those seven guys have as they're competing? Is this like a friendly thing or is this like at all costs, I'm making this team? And I know that if I make it, that means there's one less spot for these other six guys.

• 7:20Speaker 02

  It's definitely a weird dynamic, but I would say it's friendly. There's a sense of camaraderie there that you know, you know, you're all in the same boat. And basketball is a sport where there's a lot of player movement and you're going to see people, you know, down the road, whether it's played with them that season or it could be five years down the line. So it's definitely competitive, but there's a sense of camaraderie there because it's a highly stressful situation. And nobody really understands it apart from the seven people in that room.

• 7:55Anthony Pompliano?

  Yeah. And then obviously you go on and you play with some of the biggest stars today, right? With, I think LeBron was on that team, Kyrie, JR Smith. I mean, there's a whole roster full. What is it like kind of going undrafted, then signing, you know, pretty big contract and getting to play with those people? And then ultimately play for the NBA championship?

• 8:19Speaker 02

  Yeah, yeah, no, it's amazing kind of feeling to go from that to then winning a championship. Kevin Love was another one on that team. And so the first year was the year before LeBron had come back to Cleveland. So we actually missed the playoffs that year. And then at that some league was when, you know, he announced he was coming back and everything changed.

• 8:47Anthony Pompliano?

  Like what are guys on the team saying? It's just like such a go, like a crazy dynamic, right? It's like he left, there was this vacuum. And then when he announces he's coming back, I think fans see like outside looking in. But are players like all texting each other being like, wait, is he serious? So like, what is the kind of conversation?

• 9:05Speaker 02

  Yeah, I think we're in Vegas for some league when the announcement happened. I think it was on ESPN and then we had a shoot around or a game day that day. I think the the GM came over and whispered something to the coach at the time, David Blatt, and you could see his face kind of light up in a big smile. And then they announced it and everyone's like, wow, this is pretty crazy. But then I think the next thought, at least for me, was I hope I'm still on this team because a lot can happen from summer league to the time the season starts. And at that point, I was on a still on a basically year by year deal.

• 9:49Speaker 02

  So even after I made the team in that September, October time period, they could have cut me anytime before January 15, before my contract was guaranteed for the rest of the season, and then they had an option for me the next season as well. So you never really have a secure place.

• 10:13Anthony Pompliano?

  Yeah. And then last thing I want to ask about basketball is you play with JR Smith, and my friends and I, like, he's one of our favorite players, mainly just because he, you never know what he's going to do. He might come down the court. And I think there's a famous LeBron interview where he's literally like, that guy will shoot from anywhere. He just crosses half court and he'll chuck it up. But he seems like a super cool, nice guy or whatever. What was it like playing with him?

• 10:35Speaker 02

  It's funny because after, you know, the LeBron and Giannis questions, he's probably the teammate I get asked the most about, and he's awesome. I mean, I love JR. He always had your back as a teammate. He had the nickname 911 because when the shot clock's running down, you can, you know, give him the ball with two or three seconds left. And those are the type of shots he makes. He's a shot maker. And I'm happy he's got another opportunity now with the Lakers.

• 11:04Anthony Pompliano?

  Yeah, that's pretty cool. All right. So you're in this really interesting position, which is you're a professional athlete. So there comes kind of public notoriety with that. You have a quite public income, right? In terms of people know the contracts and things that you guys sign. It's millions of dollars a year in many cases, but you also spend a lot of time. Investing. And so what I want to maybe start with is just, you know, when did you start to be interested in investing? And then maybe we'll go asset class by asset class, but just talk to me a little bit about, you know, you spent your whole life trying to make it to the NBA and play at a high level. This, I think to many is an afterthought, but for you, you take it very seriously and spend a lot of time on it. So kind of where does that interest come from?

• 11:48Speaker 02

  Yeah, um, it's uh, something that uh, growing up, my dad, uh, my mom's a school teacher. So she's always stressed the importance of education. And then my dad uh, is a school bus driver. But now he's been in real estate and he's been um, subdividing land for probably the last 15 years. And he's really tried to educate uh, me and my sisters and just teach us little things along the way. So I've had that background and education and that kind of got me interested in in real estate from a pretty early age.

• 12:28Speaker 02

  Uh, and then um, didn't make basically any money until my first contract um, with with the Cavs that year. And and started learning about stocks and bonds and different things. And um, found a financial advisor and and they've taught me a lot. And I always ask them a lot of different questions. And then there's just conversations that happen in the locker room between players. And I've always tried to pick the brain of the older players and um, the veterans. Because that that's the easiest way to learn is um, you know, from their successes or their mistakes, things they've gone through.

• 13:07Speaker 02

  And um, a lot of veterans are really helpful and they want to pass on their knowledge to the next generation. I think that's something that's really cool in the locker rooms in the NBA.

• 13:22Speaker 02

  But I guess the main, one of the main things I'm interested now is venture capital. And that's probably happened over the last three to four years. I had a small allocation in my portfolio through my financial advisors and would always ask them questions about what it was. And then as you start reading more about what other players in the league are doing, yeah, the conversations in the locker room happen a lot more around that. And that's what I've been focusing in on the last four years or so.

• 13:57Anthony Pompliano?

  And it feels like this has become much more popular, obviously, in all professional sports, but the NBA specifically. I think there's been a lot of kind of media coverage on the teams in the Bay Area, just because that's kind of the center of tech. But I think in conversations that you and I have had, this is happening in every locker room, right? Like, there's players who are becoming more interested in this. And so as you're talking to your financial advisors, how much, I think, education did you get or interest did you get in terms of just like, oh, if we invest in innovation and hold it in the private markets for long periods of time, like that'll drive returns versus it being more like company-led, hey, that specific company I really like and I

• 14:42Anthony Pompliano?

  want to invest in that company? So was it more of like, I want venture capital exposure? Or was it just you found kind of individual companies and kind of built the venture capital exposure through the interest in individual companies?

• 14:55Speaker 02

  I would say a little bit of both. I think early on, you know, you get brought different opportunities and, you know, I send it through to my financial advisors, see what they think. And that led to more conversations about, you know, venture capital in general. In the off-season, they set up a few meetings for me with different people in San Francisco who were very helpful. And I think that's something that I've really enjoyed is how helpful everybody is in the VC industry. A lot of people have taught me a lot of things. And Jason being one of them, I've been to his launch incubator a couple of times in San Francisco.

• 15:39Speaker 02

  Nick Crocker from Australia has really helped me out and introduced me to a lot of people over here. I just enjoy being around people who are trying to be their best in their given field. And I find it very energizing to talk to somebody for thirty minutes or an hour and, and pick up a lot of the knowledge that they have on a specific subject, something that I hadn't known about before. And you get to learn from an expert for forty five minutes. It's a lot of fun.

• 16:09Anthony Pompliano?

  This is why I like you is because that's exactly what I like about the whole podcast stuff, right? It's just you get to sit and talk to people and learn from them. You've made a number of pretty cool and interesting investments. I'll let you kind of pick which one you want to talk about, but maybe we'll talk about like an individual deal that you've done and kind of the process you go through. I've kind of gotten to see it, you know, firsthand and you surprised me, I think, when I saw how much diligence you did and kind of reference checks and all of that. But just what, you know, is there a deal that you want to talk about? Maybe we could get through the process?

• 16:42Speaker 02

  Yeah, I'll talk about two and then I'll ask you about your process as well. But first one, a recent one is Levels, the constant glucose monitor. And I actually saw it on Twitter. And the A8 Sleep founder, Mateo, another company I've invested in, was tweeting about this constant glucose monitor, had a screenshot of a graph that showed his glucose going up and down. And so I messaged him about that, just asking what it is. And it looked really interesting.

• 17:19Speaker 02

  And he said he had got involved with them, told me what he liked about it. And then I asked him to introduce me to one of the founders, Sam, emailed him. He sent me over some info. We got on a call. They eventually sent me one out for me to try myself. I think after the call I had with him, I was that impressed with what they had built so far and where I could see it going and how big of an issue, I guess, obesity, diabetes is in the in the US and around the world that the.

• 18:00Speaker 02

  Opportunity is massive to really help out a lot of people and for the company to be successful. But I made sure to try it for a few days first and really loved it. I've learned some interesting things. Around 2pm, I kind of dipped down a little bit, but if I have a handful of almonds, that keeps me pretty level. But overall, I was eating pretty well. So that's one example. The other one is BlockFi, which you introduced me to, set up a call with Zach and Brian from BlockFi, learned a lot from them. And then I have a couple of other, I guess, contacts in the crypto industry who I spoke

• 18:45Speaker 02

  to and messaged with, and they all said really good things about BlockFi. And then I also, which I think is great for founders, listened to, I think, three or four different podcasts of Zach talking, and it was interesting to see the growth over time of the company from just speaking to Zach and seeing the graphs, but then also going back and listening to him speak about what they were planning to do in the future, and then seeing that already in the company. I thought that was really cool.

• 19:18Anthony Pompliano?

  Yeah, it, so I didn't know that you were gonna say that one, but on the BlockFi one, that's the one that I got to see kind of firsthand, right? And I remember when, after you got off the call, you were like, hey, this is interesting. And I think most people at that point would try to make a decision. But your process was much more, look, I've got this network of people who are professional investors, they're familiar with the company, some that are investors and some that might not be, like, let me basically leverage their, you know, work, right, their diligence, their years of experience. And ultimately, I think that helped you get to the point where you want to make an investment. But that process, I think, is not utilized that often by a lot of athletes, right? They kind of, they

• 20:02Anthony Pompliano?

  want to make the decision. And so there's this element of like, kind of humbleness, right, of like, hey, I might not be the expert, I'm smart enough to kind of make the decision, but let me get as much data as possible. Is that kind of how you looked at it?

• 20:14Speaker 02

  Yeah, definitely. I think that's something I've definitely got better at because I think as an athlete, you you have a high level of confidence and you like to think it translates to a lot of things. But you you have to be open to learning and and getting the opinion of of experts who are doing this day in and day out because, you know, my main job right now, even though we're in the off season, i- is basketball, keeping in shape, making sure my body's right for next season. But then, you know, lunchtime and the afternoon, this is definitely what I like to work on. And I think one of the the cool things about Twitter is being able to DM somebody

• 20:56Speaker 02

  and ask them, hey, I'm looking at this investment. And if it's a existing investor and just saying, can you jump on the a call for for 10 minutes? And and just give me your thoughts. And that's how I got in touch with Michael Arrington. And he was awesome with, you know, his feedback and and and what he saw in BlockFi and just general info on crypto, which, you know, I'm pretty new to. I'm still learning a lot about, but I think Twitter, I'm I'm realizing the the power of it just to be able to DM somebody and and get on a call that day.

• 21:34Anthony Pompliano?

  Yeah, it's a I always joke and say it's what LinkedIn should have been, right? It's basically served as that. Before I keep peppering you with questions, what questions you got for me?

• 21:44Speaker 02

  Yeah, well, I mean, what what is your process for for looking at a new investment? I know you do a lot of crypto stuff, but i- if there is something where you're not, you know, expert or you want to learn more, how how do you go about finding references? Or is it the existing investors or or just people with general knowledge on the topic?

• 22:07Anthony Pompliano?

  Yeah, so I think one probably difference between the way that I invest now definitely than I used to is there's a lot more follow on capital. And so we kind of have the ability to write smaller checks early on, work with the founders, see them execute and kind of build conviction over time. And so what that allows us to do to some degree is like, we can take a little bit more risk and be wrong a little bit more often because you're saving most of the capital, double down on the winners, right? And so that's different than let's say like an angel investor who's probably going to write one, maybe two checks into a company. And then that's pretty much the allocation for the business, right? So they've got to be kind of much more accurate, right?

• 22:50Anthony Pompliano?

  If you think of it that way, in terms of that that initial investment. Now, from a process standpoint, it also comes out like, what are you investing in? Right? And I think that because we invest so early, it's just the person, right? Like, that's ultimately all I care about. And do they have a good idea? That actually feeds into an analysis of the person, right? Like, are they a intelligent person who has a defendable thesis as to why they're spending their time and energy on this idea versus, you know, hundreds of others? How do they actually like critically think about it? So do they have a good understanding of what other people in the market are doing? Maybe other attempts that haven't worked? Why didn't they work? Like, all of those things that I think investors normally ask, I just look at it through the perspective of like, is

• 23:34Anthony Pompliano?

  this a sound decision maker? And is this person going to be like persistent, right? If they really care about this, they're going to be persistent, and they make good decisions, like, we got a shot, right? Like, that's pretty much all you can ask for really early on. And so, part of that ends up being a lot of kind of reference checking or triangulating on like that individual person and making sure that the initial read you get through conversation is what other people who know them well agree with. And then the part that I actually like is, you know, BlockFi is a great example. I don't remember the exact amount that we did. I think it was like $250,000, you At a $20 million valuation or something, right? So we were probably one of the smaller investors in some of these rounds initially.

• 24:18Anthony Pompliano?

  But at over time, as we saw Zach and Flori and the rest of the BlockFi team execute, then it was like, oh, okay. Like now we want to write big checks, right? And because we had the capital base to do that, we have an advantage in being able to almost kind of de-risk it over time. But you know, they're a perfect example. You just bet on the right people. Like they were not pitching me on a Bitcoin rewards credit card, you know, two years ago. That was not part of the conversation, but that now they just kind of figured out what to, what to do, right?

• 24:48Speaker 02

  Yeah. And what about the, I guess, the process of going from an angel investor, investing your own money to in investing out of a fund where you're investing other people's money? What about the, the process you go through there? Do you have to do a lot more?

• 25:07Speaker 02

  I guess diligence or, you know, follow up, write up a report. Has that process changed much for you?

• 25:14Anthony Pompliano?

  Yeah, I think that there's some similarities and some differences, right? So like you tend to see, and this is maybe somewhat controversial view, but I tend to see that people are actually

• 25:27Anthony Pompliano?

  more conservative with their own capital, which most people look at as a negative, right? Being that like, oh, if you invest other people's money, that means that you're less conservative. But in venture capital specifically, like we know that the outlier returns come from like the crazy, you know, very small probability of working type companies. So when Airbnb was raising their seed round, like they had air mattresses in their kitchen, in their apartment, right? Like that, that's just something that seems crazy, right? And so I do think that venture capital is like one area where having like less conservatism in the way that you think about investing can be a benefit. Now, if you go kind of, you know, overboard and you act crazy or something, then it could be a negative.

• 26:13Anthony Pompliano?

  So I think one, there's an advantage to that. In terms of raising other capital from other people, really what they want to see is again, they want to see good decision making. And they want to see kind of what I'll call just like institutional organization. Right. And so that could literally be done on a spreadsheet that could be done in Google Docs, or it can be done like we do where you've got a whole team and kind of a really big, kind of robust, you know, offering and back office and things like that. But ultimately, it's just like an LP is just wanting to know, can I trust you? Right? Like, like, like they have all these crazy questions. They, you know, have all these weird things that they do to do the diligence. But like, that's what they're trying to get at. It's just, can I trust you?

• 26:54Anthony Pompliano?

  And if you check that box by showing you have a process, you have, you know, a pipeline, you have a way to document the decisions you make and the reasoning behind those decisions and you give good updates, all that kind of stuff. Then they're going to give you money. Right? So if they don't trust you, like, good luck. And so like, I think people just kind of make it more complex than it really is. Because they get caught in all the details, but like, that's all an LP wants. It's just, you know, hey, Delhi, can I trust you? If I can trust you to make good decisions and find good deals, then why would I not give you money? Right? And I think that's what, what kind of the, the focus is, at least when I think of fundraising.

• 27:29Speaker 02

  Yeah, yeah. Is it, um, do you enjoy the process of fundraising money from LPs or is that?

• 27:39Anthony Pompliano?

  It's weird. Um, I've told my partners this before. I hate fundraising in like everything other than being in the room. Like there, there's something about like the actual conversation. That's like somewhat competitive, right? It's kind of like, they know you're there to ask them for money. You know, you're there to ask for money. And so like, but you can't just blatantly start the meeting with like, I want your money. Right? So like, you're almost like, uh, you're, you're playing this, um, it's not really a game, but like, there, there's definitely some balance, right? Yeah. And, and it's one where, um, look, these people are incredibly intelligent, right? So you, so you want to be respectful, but they'd be the first to say,

• 28:22Anthony Pompliano?

  you probably have a better understanding of like your very niche strategy than they do who's, you know, they're more allocating to the experts, right? And so you you got to kind of balance that, but that part of fundraising is super fun and just like anything, it's, you know, you go in and you ask somebody for money and they say they'll give you a lot. You know, you're super euphoric and you feel like on top of the world. And if you ask and they say no, then you're like down in the dumps, right? It's like, you know, same thing as basketball or anything else. It's like when you're when you're good at it, you like it. When you're not good, it's depressing, right?

• 28:54Speaker 02

  Yeah, pretty much, pretty much.

• 28:57Anthony Pompliano?

  Yeah. Because you you've got an Angel List Syndicate now, right?

• 29:00Speaker 02

  Yeah, yeah. So that's something that I I kind of view as my next step in the venture capital world. This is something, you know, investing in the venture stuff is something I want to do full time when I'm finished playing, which I'm not planning on it being for a while. I'm seven years in and body is still feeling good. But there was something I was going to try to do maybe in a year or two, do a syndicate. And then, you know, the the pandemic hits and I'm like, okay, well, you know, the season's on pause for a while. If there's a good opportunity for a company, I'm going to try to syndicate one.

• 29:43Speaker 02

  And a great company came along, Simple Water, does home business water testing. You basically order it online, they mail it to you with a box, with an envelope to to mail out to whichever water testing company it goes to. And then they also have a platform for the labs. So, yeah, I think it's a really exciting company, making that market a lot more efficient. So that one came along, syndicated it, actually co-syndicated it with Peter Livingston, who I've invested with on Angel List quite a bit. He was super helpful, as were the people at Angel List.

• 30:27Speaker 02

  And, yeah, I kind of got a taste for it. I'm working on another one right now. And, yeah, I think I'm going to try to continue to do that and and hopefully build a track record there that I can, by the time I'm done playing, you know, can show potential LPs down the line.

• 30:46Anthony Pompliano?

  Yeah. And what's interesting with this is in the syndicates, I've run a couple of them and it's, I'm going to put capital in and you basically can come in alongside me and like, here's why I'm doing it. Right? So, so it's not a, hey, I have this opportunity, but like, I'm not going to put any money in. You're putting your capital and then asking people to invest alongside you, which I think is a way better model than if you just had like a deal and could like somehow show it to people, but you didn't have to risk any capital either. Right?

• 31:14Speaker 02

  Yeah, I think that's a great model that the incentives are aligned. And yeah, I think just in general, the Angel List platform for, for people that are trying to learn about venture. I think I've seen, you know, I've seen a ton of deals on there, done, you know, a bit of investing on there. And it just, I think helps you almost calibrate. What's a good deal? What's not a good deal? What do you like to invest in? And even if you're not actively investing, you can join some syndicates, get some deal for and just learn. And I think it's a great platform for that.

• 31:53Anthony Pompliano?

  Yeah. And in terms of the types of companies that you're generally looking for in the venture space, you seem to have much more of a generalist view. Is that true? Or are there specific things that you're looking for?

• 32:07Speaker 02

  I would say generalist. There's no specific vertical I've found yet that, yeah, I've kind of dived right into it. I think it's more just company by company. And then I'll dive deep on, on a, you know, a specific thing. And I enjoy learning about a ton of different topics from, you know, water quality to crypto stuff, to space satellites, constant glucose monitors. It's, there's a wide range and I like to, I think I like to keep it that way.

• 32:42Anthony Pompliano?

  Space satellites, you're going to have to explain that one.

• 32:46Speaker 02

  Yeah, so um eh this was a later stage deal, but uh basically they send up uh micro satellites, so small ones um and then they can basically spread them out more uh to get more accurate readings of weather, um currents and uh different things in oceans. Um and because of uh the lack of planes flying, um you know, due to the pandemic, especially early on, um the quality of weather prediction went down, which um you know, I thought was really interesting kind of side effect.

• 33:24Anthony Pompliano?

  Yeah, it's um I I I forget the company. There's a company that I saw uh right when they were starting and uh they were shooting like these little mini satellites into space. And I remember just being like, man, we don't know any like we're so primitive when it comes to all of the things that probably are going to be true, you know, fifty, a hundred years from now, right? And so seeing everything from, you know, reusable rockets, like you can just see the innovation happening. Um and it feels like that's going to be, you know, one of the next great frontiers, right?

• 33:54Speaker 02

  Yeah, it's like the stuff that you see in movies sometimes, you are that's maybe in thirty years, but people are actually working on this stuff and um it's pretty cool to see and even be able to talk to some of them about that, what they're working on. Uh what what about you? Do you? I know you obviously focus on crypto, but what what do you do when you see other deals, I guess, outside that category?

• 34:19Anthony Pompliano?

  Yeah, so uh I have two standing rules. One is uh when your friends start a company, you have to invest. And really, it's

• 34:26Speaker 02

  Really? Because a lot of people are the opposite.

• 34:29Anthony Pompliano?

  So what I'll do is I'll usually write a a small check. Um but uh I forget who said this. Somebody gave this advice and it wasn't to me directly. It was like in public. Uh it might have been on Twitter or I listened to it in a podcast or something. Uh but they basically were like, look, when your friends start a company, like you want to be aligned and cheering for their success. And it's like a great way to do that, even if you write the smallest check on the cap table, like just have me some skin in the game one. Uh but they were like, and then two is you won't like want to jump off the building if they end up building like the next Uber and you missed out. So whoever this person was, was basically making the argument that like, you know, upside, you get to participate downside, you completely protect yourself from, right? So they were like, so like you have to invest.

• 35:14Anthony Pompliano?

  So that's one rule. And then the second one is I started out being like very generalist and then obviously started to focus on Bitcoin and crypto, but I'll still see things that I think are interesting. And I frankly, I don't have a great kind of plan as like what to do there. I've thought about everything from syndicating to rolling funds to just continue doing things personally. But, but I do think that there's a lot of stuff outside of crypto. That's obviously one interesting, but also two is the types of founders that gravitate towards crypto are very different than the types of founders that gravitate towards other things, right? And, and there's positives and negatives to that. And so I think that if you believe you're just investing in people ultimately, like

• 35:58Anthony Pompliano?

  you want to have a lot of diversity, right? And so it's important to kind of still have access to the non crypto stuff and do some of it, even if it's not the focus, because I think that it just kind of balances out portfolios and stuff like that.

• 36:11Speaker 02

  Yeah, yeah, no, that's interesting. Does, what are some of the things you've learned from your time at Facebook and Snapchat that, that helped you today when evaluating founders or companies?

• 36:25Anthony Pompliano?

  Yeah. So definitely at Facebook specifically, I was very fortunate just to work with some of the best people probably in the world, right? I mean, literally there's a number of people I worked with that had been there since the early days of Facebook, like, you know, first 50 employee type thing, and they were still there. So these are people who had a front row seat and, you know, worst argument ever would be that they got lucky. Best argument would be that they helped build one of the most valuable companies in the world, right? And so they just had been there and they had lasted. And so you get to kind of see like, how do they operate, right? And that doesn't mean that everything they do is perfect, but it does mean that they've been able to contribute in a meaningful way to the creation of this, you know, amazing business.

• 37:08Anthony Pompliano?

  And so when you see that, like you definitely pick up some pattern recognition of just like. Here are things that you know, the top operators do. And so when you see it again, you kind of just notice it. Two is, I think that for me personally, one of the things that I did when I was there, I think, I can't remember if it was 14 or 15. I spent more time than most doing interviews. So the way that it works is at Facebook, you end up. Like if somebody wants to be a product manager, they end up getting interviewed by product managers at Facebook. So there's like a recruiter and all this kind of stuff, but like ultimately your future peers are the ones that make the decision,

• 37:46Anthony Pompliano?

  which is kind of a cool way to, one, the existing employees make sure that the people who are joining them like meet the standard according to them. But also two is for me, it was a great learning experience. I think I did interviews with like over a hundred candidates, you know, in one of those years. And it's just like, you just get to understand like good answers, bad answers in an interview, right? Like people who think critically and I've talked about it before, but it's like simple things like one of my favorite interview questions is, you know, hey, Deli, you are responsible for the Facebook pages team. You go home Friday night, everything's great. You come in Monday morning and traffic dropped 50% to the product. Like, what do you do?

• 38:27Anthony Pompliano?

  Right? And you just kind of like give them the scenario and a good answer to that would be like, you know, I would immediately look at all of the dashboards and try to identify potential reasons why, you know, blah, blah, whatever. A bad answer would be like, I would, I would, you know, call an engineer and ask them what happened, right? But the great answer would be, and this literally, that was a question I used to ask people, a great answer would be, the first thing I would do is I would immediately communicate to every single stakeholder that we had a problem. Then I would go look at the dashboard, right? And like, and it's just like, oh, this person's done this before, right? Like, like this person is not kind of academically going through the theory.

• 39:06Anthony Pompliano?

  This person has been in this situation. They understand like communicating the problem first before trying to solve it is important because it gets all hands on deck. And so you just, you know, doing enough of these interviews, you realize little things like that. And so in evaluating founders, you can play some of the same games, right? You can say, hey, you're running this business. Like what happens if X occurs? Or if a competitor does Y or whatever, and you can pretty much tell like, here's the people who, you know, think critically and soundly versus people who, you know, they basically have a dream and a new plan to kind of get there.

• 39:39Speaker 02

  Yeah, no, it's interesting. When you said about how the the existing product managers interview the new one like that, that would be really interesting. I don't think it's legal in the NBA, but if you had draft prospects come in and scrimmage with the existing team and then the players gave their feedback, that would you'd probably get a pretty accurate evaluation.

• 40:03Anthony Pompliano?

  I mean, I didn't even know that you couldn't do that. But like, that would be one amazing. Like, if fans could watch that type of stuff, they would love it, right? Because it would almost be like a mix of, remember, was it the End One Tour? You remember that?

• 40:16Speaker 02

  Yeah.

• 40:17Anthony Pompliano?

  And they would like-

• 40:18Speaker 02

  I'm looking at watch that on VHS in Australia.

• 40:22Anthony Pompliano?

  But they would like bring people, you know, like kind of everyday people, and they would get a play. And they weren't playing NBA players, but they were playing like the End One professional, you know, whatever people. And those players would like pretty much recruit. If you were the best guy in that local city, you got invited on the tour, right? So it's like kind of the same thing. It's just you can be on an NBA team rather than join the End One Tour.

• 40:46Speaker 02

  Yeah, that's pretty cool. I didn't know the End One Tour did that, where they recruited people in from basically, yeah, just playing against them.

• 40:53Anthony Pompliano?

  They and I forget who did it, but they would like go to like a local town or city or whatever. So maybe they could show up to Sacramento, right? It's like all the best basketball players in Sacramento and all the worst basketball players all show up, right? And they basically have like these like street runs. And you get the guys off the End One Tour, and maybe they throw, you know, two or three people from the local community in. And I think that I'm pretty sure that there was a couple of folks who, you know, they just played, and everyone was like, wow, that person is really good. Like, you should get them on the tour. And they ended up joining.

• 41:25Speaker 02

  Good. That's one way to get the call out. That's pretty cool.

• 41:29Anthony Pompliano?

  Well, the question is like, would NBA players? Be, uh, would they behave themselves if they were playing and they knew that like whatever happened on the court would determine that they would get to determine who gets to be on the team, right? Or would they just like play, uh, as my brothers call it like bully ball, right? Would they just be like, now, listen, we're the, we're the pros here, right?

• 41:51Speaker 02

  Uh, they're probably like, uh, yeah, I like this guy. He just keeps passing the ball and I get to shoot it all the time. Something like that. I can see that happening, but, uh, yeah. Well, one other thing I, I wanted to ask you about is, um, your, your background in the army. I mean, what, what is, like, I've never really heard you talk about that. I listened to, to your podcast quite a bit and, and what I guess skills and habits did you learn there that you kind of carry forward to today?

• 42:22Anthony Pompliano?

  Yeah. Um, so I've obviously thought a lot about this. Uh, I would say that there's three things, uh, that I took away from it. One was, um, I call it like the mortality check, which basically is this whole idea of, uh, I was 20 years old and when, you know, when you're 20, you think like you're literally Superman, right? You're going to live forever. You are only going to get stronger, faster, better looking, like, you know, like life's going in the right direction. Um, but at 20, uh, I was basically thrown into a combat zone with guys who were older than me. So I don't remember the exact kind of average age, but they were definitely, you know, married, they had kids, they've got like a mortgage at home. Like they're living real life and I'm still living like, you know, fantasy college student

• 43:03Anthony Pompliano?

  life. Um, and, uh, in the combat zone, you just see death and that doesn't necessarily mean it's always, you know, somebody you know, well, um, or even somebody that's an American, right? It could just literally be you see death of people in the local communities and kind of all this stuff. And so I think it's just this like a reminder like, hey, we're all going to die at some point, right? And so, uh, when I came back, I think there was a big shift in my mentality of like, just live life and enjoy it. And like you're, you're just not getting out alive, right? So like that definitely, um, I think one like, Made me not worry about all the little things that I probably, you know, as a 20 year old kid thought was important, you realize isn't. And then two, it really gave me license to like, kind of go bigger,

• 43:48Anthony Pompliano?

  right? Which I think has served me well. And then the other two things I learned were more like actionable things on a day to day basis. One was just like discipline. I was already pretty disciplined, you know, played sports in college and things like that. But this was a level of discipline of like, even when you really don't want to do something, like you get home from a mission, you know, onto the base, it's late at night and you know, you're going to turn around in six hours and go back out on another mission or something, like you clean your weapon. And the reason you do that is because if tomorrow you start shooting and your weapon jams, like you could die. Right? And so like, you just learn like every decision you make, if you keep discipline, like ends up putting you in a position where you can be successful. And then the last one was always just like, it's all about

• 44:32Anthony Pompliano?

  people. Right? So even in the army where like, you don't get to pick the people, you quickly kind of figure out, okay, Dilly's a good guy. Like, you know, if bad shit happens, like I want to be standing next to him. There's, you know, the other guy who's like in a freeze, like maybe I don't want to be standing near him. Right? And so you just kind of like start to understand, like, the people you surround yourself with can determine a lot about your life. And that's kind of an extreme life or death type situation. But even just in investing or, you know, basketball team, whatever, that stuff really matters. And so I think that was like a big lesson learned as well.

• 45:03Speaker 02

  Yeah, no, that's really interesting. I mean, on a much smaller and less important scale, I mean, I think as basketball players, you know who you want, you know, on the court with you when the other team's going on a run or in the playoffs when, when a game is close. And I guess that just builds over time through, you know, relying on people in, in high pressure situations.

• 45:29Anthony Pompliano?

  Yeah. 911, right?

• 45:32Speaker 02

  Yeah, Jay, hi, here you go. He'll make it. He'll make it.

• 45:36Anthony Pompliano?

  I, I saw somebody was tweeting, I think they made it into a GIF. I saw it yesterday. He's with the Knicks and he hits like, you know, kind of a, the buzzer's going down, he hits the three and he, and he turns and he's on a knee and he's got like the window with his arm or whatever. And it's just like, look, man, the guy's having fun. So it makes sense. Real estate. You, you obviously have done a bunch of stuff in real estate. Sounds like your dad is really interested in that as well. Talk a little bit just about how you thought about investing in real estate and kind of what you've done, whatever you want to share.

• 46:08Speaker 02

  Yeah, so um yeah, I I've done a bit of stuff with my mom and dad uh in my hometown, which is a small country town. And um you know, he he started off, I think, doing um like some smaller subdivisions, um like a rental property, then some smaller subdivisions, and has kind of continued to to work his way up. Um but just, I guess, understanding how you can use, you know, other people's money, meaning like the bank's money to to get a loan, to add value to a certain thing, and then either hold it um to to get rent coming in, or to to sell it, and then move that money into another project, I think.

• 46:53Speaker 02

  Um, understanding how you can use the bank um to your advantage um i- is one of the big things I I've learned from him. And um, yeah, I think just over time, uh and I know we're going to talk a little bit about Bitcoin and inflation, but o- over time, um, you know, I've I've known they've seen really good results. Uh, he always loves to tell me he's never lost money on land because they're they're not making any more of that. So um.

• 47:25Anthony Pompliano?

  Well, especially in Australia, right? You you you know that there's no more land.

• 47:29Speaker 02

  Yeah, because you're surrounded by water, uh even though there is a lot of of land, um, you know, obviously, it's a big country. But um, yeah, you just see, I I guess, Melbourne, you know, the big city I'm closest to, the the boundaries of it are just continuously expanding with subdivision after subdivision. So you can see it. I mean, every time I I go back to Australia and you're up, we're driving from the airport in Melbourne out to Marybar, you know, there's just more of Melbourne to get through before you, you know, are on the country roads.

• 48:02Anthony Pompliano?

  Yeah, and and I think that the point you're making about the banks, um, one of the conversations we had, you basically, look, it's leverage, right? It's intelligent leverage. And and if you're smart about kind of managing that and and how much capital you put down and and all of those types of ratios and things like that, like, it can be your friend. Um, and it sounds like that's, you know, one of the big things that had has uh kind of caught your attention and got you really interested in real estate.

• 48:29Speaker 02

  Yeah, and um he got me the the Rich Dad Poor Dad book to read and and that kind of laid out um you know, some really helpful things um in a pretty easy to understand way. And um I think it it's okay, you know, with leverage, there's obviously risk, but um being in a smaller country town, you know, you're not going to have the the crazy price growth over time, but you have a really good rental yield that that covers the mortgage uh and then some usually. So um it's a pretty stable asset to be in.

• 49:04Anthony Pompliano?

  Yeah, and and uh everything that you do in real estate is in Australia or you do some of the United States too?

• 49:09Speaker 02

  Uh, I do a little bit over here. Um, my financial advisors have, you know, some real estate funds uh and then have a rental property here. Um, but that's something that's more time consuming. Um, and you you need to be hands on and understand everything uh that's going on there. So um because I can, you know, rely and trust on my dad, um, that's, you know, where where most of that is for now.

• 49:36Anthony Pompliano?

  For sure. All right, let's talk about it, man. Inflation and Bitcoin. What uh what what do you want to talk about when it comes to this stuff?

• 49:44Speaker 02

  Well, I think for my listeners and being my mom and dad and my sisters who I've tried to explain to them, uh, if you could just give us a a really basic understanding of of Bitcoin, why it's important, um, and then how inflation gets into it.

• 50:02Anthony Pompliano?

  Yeah, um, so I think the easiest way to talk about it is just uh first start with what is money, right? Money is a belief system. The reason why uh you and I exchange US dollars or um any other currency is because uh we believe that it has value, right? So you're willing to accept it in exchange for goods or services, uh, and so am I. And so, um, you know, with that as kind of the underpinning it then is why does somebody trust the US dollar or anything else? Well, having a government back it is a pretty damn good reason to do it, right? And that stood kind of the test of time uh for a very long time.

• 50:39Anthony Pompliano?

  Now, when it comes to kind of moving forward, most of those currencies are not backed by anything, right? And so now there's this rise or popularity of digital currencies. And so when you think of a digital currency, there's two key components. There's the technology and then there's the monetary policy. And so just like there's a technology and monetary policy to, let's say, the US dollar, right? There's a technology and monetary policy to these digital currencies as well. The technology is what gets all of the kind of attention, especially in the media, right? Is people like, oh, it's decentralized, it's digital, you know, all that. Ultimately, it just

• 51:19Anthony Pompliano?

  means that there's no government backing it. And it means that by being a digital currency that's based on a blockchain, everything's fully transparent, right? And the way that I described the blockchain usually is just when you play Monopoly, right? If me, you and two other people play, we sit down, we start with the board in front of us, we put our money, right? Which is kind of our account laid out in front of us. And then there's a bank account that's kind of off to the side. But there's no fifth player who's like the designated banker who doesn't play the game, right? And so the reason why Monopoly works is because all the money that's transferred to everyone can see. So if you pass go, we reach in the bank, we give you $200, right? If I buy something, right? Then I give the money to somebody. And because everyone can

• 52:03Anthony Pompliano?

  see every transaction, there's trust, right? Or there's verification. And so Monopoly works. That's exactly what a blockchain does. It just does it in automated fashion. So everyone can see every transaction, and that ultimately leads to kind of the truth being always available.

• 52:20Anthony Pompliano?

  The more interesting part to me is not the technology, though, right? The monetary policy, I think, is the big kind of inflection point in terms of why this is gaining popularity. And so the US dollar, you mentioned inflation, the way that it is structured is more and more of it is created over time. And what that does is it devalues the currency. So why do people buy real estate, buy art, buy gold and precious metals, right? All these different things. It's They're trying to do is get out of the dollar, right? They if they hold dollars, they will be worth less and less over time on a purchasing power basis. So yes, it still says $1, but that $1 can buy you less goods and services than it could, you know, five years ago.

• 53:04Anthony Pompliano?

  And so you're financially incentivized to get out of dollars and get into store value assets or other types of assets. That's hard, right? So take your mom who you said was a school teacher. We basically ask her to go to work every day and to be the best school teacher possible, right? Teach the kids and do a great job, but then we also ask her to take her income and go be a professional investor on top of that. And that's hard, right? That's why in, you know, especially the United States, like I think it's 45% of Americans own no investable assets. Like there's no financial education. They don't know this stuff. And so in this system where you're devaluing the dollar, investors are rewarded and savers are punished, right?

• 53:47Anthony Pompliano?

  Cause you're just putting dollars in a bank account, saving, but it's being devalued. And so now comes along Bitcoin and Bitcoin basically has the exact opposite monetary policy. So rather than there being more and more of it created every year, there's just a set amount, meaning that there's only ever going to be 21 million Bitcoin. And there's a programmatic distribution of it. So every 10 minutes, a certain predetermined amount is given out into the network. And this looks very similar to gold, right? It's kind of a sound money, meaning that it's scarce. But the difference between Bitcoin and gold is that Bitcoin is provably scarce, meaning that you know exactly how much are available.

• 54:28Anthony Pompliano?

  You know exactly how much are in circulation with gold, you basically have estimates, but those estimates have essentially, you know, drawn confidence from people for thousands of years. And so I think when you kind of zoom out, you say, okay, there's two different types of currencies, right? There's the fiat currencies, which are inflationary. And that's kind of the system we live in today, right? Where your currency is going to get devalued over time. And so you're financially incentivized to buy goods and services or to invest. And if you do that, well, you actually Get really rich, right? Because you can get out of the dollar, get into assets, those asset prices go up, real estate appreciates, all that kind of stuff, and you end up building wealth.

• 55:08Anthony Pompliano?

  But in the new system, you aren't required to buy goods and services or to invest, you can simply save. And what you're doing is you're saving a scarce asset. And so over time, that actually becomes more and more valuable in US dollar terms, right? So it's gone from, you know, fractions of a penny 11, 12 years ago to today, it's worth, you know, $12,000 or whatever it is. And so I think that's like the, the big difference is just a digital currency has a different monetary policy than the fiat currencies. The debate is just which one's better, right? And kind of, you know, how, how does that happen? But I think that's really the big difference.

• 55:44Speaker 02

  Yeah, no, thank you for that. And then I'll just ping off a few questions that they've been asking me because you'll be able to answer them better. Why is Bitcoin like the cryptocurrency like as Bitcoin was created and has had a rapid rise? You know, why couldn't there just be another crypto come in and take its place?

• 56:07Anthony Pompliano?

  Yeah, so two aspects to the answer here. So the first aspect is there's, I don't know, five or 6,000 like digital assets now. There's only a handful that are actually trying to be money, right? So Bitcoin would like to be the standard, right? Or the global reserve currency. There's others like, you know, Ethereum or Ether now is trying to be money and a couple of others. But ultimately, the competition is, let's call it maybe among 15 digital assets that would like to be money. But remember that money is a belief system. And so just as Facebook becomes more and more valuable, as more people join their social graph or their social network, right? Because there's more people to connect with, there's more content, you kind of get tied into it. Money has a network effect as well.

• 56:53Anthony Pompliano?

  And so the more people that use the same money and believe in the same money, the stronger it becomes or the more valuable it becomes. And I think that Bitcoin's advantage was, one, it was first. Two, it was able to gain adoption with a very specific type of person who had. You know, very long term view around sound money and the problems in the legacy system. But then three is just now we're at the point where it has the biggest network effect. And so it's got the most belief behind it, right? And the market has kind of determined it to be the quote unquote most valuable. And so if it fails, I'm of the belief that actually another one won't be able to be successful. And what I mean by that is, you know, in Venezuela, the Bolivian failed.

• 57:36Anthony Pompliano?

  If the Venezuelan government comes out now and is like, oh, sorry, guys, like we messed that one up, but like, here's our next one. People are just like, nah, you got us once. Like you're not, we're not trusting you a second time. And so I think like Bitcoin's a similar thing here where this idea of like a decentralized, non-sovereign currency. People are bought into it right now and from a mind share standpoint. If it failed, I don't think somebody could create another one and be like, oh, sorry, we messed up the first one, but like, here's the next one. Right? So I think Bitcoin's kind of the shot and so far so good, but that's kind of how I look at it.

• 58:08Speaker 02

  What would you say the biggest threats are to Bitcoin? Not being like a crypto, another crypto passing it, but why would it not become, you know, successful?

• 58:22Anthony Pompliano?

  Yeah. So I think that the number one, like most serious threat to it is what I call self inflicted wound. So basically there's, you know, a software code being written and runs the Bitcoin network and it's constantly being updated. That process is very methodical and intentional because there's, you know, 200 plus billion dollars of market cap to protect. But if at some point there was a software bug that was introduced, that could cause catastrophic problems, right? And so obviously the development process tries to and has successfully for a long time prevented that from happening. But that to me is like, you know, risk number one. The second risk is there could be some sort of ownership ban, right?

• 59:07Anthony Pompliano?

  So the United States, you can't shut it down because it's decentralized. So what they could do is they could basically say, we're going to ban ownership in the United States. Now that would be short term, very negative for the asset. Set. I personally believe that other countries that, you know, are frenemies with the US. So kind of the Russias and Chinas of the world, they may actually say, oh, wait, you guys are explicitly saying you're not going to use this thing like we want to get off the US dollars like we'll use it. Right. And kind of it actually drives adoption over the long term. But I do see that as a risk. Obviously, you know, if you're in the United States or in Australia, and your government says they're going to ban ownership like that's not good. Right. I think most people generally want to comply with the law.

• 59:49Anthony Pompliano?

  And then the third thing is, I do think that there is potentially in the future risk around like a quantum computer or, you know, some sort of like 51% attack type thing where just somebody gets a superior computer. Now, what I always tell people is like, one, I don't think we're anywhere close to that being developed, but also two, like, I don't know, let's say that you stop playing in NBA and you're the one who creates the quantum computer. Right. And I said to you, what all the things in the world that you can use your quantum computer for, like attacking Bitcoins network is probably not very high on the list, mainly because once you attack the network and it's been violated or someone that, you know, it's known that it's no longer decentralized.

• 1:00:31Anthony Pompliano?

  It kind of becomes worthless. Right. So it's not like you could like go and steal all the Bitcoin because then those Bitcoin would just be worthless. So if like you have a quantum computer, there's way other, you know, way more important and a much more kind of productive, profitable things you could do than go attack the Bitcoin network unless you just wanted to destroy it. But I just don't see that as like an actual kind of high probability risk right now.

• 1:00:54Speaker 02

  Yeah. What about like a few main players getting enough Bitcoin where they can basically control the price?

• 1:01:04Anthony Pompliano?

  So there's people who would say, so the hardcore Bitcoiners would say one Bitcoin equals one Bitcoin, right? Similar to one US dollar equals one US dollar. Now, on a purchasing price standpoint, we know that that's kind of a nuance. But from a US dollar value, right? So today Bitcoins at about $12,000. There probably already has been some price suppression. Right. So if you go back to 2017. Ballpark, it went from like a thousand dollars to 20,000 at the end of the year.

• 1:01:35Anthony Pompliano?

  I, if I remember correctly, uh, there was, I think it was futures contracts got approved first. So basically there was a, um, kind of in the legacy finance world, there was a derivative introduced that allowed you to short Bitcoin. So pretty much it was long only. And so what were people doing? They were going long, right? And everyone was kind of seeing that their, uh, portfolio increased in value. Well, the high for Bitcoin in 2017 and, and still the all time high till today was right before, I think it was like the day before, two days before that derivative was introduced. And so this whole idea of like, now there's more equilibrium in the market because there's people can go long and go short.

• 1:02:17Anthony Pompliano?

  So that was kind of step one. The second thing is like, there's been plenty of price suppression. I think even some of the US banks got in trouble, uh, in the gold market, for example, right? So like this stuff happens in, in markets all over the place. I keep telling myself that like, it's still so small. It's like $200 billion. I think gold's like eight or nine trillion, right? So like, it's probably just isn't that interesting to them yet. When it starts to go up, I think you'll see, you know, some of the big boys like, hey, wait a second, uh, but, but I don't think we're there yet.

• 1:02:49Speaker 02

  Yeah. And, and speaking of where, where it's going, like where, and I know we've discussed this a little bit before, but end, end of next year, where, where do you see it going? And, and what would have to happen for it to get there?

• 1:03:02Anthony Pompliano?

  Yeah. So structurally, um, you know, as, as early as like summer of last year, uh, it became, I don't want to say obvious, but like it became higher probability that, uh, we were kind of late cycle in the macro environment, meaning that, um, you know, we had been on this like really long 10 year bull market in public equities. Uh, and there were starting to be just warning signs, right? And not necessarily signs of like, hey, the market's going to tank tomorrow, but just you saw things like inverted yield curves. You saw, you know, very high, uh, high number of CEOs leaving their jobs. You saw these like gyrations or market breakdowns, uh, in the repo markets, like just things where you're like, okay, we're getting towards the late end of this bull market.

• 1:03:45Anthony Pompliano?

  When it turns over, like that's not going to be good. And so you start to think, okay, when you end it up going into a recession or a depression or what, you know, whatever. What can people do? And so governments naturally want to step in and help, right? So they can basically manipulate interest rates or they can print money. And what they did with the interest rates is they're going to drop them, right? And so I was writing last summer about like, hey, they're going to drop them, you know, pretty aggressively was basically my thought process. I didn't think that they would go to zero, but I think they thought they would drop it. And then they're going to have to print money. I thought, you know, again, I don't know, a couple hundred billion, maybe you get to a one trillion, but like they're not going to print three trillion, right?

• 1:04:27Anthony Pompliano?

  And so, you know, fast forward to now, like this whole COVID-19 thing has accelerated a lot of this, right? And did I foresee a global pandemic? No, I don't think anyone really did. But it definitely kind of was the pin that popped the bubble, right? To some degree. And so what we thought would happen in the macro environment happened, right? They had two emergency rate cuts, dropped rates to zero, then they printed money at an incredible rate, you know, historic levels of quantitative easing. And all of that happened almost simultaneously from a timeline perspective with this Bitcoin halving, which is basically the daily incoming supply of the asset got cut by 50% in May of this year, right? And that's programmatic.

• 1:05:09Anthony Pompliano?

  And so what I was talking about last year was like this, if they cut rates, print money and halving occurs all around the same time. It's like rocket fuel. And so now we sit here and we're like, okay, well, all of that happened, right? And so, you know, we can sit and pat ourselves on the back or we can look and say like, well, what was the financial performance? And so as we're sitting today, I looked this afternoon, Bitcoin's up about 70 to 75% since the beginning of the year, right? So it literally started the year, at one point it had dropped 50%, which is, you know, super scary for folks. But now it's up so that it's a 70% kind of up on the year and it's up 45% since the halving.

• 1:05:50Anthony Pompliano?

  And so like the thesis is quote unquote playing out. Now, to answer your question directly, if you kind of continue extrapolating out what we thought was going to happen is we believe that Bitcoin is just kind of right on line to end up hitting $100,000 by the end of next year, which at $12,000 today is a pretty big price jump. But, you know, that's kind of our conviction. Everything we're seeing so far is like, we're still on track for that. We'll see what happens.

• 1:06:20Speaker 02

  Yeah. And, and then I guess playing into that, I know you've probably talked a bit about it, but a company converted their cash balance sheet listed on the, they're listed on the NASDAQ, I believe. They converted their cash to Bitcoin. What do you think of that? And then what do you see that doing to Bitcoin? Then other companies that are looking at this and saying, is this, you know, a viable option?

• 1:06:48Anthony Pompliano?

  Yeah. So companies, micro strategy and I won't get the numbers exactly right, but they had about half a billion dollars in terms of capital decisions to make. And so what they decided was about $250 million they put into Bitcoin. And then they basically held a $250 million capital raised by selling some shares, right? It's kind of the over generalized description. The $250 million in cash going into Bitcoin is the first publicly traded US company to decide to do this. Now, there's two things that you could say. One is, there's a lot of people who were just like, oh, there's some, you know, entrepreneur out there or CEO who's trying to

• 1:07:30Anthony Pompliano?

  capitalize on the excitement around Bitcoin. They're going to do this. A bunch of people are going to go buy their stock and like, it's more of like a stock manipulation game or kind of riding the hype cycle. I went and I read the press release. I read everything that the CEO talked about in terms of why he was doing it. He's a Bitcoiner. Like this is not a, I'm trying to, you know, just ride a hype cycle. I mean, word for word, what he described in the press release is the Bitcoiners' argument against inflation and quantitative easing. And he basically said, look, I'm worried that the dollar is going to get devalued. Therefore, I can't hold dollars. So I need to get into something else. And I've chosen Bitcoin as our reserve asset. We'll see what happens, right? But I do think that a NASDAQ listed company doing this, to your point,

• 1:08:13Anthony Pompliano?

  opens the door now. Nobody wants to be first. A lot of people like being second, third, and fourth, right? And so I don't know when that'll happen. But, you know, and then the company, by the way, was, I think, a $1.2 billion valuation company. So it's not like it was, you know, some, you know, $50 million kind of penny stock, right? It's a billion dollar business. So I tend to think that, you know, it'll be a positive sign long term.

• 1:08:37Speaker 02

  Yeah.

• 1:08:37Anthony Pompliano?

  What do you think about it?

• 1:08:39Speaker 02

  Uh, I mean, I think it's really bullish for Bitcoin because, I mean, if you, if you have a publicly traded company, I mean, you know, if it doesn't go well, that guy's probably getting fired, right? But now, other companies, if they don't at least look at it or talk about it, you know, the shareholders or people are going to be asking questions if it does happen to go to, you know, 100K by the end of next year. So I think it definitely opens up some interesting conversations that, you know, I'd love to be on the fly on the wall at one of the next board meetings at some of these big companies. What about Warren

• 1:09:23Speaker 02

  Buffett and Berkshire getting into gold, which I believe they haven't done before? And do you see that? As or getting involved in gold is a bit of a gateway to getting into Bitcoin because they, you know, try to perform the same function, really.

• 1:09:41Anthony Pompliano?

  Yeah. So I recently wrote about this and so I'm probably going to sound like a nerd because I know all these weird stats, but it ultimately breaks down to Warren Buffett has historically been very anti non cash producing commodities. So gold being the big one. He's just said, look, it just sits there, right? It doesn't produce cash and he really likes cash flow. So in order to get the exposure to gold, he didn't go buy gold. He bought a gold miner, which is kind of interesting, or he still bought a business. They're just in the business of gold, which is almost like, I feel like there was like a midnight negotiation inside of Berkshire, like, we got to get exposure to gold. He's

• 1:10:23Anthony Pompliano?

  like, we're not getting gold, but you could buy a gold company, right? So I think that was kind of the first thing is like, he still stayed with his principles of buying a cash producing business, but it is ultimately dependent on the performance of gold. The second thing is like, his portfolio is struggling right now, right? So I think it's seven of the 10 of his 10 largest holdings are financial services businesses. And I think all six of the seven or seven of them, I can't remember, are all down like double digit percentages. So he's actually doing it pretty bad. And so those financial services on the average drawdown is like 20 to 25% this year. But then he's got these other businesses, three

• 1:11:06Anthony Pompliano?

  of his top 10 holdings are non financial services and they're up like 15 to 17%, something like that. And most of that's driven by Apple. So it's a technology company. So Warren is in this weird position, I think, where if you look at the portfolio, he's held on to a lot of like what I'll call old school businesses, right? They're not the big tech companies and whatever. And he's publicly stated over and over again, like, he's not the guy who understands tech, right? In terms of like the first one, he's 89 years old, all that kind of stuff. So he kind of changed his mind on the whole gold thing, but he's still lagging because he's kind of investing in like the old school way.

• 1:11:45Anthony Pompliano?

  I just don't see him buying Bitcoin, no matter, you know, if he lives to his 120, I just don't think that he's gonna do it. What'll be interesting is, you know, the guy's been an absolutely legendary investor, probably the best to ever do it. He's amassed this incredible fortune. At some point, he's gonna hand it over to other people. And so kind of like, what happens once he's not making the decisions, right? Whether he's alive or not, but just like when he's not making the decisions anymore. Like, I think it'll be a pretty big moment if Berkshire Hathaway bought Bitcoin, right? I just don't see that happening anytime soon.

• 1:12:20Speaker 02

  If, for whatever reason, that happens in the future. I mean, what, what do you think happens to Bitcoin?

• 1:12:27Anthony Pompliano?

  Well, when he bought Barrett Gold, I think I saw today, it was up, at least this morning, it was up like 10, 12%. Right? And so like, you know, this obviously, you nor I am giving any kind of financial advice or anything like that. And I have no clue what gold miners are trading and kind of if that's a normal movement, whatever. But like, people follow it. Right? So when he makes a decision, people are like, oh, I'm just gonna do what the smart, rich guy does, right? And so I think that it's only would be a positive. It's just, you know, what, what's the impact? I have no clue.

• 1:12:58Speaker 02

  Yeah, yeah. And then you talked about gold being a non-income producing asset.

• 1:13:05Speaker 02

  I think a lot of people, and I was one of those as well, that thought Bitcoin was, was the same, you know, you kind of just buy and hold it and hope it goes up. Over time, but then you told me about BlockFi and you could earn interest on your Bitcoin, almost like a term deposit. Can you tell, tell people a little bit about how that works?

• 1:13:27Anthony Pompliano?

  Yeah. So you got to remember that cash is also a non-cash producing asset for the most part, right? So if you just hold dollars, it's not like, you know, more dollars just appear out of anywhere. And we all do that, right? So I think that it's a question of just like, okay, how do you turn a non-cash producing asset into an interest-bearing asset? Right? And so what most people do in the traditional world is they'll go deposit in their checking account or they'll buy. Kind of treasury or whatever, but let's just say the deposit in the bank account. The bank takes those dollars and they go lend them out on the backend. And sometimes they can lend them out, you know, five, six, seven times per dollar with leverage. And so the bank earns a rate of return for those loans.

• 1:14:10Anthony Pompliano?

  So, you know, I'll make up numbers. Well, say they earn 3%. And they turn around and they say, you know, hey, Delhi, you're such a great customer. We're going to pay you 0.03%.

• 1:14:21Anthony Pompliano?

  And so like the spread, right? That 2.97% difference they keep and it's a great business for the banks, right? But you make like minuscule interest and whoever is the borrower obviously got to borrow capital. So there's a whole kind of financial system based on the deposits that go into a bank. BlockFi basically is doing the same thing, but for crypto. So you deposit Bitcoin, a stablecoin, Ether, they got a couple others. They take it and they basically lend it out to people. Those people pay an interest rate and the difference is that BlockFi pays a very high percentage of what that revenue is back to the users. So, yeah, don't quote me on it, but I think it's like Bitcoin's like 6% interest.

• 1:15:05Anthony Pompliano?

  The stablecoin is like 8.6%. Like, like, these are very high rates of return. And so what it does is it looks very similar to what happens in the legacy world. It's just not with dollars now, it's with these digital assets, right? So, you know, there's risk at your bank. There's obviously risk in the crypto world. The legacy systems de-risk a little bit with FDIC insurance, right? That hasn't come to crypto yet. So I always just tell people like the mechanism is the same. Go do your research. Don't go put 100% of your money in one bank. Don't go put 100% of your money, you know, in BlockFi. But, but I do think that in both systems, what you're doing is you're turning a not, you know, cash producing asset in to earn interest now. And so I think that's why, you know, BlockFi is interesting and obviously why people put money in the bank too.

• 1:15:49Speaker 02

  Yeah, yeah.

• 1:15:50Anthony Pompliano?

  What got you excited about BlockFi?

• 1:15:53Speaker 02

  Uh, I think apart from like the crazy growth, um, talking to Zach, um, I think, you know, as an investor or just, you know, holding cash right now, um, you're kind of looking for a place to put it. And with the stock market going crazy, you know, it doesn't seem to me like it's a great place to put it right now. I don't know how much more upside it has. Um, you know, putting it in a bond, like I wasn't really, you know, too, too interested in that. And then

• 1:16:32Speaker 02

  when you said you could get, you know, 6% return in my head, I was like, well, even if Bitcoin goes down 6%, I'll be even on the year. That's one way I looked at it. Um, but then it's like you're, you're also getting all that upside potentially down, down the line. And, um, even if, you know, it spikes like it did in 2017 and then comes back down, you're still earning interest on, on the way up, um, which I thought was really interesting.

• 1:17:04Anthony Pompliano?

  Yeah. I look, you, uh, we're gonna make you the spokesperson. You, uh, you nailed it.

• 1:17:10Speaker 02

  I know we're almost done here, but what, what do you have planned the next five to 10 years? What are your goals?

• 1:17:17Anthony Pompliano?

  Um, that's a great question. I don't really do, uh, long-term goals. Um, I think part of it is, uh, I have two rules in life. The first being, uh, if I ever do something that I don't have fun with, uh, I stop doing it. So, you know, I'm having a blast doing everything from the Bitcoin stuff to the content, whatever. Uh, if one day I wake up and I'm just like, I don't want to do this anymore. I literally will create a video and just like, that was an awesome run, guys. See you later. Um, so I think that that's always kind of the back of my head. Um, and the second thing is, uh, I focus much more now on like who I'm doing things with more so than like what I'm doing, uh, which sounds kind of weird, but just, uh, I found.

• 1:18:01Anthony Pompliano?

  The people you surround yourself with end up like dictating a lot of it. Right. And so I just want to be around like smart people that I enjoy being around and they enjoy being around me and I respect them. And, and I tend to think that like you just kind of figure stuff out as you go. So it's like, just get the right people. You know, it's kind of like a team, right?

• 1:18:20Speaker 02

  Yeah.

• 1:18:20Anthony Pompliano?

  If you get the right guys on the court, play, go play basketball, like magic happens. Right. And I think that that's, you know, friend groups are very similar. So it's more about like who I'm doing it with more so than like what we're doing.

• 1:18:31Speaker 02

  Yeah.

• 1:18:33Speaker 02

  Me, uh, I mean, hopefully the Olympics go ahead next year. Uh, want to win gold medal. For the Aussie national team, we finished fourth in Rio, which is the worst place to finish in the Olympics. Uh, and then, uh, try to win another NBA championship, uh, keep playing for as long as I can and then, um, run, run a few more Angelus syndicates, good off a track record and then, uh, get it, get more into this when, when I'm done playing.

• 1:19:03Anthony Pompliano?

  How many more years do you think you can play?

• 1:19:07Speaker 02

  Well,

• 1:19:07Anthony Pompliano?

  How old are you?

• 1:19:08Speaker 02

  I'm 29.

• 1:19:09Anthony Pompliano?

  Okay.

• 1:19:10Speaker 02

  So I'm still pretty young.

• 1:19:12Anthony Pompliano?

  35 is that?

• 1:19:14Speaker 02

  Uh, I always said 40, but maybe, I don't know. I've, I've got a nine month old son now and he's a lot of fun. And, uh, it is a lot of time on the road. So, uh, I would say 35 to 40 range. We'll, I'll, I'll evaluate it when I get there.

• 1:19:32Anthony Pompliano?

  All right. Is there anybody who, I guess Jordan came back pretty, when he like this, what the third time he came back or second time he came back or whatever. But is there anybody in recent history that's played, uh, kind of upper 30s into their 40s? Karl Malone, maybe?

• 1:19:48Speaker 02

  Yeah, Karl Malone. Uh, I mean, Jamal Crawford just turned 40. He, he got signed by the Nets. I mean, LeBron's 35, I think, and he's, you know, could, could win the MVP and, uh, I'm obviously he's a non anomaly, but I think, uh, with sports science now and, um, you know, taking care of your body for a long time. It, it kind of adds up and gives you those extra years on the end of your career.

• 1:20:15Anthony Pompliano?

  For sure. All right. I get to ask you the last two questions. Who do you, who do you think is going to be the MVP?

• 1:20:23Speaker 02

  Cool. Uh, you make me pick between the answer and LeBron.

• 1:20:30Speaker 02

  I think it's a coin flip because I think LeBron has the has the momentum around the story as well. And I think everyone in the sports world loves a good story. But yeah.

• 1:20:44Anthony Pompliano?

  One of those two guys.

• 1:20:45Speaker 02

  One of those two for sure, I think.

• 1:20:47Anthony Pompliano?

  Okay. Who do you think was the NBA championship?

• 1:20:53Speaker 02

  Uh,

• 1:20:56Speaker 02

  I think either one of those teams, I think I think Milwaukee is going to come out of the East. I think I think the Lakers are going to come out of the West. But I think it's going to be a tough series, I think, between the Clippers and the Lakers. And then also the Raptors and Milwaukee. I'm looking forward to watching both of those.

• 1:21:18Anthony Pompliano?

  If the Lakers and Milwaukee meet, you think LeBron can take it?

• 1:21:23Speaker 02

  I would never bet against either of those guys, you know, and especially LeBron. Just, you know, seeing him come from 3-1 down, what he's done is just, I would never ever bet against him.

• 1:21:39Anthony Pompliano?

  I had forgotten already how that's how crazy 2020 had been. I was on the phone with a friend and he's a big Toronto Raptors fan. And so we were talking about LeBron and Lakers, whatever. And he's like, yeah, like, I just think that like, going back to this idea of a story, he's like, and then, you know, you get LeBron going and winning at a third team, Kobe, like, and I was like, oh, wow, like, I literally had forgotten that that happened this year. Right? And not that I forgot that the event happened, just that it was in 2020. And so you start to like, put it all together, like, that would be a really cool story to see happen. But, you know, there's a lot of basketball to play between here and there.

• 1:22:17Speaker 02

  I know. It's looking forward to watching. It's good to have it back on.

• 1:22:21Anthony Pompliano?

  Absolutely. All right, guys. Before I let Deli go, if you listen to the Pomp Podcast, go listen to the Delly Podcast. He was real original with the name. So was I.

• 1:22:32Speaker 02

  From you.

• 1:22:34Anthony Pompliano?

  And and vice versa. Where can people find you on the internet?

• 1:22:37Speaker 02

  Uh Twitter at Matthew Deli, um I'm on Instagram, YouTube, um but probably probably Twitter's best. Angelus Syndicate, make sure you find out there.

• 1:22:50Anthony Pompliano?

  Go get, go check out his Syndicate. Uh it is definitely worth, uh worth looking at. I, there's a bunch of folks here who are credit investors, listen to the podcast.

• 1:22:59Anthony Pompliano?

  There's a lot of athletes who are trying to invest, but uh but Deli, I've literally seen the process firsthand. He knows what he's doing. Um so I'm excited to uh to see what other deals he finds, but uh thank you so much for doing this, man. This is a blast.

• 1:23:09Speaker 02

  Yeah, thanks, Paul. Appreciate it. A lot of fun.