Pod Insights Equity Podcast Can you build centralized islands in a decentralized ocean? About this episode We're getting back up to full speed this week, so Mary Ann and Alex along with Grace behind the scenes took on our Friday show. Next week Natasha and Chris are back, and we'll do our regular three-show lineup. Today, however, despite a smaller team we had just as much as always go chew through:
OpenSea's epic new fundraise: Alex did a little Fun Math on the company's trading volume and possible revenue totals. The gist is that OpenSea is a big business. But with NFTs as volatile as they are, charting regular growth will prove difficult.
During our crypto chat, we also dug into the Web 2.0 vs. web3 debate that has been raging.
From there we pivoted to fintech, with notes on Petal's funding round, Ribbit's new fund, and how Mexican fintech Bankaya is going after its target customers via offline methods.
Then it was notes on the private and public markets' dissonance, and a few moments to complain about COVID.
We are back Monday morning! Chat you then!
Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products.
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Transcript 0:09 Speaker 00 Hello and welcome back to Equity, TechCrunch's venture capital focused podcast where we unpack the numbers and the nuance behind the headlines. My name is Alex and I'm joined this week by my dear friend, my old time colleague and a general just good person, Mary Ann. Hi.
0:23 Speaker 01 Hi Alex, how are you?
0:24 Speaker 00 I'm good. We are not joined by Natasha today because Natasha is off, but I will say for everyone out there who listens to the show, we are back to full strength next week. Our whole team is back. Three episodes coming. We're just taking a slightly slower gear up to the year because last year was a lot and we're all hanging in there, Mary Ann. It's been tough, I think we could say.
0:42 Speaker 01 Just a little bit, Alex. Just, just a little bit.
0:44 Speaker 00 But that's not going to slow us down. We have much to get through. Today, we have probably one of the best shows we've had in some time, just given how much I love these topics. We have OpenSea's epic raise. We have Web 2.0 versus Web 3 through the context of control and what decentralization really is. Then we have fintech with rounds from Pedal and Bankaya, notes about Ribbit Capital's excellent new fund. And then at the end, a question about public markets, private markets, and who is bullish enough? Who is correct about what's going on? It's going to be an action packed show, but first, we have OpenSea. Mary Ann, when this funding round touched down, given your rampant enthusiasm for all things NFT, how excited were you?
1:21 Speaker 01 Well, you know, obviously I wasn't surprised. There'd been plenty of talk prior to this that this, this deal was in the works. So it was certainly not a shock. And your article was really informative, actually, the making sense of the $13 billion valuation. So OpenSea raised $300 million, valued at $13.3 billion now. What's fascinating about this is just last July, the company was valued at, what was it, one and a half billion?
1:47 Speaker 00 Yeah.
1:47 Speaker 01 Yeah. I mean, that's a massive increase.
1:50 Speaker 00 I don't know whether to be like dismissive of that kind of value creation because to me, it feels artificial. But at the same time, if I am critical of it, I feel like I'm like... A dinosaur, you know what I mean? I feel like the person on like a horse and buggy. So I don't want to be overly negative about it, but certainly compared to historical norms of startup value creation, that's quick, I think is fair to say.
2:10 Speaker 01 Yeah, I mean, very fair to say it's super quick. But based on your excellent reporting and breaking down the trading volume and the fact that the company monetizes by getting a 2.5% cut of transactions on its service. It seems like that this could be warranted, actually, this pretty high valuation.
2:27 Speaker 00 Yeah, that's, that's the interesting thing. If you're a crypto bull and you're a believer in all things decentralized and you're bullish on NFTs, the OpenSea valuation actually isn't that crazy. And here's kind of the way the math works out. So we went to some third-party services and pulled their data on NFT trading volume on OpenSea. Essentially, we can get a kind of a gross number. And then from there, we can apply the two and a half percent cut that they take per their own documentation. So according to, I think it's DAP Radar, in the last 30 days, as of yesterday, OpenSea had seen $2.91 billion in total volume of, you know, 2.5% of that is about 73 million, give or take. And so you can get a feel for how much revenue this company is seeing. It's impressive.
3:11 Speaker 00 Mary, and the question just becomes, how long does the NFT boom last? And does it have the same staying power that crypto itself has demonstrated over the last decade?
3:20 Speaker 01 Yeah, I mean, exactly. Certainly, I've been surprised by the popularity of NFTs and just, you know, how well OpenSea's doing and it's, it's persisted, right? It hasn't really, this interest hasn't declined over the past six months to year. So really, it's just kind of a wait and see what happens, right? If it continues at the rate that it is now, then things are only going to keep going up. But to be clear, this could be a volatile sector and it could, it could very well like bust and we could see a huge decline in volume within like the next six months or so. I feel like everything's just a little bit up in the air.
3:56 Speaker 00 Yeah, totally. I mean, if you think about 2021 as a year in NFTs, there were actually several kind of booms and busts in volume even inside of that year. And so the way that I'm thinking about this is imagine the stock market, right? If the Dow Jones Industrial Average goes up 3%, it's an enormous day. If the Nasdaq goes down 3%, it's a huge sell-off. It's a bloodbath. Rah! In the crypto world. You got to kind of 5X that, right? Like if Bitcoin goes up by 15% in a day, that's big news. If it goes down 3% a day, eh, you know, that's just kind of crypto being crypto.
4:29 Speaker 01 Yeah.
4:29 Speaker 00 NFTs are like crazy cryptos, they're the crazy, crazy stocks, if you will. And so I presume they'll be the most volatile. Actually, I have in edit, as we record this, a story kind of asking the question of what will happen in NFT volume, given today's crypto sell-off? Because Mary Ann, I don't know if you've seen, but we've seen declines in the value of a great number of tokens.
4:48 Speaker 01 Pretty, pretty big drops. I'm really curious to see what's was going to happen. Clearly, I'm keeping an open mind about OpenSea. I have to say, though, I was impressed with the massive jump in valuation, more so even with the numbers behind it.
5:03 Speaker 00 Yeah, we will be keeping tabs on NFT volume pretty closely, just given how important it is as a cultural note. And also, there are a number of startups that have raised money to build NFT marketplaces. And if the overall market declines, well, they won't do that well. But Mary Ann, the broader crypto economy, whatever you want to call it, the decentralized landscape, whatever, has been in a period of drama, thanks to former Twitter CEO and current Block CEO Jack Dorsey. And I think we can just loosely say the Andreessen crypto squad, I think would be fair.
5:34 Speaker 01 Yeah, I think that works. It's been pretty entertaining to watch, quite frankly. I mean, the back and forth. It's fascinating that one of the greatest things about Twitter is just giving these people a public forum that we can all just sit and kind of like pay attention to. I feel like we're just sitting there eating popcorn and like watching the back and forth.
5:52 Speaker 00 Yes, but just add donuts for me instead of popcorn, and that's dead on. So for people who don't remember, back in late December, Jack Dorsey, of course, no longer the CEO of Twitter, started talking more frequently about his views on Bitcoin, cryptocurrencies, and the decentralized landscape more generally. And you might think that because Jack is a well-known Bitcoin bull, that he would be very positive about the amount of money that's been invested into decentralized or kind of Web3 startups, if you will, Mary Ann. But it turns out that he's not. And I I'm curious, how how clear is it to people, do you think, why that's the case? Or should I try to explain?
6:31 Speaker 01 You know, again, reading your your article, which, by the way, the headline I absolutely adored and is my favorite of the year so far, your mom owns Web 2.0. You could have a good argument, you know, really, that the fact that all these companies are backed by big VC firms and their money is the very contradiction of decentralization.
6:53 Speaker 00 Yeah, and so the argument is that Bitcoin was essentially founded by an anonymous person. It was then kind of released to the world. And since then, its development and and structure has been decentralized. I mean, like, you know, we've seen mining activity, the kind of the computing power that backs Bitcoin move from China to out of China. And it was in Kazakhstan, and that had some problems this week and so forth. So pretty robust. In the Web three world, companies like OpenSea and really a plethora of other ones, they are raising money from fiat investors like Andreessen Horowitz. And, you know, people like Jack view that that is not, as you said, Mary, in keeping with the ethos of decentralization. And this is not just a religious war. It's actually kind of a question about how to build crypto or Web three startups.
7:38 Speaker 00 And and if you can really take a traditional venture capital model of, you know, founder control and lots of capital, kind of the current way of doing things, and apply that to crypto, or do you just end up building centralized islands in a theoretically decentralized ocean?
7:52 Speaker 01 Like I said, I could kind of see his point. And I know there was some back and forth when Chris Dixon.
7:57 Speaker 00 Yeah, it's my name.
7:58 Speaker 01 Yeah, he had some interesting arguments as well, but then Jack fought back with, well, OK, will you tell us who your LPs are? So, you know, it's an interesting argument from both sides. But it is a little bit hard to look at Web three in a way that like this is truly something decentralized, when I feel like there are so many people involved, so many stakeholders, so much money from so many different investors. It is hard for me to view it that way, at least personally. I don't know. What about you?
8:27 Speaker 00 Well, Jack took a swipe at Web three, essentially saying that, like, look, you know, these companies are going to be beholden to VC incentives, and they're effectively centralized, so be careful with what you kind of put your own money into. And given how much capital entries and has raised and pushed into the web three space, being criticized by Jack is not exactly a good day. Later on, the reason why this kind of came back up onto our radar was Chris Dixon. He tweeted out a picture of and said like, who owns web 2.0 or whatever? And it was a screenshot of like different stocks and who owns them. And it was like, you know, like Vanguard 6% fidelity 5%. And he was trying to say that web two companies are centralized, which we already knew. And therefore the complaint from Jack was meaningless.
9:08 Speaker 00 There's a lot of issues with this, like one, I own stuff in Vanguard and fidelity. So those numbers actually representing my own holdings and index funds and so forth. But also like, we always knew that web two companies were centralized because we know how they were founded. And do you know what investing group Mary Ann loves super voting shares and founder control? Andreessen Horowitz. Do you know who also loves to invest in web three companies? Andreessen Horowitz. And I can't square that circle where I'm sitting. I just, to me, either you're going to decentralize or you're going to centralize. But if your returns are predicated on centralization, what do you do?
9:42 Speaker 01 Yeah. How do you reconcile that? Yeah. I mean, I totally agree. So, you know, I think that this is not the first of these public little tiffs that we're going to see regarding web 2.0, web 3.0. I still remain skeptical about some things, of course. And I guess that's our jobs, right, Alex? Just to be skeptical?
10:02 Speaker 00 Yeah, this is why we're so popular at dinner parties. Um, I want to say though, I do have one very firm belief, one absolute conviction that I'm going to stick to as best I can, even though I screwed it up in the last couple of minutes of chatting. It's web 2.0 and web three.
10:17 Speaker 01 Ah, okay.
10:18 Speaker 00 Like they're just, yeah. So I don't want to take web space 2.0 and can squeeze it into web two, because that is letting later rebrands of crypto impact the historical nomenclature for a startup wave. We should allow crypto folks to kind of come up with their own name. I'm fine with web three, no skin off my back, but I'm not going to go back and rename the last generation.
10:40 Speaker 01 Right, right, right. Easy to make that mistake, though.
10:42 Speaker 00 Well, I mean, I made it in print and then I had to correct myself. Anyways, let's move on and talk about something a little bit less up in the ether, if you will, and talk about fintech. Quite a lot going on this week, Mary Ann. Do you want to start with the pedal round? This was one that I found to be fascinating.
10:56 Speaker 01 Petal raised $140 million, said to be at an $800 million valuation. And this company is one of a number that we've seen in recent years that is focused on providing credit to people who have historically either not been able to get credit or who are trying to rebuild their credit. And they are not basing it on a credit score because, let's face it, sometimes it's hard to even get a credit score, right? If you can't get credit. They're basing the underwriting on things like cash flow.
11:26 Speaker 00 Yeah.
11:27 Speaker 01 Payments, savings, things like that, which is pretty interesting to me. They surprisingly gave me some numbers around revenue, which is refreshing. The company last year tripled its user base, now has 300,000 cardholders, quadrupled its revenue from 11 million to nearly 50 million. So actually more than quadrupled. Yeah. Pretty big jump.
11:48 Speaker 00 I'm in favor of this company from a very high level because I think the traditional way we handle, quote, "credit scores" in this country, America, is ridiculous and it has a huge number of problems. For example, I think if you close certain credit lines, you can actually have your credit score go down, even though you have less access to debt, so you should actually be more solvent. And there's just some stupidity. And I've had my credit frozen since Equifax because I just, I can't be [bleeped] to deal with it. And sorry for the bleep there, but like, I just, it makes me angry in my soul. So, very glad to be here. But Marian, how does it actually help people, quote, "build credit and not debt" to kind of look at their phrase? Because to me, to build credit, you have to kind of show an ability to repay. So how does it work?
12:29 Speaker 01 That's a really important question because along the lines of the whole buy now, pay later phenomenon, you can say that you're trying to help people build credit, not debt, but you know, I don't know, like really, how exactly are they doing that? Another interesting thing about what they're doing, they've launched this B2B arm in addition to what they're already doing with consumers. It's called Prism Data. And so they're trying to help other fintechs and financial institutions use their own technology to grow their businesses. So I think that's, that's also pretty fascinating, too.
13:00 Speaker 00 I think it is. And like, if you think about the change we've seen in startup lending, you know, in the old days, you had to go to the bank and say, "Look, I have an asset. Loan me money and if I don't pay you back, you can have my thing. A house or..." I don't know.
13:12 Speaker 01 Collateral.
13:13 Speaker 00 A fleet of commercial trucks. Yeah, collateral. And then people realize that software companies are asset light, just kind of by definition. They own a lot of computers, but like, I mean, you know, what's a bunch of use MacBook Pros birth? And then they realized that the recurring revenue from those companies was essentially an asset that they could be, they could be lended, loaned, lent, lent, lent against. I actually do speak English, amazingly enough. I, it just sounds like I don't quite often. That could be lent against. And in this case, it feels a little bit the same, not looking at people through the lens of traditional credit scoring, but instead through things like you mentioned, the cash flow and so forth. It feels like the revenue-based financing world applied to individuals to a small degree. And I like that shaking up of how we approach creditworthiness and kind of who's worthy of a loan.
13:57 Speaker 01 They're claiming that people who've had no prior credit history have gone on to achieve credit scores of close to 700. So that means they can do things like qualify for mortgages and auto loans. So that seems to be like one positive proof point.
14:09 Speaker 00 Yeah. But let's not stay too close to pedal. We have two other stories in the fintech category, including, and we'll just touch on this briefly, Mary Ann, but Ribbit Capital, which is well known for its fintech investing for, for forever. Now it feels, put together an enormous seventh fund, it appears.
14:23 Speaker 01 They raised 1.15 billion new capital in their seventh fund. Last year, it was being reported that they were looking to raise about 750 million. So obviously they, they went above that. It's also significantly higher than the 420 million it raised in its sixth fund in January of 2020, two years ago. So Ribbit's been busy. I wrote a lot about them over the past year where they were leading a bunch of rounds. And interestingly, they were definitely looking outside of North America. They led rounds in Latin America, Indonesia. So, so they're definitely investing globally. I didn't get a chance to talk with them specifically about this fund, but clearly it means a lot more capital, even more than is already out there for fintech startups.
15:06 Speaker 00 I thought it wasn't possible for fintech startups to raise any more money because of just the, I mean, I'm pretty sure it was tens of billions of dollars last year alone that went into these companies. But here's another 1.15. I guess throw that log on the fire. If you are a fintech startup, congratulations on, on being in the right place, the right capital moment, because it's not a bad time to raise.
15:26 Speaker 01 Right.
15:26 Speaker 00 And speaking of startups doing that, we have our eye on a very neat Mexican fintech, whose name we're going to discuss right now. It is spelled Bankaya, B-A-N-K-A-Y-A. And we're reasonably sure that's how you pronounce it. But Mary Ann, tell us about what they said about the name and why it matters.
15:43 Speaker 01 Yeah, well, according to CEO and co-founder Mauricio Cordero, it's pronounced more Bankaya, but he breaks it down a little bit more by saying Banka-Ya means bank now. And the reasoning behind that name is they're wanting to highlight the speed and agility that the digital banking era is bringing to its customers. But what is so fascinating about this company is even though they are fintech and focused on digital banking, their method of customer acquisition is not digital. In fact, they are going into in-person, they're going to places like vaccination centers, grocery stores to, to recruit people. And their target users are the underserved, underbanked, and they're, they're wanting to show them in person what
16:28 Speaker 01 value their offering can bring. Because these are people who are very mistrustful of the traditional banks. They're not people that are going to be targeted via Facebook or Instagram ads, you know? So they're definitely like, look, we're going to show them in person how to do this and basically hold their hand through the process.
16:47 Speaker 00 The co-founder and CEO Mauricio Cordero, you have a quote in your story, just to kind of read this out for everybody. The underserved need a lot of handholding, someone in front of them explaining how to use a card, for example, or how to send money to family. These folks are usually not active online and they are not going to download an app out of Facebook or Instagram. So essentially, the two Most famous channels, three most famous channels are probably Facebook, Instagram, and then Google Search, right? But if your customers aren't there, you have to actually go out in the world. And this is not the first time we've seen a fintech really kind of leverage what we might consider non-traditional marketing to grow quickly. I mean, think about Brex. Like Brex got probably some of the best ROAS, which stands for Return on Advertising Spend, one of the worst acronyms come out of the marketing world in the last 20 years.
17:31 Speaker 00 Probably some of the best ROAS we've ever seen by plastering SF in billboards that said, like, Brex, it's good. It's cool to see a similar model work in different categories, say, but also, you know, in another market, too. I dig it.
17:41 Speaker 01 Yeah, yeah, I mean, they're doing really well so far. They just launched about a year ago. They already, I think by the end of last year, they had 450,000 customers. So that's pretty impressive. And I love that 59% of their users earn an income below the national average of $600 a month. So they're, they're reaching a different population. That makes me happy. Anytime fintechs can help boost inclusion, I'm all for it.
18:07 Speaker 00 Yeah, that's, I stole the words out of my mouth. The thing that I care most about in the world of fintech isn't just the fact that you can make a lot of money building these companies. Cool, but you can make a lot of money drilling oil. What I care about is the fact that technology has the chance to go into a lot of people's lives who are traditionally either overcharged for access to financial services because of their, their lower income or lower wealth, and bring them on in a better system more quickly. I mean, it extends opportunity to folks who have been historically left out of it. And that, to me, is the magic here. I hope it's also a good business, but like fundamentally, it's the stuff that's happening on the ground that I care a lot more about. It makes me
18:44 Speaker 01 Yeah, exactly.
18:44 Speaker 00 Dare I say it, optimistic.
18:45 Speaker 01 Yeah, me too. It makes me happy, and that's one of the reasons I love covering fintech.
18:49 Speaker 00 It's a good thing you love covering fintech because I hear there's a couple of things going on in that market. This is off topic, but I'm curious, has the pace of inbound for you in fintech changed at all in the last six months? Or has it been kind of steady? Is it going up? Like, what's it like?
19:05 Speaker 01 I mean, it's always crazy. It never ends. You know, there was a little bit of a lull during the holidays a couple of weeks ago, but then that changed very, very fast. I mean, there's just, there's too much happening. There's just too many startups out there, too many raising money. A lot of them are doing cool stuff. So, I mean, I think one of the funnest parts of my job is people assume that we're only interested in the really massive Deals and the massive fundraises and giant valuations. But actually, one of the more interesting parts of our jobs is kind of discovering the newer companies that just raised two or three million in their seed round, doing really neat, innovative stuff. So to me, that's just as interesting, if not more so than all those big deals.
19:45 Speaker 00 It's way more interesting than the big deals because on those calls, you generally speaking, get the CEO and they're not in a rush and they will explain things to you. And then by the time they raised that $500 million growth round, there's like 19 people on the call. The CEO can say nothing without getting in trouble. And it's so much more of a choreographed dance versus a kind of a jam session, if you will.
20:06 Speaker 01 Right, right.
20:07 Speaker 00 The downside is people don't read the early stage stories as much. So if you want to see more early stage coverage, click on it and then we can get away with doing more of it. Until then, I will still have to cover the mega rounds.
20:17 Speaker 01 Well, Alex, besides fintech, we've seen a ton of money going into software and SaaS companies as well, right? Over the past year. But there does seem to be a disconnect between the amount of dollars going into these companies and the public valuations.
20:31 Speaker 00 Yeah, I watch the stock market too much and I do it not because I'm an obsessive dweeb, but because I do it as a public service. That way our fine friends and family here on the Equity Pod don't have to do it. And frankly, I try to not write too much about stock market movements because they tend to kind of go back. So if things go up, they tend to go down. Things go down, they tend to go up. So you don't want to kind of become the journalist who cries market wolf. But finally, I kind of had to touch on this. And here's what's going on. The valuation of public software companies is in decline. And if you think about the pandemic era, think about 2020 and the boom we saw in companies like Zoom and Peloton and so forth. Basically, the back half of 2020 into 2021 was a period
21:12 Speaker 00 of enormous valuation appreciation of software companies on the public markets. And that led, I think, partially to part of the investment boom we saw last year. All of a sudden, these companies were worth more and so people put more money into them.
21:25 Speaker 01 Right.
21:25 Speaker 00 Fine, fair enough. Then things kind of changed. And with the end of the year sell off in software stocks, they actually were down in 2021 as an index. And then this year, they've continued to decline. We've had several days of like minus 5%. And so suddenly, this sell off feels pretty material. And to think that I can't really square up is private markets seem to be as bullish as ever. I mean, we're hearing stories of companies with a million dollars in ARR, raising at a billion dollar valuation. That's 1,000x revenue multiple. I mean, Marianne, I can't.
21:54 Speaker 01 Crazy stuff.
21:55 Speaker 00 Insanity. And yet we're seeing a more conservative public market. And to me, that disconnect is a potential jarring step for these companies later on, because if they try to keep raising it at higher prices, the closer they get to the public markets, the more they'll be valued like their eventual exit valuation. And if those are in decline, it's gonna be hard to keep raising it up prices, right? I mean, am I losing my mind? Or is this an issue?
22:18 Speaker 01 No, no, I think it's very astute observation on your part. And it makes sense because there's definitely a big disconnect there. You know, I wrote about one SaaS company in Canada that just raised, I think, $350 million. They're a unicorn valuation, supply chain management company called Ascent Compliance. And they're approaching $100 million in ARR this year.
22:41 Speaker 00 So see, that seems perfectly reasonable.
22:43 Speaker 01 Exactly.
22:44 Speaker 00 I mean, in fact, that seems cheap.
22:45 Speaker 01 It does, right? Right. That's like a counter example.
22:49 Speaker 00 Yeah, totally.
22:49 Speaker 01 But in general, I mean, I've written about a ton of SaaS startups raising a lot of money this year. And it does seem odd that the stock market numbers are down. So I don't, I don't get it. I really don't understand what's driving them down. And if it continues, is that going to have an impact on the private market? It seems like it would have to eventually.
23:11 Speaker 00 Yes, but you know, the old joke is that the market can stay irrational much longer than you can stay solvent. So this is why I'm not making a wait. Well, one, I don't trade because I'm a journalist, but I'm not trying to find some legal way to short the SaaS market. I'm just tracking this. But here's a couple of things to keep in mind. Interest rates are set to rise. They're going to go up this year. And what that does is make very safe assets like bonds and so forth, a bit more attractive because they pay a little bit more. And that means that more risky assets are a little bit less attractive because why would you take on that much more risk when the effective return differential is smaller? So what we're going to see, at least in theory, is a rotation out of the riskiest stocks and so forth into some other stuff. And that should hit the most highly valued companies the hardest. And I think that's what we're seeing with a lot of these SaaS companies, you know,
23:56 Speaker 00 in the topest tier of SaaS valuations, the multiples have come down dramatically because that's just the way the market's moving. But it seems that all these VCs, I'm said with affection to our friends out there, but like, you know, they raised huge capital funds. Like we just talked about Ribbit putting together its biggest fund and they have investment timelines. They're going to deploy the capital. So there's momentum to investing, I guess.
24:19 Speaker 01 I mean, there is, but I feel like, and we've talked about this in the past, just more generally, there's got to be a point where things calm down a little bit. I mean, a billion dollar valuation for a million dollar AR company is ludicrous and in no world does that make sense. I mean, I'm sorry, I don't care what you do.
24:37 Speaker 00 Well, maybe, I mean, if it is a once in a generation company like Slack was in terms of early stage ARR growth, there's a chance that it might do okay. But I mean, the expectation of growth there is either too high, or there's an anticipation that a next round will be done at a also similarly bonkers revenue multiple and allow the company to keep raising on an up basis. It just seems like a lot of risk, like why?
25:04 Speaker 01 Yeah, I feel like it's just honestly, a lot of these VCs are competing. They have FOMO. They want to get on all the deals just in case. And that's a big part of why we're seeing all these big rounds and crazy valuations because they don't want to miss out. Now, I'm not saying that these particular startups won't go on to justify these insane valuations, but they all can't. There's just no way.
25:28 Speaker 00 Some will.
25:29 Speaker 01 Some will.
25:30 Speaker 00 Most won't. So your startup, if you're listening to this and you're a founder, is the chosen one. Your startup is beautiful. It's properly priced. And if you're a VC listening to this, you have not put capital into a deal that doesn't make sense. But everyone else seems to be doing this. I only say that because I talk to VCs, as you do, Mary Ann, quite often, and they will tell you, if you're not speaking on the record, about some crazy stuff that they're seeing, but it's never their deals. Have you noticed that? It's always someone else's deal? That's, that's the one that doesn't make any sense?
25:57 Speaker 01 Yeah. Anyway, bottom line, I feel like there's got to be some kind of, I don't know if correction's the right word, but some kind of slowdown in all of this. And especially if the public markets do continue to decline. It would be kind of foolish to continue to pour huge dollars at these crazy valuations into the companies at this rate.
26:15 Speaker 00 Well, this has been an episode in which equity goes, huh, really? But before, before we go, we have decided to award ourselves, Mary Ann, about a minute of what we've called COVID scream, which is just essentially, we're giving ourselves a place to complain. So here's my set of complaints. For some personal reasons in my life, I really can't get COVID because it would screw up some stuff that we're doing timing wise. And that means that I am as hermetic as ever, even though I'm double vaxxed and boosted. I'm just staying home and Mary Ann, I'm even me, the introvert is about to lose his mind over how like, aside from my dogs and my spouse, I haven't hugged someone in so long. It's, I feel like I'm just going flat stir crazy.
26:59 Speaker 01 Yeah, I feel like we just went backwards. Over the summer, things were a little bit better. People are vaccinated. We can get out again. We can get together again. We can travel again. Woo hoo. And then all of a sudden, it all came to this screeching freaking halt.
27:12 Speaker 00 Yep.
27:13 Speaker 01 And now we're all, I mean, I don't know about all of us, but a lot of us are being extra cautious again. And if not more so, because this new variant is so damn contagious.
27:22 Speaker 00 So contagious.
27:23 Speaker 01 So contagious.
27:24 Speaker 00 I feel like my, my friend group went from no one had COVID to like half of them have it in like a month.
27:32 Speaker 01 We'd be remiss not to mention that this is obviously going to have an impact on the world of tech as well. I mean, we've already seen it with CES. How many people pulled out of that? How many companies pulled out? Companies aren't returning to the office like they had planned. I mean, we were starting to see some, some stability last year and now it's like back to the unknown. And that's, that's kind of disappointing.
27:52 Speaker 00 One last little positive note, and then we'll, then we'll wrap up. Mary Ann, you're a remote worker.
27:56 Speaker 01 Yeah.
27:57 Speaker 00 Me too. You and I have only worked together over the last, like, what, five years now roughly, or four years, whatever, on a, on a remote basis. And we were kind of the the aberration, it felt.
28:08 Speaker 01 Yeah.
28:08 Speaker 00 When that started. And we made it work because, you know, we like to type and so people will pay us to do it. But like, now I feel like we're the norm.
28:15 Speaker 01 Yes.
28:15 Speaker 00 And I think that this Omicron wave, if you will, this extension of not going to the office, this extension of the strange world we live in, is going to cement that for us. And so to me, like, the question of remote work, will it last post pandemic? Whatever the that means, I think has been solved by the pandemic not going away. Like, can you put this toothpaste back in the tube? I don't think so.
28:38 Speaker 01 And then it's all over the place and headlines. But so many people who used to look at people like us and say, oh, I couldn't do what you do are now like, oh, hell, no, I can't go back into the office again five days a week, you know? So now they realize it's actually pretty, pretty amazing to have the flexibility to be at home and work in your jammies and robe like I am in right now. So I think it's going to be really hard for companies to try to enforce it anyway.
29:03 Speaker 00 Yeah, yeah. And I think that the difference is people no longer seem afraid to quit. And so if you start telling people you have to do X, they're going to be like, eh, we're not, you know? And that's a change. And that's a positive change. And what a note to end on. Don't forget Equity is back to full strength next week. Chris and Natasha are going to be back with us. But in the meantime, from Mary Ann, from myself, and from Grace back there on the dials running the show for us this week. Hugs, stay safe, and we'll talk to you soon.
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