What Travis Kalanick Taught Bradley Tusk, & Why He Closed His VC Fund

Bradley Tusk joins Sourcery to discuss what he learned working closely with Travis Kalanick during Uber’s early regulatory battles, and how those experiences shaped his decision to shut down his venture fund and return to an equity-for-services model. Bradley explains why Travis was unusually fast, analytical, and willing to challenge institutions, and how that mindset influenced the way Uber approached politics and growth. He also breaks down how the current AI wave is affecting valuations, capital formation, data-center spending, and the broader regulatory environment. The conversation covers the real economics of running a VC fund, why mid-sized funds struggle, how AI is reshaping startup incentives, and what founders should understand about regulation, policy, and long-term strategy. It’s a practical, grounded discussion from someone who has worked at the intersection of tech and government for over a decade. Bradley Tusk: https://www.linkedin.com/in/btusk/ Molly O’Shea: ⁠https://x.com/MollySOShea⁠ https://x.com/MollySOShea%E2%81%A0 Sourcery: ⁠https://x.com/sourceryvc https://x.com/sourceryvc%E2%81%A0 𝐒𝐏𝐎𝐍𝐒𝐎𝐑𝐒 • Brex https://brex.com/sourcery—The modern finance platform, combining the world’s smartest corporate card with integrated expense management, banking, bill pay, & travel. https://brex.com/sourcery • Turing https://turing.com/sourcery—Turing delivers top-tier talent, data, and tools to help AI labs improve model performance—and enables enterprises to turn those models into powerful, production-ready systems. https://turing.com/sourcery • Carta https://carta.com/sourcery—Carta connects founders, investors, and limited partners through software purpose-built for private capital. Trusted by 65,000+ companies in 160+ countries, Carta’s platform of software & services lays the groundwork so you can build, invest, and scale with confidence. https://carta.com/sourcery/?utm_medium=newsletter&utm_source=sourcery&utm_campaign=20250923-amer-carta_sourcery_data_insights https://carta.com/sourcery/?utm_medium=newsletter&utm_source=sourcery&utm_campaign=20250923-amer-carta_sourcery_data_insights Follow Sourcery for the latest updates! https://www.sourcery.vc/ 𝐓𝐈𝐌𝐄𝐒𝐓𝐀𝐌𝐏𝐒 (00:00) Intro (01:25) How AI infrastructure spending is being driven by market narratives (03:10) DeepSeek, inference models, and compute efficiency (03:55) Where the $2T in AI data-center and energy capital is flowing (07:10) Nuclear energy and the broader implications of AI’s power demand (16:30) Zero-sum vs abundance thinking in tech and politics (17:35) How people find meaning, purpose, and balance in high-pressure work (27:00) Why Bradley invests heavily in his team and removes non-essential tasks (32:00) How Bradley’s experience with Travis Kalanick shaped his view of founders (32:35) “Travis’s Law” and turning users into political advocates (37:05) Why Bradley decided to stop raising traditional VC funds (44:30) The economics of mid-sized funds and why they’re so difficult to run (49:20) How AI valuations differ from non-AI valuations (54:40) What people misunderstand about Silicon Valley and DC (59:40) AI, unemployment risk, and why Bradley believes UBI will be necessary (01:05:50) The biggest lessons Bradley learned from Travis Kalanick

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

• 0:00Speaker 00

  The two smartest people that I've ever worked with closely are Mike Bloomberg and Travis Kalanick. Bar none. I'm sitting in a Walmart meeting and a friend of mine called and said, hey, there's a guy with a small transportation startup. He's having some regulatory problems. Would you mind talking to him? I become Uber's first political advisor that day. I get really lucky when Travis calls back and says, listen, I can't afford your fee. Would you take equity? And thank God I said yes.

• 0:23Molly O'Shea?

  What is the biggest lesson you learned from working with Travis Kalanick?

• 0:28Speaker 00

  I am an unapologetic Travis enthusiast. Did he make mistakes? Absolutely. Not Travis fans will hear this and be angry about it. I don't care.

• 0:46Molly O'Shea?

  Riley Tusk, welcome to Sorcery.

• 0:48Speaker 00

  Hey Molly, thanks for having me.

• 0:49Molly O'Shea?

  We have so much to talk about today.

• 0:51Speaker 00

  I know. So just to tell the audience, we were chatting and then Molly looks at the producer. Tell me your name again.

• 0:58Molly O'Shea?

  Lance.

• 0:59Speaker 00

  Lance, right. And said, we got that right. And he's like, no, you didn't tell me to press record. So we're gonna have to do it all over again.

• 1:05Molly O'Shea?

  We're gonna have to do it all over again. Let's talk about that. Let's talk about the Substack you're putting out right now.

• 1:09Speaker 00

  Yeah. So what we were just talking about is I've got a Substack about to come out that says that I at least have a suspicion that all of this massive AI infrastructure investment, so it's 1.5 trillion in 2025, projected to be 2 trillion in 2026, is really about the short-term share price and valuation of the big AI companies, the generative companies, where the company supplies CPUs that's disguised as long-term thinking. So investors like two things, and you know this better than I do at this point, but like, A would be the fundamentals of a company itself, but B, oftentimes even more so, is the narrative, right? Tesla should not be worth a fraction of what it's worth today if not for

• 1:54Speaker 00

  the narrative and the belief by investors that Elon, and he is a genius, but like that Elon will just figure things out that no one can predict, including Elon right now, and therefore the value is worth it, right? And then occasionally someone short stock, they look good for a little while, it goes the other way. But that's all narrative, right? I mean, Toyota should be an infinitely more valuable company than Tesla. And yet, yeah, I haven't checked him, Mark Cap, in a while, but last I checked, it was like less than a quarter. So. Oftentimes, if you can sell investors on, hey, we're doing something really brilliant for the long-term future, people are like, great, here's my money. And they double down or they triple down. And in reality, it may be that the way that we think AI will happen in the next 10, 20

• 2:39Speaker 00

  years is the way that it is today, right? So right now, what we assume is you need massive amounts of compute. So the chips from Nvidia and everyone else are incredibly valuable. You need massive amounts of energy to power that compute. So all the ancillary businesses are valuable. And therefore, you need to produce as much capacity as possible for the future. That might be true, but it might not be true, right? So for example, we know that when Deep Sea came out with their model, it was an inference model, right? That basically said, instead of having to sort of generate everything from scratch every time, we'll say that if A leads to B and B leads to C, we'll assume C is correct and just give you D. Now, is it as accurate? No, but is it possibly 90% as accurate? Yes.

• 3:24Speaker 00

  Now, it's Chinese companies, so for all we know, it's all bullshit, right? It might not be true at all. We don't know. But let's just take the off chance that they're not lying, right? And it's true. At least for the way that I use AI, 90% is more than good enough, right? I'm basically using it in lieu of Google these days. And so ultimately, if you said to me, this thing costs $10 and this thing costs a dollar, and the thing that costs a dollar is 90% as good, I'm taking the thing that costs a dollar. If that's true, you probably didn't need the $2 trillion in infrastructure spending, which means these companies are going to be crippled by debt, right? It's fine to take out the debt and everyone to be excited while you're doing so and boost the share price.

• 4:06Speaker 00

  And by the way, if you are the executives of any of these companies, your net worth is the current share price and whatever you can sell, right? Not what it's going to be in 20 years. If anyone knows to get out, it's probably you. So I do worry a little bit that a lot of the investment that's happening is really about driving the narrative and therefore the valuation, if it's private or the share price, if it's public today, as opposed to what the economy will actually need in a decade or two from now.

• 4:32Molly O'Shea?

  Can you break down where that capital is going within the $2 trillion?

• 4:36Speaker 00

  Yeah, I mean, a lot of it are things like data centers. So a data center ultimately, I don't invest in them because there's no real regulatory issue. We'll get into it that I mean, a little bit of permitting and zoning, but not that much. But I see deals, right? Occasionally I'll take a look at them. Some of it is physical capacity, servers, land. You know, you can't really put a giant data center in the middle of Manhattan because it would cost 10 times as much, right? One is where are you going to put it, right? So where Lance lives in New Jersey is a better location for a data center than where I live in Soho, right? That's one. Two would be actual chips from Nvidia or whoever the maker might be, Intel, whoever it is,

• 5:18Speaker 00

  because you need very, very advanced GPUs, processing units in order to be able to generate that level of AGI. And therefore, those are really, really expensive. And because the demand is so high, basic economics, if the, if there's massive demand for GPUs, guess what costs more money? GPUs. And especially if there are trade restrictions around it, that further shapes the market, right? So that's, and then energy, right? So it's interesting, I was talking, I won't, I won't name them, but I was talking to a guy, right, running for governor of Vermont. And, and he was, you know, basically when you are a political donor like me, they pretend to ask you for sort of strategy and policy ideas before they ask you for the money.

• 5:59Molly O'Shea?

  Yeah.

• 6:00Speaker 00

  And so we were doing that, you know, give my back or I have a little bit to add on the campaign side, I guess. But, um, and I was saying to him, because Vermont is a state that has great hydroelectric power, if I were you, I would really build a campaign, campaign platform around building data centers in Vermont, generate economic development, generate tax revenue, generate jobs. And the play is, hey, we can provide its energy for incredibly low cost and it's clean energy, which voters in Vermont care about, right? Some states that wouldn't matter, but it does there. And I said, I don't even know if it's absolutely right or not, but it's no more wrong than the narrative right now driving the market. And if investors are buying it with their money, my guess is it'll more than stand

• 6:43Speaker 00

  up to some political reporter, take a quick look at it. We'll see if he does it or not, we'll see if he runs or not. But, um, but nonetheless, you know, energy is obviously a really big component. And in fact, if there's one. Larger societal externality that's positive around this, even if it turns out the money is a little bit of a waste and stop me when this gets too wonky, but is we really do need to return to nuclear energy in this country. And if microgrid nuclear becomes a thing because of the need for energy to power the compute, that's a worthwhile outcome. It's interesting.

• 7:24Speaker 00

  You know, I am, I'm a lot older than you, and yet I'm still young enough that Three Mile Island happened before my level of consciousness, right? And what I have noticed, try this out going forward as an experiment. Okay. If you talk to anyone who's probably, so I'm 52, right? So anyone who's my age or younger, yeah, there are, we should have nuclear power. Absolutely. It is plentiful. It's expensive to generate, but then once you do, it's a lot cheaper and it's totally environmentally clean. It makes total sense. Yes, there's some risk, but the trade off is we're destroying the climate right now, which has all kinds of risk, right? Massive hurricanes, earthquakes, tornadoes. So like, there's risk either way. Anyone for whom they were kind of aware enough, maybe, I don't

• 8:09Speaker 00

  know, 10 or 12 and older when Three Mile Island happened, totally different perspective for them. They're like, no, no, no, that's crazy, way too risky. We got it. We can't do nuclear. And so I think that as that group ages out of power, there will be a lot more acceptance of nuclear again, because I'm pretty old at this point, and I'm still on the young side for this particular issue. So one good thing that might come out of all of this, even if it turns out that a lot of the spend ends up being unnecessary, and therefore, by the way, a loss for the shareholders of those companies eventually, right, is maybe we will get a much better clean energy system out of it. And for whatever reason, Trump, who is wildly opposed to wind and solar for

• 8:54Speaker 00

  reasons that still don't make that much sense to me, doesn't seem to have a problem with nuclear.

• 8:59Molly O'Shea?

  There's like many different points in there that we can unpack. It's really interesting seeing how many data center deals are coming through.

• 9:05Speaker 00

  Endless.

• 9:06Molly O'Shea?

  I see endless because it's a new gold rush. AI is a gold rush. It's causing all these different picks and shovels. Infrastructure is definitely a part of that. We have like training, we have nuclear, we've got energy, we've got the power bottlenecks. And then we also have the data center bottlenecks. And then we also don't know, like, what is actually going to be the moonshot unlock here? Like, we don't, because there are lots of things going on under the surface that we're just, we're betting on incrementalism for most of these valuations. We're betting on incrementalism with these companies and how they're going to compound. We're not taking into effect, like, what, what's going to be the moonshot unlock?

• 9:42Speaker 00

  What if DeepSeek was the moonshot?

• 9:44Molly O'Shea?

  Yeah.

• 9:44Speaker 00

  Right? What if the inference model was the thing that's like, oh, we only need 10% of the energy in the compute? And it turns out that this other 90% is basically wasteful. I mean, I don't know. And in a weird way for the American economy, I guess I hope that DeepSeek is wrong. But putting that aside, yeah, we, we don't know. And by the way, the most ironic thing is the underlying thing we're talking about here is AI. And if anything can figure out the moonshot, it's AI. Right? So that's the most ironic part of all of it. Like, or for example, you know, if you start taking this as like third and fourth kind of gradient thinking, like, okay, so maybe most of the AI infrastructure spend turns out to be wasteful.

• 10:26Speaker 00

  But maybe the upside is that nuclear happens as a result.

• 10:30Molly O'Shea?

  Yeah.

• 10:30Speaker 00

  And maybe because of that,

• 10:35Speaker 00

  we have so much AI processing power that then the AI exists to figure out decarbonization overall. Right? Like, it seems to me, you know, I'll recycle something today, I'm sure. But as someone who worked in New York City government for a long time, it all goes in the same landfill.

• 10:49Molly O'Shea?

  It does, it does. I don't know why people do this.

• 10:51Speaker 00

  I do, just because you, because it's like literally two bins, I put it in the right one.

• 10:54Molly O'Shea?

  My sister gets fined at her apartment. I'm like, I don't care and I'm not washing it because it's all going to the same place.

• 10:58Speaker 00

  Correct. But so to me, that's not gonna solve climate change. Yeah. If we solve climate change, if it's because we eventually figure out how to effectively remove carbon from the atmosphere and think like that, whether it's sucking it out or trees that can absorb more CO2 or whatever it might be. And that probably is a challenge for AI because, you know, there are carbon capture plants and startups right now. You've probably even talked to some of them and they're really interesting, but it's like very nascent, right? You know, it's, it's still a pretty big risk if you were an investor because it's an incredible amount of capex for something that still may or may not work. But if we do solve climate change, I, I have this general view and now I'm probably getting way off.

• 11:43Speaker 00

  You have to edit, Lance, crap that out of this out because it's going way off course. But I talk to humanity sometimes as we are in a race to save ourselves before we destroy ourselves because we are doing both things simultaneously all the time. So think about climate change.

• 12:01Speaker 00

  When they invented the car, when they invented hairspray, whatever it is, right? Things that ended up in one way or another being bad for the environment. No one said, my goal is to destroy the ozone layer. What I really want to do is make the earth uninhabitable in a hundred years. That's why I'm inventing this product. It was, I have something that has value to consumers, right? That has value to society. The car fundamentally transformed the economy, right? You know, hairspray aerosol as a product is before my time, but obviously became at a time, a more convenient, cost-effective way for people to be able to, to do their hair. Fine, right? There's nothing really wrong with that. I mean, if you think about every startup founder that I talked to about investing

• 12:41Speaker 00

  or you talked to, you know, in an interview, it's fundamentally, they believe they have a product or service that has some utility because otherwise they wouldn't be doing it, right?

• 12:54Speaker 00

  So in all these cases, and then it turns out that in these good things that happen like economic transformation, because now we have a car instead of a horse and buggy, there's also fossil fuels that are being burned and polluted, which then lead to other things. So then we have new technology, ultimately, you know, hopefully through AI to like, okay, now we're going to find a way to take the fuel and take the, the toxins that came from the fuel out of the atmosphere, right? So, or.

• 13:23Speaker 00

  Vaccines, right? So like putting aside the whole crazy anti-vaxxer thing right now, like vaccines were a scientific development to figure out how to take diseases that occurred typically in nature and protect people from them, right? A lot of that same learning leads to advancement of bioweapons, right? Which could be incredibly dangerous and wipe us all out. And then at the same time, they're working on more vaccines to be able to contradict the potential risk of bioweapons, right? Or even nuclear, you know, when Truman dropped the bombs on Nagasaki and Hiroshima, you can debate today whether or not it was a good idea, but like there was a clear

• 14:08Speaker 00

  purpose to it, right? Which was we were at war, we had been at war at that point for five or six years, 38th or now, wherever we got in.

• 14:17Speaker 00

  Anyway, so, and it needed a hand, right? And that was the way to end the war. Like, I don't know that if I were president, I would have reached any different conclusion than Truman did, right? However, it's also the thing that is the easiest way for us to sort of destroy humanity.

• 14:35Speaker 00

  And arguably, the greatest achievement of human history is that no one in the last 80 years has used nuclear weapons, even though it's proliferated now to, I think, nine countries plus whatever Iran does or doesn't have. So, and then the question becomes, in that case, there might not be a technology that can counteract nuclear, but can we advance enough as human beings to remove them as a threat, right? So it's just, it's always like by definition, because human beings are so unevolved, right? We're only like, at most, we've been a species in this form for a couple of hundred thousand years, and most of the stuff that I read is more like 60,000 years. I mean, the universe is 14.8 billion years old.

• 15:20Speaker 00

  The earth is something like four and a half billion years old. So, you know, like the average human lifetime, even with 100 years, is like point zero, and you have to have like 10 zeros before you even get to a one of the entirety of, of the universe. So like, we're so new and so unevolved that...

• 15:40Speaker 00

  We're like this fascinating, like in some ways, like you could almost see humanity is like the ultimate Shakespearean play that the gods created to be like, let's entertain ourselves. Let's create these beings that are in some ways amazing and some ways horrible, in some ways brilliant, in some ways moronic, right? And let's just throw it all fucking together and see what happens. Yeah. It's reality TV, right? But like in some ways, you know, imagine it from a macro standpoint, you know? And we're so perfectly imperfect that we're just in this constant race to sort of both advance ourselves and save ourselves without destroying ourselves. And then that gets to, and this is ending up being a far more philosophical podcast than you meant to have. I love it.

• 16:25Speaker 00

  Like arguably, I would say the central question of our time is zero sum versus abundance. Right? So there are really two fundamental ways to view the world. One would be the everyone's for themselves, it's everyone versus everyone. And you just have to get as much as you can in the time that you have without the cost to you being so severe that it outweighs the benefit, right? Which, you know, in some cases means people like literally just figure out ways to not get indicted for things or whatever it is. And whoever has the most toys wins, right? And I think Trump in many ways is the ultimate manifestation of a zero sum mentality, right? You know, he views success in life as who has the most money, who has the most power,

• 17:08Speaker 00

  who has the most influence, who has the most beautiful women, who has the most luxurious airplane, the most gold plating, literally whatever it is. He doesn't ever seem particularly happy to me, even though he accumulates more of that at this point combined maybe than anyone, right? And the other way would be sort of an abundance mentality, which is we're happier when we're doing things that give us some sense of purpose and meaning. So I've studied like a ton of happiness science and behavioral economics. Like I studied behavioral economics when I was in school. And then in my 40s, I started studying happiness science in part because my own life wasn't that happy at the time. And as I was realizing I needed to get a divorce, at the same time, I was sort of trying to really understand

• 17:51Speaker 00

  what is it that makes human beings happy? And.

• 17:56Speaker 00

  There's really just two things, right? It's relationships where there are people in your life who love and support you unconditionally, and you love and support them unconditionally. Doesn't mean you can have disagreements with them or disapprove of something, but fundamentally, that's there. And the things that give you meaning and purpose, right? So for example, you've been to my bookstore. I'm in a bookstore on the Lower East Side of Manhattan. It is a bookstore. It is a podcast studio that anyone in New York can use, or anyone, whoever can use for free. An event space and a cafe. It loses so much money. It is the worst business in all of New York. However, the way I look at it is, I look at how much money do I lose on the bookstore? And it's funny, the other day I came up at lunch with some friends and they like literally gasped.

• 18:42Molly O'Shea?

  What is it?

• 18:43Speaker 00

  I mean, I lose around a million bucks a year.

• 18:45Molly O'Shea?

  Oh, my God.

• 18:46Speaker 00

  Yeah.

• 18:48Speaker 00

  But, so here's what I did. I don't fly private. Yesterday, I had a disaster trip home from San Francisco and probably wish that I had. But like, most of the time, it's fine, right? Ninety-eight percent of the time, it's fine. And I looked at, okay, let's say that over the course of a year, I travel a lot, right? Domestically, if I just flew private instead of flying commercial, all what I spent. It ended up being about the same amount of money that I lose on the bookstore. So like, okay, this is a great A B test. Forget about whatever the bookstore does for anybody else. I'll say, you know, sure, it creates some jobs, people who are podcasters. Take, put all that aside, right? Just fundamentally, for me, for Bradley, which of these two things will make me happier? Because it's the ultimate sort of zero sum versus abundance sort of A B test, right?

• 19:34Speaker 00

  So if I spent that money on flying private, what do I get? A little more convenience, can avoid the TSA line, which usually would clear and pre-checks like a minute, right? But sometimes maybe it's 10.

• 19:47Speaker 00

  And I would find ways to brag to people sort of like, you know, in a nuanced way that I flew private, right? And then they probably think I'm a douchebag anyway, right? But nonetheless, that's sort of the upside of flying private. And upside of the bookstore, I record my podcast there twice a week. I should plug it. It's called Firewall. If you like this, you'll like that. If you don't like this, you definitely won't like that. We have events there all the time. I take meetings there on Fridays usually. But most of all, you know what I like about it? People pat me on the head constantly and tell me how wonderful I am because I own a money losing indie bookstore in New York City. And people like bookstores and I get a lot of validation and affirmation. So the meaning and purpose I got from the bookstore, not because it does anything for anyone else,

• 20:32Speaker 00

  but simply because if you just said, which of these two things will make me feel better? People admiring me and praising me because I flew private, or people admiring me and praising me because I own a money losing bookstore? It is like the ROI is significantly greater on the bookstore, right? Just from a pure selfish standpoint. So I would argue that the for happiness generation, the two things that are proven to be the most effective are cultivating and really investing in relationships with people who you really care about and really care about you. So like, for example, I keep a running list of the 50 people at any given moment who I kind of mattered to me the most. And it evolves a little bit over time. And then usually like, once a week on the weekend, I'll just run through it. I'll be like, okay,

• 21:16Speaker 00

  I haven't talked to so and so in a week or two weeks or three weeks, whatever it is. And I'll text or I'll call. And you know what no one has ever done? Texted back saying, why are you bothering me? It's always like, hey, great to hear from you, right? And then you have a pleasant exchange that might lead to some sort of plan, or it might just be a nice check in or whatever it is. But either way. And then I try to really look at almost and look, I am lucky to be a point in life where I have enough money to do what I want to do. But I also choose not to do certain, I don't have a big house in the Hamptons, right? I don't have a plane or boat or anything like that, because I invested in stuff that I care about instead. And I truly believe that I have figured out kind of the formula in many ways to happiness, because I effectively just prioritize relationships and purpose

• 22:00Speaker 00

  ahead of everything else. Still make money. I still need to make money to do the things that I care about and to further them. But and I also just. Just like making money, I like being a business. But nonetheless, I truly believe that if you can adopt that mentality, your odds of long-term sustained happiness are significantly greater. And I think whether or not humanity realizes that, especially in the first world, where you don't have to worry about, you know, some people do, but the vast majority of Americans don't have to worry about, you know, being homeless or don't have to worry about not having any access to healthcare of any kind, right? This Lisa's an emergency room or something. Assuming that you have the very basics covered. At that point, it becomes really a question of maximizing happiness, becomes a math question.

• 22:46Speaker 00

  And that ultimately gets to zero sum versus abundance. And I really think that it is both on an individual level, the most important question that we can answer for ourselves and on a societal level. If we want to sort of bring ourselves to extinction in the next 50 or 100 years, zero sum is a great way to do that. If we want to see our children's children's children's children live and thrive, then it's got to be an abundance approach. And like ultimately to me, like that's what life comes down to.

• 23:13Molly O'Shea?

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• 25:36Molly O'Shea?

  Wow, yeah, it's really interesting. I'm thinking about a couple of the past conversations I've had and how this relates to job and purpose and meaning. And there are some people I interviewed, Naveen, Naveen Shada from Mayfield. And he says, oh, well, with AI, we'll be able to do as much as we want. We'll be able to work from Hawaii. We can have five jobs because it'll all be running and we'll have just more time to ourselves. Same with Jonathan from Turing. He says the same thing, like, why can't I run like 10 companies like Elon? Like, I could do multiple things if I wanted to, or maybe not. But it does present an opportunity because I, I mean, I've seen in my day-to-day, like, I now have like so many projects all the time because I can get so much more done. But for some people, like, there are other constraints.

• 26:21Speaker 00

  How much of that, though? Let me just challenge it for a second.

• 26:23Molly O'Shea?

  Okay.

• 26:23Speaker 00

  Right, which is, yes, but. You choosing to do that, is it ultimately your ability to do it successfully, which you do? Is it the product of, oh, here's this technology that before just wasn't available to me, therefore had been impossible, or you make choices, right? And the choices you make, which by the way, include all kinds of sacrifices, right? You know, we were talking before the podcast about like, you live in LA, I hope, just hope your security or anything like that, and like, it's a pain in the ass tree because you're working in New York or San Francisco, right? But like, at the end of the day, we make choices and the choices facilitate what you can then do, right? Like, for example, I spent a ton of money on my team because everything that I don't

• 27:07Speaker 00

  want to do and don't have to do, I don't do.

• 27:09Molly O'Shea?

  Yeah.

• 27:10Speaker 00

  And that frees me up to do all the things that I do want to do, and that's why I have like, multiple companies and a foundation and all kinds of other stuff, because in part, I pay other people to do a lot of things for me. What does that mean? I have less money at the end of the day, right? But I made that choice. So do you buy the notion that it's technology, or is it really fundamentally just about your choices?

• 27:31Molly O'Shea?

  No, I think it's absolutely choices. Like, I choose to work really hard because I like working really hard, and I also have this like, moment in time where there's so much momentum that I am taking opportunity.

• 27:41Speaker 00

  Right.

• 27:42Molly O'Shea?

  I do know that I am making so many sacrifices, I'm making sacrifices to friends, I'm constantly letting them down because I have to work, I'm making sacrifices to my family, I'm not going to certain events, like, they're very close, they all live in Connecticut, I don't do that much, I have sacrifices for my own personal life, like, different decisions, not to go on dates, to just cancel things, because I just want to work.

• 28:02Speaker 00

  Sure.

• 28:02Molly O'Shea?

  And like, I'm constantly traveling between cities, I have a selfish reason of like, having my apartment in LA, because between all this chaos, I like to go back to there and like, have a weekend.

• 28:12Speaker 00

  Yeah.

• 28:12Molly O'Shea?

  And then I like to go run around and like, do all my interviews.

• 28:15Speaker 00

  Yeah.

• 28:15Molly O'Shea?

  But I know that's a choice, like, I know for a fact, there are some people that do have access to this technology and they don't care, like, they just, they just use it for the day to day, and then they, you know, have their leisurely activities, but unfortunately, I'm competitive and I want to succeed, so I'm like, how can I maximize my opportunities right now in this window?

• 28:34Speaker 00

  Yeah. You at least, I will say, how old are you? You have vastly more self-awareness than I had, and so, I the same, in some ways, still do have the same mentality that you have right now, but I think where you're probably way advanced than me, and that probably gender is part of that too, is

• 28:55Speaker 00

  Now that I think what you thought, but I thought the people who didn't make the choice I was making, there was something wrong with them. Like they were leading a lesser life if they chose to live a more subdued, you know, work eight hours a day, it's just part of your life and spend a lot more time doing leisure activities. Then I've come to realize that like you're you for reasons, good and bad. I'm sure some of it is, you know, genetic and some of it's trauma or whatever else that has shaped you, just like same thing for me. And therefore that's how we need to act. But ultimately if someone else can have fulfillment and contentment with half of the effort, because that's better for them, like that's fine. But it took me much later in life to have the wisdom to understand that.

• 29:37Speaker 00

  Whereas everything you just said was basically almost an acknowledgement of like, hey, this is what I choose. It's right for me, but there's no judgment on someone who chooses something else.

• 29:49Molly O'Shea?

  Yeah.

• 29:50Speaker 00

  So you should feel pretty good because it definitely took me like several decades to get to where you are.

• 29:55Molly O'Shea?

  Sometimes I feel good. Sometimes I need to go to the spa and get a massage.

• 29:59Speaker 00

  Sure.

• 30:00Molly O'Shea?

  This will be a shift into investing.

• 30:02Speaker 00

  Yeah.

• 30:02Molly O'Shea?

  Because I think this does package itself well into how you chose to lead Tusk Ventures and how you're now going into services for equity.

• 30:11Speaker 00

  Yep.

• 30:12Molly O'Shea?

  So can you talk about that shift?

• 30:13Speaker 00

  Yeah, sure. It's up. So I, you know, I don't, unlike most people you talk to, like I didn't start off in business or technology, right? I worked in politics and government for years and years and years. You know, I made government salaries or campaign salaries for years and years. And then I kind of found the tech totally by accident. Right? So my last like real job was in 2009, I was Mike Bloomberg's campaign manager and ran for mayor of New York City. We won and I decided that I thought there was sort of in the kind of political consulting business, a hole in the model where typically people did one of two things. Either they ran comprehensive campaigns for companies or institutions or candidates,

• 30:58Speaker 00

  whoever it was, but in one place, or they would work nationally, but they would offer one skill set. They were. Pollster, they made ads, whatever it was. And my view was that the world had changed enough that the way to get things done in government and politics was no longer like a guy knows a guy and you know the right guy. It's really multifaceted, right? So yes, it's the inside game of lobbying, but it is also earned media and paid media and social media and grassroots and all these other tools. And I felt like the amalgamation experiences I had had, both in terms of the things I've done and the different places that I'd lived and worked, said to me, I think someone could do everything everywhere.

• 31:38Speaker 00

  And that was sort of the genesis of my first company test strategies, which I don't run anymore, but still exists as a full consulting firm.

• 31:46Speaker 00

  And so about a year into that, I'm sitting in a Walmart meeting and a friend of mine called and said, hey, there's a guy with a small transportation startup. He's having some regulatory problems. Would you mind talking to him? I become Uber's first political advisor that day. I get really lucky when Travis calls back and says, listen, I can't afford your fee. Would you take equity? And thank God I said yes. And I became very lucrative and a lot for a lot of other stuff that I do today. But the experience that I had was effectively running campaigns all over the U.S. to legalize ride sharing. And what we figured out that was really both transformative for Uber, but really informed a lot of the investing I've done ever since is

• 32:28Speaker 00

  in certain cases, you can turn your customers into political advocates. And you can use the very technology that they you gave them on for business politically. So for Uber, the taxi industry was a very, very big. It's hard for like someone your age now to sort of imagine this, but like was this incredibly powerful industry, right? And we were a tiny, tiny, you know, seed, series A startup, right? And Travis, you know, is a genius and has transformed society. But he didn't have this great track record. He had a couple of failed startups before that. It wasn't like someone had like, was it Elon Musk doing his next company, right? And but.

• 33:13Speaker 00

  The experience of Taxi was so bad for so many people and Travis figured out a way to do it that was so fundamentally better that he had this belief and he was right that ultimately people would fight to keep that opportunity and as Taxi would then use their lobbyists and their political muscle to try to put us out of business, which they tried to do in every single market in America. We saved ourselves by going to our customers and saying, "Look, if you like this Uber thing, we need you to let people know." And we built functionality directly into the app that let people tell their city councilman, their state senator, whoever the relevant person was, "Leave this thing alone. I like it." And so many people did. That ultimately became more powerful than the donations and lobbyists Taxi had,

• 33:58Speaker 00

  and we won. And so as that's all emerging, I'm like, "Okay, this equity thing." Like, I remember literally the first time, like, I took the equity mainly just because like, I liked Travis and thought it was interesting and I kind of wanted to work on it. That was it. I literally didn't even know what the phrase equity meant from that, from a business context, when I said yes. And then I remember one day, it was like, it was nighttime, we were on the phone about some ish regulatory issue somewhere. And he says to me, "How many shares do you have?" And I'm like, "I didn't even know." And then like, he helped me figure out how many I had. And he said, "Oh, we just closed around. Your shares are worth $12 million." I was fucking, you know, sometimes you remember like, literally exactly where you were and what you, like, I remember where I was in my apartment, what I was looking at, because

• 34:42Speaker 00

  I was floored. Because I'm a first generation American. I didn't grow up with that much money. I worked in government for years. I mean, after law school, I turned down all these jobs at law firms, offering 150 grand or whatever it was at the time, to make $28,000 at the Parks Department of New York City, right? So like, to me, money wasn't like a thing. And it's not that I didn't want it, it just didn't, I didn't really understand like, how much money you needed. It never had literally occurred to me that I would ever have $12 million. Like, it just had never once crossed my mind. I remember me so fucking blown away by that. I was like, "Oh, my God. So this equity for services thing is pretty good." So I did it again with Clear to get to the airports. And it

• 35:25Speaker 00

  worked out really well, not anywhere near Uber well, but, but it was, was really good.

• 35:31Speaker 00

  And then I made, I wouldn't call it a mistake because we made a lot of money and it was a good learning experience, but I made the sort of view of like, oh, well, the really rich people have funds, so I should have a fund. And so I went out and raised my first venture fund, started in, raised in 2015, we started making our first investments in late 2016, FanDuel was our first investment. And my thesis was, look, there's no fund out there that is regulatory first. And so many startups have regulatory issues and Uber in some ways was sort of the perfect example of that. And I had gotten credit for being the person that did it, that I can find more of these and I can invest in them and they'll want me to invest because they're

• 36:13Speaker 00

  going to want my help from a political standpoint. And we'll make a lot of money. And so we did. So we did three funds. Fund one was so hard to do, but we raised it finally, it was $35 million, but it's sitting at like about a five X right now. We'll see where, we're in circles. We'll see where Circle exists in a few weeks when the lockup's done, but really well. And Fund Two was 70 million, Fund Three was 140, and the funds have done incredibly well. But as we were about to start closing the first round, circling the subdocs for Fund Four, it kind of hit me that like, it was the wrong business model. Because what I realized was,

• 36:55Speaker 00

  founders who took our investment did so not because they needed my money, but because they wanted our help politically. And ultimately, I started talking to them, like, let's say I just asked you what I did with Travis, just, hey, just give me equity. I don't, but I'm not going to give you a check. Like, yeah, we don't care. Fine. Like, we didn't need your money. Like, any really great startup to get into typically doesn't need your money in the first place, right? Anyone who desperately needs your money, there might be a reason why. Occasionally, there's a diamond in the rough that no one believed in. But generally speaking, that's not the case.

• 37:27Speaker 00

  And I was like, why am I A giving 80% of my profits back to my LPs, right? I don't actually need them. B, I have a great partner named Jordan Noff, who's a brilliant, brilliant investor. But he's a traditional venture capitalist and we split the equity and the carry and everything else, which was reasonable, but I didn't really need all that stuff. But I didn't need to worry about portfolio construction. I didn't need to worry about fund administration. I didn't need to worry about compliance. I need to deal with taking board seats. And so I pulled the plug. I said, we're not going to raise fund four and I'm going to do a hybrid of the first two models. So I announced this back in February, I think of 25 and it's equity for services. So what I did with Uber and with Clear, but now also Pro Rata.

• 38:12Speaker 00

  And then as our investor rights come up, I'll either invest off my own balance sheet. So there are companies since that I've said, you know what? I love this company and it's, you know, an amount of money that I can afford to deploy out of my own capital and I'll do so, or I have all these investors that made a lot of money with us. And I'll just go to them and say, hey, here's a company that I really like. The round is bigger than I can take myself. Do you want to partner and do SPVs? And for me, from a financial kind of time standpoint, it's better because one, I own 100% of the risk, but I also own 100% of the upside. Now I do every year now, because I have a team of people who work at the company to both source deals

• 38:54Speaker 00

  and then more importantly, help all of our portfolio companies solve their regulatory problems. I have to pay those people every two weeks, whether it's an liquidity event or not, right? So it costs me a couple of million dollars a year on the front end. But I then also own, I mean, I gave the employees about 20, 25% of it. I own all of the rest and that's a lot greater ultimately than the carry that I had at my fund in terms of upside and leverage. And A, B, I don't have to do a fundraising anymore. It's a pain in the ass, right? It's a huge pain in the ass. And the reality is I'm not good at it. And a lot of the things that have allowed me to succeed professionally are the same things

• 39:35Speaker 00

  that were hindrances for me for fundraising in that like, I'm a misfit, right? Like I don't fit in well. I wasn't popular when I was a kid. I, you know, like, I'm not comfortable like in big social settings. Like, I like my friends and I like to work, but like, I don't go to like, you probably have to go to all of these like networking things. Like, I don't go to fucking any of that, right? I mean, even like conferences, I show up, someone meets me, they put me in the green room, I have a cup of coffee, they mic me, I go speak, I take a few pictures with people, and then I'm out the side door, right? Like, I don't want to socialize. Like, even like, the other day, I was in San Francisco and did an event for Tech Week. I was very happy to do

• 40:19Speaker 00

  the event. The thirty people that came up to me afterwards, and I had to like hear every one of their pitches and everything. I was like, oh my god. Like, there are people who feed off of that. That's not me, right? So, as a result, I was not a good institutional fundraiser, because I don't play golf, and I don't like hang out in a country club or any of that kind of stuff. And like, yeah, I go to lots of Mets and Knicks games, but I don't take clients. I take my friends, right? Or my kids. And so, and also, what it turns out that institutional investors want to hear, they think they want a different, they say they want, they think they want a differentiated strategy. They don't. What they want is, this is exactly what you already know how to come

• 41:02Speaker 00

  through with, with this tiny twist that could deliver some alpha, but at the same time, isn't too risky, right? And like, it took me years to even understand that. And then even when I knew how to say the right things, like, it wasn't genuine, right? And so, I think people can feel that. So, I don't have to fundraise anymore. I don't have to manage LP relationships anymore. I hate sitting on boards, because I don't add any value. I'm only good at one thing, solving your regulatory problems, right? Or creating regulatory opportunity arbitrage. And,

• 41:35Speaker 00

  I'm gonna do that anyway because I'm an investor in the company. Me sitting on the board and hearing about the CAC or hearing about the burn or the next raise like, I don't fucking care and I don't add any value to that conversation, right? So, but when we were investors, we're taking lead positions, we took board seats, right? So I had to sit on boards, like I don't have a couple that I'm left on, but other than that, I don't do that anymore. Portfolio construction, all that shit, like I don't have any of that anymore. And I own all the economic upsides, you put all that together. So for me, this is a much better model. And I would say for the people listening to this, look, most people in order to gain access to highly disruptive, highly promising startups have to write a check to get equity because that's how the model works.

• 42:19Speaker 00

  But if you have a particular skill set, so there are lawyers that can do this, there are marketing people that could do this. You could do this with media, right? Where you're like, hey, I have this thing you really need. I believe in you and I'm gonna bet on you, right? I'm not asking you for cash, I'm just betting on the upside that you're gonna succeed, give me equity. You can make that sale and if you can make that sale, it is a much better model. So that's your question?

• 42:45Molly O'Shea?

  That does.

• 42:45Speaker 00

  Okay.

• 42:46Molly O'Shea?

  It's a really good answer.

• 42:47Speaker 00

  Did I just change your worldview on what your career is gonna go?

• 42:49Molly O'Shea?

  No, I mean, I've been getting some advisory shares from people, they offer it to me, which is amazing.

• 42:54Speaker 00

  Were you ever thinking of raising a fund?

• 42:56Molly O'Shea?

  Similar to you, like I know what it takes to raise a fund. I've worked at a couple of emerging managers, emerging partners and funds. I don't like that, that is like adding another job on top of the job and it clouds your judgment and it makes you orient the practice and everything that you probably find is like your superpowers and what you enjoy out of investing and it like, you have to like come in with the mindset of knowing that it is like a multi-dimensional practice and that like that is just one component of it, but it is a very large component. And you always have to be fundraising, you always have to be like networking with LPs when you're on the road, meeting founders, because it's like a cycle that just continues. So like in the beginning, like there are so many people that have reached out to me about starting a fund

• 43:40Molly O'Shea?

  or like having me as like a co-GP, like something like that. And I just like, I'm focused on this, like I need the power law for this to win and then maybe other stuff will come across, but like it is, it would be a huge distraction.

• 43:53Speaker 00

  And even then, if you get to that point, I would still say, having now done both.

• 44:01Speaker 00

  The advisory share model. Now ideally you get to a place like where I've been where I can then either have the capital or raise the capital to sort of continue on. It's just much better. Like, I don't even really think it's a, now, here's where that's not true. I'm for the same reasons, not a great fundraiser. You know, my biggest fund was one forty and Fund Four would have been roughly the same size. If you can raise billions and billions and billions of dollars and effectively your business model is your management fees and not the carry. And, you know, a lot of people raise mega funds. Their superpower isn't investing. It's raising institutional capital, right?

• 44:39Speaker 00

  If that's your superpower, then yes, then that's the right approach because if you have ten billion dollars under management, you're getting one hundred and fifty to two hundred and fifty million dollars. Your management fees and your only business doesn't cost nearly that much to run. So you're pocketing the rest like, sure, that's great for as long as you can keep raising the money. But if you're not in that position, it seems to me that if you have the opportunity to do equity for services, it is just unquestionably a far better approach.

• 45:09Molly O'Shea?

  Yeah, it's, it's, it's interesting. Karta had just put out their recent VC fund performance report. And so you're seeing this in the data of like the VC market itself. There is a huge bifurcation and this, you know, barbell effect that Marc Andreessen talks about too is like, there's like the always going to be like the small emerging class of managers. It's healthy. It's doing well. There's like this huge gap in the middle of like medium sized managers and then like the large, the large funds just keep compounding because they've got the superpower law dynamics within them.

• 45:41Speaker 00

  Right. Yeah. And that's right. So I think the question is if you're an emerging manager, and let's say you don't have the thing that you or I could do where you could just get the equity elsewise. If you can run your fund at say sub fifty, my advice is to do that, right? Because the challenge is sort of like when we went to one from thirty five to one forty, the upside was we had more management fees. It made life easier. It was a little less of a scramble, right? But at the same time. We still ended up basically spending all the management fees on the operations of the fund. It wasn't like we were taking home lots of cash at the end of the day, but now the hurdle is 140. So for Fund One, we won the money so fast because the hurdle was 35

• 46:26Speaker 00

  and even some of that was like SPVs. So the actual hurdle was like 22 or something. And we got there quickly and we were in carry and then we were in super, we got like a trigger to get 25%, like all of that really quickly. Whereas with Fund Three, the investors are based on just me looking at the fund. If the investors are gonna make money, like it's gonna work out for them. But I don't know how much carry I'm gonna make. And I also didn't make that much of the management fees. And so 140 is like the worst possible size, right? If you can do sub 50, get a couple of great hits and really ride those, great. If you could do billions of dollars and make a ton of money management fees, great. But that in-between number, like, at least for me, it didn't make sense.

• 47:07Molly O'Shea?

  Yeah, it doesn't make sense. It's, it's interesting because I don't think, like, many people think about VC and it's like a very sexy, it's attractive industry, but they don't understand the actual dynamics of structuring it out. You're actually probably not gonna take in that much money and most managers are poor for a very long time.

• 47:23Speaker 00

  Yeah. And even like, it's funny, there's this sort of view of like, wow, if you're early stage, as long as you have a couple of home runs, you're in great shape. Even that's, so that's true if it's, you know, a $35 million fund. But my second fund is $70 million. You know, it's sitting at a three and a half X right now, but has no DPI, a couple of minor secondary things, but no real DPI yet. Again, the investors are gonna do really well. I don't know that we're gonna do that well on it, right? Because you gotta return the 70 and the management fees and then, you know, we'll make money. But the truth is, you probably need, like, we have one absolute grand slam in that fund,

• 48:06Speaker 00

  right? That we led the Series A, like a 30, which is a mental health startup that does kind of the back office. And I think we led the A at 32 and a half and, you know, valuation now it's at least 50X, right? But everything else is like, there's a couple of probably five to 10 Xs and then a bunch of 1Xs or zeros. It will work out well for the LPs.

• 48:30Speaker 00

  When I kind of look at over a 10 year period for the management fees from that and the carry, how much I'm gonna make, like again, not a great use of my time. Like I still own my consulting firm. I don't work there anymore, but I still own it. And like I look at the profits that that generates and that takes me a couple of hours a week of management and maybe some, some pitching.

• 48:52Speaker 00

  And then in comparison to that, like a lot of the venture math isn't there at all.

• 48:55Molly O'Shea?

  Yeah, the math isn't mapping.

• 48:58Speaker 00

  Yes.

• 48:59Molly O'Shea?

  So there's, there's that component of the macro of the venture capital world right now. And then there's also the AI component, which we talked about a little bit before. But before we started recording, we were talking about valuations and how that's impacting whether you're an AI company or a non AI company. There's also data in Carter that 30, that series A companies get a 30% premium on them compared to if they're AI versus non AI. And I think it's probably more than that because like, I mean, if you reduce it down to good companies, the, the delta is going to be much, much greater.

• 49:37Speaker 00

  Yeah, for sure. I mean, look, we see this all the time, which is there's a mess. So when I started investing capitals, that's 2016, we were in this sort of a golden era of venture where all that mattered was growth. Right? No one's like, oh, figure out the business model later. Well, we're about profitability later. And that worked for a while. Like we had some, you know, FanDuel and Coinbase, whatever, with some great successes out of that. Some of them became really profitable companies. Some, some did not. But fundamentally, it was ultimately bad economics. It was irrational exuberance where everything was just sort of based on this incredible enthusiasm about the future.

• 50:19Speaker 00

  And by the way, at least with AI, there's like this concept of some sort of breakthrough that we can't totally understand. Back then, there wasn't even really that, right? A lot of the comp like tech was like a marketplace. It's not that complicated, right? Like you, me and Lance could build a marketplace this afternoon if we really wanted to, right? So.

• 50:37Speaker 00

  And then the bottom fell out in like 21, right? And then it was like, oh, right. This is a business. We need to worry about unit economics. We need to worry about EBITDA. We need to worry about CAC and like all these things like, okay, fine. Makes sense. Now we're in a world where we're living in both realities at the same time. So when it's a non-AI company, the post kind of drop off mentality still typically applies. You really are looking at like the fundamentals of the business itself. And ultimately, will P be greater than L? And will P be so much greater than L? That this is going to become a really valuable company, right? When it comes to AI, we're back to this like, oh, would the law just kind of work out? Right?

• 51:18Speaker 00

  When I was telling you about a company, I won't, won't name the company or the, the firm that won the deal. But it was a deep fake prevention space. They had about a million dollars in ARR. And I offered three and a half on 35, which I actually thought was kind of generous. Right? The winning bid was 14 on 140. I have no idea how that investor is going to make back their money on that deal. If you were an employee now coming in at the A or beyond at 140, I'm not really sure how much like if someone came to try to work at this company. I'd probably, if your only goal is to maximize the upside of the equity, like probably not. Right?

• 52:00Speaker 00

  And yet, because it was just AI, somehow all normal rules went out the window. Right? And so for us, you know, like the other day I saw a company in the mental health chatbot space that is heavily regulated. Definitely could use our help. Has an insanely high valuation. Maybe it'll grow into it. Maybe worth it, maybe it won't. I don't know. But ultimately realized that from an equity for service standpoint, like didn't make sense for me because I just, you know, there's no point in me taking a bet on a company that could, could, there are million reasons why I could still fail. But hope that it'll be a five or a 10 or a 20 X. If the starting point is so incredibly high that I just don't see any world, if you just look at the market where this could possibly be the case. It's kind of like, um.

• 52:46Speaker 00

  I didn't do any cannabis deals. And the reason I didn't do any cannabis deals was not moral on the slightest. It was just that when I looked at the valuation of the deals that I was seeing, and I looked at the comps on the Canadian market, which does allow cannabis trading. It was like, I don't really understand why these American private companies are so highly valued, because when there eventually is liquidity, if you look at the market that in Canada is a capitalist country, right? That has trading, like the multiples aren't nearly what you would need to succeed. And so like, other than some equity for services with ease, like, we never did any deployment of capital into cannabis, simply because it just didn't make sense to me from an economic standpoint. And by the way, one or two maybe have disproved

• 53:31Speaker 00

  that, but not many, right? Like, I don't really regret that decision at all. I'm not saying AI is cannabis. AI obviously has a hell of a lot more potential than cannabis. But I kind of still am applying that mentality to it. So a lot of the deals that I'm doing are in AI, but they're all really companies where the series A is still sub $100 million, right? Or right at 100 million, which is still kind of high, but nonetheless, not totally insane. And if there are companies where it's well north of that, I'm just like, you know, it might be, maybe I'll regret this. Maybe it'll be a great company. If you really want a regulatory help, I have a consulting firm

• 54:14Speaker 00

  that would gladly take your money, you know. But I'm not taking that one.

• 54:18Molly O'Shea?

  There's something about regulation that I find really curious, and I think it's become more apparent this year, particularly with the new administration and all their efforts and advancing different sectors. Like, we talked about nuclear, like, we talked about AI. Like, there are so many different areas where you're getting the call, the connection between Silicon Valley and DC that it seems pretty amicable, and it seems like it's actually progressing growth.

• 54:45Speaker 00

  Huh. So that's a really good question. I don't agree.

• 54:49Molly O'Shea?

  You don't?

• 54:49Speaker 00

  No.

• 54:50Molly O'Shea?

  Okay.

• 54:50Speaker 00

  I would say that there is a narrative that supports what you're talking about. And reporters really like that narrative.

• 55:00Molly O'Shea?

  Okay.

• 55:00Speaker 00

  And there are half a dozen people, Marc Andreessen, David Sacks, Chamath, others who are big Trump supporters, Peter Thiel, Elon and away. And they've done really well, right? It has, you know, they've invested in a person that who has a zero sum mentality to the world. And in that person's worldview, if you are helpful to them, you can really do well along the way. Like, look at all the people who are investing in TikTok at a $14 billion valuation, right? Like, that's if you're Larry or, you know, Ellison or whoever it is, like, amazing, right? But I would say that's sort of individual companies getting contracts or government favors, but it's not the market, right?

• 55:44Speaker 00

  So if you were China and you had the ability to install an American and control an American president, there's like an old movie called The Mentoring Candidate, that's about that, I think it's Russia. And you said, I really want to hurt America long term. Here's what I would do. I would go after what makes our economy great. So what is that? It is intellectual property. It is research and development. It is higher education. It is immigration, because we can get the best and the brightest from all over the world to want to come here and then become part of our economy. It is free trade. It is independent Fed, an independent, you know, somewhere independent BLS.

• 56:29Speaker 00

  It is sort of, you know, an independent market, right? So there are all these fundamentals. Trump has undermined every single one of those things. So I would argue everything that makes the American economy great, that venture capital totally relies upon at the end of the day, is being undermined significantly. And so if you said to me, are you as bullish about VC in 10 years? If the trends don't reverse, now we'll hopefully we'll have a new president, whoever it is in 2028, because hopefully we won't have sort of martial law or whatever. And maybe that person from either party will reverse some of the policies. But at this current rate, I would say the American economy is far weaker long term

• 57:14Speaker 00

  than it's ever been, and I would be far less bullish on it. So, yeah, if you're, and by the way, because of what I do for a living, like, do I know how to get a startup into DOD or HHS or whatever it is, the FDA? Like, yeah, you know, there's a skill set that we have that, you know, we figure out the right ways into things. So it's not that we don't even take advantage of it. We do. But from a long-term American standpoint, I actually think that we're going to, VCs and sector for those who participated in this, unless they just made so much money and only just care about how much money they have and nothing else are going to really regret it.

• 57:58Molly O'Shea?

  So I'm curious on your perspective on this part in particular. So the US has over $37 trillion in debt. And so a lot of people are counting on AI and the technological innovation that is going on, that's in these narratives to unlock that and offset it.

• 58:17Speaker 00

  How?

• 58:18Molly O'Shea?

  By creating economic prosperity.

• 58:21Speaker 00

  Sure. Look, by the way, again, the title capitalist is literally in my job, right? Venture capitalist. I believe strongly in capitalism. I would say everything that I just, all those points I just made to you are what capitalism is, right? And what we're doing now, especially with the US government just taking 10% of Intel or whatever, that's socialism. I'm not a socialist. Like, yes, what you just said is right, but that's based on fundamental capitalist principles and theory of which we are not advancing right now. So like, if you take the big, beautiful bill, for example, we took on a couple of trillion dollars more in debt. And I'm not really sure what the upside is, right?

• 59:01Speaker 00

  Like, it might benefit me as someone at the very top of the tax curve, but.

• 59:09Speaker 00

  What am I gonna do with it? Right? Like, I'm not fundamentally, people at the bottom of the ladder spend a lot more money. Like, if you actually want to juice the economy, you want to give tax cuts or benefits to the lowest income people because they're gonna spend every penny of it, right? You know, if I put it in treasuries or whatever it is, like, that doesn't really do any long-term good, right? Other than just a lot more borrowing. So, like, in many ways, to me, the unlocked AI is UBI, universal basic income. It's like Andrew Yang, I think, was absolutely right about this. In fact, the reason why I ran him for mayor in 2021 in New York, we lost, but the one of the main reasons that I was, you know, put my support behind it

• 59:54Speaker 00

  is because I truly believe that he's right about this, which is you can't have a world with 32 trillion heirs and 18% unemployment. Like, that literally is not, that's the French Revolution coming our way, right? And by the way, deservedly so. So, if you want to have an economy where people can prosper, people have to have income. And if it turns out that AI does in the short term displace lots and lots of jobs. So I do believe that in a 25-year span, we'll be able to look and say, oh, AI unlocked all these new industries that we can't conceive of today and all of these jobs, just like the internet did, just like the automobile did, just like the steam engine did and everything else. But

• 1:00:39Speaker 00

  there's gonna be this 20, 25-year period, probably, with massive amounts of uncertainty and job loss, while other entrepreneurs are figuring out some of this stuff, right? But as we know, like, every startup that I invest in at C, like, I have no expectation of ever seeing liquidity for a decade, right? The seven-year, I don't know where the seven-year thing came from.

• 1:00:59Molly O'Shea?

  It's all arbitrary.

• 1:01:00Speaker 00

  Right. I mean, I've had a couple, Lemonade was really fast. I've had a couple that were fast, but by and large, it's a decade is the norm.

• 1:01:10Speaker 00

  So if someone in seven years creates something really exceptional, like the US economic output isn't going to really probably be impacted for 17 years, right? So what happens in that 17 year interim? People are going to really struggle. And if people are really struggling because they don't have enough money, if they don't have enough money, they're not spending money, right? Like, I can't invest in companies that are going to make a lot of money if no one's buying the product. At the end of the day, every single thing I invest in is predicated on the notion of selling someone a product or a service for more money than it costs us to produce said product or service. Otherwise, it's not a business, it's a hobby, like my bookstore, right? And so fundamentally, people have to have money to spend.

• 1:01:52Speaker 00

  And if businesses are so wildly efficient that their spend is radically less because they don't need it, and if consumers have so much less money because unemployment is 18% or whatever it is, and people are really struggling, they're not deploying capital. That's called a depression, right? And so, to me fundamentally, if you took AI and then combined it with, how do we keep money in people's pockets? You could have this tremendous boom. I would argue that the bill that we just passed is literally the opposite.

• 1:02:21Molly O'Shea?

  That's interesting. It's also interesting bringing up the intel investment. So that one happened. And then also MP Materials, which by the way, like manufactures a lot of their magnets through China, so I don't really understand that one.

• 1:02:37Speaker 00

  Well, I think it's because you're still assuming some level of policy and consistency. And I would argue it's just about individual gain in every case. So if working with China helps a particular company that now all of a sudden benefits certain people, makes them more money, they'll work with China.

• 1:02:56Molly O'Shea?

  Even the US government?

• 1:02:58Speaker 00

  Yeah. I mean, it not generally, no, in this US government, what should happen with the TIC deal? Is that not a deal with China?

• 1:03:05Molly O'Shea?

  Fair. Fair. So what, then I guess what is your opinion on all these US government deals?

• 1:03:11Speaker 00

  I'm not a socialist. I don't support it. Like, I believe in free enterprise, which means free markets, intellectual property, rule of law, investment research development, investment in higher education, as much immigration as possible. That is how you unlock growth, and we're not doing that. This is just crony capitalism designed to benefit a handful of people at the expense of everyone else, and we are going to pay a massive price for that.

• 1:03:38Molly O'Shea?

  Scary.

• 1:03:39Speaker 00

  Yeah, really fuck it. By the way, I am in the process of getting Portuguese citizenship right now.

• 1:03:45Molly O'Shea?

  Really?

• 1:03:46Speaker 00

  Less because I don't see myself living here, but as a Jew, we have never had a period in the world where we have lived in one country for hundreds of years safely. And I hope US is the exception to that, but I don't know that it is. And there's a lot to argue that antisemitism, especially on the left, is rising so significantly that I'm not sure that's really true. And I would like my kids to have another option, right? And it might be that the Portuguese passports should sit in a drawer and safe for two decades and we never touch them. Great. That's actually a really good outcome. But ultimately, what I want to happen is Kristallnacht, which was the night, kind of the beginning of the Holocaust,

• 1:04:28Speaker 00

  effectively, where all of a sudden it was like open season on Jews. Like, that's not the time that you start figuring it out, right? You figure it out now. Now, I am lucky enough that Portugal is still a country where effectively you can purchase citizenship. And that's what I'm doing, right? Because I have the ability to do that luckily. But I would argue if you can do that, you should, because if you just take everything that I just said, if you disagree with everything I've said for the last hour or whatever it is, then sure, no need. But if you take the fundamental things I've talked about in terms of a zero sum mentality, the underlying long term damage to the US economy and capitalist

• 1:05:08Speaker 00

  system, and then arguably not even investing in the things that allow, if you take the beginning of our conversation, humanity and the race to outpace saving over destroying. All of that does not argue for the long term future of this country. And I'd like to have another option.

• 1:05:27Molly O'Shea?

  Okay.

• 1:05:28Speaker 00

  Wow, this has become a really depressing podcast.

• 1:05:30Molly O'Shea?

  No, we'll, we'll amp it up.

• 1:05:32Speaker 00

  All right.

• 1:05:32Molly O'Shea?

  It's not, yeah.

• 1:05:33Speaker 00

  Some music, Lance, what can you do to make this better?

• 1:05:36Molly O'Shea?

  Play some rave music, I don't know. Okay, so maybe, maybe a positive, a positive question.

• 1:05:45Molly O'Shea?

  What is the biggest lesson you learned from working with Travis Kalanick?

• 1:05:51Speaker 00

  A lot, and I, I am, I, I understand that he took a beating in terms of his reputation at the end of Uber. I am an unapologetic Travis enthusiast. Did he make mistakes? Absolutely. But they were generally mistakes of omission where he was so focused on growth and investment and things like that, that he really didn't pay enough attention to the underlying management of the company itself. And he paid a massive price for that. But I think he's one of the smartest, the, the two smartest people that I've ever worked with closely are Mike Bloomberg and Travis Kalanick, bar none. I remember one time, uh, this was before we were even having a New York office.

• 1:06:35Speaker 00

  So he was hanging out of my office and I was, we were in a conference room together, but I was on another call

• 1:06:44Speaker 00

  while he was working or whatever. So he only heard while he was doing his own work, 50% of the conversation. And it was some potential campaign around like gas importation. It was really complicated, right? I barely knew what I was talking about. He only heard half of it. And when the call was over, just hearing my half, then explained to me everything that I got right and wrong and where this thing needs to go and how their business should work. And he was fucking right. Like, the dude is a genius, number one. Two, he is relentless. And I think in some ways, um, his relentlessness actually has become a little bit of a mistake in the sense that other people say, oh, I need a Travis Kalanick-like founder with his relentlessness.

• 1:07:29Speaker 00

  His relentlessness is unquestionably a superpower. It works for him. There are other times where I've met founders who are almost trying to imitate him and they're hyper-aggressive without sort of the underlying substance being there behind it. And it's actually, that's really bad. Like, that's actually worse than not being hyper-aggressive. But when you combine his substance, his work ethic. And his runoutlessness, it's sort of an exceptional combination. He saw the future, man. Like, the very first time I met him in person, remember he said to me, "One day, no one will own a car. They'll all drive themselves, and you'll get it by pressing a button." And he said that long before anyone else did, or at least long before anyone was like a futurist that just writes things but doesn't actually do anything.

• 1:08:14Speaker 00

  And did more to make that happen than probably anyone in the world, maybe him and Elon, you know? And so he saw it so much well before. And even politically, you know, and my first book, I called this Travis's Law, which was the notion of, we talked about, if you have a product that people are really passionate about, and you have the right means to mobilize them, you can turn your customers into political advocates and be big, powerful, entrenched interests, right? Like, I might have deployed that really well, and I might have taken that thought to other startups I've invested in, but that was his insight, not mine, right? And that's, to me, one of the biggest political innovations we've seen in decades.

• 1:08:56Speaker 00

  So he is one of the most unique people that I know. I'm biased. I'm in cloud kitchens, so I'm not objective. And I also just think that there is a humanity to Travis because he's a shy, even awkward guy. He's not someone that's social. He has his friends, whatever, but he's not out there on like the social scene all that much. And so people don't really know. So all they know are the stereotypes of him. And what media does in general is they build you up, and they tear you down. And then, as I've been arguing to him, "Hey, we're due for the buildup again," although he's like, "I'm good." He and I have a lot to say about that.

• 1:09:38Speaker 00

  But, so he got built up. Was he ever as absolutely heroic and superhuman as all those profiles in 2013, 2014, where you walk into an airport and there'd be like, you know, 100 magazines displayed outward and his face on the cover of every one of them? No, he's a human being. Was he in any way what he was made out to be when he left Uber? Not even in the slightest, right? He's a human being. But I think, with that said, he is one of the most remarkable human beings I've ever met.

• 1:10:10Molly O'Shea?

  That was a really good answer.

• 1:10:11Speaker 00

  By the way, I'm sure a lot of people who are, you know, not Travis fans will hear this and be angry about it. I don't care. I've known the guy now for almost 15 years. I've worked with him for 15 years. I stand by every word of it.

• 1:10:23Molly O'Shea?

  Wow. Well, that answers my Brex question.

• 1:10:29Molly O'Shea?

  No, that's great. I usually ask a Brex question on like founder performance and I think that really.

• 1:10:35Speaker 00

  Yes. But the problem is, and I have this problem too. He is not a good comp for anyone or anything else. I had the same thing in government, right? Where like if you only ever worked in government and politics for Mike Bloomberg, you're actually useless to everybody else because he was so different and so incredible. And so unlike the norm, that it almost ruins you for like any other normal performance or situation. And Travis in a lot of ways was like that too. So when I try, I really try to not let my experience with Travis influence too much of my thinking about other founders and companies, because it's a terrible comp.

• 1:11:17Speaker 00

  Like for better and for worse, whatever it is, like you're not going to have another one of him or like, like, I've made a lot of investments since Uber. And some of them have been really successful. None of them are Uber and I'm never going to make as much money as I did on Uber or anything again. You know, like that's just one of one.

• 1:11:36Molly O'Shea?

  Yeah, total one of one. That's insane. Okay. Well, Bradley, we are, we are over time.

• 1:11:43Speaker 00

  All right. Well, thank you for giving me all this time.

• 1:11:44Molly O'Shea?

  Forever, honestly. Let's get a live stream going.

• 1:11:48Speaker 00

  Yeah, Lance will just keep recording forever.

• 1:11:51Molly O'Shea?

  Well, thank you so much for coming on.

• 1:11:53Speaker 00

  Thanks for having me. I really appreciate it.

• 1:11:54Molly O'Shea?

  Hey, it's Molly. If you enjoy our interviews, check out our newsletter, sorcery.vc, where we deliver a once a week top deals and tech headlines email and also go deeper on our podcast interviews. Subscribe to Sorcery today and don't forget to subscribe to the podcast on YouTube, Spotify, Apple, or wherever you listen. Link in description to sign up.