How VCX Put Anthropic & OpenAI Into Public Markets

Fundrise CEO Ben Miller joins Sourcery to break down the launch of the Fundrise Growth Tech Fund (NYSE: $VCX) — one of the first publicly traded venture capital funds. VCX debuted at roughly $700M valuation and surged to ~$6.5B within days, giving over 100,000 investors access to a portfolio of top private companies including Anthropic (~20%), Databricks (~17%), OpenAI (~10%), Anduril, Ramp, and SpaceX. The timing reflects a broader shift: private markets are now where most value is created. VCX portfolio companies grew ~193% vs ~25% for public tech benchmarks, highlighting the gap between private and public market growth. Meanwhile, IPO timelines have stretched from ~3–5 years to 10–15+ years, meaning public investors are increasingly missing the highest-growth phase. We discuss how VCX works as a closed-end fund, why it has traded at a premium (despite most closed-end funds trading at discounts), and how Fundrise accessed top-tier companies during the 2022–2023 venture downturn — including buying from distressed sellers and stepping into competitive rounds. Finally, we explore what comes next: whether public venture capital becomes a standard allocation, how cycles and volatility impact the model, and what happens if public markets begin directly funding private tech at scale. Topics Covered VCX launch & NYSE debut dynamics Portfolio composition (Anthropic, OpenAI, Databricks, SpaceX) Private vs public market growth gap (193% vs 25%) Macro shift: value creation moving to private markets IPO window + why companies stay private longer How Fundrise sources and wins allocation Closed-end fund structure, NAV, premiums/discounts Risks: volatility, cycles, and downside scenarios Future of venture: rise of public VC funds Subscribe to Sourcery for more conversations with the founders, investors, and operators shaping the future of tech, markets, and capital. Benjamin Miller: https://x.com/BenMillerise Molly O’Shea: https://x.com/MollySOShea Sourcery: ⁠https://x.com/sourceryy 𝐄𝐏𝐈𝐒𝐎𝐃𝐄 𝐋𝐈𝐍𝐊 YouTube : https://youtu.be/3-4AZ-p3tv8 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•VCX https://fundrise.com/vcx—VCX is the public ticker for private tech, allowing investors of all sizes to invest in venture capital. View The Portfolio athttps://GetVCX.com http://getvcx.com • Deel https://www.deel.com/sourcery—Deel is the global people platform that helps startups hire, manage, pay, and equip anyone, anywhere. Trusted by more than 35,000 fast-growing companies, Deel is the people platform that just works, so teams can scale without the chaos. Visit: https://www.deel.com/sourcery • Public http://public.com/sourcery–Investing platform Public just launched Generated Assets https://public.com/generated-asset, which lets you turn any idea into an investable index with AI. With Generated Assets, you can build, backtest, refine, and invest in any thesis with AI. Gone are the days of one-size-fits-all ETFs. https://public.com/sourcery https://public.com/sourcery Follow Sourcery for the latest updates! https://www.sourcery.vc/ Disclosure Paid Endorsement. Brokerage services by Open to the Public Investing Inc, member FINRA & SIPC. Advisory services by Public Advisors LLC, SEC-registered adviser. Crypto trading provided by Zero Hash LLC, licensed by the NYSDFS. Generated Assets is an interactive analysis tool by Public Advisors. Output is for informational purposes only and is not an investment recommendation or advice. See disclosures at public.com/disclosures/ga http://public.com/disclosures/ga. Matched funds must remain in your account for at least 5 years. Match rate and other terms are subject to change at any time.

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

• 0:00Speaker 00

  I've been around venture and tech for 20 plus years. Don't believe the story that venture people somehow invest in Facebook and they're the genius. No, the person who created the business is the genius. If I invested in Amazon or Meta today, no one would think I'm a genius. But mostly, the person who built the business, 99% is the business builder, maybe 100%. Well, the fund went public at about a $700 million valuation. We had about 100,000 investors in the fund when it went public, so we very proudly held. Normally, companies don't go public with 100,000 investors. Last time I checked, it was trading at 6.5 billion. It's up like nine and a half times since we went public three days ago. The weighted average growth rate of public tech companies last year was 25%.

• 0:42Speaker 00

  The weighted average growth rate for our portfolio for VCX was 193%.

• 0:47Molly O'Shea?

  That's crazy.

• 0:47Speaker 00

  10 years from now, every single person in America will have 5% of their portfolio in public capital. It'll be totally normal, it'll be like an ETF, it'll be just this thing that's standard. The public market will be a huge source of funding for private tech companies.

• 1:12Molly O'Shea?

  Ben, welcome to Sorcery.

• 1:14Speaker 00

  Thanks for having me.

• 1:15Molly O'Shea?

  Well, thanks for joining the Sorcery Club. You're now one of the names behind Sorcery and backing us, so thank you so much. Today, we're going to talk about VCX, the latest of Fundrise's financial innovations. I want to get into the origin story, but also, like, congratulations. You just recently listed and it's going phenomenally well. So we'll go through all that, the growth, we'll talk about the VC market, we'll talk about the infrastructure, how things have changed, what might happen in the future, the companies that you have access to, and everything else, maybe some hot takes. But to start, like, how did we get here and why now? Why is it time to list something like VCX?

• 1:58Speaker 00

  Before VCX, before the Fundrise Innovation Fund, we were democratized investing in real estate. And I remember going to my board and saying, "We want to expand from real estate into tech and democratize investing into tech." And the board said to me, "That's a horrible idea. Should not do that. You guys aren't VC people. You guys don't know how to get access to the best companies." And I was like, "Well, the board's against it, it must be a good idea."

• 2:28Molly O'Shea?

  Why?

• 2:30Speaker 00

  I don't know. It just seems to be like my experience is when like the consensus view is that something's bad and we have conviction. We don't get conviction. We only get conviction probably once a year on something. Maybe not even, maybe once every two years we get like conviction on something. And when we get conviction, it's like, it's magic. It feels so good. And so we had conviction. We were like, no, we got to democratize investing in tech. It was 2022 and I have raised money from venture funds. I've been around venture and tech for 20 plus years. I was like, no, no, no, no. Like, don't believe the story that venture people like somehow they invest in Facebook and they're

• 3:11Speaker 00

  the genius. Like, no, the person who created the business is the genius. Like, you, you know, you know, you invested, like, if I invested in like, Amazon or Meta today, no one would think I'm a genius. But for some reason, like, if I invest in them, like, my, in their series B or C, like, somehow, that makes me like, special. But mostly, the person who built a business, 99% is the business builder. Maybe 100%. So anyways, I was skeptic of that, that venture was some magic industry I couldn't do. And we were just lucky when we launched VC Act, we launched our Fundrise

• 3:49Speaker 00

  Innovation Fund. It was bottom of the market. And all the venture funds were really shell shocked from the collapse of the stock market. Just, they were, they were like, I mean, it was such a negative sentiment that venture funds were actually dumping their shares.

• 4:05Molly O'Shea?

  Yeah, I remember this.

• 4:07Speaker 00

  And one of the things that happens, this happens in all sectors, actually, one of the great things about being in real estate and credit, public markets, private markets, is you actually see a lot more. And so you see a lot of these patterns, and you actually see things move from private to public and from tech to real estate and back and forth. And so,

• 4:26Speaker 00

  And so when when things go bad, the you have to sell your good things first.

• 4:32Molly O'Shea?

  Well, they're selling because they want DPI so they can offset any potential extra losses.

• 4:38Speaker 00

  There's is a thing that happens in in real estate. You have to sell your best assets or private credit like Blue Owl sold some assets recently. Everybody's like, oh, that was probably their best asset. So in in 2023, people were selling their best assets or they were stepping up the rounds. They couldn't actually fund the whole round, like investors were dropping out. That's how we got into Androl is that like one of the investors stepped up. And then like some one of their LPs backed dropped out, like dropped out because they were freaked out. So we were lucky and we had conviction. We were conviction about the companies and conviction about the timing and convictions about the concept of, you know, like we have to democratize access to private companies.

• 5:20Speaker 00

  It was important and AI has made it like absolutely existential. It's become like, I think democratic ownership is the solution to how we deal with AI. The idea that everyone wants to get like universal basic income. I think that's a horrible idea. But universal basic ownership, I feel like that is magic. It's like instead of people like saying, okay, the American Dreams own a home, American Dreams own like the means of production, which is AI.

• 5:54Molly O'Shea?

  Tell me some of the numbers.

• 5:56Speaker 00

  Well, the fund went public at about a $700 million valuation. We had about 100,000 investors in the fund when it went public, so it was very broadly held.

• 6:07Speaker 00

  And that was something new. It created a lot of interesting challenges when we went public because it normally funds, normally companies don't go public with 100,000 investors. I think last time I checked, it was trading at six and a half billion. So it's up like nine and a half times since we went public three days ago.

• 6:25Molly O'Shea?

  And so what does that mean? I mean, it's a basket, it's a closed end fund, maybe first define a closed end fund, how this works. And then how that shift actually like that delta and increase in value affects or doesn't affect the portfolio?

• 6:40Speaker 00

  Yeah, I mean, the the big idea was, it has been for us for the last 15 years, is democratize private markets. And so the the last few years, AI has become potentially like the the.

• 6:55Speaker 00

  The end of technology in a way like we're at the knee of the exponential. And so the need to democratize access to these companies, investing in these AI companies was more important than ever. And so we created what was the first public venture fund. So it's a venture fund like any other venture fund typically venture funds are closed end funds. This fund was registered with the SEC so that anyone can invest in it. And so we have a fundraise has this platform where you can show up and invest it at $10 minimum. So it's $10 to get in to the fund. And you know, hundreds of thousands of people invested into it. And as we raised into we deployed.

• 7:36Speaker 00

  So you're raising and deploying and a closed ended fund means that when, when, as opposed to open ended fund, a closed end fund is when it's closed essentially. When you're buying it in the public markets, it's your, the fund is shares in the fund is trading rather than shares in the inside of the underlying asset portfolio. So let me just get a little technical for a minute. So ETFs, which are normally how people invest in funds now. When you're investing in ETF, you're actually, the ETF is buying more or redeeming out of the underlying companies. So the actual shares inside the ETF will trade.

• 8:17Speaker 00

  The closed ended fund, it's like any other venture fund and people are buying and selling the actual fund itself in the public markets. So that was, it was a novelty because everyone told us that closed end funds will trade at a discount. Like that's what in the history of closed end funds, 99% traded discounts. That's how normal closed end funds work. And I thought, well, this is different. This is not like a normal closed end fund, something new. And I think it would trade at a premium. Wasn't allowed to exactly say that, but it definitely, every single expert told me that I was wrong.

• 8:57Speaker 00

  And so far it's been, mostly they've been admitting that they were not right about how it would play out.

• 9:04Molly O'Shea?

  And so what risk does it pose to the investors if it trades up?

• 9:09Speaker 00

  Well, I mean, so our investors, so you have 100,000 investors, some of them have been selling and making a good, a good multiple. You know, I mean, some of them made, some of the, I mean, some people have said that they paid for their wedding. You know, that was like life changing money. So, cause you know, if you have somebody invest $10,000 and they, and they make, you know, 100,000 bucks. That's like pretty good. Cause we, you know, when, when the fund actually had really good performance before we listed, I think it was up 65% in the last 12 months. So, so you sort of like have a nine X on a, you know, on a, on almost a doubling. So, so, so a lot of like everyday people made a decent amount of money.

• 9:48Molly O'Shea?

  And that was because the companies in the fund were raising out higher valuations.

• 9:53Speaker 00

  Right. I mean, the way a normal fund works, right? Venture fund, just try to connect the venture with the, with the public listing is you, you know, you invest in private companies. Those companies you typically mark at their last round valuation. So like, for example, uh, we invested in Databricks. We invested in Databricks, Databricks, every time they raised a new round, they raised a number of series rounds, like we would mark at the last round. And so that's where, when we, when I say the fund was at a, almost a $700 million valuation, that's basically made up of all of those private round valuations.

• 10:31Speaker 00

  Uh, but the reason I thought it would trade at a premium is that if you wanted to get shares in these companies, normally you'd be paying a higher fee. Typically you're paying a 2% asset management fee plus 20% of the profits, two and 20. And also it's, it's, you're having to pay a lot of brokers and middlemen. So the idea that you can get shares in arguably the best private companies in the world without paying, uh, any carried interest. And doing it in a liquid wrapper, I thought was going to make it essentially a lot

• 11:05Speaker 00

  better than buying in the private markets. And so far, that's been the case.

• 11:09Molly O'Shea?

  So all VCX holdings include Anthropic. These numbers are as of 21526. And so Anthropic, these are, this is allocation of the total fund. So Anthropic is 20% of the fund. Databricks is about 17. OpenAI is about 10. Anduril is 6.9. Ramp 5.1. SpaceX 5%. Epic Games 3.5. Flock Safety 3%. DBT slash 5tran is 2.8. Vanta is 1.9. Canva is 1.8. Loyal is 1.5. Service Titan 1.4. And so on, and so on, and so on.

• 11:50Molly O'Shea?

  But with these companies, how did you get allocation into them? And what is like, I just like, this is just such an interesting vehicle. And I don't think anybody like actually grasped like outside of maybe the 100,000 that have invested into it. But outside of this, like, I don't hear my family talking about getting access to this. Although my dad's always like, how do I get access to Anduril or SpaceX? And I'm like, well, I could tell you now, but before it wasn't something that was talked about. So how do you get access to these companies and how do they allow you to then list them?

• 12:26Speaker 00

  Well, so the fund is listed, not the companies. And, and so when the, like a lot of venture, there's a lot of luck to it and a lot of timing. And so back when we launched in 2022, you know, that was Vanta raising their Series B. Actually, I got introduced to them from the acquired guys. That's how I got into Vanta. And back in then, like back in 2022, the stock market collapsed. It was late 22, maybe it was early 23. Stock market collapsed. Sentiment about tech and private tech was very negative. And so when we invested in Anthropic and Anduril in sort of, what was that like? Middle of 2023, it was so out of favor.

• 13:13Speaker 00

  Some of the companies you named, and I'm not supposed to say which ones we bought from distressed funds who were who were having to sell in early to mid 2023. So there was like this this downturn. I mean, Silicon Valley Bank blew up in April. And so, again, there's a lot of luck and some on some opportunistic hustle on our part. But it was just not what people thought was the smart move. And then and then, like, a lot of times, at that moment, a lot of vultures came out, a lot of like fangs came out, and people were trying to take advantage of the situation. And my whole view was that I'd rather be like a good long term partner.

• 13:56Speaker 00

  I'm not trying to like chisel anybody. And so we ended up being the best bidder, the best investor. And so that's how we got our our kind of our foothold in originally. And then there's just a momentum around it because you go to the company and you say, we're a venture fund, just like any other venture fund. And they would be a little bit confused because they never see anything like it. Like, oh, you have 100,000 investors. What does that mean for me? Like, I think I went and visited Stripe six times.

• 14:26Speaker 00

  They were just like, I don't know that I'm not sure about this. So there's there's this learning process where where you're doing something. I always find this every time I've done something new, people start out saying it's crazy. And then after a while, they say it's novel. Right now, we're in the novel period, and then eventually they say it's obvious. So right now, we're novel in a couple of years from now, it'll be obvious and everyone will be doing this.

• 14:49Molly O'Shea?

  Yeah, some people have done this. Robin Hood went out with their fund, their vehicle. Destiny went out maybe like a year or two ago. Destiny didn't go so well. Can you explain why Destiny didn't go well? They were trading up massively. It was a risk to their NAV. And it was a little bit of a controversy. Could you share more about that?

• 15:13Speaker 00

  You know, I'm not inside Destiny. I actually think it did go well. I mean, there was some drama around it because they had, I think, I think there was some drama with some of their portfolio companies. But ultimately, I think it it traded well and they raised money at a premium. So like, I don't know all the details of Destiny, but I think actually, all things considered, for what it was, I mean, it's done pretty well. Robinhood has done less well, but it's so new. Like, it went out three weeks ago. They raised, I mean, arguably, it was successful in the sense they raised a lot of money into the IPO. When, you know, we've been working on this for now three or four years. And Robinhood, you know, came out like, you know, a month ago.

• 15:58Speaker 00

  And actually, I thought it was fabulous. Because the biggest concern we had was that the portfolio companies would, would like, would not know what to make of it. You know, having, having a public fund, having, having so many investors. And Robinhood normalized it. Like, Databricks and all of their portfolio companies have run a ramp, you know, have been endorsing it. So they, what they did for us was, was make it, like, acceptable among the tech industry, mostly. This is, happens in tech a lot. Like, I think of this as being, the most important thing is that you're trying to create this, the category, trying to create the pie. It's not a competition among, like, the few of us who are currently doing it.

• 16:42Speaker 00

  It's about, okay, how big is the public markets? Trillions, how big are the private markets? Trillions, how big are our funds? Like, billions. I think that it's about creating, like, a multi-hundred-billion-dollar category. Where you, you get millions of people investing in private tech companies. And build this bridge between the two sides of the market.

• 17:02Molly O'Shea?

  Let's talk about the extreme bifurcation of the access to value accretion right now. So, all of the value is being made in the private markets. A16Z, Sequoia, Co2, they've all said this. Those are some of the biggest venture funds in the industry. And A16Z even put out a piece, "Private markets are the new high-growth public markets." I spoke to Alex Immerman, who's a general partner there, about this a bit. OpenAI just raised a hundred and ten billion-dollar round. I think that amounted to about a third of all funding in the private markets for tech in 2025.

• 17:44Molly O'Shea?

  So what is going on in the private markets and why is it not? Reaching the public markets, I guess, converting into the private, public markets.

• 17:55Speaker 00

  I think that the old playbook is falling apart and that everybody keeps wondering when it's going to go back to normal. And normal being the way it used to be. And I think it, it may, it may not ever. And the old playbook was that, you know, you'd fund a company in the private markets, they'd raise a few rounds. If they're successful, they go public. And maybe that happened three to five years into the company's, into company's, uh, uh, business. And then the venture fund would exit and recycle the capital. And that's how the markets used to work. I just don't think that's how the market's going to work in the future. The private markets are now tens of trillions. And I, I built a company, you know, we have two million customers. I have a couple hundred people at the company.

• 18:37Speaker 00

  We have lots of software, like I know what it's like being in the private markets and I know something what it's like to be in the public markets. And just better in the private markets. Like if you're a company, if you're a tech company, you're trying to build some cutting edge software and you're taking a lot of risk, the public markets are just risk. They're just burden, they're just complexity. You don't need it if you can raise money in the private markets. And so companies don't go public until they're really mature. Or if, if ever. So if you look at like, if it takes like a company 10 to 15 years before they go public, that 10 years of, of, of growth or high growth, it doesn't happen in the, in the public markets anymore.

• 19:16Speaker 00

  So if you look at our portfolio, just to go apples to apples, QQQ, which is like an index of, of a public tech. The weighted average growth rate of public tech companies last year was 25% a year.

• 19:31Speaker 00

  The weighted average growth rate for our portfolio, for VCX was 193%.

• 19:36Molly O'Shea?

  That's crazy.

• 19:37Speaker 00

  So there's way more growth. The companies are younger and maybe they're riskier. And so it's, it's like, there's this dynamic where now, normal people are no longer accessing a whole kind of company, a whole kind of like phase of growth. And everybody knows it's a problem. Everybody's tried different ways to solve it. And I just think that, like, this is the solution. This, this structure we, we're, we're helping create, a publicly traded venture capital fund. I'm calling it PVC. I think that is how it's going to happen. I think that like 10 years from now, every single person in America will have 5% of their portfolio in like public venture capital. It'll be totally normal. It'll be like an ETF. It'll be just this thing that's standard.

• 20:22Speaker 00

  And the public capital, so the public markets will be a huge source of funding for, for private tech companies.

• 20:28Molly O'Shea?

  We were talking about this earlier, but there was an extreme difference between how much capital was raised in private markets last year versus public markets. I think it was like a 10x difference. It's all weighted.

• 20:40Speaker 00

  Right. I mean, that, that, the thing about public markets is they're primarily trading secondary, right? They're not really, the public markets are actually, 99% of the money in public markets are secondary, not primary. And the private market used to be like almost 100% primary. Like you funded a company to build something, like build a building, build, you know, a tech company. And so like, I actually like, when I first started Fundrise 15 years ago, like, the idea of a secondary versus primary, the idea that you're actually funding like real things in real life is just so far from how normal people invest. Normal people are literally, when they're investing in public markets, like, they're not building anything.

• 21:22Speaker 00

  And so I think that like, that, that idea that you can, like, millions of people could actually fund and build like actual things by funding the private markets. I think that's like a huge knock on benefit of what we're trying to do here.

• 21:38Molly O'Shea?

  Do you think the IPO window is open?

• 21:42Speaker 00

  No, I mean, we're in war with Iran.

• 21:46Molly O'Shea?

  Is that why you delayed your IPO?

• 21:48Speaker 00

  We delayed it a couple of times. I was worried about the war with Iran. I mean, it's,

• 21:54Speaker 00

  I think that it could really disrupt the markets. I mean, right now, the market's not sure. I expect that there's going to be a shock to the economy and the markets will go through a period of volatility. And in the meantime, companies that are private are just going to keep, you know, chugging along, making progress and they just don't have to deal with as much volatility as the public markets make you.

• 22:16Molly O'Shea?

  That, and there is a little bit of a SaaS apocalypse going on. I just interviewed Thomas Lafont of COTU. They manage around 70 billion and 30 billion of that is in the private markets. So they're split between. But I asked him because SaaS companies, they used to trade at a premium. There was a whole premium for SaaS companies, but if you look, they're all down, like, I wouldn't say all down, but there's some that are significantly down. And sometimes it has to do with the new Claude release. But what are you seeing with these SaaS companies and how are they vulnerable?

• 22:50Speaker 00

  I mean, this is the challenge of being public, is that what public market wants is like, a, they call durable revenue stream that's growing at a high rate. And so they thought SaaS was essentially like, like a bond, like in terms of super low risk with a really high growth rate. And they were priced high growth, low risk. And then the market overnight repriced that to high risk, low growth. And they just got devastated. And this is the problem with public markets is that they're, you know, they, they just swing. So I'm sure that they're going to swing back. It's to some extent, just like, I mean, if

• 23:30Speaker 00

  you remember this, late last year, everyone in public markets thought that the, that the AI boom was a bubble and the data centers were going to be like overbuilt. And I think if any of the AI companies had been public, they would have been getting decimated. But and now essentially Anthropic's recent releases with Claude and then Codex and stuff has proven that was totally wrong. So that volatility, that like that short-term sentiment is just such a negative to building a business. That, I mean, I get not to like make our pitch, but like, what you want is have access to public markets without the volatility. And so this bridge that we're creating, you know, with these other companies

• 24:15Speaker 00

  is how you can bring the investors in to democratize ownership, but not expose your business to the volatility and just headache of public markets.

• 24:24Molly O'Shea?

  Sorcery is brought to you by Brex, the financial stack trusted by more than 30,000 companies, including one in three venture-backed startups in the US. Nearly 40% of startups fail because they run out of cash. Brex is literally built to help founders avoid that. Unlike traditional banks that let your money sit idle, shipping away at it with fees, Brex's designs help you spend smarter and move faster. Their all-in-one solution combines checking, treasury, and FDIC protection into one powerful account. You can send and receive money globally at lightning speeds, get 20 times the standard FDIC coverage through their partner banks, and even high yield from day one. With same-day and even same-hour liquidity, access your

• 25:08Molly O'Shea?

  funds anytime. Companies like Scale AI, DoorDash, ServiceTitan, Hims, Anthropic, Flexport, Robinhood, and Plaid, trust and use Brex. Start today at brex.com/sorcery. That's B-R-E-X dot com slash sorcery. Turing is training the next generation of AI with tasks that require real expertise and real-world judgment. That's why companies like Nvidia, Anthropic, Salesforce, and Gemini partner with Turing. Turing builds realistic reinforcement learning environments and data systems based on real operational traces, the kind of infrastructure Frontier Labs

• 25:48Molly O'Shea?

  need to train superintelligence. Visit turing.com/sorcery. So it's still very early in VCX's life. So what happens when it's hit with extreme volatility? What happens if it trades below?

• 26:02Speaker 00

  Yeah, so like- I did this with real estate with the first democratized investing in real estate, did it with private credit or asset-backed lending, and now I did it with venture. And I've, you know, I've, so I've been doing it for 15 years. So I have a pretty good idea of how this plays out. And the thing about the, this type of investment structure is that it's cyclical. And that the reality, all investment structures are cyclical. But I think this type of structure is more cyclical or procyclical than an endowment might be. And so, you know, right now, we're trading in this massive premium. It's an endorsement of the model. There's probably some period where it's positive. And then I'm not going to be surprised that at some point the cycle turns negative.

• 26:47Speaker 00

  It could be because of a shock, an oil shock from some mysterious war. Let me take that back. Anyways, it could be from an oil shock. It could be from anything. But anyways, and so like, you know, I saw it in 2001. I saw it in 2008. I saw it in 2020. I saw it in 2022. I mean, it happens over and over again that things trade up and things trade down. And so what's going to happen with VCX is that we'll see both. And the benefit is that when we're trading at premium, we can raise money into the fund, deploy it into these private companies. And when we're trading at a discount, it's not the company's problem. Like it's, we're like an insulator.

• 27:31Speaker 00

  And I just think that that's, the company needs to focus on building their business. And we need to focus on democratizing access.

• 27:38Molly O'Shea?

  Going back into the portfolio, how did you structure out allocation into the different categories and companies? And to your point, when you have more capital to deploy into them, which companies are you going to continue to top up?

• 27:51Speaker 00

  Yeah, I mean, it's evolved because the markets changed so much in the last three years. Like my dream is to have the biggest Best companies say, okay, I want to democratize ownership. I think that's important. I think democratized ownership is is critical to successful AI implementation of AI is concentrated ownership. I think it will actually be undermined, like it's successfully undermined by politics. So we have to democratize ownership, but to do that by exposing the company in public markets, I think is has a lot of risk. So if we could, if they would endorse, if I could get like some of these big AI labs to endorse this concept, whether it's us or someone else, hopefully us

• 28:34Speaker 00

  too, then I would try to deploy like I would want to put billions into Anthropic, OpenAI, the next, you know, the next wave of companies. I mean, that these companies, I think that like our investors are, you know, we have 2 million customers at Fundrise. Most of them, I'd never heard of Anthropic until like three weeks ago.

• 28:54Molly O'Shea?

  Really?

• 28:55Speaker 00

  For sure.

• 28:56Molly O'Shea?

  What?

• 28:57Speaker 00

  Yes. No, there's no question. Like it was not a household name the way ChatGPT was. And so like when we were introducing it to people and rolling it out, like they had never heard of this company.

• 29:07Molly O'Shea?

  Did the Pentagon drama help?

• 29:10Speaker 00

  That helped spread, you know, like it's like all things like, um, there's no such thing as bad press. So, so anyway, but yeah, I mean, I'm making, I mean, it's kind of a bald pitch of like, you know, like, like our job is to be the bridge. Our jobs would be the low cost, you know, structure that that democratizes access. I think it's, I think it's going to happen. I think that like the fact that we're trading at this wild premium is endorsement that there's demand there that that the model works. And now we just need to like connect the, you know, the circuits and get the capital flowing to these companies so they can go and just build like the next model.

• 29:52Molly O'Shea?

  So did the 100,000 investors in the IPO come from your 2 million?

• 29:57Speaker 00

  2 million customer, yeah.

• 29:58Molly O'Shea?

  Customer base?

• 29:58Speaker 00

  Yes.

• 29:59Molly O'Shea?

  Really? And then so how are you thinking of expanding that outwards?

• 30:04Speaker 00

  Well, everybody now is asking me about launching VC X two. And I'm like, it's only been three days.

• 30:11Molly O'Shea?

  What's VC X two gonna be?

• 30:12Speaker 00

  I don't know. I literally, I didn't even, I, I, I was just, I finally got this. It's like when you, you know, I actually have, uh, my wife and I had a baby, our third son, and literally.

• 30:25Speaker 00

  The nurse said to my wife, when are you gonna have the next one?

• 30:30Molly O'Shea?

  Oh my god.

• 30:30Speaker 00

  Like, literally, like, within minutes of having the first baby, and she was like, I'm gonna kill you.

• 30:36Speaker 00

  And so if people ask me about VCX2, I kinda feel that way. I'm like, oh my god, this was so hard. Don't ask me about that yet. But I, I think of the model of taking, you know, of, of raising in a non-traded vehicle, you know, where essentially, in practice, like a pub, like a private vehicle, where raising from, from people, you're investing, it's marked like a venture fund, and at some point, you take it public and convert it to publicly traded. I think that playbook, we just, we just followed. We've raised from our customer base and then take it public. I think that's a great playbook, because it gives you some, some flexibility about when you want to go to market.

• 31:12Speaker 00

  Um, and then we have, we currently have VCX1, which would allow us to raise more money. And so, you know, I mean, it's, it's simple. It's just so simple. You just want to get the best companies into the hands of most people.

• 31:25Molly O'Shea?

  When I was meeting with Carly at your very cool property on West Adams in LA, and when I was talking to you beforehand, she and you were both talking about how you got allocation of the companies and essentially won them over because you have such tight partnerships and ways to do strategic things. So can you walk through some of the ways that you're strategically a value add, actually, like a value add investor?

• 31:50Speaker 00

  Before I speak specifically about the value add, the best value add is no value add.

• 31:58Speaker 00

  My opinion is that you want long-term passive capital, which is what the best capital. Second best is that, is that then you add, you add value. So, so, um, we have 2 million customers. We actually did some data enrichment. So now we know like a lot about the customers. And so, um, and so we did, we've done a bunch of partnerships, like the one that was most successful was Ramp. We went out to our, we actually only went to half to, half our customers, went out to million customers. And Ramp, it was sort of perfect because it was sort of well-known, but not, hadn't really hit the public awareness about a year ago. And and we said, look, we invested in Ramp. One of the ways we we underwrite companies is we use the companies at at Fundrise.

• 32:43Speaker 00

  And so like, literally, every one of our team members has a Ramp card. And there's like, oh, my God, so much better. It's so much better than Amex. It's like crazy. And so we just went out to our customers and said, we use this product. We're not getting paid to say this. We're invested in this company. Genuinely is the best product. And I think we were the most successful Ramp partnership ever.

• 33:05Molly O'Shea?

  No way.

• 33:06Speaker 00

  Hundreds and hundreds of of of customers. And so like,

• 33:13Speaker 00

  for certain companies where they're just not household names, we can really bring thousands of customers. I mean, we can bring thousands of customers and like, that can be really meaningful for a company that's that's like high growth.

• 33:26Molly O'Shea?

  Wow, I have a credit card company to tell you about. Have you heard of Brex?

• 33:33Speaker 00

  I think they went, I think they just get sold. I don't think they fit our model.

• 33:36Molly O'Shea?

  They got acquired by Capital One.

• 33:39Speaker 00

  Yeah, yeah. Well, let me tell you about the next company I want to do this with. No, we another one we we're about to do this with is that we Fundrise has millions of customers. So we we adopted AI customer service about 18 months ago. And then we're invested in Intercom.

• 33:57Molly O'Shea?

  Oh, yeah, you were telling me about Intercom.

• 34:00Speaker 00

  And I'm like, and I want to roll out Intercom to all of our all of our customers. Because AI customer service is such a no brainer. It was awesome for us. Our team loves it. Anyways, and so one of the things that like, just some people ask me like, how did you know to invest in these companies? Because it's not like it was a total accident. Is I got access recently to two companies. Somebody offered me like, I'll say it. So basically, I got recently looked at Replit and Deal. And

• 34:36Molly O'Shea?

  By the way, we love Deal. We love Deal.

• 34:41Speaker 00

  But the thing is that we at the company don't use either one of those products today.

• 34:45Molly O'Shea?

  Okay.

• 34:45Speaker 00

  And so I just couldn't get to ground of whether or not we should invest. Like when we've, whether it's Intercom or Ramp or Anthropic, like we use the product in the software we build. We use the product like, like we, I've actually had our HRT and I was like, we should go look at Rippling and Deal and all these companies and figure out which one we like best. That's how we'll decide. Like it'll be a huge part of how we decide what to invest in. Because like if our, if our, I mean, sometimes we've gone to companies and said like, we love your product. We invest and they said, no.

• 35:19Speaker 00

  It's not like all of them said yes. Um, but that's just a way to diligence the product. Cause otherwise I just, I just don't know if it's going to be a good product. The guy knew Anthropic was, was a world-class product because our team was using it on all the AI's products we're building. And, and it's just, it was just for us, like, um, it just made so much easier to know what to, where to put the capital.

• 35:45Molly O'Shea?

  So when you're investing into these companies, how much are you investing? Or how much were you investing and how much you said you want to invest up to billions into them in the future potentially? So like, how does that scale and what was the initial entry size?

• 35:58Speaker 00

  Yeah. I mean, this is the whole challenge, like building a business, right? Is it, everything works much better at scale. When our phone was a hundred million dollars, you know, you show up, we invested, I think $5 million in Vanta. And, um, and now we, you know, we want to write 50, a hundred million dollar checks. So it's like scale definitely makes it easier because companies will pay attention to you when you're talking about 50, a hundred million, 200 million. And they just like, most great companies aren't gonna like, I, I think, I don't remember which company it was. So they weren't going to get out of bed for like less than 20 million. It might've been Kalshi.

• 36:35Molly O'Shea?

  So like Tarek.

• 36:36Speaker 00

  Yeah. So anyways, the point is like, um, the bigger we get, the easier it is to access, the more credible we are. The more it helps investors, the more we lower our fees, the more we, the more we get great companies. So it's a virtuous cycle and, and the, and the, it's a combination of executing well and having hopefully a good reputation of being a good partner.

• 36:59Molly O'Shea?

  What's the most underrated company in the portfolio?

• 37:02Speaker 00

  Loyal.

• 37:03Molly O'Shea?

  Really?

• 37:04Speaker 00

  Oh, yeah.

• 37:04Molly O'Shea?

  Why?

• 37:05Speaker 00

  Oh, my God. So loyal, you know, you know, so I'll just say what loyal is. So loyal, so I met Celine a year ago. And I've been, it's just like, hey, Celine, we got, we got to invest in your company. And we have 2 million customers. When you roll out loyal, we're going to be able to roll it out. So loyal is the first longevity drug. It, I have, I have, I have, I had a dog actually that just recently died.

• 37:30Molly O'Shea?

  I'm sorry.

• 37:31Speaker 00

  And it was 16 years old and loyal, the loyal like pill essentially would like help dogs live like three to five years longer, I think. Like years longer, healthier. So extends life, a life extending drug, right? I mean, it sounds like magic. And I, when I heard about it and I met Celine, I was in like a session with her.

• 37:54Speaker 00

  I was like, this is like a blockbuster drug. This is going to be the most successful drug in history. And then she's going to go and create the next thing. She's, she's going to create like longevity for humans, I think, too. She's special. And so we invested in their last round. And I think we're going to roll it out to like, they want to be a consumer brand. So I think we're going to roll it out to our 2 million customers. And I'm sure we have hundreds of thousands of dog owners. We probably have tens of thousands of vets as veterinarians as customers, too. I actually will know, I can say these are the, because we, we've enriched our data. So we know which of our investors are veterinarians. And then we can create a targeted campaign for Celine to like actually reach out to them.

• 38:34Speaker 00

  So we have like a, an investor network. We had this concept, trying to create this concept. I'm trying to make fetch happen here. So there's like, we call it network investing. There's social networks. We have network investing where basically the, the network of investors is value add. And so like with loyal, I think loyal is, is just going to be like a blockbuster. And it's like, it's a really good example of like democratizing ownership.

• 39:02Molly O'Shea?

  I have a couple more questions on the fund structure and everything, but for VCX, like specifically, how many people are on the team?

• 39:12Speaker 00

  On the team?

• 39:14Speaker 00

  Depends what you mean.

• 39:15Molly O'Shea?

  Like, how did you, did you create a team for this? Like, how did this?

• 39:19Speaker 00

  Yeah. Like. I mean, mostly the, the, so like, I think a lot of, this is what I think is true, but you actually, I never hear that many people talk about it. Is that a lot of times a company is a company within a company. And there's like, almost like layers of the onion, or like, we come to like, the nuclear center. And everybody wants to be in the room. But I'm like, the nuclear center is hot. It's very like, high, high pressure. So there's like a core team who, working with, building Fundrise together for like 15 years. And wherever we sort of point the, the, the eye of Saran, like, that's what gets the heat.

• 39:58Speaker 00

  And so we, like, it was like me and some of my co-founders, like, and some of the software, like, product developers who really went and like, attacked VCX over the last couple of years. And we, we hired some people. But I don't believe in the theory that, like, this is something that, some sort of theory out there that you can like, delegate, hire smart people and delegate to them, expect success, is not my experience. If you want something done, you get like, the maniacs who, who know how to do things, and just the core, core founding team, and just have them go do the next thing. So we just, we just keep doing the next thing, and it's so painful.

• 40:37Molly O'Shea?

  What have been your biggest lessons in, like, I guess, trying all these different projects out?

• 40:44Speaker 00

  Oh, man. Pain, pain, suffering. I mean, that's, that's like, definitely the magic. Whatever's the most painful thing, that's the answer. Whatever the most like, brutal, unfun thing is, that's what you got to do. So it's like, so much to success is just your willingness and ability to take on misery. Now, that's like, people are like, what does that mean in practice? This is like, when things are hot, like, right now, tech's hot, you have to lean back. And when, and that, like, people give you so much grief for that. And then when things are really cold, people give you even like, you know, one of the worst parts of, of what we're model is, we have a lot of people,

• 41:22Speaker 00

  a lot of investors, and they give you a lot of grief, and all, things are hot, they give you grief, things are cold, they give you a lot of grief, and.

• 41:32Speaker 00

  I think that's why like a lot of sociopaths are successful. They just aren't affected by it. But if you are not a sociopath, it's good to have some insulation. And unfortunately, like I haven't, I don't think I've done a great job insulating myself.

• 41:47Speaker 00

  From people like, uh, setting it like we get death threats. We invested in a data center. We invested in this world-class, I mean, this, I can't tell what the tenant is, but it's a, it's a top AI lab. I mean, we're, we're helping fund, one of our funds is a, it's, we, we have real estate, we have tech, we have, um, credit.

• 42:04Molly O'Shea?

  Is it TerraFab?

• 42:06Speaker 00

  No.

• 42:09Speaker 00

  No. Um, that's a fun one. I haven't seen that one. Uh, but anyways, and you know, some people apparently don't like data centers and they were sending us death threats. We had, um, somebody actually tried, I mean, we have, I mean, it's a world's filled with crazy people. We had somebody's try to invest. Um, and they signed the subscription agreements in blood.

• 42:27Molly O'Shea?

  What?

• 42:27Speaker 00

  Mm-hmm.

• 42:28Molly O'Shea?

  What?

• 42:29Speaker 00

  Yes. That person was not all right in there. We've, I mean, you just, the thing about democratizing investing is you get.

• 42:36Molly O'Shea?

  You really democratize it.

• 42:37Speaker 00

  Really get all types and, and, and, um, yeah, I mean, you have, I have like people reaching out to me. I mean, I have CEOs and C-suite people who are like, you know, the biggest companies in the world. And I have like, you know, Uber drivers, which is awesome, but it can be, it can be painful.

• 42:54Molly O'Shea?

  So how do you communicate with all of them?

• 42:57Speaker 00

  AI now. That's the thing. That's what I'm telling you. We, we used to have, uh, 20 people on the team. We built a whole platform for.

• 43:02Molly O'Shea?

  This is Intercom.

• 43:03Speaker 00

  This is Intercom, this is Fin, yeah. But we used to have 20 people, we used to have to hire one person for every 30,000 new investors. And now we don't. That's why I'm, I'm, that's why I'm such a big fan.

• 43:15Molly O'Shea?

  Yeah.

• 43:15Speaker 00

  But you know, we, we've been doing this for 15 years. I mean, 15 years ago, that was, you know, there wasn't even, there wasn't a term for it. No one's ever heard of the idea. When I went to the SEC, they thought it was hilarious. Like they just thought it was cute. Uh, oh, yeah, here, I'll tell you, I'll tell you the founding story. This is like, so I, in 2011, I went out trying to do this because like the 2008 financial crisis was such a, um, terrible experience for me. Like all my capital partners went bankrupt and it was like, it was, it was like, it was to me like it was a loss of innocence. If you're ever reading literature, talk about loss of innocence. I lost all my innocence in 2008 financial crisis and I set out to try to build like an alternative model where people can invest in like real things.

• 43:59Speaker 00

  And so I went to 11 law firms trying to find a way to like democratize investing. And I got introduced to the, I think is that it's the number one law firm in New York. Went to their office on the top of the Conde Nast building. And I met with the head of their securities practice, head of the real estate practice. This is 2011, May 2011. And I go in, it's like, the conference room has this like sunset. And, and these guys are sitting there and I'm pitching them on how we have to democratize access. The system's broken. And they look at me at the end of my like impassioned speech. And the guy says to me, why would you bother with a little guy? I was like, what? He's like, why would you bother with a little guy?

• 44:44Speaker 00

  I was like, that's not what I was expecting him to say. And I was like, because they're getting screwed. He's like, what's your opinion? Anyway, so like, so like, the idea of democratizing access was like, really like a strange, it was so, it was just a strange notion. Now, you know, whatever, 15 years later, it's like, it's no longer as, as weird as it was. Now it's like, oh, this is like, maybe the future retail has become such a dominant part of capital markets. It's, it's so important to public markets. I think it's going to become important to private markets too.

• 45:18Molly O'Shea?

  On your point of pain and misery, Mark Andreessen just went like mega viral, talking about how he's not introspective. And he thinks the greats of history, they're not introspective, they just focus on building. Are you introspective?

• 45:32Speaker 00

  I think I am. I don't know what he's talking about. I saw that, I saw that tweet. I mean, it's just like, he's good at like, like takes. I mean, God knows what people were over the history, like. Yeah. So, no, I mean, like, I don't even know where that, where that comment comes from. I feel like, you ever read anything like by Napoleon, he was clearly introspective and like, I don't know. That, that, but it's, but being, this is the problem, like, like, I had a mentor who used to say the agony and ecstasy of empathy. Because basically if you're empathetic, you just get all the joy and all the pain of feeling other people's emotions. And so, yeah, it sucks. It sucks being empathetic.

• 46:12Speaker 00

  But like, I think you're better off than not having it, right? I mean, I don't know. I guess it's.

• 46:21Speaker 00

  I mean, it hasn't if I do you believe he's not introspective? Is that a thing?

• 46:26Molly O'Shea?

  I don't know. I think at a certain point, you kind of have to put on the blockers.

• 46:31Speaker 00

  But what if you can't? Who? How does that work? How do you put on blockers?

• 46:36Molly O'Shea?

  Just don't listen to everyone or everything or feel everything.

• 46:41Speaker 00

  Yeah, I don't think that's an option. I think that like most people you are how you are. You are who you are. I think it's like you can you can like create coping mechanisms. The worst part about building a business is the stress. There's so many crazy things happen. So much like it's so hard miserable miserable, but you know, I mean, it's like, like all things like you wouldn't have done it if you'd known. But then when you get there, like, what else are you going to do? You keep going.

• 47:10Molly O'Shea?

  Yeah. Well, speaking of Mark Andreessen, A16Z has now shifted into this mega firm like they're not really a fund anymore. I don't think they even go by that. Sequoia doesn't go by fund. General Catalyst also says they're a firm, they're a company. Thrive mentions that they're a company. They operate like a company. Do you think these mega funds are going to go public? What do you think is going to happen to the long tail of venture capital in the industry?

• 47:36Speaker 00

  How big is um A16Z 80 billion?

• 47:40Molly O'Shea?

  I think they're around that.

• 47:41Speaker 00

  80 billion. They're the biggest and the next biggest is like Sequoia. What are they 50 billion or something?

• 47:46Molly O'Shea?

  I think Sequoia, General Catalyst and A16Z are between like 60 to 80 billion.

• 47:52Speaker 00

  Yeah, it's so funny because like BlackRock's like 15 trillion.

• 47:59Molly O'Shea?

  Yeah.

• 47:59Speaker 00

  Like, you know, these companies are not actually that big compared to public markets. And um, and so I feel like this is if you've ever heard the saying ontogeny recapitulates philogeny?

• 48:12Molly O'Shea?

  No.

• 48:13Speaker 00

  So ontogeny recapitulate ontogeny recapitulates philogeny means that the nature of something is dictated by its structure. So philogeny means structure, ontogeny means ontological means the nature of something. And so um, the nature of these partnerships is eventually they want to monetize. And the best way to monetize is go public. It's happened in all the investment banks. They've all went public. Um, and so, yeah, I mean, they'll most of them will eventually go public. And then they'll end up looking and acting like.

• 48:47Speaker 00

  All the other public companies that are Goldman Sachs and BlackRock and Blackstone. And so it's just like the, it's just the arc of all financial industry. So I think they do go public and you know, that'll be like the final chapter for their, for their businesses.

• 49:09Molly O'Shea?

  V C X by Fundrise, the public ticker for private tech, allowing investors of all sizes to invest in venture capital. View the portfolio at get V C X dot com. That's get V C X dot com. Some of you may not have heard this yet, but our sponsor Public just launched something called Generated Assets. And it brings A I into investing in a way I've honestly never seen before. Here's how it works. You type in an idea like A I powered supply chain companies with positive free cash flow, or defense tech companies growing revenue over 25% year over year. Public's A I then dispatches a swarm of agents that scan every single U S stock, evaluates them and instantly builds a custom index around your thesis.

• 49:51Molly O'Shea?

  What really stands out is how clearly it explains why each stock is included. And before you invest, you can even back test your idea against the S and P 500. So you're making decisions with real context, not just guessing. And beyond Generated Assets, Public lets you invest in stocks, bonds, options, crypto, all in one place. They'll even give you an uncapped 1% match when you transfer your investments over from another platform. If you want to build a portfolio that actually reflects your thesis, visit public.com/sorcery. Paid for by Public Investing. Full disclosures in the description. Founders ship faster on Deal. Set up payroll for any country in minutes. Hire anyone, anywhere and get visas handled fast so you stay focused on scaling.

• 50:32Molly O'Shea?

  Deal takes care of onboarding, H R, I T, E O R, benefits and compliance. So your team can grow without borders. It's why more than 37,000 fast growing companies trust Deal to move fast. Visit D E E L dot com slash sorcery. That's D E E L dot com slash S O U R C E R Y. What's the biggest vulnerability for the V C industry? I mean, we've gone through several waves and there was the Tiger crossover wave. Then there's the Middle East LP capital wave. Like there's a lot of different components that are keeping it alive. And so what happens next and what's the biggest vulnerability?

• 51:10Speaker 00

  Short term, long term?

• 51:12Molly O'Shea?

  Both.

• 51:13Speaker 00

  Oh my God, that's a hard question. I mean, short term, right? Like, it's, it feels like there's going to be a shock from the war in Iran. I feel like that shock could be, affect capital flows into, into venture. I mean, a lot of the marginal dollar has been from the Middle East over the last three or four years. I was, I was actually tweeting at Mark Suster about this. He thought that they'd want to invest more as a result of the war in Iran. I think they'll want to invest less because I think they're going to be trying to like, uh, deal with domestic issues. So I think that there's a possibility that we see a downturn coming out of this that, that could shock venture industry.

• 51:55Speaker 00

  And, and that shock is the kind of, there was that shock in 2022 where you have all these unicorns and they all sort of like, it happened in real estate too. In real estate, they call it extend and pretend, where you sort of, you sort of kick the can on the problem. And if there's a, if there's a downturn, then I think that will cause a final like, okay, let's deal with these, you know, these companies that aren't, aren't like, going to go public. Same thing with the real estate sector, same with a lot of, a lot of the, the market. So I think that, that reckoning could happen in the short term. In the long term, I think it's all but AI. And how AI affects venture industry is anyone's guess, but it probably affects everything.

• 52:41Speaker 00

  And venture is not going to be like some exception.

• 52:44Molly O'Shea?

  There was this crazy pitch book stat that I told you beforehand, it was like 40% of unicorns have not raised capital in three plus years. That's a lot of zombies.

• 52:56Speaker 00

  Yeah, I don't think zombie is the nicest way to describe it. I had this podcast I did, I do a little podcast, I called it the great deleveraging. But we went through 15 years of zero interest rate environment. Came out of that environment. And then we, we went through a transition period, which I think we'll look back and see 23, 24, 25 transition period. This happened also in the, in the, um, in the eighties. If you look, the, the SNL crisis was one of the worst savings and loan crisis in the, in the eighties. And it, 1987 was Black Monday. But the crisis didn't happen until 1992, the recession from it. There was this long lag because everybody tries to like delay, hoping that it'll get better.

• 53:40Speaker 00

  And so I think that is what's, something like that's coming. It always happens, sort of inevitable. And, um, and I think that will cause some like, you know, a lot of companies will probably merge.

• 53:55Speaker 00

  I mean, it's just gonna be sort of like a, a sorting out. And that's like a healthy, painful part of the process.

• 54:04Molly O'Shea?

  Do you think a real downturn is coming though? Like we've seen through the last, at least like five years since COVID. Like we've had these crazy volatile micro downturns and the market just correct itself. Like we just like turn on the switches, we do some things, click the buttons and like it's back to normal. Like, do you think it's possible to keep on doing that? We do, by the way, have over 37 trillion in deficit. So there's a lot of debt piling up alongside that. But like, will it actually ever break or will we always bolster the system?

• 54:36Speaker 00

  Yeah, like I don't know. I mean, it's, it's, it's kind of crazy to me because I've been through a bunch that we, we keep it. We're able to, the last 15 years, we're able to like keep dodging the bullet. Like we're like the matrix or something.

• 54:51Speaker 00

  So what, well, yeah, so like, you know, those types of things are contingent. So you could tell, you could, you could, I like to do scenario planning. So you could see a scenario where, um, there's a shock, there's political dysfunction. And as a result, there's no bailout, right? So mostly what's happened is the government's been able to bail, they bailed out Silicon Valley Bank. They bailed out, you know, it, the, you know, during the COVID, there's, there's, there's like, um, an inability for the government and the Federal Reserve to compensate for this. And that, and essentially they've, they've, we've, the governments ended up taking on these deficits. They have absorbed the, the losses, they privatized gains and, and, um,

• 55:30Speaker 00

  with publicized losses, that's what they say, or subsidizing them. And so, I mean, it's contingent on, on politics. And it's, you know, like, it's hard for me to imagine that like the political system will rally together to solve a crisis now. But maybe it'll rise to the occasion.

• 55:52Molly O'Shea?

  What do you think the biggest questions are that no one's asking right now?

• 55:56Speaker 00

  No one's asking.

• 56:00Speaker 00

  I mean, it's funny that, so I'm gonna give you one slight dodge. But mostly, no one was asking what happens, what did success look like for AI? Outside of, outside of Silicon Valley, everyone was asking what would failure look like? What would a bubble look like? And even now, like, there's no vision for how AI actually ends up being socially constructive. Like, how does it work? Like, what does winning look like? Not as what is, what is like, be able to lose their job? And, oh, there's unemployment, and there's UBI, you know, universal basic income. Everyone's focused on what goes wrong. And no one, I really don't think, I didn't even heard anybody articulate a vision for what,

• 56:45Speaker 00

  what is, what is, like, an outcome that's good? And I feel like no one's really been able to articulate, like, that question. Like, okay, how, how do we, how do we end up with a win-win here? Like, I literally haven't heard anybody say that. So that's my, I guess, my, my best answer.

• 57:02Molly O'Shea?

  That's a really good answer.

• 57:04Speaker 00

  Okay, all right, made it up on the spot.

• 57:06Molly O'Shea?

  Good, well, well done. Um, as we wrap up, let me see, are there any topics we didn't cover that you want to cover?

• 57:15Speaker 00

  I mean, the big question, right, for our venture fund and everybody is, you know, what, how far do they go? Because I think that the question of VCX, question of democratizing venture today, is it's derivative of, is AI gonna go, you know, I mean, to the limit? To the, does it go to infinity, right? Does it basically replace most white collar jobs? Does it create, like, this abundant society? And if it does, who owns it? How's ownership distributed, rather than how's income distributed? I think ends up being existential to society. And, um, you know, people I know in these companies think that is, that we're going the limit here.

• 57:58Speaker 00

  If that's true, and we, and we haven't figured out how to spread the success, I think we have, like, serious problems. And I think that that question about like, you know, what what we invest in is all downstream of like, is there an application layer? You know, at the end of the day, we built I built part, we built a real estate AI vertical product called Real AI. And we're constantly trying to work out like, okay, where's our moat? Data, data is the moat, you know, no, expertise is the moat. Like, it's, it's, it's very difficult to build in this environment.

• 58:34Molly O'Shea?

  We talked about this before, but you asked me what percentage of white collar jobs will be there. And I think it was like five or 10 years.

• 58:44Speaker 00

  Five, I think I said five years.

• 58:45Molly O'Shea?

  Five years.

• 58:46Speaker 00

  Yeah. What? How many jobs are displaced by AI or something like that?

• 58:49Molly O'Shea?

  What do you think?

• 58:50Speaker 00

  What do I think? I think more than 20%, but less than 50. So like, let's say 20 to 30, five years, 20 to 30% of jobs are not to not, not just displaced, but also suppressed. So you don't, you don't make that marginal hire. And that adds up to 10s of millions of jobs.

• 59:13Molly O'Shea?

  How has it changed in your organization? You've said you've created your own products and that kind of thing.

• 59:18Speaker 00

  Yeah, I mean, for us, for sure. We were 350 people. Now we're 200 people. I mean, every, every month, we can do more with less people. I think we're at the cutting edge of, I mean, every department, product development, you know, real estate analysis, accounting, I mean, processes, these processes are so much, you're not only just like cheaper, way better. I mean, it's, it's, it's like, um, what is an abundance vision for AI? I just, I just don't think I've heard one.

• 59:47Molly O'Shea?

  Very optimistic.

• 59:49Speaker 00

  Well, I haven't given, didn't give you an answer. That is a question.

• 59:55Molly O'Shea?

  So our presenting sponsor is Brex, and they're all about performance, spending smarter, moving faster. For you, how do you measure success?

• 1:00:03Speaker 00

  I think it's a combination of, of great returns and broad ownership. So we, you know, can we get a million investors into VC act? How far can we broaden ownership? And how much? And, and if we have these big, you know, these, the best tech companies saying like, of course, we always have an allocation for the people. Like, then I know we've won.

• 1:00:23Molly O'Shea?

  Are they saying that yet?

• 1:00:24Speaker 00

  I don't want to say which company, but it was a defense tech company. And they were like way more open minded. They were like, they went from like very skeptical to very open minded over the last 24 months.

• 1:00:37Speaker 00

  I can't say which company it was, but I've watched, I've watched people like, like go from being skeptical to being like constructive about it. You know, it, it, it takes more independent minded people to lead, to change. And I'm seeing it. I'm seeing it. I'm, it's really been gratifying.

• 1:00:56Molly O'Shea?

  As we wrap up, what are you most looking forward to in the next year for VCX?

• 1:01:01Speaker 00

  Oh, man, I would love to write, um, he, if we were could write a massive check into a, into one of these rounds. One of our advisors was the CFO of Schwab. And he asked me like last week, after VCX went public, he said, you know, you invested in like nine of these top tech node companies. Was it lock? I was like, nine?

• 1:01:29Speaker 00

  So people still wonder like, you know, like you're only as good as your next hit. And so I think we need to like, we need to write some big checks in these, into these great companies and validate the model. Because this could, you know, like these crossover ideas, they're not, I mean, like they could fail because it's a bubble and you invest poorly. All you have to do is do a bad job and the whole thing is it goes down in flames. And if, but if we can validate it, then I think that it would become normalized. It becomes so normalized that it becomes like not an innovation, becomes invisible. And that's, that's how you succeed in technology where technology is no longer considered technology. And so this is a financial technology innovation.

• 1:02:13Speaker 00

  And we, if we do it right, it just becomes totally standard, like trading, like, like trading. Trading is a, is a technological innovation. People don't think of it as technology. Mutual funds, passive investing, money markets, all these things are, are, are, were, were like these cutting edge ideas. You've probably heard this thing that the arc of financial history bends towards democracy. You know, when you introduce technology, it lowers costs and it drives more access, broadens access. So I think that's exactly what's happening here. It's totally true to the historical pattern. But we have to like deliver.

• 1:02:50Molly O'Shea?

  So how do you manage the capital and with deployments and allocation?

• 1:02:54Speaker 00

  Like everybody, we know the companies we want to invest in. And it's just like persuading them that this is a good idea. That's why I'm on the show.

• 1:03:05Molly O'Shea?

  Okay, so then I guess for the skeptics, so we can be inclusive here. What are the biggest skeptic questions that you get?

• 1:03:15Speaker 00

  I mean, I think the first one is more a misunderstanding. They're like, they think it's like an SPV or they're afraid it has too many people on their cap table. They don't think of it as like, it's to the company, to the private company. It's like a venture fund. A venture fund has lots of investors. You don't know about them. It's not your problem. You're just dealing with the principal of the fund. So I think that there's first, the skeptics are confused by the model because it seems so novel to have so many people. And then the next one, I mean, they're always skeptical about, you know,

• 1:03:51Speaker 00

  they want, I mean, everybody's funny. They, they want a name brand. They, Osekoia, A16Z. Like, and I'm like, why C and Z didn't even exist like 2007, like they're new, like they, they became this, I mean, they're the dominant player and it's so recent. I think that like,

• 1:04:10Speaker 00

  there's a graduation in terms of credibility and the skeptics are just skeptical that, you know, do you go to Wharton? Do you have an MBA? I hate that stuff, but they, people want it.

• 1:04:21Molly O'Shea?

  Anything else? Any hot takes?

• 1:04:23Speaker 00

  Hot takes? I mean, it's almost always feel like it's the most volatile time in history. But it does feel like, I mean, I, I, you know, I actually grew up in the nineties. Man, the nineties are great. Like it's just that the, the world moving faster and faster every year. And it means, I think that ultimately means the stakes are higher because the technology amplifies us all. And like, nothing's inevitable, right? We have to rise to the occasion. We have to rise to like, you know, to the, to be essentially transcend our interests and do what's right for like, for, for society and, and like, that's a lot.

• 1:05:05Speaker 00

  That's a lot to ask of political leadership, technically, our technology leaders, like, but I, as, I mean, I hear people criticizing the AI companies. I think, I, I look back in history, I was like, we know, we, we could be a lot worse off. I've seen, I mean, we're lucky to have the leadership we do. And I'm like, I'm, I'm really hopeful we pull this thing off because it's like, there's a lot of deficits.

• 1:05:31Molly O'Shea?

  Well, Ben, it was a pleasure to have you on. Thank you so much for sharing all of your knowledge from real estate to credit to now VC and public markets. It was like such a, such a pleasure. And thank you for letting me ask so many peppered questions.

• 1:05:47Speaker 00

  Yeah, you didn't prep me at all for this.

• 1:05:52Molly O'Shea?

  Okay.

• 1:05:53Speaker 00

  Thanks for having me.

• 1:05:54Molly 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.