Venture Concentration, High-Skill Immigration, And Who Should Buy Lyft? | E2067

This Week in Startups is brought to you by… Paddle. Wherever you want to take your business, go there with Paddle. Go to paddle.com/twist to get started with your exclusive listener fee-free period. Fitbod. Get 25% off your Fitbod subscription or try out the app for FREE when you sign up now at fitbod.me/TWIST. LinkedIn Ads. Get a $100 LinkedIn ad credit: http://www.linkedin.com/thisweekinstartups Todays show: Jason and Alex discuss the over saturation of venture capital, how to fix the high-skill immigration issue, including an interview with Lisa Wehden of Plymouth, and the pressing question of who should buy Lyft? (0:00) Jason and Alex kick off the episode (1:56) Jason and Alex discuss their New Year holidays and resolutions (6:25) Jason shares tips for mindfulness and meditation (8:01) Reflecting on family moments and making memories (10:13) Paddle. Go to paddle.com/twist to get started with your exclusive listener fee-free period. (11:27) Jason and Alex delve into venture capital and Instacart's funding rounds (17:41) Jason announces focus on early-stage investments and Founder University (19:12) Fitbod. Get 25% off your Fitbod subscription or try out the app for FREE when you sign up now at fitbod.me/TWIST. (21:05) Venture capital fundraising concentration and strategy (25:40) Impact of large funds on seed rounds and venture capital immigration (29:08) LinkedIn Ads. Get a $100 LinkedIn ad credit: http://www.linkedin.com/thisweekinstartups (31:05) Social media weaponization, self-censorship, and high-skilled immigration (36:45) Criticisms, reforms, and solutions to H1B visa issues (45:40) Consultancy costs and Jason's simple solutions for H1B visa reform (50:05) The rise and fall of Bench and Level; predictions for startup failures by 2025 (56:21) Potential mergers in on-demand and autonomous sectors; viability of an Amazon-Lyft merger (1:03:08) Expanding the Mag 8 to reduce tech giant dominance (1:04:33) Valuations of major tech companies (1:05:26) Overview and support offerings of Founder University and getstartupcredits.com Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp Follow Lisa Wehden: X: https://x.com/lisawehden LinkedIn: https://www.linkedin.com/in/lisa-wehden Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Thank you to our partners: (10:13) Paddle. Go to paddle.com/twist to get started with your exclusive listener fee-free period. (19:12) Fitbod. Get 25% off your Fitbod subscription or try out the app for FREE when you sign up now at fitbod.me/TWIST. 29:08) LinkedIn Ads. Get a $100 LinkedIn ad credit: http://www.linkedin.com/thisweekinstartups Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland Check out Jason's suite of newsletters: https://substack.com/@calacanis Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

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

• 0:00Jason Calacanis?

  You know, I want to get into immigration. Thank you for like bringing up this topic and following my Twitter stream because it is, you know, big on my mind. I know people like to know what I'm thinking and I like to share what I'm thinking. Why do I like to share what I'm thinking, Alex? People email me, [email protected] is my email for life, where they DM me and tell me that I'm a horrible person and, you know.

• 0:20Speaker 01

  You've got to stop accepting, dude, you've got to lock down your DMs.

• 0:23Jason Calacanis?

  I love it. I'm not lacking my DMs. I love the savage DMs I get. It's incredible.

• 0:27Speaker 01

  Okay.

• 0:28Jason Calacanis?

  You don't like them.

• 0:29Speaker 01

  No, no. I tweet them out of collection. I'm just like, I can only take so much. I think I have a slightly lower bar for negativity day to day than you do. I just like, after the third or fourth time someone calls me something nasty, I'm just like, alright, alright, that's enough.

• 0:45Jason Calacanis?

  It's strictly a reflection on how they're feeling about themselves at that moment.

• 0:49Speaker 01

  Yeah, that's true. Yes.

• 0:51Jason Calacanis?

  And usually it's a troubled person or a 12-year-old or a Russian Chinese bot trying to cause trouble. Or just somebody doing engagement farming in order to make money, you know?

• 1:01Speaker 01

  Yeah.

• 1:04Speaker 02

  This Week in Startups is brought to you by Paddle. Self-serve software is global by default, but selling to every country is complicated. Paddle's merchant of record manages payments, sales tax, chargebacks, and refunds, so you don't have to. Wherever you want to take your business, go there with Paddle. Go to paddle.com/twist to get started with your exclusive listener fee-free period. Fitbod. Tired of doing the same workouts at the gym? Struggling to plan your own workouts? Fitbod will build you personalized workouts that help you progress with every set. Get 25% off your subscription or try out the app for free when you sign up now at fitbod.me/twist. And LinkedIn ads. Start converting

• 1:45Speaker 02

  your B2B audience with high-quality leads today. We'll even give you a $100 credit on your next campaign. Go to linkedin.com/thisweekinstarups to claim your credit. Terms and conditions apply.

• 1:57Jason Calacanis?

  Hey everybody, welcome back to This Week in Startups. It is January 3rd, 2025. We are here in the new year. I'm still in Tahoe, getting in some skiing. I did 16 full days. I took my first day off. I'm trying to beat my record of 40 days, which I did, I think, three years ago.

• 2:14Speaker 01

  All right.

• 2:15Jason Calacanis?

  My second best year was 36, so I'm currently ahead of my two best years. I track it with an incredible app called Slopes. So I want to shout out Slopes. If you don't have slopes and open snow and you're a skier, please go buy those too. I'm not an investor either. But yeah, I'm just having a wonderful time. Had a restful, great time with my daughter, skiing a ton. And I got to ski with Chamath and Freiberg. We're all on, you know, this sort of vacation to Tahoe, not in the same house, but, you know, in the same area. And so a wonderful, wonderful, restful holiday. How was yours, Alex? How was your rest holiday? Was it restful?

• 2:48Speaker 01

  It was full of food, but because we had a three and a half month old dear, most of it, no, not, not super restful. But I think that's just par for the course when you have really little kids. So not a complaint. I got to see my brother, who actually, he's, he's living in Austin for another six months on assignment.

• 3:04Jason Calacanis?

  Oh, I'd love to meet him.

• 3:06Speaker 01

  I'll see what I can do. He's a major in the army and he just completed his PhD in applied physics and is going back to West Point to teach.

• 3:13Jason Calacanis?

  Wow, respect. Well, when we have our next event, we'll invite him. I do like some CEO dinners and VC dinners on Thursday nights in Austin. Every Thursday, I invite five people to come have dinner with me. I got some regulars and then I always invite like a new person to have like wide ranging discussions because I love people.

• 3:31Speaker 01

  Yes, you do.

• 3:31Jason Calacanis?

  Doing the show. Let's say hi to some of our folks who have tuned in early. Mark Beatles, our first Nody coming in today. Campbell, Nody Squad. Bernie Hepp, Happy New Year all. He was our third. Michael Dan, Mois and Sone. He is also part of the Nody gang, squad, whatever.

• 3:53Jason Calacanis?

  I think Noty Gang is good. Maddie Newman, our producer and researcher in Austin, she's here. You don't get to be in the, well, you can be in the Noty Gang, sure. And, oh, Uzi Obi is here. Yes, I'm alive. Thank you. A little dark. Gregory Kennedy, Homestead Creative, and a bunch of other people are here. We always like to shout out the Noty Gang. What's the Noty Gang? Those are the people who put on notifications on YouTube. Go to YouTube, Pippin This Week in Startups, Monday, Wednesday, Friday, we will be going live at about 10 a.m. Pacific.

• 4:24Speaker 01

  Yes.

• 4:25Jason Calacanis?

  Noon, J Cal, J Ranch time in Texas, and 1 p.m. Alex time on the East Coast.

• 4:30Speaker 01

  Actually, Jason, before we jump into our first chart and our first story, because you brought up the time we do the show, would you like to tell people how the next couple of weeks are going to be slightly different?

• 4:39Jason Calacanis?

  Oh, yes. I am going to be traveling internationally for 10 days, so we might start earlier or later.

• 4:46Speaker 01

  Earlier. I think it's 8 a.m. Eastern time next week. We'll confirm that. Put it in the newsletter.

• 4:52Jason Calacanis?

  No, 8 a.m. Eastern time. Okay, which means 5 a.m. Pacific time. I mean, so if you get up for the Noty Gang, you're going to have my absolute salute to you. So, yeah, when I'm on the road, I still want to do live.

• 5:03Speaker 01

  Hell, yeah.

• 5:04Jason Calacanis?

  And that's my big resolution for this year is to try to, you know, I got my sleep dialed in, I got my weight loss, I got my exercise, I'm adding meditation, but I just want to take those four fundamentals and increase them as part of my New Year's resolution. Maybe lose the at last, like, maybe 10 pounds, get to 165, and the weight training going. Really dial in the sleep, get that 80, 90 sleep score every night, not just four or five nights a week. So try to get that to six nights a week, maybe. Yeah, and then the diet, I'm really doing well with that, but I got to take out a little of the sugar. So, anyway, those are my resolutions. You got any short, any, any, any quick hits on your New Year's resolutions?

• 5:42Speaker 01

  Yeah.

• 5:43Jason Calacanis?

  New Year's resolutions?

• 5:44Speaker 01

  So, abs for sure. I'm putting in a lot of pushups, Jason, I'm not going to lie. A lot of planking, a lot of crunches, trying to work on that. I avoided new dad weight round two, thankfully, because I gained like 15 the first time and it was brutal. Abs, finish a novel. Don't drink for a year. And I think I'm going to add a non-professional, really personal one. I want to be a really great husband and father this year. I want to be patient. I want to be kind. I want to be engaged and available. And I want to be a little bit less in my head. So a little bit more stoic, a little more zen, a little bit less frenetic, a little bit less ah all the time. So.

• 6:25Jason Calacanis?

  I think, you know, you have an active mind is my perception. And when you have an active mind, you're highly intelligent, which you are both of those things. You can have a hard time turning it off. There's a very simple way to do this. Just get the Calm app. I'm talking my own book here, but I invested in that company for a reason. And they have one minute, three minute, five minute, 10 minute. Just do it 10 days in a row. One, three, four, five, whatever number of minutes, a breathing exercise, some music that they have at a specific Hertz that helps you go to sleep. Just do that. Then go interact with your kids. That's my secret. And there are other like stoic tests you can do.

• 7:05Speaker 01

  Yes.

• 7:05Jason Calacanis?

  To help you frame. And shout out to the guy, is it Ryan Holiday?

• 7:09Speaker 01

  Ryan Holiday. Yeah.

• 7:10Jason Calacanis?

  Yeah. Shout out to Ryan Holiday, who I have to catch up with because you know, we've crossed paths a couple of times. And he's also in Bashrop, which is east of Austin. And I would love to have dinner with him, maybe one of these Thursday nights or go out to see him. Anyway, you know, doing that stoic exercise where you think about losing something or loss or not having it. Another framing is if you were 70 years old, your kids are 30 years old, cats in the cradle. You know, they're gone. They don't call you all that often. They're busy with their lives. If you could go back to this moment in time, I'm making it a little emotional here, but if you go back to this moment in time, what would you pay for that? What would the value of that be?

• 7:51Jason Calacanis?

  When you're 75 years old, to go back to the moment when they're three and a half years old, they're screaming, they're inconsolable, you've got a diaper while you're changing the diaper. Another thing happens. They puke on you. You're covered in puke. You're cleaning a diaper. It's 2 AM. You got an insufferable boss who's like, where's the twist 500?

• 8:13Speaker 01

  Were you at my house last night? Because we had one of those nights.

• 8:17Jason Calacanis?

  And yeah, it's trying. It is trying, right? And so that's what I do. And when I was on this vacation, I was saying to myself, I don't get this back. I don't get this moment with the, with the whole family. I got the whole family out one day, five at the same time, going down the same ski run.

• 8:34Speaker 01

  I saw your picture of that. It looked really cute.

• 8:37Jason Calacanis?

  And I just have to tell you, like, I just looked at that and I said, I'm making memories.

• 8:41Speaker 01

  Yes.

• 8:41Jason Calacanis?

  Making memories for them, for myself, for all eternity. And so use those techniques. And I think you'll, you know, with a little meditation, a little equanimity and a little stoicism, you can get through what is the chaotic days. I always loved Warren Zevon, Werewolves of London, Lawyers, Guns and Money, ton of great songs. He was on David Letterman. He had found out he was dying of lung cancer.

• 9:07Speaker 01

  Oh, okay.

• 9:08Jason Calacanis?

  He had never been to a doctor for 25 years. And David Letterman said to him, hey, what can we learn from you? That you've got this diagnosis and you've got a very short period of time now. He said, well, the first thing is go to the doctor more than once every 30 years. And they laugh. And then he said, well, what else can, you know, but in all seriousness, you know, aside from visiting a doctor, and he was a smoker, lung cancer, the whole thing. He said, what can you tell us? He said, well, you know, enjoy every sandwich. Enjoy every sandwich. And if I ever got a tattoo, it would be of one or two things. Enjoy every sandwich and a picture of a sandwich or a bulldog. And in my weird 54 year old, you know, I don't know, three quarter life crisis, if I ever have one, I might do that.

• 9:51Jason Calacanis?

  I might get a sandwich on my arm or something with just those E, enjoy every sandwich, E E S. Enjoy every sandwich. Because it is such a powerful concept, the simplicity of a sandwich and just enjoying every bite. That is my message for all of you and hope for a great 2025.

• 10:14Jason Calacanis?

  No one likes dealing with taxes, especially a busy startup. Did you know you're required to pay digital sales tax wherever your customers are? That's where Paddle steps in to put your billing on autopilot. When you launch your SaaS product, an app, or a game, you're building something that can reach billions globally. That's the magic of the internet, of app stores, and it's awesome. But scaling brings a lot of challenges like taking payments in local currencies and navigating all those regional tax laws. Plus, managing fraud and refunds, that's a tremendous headache that will slow you down. Maintaining a messy payment stack eats up time, energy, and money. And these big company problems compound with every new market you enter. Paddle has seen these challenges a thousand times or more.

• 10:57Jason Calacanis?

  As your merchant of record, your MOR, they're going to handle payment localization, fraud prevention, tax compliance, and customer billing support so that you can grow faster. You need to launch in a new country? You're done. You need to set local pricing? One click. You want to add payment methods? Easy peasy, lemon squeezy. So here's your call to action. Wherever you want to take your business, go there with Paddle. Go to paddle.com/twist to get started with your exclusive fee-free period. That's paddle.com/twist to unlock your no-fee startup period.

• 11:27Speaker 01

  Yeah, and thank you, everyone, for being here to kick it off with us a twist. Jason is still in front of a tree. He has his fire going. I still have my accoutrement up to indicate my own holiday enjoyment. But Jason, why don't we give the people what they want? And I believe that is spelled C-H-A-R-T in twist terminology. So let's grab one.

• 11:47Jason Calacanis?

  Love a good chart.

• 11:48Speaker 01

  And let's start with this. So this is actually a chart that you tweeted. And I wanted to start here because I thought it was a fascinating chart. But I'm curious, why is this, quote, something that you think a lot about? And why did you share it to start the year?

• 12:01Jason Calacanis?

  Well, you know, when I started in venture capital, there were very few players, very few, 20, 30 years ago. There were 20, 30 years ago, very few players. You had your Sequoia, you had your Kleiner, you know, some other weird firms. It was a very bespoke, weird... Unique tiny business.

• 12:21Speaker 01

  Yeah.

• 12:22Jason Calacanis?

  And then, you know, Google happened. And you had this sort of big company that nobody had ever seen before. And obviously, Apple, when Steve Jobs came back and the iPhone happened, those two things created an industry that was larger than people could ever imagine. And in the early days, people used to go public with 25 million, 50 million dollars in revenue. So a lot of the growth that happened was after the IPO. People would hand them off. And what this chart is showing is Instacart's delivery, Instacart's major investors and the price of each funding round. You see here, Cosla, Canon Partners and Y Combinator paid 24 cents. I'm assuming that's the share price.

• 13:00Speaker 01

  Yeah.

• 13:01Jason Calacanis?

  And then Sequoia paid 24 cents. So what happened there is even though that was a year apart, the seed and the series A, the seed round was on a convertible note that converted, I guess, without a discount to that series A round.

• 13:15Jason Calacanis?

  Which is weird that they didn't have a discount on it, but okay. So those two people did the earliest investments and they paid 24 cents a share. Andreessen Horowitz came in for the series B a year later and paid three bucks a share. And then you had Kleiner and some other folks come in for the series C at 2015. And you see this nice like every year. Sequoia, Y Combinator come in, $18. Now they had paid 24 cents. Now they're paying $18, right? Almost like 100X what they paid originally, maybe 75X or something like that. Five years later. In other words, they had inside information. This was a great company. So they both made a second bet. That's when Y Combinator had their fund, which was their, what do they call it? Continuity, right.

• 13:57Speaker 01

  Continuity fund.

• 13:57Jason Calacanis?

  They came up with the term continuity for it. Weird name, terrible name, actually. Because it gives the impression that it's not as cutthroat as it is and that everybody gets one, which I think is why Gary probably got rid of it.

• 14:08Speaker 01

  Yes.

• 14:09Jason Calacanis?

  And then you start to see other folks come in like Tiger Global, D1 Capital, DST, which is Yuri Milner's famous firm, General Catalyst, one of the mega ones. And then eventually this last round where Fidelity, T. Rose, Andreessen and Sequoia paid 125 bucks a share in 2021, Peak Zirp.

• 14:28Speaker 01

  Peak Zirp.

• 14:29Jason Calacanis?

  And somebody took these and they circled, you know, the series D and called it venture capital. And then they called the series E and above not venture capital. You and I had talked about this last week, I think. And I just want to point out to people that when we talk about venture, there's, I think, Trad VC and then I think there's new VC.

• 14:53Speaker 01

  Yes.

• 14:53Jason Calacanis?

  And for founders, it's really important to understand where you are in this journey. Trad VC, traditional venture capital, we're placing bets, we're helping you grow the product, find product market fit. And then whatever this new VC is, this late-stage new VC, what I'll just call, I don't know, the growth stage.

• 15:13Speaker 01

  Sure.

• 15:14Jason Calacanis?

  Pre-IPO, mezz, I'm gonna just call it mezz financing. Screw it, I'm going old school. Trad VC and mezz, because we used to call this mezzanine financing, like this little round between when you were venture and private and going public. So I'm gonna say this is mezz growth.

• 15:30Speaker 01

  Yeah.

• 15:30Jason Calacanis?

  Trad VC is like the bespoke art, punk rock, gut feeling, roll up your sleeves. And everything else is just a spreadsheet. It's just people with a spreadsheet. And I'm not diminishing them, but the decisions made there are made largely on some economic bet. And that bet did not pay off because the public markets did not reward the private market investors after a certain round. And that's what the chart shows. So if we throw up that chart one more time, at what point, and what is the stock price today?

• 16:02Speaker 01

  Yep.

• 16:02Jason Calacanis?

  If we look at Instacart, you know, at what point were you underwater with your investment? Because here, I think it's somewhere, you know, it IPO'd at $27, which means, you know, that Series E, the first non-venture capital, the mezz financing, is still underwater by a third almost.

• 16:22Speaker 01

  So the share price today, because I thought that's where we'd go with this, was about 44 bucks when I checked it a little bit earlier. So actually, I think D1 Capital with the tender offer in 2020 is probably only now underwater by just a little bit.

• 16:36Jason Calacanis?

  They're at breakeven, yeah.

• 16:38Speaker 01

  But that means everything after, which was the bulk of the capital, probably invested in the firm, because late-stage rounds are larger than early-stage rounds, didn't do well. And I think this just goes to show that venture capital, the model, the 2 and 20 model, the partner model, the everything we know about venture capital, doesn't always scale perfectly through the mezz tranches. But the reason why- I like mezz, Jason, mezzanine as an idea here is it was always supposed to be temporary and short and constrained. A mezzanine is not the entire venue, right?

• 17:08Jason Calacanis?

  No, it's just this little, you know, balcony, right? This little mezzanine, the balcony there. So, you know, the point here is those people put their money in, they sat around for four or five years and had no return. In that same time, if they had just bought the S and P, et cetera, you know, there were 10 to 25% returns each of those years. In other words, they would have tripled their money, double, tripled their money if they just put it in an index fund. So the industry has changed radically and the industry in some ways has been broken. Part of it is too much capital and trying to make it bigger than it is. And that's why, just making the announcement here today, I am committing our firm to going even earlier.

• 17:49Jason Calacanis?

  I have decided, you know, as over the break here, I want our firm launch, which does founding university, a pre accelerator where half the companies aren't even incorporated yet.

• 18:00Speaker 01

  Yep.

• 18:00Jason Calacanis?

  And the accelerator, which is a peer to tech stars and Y Combinator, where we, you know, have companies that have modest traction or they're, you know, MVPs just going into the market.

• 18:12Speaker 01

  Yeah.

• 18:12Jason Calacanis?

  We're going to really focus 95% of our effort there. And we were spending about a third, a third and a third, third in directs, third in accelerator, third in pre accelerator. I'm just looking at it saying, you know what, we can do our most work, the most work, the best use of our time.

• 18:28Speaker 01

  Yeah.

• 18:29Jason Calacanis?

  Is in founding university accelerator. So I'm kind of reorganizing our firm around this concept. And so I am announcing that our founding university 10th cohort is going to be in person in Austin. So if you're interested in hanging out with me every Thursday, every Tuesday, uh, cause Thursdays I tape all in. Monday, Wednesday, Friday, I do this with startups. Tuesday is going to be my founding university day. I'm going to make Tuesday my day for just hanging out with the founding university accelerator companies. And we're going to do it in person. I don't know how exactly that will come together. I may get a coworking space. I may do it with my friends at Capital Factory. But I've been looking at that chart, thinking about it a whole bunch and thinking about where I want to spend the remaining years I have to be productive.

• 19:12Jason Calacanis?

  All right, founders, let's talk about your fitness. Yes, you can't build the next Google. You're not going to build the next Uber if you're not taking care of yourself. And this includes exercise. That's why I want you to check out FitBod. FitBod is like having your own personal trainer right in your pocket. I use it. I love it. It designs workouts tailored to you and your goals as well as the equipment available to you. And of course, your fitness level. So if you're just starting out or you're already crushing at the gym, FitBod helps you level up your fitness. How does it work? It's pretty simple. They use machine learning, they use exercise science, and they build you a custom workout plan that's just for you. And it's based on things like the muscle fatigue of your past workouts and your recovery.

• 19:53Jason Calacanis?

  So listen, you don't wind up like doing too many quads and not enough abs and too much back. It monitors all that for you. It tracks things like muscle fatigue and recovery. So you avoid overworking or underworking any muscle group. And if you don't have a gym, that's not a problem. FitBod works anywhere and it keeps your workouts fresh and effective. So for example, when I'm on the road, I might go to one of those hotels that has like a tiny little claustrophobic gym. And all they have is like dumbbells and a treadmill. No problem, easy peasy. You tell FitBod what is available. It makes your workout. Now, I might be at a full gym where they have a circuit where they got kettlebells, which I love. And then it will give me a workout based on the kettlebells and the circuit machines. And what's really interesting is I use the watch app and I can just sit there doot, doot, doot, and log my sets in the workout app. I can change them.

• 20:38Jason Calacanis?

  There's a little key where like you still want to get biceps, but there's three or four different ways to get biceps worked out. You can pick the one you want to do. They have over 1,400 videos to guide you through every move in FitBod. And you can kick off 2025 nice and strong. Take all the guests workout by getting 25% off your FitBod subscription. Or you can just try it for free. Fitbod.me/twist. That's F I T B O D dot M E slash twist. FitBod, personalized fitness that grows with you.

• 21:05Speaker 01

  Well, let's talk about the idea of going earlier because one thing that people have been talking about lately is how venture capital fundraising on the venture side has become very concentrated amongst a couple of firms. So just to give people some background around why you might be going early, here is a chart that shows just the number of venture capital firms that are active. Just as a little bit of background for folks, this by the way, Jason, is via the Financial Times and PitchBook data. And it just goes to show that as you can see over time, more firms and then fewer firms. And why that matters is we have seen the amount of venture capital raised go down, but also become more concentrated. So if you look at this chart here from PitchBook, this is from December, so it's slightly out

• 21:47Speaker 01

  of date, but it's mostly correct. We can see that a handful of firms have raised the bulk of the capital. And if we're going to think about the example of Instacart that we started with, I presume that they're going to deploy a lot of that capital into later stage rounds because you cannot deploy billions of dollars each year into a pre-accelerator, Jason. I mean, what are the checks for Found University?

• 22:09Jason Calacanis?

  Yeah, I'll get right to that. But looking at this strip chart here, 49 billion raised by the top 30 firms. Andreessen 7 billion, General Catalyst, 6 billion, Thrive Capital, Josh Kushner's, shout out to Josh, 5.5 billion. These people are doing mezzanine financing. When you're putting a billion or $2 billion into, you know, taking Twitter private or, you know, ChatGPT at 150 billion, like, should ChatGPT not be a public company if they're making 6 billion a year? Like, what are we talking about here? Why are these companies private? Now, I know they have a special situation because they're trying to do this fugazi fugazi nonprofit into a for-profit thing. But then you look, you know, the other

• 22:50Jason Calacanis?

  experienced managers and emerging managers are a small portion of that. I think LPs need to start thinking about, well, where do they want to concentrate their dollars? And what is the best use of their capital and time?

• 23:01Speaker 01

  Yes.

• 23:02Jason Calacanis?

  If they want to have average returns, I think these late-stage funds are a great way to get exposure. And it's, I think what's happening in their minds, I'm going to do a little mind reading here, is I think they're going to look eventually at this mezz-financing cohort, you know, what Josh is doing at Thrive, and again, this is not a criticism, as public market investing. They're public market investing.

• 23:24Speaker 01

  So then, Jason, just to be clear, that means they're going to be shooting for essentially the S and P.

• 23:28Jason Calacanis?

  They're going to be. They beat 7%, 12%. They're better than the S and P on average, as you know, as a lover of low fee index funds.

• 23:37Speaker 01

  It's true.

• 23:38Jason Calacanis?

  And then the rest of us are trying to hit double or triple that.

• 23:42Speaker 01

  Yes.

• 23:42Jason Calacanis?

  15 or 21%, let's say, so that we say, hey, you know, these things are private. Anyway, I think for founders who are looking at this, just understand, you know, if you're going to a firm that has, you know, 5, 10, 20 billion under management, they just are not going to give the attention to you.

• 24:06Speaker 01

  Yeah.

• 24:07Jason Calacanis?

  As a tiny founder trying to figure it out. So I think, just as founders, be thoughtful and put your expectation, you know, listen, if you're going to talk to Josh Kushner or Andreessen Horowitz, the late-stage group there, they're putting a billion or 5 billion or 2 billion into some of these deals. If they're putting 250K into your deal, it's not going to move the needle for them. It's not going to get their attention. That doesn't mean they're bad people. It's just the nature of it. Just like I can't help you when you're raising at, you know, a billion dollars or a hundred million dollars even when you need 30 million or 40 million. I can refer you to my friends, but that's almost the entire size of my fund. We do a 45 million dollar fund. The good news for me is I don't need a lot of capital. I want to do 200 of these 25K checks for Founder University. It's your original question.

• 24:52Jason Calacanis?

  We give people their first 25K check to start their company and then we give them 125K check, just like the state of terms is Y Combinator and Techstars when they're in that second stage. So I think ideally, I would like to do 200 of the 25K checks. You know, that's about 5 million and then do another 5 million in the 125K checks, which is about, I guess, 40 of those, right? So, you know, that would be 240 companies a year, which would be two and a half times what we're doing now. We're about at 100 a year now. I mean, I only really need 10 million a year to deploy, 15 million a year. And I can have enough surface area that if we hit a unicorn every 200, we could have a really amazing fund, you know, just doing the math on paper.

• 25:36Jason Calacanis?

  So I've been thinking a lot about this. The market keeps changing. My original thought was I would keep half our money in reserves to bet on the biggest winners. But what I'm realizing is, gosh, a lot of these seed funds are, a lot of these seed rounds, when these big funds dip into them, they're demanding 10% ownership, which means they want to put in $10 million, which means they they ratchet a seed round up to 100 million, and the company's got 100 million dollar valuation, they have 1 million in revenue, so they give them 100x. And that's just gonna like distort reality, as we've seen. Instacart's reality got distorted there, and these distortion effects can be profound and problematic. We're going to talk about it in the back half of the show, because Bench

• 26:17Jason Calacanis?

  and Level, two promising firms, just busted out. We'll get into that in detail. You know, I want to get into immigration. Thank you for like bringing up this topic and following my Twitter stream, because it is, you know, big on my mind. I know people like to know what I'm thinking, and I like to share what I'm thinking. Why do I like to share what I'm thinking, Alex? People email me, [email protected] is my email for life, or they DM me and tell me that I'm a horrible person, and, you know.

• 26:43Speaker 01

  You've got to stop accepting, dude, you've got to lock down your DMs.

• 26:46Jason Calacanis?

  I love it. I'm not lacking my DMs. I love the savage DMs I get. It's incredible.

• 26:50Speaker 01

  Okay.

• 26:51Jason Calacanis?

  You don't like them, I know.

• 26:52Speaker 01

  No, no.

• 26:53Jason Calacanis?

  I tweet them. I tweet them out of collection.

• 26:54Speaker 01

  I'm just like, I can only take so much. I think I have a slightly lower bar for negativity day to day than you do. I just like, after the third or fourth time someone calls me something nasty, I'm just like, all right, all right, that's enough for today.

• 27:08Jason Calacanis?

  Is strictly a, is strictly a reflection on how they're feeling about themselves at that moment?

• 27:12Speaker 01

  Yeah, that's true. Yes.

• 27:14Jason Calacanis?

  And usually it's a troubled person, or a 12 year old, or a Russian Chinese bot trying to cause trouble. Or just somebody doing engagement farming in order to make money, you know?

• 27:25Speaker 01

  Jason, you asked us to put together a couple of stats to help frame the debate that we've had nationally, I want to say, about high school immigration, and we have a guest in just a second that's an expert. But I want to show this little infographic, because I think it provides some good foundational information for everyone who's watching today. So, this is a couple of data points. One, how many new H1B visas were granted, and the latest Full year data we have is from 2023. Everybody will have 2024 data very soon, but we wanted to be consistent. So the number was 118,948, and that's a little bit above the cap number everyone talks about, and that's because there are some exempt categories. The total number of illegal immigrants in the US in 2023,

• 28:09Speaker 01

  we went through a bunch of different data points. The best number we could find was about 11.7 million total. And then the unemployment rate for the US back in 2023, 3.6%. And as of right now, open tech jobs, the best number we could find that was inclusive was about 530,000 tech jobs. So Jason, that's what you wanted to know? And I hope that that is accurate to current data.

• 28:32Jason Calacanis?

  Yeah, well, we will put these in the notes. We'll cite our sources always. And you know, the illegal immigration number is hard to pin down because it's an estimate. And they have this thing like encounters at the border. And I don't know if that 11.7 million is the cumulative during the Biden Kamala Harris administration, or it's in the single year. I think that's like the combined.

• 28:51Speaker 01

  No, that's, that's, that's expected total illegal immigrants living in the US.

• 28:56Jason Calacanis?

  Oh, living in the US.

• 28:57Speaker 01

  It went down to 10 and has now picked back up. And we're approaching 12 million again, but we're still under the all time national peak, which was 2008.

• 29:09Jason Calacanis?

  Okay, everybody, 2025 is here. With every startup hitting the ground running, it's time for you to be competitive and to beat those competitors in B2B selling. So if your ad strategy doesn't include relentless focus on targeting the right prospects, well, listen, your message might get lost in the noise. Well, LinkedIn Ads is going to ensure that you reach the right audience at the right time, in the right place. LinkedIn's advertising tools connect you to decision makers based on their job title, their industry and the company size and many other vectors. So maybe you're targeting your beachhead market, your ideal customer profile, the one most likely to buy your product is a company between 50 and 250 employees. Maybe it's companies between 1,000 and 5,000.

• 29:49Jason Calacanis?

  You can target just the people you want to reach and just the titles you want to reach using LinkedIn Ads. LinkedIn has the two things that you need to grow this year. Reach. And impact on the reach side, LinkedIn has more than a billion members, 130 million of them are decision makers and 10 million of them are C-level executives, the people who are the hardest to get in front of. Hey, listen, I'm one of them and I'm on LinkedIn every day, multiple times a day. On the impact front, B2B marketers report two to five times higher return on ad spend compared to other social platforms. Plus, 79% of B2B marketers say LinkedIn is the best platform for paid media. LinkedIn Ads allows you to build the right relationships, drive results and reach your customers in a respectful environment.

• 30:32Jason Calacanis?

  I mean, it's really about business. When I say business, you think LinkedIn. When I say LinkedIn, you think business. That's why you want to put your B2B message there. Start converting your B2B audience into high-quality leads today. We'll even give you $100 credit on your next campaign. Go to LinkedIn.com/thisweekinstartups to claim your credit. That's LinkedIn.com/thisweekinstartups. Terms and conditions apply. LinkedIn, the place to be, to be. And let me just say here, I am trying to, because I have a lot of friends who are involved in the administration, I don't have to say who they are, you can just Google them. You can just Google them, look at my Twitter stream, and people are weaponizing what I say against my friends. I don't know if you've seen this, but a lot of like the

• 31:15Jason Calacanis?

  like fringe elements of MAGA and some other things are just taking whatever I say and then slamming it into my friends' feeds and saying, hey, your bestie, your best friend, your good friend, your colleague, your business partner, they don't even know the nature of my relationships. They're saying this with people who maybe I don't even have a relationship with or have a very cursory relationship. I am going to be very muted for the next couple of weeks about these issues on my social and here because I don't like to get my friends dragged from my comments. So if people think I'm being a little subdued, I am self-censoring myself by choice. I don't have to, nobody's asked me to, but I'm going to self-censor myself a bit over the coming weeks.

• 31:58Jason Calacanis?

  Just so I don't get weaponized. But the H1B visa discussion you wanted to talk about on the show, you're the co-host. We had a guest booked. I want to talk about it here from maybe less of a political basis, but more of an educational basis, just to level set facts.

• 32:15Speaker 01

  This is Lisa Wehden, founder, CEO of Plymouth Street. Jason, she worked for Bloomberg Beta back in the day. She's a Sequoia scout as well. So she's been on the venture side and the founder side. And I booked her because I had the same thought, H1B visas. And then, as I was learning so much more about the US immigration system this week, it turns out that sure, her firm mostly works with O1 visas, which are different than H1B visas. So, one, Lisa, thank you for being here. How are you?

• 32:43Speaker 03

  Thanks for having me. I'm great.

• 32:45Jason Calacanis?

  Happy New Year.

• 32:47Speaker 01

  Yeah, Happy New Year. So I want to start at a kind of a high level here and talk about the impact of immigrants on the technology scene. The American Immigration Council says that 44.8% of the Fortune 500 companies back in 2003 were founded by immigrants or their children. I know this is a near and dear issue to your heart. So I'm curious, when you think about high school immigration, what is your compelling argument you tell people who are skeptical as to why it matters to our national growth?

• 33:15Speaker 03

  So I think the stats are really compelling here. 55% of technology unicorns are founded by immigrants. Some of the most iconic companies of our generation, SpaceX, Repli, Stripe, have all been founded by immigrants. And when you think about, you know, the early discussion, capital is not necessarily the constraint for innovation. Human talent is. Plymouth's mission when we set up was to accelerate US innovation by enabling the highest skilled talent to build in America. And immigrants have consistently proven time and time again to be some of the most innovative, risk-taking entrepreneurial individuals.

• 33:54Speaker 01

  Absolutely.

• 33:54Speaker 03

  That's the core focus here is how do we unlock a new era of US innovation?

• 34:00Speaker 01

  So my question then is, why is your firm so focused on O1 visas as opposed to the much more, I would say, newsy, recently, H1B program that I think people are much more familiar with than the O1 program?

• 34:13Speaker 03

  Totally. So the H1B program was designed in the 1990s and it was set up with a 65,000 cap limit. Today, over 780,000 individuals apply for the H1B. And the reality is, is that we could be losing out, and I think we are losing out, on the world's best talent, because these individuals are put into a lottery ticket system. And so you could imagine a leader in AI, a leader in quantum, a leader in nuclear energy, puts their name in a lottery ticket system, and they don't get it. And I think the reality is, is that we want to recruit and retain this world-class talent. And in comparison to the H1B, the O1 is not a lottery ticket system.

• 34:55Speaker 03

  You have to put together a real research report about an individual. You know, these applications are between 400 to 600 pages long to document someone's extraordinary ability. And so you have to be really elite to get this visa pathway.

• 35:12Jason Calacanis?

  Okay, I just want to recap here, Alex. O1 visas.

• 35:16Speaker 01

  Yes.

• 35:16Jason Calacanis?

  This is, I think the quote is, I'm reading here, extraordinary ability or achievement in science, arts, education, business, or athletics. They must demonstrate sustained national, international acclaim and recognition in their field. This can be proven through awards, publications, high salary, et cetera. That is one type of visa to come to the United States. And this is extremely rigorous. And there is no abuse here, or almost no abuse. In your mind, Lisa, it's too hard to game the O1?

• 35:50Speaker 03

  You know, less than 5,000 STEM individuals come into the US on an O1 visa, and you have to document substantial evidence to prove the O1 visa. So it's not easy, no. It's not an easy pathway to game.

• 36:06Jason Calacanis?

  How many get awarded each year? And how many applications? Just ballpark if you know that number.

• 36:12Speaker 03

  Just under 30,000 get awarded each year and the majority of those visas actually go for O1 visas, which is in the entertainment and the artistic professions.

• 36:22Speaker 01

  So if there is less abuse of O1 visas compared to the H1B program, which I think everyone agrees has a place, could use some fixes. Do you expect that technology companies writ large are going to move away from H1B visas and toward the O1 process, simply because it's not a lottery and therefore is worth the extra effort to go through because it's not random, it's merit based?

• 36:45Speaker 03

  I think companies use every tool in their toolkit to retain their best talent and different visa pathways offer this opportunity. You know, there's the TN category for Canadians and Mexicans. There are visa pathways for Australians, you know, the visa landscape is not a one size fits all. I think also when you talk about early stage startups and later stage companies, they have different talent needs. I think that O1 is an amazing visa pathway for the very best talent, both at the earliest stages for founders who want to build in America and the later stages. And I think the best companies that we work with, like Mid Journey, Replit, Pika AI, they

• 37:27Speaker 03

  take their talent extremely seriously because they know that the constraint for growth is finding the very best talent.

• 37:34Speaker 01

  I'm just curious about the viability of O1 visas to hopefully expand to allow for more high school immigration because I think personally, just my own view, not even speaking for Jason or the show, that if we could 10x the number of very brilliant people that work in technology that can come here and stay every year, it would be worth, you know, at least 1% GDP growth per annum, which is the cheapest thing you could possibly buy. I'm just curious, does the O1 program have the capacity to help with that? Or do we have to fix H1Bs to get that level of high school immigration flowing?

• 38:09Speaker 03

  So I think there's reform across the system, but the O1 is an uncapped visa pathway, and we should be utilizing it. And this administration should utilize it insofar as it achieves our goal of American competitiveness. I think the message for the world should be, America is open for business for the world's best skilled innovators, and we want you to come and build here and innovate in this economy. And I think this is a golden opportunity to share that message and utilize every tool in our toolkit to do that. And visas are a component of that.

• 38:43Speaker 01

  All right. And then I just want to get your take on this because I know you're a bigger fan of the O1 visa than the H1B, but the H1B has been criticized just a lot lately. It's lost some of its public luster. How fair do you think the criticisms are of H1B visas that they underpay? Or they entrap workers into contracts they can't get out of because then they get deported? How reasonable are the criticisms of H1Bs in your view?

• 39:07Speaker 03

  I think there are, you know, most practitioners would say that these are known issues that we need to identify and reform. I think there's been a ton of really interesting discussion online around increasing the compliance fees for companies, you know, increasing the wage requirements. You know, this program was designed in the 1990s. Again, we want a system that is adaptable and updates to our modern era. And so, you know, I think there is reasonable criticism that most practitioners have known.

• 39:36Jason Calacanis?

  Yeah, I can give a little color on that, actually, Alex. When I was in the, started my career in the IT business, I was at Sony. Statute of limitations is over. Or I don't really care. I'll just say it. I was out to lunch with the people running the IT department and they said, hey, we don't have to work weekends anymore. We got these Indian guys and they're going to be, you know, in this office somewhere in the middle of America. And they're dirt cheap. They get paid 50% less than us and they come here with their family. If they don't do what we tell them and they don't work the hours we tell them, we can deport them and they have 30 days to find a new job, which they can't.

• 40:18Jason Calacanis?

  So therefore they're going to do all the weekend shifts. They're going to work 50, 60 hours a week. There's nothing they can say. And I said, wow, that's really dark. And they said, yeah, it's great. And I was just a 21 year old kid and I was like, yeah, but that makes them kind of like indentured servants. It's totally abhorrent. And all the discussions I heard about H1Bs specifically during that time period in the IT business specifically, not entrepreneurial pursuits, was just about saving money and maybe being able to grind these employees down. Is there a fair criticism to that and what I experienced 30 years ago?

• 40:56Speaker 03

  You know, I can't speak on behalf of all H1B holders, but I can speak to the people that I talk to every day. A large number on H1Bs and they want more flexibility to be able to work at different companies, start their own companies. You know, there's these incredible H1B employees who are working at large tech organizations and they want to move on to another visa pathway because they want to build in America. And they are, you know, struggling with this visa category that they're pursuing because they do have to maintain their status, maintain their prevailing wage. And so from my kind of own personal perspective, like I am hearing stories of individuals who want to move on to the, move off the H1B

• 41:39Speaker 03

  because it is not the right visa category for them. And there are, you know, there are companies that abuse the H1B category too. We know this, like there are.

• 41:47Jason Calacanis?

  How do you solve the abuse? How do you, how would you solve the abuse? What are, I mean, I've watched the Twitter debates. I have my own answers, but I'm curious from your perspective, if you could wave your magic wand, you do this for a living, you work on these. What three things would you change in order to make it more fair to American workers who want those jobs? And to the employees who I believe in some cases might be 5% or 10%. It's obviously not the majority, maybe, you know, it's unfair to them.

• 42:18Speaker 03

  Yeah, you know, I focus most of my work not on H one B visas. Like I look to people who are moving off H one B visa. But I think the reality is like, there are, you know, several things that are interesting about reforming the H one B. One is that you could look to explore to increase the costs for companies for the H one B. So increasing the annual compliance costs for H one B visa, that would be, I think, really interesting. Increasing certain elements of the wage requirements could be really interesting. And reforming the number of allocations in the lottery for companies. And I think those would be, frankly, kind of like an interesting and necessary requirement

• 43:02Speaker 03

  for ensuring that this visa category is updated from the nineties.

• 43:07Jason Calacanis?

  Awesome.

• 43:07Speaker 01

  If you go back to Twist episode thirty five, we had Brad Feld on and little baby Jason, you know, fourteen years ago. They were talking about this issue and one thing that they brought up was, was the idea of a like entrepreneur or investor visa, Jason. The idea that if you're going to deliberately come here and start a company, there should be a separate door just for you.

• 43:27Speaker 04

  There should be an easy way for a foreign entrepreneur who wants to start a business in the US that raises a certain amount of money from US investors to be able to get a visa and get going.

• 43:39Jason Calacanis?

  Right. Put that amount of money in a bank account, fill out a form, you're done.

• 43:41Speaker 04

  That's right. So it turns out as we start talking, you know, to our, I don't, you know, the politics is a mystery to me. But to my, you know, the friends of mine that are in, in the House and the Senate and some of the other people that we know. What we found out pretty quickly was there's a type of visa called an EB five visa, which is basically the opposite of what we want. The EB five visa, which has been around since nineteen ninety, gives a visa to a foreigner who invests a million dollars in a US company.

• 44:12Jason Calacanis?

  Genius.

• 44:13Speaker 04

  Right? So you can basically, you basically are, you know, the idea is to drive investment in US companies.

• 44:17Jason Calacanis?

  Right.

• 44:18Speaker 04

  But the person getting the visa is simply the investor. So, you know, there's a lot of controversy around that particular type of visa, people buying visas, et cetera. But the structure was parallel. We want the opposite. We want the US to be the investor and we want the entrepreneur to be somebody.

• 44:32Jason Calacanis?

  This is the talent.

• 44:33Speaker 04

  Exactly.

• 44:33Jason Calacanis?

  If you have Yao Ming in China, you want him to play in the NBA.

• 44:36Speaker 04

  Exactly.

• 44:37Jason Calacanis?

  Somehow his visa got approved.

• 44:38Speaker 04

  That's right. That's right.

• 44:39Speaker 01

  And Lisa, just as a last, as a last thought, do you think we need, instead of trying to fix and shoehorn our needs into the O1 and H1B categories? Just simply a blank sheet of paper and an entirely new category or new system? To avoid just endless rounds of small technocratic fixes to a program that seems to have larger issues?

• 44:58Speaker 03

  I think there's huge opportunities to explore like a fast track entrepreneur visa. They did actually come out with the international entrepreneurship rule, which was a different opportunity. But it was very complicated and not super fit for purpose. And so, yeah, to the extent that we can streamline this immigration system and have very clear opportunities for innovators, I'm so in favor of it. In this moment, we do have visa categories that are advantageous for entrepreneurs. So we're doubling down on that. But again, you know, let's be innovative and let's think about our ultimate goal, which is advancing US innovation. And to the extent that we can think through every tool in our toolkit, I'd advocate for that.

• 45:41Speaker 01

  All right, Lisa, thank you so much. PlymouthStreet.com, if you want to look up her work. Thank you much.

• 45:45Jason Calacanis?

  What do you charge, Lisa? How much does it cost if a company hires you per person? How do you get paid?

• 45:50Speaker 03

  We get paid per visa. So.

• 45:52Jason Calacanis?

  How much? What does it cost?

• 45:54Speaker 03

  Between $10,000 to $12,000.

• 45:56Jason Calacanis?

  Okay, so it's kind of reasonable, but it's not cheap.

• 46:00Speaker 03

  It's your very best talent. We really fundamentally believe in investing in your talent and these applications over 500 pages long. So we really focus on ensuring that you can consistently and reliably bring over your best talent.

• 46:13Jason Calacanis?

  Fantastic. Really appreciate you coming on, Lisa.

• 46:15Speaker 03

  Thanks so much. Appreciate it.

• 46:17Jason Calacanis?

  You know, it was great to have her on. I think there's a really easy way to solve this problem.

• 46:22Speaker 01

  Hit me.

• 46:23Jason Calacanis?

  Number one, a minimum salary.

• 46:27Speaker 01

  Yes.

• 46:27Jason Calacanis?

  I don't know if it's 50, 60, or 70K, but that's an easy one to do. You put in a minimum salary for this. Number two, you have one year to find a new job. So if you're on an H1B VZ, have a year to find a new job. Now, I know what people are going to say, you know, like, that's unfair or whatever, but hear me out because there's a next piece. When I'm up, when I am an employer, I pay 10% of your salary. 10% of your salary, not just $1,000 or whatever these application fees are. 10% of your salary, up to a certain number. So there's like a minimum, but it also maxes out. So that you have a disincentive for trying to use this for like,

• 47:12Jason Calacanis?

  let's say frontline IT PC support specialists, you know, somebody who comes and reform out your hard drive or reinstall software, your whatever's not working.

• 47:21Jason Calacanis?

  And I think a lot of this stems from the fact that a lot of people on the GI Bill or, you know, folks thought, hey, I can get a degree from some degree mill. They sold me on being an IT person. They told me the starting salary in IT was 75K. So I went 30, 40K into debt. I figured I could pay that back after the five or 10 years. You know, and then I would be making six figures eventually. And then all of a sudden you're like, wait a second. The job I was going against, there's somebody getting paid 50K instead of 75K. Well, if you charge a minimum of 10K per year, and you force people to pay not only the 10K, but the employer has to pay the 10K the second year when you leave.

• 48:04Speaker 01

  Oh, so if you go away, they're still on the hook for it.

• 48:06Jason Calacanis?

  Still on the hook for that year. Or maybe you're on the hook for six months and the new employer's on the hook for the next one. Whatever it is, there's some sort of fee. So that if you are an employer, you really have to think about this. Then you take all that money. And I think Aaron Levie, friend of the pod, has been on many times, from Box, said, hey, why don't you put that money towards STEM education? Hey, there you go. Now we're talking. Or maybe you put that money towards the people who had IT degrees from those paper mills. We identify them and we have a way for those folks. To pay down the debt for IT degrees that maybe were overpriced or whatever. And I'm not big into that because I like people to make that decision.

• 48:49Jason Calacanis?

  But I'm just thinking creatively here because there is valid criticism here. I believe there's significant abuse on the low end.

• 48:59Speaker 01

  Yeah.

• 49:00Jason Calacanis?

  And once you eliminate that, I think people can have a much easier time with this issue.

• 49:05Speaker 01

  I think so too. I never, I don't think we're ever going to get the people who want to shut down all immigration for all time in the United States ever on our side here. But if there's a way we could grab 65% of the population and open up the economy to allow for more smart people to come here and build and have faster GDP growth and have more of a talent edge on the rest of the world by being an attractive place for brains to drain to, well, then we'd have a stronger nation, more money and happier people. Jason and I am just so in favor of that. I want big America, big, strong America.

• 49:37Jason Calacanis?

  I have literally three blog posts I've started, I drafted that I'm holding until after Trump's in office and this all dies down because I don't want to poke the tiger here and have people taking my blog post quoting it because I have different feelings on this and you can look at my Twitter. I've said, I think we should be the most prosperous and the most populous country. I think both of those things are important and how do you get there? You're going to get there through population growth and people having babies and you're going to get there through immigration. But you know what? We got plenty of time to talk about this in 2025.

• 50:05Speaker 01

  We do, and we have plenty of time after the administration has all gone through confirmations. So now moving on.

• 50:12Speaker 01

  Okay, sad news, but I want to talk about this. So rewinding the clock a little bit, Bench fell apart at the end of last year, at the end of 2024, Bench, a company that people had heard of and used for a long time, that had last raised money back in 2021, Jason.

• 50:26Jason Calacanis?

  Outsourced accounting firm, right?

• 50:28Speaker 01

  Outsourced accounting firm, exactly.

• 50:30Jason Calacanis?

  Loved by startups.

• 50:32Speaker 01

  Loved by startups. And when they died, it shocked people because I don't think people knew that they were on the ropes. And then to start the year, there's another company that's followed. It's a fintech HR startup called Level. It offered benefits. So essentially, if you were an employer, a startup, say, you could create kind of an innovative benefit program for your employees. They did self-insured dental and vision products, and you could also do wellness, fitness, all sorts of things using this Level program. They have also died. And according to Jason, the CEO of Paul Aaron, in an internal email that the information got, he said, quote, "While fundraising, we entered an acquisition process that we believed would provide significant value to our clients and members. Unfortunately, the deal fell through at the last minute

• 51:15Speaker 01

  due to external challenges beyond our control." My question to you, because I have a lot of thoughts about the business and the timing and so forth. But when a CEO says, "We were fundraising, there was an acquisition, and it fell apart." What does that tell you in your spidey sense?

• 51:29Jason Calacanis?

  It tells me the company was burning too much capital.

• 51:32Speaker 01

  Okay.

• 51:34Jason Calacanis?

  The investors had lost faith in this company being a great place to deploy capital. So they're burning too much money. Maybe the actual unit economics didn't work. So new investors assessing this opportunity might have thought, if putting, if they're burning some millions of dollars a month at this company, the valuation is very high. There's all these covenants and all of this preference stack where the latest investors get 2X. If I come in and I do a pay-to-play round or a cram-down round, where I say, "All the existing investors, their shares are going to get diluted 100 to 1,

• 52:17Jason Calacanis?

  or 50 to 1, or 25 to 1, or 10 to 1, or 5 to 1. They're going to be common shares, and then we're going to start over, raise more money." They just thought, you know, that pain and suffering, as Bill Gurley has said over and over again, I've heard him say this on many podcasts, a lot of investors are just like, "I don't want to come into a toxic situation and be the toxic person who delivers the medicine to the patient." And maybe acquirers, because of the wrath of Lina Com, looked at it and said, "I can't acquire this for some reason," or they just weren't acquisitive. And/or the unit economics of doing outsourced bookkeeping just looked like this was a bookkeeping firm that didn't really have enough technology there and the mission to use technology to make

• 53:00Jason Calacanis?

  bookkeeping, you know, auto categorized expenses and costs, maybe that just never got there. So maybe it wasn't wasn't great execution, or maybe they just couldn't get the margin there and this experiment failed. And the board seems to have made two mistakes. One, they ousted the founder. There's been a big controversy, hey, trying to out the board. Now, I would be very careful. The board might have been doing something fiduciary that was responsible as a fiduciary. If that CEO, and we don't know, was not hitting their numbers, was not a great leader, couldn't track talent, we don't know, then they probably were right to try to find a new leader and maybe they found the wrong one. Or maybe it just, like I said, was a crack foundation or a failed

• 53:41Jason Calacanis?

  experiment. So we don't have full information. You know, trying to out the VCs who ousted the founder, I'd be very careful. Yeah, I saw that. I would be very careful with that because they might have actually been doing the right thing and the hard thing. And doing the hard right thing is hard and it makes you look like a jerk as a VC. I've actually never ousted a founder. I've never, because I'm an early stage VC, we never got to that point. But I, you know, know people who have, and sometimes it's like, this founder was off the rails. They were in founder mode. They were off in la la land.

• 54:14Speaker 01

  Well, that's why, to me, when a VC does actually pull a founder, I almost don't view it as a non-founder friendly move because it's done so infrequently, I presume, in only the most extreme associations. So to me, if that happens, I actually judge the founder more than the VC. I want to go back to this, this bench thing. One last question, because I have been, a lot of question, more of a thing that I'm curious about. We have seen fewer deaths, fewer implosions, fewer big flameouts in the startup world of companies that raised a huge round at a big valuation in 2021 than I expected. But then we just had these two companies land in quick succession, bang, bang. And so I, my, the thing I'm curious about for this year is how

• 54:55Speaker 01

  many will we see in 2025? Will this be the year when companies that haven't raised since 21 fail? Because there's probably several thousand of them out there that are just waiting to either get bought for a dollar or to die. And I, maybe this, maybe we're finally at that moment, Jason. Maybe it's here.

• 55:14Jason Calacanis?

  I think when you raise a ton of money and you have a lot of runway, you can kick the can down the road, you can do four RIFs, you can raise your prices. But eventually, you know, you can, you can put lipstick on the pig, you can paint the house.

• 55:29Speaker 01

  Mm hmm.

• 55:29Jason Calacanis?

  But it's still got a crack foundation, it's still got a bad fundamentals, possibly. And I think that is the, the, the challenge. That is the challenge.

• 55:38Speaker 01

  Well, we'll see. Uh, do you want to wrap up with just a little bit on this left Amazon?

• 55:42Jason Calacanis?

  Sure. Yeah. I mean, I think that this was one of my big, uh, the all in prediction show comes out tomorrow. I predicted, um, that I, one of my big business, my big business deal of 2025 in the prediction show, which you'll get today, uh, Friday, uh, was the, um, that there would be consolidation in the on demand space and the autonomous space in 2025. Now that's a bold prediction, but I do think we could see Amazon, Uber, DoorDash, BYD, uh, Uber, Tesla, Zooks, Waymo. Good to see some of these merge. If Waymo and Uber merged, they're de facto going to run the table on everybody.

• 56:25Jason Calacanis?

  They become, it's going to be, it's going to be like a battle with, it's going to be hard for Tesla to beat that, right?

• 56:31Speaker 01

  No, I absolutely agree. Uber plus Waymo equals win, I think.

• 56:35Jason Calacanis?

  I think they win. Uber plus Tesla means they win. So if you look at that, you have Waymo and Tesla plus Zooks, very promising. Plus another 15 other providers of autonomy. So you, you take those 18 different autonomy providers, there's probably five that are the most credible. You take those five and you pair them with either Uber or DoorDash or Amazon and their deliveries. You got a pretty robust offering. And so in, with the end of the, the wrath of Lina Khan, we could see something epic occur. Something like the acquisition of Whole Foods,

• 57:17Jason Calacanis?

  uh, or something like the acquisition, maybe even a better one, YouTube, Instagram, WhatsApp, like a mega matchup that has significant impact on the future.

• 57:28Speaker 01

  So I agree with all of that, but I'm a recent convert to the Amazon possibility. And I had honestly forgotten

• 57:37Jason Calacanis?

  Why?

• 57:38Speaker 01

  That Amazon owns Zooks.

• 57:39Jason Calacanis?

  Yeah, you forgot. Zooks has got great potential.

• 57:42Speaker 01

  It does. And so Amazon, if you forgot, like I did, Amazon bought Zooks back for 1.2, 1.3 billion in 2020. The company had raised up to about a billion dollars, Jason, at a valuation that reached as high as 3.2 billion. So not the best venture exit, but certainly a property at Amazon that's done well. So lately, Zooks is, has expanded to San Francisco, larger Vegas footprint and Foster City. And they're going to do their first public riders in Vegas this year. So Zooks officially is going to be a real robot taxi company in the near future. So that means that they had the technology side, Jason, sorted out at Zooks, which is Amazon.

• 58:21Speaker 01

  And then there's Lyft, which my friend Anita Ramaswamy over at The Information pitched this Amazon Lyft deal as a 2025 option, which got everyone talking. And the thing that I'm just blown away by is how essentially Lyft is free. Lyft today is valued at exactly 1X its trailing revenue. Whereas Uber is worth 3 and 1/4 X and Tesla's worth 13 and 1/2 X is trailing revenue. So you can buy Lyft for 1X revenue, attach it to Zooks?

• 58:51Jason Calacanis?

  You'd have to, you'd have to pay a premium.

• 58:53Speaker 01

  Sure.

• 58:54Jason Calacanis?

  To get the shareholders to give it up. And that premium would probably be 2X or 50% or 2X. So I think if you add a 50% premium to it, but I think you're, and it is about to, you know, they are going to be break even profitable. I don't know if they're got some funny gap uniqueness to Lyft. I haven't been tracking them, but I do.

• 59:14Speaker 01

  I can answer that for you. So they are roughly break even-ish on a GAAP basis. They have 107 million of adjusted EBITDA in the last quarter. But the thing that I think is most important, Jason, is their trailing operating cash flow was 740 million in the last four quarters. So it's kicking off cash.

• 59:29Jason Calacanis?

  Awesome. So, you know, it's not, I mean,

• 59:35Jason Calacanis?

  Buying the number, you know, what will be the number five, six, seven, eighth most important player globally, maybe the 10th most important player globally, is not a power move. Power move is to buy Uber, Grab, DoorDash, like that's the power move. And so, Amazon tried to do restaurant delivery, they failed at that one. I don't know why they failed. It's, I guess it's a hard problem to solve, they weren't focused on enough, who knows what the reason was, but they, they like to take big risks. They bought Whole Foods, I think that took them a couple of swings at that, but I think that's actually working because I see Whole Foods coming to my house and I know a lot of people are buying from Whole Foods via the Amazon interface now, and they seem to have figured that one out too.

• 1:00:17Jason Calacanis?

  So I think, I don't think this is gonna happen. I think it would be, well, I just think you're like, buying a brand, you're gonna disappear anyway, and Amazon already has the Prime members, so simply opening this up to Amazon Prime members and saying, every Amazon Prime comes with essentially what Uber One is, and Uber One, Apple One, Amazon Prime, it's all the same thing. A membership fee to get people to use a product more, to increase consumption, and to do more lock-in. Uber One's got, I think, 20, 30 million members now, it's incredible. I just slowly picked up on it, and those people, from my understanding from public reports, spend a lot more money.

• 1:01:00Speaker 01

  Oh, yeah.

• 1:01:01Jason Calacanis?

  So, there's something really interesting about that Uber One membership and Amazon Prime, that could be very powerful. If you think about those as one thing, and you think about what they're both doing, at their core, Amazon and Uber both move stuff.

• 1:01:16Speaker 01

  Yes.

• 1:01:17Jason Calacanis?

  If I was on the board of Amazon, Tesla, or Google, I would have one thing in mind. And now people think I'm talking my book here, I have exposure to all these names except Tesla. And if I wanted to have a bunch of Tesla, I could, I think the stock's kinda hit meme territory right now, it's like, and I have owned Tesla in the past. The reason I don't own Tesla, as I said before on the show, is like, people think I have some inside line because of my friendship with people over there. Just, I have exposure to everything. I'm not talking my book here. Whoever on those boards buys Uber, and I don't think Uber's for sale, but...

• 1:01:51Speaker 01

  No, I don't think Dara's gonna...

• 1:01:53Jason Calacanis?

  No, but if I'm, if I'm, if I was Bezos, I would get in a room with Dara and say, what do we gotta do here? If I was Elon, if I was on the Tesla board, I would be like, we're, because I think Tesla's not worth over a trillion. Uber's worth 130 billion or 40 billion. Giving up 10% of your equity or 5% of your equity to own those 25 million members? And then just be guaranteed to win? And to have a global footprint, day one? Or day zero, because the cyber taxis aren't going to be on the road till next year sometime, or maybe the end of this year? And they'll go into mass production next year. To have that advantage? If Waymo gets that advantage, if I was Larry and Sergey, I would be going at Uber.

• 1:02:38Jason Calacanis?

  I believe Uber merges, or is acquired with, one of the four players. Tesla, Amazon, Google, Waymo. And then, long shot of long shots. Might get blocked, but a DoorDash and Uber combination.

• 1:02:56Speaker 01

  Ah, that's scary. Merge. Even me, my ding ding ding antitrust bells go off at that one.

• 1:03:01Jason Calacanis?

  But I'll tell you why this is something that the antitrust people should at least maybe consider letting happen.

• 1:03:07Speaker 01

  Okay.

• 1:03:08Jason Calacanis?

  Then, you would have a company add to the MAG8. Or Uber plus Airbnb. So, expanding the MAG8 makes each member of the MAG8 less powerful. We should be trying to take the MAG7 or 8 and make it into a MAG17 or 18.

• 1:03:23Speaker 01

  Yeah, MAG20, yeah.

• 1:03:25Jason Calacanis?

  Make a MAG20. Then, that's the way, because you're not gonna stop them. They're just too good at what they do. They're at the top of their game. They have too much cash. No administration can stop them. You're not gonna break them up. Even if you do break them up, they're gonna add more businesses. And so, or if you break up, if you force Google to spin out YouTube... Or something, you would actually then create a mag nine. So there might be a case to break up one or two along the margins. That's my best belief here. But I do think we will see that we're going to go from 1% of rides globally being ride sharing to 20. In that case, the TAM is going 20x in the next decade or two, easily, in my mind. And if that's the case, then car ownership goes away. Man, Tesla's flat year over year, I

• 1:04:10Jason Calacanis?

  think, on car deliveries, 1.8 million or something like that, which is extraordinary.

• 1:04:14Speaker 01

  It was 1% down year over year.

• 1:04:16Jason Calacanis?

  So even.

• 1:04:17Speaker 01

  Yeah, but you call it even.

• 1:04:18Jason Calacanis?

  Car ownership is having an issue right now. I think young people don't want to own cars. So actually Tesla's making the absolute right bet on the cyber taxi. So why not ensure the win for 10% of your shares by buying Uber? For me, that would be like a dream. Or Amazon buying it, or DoorDash.

• 1:04:33Speaker 01

  So a couple of data points here, just to wrap up this conversation. Lyft valuation as of right now, 6.03 billion. DoorDash, 72.5 billion. I think people don't realize how much more valuable DoorDash is than Lyft. Uber, 137 billion. And then we get into the big boys, Tesla, 1.27 trillion. And then Amazon, 2.35 trillion. And I'll just throw in Alphabet for good measure here. That is, drumroll please, 2.36 trillion dollars. So there's a lot of capital here. Someone buy Uber to make Jason's month. And we're back on, we're doing a late show on Sunday.

• 1:05:11Jason Calacanis?

  Well, we're going to record the Monday show on Sunday. We might go live with it. We'll see. So if you're around Sunday night, because I'm going to be traveling on Monday, we're going to record the show Sunday. Back to, hey, listen, no rest. We like to, we love doing the show. We do whatever we have to do to get it. No rest for the weary. All right, everybody. Do me a favor. Founder University, started company in 25. Number two, follow x.com/alex, x.com/twystartups, x.com/jason. And finally, I'm trying to get to a million dollars in startup credits. For GetStartupCredits.com, this is a gift from me and my team to all startups. We can't invest in every startup. 20,000 people apply for funding from us. So what we did was anytime anybody takes a meeting with us,

• 1:05:54Jason Calacanis?

  we give them the GetStartupCredits.com package, which is, I think, over $500,000 in credits. I'm going to get it to a million. I got Oracle in there. I got Google Cloud in there. I got Cruise for accounting, like really stable accounting. I got Vanta in there. I got Oracle. I got Zendesk. I got LinkedIn. I mean, these are the biggest names. I got Embrocker. I got Northwest. I got HubSpot. Athena, go to athenawow.com, get a free month, I think. So what I'm doing is the people who are my friends, who provide services at an elite level, I'm allowing them to provide something really great to founders. This is my mission, to help support founders in year zero, year one, year two, the hardest years.

• 1:06:40Jason Calacanis?

  You go there, you fill out the form, you say what you need. I need accounting. I need hiring from LinkedIn. I need marketing from HubSpot. I need cloud computing, could be, you know, Azure. I don't think we have Azure in there anymore. Oracle or Google Cloud. I need any of those. So if you want to be part of it, just email me, [email protected]. It's got to be something like legit. If you give away one month of your service, like the rack rate deal, don't bother contacting me. It's got to be super generous, like two years of the product, 100,000 in credits, no strings attached. And you have to attach an evangelist to it. So the way that GetStartupCredits works is when they fill out the form, Alex, the founder's contact information, if they opt into it, goes to that provider.

• 1:07:24Jason Calacanis?

  So if you say you want cloud, it'll go to the evangelist at Google. It will go to the evangelist at Oracle. It will not go if you don't click off cloud. So you're not going to have your time wasted. But then you're put in touch with people like a real human being.

• 1:07:36Speaker 01

  Yes, you're not sent to the slush pile.

• 1:07:38Jason Calacanis?

  No, you're not just going to get added to a mailing list and get spammed. You have to, have to, have to put an evangelist on it. It has to be a good deal. Anyway, it's an experiment. We experimented in the fourth quarter with it. We had hundreds of people, I believe, come in and fill out the form and the experiment. We had, I think, a half dozen partners. We're going to go to a dozen partners. It's working great. And we'll see you on the next episode of This Week in Service. Bye bye.