Of all the sectors, I would never have guessed that one-click checkout companies would be the nexus of startup world drama. And yet that is where we find ourselves.
The industry leader Bolt was co-founded by a man who seems desperate to win some sort of commendation for his conspiratorial tweetstorms.
Meanwhile, rival Fast flamed out hot and, well, fast. The startup, which raised money from Index Ventures and Stripe, generated just $600,000 in revenue from its checkout service last year. The company was burning through as much as $10 million a month.
Those figures come from the reporting of Kate Clark and her colleague Malique Morris at The Information. The duo have chronicled the fall of Fast, which had raised more than $100 million in funding.
Tom Dotan, Katie Benner, and I spoke with Clark about Fast’s implosion. We also talked about Tiger Global renegotiating deal terms and Peter Thiel’s strange speech at Bitcoin 2022.
Give it a listen.
Get full access to Newcomer at www.newcomer.co/subscribe
00:00:06
Welcome back on Sally. Hey, welcome to dead cat.
00:00:15
Hisses are newcomer. We've got Tom and Katie here and
00:00:19
we have Kate Clark. Startup reporter VC reporter
00:00:23
from the information who's been writing tirelessly about one,
00:00:28
Klick payment disaster. World with fast imploding and
00:00:32
the bolt CEO being a lunatic or export CEO.
00:00:36
Anyway, so we should have a fun. Startup World conversation.
00:00:41
Katie has undiagnosed covid at the moment and Kate has lost her
00:00:47
voice. So we've got a bunch of sick of
00:00:49
straddling this so sickos. This yeah, cait was probably
00:00:54
screaming at PR people all of yesterday.
00:00:57
Well, thanks for having me, despite despite my Lost voice.
00:01:00
Yeah, of course. I mean we feel like this story
00:01:03
is taken and it's been mostly you and your colleagues
00:01:06
reporting, you know, as taken Silicon Valley by storm
00:01:09
partially because it's one of the first real I think startup
00:01:13
implosions when, when everybody sort of thinks they're coming or
00:01:17
I don't know, like, I just want you to sort of lay out this
00:01:20
story a little bit because a lots happened.
00:01:22
Like where does it begin to you like when did we all start
00:01:26
caring about one-click, checkout companies went Did they really
00:01:31
get on your radar as like startups that mattered in like
00:01:34
the Zeitgeist of Silicon Valley? Yeah, I mean it's a good
00:01:36
question. I think they really started to
00:01:39
matter when all of this VC funding flew into them.
00:01:42
Like these companies were raising, you know, over a
00:01:44
hundred million dollars and in fasts case it really, really got
00:01:49
my attention when stripe invested which, you know, is now
00:01:51
been a couple of years ago. And then not only the stripe
00:01:55
invest, but this company, you know, free product launch really
00:01:58
early stage was Out in the market looking for a
00:02:01
billion-dollar valuation, you know, as long ago as like late
00:02:05
2020. So when you start seeing that
00:02:07
and you know, at the same time you're seeing them, sort of
00:02:09
pedal, these $1 hoodies on Twitter that didn't make a lot
00:02:14
of sense for a fin tech company. So, I think those early signs
00:02:16
really got people paying attention and then you had the
00:02:19
competition with bolt and you had this really bombastic public
00:02:23
figure CEO you know in Brian. Breslow sealed bolt and I think
00:02:28
he really he really Got people's attention to.
00:02:31
So then you have this war, these two companies, so Amazon lost
00:02:34
its patent in 2017 and then I think it in a couple, in the, a
00:02:38
couple years later, you really start to see two companies rise
00:02:42
with the help of hundreds of millions in VC funding together
00:02:46
and that's fast and bolt. Yeah.
00:02:49
Both companies had CEOs who were all over Twitter all over the
00:02:52
tech press like really Making a Splash and really really trying
00:02:56
to capture and bring a lot of attention to what they were
00:02:58
building, which was when I got software so fast in particular,
00:03:02
you know, really gets on my radar when stripe invests and
00:03:06
then invest again that the series B and puts a hundred
00:03:10
million dollars. You know, with the help of leaf
00:03:12
Exel. There's a former tiger Global
00:03:14
partner. His forearm addition puts total
00:03:16
of a hundred million dollars in this company and then again,
00:03:19
pre-launch nothing to show for it self.
00:03:21
So, of course, we're all watching.
00:03:22
Paying attention wondering what's going on this company?
00:03:25
Luncheon, even realize, yes, and they had a lot of delays and
00:03:29
it's a After bolt, right? Bolt is a little bit ahead of
00:03:33
fast. Yeah, so Ben and bolts run by
00:03:35
this guy, Ryan Breslow, or at least he he co-found sir the
00:03:39
dead and he's the CEO for a long time until this year, which is a
00:03:42
whole other story. Doesn't probably talked about
00:03:44
yes, a bowl. Get started many years before
00:03:47
actually, I think Bowl was founded in 2014, you know, it
00:03:49
took a long time to build the technology took a long time
00:03:51
before launch. So already had it, had a head
00:03:54
start, also had a different strategy, they were targeting
00:03:56
larger businesses which, you know, larger businesses Equals
00:04:00
more transaction. Volume equals more Revenue.
00:04:03
Fast was targeting smaller businesses and you need a lot
00:04:05
more customers in order to make any Dent there and that ends up
00:04:08
being a big problem for them. And so, then to skip it, skip
00:04:11
ahead a little bit. I mean Ryan Breslow is basically
00:04:13
the guy who does the Tweet storm right before leaving the CEO job
00:04:17
at bolt where he says you know there's this Grand conspiracy
00:04:20
where YC and stripe or basically running Silicon Valley and it's
00:04:24
made it hard for him to fun with the Irish mafia, right?
00:04:27
Exactly. So you know that, Now it's The
00:04:30
Road to Perdition drama. And honestly it made me think
00:04:34
sort of not following these companies closely like, oh, fast
00:04:38
the Rival must be doing super well because this tweet storm
00:04:41
seems really like defensive. It's like, oh, you know, we've
00:04:45
had such a hard time because all the stars have aligned with our
00:04:48
rival fast. Yeah.
00:04:50
And then all of a sudden so then then what happens with fast
00:04:54
like. So all of a sudden I had heard
00:04:55
of fast because you know the co-founder is what Allison.
00:04:59
Our Allen Bar Allen. Yeah, who is XU Burr?
00:05:02
And was sort of Buzzy Twitter presence.
00:05:05
So I knew I was more aware of her then Dom.
00:05:09
But so yeah, we're pick us up from.
00:05:11
We've got the Tweet storm and then where's the, what's the
00:05:14
first sign of something going on at fast?
00:05:16
Yeah. So what would was tweet?
00:05:18
Starting January January, February, let's say, okay, so a
00:05:21
few months ago, I remember reading that tweet storm and
00:05:24
thinking what is, you know, what is Dom?
00:05:26
The CEO fast going to say, you know, he had been, he'd gone
00:05:29
quite quiet on Twitter, I noticed then and again this is
00:05:32
someone who was very loud on Twitter for several years and he
00:05:35
made some statement on Twitter like supporting Ryan Breslow,
00:05:39
which I thought was interesting. But at the time, you know, I was
00:05:43
not aware of any issues at fast. I like I didn't think that they
00:05:46
were booming necessarily, but I wasn't aware of what was to
00:05:49
come. What's really unique to me about
00:05:52
this about fast. And what's really crazy is how
00:05:54
fast how fast it all happened, like the collapse.
00:05:58
I don't think I've ever seen. Suppling have a collapse so
00:06:02
accelerated. So you know, we first heard of
00:06:06
issues there. I want to say less than three
00:06:08
weeks ago. Yeah, maybe about three weeks
00:06:11
ago and, you know, the companies already shut down.
00:06:15
So, and that is because I mean at the end of the day, it's
00:06:18
because they expected. They could raise more money and
00:06:20
it was saying, oh good, Venture capitalists are not as readily
00:06:23
investing in companies right now as you know, so they just it
00:06:27
just happened. Like what was interesting about
00:06:29
it to me? Is it it shut the fuck down like
00:06:33
you don't see that that often in Tech, you know, companies will
00:06:35
have soft Landings, they'll manage to place, you know, half
00:06:39
of the P'nay elsewhere. They'll be just some sort of
00:06:41
selling in parts that happens but a full-on like everything
00:06:44
must go. This shit is over with.
00:06:46
Shut it all down. Just doesn't happen that often
00:06:49
and certainly not one that is. When's the last time you saw
00:06:51
that? Was it just Arrow?
00:06:52
I mean this is like eight years ago, seven years ago.
00:06:55
This is like very personal to me because I wrote about one
00:06:58
company. This was like 7 years ago, there
00:07:00
was like a laundry company called washio.
00:07:03
That had some high end VCS in a laundry space.
00:07:06
So, you did a new laundry strike.
00:07:08
I'll never stop. Keep it.
00:07:09
Your laundry stories. I will I will I will take you
00:07:12
seriously. It was like a ten million dollar
00:07:14
round or something. They didn't I say.
00:07:15
Yeah Taro and it's hot. Tom actually just he just needs
00:07:20
a new washer dryer. That's the actual no, actually I
00:07:23
got a new one that's will do a spin-off podcast about my my
00:07:25
back and forth with my home warranty.
00:07:28
But, but yeah, they they shut down like sold the desk sold the
00:07:32
Macbook. So that was one that I remember,
00:07:34
but, you know, not this is more professional than that.
00:07:37
This was 100 million race. This is different.
00:07:39
There have been many like, dis Arrow type startup implosions,
00:07:43
but I don't know how many there have been when they're, you
00:07:46
know, over 500 or roughly 500 employees and I think that's why
00:07:49
it happened so quickly. It's like there were the, the
00:07:53
other option, I guess would have been laying off 400 workers and
00:07:55
trying to keep on 100. But I think, you know, when you
00:07:57
actually have zero dollars and no VC is willing to invest.
00:08:00
Like they just they put themselves up against a wall by
00:08:05
growing so fast in 2021 they hired then went from 92 like
00:08:09
nearly 400 workers in 2021 and they were bragging about the
00:08:12
pace of employee growth as if that was sort of a sign of
00:08:15
underlying success which you all reported and then the revenue
00:08:21
figure is astounding. How did you get the sort of
00:08:24
financials who it was six hundred thousand dollars in
00:08:27
Revenue in a year s offer? Yeah, from their checkout
00:08:30
software. So and I note that because they
00:08:32
also have emerged business. So they sell t-shirts and
00:08:34
hoodies, and they've got they've sold 60 hoodies according to
00:08:38
the website. Oh, my God, it's like Evernote
00:08:40
back for maybe a dollar. Yes.
00:08:42
So there's there's perhaps other Revenue that we didn't account
00:08:44
for. I don't know how much I'm there,
00:08:46
merge business. But yes, I think we were we were
00:08:49
quite shocked by that number as well.
00:08:52
It's so much to ask about with the, I mean, I don't want to
00:08:54
jump too far ahead because the actual details of how Dom ran
00:08:57
the company or hysterical and, you know, to use an overused
00:09:01
term like a cautionary tale with in Tech.
00:09:04
But my takeaway from there being just no outcome for the company,
00:09:08
is that there was Nothing there in the end.
00:09:10
Like there was no Tech of substance to acquire.
00:09:13
I mean, it's a quasi fairness situation where like when you
00:09:16
really get down to like what it invented or what it really
00:09:20
produced over the course of its lifetime.
00:09:22
There's just nothing of value. No one wanted to a choir shit
00:09:25
other than some Engineers. Right there was some problems in
00:09:27
years. Yeah.
00:09:28
And we'll see, I'll, I'm very curious myself, how many of them
00:09:31
like what that deal actually entailed and how many Engineers
00:09:34
firms actually going to take on yeah as in a choir or just
00:09:37
hiring people? Well, it was Some kind of
00:09:39
agreement where they're going to take on.
00:09:41
Like, I don't know the specific. So we basically, we just said,
00:09:44
in our story like a firm agreed to take on, I'm in, probably
00:09:47
like a couple dozen of them. I think they have like a pretty
00:09:50
pretty large engineering team. So, I mean, there's a certain
00:09:53
responsibility when a company dies you're supposed to.
00:09:58
Like, I mean, I think they're even laws about it like you're
00:10:01
supposed to. If you think your company is
00:10:03
about to run out of money, you're supposed to say save
00:10:06
enough to give some sort of reasonable To the people that
00:10:11
work there. Like, did they, they gave like,
00:10:12
two days of severance or what did they do when this whole
00:10:15
thing shuts down to, like, look out for the employees.
00:10:18
Yeah, I don't know what the severance packages were, but
00:10:22
you're right there, I mean, not only is there may be rules or
00:10:24
laws but they also as a CEO he should have been thinking
00:10:28
further ahead and that's why I like the only way I can
00:10:31
understand what happened is by believing that he was 100%
00:10:36
certain that he would be able to get that rescue financing at the
00:10:38
end. I think that he really thought
00:10:40
the VCS like stripe or addition or index Ventures who are all
00:10:45
you know, big investors in this company.
00:10:46
I think he really believes that one of them would would provide
00:10:50
that last-minute round look like what good is being tied in with
00:10:53
the mob. Yeah, exactly.
00:10:58
Like it, right? And what is your thinking on
00:11:00
like why they didn't think we've seen Venture Capital firms
00:11:04
bailout? So many companies.
00:11:06
Yeah, was it simply the insanity of the CEO.
00:11:09
What, why was it? They chose to let this one go
00:11:11
and not just let it go. But like in a really public and
00:11:15
Incredibly dramatic way, right? I mean, because it's, it hurts
00:11:18
their reputations, right? Like, I mean, particularly
00:11:20
stripe who is like a absolutely balli darling, that's kind of
00:11:24
developed this big reputation as an investor to But I mean, I
00:11:27
think the real reason is likely because of how large the company
00:11:30
was and how much money it would have required.
00:11:32
Because it's not like one round would have, would have been the
00:11:36
Silver Bullet. It's going to need to continued
00:11:38
investment and how, I mean, how much hundreds of millions like
00:11:41
like to support a 500-person company that is made six hundred
00:11:46
thousand dollars in Revenue like yeah, ten million dollars a
00:11:49
month and burn so just, you know, you can do that math.
00:11:52
So I think that's the answer. I think another, you know, I
00:11:54
mean, I don't want to Be late too much, but I think that
00:11:58
there's perhaps I think some of these investors might have
00:12:01
realized what they had on our hands with dom and Lady realized
00:12:05
that what he had promised. You know, he was not delivering
00:12:07
on his promises. So I think there was some of
00:12:09
that as well. And maybe just the markets
00:12:12
themselves, sort of everyone seems like they're taking a step
00:12:15
back, a little bit to assess. Absolutely bad timing for them
00:12:18
with that, right? This was 20 21.
00:12:20
Yeah, I gotta say can like, can Massa no longer be tricked into
00:12:24
taking these shitty companies, what happened?
00:12:26
Wow. He wasn't crazy enough, soft
00:12:28
pink ball pulled back? Yeah, iger's kind of pulled back
00:12:32
and if it was a different, I mean, yes that's what's also
00:12:35
really interesting about this as it really tells a story of the
00:12:38
moment and I think we're going to see we're definitely going to
00:12:42
see more of this. This is certainly an outlier for
00:12:45
certain reasons like the behavior of the CEO.
00:12:47
He already had a spotty past Etc, but I think we'll see many
00:12:51
more startup implosions because they're just not gonna be able
00:12:54
to raise the money. They need to keep Going, can we
00:12:57
dig into that for a second here? I'm and I want to definitely go
00:13:00
into the larger implications and what, you know, what it all
00:13:03
means going forward. But he's I mean, there's so much
00:13:05
funny stuff in your story on the way he ran the company and like
00:13:09
the big kind of company-wide meetings.
00:13:12
I'm still watching the we work show.
00:13:14
So I just saw the episode where they have like the, we work, you
00:13:16
know, cult Camp. You know, we were chanting.
00:13:20
So what like give us some anecdotes from, how how Dom was
00:13:26
Hanging out in Florida with jet skis.
00:13:28
Oh yeah. So that I actually, I highly
00:13:31
recommend anyone listening. You can go on Facebook and
00:13:33
search this and you can watch the video and it is surreal.
00:13:37
So, Dom last year decided to open an East Coast Hub or east
00:13:40
coast headquarters in Tampa Florida where he had moved.
00:13:42
So yeah I bought a house there and you had a yes, Tampa
00:13:46
Florida. So I'm not even my Tampa
00:13:49
strawberry Choice. He bought a very nice home in
00:13:53
Tampa open up, open up a headquarters.
00:13:55
Anyhow Hosted this big really lavish exciting event to
00:14:00
announce this. He has the mayor of Tampa there
00:14:02
with him. He has several local sports
00:14:04
stars who I can't name, you know, sports teams that are
00:14:07
based there. And then he makes a grand
00:14:10
entrance in a NASCAR with a, a NASCAR race driver in the driver
00:14:15
seat, and they do a bunch of doughnuts spinning around in the
00:14:19
vehicle. And then, in a revving, the
00:14:21
engine like crazy. And then they'll and you right
00:14:24
next to kind of where the mayor's speak again.
00:14:26
Dom gets out. He has somebody in the audience,
00:14:28
put his jacket on him, kind of like you know like a celebrity
00:14:32
Pink Blazer walks up on stage and then just gives this speech
00:14:35
about how, you know, how the phenomenal growth that they've
00:14:39
had what's ahead for them, how they, you know, Tampa's the next
00:14:42
big Hub. And they, you know, he's got all
00:14:44
these local supporters because of course, the mayor was there,
00:14:47
right? Yeah.
00:14:48
Yeah. Yeah.
00:14:48
Mary Jane Kelly, Eric everyone who buys a house in Tampa gets
00:14:52
this treatment. So just know that if you buy a
00:14:54
house in Tampa, Summer in Kansas is one of the things that happen
00:14:58
nice city. You know?
00:14:59
It is. It's a real, it's a big.
00:15:01
I think it's a biggest, major blow down there in Florida.
00:15:04
It is. Yeah, I think Florida mayor is
00:15:07
one of those jobs that like, at some point in your career, you
00:15:09
may not you may not put on your LinkedIn like Florida town,
00:15:13
mayor is a chance. You're just like yeah, that did
00:15:16
that did happen but let's not go after the events you went to
00:15:19
were with some sort of like huckster Florida man type you
00:15:22
know you look the yeah I'm like yeah look at some point.
00:15:25
Mary. You converted your entire income
00:15:28
into Shiba Inu. You realize that this was all a
00:15:32
huge mistake and your third wife is leaving you.
00:15:34
And yeah, you didn't realize you gave Dom from Fast, a pink
00:15:38
jacket like it's all a blur anyway.
00:15:41
Well yeah that was going down. He's got all their support
00:15:43
because this is like a, what there may be a third tier Tech
00:15:46
Hub, whatever you want to call it.
00:15:47
That's trying to invite more Tech workers.
00:15:51
So there are so excited that you know, they say this is one of
00:15:54
the fastest growing companies in Silicon Valley.
00:15:56
Lee which, you know, he just told them and they repeated and
00:16:00
it's exciting to watch. I mean it to see what else we
00:16:10
can get you a video with a bearer of the mayor of
00:16:13
Pensacola. Yeah, so anyways, it's eight
00:16:17
months later there are sent down so it's quite a sight to see.
00:16:19
Any didn't hire anyone in Tampa, right?
00:16:22
Nobody. Yeah, that one colleague.
00:16:24
Who moved out there with him. An engineering manager.
00:16:28
Yeah, but that it was. Yeah.
00:16:30
I mean, he was again, false promises.
00:16:33
I don't know what his intentions are.
00:16:35
This guy is not, he'd like changed his name because his
00:16:38
past was good. That's you right?
00:16:40
He used to be got he used to go by Dominic, he changed it to
00:16:43
Dom. Long story short, he had a
00:16:45
towing tow truck startup in Australia that not only like was
00:16:49
liquidated but there was like some really bad things that
00:16:52
happened to some of the like it just kind of screwed over all
00:16:54
the employees and you can read about that.
00:16:56
I think NPR has done some good reporting on that.
00:16:59
And I mean I personally think that some of the early investors
00:17:02
did not know about that and that is completely on them.
00:17:05
It just takes a Google search but I think we were it's not
00:17:08
like he changed his name from Dominic to Richard.
00:17:10
He changes him. Nominated are incredibly easy to
00:17:13
find and I think it just really telling of the moment you know
00:17:15
that was 2019 when he raised all that early funding and certainly
00:17:19
that was at 2021 but honestly 2019 was pretty like euphoric
00:17:23
and Venture Capital to it was just before the pain that Boom.
00:17:27
So it was during a period that lasted years where diligence was
00:17:31
sometimes don't exist. I mean, I literally just just a
00:17:34
pause there, like there was the 2012.
00:17:36
Boom, the 2014, Boom, the 26 teams of the Trump, Boom, the
00:17:40
recession. Boom, the penalty was abuzz the
00:17:42
valley. Not booming.
00:17:43
They will Bloom for anything bill, right?
00:17:45
Boom. Is not even Sims.
00:17:46
I don't know. It's sort of no.
00:17:50
But sometimes, there are like three weeks for three-week-long
00:17:52
drawbacks and, you know, the batten down the hatches winter.
00:17:55
Winter comes. Yeah, like winter comes for a
00:17:59
long weekend this, I just think that's not what you know, but
00:18:04
that's just crazy to me. That it would have been easy to
00:18:06
find out more about his past. Yeah, I mean, literally you
00:18:09
probably when you Google like Dominic or Dom they're just, you
00:18:12
know, Google's like did you mean Dominic?
00:18:15
I mean y'all Hammers and index. I mean, he's sort of the lead
00:18:19
early investor here, right? Or I feel like he's big in Robin
00:18:24
Hood, which is his own company that people have liked.
00:18:26
Big big moral like objections to.
00:18:28
I don't know, like, what's your sense of his role here?
00:18:32
Yeah. So he's the First Institutional
00:18:33
Investor. So he plays a huge role in
00:18:36
providing credibility to this early stage company.
00:18:39
He is at the time already big and Robin Hood transferwise and
00:18:43
add Yen, which are three of, you know, the largest fintech
00:18:45
companies. So he is kind of the consumer
00:18:48
fintech investor. Like, there's no denying that
00:18:50
again, that he provided that credibility, I don't know what
00:18:53
he knew. I mean, you can I cited some of
00:18:55
the blog? That he wrote about fast and
00:18:57
2020, he really believed in Dom and he thought that Dom was an
00:19:01
incredible leader and said many nice things about him.
00:19:06
You know, he wouldn't, they would not comment for the
00:19:08
article. So I couldn't really find out
00:19:11
more about what actually happened in more recent times.
00:19:14
I mean, one broader, one Trend in Silicon Valley that I'm sure
00:19:17
you've seen, is just like these boards are becoming more and
00:19:20
more like founder inventions, they like bring on whoever they
00:19:26
And so that they don't get bothered by like their investors
00:19:29
and I went in the Wayback machine and it's like in January
00:19:32
2021, they say their board is Dom, lucky groom and Brian sugar
00:19:39
from group 9. Like what, what is that for?
00:19:44
Like I mean I think of you know, lucky as you know, he was at
00:19:47
stripe, he deployed a lot of capital.
00:19:50
Like what what's the, what's the deal there?
00:19:54
And then I guess like towards the end, And I forget you
00:19:57
probably know the board at the end better than I do.
00:20:00
Yeah. Yeah.
00:20:01
I think it's it's a small board. I think it's maybe someone an
00:20:08
executive might, right? Yeah, Brian Dom.
00:20:11
And and Ian. Yeah.
00:20:12
So it's interesting. Lucky lucky groom was a surly
00:20:15
stripe employee as we know now is like a big-time solo VC.
00:20:20
He is not investor in fast but he has a close relationship with
00:20:23
stripe and was sort of like there he represented straight.
00:20:26
The board basically, like he is kind of like a call a favor.
00:20:30
He knew stripe. Well, I thought he'd be good.
00:20:32
So he's on the board for a bit. I don't know much about Brian
00:20:35
sugar. I know I know.
00:20:36
Brian quit. Yeah, welcome down.
00:20:38
Would ya? I mean, Brian.
00:20:39
Brian is the president of group 9.
00:20:41
I imagine he may be on his way out.
00:20:43
Post the merger with Vox and then he has a side Venture fund
00:20:48
that I think he invested his personal capital.
00:20:51
I think called like sugar fund or something and they're an
00:20:53
investor in fast. Yeah, and they do a lot.
00:20:56
He's done a lot of e-commerce like oh yeah, see stuff.
00:20:59
Yeah he does a lot of data, see stuff, he knows e-commerce but
00:21:01
not necessarily the fan Tech side.
00:21:03
Apparently I don't know, I don't want to speak for Brian.
00:21:07
We should ask him to come on some time because he's a chatty
00:21:09
guy but you know, he's plugged into that space but seems like
00:21:13
something something. There's it seems like there's a
00:21:16
bit of a gap between that expertise.
00:21:18
And what would have been good oversight for this company?
00:21:22
Would be my assumption that I was, you know, in the reporting
00:21:24
process, we were told Some former employees that Brian was
00:21:28
often cited kind of like in sales pitches as like in a lucky
00:21:32
investor and some of the sales people were like why are we even
00:21:34
talking about this guy like this is it going to be relevant to
00:21:36
any of these customers so there was a lot of confusion about
00:21:39
like your dry why they promoted certain investors in the in the
00:21:43
pitching to two clients. He has a great Instagram, I
00:21:47
follow him there because it's all solid stories, a lot of home
00:21:50
cooking, you're all over the startup World stuff.
00:21:53
What's your view on like, I don't know.
00:21:55
Board composition. Isshin right now sort of
00:21:57
generally because, you know, we saw, you know, the Tigers of the
00:22:00
world basically being like we don't want aboard see we don't
00:22:03
want to meddle, it gave the founders a lot more like control
00:22:07
over who they appointed. I'm sure you've heard the same
00:22:09
things as I have where there there early investors who
00:22:13
bristle you know, the Sequoias the world.
00:22:15
I mean they're obviously all over but when they invest early
00:22:18
it's sort of like oh we have to keep being the responsible
00:22:20
person. Even though these sort of hedge
00:22:22
funds crossovers come in, I don't know.
00:22:25
What do you think? There's Have any optimism that
00:22:27
there's a move back to like, okay, investors need to take a
00:22:31
board so you can have some, like, culpability for their the
00:22:33
companies they invest in. I mean, I think, I think it'll
00:22:37
be interesting to have this conversation and like six to
00:22:39
nine months when there's been more of a Fallout because right
00:22:41
now, a lot of, the more traditional Silicon Valley
00:22:44
investors who do take board seats are really trying to
00:22:47
convince me of like how messed up.
00:22:49
It is the strategy, the tiger took, which is, you know, not
00:22:52
not to take board seats and to be passive investor.
00:22:54
Because now a lot of those companies, Knees are struggling
00:22:57
more and they don't have like the expertise.
00:22:59
And this is this is only if you believe that some of these
00:23:01
people are actually helpful on the board.
00:23:03
If you believe that then some of these companies feel a little
00:23:07
bit abandoned because they don't have that support and more
00:23:09
difficult times. So I mean, I think it will be
00:23:12
interesting to see like if a lot of tiger Global backed companies
00:23:16
which and negatively, a lot of them are going to fail because
00:23:18
there's hundreds and hundreds of them if they if they do feel
00:23:21
abandoned and there's a more of a public dialogue about that, I
00:23:24
do think that we will see a shift But it kind of depends on.
00:23:27
Again, it's really about, if you believe that these people are
00:23:29
really helpful members of the board, which you can only find
00:23:34
out and more difficult times. It does seem Reckless to me,
00:23:37
just like, you know, like you're saying these companies rate get
00:23:42
customers based on the firms to invest.
00:23:44
It's not like they're Anonymous. It's not like we just have
00:23:47
Anonymous money. It's like we have named money
00:23:50
and so the firm's reputations are being attached to these
00:23:55
companies. And just like, I don't know, I
00:23:57
run a business. I wouldn't want my brand to just
00:23:59
be attached to things. I had no influence over what
00:24:02
what came of it it's like people are ruining your brand and you
00:24:05
don't care like to me like if there's more of a correction
00:24:08
like just there will be business pressure to worry about it
00:24:11
because you're trashing your brand by attaching it to
00:24:15
companies. That's probably why the plug was
00:24:16
pulled at this point rather than you know investors, I mean yeah
00:24:21
like there's a different way of an investor nothing more
00:24:22
embarrassing than a company with six hundred thousand dollars in
00:24:25
Revenue. I mean it's just like that's a
00:24:28
makes you look like an idiot. Yeah.
00:24:29
Right. They should address it.
00:24:30
I think that it's frustrating as a reporter that all of these
00:24:33
investors are being so silent about it.
00:24:35
I think, you know, I mean I know it's we all say this but it's
00:24:38
like the hive table so much and they beg us to write about them
00:24:41
and that it's like the times that there are these these
00:24:44
implosions. I just wish there was more
00:24:45
honest about it. I think like that's frustrating.
00:24:48
Agreed, you know, every startup forwarder would agree with you,
00:24:51
right? Like, we all it's a broken
00:24:53
record, but, but as far as the like the what you're Thing about
00:24:56
the board and the brand, I think, like the hedge fund
00:24:59
crossover funds. I actually don't think that
00:25:00
that's something they're concerned about.
00:25:01
I think that perspective is a very like, Silicon Valley
00:25:04
venture capital firm, Sand, Hill Road, Our Brands, important,
00:25:06
like tigers, as you know, we've all reported as like operating
00:25:09
like a public market investor and just like, treating
00:25:12
everybody like stocks. So different strategy.
00:25:15
What I mean, what's the situation now with with bolt?
00:25:19
Obviously their CEO, got shit-canned is the chair he got
00:25:23
elevated, he ascends he was from Right?
00:25:26
He got a pyramid chairman of the board now.
00:25:29
So he's still revolved. You reach, Enlightenment?
00:25:32
Even rest and top. Yeah, he decided he wanted to
00:25:35
spend more time with his Twitter posts.
00:25:38
That is what a chairman allows you to do.
00:25:40
He's got a lot of side projects. I mean, didn't he say in his
00:25:42
Twitter that initially that he was thinking about building some
00:25:45
kind of Y, combinator competitor, he said something
00:25:47
about like yay. Yeah he's working with the
00:25:50
founder of Mind Med which is so psychedelics companies like love
00:25:54
medicine or what's it called It's called love our love.com,
00:25:58
okay? They've really gotten to the
00:26:00
essence of what what people want, you know, we're selling
00:26:02
blockchain psychedelic or not. It's actually, it's not
00:26:05
psychedelics. It's right, is the intersection
00:26:06
of psychedelics and blockchain. It's yeah, it's it.
00:26:10
Anyways, he's doing that. He's involved.
00:26:13
Decal and bolts doing much better than fast.
00:26:16
We, I think we reported the revenue.
00:26:18
I'm doing much better than fast that's well.
00:26:20
Well, obviously. Yeah, they're still, there still
00:26:22
a business, like, souvenirs also doing better than your right But
00:26:26
they had 40 million. I think 40 million Revenue last
00:26:28
year, so a better business but they do have like a 12 13
00:26:33
billion dollar valuation. So the correction is probably
00:26:36
overdo there. But like I said doing a lot
00:26:38
better than fast. Right.
00:26:40
Okay so so so is there still a belief?
00:26:42
I mean because I imagine what happened with both.
00:26:44
These companies is that there was this thesis on the part of
00:26:48
investors saying, like well the patent is expiring there's going
00:26:51
to be a bun or at least like a couple of winners of people in
00:26:54
like the one-click checkout. Space.
00:26:56
And so that's how you get, you know, quick Investments and high
00:26:59
valuations early on. With these two companies fast is
00:27:02
dead bolt is, you know, I guess doing better, but is there like
00:27:06
still a strong belief among investors that?
00:27:08
There's a real opportunity here or is this just something that
00:27:12
what little business exists is just going to be owned by
00:27:15
whatever Amazon one-click checkout or Apple pay or what I
00:27:18
mean. Like is there anything here?
00:27:20
Or is this just a mistake? I think people are gonna like
00:27:23
put that on ice for a little bit and maybe it keep their
00:27:25
distance. I don't think we're going to see
00:27:27
a lot of funding there. I mean, I think it's also like a
00:27:29
product that I'll other fan text can build, right?
00:27:31
A firm was sort of, didn't you say this in the story sort of
00:27:34
competing with them? I mean, obviously a firm offers
00:27:36
a different product, but I mean, people are building in this type
00:27:40
of I think a bit more complex businesses are incorporating
00:27:43
this into their business. Like, I don't think that we're
00:27:45
going to see a lot of funding and Standalone one-click
00:27:48
checkout companies. Here's my big question.
00:27:51
Do you think if the Tweet storm never gets dropped?
00:27:54
You know, I Ryan told What the three cartoon avatars but I
00:27:58
guess he was like oh I'd been sitting on it for two or three
00:28:01
years, waiting for the right moment.
00:28:02
Like you think of you never drops up fast and still in
00:28:05
business today? Like do you think like that
00:28:08
really drew the attention in or you think this was like this was
00:28:11
coming, whether there was the Absurd, I think this was coming.
00:28:14
I just didn't care about these companies until it was like he
00:28:17
was talking about but you reported them so you know your
00:28:20
own interest in it and I don't if I wasn't doing it I do them
00:28:23
well I think so I guess I'm biased.
00:28:25
It's hard for Like have an objective opinion on that
00:28:27
because I already knew them already knew.
00:28:29
Ryan, are you Dom? But I could know.
00:28:31
I really think it was inevitable.
00:28:32
You just can't you can't burn ten million dollars a month.
00:28:36
What the only thing that could have saved them is, you know,
00:28:40
going back, six months and like us, like not allowing the stock
00:28:44
market to the behavior that as, you know, right?
00:28:46
It's because of the environment change what also, it seems like
00:28:49
the mistake that they made here is that there were only burning
00:28:52
10 million a month, you know. Like that's an unfortunate.
00:28:56
Ozone to be in if you're burning two million.
00:28:58
Oh yeah, you've got some Runway if you're burning 100 million or
00:29:01
like 70 million. Oh, then you've got investors
00:29:03
really feeling that they need to get this thing going because
00:29:06
because you're in the too-big-to-fail zone, but like
00:29:08
10 million is like, you didn't go big enough right?
00:29:10
Actually, it's funny because a lot of people after the article
00:29:13
came out, we're like, well, you know, like that's pretty normal
00:29:15
for a start-up like burning 10 million and like not making any
00:29:18
revenue and like, okay, well, like a semi the list of
00:29:22
examples, I would like to have is like, you know, others that
00:29:26
Okay, but again, yeah, if you run out of the funding, then
00:29:29
you're screwed. So it doesn't really seem like
00:29:30
what was, what was Uber doing, Eric at like, edits craziest and
00:29:34
I mean, who burn like two billion dollars in China and
00:29:37
like a lot of the revenue was like yeah if you want to be
00:29:40
late, so many accounting games. Yeah.
00:29:41
I was going to actually joke on your point about yeah, not
00:29:44
pretty enough money. There is like, well, we're a
00:29:47
company that burns through a lot of money.
00:29:48
So we need to raise a lot of capital, which means you'll be
00:29:51
able to deploy a lot of capital. Take a lot of owners are, you
00:29:53
know, you can sell any of these things is like, Upside in boom
00:29:57
times where it's like, oh yeah, we want to deploy.
00:29:59
And this is a company that really, really has appetite for
00:30:02
Capital, right? I mean if you're good at
00:30:04
fundraising, then you can fund raise a lot of money and that's
00:30:06
the thing. It's like, there are these
00:30:07
people in Silicon Valley who like they've started.
00:30:10
A lot of companies, we know them.
00:30:11
They're really good there. They have a lot of charm, big
00:30:15
personalities, and they're really good at selling a vision
00:30:17
and like all, sometimes, obviously, sometimes terrible at
00:30:20
building, but that ability to fundraise really well can take
00:30:24
you really far. I would not be As if Tom is back
00:30:27
in a year with a new company, raising my, I really won't be
00:30:30
Insider. We ran a story.
00:30:31
I had nothing to do with it, but we ran a story.
00:30:34
Interviewing, some of the angel investors who were like hundred
00:30:36
percent back him again. Do it tomorrow?
00:30:38
Pitch Me Pitch. Me.
00:30:39
Dom pitch, me hard like yeah, I love it.
00:30:43
They love this shit. What, what are some companies
00:30:46
that have burned that much money, or more that did turn
00:30:51
around. And we're successful, like,
00:30:53
obviously Uber, but they had to shut down.
00:30:56
Down some of its money losing. They had to shut down like a lot
00:30:59
of projects. I'm order to like look, here's
00:31:01
this is like Javi. I'm interested, but like, should
00:31:03
be very high. Right, I'm margin, right?
00:31:06
It's like, yeah, it's like, what's a pure software company
00:31:10
that has had that kind of burn rate will palantir burn.
00:31:13
A lot of, I mean, palantir had the whole Consulting thing
00:31:15
forever, where it was like, yeah, that's they were never a
00:31:18
pure software company because their software us too hard to
00:31:21
use needed. Like so many people.
00:31:23
All right at it first to make it go.
00:31:26
So but yeah, it's like so weird. I just like the math is so
00:31:29
bizarre doesn't make anything. But on the angel investment
00:31:32
point, I just wanted to say, I mean, you know, we had Parker
00:31:35
Conrad on is our first guest. He's sort of the case in point
00:31:38
on Fantastical blow-ups, or a strong sign that this is a CEO,
00:31:43
who knows where the action is, you know, knows how to build a
00:31:46
company with Buzz Right Place Wrong.
00:31:49
You know, I mean obviously I mean some people would say what
00:31:53
Parker it is and if it's is worse, I mean I think Parker I
00:31:56
know Parker better. He's such a product Visionary
00:31:59
that it feels like. There's so much substance there
00:32:02
that it was believable. But yeah, I mean there's a
00:32:06
reason to back Founders who have crazy blow-ups, I mean, because
00:32:10
they did some things really well and learned things from the
00:32:13
rest, right? I mean, it's frustrating for
00:32:14
people, especially like female Founders watching someone like
00:32:17
that continue to raise money, but you're right and I do think
00:32:21
that he was a talented brand marketer.
00:32:24
Like, I don't counted. Yes, Don.
00:32:26
Talented fundraiser, maybe, I mean, maybe a good salesman
00:32:29
clearly, not good enough good considering that, you know,
00:32:31
their business. But in a different role could be
00:32:33
successful thing. It's the not good enough that
00:32:36
makes it that clearly was. The flaw here.
00:32:39
It's like he was a good fundraiser, but not a good
00:32:40
enough fundraiser. He was good at promoting himself
00:32:43
and making a big, but he wasn't that big because not that many
00:32:45
people knew who they were. You know, like didn't reach Adam
00:32:49
Newman like levels, you know? He was big in Florida but not in
00:32:51
Miami. It was fucking Tampa, couldn't
00:32:54
cook couldn't reach Adam Newman level.
00:32:56
As though if the market had to change these last few months and
00:32:58
he continued to raise like that's the question because he
00:33:01
did raise 125 million dollars. That's a lot of money.
00:33:03
It makes way more sense. We were I don't think this guy
00:33:06
this guy didn't go big enough. He's not, maybe you're right if
00:33:09
he'd gotten there but he's not, he's not Parker he's not out of
00:33:13
he's not I don't think he's getting the ice Australian but
00:33:16
he's always really it's not there.
00:33:18
He just seems like some of these other people at least they were
00:33:21
like really in it. You know, you want to come off
00:33:23
like you were a lunatic but on a huge impression, To scale battle
00:33:27
commence, the lunacy big enough. You know, this seems sort of.
00:33:31
So what does stripe look like after this.
00:33:33
Obviously, I don't think there's a reckoning that's going to
00:33:35
happen in stripe, put out a report on its super high level
00:33:39
financials and said that in 2021, the total payment value
00:33:44
over his platform was six hundred, forty billion dollars
00:33:47
up, 60 percent year over year by comparison, add Yen, had five
00:33:54
hundred sixty 1 billion, In up 70%, add un's, valuation is
00:33:58
about fifty seven billion and down 25% year over year and
00:34:03
Stripes valuation is 95 billion and flat since basically March
00:34:09
of twenty Twenty-One. This is she'll Mo not an
00:34:13
investor seed investor. I hope I'm saying his name,
00:34:15
right, but credit to him for pulling the information
00:34:18
together, but yeah, so and stripe also said that document
00:34:22
that they didn't think 2022. Be necessarily as good as 2021
00:34:27
be. Some of what they saw was thanks
00:34:30
to the pandemic anyway. So those are just some fast
00:34:32
facts from their report, but yeah, Kate.
00:34:34
I don't know. We have what is to follow up on
00:34:36
times. But, yeah, I mean, Kate, you've
00:34:37
done a really good job for a number of years.
00:34:39
I even back when I was at the information talking about
00:34:42
Stripes VC effort and their kind of path towards disrupting, a
00:34:46
lot of, a lot of early stage investors and their their stripe
00:34:51
is like when it comes to fintech, they're basically like
00:34:53
the NSA, right? They they know everything.
00:34:55
That's going on. Which is another reason why it's
00:34:57
kind of incredible that fast went on as long as it did
00:35:00
because they should have had very good Intel as to whether or
00:35:03
not this was being picked up. But anyway, I mean, like, what
00:35:05
what's, you know, what's your take on them at this point?
00:35:08
Well, on the DC side of things, I don't know, but I think that
00:35:13
they are going to probably slow down a little bit.
00:35:15
Well, for, of course, because of the market, but I also think
00:35:17
like I get this, this probably, this took a huge hit to the
00:35:22
reputation. I think that they're probably
00:35:24
quite embarrassed about it because they're Involved.
00:35:26
I mean every headline it's like I mean from us like Strike Back
00:35:29
fast like they're just they're a huge part of this story and also
00:35:34
the two people who are really leading VC.
00:35:37
There have left they left a year ago hey that was Jordan Angeles
00:35:42
who went to Ribbit and Justin overdorf who went to light speed
00:35:47
right and both now Partners at these firms, Jordan was the one
00:35:50
on this steel was involved guess who was on the deal had been
00:35:53
there in that emanate apartment are Corp tempted, Parchment a
00:35:56
long time, our while longer than Justin.
00:35:59
So they're gone. So Maya, I can't, I don't know
00:36:01
her last name, but she's now kind of filling that role in
00:36:03
Cork Dev. I think she's interim.
00:36:05
They haven't really seem to build up that team.
00:36:07
And I think in their absence, like they're just is in.
00:36:10
It's not as much of a priority, although I do think the
00:36:12
Collison's and will Gabe Rick, who's like their Chief product
00:36:15
officer? Do care a lot about investing in
00:36:17
are very interested in it, so I will be watching, I don't know
00:36:20
how they're going to act, I don't know if they're going to
00:36:22
make a splash or just kind of chill.
00:36:23
I think given everything happening in the market.
00:36:25
They Probably are going to take a step back and maybe they'll
00:36:28
focus more on Acquisitions because things are going to be
00:36:30
real cheap. And we're going to be seeing at.
00:36:32
So it's probably what I would expect for them and what about
00:36:35
stripe the business? Or what's your view?
00:36:38
Yeah that's a big question. I mean like it doesn't seem like
00:36:41
this is going to be the year for them to go public.
00:36:42
I'm curious what you guys think but I still going to do it this
00:36:45
year. It's got to be under the year.
00:36:46
I probably looking more like 2023 to me but like of course,
00:36:49
employees are wanted to go public so bad.
00:36:52
How old is this company now? Like 12 12 years, 13, Ten.
00:36:56
It's like a decade plus and it's time but now they kind of missed
00:37:00
their Winter Camp was founded in 2010 toys.
00:37:03
Answer told ya. I mean do you guys what do you
00:37:05
think about their valuation? Like people ask me all the time
00:37:07
and for the longest time I felt like they were like I was
00:37:10
expecting made raised at you know, a hundred fifty billion,
00:37:12
two hundred billion and they took me there were definitely
00:37:14
private Market transactions in the mid, you know, hundred we
00:37:19
got 1450 range and you know, I had an interview with Chris
00:37:22
sacca who's bought up a lot of stripe and he said that he'd
00:37:26
gotten offers at 200 billion. It's not clear if that actually
00:37:29
transact it or not but, you know, yeah, they got out.
00:37:32
There is definitely a ton of appetite.
00:37:33
Yes. I mean, we don't really know,
00:37:36
you know, the numbers, so it's hard.
00:37:38
The public comps are hard. I mean, I think that's sort of
00:37:40
didn point is just. There are companies that have
00:37:42
gone public, that seem to be trading at worst multiples than
00:37:47
stripe. And the other point this
00:37:49
investor made is that stripe has more than 7 employees,
00:37:53
whereas a d and has like Thousand employees.
00:37:56
So just on a sort of payment volume to employee basis, stripe
00:38:01
is clearly racking up the expenses.
00:38:05
I think that there's a theme here to about over hiring like a
00:38:08
lot of the companies I've been covering that's been a key
00:38:10
issue. And like we saw with hopin that
00:38:12
was like a that was like the company for the last couple of
00:38:14
years and they cut I think 20% of staff and I I've heard like
00:38:19
interest in Reading other reports that there are more
00:38:21
layoffs likely to come. And I just think last year
00:38:23
people made a really big mistake.
00:38:25
And beefing up their staffs just way too much and hearing that.
00:38:28
Maybe that's the case was right. Maybe they need to also take a
00:38:30
haircut to the to that massive number and that's that's huge.
00:38:33
Well did they I mean was part of that with stripe because they
00:38:37
were Staffing up for pandemic. Level transaction, volume
00:38:40
increasing. I think you saw that being a big
00:38:42
driver of head. Count increases for businesses
00:38:45
that had a tail one because like I mean again sorry to bring up
00:38:48
go puff again but like, you know they hired a shitload of people
00:38:52
because ordering to your home was a big deal.
00:38:55
During the pandemic. And you know, they had layoffs
00:38:57
at you guys reported and that is a result of needing to
00:39:01
restructure both because, you know, we're not living in the
00:39:04
same environment. Now, where you need, you know,
00:39:06
the maybe the number of people to do that and there was maybe a
00:39:09
mistaken bet on, you know, the continuation of the business.
00:39:12
Yeah, those are very different types of business.
00:39:15
Yeah. It's really great.
00:39:16
It's not a great comp. Unfortunately, the one I've been
00:39:18
spending time talking to people about right?
00:39:20
But you're right. I see what you mean.
00:39:21
It's like people did make that bet.
00:39:22
But like, in Hopkins case, I don't know if I understand fully
00:39:26
why they thought that the demand for their service would would be
00:39:30
sustainable after people are no longer at home of the growth
00:39:34
metrics are all predicated on pandemic Behavior, continuing
00:39:38
right? As if even after the pandemic,
00:39:41
then you have to sort of commit to that in strategy, even if it
00:39:45
doesn't really make sense and it's a huge issue for cops.
00:39:48
Right. I mean like that really was what
00:39:49
Screwed instacart when they really had their hearts set on
00:39:52
going public. Was that right there, massive.
00:39:55
Honey. And, you know, 2021 was going to
00:39:58
look awful and you're going to go, you know, to Market with an
00:40:01
S one. That was like, yeah.
00:40:03
So we're flat but were, you know, at best but we're going to
00:40:07
command, you know, growth multiple on.
00:40:09
What's basically, you know, a not great Merchant delivery
00:40:12
business and so, yeah, I think for any company that had a huge
00:40:16
tail, when going public at this environment is just such a bad
00:40:19
idea. Macro macro factors,
00:40:21
notwithstanding, you know what, it reminds me also Kate like the
00:40:24
stripe. Raishin and I actually, I defer
00:40:27
to Eric and Katie on this because you guys actually cover
00:40:29
the company, but reminds me of Airbnb near like the final
00:40:32
stages of being a private company where they really wanted
00:40:34
to hold out for as long as they could.
00:40:36
But employees were so antsy, I do think it's similar.
00:40:39
Yeah, I think that's the biggest easy to compare to that moment.
00:40:42
There was like a lot of reporting in the lead-up to are
00:40:45
babies IPO. And I like there hasn't really
00:40:48
been actually that much reporting on how stripe
00:40:50
employees are failing. It's something I've liked on my
00:40:52
to-do list, I haven't gotten to but I know it.
00:40:54
Well, it's always I always I'm sure you feel the same way.
00:40:56
It's like I should write more about stripe but it's like is it
00:41:01
that interesting of a story like everybody else?
00:41:03
Typical cautious. It's harder right?
00:41:07
Right. And they're just, has it been
00:41:09
that narrative that has been that interesting?
00:41:11
I mean, like the colosseum's are just like picture-perfect, like
00:41:13
again like Silicon Valley's darling.
00:41:15
So it's like, I don't know, hasn't been as compelling
00:41:17
diving. I mean, like, the Airbnb
00:41:19
Founders. They seem a little, like,
00:41:20
Precious about their brand. I don't, but they're good at it.
00:41:25
I mean, they're really good guy and he's more reporting, though.
00:41:27
It does. I think like, given the given
00:41:29
its size, I mean, it's 7 people.
00:41:31
It's a hundred billion dollar company.
00:41:32
Definitely is a Silicon Valley story.
00:41:34
It's it just I wish I wish there were people who could smell more
00:41:36
time on it. What has striped done to relieve
00:41:38
some of that pressure because I feel like, you know, palantir
00:41:41
Airbnb. Different companies have done
00:41:44
more or less to give employees secondary.
00:41:47
So yeah, exactly. It's like has stripe done.
00:41:51
Secondary is how they found ways to obtain.
00:41:53
I'm sure that they have. Yeah, I'm sure.
00:41:55
Done many. They've I'm sure they've done
00:41:58
many trenches of secondary sales to they've had to have re like,
00:42:01
I named both die. I think.
00:42:03
Important. All these companies are doing
00:42:04
secondary. Yeah, I mean, it's a big again,
00:42:07
another topic always, worth more reporting.
00:42:10
You know, I using their these firms that pursue secondary
00:42:13
strategies, where they have a big information advantage over
00:42:16
employees. Employees are often the ones
00:42:18
getting the worst deal on these secondary sales.
00:42:22
But then they have the least control over when the company
00:42:24
actually goes public. Alec so they need they need the
00:42:27
money. So I do think.
00:42:29
Yeah, the push back on some of these companies when you forever
00:42:33
to go public, is that they're hurting their own employees.
00:42:37
And I feel like they don't get that much criticism for.
00:42:39
Yeah. But I said go like I've strived
00:42:41
goes now, you know, it's a bad outcome for everyone.
00:42:43
Yeah, that might be an interesting way to look at a
00:42:45
company like stripe because it's not consumer-facing but to look
00:42:47
at it through the employees, this a long time ago, I did a
00:42:50
story on a company that had basically failed and So you
00:42:56
know, looking what happened the employees there was really a
00:42:58
dramatic, but I think I would love to read a story about a
00:43:01
company like stripe where the company is not failing, but the
00:43:04
employees are still not having good outcomes.
00:43:06
Yeah. And like the flip side of it is
00:43:08
also actually just had a story this morning about doordash
00:43:12
which, you know their stock has been pretty bad over the last
00:43:16
six months if they had a pretty good, you know, first half of
00:43:19
2021 and they really they they're down like more than half
00:43:22
from their Peak and they hired a lot during the pandemic and
00:43:25
They're not having to offer, like, refresher Equity, grants
00:43:28
to employees, because so many of them were compensated, you know,
00:43:31
their compensation comes through stock and that stock is now not
00:43:35
valuable as much as it was. And so it, you know, it's a I
00:43:40
almost feel somewhat for the companies here.
00:43:42
That's like, yeah, sure. We can go public, but that's not
00:43:44
going to solve the problems. I mean, give some liquidity to
00:43:46
early shareholders so you'll get returns there.
00:43:48
But if you staffed up a ton during, you know like stripe
00:43:51
maybe did. And if they were to go public
00:43:53
and their valuation is down, you could suddenly Have you?
00:43:56
No, not particularly valuable, you know, Equity.
00:43:59
So craziest thing about startup employees, is also always been
00:44:03
that there's a set that seems to pick companies based on High
00:44:06
valuations when they should pick them based on low valuable.
00:44:09
They don't, well, they don't know.
00:44:11
And that's like the big issues. Like, nobody knows how Equity
00:44:14
works, really, and companies do such a terrible job of educating
00:44:18
employees about exercising and options and what Equity is and,
00:44:21
like, valuations and it's frustrating.
00:44:24
I think like, for those As employees and like their taxes
00:44:27
and all these things that like these companies often times even
00:44:30
like the executives are for a start-up, like a sort of
00:44:33
executive might not even be that educated on and then gets a big
00:44:35
problem that I'm surprised hasn't that's what like Carta is
00:44:38
doing it. Like they're trying to like sell
00:44:41
that education to these companies.
00:44:43
So I think that's a good thing because it, it seems like a
00:44:46
problem that there's not more knowledge in the ecosystem about
00:44:49
that, but they're happy to Hype it up when times are good.
00:44:51
Right. I remember years ago, read
00:44:54
Albert Gotti at the Sandro I think fuck I'm pretty sure he
00:44:57
wrote the story. I remember talking to him about
00:44:59
it. How palantir used to have like a
00:45:01
fun interactive expel, Excel spreadsheet for palantir
00:45:05
employees to sort of show like how much their Equity be worth
00:45:08
if they joined at certain times, you can kind of, like, put a
00:45:10
little slider on to see how much your, your net worth would be.
00:45:13
So they're totally happy to gamify it when times are good
00:45:17
and uses an attraction. But yeah.
00:45:18
Like the nitty-gritty of flat or a Down Round or like you're
00:45:22
saying the taxes. It's like, I don't know you guys
00:45:25
for you. Get into that and even like, in
00:45:27
fast case, I saw an offer letter, you know, that went
00:45:30
through total comp and the trajectory that they like the
00:45:34
projections that they provided were.
00:45:35
So were somewhat silly. Like I said, in the story the
00:45:38
highest was a 12 billion dollar valuation and this is like a 500
00:45:42
million dollar startup. That was that was struggling
00:45:44
than this is a September offer letter.
00:45:45
Like you know it was a different period, maybe they didn't know
00:45:47
what was coming but like they knew their revenue.
00:45:50
So it's just those are the kind of numbers that employees are
00:45:52
given and they're like oh shit like my equity.
00:45:55
Going to be worth that much like when you guys had to 12 billion
00:45:57
dollar valuation, like that's awesome.
00:45:59
Yeah, let's think for the car last question here.
00:46:02
Like last segment here. Like we really in a downturn.
00:46:05
Okay, like is this actually something that you think is
00:46:09
going to persist for any I mean, I was just talking to people
00:46:12
about a company the other day and they were sort of saying
00:46:15
like, I looks like the text out you NASDAQ is back.
00:46:18
You know what maybe seem like a completely postponed IPO for the
00:46:21
rest of the year can now be like a cue for thing and and that
00:46:24
sort of stuff, you know. It starts early in the private
00:46:26
market. So like what's your sense
00:46:28
actually as this, you know record this on April 8 22, like
00:46:33
where are we? Yeah, I mean it's six months now
00:46:35
of me just being like it's an uncertain period I don't know
00:46:38
right but I think what I'm realizing is like regardless of
00:46:41
how the stock market's behaving regardless of other
00:46:44
macroeconomic conditions. I think investors Venture
00:46:46
capitalists have decided collectively that like, they
00:46:49
don't want to do those high-priced valuation Deals.
00:46:51
They don't want to work at that pace that they've been working
00:46:53
at and they are all kind of taking a Back.
00:46:55
And if they're all taking a setback like startups, have a
00:46:57
harder time raising you know, so domino effect on the startup
00:47:00
Market in particular. So yeah, I think we're entering
00:47:04
I don't know how. I don't want to be the person to
00:47:05
say it's a downturn, I don't know, but I think we're
00:47:07
certainly entering into a much slower period.
00:47:10
I think on the macro economic side, it supports you because as
00:47:13
interest rates are rising, I'm not going to say that it will
00:47:16
cause a downturn, but if interest rates go up, it just
00:47:18
makes other Investments that have been really low return, for
00:47:21
basically, since 2009 makes them more attractive because I'll
00:47:25
yield more as interest rates go up.
00:47:27
So part of the reason why so much money was going into
00:47:30
venture capital and into private equity, in general, was because
00:47:33
the yields of the Investments were generally so much higher
00:47:36
it. Seems silly not to put the money
00:47:38
there but if you can get more on a more traditional investment.
00:47:41
Now, you'll just start allocating big, you know, big
00:47:46
endowments will start allocating money differently.
00:47:50
So, I mean, is that a downturn or is that just people saying we
00:47:53
can make more money with less bullshit?
00:47:57
Are we gonna make reasonable money?
00:47:59
You've got somebody who agrees with you.
00:48:01
You may watch Peter teal, talk at a, the Bitcoin conference, I
00:48:05
watched the you to know but I'm going to say that I'm surprised
00:48:10
like I've listened to Peter tail Taco.
00:48:12
Like a lot of his speeches especially like his Rene Girard
00:48:14
speeches and stuff. The number of times that I'm an
00:48:17
agreement with Peter teal is not zero.
00:48:19
I'll put it that way, but just make me think.
00:48:21
Like I mean he was an amazingly Tie company argument for
00:48:28
somebody who makes a bunch of his money from a VC first, but
00:48:31
it sounds like a contrarian Tay. I know, I mean, I thought I was
00:48:35
dumb, I thought I was dumb, but he was basically arguing, you
00:48:38
know, that gold and equities used to be sort of similarly
00:48:42
valued in, you know, Collective Collective equities and gold in
00:48:46
the 70s. And that now, we've seen just
00:48:48
like an explosion of equity values.
00:48:51
And is it that crazy to think that the value of Bitcoin should
00:48:54
be more? Equivalent to the total value of
00:48:58
equity is. I don't know that.
00:48:59
It seems like it and then then he got all the headlines by
00:49:02
saying that, you know, the enemies of Bitcoin are, you
00:49:05
know, Warren Buffett, Jamie dimon and Larry Fink at
00:49:11
BlackRock. And then he then teal was like,
00:49:13
you know, ESG equals CCP, you know, it was a very sort of
00:49:19
trumpian sort of argument as Other the smartest point of his
00:49:31
thing was that he was arguing that, you know, Bitcoin, we had
00:49:35
basically been a canary for, you know, inflation and that if
00:49:40
inflation continues, that that will be a strike against
00:49:43
equities, and we'll people moved to sort of more old-school
00:49:46
stores a value like old or as he would sort of prefer Bitcoin.
00:49:50
Yeah, I was being sort of cute that you were totally agreeing
00:49:54
with. And I think I have to say it's a
00:49:56
correction, right? How NVC, that's probably like.
00:49:59
Is that safe for them saying, it's a full downturn.
00:50:01
I think it's a correction to like what happened last year and
00:50:04
just like the insanity and yeah, you're right.
00:50:05
Like the it is going to be much more difficult for second tier
00:50:10
or credit like the crappier VC funds to fund raise and that's
00:50:13
going to, you know, of course, that a plays a huge role.
00:50:15
So I think we'll start to see more evidence of that.
00:50:17
Like so far this year, we've just seen like, record
00:50:19
fundraising because it's all a steer, kind of right tumbling
00:50:22
over into early this year, but soon, we'll get into Like the
00:50:25
meat of this actual year and we'll start to see the struggles
00:50:28
a little bit, but that's, you know, that's the funny thing
00:50:30
here though. Is that you do you still see
00:50:32
these crazy rounds that will come up from time to time and
00:50:34
everyone's like? Yeah.
00:50:35
But that was a deal that really is more of a 2021 deal, you
00:50:38
know? It's really just trickling over
00:50:40
carrying over from 2022. It's like all right you know we
00:50:42
are four months into this year don't announce that stuff for a
00:50:45
long time. Yeah fair enough.
00:50:48
So that's why I mean you know you have a lot of deals where
00:50:50
it's like the hands were they shook hands and October or like
00:50:53
Java and they They wait to announce it so you don't need to
00:50:58
ask when it was done as you and your colleague Berber reported,
00:51:02
you know, you've seen companies like tiger clawing back and
00:51:05
really in elegant ways on some of the deals that they had
00:51:08
strong. Honestly, that was a great
00:51:10
story, but I think less and some of the VCS would fear Monger
00:51:13
over. It doesn't feel like there's
00:51:15
been this like, wholesale claw back, or do you.
00:51:19
You think they're just like a ton of unreported cases?
00:51:22
I mean, that is what like a free pricing.
00:51:24
Yeah. Maybe he's ever maximum points
00:51:27
that same one. The Forbes reported, I feel like
00:51:30
that company comes up all the time.
00:51:31
Oh, DBT. Yeah.
00:51:33
Yes, I think the repricing was like, a, six-week season, not
00:51:37
occurred, like, in January February, after like those 21,
00:51:41
you know, really close to 20 21, so like the deals kind of were
00:51:44
negotiated around when the markets really changed.
00:51:46
So I don't think it's happening now and I agree with you.
00:51:48
I don't I mean I was like I just went like weeks trying to find
00:51:51
as many examples as I could and kind of continued for a while.
00:51:53
And I don't think there's a ton that we Know about because like
00:51:56
those are often the ones that get to us because people want to
00:51:59
like shit on those investors that people want to show tiger
00:52:02
is like bad. Like this is why you shouldn't
00:52:04
take their money. There's so much of a source
00:52:06
interest in. Showing that the fact that more
00:52:08
has emerged to me, is I like agree.
00:52:11
I think that probably shows because I mean most investors
00:52:13
know that that is like suicide because if you're if you start
00:52:17
doing that like that gets around so quick and then people don't
00:52:19
want to work with you. So I don't think that that a
00:52:21
still in a founder market. Even if like even if things are
00:52:24
changing, the Dynamics are changing Changing like there are
00:52:27
still you know, a finite number of like these great companies.
00:52:29
And there are so many investors and there's like what like three
00:52:32
hundred and fifty billion dollars or thing raised in 2021,
00:52:35
just like insane amount of money.
00:52:37
So I don't think this is much too, that sometimes I feel like
00:52:40
they're more exciting investors than companies.
00:52:43
It's like it's more fun to talk about some of the investors.
00:52:46
I'm like, what are the companies that are like, so exciting to
00:52:49
talk about? There's so much politics in the
00:52:51
ventures and I think that is interesting to.
00:52:53
So, like, yeah, I think it can be more compelling.
00:52:56
To dive into like their Dynamics, then the founders.
00:52:59
I agree. Sounds to me, like, we're all
00:53:01
getting ourselves ready for a Dom Holland.
00:53:03
Come back, maybe maybe in the next week or two.
00:53:07
So when that happens I'll be very excited to have you back on
00:53:10
here. Kate definitely hopefully
00:53:12
feeling better. And look at least we're all
00:53:14
doing better than fast. Can we?
00:53:15
At least say that. Thanks so much for coming.
00:53:19
Yeah, thanks so much for joining.
00:53:20
This was fun. Thank you.
00:53:21
Yeah, thanks for having me. Goodbye.
00:53:36
Goodbye. Goodbye, goodbye, goodbye.
00:53:39
Goodbye. Goodbye.
00:53:36
Goodbye. Goodbye, goodbye, goodbye.
00:53:39
Goodbye.