Jake Paul & The Chainsmokers: Turning Fame into Funds, Jake Enters Politics? & Venture Bubble Signs

Jake Paul has got to be the dumbest, cockiest, stupidest, most ego-tistical person in the social media sphere. "Mr. President, what an honor." That's what makes him so damn successful. The world has shifted to attention being one of the most valuable currencies. "He is the multi-talented superstar who bridged the cap between social media and professional boxing. He is a boxer, a content creator, an entrepreneur, a philanthropist." "I have two main goals, definitely becoming a world champion. And I want to exit a company for one billion dollars. I never was like social media is the new wave. I was the wave." Please welcome Jake Paul. What's up, man? What's up? What's up? How you doing? Don't fall asleep. When I say all, you say in. Oh! Oh! Let's go. Come on, guys. We're at the summit. Get that energy up! Jake, let's actually start where I think Nick and Covicular ended, which is in this weird way, all of you guys have grown up in the social media generation. And you're maybe at the tail end of it, you're almost 30 now. Talk to us about your journey, because your journey started very similar to a lot of these guys, which is you're there, you started Vine at the time, so it wasn't even really TikTok in YouTube. And then this success, big-get success, and then just walk us through what that does to you as an individual trying to find your way in the world. Yeah, it's a good question. You know, I don't remember a time where like I wasn't already getting followers and people following me and coming up to me since I was super young. And I think for me personally, I was doing it before it was cool and because it was a passion. I think a lot of people now are trying to become influencers and trying to figure it out and seeing if they can go viral and create a team and build businesses around them because it's the cool thing to do and it seems like the best thing to do. But I think the people that authentically are actually entertaining and have a take and are filling a niche in the entertainment space and specifically on social media are the ones that succeed. I was doing it because I loved doing it and I was, what did you love about it when you first started? I loved creating. I loved having a story and an idea in my mind and seeing it come to life and to be able to put it out there into the world and to make people laugh, to change their lives, to maybe make their day a little bit better. You know, people go through hard times and all these things on a daily basis. So if I can inspire someone, in my messages every single day in my vlogs, I would say, make sure you're working hard, make sure you're smiling, make sure you're chasing your dreams. And I think those simple reminders on a daily basis are why I was able to grow a really big audience. Does the pressure change your approach to the business as you started to become more and more successful? There's millions of people. And then in this weird way, the platform underneath you goes away. And so how did that change when you're like, oh my God, I have to restart all over again. This business that I had invested so much time in isn't there anymore. This is vying specifically. Yeah, I wasn't too worried about it. So it's actually a funny story. And it's a good lesson for business owners. But we told the top 20 viners, told vine, hey, you have to start paying us. Otherwise, we're going to stop posting on here because they weren't paying us. And we knew we were getting ripped off. We were bringing in all of the content, all of the views, all of the fans. And we were like, hey, we need a million dollars. They went back to Twitter and they were like, hey, they want a million dollars. They came back and we were like, yeah, we could pay you the million dollars. Million each or a million a month. Exactly. So they said we'll pay you a million. How do you guys want to divide it between you 20? And we were like, no, we need a million dollars each per year. And they said, no, we all stopped posting on the platform, transitioned to posting on Facebook, YouTube and Snapchat. And within a couple of months, the vine died out. Tell us about the evolution now of streaming and popularity and attention. How is it changed from when you started this 15 years ago? And what do you think happens to society in these generations of young men and women who now really aspire to be famous and have the things that you've built, which we'll talk about in a second. What happens like sociologically to these people? Yeah. It's a weird world to grow up in and I don't think we have the answer to that of how the iPad kid generation grows up and they're able to access so many more things than we ever, even able, you know, were able to do. I still was in an era where I had to go knock on the door of my friend's house to go hang out with them. And so I got the technology, but also the analog real life. And so I have that balance, but I don't know what it looks like. I think there's a lot of, you know, not good streaming content out there and people doing things for clickbait for views just to generate attention. And I used to do that when I was a kid, you know, because I wanted to make it. And I wanted to, you know, build a business and I wanted to build a following. And so I call it the YouTuber disease that people can fall into a lot of times where they're just saying absurd things to generate more press and click on a daily basis. Should YouTube take more responsibility in filtering some of this stuff and actually having more of a, maybe a moral view on what the spectrum of things is that they should support? Well, I think they're just one platform and I think the problem is, and it's very similar to the AI race that's happening between the United States, Russia, China, is if YouTube stops it, then their viewership and people going to their platform go down and then Twitch, Kick, Twitter, Instagram, Twitter, whatever platform is still going up. So if they don't come together to solve the problem, then I don't think the problem will be solved. You've had to evolve from making content and you've started to be, I mean, a very successful man. The evolution of content creator tends to be, you go from content creator, you're doing sponsorships, maybe you start to roll your own products, and then ideally if there's cash flow, then you can start to actually own assets. Give us your version of that. How would happen for you? Yeah, so I'm an entrepreneur at heart and so even before I blew up on YouTube, I went to SF in the valley and fell in love with startups and seeing all of these big companies. I got to go to Google, Twitter, Uber. I saw people and hacker houses building all of these insane apps and that's when I started angel investing and I started my own startup at the time, which was a social media label. And so I always saw vision in people and the potential in people and so I'd find talent, sign them to my company team tenant, help them blow up and I created 20 or more people with millions and millions of followers and revolutionized like the content house. And that was my first startup that I did. And so I've always been in the business of startups investing and being in the valley since I was a young kid. One of the things that happened at one point is you started boxing and you had this incredible moment with Mike Tyson, I think it was 108 million people locked. 138 million people watched on Netflix and where did boxing come and why did you feel like you had to put your body at risk, I guess, maybe? And was it because you were passionate about the sport or was it that you felt like that was an unexploited way in which you could continue to build awareness and attention? Yeah, so it started off because these two brothers from the UK were talking to me and my brother and we were like, "Yo, let's just glove up and settle this." And I actually, we signed a contract to fight them in like three months it was and I was like, "I'm not going to lose." And I went to a professional boxing gym the next day and it was very grueling but I grew up as athlete in Ohio and just started training and within that three month period got to be pretty good, went into Manchester to fight them, enemy territory and got a knockout and that was one of the greatest feelings in my life, it felt very accomplished and it was very fun and I don't know if it's like a little sadistic but it was like cool getting punched in the face and beating someone up and from that moment on, it was the biggest pay-per-view in amateur boxing ever and I saw the numbers, I loved it and I wanted to double down and become a professional boxer and I took it very seriously, moved out of Los Angeles to go and train in a secluded area in Puerto Rico where there's less distractions and knew that I could take over the sport of boxing because and saw the vision because most boxers Build the record up, they fight easy fighters. than all of a sudden the first time you hear about a boxers when they're 20 you know. But I had this built-in audience of 100 million followers that followed along through every fight and that I could also grow and build fighters underneath me, similar to my original startup team 10 where it was influencers. So I just replicated that model and now we have 400 fighters boxing MMA under MVP and we're going after Dana White, Sufa Boxing and the UFC and we- Tell us about that, what's the, where's UFC failing? Why is there an opportunity to rebuild MMA? Yeah, so first and foremost is they don't put fighters first so they pay their fighters roughly 15% of their total revenue which in other professional sports leagues it's 50% 50. And so the fighters are pissed, they want to leave, they want to go box, they want to go find to make money somewhere else. Sean O'Malley got paid 600K on the White House card and so because of that the big fights aren't happening, they're not willing to pay for the big fights and people don't want to risk it, they're not putting on the fights that fans want to see, they're having trouble creating. So very classic, your margin, my opportunity kind of an opportunity where- Exactly. You attract the talent because you're just willing to give them a very significant part of the gate and the ref share and all of that stuff. Exactly and letting them have sponsorships and not shelving them. There's a lot of drama between the fighters and a lot of them want to move into boxing as well. And so in every industry there's a Coke and a Pepsi and a Nike and a Deedis and never before has it been possible to compete with the UFC until my company came into the fold and we just merged with PFL and it's going to be a very exciting next couple of years. How? And when did you start angel investing? Because you're an investor in OpenAI, cognition, SpaceX, I mean it's an incredible portfolio, how did that start? So I started angel investing when I was 18 years old after I went to the valley, made a ton of mistakes and then formalized a fund. Jeff is your partner. Yeah, Jeff Wu. Jeff Wu. So we believe that we're in the attention economy and that capital is a commodity and I think this is part of Elon buying Twitter is when you make a new account on Twitter the first suggested follow is Elon pumping all of his companies through that very smart obviously. But bringing the attention to a company and to a cap table is something that we've found to be extremely valuable and something that founders need and want. Jake, what's the downside of an attention economy? Like what is the downside when popularity is how things first get arbitrated? Yeah, no, I think the problem is if people forget to build great things and our focus on just building something to gain attention and to have eyeballs and to make it seem like they're doing something big, that's where there can be downside and I think the inauthenticity that can come with trying to gain views is a massive problem I see in journalism in reporting and in people making content online. A lot of times there's these crazy hot takes that people are coming up with because they know that it's going to garner a lot of views and make them money at the end of the day they're using that attention to try and make money I think money runs the world. So in an attention economy the inauthenticity will come through and it's not a good thing. So your attention mechanism meaning the followers you have, the reach that you have is a different shader when you're investing in these businesses at some level because for some of these businesses you can help them cut through the noise and be a generator level of awareness that they wouldn't otherwise get. Correct but also my years of experience in marketing and branding behind the scenes we help with a lot of that specifically with open AI Sora I actually was the one that told them like hey this could be a good idea for you to launch a social media app and it was involved in the whole process of building out the app. Really? Yeah and then granted them my NIL to you know people can make videos with it. Name interest likeness? Yes. You just raised a hundred million dollars for that fund you call it the anti-fund. So is this you're going to compete more aggressively with the traditional VCs or do you want to be sort of a complement? How do you see this evolve? No like that's what I hate about this like celebrity VC thing that's it's just annoying. Like if a lawyer is an investor they don't call him a lawyer investor. So like I'm a celebrity but they call me a celebrity investor it's like no compare me to the Sequoias of the world our DPI and IR and let's see who does better over the next five years. Those are the people I want to compete with we're super ambitious and that's the ambition setting where we want to go and so we thank you I'm ruthless out here. Multi stage multi sector or how do you how are you sort of a value yeah we have a barbell approach so we already deployed that fund we were raising and deploying at the same time. So we're on to fund for now and we have a barbell approach first check in helping founders build their company from the ground floor identifying talent or going in growth stage and companies that have the proven track record best founders in the world with the sams of the world polymers of the world etc and so we'd we diversify on both sides there's there's a natural evolution as you age which is the things that you did before stop working or they just need to stop obviously like you know boxing you're not going to be able to do forever but you but you've been very creative in getting to the next Lilly pad so just as we wrap tell us what is how do you see the next 10 or 15 years how do you give us the sense of like media fame attention business opportunities how are you organizing Jake Paul industries yeah look I think it's a flywheel that feeds itself you know when I'm fighting it brings attention to all of my other businesses and when I'm you know investing it's growing my my business brand but it's something that I'm super passionate about that I'll do forever when I'm making content it also helps me grow my following to funnel things into fighting then I can also push my businesses help more people I have a foundation that we've opened up 40 gyms for kids to go and boxing for free with you know sending kids to boxing events and tournaments sponsoring them so it is this whole flywheel and an ecosystem that kind of feeds the whole empire and completely grows it and where's 40 where as we wrap where's 40 year old Jake Paul where do you see I think politics that's a great answer why I believe that the best way to it's one of the best ways to make change in the world I've already done so much and accomplished so much and where I get the most satisfaction is out of helping people and where I'm doing that right now is in women's boxing and with young boxers and giving them a pedestal and the biggest paydays of their career we've completely revolutionized women's boxing and basically made it the WMBA and before they were underpaid underserved and barely on any fight cards so I get the most satisfaction actually out of doing that and them you know the appreciation I see from them and I think the next step of that for me is helping the world I believe the best way to do that is some form of politics and actually being ground floor making change and I believe that the future people in office will have a natural built in following that they can talk to I think I've been saying that for five years and then recently Spencer Pratt comes along and is the first example of someone who is or Trump was probably the first yeah but even but even him he's not like a he didn't have that like social media native audience where he's making content he was a traditional he was a traditional celebrity and I think even the the Nick Shirley's of the word I think Nick should be in office yeah I mean something at some point like these are the future leaders of the next generation will have that built in following and be able to capture the vote Jake Paul thank you very very much you problem yeah that was right where are you performing for there's nobody here you have to envision it man if they're manifested destiny if you don't envision your success you'll never achieve it their music has gone platinum 25 times these are the chain smokers are to my right Allison Drew they are one of the biggest DJ groups in the world you share to quote when you start in mantis you know it's the end of the days for VCs when the chain smokers start doing this music to venture after a whole different game are you legally allowed to say independence I can just get a fun seat view of the future it's the most stimulating show you could watch Please welcome Drew Tigert and Alex Paul Stop my guy good to see you great to see your brother See you man. It's up, bro good. Yeah last time I saw you guys me and Friedberg. We're in the pit 1 a.m. We're dancing our asses off. You guys threw down. We were impressed. I didn't expect you guys to stay I mean, I'm there to the sunrise when you guys stop playing. I got another 20 minutes. I'm good Friedberg was high as a kite. He was somebody gave him a pill in Ibiza He just popped this little thing and he was dancing like a fool. I'm kidding. I'm kidding I like I like the pre-party pre-party through more my scene. Well, the oh that was the other great part You you're going your VIP for chain smokers. They have a suite and you go in and there's a come on Let's start 50 guys and then all these famous people are there and then they walk you through the tunnel with the chain Smokers boom and there's then there's 10,000 people in Vegas losing their f**king minds. How long you been doing that? What do they call it? The residency the resident see we've been at the win in Vegas for eight years We've been in Vegas for 10 years and I think we are gonna be we're gonna die there As long as we stay relevant. Yeah, I will be buried at EBC personally. I like the beach club So the the win is your LP. That's your anchor LP and you're finding exactly. Yeah, exactly Can you guys talk about Your evolution and making music how did you find each other? How did you guys first figure out the genre of music that was gonna work and then you know this first little burst of success What what did they feel like like what were you what were you thinking would happen probably not this but just? Yeah, well, we met through kind of I guess it's a friend of a friend and Weirdly we didn't know each other at all before Alex had started the chain smokers with a different guy and They had a falling out and he was like, okay, we put all this work into it You know we're DJing all these shows around New York City. This is like 2011-12 and then I was in I went to school Syracuse and was just finishing up around that time Alex was like I want to find, you know Changed over to two people I need another person and I was just making music at school and we got introduced and weirdly, you know Didn't realize at the time the biggest decision of our life basically met and said you seem cool It started band and here we are 14 years later still best friends and we've done a bunch of You know, I had a lot of success in music luckily and yeah, and we're so like minded in so many other areas, which is I It's the lucky thing that's ever happened to me. Is it hard to make new music and feel like you're pushing new ground When maybe a lot of people want to hear the classics so to speak or they have you kind of like in a certain vein of how you? Your music should sound we were just talking about that earlier actually and You know, I think there's one side of the equation is like, you know There's a sound that we created that people you know have become come accustomed to hearing from us that we love making And then you see that like one Twitter troll that's like you guys make the same song over and over again And then suddenly you're like I'll show you and you sort of You know get away from it a little bit I don't think that one Twitter trolls responsible for the Genesis of our music But I think you know we like to challenge ourselves and and you know I think more than anything. We just follow our creativity and wherever it goes And we you know don't have a label on specifically what type of music we think we make But I also think ironically right now. There's this like big yearning for nostalgia just generally and You know we find ourselves in this interesting position where you know where there was this big trend in January around 2016 which was a pretty special year for us in our career and you know now we're you know 2016 coming to the end of it sort of wondering like where do we find that balance between you know What makes our music exciting for us to make and perform but also tap into that? I don't know like that special feeling that why why do you think there is this need for nostalgia? I mean it's funny you say this because like I listen to the I look at the Spotify playlist of my children who are in their you know teenagers and it's so much throwback stuff They're listening to Alton John they're they're going all the way back and I thought how why is that happening? I mean it's hard to say exactly it's probably different from different segments of people, but I think everyone remembers the past You know more favorably than the present and they want to Existentially exist in in in a time that they can kind of color and with their own memories and you know I don't know me. There's like a simplistic. We just say like maybe the music was just better back Yeah, I think they're I will yeah, I mean Tell us about the business of music and then we'll talk about the business of business Because you guys have done an incredible job of transcending, but just you you needed not you know You need to start your first something the first thing has to work and you have to make it into a real business and you did that Explain the business of your business before you you want to I'm gonna be too negative about the music business I could be positive. Yeah, okay. I'll start I'll be positive first. Yeah. I mean and the music business is an extremely competitive Inescape and I mean now there are 300,000 songs being uploaded to Spotify every day. Wow. This content 300,000 a day. That's right. Yeah, and so I mean when we started in 2012 it wasn't like that. It was pre-streaming and You know I think if we started over today I have no idea how would we we would do it, but in 2012 You know well as we were kind of cutting our teeth in dance music and as producers and songwriters We started doing remixes we loved Indie electronic music. There was this chart called hype machine Which was the first viral chart of the internet. This is way before streaming and Basically how you were charted on this the algorithm was basically how many times a certain amount of blogs posted about you And then that's how you entered the chart and then how many likes you got on that chart So what we would do is we'd go to all these artists because we loved all the music that was being posted on this chart and we begged them to do remixes And then Alex went in the back end of hype machine and he found every kid that wrote for every blog that they pulled music from and You know, we'd make this remix of a song they were already posting about and then he would write them these hilarious emails like super personalized It gave them shit about where they went to school because what he realized is all these kids are College kids that want to be closer to artists and you know all these labels that are sending these blanket boring promotional emails It was on inspiring so like they were really receptive to you know Alex's Messages and we went from in the first year of our career pretty much all being completely obscure to Having we now have like 30 number ones on that site because we were remixing the right thing And he was but I think within the first year of our career Alex had developed like the most Powerful promotional platform probably more than any other label at the time. I mean it's a content marketing It's like you guys, yeah, I mean that was just like our hustle at the time like that's not applicable now I'm maybe it's tick-tock maybe it's I don't know if we had to start from that point But that was kind of our first thing as we were you know what we did what we were learning to be you know good producers and Songwriters find our artistic identity Yeah, like it feels a bit broken too when I think about what the music model is right now And I think there's a lot of parallels between what happens in venture and what happens on the label side of deals You know there's more channels for distribution than ever and to create your own audience and goes directly to your fans and create your own community And I'm honestly like very interested to see who will be that like first brand new artist that sort of rejects all the typical You know customary things that like an artist does like signing with a label and you know signing away your next five albums and things like this And I think we're like on the precipice of that But I do think there's this sort of like vicious cycle that happens in music where you know It's so hard to break through and when you finally do break through you're in this position where A You're probably being offered your first few couple million dollars that you've ever made in your life for something You know that you've poured your you know heart and soul into and then you also think about all the people you've admired over the Course of your lives and they all generally signed with labels to and so is this like the moment where you decide to like Truly bet on yourself and go direct in every sense of the word or do you sort of like take the slightly safer route But in the process sort of sell a part of your self and future self To sort of the label model and there's a lot of value that labels still provide I think in different capacities But I think it's like a completely new world out there right now. I don't think anyone really has a clue What what's gonna happen particularly with like AI and music and streaming and YouTube and all these other platforms and people's Attention's getting shorter and shorter and you know, it's it's it's a kind of crazy time right now very exciting But also just vastly different than the period of you know music we started but almost all years ago on this music side of your lives You guys do a lot of live performance is that where most of the income is then generated? Is that really the business today is live performance versus Digital and once you've kind of broken through there and you've got an audience doesn't that kind of just keep feeding itself? It is for us. I mean it depends on what type of touring you do. I mean we we have songs that we go and perform sometimes We'll have a whole band and we'll do an arena tour and there's crazy overhead and It's luckily for us like we came up in dance music We were DJs before we were anything and that's a big part of I guess our touring business and and there's There's vastly better economics there, so for us that is the case. >> So then can we talk then about the transition to investing how you got into it and how this part of your lives helped you kind of make that transition? >> Yeah, I mean Drew kind of touched on it. I mean I think we've always had a really positive relationship generally with technology. I think we leveraged it in very clever ways throughout our career like the growth hacking Drew was talking about. Our friend James created this conference technology called Tilt that we used for touring data. This is like pre-cloud, pre sort of all this back end data that was available to us right now. And so I think that like established sort of a positive relationship and honestly like our foray into venture was about as cliches it gets like we were lucky to be a successful artist. We had this distributioning and marketing platform via the chain smoker is in dust. We were sort of like catnip for consumer brands. And I think that was an interesting exciting time for us to start investing. But I think what really struck us and resonated was like the relationship with founders and the ability to like add value back into the businesses. And I think that's what called us off-guard instead of kind of treating it like this like passive revenue opportunity. We wanted to be hands on and like sort of take matters into our own hands. And then also like I mean I love creative people. I think it's so amazing to have this career in music. But there's something inspiring about working with an entrepreneur that's like putting it all on the line sort of going 24/7 towards this like pretty you know big goal. And I won't lie like more water companies is not what the world needs. And you know we were like meeting great founders like Brian Cheske and Drew Houston and Michael Sible and the con brothers. And you sort of got to ask yourself you're like you know what what do we want to be spending our time and money like you know most of this stuff probably won't work out. At least let's invest in things that we think are like truly interesting could actually have a positive impact on the world. I remember like personally I invested in like the series like G of Uber or something like some the final round and I thought it was like the smartest coolest thing I ever done. I made like 25 bucks on that investment today but like that to me was like the sort of thing that we wanted to be a part of in the future. And I think that led us down like a path to you know institutionalizing our access becoming you know really great partners to you know companies and cyber security I infer a deep tack and taking it you know incredibly seriously. How did you learn to assess your selection process so you know what these things are coming in you've not seen a cyber security company before I'm assuming the first time you saw one. You know how do you start to make these choices. Yeah I mean I think like on some levels that was the big question it was like we definitely have an interest here I think like the most important piece was like we're going to show up and we're going to be good partners like I'm not going to do the traditional like you know song and dance to get what we want and then sort of disappear into the fray. But I also agree like we weren't super clear on like what does a cyber security company need. But I think what was interesting is after speaking with like ton of founders that we've you know been lucky enough to build relationships with it felt like the things that were keeping them up at night and challenging them as they built their modern business in the modern present day. Or a lot of the things that like we had a lot of experience with and sort of what I mean by that is like we make music almost the same way we did 15 years ago. Like everything else around that business has completely changed in terms of how we distribute it create community, sell it, tour it and all these things and I think building a company obviously you still care about you know revenue, debt, dollar attention, customer acquisition costs, cogs, all those things but the inputs by which you create them is different. And it felt like there was an opportunity to build sort of a differentiated type of firm that isn't necessarily supposed to be a substitute for a craft or Sequoia or whoever's out there but be like a collaborative partner and sort of like for lack of a better term like understand our role in the ecosystem and don't you can you unpack then what is the firm look like then? I mean we're you know we have me Jeff Drew Milan founded it. We have you know a few great partners and like in Grob we you know specialize in or focus at least across cyber AI and for deep tech and health tech and we invested in series A stage companies. We don't take lead positions. We like being the sixth man of the year on these teams and sort of like I think of ourselves as like Robert Horry Robert Horry is a ton of championship rings you know and you could be really successful and you don't have to be you know Shaquille O'Neal on every team. And I think we've learned a lot by working with great firms and we've also learned a lot by working with great founders and that sort of getting back to your question is the kind of the whole point which is like beginning to build that muscle that pattern recognition on what greatness looks like what are these firms doing to support these founders. And then I think we all over exaggerate like what everyone is actually doing for these companies and I was surprised by like you know I get an email saying like hey do is there any way you can get me in the you know on the phone with this person and it was like actually yes we played their company party three days ago that's no problem. And so we've been like extraordinary helpful when it comes to like go to market relationships brand you know sort of the brand building side of things which I think is you know become really important nowadays when you talk about like the defense ability in defense ability that AI has created around tech you really need to like suck the oxygen out of the room. Critical point you guys are just extraordinary entrepreneurs to actually make a business work in the music industry is one of the most difficult things you could ever do. It's a magnitude more difficult than making software and so you have I think a lot of credibility there and go to market and being able to support people and networking and then also knowing to get out of the way the great founders very rarely need help and when they do something like networking or something like understanding the business model you are actually very well connected to do it and deal flow is the hardest part of being a venture capitalist. We are blessed with this podcast you know gives us the ability to get a lot of deal flow and you're blessed with the fact that hey you guys are very well respected in your field and you know a lot of the people who are founders have probably come to see you play and might have jammed out to your music and I think it's absolutely valid and I you know for people to kind of goof on it or whatever you're doing the work it's very easy to goof off a venture capitalist but it's hard to love being the underdog like that's the best position the best position and I think like I wouldn't bet against us and I don't think anyone that has its work but like you're betting us keep underestating us I'm happy to be in that position but like we love the hard work we love showing up that's always been in our DNA you know for us it's this is an incredible opportunity I mean I studied art history at NYU like all of this is unbelievable to me to be in this position doing any of this stuff so we don't take it for granted but like it's you know these things are people's life work and let you know life streams and you know to be able to go you know play shows all over the world for our fans and see the experience that what our music means to people and I mean it's the most fulfilling thing I can imagine doing with our lives you know as tech has gotten bigger and bigger I mean I've noticed that there's a tremendous curiosity from people in Hollywood I mean not just music business but acting or the agencies I mean everyone kind of wants to get in it in some way you guys have invested in like a ton of unicorns I mean you have a phenomenal track record the companies you've gotten into it's very impressive I'm curious like what advice would you give someone in Hollywood who maybe has like huge stardom you know it's very well known and they're like who could get allocations and deal just based on their name but they have no idea how to do it what would your advice to them be I mean I would ask them if they paid off their mortgage first and if they've done all of that stuff I'd say like Venture is probably the last frontier to begin investing in in my opinion because it is long duration illiquid acids generally I mean Venture is also just extremely hard I mean you're talking about you know extremely hard we were looking at some some chart yesterday in our chat just like the you know five top 5% generate 90% of returns like you have to just be in the best companies and so when you're it's it's brutal out here to have success in two things whether it's sports Hollywood music and then Venture like you just you got approached it the same way like you have we dedicate all of our time to these two things like we work 724 7 we are heavy in the streets we've seen a lot of people that have asked us you know I you know we want to get into a venture game and you know it's very rare that those usually when we meet with them we meet with their teams and they don't show up for the call and I I don't think people realize like how much work it is like this your thing all of it is personally every deal we've had to get in because there's a lot of noise basically you have to sift through that to find I don't think people want to do that like I really I think the idea of Venture is super exciting but what it takes is grind be hard does your fame help hurt or neutral I think both I mean to be honest I mean I think there's obviously opportunities to connect with people that probably what I mean I'm on LinkedIn all the time leveraging my like name and getting in touch with people that I want to speak with but then there's obviously like the fundraising side where you know you're speaking to a principle at a you know institution and they're just like listen I like what you're doing but I'm not about to like invest in the chain smokers fund because like you'll be the first thing that will be pointed out to me if something goes wrong and I understand that and I think you need to be empathetic to that point and I think you know we just are always been results driven guys so it's like all good I'll be back next fund with numbers that will make you regret this decision and we'll try this again I think you're saying something incredibly powerful it is so I think like if I learned anything in that chapter of my life as an investor the ability to generate consistent DPI cuts through all the noise because they could have issues with you or not people have had issues with me and not but what's undeniable are returns and the ability to convert Whatever asset you have, attention, fame, track record, technical experience, whatever, into results really does speak for itself. 'Cause that's the one thing I think investors have a very good tendency to do is they have an extremely short memory for everything other than returns. - And I think that's like one of the, I mean, we're still relatively. It's been 12 years since our first check and seven years since we started the fund. And, you know, I still feel like the new kid on the block. And I feel like, you know, what's challenging right now, I'm sure you guys have discussed a nauseam up here. There is just like, there is so much liquidity going into everything right now that, you know, it's not just about riding in a company that you know is going to get marked up just by virtue of the people involved. And I think that like, that's the hard part, but also like the responsibility of being good manager, which is like really investing in like ideas, founders, businesses that feel real and tangible versus sort of like the hype side of venture, which is, you know, very relevant. And you could honestly go out here investing, you know, there's ton of companies where you're like, I know this is just going to get marked up, but I just don't see the vision long term for where this company heads. And I think that's the challenge as someone that, like yes, I love those results, those, that TVBI always looks great, but like, you know, really betting on a bigger vision idea. Like, I mean, obviously Airbnb at the time, Uber, when you did adjacent, like that was a non-obvious vision. To your point, I introduced 21 angel investors to Travis. And 19 said no. Three said yes, me sign your banister. And first round capital. And why do you think they said no? And you guys said, I could tell you the reasons. They said, well, this is a dirty business in the real world. We don't want to be involved in, we invest in software companies. If he will just sell the software, if you, very famous venture capitalists told me, if you can convince Travis to just sell the software, to the cap companies, we'll back it. But we don't want to be in that dirty, real world business, 'cause somebody's gonna get hit by an Uber and die. And, you know, then we're gonna be on the hook for it. It's just, it's too complicated, it's too dirty. And Robin Hood was the same thing. I mean, they looked at Robin Hood and they laughed at that company. And we were in that company before they left. I remember when that company was raising its seed, Series A, it was a total joke. People were like, this is the dumb thing. You know, it's not a huge mistake. I'll tell you what I made wrong in that in Robin Hood, it was purely my own ego. They had a sign up list of like some number of millions of people. And one of our principles was really adamant that we invest in this business. And what I couldn't get over was my own previous experience at Facebook and how I had helped architect its growth mechanism and it violated too many priors for me. And I just couldn't get around it. And, you know, when you look at that, that's a billion dollar mistake, which is horrible. I really resonate with that, we don't invest in any music apps or anything related. It's almost too close, because I have like a very hard time sort of not being a pessimist about these opportunities. And I think you have to, I don't want to call it like blind optimism, but like fragmatic. Any investment you've made where you've lost money, you never invest in that space again. It's like so common. Or if you've had success, it's just too close. Like, oh, we're going to get rid of the manager and you're like, what, no chance. I'm like, you know, these things you experience. The one thing that we'll cut through all that biases is just understanding how capable this person is, you know, and how difficult and driven they are. And that is at the core, when I met Vlad and his partner, and they said, we're going to get millennials to invest. And we're going to do it because they're going to invest for free. All I've thought to myself is these guys are extraordinary. They're so smart and they're quants. And now they're going to build this app. What if it works? And that is the hard question is to just pause for a second, say, if this does work, what does the world look like? And now we're over 10 years in Robinhood. I've never sold a share. In fact, I bought a lot of shares when it was $9 to share on the public market again. You've still not sold? Still haven't sold a single share. I mean, I've sold a lot of Uber over the years because I was, it was 99% of my net worth at one point. And it was no choice but to do that. But I still hold a lot. And Robinhood is a very special company because now you have two generations of people on it. And Vlad keeps launching the next vertical, the next vertical, the next vertical until he's not running that company. And he doesn't have the product vision and execution. Those things can't be faked. Execution cannot be faked. Here's an interesting observation. Not sure if it's true or not. When you look at the great investors of an asset class, it is usually the case that they have no priors in that asset class. Mike Moritz was a journalist, right? John Doerr was Intel chip sales. And look at the wood that they chopped in the internet. No priors. If you look at this next current generation of people coming up that are like super investors. So there is something to be said for being far away. But having that curiosity and the ability to network and the ability to think critically about a problem, I think that's a very good thing to do. Now thinking about, when I pick venture funds to be in, it's I have these like 4Ds of deal flow. You guys got that decision making. You're very sharp, obviously. And you're very astute in terms of your own careers. But then there becomes a doubling down and went to double down an investment and then went to distribute, went to sell shares in it. You're actually at that point now, if you're in your 10. How do you think about doubling down on an investment or not? And then how are you thinking about distributions selling too early, which is actually how you're successful in this business, in some cases? It's a really good question. And we're coming up on our seventh year. We actually just had one of our first proper liquidity events with a fun one company. Shout out to Underdog Fantasy. What company? Underdog Fantasy. Oh, OK. IG International, which is great. How great is that day to send your LPs a-- Amazing feeling. Amazing feeling. And I think partially, we think about this a lot, because in my mind, it's like we've made 75% of the business model. But we really need to get the cash back to investors. Otherwise, none of this really matters at the end of the day. But I do think about a lot about the profile of the people, and especially early on in Funds 1 and Fund 2, who invested with us. And then they're not here really generally to play it safe with us. So I think we have a little bit of more liberty to ride out the winners. But I think that's exactly that. It's like you have to really be involved in these companies. I mean, Dandy and Fund 1, which is an amazing company that continues to double every single year, just started international expansion. You're just like, I'm riding this thing to the wheels fall off. But I think in the context of where AI is today and all the capital flowing into it, and then all the external conversations around it, I wake up every day. And I'm like, you could probably build a business model about getting into super serious competitive series A's, adding value, and just getting out of the series B or C. And that is your guaranteed rule. That's not what we're doing. But I think it's important to pay attention to those signals. And I actually think there's a few companies in our portfolio that I won't name where I'm like, it's interesting to watch the demand before around, and then the price gets set, and then the feeling around that company at that new price. And then either the demand builds again, or it kind of stays where it is. And it's very interesting to pay attention to the sort of signal, supply, and demand feeling. Obviously, the secondary market gets set or emails every day. And these secondary market opportunities to get liquidity. But I think that's where you need to spend a lot of time on the underwriting and try to really understand the potential of these businesses. On the follow-on piece, I mean, it's all about concentration concentrating in your winners. I think that's a skill that takes time to learn and experience that have the balls to know what that is. I want to credit Brian Singerman to lecturing me for two hours once about the importance of follow-on. And you can architect it into your fund. I mean, founders fund, I think, what's brilliant about them on many dimensions, but one is, they force you to find the one in the portfolio and say, great, we're going to put 25% of the capital in. Every fund. Every fund. You've got to find one, which, to your point, is incredibly scary if you're forced to sit there and you have to underwrite, a deal, your deal, the other partners deal, and cut everything else. Yeah, I mean, it's like literally-- It's scary. It's like saying, like, I'm going to go live at this founder. So I'm actually going to become an employee of this company for the next three months. And figure out a way to have the leverage to convince them to basically put that size of check in, which isn't like something we've traditionally had a lot of experience doing in the past. But I think when I look back, the signals were always there. I always knew the ones that we should have been doing that with. It's just, I think, we're just taking the steps I think one at a time to get comfortable to a place where you have the guts and understand the intangible signals around these things that make it off. Have you thought about doing like a growth fund? Because some people do that where they'll have the sidecar, where they'll be able to put a ton of capital in versus concentrating the main fund. Yeah, I mean, we debate this all the time. We're growing into the idea of a growth fund, you know? I mean, the other option that is very elegant is SPVs. And I can trade notes with you on it. But it's worked pretty elegantly for us. And one of the things that's starting to happen, which you're going to experience shortly, is if you do the job right, you'll create a bunch of LPs. We have a bunch of family offices who want to do late stage. So they're very interested in the zip line deal, the vast deal, the atoms deal that we did. And then I have early stage investors. We had a company that broke out, go.ai. And we had early stage investors who invested sub $10 million, who wanted some liquidity. And there was some ludiquity. We were modest sellers. And then we had so many late stage funds I wanted to buy it, we were also buying at the latest around at 500, 600 million. Sequoias having this happen now, and so as Founders Fund, they are investing in companies, whether it's Stripe or SpaceX, et cetera, and they're also selling at the same time, and because companies are staying long for so long, you can actually build both of those parts of the business to one. And I think that's where Venture's going, is you could have a very nice late stage business with just 10 people. - Blown away by the size and scale of these companies now. I mean, saying the word billion, even like 12 years ago or 10 years ago, was like the thing you would said where you're like, you know, will you lick the pavement? And I'll give you like a billion dollars. - You know, it was like such a rational number. - And now it's a billion in revenue. Like I think being a unicorn now really should be redefined, not on the valuation on the revenue. I consider unicorns a billion in revenue. I don't care about the paper value anymore. I want to see, and we have one company that's just hit 700 million in revenue. I'm like, okay, 300 million more to go, you'll be a unicorn. - Yeah. And I think understanding that is really important going back to like the secondary sort of question and when you get out because I mean, you know, at the end of the day, it's just another, we're just passing bags around sometimes in these instances and you know, these double triple trench deals that are happening right now, which I honestly completely understand from the Sequoia Benchmark index climber perspective because I don't feel like their cost of capital is the same necessarily as everyone else is. But like, the guy piling on that second tranche is paying a significant markup. Sometimes two or three X with the company is initially valued at for absolutely no change in underlying performance. - That's bubble, that's bubble, because I hate you by the way. When you see that, that's when you take a little note. - As we wrap, maybe final question. Do you guys still perform? - Still perform? - Yeah, every now and then. - For you guys? - Yeah. - Well, yeah, well, my good exception. - Yeah. - What are you guys doing tonight? You guys any plans tonight? - We'll come by. - Do you guys have a thumb drive? - If we go into all this where we're going, what kind of text are you like? - I got tequila for you. It'll be great. We'll share a bottle of tequila before. - I haven't tried you guys tequila yet. - Oh great. - Freeberg is gonna break it down tonight on the dance floor, so watch out everybody. - It's really impressive what you guys have done. - Yeah. - And serve us. - It's well done, gentlemen. It's the same pattern over and over again, meaning like you have some attention in fame, you develop some mastery, and then you gotta translate it into something. - But I think it's great to see people translate. - Celebrities are so good at being like, "Oh, this is shiny, and like I'm excited by this." But like after three months, that shininess wears off, and all you're stuck with is the actual hard work that goes into making anything successful, and I think that's always been our difference, which is like-- - Put in the work. - We don't actually care about the first three work. - Put in the work. - Yeah, we do the work. - You're an overnight, 15-year success. - Yeah, we go. - Yeah. - All right, thank you guys. Give it up to the chains. - Smoker! - Ah, boom, it's awesome. Yeah, we'll see you in a couple of hours. - Great, yeah.