All Star Investor Panel! Sophia Amoruso and Ryan Hoover | E2158

That is then determined by your deal flow. Do you actually have three other bets that are better or as good? And that's really the, I think, the art of the discipline here is knowing when to use four bullets to hit the target versus, you know, just, hey. And I, we have this happen all the time. And the way I've now taught my team to do it, because we now have 11 people on the investment team, is I've taught these young folks to say, "Okay, uh, in our accelerator, we're investing at a $1.7 million valuation, right? So, in order to own 7% of that of that $10 million company, you got to spend $700K. Okay. Would you rather make 525K bets? Six, five, 525K bets or own 7% of this one at $10 million and compare it?"

This is a very easy way to do it. Look at the accelerator class that just graduated with 12 startups. Is this where would this company rank in their in that group? If it ranks number one or it's like by far number one, it's better than all 12. Okay, you got a case to make. If it ranks number five or six of those 12, well then why are we doing that?

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Hey, and welcome back to Twist, to This Week in Startups. My name is Alex, and we have an investor panel for you today, including our homegrown champion, Jason Calakanis, from both Foundry University and the Launch Accelerator. And then we have Ryan Hoover, best known for tweets, cat pictures, and the fact that he is a founder over at The Weekend Fund. And then we have Sophia Amoruso from Trust Fund over in the UK. Sophia, Ryan, Jason, how are we all doing?

>> Uh, I'm in Park City and, uh, really excited to see you, Sophia, and Ryan. It's been too long. Ryan, such an amazing founder. He did Product Hunt still. I mean, founders today, Ryan, still my portfolio companies. Will you share us on Product Hunt? I mean, the, you built something that lasts. That's got to feel pretty good, huh?

>> It's, it's been almost 12 years, which is insane. I'm starting to feel really old. I don't know. When I was, when I was 25, you know, talking to all these, uh, in my eyes, 35-year-old men, uh, you know, VCs, I was like, "Wow, these guys are kind of old." Now I'm 38. I'm, I'm one of those guys.

>> Yeah. Yeah. It happens quick. Yeah.

>> And The Weekend Fund is on its, uh, third fund, Ryan, I believe.

>> Yep, that's right.

>> Yeah. And then Sophia, your, uh, your venture capital firm Trust Fund is still on its first fund, according to Firelings that I could find.

>> That is correct. Yep. It's fun.

>> And Jason, you're on Launch Four, I think.

>> Yeah, I'm on a fourth fund. And then arguably, I'd say it's really our fifth because my AngelList portfolio and my Sequoia Scouts portfolio kind of predate that, and that was would have been like fund zero. So probably fund four, uh, is the official fund name, but it might be fund five. And I've got to make a decision in the next year. Do I do fund five, uh, or do I retire, or do I just work for my own balance sheet, which is what happens to a lot of funds. I, I think Homebrew decided to go off their own balance sheet. I think, I don't know if we've seen this a couple of times, but sometimes you get to the point where you're like, the, the process of raising money from LPs takes so much time, is so painful, requires so much communication post that if you have the ability to just work from your own balance sheet, you just eliminate. I don't know, what does it take you, Sophia, in your first fund to raise money and communicate with your LPs versus actually doing the job of finding and investing in companies?

>> In year one, percentage, yeah.

>> Year one, I was like, yeah, I would say 20% of the time was talking to, you know, founders, and the rest of it was fundraising. The fund raise didn't take too long. I think I spent a lot more time with funds and funds and institutional investors who weren't right for the size fund that, you know, that I'm that I was building or for fund one. Um, so I could have done it more quickly if I had just focused on individuals and people that I knew and the people who made up ultimately made up my LP base, including you, people like Mark and Dre and Hot Shots, David Sachs. Your, your buddy.

>> Got to collect them all. Got to get all the besties from the next.

>> All of them.

>> It's happened a couple of times. Yeah, we, we have, uh, I don't know if there's a fund with all four, but my friend Sundeep Madra, who's now sold his company to Grok. All four of us were investors in his last company and the company before that. But that's more of a poker table thing. He always when he would raise money would just at the poker table say, "I have a 200," like last time it was like, "I have a $250K allocation for besties," you know, first come, first serve, whatever. And I was like, "Yeah, no, that's great, but, you know, I'm going to provide a little more value." So, I'm like a $750K, but nobody needs to know, whatever. And he's like, "Yep, every single person said the same thing. You're all just at 250."

>> He invested in the fund. He invested in Trust Fund because we were at the table and you were like, "You're investing." He was like, "Okay, 50K." I was like, "Yeah, that was easy."

>> A little peer pressure. I was like, "We got to, we got to get the ball rolling here for Sophia."

>> Honestly, like, I raised a lot of money at the poker table. Like, not just your, you know, poker table, but sitting around getting to know people. People, you know, you, you talk to people. You, you know, and then there's other people there who might vouch for you and be like, "Oh yeah, something about this person." And, you know, Anthony Noto from SoFi, I played, you know, poker with at the, you know, Code Conference. And poker is just, I, you know, telling you, Ryan.

>> It's the new golf. You get to know people.

>> You know, it kind of works. Ryan, you had an incredible advantage, and that was, by the way, the last time I hosted.

>> My Sky Dayton, myself, and Brook Hammer would host a poker game at the Code Conference. That was the last Code Conference, the last time I hosted the poker game there because Kara Swisher kind of hated me, I guess, at the end. And, you know, hated Sachs and hated tech, tech people, entrepreneurs, the whole thing. So, it was like, it just became untenable because we would have some of the press there, but the press hated the CEOs and the VCs. So, every year for 15 years, 20 years of doing it, I just watched as the animosity between the two groups grew to the point at which I was like, "Why am I putting these two groups of people who hate each other in the same room?" And then I was like, "[expletive]," it. I'm just taking the best one, Alex, for myself. I'm, I'm taking him out of the journalism ghetto and I'm taking him for my side.

>> I was just thinking that if you really want to have people who don't get along, the poker table's the best place to do it because it's the only place where it's socially acceptable to lie and steal from one another.

>> Yeah.

>> Within the rules of the game. It's perfect.

>> Ryan, you had a big advantage with your first fund, I think, because you were had sold to AngelList at that time, or you were doing a syndicate or something maybe.

>> Uh, how's it going for you raising funds and, and that part of the business? I'm curious.

>> Yeah, I mean, well, the first one, it was, uh, right after shortly after Product Hunt sold to AngelList. I stayed on as CEO for four years afterwards, but raised the first one and, uh, my goal was a million dollars. I was like, "I'm going to raise a million. I'm going to try to raise a million-dollar fund." Um, that grew to 3 million. So, like, way oversubscribed, massive fund, $3 million. And, uh, and yeah, being in the flow and, you know, a lot of my like former investors who, you know, backed me and the team at, at Product Hunt were were LPs and and still are. Um, so, yeah, some advantages there for sure. And then honestly, it's, we'll see how the, the market is. Uh, we're not raising now, but we will, you know, in the future, and it's changed a lot. Um, this last, the current fund that we're in right now was, was raising in '21, and we all know, you know, 2021 was was a very, uh, bullish time. Uh, and it was, to be honest, not that difficult to raise, um, relatively speaking to what I've heard from other GPs, especially like emerging managers right now. So, uh, we'll see.

>> Stuck in the window because when Silicon Valley Bank blew up and Lena Khan took the reigns, that was the end of the, uh, the end of the innocence. Like, it was so enthusiastic, and then there was just four years of complete depression, which Sophia, you got to raise during.

>> Yeah. I mean, I was raising at a time when, you know, it was 2023 when it's like a couple years old. Um, and I think there, everybody was talking about the bloodbath of the of the managers who had raised during 2021 and that they'd invested in these companies with these wild valuations and that, you know, I was in a period where there was a correction, but also there was a, what do you call it, when, um, you know, funds hadn't marked down their private, you know, they were overallocated on venture, they, um, you know, it was a, it was a weird time, um, where the market had dropped, but, you know, funds hadn't marked down, um, their, their portfolios. So, um, but yeah, I'm, I'm glad I didn't raise in 2021 because I also know, just speaking to, uh, fund managers who raised their first funds in 2021, they weren't getting the hard questions that I was getting, um, because it was much, you know, easier to raise. And so I feel like it not being the easiest, or raising in a different environment, forced me to learn how to answer questions that, from what I've been told, some emerging managers didn't have to because of the, the environment at the time.

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Yeah, mark to market. Putting your marks, I guess, is the term you were looking for, Sophia. Uh, people use all different terms for it.

>> I want to go back to to micro funds though, because this is interesting. Uh, Ryan, you sent over some data from AngelList that said essentially emerging managers, smaller venture capital funds are having a much better time through Q2 fundraising than they were Q1, Q4 of last year, etc. So, it seems that there's been a bit of a resurgence in LP interest in smaller venture capital funds. And I'm just curious, Ryan, have you noticed that shift amongst your own LP base? And, uh, is that going to change your fundraising schedule bringing it up?

>> Robs, I'll have a much better perspective when we start raising. Uh, because that's when you actually really know, are people actually going to invest? They, they often like reach out and say, "Hey, are you raising?" Um, we get those emails. I'm sure Sophia, you get those emails all the time. Uh, but you never know until they actually write the check. Um, but yeah, I'm, I'm in touch with Avlok and the Avlok, uh, AngelList team and and they, they reported between Q1 and Q2 this year, 43% increase in LP capital, um, into the AngelList platform, which is sort of an index of, uh, a number of funds, maybe skewed a little bit slightly towards like syndicates, SPVs, and, uh, smaller funds. But that's a huge, huge increase. And, you know, part of it, my theory is we're seeing a lot of optimism around AI. Of course, we're seeing, you know, Figma being like the, the, you know, one IPO that's going out that hopefully will inspire more liquidity in our ecosystem. Um, and so I think we may see a rebound. Who knows though? I, I'm not going to try and predict the macro and, you know, at the end of the day, I'm just, you know, contin.

>> Yeah, you know, there's like a greed fear index, and we're now deep in the greed index. Um, and I think we were from Silicon Valley Bank blowing up, Trump presidency, Kamala presidency, both of those, I think were big unknown scaries for people. Like, is it going to be a, is it going to be like, Trump has gone wild? Is it going to be Kamala's raising tax rate, you know, raising more taxes and, you know, could be actual chaos. So, uncertainty over the past two years combined with, you know, no optimism and no distributions, I think led everybody to be, uh, at greed. I would say, yeah, it's interesting it came up as a 69. There, I was going to put it at 420. Um, but I think we're.

>> I didn't know you were pricing Tesla robo-taxi rides. Your birthday's 420, Sylvia.

>> Yeah. Oh, my sense ditched school and my birthday. I was so lonely.

>> It all makes sense now. Um, so I think we're, we're heading into a greed cycle. Uh, where people are starting to have FOMO and greed again. "I missed out on this round. I don't own SpaceX. I don't own Stripe. I don't own Anduril." How do I get those? "Oh my god, Humane Robots is the next big thing," but they have no revenue. But they're doing an SPV at what was that, $30 or $40 billion? They may have a customer, BMW, but BMW said they're not really using it in production, but maybe they are using it in production. Like all of that are the signals to me that greed is trumping fear, and that's good until people lack discipline in their entry prices for, you know, people in our line of work, seed and pre-seed, um, which is where you get yourself in a ton of trouble. So, anyway, good time to be playing the game, and the distributions are going to make people frisky when that Figma goes out, with Circle going out, CoreWeave going out. I think we're just going to see tons of money start to recycle, recirculate, recycle all of those things. Doesn't surprise me. AngelList is the tip of the spear.

>> Yeah, valuations are also up. They avoid sharing some numbers. Uh, pre-seed is flat, according to them. Seed is up 15%. Series A is up almost 10%. Series B's are up 40%. Now, maybe that's a smaller sample. Um, you know, hard to, hard to measure the macro, the full macro on that, but valuations are high. Uh, it's a lot different when I started The Weekend Fund, average entry price, I think was like $6.5 million post.

>> Is that a pre-seed or a seed number, Ryan?

>> Uh, that was over the entire fund, uh, so combination of seed and, and pre-seed, and that was like the median, I believe. Uh, so, yeah, much, much lower than what we're seeing right now in the market.

>> That's absolutely.

>> What valuation and stage do you target? Like, what's your, you know, I've heard funds that like, "We don't invest past $15 million post," and it's like, there's a lot that you're going to miss, right? But discipline is important as a fund manager. It was so much more fun as an angel being able to invest at like any stage. But, um, that's one thing that I know LPs will evaluate our funds by is how much we stuck to the, what it was that we said our fund construction was going to be when we talked to them, you know, the first time.

>> Yeah, I mean, I constantly question myself on this. Uh, we, we do have some price, uh, awareness, not maybe sensitivity is a maybe not the right word, but awareness. Um, we do pass on deals sometimes when the valuation seems extremely high and it's like pre-launch and there's not a lot of like objective proof points. Um, but at the same time, we're also have to kind of play the, the game, play the ball. What's the, what's the metaphor? Play the field.

>> Play the game on the field.

>> Play the game on the field. Yeah. And we obviously don't want to miss out on the best company. So, um, we're, we're reevaluating a lot of that right now, actually, and thinking through even our our strategy in the next fund and how we deploy capital. Historically, we've written about $300K average check size. Our goal is to have every company, you know, if it a unicorn or above, like could return the fund. Um, but the reality is the valuations are getting much higher. Also, the optimistic approach is, hey, what is a billion dollars? Like the, today's billion unicorn is is tomorrow's $10 billion, you know, decacorn. Um, these companies are getting big very quick, and if you look at just how, I mean, I hate to say AI, but AI is also eating into more of the market. It's going to eat into services in terms of like the GDP of of the world. And so you can actually see some of these companies that used to be unicorns be much bigger today. So.

>> That's an interesting point, Ryan, because it's almost the snake eating its tail. If we succeed with these AI companies, then we lower the revenue. And here we go. That could be problematic. It's, I think about it in like, how many bullets you have in the gun, right? And sometimes you're like, well, this is a really good target. I'm willing to take three shots at it, which is like triple the valuation. And so I too, when I organize our fund, hey, we're going to have 300 names in this $45 million fund, our average ownership is going to be 6% at a 6% average ownership, get diluted to 3%. We need approximately a unicorn in the $1.5 billion space to return the fund. Every investment has to have the potential to be a unicorn. Or why are we making the investment? Which means it has to have a great team, you know, good product velocity, and going after a big market. Um, and so then you have to ask yourself, is this worth, you know, if I'm paying instead of $6 million, if that's your average valuation, okay, there's an $24 million. Okay, am I better off making this one bet or making four bets?

And that is then determined by your deal flow. Do you actually have three other bets that are better or as good? And that's really the, I think the art of the discipline here is knowing when to use four bullets to hit the target versus, you know, just, hey. And I, we have this happen all the time. And the way I've now taught my team to do it, because we now have 11 people on the investment team, is I've taught these young folks to say, "Okay, uh, in our accelerator, we're investing at a $1.7 million valuation, right? So, in order to own 7% of that of that $10 million company, you got to spend $700K. Okay. Would you rather make 525K bets? Six, five, 525K bets or own 7% of this one at $10 million and compare it?"

This is a very easy way to do it. Look at the accelerator class that just graduated with 12 startups. Is this where would this company rank in their in that group? If it ranks number one or it's like by far number one, it's better than all 12. Okay, you got a case to make. If it ranks number five or six of those 12, well then why are we doing that instead of doing another accelerator class because we have so many people who want to come to our accelerator. Now, that is that assumes you have an accelerator people want to go to and that are high quality enough. So this is the thinking on everybody's mind, exactly what you're going through, Ryan. And Sophia, you're going to have how many names in your fund? Where did you wind up at?

>> 22. I'm at 14.

>> Okay. Um, more concentrated than I had anticipated. But I've also done some follow-ons with some of the companies that I really, really believe in. And it's just much easier to like, >> you know, throw my weight around for the guys that are going to like knock it out of the park than I think continue investing in companies that are going to still need a lot from me, but, you know, I have less, you know, I have less data to operate on. So, I'm curious about, you know, I didn't, everybody in these, you know, with these like micro funds is like, no reserves, no reserves. But I'm also like, you know, just I think math aside, logic tells me to double down on a winner, right? Like I think just everybody like believes in, you give an employee a promotion, whatever that is. You don't.

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>> Sophia, what are your criteria for making a follow-on investment? What's the standout thing you're seeing in those companies that makes you want to deploy more capital into them? Is it revenue velocity, product velocity?

>> Revenue traction, speed of development. Though, you know, two of the pre-seed companies I invested in, two pre-seed companies of the 14, and both of those guys went on to raise really big, um, seed seed rounds. And I think, um, when, when it hasn't been very long since I've spoken to the founder, but the product has moved so quickly that I need to touch base with them to ask how to describe it next time I talk to somebody or when I'm going on a podcast. I think that's a really good, um, signal. Um, and, you know, it's like Nectar Social, for example, like these, it's two sisters. They're ex-Meta, one's an ex-Meta, ex-product, um, folks, and they live in Seattle. And it had been, I don't know how long, maybe six months from the time they raised with just a deck. And, you know, Ms. Bud, the co-founder, came over to my house and showed me this product. And I was like, "Holy [expletive]." Like, this is something I wish I had, you know, at Nasty. This is something, you know, every brand needs. And now it's like, you know, they're working with Lollipop and Jones Road Beauty. They just signed on Goop. Like, they've got like real revenue. And the product is like, I use the product for my social media. It's like, you know, it's for brands, but I use it for for certain like AI kind of automation stuff. And, you know, I, I was my mind was just really blown. And what I think founders are, you know, are able to do now with AI and, you know, punch of their weight being able to use these tools and have teeny tiny little teams is really encouraging. So also the founders who are, you know, taking advantage of that and either scaling down or staying small, um, as they go from pre-seed to seed is something.

>> So we've talked about, uh, revenue growth, uh, and also how fast they're shipping, and also these team sizes. I feel like we're really circling this that he describes as the new status symbols in Silicon Valley. And if you're on the audio version, it, uh, it says that raising is now revenue, press is now social reach, credentials is now shipping, and big teams are now small teams. Jason and I have talked a lot about the static team size thing, but Ryan, it sounds like Sophia and you are in pretty close agreement about what's changed in the startup game.

>> Yeah, I mean, it's, you're seeing a lot more people showing off their revenue numbers on Twitter, and it's creating, I mean, I'm not going to lie, like sometimes some FOMO. I'm like, "Oh [expletive], like I didn't even see this company. Oh my gosh, they're they're making like $50 million in revenue in the first 12 months." Like, this is insane. And so you're seeing a shift in how people are pumping their chest, uh, whether we like it or not. Like revenue is is the new status symbol, uh, beyond just raising. Now, raising still matters. Like if you get, you know, brand name firm backing you, that still matters, but that's that's secondary to revenue at this point. Um, and also it's a leading indicator into getting those funds obviously interested in what you're building. Um, you also see like a massive shift, of course, in the past decade from like press to to social, and in many ways, like Twitter's become the new launchpad in in many cases. Um, partially because the algorithm makes changes. Um, if you think about it, like before, if you were a no-name founder, you probably had, most people don't have a large social following. You post something on Twitter, you don't get a lot of play. Now you have an algorithm, it heavily incentivizes videos for like demos, and, you know, this is changing a lot of how founders are sort of playing the status game and and showing off what they're building and what they've achieved. Um, and so it's, it's very different than when I, you know, moved to San Francisco in 2010. Uh, today.

>> Signaling is like a.

>> Go ahead.

>> No, sorry for you.

>> No. Is it okay if I ask questions?

>> You are. That makes it a dynamic discussion.

>> The host.

>> No. No. That's when it's at its best.

>> No. I'm just so I'm exhaust. I don't even make that much content, and I'm fried.

>> Like.

>> You make a lot of content. What are you talking about? You are three, four stories a day.

>> We just make different things. I make four podcasts a week. You make.

>> What?

>> Three or four social clips a day.

>> No, I don't. I mean, stories are just so lazy, but like,

>> You know, sure, startups have to like create content, maybe, maybe not. But fund managers, like some of these guys have like massive TikTok presences and, you know, they're, I just like, I feel like the older I get, the less capacity I have like in general to just do anything. And I don't know if that's like brain fog or like hormones or laziness or perspective or, you know, work-life balance, which I don't like, that's not something I think a lot about. But, um.

>> That's a big statement from you because your advantage, your unfair advantage, is your massive social media following, and that's what draws in a lot of founders, and that's your high profile. Um, but, you know, it, there's something very interesting in the signaling, Ryan, that I think you pointed out, which is the For You page means you could be a nobody, and the algorithm will put you in front of the somebodies. That's distinctly different than being like a reply guy and trying to like being Keith Rabois' replies. You put out a great video, you put your revenue numbers, it trends, Keith Ro sees it, Sophia sees it, you see it, I see it, Alex sees it. Where people put out like the Cluey video or the response video to it, like all that stuff, you just wind up seeing it. So now you're aware of it, and it's part of the overall trend. I would say there's like two trends here. Going direct, and then the For You page surfacing nobodies, you know, like outsiders being able to get in front of insiders. Those are actually two very, uh, interesting things we've surfaced here. But it, I, I like the idea that signaling is changing, and that people are looking for, you know, if you have revenue, and then the next thing will be profits. So you will see, I'm starting to see some.

>> Profits. We don't, we don't care about profits. We just make.

>> I, I've had two founders this week when they sent their note say, "We have 20% margins right now." Two different ones. One's a media business, and the other one is like a SaaS business. And they were like, "I'm like, we're reporting on profits now." I'm like, "How are we deploying those profits? Are we paying taxes this year, or are we investing in that, you know, in something?" Because that's what we want to do. But signaling is super critical, um, for founders to understand, and for investors to understand, because it kind of creates a shared dialogue. What you were talking about before about like the product velocity, Sophia, we, I like to come up with terms, and the term we use internally, so we actually have our own vernacular, is product velocity. When we see a founder with product velocity, that means something. And then we have a specific criteria for follow-on investments to Alex's original, really good question. Uh, the other thing you didn't mention, but by name, but that you, uh, insinuated was, hey, they raised money, and then I saw that that company, Nectar, had raised money from True Ventures and Google Ventures. Our criteria is revenue growth, lead investor joining the board, and the track record of that lead investor. And so if we're going to follow on, if you have three, four, 5X revenue growth, we're following on. Like, that's rare. Uh, and if you have a lead investor who I know, or we know, who's notable, who's invested in a great company before, how did you convince them? Now, there's two possibilities. Either your company's great, and they recognize that and decided to lead it and join the board. So, joining the board is a subset of that criteria, because a drive-by $250K check from a large fund is not really good. So, in that case, I'm guessing True Ventures, uh, is either joining the fund or put in more than $250, $500K.

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>> Yeah, they, they co-led the.

>> And is one of them joining the board?

>> Yeah, I think Tony did. Rhetoric may have, but like, you know, as a first-time, you know, fund manager to be like, you know, there was like some random Texas firm that had leaned in and wanted to preempt something, and I was like, "Guys, who are you? Talk. They don't have relationships in the Valley." And I was like, "You guys should talk to like the big boys. Let me introduce you to Frederick and Tony." And then I introduced them to one other top-tier firm that's like a dream firm, and, you know, both G, all of them wanted to lead. And GV and, um, True were basically like, "Okay, we'll co-lead. We're not gonna get, you know, the 20% allocation that we want, but we'll each get each get 10%." And it was like, they just showed up and were like, "Who are these freaks? What is this? This is so amazing." That was it. It was just like on the merit of what they had built. Um, and it wasn't, you know, their relationships or anything. And I certainly can't convince anybody to invest. It's not like I don't have that kind of influence to be like, "Ooh, you know," but for me to be like, "I don't, I don't know what I'm, you know, I haven't invested in that many pre-seed companies even as an angel." But to be able to send it upstream and have like, you know, the.

>> Fact that people will know the massive advantage you do have and the value you're providing to those is you validated them with your time and skin in the game.

>> So therefore, when Tony looks at it, he says, "Well, Sophia's got 22 bullets in her fund. I heard this week in startups, she she used one of her 22 bullets." That actually skin in the game means something. And and I think that's a massive advantage that pre-seed funds provide to seed funds, or seed funds provide to Series A, and that's kind of what makes the ecosystem work. The other notable thing, I don't know if we have more data to bring this, uh, to ground this, Alex, but the other thing, uh, you, you mentioned the Series B's were massively up. This makes sense to me, Ryan, because you have so many of these mega funds with billions of dollars, and for them, they have to put more money to work, and, you know, that is going to lead to valuation increases. So then that leads us to the discussion. We had a company this week, uh, we invested in two years ago, had a maybe a call it a $15 million valuation. Two, three years later, maybe three years later, they're at a $500 million valuation. Do we sell 20% of our ownership and send distributions since that investment is now theoretically 30X? That would be 32X. Do we trim 10, 20%? Uh, or do we take our pro rata? Or do we do both? Syndicate our pro rata? What do you think, Ryan? How do you think about when you trim a position? Because distributions are rare, and the opportunity to distribute is rare. What's your current philosophy on that?

>> Yeah, we, so we've done this once. Um, we did this about 18 months ago. Uh, we, we invested in the seed round of Deal in the first fund, and that was a $10 million post. It's gone on, you know, I think the last round was on $12 billion valuation, and 18 months ago, we're like, "Well, okay, we have an opportunity to sell 14% of our our position to return the fund."

>> And that's a 400X return roughly.

>> Yeah. Yeah. It's like 10X fund returner on paper, you know. We'll see. It doesn't count until it's true DPI. But we're like, "Well, let's, let's get one DPI, 1X DPI out there."

>> Thing isn't going to sink your DPI. You'll be okay.

>> Yeah. Yeah, we'll see. No, it's, I'm, I'm bullish. I'm bullish on the company. I was bullish back then. I'm bullish now. And granted, we, we did sell, um, lower than the $12 billion number back then, because this is also when the market was also in the, the slumps a little bit. But the thought was, okay, one, our LPs, they've been, you know, they're going to be so happy to see some liquidity. No one's getting liquidity like 18 months ago. Uh, two, we're still going to have 84%, 83% of our position remaining. So even if we make a mistake and it, you know, 10Xes from here, we're still good. So we did make that decision, and, uh, it was the right one. Um, even though today it would sell for like more than 2X, you know, in the market from what we sold back then. But, um, so anyway, to answer your question, Jason, I don't know. It's so subjective. Um, I think it's wise for early-stage funds, maybe after five, six, seven, you know, eight years in their positions, to start thinking about liquidity and take 20, 30% off the table, even if they have high confidence that, you know, it's going to go up from there.

>> My best advice.

>> About recycling, recycling. Teach me about recycling.

>> Well, anyway, I actually have thoughts on that too. Um, the, my best advice is, if you have an opportunity, since they're so rare, take it. Sell 10 to 20% twice, maybe three times, and then by the end of the story, you have 70% of what you could have had. No LP is going to be upset about that. And they're, uh, quite the opposite, because if you gave them that money, you know, 18 months ago, and then they put it into Sophia's fund, they're looking at it as, you know, okay, there's a time value to money, too. And then what if that company implodes? And that specific company had like a lawsuit and a couple of challenges, if I remember correctly, um, with their competitors. And so I had a company, I had a company that got to a billion-dollar valuation. We sold $18 million of our position. We kept 80%. That company's now worth three or $400 million. We look like, and that was two years, three years ago we sold it. We look like geniuses. Returned the fund. Our syndicate got a bunch of money. And so, and we did it with comm. I personally did it with Uber right when Masayoshi was offering to buy shares in the 30s. Now it seems crazy with Uber at 90 that I sold in the 30s. I, I feel great about that trade because I bought a house that doubled in value during that time. So then the truth is, with the time value of money, maybe I left, you know, a third of 15% of my investment. It just doesn't matter. What does matter is downside protection. So that, that's my sort of take on it. And man, I have, uh, two only like really two regrets. I was offered to sell some Robinhood at $30 a share, and we wound up distributing at, I think, $14 a share. When we distributed, I told everybody, "Hold your shares," uh, because it went public, and we were pre-seed investors. You know, some people sold it, some people held it. That $14 now it's at $100. So that fund, the difference would have been like a, I don't know, 10X fund versus a 3X fund if you held your shares, or whatever, 4X fund versus 10X. I don't have the math in front of me, but significant. So I was like, "Oh, maybe I should have held my shares in Robinhood and held on to the public shares and distributed them two years later," which is what Sequoia has been doing quite effectively.

>> Yeah, it's 107 right now, Jason.

>> Oh, what am I doing on this podcast? I'm rich. Bye. I'm gonna go, I'm gonna go mountain biking. What am I doing here? No, it's like, I woke up one day and like, you know, hundreds of thousands of dollars in Robinhood shares that I got as my carry turned into millions of dollars in Robinhood shares. It's a great thing about being a VC. If you love the company when it was private, and it makes it to public, why would you sell it when it's public? Like, unless the founders aren't there or something dramatic happened. I mean, obviously you have to re-underwrite it every year or every six months, but man, let your winners ride. Uh, and Jason, answering your question about Q2, uh, Series B valuations, I have that for you right here, which, as you can see, they are going up, much like every other round. But the biggest gains that we're seeing are in the super late stage, the D+ era of venture. Does that match, Jason, what you expected to see?

>> Yes. Uh, there's so much late-stage money available because companies aren't going public until until, um, LPs and GPs see companies going public earlier. They're going to keep making these late-stage investments out of their what would have been their public allocation. They'll just be like, "Okay, I'll buy Stripe, SpaceX," and here before they go public because, you know, those companies probably should have gone public already. So, on the point you made about profitability earlier, Jason, is that is that what happens when we have smaller team sizes and just faster revenue growth? Because to me, it sounds like startups are just getting more efficient overall. I'm curious if it's more of a mindset shift, or if it's more just this is what happens when you spend less money, uh, by hiring fewer people. I mean, we've seen this step function happen, I think, three times in my career, like client-server, cloud computing, that time period, and then now with AI. So, if you keep lowering the time it takes to get a product to market and the amount of money, it used to be a year or two to get a product to market and $5 to $10 million. Then it became like a million dollars in six months, and now it's six weeks in an accelerator and $50,000 to get a product to market. I mean, it's not even comparable. Um, so many more startup bets to make. That's why I'm trying to increase the surface area. That's my big re, if I have any realization this year compared to last year, is that surface area really matters because there's just so many more companies. So you have to take many more meetings, many place, many more bets. To your point, Ryan, like, how did I not know about that company? That was Sequoia's experience when Techstars, Y Combinator, and AngelList came out. They were like, "How do I not know about these companies?" And they're like, "I guess we can't know about them. There's just too many companies." Now it's, I think we're going to see, I don't know what Cambrian explosion means other than a big one. So somebody educate me, what is Cambrian? But whatever Cambrian, it sounds good, sounds intelligent, but I think it's like a 10X. I think we'll be sitting here in two years and have 10 times as many startups hitting, you know, product-market fit than we did five years ago.

>> The Cambrian explosion, Jason, was about, uh, 500 million years ago, and it was a rapid diversification of types of life, and the main hypothesis is that there's more oxygen, so more life got started.

>> Yeah. So, that, I knew that. I was testing you, Alex. I knew that.

>> Well, I only knew half of that. So.

>> Now, now anyone, and it's going to get better and better, can build, use software to build their solutions. And so historically, you, you'd have some accountant in the Midwest, maybe, who really understands.

Their space, understands their customers, understands their own problem. They can at least build like an MVP, and yeah, maybe the vibe-coded tools are not production-ready. You, you know, call back to, to, perhaps, uh, I don't know if it was vibe-coded or not, but, you know, had some security issues, but it's going to get better and better. And so I think the number, not think, it's it's pretty clear to me that the number of builders are going to increase. Um, now whether those are all startups and like venture-backable companies is is another question, but we're going to see a lot more building and creating and shipping.

So speaking of this, I just invested. This is the first angel check I've written since I started the fund because I have been really focused on the fund. But the founder of Lovable DM'd me like a week ago and was like, "Hey, we should do stuff together." And we got on a call and they were like, "We want you to angel invest." And it's like, I think, you know, it's it's not going to be like a huge check, but, um, you know, they're the fastest, fastest growing startup ever. They just reached 100 million in ARR 8 months after launching the product. They're at like a 1.8 billion valuation.

From Lovable. Yeah, I had him on the pod. It's It's very impressive piece of software for this vibe coding. It really is. And this is kind of exactly what we're talking about. People are creating software in 48 hours and generating like tens of thousands of dollars worth of revenue on it. And these are just, you know, these aren't even necessarily startup founders.

So, I'm curious. I mean, I don't know. How much time have you spent thinking about something like Lovable? Like as an angel that's like, I think that's probably, I don't know if it's the highest, you know, the it's not a late, it's not late, but it's probably maybe the most expensive, um, you know, check I've ever written. Do you think?

I mean, you're basically making a good decision. Uh, what's the price to sales ratio? Price being the the valuation of the company, sales being the revenue of the company? Price to sales should really just be valuation to revenue, would be a cleaner way to say it so people would understand it. Uh, so is it a billion-dollar company now or 10 billion company?

1.8 billion, but in 8 months they've reached 100 million in ARR.

So it's 18 times sales. So the velocity is like.

So the question is, will that sales continue? And the thing I'm hearing against this, Sophia, is people are sampling these products at an extraordinary rate. I would say similar to when apps came out. Remember, you buy a flashlight app for a dollar or you buy a game for $2.99 and like play it for five minutes and then never do it, 'cause you're like, well, it's only three bucks. Paying 20 bucks for Lovable or any AI product, you use it for a couple of hours and then you cancel it, or you use it for three months, you cancel it. That's going to be the question. Is are, is that quality revenue or is it brittle revenue? What's the re, is it durable revenue? I think is the way I would say it versus brittle, like.

And the way you can determine that is when you talk to the customers. Is this an essential part of their workflow? Ah, is anybody here ripping out Slack or Notion or Coda? If you use those things, like I can't imagine ripping that out of my company or Google Docs ever.

Have you seen Craft?

Oh, you use the glue. Is that glue or?

No, no, it's like Notion but easier to look at.

Oh, really? I don't know that one. Craft, it's called.

Mhm.

I use Notion. Coded. But once you get.

The last LP update.

Oh, fantastic. Yeah, I mean, once you get into it.

Looks great.

It was very well designed. So I guess Ryan, what are your thoughts on brittle versus resilient revenue?

Uh, I, I mean, there, well, obviously churn matters and retention matters and everything. Um, but also there, there's this interesting time where, so, uh, Vaykian, my partner on the fund, and I have chatted a bit about this more recently, and and she wrote a blog post about this. Um, maybe I'll share in the show notes or something later, but, uh, we're in an interesting time where the foundational layer, the, the foundational models that everyone is building upon are just getting better and better. And so without you as a builder, founder doing anything, theoretically, your product is just getting better. And there are certain use cases where it hasn't reached that tipping point where the utility has met consumers' needs, but it will over time. And you building on top of these foundational layers, you, you, you don't need to do the heavy work. Uh, not that it's difficult to build everything around it, but, you know, there's so much, um, opportunity coming, and it's almost more about being in position and capturing users so that when the foundational models and AI is good enough to solve the problem that you're, you're promising, then you're there. And so that's actually a shift. It's very different than like cloud infrastructure. When cloud infrastructure came around, that like shifted, you know, cloud computing, SAS, all of that shifted dramatically, but that was more binary. It was like, you put in the cloud or you didn't. Like, maybe got a little faster, maybe got a little bit cheaper, but it didn't foundationally change your underlying product and offering. And so this, something.

A profound, this is a profound insight, Ryan. Uh, it's so good to talk to you. I haven't talked to you in a year, but you always have these like really good insights. So what you're saying is, imagine if your AWS account, your S3 storage made your product better while you didn't ship any new product. That's like a really interesting thing because there's you improving your product, and then there's your underlying technology improving your product. So you could argue like AWS got cheaper or the storage got cheaper, or maybe it got marginally faster, but that's not the same as what LLMs advancing is doing.

Um, Sophia, are you going to make that outside of your fund or inside of your fund?

Outside of the fund. I mean, it's it's not in, it's not with, you know, I'm investing at like sub-20 million. You got to talk to your LPAC. Make sure as your as one of your LPs, I'm saying put it in the fund and make an exception. And it's a learning experience.

I haven't done it. I haven't done it yet. But I think it's like, I don't think it's, I don't think it would be a challenging 10x. And I think if I was, you know, I.

Do it, do it in the fund. You don't want to have relationships with founders. Even though I'm not like a lean check, I've found it pretty easy to contact a founder when they like, you know, subsequent fundraising, be like, "Hey, anybody want to buy, you know, could I sell some secondary shares?" So, you know, you know, like as as an LP, I would say do it in the fund and say, this is an experiment. We have 22 bets we're making. One of the bets we thought we'd try a later stage one and see what we learn there. And, um, you know, obviously we don't think this could be a 200x, but we think it could be a 10x and that could be accretive to the fund and, you know, it would be a single or double and it would be lower risk. So we're going to maybe experiment in this fund and the next fund and having a couple of those if it's a special circumstance where I have access. I did that with CloudKitchens. I have access to and I'm friends with Travis. I had the opportunity to invest in his fund and my third fund for CloudKitchens. It was an extraordinarily high out of, you know, uh, our normal investment zone, but I put 10% of the fund in because I was like, I can bet on Travis to 10x 10% of the fund and return of the fund. If he doubles it, great. If he triples it, great. It's all accretive and I have unique access. So that's like the unique access carve-out that as an LP in your fund, I would be really upset if you didn't take it.

I mean, it's a tiny check. It's just the ownership, like all of it.

Don't worry about ownership. Just worry about what you think the return is.

Yeah.

If you think it's low chance of.

Not returning and it's high chance of returning, low single digits.

It fills in the fund. It may not be a fun.

No, I think it'll, I'm, I feel good about it. I wouldn't be considering it as an angel check if I didn't. So.

In order to return the fund, if you have 22 bets in the fund, it has to be 20x. So that's going to be hard to do.

But it's like Wix. Wix is worth like 20 or 30 million or something like that. It's like.

Billion. Yeah. And it's like.

Feels like I. It's so funny you bring up that company because I was in a meeting with Kelly who's running our syndicate and I was asking for an update and, um, she said, "Yeah, I'm building a new portal." And I'm like, "Oh, okay. That's interesting." Who, we, we hired a company to do that, or we got a freelance developer. She's like, "No, no, I'm building it. I've been vibe-coding and Lovable. Wanted to show it to you. It's a little early, but here's what it is." And I was like, "Oh, you could build a portal like AngelList, you know, for our private syndicate with without being a coder." Okay, interesting. It feels like there's something big there. Sophia, we had a hanging, um, a hanging question about recycling. You recycle 10% of your fund, Ryan. What's in your docs? What do you do?

Uh, we, so both recycling and follow-on is, is, um, is flexible. Uh, so we don't have anything that's like, uh, strict in our LPA or anything like that. My, my position with follow-on and and that kind of flows into recycling a bit, is, um, or it's related, I should say, is, uh, on the follow-on side, it's like, if we believe in this company, like all things being equal, even if we're not an investor, would we invest in this company at this valuation today knowing what we know now? With regard to recycling, we recycle within a certain time period generally. So if we get returns, sometimes companies shut down, they return the capital, we recycle that capital. But if it's year six of a fund, year five of funds, we tend to distribute from there. Um, I mean, by then we're also on another fund entirely. So, uh, that's that's how we've approached it.

Yeah, I've recycled, I think, 10% in, I think in a couple of the funds that we've done. You know, it's, you have to play the game on the field. I think Sophia, since you were asking for advice, and for me, the game on the field is if there's no DPI, and that provides DPI to, you know, to your LPs, that's the more important thing than recycling. If you're already returned the fund, you're in the black, and it's just a matter of how much you're going to return. Um, yeah, then it feels like maybe recycle it if you have the opportunity. Like if Lovable's available and you had a million dollar return, putting a million into Lovable in a $10 million fund, um, and now it returns 5x and now it's, you know, you're at 15 million returns of the fund, it could be whatever, really accretive, you know.

Jason, for founders out there who are listening and may not be familiar with capital recycling, can you just break that down for the folks out there?

Super simple. Uh, in fund documents, uh, when you get the first return, returns back, if you had a $10 million fund, you might say we're going to recycle the first 10% of funds that come back. So if you have any early wins, instead of distributing the million dollars, which LPs probably don't want a quick win of 10% kind of what they put in. If somebody put in 100k, getting a 10K check is nice, but not life-changing. Hey, maybe we take that million. We know there's a winner in this portfolio. It's, you know, that Nectar company. And hey, let's put the million into Nectar and we'll be alongside True Ventures and we'll have even more ownership in an, what we believe is a, you know, really high conviction bet. So, it's just a way to goose the eventual returns of the fund. You know, um, now if you didn't have any winners in the fund or breakouts yet, and you couldn't identify them, then you probably would want to just distribute those returns to your LPs.

Just because they probably don't want to take on extra risk at that point in time.

Yeah, they would probably want you to work towards doubling or tripling their money. What, as an LP in 21 funds right now, I, yeah, it's too many. I've been saying no to a lot of people. Um, I, I said to everybody, like, if you double my, if you double the money I gave you, uh, you know, and it's just basically like stock market returns, I'm happy because I don't need access to this capital anyway. It doesn't need to be liquid. Like, it's like a wealth bomb for my daughters down the road. Um, but if you quadruple it or 5x it, then it's meaningful, um, for me and I'm stoked. And if I can get, build relationships or get intelligence from Sophia, you know, she's got this great company. Nectar, and what was it? Nectar Social.

Yeah, Nectar Social.

Okay. Like if I ask Sophia, can I get an intro? Uh, she's going to be like, "Sure, you're an LP. Of course, I'll give you an intro." Like, and Mark Andreessen specifically does this. He was an LP on my first fund, but we had a mini micro falling out because he wouldn't come on the pod. Then why, why are you an LP? And he's like, "Well, do I have to come on the pod to be an LP?" And I said, you know, now that I think of it, yes. And he's like, okay. And I was like, okay. And we haven't really spoken since. I mean, we had a couple little back and forths, but.

Then why he blocked me. Okay.

Uh, well, on that note, um, Sophia, I think it's very interesting that you brought up Lovable because they are such an amazing breakout company from Sweden, if memory serves, and you're based over in the UK. So, I'm curious, are AI startups in the European area performing as poorly as some American VCs think? Because there's been quite a meme lately of, you know, America builds, Europe regulates, Europe's dead, etc. But Lovable seems to break that mold. So, I'm curious. Is it.

I'm right here, Alex. You could just say Jason.

So, Jason hates Europe, especially France. Every time I.

I just don't think I'm going to find the next unicorn there in all likelihood. That's all. Certainly not in France.

Is is that is that correct, Sophia? Or are we being a bit too, um, freedom fries over here?

I've been here four months, right? So, I mean, my.

You're an expert. Definitely not an expert.

You know, I think, you know, I've spent a bunch of time with like Brent Herman and Founders Forum and went to the Founders Forum event a couple months ago and spoke at London Tech Week and whatever. So, I'm like just immersing myself in the ecosystem. Um, but, you know, I think, you know, Founders Forum was really exciting. There's some exciting companies. The founder of Lovable spoke, founder of Property spoke. But, um, in terms of Europe, I feel like Estonia and is is is there's like a, the concentration of startups in Estonia and the, um, you know, how the it lends itself to being, you know, founder-friendly or whatever. I'm not, I don't, I read about it and I forgot the details, but, um, it seems like Estonia is kind of having a moment.

Isn't that where Skype was from originally? Am I crazy? Jason, back me up here. Skype.

Um, no, I think they were Swedes. Um, but they might have been from an Eastern block country. You might be right. There were three founders. So.

We're both right. It was founded by Sweden, people from Sweden and Denmark, but was primarily developed in Estonia.

Got it. Yeah. So.

You know, the Nordics are special because those people have a design aesthetic that is really high. Um, and it's really cold and there's nothing to do for six months of the year, so they just work. Whereas in France, Italy, Spain, it's lovely. Why would you spend 12 hours working on your startup, 14 hours? Why would you give up a weekend? If I lived in Italy, I would not be working on my podcast and I would be out and about. I would be getting pasta, branzino, whatever. And the lifestyle does drive. I've seen this in every single local market. If the lifestyle is amazing, you got rich parents, cost of living is low, people are going to go out and just have fun and live their life. If the nightlife sucks and there's nothing to do, like San Francisco, like literally, if you're in Palo Alto, your last meal is 9:00 PM. Unless you're going to like the 24-hour Denny's. Like there's like two choices, Denny's and like an Arby's by the airport. Like that's it. You know, even In-N-Out Burger closes like at midnight in the Bay Area. So.

This is why I never actually believed the VCs who said that Miami was the next big startup town. I'm like, it's way too much fun. I mean, it's kind of boring. I, I think San Francisco, I'm way more social. I have way more fun in San Francisco than Miami.

That's 'cause you like to go to hackathons. That's about you, Ryan.

Yeah. I was not going to the club or surfing. Are you surfing in LA? What are you doing?

I went surfing the first time this year in Costa Rica. It was so fun.

You didn't get the bug. If you got the bug.

You'd be out there surfing four days a week.

Yeah. That's when you know you're [ __ ] with your investment is when the founder is surfing four or five days a week. LA is amazing for lifestyle. Sophia knows that.

It is. I have zero companies in LA.

I mean, had I mean, getting people to work hard.

Yeah.

Is my like, I, I've developed strategies around it, but I have now realized like working hard and putting in 10, 12 hour days and effort is for 10% of the population. Like having a career, I think, is for 20% of the population. I think just everybody else's live to work to live now. The, the number of people, and it's a generational thing, and it's no judgment, it's just the observation. So.

Big time.

I just, um, hosted Trust Fund's first founder residency in May, Orca for a week. And so invited all my portfolio companies out. I was like, I rented this, this, I mean, very, the management fees on a $5 million fund aren't very high, but I dropped like it was probably a $20,000 expense, and I got this like seven room villa and was like, if you want to come out here, I've got this. I'll feed you. I ordered a chef one night. We went out to different restaurants. We went to the beach once. We went on a boat, which was like amazing.

Did people co-work?

They co-worked. Yeah. And I sat with them. I'm like, "Oh, cool. I get to be in Spain, be near the ocean. These guys get to sit near our pool. We get to talk about like, you know, whatever latest thing they're paying attention to or reading, and all educate each other. I get to sit there and mentor them like on my time zone, and everybody kind of like gets what they want and like get to build relationships." So, I'm really excited to institutionalize that into the fund because it's like a self-genius.

You know. It's I feel.

It's genius. I.

It's just like no comp, no talks, no just totally unstructured, you know.

But what I love about your idea is that's going to inform your follow-on investment. It's also they're going to help each other. So, we call them jam sessions. We do something similar, but it's just a jam session or a pod. So we have our companies get together and do a pod where they meet every month, and we have 11 investment team members. So they have about 30 potential founders in their pod. They get five to 10 to show up every month. They share what they're working on, what their challenges on. You go around the circle and they help each other, and we're just facilitators. And founders love meeting with other founders because I, my thesis, Ryan, is founders are mutants. Uh, and like I get to be Professor X, you know, like we're the school for mutants, and they feel uncomfortable around humans, but they feel very comfortable when they're with other mutants. You, when you see those great scenes from the X-Men movies when they're in the school together, they're like joyful and fun, and nobody's being judged because like, I can make an ice cube, you can light something on fire, I can walk through the walls. Yeah, we all have something we can do that's an incredible skill. But then you put them with humans, and it's like they're misunderstood, you know, and they're just.

Well, they don't, they don't trust. I mean, there's a lot of empathy and like trust that that's, uh, we, we used to actually do this at at Weekend Fund. We just opened it up to the portfolio saying, "Hey, we're going to do a Zoom hang. There's going to be max five, seven of us, and we're just going to chat about like what we're working on, what challenges you have," and, uh, yeah, there's more trust. And, of course, you put that same person in front of like a VC, especially or their team, like they're going to act different. They got to, they have to look confident. They can't be honest. Uh, it's a totally different, it's an environmental thing.

Is there a way you guys, do you have like a Slack channel for your founders? Is there.

We have a Slack instance. Yeah.

You do. Do they use it?

It's unbelievably popular. We have.

400 portfolio companies in the 12 years I've been doing this from a Sequoia Scout Angel Syndicate to now. And, um, we even have the failed companies in there that are shut down, and we let them stay there. And we have an accounting tax channel, a growth channel, and we have their, uh, channels, and we have our entire investment team in each of the private channels for their companies, and we'll talk to them there. Uh, and they help each other. It's not us leading it. They lead it. Um, and it's, and then there's book phase. It's, I think it's a great thing to do. Persistent, great place to do it. You have to also staff all these things. So, as a fund, especially a small one, you got to pick, like, you can't start 20 programs. You got to pick the three most effective that you enjoy. So, what's great about the one you chose, Sophia, is you like to be in a great Airbnb in a city and try new food. You're like me. You're a foodie. You like to travel. Ryan likes to be on his computer. Watch Product Hunt. He's obsessed with being on his computer.

He's a surfer.

No, he's surfing. Ryan surf. Yeah, once I have once.

But Ryan really likes to be online. He's addicted to being online in online communities. He created one of the great online communities of all time, Product Hunt. That's you can always tell it's a great community if it still exists. Product Hunt still exists. So that means it's a great community that got product. So that works for you, Ryan. You like to co-work. Sophia or I, co-working for five hours on a Zoom might be death. Like we might be like, "Oh, this is draining to be on a Zoom."

Yeah.

It's so draining, you guys. I have to go. Sorry.

Yeah. No, that's that's why we came here for. All right. What are the new stories? Let's do lightning round news stories. This has been great, guys. It's just great to catch up with you, too, and share notes.

I was so intimidated. I still get so intimidated about joining podcasts for whatever reason. Unless, you know, most people just want me to babble about my life, and it's like really easy to talk about yourself, but talking about smart people things, I'm like, am I smart? I'm just always asking myself if I'm smart enough to.

So full of it. I know you're [ __ ]. You're like, I've only built a $350 million company.

It was overvalued.

Not your fault. You just constantly, you've nailed it. Like self-deprecating being inside my head. It's [ __ ].

You're just saying that's why I always send you. I.

I always send Sophia a thumbs up or a heart on her social just to let her know like, you're doing good, girl. Keep going.

You can do it.

All right. You know, I always like to give everybody the ability to plug a startup or two or an investment or two that they're super excited about.

What do you got, Sophia?

And maybe Alex, we can show whatever she pulls.

You know how I, you know, when you were talking about portfolio companies working together, one thing that's really cool is, um, one of my portfolios, well, Nectar Social is a customer of Agree.com. And Agree are another one of the breakout companies I invested in. Pre. They're basically going to replace DocuSign. And what they're creating is a, a signature to payments flow where when somebody signs an agreement and there's an invoice associated with it, they pay before the flow is over. So you don't necessarily have to send an invoice. And so they have a lot of SAS companies. They work with Beehive. Um.

I made a TikTok about them and I guess like they got like a four million customer with like $4 million a year in revenue, like who like found them on my a TikTok, which is like really cool. Um, but yeah, they've got like 40,000 customers. Um, and they, they came to me through, I literally like look through the, you know, the pitches that come through the website, and most of them are like consumer, just like off-thesis. And I, I looked at this and it was like Agree.com and I was like, what's this? So they just literally like cold pitched me. They could have gotten to me like, we, we know mutual people, but they cold pitched me and I was like, this. And, um, they just raised like a $10.2 million seed round like a year after their pre-seed. So yeah.

And Sophia, you also mentioned, um, Baton.

Yeah. So Baton Market, I invested at seed. Um, they just raised, uh, their their Series A from Obvious Ventures and so they are building a marketplace for SMBs to find qualified buyers and for people who want to buy mostly like local kind of ugly businesses, I guess, is the, the trend. Um, you know, profitable businesses, someone who might be doing like a roll-up of like dry cleaners or, you know, yoga studios or coffee shops. And so, um, Baton Market makes it really easy for people to acquire companies. They're doing an amazing job. So.

Awesome. Now Ryan, you sent in and three companies of yourself, I believe. One of them was Deal, which we've already talked about, but you also mentioned Atlas, which is a very interesting company that I did not see coming.

Yeah, Atlas is, uh, so Met Mohawk, we invested in the C round, has gone on to raise a Series A and B. And what they're building is a sort of a layer to apply for a visa, particularly starting with with Indian, uh, travelers. US in the US, we sort of have an advantage, like we don't need to apply for visas, um, you know, for a lot of different places to, to travel. But for Indian, you know, consumers, they, they need to apply for visas. They have to go to these like janky government websites and wait a long time. And they basically created this, uh, really clever wrapper, not in the the negative sense, but a wrapper around this entire experience where you can actually apply and do everything within the mobile app, and it also shows like your tracking and everything. And it's just a really interesting space. It's a massive market, uh, that I think a lot of people are overlooking. And my, my favorite part about Atlas is is Mohawk in the very beginning, he was just like, effectively building APIs on top of government websites through like web scraping was how they started. So it's like, all right, these government websites don't have APIs, they're not like modern. Let me just like effectively build our own API and build on top of that. And, you know, this is also a time like right before COVID hit, which is also an interesting time to be building a business like this. So anyway, I, I love the CEO Mohawk and and what he's building there and and, uh, just creating like more flexibility and, and, uh, convenience with traveling is just, I think a net positive for the world too.

Okay, Jason, what do you got?

Uh, so we just wrapped up Launch Accelerator 34, and two companies that really got a lot of attention. One was Autolane, which is by a serial founder. Um, he previously had a company called, um, Neighborly, which you, which rented, um, storefronts. And Neighborly was this great idea that died during COVID, victim of the COVID wars. But you would take a storefront and people could go there and rent it by the hour for a book club, for a rehearsal dinner, for an offsite. And people loved it. And there was all this extra, you know, if you live in LA and you've been to like, I don't know, West Hollywood, there's all these storefronts or Montana or, you know, there's all these storefronts everywhere. And so imagine taking one of them and making it an Airbnb, essentially. Anyway, that failed. He came to me with this new idea, Autolane. He said, you know, self-driving's here. And I said, "Yeah, I'm aware. Uh, I got a couple investments in that space." Uh, and he said, "You people are going to be doing self-driving deliveries and pickups." I said, "Say more." He said, "Imagine your Walmart, H-E-B is the big chain of like, um, grocery stores in Texas where I live, and you have a Tesla coming to pick stuff up, a DoorDash car, an Uber." I'm like, "Well, they have all those coming." He's like, "Yeah, it's chaos already." Now, imagine you add 10 different fleets of automated cars. So, they're building the operating system to manage that. So, they sell into a Walmart or to these other places. You can pull up the website and, um, that gives them software to know, hey, these are the parking spots for parking spots for the automated vehicles. And Ryan owns a Tesla Model Y. Ryan, you might send your car to the Central Market or this Whole Foods. That's a distinct possibility. So instead of ordering from Instacart, imagine Ryan, you ordered from Whole Foods, and then Whole Foods brought it out to the curb and put it in the back of your car.

Autonomous without me doing being there.

Without you doing it, but it's your car.

Yeah. Right.

Or so now Sophia, imagine like, oh, you get dropped off at work, and then it goes and picks up your air lunch and your team lunch and then brings it back to your office and parks in your parking spot. How does that whole handoff at work? Then imagine Erwan or I don't know, um, pick a company, Domino's Pizza decides they want to own the fleet. So Domino's Pizza says, okay, we're going to have five Model Ys or Waymo is selling their technology to Toyota now, and Volkswagen has their own thing. So they buy five Volkswagens and they decide they're going to send these Volkswagen IDs out to deliver pizza. Well, they still need an operating system to manage all that. So anyway, he's building that operating system and all the handoff, and he's super early. But what was amazing is this founder is a fundraising machine, and that's a new criteria for me. We have 13 criteria for investing. Product velocity is one of them. World-class design, serial founder, and alumni of our programs. This person has all of those, but he's also a fundraising machine. So I edit that as one of our 14th fundraising, uh, machine as a tag for like a founder we love because some, we have some founders who are great at product velocity and great ideas and great at recruiting, but for some reason they can't raise money. Infuriating and frustrating because it's like they have all the other qualities. So anyway, I love that one. And then another one that's really interesting, this team I think came out of Google or Uber, I can't remember. Um, and it's called Doctors. And you may have heard people are doing self-directed healthcare. And where you're seeing self-directed healthcare most of all is in travel, uh, um, elective surgeries. I don't know what they call those, but elective surgeries, uh, and traveling to places where you have the highest rated providers, um, and the lowest.

Medical tourism.

Medical tourism. Thank you. So medical tourism is part of a subset of a bigger theme of self-directed healthcare, which I think like, um, superpower, Whoop, Aura, Eat, Sleep, that's all like self-directed healthcare. This is different. This is like elective. So people are going for dentistry to Mexico, stem cells to, you know, Panama, um, all types of augmentations and facelifts in South Korea. So they started with hair transplants in Turkey. And then their, their secret that they figured out that nobody else did is this is all happening on TikTok. And there was this like fear that people had, is this safe? Should I do this? And then there's the people who are, you know, have these centers in Turkey and they're trying to convince people it's safe. And it turns out TikToks help people bridge that gap. And so that's their first one. And then the next one, I didn't know was in Spain, Portugal, France, um, freezing your eggs and doing IVF is like $5,000, and in the United States it's $30,000. So now people are going to two harvest cycles for 60 days. And it's like, so I asked them like, when people do that, are they doing it because it's that much cheaper, or are they doing it because they want to have a two-month vacation in Spain or Portugal or France? And you know what they said to me? Yes, it's both. You can spend $5,000, get an Airbnb for $5,000, have an incredible relaxing 60 days in France, harvest your stuff, and but you need to have some marketplace between them. And so they're the marketplace between them. So there's two, uh, that just graduated last week or this week actually from the Launch Accelerator. If you want to come to the Launch Accelerator, launch.co/apply. We've done 34 cohorts. Um, it's been really fun.

All right. Well, friends, that brings us to a wrap for today. And Sophia, thank you so much for coming on. Where can people find Trust Fund and where can people find you on the great wide internet?

Trust Fund.vc and then I'm Sophia Amoruso pretty much everywhere.

Pretty much everywhere.

Instagram is you're big on Instagram.

TikTok.

Yeah, you.

I spend as much time, I don't always cross-post, but yeah, I'm just focused on Instagram. I'm an elder millennial.

Yeah, elder millennial Instagram, right? Yeah. I'm a Gen X, so I'm on X.com Twitter. Yeah. Uh, where are you? Millennial Ryan.

Millennial Ryan. I, I'm on Twitter. That's where I spend most of my time. R Hoover. And, uh, yeah, I'm not on T. I mean, there is a TikTok, you'll find it if you search, but, uh, I'm not going to.

Not going to say it's good content. Uh.

And the website is weekend.fund, I believe.

That's right.

Launch.co.

There you go.

With no M. I'm still trying to get the launch.com, but I'm fine with the launch.co. Founder.university, uh, which is our pre-accelerator where we teach people how to start companies, which will be coming to Saudi. We press release went out. I haven't really talked about it too much publicly, but Founder University's second city in the world will be after the United States is going to be in Saudi, and then I'll probably bring it to two other countries in 2026 or announce two countries in 2026. Um, and I'm Jason on Instagram and Jason on the Twitter X.

All right. Well, we're back on Friday. Thank you all very much. We'll see you then. This has been Twist.