Twitter, Bitcoin, Marc Andreessen discussed on Messari's Unqualified Opinions
Cash returns for your investor. And that's when you get paid and the hard part is a lot of venture. Investors have paper marks materializing paper marks into cash Account which is how you get paid is a very different thing right. So for a lot of investors you know the first five seven years with our fund or Great. 'cause they're marking round after round and UNIM- paper. They're doing really well right there. Unrealized IRR or their internal rate of return is high but they're realized IRR is low right and ultimately at the end of the life of the fund their td Pi or their total value created to paid-in capital is going to be low especially if your accounting for the market. We're living in now or the. Snp does twenty percent. You're not really clear if performances there especially given the opportunity costs in the time value of money right so then the question that I think becomes more interesting is. How do you stay a venture investing strategy into a broader sort of play where you are an operating company is a bunch of different ways of making money and so a coin shares we have capital markets team where we have historically been Meaning we don't interact with external counterparties we trade our own book but we're starting to change our capital markets offering an open it up to external partners. So we do there is we do market making cross number of different markets where we have a bunch of stuff. We've built to help our trading team. We've built a bunch of different connectivity offerings a bunch of different solutions for traders that we can now start to offer externally to the market. We have a cash lending books that were working on expanding and instead of working with just one or two counterparties wieland cash too we WANNA go directly to the people who want to borrow There's a lot of things you can do in the capital market side where we start plugging our companies into what we're doing there. We start providing them with liquidity connectivity. Let starts to get really interesting. That on the asset management side right. We're creating financial products. We have eight listener products in the European market. So what are the opportunities to create new listed products that we can bring to market for both retail and institutional investors and then on the advisory side? We've got some really cool stuff. Planned on capital raising 'em as well as project emanate that we've been working on the we think's GonNa be really interesting compelling for the market inciting a gun is you think about being an investor. They're all these different hats. You sort of wear but at the end of the day. It's not just like nobody's a one trick pony anymore right if you look at the direction. Adventurous headed there. Basically only chew ends of the spectrum where I think it makes sense. One is your mega firm. You have billions of dollars of a U. N. and you are a powerhouse investor. Because of your you got an early before the remodeled really existed and you helped create that category so effectively. You're the category King Adventure and if you look at the firm there it's like Sequoia Andriessen these firms that have been around for over a decade the opportunity to post returns and they've built their own unique special sauce. The by the way like a lot of what goes into the secret sauce at these firms is corporate development. Dave whole army of people who are going out and finding customers for their companies going out and finding potential acquirers for managing a lot of the connective tissue. That most people don't think about right. You see Marc Andreessen on the screen like delivering his talk. There's a whole organization of hundreds of people who make that possible right. They help create that magic and I think on the other and they were playing here in that regard right. I absolutely were. I'd say. Dc G was certainly one of the early movers in that regard and in building out at work and having the roll around you is as prominent as it was in winter up to threats But the model is moving to write in what we're seeing more of like to be ineffective in investor and to help companies today. There are three things you need. One is capital two is influenced at three as a network. Right and what? I think it's been really interesting here. You look at someone like myself right. I don't necessarily have a lot of capital to invest but have influenced. I have a a network. You look at someone like Tom Brady. When pomp came into the industry he didn't have capital to invest but he had influence he built influence and he started building network through his influence and he got the capital piece on the end by partnering up with someone who had capital. Didn't have influenced or network right so you find different ways to piece. That together would think so interesting. About Kirk does have a bunch of people who created wealth for themselves who have capital who now are starting to have influence in world. Starting to have a fairly sizable networks. Who can start to apply that capital different ways inciting the really big challenge here is like we just saw the first series get done. That didn't have a single institutional lead. It was all Angel Investors. Right which pretty cool fifty seven million dollar round and it was a bunch of angels over one hundred people on the CAP table. I think we're working on a deal right now where I'm trying to do something. A little bit similar. Where there isn't one massive institutional lead. We have a group of people who bring their capital influence a network to the table. He is arguably capitalist cheap. Right money costs nothing as we've learned from she eats what's happening in macro markets. Money is fucking everywhere. One point five trillion dollars of dry powder on the sidelines right now in P. E. N. B. C. There is a faulk load of money like an absolute metric. Fuck load of money out there. Huge amounts and the difference between a company that wins a category and a company. That doesn't a lot of times is not how much money you have. It's the people around the company who have influence and the people around that company who can connected to valuable network. So who's GonNa help you find? Your first customer is great if she can raise you know huge round of really favorable terms. But if none of those people on your table can help you find your first customer. Help you hire a VP marketing helped you connect with to corporate partners for going to help you distribution the amount of You have doesn't make a difference and so I think we're at the starting point of a huge change in venture works where we're seeing a lot of people look at Angel. Funds seed fund scout funds different models. For how sourcing might work but also I think a lot of it goes back to category leadership and how you create an peddle influence right is done on the Internet. And if you're not spending time on the Internet peddling influence like I don't know what you're doing investing space could not agree more. I've I've come at this from a couple of different angles. You know when when I think about Bring it back to cryptos nothing like Dallas Don't get excited about community allocation of capital I get excited about community allocation of LP commitments yet Batesville picking the stock pickers picking the people that have networks that have influence because the logos are not as important as the faces anymore And even when the logos are important they're usually only important as like resume fodder for the faces that are now the new influencers and what. I think is so interesting one thing. I've definitely started to notice is a lot of the deals. I'm doing is like the same ten people in the deal right and so we're starting to see in the crypto space is. You're starting to see like when you own is. Starting Crypto Ryan Twenty fifteen. It was one massive category. And I feel like there's been these sub communities that have formed like I might no means an expert defy. I'm not hot on the pulse there because it's not a big part of mine mustn't thesis moment professionally personally hugely interesting. But there's a lot of stuff going on. I can only focus on so many things so when I want to know something about defy their five people go to and they're the in my view. The people who are best equipped not privacy. A lot of time on it by no means expert. Either list of five or ten people who I go to both inside and outside. Cryptography right and applied. Cryptography of people will talk to. Who knows way more about that than me? Who I think are the influencers atteberry. I'll go ask them questions about it. So you think the other piece is also constantly keeping a Rolodex in your mind of who you think is the smartest on different topics that you are not smart on and going talking to them and testing the validity of your ideas because all listen to someone explain something to me are all find a company and be like this is so interesting so cool and then. I'll go to six people who know that idea better than I do by the way also connected to six people who've built businesses like that in a legacy status and they'll tell me a million reasons why Willer won't work with the issues distribution model or Motto are receive. You're constantly testing your own thinking and talking to people who are smarter than you. By the way the way I find all of these people twitter like ninety nine hundred. Ninety percent of the Missouri team has been hired from twitter me most of my professional relationships. They all start on twitter. Pd leads You know even folks that are interesting that I didn't And this is the real shame of twitter that I can't tell you how many thousands of dollars per year I would pay for some enterprise subscription that could triage the gold mine of followers that you just don't even know about in many cases because they might just have Egg and there are more passive and they're not pushing content out so much as absorbing it but still could be highly would pay a lot of money for is messaging aggregated. Because I feel like I have a telegram. What's up like all of these different channels and it's literally twelve platforms. The thing is like twelve so the hard part is like. Where do you action things right so I get all of this like fodder everywhere but none of it is actionable unless it hits my inbox because I use my inboxes a to do list which why delete of emails some like? I don't have to do anything goodbye. There's no way to effectively action. And so what ends up happening in this age of like ideas coming from everywhere is everything goes into this giant unless funnels down into one place for your actioning is really hard which I think by the way. Big Trend of the next decade is GONNA be aggregation in different forms. We already see this like in financial services and we see a messaging but it's very very low low level and it's because things aren't interoperable futures could be hugely important because if it doesn't get into your final filter and then it might as well basically not exist so I think as inkster to learn more about the Roi across these different platforms. People are going to optimize for the places where they're going to maximize our ally and so you're gonNA see networks Value because starting networks aren't good at creating value and that just goes back to the CRYPTO premise. Right which is the networks that create and sustain value. Are the networks? Where people are going to spend time. Bitcoin has created a lot of value in staying out of values. So lot of people. Spend time calling and by the way if you talk about Bitcoin you way Martin attention on social media because the bitcoin network is much larger than the network for anyone. Individual Protocol like. I don't think enough people think about how network effects compound across a lot of different Sort of categories so financial network value on social network value and then beatty in SORTA monetization should network value and starting to bring those together like Bitcoin has done not the best so far. We'll always do that. The not sure maybe not at right now. You know odds are looking good again. Just don't understand why people don't think about optimizing Roi. I see a lot of people spending time on things that are very low. Roi In every sense of the word and if it's low are Y and there's no way of scaling it it's not GonNa work. I don't mean Quin Quin. Shares in menuires wide certainly were obviously information aggregate or the Creator. Sorry bitcoin chairs as many ways and activators. Well right it's an. It's an aggregate or financial products or folks are looking for exposure this asset class between lending side market side the demise and look by the way. We didn't do a job at that internally. I think we spent a lot of the last twelve months. Searing out. How do we want to go to market? And we realize being in aggregation point is the best play. Now the next step is how do we aggregate in? How do we bundle a new ways? You know if you told me. Hey go run you know an ETF company would be like so was your closest companies gene. Probably and I think the reason why is the business model that works and I think it's without a cash cow business which is asset management trading..