This Week in Startups
01:10:48 · Elana Gold, Tomasz Tunguz, Jason Calacanis
[01:10:48] S2: It's so crazy because I always said you could really go gamble your life savings away, go on debt, but you can't go invest in startups if it's something that you believe in. And if you go, who has a huge voice, and you want to go raise publicly, suddenly now you're not just an accredited investor, you have to be a qualified purchaser. Now you need, what, dollars 2,500,000? And so I think it's so crazy, this aspect of like, hey, could go gamble away your life savings, spend it all on whatever it is that you want to buy, but you can't go invest in Startups. [01:11:15] S3: You could put it on Black [01:11:16] S0: or rent, put it on Black. [01:11:18] S3: Then just to go back to the original point, think about how different the narrative would be if every American had exposure or could have had exposure to Anthropic at the Series D and beyond, and you could ride it the whole way. And so that data center down the street is actually what's paying for your kid's college.
01:11:18 · Tomasz Tunguz, D.A. Wallach
[01:11:18] S3: Then just to go back to the original point, think about how different the narrative would be if every American had exposure or could have had exposure to Anthropic at the Series D and beyond, and you could ride it the whole way. And so that data center down the street is actually what's paying for your kid's college. [01:11:33] S1: What these asset manager scam artists are going to do, what they're in the process of doing is they're gonna try and foist all of these private vehicles that can hold these private company securities on savers. So the the argument is well underway that the average person should be able to hold private equity in their 401 account, should be able to hold private credit in their 401 account. Now, the reason this is happening is because ETFs have commoditized active public equity management. All the money's gone from that. You can't charge 2% anymore to pick a bunch of great tech stocks in a mutual fund. And so what all these big asset managers have done is they've tried to find new strategies that they can launch where they can still charge. And that has been the private stuff. So I think this is all rotten. I want these companies public earlier. I'm sorry. If you've got a $5,000,000,000 company that's doing $800,000,000 in revenue, why can't you be public? What are you scared of? Why can't you disclose your financial? Why do we need to wait so long to see Anthropic's financials?
01:12:47 · Tomasz Tunguz
[01:12:47] S3: There's two regulatory reasons. The first, just to put this into perspective, I was working with a company that was about to go public. The financing cost of an IPO of 25,000,000 this was ten years ago, 25,000,000 on a company generating $100,000,000 in revenue. So just the expenses associated with that transaction compared to a private market transaction, which would have been $506,100,000 dollars were inordinately high. I think the second thing that really changed this and really allowed a lot of private companies to remain pub... Private is the Jobs Act. The Jobs Act allowed a private company to massively increase the number of shareholders. And it used to be there were two reasons why you needed to go public. The first was you needed access to a huge quantum of capital that's not available in the private markets. That's clearly changed. And the second was you needed to raise from more and more people, and so at some point you exceeded the shareholder count. So there you need to go public. Both of those have been relaxed, and I think the second order unanticipated effect of both of them has been that the total number of publicly traded companies is significantly less. And the reality is the private markets, you know, you can look at private credit, which has absolutely exploded, right? Global private credit is $4,000,000,000,000 That comes out of the, 2,008 legislation because now the banks are no longer allowed to lend, so you need to find lenders in the different private credit markets. But I agree with you. I think there is a transparency that really needs to start to happen because a lot of retail capitalists are starting to come into privates. Privates are exploding because really tough for them to go public for one reason or another or just unattractive. And so we have this new emerging market that has a lot of opacity. Mean, you figure out how to make it more transparent, but I would argue not regulate it in the same ways that we have in the past because otherwise we'll just recreate the same problems that we were the same second order consequences that the original regulation produced.
01:14:31 · D.A. Wallach, Jason Calacanis
[01:14:31] S1: Well, I think we've got I think the one possibility that maybe hasn't gotten enough heat yet, and it kind of harkens back the tokenization stuff in the crypto world, is what's... What you're seeing with Hyperliquid, you know, in particular. Explain what it is because [01:14:48] S0: I don't know if everybody understands what [01:14:49] S1: Hyperliquid is. Platform, It's a protocol. You know, it's a crypto ish kind of concept where decentralized market participants are basically able to create effectively... Think of it as synthetic securities, whereby you can bet on anything. You can bet on private company valuations, you can bet on individual company milestones. If it were a pharmaceutical company, you could bet on an individual clinical trial, not just need to buy the entire Pfizer stock and their huge portfolio where the one trial you have an opinion on is not gonna move the needle on the overall valuation. And this really marries with what we've seen happen in the prediction markets world. I believe we may be right on the doorstep of this whole conversation we just had becoming totally irrelevant because it's kind of gonna supersede. I mean, it conceptually supersedes the regulated securities market entirely. Just as an end run around the whole thing, it's permissionless. I don't need some SPV hustler to get me into Palantir or rather to Andreessen Horowitz or something. I can just like make a bet on it in some weird synthetic market. [01:16:09] S0: This is, I think this is Hyperliquids market for Anthropic. I'm not sure yet.
01:16:09 · Jason Calacanis, Tomasz Tunguz
[01:16:09] S0: This is, I think this is Hyperliquids market for Anthropic. I'm not sure yet. [01:16:18] S3: No, is for, this looks like the USDC market. [01:16:20] S0: Oh, USDC. [01:16:21] S3: Yeah, it's a stable coin backed by a US dollar. But I agree with you. I mean, so tokenized assets, which is what you're talking about, can you take existing equities and debt and move them on chain and then trade them twenty four hours a day? It's growing faster than AI. It's the fastest growing technology market in the world. It allows people outside The US to buy US stocks. It allows US investors to buy Korean stocks if you really wanted to get a stock, a share of SK Hynix, actually really tough. And you should be able to get exposure. The other thing that's really interesting about these markets is there's a new kind of option. For a lot of people, myself included, options are kind of impenetrable. You have all these Greek letters associated with understanding what they do, but there's a thing called a perpetual option or a PERP, which makes it much simpler. I can decide, Okay, let's see what's happening in the Brazil election. I want to short that economy. Here's a really great instrument for me to do it. Many of the major, the largest banks in the world are pushing extremely aggressively into tokenization, both of public and private assets in equities and credit, and it'll be a huge wave. So I totally agree with you, D.
01:17:24 · D.A. Wallach, Tomasz Tunguz, Jason Calacanis
[01:17:24] S1: I mean, look at... Jason, you gotta pull up pull up the Kalshi Perpetuals markets. People need to see this. I mean, what Thomas is talking about is crazy. And if you pull that up, you're gonna see... You can bet on anything and the price ticker... I'm sure you've seen this, Thomas, and and Elana. The price ticker's moving in real time. I mean, this is catnip for a gambler's mind. [01:17:48] S3: Well, and then Jason just had the Anthropic, pair up. And what's amazing is two or three weeks ahead of an IPO, you have price discovery happening on these exchanges, which means as a retail investor, can say, like, oh, I think the right valuation for this business is 1.75 or two, and I can make a bet. And all of a sudden now, I have access in a way that I didn't have before. So it's... I think it's a really exciting phenomenon. [01:18:11] S0: Wow. You can put on whatever leverage you want here. [01:18:14] S1: Yeah. You you see that little purple slider over there? [01:18:17] S0: Uh-huh. [01:18:21] S1: Okay. You can just you can just put on a bet, and you're just voting up or down with up to almost seven times leverage. Wow. And they're doing this in real time and you're going to have this at least outside of The US on virtually every asset, including any derivative you can make up. So I think there's a good chance that this just eats a lot of the capital market if it were left to its own devices. Of course, regulators are not going to let that happen. This is going to be heavily regulated in The US. But, you know, we'll see how much they tighten the screws on it.