00:12:30 · Ron Biscardi
[00:12:30] S0: Well, I'll say this. The the, you know, the market is moving so fast. It's always hard to know where... Exactly where the sentiment is. And you know, you've seen a little bit, I would say more concern in the market as to whether or not we're in a bubble and how close to the bubble bursting if we are in a bubble. But then this election result, I think primarily as a result of what will now be divided government, sent the stock market on a tear yesterday. So it it is hard to really know, but I can tell you this. Venture investing, which is where Anthropic sits, right, they they were a venture funded company, venture funds have had an incredibly hard time. The top top funds, this doesn't apply to the top funds, can pretty much always raise money. But as an asset class, venture has had a really hard time raising money for really the last three or four years, and it's primarily because their funds couldn't achieve liquidity on the on the investments that they made, even the ones that were really successful. I mean, SpaceX is actually a great example of this. SpaceX is about twenty years old. So here you have this company that in any other era of our stock market over the last hundred years would have gone public like fifteen years ago probably. Didn't go public because of the the change in our public markets and this whole process and and also the availability of capital in the private markets has been so much larger. Companies are just staying private much, much longer. But what it's created is a lot of anxiety for the institutional investors who are used to... You know, if you're an institutional investor and you like your venture fund and you you generally invest, call it $10,000,000 per fund, what you're counting on by fund three and fund four is that funds one and two are starting to exit their investments and you're taking the cash flows from those investments and you're recycling them back into the future funds. Well, if those cash flows don't materialize, you know, now you need to find other sources of cash. You know, if you're a pension fund, it's the retirees or... Not the retirees, it's the future retirees who are paying into the plan. Wherever your cash flows are coming from, they're not coming from your investment portfolio.
00:15:01 · Ron Biscardi
That has been a huge issue which really hurt the ability of, I would say, illiquid funds, private equity, private credit, and maybe not private credit as much because they do cash flow more, but venture, I think, was the most hurt by this dynamic. And we saw at our our cap intro events over the last three years, venture funds had the hardest time even getting meetings with institutional investors because they felt like I can't keep putting as much capital into this illiquid asset class that doesn't return money fast enough to me. Well, with the year we've had in the IPO market with SpaceX obviously leading the way, that whole dynamic shifted dramatically. And and I saw it literally across two events. One I held in late February where venture funds really, really struggled to even get meetings. Then I had another event in New York in June, completely different scenario. Venture funds were the belle of the ball. They got a ton of meetings and we saw, wow, there's this huge renewed interest, obviously very much tied to the timing of the SpaceX IPO, I'm sure. So I think with Anthropic going public, my expectation is that that momentum that started mid year should absolutely carry through. And we are seeing it in another event that we're throwing in Austin in a couple of weeks where we've got thousands of people coming in to meet with tech CEOs. So I do think there is still tremendous interest in... Look, if you want the best investment returns, you have to be a tech investor, generally speaking. There are pockets where really smart investors create other strategies that may perform for a period of time. But generally speaking, the best investments in history have come from technological innovations driven by companies like SpaceX and Anthropic. So my expectation is that this is gonna run a fair amount longer. Another, I'd say, difference in this particular era of tech investing is that these AI companies are generating tremendous amounts of cash flow or I should say revenue. Anthropic's revenue growth is like nothing we have ever seen from any company in the history of business. That's really, really unique. I'm a business guy who grew up in the .com era. And I remember to this day how we would meet companies that had no revenue, really no customers, but they had a ton of eyeballs hitting their website and they were raising millions and millions of dollars.
00:17:41 · Ron Biscardi
In the midst of that, a lot of us were looking at it saying like, this is crazy. Like, this has to be a bubble. This can't go on forever because sooner or later, you have to generate revenue to survive as a business. That's not the case in this AI era. These companies are incredible revenue generators. So it's it's a real... It's a really interesting twist to figure out, well, is it really a bubble? If you go from 0 to 16,000,000,000 a year in revenue in four years or five years, whatever it's been, that that company should be worth a lot of money. Now I don't know if it should be worth 2,000,000,000,000, but but it is certainly an incredibly valuable asset. So investors, I think, are are trying to figure out all of these, you know, different dynamics. And it... It's... My my guess is that venture is gonna be a really strong asset class for at least a few more years.
00:18:40 · Anthony Pompliano
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00:20:19 · Ron Biscardi
[00:20:19] S0: Bitcoin? So, I will say, like, digital currencies have been a wild ride in my world for, like, five years now. We saw the, you know, the huge spike that happened and then the nuclear winter of, of crypto. I would say institutions have been curious about this for a long, long time. I think, generally speaking, where, you know, five or six years ago, there was a huge percentage of them who just thought Bitcoin is snake oil. Like, this is not real. This is never really gonna be an investable asset class. That has completely changed. I would... I don't really know anyone who says anything like that anymore. I think people now see that it is a completely legitimate asset class, but I I think a huge disappointment, frankly, of the Trump administration has been the inability to get regulations passed to make it institutional grade. You know, if you're if you're a portfolio manager for a sovereign wealth fund or for, you know, a multibillion dollar endowment or foundation, you need guardrails. You know? You're... You don't wanna put certainly a large amount of capital at risk into an asset class that you don't know has the proper guardrails. Like, our our public markets are incredibly well functioning. They're the best public markets in the world largely because, I mean, obviously, capitalism at the core of our system is the main driver, but you... They wouldn't be as successful as they are if it wasn't for the regulatory infrastructure that also protects investors and that sets up... You know, it's like you can't have a football game with no referees on the field. You know, you need rules and you need a system for all the players to play within. It needs to be fair. And we thought the Trump administration was gonna make more progress, I think, in this regard to to create that for the crypto industry. It hasn't happened. I think if it did happen, you would see a massive influx of institutional money come into this asset class that frankly, I... Will they dabble in it and throw small small checks, you know, small percentages of their overall portfolio into it? Sure. So, like, get more familiar with it. But... And it it is popular at our cap intro events. Know, we'll have 50 to a 100 funds that are in crypto or at least have a significant amount of their investment strategy in crypto.
00:22:56 · Ron Biscardi, Anthony Pompliano
And they get a lot of meetings with investors, but I don't hear the next step, which is stories of how those investors are writing billion dollar checks to go into those funds. There are some funds who have reached scale like that, but I think most of their capital is coming from family offices and individuals more so than pension funds and foundations, endowments, sovereign wealth funds, groups like that. We just need that regulatory infrastructure. And if we could do it, I think the asset class would absolutely explode. [00:23:32] S1: Now when you think about unlocking that capital, is it just a matter of, like, regulation and and kind of government related things, or are there other aspects that are important for for that capital to flow?