TWiST LIVE News Record!

TWiST LIVE News Record!

some new software here at this week in startups the new software we’re trying is called restream.io never used this product before but it allows me to live stream to youtube twitter and linkedin live at the same time so as you know this week in startups is doing five shows a week i am not kidding five five five shows a week i’ve always dreamed about having my own daily show uh and here we are now i have my own daily show and oh my god that was a huge mistake this is a lot of work folks it’s not a mistake it’s been great and we thought we’d try something today as you know i taped the news every day what you may or may not know or you might have guessed there’s a bunch of people behind the production here and what they do is they prepare probably six or seven stories for me i pick the three that i most want to talk about and then i will riff on them they give me a notion page with a bunch of bullet points and the facts i read some of those quotes and then i riff right and we typically go and review all this uh information before the show starts and then when i mispronounce a name uh or i stumble they’ll edit it and when they edit it i will uh sound much smarter in the finished product but we thought maybe it’d be interesting for the super fans to watch me record the news i don’t know so i am watching people say hi there chef lizette how are you uh i love waffles you’re saying i love to waffle but actually i love waffles where is the next all in pod we’re taping the all in pod tomorrow tomorrow bet your bottom dollar that tomorrow will be taping it so uh we can do fun stuff like pull up here uh your questions on the main screen oh thank you for the fresh haircut i did it because i somebody did a um i can tell when i need to get a haircut because these trolls and haters mostly mostly on the crypto and tether side take a picture of the guy from better call saul who is an incredible incredible actor and then they but he’s got a comb over and then they take a picture of me with my comb over listen i have a little bit of hair left i’m trying to enjoy it for the last 10 years of my life give me a break folks but i did get it cut and it does stick up a little bit and it looks less comb over when i do it but i’m not wearing any makeup i got the bags under my eyes i’m working out really hard i’m losing weight i’m 20 pounds off my peak weight i’m gonna lose another ten catch up to sax and then dunk on them because i think you know when you’re a 50 year old guy if you get old you get some wrinkles but you have a diesel body you got that you know i want to get like the uh you know harrison ford thing going you know i want i want to just age nicely um no mohawk thank you and it is an italian town yes i got a little bit too much sun so this is really amazing i can see the periscope icon from christopher and then i see danny uh is saying i have beautiful guitars i i try to play yes young spielberg in the house on periscope which i think is twitter uh and wow this is a really amazing software congratulations to the folks at restream.io uh and yeah i have a good camera here if you want to see my setup uh the team i think can pull up any web page here so if i were to ask producer nick or charles to pick pick the sony i think i have a sony digital slr if they pull up that page i can say pull up a web page and they’ll show it here so this is going to be interesting i’m going to read two new stories that i selected for today for this week in startups because i think i have an interview after i think they’re going to pair these two news stories with an interview so can one of my producers reply on periscope linkedin or youtube so i can see you’re in there and then tell the audience what to today’s shows going to be paired with um oh there’s this weekend startups on youtube saying hi uh so i’m going to do two news stories and then the second half of the episode for today on this weekend startup for what thursday is going to be what um [Music] today’s new show will be paired with uh packy mccormick uh and so tell everybody a little bit about that um and then uh amazing yes yes he was on yesterday i taped that yesterday so just so you know how we work here there’s three uh full-time producers nick justin and rachel and then there’s sir charles and then we’re adding another producer editor so we’re gonna have five full-time people on the show they also do all in um more people commenting on my haircut thank you for noticing my wife doesn’t notice but you all notice uh which makes sense because you watch the podcast and she doesn’t ah and shelly is asking on linkedin can the producer put a kit um yes we have a notion page i think with my kit so i think we can put that in the chat room and then i would like to have uh rachel nick and justin say hi for whatever account they’re looking at i think one of these on linkedin ones on youtube and one’s on twitter periscope so go ahead and say hi and i see that on the youtube channel they put this notion so i don’t know how many people are watching on youtube but uh my team i’d like you to just give me every time we break you know 10 or 20 you know if we’re at 50 tell me 50 if we’re at 60 tell me 60 70 tell me 70 whatever it is and if you just give me updates every couple minutes on how many people we have on each one so paul tells me we’re at 56 on youtube if we get to so i’ll take one question from youtube if it gets to uh 75 on youtube i’ll take a second question from the youtube audience so and if you want to like and thumbs up and follow the channel and when you go to the channel page youtube.com this weekend if you hit the little bell there you’ll get alerts when i go live and i think that’s kind of cool so please go ahead and thumbs up smash the thumbs up as they say in the biz if you smash the thumbs up i’ll take more questions at the end so that’s how we do it here uh linkedin is streaming well that’s great a linkedin user told me that um you’ll be better looking than harrison ford i don’t think so but i’ll try i’m very committed to my health uh and to not having a comb over so i’m working on both of those things lest anybody be concerned about these two things you guys are funny okay thank you for smashing and killing the like button that means a lot all right so we’ll do some q a at the end i’ll take your questions at the end i’m gonna tape the news now and so what you’ll hear is the actual way i will do the news and you might hear pauses in here where i ask my research team in real time to clarify something or to look up a fact so this is sort of like watching you know not cnn because they just go live this is like watching a news program that’s gonna go live in a couple of hours okay here we go three two okay our first story today is a unicorn sass startup called headspin has been accused of massive fraud by the sec and the doj this is an amazing story headspins co-founder and former ceo manish lok wani was arrested yesterday on charges of securities and wire fraud according to the doj press release the charges and arrests stemmed from an investigation by the doj and sec after lachwani allegedly defrauded investors out of 80 million dollars according to the sec complaint now we’ll get into what that fraud was and did he get that 80 million or did he get other benefits and that is a key here i think when you look at these fraud cases is you know sometimes there’s a fraud where it’s a ponzi scheme and the person is sweeping the cash other times it’s founders who get ahead of their skis and maybe they get themselves in trouble or they’re delusional we’ll see what uh happens in the theranos case which i think was supposed to start in august but it’s starting in september and john kerry who was on this podcast uh right after he did the first story for um the veranos investigation into elizabeth holmes is going to be covering it live on a new podcast so i am going to try to have john kerry on this podcast and obviously we’ll be covering the varanos trial as well so uh just real quick here about headspin um they charge a sas fee software as a service to help optimize mobile app performance metrics like reducing in-app load times increasing the speed of development cycles etc this seems like a pretty reasonable idea for a business and apparently they did make money and they had a certain number of customers using it they have three pricing tiers 50 bucks a month 200 a month and some custom enterprise tier okay this all sounds good sounds like a company i might invest in and according to pitch book which is a cool database uh run by a friend of mine john gabbard who started it we knew each other from the venture source days uh we had he which he ran venture source back in the day and had sold one of my companies to dow jones um pitchbook says headspin has raised over 90 million from investors between 2015 and 2020 their data is generally right on sometimes they’ll be missing a round or two because uh not all this data is available but it’s private company data they do a really good job over pitch book so in february of 2020 headspan closed their 60 million dollar series c and this valued them at 1.1 billion they had a bunch of notable investors in this including tiger global which people have been talking about is throwing throwing throwing cash at later stage sas software companies some people are a little bit upset about that uh maybe thinking they’re not as thoughtful as they should be and that tiger is just splashy cashy throwing money everywhere iconic is also in this round gv uh which is i think google ventures uh and then dell technology capital uh and that was their series c now it was the fundraising of this round where lachwani got himself into hot water according to the sec complaint and i’ll read from the complaint right now from at least 2018 through 2020 lachwani engaged in a fraudulent scheme to propel head spins valuation to over one billion dollars by falsely inflating the company’s key financial metrics and doctoring its internal sales records okay that last part is critical they must have him dead to rights that he actually changed documents now this is where even doing diligence if somebody doctors records you might think i’m doing pretty good diligence here i looked at their sales numbers and they look good well what they change what if they went into a spreadsheet what if they went into a bank statement uh or you know stripe account or whatever took a screenshot and then actually changed the numbers that is what i fear there was some um changing of internal documents to raise money according to the doj release quote in materials and presentations to potential investors lachwani reported false revenue and overstated key financial metrics of the company when they say materials and presentations they’re meaning this the startup is deck and probably these or due diligence documents so when you sell securities stock in your company and um you know uh you change and you lie about your metrics what you’re doing is called securities fraud and it is deadly serious so um here is uh what he’s allegedly here’s what he they allege he did in terms of cooking the books uh and this is a quote he was instructing employees to include revenue from potential customers that inquired but did not engage headspin okay so that would typically be called your pipeline and i’ve seen this before index and i’ve literally instructed my founders please with the pipeline nobody cares about your goddamn pipeline talk about reality we all understand you have some pipeline but people like to get obsessed with the pipeline because it’s a precursor to actual revenue in other words the targets your sales team tell you they have who they’re engaging who they’ve emailed it really means nothing continuing the quote from past customers who no longer did business with headspin and from existing customers whose business was far less than reported revenue in other words this idiot criminal was lying three different ways at least that’s how they caught him so he was telling them telling people that the pipeline was actual revenue that past customers who churned did not churn and that existing customers were uh spending more money than they were so think about those three things that is sounds like to me a very deliberate scheme remember i just told you to be careful with arr uh on yesterday’s show and you know you really do need to be careful that when you present information you present reality that’s why i like here’s our revenue from the last three months that is so indicative of where you are as a business anything other than the last three months revenue three different numbers we were at 100k we went to 120 and then we went to 100 and you know 42. whatever it is just be straightforward when you start putting in your projections and you start putting in your pipeline or you start talking about you know at the same rate we’ll hit this amount at this pace forget all that just tell the truth investors are mature enough to understand the truth because and where that could lead we understand that companies can grow double digits and double every three to six months that’s why we’re in the business you don’t need to lie you need to just present reality so uh here’s another quote la kawani provided investors false information that overstated headspin’s annual reoccurring revenue arr by approximately wait for it folks 51 to 55 million dollars this was not a tiny exaggeration this was a colossal exaggeration so how did it all happen according to the sec complaint um lachwani’s fraud was unraveled after the company’s board of directors conducted an internal investigation that revealed significant issues with headspins reporting of customer deals and revised head spins valuation from 1.1 billion to 300 million in other words the board the board caught him at some point and then lowered the valuation now what happened here and how the board caught this that’s actually the question i have i have two theories one is uh somebody who’s on the board did math when you’re on a board of directors you know you’re kind of can zone out you know product is being shown here’s our hires here’s our projections and here’s our revenue you just assume the person you’re working with is telling you the truth what i do when i see these numbers is i do math they tell i say hey what was the revenue last month and i just want to see if the founder actually knows that and then i asked what was it in january and what was in the january before that and i like to have founders who know their numbers crisp enough to do that or you know have them at their fingertips to look them up and then i’ll say what did we spend that month they tell me what we spent and then i look at it okay so we had 10 million in cash we’re burning 150 a month we’ve been burning 150 a month for 10 months we started the year with 10 million so we have 8.5 million in cash but i see here we have 6 million cash what’s the difference and then they’ll say oh that revenue is future looking oh we had this one time expense oh we bought this company you get the idea so just somebody on the board doing basic math might have figured this out that something was wrong by comparing one set of information to another the second thing is and the more likely thing is somebody who works at the company emailed the board member uh and said or called them or dm them and said hey listen i was asked to do x y and z than the board because they have a fiduciary responsibility and they could be legally liable and this is why you always get directors insurance because now this is going to result in lawsuits because you have criminal activity it makes the lawsuits that much easier if you remember when o.j simpson got even though he had a criminal case that he got off on he was guilty in the civil case right so the civil cases typically come after the criminal one so here’s the criminal there’ll be civil i would guess an audit conducted in mid-2020 found that headspin’s total cumulative revenue from inception not this year from inception through the first half of 2020 was only 26 million instead of the 95 million they reported to investors so this is a big big gap bakwani didn’t forget uh he didn’t forget allegedly to wet his own beak either um in the sec complaint lakwani enriched himself by selling 2.5 million of his head spin chairs in a fundraising round during which he made misrepresentations to existing headspace investors so take a pause there he sold secondary when you are selling secondary now you’re taking ships off the table and you’re lying and raising money this goes beyond like i was just trying to help the company or whatever ridiculous claim uh this idiot’s gonna have for his you know illegal behavior now it gets a little bit deeper um he actually swept chips off the table so you got to be very careful when you do that because that means he’s taking those investors money and putting it into the company uh yes that’s the primary raise but then he did a secondary transaction apparently and how that would typically go although i don’t know in this case how that would typically go is he in fact sells his common shares directly to those investors right so he would sell directly to tiger or iconic in this case and they would pay him and then the company would record on their cap table these 2.5 million common shares owned by the founder go to this person boop and they move over whether they’re using you know cap table software or they’re doing it on an old spreadsheet uh like many people do if he’s convicted of securities fraud lachwani faces 20 years and a 5 million fine that’s a max sentence and if he’s found guilty of wire fraud defenses he faces a max sentence of 20 years to a fine of 250. i bet he gets 5 to 10 feels like a five to ten type of situation in low security maybe it gets off in four to seven who knows um you know people tend to let these um white collar criminals out early which is kind of crazy when you think about it if you went into a department store and sold stole five thousand dollars worth of merchandise or two thousand dollars i bet you you get less than or the same as this cat who uh sold 2.5 million of his shares ilya sukhar a general partner at matrix partners and angel investor in headspin had a pretty funny tweet not my best angel investment not my worst either but one of the best learning experiences and he’d literally post the justice department’s uh the robber of justice is a you know pdf case on it so um i have had my producers asked me in the notes here if i’ve ever had these kind of experiences i’ve had people um do their books wrong but never intentionally so i’ve had people make mistakes in their books but not intentional mistakes i have had people do self dealing where they gave themselves extra shares in a company i’ve had people uh pay for their apartment or give themselves a 50 000 or 100 000 wire to cover expenses not pay taxes on it and you know that stuff could be looked at as bad hygiene or bad judgment you know expenses that would not pass mustard and so in those cases you basically try to clean them up you do a little investigation and you either have to fire the executive or sanction them in some way and it’s just messy so don’t ever do anything that’s not approved by your lawyers and accountants for example don’t pay yourself a three thousand dollar draw that’s not a financial concept according to the irs or the department of justice or anybody you know just pay yourself a salary and um don’t pay for your apartment you know and your you know vacation uh you know you have to use common sense here uh if you have an office in your house and you talk to your accountants and they say yeah it’s 20 of your you know living space and it’s dedicated for that yeah you can you can deduct that or something or you can charge the company but just be super clear about it what i do is anytime i have these is i have a cfo in the company actually documented and i have them be super careful about it okay all right so that as an example is our first story and i think i read that one through i don’t think there’s any pickups so now i would ask my producers any pickups is there anything i missed and then hopefully they’ll come on air here and you’ll get to meet one of our producers so producer nick you want to come on air for a second and i think i should be able to see him okay so you guys do you guys uh uh on linkedin and twitter and youtube here uh nick uh they should hear me if you do yeah i just wanna i’m just what um i do have one pickup for you okay what is the pickup so um under the bullet point that i’m hovering over you called headspin headspace you know headspace is a competitor to come so i did one that’s true take a shot at them here no that’s good so this is uh now you see how the sausage was made if this was live tv i wouldn’t have a chance to fix this so let you want me to read the whole quote or the second half of it where do you want to pick it up from uh the whole quote where you said headspace okay three two an audit conducted in mid-2020 found that head spins total cumulative revenue from inception through the first half of 2020 was only about 26 million instead of the 95 million they reported to investors according to the doj release clip now you know how i do this math not meth that sounds good baba bowie you guys are funny in the comments i can’t watch these comments while i’m doing the news all right should we do the next story now or do you have more than you need that was 12 minutes i think want me to do the other story charles here in my opinion that uh that you got that we were around 13 minutes i guess okay the only thing we want to do the picasa now because i have energy and we have everybody on live and you can bank it for tomorrow that’s a question for nick yeah okay the only thing i would say is the comment now the comment about meth not math is because when you were saying math earlier it sounded a little like meth and so you were like oh i do meth yeah it was confusion i do math i do math math that’s pretty funny okay sorry while i blow my nose you can cut that out of the show too all right here we go second story three and i’ll do uh questions uh from each of the channels uh in a minute three two okay an innovative real estate startup offering fractional ownership of vacation homes is causing outrage in sonoma and napa and i’m really interested in this company i thought it was a brilliant idea uh before we go into the crazy neighbors uh before we go into the crazy neighbors let’s first understand picasso’s uh startup and how they work it’s spelt p-a-c-a-s-o i found out about it because i was listening to stay tuned with preet and some other you know highbrow left-wing podcast and i put together that they were doing this advertising to really high-end affluent people uh on the left in all likelihood like people in cities and that they were also getting dogged in the press and this big npr story was out so i thought that was kind of ironic and i looked into it and i found out the back story here so picasso was founded in october of 2020 according to my notes here by two former zillow executives austin allison and spencer raskoff if i’m hopefully pronouncing his name correctly and i actually did invite him on the podcast before i knew about this uh brouhaha this donnie brook their main objective is to make a second home ownership i.e vacation homes more accessible by utilizing a fractional home ownership model according to npr and their website it’s sort of like time sharing but very different so in time sharing you pay a company that owns the asset they give you two weeks everybody knows time shares it’s kind of a scam feels a little multi-level marketing boiler room in this case uh when you work on picasso you pick five of your friends like say five other families or eight other families and you each buy one eighth share in a picasso home and you can pick the home you want or i think picasso has some of the homes you know listed and you can join in and jump in with a different group of people so um the owners are investors they’re not renters it’s not a vacation home it’s not an airbnb it’s not a um you know essentially a hotel it’s just a group of people who own a home together in the form of an llc so picasso will buy the home they refurbish it they make it nice they do the interior decoration and they create an llc and then the ownership is divided into eight equal fractions and they sell it so you are charged twelve percent of the initial purchase price along with some monthly fees uh and then you have to hold on to your shares for at least a year and you can sell it after that point and you then can stay 44 days a year but only 14 consecutive days and you have the ability to access and help you can access an app and that helps you with the logistics of booking so if you did this with eight people and you worked with four of them and four of them were another one of your friends family members everybody gets to stay and you can gift the space uh to other people so if i had an eighth in a ski place in tahoe i could allow my brother or my nephew or a co-worker to stay there which is kind of cool if you divide 365 days a year by 8 that’s 45.5 45.6 so the math here checks out um and then what’s key is picasso oversees the property management maintenance and uh i believe the cleaning of the property so if you were to do this with your friends randomly somebody out of the eight people would have to take the burden of doing all this so essentially picasso is not the equity owner they are a service that does all this management for you i think you pay them an upfront fee to set all this up and then they make a little bit of money managing it for you so i love this model i think it’s brilliant why is it brilliant we have a supply problem and second homes don’t get used that much so if you have a second home you wind up either not using it and having this massive expense and feeling like an idiot because you use it for 30 days a year 20 days a year 40 days a year and then the rest of the time nobody’s in it and you’re paying all those expenses and it’s breaking down and nobody’s maintaining it so you could have stayed you know at some incredible hotel for the same amount of money here you get to have uh 44 days and you have no overhead and you have ownership so you’re not throwing the money away now here’s where it gets interesting according to npr uh picasso uh claims to be the fastest american company to receive unicorn status is something that seems to be important to uh founders these days uh in the market according to picasa ceo austin allison’s linkedin the company was founded in february of 2020 11 months later in march of 2021 they closed their series b which valued them at 1 billion so obviously housing is hot obviously the overall market is hot obviously these are zillow executives that would lead to a crazy funding uh moment and it seems like they’ve raised 341 million so far um including vc money and some amount of venture debt and uh you know vacation rentals were absurdly priced this year because of people coming back from the pandemic who knows what the long-term um you know situation will be given the never-ending uh pandemic but there has been some controversy here and where else but in wine country so it turns out homeowners in sonoma county saw a drone flying around their house and after talking to their neighbors it would discover that a home in the neighborhood would be turned into an llc after being sold to picasso so they denied operating the drone to film the neighborhood but they basically claimed they bought the photos after the fact that seems to me like a little bit of revisionist history or splitting harris if they flew the drone or somebody flew it on behalf of them you know it’s it’s basically the same thing they wanted aerial photos of the house in question for their website um which okay who cares if it’s if they’re buying the house or it’s their house they can fly a drone over it i mean this sounds like some weird uh claim that picasa is uh creepy or spying on people but the fact is every time i look at zillow or my preferred site redfin what i think redfed’s a better site uh their interface but um when i look at those uh sites it is um they always have flyovers and it makes it wonderful to do that and you’re allowed to fly drones over your own property so i don’t know what the issue there is there have even been posts made to neighbors.com from the homeowners that mentioned the article who posted about a fundraiser to keep picasso out so there is this brouhaha starting where people don’t want to have obviously airbnbs next to their homes they don’t want a rotating group of guests i understand that if i lived in a community and there was a party going on next door yes that would be annoying if they had a party house but airbnb doesn’t allow parties anymore uh except on the margins and i think they are pretty strict about that the number and i operated an airbnb for a little bit at a former house i had um which is a very interesting experience airbnb is a pretty cool site we did have somebody break the rules and throw a party that was annoying uh police got called all that kind of stuff because i live in a very you know um i live in a neighborhood with old people who will call the police for anything and so uh this npr article mentioned um that they uh just didn’t like the sense of uh you know destroying their neighborhood and so here is the quote that it would destroy their sense of community and turn their neighborhood into adult disneyland well you know what i’d be totally honest with you i don’t think you have a leg to stand on here you know nimby people in sonoma i know you’d want every single home to be somebody living there and to not be rented out but you live in america where people have property rights and they get to do what they want with their home within reason now they can’t throw a 24-hour party and infringe on you but how does it infringe on you that it’s a second home that eight people own and only one of them theirs at a time the npr article also mentioned that homeowners had concerns around increased wildfires and drought risk i don’t know what that means noise and traffic okay i mean calm down people it’s just a vacation home um so they formed an organization opposing picasa created an anti-picasso website and also circulated a petition according to the article on neighbors.com you can actually see a post someone uh giving out free stock picasso lawn signs so these are people with far too much time on their hands and i think really it’s kind of short-term um uh it’s kind of a long-term dumb because if you are an owner and these uh picasso homes work out it’s going to drive homes up in value because you’re going to have a larger number of people who can afford a second home if you have to pay you know one if you only have to pay one-eighth the price of a home you might actually consider it when you wouldn’t or it might be a you might consider this like on top of your second home so maybe you have a condo and ski country you know in some ski place and you got this one you know because you’re going to use it two weeks a year or whatever so it’s kind of silly um i would love to buy a picasa picasso home or use this software to manage it or i was just thinking like i could start an llc myself buy some piece of property in tuscany where i just got back from italy and share it with 10 friends and we all use it two weeks a year uh or maybe three weeks a year it’d be amazing and then you could even uh you know put it into an airbnb pool on top of that so i think this is a great idea i feel really bad that i i miss this and i think somebody should create a competitor to picasso that um just provides the software to people and lets them do it so or matches people together like a marketplace because this seems like a really viable idea i love this idea because it is more efficient just like uber’s allowed people to use cars that were sitting in garages for 96 percent of their lives and they used them for another 30 of the time that’s good for society you don’t have to make as many cars that’s better and if somebody can use their personal car for deliveries we don’t have to have as many delivery vans etc so this efficiency of on-demand and fractional ownership is good for society especially since in this society we are not building enough homes and we have more affluent people who have made more money in the stock market who are buying up all the second and third homes i have friends who have three four homes and they don’t use them and that’s really wasteful okay three two in a different instance picasso bought a napa home located two blocks from a high school for 1.13 million 35 percent higher than the other median home prices according to npr but i’m not sure if that’s valid we don’t know if that home was um worth 35 more maybe it had a pool or whatever so you know when you get these uh journalists covering a story when they’re using the median home price the fact that it’s 35 percent higher than the average price means nothing i don’t know what they’re trying to say there that they overpaid or something um the mpr article also reported that picasso says the only they only buy luxury homes and they don’t compete with local middle class families in the housing market okay so here we go now you’re talking about oh my god is this taking away housing supply from other people in a way yes if you put all housing into one bucket if you take one house off the market for a second homeowner yes that is bad for the overall inventory however if five people were gonna buy five homes there and now they bought one and they share it or eight people that’s better because you keep more homes in the market because nobody needs a second home for more than 44 days a year it’s by definition it’s a second home um so npr reported quote some napions is that how you pronounce napa napanz how do you pronounce residents of napa nick how would you pronounce it yes some nappins i’ve never heard that before n-a-p-a they should get a new uh they should get a new moniker that’s tough it’s a good moniker napkins so some napkins were pissed picasa says the house was the victim of trespassing and illegal signage picasso even claims it had to file a police report after a local who wrote to the company and said i will burn down any home you buy in napa this is not a joke uh man nimby people are pissed they could also be found being very vocal on the twitter and we’ll pull that up here if you’re watching on youtube go to youtube.com this weekend and uh follow the channel and then hit that little alert bell and you’ll get to watch these live from time to time when i read the news live for the audience uh picasa ended up selling the house to a normal home buyer and quote pledge to bipa beef up its co owner and pledge to beef up its owner code of contact to include decibel limits on all home sound systems create a local liaison dedicated to assisting neighbors not buy any homes in the area under 2 million and for each house sold in napa and sonoma counties donate 20 000 to a local non-profit dedicated to affordable housing according to me are you know what i would have told everybody i’m gonna tell them to pound salt like just worry about yourself it’s your people are ridiculous nathan’s just just drink some wine and chill out like you nobody you don’t get to tell people what they can do in their home and how many people can buy it uh you’re being ridiculous uh you’ve gone way too far you’re being super nimbies this is uber nimbyism so uh picasso i think uh you should uh ignore these idiots it’s just ridiculous um and they’re not time shares everybody knows time shares the ownership is owned by the company which is then renting time this is fractional ownership in an llc sorry if big companies can do it if people are already doing it you can do it too so for the the nimbys in wine country i know it’s not everybody uh you’re being ridiculous and maybe you should just do it with your house or maybe you should buy one of these and make your own competitor to picasso it is a great idea i’m not an investor wish i was and if somebody makes a competing startup or you know has a way to best this idea i’m open to investing it’s a great idea okay let’s move on all right okay so i think i did everything how any pickups guys gals pickups that story was good for me do you want to do the intro rachel this was your story rachel this was your story yes okay that’s a rachel everybody producer rachel and producer rachel is going to be doing a uh she’s gonna be doing some gen z reporting for us tell everybody about your first story yeah i’m pretty pumped about it i got to interview one of my favorite people on tick tock um he runs the morning brews tick tock so excited for you guys to hear more about that when are we doing that we’re going to have our first correspondent you’re our first correspondent when will we be running that rachel tuesday oh that’s nick okay so tuesday you can look forward to on the show um that and then friday we are taping the all-in podcast okay so let’s take your questions um if you have a question can i get a count how many people are watching on the youtube nick how many people are watching on linkedin how many people are watching on twitter 175 on youtube 175 on youtube then we start with youtube and what i’ll say on youtube is uh yeah wow look at that we have 66 people who’ve liked in 173 people watching uh everybody smash the thumbs up button for your boy jaycal and uh if we can get that up to 75 i will take a second question but i’ll take my first youtube question right now if we get it to 75 i will do another youtube question so what is my first question nick and go ahead and smash the thumbs up everybody uh nick do you want to pick the question you want me to pick it i did not have one prepared but i could look through it real quick okay so who’s monitoring youtube is that you nick oh i like this one how do you uh chamoth sax and friedberg differ in your approach for choosing startups to invest in maybe explain the differences between your funds and you know what fredberg’s doing okay i don’t see that question but can you put that up on the screen uh charles uh so people can see it yeah is it in the comments or it’s in the chat right it’s in the chat we don’t have comments youtube chat i am i’m working on that okay how what time stamp is it nick or how far back is it for charles to go who else looks like i can’t scroll up or down and who has that question uh your question was asked by jacob okay so you can do it on uh yeah i see it uh charles do you see it jacob garof it’s like two pages back on youtube so you can’t scroll backwards nick on this uh restream studio but you can if you have the youtube window open i would suggest you keep the youtube window open then he can pull it up charles let us know when you get the jacob one i want to answer it when you pull it up on the screen so that we can clip this and use it on the pod that makes sense i think that’s a good idea or not what do we think yeah i like it all right and then uh on linkedin who’s watching the linkedin stream that would be me justin okay justin have you picked the best question from linkedin and how many people are watching on linkedin right now we’re at 33 right now perfect okay uh and does it have commenting underneath it or they use chat on there it’s somewhat of a hybrid it’s it’s comments that will stay with the video uh after it’s done but it looks kind of like a chat window um i just want to find the streaming video by the way on uh i found it through a notification uh we got some more oh wow it’s on my if you go to my profile page linkedin dot com slash in slash jason calacanis it put it on my live profile page you have to see this guys it is so cool the feed is live as my banner do you see that nick yeah i’m looking at it it’s nice uh so then if you click it it goes live oh my god they copied the youtube page all right so on this page we do have um i don’t see where we have uh how many people are live oh maybe yeah so we got a bunch of reactions that is really good okay so i’ll do my first question here uh how do chamath you sacks and freeburg differ in their approach to choosing startups to invest it’s a great question um chamath is primarily doing uh very late stage pre-ipo companies to stack them that means he’s picking companies that have in almost all cases uh a very robust established business model and revenue stream they might have years of revenue in some cases it might be something like virgin galactic that’s a bit more speculative and early stage and big tech i think tremont is also because he has been so successful is looking for things that are world changing and not you know simple he wants to do things that have a big impact in the world saks is focused on two sectors uh sas and marketplaces so he cares about software as a service and marketplaces and he tends to do it when those companies have a couple of months to a couple of years of data but maybe not as much as chamomile taking companies public so think series a c in series a and freeberg is a completely different beast he might invest in a friend’s company here and there on the margins but he is actually creating companies in a studio system which means he hires a group of people they try a bunch of different ideas when one of them starts to get traction they spin it out get additional investors and staff it and that is the studio model i have an accelerator like y comet error in techstars called launch accelerator then i will do seed rounds which are typically 500k to 3 million we will lead those rounds and then we will co-lead series a’s from time to time as well and we have the syndicate so mechanically we have a fund in a syndicate mechanically chemoth is doing public equities mechanically sacs is doing a fund and then mechanically freeberg is doing a studio system so there’s the mechanics of how you do the financing and then there is the stage and the vertical so i think i answered both those questions pretty well what’s our linkedin question oh you said you’re going to do another youtube if you’ve got 75 oh okay i did get to 75 i’ll do one more uh we’re at 96 now so if we get to 110 on the thumbs up i will do another uh youtube question so we’re at 96 and um i see a youtube question when should a sas startup start planning on profitability as opposed to just arr growth pre-ipo ask them because i am invested in one of your very fast-growing sas companies okay most early stage private market investors and even late stage are not looking for profitability they’re looking for growth so if you could be growing you know let’s say thirty percent year over year and be breakeven to modestly profitable most people would say you’re doing it wrong as a private company if you had the opportunity to lose you know millions of dollars but grow at a hundred percent why why would you take losing money but having growth over being profitable and having you know two-thirds less growth because you’re capturing market share so if you believe the market is important like uber did or com did um you might or airbnb did you might be okay losing money as you build up that base of users and you build up that base of inventory if it’s a marketplace or you build you know features to your uh product to make it more sticky so we’re in the high growth business because we’re not trying to get a dividend i’ve only had one company in 350 uh want to pay a dividend and i was like please don’t give us money invest it back in the business and growth and they’re like no no we want to take a dividend and i was like okay fine we didn’t want to be in a dividend business but here we are we’re in one so that is a way to think about it you don’t and i’m glad you’re in i think i know which sas company you’re in uh but we have two sas companies that have become worth hundreds of millions of dollars coming out of the um accelerator and then uh going on to the syndicate and i’m super thrilled that we’re sharing that deal flow with folks okay we got to 106 on youtube four more thumbs up on the page and we’ll do another question from youtube but for now we’ll go to our first linkedin question can i get the linkedin question from producer justin and he says what is your personal investment strategy as it relates to climate crisis solutions i don’t have one um however i am an lp uh a small one in krasaka’s oversubscribed lower carbon fund so my bet is to bet on chris and to learn there and i think that’s you know he’s dedicated himself to it we’ve got a long-standing friendship if i put a little bit of chips behind him i’ll probably get a return he’s really good at what he does even if i lose the money i think it’s better money better spent than giving it to charity because i think entrepreneurs do a better job of solving problems than charities no offense to people working the private sector but i do think getting rich and running your own company just results in better outcomes than the non-profit world in most cases in most cases i wouldn’t say all there might be some non-profits that do a great job and they do a better job than for-profit companies but a for-profit company working on housing and they figure out a way to build houses you know twice as fast for half as much money and they target the high end eventually that creates inventory um and then that creates more inventory for other people on the low end as one but one example so i would rather invest in a company that’s making adus or high-end homes and then have them create more inventory than that helps um lower-end homes or the technology trickles its way down so i have the 16th tesla ever made the 16th roadster and that car cost me 160 000. i think it got devalued down to 30 or 40 000 maybe six or seven years after i bought it so i looked like an idiot but the bet i was making there buying that was that elon could um take our money for the roadsters and uh put it to good use and then maybe someday he’d have a 50 40 or 30 000 car and here we are and supposedly there’s a model 4 coming that’s going to be 25 000 so instead of me donating money to charity i i paid for a sports car that was 160 000 and now actually it’s probably worth 250 because it’s you know went through the j-curve now it’s a collector’s edition so it’s probably worth twice as much pay for me it’s worth 300. um but i didn’t make i made that bet because one i wanted the car two uh i wanted to support my friend and three i thought that this would actually have a profound impact down the road and i was proven correct so the people who put solar on their homes 20 years ago made it super cheap for people today people who bought tesla’s 12 years ago you know are basically making an investment in this and i think the same holds true for people who are investing in things like beyond meat whether you’re buying you know an impossible burger when they came out i think the umami burger they were charging 16 for an impossible burger that’s you betting on that company and then betting on the trickle-down nature of technology now trickle-down might not work in the tax world it works brilliantly in the world of technology you buying a smartphone for twelve hundred dollars makes the hundred dollar one possible you buying broadband you know 30 years ago 25 years ago for 5 000 a month for your t1 line makes it you know 15 a month for people to have in the developing world wi-fi now so um yeah that’s my approach i could be wrong okay it looks like okay now do we get any questions on the periscope and who’s monitoring the periscope slash twitter and how would i find that is it just live streaming on twitter is that where you find it twitter.com jason i am on periscope yeah oh wow there it is look so we have 26 viewers there if um people will have a question just reply um oh look danny uh fortson um from danny in the valley wrote a question um and uh should we take we also uh we gotta go soon you have an onboarding call in five minutes okay i’ll take this i’ll take danny says the last one then uh so if you pull danny’s up that would be great and uh do you i don’t see danny chat danny’s is a twitter reply is it possible to pull that up sir charles uh yes could you tell me what the question is because uh a reply to the periscope tweet so if you go to twitter.com jason you’ll see the tweet there’s two replies to it and uh what was and what is his question says are you seeing investors not do due diligence on stuff like this okay i’m searching for now and it’s from danny so we just do a search for danny you’ll find it pretty quick he did that at 11 11 so he did it half an hour ago but i think it’s a good question and i’ll just answer it right now since i got to get off all right three two okay so danny in the valley uh danny fortune asks on twitter are you seeing investors not doing due diligence on stuff like this how possible is it to actually vet this stuff in startups great question from danny about our first news story on august 26th which was the head spin um founder being accused of a massive fraud by the sec and doj so when you do due diligence uh you will typically ask for a series of documents incorporation is one okay check this is our actual company registered in delaware okay um you might do a background check on the founders have they had a felony it’s kind of a light background check then you will ask for bank statements you might ask for statements from stripe you might ask for statements from the itunes account so you can see the number of downloads and in this case you know some people probably invested without audit rights which is a standard right is they have the ability to audit and that would give you the ability to correct this in the review mirror we do diligence we ask for all these documents it is possible for a founder to do a very complex fraud and we might not catch it it is possible that people can uh commit crimes and they’re not stopped in this case it did get stopped so that’s good but it didn’t get stopped until after the money was put in so it sounds like these venture firms didn’t do enough diligence and they should have been talking to the cfo of this company when you get to a company that has 50 million dollars or claims to have that kind of revenue 50 or 75 million they should have a cfo they should have an outside accounting firm that outside accounting firm should have done an audit or should have at least had you know p l’s and somebody should have talked to them in a gang busters environment like this if you don’t move quickly and you start asking for diligence and you slow down a deal a founder might say you know what i’m just gonna take the other money and the person’s not doing that level of diligence it sounds crazy but um people will move quick and not do these kind of audits or you know checks we do them but here’s one example of how a fraud could happen and then actually people have accused tether of this which is they have that moment where they have the attestation where they take a you know look at how much money is in the bank account well what if you took money from another bank account put it in there take the screenshot and then you um give the money back to the other bank account the next day so okay you did in fact have money in the bank account on august 26th but on august 24th and august 27th you did not you just moved money in there and you played a shell game so some frauds are complex sometimes people will do really fugazi things and other times um you know it’s a pretty easy spot in this case they should have spotted it and we do the best we can and you want to do proportional due diligence if the company’s got a hundred thousand dollars in yearly revenue and they give you bank statements okay great and you look at the bank statements if they doctored the bank statements or they move money from their personal account into the bank thing and then took it back out and stole it it’s kind of like okay they were you know they committed fraud you know you do have to to a certain uh level except that you have to trust in people but i believe trust but verify how do you verify you have audit rights uh and you have a direct line to the cfo controller etc and when you see those things not happening which is why i think a lot of people assume tethers are fraud because they give the signals of a fraud by not doing an actual audit how can somebody have 60 billion dollars in capital and not do an audit that makes no logical sense people are suspending disbelief just like they did for um you know um bernie madoff the thing about bernie madoff was people were like how could he have this consistent results they’re too consistent he was doing like whatever it was 12 a year year in and year out he was too perfect he never had down years he never had huge years that makes no sense but people suspended disbelief because i think they wanted to um you know get those returns uh and didn’t care that maybe it was fugazi so sometimes people will turn a blind eye here i think it was laziness or the deal was closing quickly and people just assumed other people were doing diligence i don’t assume that um but you do want to make due diligence proportional to the state of the company etc okay that’s a wrap everybody thanks for doing this i will see you next time if you want us to do more of these just let us know on twitter etc and uh i think we’ll leave this file up for now to my team and then on youtube we have to make a decision do we want to leave raw files like this up or not when the show comes out i don’t know does anybody have a thought on that yeah i think we should take them down when the show comes out drive traffic to the episode okay sounds good to me uh all right and then you’ll you’ll have you’ve got two or three ask jason’s out of this as well which is kind of cool we did we did and just pick the best ones all right i’ll see you all next time bye
rn

TWiST LIVE News Record!

rn

Share this post

Leave a Reply

Your email address will not be published.