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VENTURE CAPITAL & PRIVATE INVESTING
Recorded: March 20, 2025 Duration: 1:00:42Space Recording
Short Summary
In a dynamic discussion, panelists explored the recent $181.8 million fundraise by Ariel Zuckerberg's Magical Weirdos Fund and WAP's $800 million Series B, highlighting emerging trends in venture capital that favor visionary founders and innovative payment solutions. The conversation also touched on the potential decline of traditional VCs as decentralized funding models gain traction.
Full Transcription
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Mae'r cyfle yn ystod y cyfle. Mae'r cyfle yn ystod y cyfle. Welcome, everyone.
Happy Thursday afternoon.
Welcome back to our venture capital and private investing show here on Wolf Financial.
My name is Jared.
I am one of your co-hosts.
I go by self-taught success on the internet.
And the meaning of that name
is all the information you need is out there.
It's just up to you to seek it out.
Go apply on the path to your goals.
And my connection to the VC space
is I work with a lot of founders,
a lot of startup companies, help them with marketing,
help them grow their brands on X.
We've done over two and a half million followers
and a billion impressions for them.
And that's kind of my connection here.
I have another cohost, Kyle.
Kyle will be joining us in a little bit.
He just got back from an event here
and is in between flights at the moment.
So he'll hop on here in a little bit.
To start things off here on the show,
I'll pass it around here to the panel,
let everybody give a quick 30-second intro about who you are, what you do, and what's your
connection to the VCPE space. Then we'll hop into a couple recent updates from the past week and
the space. So with that, I'll pass it to Matthew and let you start it off.
Awesome. Thanks so much, Jared. It's great to see everybody here. Hope everybody's
doing well. This awesome Thursday, I just dealt with a very large deluge of rain in North Carolina.
I'm not sure where everybody else is, but it's good to get March Madness started off as well.
A lot of good basketball going around. So that's not why we're here, of course, but my name is
Matthew Snyder. I'm the Chief Investment Officer of Digital Wealth Partners, a SEC registered investment advisor that specializes
in digital assets and building holistic portfolios for people in the digital asset space, traditional
space. We work with high net worth individuals and other RIAs and really just focused on
building holistic portfolios for people. And my connection to the VC and private placement space
comes from having a sister hedge fund that
works with this registered investment advisor that
creates opportunities for clients and outside LPs
to participate in private placements.
That includes a number of financial vehicles
that allow people to earn income on assets that are maybe not
earning native yield, or we put them to work in other ways.
We can compound them and we're also looking to partner with organizations from a VC perspective to provide those clients opportunities into some of these private placement opportunities.
So excited to be here and thanks again for the opportunity, Jared.
Awesome. Appreciate you coming on here, Matthew. We have another one of our semi regulars, Russ up here.
Russ, I'll let you give your 30 second intro and then we'll pass it to Martin and Dimple
here.
Yo, hey, thanks for having me again.
I'm always surprised you keep having me back, but I'm stoked to be here.
I'm from the founders.
I'm like an evolved founder in the space more web three oriented.
I really champion the future of venture capital on chain and how much we can automate. So that's
where I'll probably be chiming in the most. I'm a founder, like I said, I've had one successful
raise and then I've been a part of brokering several
deals.
So yeah, that's a little about me.
Awesome.
Thank you, Russ.
Martin and Dimple, I'll pass it to you guys here.
Hey, thanks for having me.
I'm Martin Tobias.
I'm the Managing Director of Incisive Ventures.
And I like coming on this space because there tends to be a lot of Web 3 guys, and I'm probably
the biggest Web 3 skeptic, so we can start yelling about that if you want to do that.
I'm a B2B software investor.
I invest pre-seed, which I define as you've got an MVP, you've been in the market for
two or three months.
I've been doing this for about 30 years.
I'm an LP in 17 funds invested in 250 companies,
six unicorns, including some you might've heard of
like Deal and Jeeves and DocuSign.
And I was in the series of Google a long time ago.
I still own those shares.
So I'm writing checks to great founders in B2B software
and love to talk about what's going on
in early stage venture.
Awesome, Martin is the real deal
if you haven't heard him talk before.
And I love that intro Martin,
because we have a hot takes topic later on coming on today
that I think you and Russ
are gonna have a great conversation about.
So Dimple, I'd love to hear your quick 30 second intro and then Evan, if you're available,
you as well.
Thank you so much.
And this is my first time.
So hello guys.
I'm a noob out here.
So pardon me.
Nowhere is close to everybody's experience and Martin and Kyle and all of you have just
I've met most of you, but heard great things.
Quick TLDR, recruiter by trade, technical recruiter, public market investor.
Got into angel investing close to about three years ago
and have made over a dozen investments.
Haven't formed a thesis yet,
but I like to think that it's futuristic.
But I sit somewhere between futuristic
as well as really old regulated spaces.
And I enjoy that the most. as well as really old regulated spaces.
And I enjoy that the most. And yeah, I'm a venture fellow with Hustle Fund
and also an angel squad members.
So happy to talk to anybody who wants to know more
about that because they sort of gave me the entry
into this space and it's been a ride, an amazing one.
Awesome, glad to one. Awesome.
I'm glad to have you here.
Evan, if you, if you want to chime in real quick.
No, I appreciate you for having me.
This is a fantastic conversation.
I would love to come in and listen to it.
So I'm excited to tune in here more truthfully.
I know absolutely nothing about the VC space.
I'm more in here of a backend role, a learner, and I'm excited to hear more.
I won't lie to you in that Web 3 conversation,
I'm Team Martin here, so you're not
going to be alone on that one.
But yeah, no, I'm excited to listen in.
I do have some thoughts about some areas,
and I'm just excited to hear more.
And just in general, in these spaces,
make sure when someone says something you enjoy or find
smart or anything like that, make sure you follow them.
These spaces are a great place to find new people.
And we really try and bring on a bunch of really great people. So go in, check them out, especially when someone says something smart. And I'm excited for this conversation.
Amazing. We appreciate that. And also to go along with following our speakers, if you click the little purple pill button in the bottom right, and go ahead and retweet this space, we can reach more people. A lot of great speakers sharing a lot of great knowledge here today. So that'll be great for more people to join us here as well.
I wanna dive into our first trending news topic
from this week.
You can see it at the scoreboard here
at the top of the screen.
But Ariel Zuckerberg raised $181.8 million
and a fund that they are calling
the Magical weirdos fund.
Um, so kind of an interesting name, but they are giving it that name because
their fund is focused on eccentric weirdos and visionary founders.
So the question that I have for the panel, and maybe Martin, we'll start with
you is when looking for companies to invest in, are you looking for visionaries in a new space or someone in an existing space with a better product, system, team?
And if you're looking for the later, which one of those is the most important to you?
Thanks for that.
And I know those guys at Long Journey, I've invested with them before and they kind of
have a unique kind of spicy take on venture capital.
They're looking definitely for the visionaries.
They're very founder driven.
I'd say I'm a little less so because in B2B software, you're typically building something
better than somebody has before.
And so it's a little bit more incremental, even though some of the companies, like I was an
early investor in DocuSign, they were the first to build digital signatures, and it
was actually really hard in the beginning.
A lot of people have copied it since then.
I'm actually looking for that most rare of unicorn thing, which is somebody creating something new and having
a vision, but doing that from a place of personal experience.
For example, let me give you a company that I just invested in recently called Grow AI.
They have an AI sales coach, which helps SDRs, giving them personal coaching on how to move deals along,
close deals better. This guy was in fact a sales coach for 10 years and he was doing
as a consulting business. The problem he had is that he charged $300 an hour and only the most
biggest, most expensive salespeople could afford that.
When AI came along, he said, you know what, I bet if I could train an AI to do what I
do, I could sell it to people for like $100 a month, lower the cost of doing this thing,
which I'm really good at, by like 95% and potentially increase the market size for that
thing and the TAM. that's what they're doing.
And I think sometimes the best innovations
are things which actually democratize access to something
and software is particularly good at that.
What I keep going back to is I wasn't an investor in Uber,
but in 2009, the total ride share revenue market,
if you include taxis and black cars,
was about $10 billion.
Uber comes along and says,
we wanna have this software platform.
And a lot of VCs kind of passed
because they said, hey, you get 5%, 10% of that market,
you make maybe 10% off each ride.
It's not a very big company.
In 2024, there was $160 billion of rideshare revenue between Uber and Lyft.
What people missed is that the existence of the software increasing supply and demand for that
service and lowering the cost actually unlocked $150 billion of demand for something that people
used to use but didn't use very much because it was inconvenient and it fucking sucked.
to use but didn't use very much because it was inconvenient and it fucking sucked.
What I'm looking for is that combination of a technology trend and a visionary founder
that can drive adoption of some serve or democratize access to some service.
That's where I believe the real unicorns are found.
I think that the long journey people would agree.
Well, that's a great answer and a great way to put it with somebody with first-hand experience as well.
Matthew, I'll pass it to you and Dimple and Russ. What's your feedback on that?
I think anybody who has the way to stand out and make yourself differentiated
with respect to your narrative
or how you go about actually marketing this
is gonna lead to more eyeballs
and potentially more capital, right?
I think that calling it this sort of weirdo fund,
like that perks a lot of ears up.
One of the things you notice about creating funds
or especially if they're private placements
and things like that is they're typically boring names,
the income fund, the this fund, the that fund.
They say exactly what they do,
but this gives you a question of like,
oh, I kind of want to learn more about this
and maybe I'm a weirdo, right?
Like it drives a little bit of,
not necessarily FOMO from the perspective of people
who want to contribute,
but they align themselves with feeling like
that, or they feel tribal in the sense that this is something that they could fit with
and that they think they're different.
So I think I really appreciate their uniqueness here.
Of course, it is a big risk, right?
Like if people think it sounds really stupid or it sounds ridiculous, it's probably going
to not lead to a lot of extra capital.
So you got to be really careful about stuff like this.
Sort of like the meme token of funds.
I feel like they are inspired a bit.
Um, but I was going to ask Martin, I don't think we're going to
butt heads, Martin, but I do.
You say you are investing in, uh, people who are democratizing things.
I mean, what about like democratizing access to VC funding?
Uh, and that's pretty much the stupidest idea I've ever heard in the planet. Why?
Why is?
I mean, I'd like to break unpack that.
I mean, if we have time, we don't have to jump right into it.
Well, you know, first of all, I don't think tokenization of any asset has ever fucking
worked.
And it's been the promise for 20 fucking years that you can tokenize real estate
and tokenize my fucking toaster.
Nobody cares about tokenizing your toaster.
And nobody cares about tokenizing venture capital either.
What you're talking about is the greater fool theory.
There's a there's accredited investor regulations for a reason.
The reason is because venture capital is an incredibly risky thing that
takes a lot that you have to be able to lose all your fucking money. And you don't want retail
investors taking that kind of risk. That's why we have SEC laws and securities laws and things like
that. It does take a higher, a more sophisticated investor to make venture capital investments.
hire a more sophisticated investor to make venture capital investments.
And I think some of the protections that we have in place are incredibly appropriate.
If you want to see poorly functioning, poorly regulated public stock markets where
everybody can invest in all sorts of shit, go to Canada. You already have that.
They have a venture exchange there where companies with no revenue can go public, quote unquote,
very low disclosure rules, very lax oversight, and anybody can buy a piece of that and 99%
of them go to zero.
What you get is a lot of fraud and a lot of unsophisticated investors believing pump and
dump schemes.
America is different.
America has the highest quality financial markets for a reason.
I do not buy into the idea that you need to tokenize all these super risky assets like
venture capital.
You don't do away with regulation in what I'm explaining here.
They can coincide completely.
And then that's how the future I believe will look. And it will automate things on that front,
where regulation will just be easier. And so the processes will be automated. And so
it's not an argument on regulation. Yeah, I don't necessarily see that. I mean,
people talk about, you know, the blockchain replacing about the blockchain replacing fiat currency and stuff like that.
When I swipe my credit card at a store, I get an immediate response.
Why?
Because it's centralized and somebody spent billions of dollars building a fucking network.
When I try to do an Ethereum movement, I have no idea what my gas fees might be, and it
could take hours
to confirm that transaction.
The technology is just not there.
We have a really, really good system for using a really, really good thing called the US
dollar, and it works really, really well.
I don't see any need for an alternative.
I'm 100% on board with stable tokens, and I believe that $8 billion infrastructure isn't as good as a decentralized system just
by the I mean, if you really I don't want to go down that rabbit trail, but it's so
stables in general would make it where we don't replace the dollar.
Again, I think we agree on that.
So, okay.
Well, I mean, the one use Again, I think we agree on that.
The one use case that I've seen for crypto that I think is incredibly valuable for the world
is stable coins outside the United States. Because if you live in some podunk town in Africa, and your local currency is inflating 300%, having the ability to store things in dollars without the approval of your government
and stuff like that is incredibly useful. I actually am super hopeful on the positive value
of stablecoins as well. You still have latency issue in stable coins and confirming of transactions and so on.
I think it's still light years behind the infrastructure we have in America.
I agree with you.
I'm going to jump in here.
I want to hear Matthew, I saw you throwing a bunch of thumbs down.
Give you a quick 30 seconds here, then I want to get back with the follow up
here.
Well, Martin's PFP has shown his age in a sense because the notion that stable coins
are slower than the US dollar in terms of transactions is ridiculous.
It is much faster, it is much easier, and most of these blockchains are still centralized.
So you have an entity where you know where the information is going, you know who you're paying and you know who you're transacting with.
So the basket that you put crypto in and that you put stable coins in is like all being useless or
all being behind the curve or light years behind is just absolutely ridiculous. There are opportunities
right now that are going on in the space that allow people to transact peer to peer with organizations, with governments.
There's organizations right now, you can open up a bank account in the United States in
a foreign country being paid in foreign dollars and get that transacted into US dollars so
you don't have to deal with the foreign currency issue.
I get that there's people who think that they're not quite there yet from a use case perspective
But it is just so short-sighted to think that this stuff is not coming to the fruition
It is like in the next year or two. It is not light years behind
Man we jumped right into the hot takes
Usually that's the second half of our show
But we can come back on that topic. I do want to get back on the magical
unicorns. I had a follow-up question that I want to ask Dimple, but I'll throw it to my co-host,
Kyle, who just landed on his flight here first and let Kyle give yourself a chance to intro
yourself as well. But when these companies like the Ariel Zuckerberg raising $181 million, when they're raising
funds of large numbers like this, how much of this comes down to skill?
Whether that's being a good salesman on your pitch or just having a really good product
versus how much is that just having really good connections.
Obviously, you know, the last name Zuckerberg carries a lot of weight.
Her other partner in the fund is a former worked on Peter Thiel's fund.
So first I'll pass that to Kyle and then Dimple, you can hop in on that one.
Hey everybody.
I am so happy to be here. My name is Kyle Somblin. the And I know that that is, I guess, maybe a rookie mistake, but I have put probably a couple of hundred thousand miles in the air.
But either way, a solid hour delay, but I am back, touched down in Miami, Florida.
I hate to be that guy, but I'm going to have to know the airline.
I'm going to need to put them on blast a little bit.
It was JetBlue this time.
I did it to get the free Wi-Fi and that was just a mistake. But yeah, I do a lot in this industry and love hosting
these with Jared. He's doing an awesome job. I'm here for the conflicting opinions on the
panel. So keep it up everybody. I definitely have plenty of thoughts here, but I don't
want to take up all the airspace since we're already 23 minutes into the space. Jared,
I know you wanted to ping it over
to Dimple, my good friend.
We both are in the Hustle Fund ecosystem.
So wanted to let you kind of re-introduce that idea
and ping it back to her.
Thank you, Kyle.
Thank you, Jared.
This has been amazing.
And I have to say, I sort of am on the fence
because I agree with a lot with what Martin's saying
and I agree with a lot with what Martin's saying, and I agree with a lot with what Matt's saying, right? Which is,
but let me start with the unicorn, the magical unicorns. What do I look for?
When I, is this possible? I think,
I think maybe it's just a new agey way of looking at
creating a new Y Combinator. I mean, that's just my thought. Like, hey, we're gonna go out and find these people
that are magical or they're creating something.
But I'm on Martin's side on this.
When I invest as an angel investor,
and I didn't even realize this was my thesis,
but I tend to look at people that are two types.
One, that they've been in this,
they've been doing this forever and ever,
and they know where the problem lies,
and they're going to go fix it. And they're so fixated on it, that they will pivot over
and over again.
One of my favorite investments, the guy doesn't even have a deck. It's called legit AI. And
the founder has lived in Canada is now in India is moving to the US, you know, he and
his partner 20 years of experience working across the consulting firms, all across
HR and FI.
And their biggest competitor and only competitor is Harvey, which is the only paid subscription
on Microsoft.
These guys are free.
In fact, one of their clients has been, it's a unicorn billion dollar client in India,
and they've asked them to replace Salesforce.
So for me I'm looking at that where I'm going you have experienced this problem
for the last 20 to 30 years and you're gonna come in and if this is where this
is the hill you're gonna die on that's really what I'm looking for. On the flip
side I've also spoken with very very young young founders, you know, in their teams
who just have that tenacity and they're going to go get it and they're open to coaching
and all of that.
So I sit on the fence on that.
So do I, what do I think about this magical unicorn?
Good for them.
I think it's just another way of advertising and all respect, but that's just how I feel.
But let me sideways really quickly for two minutes on the Web3 thing and Martin and Matt,
I'll say this.
I think Martin's right because I agree with him on a lot of it because he was talking
about Ethereum and how it takes that long.
I think Martin's looking at it from a consumer perspective and Matt, maybe you're looking at it
from a market perspective.
And I think that's where I agree with both of you
where I'm going, me as a user, I'm not buying into it
until there's a system that's ready to spit this out
for common layman language, right?
That's just where I come from, but I'll stop there.
Awesome, appreciate all that great feedback and that great knowledge you're sharing there, Dimple. I want to shift topics a little bit. We can come back to the Web3 stuff a little
bit later when we get back to our hot takes, but in other news this week,
WAP raised their Series B at an 800 million evaluation.
WAP is, if you're unfamiliar with it, I would consider them a Stripe competitor,
except instead of just payments,
they also do a bunch of other things.
So if you're familiar with Gumroad,
it's a better version of Gumroad,
a place where people can put on subscriptions,
different products, and they can sell online.
They could also kind of be grouped in that Shopify category.
Very interesting project.
Also very interesting founders.
Of all places, I actually met the founders
at Ty Lopez's house while we were using the urinal.
And he leaned over and introduced himself at that moment.
So you never know where you're gonna meet a founder,
but pretty impressive guys.
Think they're like 23 years old.
Kevin O'Leary's one of their lead investors.
So I just kind of wanna ask the panel
and Kyle maybe we'll start with you.
What is kind of your guys' thoughts on,
seems to be a ton of different payment processors,
but it seems like most people use Stripe and most people are unhappy with Stripe.
How do you kind of see that space evolving?
Um, and obviously we know Martin sees it more as definitely USD.
I know Russ, um, could throw in some web three aspects on the payment processors,
but what's kind of your guys's thoughts with the future of payment processors?
Yeah, that's a great question.
And this space does seem to continue to grow
being such a dominant one in the, you know, the 2010s era of venture capital.
And yet we're still seeing it continue to dominate in the in this new era
of venture and startups.
It's a really fascinating one.
I think that just because of the amount of competitors,
whether it's on the credit card side,
we talked about Flex a little bit last week
or the week before, obviously now
on the payment processor side, it is a margins game.
And a lot of these things do come down
to shaving off basis points on transactions because when
you're talking about significant volumes that's where the money is made especially when there's
so many well-funded competitors and I actually think that this is a feather in the cap if
I can be a tiebreaker and kick off the conversation again this is where stable coins potentially
add value because of the fact that you can automate some of those payments infrastructures that
are generally burdensome.
Now I think there's a fair response to suggest that the compliance side of handling payments
from money transmission is one of the bigger bottlenecks here that technology really is not going to replace.
But at the same time, that only kind of furthers the point that the industry will continue
to become more and more efficient in every possible way in order to reduce the costs
of actually moving money from place to place. And so interoperability of payments infrastructure is something that I've
spent a lot of time looking into and many of these firms don't have a common
standard. And I think that that's where there's so much room for optimization,
but where I think potentially tokenizing a dollar really can be beneficial
because at least with those standards they are on chain and can be automated efficiently with smart contract stuff.
So I don't want to bring it back to that conversation necessarily, Jared, if you're trying to move
away.
But I think that you're going to continue to see payments as a huge market because if
they're not using some of these Web3 solutions, that's just going to be another paradigm shift
to continue to drive this market forward. If I may just interject one second, Kyle, I love the Web3 and the smart contracts, but really that's addressing large markets. We're talking about 60% of the world that is mid to small tier.
Who's addressing that, right?
So that's my big question.
Sure, I think that from a small market,
you still end up needing to use a credit card processor
and you still need to end up using a regional
or commercial bank to fit your business.
And so I think that any time you're talking about ACH wire transfers or any kind of invoicing
or payments system, it's always going to get conglomerated back up to an underlying processor.
And I think that that's where I was referencing.
So yeah, I think you're right in terms of my perspective definitely sits at that higher level.
But I think that everything just ends up flowing back into that anyway.
Because if you're a small business, you're you're you're very likely to, you know, see that opportunity and see that translate back into to your direct business, even if it's a few lines down.
your direct business, even if it's a few lines down.
I have a comment on this.
I'm not familiar with the WAP.
I saw that announcement,
but I was familiar with Stripe when they started.
And the first of all,
the first thing I wanted to say is,
there's probably 10 or 20 unicorns in the payment space.
It's such a big fucking market with so many transactions
that there's a lot of room. There's such a big fucking market with so many transactions that
there's a lot of room, there's always going to be a lot of competitors. But what caused
Stripe to take off is that when they started, they were riding a technology shift. They
basically went API first and made it embedded, whereas every other processor before them required custom hardware and lease lines
and all this.
So they built their brand on a technology shift at the time and built increased democratization
and increased access to payment processing by going API first.
I'm not sure what WAPT's trend is, but I think there will be lots of new entrants in payment
that pick some new technology trend and apply that to that bigger market.
And I don't necessarily want to get pulled back into the crypto thing, but I've already
seen that in other markets, like for example, in India, they've skipped over the traditional credit
card rails and went to P2P payments based on the phone.
They don't fucking need the blockchain.
There was a whole different technology infrastructure based on the phone, which enabled P2P transactions.
You don't need any of that Web3 crap. It actually has a really
low latency, really high reliability. There are alternatives to those payment rails, which do
shave off lots of bips and can deliver the performance that people need. One that I point
to is the mobile money trend. I actually see a lot more promise in things like that, and other technologies that are
coming that are going to make those transactions more efficient as well. I just want to quickly
jump in. By the way, WAP is not, they do not do payment processing. They actually use Stripe.
I think the Shopify thing, they're basically more of like a marketplace kind of, you know,
I would say maybe make a Shopify more for services. A lot of the traders on
here, if you want to build a trading group and you have a Discord, 99% of them use WAP
as the front end. It auto gives roles and auto does stuff like that.
As a creator side of this, looking at it a little bit differently, the one thing that
has really stood out for WAP about me, 99.99% of referral programs
and affiliate programs at my point, I have zero interest in.
WAP created the first one ever that I was like, wow, I actually might go out and share
that out there.
What they do is if I say, emperador is up here, if I refer someone to his Discord, now
I help that person get on to WAP. Whenever that person makes another purchase within WAP
or goes back to that one, I still get credit for it
as bringing the person in, which is one of,
honestly, it may be sound simple,
but I have not found another affiliate program
that has done that.
So I definitely think that's a key into what WAP is doing
that you might not see on the numbers.
That's awesome. Appreciate that feedback. my apologies everyone for my miss speaking there,
but Dimple you see your hand up. What do you have to add here?
Thank you and I was so excited when somebody brought up the whole India thing and the UPI thing.
Yes, it's absolutely relevant to what we're talking about. But to Kyle's point earlier, they're pissed off right now because they didn't monetize.
So now they're looking to actually see ways on how they can do that.
So the rails are there, you're right.
But until now, it was being used just to get, you know, GTM, so to speak.
Right.
And they're selling it to Africa.
They're selling it to other nations.
It's in Europe. It's everywhere
But how do they monetize it? So to everyone's point?
FinTech strike all of these
There's a huge fucking market out there and somebody's gonna get it
It's just who's gonna price it at the best level
But again, you shave off a little bit of the market you're're in there, you're going to be a unicorn billion
dollar company. So that's what I have to say. Go for it, Matthew. Just got to say like the fact that
people think payment processors are still going to be profitable or have like really ridiculously
high valuations is pretty, it's pretty astonishing considering the race to
the bottom in terms of transactions and fees that blockchain based technologies are going
to bring despite how some people call them crap or whatever they think they know about
the technology. The truth is money is going to be so seamlessly passed between people,
entities, individuals, companies, nations, so fast, so cheap that there's not gonna be the need for,
or there's not gonna be a lot of meat on the bone left
for payment processors to take.
They're gonna be an intermediary
that gets disintermediated by a technology,
by a lot of technologies,
and it's gonna happen pretty quickly.
So if you think that these organizations,
payment processing, quote unquote,
Wells Fargo was a payment processor, right?
But nobody uses Wells Fargo the same way they use it today.
So the notion that these activities
or these institutions are gonna stay large players
in this space with these gargantuan valuations
is just very, very short-sighted.
I think that they're gonna be a dime a dozen
cottage industry, no margins, pretty soon.
I just want to chime in with that, what Evan said.
Sorry about that.
But the interesting thing is that what made WAP interesting
to him was the rev sharing through the affiliate system,
but essentially being more fair to the end user.
And that's just like a step towards either the direction
Web3 is taking
So that's all.
Evan, hop in.
So I kind of started this off that I might not be as, I might be on closer to Martin's
side on the web3 kind of side of it and I want to share my thoughts around it.
You know, I very much believe in the underlying tech of blockchain and crypto, but my question
that I keep coming back to,
is this something that's going to create a whole entire new industry? Or are the existing technologies, those existing payment processors, the square, the shift four, the toast of the world,
start to implement this technology into their own stuff, make it incrementally better, 5 to 10%.
And this whole ecosystem that people thought was going to be built may not actually come
to fruition and just the companies that have established and have been successful will
get incrementally better.
And truthfully, I've started to lean towards that way.
I don't think they can afford that big of a transition.
That's how I think of a lot of legacy systems.
They genuinely can't afford to move into the web 3 industry the way that it actually makes
things more fair, it would wreck their business model. And so it's going to continue to be
competitive. So they're going to have to like, essentially, either downsize or figure it out a
different way. I don't think that they can just adopt everything and still compete. I'm going to
I mean, they have to rearrange their business model to do so.
Martin, I'd love to, go ahead, Evan.
So many people in the crypto space and web three space,
I hear a lot about onboarding
and how that's a super important thing.
And I've started, I look at how quickly that grew.
There's not these same conversations about onboarding.
It feels like if the product was that great, the onboarding would be easier than it is.
Sorry.
The point is that you're not supposed to know how you're using it.
MasterCard is going to integrate with Ondo or a stablecoin company, and you're never
going to know that you're using the technology.
So when we talk about onboarding, it's not like somebody signs a form and creates an
account and has a username and a password.
They're going to be onboarded because they're using legacy systems that integrate blockchain
technology in a seamless way so they never know that they're using it.
I think that's the good part.
I think that goes back to the point I was going before.
I completely agree with that.
And I feel like the master cards are going to be the winners of this game getting incrementally
better than some of these other ones.
And you know, maybe it's the on dough or whatever. I have no idea whatever block chains or technology
They acquire to get to that point, but I really think it's gonna be those big established players continuing
Yeah, I also
Love the referral mechanics. I think that this is just the you know to talk about you know
We've spent
a lot of time talking about distribution here on the channel. And it was kind of a big point
of discussion with Martin last time around customer acquisition. Developing viral feedback
loops that encourage more and more users to send each other and their own networks to use platforms
continues to be a huge opportunity.
And so I love that this is kind of being implemented here.
We see gamification all over social media style industries, consumer style industries,
any type of application leverages a lot of these services.
It only makes sense that payments does the same. style industries, any type of application leverages a lot of these services.
It only makes sense that payments does the same.
We've seen some of it blow up in weird ways like Honey recently and others, but at the
same time, these types of referral mechanics, whether it's from Amazon and other fashion
industries that are passing through referrals to influencers,
or in this case, from a community perspective,
I really like that model.
I think that's a very sticky product
that does drive strong organic adoption
and can see those network effects.
So I do like that that's a big focus of this business
and that's something that attracts me.
I think it's gonna boil down to good customer service and that's where that attracts me. I think it's going to boil down to good customer service,
and that's where you end up.
I know it's not a hot take or anything,
but it really is going to boil down to the human aspect
because when the playing field is completely leveled,
that's all you have left.
Oh, Martin's off.
I just wanted to make a comment.
I agree that there are going to be people that have scale that can facilitate this P2P
payments without going on the credit card rails.
In fact, we had one of those 30 fucking years ago, it was called PayPal.
When you sent money from one person to another person at PayPal, you didn't go over the credit
card rails or the banking rails, you just changed the log entry
on their database.
And if you're a big enough player,
like many of these existing people are,
you can just run that database and you don't need web three,
you don't need blockchain, you don't need anything,
you're just holding a ledger.
And you can do those transactions.
In fact, there's some speculation that people like Shopify
are gonna start their own thing
because there's so many transactions between Shopify merchants that they can just handle the
ledger and you don't need any new technology to do that and plenty of people that's the most
that's the absolute cheapest way is when a big scale player like that just holds a bunch of
bunch of journal entries for you, you don't need Rails of any sort at all.
journal entries for you. You don't need rails of any sort at all.
Yeah, that's a very good point there, Martin. To kind of stay on the Web3 topic,
EMP, if you'll go ahead and pin that thread that I sent from Russ earlier today,
our Hot Takes champion, I think this is a good place to go with this next question.
Russ, I'm going to give you 60 seconds to give the TLDR, too long didn't read, about
what your thread says. And then we're just going to throw it right in the fire and let
Martin, after Russ you give your 60 seconds on what the thread says we're gonna give let Martin give his chance to uh to tell you that you're wrong
basically so we'll go there I mean is it I don't need 60 seconds I mean I truly
believe that VCs at least the way that they operate now have an expiration and
will slowly become less and less required in the facilitation
of funding startups and things of that nature.
So, I mean, the future I see will look much more like a Kickstarter on
chain where you get everything discoverability as well.
You have the DAOs that facilitate the release of funds.
It's all automated,
which is essentially what Web3 does for us.
It automates everything and makes the intermediaries
that don't actually contribute value go away.
Martin, what's your what's your response?
Well, as one of those intermediaries,
I do think I contribute a little bit of value,
but you can just talk to my founders about that.
Seeing as how six of them are now
billionaires and running unicorns.
But you know, for me it gets back.
There's there's two parts to this.
One, we've had crowdfunding for a long time,
probably 15 years, Kickstarter and all of those.
And if you look at the total amount of startup capital
that's raised by crowdfunding,
and none of those, by the way, use any Web3 technology,
so I don't understand what value Web3 adds
on top of something people are already doing.
And you look at the total amount of venture capital, it's about 1%. And we've been doing it for 15 years. So this is not a way that
a lot of founders can raise money, despite the fact that they've been able to do it for quite
a long time. And one of the reasons why is that you've got companies like Republic, and it's all
democratization, but you're talking about people investing $50 at a time, and you've got companies like Republic and it's all democratization, but you're talking
about people investing $50 at a time and you've got to get thousands of them.
The good thing that the VC industry does is they amass a lot of capital from very big
LPs that want to put a lot of capital to work and they can just get the scale of capital.
Before I started my venture fund, I actually ran a syndicate on AngelList. I had
3,000 LPs there. Even with 3,000 LPs, to fill a $100,000 allocation in a company could take like
two or three weeks and emails and all this. It's like herding cats. The advantage a VC has is that
I've got the money sitting in the bank that was given to me by LPs, and I can write a check after one meeting.
That efficiency, that reduction of friction, rather than adding friction in the space,
the VCs actually concentrate capital and allow founders to raise a lot of capital from a
smaller number of people very quickly.
I don't think increasing access to retail investors to try to herd the cats is going to
solve that problem. I would bet you, and if you want to go on one of those long bet sites and bet
me, I would bet you that even five years from now, you will not have double digits of venture
capital coming from any kind of crowdfunding. It will still all be concentrated in VC funds
making the investments.
I would just jump in and say on that Martin's bet there.
I mean, if you look at just that bet,
I mean, in some ways that would make sense
because your VCs are the guys with the big monies
and your crowdfunding, like you said,
are the people putting in $50.
So just from a total dollar amount,
I could understand where you're saying that.
Matthew, I'm gonna throw it here to you.
It was an interesting point too,
because I mean, I agree from an aggregate number,
it's gonna be challenging.
But as Martin pointed out previously, you know, the accredited investor pieces are kind of like in place for a reason, but they just laxed some of the crowdfunding
stipulations for how people could crowdfund, which I think is interesting.
So it'll be it'll be curious to see how this administration does or doesn't address any of the accredited investor
shackles that are potentially on people right now in terms of how they invest but of course because they have such strict regulations you're gonna have
More money coming in from the bigger players
Go for a cow Yeah, this is an interesting take. I mean as I may be the only one on the panel that's actually done a
This is an interesting take. I may be the only one on the panel that's actually done
a regulated crowdfunding offering. I did a Reg CF with one of my portfolio companies
maybe three years ago. It was, I would say, lackluster. I'm sure there's a variety of
reasons that might explain that.
One that I find particularly compelling if we were to kind of project it onto a broader
audience or on a macro level is actually just a pretty important point around economics
and user behavior.
And so from a fiscal perspective, you know, there's a reason why the private equity markets are
dominated by generally accredited investors, but particularly rich people.
And the reason why is because the average small time person just doesn't have a lot
of money to actually spend on very low liquidity moonshots or pot shots, right? People take risks and smaller income people do take risks, but they're highly liquid risks,
right?
That's why people like sports betting.
This is something that does get resolved very quickly.
You make a bet today that is either going to resolve itself today or maybe tomorrow
or maybe once in a while at the end of the season if you make a bet on who's going to
win the Super Bowl,
but you're not taking 10 year bets typically.
So I think that part of the problem with crowdfunding
is that there kind of does seem to be a natural cap
with respect to the amount of people
that are going to have to do this.
So there's a big component there for me
that so much of venture capital comes from large LPs,
family offices that I've worked with
that deploy hundreds of millions of dollars on aggregate
as just a single individual.
And so if you're taking $100 checks,
the amount of investors
that you're going to need to participate that are going to match those similar rates are just really, really extreme.
You're going to need such aggressive participation.
And I just haven't quite seen it, at least as a competitive mechanic to traditional VC.
Not that it doesn't work.
We do see some investor clubs, some Web3 syndication groups have had some success, but it does
seem to me that even in the Web3 space, most successful fundraisers come from a paradigm
or a Pantera or a Galaxy Digital or a large Web3 focused venture fund that deploys $60
million into the deal.
I don't think I've seen a lot of, you know, ICO style of
crowdfunding campaigns since the 2017 era. Like there is some level of grassroots adoption
that we can typically see in the odd occasional project, but meme coins have been very, you
know, have been a great example of how retail gets washed and how that hasn't proven to be a strong enough stack
of capital to actually defend against sell pressure.
So I would be typically skeptical personally to see that that market really drive any meaningful
investment into early stage business.
I think calling it crowdfunding, maybe I shouldn't have even mentioned that. I think that was taken from the Kickstarter reference.
But let's just assume that this futuristic Kickstarter has algorithmic discovery.
So now it's not your network getting this thing in front of people's eyes or even just
trying to get those $100 investors to actually throw down.
And of course, you'll never have enough of them in the way that things look right now.
But just imagine if the curation, the algorithmic curation, even implementing AI to actually showcase,
to have basically your history of how many successful startups or founder, how many successful raises have you done
and was your company successful in general?
I mean, that can all be done in a Web3 system.
And I do believe it'll get messy before it gets better,
as we saw with meme tokens, but I think it's all worth it.
I think that giving someone the opportunity
for 1000X upside so we can actually compete in the market
space of ideas and help people and ideas that he believes in
is worth it. So I mean, that's just kind of like my stance,
but it's not just crap. I'm not trying to put this in a
crowdfunding bucket. I think it's just look more like
crowdfunding.
Yeah, no, I think that's interesting. I wanted to hear I
was gonna I should have asked the follow up that I think you
did nicely was just to better understand where, where kind of your line of reasoning came
from.
I heard the take, but I didn't fully, you know, get a chance to read the thread that
was referenced.
So just, just better understanding kind of your perspective there.
You know, I mean, I look in the grand scheme of things, there's, there's a lot of LPs that
don't want to do this work.
I think that there's always going to be a level of accountability passed through to an intermediary
that takes fees in order to manage capital. This is just such a common thing that I would be
surprised that even if you used smart contracts and AI, that there's not going to be some level of
fee structure there that kind of mirrors what you're looking at in the
Space even if it's kind of AI driven. I like that
and I I'd sorry to interrupt but the the concept of curators in
In the world of investing is great
And I think there's always going to be a reason to have curators
But it's they're gonna have to prove their worth and it's all going to be a reason to have curators, but they're gonna have to prove their worth.
And it's all going to be transparent.
But just like playlists on Spotify.
And I mean, it's just strange that you have to pay to be on a playlist to me and to be
seen and things like that.
But doesn't that isn't that just kind of like what isn't a fund manager just just nothing
more than a curator of deals. I don't
I don't understand the argument that the fee structure is like too high or or is your I don't
fully understand that that perspective. No I mean that I agree that that curators can be necessary
for a while until this algorithmic discovery you know thing that I'm outlining comes to fruition. But I also genuinely like the
idea of curators to be able to even facilitate these deals and things like that. So I think we
agree more than we disagree. But yeah. Well, got it. I can just say something on curators since I guess I am one. The efficacy of a curator degrades
the earlier you get. For example, I just do pre-seed. I'm investing in three guys and a dog
who have not really created a product yet. There are no financial metrics. There are just projections.
financial metrics, there are just projections.
And so to curate that sort of a deal is for an algorithm
is very, very hard.
You already can curate public companies,
like Betterment and Wealthfront have already done.
There's algorithms that can sift through craploads
of public data.
And I think the efficacy of algorithms related
to the span of data available on the opportunities
that you're looking at.
And I think they're very applicable in the public markets.
In the private markets, it's much, much harder, especially as you get earlier.
I do know some algorithmic VCs in the C and the D. But by the time you get to the C, you've
got $50 million of revenue, you've been operating for
five years, you've got historical financials, you've got quite a bit more data to make your
decisions on. In the early stages, I think it would be very, very difficult. And to just give
you an idea of the difference in scale, I saw last year 3,500 deals and I wrote 10 checks.
So that's 3,990 deals that people didn't have to look at.
And if you're an angel investor,
and I know there are a few on the call here,
they probably didn't see 3,500 deals last year.
So I'm making my picks out of a much larger thing
and that takes a lot of work to do that filter.
And it is an order of magnitude larger scope of deals
that I'm looking at then as an angel.
As an angel investor, I was seeing maybe 50 deals a month
and now I'm seeing 300.
So professional managers are gonna have a view
of the market and a picking from a larger pool
that regular investors are simply not gonna have.
And there's definitely a value in that.
I will absolutely copy trade you in the future.
So just putting that out there.
That's awesome.
Martin, that sounds like you're a pretty busy guy.
You're going through 10 different deals on your desk
every single day.
I mean, that's impressive.
But that also speaks to, you know,
when you see that many and you go through that, that's, that's impressive. But that also speaks to, you know, when you see that many, when you
go through that, that's a speaks to your success.
Someone who's seen that many deals, can you give me like, you
know, if you look at the first page, and it says this instant
off, is there anything like that? That like, you know, you see on
the first or second page quite often, you're like, that's
yeah, if they have web three.
Or if they, man, you're gonna miss. Yeah, if they have Web3. Or if they...
Man, you're going to miss out on a bunch of deals, Martin.
I absolutely am.
And by the way, I'm an LP in Redbeard Ventures, who is a crypto focused VC.
And the reason I am an LP there is that he knows and spends every day looking at crypto
deals.
And I want to get a little bit of exposure to the asset class, but I'm not qualified
to make those decisions.
So most of my, I focus just on B2B software.
I also don't do pharmaceuticals.
I don't do medical devices.
I don't do hardware.
I don't do CPG.
As a VC, most VCs specialize a little bit in something where they think they have an advantage.
And I think most managers should do exactly that.
I think it's so ironic that I'm actually working with Redbeard right now.
I think they're great.
And I'm happy letting them make the decisions and understand the ecosystem.
And so I have some exposure to crypto, but I don't do it myself.
But why? But why do you want the exposure? ecosystem. And so I have some exposure to crypto, but I don't do it myself.
But why?
But why do you want the exposure?
You know, maybe a little bit of FOMO or something, you know?
I mean, there's going to be some value created.
There was also a ton of value destroyed there.
So you know, well, yeah, so is the Internet.
You could say the exact same thing about the Internet.
Exactly.
So I mean, I wanted a little bit, I mean, it's a tiny,
it's like 1% of my portfolio.
So I didn't make a big bet there at all.
But it's the same reason why I own
some very low alpha investments.
I own some gold, I own some things like that,
things that I don't think are high alpha,
but just as a portfolio diversification, right?
Wow, this has been a great discussion today,
but we are at the top of the hour.
So I wanna thank everybody for coming on
and joining all the listeners and our speakers.
Listeners, if you would go ahead
and give a follow to our panelists,
give them a follow, stay up to date with
Them and their content to see what they're up to if you liked what you saw today. We are back every Thursday at the same time
5 p.m.. Eastern with more venture capital and private equity shows
And if you have any questions feel free to send us a DM and we'd be happy to get to it on our show as well
So again, thank you to all the panelists for a great discussion.
I'm going to pass it to Kyle and then to Wolf and let you guys close it out.
All right, all right, all right.
Well, hey, panelists, this was amazing.
Thanks for all the good sports.
And look, this is the reality of venture capital is that you're getting into so much hypothetical,
so much theoretical stuff and some investors are going to have different perspectives and
that's a wonderful, wonderful thing.
We need that diversity of thought and opinion to really find the true unicorn.
I think it's been an awesome discussion.
Major shout out to Jared for carrying the load this week as I've been inundated with
travel missteps.
You can certainly be sure that I'll be loud and proud
next week, Thursdays at 5 p.m.
for the Wolf Venture Capital and Private Investing Show.
We do this every Thursday at 5 p.m.
We have some amazing recurring guests.
We always try to get new guests on as well.
So I wanna thank all of our panelists
between Dimple and Martin and Matthew and Russ
and everybody listening.
This has been a
Wonderful wonderful discussion. I love a little bit of conflict just to make it entertaining for the listeners
So with that we will talk to you next week
If you don't know wolf financial does all kinds of shows on public markets on crypto on everything
You can follow them wolf financial or wolf web 3 has all of that crypto discussion there
So with that I'm gonna kick it back to the main channel to close us out
Thanks Kyle and thanks Jared great show today as always this show has been a lot of fun each and every Thursday afternoon
Appreciate having Martin up here Matthew Ross and dimple joining us today
We always find really great panelists up here, Matthew, Ross, and Dimple joining us today. We always find really great
panelists up here and I really enjoyed the discussion. And I echo Kyle's thoughts there.
Sometimes these spaces, because I host spaces all throughout the week, all day long. And when they
become echo chambers, they do get a little bit slow at times. I absolutely love these healthy
debates back and forth. I thought it was super interesting, so great job by the panel today,
and great job by my two co-hosts up here, Jared at Self Taught Success and Kyle Sonlin. Appreciate
both of you. Appreciate all the listeners that tuned in, and we will be back on Spaces all next
week. Thank you so much for tuning in. We hope you have a great rest of your Thursday evening,
and take care all. See you later guys. .
