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VENTURE CAPITAL & PRIVATE INVESTING
Recorded: March 27, 2025 Duration: 0:58:15Space Recording
Short Summary
In a dynamic discussion on venture capital trends, panelists highlighted the upcoming IPO of CoreWeave, the successful fundraising of Kyle Sondland's Global Settlement, and significant legislative changes in Delaware that could reshape the investment landscape. Additionally, Blackstone and UBS's push for private equity in retirement accounts and BlackRock's new investment portfolio reflect a growing trend towards integrating private investments into mainstream finance.
Full Transcription
Thank you. Yo, yo, yo, good afternoon.
Happy Thursday, March the 27th.
It is five Eastern on Thursday, which only means one thing
here on Wolf Financial. That means it's time for our weekly venture capital and private investing
show. We've started this series this year. It has been fantastic. The conversations and guests that
we've had on here have been absolutely incredible. I know we have, well, Jared's up here as my co-host,
and then Kyle coming right back up, maybe a little glitch there.
X has been glitchy this afternoon,
so we do appreciate everyone that has stuck with it this afternoon,
everyone that's joining us.
If you are on the panel, go ahead and throw a request to speak up.
We'll get you up.
And with that, I'm going to go ahead and turn it over to my two co-hosts here, Kyle and Jared, and let them kick us off.
Hello, everyone. Hello, hello. Welcome back to the official Wolf Financial Twitter spaces
talking about venture capital and private markets. I am so happy to be here.
My name is Kyle Sondland.
And as always, do a quick intro on me.
But you guys, if you listen to this space, we do it every Thursday at 5 p.m.
for hundreds of listeners, thousands of people tuning in every single week
talking about venture capital.
Because while we do like the public markets and here on Wolf Financial,
we do plenty of public market coverage around ETFs, around tech, around Tesla, around
crypto even, which has its own kind of trading ecosystem. I love the venture capital space
because it has that asymmetric upside. It has that opportunity to make thousands of times return on
your money. It's just something
that you're probably not going to see very often in the public markets from just traditional stocks.
But we have some cool and interesting things to dive into today. A common theme being CoreWeave
over the last couple of weeks, an earlier previously startup company set to go public
just tomorrow on the IPO markets and a lot to look forward to there
with respect to liquidity. But as always, my name is Kyle Somlin. I am a second generation family
office, so I do some investing as well as syndications, meaning that I do invest through
my own balance sheet, as well as I'm a general partner of a few different funds that do actively
trade stuff as well as venture things. And of course, I'm an entrepreneur. I've started businesses
all across the tech space, focused here in Miami, Florida. Recently, my new company,
Global Settlement, has had a super productive pre-seed financing round as we've just brought
in a bunch of incredible investors. And without further ado, I do want to introduce my co-host,
Jared, as we bring up our panelists. We have got Darren Marble. We've got Keith Kohler.
We've got some amazing people that we're working on bringing you up right about now.
Hey, everybody. Kyle.
Happy. Thanks for being here. My name is Jared.
And the meaning of that name is all the information you need is out there.
It's just up to you to go seek it out and apply it.
My connection to the VC world is I help founders and startups anywhere from pre-seed all the way up to publicly traded companies.
I help them grow their brands on Twitter.
We've done two and a half million followers and a billion impressions for clients.
And so that's kind of my connection to the VC space is working with those founders in the marketing realm.
So excited to dive into some tech.
DC realm this week.
So it's going to be a good show.
All right.
All right.
All right.
Well, it's exciting to be here we have some some new guests and some
old guests unfortunately due to the technical difficulties with twitter spaces or x spaces
as always i actually cannot see any other panelists so i do want to either pass it over
to the wolf account or jared could you introduce our panelists that we've been able to bring up on stage thus far? We do have Darren up here on stage. Darren Marble,
welcome to the stage. Great to have you. Would love to get a brief introduction and background
on you, sir. Thanks, Wolf. What's up, Kyle? Great to be here, guys. I'm Darren Marble. I'm an
executive producer of the Going Public series. It's a show like Shark Tank where viewers can
actually click to invest and buy shares
in featured companies while they watch.
And very excited to share that Season 3 of Going Public has been licensed by X.
Here we are on X Spaces, Season 3 streams on X exclusively on X on Tuesday, May 6th.
It's a show unlike any other.
We follow the stories of the founders,
building businesses, raising capital. We run the founders through a variety of challenges. So you
get to see who these people are at their core when they're totally out of their element or comfort
zone. And if you're interested, you can buy shares in any company. At the end of the season,
investments open up and for as little as $100, you could be an investor in a really exciting
startup. I own and operate two companies. I've raised several million dollars for my own
businesses. I've got about 100 investors between my fintech company issuance and the going public
series. My media company, we've raised capital from billionaires, family offices, venture
investors, high net worth. And we've been to hell and back
during that process. And so we're no strangers to the capital markets and strategies to attract and
kind of close investors and excited to be here. So thanks for having me.
Oh yeah, Darren, it's always a pleasure to have you here. You're a beast. We've spent many of nights and days together all across the U.S.
And I look up to you in a lot of ways.
So I'm excited to have you here on the panel to dive into some of the amazing things that
you've seen, not only with your company, but also trends across the industry.
I do think we also have Zoo here, a returning panelist.
Zoo, do you want to introduce yourself?
Paging Dr. Zhu.
All right, perhaps not.
I just want to make sure everybody else can hear me.
Zhu, I've got a heart there from you, so I don't know if you're not on stage yet.
I'm going to have to go over to my computer to make sure that I can see all the different panelists. But we do have an amazing show on
today. And also for a note to Keith as well, I know you're here on the, you're in the listener
audience. So definitely make sure that you request an invite to join the stage here so that we can
bring you up. Keith has a really interesting perspective
on this stuff from the debt markets, which I think is really, really cool. So we'll make sure
to bring all of those people on board. But Jared, I know you had talked about privately a few
interesting headlines you wanted to dive into. Anything you wanted to lead us off with on the
TechPulse? Yeah, definitely some neat updates here this last week.
I think one of the things that really stood out, let me get my note here, is Blackstone and UBS are trying to push private equity allocation into retirement and 401k accounts.
So I thought that was interesting.
I'll just share a couple headlines to kind of let you take it where you want, Kyle. Dollar Tree sold family dollar for a billion dollars.
They had acquired that as just kind of make a colomerate, I guess you could say, of dollar
stores and moved on from that one. So that was definitely interesting. One other thing that I
thought was really stood out was the Senate Bill 21 that passed in
Delaware.
I know a lot of companies are incorporated in Delaware.
And basically what that Senate bill does is it modifies corporate law, reducing shareholder
lawsuits against companies and execs.
At least that's the idea behind the bill.
And so that's a win for companies
as far as taking companies public
or taking companies private.
And then the negative kickback
that people said behind that
was it gives too much power
to the inside shareholders.
So I'll kind of start with those three
and let you take it where you're going.
Yeah, no, unfortunately,
we have been able to get
a couple of people on stage.
I want to do those intros
just for all of our panelists and listeners.
We want this to be a great roundtable discussion.
I want everybody to be jumping in.
If you have thoughts, feel free to put your hand up or to jump in, ask questions or chime
in with your thoughts.
Try to make it short and sweet.
But fire away.
We want that kind of roundtable discussion.
And we can take this conversation in any direction.
But we do like to kick it off with some of those fun headlines and then see where the conversation
goes so with that i want to kick it over and allow our other panelists to introduce themselves
first up we have john rush john really appreciate you being here you want to do a quick introduction
on yourself and and talk about your expertise yeah man. So I'm running a bunch of startups, all powered by AI.
So basically my goal is to build
the most automated organization on earth
where all the boring stuff is done by AI.
And I'm basically running the creative part
and the idea part and the strategy,
but the rest goes then being done by AI agents.
So I do a lot of AI education on Twitter.
I share threads about startups, about growth,
about marketing, about SEO and no-code, et cetera.
So my background is from VC-backed startups.
I've been doing VC-strips for like 10 years
and now i'm bootstrapping so i think the bootstrapping is the future because the capital
is not that important for startups anymore so i think it's the leverage that we get from ai
makes the whole game so much easier when it comes to capital. So it's more like idea heavy and distribution
heavy, but distribution is also happening through social media and through other means
where it's not really expensive and often it's free, but it's hard, but it's free. So
that's my expertise.
Yeah, it's a really good point. And you actually kind of made me think, you know, we've talked
a lot here on the show and the differences in the venture capital industry in the 2020s versus the 2010s, where in the 2010s, it was
so much free money or at least cheap money going around. These monster funding rounds kept going
around. People were throwing money at software developers left and right. It was the highest
prized profession in the world. And now it seems like with AI, we're really able to scale
our human resources at a significant capacity relative to what we've seen in years past.
And perhaps the AI boom is actually not only its own kind of world, but maybe it's a market
adjustment to the fact that venture capital is harder and harder to come by for the average
startup, which makes it more and more important
to be hyper-efficient with the labor and the manpower that you're bringing to markets.
I think there's a whole conversation we could talk about there regarding trends. Really appreciate
you being here, John. I also wanted to give Keith a chance to introduce himself. Keith,
I'm a huge fan of yours. You're a good friend of mine here in Miami, and you've invested in two
of my portfolio companies. So you have put
your money where your mouth is on multiple occasions, and you also have some really
great perspectives on the debt markets, which I think is a cool direction to go on this front.
So I want to introduce yourself and share a little bit about what you've got going on.
Yeah. Hi, everyone. Keith Kohler here. And yeah, Kyle, two so far, right? There could be more.
Keith Kohler here. And yeah, Kyle, two so far, right? There could be more. Glad to join you all
today. As Kyle indicated, I'm a debt financing specialist. And that's from startup and early
stage all the way to multi-year profitable or lower middle market. And so my perspective is
quite a bit different. And I specialize in the consumer space. So CPG, consumer packaged goods,
although I dabble in other industries,
that's my core industry and more specifically, natural food and beverage, the type of product
you might see on a whole food shelf. I had raised capital many years ago when I had what I thought
was going to be my dream when I opened a gluten-free food factory in Methuen, Massachusetts.
We raised capital from family offices and a small fund, and it was good
until it wasn't. We got to a $4 million run rate, and then unfortunately, we ran out of money.
I have a lot of perspective on venture capital because in the work I do in debt financing,
often many of the companies I work with are already venture supported. So I get to benefit
from hearing a lot of stories from founders about their experience,
particularly at early stage venture capital, whether it's whether they've raised money from friends and family or angels beforehand, or if that's their first way they get into
venture capital.
So I really hear a lot of stories about the benefits and the pitfalls of this industry.
And so that's mainly my perspective.
That's awesome, Keith.
And I can't wait to get everyone's perspectives here.
But we actually do have one additional panelist who's joined us today.
He was in the crowd and feels like he's got a fantastic perspective on some of these things.
So I want to give Ravi the opportunity to introduce himself and talk about what's going on in his world.
Thanks, Kyle.
And this is great to see a space like this.
I do a lot of work investing and also advising companies in agritech and food tech, very much on the CPG side.
So we're excited, but really looking at the sunrise opportunity of AI, but really use case AI, both in the Indian market and the US market.
So we're eager to connect with folks and listen to everybody and contribute. Thank you so much
for pulling me up. Yeah, I think we have a really great diaspora of perspectives here.
Darren Marble, a crowdfunding expert, retail opportunities and knows everything about that
space. You've got Keith with the expertise
around the debt markets. We've got John with expertise around venture capital and AI at large
and Ravi with emerging markets like India, which has been, I would say, outside of the US,
one of, if not the second largest venture capital market, not only in terms of fund deployed,
but also really in terms of successful startups. I mean, there are a lot of amazing multi-billion dollar companies coming out
of India because of obviously how hard working the population is, the size of the market there,
and just everything else to do with Southeast Asia and I think the favorable political climate
generally, at least geopolitically. So a lot of really interesting perspectives here.
I wanted to kick it off with some of the things that Jared mentioned.
So, you know, I think the first one talks about the corporate law and managing shareholders.
And so, you know, a lot of this has been, you know, we see in the public markets, sometimes
there's manipulation.
This is, you know, even in the private markets, we see the rise of like a safe note, for example, which really kind of actually sits as debt for someone that doesn't know.
A safe note is where you're essentially giving an investor an IOU.
So you're saying, yeah, I will give you shares in the future.
But for now, you actually don't sit on the cap table. You don't
actually get those shares. And the benefit of that for a company is that they don't actually
need to have to give up the governance controls around their company until some point into the
future. And this is a lot of value of the debt markets is that you aren't beholden to somebody
else and how to run your business, provided that at least in debt,
you can cover those costs of maintaining that over time. I've certainly had a lot of experience
doing safe notes, both in terms of a traditional safe note on a private market, but I've also
conducted a crowdfund and we've used safe notes because having the retail public with governance
controls can sometimes be a concern. So I want to start off
with Darren. Talk a little bit about going public and the companies that are raising,
how are they managing a cap table that may have a lot of different investors? How are they managing
how to run that company? Yeah, it's a great question. So I've been in the online capital
raising industry or equity crowdfunding industry since day one,
which was in June 2015 when the Regulation A-plus or Reg A-plus securities exemption went into effect.
The SEC has actually made it easier over the years for companies that are utilizing online capital raising tools
tools to more easily manage their cap table. So for instance, one of the most popular securities
to more easily manage their cap table.
exemptions right now in the United States is called regulation crowdfunding or reg CF. In a nutshell,
a startup in the United States can raise up to $5 million from anyone over the age of 18 globally.
You can market the investment, which is called general solicitation.
And now the SEC has allowed those companies to consolidate hundreds or thousands, in theory,
tens of thousands of non-accredited retail investors into a special purpose vehicle or SPV.
And this tends to be a great capital raising tool, Kyle, for companies that have big communities.
And this tends to be a great capital raising tool, Kyle, for companies that have big communities.
So if you're a consumer products company, maybe you're a fintech company, even a SaaS company that has an email list, a brand, there's some community behind the company.
This is a way for you to turn your customers into investors.
And one of the reasons that founders choose this capital raising tool, by the way,
is that founders are setting terms of these deals.
That's obviously different than if a venture capital firm comes to you and says, hey, I'll give you $5 million, but I want 40% of your business and two board seats
and liquidation preferences and all these control provisions
that founders are generally used to giving up.
In a reg CF deal, you could raise up to $5 million on your own terms.
And your community is going to be less valuation sensitive.
And they're not going to expect the board seat for investing $100 or $500.
But we see companies commonly use this SPV structure in the online capital raising industry
so that you can effectively
market your deal. And yet you have a single line item on the cap table that of course represents
the economic interests of the aggregate number of investors that you bring in. Again, whether it's
five, 500 or 5,000. Right. That's a cool perspective. And, you know, this fake note especially was popularized by Y Combinator, one of the most influential platforms to drive startup adoption. So, so successful, led by Paul Graham and many of the other founders.
Obviously, Sam Altman was a huge part in driving mass adoption around that before he's done
all of his initiatives with OpenAI and other businesses.
So I wanted to kick it over to John and say, what are your thoughts around startup fundraising
right now with respect to the next generation of this?
Do we see this type of fundraising model being successful moving forward of just raising
round after round after round? Are you kind of looking at this type of venture debt model that
I've actually done a few times with startups where I actually may lend them money because
they have an AI wrapper that makes money today? So it's like, yeah, I'll give you some CapEx,
but I want Mr. Wonderful style a dollar on every whatever or or x amount
of you know percent of the revenue do you see that being something as these companies go leaner
where do you see the fundraising environment going moving forward um from your perspective
yeah that's a good question i think uh things are changing quite fast in the funding um ecosystem so
the ai startups are having the same model as we had in the past. So the venture
capitalists are funding them like crazy and they fund them often. And we see some of the companies
raising every three, four months, which is more often than in the past. But I think with non-AI
companies, we're seeing a big shift. And I think a lot of the non-AI companies are now expected to have a pretty serious traction before they can raise funding.
I think the pre-seed and seed stages are not that common for non-AI startups now.
And I think eventually we will see the case where the first-time founders will skip the pre-seed and seed rounds and they will
be expected to have certain traction and they will probably go for the series a as their first round
and i think that will be very common case for a lot of startups also because the um it's not that
costly to build your startup and it doesn't cost that much as it cost before.
And also when it comes to the revenue sharing model, I see that pretty often too now.
So there is new class of startups, the bootstrap startups.
And in the past, the bootstrap startups were very small and nobody really cared about them.
But now we see a lot of them being
pretty serious and they're pretty serious competitors to VC-backed startups and I think
for the venture capitalists there's no big play with bootstrap companies because these are
not planning to go for APL they are not planning to exit so these are usually turning into like
100 million size businesses rather than
billion size businesses. And that's why we see that the popular way for these companies to raise
funding is to do the community round. So I see a lot of community rounds for such companies where
they raise from their users and they use these platforms. There are a lot of platforms for that now where you can raise from hundreds of users or even thousands of users.
So I think that's kind of where we're heading, where in the past we had one model for most startups.
Like everyone went through pre-seed, seed, and then series A and B and C.
But I think now we will see that there's three groups.
So one group is the AI startups and also the hardware startups.
They go the same way as they did in the past.
They're capital heavy.
But then the second group, which is the regular startups, they will skip the pre-seed and seed, and they will probably go to series A once they have traction just to scale faster. And then we'll have the bootstrap scene
where there will be either community rounds
or there will be revenue share
where the smaller angels will invest
for the revenue share rather than for the equity
because the bootstrap startups
aren't being sold that often,
but they make pretty good revenues
and they're like cashflow companies.
So it makes sense to own 10% of the revenue in such company for smaller agents.
So that's what I'm seeing now.
Interesting.
Interesting.
And Keith, based on your perspective, how do you see this going?
Do you think that venture debt, like Silicon Valley Bank was such a huge lender of venture
debt and that model
seemed to be really fruitful for startups. But obviously, that bank went bankrupt. So what
percentage of that, you know, was their fault versus perhaps, you know, some of the other long
dated treasuries and things? Is the venture debt model, you know, is that something that you see
maybe growing over time? Or are you primarily keeping and you think those trends are going to stay with more established businesses with long run cash flow?
Yeah, my observation has been this, Kyle.
Ever since the pandemic and with the drying up of equity overall, really at all levels, right?
From angel to early stage venture to later stage venture to private equity,
at least in the consumer space.
I've been advising a lot of my founders
to do one-off or bespoke or private,
choose your favorite word,
venture debt style arrangements
with people who are currently on their cap table.
So I think for all of our founders out there,
if you have folks on your cap table right now who may be invested in you in some way, whether it's a safe note, convertible note or straight equity, whatever that instrument was, you could look at structuring a private type of arrangement, which is akin to an institutional venture debt style structure.
arrangement, which is akin to an institutional venture debt style structure. And it's a good
creative approach because a lot of times the folks who are already there may say, hey, I've already
done as much as I can on the equity side. I myself can't do more or my fund won't allow me to do more.
My LPs won't allow me to do more. But I could look at providing debt to you and it can be senior secured.
It could be unsecured.
There's lots of different ways to structure it.
I'm actually, Kyle, my experience is I'm seeing a lot more creativity coming from existing
investors saying, not more on equity right now, but I'll entertain some type of private
debt structure that could make sense, particularly as a bridge until such time as we see equity free up a bit more. And I am seeing equity deals or more
activity in the equity space right now in consumer. There's been a slight uptick in this
early stage of 25 so far. Yeah, it's interesting. And I guess with types of venture debt models, I mean, we've seen
this in actually the market making space for crypto companies. There's a lot of like warrants
to get thrown around, things like this. Obviously, in the crypto side, there's easier liquidity for
some of those things than in a private company. But how does a venture debt style model work
if the company is, you know say, not profitable? Is it possible
at pre-revenue? Probably not. But what would a venture debt model look like for a tech company
where they probably have high burn, they're probably a pretty low credit risk, but clearly
this is a model that worked because Silicon Valley Bank used it a lot.
Was that because it was just kind of a loss leader for them? Or do you see somebody else
being able to come into that space and offer a similar service? My observation was as regards
as SVB, it was a function of how much they trusted in or had confidence in the sponsor,
the equity sponsors of the company. So a lot of times they provided capital to companies based on the strength of that private
equity firm, venture capital firm.
And I would say, quite frankly, quite recklessly without regard to the underlying financial
condition or the prospects of the company.
I think there's another thing, too.
SVB was in its heyday when the strategies employed by most companies
was grow revenue at all costs, right? You burn whatever you needed to burn. I did not see,
like I see now, something highly different. A lot of companies I'm observing now,
capital efficiency is what's on the top of mind of venture capital firms and private equity,
I believe, largely, not all, but largely, capital efficiency, meaning they want to see a path to cash flow break even over some time versus burn, burn, burn, just build the revenue, sell it was strategic.
That was the prevailing model pre-pandemic.
And again, SVB supported that, and I would say proliferated it too.
it too. And now here we have something different. So my feeling on current venture debt, Kyle,
And now, here we have something different.
is more like, hey, venture debt for me makes a lot of sense if a company is either break-even
or about to be. About to be, I mean, in a bite-sized timeframe that people think makes
sense. And for me, that's probably within about 12 months.
Because-
Is there like a, is kind of there a low bound on that break-even figure?
Like, is it eight figures?
Is it nine figures?
Like, where do you see that market heading?
You mean as far as net income or EBITDA?
Yeah.
Oh, God.
You know, again, what I'm looking at is mainly in the earlier stage to growth stage, Kyle.
So I'm seeing a lot of these venture debt structures happen even at hundreds of thousands of EBITDA.
Yeah, particularly if it's a bridge to whatever's next.
That's really what venture debt is often meant to be. How do we get someone from the venture, the first round of financing we did, whether it was a seed round or whatever you want to call it, or a series A, to whatever is next for them, whether it's a series B or something else?
And that's at the core of what venture debt is supposed to do.
The cool thing is, is if venture debt is placed at a time when a company, like let's say you have a two-year note with some warrants. And during that time, the company becomes profitable.
Well, then you can have a debt financing exit strategy, right?
You can take it out with SBA or other asset-based lending
or other types of instruments that are going to want to see profitability
either nearby or in the rearview mirror.
So there's a lot of creativity that founders can come up with.
And I really just encourage everybody who is currently have a venture backing to go back to everybody and ask them, hey, what would it look like if?
What could there be on a venture debt style structure that could make sense to all of you?
Because actually, it's a great thing for existing investors, because what does it do?
It provides a runway for a higher valuation and that benefits everybody.
Right. No, I appreciate that insight. And I want to take one minute here just to shout out. We're
halfway through the show and then I'm going to ping it over to Ravi. I want to hear his thoughts
in the emerging markets and maybe back to Jared to give his thoughts and maybe transition us to
the next topic. But before we do any of that, I do want to thank everyone for being here. This
is our Thursday show. If the Wolf Financial, please, if you could give it a share or retweet,
that would be really appreciated. Or if you could tag in any questions that you have for the show,
we'd be happy to answer them live here on air or tag in people who you'd like to be potential
panelists in the future. So all of that is available. We do this every Thursday at 5 p.m.
Eastern. So with that, I want to kick it over to Ravi. Ravi, what are your thoughts around
the emerging markets? Do you see similar fundraising processes in those markets as we see here
in America? Or does the structure vary? Is the standard higher than what you'd see here in the U.S. just because there's maybe less available capital?
Or is it a totally different structure altogether?
What are your thoughts?
I think a really good question, Kyle.
But I'll also come back to the U.S. market because I work in both.
But, you know, specifically in India, I think the governance really matters.
I think the fact that you have a government which is very, very pro,
you know, VCs and startups, we've seen a huge increase. You know, traditionally,
Indian economy would not encourage young entrepreneurs. And there's a lot of, you know,
brain flight, as you know. But now, one big distinction that I see, and I really hope that
one of you can answer that. In India, the government
of India has now introduced six specific programs supporting creation of startups. So while you have
the PE and you have the VCs, you have the debt, but you also have the government schemes promoting
startups, especially to create this Make in India initiative that you must have heard of. And I think
I've been very, very eager to really understand that do we have something parallel or the same
by the US administration? I know there was nothing with Biden. I don't know. I mean,
if I have to make one recommendation, in fact, I had a very interesting conversation with somebody
yesterday. I said, one thing that I can learn, because we learn so much from US to the Indian
market, but one thing that you can learn from India as an emerging market is really the governance support
that is really nestling creation of these AI-powered and many more startups.
Now, the second important distinction really is that, you know, you see that in India,
because of the size of the market, right?
I mean, if you just look at the middle class population
and you're talking about 450 million people
doing extremely well.
And I've been here for 20 years
and over the last 20 years,
I've seen the way the purchasing power has changed in India.
And now we see clearly,
I mean, I've been part of at least three startups
that are going IPO
and hopefully one should be out very soon.
So the variation is huge from agritech to drones to looking at fintech.
Fintech is very, very big in terms of a startup in India.
Manufacturing, robotics, space, and also arm production.
These are new areas that were not really traditionally part of the Indian culture.
And so you see that part of it.
And then the other thing, which is amazing, I really hope that's similar to what, you
know, President Trump did here, which is to do an AI summit.
I really, really, I hope somebody is listening to do a White House summit on supporting startups
in this country, because this is also kind of an emerging possibility.
Of course, the market is kind of fluctuating, but on the long term, I think we need to bring those,
you know, jobs back, the manufacturing back, and so on and so forth. And startups are the
most critical thing to put in. So in terms of the opportunity, I also co-founded the India 2047
Investment Forum, which is based out of New York. And we really bring, you know, U.S. company and
Indian companies together, both the Indian companies that want to invest in the U.S. market.
And you see a complete reversal for the first time. You have many U.S. companies. You, of course,
traditionally know folks like Infosys and some others. But now you will see many other countries,
especially in the solar tech. For example, you have companies in India saying that we want to be in solar tech, you know, investment in Texas, for example.
Pharmaceuticals is another very big opportunity opening up.
And the reverse, where you're also bringing this because, you know, the market is great.
And that's kind of a distinction if you look at India as a size, but also, you know, from China.
Because China has been, you know, a very, very closed governance model, right?
Because the opportunity was great. The market was fantastic.
But because of decoupling, I think India is pulling that as a big opportunity.
You see that in the stock exchange.
You've seen the GDP over the last 10 years.
I think I tweeted that about two days ago that it's been very consistent.
So I think having that consistency and market confidence is critical. So you've seen also
emergence of very critical VCs in the last 10 years. So that is what you can, and probably
I'll tweet that or tag this here, and you guys can follow that.
Interesting.
Yeah, but my question to you, Kyle, and to the other panelists is really that you know while we talk about the vcnp fund i'm also very curious to know where is the
governance supporting startup culture in usa interesting where is the governance um and
supporting structures within the usa well there certainly seems to be um a lot of focus on
reduction of regulatory burdens which i certainly think think addition by subtraction there might be one of the strongest signals in the current U.S. administration.
But I'm interested to hear if anyone else, perhaps Darren, John, if either one of you guys has any thoughts there as well.
Yeah, I guess I can jump in. I think one of the things that I can share just relative to the startup venture market in the United States right now is that it's
fucking tough. So the reality is that if you're a founder and you're raising, and truthfully,
it doesn't matter if it's a venture round or angel investors or even a community round, although there are exceptions, it is a very tough market.
And I don't know that we were all expecting that. I personally had hopes that, you know,
kind of quickly after post-Trump and the Biden transition to Trump, it would be smoother waters.
It just hasn't been the case.
NASDAQ is down. Dow is down. S&P is down. NVIDIA is down. Tesla is down. This scares the hell out of people. And it impacts their ability to invest in earlier stage companies. And so what I'm seeing
and what I'm hearing right now is that it's a struggle for even credible, high-growth businesses
to get rounds done. And I'll just give you an anecdote. There's a guy I know who has,
he's the CEO of like a $5 million a year hot sauce company, of all things. But it's a hot
sauce company. A year ago, the company was doing $100,000 in revenue. They skyrocketed to $5 million. They went from like $100,000 to $5 million in basically like 14 or 15 months. And the CEO said that he had soft circled $1.4 million in investment from maybe a dozen investors.
investment from maybe a dozen investors. And these are people, soft circled means somebody
says, yeah, I'm in. I will invest. I will invest a quarter million. I'll come in for 100. I'll come
in for 500. And this is a very savvy guy. He used to work at a NASDAQ listed beverage company as a
chief revenue officer. So they've got this growth. They've got a CEO who comes from a publicly traded company, $100K to $5 million. And he had soft circled about $1.4 million of investment from a dozen or so investors. When it came time to signing, he only converted $300,000. And this is like, I think, a pretty common phenomenon right now. So I just think, you know, it's a tough fundraising environment. I have empathy
for founders out there, those of you listening, and we're seeing it in our deals and my deals.
It's just, it's really tough to get deals done. I think you really have to be cognizant about who
you're spending your time with. It's very easy in general as a founder, especially first-time
founders, to spin your wheels with the wrong people. There's a lot of people out there that are half crazy or totally fucking insane.
And they will tell you they're investors or they'll express interest. And then you find out,
oh, this is not an investor. You know, this is a connector or this person maybe didn't have the
capital they represented or oops, this venture capitalist is actually raising capital for his
own fund in parallel
while trying to court me and tell me he's going to invest in my company.
Turns out he didn't raise his own fund.
So there's all these things that happen that make it a really difficult fundraising environment.
So I think the one thing you can do to try to avoid that is just be really smart about
who you're spending your time with and really try to
qualify the investors that you're engaging with upfront. So you don't get into a situation where
three months later, two months later, you know, you're shit out of luck at the wire when you're
really expecting that capital to come through. Great, great points there, Darren. I honestly
had like two or three follow-ups I want to ask, but time is flying. It's 543. I want to kick it over to Jared.
Jared, any thoughts, any questions, any follow-ups?
What's on your mind, brother?
Yeah, I would like to shift things a little bit and ask about some recent news that came
out this week regarding BlackRock.
They have launched a portfolio that is integrating private equity and private credit with stocks and bonds to make that more accessible to customers and clients.
So I wanted to pass that to the panel, kind of see what your thoughts are with that.
I know in the previous week we talked a little bit about just different ways that private equity was becoming more available to the masses.
But regarding that specifically with BlackRock, do any of the panelists have any thoughts on that?
No thoughts on BlackRock?
I mean, there are many thoughts, but I'm just thinking that, you know, because I did, you know, BlackRock, I think everybody flooded with many thoughts.
But I must confess, I miss this news.
So I need to catch up.
If you could speak more about that, please.
Well, that's a, we'll just move on from that.
No other thoughts there from the panelists. We'll switch to our next kind of topic that we like to do on this show, which is the hot takes segment. up here. But from Reed Christian, his tweet said, in VC, you either die an early stage investor
or survive long enough and become a growth investor. So I'll pass that to the panel.
I'd love to hear your guys' takes on that. Is that true? Do you agree with it? Yes or no? And why so?
I actually, I think that's a pretty funny take. It's interesting that really the construction of the panel here really might dictate some of the responses. You know, if we had, if we've had previous panelists who have specialized in the VC space and early stage stuff, they may totally disagree with this. Others may agree. I do really think they're different businesses. And that's a pretty important thing
to recognize. But I certainly think that there is a big chunk of people where this is probably true.
I think that if you have very little track record, or if you don't have a lot of money to invest,
you're going to be priced out of those growth stage
businesses from an investment capacity.
And so it is natural to assume that early stage is probably the first part of a successful
venture capital career.
The problem with early stage is that as you raise bigger and bigger funds, it's just really,
really difficult to spend that money. So when you raise a $300 million fund or a $500 million fund or a billion-plus fund,
writing 25, 50, 125, 250K checks is actually really difficult to get that many investments
that are going to generate the returns you're looking for. So a lot of these funds, as they mature, as they grow in fund size, it does seem to me
that they end up getting into growth stage, not only for those reasons, but also because
they may be doing follow-on capital into successful investments that they've already made, doubling
down on those industries.
industries. So I definitely think that there's something to be said there. But I do think that
So I definitely think that there's something to be said there.
some people like myself love cutting edge technologies, love the early stage industries,
and really see value in the huge upside that can be provided there. The problem just is that the
earlier stage you are, the longer it takes to get your money back, which if you are an established
individual, you may have more competition for opportunities that have a shorter redemption
period or a shorter payback period.
So I don't want to kind of sit on the fence and say yes and no.
So I'm actually going to say yes in a lot of cases with this, except for maybe a smaller
subset of investors that really, really do like that high risk industry of early stage
venture.
I want to pass it over to the rest of the panel and get other people's thoughts too.
Come on. I know that, I know John's got to have some thoughts here, right?
Yeah, true. I covered this in my previous pitch, but I think what we see now is that the number of startups is growing
exponentially. So I think we will see so many startups soon that, you know, it will be kind of
impossible to even evaluate them in the old fashion, the way the VCs did in the past, where
now they have a call and then, you know they they run through a few
stages and then they probably invest what i'm seeing now and i think about 20 latest early
stage investments that i've seen they happen over social media so it's basically some young guys
just build something and then goes viral and investors see that and then they just dm those
guys and then they have a call and then the whole thing is done so i've seen 20 investments like that
in the past six months and uh it was interesting because i can see that the whole thing has changed
so now vcs are not really looking into receiving requests
or the cold messages from founders pitching their ideas.
So they're actually going out to the social media,
mostly on Twitter, and they're looking into the feed
and trying to see if there's anything interesting there.
And then they attack those founders with the pre-seed or seed money.
And that happens often. So I think that's kind of the new way of pouring the pre-seed or seed money. And that happens often.
So I think that's kind of the new way
of putting the pre-seed and seed money.
But for the growth stage investment,
I think we are seeing that the growth stage funding rounds
are really huge now.
Like a lot of them are 100 million
and some of them are billions now
because those are mostly AI startups. really huge now. Like a lot of them are a hundred million and some of them are billions now because
those are mostly AI startups. And we don't see a lot of growth stage investments and CRC and D
for non-AI startups. So I think these two things are pretty evident now. So I would say that
the claim is true. So being early stage VC now is really hard because uh it's a lot of
noise on the market and uh when there's a lot of noise there's gonna be a lot of mistakes so you
either have to put a lot of bets like a lot like like thousands of bets or you have to be really good at finding those startups yourself one by one
and investing directly it's really interesting john you say that because you know if i have to
see it from an emerging market perspective the reverse is true right because the early stage
startup is something that is really being invested a lot in and i think that's particularly being
done because of the opportunity, right?
Because the market is growing, the economy is doing well, and they're looking at more innovation.
And we've really, and I think I did put some tweets out right now, you'll see the data which
shows very clearly that in the last 10 years, we see money that has been invested in India,
especially on the early stage, has just skyrocketed.
And the incentives and the initiatives that have come both from the PE world and from the VC and the government, as I was talking about, we've never seen that.
You've never seen that kind of money, at least in South Asia.
And you see some of this now being replicated in other parts of the world.
I mean, mostly you can see some emerging market countries, especially Rwanda, is coming up in a very interesting way, especially from a tech perspective, because I also have interest in the African market.
at least in the emerging market, is the reassurance of solid government backing and a political system that can really not screw up or become volatile or what we're seeing right now.
I think that's something which really drives both the PE investment and the VC investment, including angels, right?
And there were many, many angels, at least in the Indian market, who were very skeptical because, you know, Indians are not really into risk.
And they don't know whether they want to put this money into this young group of folks.
Will they make a difference?
But that is really paying out.
So it's completely interesting to see which market and really analyze.
But definitely in the U.S., we've seen that it's completely drying up.
There is definitely, you know, more questions than easy money in this market.
Ravi, I'd love to ask you a follow-up.
You talk about the emerging markets and you talk about Rwanda.
Just from an outsider's perspective, I'm more on the marketing side.
From your perspective with those emerging
markets, how do those more developing based countries, as far as raising funds, do they
have a harder time just on, you know, finding people in their country that have the funds to
deploy? You know, what, what's kind of the difference with that when you're starting to
look at some of these more third world countries outside
of your first world countries?
That's a very good question because traditionally in these countries, the top 1%, which is similar
to here, really have all the money.
And I think, like I said, the issue, especially of the confidence, where the money that you
will put in will not disappear or because of corruption will completely be mishandled. I think we see that there are some non-resident investors of the same
ethnicity who are putting back the money into the countries to remittance, but also creating
these kind of hybrid funds. So there is a lot of British money flowing in because of the,
at least in Rwanda, for example, and Kenya.
You see that.
I think in India, I think definitely you see that there's more money, which is now because of the way the economy has done well.
It's coming.
And because of that, you've seen now, folks, I remember the time speaking about the Indian economy on X two, three years ago, and people were so skeptical.
They're like, we're not putting money in the Indian market.
We don't know where it is. But when you start looking at the numbers, you look at the performance of the Bombay Stock Exchange,
you're like, okay, this is definitely going up. So that's one thing.
Second is also transparency in terms of reporting the ROI of your investments.
From a marketing perspective, I think you see that the
GTM, for example, is playing a very critical role.
And many startups in India are right now trying to understand the GTM, which is new because not everybody was on X.
So that's an interesting point that came earlier about investors looking at X.
And India, I don't know if you guys realize that India, the X is huge because we don't have TikTok.
Nobody goes to Facebook.
So people are obsessed with LinkedIn is, again, a very, very big place where VCs actually go and find out on the co-founders of founders and their timeline to see whether that is worth it.
So really on the emerging market, there is the money still coming from some blocks.
But there is the money still coming from some blocks. But there is, you know, the hybrid model of investment.
There's a new, that's another important trend to recognize that the new funds are being formed, right?
That was not so, Secua Capital is great, but now you have more domestic funds that are coming through in Bangalore, in Mumbai, in Delhi, which were never there.
That was never part of the time when I was there 20 years ago, right?
So you see that.
So many folks are now, some of us who understand both the markets.
So we have that advantage in a certain way that because you're putting the money in both
the markets.
So there is definitely that opportunity.
But I would say countries, one common thing is having a strong, you know, a market reassurance
by the main government.
That is definitely critical.
I mean, Turkey is a very good example.
At one point, Turkey was doing so well, if you go back 20 years ago, right?
And the VCs have totally kind of crashed out of the Turkey market now.
Sorry.
No, you're good.
That was amazing.
I appreciate that answer.
And it's just such a great, great opportunity to be on this panel and to get to learn from such great people like yourself. We're wrapping up here. We got about four minutes left of this show. I got one quick question I want to get to. But if you're in the audience, go ahead and give all these speakers a follow. They put out great content. And so that way you can stay up to date with what they're doing and continue to learn from them. We're here every Thursday with the Venture Capital Show,
same time. Real quick, I want to pass it to the panel. One sentence. You got one sentence.
Give me the most important thing you look for before you deploy capital to a company. What
would you say? We'll start with John. We'll go to Darrenren keith and ravi one sentence what you got the ability to
execute in the founder team so that they can do it without hiring people at the start
amazing darren what do you got one sentence on the most important thing before you deploy capital
important thing before you deploy capital?
Extreme resilience and grit.
I think investors are looking for founders that will do whatever it takes, go to whatever
length is necessary to win and to succeed.
And I think the best founders do just that.
It doesn't matter if you run out of money.
It doesn't matter if you get sued, you pivot.
The best founders are incredibly, incredibly resilient and will win at all costs.
Well said. Keith, do you founder to recover from the inevitable pitfalls
and surprises and all the crazy ass things that can happen to them as they grow their business.
Amazing. Thank you. Ravi, what do you got?
Exactly. It is the bio and the credibility of the founders and the co-founders.
And, you know, really, when you're doing the Q&A, right, really deep diving on the points of resilience.
I think that's something which is so, so, so critical.
So I think the points have already been said.
And, you know, I see that because I also, you know, kind of coach and mentor some of the founders.
And you see that, you know, that point when you're almost about to give up
and then you see that another layer of co-founders
are founders like, I'm gonna go forward with this
no matter what.
I think that's so critical, very well said.
Awesome, seems like we have a consensus there
that your founder and the guy leading the ship
is the most important aspect there.
I'm going to pass it here to Kyle and let him wrap up our show.
Thanks again, everybody, for tuning in.
Lots of great insights shared today.
Awesome work, Jared.
Really appreciate the panel.
As you mentioned, I want to echo that sentiment.
John and Robbie, Keith, Darren, great, great, great stuff from all of you guys.
Really appreciate you being here.
I think all of you are welcome back on the show anytime.
So we do this Thursdays at 5 p.m. EST.
So when you guys are available,
definitely make sure to come on back and share your thoughts.
We actually had such a great conversation today.
I think the thing flew by.
We had hardly any time to actually get into anything else.
So major shout out to everybody here.
Looking forward to running this conversation back.
And as always, check out the Wolf Financial Twitter account or X account.
I still say that.
I'm sorry.
They also have the Wolf Web 3 account talking about everything crypto.
If that's more your scene.
But they do everything from
public markets stock trading to innovation and technology it's an honor to be here amongst my
my partners here on the show really shout out to everybody behind the scenes
and making it all happen and thanks so much i'll pass it over to Emp to close out the show. I'm really enjoying this. Thanks to all those speakers that joined. Thanks to my co-hosts, Jared and Kyle running the conversation. As always, we will see you guys next week. We have
plenty more spaces coming up as well as this exact space again, each and every Thursday.
Hope everyone has a great rest of your night, whether you're watching basketball or whatever
you're going, maybe opening day baseball. I don't know what's on your radar for the night,
but I hope you enjoy your evening and we thank you all for tuning in hope everyone has a great great time
and we will see you on the next space thank you excellent space Thank you.
