Kevin Hartz: Explaining SPACs

Foreign this is series T where we find the greatest entrepreneurs and investors in the world and force them to have tea with us live on air. I'm Imad Akhan, founder and CEO of Mercury and today we're having tea with Kevin Hart, co founder and chairman of Eventbrite. He's an early investor in startups like PayPal, Airbnb, Pinterest and Mercury. Most recently he's founded Astar, newly listed SPAC special acquisition company, special purpose acquisition company which raised 200 million to acquire and take public attacks on it. So thanks for joining us, Kevin.

Thanks so much Iman. And I'm a very proud investor in Mercury. It's an incredible service and really in such the early innings of exciting growth ahead.

Thanks for your support. So you're kind of unusual in that like you're an entrepreneur, you've taken the company public. Obviously you've been an early stage investor, but you're not a late stage VC or like a kind of PE person. How did you, what was your journey from like learning about SPAC to like, you know, launching a star and I guess a one. How did that happen?

It's a great question. You know, I've been involved in two companies I've founded that have been out in the public markets. A remittance business helping immigrants send money to their families around the world called Zoom Xoom and then Eventbrite, which Julia, the current CEO and my wife business we co founded with our third partner Renault Public in September of 2018. And being in the public markets is actually a great place to be. I think there's this conventional wisdom or conventional thinking that says never go public, stay private. And really being out in the public markets has been a great experience for both companies. Zoom was eventually acquired by PayPal in 2015. But the public markets really helped build a muscle that can atrophy often. Or I find atrophying in round after round of private financing, which I went through myself as a founder in terms of how did I go from early stage investor to a $200 million vehicle? A SPAC is simply taking public IPOing a company with 200 million in trust. And that company, we're looking for a partner in the private side which will subsume that and take that capital and establish itself as that primary entity as a public company. So after that it's no different than an IPO or direct listing. The finished product is a wonderfully enduring public company. We're looking for enduring businesses that are going to be around for 10 years. We want to hold stock in for 10 years, 20 years, 30 years, not that we want to flip six months after which had been one of the critiques of SPACs.

What was your journey? Was it Chamath that made you think about let's do a spac? What was your starting point to really start thinking about spacs as a good thing for you to do?

Well, I think if you spoke to Chamath, he would probably say he invented the whole category. No, I'm kidding. Chamath's a very bright person, known pretty well and he was truly, or he is truly an innovator in coming first to this market. But I think my challenge had been, and I was actually on a panel a number of years back, I think in 2012, where we talked about you stay private or do you go public? I thought it was really nuts that companies were staying private for so long. It's really a kind of diversion from where the status quo was 15, 20 years ago. We have a four year vesting on shares and you're all familiar as founders of your companies that there's four year vest on your team members and even yourself. And that four year vest was the amount of time you're supposed to be a private company before going public. So the average was four years. I think it was Amazon that was founded in 93 and maybe went public in 96 or so, but I think it was three or four years after its inception. And then there's this conventional thinking that says you can't be a long term company. And Amazon went public at a $500 million market cap, selling books and look where it is now. So that inspiration of being out in the public markets competing has always been there. And the market is moving now back that way and we see the tailwinds.

Okay, so you saw these tailwinds. Then how did you go, okay, I'm going to do a spac. I understand the rationale, but what was your personal decision that you want to go after this thing as the next thing that you do?

Well, I'm supposed to tell you how difficult and arduous it is and warn people from doing it. But to be honest and against my own best interest, it was very simple to get up and running. We had a ragtag team of four of us, Laura, Spike and Troy. And Troy and I are really the two that are working on this full time. We had our org meeting which is in public market speak, the first meeting with your financial advisor, your bank on June 18. We retain Goodwin that day Goodwin, our law firm. We worked with Goldman Sachs. So part of the legitimization of SPACs is having the big prominent banks like Goldman and Morgan Stanley backing these deals. And then we filed our confidential filing on the early July, the first of July. Our comments came back from the SEC at the end of July. So the government really held things back the most. Our filing was flipped public on August 2 and followed by that. We had, you know, a couple weeks required before we could do our roadshow. We did our roadshow in one day, all via Zoom. And the company was public on August 18. So 60 days from zero to a public entity. I won't call it a, I mean it is technically a company, but it's look, it's $200 million in a trust account and this is the easy work. The hard work is finding a great company and the hard work is building a great company is all you're doing out there so that you can be part of the public markets in the future if you choose that direction.

That's absolutely insane that you did it in 60 days. I mean that's obviously after you built up all of this network that like you felt confident that you could get that 200 million in like a relatively quick fashion from institutional investors.

Well, I don't like to sleep very often, so it was a lot of fun.

I'm sure that helps. And then this company, well, the SPAC has like 200 million and then how it works is it can target up to like 5x valuation company, like it can target a billion dollar company. Is that roughly the boundary that is?

So we chose 200 million and we intentionally chose that money because that amount, because we want to reach companies, it's usually that 5x4 to 6 range. And then we both made the cardinal sin that I've been trying to correct. And that's not to use the term target, it sounds like one is an assassin. We're looking for a partner company and we're not out there to hunt big game or do any of these things. We're out there to find a company that we have a great deal of respect and admiration before and be a quiet partner to help bring them into the public markets.

Got it.

And then also, sorry to interrupt Imad, but we can also add what's called a pipe, private investment in a public entity and actually bring in more capital. So if a company needs 500 million, we can add 300 million via a pipe. And then not to go into too much complexity, but the cost of capital is much lower when you raise a pipe. It's less than 3% versus the 7.5% of a traditional IPO.

Did you have to pay the 7 and a half percent for the SPAC as well? Like the 200 million had a rough.

The economics are a little more complex, but they're actually higher. And it's one of the things that why SPACs are. Why now with SPACs is because the economics are coming more in line. Before, they were very egregious economics. And you're seeing what's called the promote. It's kind of like a venture carry compress. And then we also there's this warrant coverage that we were. Because we were able to be oversubscribed with a relatively small $200 million vehicle, we were able to push down the warrant coverage to a quarter. These are all the things that a company that's thinking about taking their company public should look at closely. And again, against my own best interest.

I want to dive into why you think a company should go public earlier in their life. And, like, I want to get, like, pretty specific on it. So, like, here's the reasons why I think they shouldn't, and you can tell me, like, why they don't matter or maybe they do. Number one, I feel like there's like, a fixed cost to being a public company. Like, you need to have, like, you know, CFO and like, there's a whole. You need to be audited. So there's a whole, like, fixed cost component. Is that just not that significant a cost? Like, what is that kind of fixed cost of being a public company?

You know, honestly, very few people have asked that question, but you're right. There is a fixed cost of the filings. And, you know, this, this overhead, it's, it's, it breeds a certain amount of discipline, though, to have audited financials, to have one's house in order. And there is a cost of capital, there is a cost to it. But when you weigh it against the benefits of being public, of, again, how you're in effect open sourcing your company and getting all this great feedback from investors, you're much more competitive and nimble in how you act. I think that vastly outweighs those fees, those New York Stock Exchange fees, or they're relatively small in comparison to these companies.

Okay. Second thing is, like, if you're, if your performance, like, if you're still launching new things, your quarterly performance is, like, maybe not that predictable. Do you want to be past that phase where you have, like, I don't know, maybe two years of, like, very predictable quarterly Performance and growth. Before you think about being public, we're.

Talking to companies with wildly unpredictable quarterly numbers because they're doing so well. So if your numbers are up and to the right, that's a very exciting business that public markets want to see. And then there is just day in and day out of building a company and the vision and the notes that you give or the message that when a shareholder understands, truly understands a business that they're looking not how a company undulates and you know, quarter in, quarter out, but where it's going to be 10 years out. And so you look for those kind of lockbox investors. We've had the good fortune of having a number of them in Eventbrite like a Baillie Gifford or so on, these long term investors. So I think there's a misnomer of like having to, you know, that everything has to be perfectly orchestrated. If you have a growing business, there's always a pattern to that in there.

Okay, that's reasonable. And then I guess like a third point is, I mean, I guess there's kind of two versions of this point. Like number one is like do you want your employees to be looking at kind of the stock ticker every day and like having their, I don't know, they like maybe livelihood or emotions like tied to like whether the stock's going up or down like on a daily basis or do you think like you can, if you have a good culture, you can manage that out.

You know, I forget the Eventbrite stock price most days, so it's not top of mind. You know, it's fun to watch the first couple weeks, but then you know, you know, where value is being created and that's inside the walls of the business. And what's exciting is continuing to do what one does and that's hit these great milestones, build a business like you're doing it at Mercury and see more customers, making them happy. And the stock price is really a distraction at that from that perspective.

And then I guess the last point, which I don't love this point but I have heard it made, is once you're public, the early employees, the entrepreneur, the founders, whatever, have liquidity. And maybe they're not as passionate about, you know, working because like now they're rich people and they can just like chill out or something.

Well, I would argue that it's just the other way around that, you know, there's an exhilaration in a. Well, I don't want to tie it around. Money, I guess is where I would go with this is that, you know, we're all looking. You've built a team of great missionaries that are innovating on banking, on financial services. And so if somebody's there to just call it, phone it in, they're really not the right employee for a company. And then you look at these great companies that have been in the public markets for decades from very small numbers again, the Amazons, the Apples, the Googles and so on, and you see Facebooks and so on, and you see very high performance cultures. So it's really indistinct. It really comes from the leadership and the hiring that's most important. I think that if you have somebody kind of taking it easy or just kind of sitting back, then you've got more fundamental problems with your culture.

Yeah, it's interesting. I think there was a temporary time period and maybe this was partly led by Softbank where valuations were better in the private market than public market. And again, do you think that's ended because the Vision Fund is kind of finished now.

That is part of the change on the macro level is that it was stay private forever, take as much capital as you can, you'll win in a capital battle. But what we found are there are these new emerging nimble companies that didn't over raise and they're performing quite well, I think of maybe Notion and Figma that baked for a number of years and did that with very little capital and now kind of enjoy the fruits of that. I think they should be out in the public markets, but they'll be out, I'm sure soon enough. In contrast that to some of these companies, wework being the kind of granddaddy example where it was fundamentally a great business and then they over capitalized to an excessive amount and they started exhibiting all sorts of bizarre behaviors of burning capital, strange acquisitions, crazy facilities and that actually bred their downfall. So most companies don't die of starvation, they die of indigestion. And the best way to get fit is to be out in public markets.

Is there a revenue number where you think an entrepreneur should be considering it? I heard Chamath say 50 million is the revenue number where people should be thinking about kind of going public. Is that a boundary?

Is that Chamath or me? But no, I didn't say it recently. 50 million in triple digit growth is that number. In my perspective, that's where a company has generally a product that's scaling very fast. If you look at an Airbnb or other that has a business where you have guests and hosts and a Very simple transaction and transaction fee that has carried it to many billions in revenues today. But that company could have been out that early and I think that would have been a phenomenal outcome. So 50 million high margin is what we look for, triple digit growth and that is moving into a big market with a key differentiation. Of course, if you're a founder out there, you always want to be building a business with having the best team, a big market and a clear competitive advantage. Being unique in a market.

I think there's been like 80 or more SPACs this year. You might have a more precise number. If you're a founder of a company that's in the right ballpark and you're considering SPACs, how do you think you should view different people running SPACs? What's the process you should use to pick the SPAC that you go public with?

Well, we're investors in each investment firm. Just as on the growth side and even on the early stage side, each investor, each firm has its own culture, values. In a lot of the spac, the values are lacking and that's been an issue. But you're starting to see really great operators. We put ourselves, we think of ourselves as operators as much as investors. We've walked in the shoes of founders, we've been there on that side of the table. We know the tech ecosystem, we have a certain size of spac and we're not looking over our shoulder. We're really just thinking about finding a great partner. Now every growth fund that makes 12, 20 investments a year has the same issue. There's a lot of growth funds out there. They're making a dozen or plus investments a year and you look at that and that's a lot more inventory than there are of SPACs out there. I think we're just getting started. We welcome more into the market and there's so much opportunity.

So you think if you're an entrepreneur and you're judging a spac, it's very similar to how you judge a growth vc. It's like you look at the people, you're like, do you want this person on your board? And like all of these kind of like similar decision making process.

Precisely. Our values are hard work. Founder, CEO, centricity. We won't take a board seat unless we're asked to do it. We're not going to switch out a CEO. Certainly that you see in some of these private equity deals, facts that intend to rip and replace teams. We're really just entirely focused on finding a great team and they know how to build their business. But we're certainly here to help in any way.

When you compare it to alternatives, right, like there's obviously like the IPO and that's got a roadshow. And like, I kind of understand like the reasons people would choose a SPAC over like a traditional ipo, but now there's direct listings. And I think there was a new thing where you can have a direct listing and have an auction with it if you are ready to like go public. Like, why should an entrepreneur choose a SPAC over like one of these other options?

Yeah, that's a great question. That's the right question. A SPAC isn't necessarily a replacement for all this. It's another great option and each has its own characteristics. I had a great experience with two IPOs and they were a lot of fun. There were a lot of hard work. You're very restricted in what you can say to the market versus what you can say and publish in an S4. And the time you can spend with investors in a SPAC is much superior to the kind of quick roadshow that's put on that a CEO has to go through or that CEO and CFO go through and can only give very limited information. A direct listing is all secondary. So if there's now this proposal for secondary and a primary, a traditional IPO is all primary. A SPAC can be primary and secondary. So there's just a wealth of different options and you can always, one can always take another private round.

So if you were to compare like a direct listing where you can take a primary and a secondary, or a SPAC where you can take a primary and secondary, why would you choose one or the other?

Well, a direct listing generally doesn't raise money. If you do, there's a lot of complexity and time. You know, I think it took Spotify a year to do a direct listing. It is still a more exotic, you know, kind of animal itself. It's a relatively new phenomenon. There are more companies and more doing that. But the nitty gritty of the trade offs, looking at the cost of capital, setting price. The other advantage of a SPAC is that you can come to a very efficient price versus in a traditional IPO being kind of negotiated last minute with your bankers and investors. So each does have a different flavor.

In a spac, the price is set by the split. Like the SPAC lead is like buying you effectively. Well, you're merging but like they're setting the. Like it's a negotiation to set the price.

It's much more of the company setting the price. You certainly don't want to overprice excessively your business, but you really set the price. You have that autonomy to do it. In our perspective is that we just care where the company is in five to ten years now. We don't want anything to trade down. And I think the company is rational in terms of where to set a good price. In our discussion with partners, that's been a very attractive aspect of it.

I see. So it's not like normally when you do a VC growth brand, you want to get the highest price possible. The dynamics are not like that because it's going to be public afterwards. They don't want to overshoot on price and have like a correction in the public markets.

That's a great point.

Do you think at all there's like an adverse selection for people who are willing to do SPACs? Like, would companies that are doing better stay private longer or take like another route? Or you think like, yeah, it's really just an option and you see like good companies doing it. I mean, so far we've had like some great companies going the SPAC route. So I don't know if you've got a different opinion on that.

Well, those are two. The two main points today are the cost of capital, which is coming down and will come in line, be Amazonified. And the second is the kind of reticent, the historical negative perspective of SPACs. And both of those are changing in rapid real time. You're seeing Reid Hoffman, you're seeing Mark Stodd from Dragonier entering the market. You're seeing Mickey Malka from Ribbet Capital. And these are excellent, excellent operators and investors that really invest in the best companies on the planet. So you're seeing in real time the quality changing from when it was these kind of boiler room deals a long time ago.

So what was the actual thing that changed that like made SPACs interesting again? Like, was it like a regulatory change or something like that or was it just like. Because it seems like a lot of these things have existed for many years.

Kind of liken it to the Internet or Bitcoin. You know, those are technological phenomenon, but this is a financial vehicle. Like, this is a financial innovation that just had to get in line. I think there are a number of interesting thoughts I've had. You know, the fact that we could go through and be public so quickly as a vehicle, which was facilitated by Eric at Zoom, you know, so being able to do your roadshow all virtually instead of traveling around the country is one key Aspect or the team over at DocuSign being able to. Or HelloSign as well, being able to go through and sign, you know, I signed hundreds of documents. And to be able to do that, you know, virtually was key. So I think there was an aspect of COVID accelerating the trend as we've seen this acceleration into the future. And it's been the innovation economy that helped buffer this in. But it's almost like any phenomenon. There's a technological S curve where you see, for example, commercial banking is now hitting its S curve with Mercury and it's going to grow, and it's growing at a torrid pace. Similarly, some things, like the radio took decades to reach 100% penetration. Venture capital took decades to mainstream. Y Combinator took maybe a decade to become this financial vehicle at the formation stages to really aid and buffer companies. And now we see SPACs at the late stage as a vehicle that's emerged very quickly to go public with all these different tailwinds aforementioned.

Is it also like, I feel like people are like rushing to go public right now. Is there some sort of like, I don't know, like, potentially irrational panic that people think that the IPO markets are going to close if they don't act quickly? And that's also like feelings, facts.

Well, there's a certain rationality to it. I mean, I think first, every company we've seen go public in the traditional IPO window, especially after Labor Day, which is one of these windows that open up and you see a rush of companies. We did that in September of 18 with Eventbrite, where there were kind of a slew of companies that came out during a window. And this is, by the way, another advantage yet to be mentioned, that a SPAC is already in the public market. So rain or shine, you can get out there with a SPAC vehicle. But there has been a rush. You saw Snowflake and Asana and Palantir and all these businesses really go for this because of this window. If that window closes, there's concerns of the election and so on. I don't know what's going to happen with the market. The one thing I've proven is I know nothing about the macro environment. And so again, a SPAC can be this consistent option that's always there.

Do you think a SPAC actually performs better in the down market in the sense that presumably it's cheaper to merge with companies than outside the down market? They'll do well?

That's the presumption. But there's great companies that should be in the public markets at any period of time and finding those companies. I had the good fortune of being a seed investor in PayPal and it was the first tech company. I believe it was February of 2002. It was the first tech company to go public after 911 and was an immense success. So there's really no bad time to go public with a great company.

I think you touched on this earlier. So let's just like, just for simple maths, like you have a $200 million SPAC. I think my company's worth a billion dollars. After I go public with you, I would have presumably 1.2 billion dollar company. Like I'd have 200 million dollars in my bank. What are the other costs involved? Like is there some percentage of the equity that is not part of that equation? And it goes to kind of you as a spec.

There's a sponsor promote that comes out. There's warrant coverage that's mildly dilutive, but still dilutive. Those warrants have come down in. You know, there used to be one to one warrant to unit of SPAC share and they've come down. We were one of. We were the first to launch our first SPAC at a quarter warrant, which is extremely low. So those are the rules. Sponsor.

What was the first thing called? Something Promote.

It's called the promote. It's similar to carry in a venture fund.

Okay, so what is the promote for.

A one the promote is essentially 20% of the $200 million is as it's published, but it's negotiable.

So in theory, like after I go public with you, I'm gonna have to pay 40 million to you, which is the promote and a quarter of a percent. And when I say you, I mean like the organization a star, I guess that's the name of the organization.

The warrant coverage is on the shares and it's actually 20% post money. So 50 million.

Okay, got it. Interesting. So that's actually not that. Not that bad, right? That's like pretty reasonable to pay that and go public at the end.

We think so. We think it's a little high and we intend to bring it down when meeting a company. And then Mickey Malka had a great idea of modifying the terms in a favorable way where if there's downside, which again is kind of crazy to us that in a venture fund that if you lose half the investors money, you would never make a carry. But in a spac you do so Mickey has reduced his promote to 10% in downside. But then in certain milestones it actually raises interesting.

It feels like there's also a little bit of an arbitrage that you've already done the roadshow, you've already collected the money and the company doesn't have to go do their own roadshow and buy money. Right. Like you've kind of, you've people have entrusted you with this money and it's like ready to go kind of thing.

That's correct. And from, you know, a couple week diligent period in a signing of an LOI, that deal can be announced in 30 days, which we've seen time and time again. So it's not. It's a fast pace, but it's a realistic pace. And then 30 days later, you're submitting all your papers, your final S4 to the SEC for review.

So how many of these are you going to do? Is this kind of one and you're going to see what it's like or is there a plan to do many next year?

The plan is to build a franchise like a Sequoia benchmark. We of course have to be successful in our first so we're very focused on that. But we're very excited to help innovate and get companies public sooner and we hope to be in this for the long term.

But what is it realistic that I guess your math's got like three going right now? Is there a number where you're like, okay, up to 10 a year is a good number for a franchise that's doing specs?

Well, the storied venture funds are in their 15, 18, 20th funds with thousands of investments and sometimes 100 IPOs. So this can, you know, we think the real legs, the goal for it is to outlast me.

Is it also true that once you're public, it's much easier to get primary capital for the company? I've heard that from multiple sources. Is that one of the drivers that once you're public, you go public price, then it's easy to raise money?

That's absolutely correct. That's where we see that companies take round after round of diluted capital in the public markets. You have just so many different types of investors and companies hit snags. Eventbrite was massively impacted by Covid and we had an emergency manner which Julia the CEO did quite brilliantly, raised $300 million and a growth investor is not going to be the one that makes this investment. And we were able to raise a very interesting debt structure along with the public convert. And we were able to do the public convert in A few days, the debt financing with warrants in a few weeks. It's incredible the availability of capital and different types of capital. Of course you never want to be in the situation that we were in with the COVID disaster. I would say in the case of live event ticketing, Julia and Eventbrite was harder hit than anyone out there. Maybe not as hard hit as cruise lines, but in that category. And the comebacks to staging is brilliant. But I don't think we would have been in business if we'd been a private company and had to find that capital.

I guess on the later stages we have SPACs. On the early stage we have rolling funds. How do you see, I guess do those interact? Is there more innovation that you're seeing across this kind of funding spectrum that you think is interesting to think about?

Well, I think it's interesting that we are starting to see venture funds with SPACs. And I think in our conversations we had a lot of conversation with a lot of outreach from venture funds that wanted to learn more and we want to encourage this. We want this to open for more business and legitimize further. So we're encouraging venture funds to enter this market. And as you saw from Dragoneer, Dragoneer is a public and private market investor and now is a SPAC investor. As we encourage more and we think many more are going to enter the market as a very similar but product to what they're doing now, diligence in finding great enduring growth businesses.

Is there a conflict when a VC does it? Because are they going to be kind of spacing the existing portfolio which they already have an investment with?

There's not an SEC violation, there's not an ethical violation. It's just like a follow on round. Now what you can't do in a SPAC is have a partner company already picked out and agreed upon before. But there's interestingly no conflict whatsoever. You see it in private equity where a firm will own a private company, a private equity firm and then we'll take it public. And so I think it's a great mechanism. You also see LPs by the way, that are tired of such long 10 plus year periods to liquidity. It's certainly been a bountiful great time to be in the venture in the LP business. But the timeline to liquidity is so long that I think you'll see LPs, limited partners, the investors and the investment venture funds actually pushing or actually very in favor of this back direction.

So you think more of these kind of late stage growth VCs will be entering this kind of spec like option behind the scenes.

I hear quite a bit of discussion about it and again you're already seeing it happen.

That's super interesting. Is there something limiting specs like from a regulatory perspective or technology perspective, is there something that could improve that would make them even better? For example, why can't they go after a $10 billion company? Well, we can.

We could reach a $10 billion company with pipe. So if a company wanted to raise a billion dollars, we could raise an $800 million pipe where you're paying 3% less than 3% cost of capital and that's a brilliant outcome for a company. And by the way, we're all familiar with the IPO pop in the primary side that's incredibly dilutive, far more than any sponsor promote that we discussed earlier. And one of the reasons that direct listings raised or is raised up in esteem and highlighted and we think that the SPAC and the direct listing offer two different products. Really what we're focused on is bringing the promote in line. And secondly we're focused on just the reputational piece. I think those are the two most important aspects right now.

Well, why would there not be a pop in the SPAC that's it's just as likely to pop, right? Well.

There'S more thought and analysis in company led direction on pricing. So if you're a first time founder and CEO, you're going to be much more reliant and it just happens to be very last minute. Like you do the roadshow, you come down to this pricing meeting, you have this pricing meeting and build your book and it just happens in rapid succession and, and it's not the best environment for price optimization.

Okay, but didn't Virgin galactic pop like 67% or something after they did the SPAC merger?

They did and you know, so but that was much, that price was much more set by that company and you know, rather than, rather than basically it's.

Mostly like the person who's setting it changes and the incentives are better aligned. Like the company sets a price rather than bankers setting the price and the bankers have like weird incentives.

That's absolutely correct.

This has been a super interesting conversation. I feel like I knew a lot about SPACs but now I know way more. Feels like I should launch one just for fun. What's the best fundraising advice you've ever received?

That's to choose not the highest price but the best investor and somebody that you're willing to be work with for a decade plus. We had the good fortune of working with my two companies, with Sequoia both times and Ruloff both times. And he's extraordinary and he really was a great guide for us. And especially Julia, the CEO of Eventbrite through Covid and that decision 10 months ago or 10 months, 10 years ago, when we signed the series, a term sheet was so important. We had a term sheet that was 2x the price and we chose to work again with Sequoia and they're just incredibly valuable. Great partner.

Why weren't they willing to up their price to match the 2x? Or was the 2x like just someone throwing a crazy number out there?

You know, the response to that is maybe I'm a lousy negotiator. Best response to it?

Well, you've done okay. So what's a company or product that you're kind of excited about, whether new or not new?

Whether you come on my new. This company I just invested in is called Sidekick. It's a YC company and it's a telepresence device.

I invested in it as well.

Oh, my God, I love this company. So this is. Yeah, this is Sidekick and it's always on and it's one of the most brilliant things. So Julia, while she's my wife, she's the CEO of Eventbrite and we can tap to talk at any time. And so it's for teams to get that sense of being there when you can't be there. And telepresence is such a different model from what we're doing with Zoom or what Alexa or others do. And I'm just such a big believer in the future of telepresence and think this team is brilliantly, kind of hacked together a great solution that I've been using nonstop since I got it a few weeks ago.

So it's funny, when I was thinking about ideas for my startup, that was pretty much. I mean, I don't know exactly this feature set, but it was pretty much my second best idea for startups instead of Mercury. I'm still happy I did Mercury, but I also invested in Sidekick.

So we're both proud investors, as always. It's really important to have a great team behind it.

All right, this is awesome, Kevin, thanks for taking the time. If someone wants to get in touch with you or be involved with Astar, what's the best way they can do that? Well.

We'Re looking for help. There's again, just two of us full time and two part time, and we're looking for very energetic, intellectually curious folks to help us out. You can reach me@KevinArtsFamily.co is probably the best way to reach me.

Okay, awesome. Cool. Thanks, Kevin.

All right. Thank you. Great to see you, Imad.