MFM #164: BitClout Explained & How To Successfully Angel Invest

So I came on the show to talk about only two things, and one of them is how to— is my investment strategy, where after 20 years of making like, I don't know, like 60 investments, I've now figured out exactly how to do what you're just— what you're talking about. You want to hear the breakdown?

I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back.

Sean, all right, we're live.

What's going on?

I did something last night. I had dinner with, uh, Andrew Chen.

How'd that go?

And, uh, so the back— I gotta tell people the background of the story because it's fun. Uh, basically Sean tweeted this thing, got viewed by like probably 6 million people at the time. He politely, but he still said it, that he thinks Clubhouse is gonna like die. It was polite, whatever. Andrew Chen, who's, uh, A friend of mine basically discovered Clubhouse. I think he was their first investor. He loves the company. He thinks it's gonna be the biggest thing ever.

Invested in it.

Yeah. Blocked Sean, invested in it, blocked Sean. And Sean po— this sounds like silly drama and it is, but it's fun. But it's fun. Sean blocked him.

I didn't block him.

Or Sean got blocked and he— Sean, you posted a picture of it and that alone got thousands and thousands of likes. So anyway, I just think it's fun. I'm a little caught in the middle, so it sucks for me. I'm not— I'm not actually defending— I'm actually defending both sides, but I'm not— I'm staying neutral. But I think both parties are actually right.

So did he block me because I think it's fun at me or he doesn't like me or what? What is the— why did he block me?

He just says that he goes, I have a rule that I just don't like a lot of negativity on my Twitter feed. And also anyone that disrespects anyone that I'm associated with, I just automatically block. I don't even reply. Which I think is fair. I actually think that's a good— I'm on board with that. I don't think you were disrespectful, but I, I— it's cool that he feels that way.

Uh, yeah, that's okay. I, I think it's fine. Um, I was surprised because I've met Andrew before and we were friendly. Um, like, you know, before this, I would have thought Andrew is somebody who, um, you know, if I see something interesting, I would send it to him. I'd be like, hey, this— I think this is right up your alley. And he'd be like, cool, thanks, man. And, you know, we— if we saw each other at a at a meetup or a party, would say hello. Like, you know, it was, it was like that. So I was surprised when he blocked me. Him and Marc Andreessen blocked me. So both of them, you know, followed before and then went straight to block without like, you know, anything in between. I'm cool with that.

I'm sure you guys will all be. I'm sure you'll all be friends eventually. You guys are all great.

I totally get it. You know, like, if I respect them, if I think someone's just being a hater or like, you know, and for them, I think they get it from all angles, like They're always fighting with what's her name, Taylor Lorenz, and like, you know, different people in the media and shit like that. And they're probably just like, dude, I just like, they're probably just tired of people who are critics or critical. And I think there's a difference, right? There's one thing, person who's a critic, and this is somebody who sits on the sideline and they are a professional criticizer. And I think there's a difference between being critical, which is to say, hey, actually, like I'm trying to I've noticed some things or I've made some observations and here's my opinion. And I don't know if I'm right or wrong. I'm saying it as an opinion, clearly. And secondly, I hope this is not true. I hope they succeed. And I was genuine about that. That wasn't like just some bullshit I put in there. And I'm clearly somebody who has been through it. I'm not just like somebody on the sideline throwing rocks. You know, like there's that thing that, that quote that everybody loves. It's like, you know, some Teddy Roosevelt quote or whatever, the man in the arena. It's not the critic who counts type of thing. And I would say in this case, I'm neither the man in the arena because I'm not doing this startup, nor am I the critic who just sits in the bleachers and boos. I'm like the man who was in the arena, got my ass kicked by the same competitor, and I'm trying to yell to the man in the arena, hey, watch out, this competitor is no joke. And here's why. If you try this move, this might be a problem. If you try this move, this might be a problem. I hope you don't try those too.

The issue, the issue is, is that your thing, your polite but criticism nonetheless, reached so many people that it, it, you could actually impact the outcome. I, people might think I'm crazy. I think that, I think that tweet could potentially, uh, uh, have a, have a say.

I think this will have zero impact on the company, uh, in terms of that. If anything, it should have a positive impact where maybe the Product people inside the company read it and they say, okay, if you take the jokes and the zingers out and you just look at the actual product observations of what the challenges might be, cool. Do we think this is true? And if we do think it's true, do we have any good counterattacks for what this problem might be and how we might actually solve this problem? I think that would be the positive. People keep sending me these charts because the Google Trends and the App Store keeps showing that Clubhouse going down sharply recently. And they're like, "Oh, the Sean Puri effect." I'm like, "No, no, no, there's 0% chance I could do that." And if anything, most people haven't even heard of Clubhouse yet, haven't had access to it. So if anything, a bunch of drama about Clubhouse should actually be driving interest up in checking it out or Googling it and trying to figure out what is the fuss about, if anything. But the other thing is I get their, the thing that might've pissed them off is like, Okay, the tweet storm was a little over the top, you know, maybe unnecessary, but, uh, okay, you know, forgivable. Uh, but then, you know, the next day I go on CNBC and do a 2-minute segment about it, and at that point you're just like, who is this fucking guy and why is he on this crusade against Clubhouse? Why is he going on TV talking shit? And like, my only response to that is, uh, hey, if I get invited onto CNBC, I'm just gonna say yes. Uh, like, I know that sounds a little silly or selfish, but like, I don't know, put yourself in my shoes. Would you want the opportunity to go on TV? Like, I think that's fine. And I don't think I said anything that was harsh or untrue to them. So, you know, anyways, I could see them being annoyed.

I just got off the phone. I just got off the phone with HubSpot's PR people because we were talking about something and I was like, you guys see Sean on Squawk Box or whatever it's called? And they were like, yeah, they're like, he killed it. And I'm like, yeah, it's It made me happy that these like uptight— they're not uptight, but I stereotype— I pegged them in my head. Yeah, I pegged them in my head as being such that, uh, they've been on board with you. Like, you didn't do anything wrong, but like you made funny— you're talking about Kim Kardashian's butt and they were like, it was awesome. So I'm happy they're on board. Uh, so in this episode we're going to talk about BitCloud, right? But before we do that, we have Ryan Beagleman. He's on the line. He's going to come on in a second. Before we do that, I wanted to bring up two things with you. The first thing, do you remember a couple months ago when we talked about a carbon offset credit card? So I have to learn exactly how this works, but we discussed this of, uh, about this idea of basically taking a MasterCard and just putting slightly different branding and slightly different perks and building a business. Um, a company that we, uh, didn't know existed just raised $250 million today building in a carbon offset credit card called Aspiration. I think it's called—

no, I see that. I see that Aspiration is the name.

Yeah, I just linked to it in our thing. It's called the LA socially conscious bank challenger Aspiration launches a carbon offset credit card. They raised $250 million from Leonardo DiCaprio, Orlando Bloom, but then they have some like actual real people like Allen Co. Cool. We, we, we, we, we called that one.

Yeah, there's actually— I can't—

oh, wait a minute. Had they already raised? I think they had already raised $100 million as well, right? We missed that 10 months ago.

That's okay. We are ignorant of not knowing about them. Also still shows that we predicted it even if it had already happened. I actually am investing in another one. I'll send it to you. It's stealthy right now. But when we can talk about it, we'll talk about it. The founder started a media company actually before this, grew it huge, sold it, coming back to market with a credit— similar, similar idea, a credit card where the rewards, the perks, and the branding are around a different part of your lifestyle and not like, you know, the generic, which is like cashback or travel rewards, travel points, you know, go stay in a Marriott for a 4th night free. And like what these Carbon guys are doing, what— from what it sounds like is that for somebody who is eco-conscious, specifically eco-conscious, they would rather make their impact and have their rewards be something that is helping the environment than get that 4th night at the Marriott. And this guy that I'm investing in, he's got a different one.

Do I know him personally?

I don't know if you know him personally, but you know of the thing that they built before this, and so you'll like it. So it's a very similar idea.

Can I invest in it?

Yeah, I'm going to send it to you and we can do it. I'm in. And then we can talk about it when he launches it.

I'm in. Let's just do that. I'll bring to you the stuff, which I brought. I showed you 2 cans. Maybe I'll— we'll show each other stuff and then let's just talk about it on here.

Because I think people like that. So far, every time we've talked about investing, people have liked it because you get to hear about a new concept. We're not just saying, oh, that's neat. We're saying like, no, I put money into this. That's a certain level of conviction and skin in the game. And then also there's like the people who are interested on the investing side, which is like, cool. So like, how do you, how do you invest? What do you decide on? What are the check sizes? What, what type of returns do you expect? What type of returns do you end up getting? What were your big mistakes? People like that type of shit.

And I'll say, I guess I can say now I put $10,000 into Toucan and then we did a syndicate where we put in $150,000 total, which kind of shocked me. I thought it was going to be like $50,000. But I did $10K on that one of my own money.

Yeah, that's cool. Yeah, I think that's an interesting one also, deciding what's your basic check going to be like. I, like, you decided $10K. The first few angel investments I did were basically, I think, $25K. And then I like randomly did like a $50K one. And then I just felt like, oh shit, I like, you know, that $50K felt like a significant, like a more significant bet than the $25K ones did to me psychologically. And so then there's like, there's a math behind how do you want your portfolio structured and all that shit. And then there's the psychology around you want to bet an amount of, you want to be betting an amount of money that will matter to you where you care and you'll track it and you'll do the work. So not too little, but also not too much where you become emotionally wrapped up in the outcome, which you cannot control and is, you know, subject to all these different variables anyways.

I was going to do, and actually we could bring Ryan on.

Yeah, Ryan, fire up the camera.

Because he was telling me about his he was telling me about his buddy who I don't know if he wants to say his name about what his process was. And we could talk about in a second, but we're going to talk about the guy who hired an analyst, Ryan. But my, my philosophy right now with angel investing is I was going to do maybe a quarter of a million to $300,000 in the next 12 months, and I was going to do it in increments of $10,000 to $15,000.

Gotcha. My, my quick reaction to that is that that's too many deals at too small of an amount. You'd rather do, I think, because just to do that, like, okay, let's just do the math real quick. So that means you're basically saying yes to 30 deals. To say yes to 30 deals, let's, you know, about how many deals do you think you'll need to, what percent hit rate do you have or acceptance rate? So from a deal you see, you either look at a pitch deck, you meet a founder, you take a meeting to saying yes. You don't want that to be like 100%. You don't want it to even be 50% probably. What do you think? Just for you, just off top of your head, spitballing, what percent of your deals do you think you'll say yes to or do you want to be saying yes to?

30%.

Okay. That's a— I think that's still probably fairly high, but okay, let's say the phone off the phone call, right?

Okay.

So of all phone calls, people who make it to the phone call, you want to do 30%, right? So let's just, let's just totally—

No, I'm not saying I, I'm not saying I want to do, I'm saying that. Yeah. But I also think I say no to most everything that I email.

So let's say, let's just take the meetings part. Okay. So that means, you know, for doing 30 deals, you're going to need to take— you're going to need 90 at least of those 1-hour meetings to get to that hit rate. And so 90 1-hour meetings, that's 90 hours of like kind of like founder meetings. And so it just ends up being a lot. And then now you have 30 deals to like add value to, to help, to make intros for, to do all those things. So it ends up being a lot of maintenance and a lot of vetting for very small ownership and small check sizes. But it is a good way to just see a bunch of shit. So I like the strategy from that point of view. What do you think, Ryan?

So I came on the show to talk about only two things, and one of them is how to— is my investment strategy, where after 20 years of making like, I don't know, like 60 investments, I've now figured out exactly how to do what you're just—

what you're talking about.

You want to hear the breakdown?

Well, can you first tell me the story? Can you tell the story of the person you know who— what they did?

Well, let me, can I explain this theory and then I'll tell you how that plugs into it? Yeah. So I think that the filter for me has actually turned into, I think there's an icky guy for investing. So, you know, there's the icky guy concept. I know you guys are both familiar with, you know, you choose your career based on what you love to do, what you're good at doing, or what there's a market need for, right? And at the intersection of those three things is like exactly the thing that you will be best at and enjoy. Well, my epiphany looking back on my like 60 or some odd like angel and real estate investments is that the ones that generally perform well are the ones that are at the intersection of what I'm naturally curious about, where I'm well networked, and where there's good fundamentals. So it's a similar like Ikigai, right, concept where— and so my main, my main filter for, for making investments now is is this something I'm actually sincerely fascinated by? I'm regularly reading about and I'm well networked in. Like, so for example, like I made some investments, like, you know, in healthcare, which I don't know shit about. I'm not well networked in. And yeah, the fundamentals are amazing. Like healthcare is only growing in America. People, you know, costs are rising, whatever. Like, but those have not been predictably looking back. Like those have not been as good as say, my investments in Coinbase, Warby Parker, like Uber, and like real estate investments where I was well networked, I was really interested for a long time, and the fundamentals were good. So what do you guys make of that?

So I'm a framework guy. I like anytime somebody has a framework or thought process around how they do what they do. The only thing I would say is that for me, whenever you see something growing really fast and you see that the fundamentals actually make sense, It's very easy to get the other two to work. So for example, I can get really curious about something when I see something working extremely well. I'm like, wow, what the hell is this? And then curiosity can follow. It doesn't always have to lead for me. And the second thing is well networked. What I found is that the whole kind of value-add side of investing is sort of a load of shit. I agree.

Whenever we raised money, I was like, I don't want to talk to you ever again unless we're just having fun. Fun with you. Like, we're just hanging out.

Maybe I'm just bad at it, but what I see— and I do the same shit thing, by the way, when I talk to founders. I'm like, look, here's what I've done in my life. If any of that applies to what you're doing, I've been through a bunch of shit. I've done a lot of these steps that you are about to do. So I think I could probably help. And secondly, like, I'm particularly good at these 3 things. And by the way, like, I think your messaging sucks. And I think I'm good at messaging. You know, yeah, you know, I think I can do the pitch better than you. Your deck is a little bit weak. I can help you with your deck. Those are true. In reality, the amount of times that gets taken up and actually has some material impact is just so low that I—

I'm not saying that I'm using my network to help the investments. I agree, I rarely help the people I invest with materially. I'm saying I got in early to say Uber, because of my network. Yeah. And I can't get in early. Like I tried getting in early you know, to say like, uh, SpaceX, like I wasn't well networked then. Now I became better networked around SpaceX later and I ended up investing later, but like there's certain areas where I have an unfair advantage to getting investments.

Right. And by the way, we should introduce you. So Ryan, uh, you know, you were part of Summit. You've been on the pod before many times, I think, uh, built a media company, sold it, was one of the co-founders of Summit, Summit Series. They bought a mountain, did crazy shit. And I would say one of the more well-liked guests on the pod because has real business knowledge and also knows how to deliver it in a way that's entertaining to people. So a good sense for entertainment. So excited to have you on. You have been infected by this mind virus. Can we just talk about it or do we need to— I feel like talking about anything but BitCloud can't even enter my brain right now.

I honestly have canceled almost everything on my calendar because BitCloud is so addictive and so much fun and so lucrative so far on paper that I just can't, I can't talk about anything. My wife wants to throw me out of the house right now. Like I'm just—

so the good news here, guys, is that I signed up for BitCloud, but I pretty much only signed up because Ryan just called me and said, uh, I want to talk to you about this. Sign up. I don't really know what it is, so you guys could talk about it and I'll be the one asking the questions on behalf of the audience. Right. Like an idiot.

So let's, let's take a stab because it's kind of new and foreign and most, almost I would say 99% of the people listening to this are not active on BitCloud yet. Let's each take a stab at it, Ryan, and see if we can get to a simple explanation of what the heck it is. So here's my, here's my simple explanation. Sam Parr is basically like a stock market for people. So me and you and Ryan and anybody else, we each have like a little coin, a price where you could buy some of our stock, let's call it. And so people are going on there and they're using Bitcoin to buy our stock 'cause they believe that we're gonna continue to get more popular and our reputation's gonna grow and that owning a piece of our limited coin the, you know, if I own 10% of your, your stock, basically, uh, I feel good about that because I think in the next 10 years you're going to be getting even more popular, right? So it's a way to bet on people. And so that's the first—

which we, which we've talked about a lot. We love this.

We, we've looked at human IPOs, like what we talked about before, which is like, is it for income sharing? Is it for X? Is it for Y? Is it for Z? Right now it's literally for nothing. And so the reason this is cool right now is because Nobody knows who's behind it. They're kind of like being stealthy about it. People know, but nobody has publicly outed who's behind it. Do you know the name of the people behind it? But I know people who know the person, people I trust say they know who it is. And they said, because I asked, they were like, yo, I'm buying your coin. Are you going to actually use Bitcloud or not? I was like, well, I don't know. Is this like a scam? It kind of looks scammy to me. And they were like, yeah, I thought so too, because of kind of the secretive way that they're going about it. But Actually, I know the founders. They're like legit people from the tech scene. They kind of have a reputation in our circles. And a bunch of the big name tier 1 VCs are involved in it. Now, that doesn't mean it's not going to fail. It doesn't mean it's not like maybe something unethical is going to happen or it's going to get hacked or who knows, any number of bad things can happen. But it's not random guy and not Nigerian prince is kind of the main thing that that I've heard.

Now, you guys, you're forgetting a major part here, which is if you go to Bit— it's Bitclout, C-L-O-U-T.com. You can't actually do it if you don't have a password. It's all— you need a password.

So you guys are forgetting, it's invite-only right now, and you have to have this, you know, similar to Clubhouse and Superhuman. Like, you know, this is one of the techniques in Silicon Valley now to build hype and get early adopters to want in is to not let them in and then make it so they can only get in if they have the secret secret codes. So, okay, Ryan, that was my, my attempt. What would you change about it? How would you describe it differently?

Yeah, no, I think you nailed it. I mean, it's a social currency platform. I think you put it more simply, you can bet on people. So like, take Sam. So I called Sam last night. I'm like, dude, what the heck are you doing? How are you not on BitCloud yet? You need to get on here. You need to create your profile. So he goes on, he creates his profile. I put in $2,000 into, into the app, the Sam Parr on BitCloud. I then, you know, I then watched it overnight. And when I woke up this morning, I had already made like $5,000, $6,000 off of it.

What?

And so, yeah, wait, Sam, here's the way. So let's— Ryan, let's walk through me and Sam's coin. So can you just pull up— actually, the site's down, which is sort of problematic.

The site's down.

So that's a bit of an issue. It'll come back up, but it's getting hammered with traffic, I think. So last I— last you saw, Ryan, what was my coin trading for? And do you remember my market cap?

I don't. It's so annoying that the site's down because I was hoping to have it ready. But I want to say you were pretty legit. First off, I just want to say like you were trading at a relatively high number relative to like your fame and like your Twitter handle. You were— which what I've noticed is people who are known in the crypto world disproportionately are doing well on the platform. So like, like I bet yesterday on Chuck Norris, and I'm— because, because part of my strategy is to buy people who are trading at a cheap number relative to like the following they have on Twitter or Instagram. And like Chuck Norris was trading at like $200, but you know, he's got a huge— like he has a big following. He's obviously pretty famous even though he's like, you know, a C celebrity.

Where—

but I don't get any of that money.

You do.

No, so you get— so you can set whatever percentage you want to take of the, of the coin that people invest in. So the default is 10%. So if I buy like $1,000 worth of Sam Parr, I believe the way the math works is, uh, you'll take 10% of that in coin. And so what's cool about that is like, as you become more famous, as you build up a reputation, and as you keep your reputation, you know, good, in the public eye, like in theory, your BitCloud market cap will grow and you'll take 10% of that. Now, what I've seen some people do who have money like you, Sam, is they set their percentage down at zero instead of 10%, which is the default, because they don't want to discourage people from buying their, their coin. And then they just buy their own coin and then they bet on themselves, which is something—

oh my gosh, as I saw this a few days ago, And I saw, oh wow, some people have bought, like, I think somebody had bought $10,000 worth of my coin. And basically I was trading for almost $2,000 per coin. And my own holdings that they kind of like give you through your, I don't know if it's like a founder reward or like a 10% vig you get on every buy or something like that. My own holdings, if I claimed my account, I had $60,000 worth of my coin ready for me. So the genius of their model is this.

Wait, you had 60,000?

In just my own coin, what I had gotten from the way that the site works, if I verified my account. So here's how it works. This is the genius, the growth hack that they have, which is very, very smart. And so what they do is they pre-made all of our accounts. They took the top 15,000 Twitter accounts, I think, and they made profiles for all of them. They made coins for all of them immediately. And then they let some people in with Bitcoin to go buy up whoever they wanted. So people start buying coins. And of course, every time you buy a coin, the default is at 10%. If I buy 100 coins of yours, 10 of those coins go to you and 90 come to me. So there's like a, like the brokerage fee goes to the creator themselves. So what this did was you're Elon Musk, you're Naval, you're, you know, on a smaller scale, us. And you go on the site and right now it basically says, cool, if you log in and verify that you are you, you are, SeanVP on Twitter, you get to claim your coins. Your coins are sitting there in this account. So I have a 60— like last time I checked, this was a few days ago before several friends bought my coin. So I might have more now, but I had a $53,000 bounty just waiting for me. All I had to do was connect it to my Twitter account and tweet out, hey, I'm on BitCloud, you know, like, come buy my coin or whatever. If I did— if I didn't do that at the time, I didn't know, is this legit? Am I promoting a scam? And so I went, did some background checks. I asked a few people who I knew were buying my coin. I said, what, you know, is this real or is this not like Ryan, you know, and others. And so, um, and so that's how simple it is. So, so, so think about that mechanism right now.

I have cornered the, the Sam Parr market. If you look at Sam Parr, I am by far his biggest holder. Um, and, and I plan to buy more Sam Parr as soon as the site comes back.

Guys, listen, it wasn't like— it wasn't— I can't tell you what's the, like, the red pill, blue pill phrase. What's the— what's the— what's the pill that you take where your perception is completely changed? It can't go back. Okay, maybe I'm just like a blue pill guy here, but like, it wasn't that long ago that I was so poor that I would put 2 pieces of pizza in a one Whole Foods box and so I could just like only pay for one, or, or where I would like eat half the food out of my container before I weighed it. Like it wasn't that long ago that I was that poor where I was stealing food from the grocery store. Now we're talking about Sean just logging in and being like, "Oh, beep bop boop, $50,000 in my account." Does this stuff freak you out? This kind of freaks me out.

No, it does not freak me out at all. I think it's awesome that I could log in and get $50,000. I think that's cool. Now, okay, here's some of the criticisms, right? And this is where, Sam, your bullshit detector is about to like, you know, fly around the room. You're about to raise your eyebrows all the way to the moon when you hear this, which is that you could transfer money in and you could buy coins, but there's no withdrawals right now. You can't—

what?

I could go in and verify, I could claim my $50,000. What I can't do is put that in my bank account. That's a feature that conveniently is not available and not built yet. Now they are going to do it. The main thing for them is that they say, oh, we're building it, it's not ready yet. In reality, my theory is basically if you allowed people to immediately come in, grab $100K, grab $50K, if I can come and grab $50K, withdraw it out of the system, it's going to crash the network. The whole system fails. There's this theory about one of the reasons Bitcoin is so valuable is because the central philosophy of the religious Bitcoin holders is to is to hold the coin. If you're selling out of it, the price drops. And so what they want right now is for everybody to hold their— hold coins so that the network can get big enough, get enough strength. And then once it's bigger and more popular, you can add liquidity and people can trade it in and out and it won't just completely crash the system.

So do we just have so much money going around right now that we have to invent?

Okay, so here's— okay, let me explain to you, because I also was like, what the hell is this? And then I was sent the one-pager, and I want to actually read to you guys the one-pager PDF. Uh, this might be a little boring. Yeah, I don't need a PDF, but honestly, when I read this— so I talked to Ryan, I don't know, like 40 minutes ago on the phone before this podcast. I was like, yo, okay, we're coming on, I'm excited about BitCloud, I heard a little bit about it, but I haven't had time to look at it. I just had a kid, like, I haven't had a chance to go and kick the tires. And he was like, dude, this is like the most— you, Ryan, you said this, right?

You're—

this is the most addictive thing since for early Facebook for you?

Craziest thing I've been— I can't— like, all my friends have been up all night. Like, one, one's in Alaska heliskiing, another one is in Utah. Like, we're all texting all night. Hey, who's buying Chuck Norris? Has anyone figured out— like, oh, I just 10x'd on Gwyneth Paltrow. Like, a number, a number, a number of my friends, like guys who worked for me at Summit who have like maybe $50,000 saved, have put in like a quarter of their net worth, and in the last like 4 or 5 days have 5 to 10x their money.

Like, but they can't get anything out.

They can't get it out. Get out. Yeah, but I, I contacted the founder of a pretty major, um, like crypto hedge fund, and he assured me that, that they bet quite a lot on this and that he's confident that they will— there will be a way out. Plus, the founder also said that eventually there'll be an exchange, you know, where you could sell it. Um, it's just craziest thing I've seen so far.

Let me give you Both.

How do I make Sam Parr the GameStop?

Yeah, yeah, well, first of all, calling it GameStop is perfect. That's all right, you're already memeing yourself.

GameStop, yeah, whatever.

So, okay, so here's the— okay, because when we were talking on the phone, Ryan, I was like, so you're buying my coin, great. What, what's the reason? Why would you want my coin? What does that do for you? Like, I get that if I get more popular, in theory my coin could get more popular, but that assumes more people will want to buy it. Why would they want to buy it? What are they getting out of this? It's like, well, then they think you're going to get even more popular, then the next person will want to buy it, right? So there's definitely like a greater fool theory that underlies this whole thing, which is that I'm buying it today because I think somebody else is going to come buy this tomorrow, either because the creator I'm buying is going to get more popular or Bitcloud is going to get more popular. In reality right now, both are going to happen. And, and so, so I think it's actually a good bet, even if you know going in that this is greater fool theory. This is, I'm looking to pass this to the next guy and make a lot of money before the music stops. So I think that's the skeptical way of looking at it. Now let me tell you the, like, why this actually might be a thing long term. And I'm going to read to you from the PDF what they say this is. Okay, so Sam, I'm going to read this to you and you just tell me paragraph by paragraph is your belief going up or down? Okay.

Where did you find this? I just Googled Bitcloud.

Yeah, I'll send it to you. It's a white paper.

Where are you guys getting this shit?

Bro, we're connected on the inside. Not connected enough to know who's actually doing this, but connected enough to know the people who know the people. All right. So Bitcloud is a new type of social network that lets you speculate on people and their posts with real money and is built on a blockchain. Okay, cool.

Cool.

Then it goes, it's a fully open source project. There's no company behind it, just coins and code. So then it says, let me skip to the part about creator coins. What are creator coins? Everyone has a coin. Every profile on the platform gets its own coin that you can buy and sell. These are creator coins. You get one, you can have your own creator coins just by creating a profile. And they already pre-created a whole bunch of profiles because I didn't do I didn't do it, but my creator coin exists. Okay.

I had to make mine.

Then it says you can buy your favorite person's coin. To buy someone else's, to buy someone's coin, you just go to their profile, you click buy. For the top 15,000 influencers on Twitter, it's preloaded into the platform. Okay, cool. So now then it says tweet to claim your profile. The owner of a profile can claim their profile by tweeting out their public key. This will give them full access to their account as well as the percentage of their founder rewards, which is— that's what I was talking about, my $50K that's sitting there for me. That's my founder reward for claiming my account. Now, the genius of it is by me tweeting out, like, I have a big incentive to tweet this out, right? Because I get access to my $50,000. So they're basically kind of like paying me $50,000 to tweet out about BitCloud. And if enough of the— and the bigger you are, the bigger your reward. And so they're going to get a lot of big people to tweet this thing out, which is going to create this like enormous hype cycle. Okay, so then it says, what are creator coins useful for? So this is where it starts to become interesting. It goes, there's a new asset class that's tied to the reputation of an individual. For example, let's say Elon Musk succeeds in being the first person to land, uh, land on Mars, put a person to Mars. His coin price should theoretically go up because he will be world renowned for it. Um, and if in contrast, he makes a racial slur during a press conference, his coin price should go down because his reputation takes a hit and his popularity, uh, goes down. So you as a trader can make money by buying and selling the ups and downs of speculating on a person's future popularity. Okay. So then it says, what could you use the coins for? So today it's just about buy and sell. But in the future, let's say that, you know, right now, for example, I think Craig Clemens is my biggest coin holder. He has like, I don't know, $10,000, $15,000 of my coin. Ryan's got a— Ryan, how much of my coin do you got?

What?

I think I bought like $3,000, $4,000.

So What can I do to reward the people who own my coins so that more people want to buy my coins? So one is a stakeholder meeting. So you could basically say, okay, I'm going to do an AMA or a Q&A for anybody who owns over, you know, 100 of my coins at whatever.

So what do you tell them? Like, hey everyone, I wanted to give you an update on the next quarter. I'm thinking that I'm not going to say anything sexist or racist, but I am going to do that. I am going to film someone committing suicide, which you might make my thing You're not doing a totally report about your own popularity.

You're saying, okay, for my super fans who want access to me, you want more access. Like let's say, you know, like for example, our friend Andrew Wilkinson has done a thing where he says, cool, buy this expensive thing for charity and you get to do a lunch with me or you get to join this AMA, this Q&A exclusively with me and 25 people who pay the $5,000 to this. All the proceeds go to charity. It's that same idea. If people want to do a, want to ask you a question or whatever. So here's a simpler version, right? That's like you get to attend a private meeting for people who own X amount of my coin. The other way is to say, look, I get a bunch of spam in my inbox every day. People email me, people DM me, and literally this is true. There's so many of those that I don't respond to 90% of them. And unfortunately, some of the good ones just get mixed up in all the random junk that people send me. So here's the thing. I have an inbox. The inbox has a contract that basically says Anybody who— if you want to message me, it costs you 5 coins and my coin has a real price. So you can do that by either having a huge amount of my coin or going and buying some in order to message me. And I will respond to everybody who, who sends me this paid message through this channel. Right. So now I can have an inbox that has a price with it, or I can prioritize it based on sort this by my biggest coin holders because those are my VIPs. I want to talk to them first. I want to give them replies first. Another idea they have, sponsored posts. So I can have an inbox that basically says, you can pay me, you can buy a certain amount of my coin and I'll retweet your thing. And so it's just a simple, like, you don't need a central middleman agency to set up like these paid promotion deals. It's just, I just set a price or people just bid a price and I just look at it and I say, okay, I'll take 100 coins, 100 of my own coin for posting this thing. I don't mind. I actually like the thing you told me to post. And then the last one, like there's an OnlyFans version of this where, cool, if you have this, if you pay this much coin of my coin per month, you get exclusive content. The last one is what they call money likes. So let's say, like, let's reimagine the like button. So instead of just being able to smash like on everything, let's say that it costs a tiny amount of coin to like something. So for me putting out a good post, like let's say that Clubhouse thing I did that went viral, Today, all I got was fame. I didn't make any money off the fact that 7 million people saw that thing. Twitter made money, but I didn't make any money. So in this case, if I put out great content that goes viral, like my, my Clubhouse thing, then every person who's hitting the like could be basically buying, you know, in order to like, they're buying a micro amount of my own coin. And so I earn for posting good content, um, in that way. And by that, by that person buying my coin by hitting like, they're actually sort of investing in me, right? Because they hit the like, let's say it costs 1 Sean coin to do it. They bought 1 Sean coin, they hit the like button because they like my content. Now let's say I keep getting more popular. They still own that coin. So both of us have an incentive to do that. Those are some of the ideas. What do you think?

Where, where I am right now is there's one of 3 things happening. One, either my IQ is just low enough that I can't keep up with you guys when you discuss this. 2, I'm just out of touch and like it's happening where like when my wife started getting a job at Facebook, her dad was like, why do you need it? Why do they need all these people? It's just a web. It's just a website. Like, am I, am I getting, am I getting out of touch? Or 3, this is bullshit and I'm right.

Well, can I, can I give you a simpler use case? So right now, you know, I've been doing executive coaching, I think, as you guys know, and I've been, I've I'm coaching the, the founder and CEO of Morning Brew, and I think we should pit Austin Reef and Alex Lieberman of Morning Brew against the Sam— at the Sam Parr on Big Cloud. I, I am going to buy coin in all of them, and let's see who can become the bigger market cap in the next 30 days.

But I don't want to do that. Like, I— wouldn't it be better if I just spent time in like making money on shit that I own in the entirety of.

But these— this is like— I thought these guys are like, like your nemeses. This is a newsletter war between The Hustle and The Morning Brew. The final—

I'm cashed out, dude.

I've won.

Like, I, like, like, I have everything I need. I have— I have— I've won my game.

As far as I could tell, Austin is crushing you on BitCloud in terms of his market cap.

There you go. I'd like to see the amount that Now, now this competitive juices is starting to flow. He's like, I don't care. But if you're saying he's crushing me at a game I don't care about, I start to care about the game a little bit.

No, I— the game I care about is my bank account and what time I can wake up in the morning and what I can do during my day.

Your popular—

no, that's not my big account. What? How many houses you'll be able to cash out your coin, right?

You're going to—

will I, will I be able to cash this out?

Say there's scenario one, these guys never build a way to cash out. This whole thing is a scam. All the smart people that are involved in it are wrong.

Cool.

There is a percentage chance that that is true. I don't know what that percentage is. Might be 1%, might be 50%. Let's just take that off the table because if that's true, then yeah, there's no discussion. It's stupid and useless. If, if you're buying, if you can only buy in but never sell out, like, you know, what is this, you know, Robinhood? Like, you can't, you can't do that. So here's the, the other side of it. Let's say it is liquid where you can trade some of your coins for actual cash if you want it, or Bitcoin if you want it. but people are going to be betting on, hey, this podcast is going to keep getting more popular. Sam's going to keep getting more popular. He's going to keep doing more things. I've seen his Twitter account growing. He posts awesome content. I want to get on, on the ground floor of Sam. And they start buying your coin because they want to hold a piece of the Sam Parr popularity, like clout score basically. And they believe more people are going to buy it. So now more people do start buying it and your stock goes up. Your stock goes up because you sold The Hustle, and then this podcast hits number 1 in the charts and more people hear about it. And then we do some viral thing and then that goes viral. You get more popular there. Now what?

But Sean, do you actually want this? Yes. Do you actually want these people betting on you? Yes, I do.

And I want—

No, no, I'll tell you something I like about it is I've always kind of tried to be an early adopter of certain things, right? That I was excited and like naturally curious about. And I would tell all my friends, but I had no way of like riding the wave with the person I was popularizing. I would go, I'd be like, hey, you really should check out this awesome musician. And then they would just get really famous and like, they would get way richer. And in fact, I often couldn't even talk to them anymore because they became too big a deal to even, you know, return my calls. And like, I would have liked to have been like on the ride with them financially. I would be really excited.

I met you before you started The Hustle, right? And I was like, this guy's the shit. This guy's, you know, totally switched on. He's a dynamic dude. Okay. If I could have just bought stock in you and not bet on, like for example, I had the opportunity to invest in the Hustle, the media company. And I was like, well, I don't know if this is gonna be like this humongous billion-dollar company or what. I don't know if this fits my profile, whatever. I don't know about media, but I was believing in you the whole time. And if I could have just bought Sam and owned Sam for 25 years, that's something I wanna do. I think that you are gonna become a hitter. and you're already on your way to becoming a hitter. And if I could have done that from the beginning, or like, you know, we've talked about the founders of Calm. I was buddies with them early on. Now Calm is so big that I feel guilty even hitting them up to go hang out with them because I'm like, ah, they just, everybody wants their time. They're busy with their, you know, huge company. What am I gonna, do I really wanna go hang with them? No. So I, you know, I'm a fan from afar now. But at the time, if you said that you could buy Alex Tu and you could buy Michael Acton Smith, you could buy their, their, their coins, I would, I would bet in all my friends' coins, right? And I do with my time, but I don't ever get to benefit financially from spotting future stars today. I—

that was a good speech. I think that I'm a little bit on board now.

Do I feel the exact same way? There's so many entrepreneurs, including the guys at Calm that I met through Summit early on. And for whatever reason, I didn't persist and get in. Didn't get the ability to invest in their company.

You know, they—

it was mentioned. I, I didn't— I didn't, like, you know, I missed the email. A friend of mine heard about it. I wasn't at the right event when they were raising. I met them 3 months earlier, whatever. Now I can actually bet on these people. It's, it's— I, I don't know.

Well, this is why there's 2 huge problems, is the fact that you've just put tens of thousands of dollars on this website and you get— you can't get the damn thing to fucking turn on.

Yes.

Right now, this entire podcast. This podcast has been on for 45 minutes and it says BitClout is under brief maintenance. All funds are safe.

Thank you for your support. It's a black screen with red text, red like Arial 14 size font.

Yes, it looks like a terrorist or kidnapping.

I remember when Facebook first came to my college and I was like, we were one of the first colleges. And I remember like calling you. It was really fun. This is the first time I felt like that in a long time. That's why I wanted to come on the show and talk about.

But there's two major differences, which is you didn't have money on Facebook, and two, you, you knew a little bit about the background and who made it. We're looking at this anonymous thing that isn't working and you have money on it. That's a little nerve-wracking. And also, you can't even get your money back out if you want it.

By the way, Sam, do you know how many of my, like, angel investments went to— like, I had no clue. Someone was like, you should try— like, this guy said from this person, and you should throw $50K in this thing. And I was like, what's the least I could do? Could I do $10K? Okay, cool, here's $10K. And, you know, so over, I think now 25 of those or so have gone to zero, but a few of them pop. So I'm looking at this like an angel investment, right? Like I'm looking at this as like 1 in 10, but I get it.

I'll do it. I'll do it. But I'm not going to like, I think that people like you two need someone to criticize you because like just everything on paper that we're doing here, it just like, this sounds like a scam. A horrible total scam. And I think you should be optimistic about it, and I'll definitely dabble in it.

So here's the other thing, right? Like, let's, let's say you said something earlier like Facebook didn't have money in it. Like, I think you meant— I think what you meant was you didn't have to put in tons of money to bet in Facebook. You could just start using the thing, and it's kind of like, you know, low risk.

Like, Brian just said that, that his, uh, normal young friends had a quarter of their life savings, but you know, YOLO.

So, so, okay, so, so, so here's the, the part that I think is exciting. And a lot of people have talked about this. This is the first attempt that it actually clicked with me. And I'm like, oh, this might actually work. So there's a whole bunch of people that have, since crypto came out that were like, oh my God, we need to take the social networks and we need to convert them into crypto networks. Basically what we need is why don't, like, why does Facebook and Twitter and Instagram, why do they make all the money and we do all the work? We make the content, we like each other, we put our attention and our time into viewing the content, viewing the ads, and advertisers spend all the money and they're hoping to make a return on the other side. But the users who do all the work on these user-generated content platforms reap only social value, no financial value. And so a whole bunch of attempts were made. People tried to make Steemit, which was like Reddit, but instead of the karma being kind of funny money, it was like real money, you know, type of thing. But it never took off. And, um, but the, the fundamental always did make sense, which was if you did get on a platform early and you were one of the people that helped make it big, why don't you ever get any reward for that? If you were one of the first Uber drivers, first Airbnb hosts, first power users on Instagram, you know, like, what is it worth for those people that are on Clubhouse today that are making content, you know, freaking 24/7 and trying to make Clubhouse successful? And they're, they're not the investor in Clubhouse. It's, you know, Andreessen Horowitz and like Eazy-E and Kevin Hart and shit. And so, um, so Eazy-E is not an investor, but we'll—

because he's dead.

One thing I love about this that you're saying is when I got into some of these, you know, awesome investments like Uber, I couldn't share them with anybody. I'd call my mom and be like, you really— oh man, sorry, but I can't even get you— I couldn't get you in, you know. And now it's like, I feel excited. I want to become on the show and like share it with the listeners. And like share it with trends because I was like, shit, everybody, as soon as I get this password and as soon as the site's back up, like we can all actually—

we're like, as soon as the site works and as soon as they open it and as soon as withdrawals happen, this is totally going to be sweet. But until those three primary fundamentals work, this is garbage. As Sam is rightfully pointing out the obvious.

Oh no, it's very risky right now. It's very early days. But we need to talk about the investment strategy because the next thing is once you get on, you become addicted and you're like, well, What is the strategy? And I have like 5 strategies for you guys.

Well, can we talk about your friend who—

He's talking about his investing strategy, by the way.

I know, I know. But can we talk about this? Because I think this is pretty interesting. I won't name names, but can I say details of the story, right? I'm going to. So you had a friend who sold a business and it was amongst like your everyday person, massive home run. Um, but he— the amount of money that he made was not enough that you would go and do what he did. And he hired two full-time people to invest his money.

Yeah.

And we're talking like potentially like single-digit millions of dollars, which again is a lot of money, but not enough to like have two people on staff full-time to invest your money. And that's what he did. And Ryan said that it ended up being a massive success, even though you thought it was a stupid, stupid idea, and it totally worked.

Yeah, I mean, the thing that blew my mind is a friend of mine made a similar amount of money to the money I made selling my media company, and I, I did not think I had nearly enough money to build what, you know, was called like a family office, right? Like, I, I need it. At most, I'll hire a wealth manager, I'll pay them like half a point of the money under management, they'll invest my money in stock and whatnot, and My friend instead hired two hedge fund guys, an analyst and like a full, like a real like associate vice president, like a senior guy at like a hedge fund, and is paying them like, you know, I don't know, like half a million collectively in salary a year, which is like a very high percentage of his money, and, and giving them as well carried interest and upside. And I, at the time, this was in 2016, I thought that's the craziest thing I've ever heard for, for world's smallest family office. And what, what he now, he, what was smart is he had a very good, like, kind of similar to us. He had a, he had a good network and he didn't have time to underwrite all the deals that would come to him. He didn't have time to run a financial model or call people and dig, you know, kick the tires and make sure that, you know, the thing was real and that it was a good investment. But he had a lot of flow like we do. And so I don't have time to look at most of my investments because I don't have an analyst and I don't have the time myself because I put my own time into my business. Right. So I thought what was crazy is he did that and he's up like a lot. Like, I don't know exactly how much, but like, let's just say his, his BitCloud investments are like 100x mark, you know?

So, so, so you, um, what, what is the typical size of a family office? What amount of wealth does an individual need to where, you know, you typically, they'll be $50 million themselves, $100 million?

It's definitely in like the— I think my opinion is that at $50 you split it with another family.

Okay, so I, I worked at JP Morgan Private Bank in college as an intern, which at the time was the largest wealth management organization, and, and they had billionaires as clients who did not have family offices. They hired JP Morgan to be their family office. But the really big clients at the firm would— some, some of them would also have a family or would leave the firm to form it. And so back then, this is back in like 2004, like I don't think you had a family office unless you were like one of the top 50 richest people in the world. It was my recollection at the time. And then there— and then, and then came these ideas of multifamily offices, where people share billionaires, share a family office. And now obviously things have become much more like, I think there's more and more of this going on. And so I think people are forming family offices who maybe have, I thought a couple hundred million, a hundred million. But what was amazing about my friend is that, you know, this is somebody who had more like low eight figures and have essentially formed a family office. Yeah.

I like the idea of the shared family office, by the way. That makes a lot of sense to me. I'm surprised that doesn't happen more at like every level of wealth.

It does. You could do— yeah, there's like shared family office. I mean, I think that like once you get into like the $40, $50 million range, it makes sense to like do like 3 or 4 people together. But yeah, for making less than $20 million, which is still a significant amount of money, the idea of hiring a full-time staff is kind of outlandish. And that's kind of cool.

So I have a similar setup. I'm lucky that the business I have makes enough income where it's cool. This is a business expense. It's basically a lot of tax I would otherwise be paying. And so instead of paying tax, I actually get this individual to actually grow the thing. And so that was my logic, but that might be sort of silly logic, but it's definitely more than what most people do.

What do you think? Is it going to work?

It's already working as far as I'm concerned. I think it's a fair trade.

Yeah. By the way, I couldn't agree more. I mean, investing in talent always pays off. Off if you're, if you're like willing to iterate and try and experiment and you're, you have hustle and you work hard in my experience. So I love it. I hired a bookkeeping firm in Europe and they've created my books for my coaching business, for, you know, renting my home, for all of my investments and for my personal. And then I have like an executive assistant who, you know, frees up a bunch of my time. And I've been thinking about hiring somebody to just like manage my investments. With me, which is part of why I was mentioning this to Sam the other day, that my friend had this great success, you know, doing this. And I think it makes all the more sense for you, Sean, you know, because you're obviously— you're also operating labor-intensive businesses, like where you have to, like, you know, create things and put them online, like e-commerce. And I mean, that makes a lot of sense.

I just think it's like— I think it's a little nutty to do some of this, because if you just kind of let your money it. Like, it's gonna grow pretty good doing boring-ass shit. And the question is, is, is doing all this extra stuff actually gonna work out if you do it for 3 decades? You know, what, what will you perform better doing? And sure, Sean, you're crushing it now, or I, I think— I bet you are because Bitcoin is growing and the economy is booming. But do you think that over the next 30 years, that— what do you think is going to be better for you?

Um, you know, I think it's true that most people will fail to just beat the passive index when when you account for fees. That's been proven out. But also, most people is not all people. So I think maybe having the network that we have in Silicon Valley is actually significant enough of an edge where this works. For me, I didn't think about it like, I need somebody to manage my money. If it was just manage my money, I definitely wouldn't pay somebody in-house to do it. For me, it was like, cool, I want to be creating content. I want to be running this angel fund, but I don't want to be taking all these meetings and I don't want to be, you know, like I'll be in a meeting, you know, I'll be in a business meeting and then my newsletter will go out and people will like look at their phone and be like, how did you, what is that? And I'm like, oh yeah, like I don't write everything. I don't send all this stuff. I don't do the formatting. I don't do all the research. Like I have somebody I really trust and we work together on it and I'm more the editor than the author. And, um, and that's like the case for a lot of the different things I do. When it was raising the rolling fund, I didn't have time to go raise all the money. I tweeted shit out and then a bunch of things came inbound. And then my guy basically like took those inbounds and turned them into cash in the bank. And I was like, this is magic. And he does that every week. He goes through my DMs and he's just like, hey, he gives me an Excel sheet that says, like, for example, for this Clubhouse one, it was insane. It was like Malcolm Gladwell follows you now. This guy follows you now. This guy follows you now. I'm gonna— here's some DMs I have as like something to say to them, or they said this. I'm thinking about replying this. Just say yes or no. And I just say yes or no, and then he does all of it, right? And it's like, that is being in two places at once. I'm down to pay for that. I'm not really— personally, I don't think it makes sense for me to pay just for investment advisor or sort of a wealth manager from where I'm at.

Well, I'm less— this other guy, I think if you keep iterating on the concept, you'll find that it's actually extremely lucrative to hire even into this, this role, because your rolling fund, for instance. Imagine if you had someone just full-time focusing on growing the, the Sean investment world. I do know, like, because Sam, so one thing I think you're missing out on is that it's not just investing your capital, it's the ability for you to raise special purpose vehicles and syndicate.

And so I did, uh, I did, I did my first one yesterday. I raised $150,000.

Okay, and are you keeping carried interest on that?

Yeah.

Okay. So imagine if you had someone full-time spinning up more of those so that you were getting 20%, you know, carried interest in, you know, instead of one deal a month, what if you're doing 10 deals a month? But you would need, you would need like some infrastructure around that. Yeah. One of the coolest examples.

I think, I think doing it though for investing is actually a little silly. I mean, it's not silly. It's just, it's hard because a lot of these angel investments won't pay money for 8 years. So what are you going to like front the bill early on? So I actually think what Sean's doing is actually the right move because he—

if someone's working on other income generating things earlier, like, I think your investments will— will— you just need to structure them differently. 2 and 20. So the 2% in a hedge fund, venture fund, or private equity fund pays for your overhead. It pays for your investment.

Sean, are you doing 2%?

No, I took 0% management fee, uh, because I didn't know if anyone would really want to invest in the rolling fund. So I was like, okay, Well, how do I differentiate from the other 5 people that are like me? They're like an entrepreneur who's had an exit, has done some angel investing, and just spun up a rolling fund. Because I was, I think, in the first 10 rolling funds. I think I was one of the first 10, maybe 20. And so I knew there's going to be like 100 more of these in the next quarter. How do I just quickly raise this amount and differentiate myself? And I said, well, I hate fucking fees. I hate fees all the time. So I was like, I'm just going to take no fees. I have enough income coming in from other places that I'll do this. And I have two full-time people that basically are not full-time. I shouldn't say that. I have two people that are dedicated. One is this guy Ramin, who you've probably seen on Twitter. He's a real smart guy. He himself owns a really successful big business, man. He has a podcast and he's an investor himself. And I basically said, he went to college with me. I said, hey, I need somebody to kind of manage my fund and take a bunch of these meetings because I don't have a ton of time. And do you want to do it? We're going to invest in 25, 30 companies a year. you know, so like, if you want that experience while you're running your company before you eventually sell your company, like, let's do this. And he's like ex-Harvard, McKinsey, uh, you know, law, he's a former lawyer. Like he's a super sharp guy. And then I have this other guy who's a scout that basically he works at On Deck and he went through YC and he referred himself, I think 20 companies into this YC batch. So he's like boots on the ground, sees everything before it even gets into YC. And so those guys basically are doing my rolling funds. One guy does the scouting and the other guy does the vetting. And then I basically am doing the final meetings with the founders and making the final decisions on a lot of those. And so that's been a pretty sweet way to do this investing. And now we're doing $4 million a year of startup investing. I was doing probably, I don't know, $200,000 a year before that. So I was able to get massive leverage by doing this. And I just agreed to split the carry with these guys because I'm taking no management fees. So I said, hey, you get a piece of my carry instead of me paying you a huge salary. Right.

This is how normal funds start. They often start with little to no management fees in order to incentivize people to invest. And then as they mature and grow reputation, they start to charge management fees, which is, which is, by the way, a service to the investor because they don't want you to be on understaffed and under, under-infrastructured. Like a really, a really extreme— where, where this goes at the most extreme, when I worked at Carlyle, that was pretty, a pretty fun example of this, is David Rubenstein, the, the co-founder and lead fundraiser at Carlyle, had a full-time equity analyst who would, you know, graduate from like Yale or Princeton, who worked at Merrill Lynch, who he would hire. And he would go through these, I think, every few years. All they would do all day is do research. So that when he would speak on a podcast, he would sound extremely intelligent because he knew everything that he needed to know about what's happening in China or Dubai and whatever the, whatever the topic of the day was, because he had a team of people, like, you know, he had a small little, like, crew working on this who were actually trained equity research analysts. So you can imagine all the things you could invest in, like people who make, you know, make sure that your research for your podcast, for example, which that I know Sean has that and we have that, or we're getting a lot more of that. By the way, all these investments are going to make your BitCloud go up. Tying it back.

So, Brian, let's finish up the BitCloud thing. So you have put in tens of thousands of dollars into BitCloud, I believe. And what is the strat you're using right now? You're looking for undervalued, basically like Sam. You said, okay, Sean and Sam have about similar Twitter followings, but Sean's coin is more expensive right now. So I'm going to buy a ton of Sam. And also they're in the same vehicle of My First Million. So there's a good chance they'll grow together. So you saw Sam as an undervalued asset. Is that the core thing you're doing, basically just looking for the undervalued?

Yeah.

So there's two main investment strategies, and then there's multiple investment strategies under the second one. So the first one is you just buy Big Cloud and you just bet on the whole platform. And I'm probably going to keep like 60% of my money just in BitCloud. And then once you own BitCloud, you can buy, you can buy creator coins, right? Creator coins are like the Sam coin, the Sean coin. Within that strategy, I have a few strategies. So one is I buy undervalued people like the Sam Parr, who until yesterday was valued at zero. And I, and I bet that he's going to go up, right? And then there's people— I've also bought some Elon Musk and some Chamath and some of the people who are already trading at really high numbers because I just think as the platform gets more popular, people are going to go to the FANGs, the FANG of Bitcoin basically, right? Yeah, that's like buying like, you know, it's like buying like, yeah, like Walmart, you know, is buying like, you know, Chamath or Naval. So, and then I'm looking like, I'm telling you, Chuck Norris, you watch Chuck Norris is going to go up.

Like, I think Chuck Norris is way undervalued. GameStop analogy. Perfect analogy.

Chuck Norris is the GameStop. Let's— we're gonna pump and dump that bitch.

And Austin Reef at Morning Brew, I think he's gonna go way up and he's gonna do better than Sam because Sam's kind of being a wuss about Big Cloud from what I can tell.

I, I think it's true, I am being a little bit of a wuss. I just can't tell if I'm just like—

so Sam, did you ever see— did you see this thing a couple years ago, um, by Siki Chen called Famous? Or it was also called Stolen 'cause there was two versions of it. It was called Stolen initially. And then that was a little bit too controversial and they ended up having to change the name to Famous. And then even that got too controversial and they just had to, the whole app got taken down. It was extremely viral. So what Stolen and Famous were was basically people started tweeting out one day, just stole @SeanVP, just stole @TheSamParr. Oh yeah, yeah, yeah. And then you would click the Stolen account And the stolen account had like the funniest bio. I don't remember what it was, but it was just like, you know, it wasn't trying to explain what it was. It was like just like, um, super low-key about the whole thing. And so what it was was you could just go, and if you placed the top bid, it was like you have the hot potato. Like you owned that person because you made the winning bid. And so it was an auction of people on Twitter. And so you could go and you could buy Naval, you could buy Ryan Hoover, you could buy all these people. For some amount of money, and then that would be like the winning bid. Somebody had to top you in order to take it. And so it went super viral super quickly in the kind of like product tech Silicon Valley bubble. And then I guess they didn't like the connotation of Stolen, so then they rebranded as Famous AF. And so Famous AF started working, and then it went so viral that it was going into schools and like bullying was happening because people were just stealing like classmates and then like dumping them or something like that. I don't know what it was, but like some teacher came out and was like, or some mom came out, was like, dude, my kid is getting bullied via Stolen, via, via Famous. And, uh, this is like messed up. And then Apple took it off the App Store because they were like, what is this bullying app? And so, um, and so that was the— and so, so Siki, who's the, the guy behind it, he made Sandbox VR and he's, you know, doing Runway. Yeah, yeah, yeah, cool new startup. And so this guy's a, this guy's a gangster. And so he, he built these games. And so now every time I see BitCloud, And by the way, anytime anybody sees BitCloud that knows Siki, they're like, oh, this is it. He's like, dude, I know. Just stop saying it to me. Please just stop sending me. If one more fucking person sends me a BitCloud link, I'm going to lose my mind. So this has happened before, and it did go viral before. I think there's a very good chance that this goes viral again. It has two kind of core things going against it. One is it's It looks a little bit shady and it's come across a little bit shady so far. And you have to have a password to get in.

Which is one of the reasons why it's not popular right now.

The friction of the password is one major friction, right? That's why it's not going viral right now. It's going viral within a small circle, but not like super viral because it's not open to everybody yet. And then the second thing is you have to transfer in Bitcoin in order to use it. And so that already limits it, right? There's like just very few people who even own Bitcoin. So, you know, that's a big, big gate in the way of this thing going crazy. But everything else, I think, is— it is engineered. It is pro— from a product design perspective, this is designed brilliantly, and this will grow the way that it's designed.

Well, I spent the better part of yesterday trying to teach my mom and my sister how to create Coinbase accounts, transfer, transfer, buy Bitcoin, transfer Bitcoin into, into Bitcoin.

Uh, Sean, do you think that angel investing— like, is this going to be— what's the future of Sean Puri? I mean, do you think that this is going to be your full-time job?

Angel investing is a way to— for me, it's like just dipping a net into a stream of flowing water with a bunch of fish inside. I'm not taking a boat out, spending, you know, an afternoon out in the water fishing and trying to catch something. Is in front of my house, there's this stream with fish going through. And if I just put a net in, I can catch some great fish. That's what angel investing is for me. And that's what it's been basically for the last, I don't know, 6, 7 years where my own friends, my own personal network, or things that come inbound through getting more popular on Twitter and the podcast, it leads you to some opportunities. People want you in their deals and you get to see deals early. And before I used to sit on the sideline and I watched a bunch of those companies get big. And then I started, you know, I asked a rich friend, hey, if I give you a good deal that you invest in, can I get a piece of the carry? I said, yeah. That's how I got into Lambda School, which is already kind of like a big winner. And then as soon as I did that, I was like, man, instead of a big carry, like instead of getting a piece of this guy's carry, why can't I just do this myself? So as I got a little more money, I started doing it myself. And then with the rolling fund, that just lets me do it on steroids where I could just do more.

And so What percentage of your net worth— well, kid, let's be— you cannot answer this, but let's just say that you invest $4 million a year. In 8 years, how much income do you think you're gonna— do you think you're gonna make an additional $200,000? You think you're gonna make $200 grand a year? Do you think you're gonna make $1.5 million?

So a, a good fund is gonna like, let's say, 3x its money over the kind of like 7 to 10 year period. Uh, great will be, you know, 5x or more. And like, if you're— if you count— if you caught an Uber, if you caught a Coinbase, uh, you know, you're laughing. Your returns are going to be super skewed just by this one company that's now worth tens of billions.

But let's assume for this conversation, let's assume you're only—

so let's take, um, let's take— let's take 3x. Let's take the most con— like, the most conservative version of winning, right, is I triple the money. So over the next 3 years, I'm going to deploy $12 million. Let's say I 3x that money, that's $36 million. that gets— that comes back into the fund after returning the money. So, uh, so a total of $48 million. And so on the $36, that's the profit. I get to keep 20% of the carry, right? So that's about $7 million-ish. Is my mental math right? Um, you know, roughly $7 million. And that's $7 million over a, let's call it, 8 to 10 year time span. It's not the biggest, like, that's the thing. That's why I don't go all in on it is because I can make way more money building a business in that same amount of time. So if I—

well, in 7— so, but that's the recap. That's your— how much in 7— you say $7 million?

That's my commentary. Yeah.

That's a significant amount of money. That's $1 million a year. So you're thinking this will make you $1 million a year for 7 years starting in 7 years?

No, I think it's like kind of like a lump sum. That you get in 7 years, more like it. I get nothing for 7 years. And then as these companies, as many of them die and some of them do okay, then a few winners emerge.

Eventually you reach a steady state where you keep going and you are making $5 million a year. And where it really gets interesting is where you scale and you start doing, you know, $20 million a year, $50 million a year, $100 million a year. And, you know, eventually that's why you could see yourself hiring investment professionals, you could have a whole fund.

Have— has any of yours paid out, Ryan?

Yeah, yeah. But I, I, but I think there's another important point is it's not just about money, it's about well-being. As I'm always saying on the show, like, it's about like what investing has done for me is it's been a vehicle for learning and for connecting to really interesting people and for like getting to like kind of like go on these fun adventures where I'm like learning about like the latest things in crypto or the latest things in e-commerce. And I'm connecting dots. And then the other thing it's done is it's made my primary businesses far more successful because I'm borrowing ideas. I'm learning like, oh wow, look how this e-commerce company does performance marketing. I've never even heard of performance marketing until— and then I brought it back to a newsletter company and I'm like, oh, at our newsletter company, we can buy Facebook ads and Google ads like this e-com company that I invested in called Warby Parker or whatever. And like, I'm now I'm like cross, you know, I'm taking— I mean, kind of like what your show has done a really nice job of for you.

But does it, does it distract you from your main job?

Well, that's, that's where, like, that's why I think it was smart that this guy hired some people and how, you know, Sean's hiring some people, because then, then you can kind of like be, as you said, in two places at once. But no, that's—

you just have to, you just have to take the risk of hiring $150,000, $200,000.

Well, you don't, you don't have to. I mean, I, I haven't done that and I've still made a bunch investments. But, but I missed a lot of investments because of that very reason, because I was like, hey, I'm really laser focused on BizNow and Summit and Powder Mountain. I'm not going to look at a deal every day. I'm going to look at like a deal every like 3 weeks. And so I'm just gonna miss a lot of stuff, you know. I missed like— I mean, I, I have a— one of my— the COO of my company invested $150 grand in a, um, in a, in a crypto hedge fund, and he's, you know, he's up to like almost $6 million of value. I don't know if I should be saying that here, but you know, he, I missed that because I was just like, I'm busy. I can't look at that right now.

Yeah, that's totally true. And by the way, most of the time when people say like, oh, it's not about the money, it's about the journey, it's about the learning, it's about the people you meet, you know, the kumbaya thing. Normally that's like, you know, that's the tell. It's actually almost always about the money. 'Cause if you took the money out, they wouldn't do any of the shit. This is actually one of the rare things where that's actually true because I actually was doing all these things. I was meeting founders, I was helping them with their businesses. I was getting excited and digging into new spaces. I was keeping a fantasy portfolio of like to learn like, oh, I'm tracking these spaces and I think these are going to be big and I want to learn about these spaces. And here's some of the companies that are doing cool things and let me observe their growth tactics from the outside and try to see what's working and maybe apply that to my business. I was literally doing all those things for fun. Before I ever put a dollar in. You know, I was subscribed to like, I don't know, 50 different angel syndicates because you didn't have to put money in, but you could get the investment memo because I literally loved the learning so much. And I had no plan at the time to be investing in any of those. I put $0 in. Sorry to all those syndicate leads. You know, I was that annoying guy that was subscribed and never invested. But it was because I actually genuinely actually wanted to learn and I wanted to meet these founders. And so This is one of the rare occasions where when you hear that, normally it's bullshit. In this case, I'm 100% on board with what you said, Ryan. And like, that's how I, that's exactly how I think about it is this is like a, my other friend described it as like, it, it's a great way to just blow off some entrepreneurial steam. It's like you, your brain, if you're operating a business, you all of a sudden start hearing about vertical farming and crypto. And then like, you know, oh, what the hell is, you know, what the hell are NFTs? And like, you learn about all this shit. And then part of you is like, should I be doing that? Like, why the fuck am I doing this stupid, like, real estate newsletter? I should be going out there and building, you know, this ridesharing company or whatever. And so investing gives you a way to, like, get the high and dabble in that and have some financial upside. But you don't— it lets you stay focused as an entrepreneur. So that's the other, like, like, weird psychological things that comes from investing is, aside from the learning, aside from the good friends you make and the network you build and the learn, you know, the cross ideas you get, You literally just get to like, it's like a release. And, uh, and then you can go back to doing your thing.

Do you, but, but are you, Sean, are you the reason I did the syndicate thing? I'm doing it with Joe and we're, I bet my own money. It's, it's kind of like a rolling fund, but it's not, uh, it's only deal by deal basis. Whereas Sean, you have like money that you could deploy a little more freely. I didn't do the rolling fund thing because I didn't want to have customers that I have to appease and talk to on a regular basis because I didn't want like a job. Do you feel now that you have like a job because you have 100 people who have given you money?

No, I write once a month updates and I like doing it anyways. It's just, hey, here's the new companies we invest in, why I would do that for my own documentation anyways of what was the conviction at the time I made the investment. Here's what I believe. Here's why I believe investing in it. I like having that anyways for 5 years from now as an important thing for me. So in this case, I just publish it to my investors. Great. So that's the, that's all the maintenance that goes into it. There was a little bit again early on of like actually getting the investors on board, but I took no meetings. I took no phone calls. I just said, here's the link. And because of this podcast, because of my newsletter, because of my own track record and the deck I made, that was enough to raise the money for me. And I know that that's kind of like a, not everybody can do that part. Most people would have to go knock on a bunch of doors and really sell this thing. So that's that. But the other thing you mentioned, like for you, if you just get busy and you just don't care about angel investing, you could just not do a deal for the next 6 months and no sweat. Whereas for me, I actually do need to deploy this money. And so there is like a certain amount of like startup pitches I need to take every month in order to be doing great investments. And so, you know, I actually have to deploy this money. I can't like just sit on my hands and decide I want to go go on vacation or like just go super heads down in my own business. I can't like, I can't do that because I've taken on a fiduciary obligation to deploy these people's capital. Right. What I thought would be, man, I used to invest, I don't know, like $50K a quarter, $100K a quarter max. And now I have to deploy $1 million a quarter. And actually I run out within the first 2 months of every quarter. So it's actually not been an issue because I just— my check sizes are bigger. And once people know you're investing, they send you deals. Your friends send you deals. They're like, hey, I'm doing this, this is a good deal. And they're like, oh wow, I didn't need to— like, the fundamentals make sense and all is all good. There's other good co-investors there. I didn't need to go find this deal. It came to me. And that's the best thing that happens.

What percentage of your liquid net worth did you allocate to AngelList?

Before this?

Because now with the rolling fund, I'm investing OPM, right? Other people's money. I only put a small amount of my own money into the fund. Before this, I was doing roughly $200K, $250K a year was what I put in. And I don't remember what that was at that time of like liquid net worth. It was like kind of substantial. Like it was, wasn't, wasn't, I don't know, half a percent or something. It was like, like that mattered to me. But also if I lost that money or if like I knew going in at the very least, this money is locked up for a long time. I can't use it to go buy a vacation.

Over or under 15, over or under 15 or 10%. Like, was it more than like 10? Because that's a lot.

I don't know. I'd have to think what I— I don't know how much money I made at the time. I made more money in the last couple of years than I did back then. So I don't know actually how much money I had then. What I do remember is thinking when I very first started, I thought I need about $300,000 of a bankroll to even do this, to have enough of a portfolio to give myself a shot. Because angel investing, so many of your deals are going to be losers. And so I thought, okay, I need to have 20 to 30 bets. I need at least $300,000 to $500,000 of bankroll to go do this. And at the very beginning, I didn't have that. That would have been an irresponsible amount of money for me. That was like, at the time, I don't know, half of the money I had or something like that. So I said, okay, I can't do that. That's why I started talking to other people and being like, hey, if I scout for you, can I get carry and you put up the capital? And that's how I got started.

Although, you know, go ahead.

Even when you have almost no money, I really like this as opposed to buying public equities when you have very little money because of the learning and the connections and like the benefit that that can have on your own business. Like I was betting a very high percentage of my money initially and it really helped me because I, rather than just buying like Coca-Cola or Walmart or some publicly traded company where I learn nothing, I meet no one, you know, it doesn't really help like the day-to-day of my like newsletter business or my community business or, you know, the, the real estate business, if these things were basically benefiting my ability to make money on my day job. So that's why I, I actually think when you're small, it's actually not a terrible idea.

And in fact, I read a Tim Ferriss thing a while back, or he wrote a long time ago before, before he started investing, and he was basically like, I'm just going to fund my own MBA. Like, if I was going to spend $200K going to business school, I think I can learn more investing that $200K in a mix of public stocks and private startups. And when I read that, I was like, oh, absolutely. I will build a network. I will build business knowledge. I'll have skin in the game. And actually, this might become a profitable thing. But the worst-case scenario, this was my— rather than going to Wichita State and going and get my MBA, why would I not do this? And so once I read that, that's how I started thinking about it. It was like, I'm going to put $120K in. That's like a, you know, that's business school. And let me, let me just get going.

Well, so we, we not only thought about that with investing, but we, we lost $25,000 on the first summit. We held various private summits in between summits where we would lose $20 grand here, $10 grand there to throw like an event. And I always saw that as an investment, like you're saying, like in like my network or my learning. And the same thing, I was talking to a guy the other day about, you know, he wanted some coaching, and he was like debating whether or not it was worth like the monthly amount. And he had like $400 grand in his savings. And I was like, well, what do you want to do? What else do you want to do with the $400 grand? He, he wanted to put it into like Robinhood and buy stock. And I was thinking like, man, if I had known about coaching or consulting or some of the things I now know about, you know, like trainings that you could go get online, you know, taking like a, a writing course from like, you know, Perel online. Like those things are so valuable. Like they're so worth the like $3,000 here, the $5,000 there. If you have, you know, a little bit of money saved, I think that's so much better than trying to make like, you know, the index return on the stock market when at least when you don't have that much money. I think, um, somebody said to me, you know, concentrate to get rich, diversify to stay rich. Like when you don't have that much money, like put your money into building yourself up, building up your learning. Learning, building up your network. And then later when you're, when you're much richer, then diversify and have a, you know, an allocation and a portfolio like that.

I don't know if we're gonna get— so like, Sean, do you agree? I think the clips that we're doing are like the greatest thing. That's like one of the most proud things I am about, even though they're all of you. It's like, it's the most proud thing that like, I'm so proud of that. And I'll tell you, I don't even know if anyone has made it this far, but we're gonna— we, uh, we hired— I can tell you, Sean. We hired these— we were just about done with the contract. They're going to be doing 30 to 60 a month across the whole Hustle organization, and you and I can take up as many as we want. Um, I think that they are the greatest thing ever, and all I want to do is talk in— talk in 120-second bites so it becomes— uh, Ryan, you gotta Google, Google the Hustle on Instagram and you'll see these clips I'm talking about. They're getting like— Sean, Sean did one the other day that the Michael Jordan thing. I think it has 150,000 views at this point. Um, me and Zach did one where that has 80,000 views. They're like, it's so fun. That's the most proud I am. So I don't know if we're gonna get any clips out of this.

I feel like if the guys, by the way, the guys who are listening to this and doing it, if you don't feel like you get a great Bitclout clip from this, message me on Slack. I'm gonna record a clip-worthy Bitclout thing because I know how you guys will animate it because We have to get a BitKlop clip. That has to happen through either the stuff you got out of this, or I will say a full, like, 2-minute monologue if we don't get this.

I want to do a clip too. Let's all do it. Let's all get that. Let's get all going.

They're really good. Sean's naturally good at it. I think I'm okay at it. Ryan, you got to talk way faster to get good at it. You got to, like, you have to pack these with information and you have to talk really fast.

It's kind of hard.

I'm going to have to jump. Because I have, uh, A, I gotta get back to the baby, and then B, I have a very— I'm gonna literally go execute a shakedown, uh, right now, and I can't wait to see what happens. If I get shot, you know, hey, this was my last hurrah by my big clout in my memory. But, uh, I gotta go shake down somebody who stole something from me and, uh, get it back because, uh, I know who has it. God, I love Sam. I remember you, you were talking about this once and you were like, dude, I would go back and— or you said have done it, or you said you would go do it?

I have done it, and I'll go.

I remember at the time being like, this guy's a maniac, I would never do that. And now I'm so enraged that this person stole. And also, like, there's no other recourse. The cops are like, well, you know, what are we going to do? Like, you're the fucking cops. And like, the— and then, you know, the, you know, the lawyer's like, well, you could try to like sue him, but you know, just don't cross the line.

I saw like fuck them, like don't hurt, don't physically hurt them, just make it intimidating.

But basically the cops were like, here's what you, okay, they're like, once they understood what I wanted, they're like, oh, you need something called a civil assist. And a civil assist is where a cop goes with you. You say, I'm gonna confront somebody and a cop goes with you to ensure that nothing goes down.

Just as a thought, to let it go and think of it as, oh my God.

No, right? Let them be angry. For mental health.

Point of view. I understand.

Don't tell them to forget about it.

This person will keep stealing unless they understand that we know that they're stealing and we could stop them from doing it. So, uh, need to—

well, you could, you could say to them, I, I— hey, I, by the way, I know you're stealing and I'd really appreciate it if you don't steal. Enjoy the things you've already stolen.

I'm—

no, and, uh, I'd really appreciate it if you wouldn't steal anymore.

All right, I'll keep my back.

Do you realize, do you realize how, how, how much rage drives people to be successful and how much revenge I don't want you to tell me to forget about it. I want you to teach me how to use my rage to fuel me to be better.

Dude, there's such funny things you can do with this. Someone's been stealing my bike seat outside my house here. I've been— it's been stolen twice in the last 6 weeks. And like, you know, you can just put a note outside, like, here's— I'm going to put— I'm going to go buy a few extra bike seats and just leave them out for them. And you can put a nice note out there with some lemonade.

No, tase them. No, don't write them a note. I want you to like—

Tase them. All right, come, come to Miami. You're gonna tase them, I'm gonna give them lemonade, and we'll, let's, let's see how it all plays out.

Oh man, now I'm torn. I got, I got Ryan on one shoulder telling me to, you know, turn the other cheek, and Sam literally saying, no, tase them.

Go to Amazon, type in cattle prod, order the top one, and that's what you do.

Meditation cushion.

Yeah, you do your way, I'll do my way.