Peter Thiel's 27-Year Partner on the AI Bubble, the Venture Capital Crisis, and the PayPal Mafia

Do you think that's second of order effect of just being such a prolific project early on in in Silicon Valley, or were these people really that exceptional? I think it was a function of a couple things. So we we had a good outcome. We ended up selling the company to eBay for, I think, around $1,500,000,000, which I know in today's times feels like That's a seed round. That's chump change. But back then in 2002, that was, seemingly a real number. But the majority of our time during PayPal was actually after the dot com crash. And so it was it was a really difficult process, but at the same time, it was also relatively short.

So from when we started the company to when the business sold to eBay, it was less than four years. So quite short, especially by today's standards. So I think for a lot of the folks, they kind of got a taste, and they really enjoyed that success, but they wanted more. And then on top of that, the average age of our executive team, like, when we went on the IPO roadshow, I think it was 26. So we got a taste. We're all still very young, but wanted more, I think, would be the most succinct way I could put it. It. A lot of people today, it's almost an overused term at this point, talent magnet. How did PayPal recruit this kind of gang of characters that ended up building some of the greatest companies in Silicon Valley?

Peter's approach to hiring was very much kind of a best athlete approach. And so we weren't looking for someone who was necessarily, say, an expert in payments because we kinda stumbled into, you know, the ultimate product for PayPal, you know, emailing payments. I mean, our original product was beaming money between PalmPilots, and that's what we spent most of our entire series a round that we raised from Nokia because we were literally beaming money between PalmPilots and most importantly, trying to figure out how to encrypt that infrared beam between the two Palm Pilots. So it wasn't as if we were hiring for specific aspects of how the business looked at the time.

We're just really looking for kind of the the best athlete, smartest people we could bring onto the team, and I think Peter did a really good job of that. And what was the trade off there outside of the domain expertise? Was there also cultural trade off in terms of if it's the best athlete, it doesn't necessarily have to be a culture fit? The culture just kinda coalesced naturally, organically. I ended up running the international operations. I was 25 years old. I mean, I didn't know anything about running international payments or international operations for a payments company. So like most of us on the team, on the executive team, we just kinda made it up as we went along.

And so... And the culture just kinda coalesced. And if you fast forward today, like, we did a twenty year post IPO reunion party at Peter's house in LA a couple years ago, and, basically, everyone showed up. It was really cool. We had, like, 400 plus people there, and so we're all still really friendly and get along, quite well, which is, which is pretty amazing. There's a lot of turmoil around the company in terms of a lot of fraud and just these big issues that you had to solve. It was obviously a very stressful time. Did that help define your career in terms of that's where you started and there was, like, a second order effect?

I'm still trying to double click on why everybody became successful. There was always a lot of stress. I mean, the analogy I would give you, if you're working at a successful startup, it's like you get on the treadmill, and it just goes faster and faster and faster. And if it starts slowing down, that's a problem. And so it was just a fire drill at all times. Like, on the fraud side, you mentioned, like, Max Lupshin, world class in helping figure out how to prevent all these attacks from these Russian mobster mafia types that were trying to infiltrate our system and steal money out of the PayPal, overall network.

And that was just one of many, many, many issues that we were dealing with nonstop. But that was just... That was the kind of the normal business affairs on a day to day basis. So I think that probably forged us to be, I don't know. Maybe we... That left us stronger because of it, but it was a constant fire drill. Oftentimes, think about there's this meme now that you wanna find founders that have childhood trauma. So I wonder whether there's such a thing as an adult... Adulthood trauma that that leads to success. I mean, we certainly had a lot of turnover. We had to certainly had to let some of the senior staff go because they just ended up not being cultural fits or they just were underperformers.

But for the most part, the team that was with us from the earliest days, that was the team that we basically left with when we sold the the company to eBay. So it was... Again, to Peter Zimmad's credit, he's a very, very, very skilled guy, and arguably his best skill for at least from the PayPal days was as a hiring manager. And you have the track record of being with Peter Thiel, I think, longer than any other human being in the world, close to twenty years. What did you learn from Peter Thiel that a lot of people don't know? I've actually... I met Peter twenty eight years ago and have been working with him for twenty seven years.

So, it's been truly an incredible ride. I mean, my bad joke on this is that I met Peter Peter when I was 24, and then we merged with Elon's company when I was 25. And so if you had to replicate that in a laboratory of meeting two luminary types at such an early age, I mean, that... Replicating that experiment would be basically impossible. So I feel very blessed, very lucky, and just fast forward to today, still as a managing director at Teal Capital and having a kind of a foot in his world and the people I get to meet and the companies I get exposed to, it's really special. I feel very So let's talk a little bit about your thesis.

How many Anthropic or OpenAI level engineers, let's just call it STR? They used to be called the 10 x engineers. How many even live in a metropolitan area like that? I don't know. And not to be flippant, but I don't care because I'm not trying to find you the next Anthropic or the next OpenAI. So you think unless you're doing fundamental research lab type type businesses, you don't need that level of talent? I am trying to find the next Carbona esque type company, and that's the vast majority of technology startups.

Anthropic and OpenAI are in the vast minority, and again, I would concede those types of businesses should be built in Palo Alto, but that is less than one percent of the startup universe. So I'm not focused on that. Investing in those types of companies is a sandbox that is all about access. I don't have that access. I have no edge in that, and that is also an extremely expensive sandbox. So that is the polar opposite of what I try to do with CopperSky. So maybe we could define these Carvana type businesses. What exactly are you looking for? So we're sector agnostic. So we are looking for truly rock star entrepreneurs.

So if I can wrap my liberal arts, classics economics major around whatever an entrepreneur is doing, then we'll take a look. The job is almost as if you're a talent scout. Like, you work for CAA or WME, and you do enough of the kind of the ten thousand hours of sitting across the table from aspiring actresses, musicians, whatever it may be. You get a sense of who has that kind of sparkle in their eye or that spring in their step. That's what I'm looking for. And what that actual person does is a secondary conversation if you can find that sparkle in the eye. Speaking of ten thousand hours, how does somebody become this world class entrepreneur in a noncoastal context?

And I guess the distinction is, obviously, they are very high IQ, very smart people, but the premise is that they're not... They... Their LLMs, their personal LMs have not been trained on what greatness looks like. That... That's the premise. There's greatness in all these places. And so, again, there are plenty of talented entrepreneurs amongst this 290 subset population. So they're everywhere. And so the idea that they're getting less than 10% of the early stage risk capital is preposterous. So the the opportunity set... I mean, I I I refuse to believe that the opportunity set is not sufficient for more venture capital, and we could debate how much more that is, but it is so outrageously imbalanced.

That's what we're trying to alleviate with Copper Scott. Just to kind of agree with you for a second. I think that, certainly, one one metric that you could go off of is top engineering talent in terms of undergrads. And, certainly, those three states do not have 90% of the top engineering students graduating from colleges and graduating from from these places. So certainly from an engineering standpoint, my concern is just on the training, is that you need that training in order to to become world class. Sure. You have universities like Carnegie Mellon. I was in Pittsburgh last week. You have University of Illinois where I think half of our founding engineering team at PayPal came from.

And Mark Andreessen from University of The list goes on and on and on. Again, there are tons and tons of world class universities in these noncoastal places, but if there was more capital there, like one of my... I I've been an investor in Cleveland, for example. I won't mention his name, but he's very involved in the community. So the Cleveland Clinic, Cleveland Foundation, Case Western is his alma mater, and so my pitch to him and said, okay, if you participate as an LP in my fund, what percentage of your beloved alma mater, Case Western, what percentage of that graduating class can we keep in Cleveland?

I'm not saying it's a 100%, but it's definitely not 0%. You're trying to prove the counterfactual, which is if there's a lot of brain drain going on in the area, what would happen to people the because otherwise, we can go back and forth, and it becomes a circular discussion. It's very difficult to disprove, which I would concede. So I'm not trying to be argumentative, but I guarantee you the number is not zero in terms of the number of the Case Western graduating class I could keep in Cleveland if there's more venture capital in Cleveland. I'll give you a case study. So very first company. I was inadvertently...

Did the entire PreSeed round before PreSeed exists, and, actually, they were they were backed by Founders Fund for for their for their seed round. And was two guys, John Ramey and Zach Hassanein. I connected the two cofounders. They're both from Indiana. One went to Indiana University. One went to Purdue University. Yep. And they tried to raise money in Indiana. They tried to move... Raise money in Chicago. And then they moved to San Francisco out of desperation and to Birmingham, actually, to to the Peninsula. And then they raised from, you know, the best of the best, Founders Fund, DFJ, Brad Feld, all all these people.

So this is a very specific case study where they clearly were talented, clearly were ambitious, but they couldn't raise in their homegrown talent. Perhaps a much better example of that is Mark Zuckerberg. Mark Zuckerberg wanted to stay in Boston. He actually had an affinity towards Boston. He went to Harvard. And venture capitalists in Boston, which Peter Thiel has opined on, for whatever reason, would not fund him, and he had to move to to Palo Alto and and and the rest is history, as they say. There are quite few of counterfactuals of what would happen if those entrepreneurs stayed. No. I mean, your example of the entrepreneurs that had to move out to Burlingame is is spot on, and I see that all the time.

And this goes back to my point earlier that it's a it's a... It's not a human capital network effect. It's a financial network effect that is drawing. It is the magnet that is bringing all these people to Silicon Valley. So this strategy has been around in different forms, for probably twelve, thirteen years, I think. Originally, Steve Case from Rise of the Rest, I believe, 2014, tried to solve this problem. What did he get wrong? So I don't wanna speak negatively about anyone. Steve's a friend. He's a... An... Another luminary fellow. What was the... What was wrong with the concept as it was?

What I would have done differently is I think having connectivity back to Silicon Valley is really important. And so to put it differently, if you're trying to operate on an island in one of these noncoastal places without that connectivity, I think it makes the probability of success really, really low, if not impossible. So having that bridge... And I'm talking my own book, but I believe this to be true, this is why we have the strategy the way that we do. You have to have that connectivity. It's like I sit down with an entrepreneur, and I give them a blank piece of paper that is effectively like an a la carte menu.

And I'm like, here are the different options that I can bring to bear for you to help you with your company. You can choose out however many items you like off the a la carte menu. You can choose zero. Choose your own venture, but I wanna help you with your business, and oftentimes, it would require bridging back to Silicon Valley. And I think in the early days of a lot of the noncoastal venture capital op... Activities, that bridge was not sufficiently established.

Certainly, it's not controversial what you're saying in terms of valuations are low outside the coast and apparently 90% lower, which is a bit surprising to me, but believable.

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Yeah. It's a good question. And I think, you know, if it was a KPI for what we're doing at Copper Sky, if you fast forwarded, say, five or ten years and you saw more coastal firms coming to the interior, to the middle market to quote unquote compete with us, I would view that as a successful outcome for what we're trying to do. Because the reality is right now, you know, essentially, a venture capitalist has two core jobs in my opinion. You're sourcing deals, and you're competing for deals. Do you know this joke about the further a VC is from their board, the the better the company does? I'm very well aware of this Yes.

It's an excellent joke. It's an expert... It's very spot on. Joke because it's actually empirical. And the reason it's empirical, there's different theories about it. Right? You could debate the causation. But the the official, I think, academic interpretation is that VCs, once they get to a certain level of success, they become lazy at the margin. And if you could go in your coffee shop in Palo Alto and meet a company versus go to Milwaukee, Wisconsin and then have to go to Milwaukee, Wisconsin in the next fourteen years, two, three times a year, then you're gonna be more likely to stay in Palo Alto.

And because of that, you're willing to pay up a little bit for for lifestyle reasons. Let me be fair. There is so much talent in the Bay Area that the top tier Sand Hill Road guys do not need to leave Santa Clara or San Mateo County to find amazing deal flow, in fairness. And so they don't need to get on a plane and fly to Milwaukee or Phoenix or Cincinnati. They just don't need to. And so... You know? And they get... Like I think you said, there's a degree to which they get a bit lazy, and they like to ride their bikes or at most Some some could argue efficiently lazy at the moment. And there's a degree of efficiency, I think, in the approach, but they prefer to ride their bikes or at most drive their cars to their board meetings and not have to get on their g five and fly to Milwaukee.

And that's fine, but therein lies the opportunity. You're obviously Jack Selby, and you have this reputation. You worked with Peter for all these years, and still... I feel like you still have to have these arguments day in and day out. What's the best counterargument to your thesis? The best counterargument is that no one has done this successfully in putting up solid top decile numbers yet, and that's what I'm trying to do. So it's difficult to disprove that. In other words, interesting theory, but show me the proof. That's right. And so no one has done it. This is hard. Raising money for a non coastal venture fund is hard.

There's a, you know, there's a phrase called the flyover states. It's pejorative. It exists. I'm acknowledging it. It is what it is, and I'm not saying all investment sentiment is dictated by the coasts, but I would be naive to say that it's not to some extent. And so when I sit down in a fancy boardroom here in Manhattan and I look across, you know, at the CIO and I try to convince him that there's some smart people that actually live in Milwaukee, I often get looked at as if I have three heads. That's the reality. But I acknowledge it, and it's just part of the job. Speaking of tropes, one of the biggest tropes today is in a post AI world, everything changes, and funding changes, strategy changes, hiring changes.

How does a strategy change or evolve in a post AI world? AI has become so ubiquitous, so pervasive. So even in the noncoastal geographies where I invest, I see it as an ingredient in the recipe of basically every single company I look at. And I'm pleasantly surprised by that. I mean, it's happened more quickly than I would have probably originally appreciated. But I think at some point, we're going to stop talking about AI as an independent dynamic or component. It's gonna... I think very similar to what the Internet was in 2001. It was just so pervasive at that point. Everyone just assumed the Internet was involved in almost every aspect of business, and in this case, your question, venture capital.

So I think if we're not there... We're there yet, I think we're very close. But in terms of team construction, so you could argue from both sides of it. You could say, well, because of AI, now the 10 x engineers are a 100 x, and now you have to be in San Francisco for the network density. Or you could argue the exact opposite, Mhmm. Which is now because you could build a $10,000,000,000 company with 15 people, there's certainly 15 great engineers in Milwaukee. Yes. And you don't even need anyone to move. I'm certainly in the latter camp. Right? And so I think you can build companies with more efficient rosters, smaller teams to be precise, and you can get to outcomes that still generate very good venture returns.

I'll give you an example. So I was speaking at some MIT event earlier this year, and the guy next to me, not to name his name, but he made a preposterous statement on stage. He said, you know, venture is going to evolve to finding the next trillion dollar company. And so there were gasps from the audience like, oh, wow. That's such a bold idea. It's a terrible idea because it is so self unaware about what has been going on in the venture capital industry. So to be precise there, what has been going on is that the industry has done an exceptionally poor job of generating returns, of actually getting money back to the pockets of their investors, DPI.

And so when you sit on stage at MIT and say, well, no problem. These billion dollar companies that we've been trying to build and get money back to, good news. We're gonna go find trillion dollar companies. And so is that more probable? No. That's even less probable. So this again goes back to the analogy of finding Elon Musk at age 24, and you think that makes the duration longer? You bet it does. So investors are gonna tolerate, again, the improbability of you finding the next Elon at age 24 and, what, wait thirty years to get money back? There is a level of absurdity here. I had sitting where you...

Or sitting, Matt Harris from Bain Capital Ventures. Mhmm. And they've had... I think they're on their eleventh fund, and they're almost always top quartile. But they haven't had a fund returner. They haven't had a power law outcomes. And several of their LPs are upset about this versus realizing kind of on a on a sharp ratio, it's it's a much better strategy than if you were relying on these kind of power law returns to to drive the portfolio. Yes. I'd be very happy, you know, speaking from my college endowment perspective, we'd be very happy with mass returns. I wanna go back to the early PayPal days.

I mentioned, you know, just the unbelievable people that are in the PayPal mafia. Sometimes when we work with somebody day to day, we just learn these lessons much more viscerally than you would from from a podcast or from from a clip or from a tweet. What are some lessons that you took away from there that's really driven you in your career? Work ethic, I would say, more than anything else. You're just surrounded by people that were literally working twenty four seven. You know? And it started at the top with Elon. That mean? Like, nineteen hours a day? No. You... Like, you email Peter Elon at 02:00 in the morning, they respond to you within ninety seconds.

And so Does that mean that they just slept with their phone by their It means they're working almost around the clock no matter what. So And I would do that because I was, you know, managing the international, operations. So I was often, you know, in our offices or Tokyo or in Singapore or London and so forth. And so I'd be emailing them at all different kind of crazy hours of the night depending on where they were, usually back in in California. And so it just... It enforced a mentality or a work ethic to just be on, so to speak, twenty four seven through 65. And so that might sound basic, but that was shared by essentially the entire management team.

And so... And this goes back to what we talked about earlier. Like, we were just dealing with different fire drills at all times. And so having that kind of manic energy of this is just... This is the default of how we have to do that if we're gonna be successful because there's a near death crisis at at every given moment. I think that has probably served me well over the years. What else? One of the management traits that Peter brought to bear is that if you find someone who's not a fit, you have to just rip the Band Aid off and move on. And so... And that's something I have not always been good at.

But having seen that with Peter and it's reinforced over the years, I think that's a very important lesson. How quickly immediately? Almost as soon as you know that it's not a fit, because you usually cannot reborn. Happens when it's within a couple weeks of hiring a person? Then it's unfortunate. You made a bad decision. And so when you do kind of the Monday morning quarterback about how you got to that hiring decision in the first place, then maybe you can learn something from it. But you just rip the Band Aid off, and you can't rip it off too quickly because otherwise, it's kind of a cancer.

It impacts in in a negative way, culture, and you just have to do it immediately. But it's hard, and it's hard, and it's not not my personality because I'm not a naturally, confrontational person. So it's something I've had to learn. I think I've gotten better at it, but it's definitely something I've learned from Peter. What about recruiting? I've had some top CEOs that both publicly and privately will confess that they have about a 50 success rate in in great hires, and it seems like, at least from the outside, PayPal was close to a 100%. What are some lessons that you took from PayPal in terms of recruiting?

So Peter leaned very much on kind of the organic network that he could bring to bear. So Stanford in particular, and then with Max and Luke coming from University of Illinois, they they relied on their alma mater as well. And so just hired amongst your friend group. People that you have worked with before. Yeah. I run Copper Sky with a guy named Jason Pressman. Like, he's literally my best friend. And I... He was the first guy that I met when I moved out to Palo Alto in 1999. You know, like, Jason's son is named Jack, not by coincidence, just to give you context. And so oftentimes, you know, adults will tell younger people not to work with your friends.

And I think that's literally terrible advice. Literally terrible advice. Because, like, in any relationship, you set up guardrails, of course. But then once you have that relationship within the guardrails... Like, Jason and I can cover topics, subject matter in twenty minutes that would take other people two hours. It's not because we're smarter than other people. It's just we know each other so well. Get the context. And... Yes. And even more importantly, what is our most valuable resource? It's our time. And I'm basically multiplying my time with Jason because he and I know each other so well.

So if you have the ability to work with people that you know so well, I. E. Your friends, you should take that opportunity to do that all the time because it multiplies your time. Let's talk about the state of venture capital today. I'm guessing you have some strong opinions on that.

At the top of the stack, you have this famous study, professor Steve Kaplan, previous guest, and he did this study on the persistence of venture capital.

So 52% of top quartile funds end up being top quartile. I believe roughly 75% end up being in the top 50%, so above above the median. Do you think that's gonna continue to persist in this age of AI, or do you think it'll increase or decrease? So it doesn't directly answer your question, but let me ask you a question that I think

So venture capital is known as this access class Mhmm. Where the founders choose the VCs, and the top VCs, at least, choose the top LPs. And my thesis is that the reason that Anthropic, SpaceX, OpenAI, the reason that all these startups essentially had to go public was not because they just suddenly decided, well, it's time to bring back liquidity.

Mhmm. SpaceX had tender offers. OpenAI had tender offers. Anthropic, I'm sure the the early employees are are are not too worried about about their liquidity. So I actually think the reason it goes back to this kind of consensus and venture capital, 75% of q one twenty twenty six of the entire venture capital funding was put into five companies. Mhmm. Said another way, they wouldn't have room to do another round. If they did another round, they'd be approaching a 100% and now over a 100%. So I actually think if there was more capital, let's say, it went from 3,500,000,000,000 to 7,000,000,000,000, now you would actually have the Anthropix, OpenAI's, SpaceX doing one or two more rounds staying private because as we know, there's a preference for top founders to stay private.

And that would be much more advantageous to both the startups, to the founders, to even early stage VCs. They have higher multiples. What do you think about that?

companies that don't have to be trillion dollar outcomes? That is a mentality that is totally lost in Silicon Valley. And, again, I I love Silicon Valley with its audaciousness, and it's actually to give give

of my geographies at a more reasonable price for me as an investor, you bet. That's a great combination. Yeah. That... And you see this across all of finance. Philadelphia is famous for bringing New York New York City transplants, and it's a model that works.

So that... Seeing what greatness looks like, it's one of those things that you lock in. It's one of my thesis around the PayPal mafia, around your friends, is that just seeing that early on, seeing what hard work looks like, seeing what intelligence looks like. There's so many different degrees to all these things. You have to lock that in to see the gap. Even with podcasting, I I had Jason Gallican. It's, like, episode 10 or so. And I immediately just saw the skill gap between us. I'm like, holy crap. This is both incredibly humbling and that he's, like, 10 x better than me and also incredibly motivating because I see, like, I see I see the the path to that.

Another friend of ours, Eric Anderson Mhmm. From Aloy. He's been my mentor for seventeen years. I I met him at at Dartmouth. And when I met him, I'm like, holy crap. There's a gap between us and, like, I need to figure out, like, what he does. And he's one of these other people that wakes up at 04:30AM and and just just grinds, and and and now he started $4,000,000,000 plus companies. But just seeing that gap is such, I think, not only powerful, but such a necessary component to greatness. Totally agree. I totally agree. And that's... Again, to give it fairness and balance and having spent a lot of time in Silicon Valley, just the the grandiosity, it...

It's just... It's inspiring. And I think, honestly, it it... It's what makes... Not to be corny about this, but it... What... It's truly the superpower of The United States. Like, we are such a risk on culture, and Silicon Valley takes it to the nth degree, which is a great thing, and that it inspires the rest of us. And, again, I just want my noncoastal entrepreneurs to have a little bit more of it at times. Going back to the beginning of the conversation when we talked about... I I followed this company, EyeSocket, into San Francisco. Mhmm. And I was 22 years old at the time, and I I slept on John Ramey's couch, and I was in the office and just seeing people create stuff.

But, also, just in San Francisco proper, and you're just standing around. You're talking to people even at a coffee shop, and they're like, yeah. I started this company. I raised 5,000,000. And you see that enough, your brain starts to believe that it's not some crazy thing. It's almost like inevitable. Of course, you go out and raise a pre seed based on some crazy idea. Of course, you raised $5,000,000 on, you know, $500,000 in revenue. Of course, then you have to raise a series. It becomes almost this sort of this preposterous dream everywhere but San Francisco. This was the early two thousands, so Silicon Valley culture was not yet as pervasive across the entire country.

But there's something just powerful about just being there and literally, like, touching people that that have raised money. It's it's hard to put in words, but it it is something. It's inspirational. It's, it's truly a national superpower. Our risk on culture is better than anywhere else in the world. It's amazing, and we should embrace it. You also cofounded Clarium with Peter Thiel, which is a macro hedge fund. I don't oftentimes have macro investors on the podcast, you and Cliff Asness and a few others. What's your view on the macro climate today? I think macro's back. I think, volatility's back.

You know, thirteen plus years after the GFC and interest rates were bolted to the floor. We live in a very different world now, I think, whether it's geopolitical, volatility, across the board. So it doesn't mean it's easier. That's for sure. But if you're smart and you can come up with some good theses, in the macro world, I think this is a great opportunity to potentially make money. So I think this is a... I think macro has a... Finally has an opportunity of being back and being more in vogue. And kind of the pendulum, you believe, will swing from more passive to more active? I think so. And, again, with emphasis, it doesn't mean it's easier.

But I think the opportunity set is is better now than what it had been for so long. Because after the financial crisis, you know, macro is basically trying to read the tea leaves in so many respects of, you know, what is the Fed gonna do, or what is, you know, some aspect of government gonna do, and that's just impossible. Like, there's no amount of fundamental research you can do to kinda come to any sort of informed conclusion. But now volatility is back. We live in a very different geopolitical world. Traditional trade relationships seem to be breaking down. Geopolitical global order seems to be shifting.

So if you can put together informed perspective on that, that might give you a trading edge. What do you think about these spot jobs that have hundreds of billions of dollars leverage, and some some people believe they're almost like policymakers. You know, they're they're bailing out funds like situational awareness with what Ken Griffin did. What's their role in the market, and how do other investors compete with these pod shops and their resources? Talent rules everything, kinda going back to my venture capital analogy. And so I think a pawnshop perhaps is a great place to kinda get a career started.

But if you're a world class, you know, Ken Griffin aspirant, and you put in your time at a pawnshop, you should spin out and go run your own fund. And why would you stick around? And so so I think they serve a purpose, but I think there's also a degree of kind of adverse selection, and that's a tricky balance. You've had one of the most fascinating careers spanning PayPal, Clarium, now CopperSky. If you give yourself one piece of advice, and going back to starting out PayPal and the day before you started PayPal, and you can give yourself one piece of advice for the rest of your career, what would that be?

I was talking to my my business partner, Jason Pressman, at CopperSky about this, a couple days ago, is that I have not done a good job of playing into momentum orientated markets. And so when the momentum market is going, it's a great way to make money. But I think I've been too boy scout, maybe even too cynical to participate. And looking back, I think that left money on the table. And I'm fine with that. I didn't lose any sleep on it, but it's annoying all the same. What's an example of that? Coming back to the venture industry and all the crazy growth rounds that have been going on and, you know, just basically fake markups.

And it's a hot potato game, and... But you make a lot of money playing it. And as long as the hot potato doesn't land your your lap or to mix metaphors, the music stop, and you don't have a chair to sit in, it's a great way to make money. And I just have... It's just my my personality to to just fight that and not play in that type of momentum market, and that has probably been a costly mistake. But, it is what it is. So another way you wanna play investing games, not narrative games? I'm an investor. I'm not a trader. The market and venture for the last several years has been a trading market.

Like, you can't underwrite Anthropic at $2,000,000,000,000. There's no way you can do that. There's no way anyone can do that. It's a trading market. So I'm an investor. And so I need to be able to get out my pencil and make the assumptions and underwrite the deal. That's what I do. And so that serves me well with what I do. And, you know, when this market currently corrects, which it will happen, it'll be, you know, when, not if, I will be relatively fine. And when our trader friends who are investing in these crazy valuations, they will not. But in the meantime, they've made a ton of money. Just to go contrarian on your mistake, I study the compounding of things.

I'm obsessed with this concept of different things compounding. I think much more things compound than people realize. Mhmm. Is there not a compounding to being more of a fundamental investor that could compound throughout your career? I think so. I mean, when the current market corrects, the only impact that'll have on what I do with my copper sky strategy is it will make the multiples that when I take my companies to Sandhill Road, the multiples undoubtedly will contract, and that that will have an impact on what I do. But because my entry point as an investor, as a value investor, are so inexpensive, it will impact me far less than my peers in Silicon Valley.

And that's why I can sleep well at night. But at the same time, you know, the guys that are out peddling SPVs and Anthropic at $2,000,000,000,000 when, you know, they just traded at 1.5 or one or... They're making a ton of money, and God bless them. But that is the antithesis of what I do. Well, Jack, this has been absolute masterclass. Thanks so much for jumping on. Thanks for having me.