{ "episodeId": "SLP595", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "stephan_livera": { "name": "Stephan Livera", "role": "guest", "tag": "STEPHAN" } }, "segments": [ { "speaker": "stephan", "time": "00:11", "start": 11.15, "text": "Hi everyone and welcome back to Stephan Livera podcast. Today I'm re joined by my friend Mike Jarmuz also known as \"Muz\" of Lightning Ventures and now recently Thunder Funder. So Mike welcome back to the show. Hey man," }, { "speaker": "stephan_livera", "time": "00:25", "start": 24.96, "text": "thanks for having me. you're the best. It's, ten AM here, no idea what time it must be there, but thanks, dude. You're awesome." }, { "speaker": "stephan", "time": "00:32", "start": 32.33, "text": "Well, great. Well, yeah, look, let's get into it. Bitcoin twenty twenty four was recently on, I know you gave a talk there announcing ThunderFunder, and, yeah, I thought it would be interesting to have a chat a bit about this and, yeah, just kind of chat a little bit more broadly about investing in the space, kind of in this Let's start with that. What's new with Lightning Ventures? Alright, Lightning" }, { "speaker": "stephan_livera", "time": "00:58", "start": 58.07, "text": "Ventures, and we're lucky to have you too. Stefan's got a lot of experience investing in early startups and advising them. He was a partner at Bitcoiner Ventures, so he knows all about this world and, and how it works as far as whether you're an accredited investor, how you get access. So my mission with Lightning Ventures has always been to Provide access to people to invest in these specific Bitcoin companies, right? That's, that's my core mission, is to democratize that. And, you know, there's a lot of laws like the accredited investor laws and the non-solicitation laws and how you set up these sort of vehicles. So Lightning Ventures, while we did deploy a small pilot fund, really builds that community of the world's largest Bitcoin-focused angel investing network. That is what it is. Okay? With a low minimum of like a thousand bucks, okay? So if you love Fold or Voltage or, or, you name it, right? You can actually invest alongside the VCs and often on the same terms as \"quote unquote\" the suits, and you can invest in these companies and you can learn a lot in that process. And I'm not talking about big checks and all of that. I'm talking about small checks getting started, reading updates from the founders, seeing how you can be impactful, what can you do? For them, it might lead to networking and partnerships and jobs and other things, right? But you're aligned with their success in a whole different way, and it is completely illiquid, and this is a low time preference. It complements Bitcoin well because it really is a low time preference sort of horizon here with these things. And then you also have to meet what's called an accredited investor status, or you can be what's called a qualified purchaser or a qualified client, and all these kind of things based on your net worth Worth or your income, and it's a self-certification process, that's how it's designed by the SEC. And I, I like to joke, right? It's a complete joke that, you know, everyone's an accredited investor if they click the right button. And that is, you know, it's a joke, but that is the truth, that's how it works. So, you have to meet this, this hurdle there. and we were able to deploy probably about six, almost seven million dollars or so, give or take, through that in- Investing network. So that's pretty cool, right? That's maybe forty or so startups, a lot of these Bitcoin companies in the space, right? You can look at the list on LTNG dot ventures, but, a lot of these companies that we know and love And then we do our best to try and support them, right? So that's kind of the goal there. But what about everyone else? What about people who aren't comfortable be-- you know, or aren't yet an accredited investor by, by that definition there? How can they participate? And up until twenty twelve, that was really impossible. Nobody could participate, you had almost no access to any of these investments as a retail investor. Now it's hard enough to get connected and get your deal flow up and learn about angel investing and learn about startup investing, even if you can't. I remember when I got started. Before I psychotically invested in over fifteen hundred companies. Who do I listen to? Who's running these syndicates? Who are these VCs? How do these sort of things work? I'm not a fund person. I don't invest in funds. Okay, that's not fun for me. What's fun for me is waking up and getting a deal that says, \"Lightning Ventures invites you to invest in X, Y, Z awesome Bitcoin startup that you already know love and use, and you get to make the decision for yourself whether you wanna invest a small amount. Of money in them. That's the fun and that's the learning, that, that I love there. So in 2012, this Reg CF sort of vehicle came about in the Jumpstart Our, you know, Business Startups Jobs, Act, and now private companies can actually raise from individuals. They can raise from retail, they can raise from- Pretty much anyone actually that, that, that isn't a bad actor and, can, can participate. But now we're talking about even smaller amounts, and there are a lot of other rules and regulations, and we got this license from FINRA, and that's a whole story in itself, right? And now we have the SEC and Form C filings and other things that we have to do, but it ultimately makes it so anyone can sign up for free and invest and support in these companies and stack that extra- Equity, moving forward. So that's what we announced at Bitcoin twenty twenty four in Nashville. It's called Thunder Funder, right? It's a product of Lightning Ventures, hopefully the first of many, right? 'Cause what about going to Europe? What about involving other areas? there's a lot there as far as what about an accelerator or a hackathon or doing other fun things, right? Building a community. We want investors, that's nice, we need investors, but we need other people, we need builders, we need podcasters, we need- People to fill out their, their profiles and network. You know, we need to build out those connections where you can connect with other people. If you're an investor, you can connect with other investors. If you're a builder, if you have a project, if you're looking for funding, I have to put a lot into the community. And right now, you know, we got that approval for Nashville from FINRA on the Monday. On the Monday, we got the go-ahead. So that's pretty last minute. And we're talking about an or a regulatory organization here that they- They read every word on your website, okay? They have ultimate, a lot going on here to get that approval. And then once you get that approval, it's a little bit of a different story, okay? But in order to get live, to get into Nashville, this was, this was how we had to do it, okay? And a lot of it, I have to tell you, is really nonsense. It is really crazy. Do you realize they made me take the word innovative off the website?" }, { "speaker": "stephan", "time": "07:03", "start": 422.65, "text": "I, I guess they- You know, they get maybe the lawyers go through it and pick through with a fine-tooth comb and all that. But, but think about" }, { "speaker": "stephan_livera", "time": "07:09", "start": 429.1, "text": "it, they said that me saying invest in innovative companies or funding the future of open-source technology was misleading." }, { "speaker": "stephan", "time": "07:18", "start": 437.94, "text": "I know, what are they saying? Are they saying Bitcoin Lightning isn't innovative? No, it's just," }, { "speaker": "stephan_livera", "time": "07:22", "start": 442.02, "text": "it's just that language that they want. It has nothing to do with Bitcoin, the word Bitcoin, you know, was not, was not there. It's just the language and the scrutiny that they put you through. So look, when you click on the education section- Just being facetious, by the way, but go on. Yeah. Yeah. Yeah. When you click on the education section right now, that isn't what we want it to be, okay? We, we And I'm the CEO, I'm the CEO of ThunderFunder." }, { "speaker": "stephan", "time": "07:52", "start": 471.64, "text": "Great, well, I, yeah, I guess, yeah, because I guess now you're kind of playing two roles, right? You're the CEO of ThunderFunder, but also managing partner, Lightning Ventures, right? my" }, { "speaker": "stephan_livera", "time": "08:00", "start": 480.14, "text": "friend, no, I'm actually not. the CEO of ThunderFunder can only be the CEO of ThunderFunder. Can you believe that?" }, { "speaker": "stephan", "time": "08:08", "start": 487.87, "text": "okay." }, { "speaker": "stephan_livera", "time": "08:08", "start": 488.37, "text": "So you had to drop" }, { "speaker": "stephan", "time": "08:09", "start": 489.17, "text": "one to" }, { "speaker": "stephan_livera", "time": "08:10", "start": 489.69, "text": "get the other, okay, yeah. It's, it's, it's Open with it, okay? But this was a lot of what I think is really kind of nonsense, to be totally honest with you. But no, I am just the CEO of ThunderFunder for, for right now. That is, that is what I'm focused. Gotcha." }, { "speaker": "stephan", "time": "08:32", "start": 512.38, "text": "Yeah. And then just for the benefit of listeners, that, I presume that means for listeners who wanna participate via this Reg CF thing, this is US only, right, for now, until you, you know- Can I be even more honest with you? Sure." }, { "speaker": "stephan_livera", "time": "08:46", "start": 526.49, "text": "It is such a gray area with most of this that just now And I'd love to talk about the number one founder tip, 'cause now I'm in the founder seat here. I raised money myself, I went through specifically what these companies go through, and that's a whole nother thing. And that was, that was a nice, refreshing bit, you know, to get slapped around in the five hundred K that we raised. For this new platform. That was a nice treat being in the founder seat. But the number one tip that I found is really through The AI to use a lot of what you would spend on, and it is unbelievable what you can do now, the rate at which ideas will be coming. You know, my AI attorney that I coded up here, I swear to you, I swear to you, I can't, I haven't built anything. I made a little Muzpackman game that was fun one night. But, you know, as far as the AI for law and legal and specialty of your business, every founder, you gotta dial that in. Because once I got that first legal bill, it was like, \"Hold on, I don't think so. \" And not paying another dollar in legal fees until the absolute end when you needed it could have saved a lot more. And, you know, basically making your team, engineers, everyone, like, you have to learn this. Get it down now, axe your skills, you know? And that was a huge deal. That was a huge deal. So I'm getting a lot of information based on Finra and SEC's website. There's a lot of like mis- confusion. It doesn't specifically say that we can't have individual investors from outside countries, outside the US, as long as we comply with their local laws. Specifically, that's what it says. Now, our application and MVP and what we have to do to get this approval right now is US only. Okay. So that's US only investors and that's US only domicile co-companies, okay? And there's a lot of European, a lot of other companies that are, their parent company is still a Delaware C. So that's a, a, a lot. I still want everyone to sign up, right? I still want people outside the US to sign up, and I wanna build the community and the networking aspects and plug in links to your GitHub and everything else that you're doing. So that is a big part of it. I want everyone to sign up, and I wanna be able to let them know when we are in this. But there's a lot of, it's a lot of uncertainty. There's a lot of gray area with a lot of this stuff, and that's what I'm dealing with as my first license, right? We are a FINRA member, and it's, it's gonna be, it's gonna be interesting to really see how we can do this. What-- Can I just say one more thing? So we aren't allowed to- To ever give any kind of recommendation or advice as ThunderFunder, okay? We specifically cannot give any recommendation or advice. But that also goes to, we can't really speak super positively About these companies that we're rolling out on the platform, it looks like LN Bits will be our first deal, probably about twenty-one days from now, okay, as soon as we can do it. We're working on a deal for Bringin', which is, Stephane's, an advisor to them and, and maybe an investor as well, I don't know. We're building the pipeline now. We're starting the process to, to get them all online, and we're just in the very" }, { "speaker": "stephan", "time": "12:15", "start": 735.06, "text": "early phase. Back to the show in a moment. This show brought to you by CoinKites dot com, the creators of the best Bitcoin hardware security devices, such as the Coldcard Mark IV and the new Coldcard Q. Now, we use Bitcoin hardware security devices to keep our keys offline, our private keys offline. Now, the way these work is you can do that setup, write down your twelve or twenty-four words On those, the seed word cards and keep that secure. Now you can use this device to interact with the Bitcoin network using software such as Sparrow Wallet, Electrum, or Bep20 Desktop or Nunchuck as a few examples. Now you have a range of security features that you can use with these devices such as passphrase, you can use seed x or my favorite is multi-signature. Now if you're starting in a basic way, just start with the device and the USB-C cable, plug it to- directly to the computer and use it that way, and then later improve your setup. But I believe these devices are great at helping secure your coins, especially as you start to migrate up into multi-signature security. But don't be disheartened or don't be, scared away, they are accessible, and I think you actually do learn about Bitcoin in the process. So to get yours, go to coinkite dot com, use code Livera to get a discount on your cold card. And now, back to the show. I see. Yeah, okay. So, yeah, An investor, an advisor for Bringin, which is like a lightning startup in Europe, and, yeah, so as you're mentioning this process of Let's say at least at the start, fo- fo-focus on American people who want to invest in these Bitcoin companies. I guess, you know, we should be upfront about, you know, the first, I think I like to say, you know, first things first, and I know you are also pretty upfront about these things as well, that people should have Bitcoin first, right? Like it's not the kind of thing that you should think of like, \"I won't invest in Bitcoin companies, I'll just invest in these high-risk Bitcoin equity startups,\" right? Like it's, it Yeah, realistically you should be, you know, you should be well comfortable with Bitcoin, you should, you know, have some Bitcoin ideally. You, you know, and you should be aware of the risks, aware that this is more illiquid, more speculative, more risk, these kind of elements of it, just so that, you know, people are aware, so that people know what they're getting into. But then, of course, that's, that's the risk side, but then there's also the benefit side, of course, where, you know, if you're investing in some of these You know, there's obviously great, high growth potential in some of these, and also the opportunity to help fund the kind of future that you would like to see. I think those are kind of-- That's how I'm seeing it. I'm curious how, how you see it there." }, { "speaker": "stephan_livera", "time": "15:00", "start": 900.22, "text": "Right, and again, I gotta get used to the whole like no investment advice thing, you know? So definitely no investment advice, but you're one hundred percent correct. I mean, you have to have Bitcoin first. You're never gonna stop buying Bitcoin, right, in your life, or gradually moving to a Bitcoin standard as these things come out, right? And it gets easier and easier, to pay your bills or receive payments or to- Live in that world, what-- with everything that we do, you're always gonna be buying Bitcoin. the startups and the early stage investing and that is, it's a different asset class that is really Highly correlated with the success of Bitcoin. So if you think that Bitcoin is gonna win, then a lot of these companies are probably gonna win. but the chances of Bitcoin failing and the chances of these startups failing is, is highly different on the other end of the spectrum. A lot of these startups won't make it even though Bitcoin ultimately will, and those are gonna be write-offs. And the ones that do, the kind of returns that you can get, it's really hard to find them anywhere else. So, you know, it shouldn't be a significant part of your, of your net worth, but it's certainly something to invest in, and they can like outperform, Bitcoin in certain time periods. that's, that's the difference. If you're not selling or trading or whatever, you know, to see a company go from a ten million valuation To say a hundred and fifty or a hundred and eighty million, that can happen very quickly. It can, could, possibly, all those fun words, okay? It can, and I've seen it happen, fairly quickly. And I think at this point in time where we're at with Bitcoin, it might be hard to see a fifteen x return in eighteen months. Can it happen? I mean, it's Bitcoin, right? Anything can happen. And over the long period, seeing how these investments stack up, like when we raised our first fund, if you sold one Bitcoin to invest in our fund, Bitcoin was maybe sixty-five, sixty-eight thousand, somewhere around there, that was in August or so, around there of twenty twenty-one, okay? if you invested in our fund, now here we are, August of twenty twenty-four, the Bitcoin price is technically lower than it was. When you invested in our fund, and our fund has a small markup, right? Single digit IRR, it's still early, whatever, but it's a positive, it's a positive, markup. And some of the companies, or some, maybe two investments from that fund are zero Zeroed out. So with the, with the markups from the winners that are moving, it makes up for it. So over certain time periods, you never know. So I, that's why I advocate doing both, and I think it's a lot of fun, and I think it's, it's great for a number of other indirect benefits, that, that come with investing in these companies. I don't think it's just for the returns, but we're here for returns. This isn't Geiser, we love Geiser, we invested in Geiser. you know, people need funding for their passion projects and for everything else and to sell products, but this is investing, this is angel investing, early stage investing, and we're definitely here For a return, right? To, to, to do well, the benchmark is, beating Bitcoin, right? And if you're just somebody who doesn't particularly care about win moon, then maybe you like just supporting, and ha-- owning a piece in some of your favorite startups. So that's, that's the dedicated focus to ThunderFunder is just this area, this open source and Bitcoin." }, { "speaker": "stephan", "time": "18:45", "start": 1124.69, "text": "Yeah. And I will say, I think it is Definitely difficult to beat Bitcoin over the long term, right? Like that's ver-- there are very, very few investments that have actually done that. Maybe at certain time periods, you know, like a Coinbase or a Kraken or maybe Nvidia, you know, depending on where you start and finish, you know, did they outperform Bitcoin? Yeah, potentially, so I guess that's one thing to think about, but it is also illiquid, so that's the other thing that you might have on paper, you know, yeah, on paper your equity has been written up because that level at a high evaluation in a future round or maybe some of those companies got bought out or there was an IPO. But I guess those are the, those are the main aspects. So could you maybe, it would be useful just to sort of talk people through who aren't, you know, let's say somebody's not familiar with this whole VC and angel and early stage startup world, hypothetically what would it look like if they were to invest in some company, you know, through ThunderFunder today, in five years time or ten years time, you know? What, what, what would that look like? So the liquidity" }, { "speaker": "stephan_livera", "time": "19:50", "start": 1190.21, "text": "aspect of it is, is super interesting. Let's just do a quick one o one high level on the liquidity aspect of it. So let's say that you're an individual angel investor. And you invest twenty-five thousand dollars directly on your own. Nobody sourced this deal for you, nobody vetted it, nobody sent it to you. You met with the founder, that founder says, \"These are my terms,\" and you wired that person twenty-five thousand dollars, you signed their safe, you reviewed it, you had someone review it, you executed that on your own. And that company's worth ten million dollars. And let's say that you're sitting on a thirty X markup, okay? That company does a price round and they've marked a value at three hundred million, pre-money for whatever they raised, okay? So without accounting for dilution, some other fancy things, let's just say you're sitting on a thirty X there. And let's say at that point in time you wanna sell. Okay, you'd like to get some liquidity. You'd like to sell half, maybe. You'd like to sell a portion. You'd like to sell alongside some other early stage investors who might also wanna sell. In a grouping with some communication there, okay? Because you have to remember, when do the late stage people get in? When do you get new lifeblood on your cap table, right? You give liquidity to some of those early funds and early investors who have to return that money to their investors, right? That has to go, and then you get newer late stage investors that kind of specialize that and come in at that later point in time, okay? So that's a process that's not just logging in and hitting sell, okay? There's a conversation there That happens, there's timing, there's also a marketplace, right? If the company's doing great and after the press release is out, you might even be able to get a little bit of a premium on those shares, and these are called the secondary transaction. And I really hope that in the future, there's a product here where we get to facilitate a lot of these secondary transactions for Bitcoin and open source companies or the later stage ones, right? Things like the later stage companies in the space and some people who might want some liquidity, okay? And that- That's just for accredited investors, and that's a different thing. So that's one option that you can get liquidity, but you have to be in control of that. You have to make that investment directly. Now, let's say you invested through Lightning Ventures, you're an accredited investor, and you put five thousand dollars into that same deal for one of our deals. You don't, you don't wanna invest twenty-five thousand dollars in each startup, you wanna spread it around, you're still learning, okay? And you invested five grand, alright? Now you're-- We're sitting on that same thirty Venture syndicate, okay? Grand poobah, okay? We do this as a group. Now, I might send out an email to everyone who invested and take the temperature. How does everyone feel about this? I'd like to sell twenty-five percent and get some liquidity. I'd like to sell half. I'd like to sell it all. Don't sell any. Win moon. Whatever, okay? And then everyone comes back with kind of like a feeling. How are we feeling? Do we want some liquidity? Do we don't have some liquidity? What are we gonna do here? Because- I sure would like to sell a certain portion of that, give everyone more than their money back in cash, and we're still riding some equity here, right? Is it a mistake? Does it go to ten billion, whatever, right? But that's kind of like my decision being the sub-advisor of that through Lightning Ventures through the syndicate, right? And you, you definitely have a little bit of trust there that I'm gonna do the right thing or whatever it is, you know, you can't handle everyone individually, okay? If we're gonna sell, we're gonna sell something or a portion of it or start that process, right? But the individual themselves as the investor in that can't just, \"I want out and do a transfer.\" It's very limited, right? If they brought a buyer or another buyer for SPDB thing, I mean, technically I think we could do it, but this isn't-- you know, we've done it once, once, but this isn't like how it works with the liquidity. And it's the same way, okay? So you have a little less then. So when you invest in a Reg CF deal or something on ThunderFunder, you put in two hundred and fifty dollars, okay? and a lot of people put in small amounts. In the same way, that's consolidated into one line item, ThunderFunder, yada yada, on XYZ company's cap table, okay? And there is no liquidity, okay? With this license, there is a mechanism where there could be a trading thing. After twelve months, okay, and some of these other RegCF licenses outside of Bitcoin land, they do interesting things. They buy Michael Jordan's first tennis shoes, and you can invest in that as an asset class. I don't know, I guess that's okay. and, you know, and, and there's a liquidity aspect, they'll, they'll, they'll acquire a Picasso. And they'll do that sort of thing. So there's a lot of interesting Reg CF things out there. I personally don't like the trading element of it. That isn't what early stage investing is all about to me, and I get to put my influence on how we shape this, okay? If I was a founder and I was like, \"I wanna do a deal on ThunderFunder,\" and then I found out there was some aftermarket, I wouldn't wanna do that deal. That isn't appealing to me. Having a marketplace where shares of Breeze and Strike trade, okay, is not something that I'm interested in building, to be honest with you. I don't think it's good, I wouldn't do it myself, so there is no liquidity in the ThunderFunder realm, that's kind of by design, alright? And this is just an MVP, we're just getting started with it, but ultimately when you invest five hundred dollars into whatever company, you gotta just, you gotta just cheer them on and see where you can help and wait for an- Exit. Maybe they're acquired by someone in the public markets, right? And then we all get stock, and we get to distribute stock to your ETrade or Robinhood or whatever. Okay, that's a fun process. You'll get to go through your first IPO eventually, possibly maybe whatever words I'm supposed to say on the thing to not get in trouble, possibly maybe, you'll experience your first IPO and that's great. Or maybe it's half cash and half shares in an IPO. Or maybe you get the option where you don't wanna take the shares, but you can click the button Or maybe we can give you those proceeds in Bitcoin, which is really what excites me, is pressing the envelope with new things that don't exist out there. You know, maybe you were investing in a mining startup and there was a dividend payment that was paid in Bitcoin and sat, okay? And I'm not talking about some cloud mining scam, I'm talking about really unique, creative deals. And mining has never been one of our big focuses with Lightning Ventures, but I think there might be a lot of appetite for mining and Bitcoin-denominated deals, through ThunderFunder, so it's something I'm, I'm definitely looking at closely." }, { "speaker": "stephan", "time": "26:40", "start": 1600.06, "text": "This show also brought to you by Mempool dot space, the leading Bitcoin and blockchain visualizer. I use it all the time when I'm checking transaction fees and trying to understand what is the state of Bitcoin's mempool. You can search transactions, historical as well as unconfirmed ones, and also see a great way to visualize things across the Lightning Network, Liquid, mining, and so much more. Also, for those of you with an enterprise- They offer a mempool dot space enterprise program, so for those of you as part of that enterprise program, you might wanna get increased API limits, and you might wanna have increased access to the team in terms of feature requests. You might wanna have special branding in terms of how your custom instance of mempool dot space looks. So to sign up for that, go to mempool dot space slash enterprise. And now, back to the show. Right. And as you mentioned, as part of the process Of being along for the ride, you might get a little bit more insight. And so typically, angels and VCs who invest into some of these early stage startups, some of them are getting updates from the founders saying, \"Oh, hey, here's what we got this quarter or this month, here's what happened. \" And they might even put out some asks there. They might say, \"Look, oh, we're, we're hiring for a developer here, or we're hiring for some other role, and can you help us? \" That kind of thing. So what's that gonna look like" }, { "speaker": "stephan_livera", "time": "28:05", "start": 1684.92, "text": "So look, the information is a whole 'nother topic, that needs its own education for both founders and investors, and there's also a lot of etiquette with how to, how to act. and how do you learn these things as you go through the process? So when you're a direct investor like the first example into that startup, or maybe you've invested a hundred thousand or so of your own money, you have a certain level of information rights, that you're getting at that point in time. And if you are, say, a small check investor or a syndicate investor, there's another set of information that you're getting at that time and updates. Sometimes they're the same, sometimes they're not. because it is more widely distributed, there might be forty people who invested in that syndicate, and now forty people are reading that update, and they're all accredited, they're all vetted, they're all in our group for a reason, they all know the rules, the rules are very clear, okay? And it's a zero tolerance policy, and thankfully I haven't discovered any breaches or leaks, okay? But it's a zero tolerance thing, and that's what you have to learn when you become sort of a professional. Retail in- angel investor is how to treat those situations when they come in. And then there's the crowdfunding element of it, where a lot of it is public, okay? The company's financials and information is always public in a Reg CF deal, okay? It can't even be gated behind a, you have to log in to view. it must be public to anyone at any point in time. So as a company, you have to be okay with that, and it depends on where you're at and how much money that you're raising for what is public Click there. And then the updates that you send to those investors are gonna be probably less than your small group angel investors, but it'll probably be a more broad based general- Type of, of course, yeah." }, { "speaker": "stephan", "time": "29:55", "start": 1794.98, "text": "It's kind of like the more you invest, the more inve-information rights you have, and sort of gradually it sort of comes down a bit over time to account for the fact that you're not as much of an insider per se, and I guess, you know, at certain levels, it's, you know, you gotta sign NDAs before they give you that info, and other levels maybe not so much, and they don't give you that much info. That kind of, I guess, that's kind of the, the broad way. But," }, { "speaker": "stephan", "time": "30:23", "start": 1823.28, "text": "Growing and how they are or not growing and how things are go, how things are going in the space and what, what things are they trying, and also as you said, there's opportunities to get involved at that point because you might be interested to help out, like, you know, I, you know, there are often examples where, you know, somebody might have started as an angel investor or, an advisor or something like this and then, and then they end up going to work at that company or they end up making a connection or they end up, you know, helping them, Somewhere else or provide some technical expertise. So there's all these, different, opportunities there, so that could also be interesting." }, { "speaker": "stephan_livera", "time": "30:59", "start": 1859.36, "text": "Yeah, and if you think about like, let's just say that there's a thousand investors on a ThunderFunder deal and they all invest a hundred dollars, okay? So that's only a hundred grand, it's not super exciting, but if you're an early stage founder, it helps. You just got a thousand people to invest a hundred dollars in your company, and when you do choose to communicate with them and leverage them, and whether that's," }, { "speaker": "stephan_livera", "time": "31:22", "start": 1882.42, "text": "tweet or a new release or, you know, hiring or partnerships or whatever they're looking for, it's a lot of people in your corner, to, to potentially leverage, as your superfans and customers. so I, I think that it's a, it's a brand new area and way for people to- To, to invest and connect and get, and get, get started somewhere. And if you, you-- there's nothing saying that accredited investors can't invest. There's actually a difference. There's actually no carried interest On deals through a Reg CF platform." }, { "speaker": "stephan", "time": "31:58", "start": 1918.38, "text": "So, that's a substantial- Actually, do, do you mind explaining that part as well, just for people who aren't aware, like what's carried interest and what, what are some of the differences there for that? Sure. Carried" }, { "speaker": "stephan_livera", "time": "32:07", "start": 1927.13, "text": "interest is pretty much the primary driving force for, financial incentive in venture capital, whether that's through a fund or a syndicate or whatever people are doing, the amount of money that the VC makes on top of the initial investment is subject to a carried interest. Now, I believe this actually comes from, pirates and ships, back in the day in the maritime world, where the captain of the ship, when they chose to make this voyage, they- They could literally take off the boat anything that they could carry on them. That's where the saying comes from, is carried interest. Like if I make this voyage, whatever I can carry off, that's what I get to keep. But that's generally twenty percent in venture capital. So if a, if a, if a fund is a million dollars and it-- there's a ten x return to ten million, that nine million dollars is subject to usually a twenty percent, carried interest, and that's what the VC makes as their- profit, and then the rest is" }, { "speaker": "stephan", "time": "33:08", "start": 1988.15, "text": "distributed. Right. So like as an example, a typical thing you might hear is two and twenty, right? So that means they're taking two percent of the total, assets under management every year, plus twenty percent of the, the upside, let's say. So in that example, nine million, twenty percent, oh, what's one hundred eighty k, is it? Yeah. So, and then that would flow to the general partners of the fund and- Yeah, it's actually, I think it's, it's actually one point eight million, On the show. But, yeah, one point eight million, sorry about that. And then so that goes to the general partners, and then the limited partners are, you know, receiving the other, you know, yeah, the other eighty percent. Yeah." }, { "speaker": "stephan_livera", "time": "33:48", "start": 2027.66, "text": "After they got their money back. So that's another good thing about syndicates and about this is that two percent, boy, I'm a stubborn cheap guy. You know, I've been never able to pay that two percent myself and justify what the fund is charging, that two percent on a hundred million, that's two million dollars a year, all right? And maybe that gradually goes down over the ten years or however it's, it's kind of phased in, and then the fund can either recycle that management fee and put it back into the fund, and there's all sorts of complicated things there, Maximize their return by putting it in, but that's a two percent. So in our syndicate in Lightning Ventures, you don't have to pay that two percent. There's no management fee on that, it's just the carried interest. And then same thing with the crowdfunding, with the crowdfunding, there is no management fee on those funds, and there's no carried interest. So if you have a, ten x return, on your hundred bucks, you're gonna get back a thousand." }, { "speaker": "stephan", "time": "34:45", "start": 2084.53, "text": "Gotcha. Okay, great. So yeah, as you said, it's, an interesting way to get involved, and I think, yeah, as you said, there's a kind of benefits in the sense that you can- Not just be financially invested, but also for people to sort of participate in the same way that, you know, people maybe subscribe, if they really like some particular influencer, they subscribe to his Patreon or whatever because they wanna, they wanna support him. and so it's in a similar kind of vein that if maybe there's a builder, a founder, a team building some particular product or service that people really want, and obviously this is Bitcoin, so it might be something very, you know, Bitcoin related that people really wanna see. so that's an interesting idea, I guess. It, it will, you know, there may be some angles of criticism or maybe some angles where people are sort of looking back to, you know, historically, people are thinking about like pump and dump, or people are thinking about like, as an example, people would criticize like Chumoff, what happened with the SPACs, they say, \"Oh, see, he pumped all this stuff and he sold it, and, you know, etcetera.\" So I guess that's one angle that people have to be wary because, you know, maybe over time, maybe not right now, but let" }, { "speaker": "stephan", "time": "35:56", "start": 2155.84, "text": "You know, coming up with nonsense ideas and, you know, I guess that's just one thing people have to be wary about and keep your wits about you, but at the same time understand there's an opportunity to be a part of some of these Bitcoin companies. So I think that's how, you know, I want to try to be fair and recognize, okay, there's some risks here, but there's also some benefits too." }, { "speaker": "stephan_livera", "time": "36:13", "start": 2173.02, "text": "So all those people like Chamath and Kalikanis, the All In crew, David Sachs, you know, Brad Feld, Foundry Group, Fred Wilson, Andreessen, SoftBank, all of these people. I mean, everyone has their follies, right? And like you mentioned, certain markets are very frothy and everything's, you know, valuations are stretched and extended, every deal's very competitive to get in. I mean, that was kind of like where we started. We were in In a, a, a tough, very easy, environment to raise, and that's changed, significantly here. And all of those people, those venture capitalists, whether they had failed spacs or bad things or whatever happened to them, they made like the lion's share of their money, investing in early stage companies. Whether that's you're in the seed round or you lead the seed round of something like Slack, if you specialize in SaaS products or whatever, or, you know, Rumble to the IPO or Stripe or all of these companies, it's just such a massive win when it happens, that's where all their money came from. So look, I mean, I'm not saying that, that they're, you know, the, the spacs, and you, you have to be careful, you have to watch the market. Now's a good time. And ultimately, valuations do matter. And a lot of these deals, when you look at the companies like from Europe or that are doing- Spread out all over the globe, right? Whatever they're doing, the Bitcoin exchange in Australia or India or here or Canada or whatever, that model, it's an exciting area to invest in. And the one thing that I was gonna tell you is the types of deals we can have on ThunderFunder is very creative due to this license, okay? So what we've done through Lightning Ventures and the syndicate, they're pretty much normal deals, right? Maybe the company's in Wolf. Maybe they've just graduated from Wolf, maybe it's before they get accepted. We have updates. They're traditional deals, right? They're SAFE notes, equity rounds, convertible debts. With ThunderFunder, we can do some other interesting things, right? Paid in Bitcoin or, let's say there was a creator, let's say someone like yourself, if you had a, a RSU, a, some kind of revenue sharing unit, okay? You could actually raise if you wanted to, maybe a few hundred thousand dollars. And have, and own a piece of the profits and however that works, there's a compliant way to do so. But now we're in an ability-- we're, we're in a position to figure that out, and I really want things to be creative, okay? Whether it's media companies or mining companies or open source plays, we have the ability to do some really fun and interesting things, and that's what a focus is. So don't count us out." }, { "speaker": "stephan", "time": "39:12", "start": 2352.45, "text": "Yeah, for sure. And, I think, the interest-- another interesting angle is this open source project, funding element, because for people who are deep into Bitcoin world, open source is a very strong part of the ethos, it's a strong part of the security culture, and so, yeah, as you said, there are some interesting opportunities, in terms of how open source projects might be able to create a structure here, receive- Funding. Now of course, they would need some kind of revenue to, to, to make it work, but fundamentally there's an opportunity there, isn't it? Isn't it?" }, { "speaker": "stephan_livera", "time": "39:50", "start": 2389.66, "text": "Yeah. So opening up, I mean, Lightning Ventures was really only Bitcoin focused, and that is certainly the, a big part of open source is Bitcoin. but we also wanted to get a license approved. And, that's definitely a, a specific niche that it's great that we can now go into officially, write some noster things maybe. or, other sorts of projects like Federated Computer, we invested in. They're providing, an open source version of like a Google Suite type of product. so there are a lot of other things like, even like Startminer, so they're, you know, they're not really a Bitcoin company, they're known for some Bitcoin things, but- There's a lot of open source there, and people don't realize that there's been a lot of high open source exits, like, Linux, was acquired for, Red Hat was like thirty-six billion dollars. there's a lot of private companies that are worth quite a bit, right? Like every developer's running Docker containers. you know, Docker's a private company. MongoDB is publicly traded, probably worth about twenty billion. I don't know what happened after the last little sell-off, but these are open- Open source companies that are, that are, have huge valuations, so it is certainly possible, to make money with it, and, you know, it's, it's a nice area that we can expand into, especially when you think about hackathons, okay? A big part of what we wanna do is provide education to founders and builders in the early stage. So scenario, we're involved with a hackathon, two people win the hackathon, and they need help incorporating, how are they gonna- Get a cap table going a-and claim that, and how are they gonna get ready for their first fundraise? And is there startup in a box sort of tools and documents? And where's like a, a couple of sample- contractors, consultants, like, let's get them set up for success, get them a bank account opened, and, can we provide those type of services in one way or another and really help educate and start these things? That doesn't necessarily mean they're gonna show up on ThunderFunder, okay? But I mean, just the ability to help those early stage coming out of the hackathons, there's a lot of, there's a lot of education there. so we're pretty pumped about that too. And that, a lot of that has to do with the open source. Fantastic." }, { "speaker": "stephan", "time": "42:14", "start": 2533.6, "text": "Okay, so, yeah, look, I guess where do things go from here with ThunderFunder? What can people look forward to in the, let's say, short term future?" }, { "speaker": "stephan_livera", "time": "42:24", "start": 2543.91, "text": "Well, first off, we gotta get this website, alright? I mean, we need the investor and the personal profiles like ASAP. We're working on it, connecting all the socials, giving a place to connect if you're looking for a particular person, we're, we're working on that. what you can also expect is hopefully our first deal, which is about twenty-one, I wanna say about twenty-one days away, from launching on the platform. And then after that, we'll have new opportunities. And you can- You just get an email one day that says, you know, this deal is live, and if you love Ellen Bits and Ben Ark and wanna read about it and participate and own a small piece of the company, that's what you can do. Can you invest in Bitcoin with Bitcoin into these deals? We're working on it, okay? co-founder, rockstar dev, everyone's favorite uncle, is working on a very, very slick integration, okay, with Strike and BTC Pay Server and ways that you can, if you have point- 0.1 Bitcoin sitting somewhere and you wanna invest two hundred and fifty bucks and you wanna fund that in Bitcoin right there with the Lightning address, this is all happening. this, this is a, a major upgrade that we're hopefully gonna have. And the same thing with, if you wanna get American Express points or whatever, you could fund in fiat, you're gonna pay the, the cost for the credit card processing, then no way the company should have to pay that for you, or linking your bank account, ACH, whatever. that's what we need to get up and running. Up and running, continue on building out the community and, and, and growing. I mean, we just, we just started. So that's, that's it. I'm just trying to get everyone to sign up at thunderfunder dot com and follow along live at home. I mean, it's free. So, you know Join and have some fun is really what I'm trying" }, { "speaker": "stephan", "time": "44:13", "start": 2653.07, "text": "to do. Fantastic, yeah, and it's great to hear that, Uncle Rockstar's got a new gig. he's, been working, a long time in the space, doing a bunch of different things. Most not-- most known for his work with BTC Pay, but I know he's obviously a, a huge fan of Nostra, and of course, great to hear that he's now the CTO of ThunderFunder. So, yeah, look, I think we'll leave it there." } ] }