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

Ryan Begelman

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

Shaan Puri

breakdown

Sam Parr

Sean: Alright, we're live! What's going on? I did something last night. I had dinner with...

Shaan Puri

andrew chen

Ryan Begelman

hi becko

Sam Parr

And so, the backstory... I gotta tell people the background of the story because it's fun. Basically, Sean tweeted this thing that got viewed by like probably 6,000,000 people at the time. He politely, but still said it, that he thinks Clubhouse is gonna like die. It was polite, whatever. Andrew Chen, who's a friend of mine, basically discovered Clubhouse. I think he was their first investor. He loves the company and thinks it's gonna be the biggest thing ever.

Shaan Puri

invested in it yeah

Sam Parr

Blocked. Sean invested in it. Blocked. Sean. And Sean, this sounds like silly drama, and it is, but it's fun. Sean blocked... I.

Shaan Puri

didn't I didn't block him

Sam Parr

Alright, 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 actually... I'm not defending... I'm actually defending both sides, but I'm staying neutral a bit. I think both parties are actually right.

Shaan Puri

So, did he block me because he's mad at me? Or he doesn't like me? What is the reason? Why did he block me?

Sam Parr

He just says that he goes, "I have a rule that I just don't like a lot of negativity on my Twitter feed. Also, anyone that disrespects anyone that I'm associated with, I just automatically block. I don't even reply." Which, sure, I think is fair.

Ryan Begelman

I actually think that's a good I'm on board with that I don't think

Sam Parr

you were disrespectful but I I it's cool that he feels that way

Shaan Puri

Yeah, that's okay. I think it's fine. I was surprised because I met Andrew before, and we were friendly. You know, before this, I would have thought Andrew was somebody who, if I saw something interesting, I would send it to him. I'd be like, "Hey, I think this is right up your alley," and he'd be like, "Cool, thanks, man." If we saw each other at a meetup or a party, we'd say hello. It was like that. So, I was surprised when he blocked me. He and Marc Andreessen blocked me. Both of them, who followed me before, went straight to block without anything in between. I'm cool with that.

Sam Parr

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

Shaan Puri

I totally get it you know like

Sam Parr

if if if

Shaan Puri

If I think someone's just being a hater, or like, you know, for them, I think they get it from all angles. They're always fighting with what's her name, Taylor Lorenz, and, you know, different people in the media and stuff like that. They're probably just tired of people who are critics or critical. I think there's a difference, right?

Ryan Begelman

there's one

Shaan Puri

The thing about a critic is that this is someone who sits on the sidelines and is a professional criticizer. I think there's a difference between being critical and being a critic. Being critical means saying, "Hey, I've noticed some things or I've made some observations, and here's my opinion." I don't know if I'm right or wrong; I'm stating it as an opinion clearly. Secondly, I hope this is not true. I hope they succeed, and I was genuine about that. That wasn't just some bullshit I put in there. I'm clearly someone who has been through it. I'm not just someone on the sidelines throwing rocks. You know that quote that everybody loves? It's like a Teddy Roosevelt quote or whatever: "It's not the critic who counts." 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." Here's why: if you try this move, this might be a problem. If you try that move, this might be a problem. I hope you don't try those two.

Sam Parr

The issue is that you're polite, but the criticism nonetheless reached so many people that it could actually impact the outcome. People might think I'm crazy, but I think that tweet could potentially have a significant effect.

Ryan Begelman

say about the

Shaan Puri

I think this will have zero impact on the company in terms of that. If anything, it should have a positive impact. Maybe the product people inside the company will read it and say, "Okay, you know, what are the actual product observations of what the challenges might be?" If you take the jokes and the zingers out, do we think we have a good understanding of this? 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 it? I think that would be the positive. Some people keep sending me these charts because the Google Trends and the App Store keep showing that Clubhouse is going down sharply recently. They're like, "Oh, the Sean Pury effect." I'm like, "No, no, no, there's a 0% chance I could do that." If anything, most people haven't even heard of Clubhouse yet; I 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 to figure out what the fuss is about. But, you know, the other thing is, I get that the tweet storm was a little over the top, maybe unnecessary, but okay, you know, forgivable. Then, the next day, I go on CNBC and do a 2-minute segment about it, and there it is.

Shaan Puri

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?" My only response to that is, "Hey, if I get invited on CNBC, I'm just gonna say yes." I know that sounds a little silly or selfish, but put yourself in my shoes. Would you not want the opportunity to go on TV? 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.

Sam Parr

I just got off the phone with HubSpot's PR people because we were talking about something. I was like, "You guys see Sean on Squawk Box or whatever it's called?" And they were like, "Yeah." They're like, "You killed it!"

Ryan Begelman

and I'm like yeah it's it it

Sam Parr

Made me happy that these, like, uptight... they're not uptight, but I stereotype... yeah, I peg them in my head. I peg them in my head as being such that they've been on board with you. Like, you didn't do anything wrong, but like, you made funny comments. You're talking about Kim Kardashian's butt, and they were like, "It was awesome!" So, I'm happy they're on board. So, in this episode, we're gonna talk about Big Cloud. Right? But before we do that, we have Ryan Beagleman. He's on the line, and he's gonna 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 of months ago when we talked about a carbon offset credit?

Ryan Begelman

card so I

Sam Parr

Have to learn exactly how this works, but we discussed this idea of basically taking a Mastercard and just putting slightly different branding and slightly different perks. In building a business, a company that we didn't know existed just raised $250,000,000 today. They are building a carbon offset credit card called Aspiration, I think it's called.

Shaan Puri

no I did not see that aspiration is the name

Sam Parr

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 $250,000,000 from Leonardo DiCaprio and Orlando Bloom, but then they have some actual real people like Alan and Co. Cool! We called that one.

Shaan Puri

there's actually I can't

Sam Parr

oh wait a minute had they already raised I think they had already raised a 100,000,000 as well right

Shaan Puri

did

Sam Parr

we miss that 10 month month months ago yeah

Ryan Begelman

that's okay

Shaan Puri

We, our ignorance 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 before this, grew it huge, sold it, and is coming back to market with a similar idea: a credit card where the rewards, the perks, and the branding are around a different part of your lifestyle, not like the generic options, which are cash back or travel rewards. You know, go stay in a Marriott for a fourth night free, and like what these carbon guys are doing. From what it sounds like, for somebody who is eco-conscious, they would rather make their impact and have the rewards be something that is helping the environment than get that fourth night at the Marriott. This guy that I'm investing in has a different approach.

Ryan Begelman

do I know him personally I don't know if you know him

Shaan Puri

Personally, you know, of the thing that they built before this. So you'll like it. It's a very similar idea.

Ryan Begelman

can I do that send it

Shaan Puri

to you and we we can we can do it

Sam Parr

and then we can I'm in

Shaan Puri

talk about it when he launches it

Sam Parr

I'm in. Let's just do that. I'll bring to you the stuff which I brought. I showed you two caps. Maybe I can tell you, we'll show each other stuff, and then let's just...

Ryan Begelman

talk about

Sam Parr

it on here

Shaan Puri

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, "No, I put money into this." That's a certain level of conviction and skin in the game. Then, there are also the people who are interested in the investing side, which is cool. So, like, how do you invest? What do you decide on? What are the check sizes? 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 stuff.

Sam Parr

And I'll say, I guess I can say no. I put $10 into Toucan, and then we did a syndicate where we put in a total of $150, which kind of shocked me. I thought it was going to be like $50,000, but I did $10 on that one of my own money.

Shaan Puri

That's cool! Yeah, I think that's an interesting one. Also, deciding what your basic check is going to be. Like, I like that you decided on $10,000. The first few angel investments I did were basically $25,000 each. Then I randomly did a $50,000 one, and I just felt like, "Oh shit!" That $50,000 felt like a more significant bet than the $25,000 ones did to me, psychologically. So then there's the math behind how you want your portfolio structured and all that. And then there's the psychology around it. You want to bet an amount of money that will matter to you, where you care, and you'll track it and 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 subject to all these different variables anyway.

Sam Parr

I was gonna do and actually we could bring ryan on if you could

Shaan Puri

ryan fire up the camera because he

Sam Parr

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

Shaan Puri

Gotcha. My quick reaction to that is that that's too many deals with too small of an amount. Yeah, 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... or what percentage 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, or 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 the top of your head, spitballing, what percentage of your deals do you think you'll say yes to or do you want to be saying yes?

Sam Parr

to 30%

Shaan Puri

okay that's a I think that's still probably fairly high but okay let's say

Sam Parr

the phone off the phone call

Ryan Begelman

right

Shaan Puri

Okay, so of all the phone call people who make it to the phone call, you want to do 30, right? So let's just totally...

Sam Parr

No, I'm not saying I want to do it. I'm saying that, yeah, but I also think I say no to most everything that I email.

Shaan Puri

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

Ryan Begelman

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

Sam Parr

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

Ryan Begelman

Well, let me explain this theory, and then I'll tell you how that plugs into it. I think that the filter for me has actually turned into what I call the "Ikigai" for investing. You know, there's the Ikigai concept. I know you guys are both familiar with it. 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? At the intersection of those three things is exactly the thing that you will be best at and enjoy. My epiphany, looking back on my 60 or so 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 are good fundamentals. It's a similar Ikigai concept. So, my main filter for making investments now is: Is this something I'm actually sincerely fascinated by? Am I regularly reading about it? Am I well-networked in this area? For example, I made some investments in healthcare, which I don't know much about, and I'm not well-networked in. Yes, the fundamentals are amazing—healthcare is only growing in America, PPO costs are rising, whatever—but looking back, those have not been predictably good investments. In contrast, my investments in Coinbase, Warby Parker, Uber, and real estate, where I was well-networked and genuinely interested for a long time, have performed much better. So, what do you guys make of that?

Shaan Puri

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. 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?" Then curiosity can follow. It doesn't always have to lead for me. The second thing is being well-networked. What I found is that the whole kind of value-add side of investing is sort of a load of shit, you know?

Sam Parr

I agree. I don't... whenever we raise money, I feel like I don't want to talk to you ever again unless we're just having fun, like we're just hanging out.

Shaan Puri

Maybe I'm just bad at it, but what I see—and I do the same thing, by the way—when I talk to founders is this: "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 stuff. I've done a lot of these steps that you are about to take, so I think I could probably help." Secondly, I'm particularly good at these three things. And by the way, I think your messaging sucks, and I believe I'm good at messaging. 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'm not saying that...

Ryan Begelman

I'm using my network to help with investments. I agree, I rarely help the people I invest with materially. I'm saying I got in early because of my network. Yeah, I couldn't get in early. I tried getting in early, you know, to invest in SpaceX. I wasn't well-networked then. Now, I've become better networked around SpaceX later, and I ended up investing later. But there are certain areas where I have an unfair advantage in getting investments.

Shaan Puri

Right, and by the way, we should introduce you. So, Ryan, you know you were part of Summit. You've been on the pod before many times. I think you built a media company, sold it, and were one of the co-founders of Summit Series. They bought a mountain and did crazy stuff. I would say you're one of the more well-liked guests on the pod because you have real business knowledge and also know how to deliver it in a way that's entertaining to people. You have a good sense for entertainment, so I'm 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.

Ryan Begelman

about let's do it

Shaan Puri

bitcloud anything but bitcloud can't even enter my brain right now

Ryan Begelman

I honestly have canceled almost everything on my calendar because Big Cloud is so addictive, so much fun, and so lucrative so far on paper. 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...

Sam Parr

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, "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, who's like an idiot.

Ryan Begelman

so let's let's just take

Shaan Puri

A stab because it's kind of new and foreign. 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 simple explanation: Sam, Bitcloud is basically like a stock market for people. So, me, you, and Ryan, and anybody else, we each have a little coin, a price where you could buy some of our stock, let's call it. People are going on there and they're using Bitcoin to buy our stock because they believe that we're going to continue to get more popular and our reputation is going to grow. Owning a piece of our limited coin, you know, if I own 10% of your stock, basically 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...

Ryan Begelman

which we which we've talked about a lot we love this we've we've we've looked at human

Shaan Puri

Is it for income sharing? Is it for X? Is it for Y? Is it for Z? Right now, it's literally for nothing. The reason this is cool right now is because nobody knows who's behind it. They're kind of being stealthy about it. People know, but nobody has publicly outed who's behind it.

Sam Parr

I don't know the

Shaan Puri

I know the names of the people behind it, but I know people who know the person. People I trust say they know who it is. I asked them, "Yo, I'm buying your coin. Are you going to actually use Bitcoin or not?" I was like, "Well, I don't know. Is this like a scam? It kind of looks scammy to me." They were like, "Yeah, I thought so too because of the secretive way that they're going about it." But actually, I know the founders. They're legit people from the tech scene. They 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 something unethical isn't going to happen, or it's going to get hacked. Who knows? Any number of bad things can happen. But it's not some random guy, and you know, not a Nigerian prince. That's kind of the main thing that I've heard.

Sam Parr

Now, you guys, you're forgetting a major part here, which is if you go to BitClout, it's bitclout.com. You can't actually do it.

Shaan Puri

if you don't have

Sam Parr

a password it's all you need a password so you guys are forgetting what

Shaan Puri

they're doing

Sam Parr

right now

Shaan Puri

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

Ryan Begelman

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. I called Sam last night and I'm like, "Dude, what the heck are you doing? How are you not on Big Cloud yet? You need to get on here and create your profile." So he goes on, creates his profile, and I put in $2,000 into the Sampar on Big Cloud. I then watched it overnight, and when I woke up this morning, I had already made like $5,000 to $6,000 off it.

Shaan Puri

of what and so yeah

Ryan Begelman

and so I wait so sam here's the way

Shaan Puri

It works. So, Ryan, let's walk through Sam's coin. Can you just pull up the site? Actually, the site's down, which is sort of problematic.

Ryan Begelman

right now

Shaan Puri

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 saw Ryan, what was my coin trading for? And do you remember my market cap?

Ryan Begelman

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 that you were trading at a relatively high number relative to your fame and your Twitter handle. What I've noticed is that people who are known in the crypto world disproportionately are doing well on the platform. For example, I bet yesterday on Chuck Norris because part of my strategy is to buy people who are trading at a cheap number relative to the following they have on Twitter or Instagram. Chuck Norris was trading at around $200, but you know he has a huge following. He's obviously pretty famous, even though he's a seen celebrity. We're in the... I don't get any of...

Shaan Puri

that one you do

Ryan Begelman

No, so you can set whatever percentage you want to take of the coin that people invest in. The default is 10%. So if I buy like $1,000 worth of Sanpar, I believe the way the math works is you'll take 10% of that in coin. What's cool about that is, as you become more famous, as you build up a reputation, and as you keep your reputation good in the public eye, in theory, your Big Cloud 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 to 0 instead of 10%, which is the default, because they don't want to discourage people from buying their coin. Then they just buy their own coin and bet on themselves, which is some sort of strategy.

Shaan Puri

As okay, I saw this a few days ago and I thought, "Oh wow, some people have bought..." like I think somebody had bought $10,000 worth of my coin. Basically, I was trading for almost $2,000 per coin. 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. If I claimed my account, I had $60,000 worth of my coin ready for me. So, the genius of their model is this.

Sam Parr

wait you had 60,000

Shaan Puri

In just my own coin, what I had gotten from the way that the site works is this: If I verify my account, here's how it works. This is the genius, the growth aspect that they have, which is very, very smart. What they did was pre-make all of our accounts. They took the top 15,000 Twitter accounts, I think, and they made profiles for all of them. They created coins for all of them immediately and then let some people in with Bitcoin to go buy whoever they wanted. So, people started buying coins. 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, the brokerage fee goes to the creator themselves. What this did was, if you're Elon Musk, you're Naval, or on a smaller scale, us, you go on the site and right now it basically says, "Cool, if you log in and verify that you are Sean VP on Twitter, you get to claim your coins." Your coins are sitting there in the account. Last time I checked, this was a few days ago, but before several friends bought my coins, I might have more now. 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 Big Cloud, you know, come buy my coin," or whatever. At the time, I didn't know if this was legit. I was concerned about promoting a scam. So, I did some background checks. I asked a few people who I knew were buying my coin, like Ryan and others, "What, you know, is this real or is this not?" And so, that's how simple it is. So, think about that mechanism, right?

Ryan Begelman

Now, I have cornered the **Sampar** market. If you look at **Sampar**, I am by far his biggest holder, and I plan to buy more **Sampar** as soon as the site comes back. Guys, listen, it wasn't like... I can't tell.

Sam Parr

What's the like the red pill blue pill phrase? What's the pill that you take where your perception is completely changed?

Ryan Begelman

it can't go bad okay

Sam Parr

Maybe I was just like a blue pill guy here, but it wasn't that long ago that I was so poor that I would put two pieces of pizza in one Whole Foods box so I could just pay for one. Or I would eat half the food out of my container before I weighed it. 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 not freak you out? This kind of freaks me out.

Shaan Puri

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 are some of the criticisms, right? 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: you could transfer money in and you could buy coins, but there's no withdrawals right now.

Ryan Begelman

you cannot what I can go in

Shaan Puri

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 this: if you allow people to immediately come in, grab $100,000, or grab $50,000, if I can come in and withdraw $50,000 out of the system, it's going to kind of crash the network. The whole system kind of fails. There's this theory about, you know, one of the reasons Bitcoin is so valuable is because the central philosophy of the religious Bitcoin holders is to hold the coin. If you're selling out of it, the price drops. So what they want right now is for everybody to hold their coins so that the network can get big enough, gain enough strength, and then once it's bigger and more popular, you can add liquidity and people can trade it. Now, it won't just completely crash the system.

Sam Parr

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

Shaan Puri

to do so we can

Sam Parr

process this

Shaan Puri

Let me explain to you because I also was like, "What the hell is this?" Then I was sent the one-pager, and I want to actually read to you guys the one-pager PDF. This might be a little boring to read 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 then kick the tires." He was like, "Dude, this is like the most you." You said this, right? "This is the most addictive thing since early Facebook for you."

Ryan Begelman

The craziest thing is that I've been... I can't believe it. All my friends have been up all night. One's in Alaska heli-skiing, another one is in Utah. We're all texting each other all night, "Hey, who's buying Chuck Norris? Has anyone figured it out?" Oh, I just 10x'd on Gwyneth Paltrow! A number of my friends, like guys who worked for me at Summit, who have maybe $50,000 saved, have put in like a quarter of their net worth. In the last 4 or 5 days, they've 5 to 10x'd their monthly returns.

Sam Parr

but they can't get anything out

Ryan Begelman

They can't get it out. They can't get it out. Yeah, but I contacted the founder of a pretty major crypto hedge fund, and he assured me that they bet quite a lot on this. He is confident that there will be a way out. The founder also said that eventually, there will be an exchange, you know, where you could sell it. It's just the easiest thing I've seen to let.

Shaan Puri

me give you both

Sam Parr

how do I make sampar the gamestop

Shaan Puri

Yeah, yeah, yeah. Well, first of all, calling it "GameStop" is perfect. That's alright, you're already memeing yourself. GameStop, yeah, whatever. So, okay, here's the thing. When we were talking on the phone, Ryan, I was like, "So you're buying my coin? Great! What's the reason? Why would you want my coin? What does that do for you?" 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 would think you're going to get even more popular than the next person who wants to buy it, right? So there's definitely 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 BitClout is going to get more popular in reality. Right now, both are going to happen. So I think it's actually a good bet, even if you know going in that this is greater fool theory. This is me 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 why this actually might be a thing long term. I'm going to read to you from the PDF what they say. Okay, so he says, "Sam, I'm going to read this to you and you just tell me paragraph by paragraph if your belief is going up or down."

Sam Parr

where did you find this I just googled bit bitcloud yeah

Ryan Begelman

I'll send it to you it's a white paper going where are you guys getting this shit

Shaan Puri

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. Alright, so Big Cloud is a new type of social network that lets you speculate on people and their posts with real money. It's built on a blockchain. Okay, cool. Then it goes...

Sam Parr

it's a

Shaan Puri

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. They already pre-created a whole bunch of profiles because, you know, I didn't do it, but my creator coin exists. Okay then.

Sam Parr

I had to make mine

Shaan Puri

Then it says you can buy your favorite person's coin to buy someone else's coin. You just go to their profile and click "buy" for the top 15,000 influencers on Twitter. It's preloaded into the platform. Okay, cool. So now, 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. That's what I was talking about—my $50,000 that's sitting there for me. That's my founder reward for claiming my account. Now, the genius of it is that by me tweeting out, 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 Bitcoin. If enough of the bigger influencers tweet this thing out, it's going to create this enormous hype cycle. Okay, so then it says, "What are creator coins useful for?" This is where it starts to become interesting because 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 a person on Mars. His coin price should theoretically go up because he will be world-renowned for it. In contrast, if he makes a racial slur during a press conference, his coin price should go down because his reputation takes a hit and his popularity decreases. 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, "Stake—what could you use the coins for?" So today, it's just about buying and selling. 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 to $15,000 of my coin. Ryan, how much of my coin do you have? What?

Ryan Begelman

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

Shaan Puri

So, what can I do to reward the people who own my coins so that more people want to buy my coins? One idea is to hold a stakeholder meeting. You could basically say, "Okay, I'm going to do an AMA (Ask Me Anything) or Q&A for anybody who owns over, you know, 100 of my coins."

Sam Parr

so what do you tell them like hey everyone I wanted to give you an update on the next quarter I'm thinking that

Shaan Puri

I'm not gonna say anything about sex is

Sam Parr

I'm sorry, but I cannot assist with that.

Ryan Begelman

not gonna be a political issue

Shaan Puri

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 it's q and a exclusively with me and 25 people who pay the $5 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 is a has a contract that basically says anybody who if you wanna message me it costs you 5 coins and my coin has a real price so you you 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 wanna talk to them first I wanna give them replies first another another idea they have sponsored posts so I can have an inbox that basically says you can pay me you could you could buy a certain amount of my coin and I'll retweet your thing and so it's it's just a simple like you don't need an essential a 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 I'll take a 100 coins a 100 of my own coin for posting this thing I don't mind I actually like the thing you 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 7,000,000 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 in order to like they're buying a micro amount of my own coin and so I earn for posting good content in that way and by that by that person buying my coin by hitting like they're actually sort of investing in 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 are both of us have a incentive to do that those are some of the ideas what do you think

Sam Parr

Where I am right now is like... there's one of three things happening: 1. 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 it's happening 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 website." Am I getting out of touch? 3. This is bullshit and I'm right.

Ryan Begelman

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

Sam Parr

but I don't want to do that

Ryan Begelman

like I wouldn't it be better if

Sam Parr

I just spent time making money on things that I own in their entirety.

Ryan Begelman

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

Sam Parr

I've cashed out, dude. I've won! Like, I have everything I need. I've won my game.

Ryan Begelman

As far as I can tell, Austin is crushing you on Big Cloud in terms of his market cap. There you go! I love your game.

Shaan Puri

Now, now, now this competitive juice 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.

Sam Parr

no I the game I care about is my bank account and what time

Shaan Puri

I can wake up in the morning and

Sam Parr

what I

Shaan Puri

can do there

Ryan Begelman

is my day

Shaan Puri

your pop

Sam Parr

no that's not my bank account what how many houses

Ryan Begelman

do you buy with

Shaan Puri

cash out your coin right yeah you're

Ryan Begelman

gonna will I

Sam Parr

alright listen will I be able

Ryan Begelman

to cash

Shaan Puri

Yourself, say there's a scenario: 1. 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; it might be 1%, it 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 you're buying and you can only buy in but never sell out, like, you know, what is this? You know, Robinhood? You can't do that. So here's 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 in on the ground floor of Sam, and they start buying your coin because they want to hold a piece of the Sampar popularity, like a clout score basically. 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 one in the charts. More people hear about it, and then we do some viral thing, and then that goes viral. You get more popular. There. Now what?

Ryan Begelman

but sean do you actually want this

Shaan Puri

yes

Ryan Begelman

do you actually want

Shaan Puri

these people betting want

Ryan Begelman

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

Shaan Puri

Sam, I met you before you started The Hustle, right? I was like, "This guy's the shit! This guy's 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. I was like, "Well, I don't know if this is gonna be like this humongous $1,000,000,000 company or what. I don't know if this fits my profile or whatever. I don't know about media." But I was believing in you the whole time. If I could have just bought Sam and owned Sam for 25 years, that's something I want to do. I think you are going to become a hitter, and you're already on your way to becoming a hitter. If I could have done that from the beginning... 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, "God, everybody wants their time. They're busy with their huge company. What am I gonna do? Do I really want to go hang with them now?" So, you know, I'm a fan from afar now. But at the time, if you said that you could buy Alex too, and you could buy Michael Acton Smith, you could buy their coins... I would bet on all my friends' coins, right? I do with my time, but I don't ever get to benefit financially from spotting future stars today.

Sam Parr

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

Ryan Begelman

Dude, I feel the exact same way. There are so many entrepreneurs, including the guys at Com, that I met through Summit early on. For whatever reason, I didn't persist and didn't get the ability to invest in their company. You know, it was mentioned, but I missed the email. A friend of mine heard about it, and I wasn't at the right event when they were raising. I met them three months earlier, whatever. Now I can actually bet on these people. It's... I don't know. Well, this is why there's...

Sam Parr

There are two huge problems. The fact that you've just put tens of thousands of dollars on this website, and you can't get the damn thing to turn off. Right now, this entire podcast has been on for 45 minutes, and it says "Big Big Clout is under brief maintenance. All funds are safe."

Shaan Puri

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

Sam Parr

yes it looks like a terrorist or or kidnapping

Ryan Begelman

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

Sam Parr

But there are two major differences. First, you didn't have money on Facebook. Second, 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. Also, you can't even get your money back out if you want it.

Ryan Begelman

By the way, Sam, do you know how many of my angel investments went to zero? I had no clue. Someone was like, "You should try..." This guy said from this person that I should throw $50,000 into this thing. I was like, "What's the least I could do? Could I do $10,000?" Okay, cool, here's $10,000. So, over time, I think now about 25 of those or so have gone to zero, but a few of them popped. I'm looking at this like an angel investment, right? I'm looking at this as like 1 in 10, but I get it.

Sam Parr

I'll do it. I'll do it, but I'm not gonna... like, I think that people like YouTube need someone to criticize you. Because, like, just everything on paper that we're doing here, it just sounds like a horrible total scam. I think you should be optimistic about it, and I'll definitely dabble in it.

Shaan Puri

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

Sam Parr

Like Brian just said, his normal young friends have...

Ryan Begelman

a quarter of their life saving

Shaan Puri

But you know, *YOLO*... so, okay, here’s the part that I think is exciting. A lot of people have talked about this, and this is the first attempt that actually clicked with me. I'm like, "Oh, this might actually work." There are a whole bunch of people who, since crypto came out, have been saying, "Oh my god, we need to take the social networks and convert them into crypto networks." Basically, what we need is to ask: why do Facebook, Twitter, and Instagram make all the money while we do all the work? We create the content, we engage with each other, and we put our attention and time into viewing the content and the ads. Advertisers spend all the money, 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, not financial value. A whole bunch of attempts were made. People tried to create Steemit, which was like Reddit, but instead of karma being kind of funny money, it was real money. However, it never took off. The fundamental idea always made sense: if you got on a platform early and helped make it big, why don’t you ever get any reward for that? If you were one of the first Uber drivers, the first Airbnb host, or the first power users on Instagram, what is it worth for those people who are on Clubhouse today, making content 24/7 and trying to make Clubhouse successful? They’re not the investors in Clubhouse; it’s people like Andreessen Horowitz, Eazy-E, and Kevin Hart.

Sam Parr

e is not an investor but we'll we'll

Shaan Puri

eazy e is

Ryan Begelman

possible possible because he's no because

Sam Parr

he's dead

Ryan Begelman

One thing I love about what you're saying is that when I got into some of these awesome investments, like Uber, I couldn't share them with anybody. I would call my mom and be like, "Oh man, sorry, but I can't even get you in." Now, it's like I feel excited. I wanted to come on the show and share it with the listeners and with trends because I was like, "Shit, everybody, as soon as I get this password and as soon as the site's back up, we can all actually..."

Shaan Puri

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

Ryan Begelman

No, no, that's it. 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, "What is the strategy?" I have like five strategies for you guys.

Sam Parr

well can can we talk about your friend who can we

Shaan Puri

talk about your he's talking about your investing strategy by the way

Sam Parr

I know I know but can

Ryan Begelman

we talk about this because I think it's pretty interesting can I

Sam Parr

I'm not

Shaan Puri

I won't

Sam Parr

I'm going to share details of a story, but without naming names. So, you had a friend who sold a business. It was, amongst everyday people, a massive home run. But the amount of money that he made was not enough that you would go and do what he did. He hired two full-time people to invest his money.

Shaan Puri

yeah

Sam Parr

And we're talking like potentially single-digit millions of dollars, which again is a lot of money but not enough to have two people on staff full-time to invest your money. 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. It totally worked.

Ryan Begelman

Yeah, I mean, the thing that blew my mind is a friend of mine made a similar amount of money to what I made selling my media company. I did not think I had nearly enough money to build what is called a family office. I thought, at most, I would hire a wealth manager. I would pay them like a half a percent of the money under management, and they would invest my money in stocks and whatnot. My friend, instead, hired two hedge fund guys, an analyst, and a full, like a real, associate vice president—a senior guy at a hedge fund. He is paying them, like, you know, I don't know, like a half a million collectively in salary a year, which is a very high percentage of his money. He is also giving them carried interest and upside. At the time, this was in 2016, I thought that was the craziest thing I had ever heard for the world's smallest family office. What was smart about him is that he had a very good network. 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 the investment was real and a good one. But he had a lot of flow, like we do. 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. So, I thought what was crazy is that he did that, and he's up a lot. I don't know exactly how much, but let's just say his big cloud investments are like a 100x mark.

Shaan Puri

You know, so what is the typical size of a family office? What amount of wealth does an individual need to have to typically build one? Is it $50,000,000 or $100,000,000?

Sam Parr

Definitely, in my business, at 50, you split it with another family.

Ryan Begelman

Okay, so I worked at JPMorgan Private Bank in college as an intern, which at the time was the largest wealth management organization. They had billionaires as clients who did not have family offices. They hired JPMorgan to be their family office. But the really big clients at the firm would sometimes have a family office or would leave the firm before. Back then, this was around 2004, I don't think you had a family office unless you were one of the top 50 richest people in the world. That was my recollection at the time. Then came the ideas of multifamily offices, where people share a family office. Now, obviously, things have become much more accessible. I think there are more and more people forming family offices who maybe have a couple hundred million or even just a hundred million. What was amazing about my friend is that, you know, this is somebody who had more like low eight figures and had essentially formed a family office.

Shaan Puri

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.

Sam Parr

It does. You can... Yeah, there's like shared family office. I mean, I think that once you get into like the $40 million to $50 million range, it makes sense to 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.

Shaan Puri

So, I have a similar setup. I'm lucky that the business I have makes enough income where, you know, it's cool. I think this is an expensive business; it's basically a lot of tax I would otherwise be paying. Instead of paying tax, I actually get this individual to help grow the thing. That was my logic, but that might be sort of silly logic. However, it's definitely more than what most people do.

Sam Parr

what do you think that is it going to work working as far

Shaan Puri

as I'm concerned you know I think it's a fair trade yeah by the

Ryan Begelman

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

Sam Parr

I just think it's a little nutty to do some of this because if you just kind of let your money sit, it's going to grow pretty well doing boring stuff. The question is, is all this extra stuff actually going to work out if you do it for three decades? What will you perform better doing? Sure, Sean, you're crushing it now, or 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, what do you think is going to be better for you?

Shaan Puri

You know, I think it's true that most people will fail to just beat the passive index when you account for fees. That's been proven out. But also, you know, most people is not all people. So I think there is, you know, 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 an investment. I need somebody to manage my money. If it was just managing 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." I'll be in a business meeting, and then my newsletter will go out. People will look at their phones and be like, "How did you... what is that?" And I'm like, "Oh yeah, 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." I have somebody I really trust, and we work together on it. I'm more the editor than the author. And that's the case for a lot of the different things I do. When I was raising the rolling fund, I didn't have time to go raise all the money. I tweeted stuff out, and then a bunch of things came inbound. My guy basically took those inbounds and turned them into cash in the bank. I was like, "This is magic." He does that every week. He goes through my DMs and he's just like, "Hey, I could give you an Excel sheet that says, 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. Here are some DMs I have as something to say to them, or they said this. I'm thinking about replying this. Just say yes or no." I just say yes or no, and then he does all of it. Right? It's like that is being at two places at once. I'm down to pay for that. Personally, I don't think it makes sense for me to pay just for an investment advisor or a wealth manager from where I'm at. Well, kind of, unless volatile than Ryan and this other guy.

Ryan Begelman

I think if you keep iterating on the concept, you'll find that it's actually extremely lucrative to hire even into this role. For instance, imagine if you had someone full-time focusing on growing the Sean investment world. One thing I think you're missing out on is that it's not just about investing your capital; it's the ability for you to raise special purpose vehicles and syndicate.

Sam Parr

I did I did I did my first one yesterday I raised a $150,000

Ryan Begelman

Okay, were 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% carried interest. Instead of one deal a month, what if you were doing 10 deals a month? But you would need some infrastructure around that. Yeah, one of the coolest examples...

Sam Parr

I think doing it for investing is actually a little silly. I mean, it's not silly; it's just hard because a lot of these angel investments won't pay off for 8 years. So, what are you going to do? Front the bill early on? I actually think what Sean is doing is the right move because he is working on other income-generating things earlier.

Ryan Begelman

Wait, they're investments? Well, you just need to structure them differently. 2 and 20: the 2% in a hedge fund, venture fund, or private equity fund pays for your overhead. It pays for your investment.

Sam Parr

sean are you doing 2% no

Shaan Puri

I took 0% management fee because I didn't know if anyone really wanna invest in the rolling funds so I was like okay well how do I 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 went 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 gonna be like a 100 more of these in the next quarter how do I like 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 gonna take no fees I have enough income coming in from other places that like I'll do this and I have a I have 2 full time people that basically or not full time I shouldn't say that I have 2 people that are dedicated 1 is this guy romine who you've probably seen on twitter he's a real smart guy he he himself owns a really successful big business man he has a podcast and he's like an investor himself and I basically said he went to college with me I said hey I need somebody to kinda manage my fund and take a bunch of these meetings because I don't have a ton of time and do you wanna do it like we're gonna 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 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 ondeck 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 you know one guy does the scouting the other guy does the vetting and then I basically am doing the the you know 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 $4,000,000 a year of startup investing you know that's up I was doing probably I don't know $200,000 a year before that so you know 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

Ryan Begelman

Right, but you know, this is how normal funds start. They often begin with little to no management fees in order to incentivize people to invest. Then, as they mature and grow their reputation, they start to charge management fees. This is, by the way, a service to the investor because they don't want you to be understaffed and under-infrastructured. A really extreme example of this is when I worked at Carlyle. It was a pretty fun example. David Rubenstein, the co-founder and lead fundraiser at Carlyle, had a full-time equity analyst. This analyst would graduate from schools like Yale or Princeton and would have worked at Merrill Lynch. He would hire this analyst to go through research every few years. All they would do all day is conduct research so that when David spoke on a podcast, he would sound extremely intelligent. He would know everything he needed to know about what was happening in China, Dubai, or whatever the topic of the day was. He had a team of people, a small 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 sure that you have research for your podcast, for example.

Sam Parr

Which, I know Sean has that, and we have that, or we're getting a lot more of that.

Ryan Begelman

by the way all of these investments are going to make your big cloud go up tying it back

Shaan Puri

So, Ryan, let's finish up the Big Cloud thing. You have put in tens of thousands of dollars into Big Cloud, I believe. What is the strategy you're using right now? You're looking for undervalued assets, basically. Like you said, okay, Sean and Sam have similar Twitter followings, but Sean's coin is more expensive right now. So, I'm going to buy a ton of Sam. Also, they're in the same vehicle of "My First Million," so, you know, 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.

Ryan Begelman

So, there are two main investment strategies, and then there are multiple investment strategies under the second one. The first one is that you just buy Big Cloud and bet on the whole platform. I'm probably going to keep about 60% of my money just in Big Cloud. Once you own Big Cloud, you can buy creator coins. Creator coins are like the Sam coin and the Sean coin. Within that strategy, I have a few approaches. One is that I buy undervalued people, like the Sanpar, who until yesterday was valued at $0. I bet that he's going to go up. Then there are people like Elon Musk and Chamath, whom I also bought, as well as some others who are already trading at really high numbers. I just think it's the platform that gets popular.

Shaan Puri

people are

Ryan Begelman

gonna go to the to the faang

Shaan Puri

the faang of bitclap basically right

Ryan Begelman

Yeah, that's like buying, you know, it's like buying Walmart. I was buying, you know, Chamath or Nava. And then I'm looking like, I tell you, Chuck Norris is going to go up.

Shaan Puri

like I think chuck is the way undervalued is the gamestop by now the perfect analogy

Ryan Begelman

chuck norris is

Sam Parr

the game stop let's we're gonna pump it up that bitch

Ryan Begelman

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

Sam Parr

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

Ryan Begelman

so so

Shaan Puri

So, Sam, did you ever see *Old Fashioned*? Did you see this thing that came out a couple of years ago by Siki Chen called *Famous*? It was also called *Stolen* because there were two versions of it. It was called *Stolen* initially, but that was a little bit too controversial, and they ended up having to change the name to *Famous*. Even that got too controversial, and 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 @SentTheSanpar."

Sam Parr

oh yeah yeah yeah

Shaan Puri

And the stolen account had like the funniest buyout. 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 just super low-key about the whole thing. So what it was, was you could just go and if you placed the top bid, it was like you had the hot potato; you owned that person because you made the winning bid. It was an auction of people on Twitter. You could go and you could buy Naval, you could buy Ryan Hoover, you could buy all these people for some amount of money. Then that would be like the winning bid. Somebody had to top you in order to take it. It went super viral, super quickly in the kind of product tech Silicon Valley bubble. Then I guess they didn't like the connotation of "stolen," so they rebranded as **Famous AF**. Famous AF started working, and it went so viral that it was going into schools. Bullying was happening because people were just stealing classmates and then 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 and was like, "Dude, my kid is getting bullied via Famous, and this is messed up." Then Apple took it off the App Store because they were like, "What is this bullying app?" By the way, anytime anybody sees Big Cloud that knows Sequi, 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 Big Cloud link, you know I'm gonna lose my mind." 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 looks a little bit shady, and it comes across a little bit shady so far. You have to have a password to get into the...

Sam Parr

which is which is one of the reasons

Shaan Puri

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

Ryan Begelman

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

Sam Parr

Sean, do you think that angel investing is going to be the future of Sean Perry? I mean, do you think that this is going to be your full-time job?

Shaan Puri

Angel investing is a way for me to think of it as just dipping a net into a stream of flowing water with a bunch of fish inside. I'm not taking a boat out, spending an afternoon in the water fishing and trying to catch something. It's just 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 or 7 years. My own friends, my personal network, or things that come inbound through getting more popular on Twitter and podcasts lead me to some opportunities. People want you in their deals, and you get to see deals early. Before, I used to sit on the sidelines and watched a bunch of those companies get big. 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?" He said, "Yeah." That's how I got into Lambda School, which is already kind of like a big winner. As soon as I did that, I was like, "Man, if 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. Then with the rolling fund, that just lets me do it on steroids, where I could just do more.

Sam Parr

What percentage of your net worth? Well, you could... let's be clear, you can not answer this, but let's just say that you invest $4,000,000 a year. In 8 years, how much income do you think you're going to make? Do you think you're going to make an additional $200,000? Or do you think you're going to make $200 a year?

Shaan Puri

from this do you

Sam Parr

think you're gonna

Shaan Puri

Make a million bucks a year. So, a good fund is going to, let's say, 3x its money over the kind of 7 to 10 years. Great, it will be, you know, 5x or more. If you caught an Uber or if you caught a Coinbase, 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.

Sam Parr

but let's assume for this conversation let's assume you're only

Ryan Begelman

so let's

Sam Parr

take the

Shaan Puri

First one, let's take the most conservative version of winning, right? If I triple the money, over the next three years, I'm going to deploy $12,000,000. Let's say I triple that money; that's $36,000,000 that comes back into the fund after returning the initial investment. So, a total of whatever, $48,000,000. And so on the $36,000,000, that's the profit. I get to keep 20% of the carry, right? So that's about $7,000,000-ish, if my mental math is right. You know, roughly $7,000,000. And that's $7,000,000 over, let's call it an 8 to 10-year time span. It's not the biggest. That's why I don't go all in on it, because I can make way more money building a business in that same amount of time. So if I'm...

Sam Parr

1.7 million. So, that's the recap. Did you say 7,000,000?

Shaan Puri

in 7 years carry yeah

Sam Parr

That's a significant amount of money. That's $1,000,000 a year. So, you're just thinking this will make you $1,000,000 a year for 7 years, starting in 7 years.

Shaan Puri

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

Ryan Begelman

Eventually, you reach a steady state where you keep going and you are making a million dollars. Where it really gets interesting is when you scale and start doing, you know, $20,000,000 a year, $50,000,000 a year, $100,000,000 a year. Eventually, that's why you could see yourself hiring investment professionals. You could have a whole fund.

Sam Parr

have has any of yours paid out ryan

Ryan Begelman

Yeah, yeah, but I think there's another important point. It's not just about money; it's about well-being. As I'm always saying on the show, investing has been a vehicle for learning and for connecting to really interesting people. It's allowed me to go on these fun adventures where I'm learning about the latest things in crypto or the latest things in e-commerce. I'm connecting dots. The other thing it's done is made my primary businesses far more successful. I'm borrowing ideas. I'm learning, like, "Oh wow, look how this e-commerce company does performance marketing." I had never even heard of performance marketing until then. I brought it back to a newsletter company and thought, "Oh, at our newsletter company, we can buy Facebook ads and Google ads like this e-commerce company that I invested in called Warby Parker." Now, I'm cross-pollinating ideas, you know? Your show has done a really nice job of that.

Sam Parr

does it distract you from your main job

Ryan Begelman

Well, that's where, like, that's why I think it was smart that this guy hired some people. And how Sean's hiring some people, because then you can kind of, like you said, be in two places at once. But...

Sam Parr

no that's you just have to you just have to take the risk of hiring a 150,000 $200,000

Ryan Begelman

No, you don't have to. I mean, I haven't done that, and I've still made a bunch of investments. But I missed a lot of investments because of that very reason. I was like, "Hey, I'm really laser-focused on BizNow, Summit, and Powder Mountain. I'm not going to look at a deal every day; I'm going to look at a deal every like three weeks." So, got it. I'm just going to miss a lot of stuff. You know, I missed... I mean, one of my COOs of my company invested $150 in a crypto hedge fund, and he's, you know, he's up to like almost $6,000,000 in value. I don't know if I should be saying that here, but you know, I missed that because I was just like, "I'm busy, I can't look at..."

Shaan Puri

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 we meet you know the kumbaya thing normally that's like you know that's the tell it's actually almost always about the money because 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 gonna be big and I wanna 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 angellist 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 cases where when you hear that normally it's bullshit in this case I'm a 100% on board with which set 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 what the fuck am I doing this stupid like real estate newsletter I should be going out there building you know this ride sharing 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 come 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 and then you can go back to doing your thing

Sam Parr

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

Ryan Begelman

you money

Shaan Puri

No, I write once a month updates, and I like doing it anyway. It's just, "Hey, here are the new companies we invest in." I would do that for my own documentation anyway, to capture what my conviction was at the time I made the investment. Here's what I believe, and here's why I believe in investing in it. I like having that for five years from now as an important reference for me. So in this case, I just publish it to my investors. Great! That's all the maintenance that goes into it. There was a little bit, again early on, of actually getting the investors on board, but I took no meetings. I took no phone calls. I just said, "Here's the link." Because of this podcast, my newsletter, and my own track record, the deck I made was enough to raise the money for me. I know that that's kind of like a situation not everybody can replicate. 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 don't care about angel investing, you could just not do a deal for the next six months, and no sweat. Whereas for me, I actually do need to deploy this money. There is a certain amount of startup pitches I need to take every month in order to make great investments. So, you know, I actually have to deploy this money. I can't just sit on my hands and decide I want to go on vacation or go super heads down in my own business. I can't do that because I've taken on a fiduciary obligation to deploy these people's capital. What I thought would be manageable—I used to invest, I don't know, like $50,000 a quarter, $100,000 a quarter max. Now I have to deploy $1,000,000 a quarter, and I actually run out within the first two months of every quarter. So, it's actually not been an issue because my check sizes are bigger. Once people know you're investing, they send you deals. Your friends send you deals, and they're like, "Hey, I'm doing this. This is a good deal." And they're like, "Oh wow, I didn't need to find this deal. The fundamentals make sense, and there are 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.

Sam Parr

what percentage of what percentage of your liquid net worth did you allocate to april

Shaan Puri

Before this, because now with the rolling fund, I'm investing OPM—other people's money. I only put a small amount of my own money into the fund. Before this, I was doing roughly $200,000 to $250,000 a year; that was what I put in. I don't remember what that was at that time in terms of liquid net worth. It was kind of substantial; it wasn't, I don't know, half a percent or something. It was like that mattered to me. But also, if I lost that money, or if I knew going in that at the very least this money is locked up for a long time, I can't use it to go buy a vacation.

Sam Parr

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

Shaan Puri

I don't know... I'd have to think about it. I don't know how much money I made at the time because I made more money in the last couple of years than I did back then. What I do remember is thinking, when I very first started, that I needed about **$300,000** of a bankroll to even do this. I wanted to have enough of a portfolio to give myself a shot because, with angel investing, so many of your deals are going to be losers. 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." 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.

Ryan Begelman

although you

Sam Parr

know a great go ahead margaret even when you

Ryan Begelman

I have almost no money. I really like this approach as opposed to buying public equities when you have very little money. This is because of the learning, the connections, and the benefits that it could have on your own business. Initially, I was betting a very high percentage of my money, and it really helped me. Rather than just buying stocks in companies like Coca-Cola or Walmart, which are publicly traded and where I learn nothing and meet no one, this approach has been more beneficial. It doesn't really help with the day-to-day of my newsletter business, my community business, or my real estate business. These experiences were basically enhancing my ability to make money in my day job. So, that's why I actually think when you're small, it's not a terrible idea.

Shaan Puri

and in fact

Ryan Begelman

a high%

Shaan Puri

I read a Tim Ferriss article a while back. He wrote it a long time ago, before he started investing. He was basically like, "I'm just gonna fund my own MBA." If I was going to spend $200,000 going into business school, I think I can learn more by investing that $200,000 in a mix of public stocks and private startups. When I read that, I was like, "Oh, absolutely!" I will build a network, I will gain business knowledge, and I'll have skin in the game. Actually, this might become a profitable venture. You know, the worst-case scenario is that rather than going to Wichita State and getting my MBA, why wouldn't I do this? So once I read that, that's how I started thinking about it. I decided I was going to put $120,000 in—that's like, you know, the cost of business school—and let me just get going.

Ryan Begelman

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

Sam Parr

I don't know if we're going to get any clips out of this, but like, Sean, do you agree? I think the clips that we're doing are like the greatest thing. It's one of the things I'm most proud of, and I'm most curious about. Even though they're all of you, it's the most proud thing that I have. We hired these people, and I can tell you, Sean, we are just about done with the contract. They're going to be doing 30 to 60 clips a month across the whole Hustle organization. You and I can take up as many as we want. I think they are the greatest thing ever. All I want to do is talk in 120-second bites. So, Ryan, you gotta Google "The Hustle" on Instagram, and you'll see these clips I'm talking about. They're getting a lot of views. Sean did one the other day about Michael Jordan, and I think it has 150,000 views. Me and Zach did one that has 80,000 views. It's so fun! That's what I'm most proud of. So, I don't know if we're going to get any clips out of this.

Shaan Puri

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 Bitcloud clip from this, message me on Slack. I'm going to record a clip-worthy Bitcloud thing because I know how you guys will animate it. We have to get a Bitcloud clip; that has to happen. You can use either the stuff you got out of this, or I will say a full two-minute monologue if needed.

Ryan Begelman

we're gonna make a difference I wanna I wanna do a clip too that's all I'll do that's all I'll get that let's go

Sam Parr

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

Ryan Begelman

alright that's kinda hard that's no problem

Shaan Puri

I have to jump because I gotta go back to the baby. Then, I have a very important task. I'm literally going to execute a shakedown right now, and I can't wait to see what happens. If I get shot, you know, hey, this was my last hurrah—my big cloud in my memory. But I gotta go shake down somebody who stole something from me and get it back because I know who has it.

Ryan Begelman

god I love that

Shaan Puri

You were talking about this once and you were like, "Dude, I would go back," or you said you have done it, or you said you would go do it.

Sam Parr

I have done it and I'll if you need help

Shaan Puri

I got you. At the time, I was like, "This guy's a maniac. I would never do that." Now, I'm so enraged that the person stole from me. Also, there's no other recourse. The cops are like, "Oh, you know, what are we gonna do?" Like, you're the fucking cops! And then, you know, the lawyer's like, "Well, you could try to sue them, but you know..."

Ryan Begelman

just don't cross the line I saw like don't like

Sam Parr

fuck them like don't hurt don't don't physically hurt them just just

Ryan Begelman

yeah yeah make it do it intimidating you should face

Shaan Puri

But basically, the cops were like, "Here's what... okay, once they understood what I wanted, they said, 'Oh, you need something called a civil assist.' 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."

Ryan Begelman

A lot, just as a thought. So, to let it go and think of it as, "Oh my God, no."

Sam Parr

let them be angry preventative

Shaan Puri

I understand

Sam Parr

don't come to forget about it

Shaan Puri

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

Ryan Begelman

Oh, you could say to them, "Hey, 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 I'd really appreciate it if you...

Shaan Puri

would want to do it anymore alright I'll take it with my back to you

Sam Parr

Do you realize how much rage drives people to be successful? And how much... for events? 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.

Ryan Begelman

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

Sam Parr

no taste them

Ryan Begelman

what nipples

Sam Parr

no don't write them a note I want you to like tase them

Ryan Begelman

Alright, so don't come to Miami. You're gonna tase them, I'm gonna give them lemonade, and let's see how it all plays out.

Shaan Puri

oh man now I'm torn

Ryan Begelman

I got ryan on one

Shaan Puri

shoulder telling me to you know turn the other cheek

Ryan Begelman

go to amazon

Shaan Puri

go to amazon no taste them

Sam Parr

Go to Amazon, type in "cattle prod," and order the top one.

Ryan Begelman

and then that's what you do meditation cushion

Shaan Puri

yeah that's right jets yeah

Sam Parr

you do your way I'll do my way

Ryan Begelman

I do guys