B (3:21)

David the fact that we're sitting here at the New York Stock Exchange, definitely we're in a bubble. But even very sophisticated individuals works like liquidity or yield. These terms are like second nature for people in this building just one or two blocks from here. I would be shocked if more than 50% of people on the street can give you a definition of liquidity. That's how low financial sophistication is. And indeed, by getting people in, enabling them to participate at a small amount is the best way to increase and improve financial know how.

A (4:05)

Me and my business partner Curtis, we tried to test our own understanding of the market and people's understanding and we recently learned that some small percentage of people not only know who the treasury secretary is, but know that there's even such a position. Something like 20% of the population actually know that there is a treasury secretary.

B (4:25)

And I think even the question of who's the vice president is a shocking percentage of Americans who don't know or can't answer that question. But yes, I do think that when we talk about tokenization and the transformation of capital market there is a social good element to it which is how do you lower the wealth disparity? And I think the easiest, the most obvious one is to fix financial lack of or lack of financial sophistication and that is by enabling money more people to get in. There's a longer conversation on how to do so in a sensible way. But access or accessibility, that is exactly what tokenization promises to deliver.

A (5:16)

There's a famous pension fund study that showed that 90% of a return in portfolio was based on the asset allocation. So just being in private equity, just having exposure in venture capital predicted 90% of the returns. When it comes to tokenizations in private markets, what's the gateway drug? What's the product that you believe will lead to retail's adoption of this, of this investment instrument?

B (5:46)

There's two answers to your question. One is what I believe would drive adoption and the second one is what I think is actually good for mass adoption. I think things that resonate with people because they are, you know, hypey because these are brands or companies that people understand. It grabs people's attention at a time whereby someone's attention I think on average is seven or eight seconds. So names like Taylor Swift, Drake, the Patriots, SpaceX, TikTok, these are things that people like, wow, I get to invest and own it. It's going to get their intention, their attention. And I Think that's going to drive adoption? Do I necessarily think that that's the best product for someone who's brand new? No, I think products that are consistent in yield, that is how much, what percentage of return that investment is going to yield with low volatility on an ongoing basis and with liquidity, that's best. And I think both of them are now, beginning as of 2025, are being introduced to the retail public here in.

A (7:05)

The US that's the paradox. Probably the best instrument for the retail investor might be a fund to fund of venture capital funds. Maybe they get exposure to 10,000 underlying portfolio companies. But they want that SpaceX, they want that OpenAI. And we've seen that Robinhood just did SpaceX and OpenAI tokens. Tell me about that. And what was Republic's role in that?

B (7:28)

Yes, I think in the news in June, there was a big announcement on Robinhood giving away a Robinhood Token that represents SpaceX and another token that represented OpenAI. And they basically gave it away. They didn't sell it, they didn't do it in the us they only gave it away to new Robinhood users in Europe. So that effort did exceptionally well for Robinhood. In terms of the reflection on how well the stock performed that particular day, our role as a technical partner, I can't go too in depth into it, but we did work with our partner in structuring that effort for them in Europe in June of 2025 this year.

A (8:19)

And I was watching the stock that day. Tell me about what happened in the stock.

B (8:23)

I think the stock jumped something like 13% and managed to sustain with some volatility, but it wasn't just a, you know, a peak and then it went back down. I think the stock now continue to rise in that framework. And I think the prediction or the estimation is that the public, the market looked at that token giveaway as a reflection on Robinhood's willingness to embrace tokenization and penetrate the world of private equity, which is an expansion from what Robinhood has been known for public equity, public stock. So I think that it speaks to both market expectation and how they embrace all of these major financial companies foray in towards tokenization for retail access of things that previously had been completely out of reach.

A (9:27)

The market's pricing in potential doubling of Robinhood's business. The reason I say that is endowments. Arguably the best investors in the world, some of them, the most elite ones, will have up to 50% of their assets in privates, 50% in Publix, some do 60% in Publix, 40% in privates. But Robinhood essentially showed their willingness to potentially double their market size in the in the tam of their business overnight.

B (9:54)

And the potent the demonetization, the revenue for private equity is always much higher for public. To give an example, say Robinhood, enabling people to trade public equity, even if you were to tokenize it and charge a fee, obviously is free on Robinhood. If you allow tokenized public equity and you permit Europeans to trade it, the fees that are chargeable on that are bound to be somewhat limiting. What would be the fees? When in Q1 of 2026, did Robinhood enable retail public to trade and buy Robinhood SpaceX tokens? Obviously people are going to be willing to pay much more to access something that they will not be able to find anywhere else. That's the allure of private equity. On the one hand is the demand from the public and on the other hand is because of that lack of demand and accessibility, the revenue potential for the first movers in this sector.

A (11:08)

How do these mirror tokens work? Maybe you could break down. How are you able to give investors exposure to OpenAI and SpaceX?

B (11:17)

Technically, someone can go on a betting market like Polymarket and simply bet on when SpaceX is going to go public. You don't actually need to own any shares of SpaceX in order for you to enter into a bed with me. Right? That just in that function is not even a financial product and it will be governed by the cftc. Now, a forward contract whereby I'm paying for something that you currently own and hold on to it and then you're going to deliver that to me later on in the future time when the value is higher and I reap the benefit. That's also very commonly done. A forward contract can be naked. That is, just because we enter into a forward contract, it doesn't necessarily mean that you, David, has to hold on to the asset underneath. And so taking this step further and navigating within the regulatory environment, you allow for an issuer like Robinhood that that is not SpaceX to have a financial product that enable them to deliver to buyers an iou. Essentially, if Curtis or you purchase or receive a Robinhood mere token for OpenAI, it simply means that when OpenAI goes public, you're going to go to Robinhood and they're going to deliver for you the market value of OpenAI share at the time.

A (12:55)

And that's regulated by the FTC?

B (12:57)

No, no, that can. Which regulatory framework applies depends on how you structure the product and how you describe it in the scenario that I had just described. In our view it is squarely securities an investment contract and that should be governed by the, by the sec.

A (13:19)

You've also partnered with one of our previous guests, co CEO of Hamilton Lane. Eric Hirsch and Hamilton Lane, if they haven't passed a trillion dollars, are going to pass it shortly. What's your partnership with Hamilton Lane and how does this tokenization apply to private equity firms?

B (13:37)

Hamilton Lane is probably the firm that I most respect when it comes to asset managers. It's stay very low key with the track record how low volatility is the fact that they are NASDAQ listed firms for a couple decades now. But what people don't realize is that a firm like that and within their organization they are as forward advanced in ideating and embracing new technology as a Silicon Valley startup. So they have been thinking about how they can apply tokenization to make their funds, multi manager funds more accessible to the general public. That is how do you tokenize a infrastructure fund of Hamilton Lane and all of a sudden be able to take in investors well below the standard $5 million minimum investment. And that's exactly what we work with them for a year, a year and a half to execute on it earlier this year there's a regulatory restructuring. It's about building out new vendors and you know, from fund admin to custodians, it's about leveraging the Republic interface to deal with small checks but at a greater volume than a firm like Hamilton Lane is familiar with. So it's a multifaceted effort. But yes, these things like building a whole new hotel, it takes time. It's still not yet a commoditized service and it really is only for partners who are very, you know, all in on the future of retail accessibility.

A (15:28)

It's interesting because you look at somebody like Hamilton Lane that has roughly a trillion dollars in assets and you think why do they care about tokenization? Is it they're trying to get some PR or some good press? And then you take a step back. I had the CEO of I Capital, Lawrence Calcano and he estimates 150 trillion with a T 150 times the size of Hamilton Lane in retail going into private equity and private markets in the next five to 10 years. So Hamilton Lane though today maybe it doesn't have a big impact on their business over the next five to 10 years could potentially double triple 10x that business through retail 100%.

B (16:09)

David, let me use an analogy. Uber, when Uber first launched, the year that it went to Market, the entire tam, the addressable market of all taxi companies in the world was somewhere in the range of 30 to 50 billion dollars. That company, enabling more people to use something that everyone knew about but not everyone used. A taxi is such that a single company now some 15 years later, its valuation is five times what used to be the total size of an entire global market. You're going to see that at a magnitude order larger when it comes to financial products, whether it's venture funds, whether it's a multi manager funds and yes, including the Hamilton Lane, the blackrock, the Apollo of the world and headline news. You see the CEOs of these companies are all at least not chasing but embracing it. Executing on that is still work in progress for for many of us. You at the forefront of doing this.

A (17:31)

Just to double click on that, I know several of the investors that either passed or invested in Uber. Of course the most famous one, Jason Galganis, invested 25,000 into Uber and returned I think a hundred million dollars for Sequoia. I know other investors that will remain nameless that did not invest. And the reason they didn't invest, not because there weren't great investors. And it's because Uber in their deck was going around saying they were going to capture something like 50% of the market share of taxis. And they were sitting around saying how could they disrupt this incumbent industry with a hundred years? How could they get 50% market share? Lo and behold, they were wrong. But to the upside, by an order of magnitude of 10x, they ended up being five times larger than the entire industry. Why? Because bringing down the costs, bringing down the friction, and actually increase the total addressable market, the size of the market. And you're arguing that that might happen in private equity where it might be 150 trillion right now, institutionally roughly the same as retail. But that's people that are putting in 5, 10, $20 million. And if you bring that down and if you create liquidity in it, that might actually increase the size of the tam.

B (18:46)

I think the $100 bills underneath mattresses across the world, from Ecuador to Malaysia to Vietnam, where I was born, even though I grew up in the us that kind of retail capital globally that earns almost zero yield when productively redeployed into the capital market. Yes, you're going to see a more transformative shift to the capital markets as it exists today than commerce in the early 90s, before the Internet and the world that we're living in today. And it's not just Uber, David, there is no question. I wonder if anyone would disagree with this statement that all of us in 2025 buy many, many more things on a regular basis compared to our parents and our grandparents, just because it's that much more accessible in the very much in the same way that I think the world of capital market investing and owning things, the inaccessibility is comparable to commerce. Back in like the 60s and the 50s you bought things that were available to you in your village and now Wales and now you buy things produced globally. Yes, that should be enough to shock proof in the most optimistic way. The next generation.

A (20:18)

Me and you met before you started Republic when you were at Angellist. I remember we were whiteboarding the idea for Republic. What was your thesis then? How has that evolved since growing the business?

B (20:30)

For those who know Angelus know well that one of the things they do was to buy bring accredited capital into venture capital through syndications. But that model we're limiting in two ways. You gotta be an accredited investor and really it only focus on early stage venture investing, meaning two things. Very, very high risk if you look at any one investment and very very illiquid. But the regulatory framework underneath for us at Republic from day one is like how do you bring private inaccessible opportunities to the general public? Because I really think that someone like Jake Paul or Beyonce, can you imagine how they can change venture capital as it exists today? If they every time they make a thousand dollar investment in an early stage company, did they also have a framework to allows all of their fans to put in up to 20 or $50 each? Imagine the size in total investment volume, the number of deals that they can broadly diversify and the kind of leveling up in people's experience with venture that they would do to hundreds of millions of fans. I would dare say that in five to 10 years I have to make a bet that the Jake Paul's of the world will be the new sequoia and a 16Z in a way no different than Uber and Lyft compared to yellow caps in New York Val in New York City today they can coexist, but there'll be a massive evolution that is to come.

A (22:33)

So you know Jake Paul's a friend. So if Jake Paul came to Republic and said I want to partner with you guys, how would he leverage his crowd? Like give me the blocking and tackling of how that would actually operationalize into investment.

B (22:47)

Very specifically, logistically leveraging a platform like Republic, it's like a turnkey thing for him. We set up a profile and we take care of the legal structuring so that a million fans each putting in $10, which is $10 million can whenever Jake recommend and say that I invest in company, a company a sets up a campaign with Republic and all of a sudden all of his fans through you know, TikTok and Instagram and email list can go to that link and there's a single 10 million dollar investment in the aggregate that goes into the company. And so Jake essentially is leading a $10 million investment into an early stage company. And he can do that a thousand times because he's lavishing a very large community base and each person is only putting in 10, 20 bucks so they are able capable of doing so rinse and repeat in a way that no venture fund is equipped. Very few to deploy a billion dollars in a year or two.

A (24:11)

We were talking before this podcast started about our mutual friend Naval and this is like a navalism, which is what are the things that scale brand and reputation so taken to extreme. If Jake Paul starts representing or investing into companies that go to zero or that are not credible, his brand reputation will go down, his followers will start listen, stop listening to him. But if the opposite, if he gets access to the open AIs, the SpaceX is his actually reputation could increase. So it's going to each deal kind of increases and then these influencers could actually start to monetize their credibility with their fan base 100%.

B (24:47)

But David, I want to introduce the concept of return on experience as well. We all know the ROI return on investment. When someone puts in $1,000 or more certainly 10, certainly 50, that getting a return and profitability on that is 100% of their consideration. When someone is making a $10 investment into a company or into an artist that they love, even 100% return of 5x return, that is not a material financial return. It is the ability to do it to begin with and thereby the, the newness, the novelty in human, in investor psychology, when you have someone like Jake with a hundred million fans and a million of them investing $10 into three different companies, even if they lose all three $30 just the experience learning be able to go to an event, be able to go on a podcast or a, you know, a stream that's exclusive to investor, that is already the experience, the process of learning. And David, can you think of any more effective way at scale to get young Americans to learn a financial concept than getting one of the celebrity that they love and that by making an investment they learn for the first time what a SAFT is? What A convertible no is what revenue sharing is. So I would, I would, I would dare say that at smaller amount, return ROI is less important than roe. And because of that, the ability to broadly diversify and bring the rest of the population on board will give the first movers, the first celebrities mover, an extremely advantageous position. And they may very well be the next Uber of, you know, share riding.

A (27:02)

It's so interesting because investing, like poker, cannot be played with play money. Yes, you could open up an account and try to simulate, but you need to use real money. Psychologically, we can't learn to do something like investing without real money.

B (27:17)

Correct.

A (27:17)

And oftentimes when somebody has a big liquidity event, they sell their company for a hundred million dollars. They come to me and they ask me for my advice. I tell, I tell them some principles, but I also say make some very small investments. Make your mistakes with small chip stacks. And as you gain experience, really over 10 years, ideally, but at least over three to five years, then start increasing the size of your bets. A lot of people do the exact opposite. They have $20 million in the bank. They're like, oh, man, I'm like, I can't have it in a treasury. I need to go and spend it. And they start, they make the worst possible investments with a lot of money. I would suggest the exact opposite, which is put, take that $20 million, put in a diversified liquid portfolio and start making very small bets in order to learn your mistakes on a small chip stack.

B (28:07)

I agree entirely. And better yet, if it is feasible to make investments with $5, $10, $20, people should do it now. High school kids. David. I went to East Palo Alto High School, that is definitely not wealthy on the wrong side of the highway. And our high school got like, donation from, you know, HP of like, oh, laptops and computers or whatever. That's how you, you know, you get less economically advantaged high school kids to be more familiar with math and sciences. Can you imagine giving inner city high school children $50 each? You got to make 10 investments and you got to write a paragraph and decide why you deploy $5 into this company. It may very well be, out of 100 kids, 20 was like, whoa. I actually kind of like accounting and concept and I didn't know this is how you make money. And out of those 20, maybe five would go on to become accountants and financial analysts that otherwise they would never be. So I do think that the ability, going back to your question at the beginning on tokenization accessibility, that add a small enough of an amount that you can get people in to participate. Similar to commerce. There is no better way to change the sophistication, knowledge, learning, know how of the public at large. You imagine instead of getting a credit card and be able to buy anything, you gotta wait until you're accredited to go to an Amazon and purchase things. How, how limiting, what would that be? But that is currently the construct of securities law and I think that's changing very fast.

A (30:03)

We're in the capital of the world when it comes to finance. We're literally in the New York Stock Exchange. And being in New York City we see politically a lot of younger people have started to go towards the socialist side and you could criticize that and you could say why that's wrong, why that hasn't worked for last hundred experiments. But if you were a little bit more self critical at a society and looked at what's driving that, you would see that this inability to participate in the economy. You look at Gen Z where their parents were able to have a normal job and to have a house in the suburbs, their retirement went up, their house went up. And that American dream has fundamentally been lost on the Gen Z and that's why so many of them have turn to to socialism. One way to counteract that. Brad Gerstner popularized this idea of giving every person born a thousand dollars in order to invest in the stock market to make sure that more people participate in this. The tokenization could be another path in order to make sure that individuals feel like they're part of the economy and part of the future. And instead of learning to, instead of having a negative affiliation with AI and driving electricity costs and all that, they could actually be on the cap table of these companies. It's a powerful thing.

C (31:26)

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B (32:25)

Agree. And David, I think for us, right, to be able to buy a home, that is the ultimate American dream. That's like, you know, American middle class. You go, you work hard, you go and buy a home, much less buying a home for your parents. I think that is just like you said, completely out of reach for 90% or so, certainly if you live in New York or California. But now to be able to deploy a couple hundred dollars into a fractional interest of a luxury building in midtown Manhattan, even though you live in, you know, northern Oregon, and be able to get some rent, a fractional component of rent coming out of it, this is something that wasn't feasible 10 years ago. And I think, just like you said, is another example of making the American dream of owning real estate and home feasible through fractionalization and accessibility and real estate, you know, less liquid than public equity. But I'm actually very, very optimistic about the trend overall towards, you know, the young generation embracing and actually trying from crypto to trading on Robin Hood to things like factional real estate. I think the, the arc of history typically points towards capitalism.

A (33:55)

It's such an under rated thing. Being excited about your investments. My mom calls me, she'll watch a podcast with Travis Kalanick or pal Alex Karp and she'll say, do I buy Uber? Do I buy Palantir? My answer is always yes. Because if you believe in the mostly efficient hypothesis, I believe the public markets are mostly efficient. Investing in anything is good. Taken to extreme, you could invest in just companies with the letter K. My name's Kendrick. I'm just going to invest in all K listed and you're going to have some variability, but you might actually outperform the index. So this having excitement and having tangibility on what you're investing in is so underrated. And people will look down and say, well that's like serious investors don't need that. And yet the number one mistake you can make as an investor far and above is not investing in the first place. If you had invested in the worst possible day and sold it in the worst possible day, 10 years later you'd still be up and you'd be up sizably. So this idea of the the biggest mistake being non investing is something that we don't really hear about because all the people talking about investing are, are already invested.

B (35:02)

David and I agree. And can I touch on a little bit of a social component of investing as well? Can you imagine if the next company that goes public here at the New York Stock Exchange, that there are 2 million people in New York and around the world who may already own like a small bit. It may be five bucks, maybe two dollars. And now because the company has gone public, that becomes $2 or $3 or whatever it may be. It's not going to change. It doesn't even buy them like a burger at McDonald's these days. But you feel like the headline news is relevant to you. You read the watch return or whatever's on Financial Times. And I think much of it about this, this, the retail participation at scale. Uber for example, when it went public, they tried to give equity to all of the users in advance. They should have used us because, you know, the SEC didn't allow them to go through with it on their own. And I think so much of it, um, is about that feeling that you're more connected to things and stories and companies that are clearly changing the world around you. And where we are today, which is vastly more excited than before, is that it's not just about that return. Yes, it is about that potential return, but it's really about, hey, I too can do this. The fact that I don't, but if I want to, technically I can go and try and buy a Lamborghini. But knowing that I can do it even if I don't makes a big difference to my happiness and my sense of well being.

A (36:51)

To tie this in, I've been reading a lot of Nietzsche and his philosophies. He has this whole concept of slave and master psychology which is are you part of the wealth creation or are you a victim of the wealth creation? And this is something that if you look at the arc of history, has really determined significant historical events, most most famously the French Revolution, but also things like World War I, World War II, and again getting more people on the boat and feeling like they have equity in the future, even if it is fractional, I think is really powerful. I want to go to crowdfunding. When it came out with the jobs act, it was, it came out with a lot of fanfare. Then there was some adoption, then there was an increase to 5 million. Where's crowdfunding today when it comes to startups? And what do you think could take it to next order effect?

B (37:43)

David, I want to clarify the word crowdfunding. To begin with, because this is a somewhat of a misunderstood term. Kickstarter is crowdfunding. GoFundMe is also crowdfunding. What is basically platforms that allow people to donate and just buy things. But when it comes to allowing the general public, the crowd, to invest in private companies, the hurdle has always been a regulatory impossibility. And then it became a regulatory barrier that's very difficult to go over. And then in recent years the barrier has come down a little bit more. And now this is the first year that that the barrier is low enough that it can be as cheap as like $5,000 for if we were to launch a restaurant that we can allow our customer to come in and put money in. But it's a very new thing. We're talking about a matter of a couple of years. Yes, it's been technically legal for 10 years, but the first five years all of the additional requirements and restrictions were so limiting that it wasn't real real. Now it has become real. And that's why you seeing this proliferation of companies that are looking to do token sale factionalization, our effort to do a tokenized version of Biden's equity or SpaceX equity is crowdfunding. I think what will change the narrative and drive adoption is when this liquidity. After you invest in something, how can you sell it faster if you want to than having to wait for the company?

A (39:33)

That's so interesting. So you're saying a bunch of people put money into crowdfunding to startups as we know it could take up to 14 years for startups to exit. Even institutionally backed startups, they haven't seen that money come back, they haven't become believers through liquidity, which is important psychological aspect. And when they go into the later stage, something like an OpenAI SpaceX, you mentioned ByteDance, you're going to see that feedback loop accelerate and you're going to see people making money, people losing money almost. I dare use the sports gaming analogy, but one of the reasons sports gaming spreads is because everybody goes around talking about the money that they made and not the money that they lose. I've never met anyone that lost money in Vegas. The difference here is with a SpaceX or with an OpenAI or startups in general, is historically over the last 60 years, the expected value is positive. I think the mean return is somewhere in the mid to high teens. It's pretty good return on average once you get exposure to thousands of startups. So here you need this kind of mimetic instrument to spread in the Market about people actually making money and taking out money that they made in order.

B (40:47)

For this to prove 100%. Can you imagine if all of a sudden you can no longer sell Bitcoin eth, any crypto, what would that do to adoption or participation in the crypto market? Right now we have the reverse issues, which is if you make a small investment into a private asset, doesn't matter if it's an yc, you know, series A company or a Hamilton Lane Fund interest, there isn't a place in exchange, a liquid active market that you can go and sell them because you want to buy a Honda Civic, a bike, whatever it is you want to do. That option right now is not yet available. We have a company that's going to build and roll that out at scale. So that problem is being solved actively. And I think 2026 is when you're going to see that secondary trading capability in a robust, seamless way get paired with primary possibility of the past 10 years. And that's the proverbial rubber meeting the road. By our estimation.

A (41:51)

One of the most underestimated aspects of Republic is that you yourself are a trained lawyer, Stanford lawyer, and you're dealing in a highly regulated space. How much of an advantage is that as you're creating these new financial instruments?

B (42:04)

I do think building in fintech, um, a big part of it is legal engineering. We all know that when there's technology, there's, you know, technical engineering, coding and all of that, there's capital market engineering, which is what I mean, you being obviously a pioneer of that from at Weisberg Capital and 10x before. And then there's regulatory engineering because you're moving at a front for the forefront of, of one of the most regulated industry, the ability to take risk sensibly and move faster. Whoa. That is much of a moat in terms of competitive landscape. And so I would say the advantage of that is the equivalent of would you invest in a tech company that relies on a dev shop rather than having his own CTO and CPO and engineering team? I would ask the same question. If you assess a fintech company, using an outside law firms, especially the big law firms, is the equivalent of using a dev shop to build deep tech AI. The next LLM. What do you think a big law firm is going to provide in legal advice? The most conservative advise, not taking risks at the forefront, which often are areas they are not the partners of a large law firm are typically not actively involved in.

A (43:39)

And just to double click on why that is, first of all, law firms are extremely conservative. Second of all, they get paid hourly. They rarely if ever take equity, so they don't have incentive. If there's a 50% chance the SEC is going to find you in 50% chance it goes up 100x they're not.

B (43:56)

Going to do that, correct their clients to be able to afford $2,000 an hours at the bank of America, the JP Morgan, the Apollo, the Hamilton Lanes. The larger the firm, the larger the revenue, the lower risk one can take. Naturally, that is uniformly applicable even for the Robinhood and the coinbases of the world. So if a law firm only deals with that type of a client, meaning the the risk assessment is always on the take very little risk and protect the existing infrastructure. That is literally the opposite of what one needs to do to move speedily into innovate in fintech, which is you got to push the boundaries. In fact, you got to even encourage regulators and policymakers to change the law that exists today because it is not the status quo that you're trying to gain a market share of. It is expanding in new frontiers.

A (44:57)

You're on the cutting edge of regulation in these products. How much of your job is collaborating and being a good partner to the different regulatory agencies and what are the best practices there?

B (45:11)

I think some of the biggest or mistaken assumptions that fintech founders, young fintech founders make is that they assume regulators are there to make their life miserable and so it's easier to just avoid it altogether. And oftentimes that may mean that you take too much risk or take, you know, regulators and policymakers just from a different background. They want the same thing as entrepreneurs do, which is hey, we do want society to be more educated, to be wealthier. They just could come from a different background. So know how to do the dance. Assume that everyone is in good faith and have that dynamic information or sharing. And yes, sometimes you your decision, your approach will be different than, you know, than an SEC examiner and sometimes there are conflicts, you got to pick a fight. But I do think that probably the best advice I can give is, is if on the founding team, on the management team, there isn't someone who is very well versed with regulatory maneuvering in relations, at least get one or two advisors who clearly have done it and, and have that person, you know, guide you and the team in dealing with external counsel would be my, my, my advice.

A (46:44)

Speaking of knowing when to push the boundaries, you released the OpenAI and SpaceX token without talking to Sam Altman, Elon and team. Tell me about that story and how did that play out?

B (46:54)

Yes, it's pretty. It's somewhat known now that the Washing Journal shares or published an article about Republic rolling out a SpaceX token that mimics the performance of SpaceX and, and it allows anyone retail, non accredited and accredited globally to buy it. The SpaceX team definitely was not happy with it and I don't blame them. And can you imagine all of a sudden that you're the, the news is out there that anyone can buy your stock on a tokenized basis and has nothing to do with you. That obviously would be, would be, would be, you know, jarring to say the least. So we've had a few conversations with the SpaceX team and their counsel and our counsel. But the advantage of being a fairly experienced corporate and securities attorney is that what we have built is well within the existing legal construct and we are not beholden, nor have we violated any rights or obligation with SpaceX. I'll give you an example. The betting market on the outcome of the election certainly bet on President Trump and former President Biden. As far as I know, President Trump never gave polymarket or Kalshi or any of these platform the ability or the permission to do that. We live in a fair and free country and events of public interest. Well, there's a clear framework to do that. So the hope and the plan on our side is that in due time we're going to get the collaboration, the support, the partnership of OpenAI and SpaceX and the likes, so that they can set pricing, they can set tradability timing and that they don't have to worry about a non us, non regulated entity rolling out the exact same product mimicking SpaceX and OpenAI in a foreign market that would give them even fewer options to navigate.

A (49:10)

I'm a small SpaceX holder and I totally get the company's trying to go to Mars. They have enough problems on their table. That being said, I think even in the short term it could create a headache in the long term again, aligning more people with that mission. It's one of the hidden strengths of Bitcoin is as more people own Bitcoin within the government. If you're trying to tell me that that didn't influence the Trump administration's pro Bitcoin policy, then you're crazy. People around Trump had Bitcoin and whether consciously or subconsciously they started to influence him in that direction. Same thing happens with any security. And I think the more people we could get to be investors in SpaceX, I think that's going to be very positive.

B (49:56)

And it aligns with Elon's thesis and view of the world. He's always been a huge advocate of wanting the community of X, for example, being involved in making decisions. I think the thing that has precluded or prevented founders of mature companies like Sam and Elon from going public or from taking a company public is a very onerous disclosure and compliance requirements of a public company in dealing with it. I think the mere product that we roll out is a not the only. I'm sure there will be many derivatives to come is a solution to that, which is how do you enable fans and the community to feel like they have an upside, a stake in the story, without having to deal with very archaic investor rights that perhaps a venture capitalist like yourself would and should have in voting in all of the things that you would have. And someone who has a $20 interest in SpaceX and feeling really good about supporting the company would not care and can be the two can be separated. But David affirmed SpaceX. You know, a substantial percentage of their revenue comes from federal contract. Government contract is one of the most, if not the most loved American company. I think it's a very good thing that there's such a tremendous retail interest in it. And I hope in due time the exact team will see that this may very well be the answer to Elon's long term vision of community ownership.

A (51:50)

And you have one of the most remarkable life stories. You came from Vietnam as an immigrant. You mentioned East Palo Alto High School. It's a difficult high school. You went on to go to Stanford to start Republic. What life experiences define you and how are you able to overcome these obstacles?

B (52:08)

Thank you, David. It always sounds better on paper than it did in reality. I gotta say, the older I get, the more I appreciate my parents being immigrants and moving to a different country as adults. And so like having that experience on my like worst days, just like you, is very, is much easier for me and I imagine for you as well to imagine like, hey, my parents worst days or my worst day is nothing like what, you know, my parents, whom I love, have gone through. And so it's very easy to like reorient your perspective and just put on a smile and get on with it. And so whether you call it resilience or whether you call it positivity, I think it needs a frame of reference. And having that frame of reference, I think is so incredibly valuable if you live and work in a dynamic environment with a lot of surprises. And sometimes surprises don't go your way. So I, I Am very grateful for, for that bit.

A (53:18)

I think at some point 50% of Silicon Valley venture backed startups were either first or second generation immigrants. And I thought a lot about why that is. Because it's not even that immigrants are a much smaller part of, of the ecosystem and they end up being successful, it's that they also have more things to overcome. So all things being equal, they should actually be underrepresented. And takes me back. So I, my par, my family also I was first generation, we were refugees from Russia, came here with $600. So the US government gave $150 for me, my sister and my two parents. And I went to private school and I saw this disparity, I went on scholarship, I saw this disparity between the private school and my family. I would go back to a very tough neighborhood as well. And I remember specifically in 8th grade I had this party at my place with, with my classmates and I remember we were barbecuing and I think we had run out of hamburger buns. We had just had hot dog buns and none of the other kids would actually eat a hamburger on a hot dog bun cause they thought it was outrageous. And at that moment I realized, holy shit, I'm going to run circles around these guys. If they are so fragile that they cannot put a piece of hamburger into a specific shape of a bread, I'm going to just dominate. And since then I've been empowered to really accomplish many things.

B (54:46)

That's an amazing story and I think it exemplifies in so many ways that if you're a little bit more nimble about the world and not looking at things so rigidly that I think it just makes things easier and more innovative. And David, I'm very, very curious. Out of the hundreds of investments you have made, what do you think is the value of the so called spark of ingenuity versus luck and resilience in a team or a company? Are you betting on an idea that no one has thought of before and, or, or, or plays more value in that compared to the ability to just, you know, just go for long enough and, and, and achieving a certain goal.

A (55:37)

I've invested in many different stages of the life cycle. I think my alpha is at the early stage. I have both my mba, my master's in psychology, and I'm very good at picking people out, seeing people's potential. In most other stages, it ends up being a liability. If you're investing in series C, series D startups and you're doing it based on the Founder like pivoting and improving it's liability at the pre seed, it's almost definite definitionally the alpha. Sometimes you're investing before there's even a concept. So that's where I like to play. That's the most exciting personally in terms of founder versus product, I completely believe in backing the founders and I have found the founders have iterated into success much more so than the company somehow iterating the founder and I don't think that's even possible. So I'm a big founder guy. I know it's a philosophical question in Silicon Valley, but I think at the early stage you gotta back the founder.

B (56:36)

And now that you're in the fund investing in manager or focusing on managers side of things, has that changed?

A (56:45)

I think it has changed. I think you have to look at a lot of different factors. We're oftentimes betting on whether that fund manager can raise one or two more funds. So you have to look at the partnership, where everybody stands sometimes when you're on your fund three fund four people strive to stray. They, they have midlife crisis, they buy their Ferrari, their second home. So I think it's more of a science than an art, but there is still an art aspect.

B (57:12)

Incredible. I think for me anyhow, because I do make personal investment and obviously Republic is an investment platform. I think the hard to define but this metric of happiness I do think has outsized alpha. Because you're happier, you naturally a little bit more resilient. If you're more resilient, you last longer. And if you last longer, then eventually the right things would just come along. And so much of quote unquote success in life is good timing that you happen to be there when a good opportunity land in front of you and you see it and capture it. And so somewhere along the way that one leads to another.

A (57:55)

Absolutely. So every 10 years as investor and the venture ecosystem, you're gonna have that one year. Sometimes it's three to nine months of these crazy returns. And you could do one of two things. You could try to predict those three, nine months which basically nobody on planet Earth, even Sequoia Andreessen, they, they can't do that. And the second thing is you could just be alive and at that point, which sounds simple, but it's extremely difficult because that means you have to survive for 10 years on average. So the best way to get these shots on goals, to get this capture this asymmetry is to make sure you do the blocking, tackling and the boring stuff. Make sure you do what you say you're going to do, you have the right team, you enjoy doing. It's one thing to suffer for 10 years. It's another thing if you love it. And I think that's an under, under thought of and underestimated part of investing of building anything. The compounding compounding that results from resiliency.

B (58:50)

100% in agreement through and through.

A (58:52)

Kendrick, what is one piece of advice if you could go back before you went to Stanford and when you were going from a difficult childhood to really building your career, what's one piece of timeless advice you wish you could tell the younger Kendrick that would have either accelerated your career or helped you avoid mistakes?

B (59:14)

I would say most certainly don't overthink, don't worry so much. Things are going to be just fine. And an extrapolation out of that, I think one of the more at least for me anyway, looking back, fear or anxiety is the main limiting factor. And I think, strangely enough, reading up on a number of religions, the notion of don't fear I think permeates all throughout and especially whether by being an immigrant, whether you're, you know, just born in the United States, clearly already have won the lottery of life and life is going to be just fine. So I think having not overthinking, not worrying so much and just, you know, do your best and just trust that and keep going forward. I'm doing a much better job at that now than certainly before and hopefully we'll do better yet.

A (60:25)

Well, Kendrick, I know you know this. A lot of people don't know we're best friends. Thanks so much for jumping on. Thanks to New York's Stock Exchange, Wired and TheCube for hosting us and looking forward to seeing you very soon.

B (60:36)

Thank you brother. Much appreciated.

A (60:38)

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