E369: Midas List VC: Why Smart VCs Are Buying Secondaries

Brian, you've been a VC for over 25 years, prolific career, including being on the Midas list, the list of the top 100 VCs. A couple of years ago, you made a structural pivot to go from primary investing to secondary investing. Why did you do that? I mean, as I got older, I started to recognize more and more the time to liquidity for seed investing was just stretched to 15, in some cases, even 20 years. And I felt it was a much more interesting place to play and a much more rapid payback. and I was starting to see some of the LPs start to question the asset class in the payback period. And I felt secondary was a more interesting way to tighten that loop. And the secondary and asset class, is it a way to access opportunities? I felt the secondary market was ripe and I felt there was an opportunity to frankly create a new aspirational brand because there's some good secondary, pure secondary firms out there, but I felt I could bring a venture capital kind of mentality, service level approach to entrepreneurs and cap tables and access really good assets via the secondary market and to create frankly a new brand in the asset class. Give me a sense of what stage you're investing in when it comes to secondaries. What I try to do is quote unquote inflection point invest in advance of a P&L inflection point, a value inflection point, where I'm trying to buy shares a couple of months, a couple of quarters before that inflection point. So the key for me is not just access, but real detailed information and frankly leverage relationships so I can get that access and that information. I've had this thesis and maybe it's more of a thought experiment that some of the best opportunities via secondary is not buying some asset for 30, 40%. It's really actually buying quote unquote at par for an asset that's grown two, three times in value since the last round. A hundred percent. Yeah. Why I wanted to get into the secondary market, I thought with a VC, I wasn't super focused on like pencil pushing and FMV and discounts, so to speak. I'm just trying to access some of the best businesses that I know that are maybe misunderstood and frankly, less followed. And that's where you can frankly find the value, if you will. And it's interesting because you're competing against other secondary investors, not primary investors. So they don't have the same skillset or track record of fundamentally underwriting a business. That's why they have to go for these large discounts. You got it. So when I think about like my competition, of course, I run into secondary, pure secondary buyers. That's the business we're both in. But I view the real competitor as the incumbent cap table member. Like I think that's- Insiders. Insiders. Insiders is the real competition that, you know, when I talk to my LPs about who do I run into and who do I fear the most, it's the insiders. They've got governance, knowledge, relationship, all of the things that I kind of employed at a compiless when I was buying secondaries. I'm not saying like the other secondary groups aren't good. It's just I can differentiate from them given my background. But insiders are much more a real competitor, if you will. And the flip side of that is insiders are not buying. That's also itself a signal. What I have found is you can play a role and co-invest alongside the insider because hygiene. An insider leading a secondary round on its own deal, it doesn't necessarily pass the mustard. So I've looked at a couple of transactions where I've played the role of pricer. And that just clears hygiene. And to your point, I love to see an insider doubling down. There's no better signal. And I've kind of used that signal as actually a filter for diligence. There used to be these firms that would come in and price rounds for the Sequoias, for the Greylocks, and then give most of the round back to those firms. But they needed that third party underwrite. This is kind of a secondary version of that. We'll add my fifth deal to coming up here in a couple of weeks here. And it's exactly like that. Introduced by the insider, splitting the insider, cutting the insider in. And then I had to negotiate for my slice and I paid a service of pricing and doing all the work. And they're coming in and doubling down actually even in an SPV out of the fund and within their LPs. And that's the best signal you can get. In that case, you're solving the problem not just for the seller, but also for the buyer. And the entrepreneur, continuity of the cap table. Don't underestimate the continuity of a cap table when you're a founder. You just want to know the people you're dealing with and you want the people who've been with you for the last decade staying with you and concentrating more capital in your business. Is that just less problems, less headaches? What I learned in venture for two decades is like it takes 20 years and there's a lot of things and along comes a secondary buyer, you don't really know them at all. So in a perfect world, you would rather have your insiders concentrate more equity because it solves it. Entrepreneurs understand they need liquidity or their seed investor needs liquidity. but they don't necessarily want to entertain a new relationship. They want to be building their business, not building their cap table. Focus. Liquidity is not their problem. One of the novel things that you did, I've heard a lot of GPs talk about this, but you actually execute on this, is you had 30 GPs invest into your fund. Tell me about that strategy and how does that play out? Revenant was created off of a practice that I was running at Accomplice. Over the last 10 years, I did 35 secondaries all within the Accomplice portfolio. So I kind of knew the model, but as the GP and the person co-running the fund, I had all the relationships, all the information, and I understood where to create alpha. So when I left and wanted to create my new fund, I wanted to do it on quote, unquote, someone else's book. So I went out to 30 friends in the business, people I've either co-invested with, worked with, have done deals with. And one, I wanted them to endorse me in a certain way. And then two, I wanted deal flow. I wanted access to their portfolios. The thing that I can see here now, like what, eight months since I closed those 30 GPs as LPs is I've got both of those things for sure. But the other thing, which I didn't appreciate was how much information flow you get from having 30 GPs and not only about their portfolio, but everyone has an opinion on another deal. So the information flow has been probably the thing that I most valued, but I didn't appreciate when I created it. Similarly to making a small investment in a startup, a lot of people don't realize the downstream consequences of investing in a fund and how tied in you get. very different, by the way, than having an equity stake or advisory stake, but having that skin in the game, even if it's a small check, this is why I don't write small checks into funds or things that I don't want to be really active in. It becomes very problematic from that perspective. So building the strategic LP base around GPs is a very high leverage way for you to run a business. I live in a world where I think founder-led businesses are worth more. That's been proven in the last 15 years. And a lot of the GPs that are my LPs are seed funds because their relationship they have with the founder is on, once you put somebody in business, they look at you different. I don't care if you own 0.1% or 5% of the business, but if you're a first check kind of investor, the entrepreneur will always, always hold you in a certain high regard. And I've learned eventually when competing with quote unquote incumbent insiders, I'm going to have to go to the founder and ask for a favor. And there's no better currency I can find than a first investor. so I have used that in the past where I've gone to you know one of the GPs is an LP in my fund and I'll say hey can you get so and so to help me wave the like wave some sort of governance and in my world for the most part you would agree founders usually carry a certain amount of cachet and and they can steer governance your way and that's another like tactical reason I brought that group in. At the end of the day it doesn't necessarily matter why see investors have this way or first investors have this way around a founder but how would you explain it if you had to? I would say for every founder, you're obsessed with something. And that first person, whether it's a customer or an investor that says, yes, I believe in you. I believe in your vision. And I'm not only agreeing with you, I'm putting my skin in the game. I'm investing behind you. And I want you to be successful in this mission. 20 years of seed investing, those relationships that get forged in the earliest stages of a business are the strongest. And they can go the other way when they go negative. But I have found that first investor relationship is very unique because they believed in you when no one else did. And I've used that as a calling card and drawn on that relationship with my old piece. What's the half-life on that? That's a great question. I would say it's 30 years because I used to think about what's the half-life of an entrepreneur relationship. Let's think about it. You probably get one, two, three deals out of the person. They probably introduce you to your best deals. Because when I think back about everything that we did really well at Accomplice, every great deal came from another entrepreneur And so what the value Why do you think that is I think talent recognizes talent at its core level Relationships are very very valuable If I going to step out and put my neck out there and say and endorse you to one of my investors or one of my friends I don do it a lot And I'm really, really, and I think the bar is very high for that. VCs are obviously very smart. Oftentimes Ivy League, double degrees, all this. But do you think there's something to be said that founders are more at least first principled or more in touch with cutting edge technologies versus the venture community? 100%. I mean, I actually think I've been for another podcast another time, like I'm kind of a sell on the whole education and the brand around it. I actually think, you know, I've lived a world where 99% of the value creation is the execution, never the idea. And I found the most interesting entrepreneurs have in their life been trained in resilience. whether they went to school or not it actually doesn't even matter is they have lived they're obviously smart they're obviously passion and i think more and more like the third party like validation of what intelligence is is going out the window that's like pretty exciting that's one of the exciting byproducts of ai but i come back to like what have you done in your life that required survival because that's what it is and that's like that's that i'm drawn to that I completely agree as a double Ivy. I agree. I know you went to Ivy League as well. So we're trashing our own pedigrees. But I think it's necessary, but not sufficient. I'm not up to date on Generation Alpha and Generation Z as I probably should be. But there still seems to be this fun the door, this opportunity that comes to those that have the Ivy League degrees. even if you, I would argue, don't learn that much or you don't learn something that you couldn't learn online, let's just say, or through AI today. But it still seems to be very important. And I've such a hard thing to A-B test. Obviously, this is why Peter Thiel created the Thiel Fellowship. We backed a fund based on Thiel Fellowship called Valerian for this very reason. I'm a huge believer in that. But even that's credentializing. So if you're not part of the Thiel Fellowship, which I think many people will take over a Harvard, Princeton, Dartmouth, et cetera, you still need that stamp, don't you? I think the brand of education still exists in the world, but I think back in my own experience, because I was a middle-class kid, grew up in Philadelphia, went to school at Princeton. And I think back, what did it do for me? It probably gave me validation, whether I deserved it or not. I don't know. Did I learn anything? No. But what it really triggered in me was ambition. Because the one thing you can say about the Ivy League, there's a lot of people there who have come from a fair bit of wealth and affluency, and it triggered ambition. And then I'm a competitive person by nature. So ambition and competitive, I wanted to win. And one of the ways you win is being successful against your peers. And that's the thing I look back on with 30 years of hindsight at the time. I had no idea, but I look back, I'm like, man, I was really, it ignited an ambition that I probably didn't appreciate. You also saw what great looks like. That doesn't mean everybody at Princeton was smart, but the top 10% of Princeton are shaping society and doing all these things. You got to see what does it mean to be extremely smart? the average person politically incorrect does not necessarily know the difference between a very smart person and extremely smart person they just don't have that context going to ivy's you're able to see you're able to also see your gap when you meet somebody just exceptional you're like holy crap there's like levels to this i 100 agree and i think even you look at the stanfords and like like the like the other schools like you want to be impactful you like i think every entrepreneur by their nature they want to change the world and create something but they're also competitive as hell. And they want to be the best in their class, whatever that means. And I think you have to harness that and believe in it. And that's why I think these founders, they're so valuable to, frankly, society. You've seen venture across multiple decades. As I mentioned, you're on the Midas list. You went out and raised $100 million for Revenants Fund One. What did you learn in that process? I learned, and the whole idea around a small fund was to get in business. And then also one of the interesting things about Revenant is we have a co-invest program. So every deal we do, we try to offer co-invest to our limited partners. And as a student of venture capital, and really in the last 10 years, I started to see a lot of these smarter family offices want direct access. They love their blind pools, but they love their direct access. So Revenant was purpose-built to be small. So I need co-invest partners, people who can actually do it and write a check alongside me into a cap table. So it was literally, that was part of the mousetrap. The foundation was the GP, LP. And then I went after all family offices that actually could do co-invest. So it allows me to flex up and be a little bigger than 100. But then also, I think you can create meaningful multiples of capital with a $100 million fund. Yeah, your fund size is your strategy. Yes. Expert calls have always been one of the most powerful ways to build conviction. But today, investors are asked to cover more companies, move faster, and do it with leaner teams. With AlphaSense AI-led expert calls, their TGIS call service team sources experts based on your research criteria and lets the AI interviewer get to work. The magic is in the AI interviewer, purpose-built and knowledgeable-based information to conduct high-quality context-rich conversations on your behalf, acting as a trusted extension of your team. Then they take it one step further. Your call transcripts flow natively into your AlphaSense experience and become querible, searchable, and comparable. So your primary insights plug directly into earnings preps, digital work streams, and pitch books with zero tool switching. 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The first to see wins. The rest follow. Learn more at alpha-sense.com slash how I invest. It's so underrated to raise a fund. and get it to a certain size, but just get into business. And as I've interviewed hundreds of LPs and GPs across the years, realized one extremely obvious point in retrospect, which is everything is upstream of your first close. If it's very difficult to do $150 million first close today and do a $300 million fund, do the second best thing, which is do a $50 million first close, do a $100 million fund. And by the time you would have gotten to that $300 million, which I would argue would be highly unlikely. I'm not even saying it would take two years. I think it more likely than not would not have happened. You're going to be on your second fund, which at that point you could do 200, 250. And people are just, I think they're set egotistically on a number or they're just anchored on a number. Or again, it goes back to this memetic copying. Their friend from Princeton raised a $200 million fund. They're like, that guy's an idiot. I should be able to do a $300 million fund. Not understanding all the context. Maybe they raised two years ago. Maybe they had an anchor investor that came in early. getting into business is just so underrated in every aspect, but certainly when it comes to fundraising, which is more binary than people realize. People think it's, you know, like a typical sales process, like a SaaS company, you go talk to a hundred investors, somewhat of them convert, and then you have this magical kind of pool of capital. It's not like that. It's a momentum game and it's entirely contingent on that first close. A couple of things to unpack here. One of the ironies of asset management is you can run a strategy with a smaller fund, be very successful. Then you raise too much money. You can't run the same strategy. You have this brand to people back this brand. And I was a big believer in like, you want to run the strategy you want to run. So keep the fund size at the right level. You can create ancillary products and ancillary things to take on more capital, but do it in a more intelligent way that works for the LP and works for you, but keep the integrity of your fund size the same. Where you're going was, it's like one, the GPs gave me deal flow and validation. Then I got some pretty well-known family offices and then you're downhill and you play the scarcity game. And there no better way to fundraise than scarcity And the way you do that is you keep the fund size tight How do you communicate scarcity have a scarce product Yes Well so I mean you do a lot of marketing you get yourself to a certain level And then when you launch, you're scarce. Last time we chatted, you said something that shocked me, especially given that you've been in the industry for several decades. You said you're not looking for power loss. My career has been made on underwriting really good people and underwriting some semblance of information. My experience in the quote-unquote power law game is I have an hour, maybe 12 hours, maybe a day to make a decision, and I have very stifled access, and it feels like I'm playing a momentum game. And it's very successful that those are comfortable, that those can do that. I live in a world where I want to sit across or at least have a Zoom with somebody I'm backing, and I want some semblance of information to underwrite. And the power law, there's been such a frenzy, and there's so much competition around it that my process doesn't necessarily work in that world. I still believe in it. I don't think about what I don't do. What I do do is I underwrite great teams in really interesting markets and I come in as a secondary buyer, oftentimes solving a problem. Just to play devil's advocate, doesn't that break the venture model? Don't you need that power of law outcome to drive the entire portfolio to 3, 4, 5x? Secondary buyers look at their loss ratio. Venture people don't. Well, my loss ratio should be close to zero as a secondary buyer because I'm coming in and underwriting in a meaningful moment and as a more mature business. What stage are you going into? Like I said, I mean, as early as I've gone is $25 million revenue and as big as $900 million. So it's a very wide swath. I'm really trying to pinpoint an inflection about to happen to the business. And that's how I've been, that's how I've kind of been underwriting. Is there no opportunity to buy secondary in a fast growing AI company that has an incredible cap table and has some implied expected value and potentially a very high expected value. We look at these deals when we can, that our challenge has been, or at least my challenge has been, really trying to get access, the right amount of access, which I committed to my LPs in terms of access to a team a little bit, access to some semblance of financials and what's happening in the business. I kind of hold myself to that standard, a higher underwriting standard. And it doesn't matter the deal. Like I would love to do a late stage AI deal if I got to meet the founder. And like you said earlier, maybe I paid 10%. There's a trade off. Yeah, maybe I save 10% above par. I'm not looking to discount. If I want to be in a business, I'll pay the price I need to if I've underwrote it appropriately. Mark Andreessen recently said, there are no diamonds in the rough, only diamonds. Do you agree or disagree? Well, first of all, it's a little self-serving. If I ran a $15 billion platform, I would probably say something like that to some degree. I guess he's right, but I don't view the company as the diamond. I view the founding team. I view the founders as diamonds. So tell me about your portfolio construction. Yeah, so my portfolio construction, like I said, it's a wide swath, industry agnostic, not focused on themes here or there. What I'm really focused on is this inflection point. Am I buying into a business right before it triples? Am I buying into a business right before the valuation doubles? And so I traffic and I need to be introduced at the right time in that moment by usually one of my GPLPs. And then I access some shares and then enjoy hopefully the performance that happens afterward. Last time I took a deep dive into the secondary market, I saw this natural gravity to push prices close to the 49A or to the last round. Is this something that you're benefiting from, this natural, I guess, discount in secondaries that could stun? A lot of times I am very efficient because I was a VC myself around, can I make five times my money? So I really price things off of what I believe the potential will be versus a discount. That's why in some examples, we have bid par or even north of par because you just you see the inflection point happening or you have really good inside knowledge from maybe an insider that x y and z is about to happen and that gets you comfortable that you can pay a price but i'm really trying to underwrite to three to five x quickly and that's how i think about pricing less than less than a discount you have several pet peeves about the venture industry what's your number one pet peeve man there are a lot of pet peeves i probably would say group think i would say i think the industry from lps down tend to talk each other into the same kind of deal and i'm a big believer you got to go where people aren't and the group think mentality uh and is probably the thing i i i dislike the most close second is it's all around it's really the founder vcs like they sometimes get a little bit caught up in the investment they did when they really, they just found a really good team and they executed and they overly attribute their role in the success. I invested in Seed Brown. I took the company from Seed to a hundred billion dollar company. That might be my greatest pet peeve that they don't appreciate. It's really all about the founder and you were fortunate to witness greatness. And I'm sure you made an introduction here too, but you witnessed greatness and you took a risk and you should be applauded for that. But let's just, let's be really clear on what you actually did in building this business. Just to play devil's advocate, they're not, VCs that come in and completely change the trajectory of a company? VCs, it's an asset class that lives with brands. And I think there's something to be said about if a branded VC comes into your cap table, it facilitates talent aggregation. That's really it. And I'm sure there's some introductions here and there. But to me, when I'm a big believer and it's all around the execution and hiring great people, I do think VCs can definitely influence that. And that's particular at the early stage? Correct. because great talent is more effective at amalgamating great talent than the next VC. Ninjas want to work with ninjas. When I was a seed investor, I was like, your first three hires have to be absolute ninjas because if I'm coming to join a company, how good are the other people? It's the first thing I think of when I leave. So you really have to hold that bar really high. How scarce is great talent? Is this something that's pretty scarce? Is it just extremely rare? I actually think it is probably the rarest thing. And I think that's what zero interest rate environment, mediocre people got funded. And that's really hurt the asset class. Obviously, there's the SpaceX's, the Androles of the world. But across the board, is it very common to see these clusters of talent at companies? Is that more the rule than the exception? Is the rule. Because I really think, like I said, talent aggregates more talent. I think talent compounds maybe more than anything. And then before you know it, you've just got an awesome team. And then they're going to borne out the next set of companies. Obviously, the PayPal mafia being like probably the poster child for it. And the opposite is also true where you have no talent, somebody extremely talented comes in, then they friction off in six months. If there's a really average person at the company, you're looking around like, why is he, why he or she still here? And then you start to question the leadership. Like why are they allowing mediocrity in our company? Because it's kind of the lowest common denominator. Mediocre people hire worse people than themselves. And then before you don't, you've got a really average team. Yeah, it's a Steve Jobs saying, A's hires A's, B's hires C's. Yeah, you got it. as i've gotten to know you you're i won't use the word contrarian but you're a great first principles thinker how do you invest your money outside of revenant your own money i'm such a sucker for innovation you know you'd think i would be a little more diversified in my own like personal finance yes i have some real estate here and there and some safe stuff but i'm still a very active angel investor because i still want to be you know in actually one of the deals that quote unquote source from Revenant, I was the GP as an angel investor. I'm a secondary buyer buying into later stage businesses today, but in my person, my PA, I would much rather give an entrepreneur a $50,000 check than put money in an ETF. I have some good news for you. So I sat down for what I didn't realize would be a therapy session with the CIO of Marc Andreessen Ben or which is family office a 16 perennial michelle del buno and i let him know my portfolio construction which was over 90 startups now across many different verticals hundreds of positions and he said something that was very surprising to me especially somebody in asset management is that it's not necessarily a bad portfolio it's a very illiquid portfolio but it is not fundamentally flawed and even more so it's not fundamentally not diversified there's this dogma in asset management, they have private credit, private equity, bonds, stocks. The opposite is true, by the way as well In 2022 investors woke up and realized their stocks and their bonds were correlated They thought they were diversified and their model said they were diversified Obviously the models were based on previous correlation but they weren diversified So I've evolved my thinking, this was just a couple of weeks ago, in that, sure, liquidity is very important, and sure, you want to have some diversification, and sure, you should never put your eggs in one basket, but if you have a sizable enough diversification, Being overweight to where you have alpha, where you have access, all those things, is not the craziest thing. And also so many of these asset classes that I'm not involved in, there's often a middle level management. One of the things I love about startups is I'm looking across from the person I'm actually writing a check to or sending a wire to. And there is something tangible, feasible about that. And that's what, you know, if you're going to invest, I'd rather know who's going to be managing my money, this founder. And I love the creation of that. And I love just being involved in that hectic stage your startup. I love that. The founder is your wealth manager. Pretty much. He just has a very small stake of your wealth. Exactly. You played football at Princeton. You were a linebacker. You went into venture capital, started this firm called Accomplice. You were the first investor and angelist. You had a story career, as I mentioned. If you could go back and give yourself one piece of advice when you had just graduated Princeton, one timeless piece of advice that would have either accelerated your career or helped you avoid custom mistakes, what would that be? trust your instinct. When you're young, you're taught, you don't know anything, you're inexperienced, especially in the nineties when I was kind of growing up in my investment career. And I look back and your instincts are often right. And you got to trust them, even if you're not experienced. So I look at my investment career and when I trust my instincts, they're far greater than my experience. So if I was 22 or 23, I would have trusted my instincts earlier. Is this around founders? It's around everything, frankly. Like, what do I want to do with my career? Do I want to go work at a bulge bracket? Do I want to go do something more startup oriented? Trust your instinct. Um, and you know, like I learned really early, I'm a much better, like throw me in the deep end. I learn a lot by doing. I wasn't a great student per se, but I'm a great worker because I've got a quick mind. It can iterate quickly. And then what I've learned is I should have trusted my instinct the whole time, but I was kind of taught your inexperience and maybe your instinct's wrong and in hindsight there's this there's this gary v meme which is one hour of of doing equals 100 hours of thinking gary v's got a lot of great ones that's a great one and it's a it's a trap and the higher iq people your your classmates at princeton minot dartmouth and harvard that is a very common trap the overthinker and the more iq you have the more ego you get and the less you want to look stupid we talk my business partner, Curtis, about this all the time. The first 150 episodes or so, we didn't have a lot of listeners and it's brutal for the ego. And now you have an identity around this. Now I have an identity around doing something that a lot of people don't listen to. And it's a brutal thing. And having the ego strength to do that is a significant competitive advantage. And it's one that I don't believe is priced into the market. One of the things that I learned as a seed investor in the last 20 years was people were like, how did you know what to double down on? Was it P&L? No. P&L can be a lagging indicator. It was organizational metabolism. The teams that move super fast are the teams you want to be in business with. The teams that are breaking glass, making a mistake so quick and iterating before you even knew it was a mistake. That's where we made all our money. P&L had nothing to do with it. It was like organizational metabolism and speed and instinct. And that's kind of where I would, that's why I want to get access to the teams I'm backing because it's really hard to do at scale. Perhaps a dumb question, but how are you able to tell the organizational metabolism of team? It's part instinct. It's part conversations with people on the board or investors. And that's kind of like really why I try to hone in on, I'm still trying to back teams in this, just as a secondary buyer. Been in hundreds of investments. You've seen thousands of deals. What have you changed your mind on the last couple of years? That's a great question. You know what's probably changed my mind on? I used to be team, team, team, team, team. What I recognize really, and in the last few years is I don't care how great the jockey is. You have to be in a good market. Market tailwinds will drive success as much as any great team. And sometimes I've backed some great teams in mediocre markets and they're actually so innovative. They're shrinking the TAM they're in. And I've recognized more and more, you got to have the combination. That's the one plus one is five. Great team. Where is the revenant going to be in five, 10 years? It's a great question. Hopefully on our fourth fund with a great cabinet of LPs that love the co-invest partnership that we've created, small funds, maybe different kinds of products, but I think we'll always keep the integrity of the fund small-ish. And it's one of the brands, an aspirational brand in the secondary market. We want to be sought out by our GPs and our founders to solve liquidity in the BFS secondary. And that would be a win. We have this unique vantage point here on the podcast. I have a pre-interview and interview and now roughly 360 episodes. And one of the things I think GPs are not aware of is this pullback. We started the conversation talking about this, but this pullback from the dedicated blind pool funds and how little appetite there is for LPs to back new brands. some people see this as fatalistic they decide not to be a bc they go out to do something else and other people are leading with their co-invest are leading with their innovative structures to give the customer aka the lps exactly what they need and those are the funds that are going to succeed if you think about this extinction level event that's happening in the merging manager market somewhere between 2500 to 3000 merging managers a couple years ago some accounts some people think 50 of them will be gone some of them 75 will be gone meaning they won't raise another fund. On the opposite side of that, there's a lot of opportunities. And the question becomes, how do you get over that hump? How do you pass that chasm between default dead and default alive when it comes to emerging managers? And the answer is give your customers what they want. I've had IV endowments that are telling me all things being equal, they want to deploy into pools of capital, co-invest or other pools of capital where A, they know the assets they're getting and B, they don't have to wait for these kind of 14 years. So I think you're on the right track in terms of product innovation, how you're building your firm? I probably did 35 secondaries when I was at Accomplice. And a lot of the dollars I raised for these deals, we didn't have a dedicated secondary fund. I did it via the three-letter word SPVs before it was a thing. And I did it with family offices. And I recognized firsthand those that if you give them the right amount of information, let them underwrite it, it's a great product. So when I started this fund, I targeted family offices that had that muscle because I think it's really important and I think it's where the industry's going. It's great to hear the institutional LPs you talk with and traffic with that, frankly, I don't a lot. I was surprised by it. Yeah. An endowment going direct. I know for years in the buyout land, there were these co-invest vehicles, but I think more and more across every asset class, it's a very interesting product that makes a ton of sense and frankly is healthy for everyone because you don't wait for the waterfall, the fund to pay out. you can win. When a company goes public, it's a win for you. And then you can reinvest a proportion of that into the next thing. And I think for too long, people have been scared of that. Just double click on what you said. You said that you looked after family offices that had a predisposition to do co-invest. I've never met a family office that didn't say they wanted to do co-invest. How were you able to? You have a track record of doing it. Everyone talks about it, but then you know the game. Can you really pull the trigger in 60 days? That's a little fast. and you ask the LPs before they... For sure. For sure. Because I say to them, like, listen, I'm offering co-invest. You know what this means in practice? It means when I bring you a deal and you want an allocation for it, you need to close it within 40 days, sometimes sooner. Do you have the muscle memory and the ability and frankly the staff and the risk appetite to do that? And very often not, not yet, but we want to. Can you show us? It's a great framing. Well, Ryan, you're an absolute legend. It's a pleasure to have you on the podcast. Looking forward to doing this again soon. Thanks. Thanks for having me.