WEBVTT - Confessions of a Tech Entrepreneur Who Lied to Investors 0:00:00.200 --> 0:00:03.080 Back in the fall of two thousand ten, Antonio Garcia 0:00:03.120 --> 0:00:05.720 Martinez was sitting in an apartment in the Mission in 0:00:05.760 --> 0:00:09.360 San Francisco. Antonio was co founder and CEO of a 0:00:09.400 --> 0:00:13.080 brand new startup called ad Rock. It was an exciting 0:00:13.119 --> 0:00:15.800 time for him. Yeah, Antonio at the time had just 0:00:16.000 --> 0:00:18.639 finished his time at y Combinator, which is kind of 0:00:18.640 --> 0:00:22.720 an elite startup accelerator of Silicon Valley. And at the 0:00:22.840 --> 0:00:24.639 end of your time at y Combinator, you do a 0:00:24.680 --> 0:00:27.760 big presentation in front of a room of entrepreneurs and 0:00:27.800 --> 0:00:30.639 investors and show off in two minutes what you've made. 0:00:31.080 --> 0:00:33.960 And Antonio's presentation had gone really well, and a bunch 0:00:33.960 --> 0:00:37.720 of investors were interested in giving him funding. And now 0:00:37.760 --> 0:00:39.960 he's sitting in the apartment of his co founder and 0:00:40.000 --> 0:00:43.199 they're all drinking a couple of beers and it's it's thrilling, 0:00:43.320 --> 0:00:45.600 and they're right at the precipice of all this opportunity. 0:00:45.960 --> 0:00:48.680 And then they get a call from a lawyer representing 0:00:48.720 --> 0:00:52.360 their company at Rock, and the news is devastating. It 0:00:52.360 --> 0:00:56.120 turns out that their former employer is suing the company 0:00:56.160 --> 0:01:00.240 for stealing secrets and stealing intellectual property, and it's basically 0:01:00.640 --> 0:01:02.800 a death knell for ad roc because who in the 0:01:02.920 --> 0:01:05.240 right mind would invest in a company that is plagued 0:01:05.280 --> 0:01:08.840 by lawsuits. So things are looking pretty bad. But because 0:01:08.840 --> 0:01:11.759 this is Silicon Valley where crazy dreams sometimes make it through, 0:01:12.000 --> 0:01:14.880 and Antonio is a scrappy guy, he's backed into a 0:01:14.920 --> 0:01:17.560 corner and he turns to his final resort, which is 0:01:17.560 --> 0:01:20.720 something that was definitely dishonest, and as we'll discover later 0:01:20.760 --> 0:01:23.800 in the show, of questionable legality as well. And it's 0:01:23.840 --> 0:01:26.039 something that happens here in the world of startups a 0:01:26.040 --> 0:01:28.640 lot more often than you think. This has been public 0:01:28.680 --> 0:01:30.240 companies when we're on Wall Street, we would all have 0:01:30.280 --> 0:01:32.640 gone to jail. Right. The level of sort of just 0:01:32.720 --> 0:01:36.480 generalized lying, backstabbing, total conflict of interest and spilling of 0:01:36.480 --> 0:01:38.840 secrets is just rife in Selicon Valley, and it's just 0:01:38.920 --> 0:01:45.120 kind of the way it is. Hi, this is brad 0:01:45.160 --> 0:01:48.720 Stone and this is Ellen Hewitt, and this week Undecrypted, 0:01:49.000 --> 0:01:51.920 we're bringing you confessions of one startup founder who lie 0:01:52.000 --> 0:01:54.280 this away and they're raising money from investors and how 0:01:54.280 --> 0:01:56.080 he got away with it. But there's a little bit 0:01:56.080 --> 0:01:58.120 of a dirty secret to the way these young startup 0:01:58.160 --> 0:02:01.240 founders work and get funded in the valley. No matter 0:02:01.280 --> 0:02:03.960 how many charts and spreadsheets you see, a lot of 0:02:04.000 --> 0:02:06.400 these numbers are kind of made up, and how could 0:02:06.400 --> 0:02:08.440 they not be made up? And these are brand new 0:02:08.480 --> 0:02:12.080 businesses creating things that have never existed before. You can't 0:02:12.160 --> 0:02:15.040 count on the normal rules of commerce and decency and 0:02:15.080 --> 0:02:18.160 transparency to apply here. If you're thinking about going into 0:02:18.240 --> 0:02:22.440 angel investing, consider yourself warned. So let's go back to 0:02:22.480 --> 0:02:25.320 this moment. In two thousand ten, Antonio was sitting in 0:02:25.360 --> 0:02:27.640 front of his spreadsheet trying to get a handle on 0:02:27.720 --> 0:02:29.560 what the next year or two was going to look like. 0:02:30.200 --> 0:02:32.280 So he's looking at his Excel and on one side 0:02:32.280 --> 0:02:34.280 he has the cash that expects to raise, as well 0:02:34.320 --> 0:02:36.360 as the revenue that he expects there soon to launch 0:02:36.400 --> 0:02:39.240 service to start to bring in and plout it. Against that, 0:02:39.360 --> 0:02:43.000 he has all the company's costs and salaries to office rent, 0:02:43.080 --> 0:02:45.480 to these very expensive fees that he was gonna have 0:02:45.480 --> 0:02:48.520 to pay his lawyers to fight this lawsuit, and it 0:02:48.600 --> 0:02:51.120 shows something pretty dire that the company is going to 0:02:51.200 --> 0:02:54.520 run out of money in less than a year. Antonio 0:02:54.560 --> 0:02:57.280 published a best selling book called Chaos Monkeys that came 0:02:57.280 --> 0:02:59.200 out a few months ago, and in the book he 0:02:59.240 --> 0:03:02.000 has a passage which describes what he did next, and 0:03:02.040 --> 0:03:05.720 we actually had him read that to us. I didn't 0:03:05.760 --> 0:03:08.600 show the projections to the boys, I my my co founders, 0:03:08.760 --> 0:03:11.600 it would just depress them pointlessly. I also didn't share 0:03:11.639 --> 0:03:14.120 it with investors. Ag Rock was dead on arrival if 0:03:14.120 --> 0:03:17.280 this got out, so I lied. I diminished the cost 0:03:17.320 --> 0:03:19.799 of the lawsuit too far below the Undertaker's projections. The 0:03:19.880 --> 0:03:22.040 Undertaker is the sort of grim looking litigator that we 0:03:22.080 --> 0:03:26.000 had managed to cajole into defending us. Meanwhile, moving our 0:03:26.000 --> 0:03:28.960 projected launch date forward to next month to generate revenues 0:03:29.000 --> 0:03:31.840 immediately and impossibility given all the changes the boys were 0:03:31.840 --> 0:03:34.040 making to the product. Then I jacked up the growth 0:03:34.120 --> 0:03:37.160 rate to an unconscionable amount. It was outright chicanery, cooking 0:03:37.160 --> 0:03:39.040 the books in the worst form. But it's either that 0:03:39.160 --> 0:03:41.680 or give up now, and surrender was unthinkable. I still 0:03:41.720 --> 0:03:44.040 can't believe the investors believe my numbers, but they did. 0:03:46.160 --> 0:03:48.520 I mean, we're raising money for the sake of basically 0:03:49.000 --> 0:03:51.640 continuing the company, but also defending ourselves with other people's 0:03:51.680 --> 0:03:54.280 money effectively, and I love that. It's called the death clock. 0:03:54.280 --> 0:03:56.400 Which I think. I mean that you called the spreadsheet 0:03:56.440 --> 0:03:58.680 the death clock because it puts into perspective like what's 0:03:58.760 --> 0:04:01.400 at stake, which is this or nothing? I mean, you 0:04:01.440 --> 0:04:03.200 have no no choice but to try to do what 0:04:03.240 --> 0:04:05.320 you could make it happen. And that's the name of 0:04:05.320 --> 0:04:07.520 the startup game. Is that learning the game faster than 0:04:07.520 --> 0:04:08.920 you burn money? And that is that is the day 0:04:08.960 --> 0:04:10.640 I'd say in the death clock, it was literally just 0:04:10.680 --> 0:04:12.920 a spreadsheet and it had all our top line items, 0:04:12.960 --> 0:04:15.440 which is basically servers, rent and humans. That was it 0:04:15.960 --> 0:04:18.159 um against you know, a cash pile, and we plotted 0:04:18.200 --> 0:04:20.080 on a graph and I have a metaphor in there 0:04:20.080 --> 0:04:22.040 that it kind of looked like one of those infographics 0:04:22.040 --> 0:04:23.800 you see with any plane crash, like the planes going 0:04:23.839 --> 0:04:26.440 okay and then suddenly something happens and then boom you 0:04:26.440 --> 0:04:28.240 have like a smoking crater in the ground. Can you 0:04:28.240 --> 0:04:30.440 think back to that time and think about what how 0:04:30.440 --> 0:04:33.120 did it feel to cook the books? I mean, what 0:04:33.120 --> 0:04:34.719 what was going on in your head when you when 0:04:34.720 --> 0:04:36.880 you change these numbers the things you knew were untrue 0:04:36.920 --> 0:04:39.080 and not even remotely possible. I mean, I think this 0:04:39.160 --> 0:04:41.320 is how moral rationalizing happens. And I think it's fairly 0:04:41.320 --> 0:04:44.159 common um. And I applied the same, you know, rational 0:04:44.160 --> 0:04:46.799 calculus later when I was considering deceiving my co founders 0:04:46.839 --> 0:04:48.760 to go to Facebook instead of Twitter. It's for the 0:04:48.800 --> 0:04:52.839 greater good, right, Like everything, the world will be just 0:04:52.920 --> 0:04:55.880 be better if we perpetrate this sort of not so 0:04:56.000 --> 0:04:58.600 minor lie and get the company funded and continue. And 0:04:58.800 --> 0:05:00.640 it turns out I was right. The investors ended up 0:05:00.640 --> 0:05:02.560 making money, right. They ended up doubling their money in 0:05:02.600 --> 0:05:08.520 six months. So even though investors were fed these complete 0:05:08.560 --> 0:05:12.080 fabrications about the future of ad Rock, they still ended 0:05:12.160 --> 0:05:15.080 up making a profit, right. And most of that is 0:05:15.120 --> 0:05:17.800 things only to Twitter, which decided to buy ad Rock 0:05:17.839 --> 0:05:20.200 about six months after the seed rout we're talking about. 0:05:20.680 --> 0:05:23.359 If anyone was going to be upset about being lied to, 0:05:23.440 --> 0:05:26.040 it would be a guy named Russ Siegelman. Russ was 0:05:26.080 --> 0:05:28.960 a longtime venture capitalist at Kleiner Perkins. He was an 0:05:28.960 --> 0:05:32.479 angel investor. He was really the biggest backer of ad Rock, 0:05:32.800 --> 0:05:35.440 And I called him after the book came out and 0:05:35.520 --> 0:05:37.680 asked him how he felt about being lied to. And 0:05:37.720 --> 0:05:41.280 here's what he said, Well, I certainly don't approve of 0:05:41.800 --> 0:05:46.839 submitting projections to investors or anybody that you don't believe in. 0:05:46.960 --> 0:05:49.400 I don't know. I mean, it's not only dishonest, but 0:05:49.480 --> 0:05:53.279 it's it's it's just not it's it's not good business practice. 0:05:54.040 --> 0:05:57.200 But to be honest with you, the reason I don't 0:05:57.320 --> 0:06:00.520 react to strongly to it is because I don't believe 0:06:00.880 --> 0:06:06.520 anybody can project with any level of faith, accuracy or correctness, uh, 0:06:06.760 --> 0:06:10.880 your revenues when you're at the seed stage. So you know, 0:06:10.960 --> 0:06:14.640 I frankly couldn't have even I probably would never have 0:06:14.680 --> 0:06:18.640 even noticed that the growth rate was unconsfortably high quote unquote, 0:06:18.880 --> 0:06:25.159 because I wouldn't have even looked at it. It's funny 0:06:25.160 --> 0:06:28.240 because he asked me for that projection. Do you think 0:06:28.240 --> 0:06:31.400 he just wanted to give the impression of reading it 0:06:31.600 --> 0:06:34.880 or I think that the big hang up there was 0:06:34.960 --> 0:06:37.400 that he no one wants to put money into a 0:06:37.400 --> 0:06:39.760 sinking ship, right, And I thought of putting money into 0:06:39.920 --> 0:06:41.960 a company that's fighting its way to have lawsuit. And 0:06:42.320 --> 0:06:44.680 he felt he was subsidizing Fenwick because I would literally 0:06:44.680 --> 0:06:46.640 take money from one rich guy and give it to 0:06:46.680 --> 0:06:48.560 another rich guy called a lawyer, and we would just 0:06:48.560 --> 0:06:51.039 be the middleman. He didn't want that to happen Fenwick, 0:06:51.120 --> 0:06:53.279 by the way, is the law firm that Antonio hired 0:06:53.320 --> 0:06:56.120 to defend him in the lawsuit. And so I could 0:06:56.200 --> 0:07:00.240 only convince Rest to invest after Fenwick basically a great 0:07:00.320 --> 0:07:02.760 loanus the money. And so you know it's possible that 0:07:02.880 --> 0:07:04.320 it was you know, it was someone in my head 0:07:04.320 --> 0:07:05.800 and he didn't even look at the projections. Maybe it's 0:07:05.800 --> 0:07:08.160 interesting because he he is a savvy investor. In Krissock, 0:07:08.200 --> 0:07:10.600 it was a savvy investor, and and so it wouldn't 0:07:10.640 --> 0:07:13.440 surprise me if for very early companies, you know, projections 0:07:13.440 --> 0:07:15.200 are projections, and they don't they don't look at it, 0:07:15.240 --> 0:07:17.560 and they're they're evaluating a company more on the quality 0:07:17.560 --> 0:07:19.800 of the team and the quality of the idea. Right now, 0:07:19.920 --> 0:07:21.800 I think they are canny investors, right And I remember 0:07:21.800 --> 0:07:24.240 one investor I won't name, we immediately excluded because you 0:07:24.240 --> 0:07:27.080 asked me for a yeah business plan and a cash 0:07:27.120 --> 0:07:29.440 flight projection has like the first question he asked and 0:07:29.480 --> 0:07:31.160 I never got it to him, and it just it 0:07:31.280 --> 0:07:33.040 felt like a very j V movement. And you're absolutely 0:07:33.080 --> 0:07:34.520 right there. I think at that stage what you invest 0:07:34.600 --> 0:07:37.400 is in the team, not some spreadsheet. So the question 0:07:37.440 --> 0:07:40.200 I think that interests us is you know how how 0:07:40.240 --> 0:07:44.200 widespread then is as as you describe it, outright chicanery? 0:07:44.360 --> 0:07:46.800 Is it? Is it? Is it seed stage startups? Or 0:07:46.840 --> 0:07:48.840 does it expand beyond that? Could we see a late 0:07:48.920 --> 0:07:51.920 stage company, uh, you know that's not yet public, that 0:07:51.960 --> 0:07:55.760 has that same sense of desperation the spotlight is on them, 0:07:55.800 --> 0:07:58.320 you know, resort to fudging the numbers? I think a 0:07:58.360 --> 0:08:01.920 little bit harder um um. Like a piece of advice 0:08:01.920 --> 0:08:03.920 I think I got from Russ actually was at the beginning, 0:08:03.960 --> 0:08:06.440 it's easy to sell the dream right before you've actually launched, 0:08:06.440 --> 0:08:08.040 because you can tell the story and no one cares 0:08:08.040 --> 0:08:10.480 about the numbers. But after the dream has sort of launched, 0:08:10.720 --> 0:08:12.880 at some point you have to provide numbers, and maybe 0:08:12.920 --> 0:08:15.040 even audited numbers. And so I think if you ask me, 0:08:15.120 --> 0:08:17.920 is there is it common to have outright fraud at 0:08:18.000 --> 0:08:20.040 large companies just to name names, Not that I know anything, 0:08:20.040 --> 0:08:22.080 but like an ubern Airbnb, I think no, there isn't 0:08:22.280 --> 0:08:25.280 sort of widespread fraud. Yeah they're being Yeah, there's no 0:08:25.320 --> 0:08:27.520 way you'd get away with with that. What what I 0:08:27.520 --> 0:08:29.720 did at that level just absolutely I can't imagine that's 0:08:29.760 --> 0:08:31.440 that would happen. The reason why this is all funny 0:08:31.440 --> 0:08:34.559 money and funny numbers is because not to get too wonky, 0:08:34.720 --> 0:08:38.720 the evaluations we're talking about are the theoretical valuation of 0:08:38.720 --> 0:08:40.760 the company if the company were to raise another round 0:08:40.760 --> 0:08:42.880 and there were these these people are buying their lending 0:08:42.920 --> 0:08:45.000 you money on the terms that hey, when you actually 0:08:45.080 --> 0:08:47.360 raise money, this is how much I paid per share, 0:08:47.400 --> 0:08:49.719 which is less than later investors, and that's that number is. 0:08:49.720 --> 0:08:51.920 So it's an input to a theoretical calculation. It sounds 0:08:51.960 --> 0:08:54.320 a little bit that it has a little whiff of 0:08:54.520 --> 0:08:57.360 pyramid scheme to it. No, No, it absolutely is. Yeah, No, 0:08:57.440 --> 0:09:01.680 it does, it does. Just to be sure, I called 0:09:01.760 --> 0:09:04.920 up an expert on startups, Rob Siegel, not to be 0:09:04.960 --> 0:09:07.800 confused with Russ Siegelman, who we just talked to. Rob 0:09:07.840 --> 0:09:10.840 Siegel teaches at Stanford Business School, and he said that 0:09:10.880 --> 0:09:15.000 it's true that startups give investors optimistic protections all the time. 0:09:15.520 --> 0:09:18.280 When an entrepreneur at the seed level walks in, every 0:09:18.320 --> 0:09:24.320 sophisticated investor knows that the forecast is wrong. What you're 0:09:24.360 --> 0:09:28.720 looking for is the thought logic that goes into not 0:09:28.880 --> 0:09:32.640 the tops down. The market is worth six trillion dollars 0:09:32.640 --> 0:09:35.120 and we're going to capture five percent of it. But 0:09:36.120 --> 0:09:38.240 how many units of whatever good or service are you 0:09:38.320 --> 0:09:40.559 going to sell? And how much are people going to pay? 0:09:40.600 --> 0:09:42.560 And how many people are out there that might buy it? 0:09:42.760 --> 0:09:46.640 And what's the logic that's gone into that forecast? Are 0:09:46.679 --> 0:09:49.680 any customers using it already and are they paying a 0:09:49.760 --> 0:09:53.280 company any money? The forecast, by definition are going to 0:09:53.360 --> 0:09:56.640 be wrong. It's impossible to know the future exactly, especially 0:09:56.720 --> 0:10:00.199 at the seed stage. So institutional investors know that when 0:10:00.240 --> 0:10:07.000 something comes in, it's probably aggressive, it's probably uh, slightly overstated. 0:10:07.400 --> 0:10:11.800 You hope it's not over lying, but you know, if 0:10:11.840 --> 0:10:15.360 somebody's being aggressive, is their logic behind the expected ramp 0:10:15.400 --> 0:10:20.160 and forecast? That's completely common and normal. But Rob said 0:10:20.280 --> 0:10:23.120 that even in a world where Rosie projections are the norm, 0:10:23.280 --> 0:10:26.640 he thinks Antonio crossed the line. So to Russ his 0:10:26.760 --> 0:10:29.000 point that he knows that the forecast don't make sense. 0:10:29.040 --> 0:10:31.600 I think all vcs and all institutional investors and all 0:10:31.640 --> 0:10:37.280 sophisticated angels know that the forecast is going to be wrong. 0:10:37.360 --> 0:10:40.719 The question is that they're good logic behind it. The 0:10:40.760 --> 0:10:43.120 point about whether or not this is legal that's more 0:10:43.160 --> 0:10:46.840 worrisome in this particular example because if an entrepreneur is 0:10:47.040 --> 0:10:51.240 knowingly lying, knowing the line that revenues will not commit 0:10:51.280 --> 0:10:54.080 at a certain time, knowing the line that the growth 0:10:54.120 --> 0:10:58.200 rate is impossible as opposed to aggressive, you know, um 0:10:58.360 --> 0:11:03.520 is purposefully cutting down the costs of the expected lawsuit 0:11:04.120 --> 0:11:06.800 because the entrepreneur knows it's going to be much higher, 0:11:06.920 --> 0:11:10.880 but is knowingly you know, dividing by two. That's where 0:11:10.920 --> 0:11:15.560 you get into, you know, potential legal complications because you 0:11:15.600 --> 0:11:26.920 are actually misleading investors. You're knowingly misleading in investors. So, Ellen, 0:11:27.000 --> 0:11:30.280 you reviewed Chaos Monkeys for Business Week. We talked to Antonio. 0:11:30.679 --> 0:11:34.679 Did this episode make you more cynical about Silicon Valley? 0:11:35.559 --> 0:11:38.920 You know, I think as a startup reporter covering Silicon Valley, 0:11:38.960 --> 0:11:40.960 I get the impression that people lied to me all 0:11:40.960 --> 0:11:43.760 the time, but I'm never sure. So reading someone talking 0:11:43.800 --> 0:11:46.520 so baldly about it, uh, definitely made me a little 0:11:46.559 --> 0:11:48.400 bit more cynical about it. It It made that part of 0:11:48.440 --> 0:11:52.040 me that thinks people aren't really honest about the month 0:11:52.080 --> 0:11:54.520 or a month growth. That part of me is smaller now. 0:11:54.880 --> 0:11:57.400 I guess I'm more inclined to give them the benefit 0:11:57.559 --> 0:11:59.560 of the doubt. I mean, I guess I feel like 0:11:59.840 --> 0:12:02.440 no one here knows what's around the corner. Everyone's just 0:12:02.440 --> 0:12:05.360 trying to do their best impression of being confident about 0:12:05.360 --> 0:12:08.520 all these changes, and at least the savvy investors are 0:12:08.559 --> 0:12:10.920 going to take any projections with a grain assault. And 0:12:11.080 --> 0:12:13.480 I feel maybe Antonio was grandstanding a little bit and 0:12:13.640 --> 0:12:16.960 describing what was really typical uncertainty as a sort of 0:12:17.000 --> 0:12:21.000 outright falsehood. And another wrinkle is as Silicon valiant and 0:12:21.120 --> 0:12:24.120 startups become more popular and people see these huge gains 0:12:24.160 --> 0:12:26.120 coming out of it, I think we're gonna see a 0:12:26.160 --> 0:12:30.559 lot more people outside of the traditional investors. We're talking celebrities, 0:12:30.720 --> 0:12:34.000 other people of high net worth interested in investing in 0:12:34.120 --> 0:12:38.000 early stage startups, kind of like Antonio's. And I just 0:12:38.000 --> 0:12:41.120 wonder if it means that we should be hoping that 0:12:41.160 --> 0:12:43.720 they get more fair information. They don't have the same 0:12:43.760 --> 0:12:46.080 savvy that Rusta. They haven't been doing this for thirty 0:12:46.200 --> 0:12:48.280 That's a good point, right, do do Britney Spears and 0:12:48.360 --> 0:12:51.920 her agent know that that? And Antonio Garcia Martinez may 0:12:51.960 --> 0:12:56.679 be making up as numbers should probably not, maybe after 0:12:56.720 --> 0:12:59.600 you've written this book. This is a mooch question, But 0:12:59.640 --> 0:13:04.400 if you were to make a new startup today and 0:13:03.200 --> 0:13:05.960 you and you ended up in a position like this again, 0:13:06.040 --> 0:13:12.200 death clock, would you lie? Oh yeah, yeah, I think yeah, yeah, 0:13:12.240 --> 0:13:14.679 definitely it's for the great because because when you're in 0:13:14.720 --> 0:13:16.000 the ship, you do everything to save the ship. It 0:13:16.040 --> 0:13:19.160 just doesn't matter. That's the way it works, right, I 0:13:19.200 --> 0:13:22.000 mean why Combinator was still relatively new back in two 0:13:21.880 --> 0:13:23.560 thou ten. Do you think that there are more checks 0:13:23.559 --> 0:13:27.079 and balances that exist in those programs and other other 0:13:28.040 --> 0:13:32.760 incubators to ensure that there's a level of honesty in 0:13:32.800 --> 0:13:36.760 the dialogue between investors and entrepreneurs. No, No, I don't 0:13:36.760 --> 0:13:38.440 think so. I mean the real is that it's never 0:13:38.520 --> 0:13:41.120 lying right like, it's never outright fraud like Obviously I'm 0:13:41.120 --> 0:13:43.760 a little hyperbolic in the book, right I've I've I've 0:13:43.800 --> 0:13:46.040 personally seen very few cases of like fraud like we 0:13:46.080 --> 0:13:47.920 claimed we had a hundred million top line. In fact 0:13:47.960 --> 0:13:50.080 it was nothing like. I've never seen that before. But 0:13:50.160 --> 0:13:52.160 you could definitely there's all sort of ways you can 0:13:52.200 --> 0:13:55.559 lie with statistics and with figures that would impress um, 0:13:55.640 --> 0:13:58.400 that would impress and and yse startups. I think maybe 0:13:58.440 --> 0:14:01.080 unfairly our character are in the sleeve are famous for 0:14:01.120 --> 0:14:03.240 their up into the right graphs and which they rescuyle 0:14:03.280 --> 0:14:05.240 the y exist always make look make it look amazing 0:14:05.240 --> 0:14:07.360 on demo day, right, And so you know, stuff like 0:14:07.400 --> 0:14:09.000 that I think is pretty common, and I think it's 0:14:09.000 --> 0:14:11.520 still happened, and there us as point investors are probably 0:14:11.520 --> 0:14:13.960 savvy to it and they know they know it. The 0:14:14.000 --> 0:14:15.760 better questions why do we even go through the arade? Right? 0:14:15.880 --> 0:14:17.800 But I don't know. Actually that's a good question. Well, 0:14:17.800 --> 0:14:19.440 and so when when we saw us as answer, which 0:14:19.480 --> 0:14:22.400 which came in um uh pretty you know, pretty soon 0:14:22.520 --> 0:14:26.200 just before we talk to you, it made me think, um, 0:14:26.240 --> 0:14:28.720 you know, Russ has been doing this for decades. He 0:14:28.720 --> 0:14:32.360 knows what's up. If you continue to see I think 0:14:32.680 --> 0:14:35.480 a trend of more people and we're talking like celebrities 0:14:35.600 --> 0:14:37.640 or other rich people with with cash who want to 0:14:37.680 --> 0:14:40.720 get in on startups and and seeing investing is very 0:14:41.120 --> 0:14:44.440 um attractive to them. Do you think that changes the 0:14:44.440 --> 0:14:46.040 moral calculus at all? Like is there more of a 0:14:46.080 --> 0:14:49.240 responsibility to be up front? You'd like to think so, 0:14:49.440 --> 0:14:52.400 but not really. It's like the battlefield and there's like 0:14:52.480 --> 0:14:54.240 no women and children out there, right, and like if 0:14:54.240 --> 0:14:55.520 you show up and you're you know, it's like the 0:14:55.560 --> 0:14:57.120 old drug about like we're sitting at the poker table 0:14:57.120 --> 0:14:58.240 and you you don't know who the sucker is. Then it's 0:14:58.280 --> 0:15:01.040 you right then, like you know still can value still 0:15:01.080 --> 0:15:05.680 that way? There it is, And that's it for this 0:15:05.720 --> 0:15:09.120 week's episode of Decrypted. Thanks for listening. We're a brand 0:15:09.120 --> 0:15:11.720 new show and we'd love your help in spreading the word. 0:15:11.840 --> 0:15:14.000 If you have an iPhone, please subscribe to the show 0:15:14.000 --> 0:15:16.800 on your native podcast app and leave us a rating 0:15:16.840 --> 0:15:19.360 and a review there. You can also rate and review 0:15:19.440 --> 0:15:21.080 us on iTunes, and we're on a bunch of other 0:15:21.160 --> 0:15:24.480 platforms like SoundCloud, pocket Cast, and Stitcher. And tell us 0:15:24.520 --> 0:15:26.840 what you thought of today's show. Write me on Twitter 0:15:27.040 --> 0:15:30.600 at at Bradstone and I'm on Twitter at Ellen Hewitt. 0:15:31.000 --> 0:15:34.480 This episode was produced by Magnus Hendrickson and Liz Smith 0:15:34.560 --> 0:15:39.040 and aki Ito. Aaron Black assisted with recording Alec McCabe 0:15:39.040 --> 0:15:42.120 as head of Bloomberg Podcast. We'll see you next week.