Is the macro picture all-encompassing right now, all you factoring in rate cuts and an energized VC community? Yeah, look, we absolutely need something to change the way the market has been the last few years. There's been a terrible lack of liquidity in the DC market really since 2021, and we're waiting for something to shake it loose. So interest rate cuts are certainly part of that equation. The less attractive fixed income are, the more that venture may look good as an alternative. I think the election is the other big one, right? And it's not that President Biden's been bad for venture capital, but there really, other than in his first year, has just been no liquidity at all. So seeing a change in president or change in regulators, a new chair, a new FTC chair, I think, you know, it's interesting that we have had big valuation cuts from the public side when it comes to some of the losses we've seen.

prior to what have now been a run-up in the markets. I think a few. This has hurt a lot of them. The tiger cubs, for example, some of the hedge funds. We just have the news that one key tiger cub goal is closing his $11 billion firm that's citing some health issues. How much turnover do you expect to see in public investment, in private investment when it comes to VC and public equities? A lot because one too many farms were raised during kind of the boom period of, say, 2017 to 2021. Too much money was raised. The reality is that we're early-stage investors. We do see in Series A are average check sizes about $5 million. I don't need a three or $400 million early-stage fund. Sure, that makes you more money from money management fees and transfers are risk for me to my LP, but that's not good for them and it doesn't help us make a lot of carry.

And so the reality is you don't need funds that are so big. And the reason why companies are so wildly overvalued is the CS raised funds are way too big, and they couldn't write a check for, say, $5 million. It had to be for $15 or $20 million, and the valuations had to be increased commensurately. Everything was way out of whack, and it would get to the public markets, and they would cut the valuation by 60-70%, rightfully so. You know, a lot of private tech companies can be very valuable, but that doesn't mean that WeWork should be worth $40 billion. So it was probably never more than a $1 or $2 billion company. And so there's probably a return to rationality to the market. But with that said, when there's no liquidity at all, what you see is a significant decline in early-stage investment, and then that reduces company formation, new technology.

development growth. So you want more rational valuations, but you also want a lot more active. Bradley I'd love to help our Bloomberg Technology audience understand a bit what it's like to be a venture capitalist in the context of a liquidity crunch that you talked about. So if you are VC, you have all these opportunities on your desk term sheets that you want to sign. Why is this environment and a pending rate cut a challenge? What what changes mechanically? Yeah, well, look, when there's no liquidity, you have a few problems. One, you can't recycle proceeds. So what happens typically for us is we'll have liquidity within a farm and then we'll use that money because the fund period hasn't completed yet to reinvest back into again. So that creates more economic activity all around to when there's more liquidity, you're out. These are seeing returns and they're re-upping for new funds. So there's more activity happening there

as well. Everything is moving at a much more conservative, slower pace when there's no money going out the door to anybody on any side. So it just slows everything down considerably. And then the other problem is the temptation around a lot. Right. So the one place where valuations have remained really, really high is in the air sector. And yes, are there a lot of long-term potential in the space, of course. But, you know, we keep seeing companies with one or $2 million in revenue, asking me for $100 million valuations, and that's just crap. Yes, it's I don't mean to cut you off. We're short term the presidential election. Which candidate is the candidate of the entrepreneur and of the venture capitalist? I mean, ultimately I am supporting Harris. I have given Harris a considerable amount of money because I believe that having stable markets and a government that is somewhat trustworthy and

Functional is ultimately a lot better than the chaos of Trump.

How Fed Rate Cuts Could Impact Tech Investing

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