Legendary Venture Capitalist Bill Gurley on the AI Bubble, Why IPOs Feel Rigged and How to Find Your Dream Job

I got to go to Cannes this summer. I loved it, and the vibes were incredible. What is not incredible is using an ATM in France. The fees can eat you alive. But sometimes you just need euros in hand to tip or split the bill. When traveling, the card you use can cost or save you money. That's why I love the Chime Card with Chime Prime. Not only does it not charge foreign transaction fees, it will even reimburse me for foreign ATM fees up to two times a month. Chime is changing the way people bank. They offer the most rewarding fee-free banking. Plus, you get premium travel perks like airport lounge access and 24/7 travel concierge included with your Chime Card. Chime is not just smarter banking, it is the most rewarding way to bank.

Join the millions who are already banking fee-free today. Head to Chime.com/MNN. That is Chime.com/MNN. It only takes a few minutes to sign up.

Chime is a fintech, not a bank. Banking services for MyPay and Chime Card provided by Chime's bank partners. Optional products and services may have fees or charges. Stated annual percentage yield and cash back for Chime Prime only. No minimum balance required. For more information on APY rates, MyPay, SpotMe, and travel perks, go to Chime.com/disclosures.

I am loving ice cream from Wanderlust Creamery this summer. They have the best hard-to-find flavors. And some flavors you would never think to look for, like Palo Santo. Going to the one in Venice Beach feels like the perfect summer outing. And they use Square. So, you know, I get those sweet loyalty points. Square reports that loyalty customers spend 53% more per visit on average. And sadly, I think I can personally verify that. Square has built-in tools like loyalty and marketing to help you connect with customers and reward them for showing up again. Square works for one-location shops, pop-ups, mobile service businesses, and multi-location franchises. Take payments at a kiosk, counter, website, or with your phone, all synced in real-time.

Plus, Square lets you track sales, manage inventory, and access reports in real time, whether you're in your shop, on the go, or running things solo. With Square, you get all the tools to run your business with none of the contracts or complexity. And why wait? Right now, you can get up to $200 off Square hardware at square.com/go/MNN. That's S-Q-U-A-R-E.com/go/MNN. Run your business smarter with Square. Get started today.

Pop quiz. Are you the kind of investor who likes to pick their stocks and ETFs?

Or are you all about that robo-advisor life? There's not only one right way to invest, so you shouldn't have to choose. No matter what kind of investor you are, you can take control of your investments with SoFi. SoFi is an all-in-one finance app helping members save, spend, borrow, invest, and protect their money so they can reach all their ambitions. I have been super impressed by SoFi for years now, and honestly, I have the receipts. I had their CEO, Anthony Noto, on the podcast three years ago just because I'm a genuine fan. I love the investing capability. On SoFi, you can trade stocks and ETFs, invest in IPOs at IPO prices with SoFi Securities, or try robo-investing offered through SoFi Wealth, all in the SoFi app.

And I can attest to this. They really care about members. From all the educational resources in the app and in their newsletter, to the exclusive access their members get to premium events. Hello, SoFi Stadium. SoFi really puts their money where their mouth is when it comes to their members. Check them out today at SoFi.com/MNN, as in Money News Network, and you could get up to $1,000 in stock when you open and fund a new active SoFi Invest account.

This is a paid advertisement by SoFi Technologies and is not intended to be financial advice or an investment recommendation. Investing involves risk, including total loss, and is not guaranteed. Active investing via SoFi Securities LLC, member FINRA/SIPC. Advisory services via SoFi Wealth LLC, an SEC-registered investment advisor. Probability of member receiving $1,000 is 0.026%. If you don't make a selection in 45 days, you'll no longer qualify for the promo. Customer must fund their account with a minimum of $50 to qualify. Probability percentage is subject to decrease.

This episode was taped in the Money News Network studio brought to you by U.S. Bank. Are we in an AI bubble?

Yes.

Modern IPOs are way overhyped. Do you feel like the system is rigged?

They handpick a price. The retail investors get screwed.

Bill Gurley is a legend on Wall Street and in Silicon Valley. He was the lead analyst on the Amazon IPO, and then he went on to make a name for himself in VC as an early investor in Uber, Zillow, and Grubhub. Today, Bill answers some of the most important questions for investors right now.

I really like this battery manufacturer in China. I think China is extremely well positioned to serve solar and battery demand across the world.

We don't have any competitive products whatsoever in the U.S. And we even cover his secret to thrive in a career you actually love.

I reflected and asked myself the question, 'Do I want to do this for the next 30 years?' And in both cases, I reached a point where the answer was no.

I'm Nicole Lapin, the only financial expert you don't need a dictionary to understand. It's time for some Money Rehab.

Bill Gurley, welcome to Money Rehab.

Thanks for having me on, Nicole. Appreciate it.

So excited to talk about your book, Running Down a Dream. But first, I really want to talk about news that just came out yesterday. We're talking on the day after Elon said SpaceX is acquiring xAI ahead of the potential IPO, which could be the biggest one in history ahead of everything, a company formerly known as Facebook, Alibaba. What are your initial thoughts?

There's a lot going on that one could use to argue why this would happen. There are a number of investors that invested in Twitter and X along the way that have kind of been rolled into each of these things. And this certainly increases their likelihood of success, you know, so to the extent that Elon Musk had a particular reason to care about the people that stood up and backed him when he did the Twitter deal. And if you remember, the price of Twitter went way down afterwards and kind of worked its way back. The second thing I thought about this morning that I hadn't really considered before, but I saw that somewhere in the EU, they're coming after him for some of the Grok images. And Starlink in particular has a lot of political power, like the fact that you can offer high-speed internet, especially rurally in any country.

It's just a—it's a—it's a chip, you know, that that help trade if you're fighting those kind of battles, global political battles. So that could be part of it, too. But that makes more sense about why you might merge a Starlink and a Twitter and a Grok. It gives you a little bit more power. It is probably the most anticipated IPO, and they've said that they plan to continue on path. And we've had a dearth and absence of IPOs. So yeah, it could be pretty successful. And then I guess lastly, OpenAI has made it clear that they're going to raise lots and lots and lots of money. So if you want to compete on the consumer side of AI, you need to have deep pockets.

That touches on a big concern, especially among young people, that some of the greatest companies of our time, from SpaceX to OpenAI and Stripe, are private. And therefore, you're not an accredited investor. You don't get access to them. You don't have real wealth like the generation before us did with Apple and Google. I know you have a lot of issues with the IPO system.

Which we can get into. But could this open the door to the public markets and access that most investors have been shut out?

I mean, they've signaled that the M&A transaction went down at over a trillion dollars. So I think you've already missed. I mean, I worked on the Amazon IPO. It was under a billion dollars. Like, so that's one-thousandth of this. And like this window that there used to be for everyday consumers to trade these tech companies in their growth phase. I think you're right. I think it's being, they're being taken out of the market. And I think it's caused primarily by the behavior of the late-stage VC industry. They're begging these companies not to go public. And it does create the problem you described. I think, unfortunately, their answer to it is going to be to try and get the regulators to let retail investors invest in their vehicle, not to get the companies public sooner, which is exactly what's happening in the PE market right now.

They're trying to put 401(k)s into PE funds. I think they've got an illegal waiver to do that.

They have, which is a whole other can of worms.

I think this would be a can of worms, too, by the way. I think, like... A lot of the efforts to allow retail access to non-public companies would be best solved by having these companies just go public sooner. Because there's a level of rigor and responsibility in being public that's not there when it's not public. And if we allow a whole bunch of people to play in private companies, there will be a—there will be a lot of people burned because when you invest in private companies, you see PowerPoints with financials that aren't audited constantly. And the players like myself that are doing that, you know that going in. And so you double- and triple-check things. But the retail investor is not going to have any—

ability to manage that problem. Yeah, or double-click on the charts that go up and to the right. You know, not every company is Google or Amazon, either. And when Figma IPO'd, uh, last year, I did a video about some of your tweets that modern IPOs are way overhyped and inefficient because of supply and demand issues. Can you explain, do you feel like the system is rigged there?

Well, I mean, it's definitely rigged. They don't match supply and demand. I mean, automated trading was implemented in the late '50s, and matching supply and demand is understood by any first-year comp sci student or first-year finance student. And yet, that's not how they—how it's not how they determine price. It's not how they allocate shares. So, regardless of the Figma IPO or any IPO that traded up or down, the right and fair thing to do on an initial offering is to let price win, you know, and to allocate shares based on whoever is willing to pay the highest price. It's how every stock opens for trading every single day. Like, these techniques are known. And it's how a direct listing works. And ironically, it's how an initial coin offering works.

So, that's how anyone in the crypto world would match supply and demand. And we've just gotten used to that not being the case in the public markets. And these stocks are all mispriced. And here's another huge irony: the next morning, it's like an hour to open, they're opening it the way you do a direct listing. That next day, they do match supply and demand. And the reason there's a gap is because they didn't do it the night before. It's really sad. I'm surprised—I'm personally surprised that more people aren't astonished at it, and I'm surprised that people aren't embarrassed by it. But the long-term clients of the investment bank get a free one-day pop, and then they give some of that money back through overpriced trading.

So the money flows back to the investment bank.

Yeah, but not to the people that jump in on day one.

Yeah, no, the retail investors get screwed because they set the price the next day. If they had been part of the initial bundle, you would have had an entirely different situation. And the big clients of the investment bank aren't locked up at all, so they can sell into that retail demand the next day. And they make a one-day, like, windfall profit. It makes no sense. The SEC should be more upset about it, and they're not. They got a lot on their plate. But I'm hopeful, oddly, that tokenization could solve this problem. That's my latest leaning.

Let me just sort of paraphrase what you're saying to break down what the issue is. So Figma, for example, way oversubscribed. So there was 30 buyers for every one share. And you're saying that this is engineered—like, the banks behind the scenes did this by setting the price lower than what the market would pay. So that generates a bunch of demand, and then the stock price jumps. But the institutions are the ones that are holding the really valuable shares.

Yeah, look, I mean, the fact that when they run an IPO, the investment banks put out and put their clients and say, "Hooray, look what a great IPO it was, 25, 30 times oversubscribed," it's just like the irony that that's a marketing message is just... I can't believe it's lost on so many people. They've mispriced it. They're telling you, if there's 25 times the demand for the shares, raise the price. Like, you're not... This isn't hard. But it's what we've evolved to. It's a real shame. A lot of people on Wall Street and in the SEC like to say that the U.S. capital markets are the gold standard of the world, and we're just not. I mean, playing these stupid games is by far not the gold standard. But the reason I'm hopeful is...

You know, I don't know if you've talked about tokenization on your show, but there's this growing idea of using the blockchain to basically keep track of trades, which is actually a pretty good use for the blockchain. And we now have stablecoins transacting at volumes where the rails have been tested, right? They're really tested at very high volumes. And the next step people want to do, and the SEC seems to be behind it, is to let stocks trade on-chain when the markets are closed. And that just gets you in a position to where you could theoretically think about doing an on-chain offering. And as I already mentioned, all of the initial coin offerings that have ever been done to date match supply and demand the way you would in a direct listing.

Let's fast-forward for the rest of the year. Let's say SpaceX goes public. What should retail investors be wary of? SpaceX is a way different beast than Figma.

Yeah. I mean, one thing that's been true in the past, this was true of Uber, these really, really, really big IPOs, they're so large that it's harder to game the system. Like, it's harder to underprice them. You need too much. Like, if they go public, where are they going to raise an offering, you know, $20 billion or something? And the people that stand up and say they're going to do it, they need them to be able to to write the checks. And so I think people get more conservative on these bigger deals. I think you're likely to see a pop.

What about for a retail investor?

It's just hard. I mean, I haven't seen the financials, and so I'd really want to wait and see those before I opine. Like, I don't know if it's, you know, let's say it's trading at a trillion, but I don't know what the revenues look like. I don't know what the cash flows look like. I'd want to see that stuff before opining on what someone should do. It is a highly speculative time right now. And there's a lot of money splashing around, especially in the venture world at very high prices. And so I would be cautious in general as a retail investor, even towards AI. There's another irony: if you own the index, you have pretty good AI exposure already. Like the indexes—NVIDIA is a big part of it,

Microsoft's a big part of it, Google's a big part of it, as opposed to, like, even just simply being an index investor.

Yeah, the Mag 7, and then there's the rest of the S&P.

I mean, I would love to actually go behind the scenes, if you don't mind, take us into the room where it happened, so to speak, because you're on the Deutsche team that won and led, as you mentioned, the underwriting position for the Amazon IPO. So I'd love to hear what happens in those rooms. How did you make the Amazon IPO strategy and solve for that supply-demand mismatch that you're talking about?

Well, it is a funny thing. And keep in mind, that was, whatever, 1998, '99. So long, long time ago, 20, 28 years ago. Jeff, Jeff Bezos, unlike a lot of people, is a very independently minded individual. And he put a lot of pressure on us to price it high, and he didn't care if it broke issue. It did, in fact, break issue. It traded under for a couple of months. And so he pushed us for more perfect pricing because he cared about the long term, and he didn't have this silly hang-up about whether it went down or not. Part of, part of the reason these companies get in a position where they can be taken advantage of is the press likes to talk about a pop as a win. 'Oh, look, people wanted it so much,' but the company sold stock at a price below its...

I mean, would you feel good if you sold your house and the next day it traded at 2x the price to somebody else, or would you feel stupid? Like... That's how you should think about it from the company side.

That house is a good analogy, too. If you know that your house is going to trade for $2 million, but you price it at $1 million and start some bidding war to push the price up...

Yeah, but imagine if instead you put a price out on Zillow and that's the price, and your realtor comes to you and says, 'We have 25 people that want to buy at that price, and we're going to close with one of them because they're reputable.' Wouldn't you be pissed? You'd be like, 'No, we're going to ask for auctions and raise the price.' Of course, that's what you'd do. Yeah, it's pretty simple. Anyway.

But it's interesting to kind of go behind the scenes.

Yeah, Bezos pushed us up on price, so this didn't happen. It didn't pop. It actually went down because we priced it so high.

And you guys are homies, right? Did he tell you personally that you won the bid?

Yes. The team that won the deal was at an investment bank called Deutsche Morgan Grenfell. So Frank Quattrone had left Morgan Stanley. And we were competing with Goldman and Morgan. So yes, we won the mandate. But it was a pretty—once again, Jeff being independently minded—it was a pretty risky bet to bet on a bank that no one knew. We did have Frank Quattrone, who was the most experienced guy in the business. But that's what happened. Good trivia question: Which bank took Amazon public? Most people can't get that one.

I don't know. That's definitely a trivia night in the Valley. But let's zoom out on AI. I mean, the biggest market question—you alluded to it earlier—that I'm sure you're getting, I'm getting over the last six months is, we can probably say it in unison: Are we in an AI bubble?

Yes. So there's a great book by Carlota Perez where she studies tech innovation and waves for over 400 years. And I think this is beautifully elegant. But what she says is, if the wave is real and there's people getting rich quick, which is true here, you eventually are going to attract charlatans and speculators. So most people want to put you in a box and say, 'Do you think it's real or a bubble?' And what she says, if it's real, there will be a bubble associated with it. And I agree with her analysis. So I think AI is real and there's bubblish behavior. That's a consequence of it being real. And I think we've already seen some speculators. Here in Texas, we had the Rick Perry data center SPAC that went up and down already.

That's an outsider trying to glom on to a new thing that's happening. I think the circular deals are really bad. I think they smell bad. I did this thing where I just described them to ChatGPT. I didn't tell it what industry it was. I just described the structure of the deals. And it immediately said, 'Oh, that's like Enron.' It brought up these names. I don't know why they got started with that. It was the Microsoft-OpenAI, the very first deal, which was one where they gave them credits to use back. But you shouldn't be able to boost your income statement by leveraging your balance sheet. And the reason we know about this stuff is the auditors forced them to disclose it. But when... it, when we go over the top and there's a correction, which will happen at some point, everyone's going to point to these deals.

So there's—look, I believe AI is real. It's disruptive. It's fun. It's—my behavior is completely changed. I use OpenAI 30 or 40 times a day. So, but there's also business behavior that's speculative. They're both true.

And yeah, so both can be true at the same time, but the circular spending is a concern. It's not necessarily illegal, it just smells bad. So can you explain, like in the Microsoft-OpenAI example? Just follow the money trail.

Yeah, yeah. And by the way, this is an argument to have with some super experienced auditor, although they typically won't go on podcasts and talk. I've tried to have auditors come talk. People think that auditing is this black or white thing, but there are many gray areas. And I can assure you, not from knowledge, but just once the Microsoft deal happened, the next person, their auditor probably said, 'I'm not sure.' And they go, 'Well, Microsoft did it.' Like, they pressure them to say it's okay. But here's what Microsoft did. So in the very first deal with OpenAI, Microsoft invests X billion dollars. Let's just say it's 500 million. But instead of giving OpenAI cash, they give them credits to use Azure.

And so by making this investment, they're assuring they're going to have revenue down the line. And then OpenAI uses those credits and Microsoft counts that as revenue. But guess what? There was no cash flow. So it's cash-flowless revenue for Microsoft. And that should be questionable. It's certainly low revenue quality. You're right. I can't prove it's illegal, but it's extremely low revenue quality for a reason. And now it's all over the place. I mean, I guess NVIDIA committing $2 billion to CoreWeave when CoreWeave may not have another source of funds. And it's just—it's not good. It's very non-ideal.

Not money laundering?

I don't know. That's a pretty strong word, 'money laundering.' But it is—you're using your balance sheet to prop up your revenue, you know? And, and those—when you do that, the revenue that you get in the future doesn't create positive cash flow for you. If you give credits, it certainly doesn't. And in the case of—if, if NVIDIA invests in CoreWeave, they're giving them the money, but then they're giving it back, you know? And so there's no incremental cash flow. So you have revenue without incremental cash flow. And if—I mean, that's—I think Buffett would, would puke all over that.

And there's so much comparison to the dot-com bubble. You were at Benchmark at the peak. How do you see it being similar or different to what we're seeing right now?

Well, it's—I think you can point to certain things in both directions. I think the, the revenues weren't as big in the companies back then. And so a bull would say that there's more real spend here from the end customers, the enterprises, and the consumers. One thing I would say, most of the circular deals back then involved debt. So they were loaning—Cisco was giving loans to companies to buy their products, but debt comes due fairly quickly. Using equity to do it would allow for it to run for longer because you don't have to pay it back. And so in some ways, it's more speculative to use investments than loans for that reason.

You mentioned being on ChatGPT 20 times a day. So I'm assuming you're a ChatGPT guy.

I try and use them all. And there was a time where, for current things, Perplexity was better, but then ChatGPT caught up a little bit on, you know, doing a search, like recognizing you're looking for something current and doing a search and coming back at you. So that differentiation, I felt, got closed, but I do try and jump around.

It seems like all the LLMs, though, are ravenously running toward AGI. What do you think that looks like, and who do you think wins?

I'm probably on the other side of this one, Nicole. I think there's a lot of rhetoric in the U.S. model business. And I think a lot of that rhetoric is purposeful to try and attract regulatory capture. And I'm not as convinced that the sentient AI is right around the corner. So, and there are other people that are smarter than me about this that agree with me. And of course, there are other people on the, on the other side. But I'm not, I'm not personally sitting around worried about it.

So, what are you sitting around worried about right now? What scares you about this market outside of AI? Where do you see the opportunities?

Yeah, I mean, I would say one thing that, that—I use the word scare. I think the venture capital industry is... You know, from the day I entered to the day I left, I only got more competitive. And since I've stopped doing new investments, I would say it's gotten even more competitive. And how that manifests itself in the markets is the vast majority of new investments in successful companies are preemptive and proactive, which means the company didn't go out looking to raise money, the investor came to the company and insisted they take their money. And I experienced this in the Uber-Lyft situation. It is, it creates a situation where these companies have burn rates that are much bigger than anyone before them.

And, you know, it's funny when when Uber was burning one or two billion a year, everybody thought we were crazy. And now OpenAI is burning a number that's a multiple of that. And so that that means you're in these businesses where it's kind of a sport of kings and you got to get comfortable with massive burn rates and you're not allowed. as a founder or an investor to say, Hey, let's just sit around and be disciplined. We're not going to do that. So if you take like the legal AI category, you can have chat to BT, do this analysis for you. But there's like eight companies that have raised over a hundred million dollars. So if you're, if you're an entrepreneur 14 entering this market and you think like, you know, you're just, you're dead, you're dead man walking.

Like, you got no shot because there's just going to be so much money spent.

I mean, I wish it was a sport or a game of Queens, but it's not.

Yeah, that's a fair pushback on the term. But what I meant was that everyone out there has massive amounts of money, and you're very unlikely to be able to compete if you don't have access to a similar amount of money, whether you like it or not.

I think everybody would like to have more money.

Well, it's dilutive. It's dilutive. It pushes up your valuation. Your valuation really represents discounted future expectations. So now, if you raise money at really high prices, you got to perform higher, or you run the risk of a down round. Down rounds in private companies are messy as all get out. I'm not convinced that, for a founder...

Always having more money is a good thing. I think there are a lot of negative consequences. So outside of tech and AI, do you see other opportunities? Ray Dalio, who's been on the show, you know, has his All-Weather Portfolio that's stocks and long-term bonds and intermediate bonds and gold and commodities. I've spent my life as a venture capitalist, not as an LP, so I mean, I've generally...

Every time someone asks me for investment advice, I ask them if they've read A Random Walk Down Wall Street by Burton Malkiel. And if you haven't, like, go read that and then let's have a conversation. But I generally believe, unless you have a reason to know that you have an edge in a particular field, you should run a well-balanced portfolio, as Burton would suggest, you know. And so whether or not someone knows they have an edge is really a question for them, not me. But in general, that's, that's, that's how I feel. If I were to say one thing, the SaaS companies have been beat up pretty bad late, recently, very recently, and if you had a correction that was caused by AI that took them down even further, like, that would be, I think, an incredible entry point for some pretty strong, positive cash-flowing stocks.

And I'm also somewhat skeptical of this argument some people have made that because AI can write code, they won't buy software anymore. And I just, like, I can't imagine someone saying, like, replacing SAP with, you know, just telling AI, 'Oh, well, we'll just dump our transactions into AI.' I can't see it. Like, I really can't see it. I don't think the auditors would be okay with it. It's just too cute. It's a step too far. So I would watch and wait for a bit more of a correction, and then I think you can get some real bargains in non-AI stocks.

B2B stocks, so you're talking about the Salesforces of the world.

Yes, yeah, yeah. I mean, I think you could, like, there are certain companies like Adobe where you may be more susceptible to AI risk, but yeah, I'm talking about, you know, Workday, SAP, those kind of things. Yeah, if those get beat up even further, I think you're picking up stuff really cheap.

How often do you check your portfolio?

Not as much as I should at this point. Not as much as I should at this point. There's another trade I like, which is here I say you should all index and then I'm going to give specific names. I really like this battery manufacturer in China. I think China is extremely well positioned to serve solar and battery demand across the world. We don't have any competitive products whatsoever in the U.S. And, you know, Elon recently, when he was at Davos, he said we should cover like. a small fraction of Utah or Nevada with solar panels and we could serve the whole energy in the US. And the person said, well, I want that to happen. And he said, because we can't import these Chinese products because of tariffs.

And so that's a big hint to me that the rest of the world is going to buy a ton of this stuff. And this company is particularly innovative. So it's an innovative exporter in China.

Say the ticker one more time.

It's CATL. It trades on the Hong Kong exchange.

And just as a reminder, not financial advice, do your own research.

And I do own it, for full disclosure.

Thank you for that. My next question. You know, we talk about this idea of private markets being risky, but another way that people have exposure to private equity or private company stock is being employed by them. And you talk in your book about how you were offered stock options for the very first time when you were at Compaq. One of the most popular episodes we've had on the show is actually how to assess stock options as an employee when you're joining a company and you're being offered base salary plus options. What are good things to look for in order to see if it's worth taking a smaller salary in exchange for it?

Yeah, so I mean, I could imagine all the different kind of things you guys could have talked about because it's quite complex. Most people that take stock options probably have no idea how many total shares outstanding there are, which is a really important thing to know if you're going to try to attempt to value what you're getting. Unfortunately, there's this practice called 409A where you try and have an opinion of what this company is actually worth. And I think from a—just purely from a financial rigor standpoint, that process is really, sadly, imperfect. And so that number is not something I think you can hold much weight on. I mean, it's important to know what the strike price you're being offered is,

compared to what you think the company's worth. And you need to know total shares outstanding to pull that off.

I think "compared" is the interesting word there, or just context in general, because, you know, I think people see a big number or a bunch of shares and they're like, "Oh my God, I'm going to be rich," and then end of story. In the episode, we talked for sure about the number of shares outstanding, you know, the founders' goals for liquidation events.

I mean, people don't know this, but a company can have as many shares outstanding as it wants. So some founders have made the argument that if they just say, "Okay, well, we'll have 400 million shares," then when they offer to the individual, they'll have more absolute shares. But then on the eve of the IPO, you might do a big 10-to-1 reverse split to clean it up before you go public. And all of a sudden, the number of shares that person has gets cut by 10. And that happens frequently. So yeah, you really need to know total shares outstanding. Probably the thing that matters most, though, is that the company's really well-positioned and going places. And there are multiple reasons, especially for someone early in their career, to jump on.

Jim Barksdale used to say, "Get in front of a parade." Like, if the company's working really well, two things are going to happen regardless of how many shares you get. If it's growing really fast, the opportunity for advancement is really high. You know, if you're in a company that doesn't grow, in order for you to move up, someone's got to get fired or quit because you're not hiring. And these companies that are expanding aggressively—you know, if you're doubling headcount every year, there's management opportunities coming up all the time or the ability to move up. And then two, you're going to be around some of the brightest people that you could ever imagine being around if you're at a hot company.

And those networks are going to give you value long into your life. And so, when young people, you know, ask me about—and if they don't have some massive passion to, like, start a company themselves or whatever, you know, I think being a part of something that's really working, uh, for a year or two or three or four can be super helpful to an early resume. But maybe keep low expectations, like, in your mind,

assume it could also be worth nothing.

Yeah. Oh, yeah. But, but, but I'm making a different point, I guess, which is the long-term impact to what you may be worth, uh, from merely improving your network and being exposed to great people might mean more than whatever the options are worth.

You're talking about the intangible value.

Yes, yes, yes.

And a lot of our listeners are first-time investors wanting to get into the market. I'd love to just briefly talk about your previous life as an analyst on both buy-side and then sell-side. Can you decode for us when you hear in the headlines like, 'analysts, so-and-so changes stock such-and-such from hold to buy' or whatever? Who is making those calls? How seriously should we be taking them?

I wouldn't take it very seriously. So, I spent four years of my career as a sell-side analyst. So, most of the people that are quoted that way are at sell-side firms. And what the term 'sell-side' means is they're being paid by the companies that want you to trade stocks. The purpose of what they're doing is to get you to trade stocks. Now, the amount you can make for trading a stock used to be a lot higher before automated trading, and there were some famous things that happened during the dot-com period that caused Eliot Spitzer to build this wall, and the sell-side analysts don't make nearly as much as they used to, but they're still the ones that are most quoted. But I find that a lot of what they write is just a regurgitation of what the company told them to write.

They don't have... I'd be much more interested, personally—you can't get this information—but if the buy-side was making a call, so the people that actually buy or sell the stuff. Like, if you see, you know, an investor you respect, like a Capital Group or Fidelity, move out of a stock, that's a bigger signal, I think, a more important signal. Unfortunately, the media doesn't track that as much as they could. The filings are a little delayed; they're like 90 days delayed. I did not pay that much attention to it. Yeah, to that point, we had a big fund manager on the show saying that it's a lagging indicator because of that delay, so...

You know, but when you go onto a brokerage, you see a lot of reports, and it's kind of fuzzy to see how much weight you should put.

Yeah. Yeah. Even though I came from that world and loved every minute of it, and I would like to think I was differentiated, I just think you asked the question, I'm giving you my opinion: I wouldn't put that much weight on.

I appreciate it. 'Loving every minute of it.' You've also said that you've gotten your dream job in VC. You talk about this realization in your book: getting your dream job or even liking your job isn't necessarily a given, that you have to continue to make it your dream job. How do you do that?

Well, for me, I've discovered something in talking about the book that I didn't know because everybody likes to go through my journey. I didn't realize I was doing it. But my first job was as an engineer. My second job was as a sell-side analyst. And in both cases, about two or three years in, I had a moment where I asked myself the question—I reflected and asked myself the question—'Do I want to do this for the next 30 years?' And in both cases, I reached a point where the answer was no. And I don't know how many people take the time to ask that question. You get caught up in the moment. You're trying to get ahead. You're working. It's not a question anybody provocatively tells you to ask yourself.

But there's quite a bit of data that when people get towards the end of their life, their biggest regrets—Daniel Pink talks about this a lot—their biggest regrets are regrets of inaction. They're not mad at themselves for the mistakes they made; they're mad at themselves for the things they didn't try. Daniel calls them 'boldness regrets.' And so if you want to... you know, life's short. I have a phrase in the book: 'Life is a use-it-or-lose-it proposition.' And I think it's awesome to explore. I think it's awesome to... I don't think anyone should feel guilty if they're in a job they don't love. But, but give yourself the opportunity to move on and be flexible about... A lot of people change jobs. A lot of people change careers.

Nothing's set in stone. Plenty of people end up working in areas that are different from their major areas. And so just be fluid, be flexible, and ask yourself this question, you know, do I want to do this for 30 years? And if not, man, life's short. Go do something else. Have fun.

I thought it was really interesting in the book that you have the study with Wharton that said nearly 6 in 10 people would do things differently if they could start over. They had wished they had followed their interests, but also a ton of people in the survey said they wished they made more money.

I think there's quite a bit of data through a bunch of different research that money doesn't drive happiness. And one of the things I was careful to do in the book, we have a number of stories. In fact, every other chapter is a story. And I was very careful to pick industries that are the kind of jobs where your parents might tell you not to go into them. Because I think one of the problems we've gotten to is parents... with very strong positive intentions, push people towards jobs where they can make money. But if you're unhappy, I just don't think it's going to matter how much money you have. And one of the things that I hope I uncovered with the stories in the book, if you go into... a sector that may not be one that's known for making money, but you thrive and you really love it, the wealth tends to follow.

And so I would, at this point in time, with all the data from all these surveys, there's another survey in the book you didn't mention, the Gallup Poll survey, that only like 23% of people would call themselves engaged at work. And like 59% are quiet quitting. Like that's not ideal. Like that's not an ideal way to go through your whole life.

Just worry a little bit, Bill, about this follow-your-passion rallying call. Because I think there has to be a baseline. Unless you're from a privileged position or family, you know, there's no shame in obviously needing money to feed yourself or your family. And sometimes... your interests don't lead to even that baseline. So that makes people feel bad that they're optimizing for money.

Here's what I would say. I would not hold out to you the argument that the point of the book is to be an operating manual for every human on the planet for every job. The goal of the book is to help unlock human potential, to give those people who have the, the little bit of inkling or a little bit of spark or a little bit of fire, the permission to go do what they love. And I think for those people, they're going to have a much more satisfied life if they do it. And I think the money will follow. And one... important corollary and caveat to that is they're going to have to work their butt off, you know. And so all those things have to align. But I do think that if we have more of those types of people in the world, the world's a better place.

I think they're the ones that will dent the universe. They're the ones that will change their fields. They're the ones that you'll be inspired by. And so, yeah, the goal of the book is to create more of those types of people, and certainly, I think a number of people won't qualify for that, for that mission. I mean, for me personally, I made my job my dream job out of necessity. I started as a poetry major, and so...

Continuing on that passion wasn't going to pay the bills. But once I got into business news, I sort of found the shaded part of the Venn diagram of what I love to do. And then the opportunities I had. So I started writing, like I incorporated some of what I wanted to do into, you know, the jobs that I had to pay the bills.

No doubt. And look, there's a number of things you said, which I'd double-click on. First of all, a lot of podcasters are in their dream job. Like they love, they get to talk to interesting people. They love it. And, and most of them, and you're probably similar, kind of created the job yourself, right? You didn't apply to be a podcaster somewhere, right? This is something you went out and hustled and made happen. We use a phrase in the book, 'be a candidate of one.' And so many of the stories are people that are purposefully creating the job they want. A good friend of mine is named Mike Mauboussin. Mike loves reading books about the brain and investing and talking about investing. And he has found a way for 30 years now to get paid to read everything he possibly can and to synthesize it.

And his career is very non-traditional. He's, you know, found people to hire him that appreciate that he does that, but he's got to do what he loves, you know, his entire life. And that's the kind of thing I'm talking about. Like, helping people to unlock that. The example you used about thinking about what you're good at and what you love, there's a story in the book about this gentleman who lives here in Austin, Texas, that was a seismologist undergrad, did that for a while, became a mortgage broker. He's 40 years old. He does an exercise where they take a blank sheet of paper, draw a line down the middle, put what they're good at on one side, what they love to do on the other, and try and find an intersection.

And that is how Tito's Vodka was started. Him doing that simple example with that sheet of paper. Most successful spirit brand in America. He owns 100% of it. And it all started from that exercise. And this gets back to my point about... If someone said, at the time, back then when Tito started Tito's, 'I'm going to start a beverage company in Austin, Texas,' they would tell you you're not going to make money doing that. You're going to fail. That's a quixotic thing to go do. And he's one of the richest people in America today. And I just... I have examples in the book that are more realistic that maybe relate to your major. But like there's a gentleman who fell in love with the Grand Canyon and started writing about it.

And he's published several books now and has a podcast and, like, he has enough listeners. He gets, you know, he's doing fine, you know, and loves what he does. There's another one that does the same thing for Texas horticulture. And if you can do it in those fields, I think you can do it in almost any field. You do have to love it. I had this argument, a similar argument about whether you should chase your dreams or not with a counselor at one of the top universities in the country. And I brought up poetry and I brought up these examples and she said, 'Yeah, but you'd have to work really hard.' And I said, 'Yes, absolutely. You'd have to work really hard.' Yeah. Look, one of the, one of the big points we make in the book is that if you can find something you're fascinated by that you're extremely curious about, it won't feel like a grind.

You'll be out there doing continuous learning all the time. And that means working hard won't feel like working hard and you'll be successful. And by the way, the flip side of it is an interesting lens through which to evaluate. You send someone into a job they don't love. If they're competing with someone that does love that job, that other person's going to be out there doing continuous learning, doing the networking, the mentorship, connecting with peers, and you're going to fall behind. And because the other person is just going to be more motivated. So that's a dangerous trap, I would argue, of just going into a job because you think it's safe.

Well, you mentioned a dream job being podcasting. And you have an excellent, the most excellent podcast voice. But I think you know that. You did an episode of the BG2 Pod that you used to co-host where you talked about the next phase of your life is all about giving back. You said that this was something you were looking to do not only with the book but, quote, 'in the next project after the book.' So sounds like you already know what that project is, but can I guess? Yes, I do. Sure. Anything in politics?

It's somewhat related. So first of all, one of the things that allowed me to focus on this book—and people have asked me why I wrote a book about careers, why didn't I write a book about VCs or investing or tech or any of those things. And once I decided to hang up my boots from venture investing and started thinking about what I do with my life from here forward, I read this great book by Arthur Brooks, From Strength to Strength, which is really targeted writing for people where I am. And I think I did make a decision that finding a way to give back, back was what I wanted to do. And once that decision was made, this was really the only book I wanted to write. I had done the speech on this topic six years earlier, and so I knew the content was there.

But this book hopefully has ability to impact a way broader audience than writing a VC book would have. So I'm hopeful for that. I also, I'm going to turn my attention to a foundation that's associated with the book so we're going to give out uh five thousand dollar grants to people that apply that want to chase their dreams and need a financial boost so i'll be doing that but but that's not the thing that's not the thing you were asking about and there's the last page in the book talks about the uh the foundation and there's a website for

Well, at the end of the book, I appreciate that you say you could have written an Uber book or a memoir, but you didn't. And you found this really cool niche and sweet spot, and you're putting your money where your mouth is.

My intention past the book is to start a policy institute. So there was something that happened in the past five years that I consider to be a win from a policy perspective. And that is, it relates to nuclear energy. So there were—there were these huge voices that had decided that nuclear wasn't clean. And you had a bunch of people arguing to tear down nuclear plants. And unfortunately, in places like Germany, they started decommissioning plants all over the place. And a number of voices, many of whom I respect, like Steven Pinker and Elon Musk and the Collison brothers, pushed back. And they were willing to go out, despite the fact that the political winds were going the other direction, and said, 'This is silly.'

And Josh Wolfe at Lux. Josh used to say, if we had never had a nuclear bomb and we had just discovered nuclear energy, we'd have been like, 'Oh, my God, this solves all the world's problems. And we're sitting here worried about climate change.' Anyway, there's also a woman here in Austin, Isabelle Boemeke. I can't pronounce her last name, but she became like an influencer on this topic. Anyway, it shifted. There was a—there was a moment like a year or two ago where everyone kind of woke up and agreed, 'Oops, that was a mistake,' and flipped back the other way. And now there's a bunch of people that all agree nuclear is really smart. And so I'm going to be looking for opportunities that have that type of thing.

I don't want to lobby. I don't want to get in and deal with little bitty state-by-state laws, but I'd like to find big ideas where some research and some synthesis can lead to better thoughts and decision-making. Topics that interest me include nuclear, the U.S. healthcare problem. I just want to go tilt at that. I really don't have an answer. I want to go learn for a long—but we got a real problem. U.S.-China relations, the K-12 education system in America, I think, could use an overhaul. And I just want to figure out what those big top-down type decisions that could be made that could potentially fix some of these things.

Fix it, Bill. Those are the biggest ones.

I mean, it might be a quixotic effort, but it's what I'd like to spend my brain time on.

Quixotic is an excellent word. You've used it twice and I really appreciate it. So it sounds like the dream that you're running down now is policy.

Yeah. And by the way, it took me—and, you know, who knows, let me get into it and not like it—but it took me a while to come to that conclusion. A lot of people, say, wanted me to go be an angel investor. A lot of people wanted me to manage my own money. There were people pushing me in different directions. But this is the one. And it took a couple of years. And Arthur Brooks' book really helped on this also.

He's been on the show and I agree that the linkage there is really asking yourself, not everybody else, what will bring you happiness. We end all of our episodes, Bill, by asking our guests for a tip they can take straight to the bank.

I'm going to steal one from the book that we hinted at, but I fundamentally believe that the most advantaged people in any field are those that have this commitment to continuous learning. And I don't think you can fake it. And I don't think you can muscle your way through it because you'll burn out. And Duckworth—Angela Duckworth—has come out, like, 10 years after she wrote *Grit* and said, 'I probably should have put more weight on passion and perseverance because we've taught these kids how to grind, but eventually they just burn out if they don't love it.' People like to talk about AI taking jobs. I'd like to make an argument that for those that are curious and are fast learners in their field, it's going to be an accelerant.

They're going to move faster as a result of AI being out there. You've got to want to learn. It's almost got to be for free. I've used the phrase, like, 'it's got to compete with Netflix.' Like, do you want to go learn about this more than you want to watch a TV series? And if you can find that place, you're going to—I think you're going to have an awesome life.

Well, the cool thing about learning is that the more you learn, the more you realize there is to learn. And so the cycle continues.