YouSaid · the spoken record

Ali Hamed

lines on the record: 89
first: 2018-01-09
most recent: 2018-01-09
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“So, people would walk by, and I said, Do you like yoga? And they'd say, yeah, I love yoga. I was like, I love yoga too. You know what? People who love yoga love Chloe Softer Fruit Company. And that was probably the number one.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“He ended up becoming my first investor in coventure. I still love Chloe Sofster Fruit Company. It's still in our freezer every single day. And if you haven't had a popsicle, you can get them at Whole Foods or all these different places. And he's the CEO that I most admire and he does the nice thing anyone's ever done for me.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“And he goes, we started talking. He's like, I went to Cornell as well. You should come to my office. So I went up to his office in Midtown, and this office was bigger than my parents' apartment. This was like, I was like Florida. I had never seen Marvel Florida. This is cool. And I was wearing my best khakis. And he goes, look, I think this is cool that you came to work for me. It's cool that you try to do a startup. And I started a company as well. You should go to school and keep taking risks. No matter what, you can always work for me. And that was when I got to be able to continue to take risks. I didn't have to go down the traditional banking path. I didn't have to go down the traditional consulting path or one of these sort of paths because this was a guy who said, look, you worked your ass off passing out flyers. And by the way, I was really good at passing out flyers. Like I had lines coming in. It was awesome. I do and say anything to get people in. You know, he said, you worked really hard. I sort of think that I've always wanted to sort of help somebody sort of at your place in life. So you can always work for me, keep taking risks.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“My first sergeant work out, and so my second job was working at a company called Chloe Softer Fruit Company. And Chloe Softer Fruit Company sells softer fruit. So it is not frozen yogurt. It's actually made of only three ingredients, fruit, water, and a touch of organic cane sugar, and there's only 80 calories that small, 16 grams of sugar. There's no dairy, no allergens. It's kosher parv. And I know all this because my second job was passing out flyers in the corner of 17th and Broadway. If you want to meet the meanest people in the world, it's the people who are in that area trying to ignore a person passing a flyer into their hand. But the guy who owned the business turned out to be a guy named Michael Sloan. And Michael was the CFO of a private equity firm. He was secret shopping. And I made a web analytics joke to him. He goes, how do you know about web analytics? I was like, well, it's sort of interesting. I used to be the president of this tech startup. Now I'm not. Now I work for you for probably $2 less an hour than I should be making. But if you want to raise my great.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Made for you. It was content just good enough to get you to watch it so they could serve you ads. Netflix, you're paying for, theoretically, or your friend's friend friends paying for it. So it's actually meant for you.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the two hour movie is like the Sonnet. And I think that my kids will probably never watch a two hour movie except in their classroom as this is how people used to watch film. And the reason is like Harry Potter should have been an HBO series and every book should have its own season and every Horcrux its own episode. We got gypped by the fact that there were two-hour movies. Big little lies I thought was a cool show, you know, I thought it was fine, but like, that's movie star level talent on a TV show. And that story was told in the right amount of time. I think this thing that HBO Netflix still get wrong is every single show is told in the same amount of time. Every chapter is in ten pages. So why is that every episode's always 40 minutes or 60 minutes or 30 minutes? Every subplot should be told in its own amount of time. I think we're going to get there. But that's proof that the reason structure built the stories was because of ads because cable had to fit. You were not the audience.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and I think that's really sad. We wonder why people are getting false information because the information was never meant for them. And we're frustrated by it. We should be. I don't know how to solve it, but I think paid media is really important. I think it's really important that we pay for content. One of the things I get excited about, though, within media and stuff that we do pay for, I love the idea of Netflix and HBO. And I think that what Netflix and HBO will do are do what books did for Shakespeare. So I grew up going to school, reading Shakespeare, and thinking, wow, this is like the worst stuff ever. And I know that I'm supposed to like Shakespeare because I think you're sophisticated if you say that you like it because it's classic. But really, it's like, you know, these sonnets and there's a certain amount of syllables on each line. I think it's 10. And you have to figure out how to tell a story within that structure. And then eventually someone said, well, you know, it would be better if you just sort of loosened up the structure and you wrote books. And books became more and more flexible. And all of a sudden, you had 500 page books and 200-page books and words that there's sentences that started with the word and you had paragraphs or different lengths and chapters that were different lengths.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Because all you're trying to do is say, I need to find women between the age of 20 and 28 who like X, Y, and Z product, and I'm going to write posts about that product to aggregate them so that I can then go to Sephora and say I'm going to market to them. Or I'm going to find men between the ages of 45 and 60 who like bowling or whatever. And I'm going to write just a bunch of posts about bowling and I don't care if they're true or not. I just need to aggregate that audience and then go sell ads to advertisers. However, paid media is completely aligned. All of a sudden your customer is your reader. When I read the Financial Times, I'm paying a stupid amount to read something that's actually meant for me. So the odds that it's actually correct, the odds that it's high quality are incredibly, incredibly important. So what ends up happening is the people who are poor continue to listen, watch, or read free media, not meant for them and productizing them. Whereas the people who are wealthy”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think that people looked at, by the way, this is more interesting when I first published it than now, because I think that this is before the term fake news. But I think that people looked at digital media and Twitter as this great tool to democratize the minority voice. And they said, okay, this is really great. All of a sudden people who are often not heard because of agenda setting or because CNN doesn't want to publish it could never get their view told. Now we have John Oliver. But at the time. But the reality is free media is completely misaligned with its readers because the readers are not the customer. The customer is the advertisers who are publishing ads on those posts. And so really, if you're a media company whose model is to get free viewers, that viewership is your product. And the way you make that product is you write articles that you know that product is going to be attracted to. So writing the articles almost becomes your marketing tool. It's just a marketing engine. It's why we have listicles. It's why we have crazy headlines. It's why we have these sensations.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Employers lending to their employees. So there's a large company that I kind of got to know, and they have a bunch of truck drivers. And the truck drivers can't afford to buy trucks, so they lend to the truck drivers and then give them the work. So they're lending and then making sure the loan gets paid back by then giving their own employees work. I think employers are really good at underwriting their own employees. I can't believe that some of these really, really well-established businesses, as soon as they hire someone out of college, they say, by the way, I'm going to lend you money to get your apartment. And I don't know, I'm surprised there's not financial products offered to the employee's larger companies.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“I still wouldn't want to be in the seed round because I probably own 0.0001% of that company now because they've raised so much. I just don't think insurance really makes sense for the venture space. So I think it's more like just trend lines. By the way, you see a big round, like Sequoia does a big round of a company, and then every seed firm suddenly is like, all right, I'm going to find the next one that Andresen Horowitz can do. So those are sort of the themes that”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah. They heard the word float financing and they were like, wow, I finally get finance. And finance, sorry. And I don't know. And if you look at it, like, Metro Mile is an amazing idea. Metro Mile basically says we're going to underwrite your insurance, your auto insurance based on how much you drive.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“For the venture capital model. And so I think that people were like, oh man, insurance tech is cool. Warren Buffett likes insurance. Other people in finance seemed like Warren Buffett. So I kind of am a techie, but now I can talk about insurance.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Let me go to ones that I disagree with a little bit. I think a lot of the worst ideas that we see are not bad ideas because they're bad ideas, but bad ideas because everyone thinks they're like they're just overpriced. Everyone says, hey, are you going to invest in blockchain companies? I've heard a lot of people talk crap about Bitcoin, but I haven't heard a lot of people talk crap about the blockchain. I think every bank executive has been explained to them by their PR firm that they're supposed to say the blockchain even if they don't like Bitcoin. And so it's really hard to find reasonably priced business in this space. I think insurance companies and lending companies are built similarly. So if you think about insurance companies often start as customer acquisition businesses, then they get better underwriting. Then they become the carrier. Lending companies are the same, right? Like most of the first wave of lending companies were customer acquisition businesses. Hey, let's just do this online serve in a bank. Then they got better underwriting and eventually they'll actually figure out a unique way to access capital, which will be bad for my business. But insurance companies are just so expensive to build that it just doesn't make sense.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“That I'm morally against. I think that A, it's a social justice. I think the bail bond system is totally messed up. If someone can't afford bail, they're in jail for 30 days, they lose their job, they lose their apartment, their life is ruined. I think there's a way to create a fair product in that space. So that's like, you know, I could probably tick off a number of things that I think are interesting. I'm just trying to figure out what's reasonable and won't get me yelled at at the office because they get more and more bizarre the longer I do.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll start with things I like because I'm an optimist. You had another guy on the podcast who was talking about bail bonds. I think bail bonds are still a place that should probably be cleaned up. The way a bail bond works is average bail is about 25 grand. So let's say your kid gets arrested. Most people don't have $25,000 on them. So they'll go to a bail bondsman. And he or she'll say, great, give me 10% of the money. I'll put up the bail for you. And as long as your kid shows up to court, I'll get my money back. And by the way, if your kid doesn't show up to court, I'm going to send a bounty hunter to go get them. I might also put a lien on your home. So it's like a 300% APR product that's secured. And by the way, there's no discriminatory law. That's bad and good. It's bad because you could be racist and do all these horrible things that there's reasons you can't profile when you're making loans. But for whatever reason, bail bonds aren't like that. The reason it's good is you don't have to do hard crimes. If you ever built a bail bond business, you could say, look, I'm not going to do anyone who did any hard crimes, anything.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“If you raise like a $7 million round, if you sell that business for $35 million, you still make $10 million. You're actually still a wealthy individual. So putting that much preferred equity on top of you, I think, is really scary. I think people spend a lot of time optimizing for valuation and I don't think as much about structure. Preferred equity is kind of like debt. And I think that people probably don't think that much about it.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Away the value of building a business. One sort of thing I'll add to that because I think it relates to how people think about raising fall on rounds of capital. I think when it comes to acquiring companies or acquiring customers, it's just way more expensive now than it used to be. I think that raising capital can do two things. It can make your company less risky by having more runway and buying all those customers. It can also make it more risky. The reason raising more, and VCs love to say, oh, you shouldn't raise too much capital because it makes you spend more money and you have to grow faster and all these different things. And I think there are a lot of things that are self-fulfilling or in the best interest of VCs to say that. I think that we have a portfolio company that is thinking about raising a large Series B right now. And we told them, look, you've raised, let's call it $10 million to date. If you raise like 25 million dollars in the series B, if you don't sell your company for $35 million or above, you will make zero dollars because you're going to have preferred equity on top of you.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Less and less expensive now to start a company, but more and more expensive to scale a company, right? Because we're invested in a few consumer companies. No matter what consumer company we're invested in, there will be competitors. There will be other people who are trying to do it. When the technology was hard, you actually might have been the only person in your space. And so getting the application up and running was expensive. But then once you had it, you could kind of scale quickly because there's no other markets. You could buy ads on Google really inexpensively, et cetera. So I do think that you kind of have to find really interesting distribution channels now, and you probably have to invest a lot of money. A lot of founders come to us and they say, this is the last round I'm ever going to raise because then I'm going to be profitable. And we tell them, that's not true because raising cap, you're going to have to raise capital to create defensibility. You're going to have to go get markets before anyone else is there and create a presence where it would be uneconomical to even compete with you because you're already at scale.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“We hope that happens one day, but until then, we want to just have great relationships with other seed stage firms and solve their problem, which is a founder goes to a VC firm and says, hey, you should fund me. The VC firm used to say go find a technical co-founder. And instead, what we want them to say is, you should go talk to Coventure and launch the product, and then we can invest. For lending, we've done the same thing. It's the same sort of B2B model where we say, you want to invest in a lending company, we'll let you do that because we'll provide the debt financing for it and de-risk your equity investment. In starting a company, the hardest part of starting a technology company used to be building the product and now the hardest part of building a company was acquiring your first customers. And I think that that's part of sort of our investment model why we focus on finding founders who are most equipped to go find those customers. I also think the fact that technology has made it easier to build businesses, I'm going to say something sort of unoriginal because other people have said it, but I do think it's true, which is it's”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“See, the blog post I wrote was that Seed Stage invested in Series A investing are two different businesses. One's a B2B business and one's a B2C business. The reason Seed Stage Investing is a B2C business is you're basically going out and finding people who are going to start companies. And what that takes is brand awareness. You kind of need people to come to you because it's hard to know about something that doesn't even exist yet. In some cases, you can figure it out by knowing a lot of people and having a lot of impressive friends who will one day start a company, et cetera. But it really is a marketing business. Series A investing is a B2B business because you're investing in a company that's already a company. So it's almost like a sales process. The hard part, or sort of the problem with that, is marketing is more expensive in many cases than sales. So you have a seed fund with a smaller fund and less management fees doing something more expensive than what a Series A fund can do. And so with our firm, what we've done is we've really tried to turn ourselves into a B2B business by saying we want our deal flow not to come because everyone knows the name.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Instagram, I think that's tricky because I do think that it's harder to repeat the magic of that Instagram handle. And I think it's probably less about Biden majority ownership. It's probably saying funding the GP of a fund where you have some sort of compensation committee and you say, look, like you can't take all the revenues of the business. Like there's got to be some sort of governance. So I think you probably have minority economics, but majority governance is probably how I would think about that. And by the way, I hate that people always marry economics and governance. And the way they don't, they say, oh, well, we have protective provisions. That's our way of disentangling the two. I think that you could go beyond protective provisions when trying to disentangle them.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, sorry. Okay, so Instagram, I'll finish Airbnb and I'll get Instagram. So the way I'd probably think about Airbnb is I'd say, okay, well, the account is probably more valuable than this person's incredible expertise on taking pictures. I think a lot of that stuff you could probably repeat yourself. I think you could make sure there was clean towels. And I think that the Airbnb ecosystem will end up being similar to the hotel ecosystem, whereas the management company and the property owner and the brand. And I think you'll end up differentiating those. And I think there's a time patrick where you're going to go to an Airbnb and you're going to see a towel with a logo and you're going to recognize that logo from another Airbnb. You're like, holy shit, there's service providers in this ecosystem.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I'm trying to figure out what I'm allowed to say on the podcast or not. So, the Airbnb world is really interesting, right? Like you have people who own the properties, you have the people who lease properties to then manage and rent out to other people. So the people who own the accounts aren't often the people who own the real estate, which is sort of interesting. I think it's important to differentiate the two. And you might have people who have built-in choice.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I couldn't name you the. So I have a few tattoos, and I couldn't name you the first name of the guy who gave me two of them. That's crazy. These things are on my body forever. And I couldn't name you the guy's name. That's sad. You know, I mean, maybe that's like a reflection on me. But I bet you that if you ask most people tattoos, they'd say the same thing. And there's no brand affinity. The best way to discover tattoo artists is on Instagram. You should really follow some of these guys. They are incredible. Maybe I'll buy their handles on it, right? Like, I really do think there's an opportunity to take some sort of prestigious tattoo parlor and then roll out the brand to a bunch of others.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of investing in only tech is doing a tattoo parlor rollout. I don't know if you can name one brand in the tattoo space. But there's clares for earrings. Why isn't there clares for tattoos? Tattoos are going to this ridiculous Kager, by the way. So I'm totally bullish on the tattoo thing.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Patrick, you've built equity value in this podcast, your readership or viewership, or whatever you want to call it, is probably high net worth individuals. There's probably people who work in financial services. I bet you people would have a really hard time figuring out how to value it because they have no idea how much they could monetize it for. They probably would try to value it on some value per listener, some value per downloads. But no matter what they do, it's wrong. It's just whether or not they're wrong on the wrong side of that better side. I think Airbnb accounts could be really valuable. If you're the best Airbnb host in LA, you probably have a lot of reviews. Your pictures are probably great. You probably have a lot of people who stayed there. That's a competitive advantage. There's some asset there. I don't know what that asset's worth, but there's a way to buy it. And I think that there's a lot of these digital assets that people haven't figured out how to purchase yet that, you know, maybe one day we'll go after. I don't know. I think there's a million things. There's digital stuff. I think, by the way, like one of my dreams, if I'm ever done sort of.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, no, look, we love looking at stuff that's just sort of, okay, this is a new thing. How do you buy it? Instagram's new. There's a lot of famous accounts. At the end of each day, I have friends who have sent me sort of the funny posts. And those are now really famous influential accounts. And they're starting to make money. The famous Instagram handles will go out to some sponsor and say, hey, I've got all these followers. You should really sponsor this. What if you rolled all of them up and then built a sales team and helped them scale? I think there's a lot of service providers in that space that are helping their sort of consultants to these famous Instagram handles and helping them monetize. I do think there's an opportunity to buy all those up as assets and then build a sales team around them and like sort of like what if people bought up all the best podcasts.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Felt, the more expertise we have in structuring a bunch of really weird different things that are sort of the right fit for those companies. And we can build a differentiated product because of it.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“A couple different ways. So, in that business specifically, the way we build moats is if you do a deal with us, to do a deal with an early stage company with a completely new asset, you want like a 20% return. If you've been our LLP for three years, four years, five years, and we've been doing it for a while and all of a sudden we can do 12, 13, 14, you'll do it. And so now we're competing with a different product than everyone else is competing because it's cheaper. So I actually have a structural advantage by having done it earlier. On the podcast, we were saying I would give my money to first round for a two extra turn and a random VC fund, I would require 5x. First round for having done that for a long time has just built a different product. They could actually invest at higher valuations than other seed firms and still survive because they have a more loyal LP base. That's a different product. They also have their brand. And so I think it's probably going to be a combination of those two things where the longer we've been doing it, the more trust we build with our LPs, the more tracker we've”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Take the title, put it into an SPE, lend against the SPE, it's bankruptcy remote, et cetera, et cetera. The problem is every single state has different rules, and the cost of transferring titles was high enough where it would have knocked off like 500 basis points from the loan. Like, there's no way you could have put that into an ABL facility. There's no way that could have fit within the box of the traditional lenders that you're thinking of who are like the massive firms of today. This company needed a unique facility where we could make a loan, trap all the assets, make sure”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“By the time we're meeting you in person, all that stuff has to be figured out. That way we're using each other's time efficiently, and that way you can do really deep diligence on the companies that you're getting close with. And not just sort of the trivial stuff. And how we see deals, so we're seeing deals from like having a venture capital business allows us to build networks in the venture capital community. And every single time one of our friends in the seed world says, hey, I found this cool lending deal. I can't do the equity without somebody else doing the debt because I don't want them to use equity capital to make these loans or beyond a few hundred thousand dollars of these loans we get the call and allows us to get in really, really early into these deals. And we're built as a firm to figure out how to structure facilities with companies that don't have a lot of capital on their balance sheet. So we funded a company that was lending against the title of some asset. And it was a startup. And they wanted to, we wanted to lend to them directly. And everyone else would have said you have to put that in an ABL facility.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's been probably our competitive advantage. So we see about 200 deals a month, which is really overwhelming. That's, by the way, a total vanity metric, right? Like most of the stuff sucks. But every once in a while, you see something that checks a lot of the boxes. And one of the processes we go through, by the way, is we never try to ask a company a question in person that we could have asked online or over email. So if you and I are talking and I ask you who your competitors are, I've wasted both of our time. That's incredibly disrespectful, right? Because I could have asked it over email. If I'm asking about market size, all you're going to do is give me a big numbered sale, follow up with an Excel sheet later where I broke it out.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Once it's an established asset class, but that's the type of stuff we love where we can get a mid teens to low 20s return, not by taking a ton of risk, but by just finding something that no one's done before.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Piece of paper in the back room or an app called One to Work or something like that. We said, use this app instead. Don't pay your employees every two weeks. Instead, pay us. We then tell the employee, you can now take your paycheck any day of the week you want instead of on the bi-weekly pay cycle. And so if your rent was due Wednesday, but your paycheck wasn't until Friday, you don't have to take a payday loan out anymore. You can just take your paycheck early for like $1.50. And now we're getting like a 20-something percent on McDonald's credit. That's a new type of product that hasn't ever existed before, which, by the way, has switching costs. And the reason a company like McDonald's would want to use that is if you were thinking about working at McDonald's or Starbucks and one would pay you any day of the week you wanted and one would make you wait two weeks for a lot of those people cash flow is a huge huge issue and they'll pick McDonald's maybe even if it's for a little bit less money and so that's another example of finding companies that are in I don't know what to call is it payroll finance like I don't know there's probably a word that will one day be a thing”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Lending business, what we do is we look for companies, so we look for alternative lending platforms that are using their technology to invent new types of credit. So we're not looking for companies that are basically taking loans that banks used to make offline and putting them online, like unsecured consumer loans or S&B term loans. We're looking for companies that are actually inventing new types of credit. So produce pay was a great example. So when we were doing diligence, we called Robo Bank. We said, hey, are you guys ever going to do this? And they said, no way. Like we could never underwrite perishable or lend against perishable produce. So they were using technology to actually track this stuff in real time and invent a new type of product where we could finance it at a really, really attractive yield without taking any extra risk. There's another company that we invested in, what they do is they built scheduling software for large companies. Let's just pretend it's not a real customer, but let's pretend McDonald's with a customer. So they go to McDonald's and they say, how do you figure out when your employees are going to come work? And they say, well, we use a”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Holy moly, like, this is absurd. Like, you are not understanding that this is way, way better for you and way, way better for me. And it was one of the first times that we said, wow, venture capital is really uncreative. And I wonder if you went into Silicon Valley and said, hey, guys, what if you didn't fund a company with venture capital? How'd you do it? And they'd be like, oh, venture debt. Like, that's their only other solution to venture capital. The world's bootstrapping with money from another venture capital-backed company, venture capital and venture debt. And there was no other solutions. That to me felt weird.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I looked at the business and said, Well, you have $2 million in change of receivables. How about I just factor the receivables and you go find a million dollars from someone else? I like your business, but it's going to take me a while to underwrite it. I don't really have to underwrite the receivables in the same way. I still underwrite them, I promise. But not in the same way. So what I'll do is I'll fac them for some absurd rate. I'm going to charge like 5% warrant coverage. So I feel like I have some upside in case this business ever goes well. And I just saved you, what if you were going to sell 6% of your company now you only have to sell 2.2, 2.1% of your company, I just saved you like 3.8% of your business. What can that buy you? That can buy you a COO, a VP of sales, like, I don't know. And he goes, no, no, I'm just trying to raise a control note. I don't think my VCs are going to be comfortable with me doing factoring yet. Like factoring seems like it's addictive and like I don't want to get on the factory.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“I do like most venture capitalists. I do like the asset class. But I do like talking trash about it. So this company came to us and they were doing a million dollars of revenue a month and they were about breaking, I think they were slightly profitable. And the guy said, hey, I need to raise $3 million really quickly. I'm raising it on a capped note. It's a convertible note with a $50 million cap.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“And everyone started doing this. And so in the year 2016, I think Amazon did like $130 billion of revenue or something like that. And still, the only way to purchase on Amazon was with tokens. If there were only a million still, each token would be worth more than a dollar. I don't know what the velocity would be on Amazon, but let's say they were worth $10 billion in total. And Amazon wanted to raise capital. And they said, well, it's hard to raise equity, and it's hard to raise debt right now. What if I just issued 1% more tokens? Would anyone be pissed? And all of a sudden, they just raised $100 million with no dilution. So you had equity to raise capital and debt to raise capital and then like a token financing, like a real token financing, not just an ICO with a white paper and a couple of engineers who said this is going to be cool, I promise. That's like a third asset class. That's really powerful. Now, what you should say back is, okay, you never use a token because A, the volatility of the tokens would make it hard to purchase the books, and it's going to be speculation, like the hassle going from the dollar to the token would reduce revenues.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Utilities for tokens, I think that's cool. The other one, and it's going to be an analogy that you can break down 50 different ways. And so anyone who's listening to this is going to be like, that's a stupid idea. But I think it illustrates sort of what could be. So let's imagine 2000, Amazon created Amazon tokens. And I said, okay, so the only way to purchase a token.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably still store value. I have a hard time getting excited about store value because for store value to be more meaningful, it means something that bad in the world probably happened. So it's a little bit weird to be optimistic about it. If I had to come up with like a utility token, so there's a company called Blockstack, and basically the whole idea behind Blockstack is you can build applications without building a backend or a database where you're storing people's information in a central place. I blog on Medium, as you know. I think it's crazy that God forbid Medium went out of business. I would actually lose all my blogs. That sucks. And I don't think Facebook's going out of business, but oh my God, if Facebook shut down, I lost every picture I'd had. So it is crazy that data is essentially stored. I think what they're doing in terms of saying, look, we're actually going to decentralize data. We're going to allow you to store it wherever you want. You can put your data on Google Drive or Dropbox or on your local computer and the web application that you're accessing, it just sort of queries wherever you want it to query from. I think that's interesting.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Bring professionalism, right? Like, know how to write a freaking hedge fund doc. Know that there's a difference. Know how to mark your nav professionally, like stuff like that.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“That's sort of weird so I can redeem my whole nav, and you're in an ICO? So that was like someone like, there were really small things where I was like, all right, we're better than that.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“What if someone wants to redeem and some of it's a liquid? Have you thought about that? They're like, oh, well, no one's redeeming right now. Like, okay.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“The way we think about our firm's core competency is we build funds in emerging asset classes built on the back of new technology. And we have to be amazing at doing that. And if we were to think about what skill set is required to manage a crypto fund, we think it's engineering. You have to understand sort of the technology and underwrite the technology. I think you had to take sort of a venture-ish view of do I believe it'll get the network effects? Do I believe it'll build barriers to entry? Do I believe that there'll be adoption? One of the guys on our investment committee used to run a trading desk at Goldman. Can you actually trade this stuff? So I think it takes this cross-disciplinary approach of being able to actually trade it, understand it, and invest it. And we felt like there was a good place. The other thing is when we got started, frankly, we just didn't think there were a lot of professional money managers managing the capital. The first LPAs I got for some of these funds had European waterfall. They look like venture fund docs, but were trading crypto. And I was like, do you have side pockets for forks?”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so look, I completely agree with that point, which is we're probably at a place where everyone's sort of like, all right, we think it's going to be a big deal, and the amount people think it's going to be a big deal compared to the big deal it is right now is like probably out of access. So I totally agree. You know, I think that there's probably people in South Korea who do that more. I don't think, like, I think we love talking about Venezuela because this is in the news all the time. I don't think there's a lot of people in Venezuela being like, oh, thank God I have Bitcoin. So I sort of agree with that. And I think the places where you're going to need it the most is going to be the places that's hardest to get. So completely agree. I think that's like in the bear case column, which is the utility of it just isn't there compared to the speculation. I have no idea what's going to happen in 2018 or 19. I just think by 2025, it's going to be better. And I do think that the use case will catch up.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Refugee, I'd probably rather be traveling with my private key than like a pack of gold. So if you keep going down the list, like acceptability, the restaurant that we didn't pay the bill at because we didn't like the food, they're going to accept Bitcoin before they accept gold. Can you imagine taking out a piece of gold and saying, here's my scale, I'm going to just shave off a sliver of it. I'm going to put on the scale. I promise my scale is not rigged. So we're really bullish that Bitcoin could be a real store value.”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“This trustless system, and people often think about the US dollar and banks in the US and say it really sucks that Bank of America has all my money and I have to trust them, but I'm willing to deal with it. I use Bank of America, and I think it's a fine business. And if I give them $1,000 and I go back the next day, they'll probably say I have $1,000. But if you're in Libya, I have half my family in Libya. If you're in Libya and you're going to the regional bank of Tripoli and you give the regional bank of Tripoli $1,000 and you go back the next day and say, no, you gave me $990, who do you complain to? That's actually really tricky. So that was one thing that I thought was interesting about the system. The other is if you think about Bitcoin as a store value, it's probably a pretty good one. So like if you were to go down a list of what makes something a good store value, you know, it's volatility and Bitcoin sucks at volatility. It's portability. I think Bitcoin crushes gold at portability. I've never tried crossing a border with $10,000 of gold in my pocket, but it's a guy named Ali Hamid. I can't imagine that's like a super fun experience. So like, and if I was like a Syrian”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source
“Really believe in as an asset class, and I think that people are probably more euphoric than they really should be right now. So let me start with a couple bear cases. The first bear case and my partner Sevenie talks about this all the time. He goes, look, it's really ironic and kind of sad that the blockchain was supposed to disinter me the banking system, but the first company we all think about when we think about Bitcoin is Coinbase, and that's like an intermediary that charges a point and a half in and a point and a half out. So that didn't work. The other thing is people say things like, oh, man, the government couldn't shut it down. If the US government tells me it's illegal to own Bitcoin, I'm probably not going to own it. And like that comes from a guy who's got a business in it. Jail sounds like it blows. And I just don't want to go to jail. And I think that's actually a powerful concept. And it's probably not going to be a currency. It is just stupid for a government to allow somebody to compete with its own currency. If I wanted to think of like one way to revolt against the government, it would be to debase its currency. I think governments kind of have a clue. But there are a couple things that are incredibly interesting about it. The first is we think about”
2018-01-09 · Invest Like the Best · Ali Hamed – Creative Investing - [Invest Like the Best, EP.71] · IDENTIFIED FROM THE TRANSCRIPT · source