FULL TRANSCRIPT

‍

Eric Cantor (00:00)

All right, let's kick this off. So here we are, we're at Emerging Leaders and Pre-IPO. We're gonna talk about how individual investors relate to venture capital and asset class, both what the products are emerging that solve that need, as well as what some of the exciting companies are, maybe the second tier of companies, ones you've heard of, or maybe haven't even heard of yet, but we'll certainly be in the news in the next quarter or the next year or the next month. My name's Eric Cantor, I'm the CEO of Vincent.

We help individual investors navigate private markets. We're going to try to do that today. ⁓ We've got a great panel here of innovators. Let's start with our audience. Let's find out with who is in our audience. were all a couple hundred of you were kind enough to fill out a little profile on the way in. We just want to make sure that we stay cognizant of who's here and cater our conversation to them. So the bulk of you are credit investors, but not everybody. That'll be interesting. We're going to talk about.

products that are suited to accredited and products that are more universally available and what the kind of splits are between those. Excuse me. We've got a wide range of experience, but most of the people in this audience have some experience with venture capital. So we're going to try to keep the remarks on the kind of advanced level. If you have questions, feel free. Planning to invest. There's a lot of interest with all the IPO action. There's a lot of people who...

⁓ plan to invest into this asset class in the next 12 months. So hopefully on this discussion, you can pick up some good tips or insights on how to do that in an optimal way. And last, but definitely not least, we're to talk about this different approach to how people get into pre-IPO companies. Do you pick a single company? Are you a stock picker per se? Do you build a diversified portfolio? Do you use both? And that has implications for which products are suitable to you as well.

So let's get started by doing a couple things. First of all, I want to do a quick disclaimer. Nothing you're going to hear on this call is financial advice. This is all, you know, discussion and conjecture, and you're going have to make decisions based on your own portfolio, your experience, your profile, consulting with your advisor.

Now that we're through there, let's do quick introductions of our awesome speakers today. ⁓ Let's kick it off with Atish from EquityZen.

Atish Davda (02:21)

Hey, thanks, Eric. Hey, everyone. Atish Davda, founder and CEO of EquityZen. EquityZen is a private investments platform. We work with issuers like the ones we're going to talk about today to help shareholders get liquidity and accredited investors get access. And I'm excited to dive into it.

Eric Cantor (02:40)

Amazing. We've also got our trusty ⁓ analyst here, Jan-Erik from Sacra Jan, you want to introduce yourself?

Jan-Erik Asplund (02:48)

Yeah, I'm Jan, co-founder at Sacra, longtime Vincent ⁓ friends and webinar partners. And we are a research and data provider for the private markets. So really specializing in pre-IPO growth stage companies, ⁓ helping you understand them with data analysis and expert interviews ⁓ with folks like Atish, who we just interviewed a couple months ago. So yeah, check it out.

Eric Cantor (03:10)

So we do not have Cathie here right now. I know she's overseas. I'm hoping she'll be joining any minute now. We'll jump back to her, but why don't we dig in and we can then catch up. So ⁓ let's talk about the rise of venture for individual investors. That's gonna be our first topic today. If we wanna take a look at what we're gonna discuss, it's gonna be rise of venture for individuals. We're gonna get into ⁓

this set of emerging pre IPO companies, as we said, not the top names that we talk about all the time, the SpaceX and the OpenAI, but that next tier down there also super interesting and potentially more economically efficient in terms of getting in at lower, earlier stages, lower prices, et cetera. And then at the end, we will take investor questions. We actually got a number of great questions on the way in. And so we can work our way through those, but at any point in the discussion, if you

have some that comes to mind, feel free to drop a question in the Q &A below and we will try to work into the conversation or get to it at the end. So what do we mean by the rise of venture for individuals? Well, one thing that's been happening, you know, is individuals are seeing that the returns in private markets have been excessive, have been higher, you know, on average than public. And there's this perceived ability to get in earlier.

right to be in an earlier stage, come at an earlier price, but you don't get post IPO. Additionally, there's like many fewer public companies, right? I think there was something like 50 % of public companies as a total number that existed 30 years ago. So there's a lot more orientation toward what's happening at these early innovation stages. So as privates, I mean, I venture is an asset class that Atish can correct me if I'm wrong, but I think there's about a trillion invested right now.

And this used to be exclusive to family offices, institutions, but it's increasingly becoming more and more available to the wealth channel, especially over the last five years. And actually this year, we've seen this year innovations that are, that are completely novel in terms of packaging up these products for individuals. So you see things like fractional shares, you see things like SPVs, tokens, interval funds, 40 act funds, mutual funds. We're going to get to all of that today. ⁓ And so.

You know, as an individual investor, you've got a number of product choices and you can decide, do you want to be a stock picker? Do you think you know that Anthropics going to win the AI game? You want to everything on that? Or do you want to get into a portfolio that might be managed? Like something that ARK provides a public private managed fund with a number of names or something like what Atish provides at equities and where you can get into a theme or a basket of preset companies. ⁓

Maybe just pausing for second, Atish, do you want to comment on how you see individual investors approaching the asset class in recent years?

Atish Davda (06:01)

Yeah, yeah. And first of all, you nailed it. Venture is top of mind for so many folks. just as a, know, just like two more data points on why we've gotten from 7,500 listed companies, public companies to under 4,000 now over the last 45 years. And this means that if you're only concentrating in public markets, then you're essentially investing in highly concentrated, you know,

Cap weighted, essentially the Mag7, Mag10, what have you. And so that's one reason. And the other reason is, I think if you want exposure to AI, a lot of folks invest in Nvidia. That's one way to get access to AI. But really it's open AI and it's entropic and it's perplexity and a lot of firms like that. So I think there's a natural extension for folks to say, well, I understand these tools I'm using. How do I get access to them earlier than waiting for them to be

10, 12, 13, 16 years old, 15.9 is the average age of IPOs in 2025. And so exactly to your point, Eric, no surprise, there's a lot of interest in it. ⁓ Answer your question. We are seeing ⁓ several ways that folks can enter the venture market. think there's the institutional or the pseudo institutional access, which this is not really the right forum for, but that's the family office institutions, they can access it.

through their sales coverage at various institutional brokers. And then for individuals, you kind of have this accredited investor and qualified purchaser set of products that are out there. That's what equities ends kind of primary area of focus is regulation D, private placement transactions. These are private offerings that we facilitate with the issuers blessing in order to let one or a hundred accredited investors.

one or 2000 qualified purchasers invest with the issuers blessing, selling stock from existing shareholders. And then you have the 40 act funds. Then you have the non-accredited pool of investors like ARK's products, like Destiny XYZ that's out there, like the old private shares fund from shares posts back in the day.

There are vehicles out there for non-accredited investors. It's a great conversation I look forward to getting into today. I think the bulk of where EquityZen has really led the way is to offer access to accredited investors and above. And over the years, we've slowly also expanded to institutional investors though. I'm actually most excited about the non-accredited access avenues that are really proliferating right now.

Eric Cantor (08:49)

So you've talked about why investor chase. We'll talk about how they're doing it and the different forms of products that are available. You touched on some of them, but if we want to look at a more thorough categorization, next slide please. You talked about a few instruments and at the end of the day, what an investor wants is SpaceX, right?

40 act fund holding space, but they have to understand there are different trade offs. mean, a lot of the, I mean, in general, you're going to, you're talking about a lot more illiquidity, right? Cause even in a 40 act fund, um, there are times when there's going to be redemptions available at not, right? It be a lot more liquid than buying a stock, you know, through an issuer, but it's not like you can trade every day the way that you can with like, you know, a public stock. Um, similarly,

when you're looking at these different ways of getting exposure, you've to keep in mind the fees, the liquidity, the tax implications. I don't know if you want to say any more. mean, you've said a little bit about products, but it just seems like we've gotten so many new products this year. We're hearing about tokenization. Is this in five years, are we going to have a Cambrian explosion of new products or is this kind of...

Atish Davda (10:07)

Look, I think it's a fantastic question. And just to underscore what you said, you're right. Many people want to own SpaceX directly. It's not practical for that to happen. I think if SpaceX wanted that, they would list themselves publicly and just allow everyone to be able to buy a single share or a hundred shares at a time. ⁓ In the world where these companies are still private, ⁓ looks like... ⁓

By the way, Eric and the Vincent team looks like Cathie Wood is joined, potentially has joined the webinar link as an audience member. So I'm sure we're going to try and offer that. just coming back to what I was saying, I think we have a lot of folks that have, you know, it's clear there's demand. What's the best way, as you said, Eric, how do we get people the access? I do think if you fast forward a few years, there's going to be several 40 act funds that are available.

registered investment companies that are available. And I think there's going to be a bit more of a barbell ⁓ where you see these accredited investors and qualified purchasers accessing through private funds. And then you have a whole bunch of public vehicles that are available the same way that ETFs have proliferated. You have thematic ETFs, you have broad-based ETFs, have in the public markets, you have levered and double levered ETFs. I don't think we're going to quite get to the levered and double levered state just yet, though you never know.

I do think you're going to get this barbell where you can get access for 100 bucks and you can get access for $10,000 at a time. And in between, I think the gap is now so small that you can kind of choose, well, part of my portfolio can go into diversified fund or if I want to express individual bets, I can go through this channel. Eric, you mentioned something earlier. Do I pick one name? Do I want to be a stock picker or do I want to buy a basket? I think it's fair to say,

You can actually do both. You can go buy a basket and then if you want to express and overweight certain names yourself, there's an avenue to do that as well. So I don't think it's an either or. I think it's going to be yes and for a variety of these sleeves.

Eric Cantor (12:12)

So do you see any dangers with any of product formats? mean, like, you know, the, there's a reason why Reg D and the private placements evolved the way they did. And so kind of stuff them into tokens and public wrappers. there any kind of danger or concern that raises for you? I mean, do think people have the right level of information or is that just kind of abstracted out and you just have to trust kind of the managers?

Atish Davda (12:38)

If you're investing in a registered investment company, no matter what the logos on the portfolio say, really the investment you're making is in the fund manager. I think that's the thing the investing public really needs to be honest about. Yes, a publicly registered fund may have all these five logos that you really care about, but they can sell them at any given point in time. Exactly the structure in which they entered in is unclear. The price they paid to enter is unclear. So I think it's really important that you're actually investing in the track record.

of the fund manager, not just a few flashy names that they're showing you. ⁓ Are there risks? Definitely there are risks. think inherently, if you take something extremely illiquid and you wrap it in something that's liquid, there's kind of two ways to do it. Way one, you keep a whole lot of cash buffer that creates a huge cash drag in order to deal with redemptions, and you're not able to really optimize the returns that you want. The second way to do it,

is that you kind of hope and pray. You ⁓ invest in these private assets and then if it's time to provide a redemption but you cannot liquidate something, then you either have to force liquidate something or you have to fall down on a redemption. Both of those are anathema. They're not a good idea. And I think it's a big reason why historically we haven't seen a lot of successful 40 act funds deliver good returns. What I think is going to be different in the next five years compared to the prior 10

is the sheer amount of liquidity that's available in the private markets. So what I mean is I kind of laid out two ways. Keep a whole bunch of cash stuck under the mattress to deal with redemptions or risk it and hope that you can get liquidity when you need it. I think there's option three that's slowly becoming ⁓ more common. I think in the next five years, we'll see a lot more of it. I the option we're gonna see is portfolio managers, the same way that hedge fund managers used to do before. They're gonna hold onto positions.

But as they approach the redemption windows, they're going to say, you know what? The cash buffer is a little low. I'm going to liquidate a piece of a position. And I think there's going to be more active management that takes place in order to meet the needs of a liquid product, even though the underlying is illiquid. Business development companies have done this for a while. There's been actually many public vehicles that have successfully done this, as long as the liquidity on the underlying layer exists.

Eric Cantor (15:00)

Interesting. So we can talk a lot about products. I want to shift into the meat of our discussion, which is really thinking about some of these actual businesses. So I know how I can invest. What are some interesting things to invest in? Again, maybe that second tier, but really exciting ones. And then we're to have Jan-Erik lead this discussion. I'm going to show you the six companies that we're covering.

which is going to be ⁓ from a variety of sectors. So some of the themes that are hottest in the secondary market, we just pick one of the up and coming companies and we're going to walk through those. We'll do like a minute or two of just Jan-Erik taking us through the business since he's done a lot of research on these and has forecast models for each one, price, multiple, et cetera. We can take questions as we go. And then we're going to have each of our panelists just do a little bit of commentary on that name and whether they see significance in the market of it or

what the trading is like or any other kind of color they can add. So let's jump in. We'll start with AI, everyone's favorite sector. The company we want to profile here is Perplexity. Take it away, Jan-Erik.

Jan-Erik Asplund (16:03)

Yeah, I think every one of these six names to me is kind of the flip side of a big public player or one of the really big private players. And Perplexity is sort of the AI native upstart competitor to Google. So if you go back to Perplexity when they launched, what they were doing was they were trying to steal this particular slice of search queries away from Google, which is not the pizzeria near me.

⁓ type of query. It's more of the ⁓ long query, like let's say you want to know how to provide your California employee with health insurance and you don't know how, so you type that into Google, you're going to get a bunch of pages to read. ⁓ Perplexity basically built a ⁓ workflow of LLM plus search index so that you could type in a very complex query and then get a answer synthesized from the search results. And this was well before

you know, the public version of a chat GPT head web search or ⁓ cloud head web search. And that was really this big ⁓ initial wedge. ⁓ They did it first and they also built ⁓ an extremely fast ⁓ low latency search product. ⁓ So that really has propelled them. The most recent numbers we have are, you know, them just about to cross 150 million ⁓ revenue run rate back in June.

around the same time getting, you know, raising at $18 billion valuation, then 20 ⁓ shortly thereafter. So ⁓ pretty high multiple, but you know, have become one of the biggest players outside of ⁓ open AI and anthropic in kind of ⁓ consumer, you know, ⁓ AI and AI search. So the last thing I'll say is kind of to highlight, I guess, one, the big opportunity, you know, they recently released out of beta.

their Comet browser, which has been sort of a buzzy topic. ⁓ It is a Chrome fork with kind of AI built into the browser at every level to enable this kind of agentic automation, filling out forms, booking travels, the favorite comparison always, but ⁓ lots of different things. So that's very interesting. I think the main risk is like I alluded to, Chai GPT has

web search ⁓ enabled in chat, Claude has it, Gemini has it, ⁓ and access to their search index. So the core differentiator has kind of been commoditized away, but what we're seeing is sort of going into deeper vertical workflows around finance, things like that, plus this kind of, their product, ⁓ their sort of product velocity has been very high. So you see things like Comet coming out.

and adding to a sort of stable of products that they're building, which is pretty cool. that's the sort of the gist of it.

Eric Cantor (19:02)

Did Google miss the boat here? or is this like the, what do they call it? The innovators or the, ⁓ I forget what the term is, but like monopolies can't see the threat coming or is Google, was Google just kind of biding their time? Right? Can they catch up? mean, do you think this is like actually sync Google search? I mean, I shouldn't say Google because they have a number of business, but the search piece of Google, like, are they being disrupted here for real? Or is this just a little bit of a flash in the pan that's going to then get crushed?

Jan-Erik Asplund (19:32)

I think that there was a bit of an overreaction in that direction early on. I don't think that search or, you know, web access is going to be perplexities kind of, you know, if this becomes a hundred billion dollar company, I don't think that'll be key to it. I think Google is moving. ⁓ Google is showing a willingness that a lot of people didn't expect to cannibalize a search ads business. You know, they're launching AI mode, AI previews on the web. Now, I think a lot of this stuff takes longer than

It takes much longer for a company Google size to obviously implement this at scale, given the cost of it and other things than it does for perplexity startup to launch it. So I do see Google moving more aggressively now, and I would say the last six months to 12 months to sort of take back the mantle of search and build AI into search, which is also, I think, a big explanation for why perplexity is pushing so hard into.

⁓ browsing and the agent in the browser.

Eric Cantor (20:34)

Is, ⁓ a teach to, mean, any comments on this name? ⁓ yeah.

Atish Davda (20:39)

have a view on that. Look, I agree with a lot of what Jan-Erik has said. ⁓ I think there's two additional items I would add. ⁓ think Perplexity has taken the approach of, if I don't have my own core LLM, and now the quote unquote larger firms, OpenAi and Thropic, are coming out with competitive product suites, maybe what I can do is just go and lock up distribution.

It's a big reason, candidly, think, why they've gone to India and have started striking distribution deals that are going to give them hundreds of millions of users in a matter of ⁓ just a few quarters, ⁓ if not a couple of years. And you talk about what's your competitive advantage. I Jan-Erik, covered it. This company has a phenomenally high product velocity. They have demonstrated that, they can be methodical and surgical about what they're going to pick off first. And when they see the threats coming,

Okay, now OpenAI also has kind of search mode. By the way, Google Chrome has just now laid out the gauntlet and come up with a browser AI tool ⁓ that essentially is supposed to compete with comment. Again, distribution matters. So now they're gonna say, okay, now I'm gonna pivot and focus on a different avenue for a competitive advantage. There's a reason Perplexity is the ninth most popular company on Equity Lens platform. Of course, it's an AI.

unsurprisingly, the most popular industry on the secondary market on EquitySense platform right now. ⁓ Scale AI, believe it or not, and Anthropic kind of still remain in the top three of most popular companies. But it's been fascinating to see Perplexity not just become a popular name that was well recognized, but remain an endurer in the top 10. And I think it's a lot of ⁓ credit to what Jan-Erik was talking about.

They kind of saw the market evolve even rapidly in a matter of three, six months and they moved quickly.

Eric Cantor (22:37)

Right. Let's move to our second company we picked out for discussion. And by the way, people can drop questions in the Q &A as you're as you're already done. ⁓ Shifting to another sector that a lot of people are interested in, which is kind of national security and defense. ⁓ Tell us about Helsing.

Jan-Erik Asplund (22:54)

Yeah, so if perplexity is kind of the AI native upstart ⁓ version of Google, think with Helsing, the comparison that comes to mind most easily, think for ⁓ most of us would be Anduril which Helsing was founded about four years after, but is kind of the European counterpart to Anduril. are a European defense company, highly indexed on AI and highly indexed also on kind of geopolitical. ⁓

the geopolitical ramifications of the last few years, right? We're seeing European defense budgets are now steadily rising with commitments from a lot of EU countries to ⁓ generously increase their spend amid ⁓ the war, Ukraine and Russia. ⁓ And all of those governments are also realizing that their national arsenals are well behind and haven't been refreshed in decades and that there needs to be

⁓ not only innovation to bring ⁓ their military sort of up to speed, but also ⁓ European native ⁓ companies doing this ⁓ for various reasons. The last few years, there's been tensions between US government and European governments, and European governments in turn have looked for ways to sort of ⁓ seed and foster a domestic ⁓ defense ecosystem. ⁓ So Helsing is one of the biggest ones.

from Germany, they do autonomous drones, underwater ⁓ drones, do AI ⁓ for battlefield management in general, much like Anduril, also for fighter jets. ⁓ So they have raised the most ⁓ value to about 12 billion euros. And yeah, some of the biggest sort of backers in Europe have lined up behind ⁓ Helsing as the sort of European

champion of modern defense, incorporating AI and kind of going toe to toe with ⁓ going toe to toe with Anduril kind of on the world stage and being able to partner up with the big European prime contractors domestically.

Atish Davda (25:05)

Yeah, the market view on this is national security is ⁓ currently the sixth most popular industry. ⁓ It fell out of the top five candidly ⁓ right around the election time. It had kind of surged up and then it kind of came back down. ⁓ I don't think the enthusiasm even for the

I mean, know, Jan-Erik you just mentioned several states in Europe that are turning and changing their posture to be more supportive. I don't think it's a surprise that even the US is continuing to go in that direction. And candidly, ever since 2022, just a number of conflicts that we've been aware of as an everyday operator and market participant has grown.

Not entirely surprising that this is happening. I think Andrew will kind of continues to be the big juggernaut here. ⁓ Andrew will actually still in the top 10, eighth most popular company on equity lens platform. ⁓ But know, Helsing has hundreds of investors that are interested in investing in it. ⁓ I do think being in Europe and being Europe focused ⁓ means that there's less of an awareness in the U.S. It's just natural, know, they're just have less of a presence.

covered a little bit less by the US media. ⁓ But it's, ⁓ look, I think if you are going to build a proper portfolio of national security companies, it's hard to argue that Helsing doesn't deserve at least some consideration to be in there.

Eric Cantor (26:38)

And I mean.

I mean, is this like an infinite market? How big, you know, AI for battle field like, it just seems like sadly there's probably very little limit for how big this can get.

Atish Davda (26:56)

I think if you add quantum computing into the mix, then you could raise a trillion dollar fund right now, just backing that industry.

Eric Cantor (27:02)

Great, let's keep moving. So space exploration, everyone's talking about SpaceX all the time, but let's look at another business, Axiom Space. Tell us about this one.

Jan-Erik Asplund (27:13)

Yeah. So while SpaceX is very focused on building launch capabilities as a way of eventually ⁓ building a civilization on Mars and elsewhere, Axiom Space is a little more narrowly focused on really building the replacement for the International Space Station. ⁓ So this is one of the kind of big government-backed space opportunities in the private markets based on the fact that the International Space Station is decommissioning in 2030.

So once that goes away, the US and US allies lose their basically only platform for human presence in low earth orbit. And what Axiom is doing is trying to be the company to ⁓ build the replacement. So they are building a station in parallel. They sort of have three revenue streams. One is flying private astronaut missions to the ISS ⁓ on behalf of the US, but also various US allies.

They're building next generation space suits for NASA for which they have a $1.26 billion contract. And they're also building out an earlier stages, but orbital data center business. So basically in space, ⁓ cloud computing for satellite operators. So this is a huge market. You have a lot of startups going after the sort of low earth orbit economy. ⁓ They have had some first mover advantage.

They have sort of existing relationships with the government, with ⁓ NASA. So if you're looking for sort of, de-risking is a strong word, they're one of the biggest companies, has had one of the biggest presences in the space for a while. So definitely an interesting one.

Eric Cantor (28:56)

So Cathie just joined, welcome Cathie. Apologies for whatever, it always happens when you leave Dixby. And aren't you overseas now as well or something?

Cathie Wood (28:59)

my gosh.

I am in, and maybe we can blame it on that. Maybe we can blame it on Switzerland Let's do that.

Eric Cantor (29:13)

I heard the international zoom links are very poor. Yeah, we'll blame that. ⁓ It is great to have you. ⁓ We want to catch you up a little bit. So maybe if you could just give your brief introduction. A lot of us know you and admire a lot of your work, but just tell us where your head is these days and what you're working on.

Cathie Wood (29:33)

⁓ okay. Well, thank you for giving me that free rein. ⁓ Well, as you know, we are focused exclusively on technologically enabled ⁓ disruptive innovation. And we feel like we're in a prime time now. When I started my career, which was a long time ago. So in the early eighties through the nineties, all of the seeds

for the innovation that has germinated over the last 25 years, all of those seeds are flourishing now. And yet it's been so interesting over the arc of my career to see investors just throwing money, just throwing money at ideas that were well before their time. The technologies weren't ready, the costs were too high. So we didn't get cloud until 06, we didn't get...

the two big breakthroughs in AI until 2012 and 2017. So 2017, especially transformer architecture and the costs were prohibitive back then. So just to give you a sense, and I know maybe a lot of your investments or your discussions are not around healthcare. We think healthcare is the most profound application of AI.

Autonomous mobility is the biggest revenue generator associated with AI in the next five to 10 years. But back then, if you think about healthcare, analysts and bankers were talking about personalized medicine, but it costs $2.7 billion to sequence the first persons, just one person's.

whole human genome and it took 13 years of computing power. Today, okay, 2.7 billion in 2003, 22 years later, we're down to $200. So we are ready for prime time in all kinds of disruptive innovation. And yet today in the public equity markets, not so much in the private, which I know we're talking about here today, but in the public equity markets,

There has been a shift towards passive and towards benchmark sensitivity, which really, when you think about it, the benchmarks, the big and successful stocks in the benchmarks are there because of what has happened historically. And they may or may not win in the new age. We think some are going to be disrupted. There's a lot of talk about Apple really not being able to keep up in the AI age. And we've seen that for the last six years.

So everything you're talking about today, venture, private markets, ⁓ we are ready for prime time. And in the public markets, there's fear. The private markets, well, thank goodness for the chat GPT moment because the private markets started opening up with that. And now I think they're broadening out because there has been such a dearth of ⁓

&A activity, IPO activity, until very recently. So we're pretty excited about this moment in time for private investing and for ⁓ technologically enabled disruptive ⁓ innovation generally.

Eric Cantor (33:10)

It's an awesome intro. We're catching up to where we are with this slide, but before we get to here, I want to go back to something we covered a couple minutes ago, which is just product innovation. Talking about technology innovation, but also, you were one of the first, or the first, I'm not sure, to put private deals into a public wrapper. I'd love to just hear a little bit about how investors are responding to that, or were there challenges you didn't foresee? How is that going, and where do you see it going next?

Cathie Wood (33:38)

Yeah, it's been really exciting for us. Now we have always ⁓ researched private companies. So we started our ⁓ interval fund, which is a 40 act fund. And I did see your chart. Thank you for highlighting us on your chart. ⁓ So we started that three years ago, just almost exactly three years ago. So at the end of 22, which was incredible timing.

We're not going to take credit for the timing. We probably would have loved to have gotten it out a year earlier, but then we would have suffered the fall that came with 22. Instead, we were able to average into private companies, were public-private, with the goal of 80 % private, 20 % public.

because as an interval fund, allow inflows every day as low as $500, and we are able to accommodate redemptions once a quarter up to 5 % of NAV. And what has been our experience with this? Yes, we were one of the first, there were others, but I think we are scaling, I think faster with

private companies we're getting on the cap table and most ⁓ other funds, FortiAct and otherwise, are not getting direct to cap table. And I think one of the reasons we are is because of the research we've been giving away for the last 11 years. So we have an open ⁓ source research ecosystem and we give our research away

not when it's finished because it's never finished, but as it is evolving. our most productive social network, many people think it would be LinkedIn. It's not, that's good, but that's more for a conservative, ⁓ I think, breed of investor. Our social network of choice and where we're getting the most activity is X.

And it seems that ⁓ investors, not investors, but innovators who are out there in the field, heads down, innovating as aggressively and fast as they can, know, move fast, break things. They really do like our research because what we're doing is sizing the opportunities they're going after ⁓ using something called Wright's Law. And we don't have to get into that, all.

All it does is help us understand the learning curve associated with each technology and therefore how quickly the costs are going to fall and how quickly those cost declines are going to be passed into price declines so that a technology can scale across sectors. That's what we do from the top down. We are as bottom up and stock research driven as any other team out there. That's my heritage. I grew up in that business.

that starting point, many innovators are very grateful that we're sizing the opportunities they're going after. And these are huge opportunities. And so if they see us making a mistake in one of our assumptions or saying something that doesn't agree with the way they're evolving their companies, we will have dialogues. And that is such a win-win for both of us.

So we are direct to cap table, I think for 95 % of our holdings. We've tried to stay away from SPVs because we've seen, you know, the piling on and meaning fees upon fees upon fees, but more important for us because of the way we do our research, we need to have access to data rooms and management teams. And I'll just say one other thing. I know I'm going on about this, but

One of the things, one of the reasons we've been more successful than I think even we expected getting direct to cap table opportunities is even in our early days when, you know, we could only cut $25,000 checks. Now we're cutting five to $10 million checks because we're up to, I think it's $320 million in the venture fund, but even back then.

We would go to the founders of companies and we'd say, you are in the sweet spot of where we believe this new technology is going. You're doing it. And we'd like to share our research with you. And very often they would already know our research and they would already have featured it in their decks as they are trying to tell their own stories, which is fantastic. It's a win-win for us.

Now, what has been the gating factor? Why aren't we bigger? Well, 320 million puts us in the top 10 of venture companies. So that kind of surprised me. In the public world, altogether we're in between $35 and $40 billion in AUM. So we have a lot of places to put these private companies when they graduate.

and they can stay in our funds because these are evergreen. But the gaining factor has been for us ⁓ getting on platforms. So we had to start with a company called Titan. They were very interested in what we were doing. You may have heard of that company and they have been very good to us. They did move to an upfront fee kind of service for their clients. And so

They have not been growing as quickly as our second platform, which was SoFi. And since then, we're now on Schwab Fidelity and Pershing. $300 to $400 million is what wirehouses need. So Morgan Stanley, UBS, Merrill Lynch, B of A Merrill Lynch, Wells Fargo, they need $300 to $400 million before

they will start their due diligence. Raymond James would be in that category as well. ⁓ So now we're there. They are doing their due diligence. And the other thing that's very interesting here in Europe, there is no such thing as what we're doing in Europe. And so we are evolving a strategy, hopefully the regulators bless it, that we hope to launch here as well. So it's been a journey. It's been a fantastic journey.

⁓ led by Charlie Roberts and Chase Prather, but most important, and this is critical, I think as a differentiator of ARC relative to other venture funds, the analysts on our public funds are the same analysts on our private funds. We know that for regulatory reasons in the past, companies set them up separately.

We think there's a continuing developing and a continuum developing. And we do think a lot of funds are going to end up being public private, especially with this new SEC. The SEC ⁓ is very focused on the idea that ⁓ the number of equities in the public equity markets have been cut in half during the last 20 years and more companies are staying.

Why? Regulation, regulation, regulation. Well, they're going to turn that around. So I think we're going to see a lot of regulatory in a positive sense, ⁓ opening up for both the private and the public markets in terms of taking down unnecessary regulations.

Eric Cantor (41:58)

Awesome. That context is super helpful as we, as we keep looking at these businesses and the products, ⁓ exciting stuff. Maybe we jump back. I think we're back from our detour back into Helsing. So Janer just gave his overview of this company. Actually, sorry, we were on Axiom space. We, we, ⁓ yeah. So Axiom, ⁓ so Atish, do you want to just comment? know that we, I, we went away for a little bit, but super interesting business here. ⁓ what are you seeing on your marketplace relative to this name?

Atish Davda (42:28)

Yeah, yeah, happy to do that. And just wanted to echo, ⁓ Cathie and I did not coordinate this ahead of time. And I just want to call out the worldviews of why these tailwinds are converging. The company's staying private longer, access to retail where innovation is happening. ⁓ It's nice to see that the OG in the space and some of those of us that have come along ⁓ more recently are seeing the same opportunity and the belief kind of remains.

Cathie Wood (42:58)

Yeah, thank you for all you're doing. You've got a fantastic, fantastic platform here with a great demographic. So thank you.

Atish Davda (43:07)

I appreciate that. ⁓ Back to your question, Eric. So, Cathie, you were just looking at the next company on the list here, Axiom Space. ⁓ Look, it's no surprise. SpaceX kind of remains the most popular company, at least on Equity Sense platform. ⁓ I would go so far as to say definitely top five in the secondary market generally. Axiom Space is actually the second highest monthly mover.

in September, it's jumped up the most in terms of popularity. There's over a thousand investors kind of banging on our door looking to get access ⁓ into the company. ⁓ And Jan-Erik, I think you were mentioning one of the key reasons why the low-Earth orbit economy, I think is the way you phrased it. It's fascinating to think that even in the science fiction world that's now becoming closer and closer to reality, there's actually stratification

that we can take a look at, quantify, and at the same time, ⁓ companies can provide counter positioning to others. Hey, you guys want to go to Mars? That's great. We're going to focus on the low Earth orbit opportunities here. So we're certainly seeing an increased attention into the aerospace subsector generally. And I know we have a couple more to get to. So Eric, I'll kick it back to you. I do want to make sure we cover the remaining two names on our list.

Eric Cantor (44:33)

Great. Any last thoughts you want to add there, Cathie, on Axiom before we do that?

Cathie Wood (44:37)

Yeah, we have a position in Axiom. As you know, we're all about space. ⁓ We put out, we actually opened open sourced our SpaceX model. You can find it on GitHub or on our site and you'll see that that, you know, we think space is big business. It's a whole new world. Many people ask me, ⁓ my gosh, we're

We're going to lose so many jobs because of AI and automation. What are we going to do? I said, are you kidding me? There are two big new worlds opening up, just opening up. And if you go to chat GPT or Grok and ask, okay, what are going to be the new jobs that will be created during the next ⁓ five to 10 years because of new technologies?

Space exploration is a big one. ⁓ I ⁓ remember asking the question, okay, what are the new jobs? ⁓ Asteroid miner, and it got me thinking, yes, of course, there's a whole new world opening up. So I try to talk people off the ledge when it comes to AI and automation and say, go for it. There's a whole new world opening there. And there's a whole new world opening thanks to blockchain technology in

the digital world because now we're going to have for the first time immutable property rights. So, but space is big, ⁓ Axiom we do have a position in, of course SpaceX is our largest position. And you're right, there's a lot of work to do in space, especially as the ISS is decommissioned and

And Axiom helps to operate the successor to the ISS, so pretty exciting.

Eric Cantor (46:33)

My kids are going to be excited when I tell them they can go train to be an asteroid miner. Next company, let's dig into a fintech. And by the way, somebody asked along the way, how did you choose these companies? These were, you know, why didn't you pick Anderil instead of Helsing? And the answer is we wanted to pick kind of the up and commerce companies. Maybe you haven't heard of, we did an Anderil briefing on a couple months ago. We're to do SpaceX in a couple of weeks. Those have been talked about a lot. We like to talk about those. has some great analysis to share, but

we want to kind of pick the kind of emerging businesses. So let's actually jump ahead to ramp. I think ramp is probably the most interesting company I've left. We have time for about one more here. ⁓ Jan-Erik, do want to give us the overview and we'll kick the tires on it? That's great.

Jan-Erik Asplund (47:16)

Yeah, so to zoom back in time a little bit for context on ramp, if you go back 10 years ⁓ and you're a startup trying to get started as a business, trying to get a corporate card, ⁓ going through a company like Amex could be quite difficult because you don't have a lot of cash coming in every month, presumably. Now you might have done a seed round, ⁓ so you might have some cash in the bank, but that is not a compelling explanation for

for traditional banks. So you had companies like Ramp that kind of emerged and filled this gap and they would underwrite based on ⁓ the money you had in the bank, being a startup and they would also orient towards ⁓ rather than earning rewards on your spend, which is a various sort of consumer ⁓ centric benefit. They really oriented hard around this idea of savings. So as a business owner ⁓ operating on

you know, a finite amount of cash and runway, you want to save money. You don't care so much about getting rewards points. And that was really what Ramp built around as their wedge. And from there, ⁓ they really expanded. So the first thing they expanded into was kind of doing OCR ⁓ over receipts so that they could automate all of your expense management, you know, which otherwise you'd spend hours on every month. And they started with expense management. They've expanded into ⁓

automating bill pay, procurement, more recently into travel, treasury, building this kind of all-in-one ⁓ operating system for business finance. They're at a billion in sort of annualized gross revenue run rate, ⁓ which compared to sort of nearest competitor Brex, you they're at around 700 and yeah, valued at 22.5 billion. So one of the bigger ⁓ private companies in the space and definitely one of the biggest.

in that Infintek.

Eric Cantor (49:14)

I liked my Brex card until I saw this. Atish, do want to comment on this name and what you're seeing? We're getting number of questions we're probably not going to get to. So if you want to talk about some of the other names people are asking about, mean, there seems to be certain names that you cannot find. So tell us about Ramp and whatever else you'd like to comment on.

Atish Davda (49:34)

Yeah, so, Ramp Fintech, look, Fintech became unpopular when the interest rates rose. Now that interest rates came down a little bit last year, and they're beginning to come down a little bit again this year, and generally there's a risk on sentiment that we're seeing in the public markets. I think Fintech has once again risen in popularity. It's not just payments driving it. That's the important thing to point out here. I think if you think about Ramp purely as, based on the numbers that we've looked at, look, it looks like a solid business.

If you zoom out and again, kind of take a big picture and then say, well, what is ramp actually doing? Well, is it actually driving the, it's driving small businesses, driving the innovative businesses, driving the venture back businesses forward without having to them to take venture, you know, venture debt or go take, you know, lines of credit elsewhere, helping them actually become more efficient using technology and dispersing them right at the point of origin in terms of the numbers where the source of truth is.

That's pretty powerful. ⁓ Just from a market standpoint, thousands of investors ⁓ interested in investing in Ramp for the most popular ⁓ subsector on the platform, on EquityZent's platform is FinTech, and we're big fans of Ramp actually ⁓ partnered with them as well in order to try and see a lot of EquityZent client base, not just accredited investors and shareholders, ⁓ they're just tech forward. They're tech enthusiasts. Many of them are entrepreneurs.

And so there's actually a good collaboration ⁓ with Ramp that we ended up doing. I'm happy to say that we're definitely big fans of the company and the space channel.

Eric Cantor (51:12)

Cathie, any quick thoughts on ramp? Do you want to try to squeeze one more name in so we're...

Cathie Wood (51:17)

Yeah,

just very interesting. We have not done work on ramp. We have. I asked my team to look at it and they said, you know, it gets great reviews, great products and just funny as I was coming out the elevator to my hotel room, I met a young person from ramp and I love to meet young people who are in the midst of, ⁓ you know, an experience like this enjoying.

a quote unquote ramp like this because you can see the enthusiasm and ⁓ it's pretty infectious. So we'll probably start taking a look at it.

Eric Cantor (51:54)

Great. Let's try to race through one more name, Jan-Erik. We have five minutes left. Let's do side quantum. Just different, interesting, and I know deep tech. And then I want one more question. let's see if we can capture all that.

Jan-Erik Asplund (52:11)

So, PsiQuantum, their ambition is to build sort the world's first commercially useful ⁓ quantum computer. ⁓ There's a bunch of companies in the public markets doing this, IonQ, Rigetti. ⁓ You also see work on this at IBM and Google. ⁓ The upshot of a ⁓ quantum computer, what is that exactly? It's all about sort of ⁓ solving problems that are difficult for classical computers, even sort of the biggest.

supercomputers. So a lot of the applications are in chemistry, material science, ⁓ optimization, cryptography. There's also potentially with artificial intelligence, which is sort of built or the modern paradigm is built on linear algebra, you know, in speeding those up potentially, which is part of why Google and Nvidia are looking closely at quantum computing and, and SciQuantum in particular, you know, they've raised a billion dollars, you know, they have a fair amount of ⁓

government partnerships from the US and Australia. ⁓ And they also have this sort of manufacturing angle around building their quantum chips at an existing semiconductor fab in New York using the same processes that make regular chips in theory, allowing them to sort of leverage the entire semiconductor industry that's been ⁓ optimized, the supply chain of it for decades rather than sort of building something from scratch.

So that's the, yeah, that's the gist.

Atish Davda (53:40)

Yeah, a market standpoint, third most popular industry, sixth most popular company on EquiZen's platform, this has been pretty consistent, surprising that it's kind of remained there. Obviously, quantum computing is deeply in the interest and is like dice more, about 3,000 investors trying to get access to it right at this moment.

Eric Cantor (54:05)

Awesome.

Cathie Wood (54:06)

May I say something, Eric? Yeah, just ⁓ we promoted our director of research to chief futurist to focus exclusively on opportunities like this, like what's the new new. So he's been doing a lot of work on quantum computing. And, you know, I've been in the industry for a while and I've heard, well, it's 20 years out, it's 20 years out every year. And now we're hearing it's 10 years out. OK, that's good.

⁓ Brett ⁓ believes, Brett Winton is his name, that the breakthroughs that we're seeing in AI right now are so profound that ⁓ they are ⁓ really ⁓ receiving a lot more of the capital allocation to innovation that might otherwise have gone to quantum. And he doesn't believe that, of course, this research and this work has to continue now.

So we're not saying anything about that. But in terms of commercial, true commercial applications, he doesn't see much until the late 30s, early 40s. Now that's commercial applications. Research is different. But we've been watching this for a while and we know that AI is surprising investors, analysts, researchers.

⁓ in terms of ⁓ its capabilities and how it is not asymptoping in terms of performance as we pour more money into it. So I think that many of the dreams we've had about quantum, some of them might be solved by the breakthroughs ⁓ yet ahead in AI. ⁓

Eric Cantor (55:58)

Cool. I'm going to try to sneak in one more question each to you. Super short answer, circling back to where we started, which is all of our investors here. So I'm an investor. want to start dabbling in venture for reasons we've discussed. I've got, I don't know, make it up 10 to $25,000. want to deploy. I learned a ton on this call. I now feel ready. What should I do next? Atish?

Atish Davda (56:23)

Look, what I would do is I would take two thirds of my money, put it in a diversified basket. If you're an accredited investor, can consider platforms like EquityZen. If you're not an accredited investor, you should absolutely consider 40 Act funds regardless. I would say take a look at ArcBX, take a look at EquityZen's platform. With the remaining one third, use that to start doing research, get your hooks in, start putting your mind to work on it let your curiosity kind of let you make individual bets.

Eric Cantor (56:52)

Cathie, last word on this?

Cathie Wood (56:54)

last word, always depends on risk tolerance. That's the first thing. But I guess if they're on this call, they have a high tolerance for risk and they're very curious about the future. So if your risk tolerance is high, you know, and you can just let your money ⁓ work for you, I don't think there has ever been a more fertile time in history.

than the technology revolution we're going through right now. ⁓ So, you know, of course, consider the source, you know, we're in the public and the private markets focused only on this. Many people consider this niche investing. It is not. This is the way the world is going to work. So just as one person, and I can afford to do this, but I have all of my money in ARK, crypto and private venture funds. That's how confident I am.

that we are in a completely new age.

Eric Cantor (57:55)

Great last words. All right, thanks to everyone. Thanks to all you for being on the panel. Thanks to our attendees for joining. We will follow up with recordings and a lot of other info and we'll see you next time on our SpaceX briefing in a few weeks. Have a great day.

‍