FULL TRANSCRIPT
Slava Rubin (00:00)
Thank you everybody for joining. I'm excited for today's conversation. My name is Slava Rubin. I'm one of the founders here at Vincent. We are your platform for all things democratizing and access to alternative investments. You can read our alternative investment report on the daily, listen to our podcasts, Smart Humans or obviously we do these timely webinars talking about hot topics. With us today is a regular, Jan-Erik from SAKRA. Jan-Erik say hi.
Jan-Erik Asplund (00:25)
Hi, everyone. Great to be here. Thank you.
Slava Rubin (00:29)
So today's conversation is gonna be unique one, very timely. Everybody is talking about IPOs and is SpaceX gonna IPO in June? Is Anthropic or OpenAI gonna IPO soon? How do I get access to Anduril, Databricks, Stripe and others before they IPO? Because it seems like they're all set to IPO soon. And when I say soon, I don't mean next week. I mean potentially in the next year and a half, let's call it by the end of 27.
So is all that value stuck in the private markets and impossible to get to huge fees? You have to be concerned about fraud, single layer SPVs on the cap table, second layer SPVs, third layer SPVs, fees and carry, lots of chaos. Everybody wants to know how do I get into this action today? So our conversation today is going to be talking about how can you actually get exposure to these companies right now in your brokerage account?
where you could just buy some public tickers and you could get exposure. You might be wondering what am I talking about? Well, we will get into that in just a second. So let's first word from our compliance department. Nothing in this presentation should be construed as an offer to sell securities or a solicitation of an offer to buy securities. All investments involve risk and possibility of loss, including loss of principle and neither past performance nor forward-looking information is a guarantee of future results.
So quick snapshot of who's in the room. We have a lot of accredited investors this time, which is exciting. It means you are a little bit more sophisticated and potentially looking to deploy bigger dollars. Some of you have some experience and are advanced, like 23%. A bunch of you intermediates and some of you are beginners. And a lot of you plan to make some pre IPO investments in the next 12 months. Now let's go to the next slide.
And here's our agenda for today. So we're gonna talk about what's happening in these public market funds. The fact that you have now options for funds that have more than one of these pre-IPO companies. We're gonna review what are options into the six companies we mentioned and we'll have Q &A throughout. So there's, for those of you that are new to our process, there's a Q &A button at the bottom here. You can feel free to add any questions. I do my best to try to keep track of all those questions
throw it in whenever you want. You don't need to wait for Q &A. You don't need to raise your hand. You don't need to do anything like that. Just send us your questions. But I do have a specific survey I'd like to start off with, which is how many of you are looking to buy pre-IPO exposure through a public market name? Okay, so not how many of you are looking to buy pre-IPO companies through some, you know,
through a fund, meaning a private fund, or some fees and carry, or trying to find an SPV, or finding the right broker. How many of you are actually thinking about going onto your Robinhood, Schwab, E-Trade, et cetera account, and actually trying to buy some of that in the next five minutes, 10 minutes, hour, year, in the next 12 months, how many of you are looking to get public market exposure to these pre-IPO names? So is that yes, that's interesting?
Or no, that's confusing, that does not seem appropriate, that does not seem the right way to get exposure, maybe it's not the right fee structure, et cetera, et cetera. So let's give it 20 seconds. How many of you are trying to actually get public market exposure to the top pre-IPR names?
Okay, survey says...
All right, so ⁓ one quarter of you are not interested. That's not interesting, but you do want probably exposure to the actual pre-IPO companies. That's why you're here. But three quarters of you are like, yeah, let's figure this out. How do I get some public market exposure to these names? So let's dive into this. Jan-Erik why don't you start for us, give me some context on what's happening.
Jan-Erik Asplund (04:12)
Great, so this trend towards private market assets, particularly pre-IPO companies, startups becoming more more accessible has been kind of the story since roughly 2012, that's when this graph starts, about Facebook's IPO was sort of the big bang for a lot of this kind of...
democratization of private market stuff with sales happening on second market for the company when public that kind of thing. It has sort of trickled down right from being primarily the remit of ⁓ family offices and, and, know, existing accredited investors to today where, you know, anyone can go onto onto some of these platforms and buy some amount of, of a, of pre IPO company. And so
you know, in terms of the sort of volumes we're talking about here, we've gotten up into the, you know, past the hundred billion mark of what is being exchanged yearly in terms of secondary volume. So people who already own shares in private companies, reselling them on marketplaces through brokers or what have you, and then really giving rise to, you know, lot of deliberation and theory about, know, how, you know, how do you build a portfolio of private companies?
How do you balance it with public companies? How do you pick private companies? Do you pick your favorites, pick winners, pick companies that you know well? Do you try to build a basket of these companies? And I think that this trend, what you're seeing on the graph here, which is sort of the institutional to prosumer kind of shift and secondary is what has now given rise to the things that we're going to talk about today, which are
these public market vehicles, these public market funds and baskets for getting exposure to pre-IPO companies without necessarily needing to get access to the cap table, get access to an SPV as you mentioned, and deal with trying to figure out if the fees make it worth it to invest in that third layer SPV into Anthropic, et cetera. yeah, everything that we're gonna talk about, I think is sort the outgrowth of this
decade long, decade plus long trend towards private markets becoming more accessible.
Slava Rubin (06:24)
Perfect, so let's go to the next slide.
Jan-Erik Asplund (06:26)
Okay, and these. Yeah, go for it.
Slava Rubin (06:29)
Yeah, so I just want to make sure I remind everybody. So we're not talking about the brokers. This is not you being able to find through one of the brokers or through one of the 20 brokers, you know, where can I get my SpaceX or Anthropic shares for the best price and is it a single layer, double layer? What's the fees carry, et cetera? That is not what we're talking about. We're talking about if you have your Robinhood account or any of types of account like that.
Right now, while we are speaking, you can pull up these tickers. You can pull up VCX, DXYZ, RVI, ARKVX. And you can actually find what the price is and you can buy one of these shares. So I think that needs to be really well understood that these are not things that you need to broker. This is actually through regulatory advancements. Now that's the second layer there where it's the structure.
closed end funds, interval funds that are navigating how to be compliant, but be able to have a publicly traded vehicle. We are not gonna get into the actual machinations of how that happens and like why it's regulatory appropriate, but this is all kosher. This has been approved by the SEC. This is actually being traded and this is totally legit. VCX is brand new. It's been trading as a private vehicle.
for a couple few years and it actually just IPO'd about a few weeks ago or a month ago, something like that. DXYZ has been around for a little longer. So a little bit more of a track record in terms of its performance as to how it trades. RVI is actually Robinhood's own product. So, you know, clearly they are intrigued by what's happening there and their clients asking for this. I think that's also a fairly new product.
And ARKVX has been around for a little bit longer as well. I don't have the exact dates on them. But these are things that you can trade right now. But Jan-Erik, what other comments do you want to bring up here across these four various opportunities?
Jan-Erik Asplund (08:31)
Yeah, I think you know that it's remarkable. Yeah, VCX being about a month old and RVI very similar. Destiny is kind of the OG and the goal there is to invest. That's right. right. Yeah. Destiny DXYZ is kind of this, the original idea was to be 100 % private. Whereas ARKVX is mostly private.
Slava Rubin (08:45)
DXYZ.
Jan-Erik Asplund (08:58)
⁓ and to own shares in a hundred pre-IPO startups. I think they're at around 50 right now. So it is pretty broadly distributed. Whereas for example, Robinhood right now, RVI has about seven holdings, I think, and they have two new investments pending. So there's a bit of variance that you'll see if you look at their holdings on how many companies they hold, what kinds of companies they hold.
and that kind of thing. But otherwise, I think the other main thing I've seen, noticed is that because these trade on public markets, because these are holding companies that people are excited about, there has been a tendency for the sort of the price of the vehicle to greatly exceed the value of the things it's holding, which we saw with VCX shortly after it listed and then also with DXYZ.
in 2024, trading at a 500%, 1000 % premium to Nav. So this happens in the public markets, of course, and of course, with companies like OpenAI, Anthropic, in the holdings, it'll happen. So something to be aware of as you're looking at these baskets.
Slava Rubin (10:09)
So you mentioned NAV, so that's the Net Asset Value. So that's the actual value of the underlying companies that they own based on the latest valuations for the company. So this is an objective measure based on the latest valuations. It's not saying how well the companies are doing, it's not saying how well the companies will do in the future, but based on the latest prices of the holdings of each of the companies, that's what ⁓ really accountants and auditors
confirm that nav. Is that right, Jan-Erik
Jan-Erik Asplund (10:41)
Yeah, and it's worth mentioning, I think all of these, more or less all of these are done quarterly. So quarterly is when the new, the NAV is updated based on their own internal valuations because these companies often don't have their valuations change quarterly. So the fund itself is doing some work there.
Slava Rubin (11:00)
Yeah, it's a great point. So when you see these as public shares available, that's the market price. There can be some separation between the NAV and the price that it's actually selling at. That doesn't mean the accountants and the auditors have approved that new price. That's just saying that's what the shareholders that are buying and selling this share are saying. This is what we think it's worth. We think it's potentially worth more or less than the actual NAV.
which is obviously a very interesting opportunity to see if it's worth too high or too low. Specifically for VCX, the Nav is around $19, DXYZ around 20, RVI around 24. The way ARKVX is set up, the Nav is around $49.
because it's only changing quarterly, you can't just rely on the NAV. You also have to have some opinions as to where you think the market price is at too high or too low. So, the most recent pricing, we made these slides a few days ago, but let me check here. Last I saw VCX, even today, was volatile. So VCX right now is 88.90. Just shows you that it's already moved down from 111. DXYZ is around 29. RVI around 25.
and ARK just under 50. So it just shows you that there's obviously some movement that's happening. We already have a question from one of the audience members is, you know, do I think that 6X NAV multiple, the MNAV, do we think that a 6X multiple for 111 versus, you know, the 20 VCX, is it too high to pay?
That is really a great question. We're gonna dig in further because you have to think about what are the assets that are inside there.
And then what do these premiums or discounts mean in context? Really what it means is the accountants and the auditors and the latest valuations of these actual companies that are reviewed quarterly, that is the price that it's worth. It does not take into account speculation, potential future rounds, what potential growth weights could look like, and that's where the actual market price separates
from the most recent NAV. And some would argue that's crazy, and some would argue it's totally fair. So it's really for you as the investor to decide. We do have another question, which is, can I trust the counterparties under the hood? So anytime you get into private investing, especially through these SPVs and such, you have to do a lot of diligence and make sure you trust the party you're interacting with and then the counterparty that you're tracking acting with.
where I think you can feel a little bit more comfort is these are SEC monitored and reviewed and regulated funds. That's not to say that they're not doing tricky forward contracts. I think you need to read each one of their underlying investments and filings for you to understand what they're doing for each of their investments, but know that this is much, much, much bigger magnifying glass and scrutiny that they're looking, that they're being held under. So.
you know, I get a little bit more comfortable thinking about investing via the public markets because of that. What do you think about that, Jan-Erik
Jan-Erik Asplund (14:18)
Yeah, I agree. I agree. For the most part, think the forward contracts point I think is good to understand, you know, are they on the cap table or are they in SPVs What's the foundation there? think it's important to do your due diligence before investing. And then on the point about NAV and premium, think, you know, typically 6X NAV typically with a closed end fund would be very surprising given that generally these kinds of funds traded at discount to NAV, but
with these companies that we're gonna talk about here and that we've talked about in many previous webinars. It's kind of the perfect storm for these multiples to get high because of the excitement, the fact that these funds are some of the only easy ways to get access to these companies. And because there is really a phenomenon of companies growing revenue by 10 billion.
in between quarterly valuation events, right? So there is actually a degree to which these companies can sort of outrun their own navs, outrun the nav at the basket and grow to an extent so quickly that some of these multiples become more sort of rational versus just kind of momentum-based, but we'll talk about that more.
Slava Rubin (15:26)
Yeah, and then other things to highlight here is, you know, there are fees. So each of these products is offering a fee between 1.85 % and, you know, 2.9%, which is far from nothing, right? Because when you invest in, let's call it Amazon directly, just some AMZN shares, there are no fees, especially in a no fee brokerage, right? It's very low fees, extremely low fees.
and a lot of them are no fees. Here you're getting an annual fee. That's definitely not nothing. mean, there's other ETFs where it's 10 basis points, 30 basis points, potentially other interesting mutual funds that are 30, 50, even 100 basis points. A basis point being 0.01%. So 1.0 % would be 100 basis points. So typically they talk in basis points. Here we're talking almost in entire percentages, right? So.
1.85, 185 basis points up to 2.9, 290 basis points. So that is not nothing. But again, if you were going through the private markets, we're talking about fees and carry and broker fees, there's gonna be a lot of fees and potentially we're talking about layer one, layer two. So you just have to take these trade-offs into consideration. Any thoughts on that, Jan-Erik
Jan-Erik Asplund (16:43)
I agree. Yeah. think, mean, it's high compared to your typical passive ETF, but at the same time, you're, banking on, you know, well over 2 % yearly returns for, you know, these kinds of funds and the kinds of companies that are investing in. So I don't think it's anything, you know, to dismiss out of hand just because it's higher than your typical ETF. It's, it's, these are more in line with your typical kind of closed end funds. So, ⁓ yeah, worth it to be aware of, but not, ⁓ anything surprising.
Slava Rubin (17:10)
And then the other variable that's very interesting is when you go into an SPV, into Anthropic a week ago, you're not getting out of that SPV. You can't trade it. It's very difficult to trade. Not impossible, depending on where you did it, but very difficult to trade. Here, you actually have, especially with these, you know, daily traded exchange ones, VCX, DXYZ, and RVI, you can trade in and out immediately, which is really a fascinating feature.
So you can have some exposure to SpaceX and then decide, you know what, I don't want anymore because I need to go pay for the car or whatever. You can sell your shares, meaning in this fund. And with ARKVX, there is a limit on redemptions, but still it has decent liquidity. And the reason they're able to do that is, correct me if I'm wrong here, Jan-Erik, but each one of these VCX, DXYZ, RVI,
has a portion of their holdings that has to be kept liquid, like in T-bills, et cetera, whatever, so that they can cover any sales without actually having to sell the underlying SpaceX, et cetera.
Jan-Erik Asplund (18:11)
Yeah, I believe that's correct.
Slava Rubin (18:14)
I don't know the exact number, but I think VCX even something was like 25 % of it is held in, know, liquid available cash in some form of T bills, et cetera. And I think all of them have that sort of cushion. So if there was any sort of run on having to sell or to get money back, they have the liquidity available without selling to underlying companies. Okay, so all of this is interesting.
To understand the structures and the types and the fees and the liquidity, etc. But really what matters is what do I get exposure to? What am I actually buying? What do I wish I had in a package that I just get through one of these vehicles? So let's go to the next slide. Which is here are not all the holdings, but the top five holdings for each of these funds. So without going, let's call it play by play. What's your
quick reaction here, Jan-Erik, and let's turn this into a conversation. And if anybody has any comments or quick reactions, if anybody wants to vote on which one is their favorite, or feel free to send me their order of one through four in the Q &A, feel free to order however you want or send me any comments and I'll try to incorporate it. What do you think, Jan-Erik?
Jan-Erik Asplund (19:27)
Yeah, I think one of the things that jumps out, that jumped out at me making it and then jumped out at me now is how kind of, there is a fair amount of crossover. I think that if you're looking for four distinctly very different bets, there are differences that we'll talk about, but there is a huge indexing on the sort of AI infrastructure trade here, right? From Anthropic,
being number one, VCX, Databricks. VCX is probably the most AI max long, ⁓ but everyone has Databricks or Anthropic. OpenAI is up there, ShieldAI, OpenEvidence. And so this is clearly sort of the dominant theme, I think, and expressed most clearly with VCX. Whereas, for example, I think Destiny and ARKVX a little bit more of a...
know, throwback being more SpaceX proxies with SpaceX being the biggest holding by ⁓ some margin at DXYZ and also at ARKVX So yeah, those are kind of some of the big themes that makes them all kind of exciting, you know, bets on some of the fastest growing companies in the sector, but makes it little bit more of a fine distinctions, you know, analysis when you're looking at one versus the other.
Slava Rubin (20:43)
Yeah, I would totally agree. I I don't think these are for radically different offerings. It's rather different packages of how you want to hone in on the companies you want exposure to. So I'll just give you my quick perspective here and feel free to challenge in any way you want via the Q &A. But let's go with ARKVX first. So ARKVX is interesting.
A little bit I would call it the most diverse offerings of types of things. So you have a heavy SpaceX offering and a pretty heavy OpenAI offering there. Only time that you're seeing Replit show up in the top five and Replit just raised, which is interesting, Figure, which is really the only robotics offering that you're seeing here in the top five.
You could argue that figure is potentially overvalued, so that might be tricky, but that is obviously your opinion. And then Anthropic is showing up in the top five, which is awesome, but with about three and a half percent. In total, we're looking here at about like 40 % is in the top five. Then RVI, you have a huge Databricks position. I think Databricks is an amazing company.
I don't know that it has rocket ship growth, funny use of word there, but it has steady growth and is probably gonna be an amazing company for a very long time, but that is a huge position. So you have to be a big believer of Databricks with RVI. And then you have Revolut, which I would say Revolut and Ramp are kind of the only FinTech name showing up and they have two of them here, right?
So they have 14 % of Revolut, and then we don't have the ramp number, but let's just say it's enough.
Jan-Erik Asplund (22:29)
Sorry,
are both seven ramp and air walls are both about 7%. We had a logo.
Slava Rubin (22:34)
20 % in fintech. Me personally, this is one man's opinion and this is not investment advice. I don't love a lot of fintech exposure as part of my pre IPO exposure. Plus it's not even Stripe. You know, so I think potentially Stripe is the best name. So the fact that that's 20 % Mercor then is a data labeling company, which by the way, data labeling is growing super fast, but the margins are rough and it's highly competitive.
So that's another 14 % there. And then you have air wallocks at 7%. DXYZ, again, a very big position. Oh, but they are concentrated. RVI is quite concentrated with, what is that, 42? We're talking over, like two thirds of it is in the top five, which is both good and bad, depending on how you're trying to get your exposure. And then you have DXYZ, SpaceX, big position, 16%.
Shield AI, super interesting way to play defense tech. They just doubled their valuation, potentially has some tailwinds behind it, especially in the near term. Has some data bricks, which you can't argue with. Beast Industries, super interesting again. And I'm a huge fan of the open evidence position here as well. So I think that people mostly think of DXYZ as only a SpaceX proxy, but I do think their Shield AI and open evidence.
is really interesting, unique positioning that you don't see anywhere else on this slide. And then you have lastly, VCX, which for full transparency, I have invested in VCX. I bought and sold, just so you know, really has the biggest Anthropic position, which Anthropic is kind of the darling of the moment. That can obviously change. OpenAI was the darling, I call it a year ago. So who knows what can happen?
⁓ But right now that Anthropic position is serving VCX very well. It also has a very large Databricks position, which we talked about with RVI. Not massive growth potential, but very steady. Open AI, big position, 10%. So combined with Anthropic, you have over 30 % exposure to the LLMs, which I think is interesting, especially if you're trying to play ⁓ AI. And then you have Anduril Anduril, this is the only time Anduril is showing up here in the top five.
You do see Shield AI 4.1 % with DXYZ, but Anduril will does get more of the love. That doesn't mean it'll get more of the return on a multiples growth basis, because who knows, maybe Shield AI will keep up with the growth versus Anduril or maybe not, it's hard to say. But in defense, definitely Anduril is the 800 pound gorilla. And in their top five is Ramp, which we covered as part of RVI. I think it's a good FinTech name.
I don't love it in the top five, but again, that's just me. Sorry, I'm biased there. Not, you know, trying to get a huge exposure to FinTech as part of my pre-IPO exposures. So any thoughts on that, Jan-Erik?
Jan-Erik Asplund (25:30)
Yeah, I think it's a great summary. ARKVX, the most kind of like traditional portfolio. RVI, yeah, RVI is small and I'll be curious to see how they expand it. They also have holdings in Boom, Supersonic, which is interesting, and Ura, I believe coming up are gonna be 11 Labs and Stripe. But even just saying that, it does feel, it's kind of a, it's very wide range of.
of companies, adding in defense, adding in Stripe, adding in AI audio generation. So yeah, it's a little bit diverse. I'm not crazy about having Mercor at the top of the holdings or Revolut personally, but Destiny XYZ, yeah, I think they have like 23, 25 holdings in companies. I like the SpaceX.
you know, concentration and holding, think that's key. But yeah, I'm not crazy about some of the other names either, you know, Impossible Foods, companies like that in there, but I do think there's some, you know, Stripe, Revolut, OpenAI, Anthropic that are just lower than the 3.5 threshold. it's definitely interesting as a wider index. then, but yeah, I think VCX you know, if you forced me to say sort of where my favorite was at this moment,
And I think with this sort of moment and venture that can change quickly, as you pointed out, think VCX has really strong positioning being kind of AI centric, right? And having Anthropic is key at number one, but also Databricks, OpenAI. know, Ramp has an AI story and then there's sort of a below the fold. have SpaceX with 5%. ⁓ They have Flox safety at 3%, which is an interesting company.
and worth looking at and Epic Games at three and a half percent. I think in total, yeah, they have a fair amount of holdings, like roughly 30 companies, but those make up the vast majority of the portfolio. And I think it is the most exciting to me, from the perspective of where am I gonna see sort of the highest growth? What companies do I think have the potential to be number one or number two, which is where I would love Anderil.
ramp, Databricks, seeing those is good.
Slava Rubin (27:39)
Yeah, so one comment here, DXYZ should have higher SpaceX allocation than 16.2 % based on reports. Yonair, any thoughts on that?
Jan-Erik Asplund (27:49)
It could be. could be. Yeah. I'm not sure. I put together the data the other day. So I don't think it should have changed since then, but that's what their current website says as far as what their holdings are.
Slava Rubin (28:02)
Okay, great. And then also there's a difference sometimes between what's the percentage of the assets into companies versus what's the percentage of the assets versus the total holdings. Because there's also sometimes holdings that is not in the companies. But again, this is not financial advice. You guys should do your own diligence and thank you for bringing that up. So if you were gonna order them, I'm gonna force you, Jan-Erik, one through four, which one?
is one, which one's two, which one's three, which one's four. And again, it's one man's opinion.
Jan-Erik Asplund (28:31)
Yeah, that's a point. Probably, for me, would be roughly VCX and purely holdings, VCX, ARKVX, DXYZ, RVI. I think that's probably where I would fall.
Slava Rubin (28:47)
Oh my gosh, we've been doing it We've been doing it too long. Yeah, I agree with that. I would go VCX1, ARCVX2. I like the fact that ARCVX, I actually like the five names. just wish, know, figure wasn't so expensive in my opinion over price, but Bread Act is great at fundraising. So I think there is the potential for it to go up. I just don't like the RV. I'm actually shocked.
Jan-Erik Asplund (28:49)
Is it the same?
Slava Rubin (29:14)
that Robin Hood, which by the way Robin Hood as a stock, this is not public markets advice, but I love Robin Hood and I use Robin Hood, but I don't think our VI is so strong. think they need to, I guess I'll be bold here. They just need to do better. I get access to great names and I think they will. I think they have it in them and they should have the access. DXYZ I think started out with really just being a SpaceX proxy.
but I think they've done a nice job of layering in some more names. So kudos to them on that. I do like Shield AI and OpenEvidence there as things that are hard to find that they have some exposure to. So what happens, Jan-Erik, these companies are gonna IPO. So let's just take SpaceX. Let's just assume for a second, SpaceX IPOs in June, there's gonna be the lockup, So.
What happens on July 1st, assuming the SpaceX IPO happened on June 15th, that's just me making a date up. So what's next? mean, now if they hold onto their SpaceX, now I'm paying the 2 % fees round number here for something that I could just be buying directly. So does that mean that these funds all need to keep on reinventing themselves? Or are they gonna hold the assets and try to become a mutual fund like that or an ETF? But that's kind of weird because then you're overpaying for this exposure. What do you think about that?
Jan-Erik Asplund (30:33)
Yeah, I think it's possible that they will. mean, that's kind of how ARKVX works. ARKVX has public holdings as well as private holdings. I don't know the long-term strategy. I think actually VCX might have some public holdings, small public holdings as well. Yeah, very small. I mean, it would seem like a sort of difficult problem, a difficult challenge to sort of be able to do both at one time.
I think it would make more sense to, know, once the lockup is over, yeah, return the capital and make other investments. it'll be interesting to see, you know, especially with some of these companies that I think are, you know, going to be blue chip names once they go public. As long as things continue to go as they have, know, Anthropic, OpenAI, SpaceX, potentially we see IPOs for all these companies inside the year. So, yeah, we'll find out soon enough, I think.
Slava Rubin (31:26)
And how are they getting more cash to buy more names? So like how is the XYZ buying open evidence? Is it through the fees on the current or are there ways to invest into the XYZ to have it get more capital?
Jan-Erik Asplund (31:38)
Yeah, I think it's, ⁓ you know, pretty, you know, they're pretty capital constrained and a lot of the money is from those initial raises that they did when they started the fund and then any kind of follow on offerings, which they do periodically. But yeah, I think those are the main ways, you know, these kinds of follow on raises, because I don't think that, for example, selling their existing position, I'm not sure that that's going to be doing it. And then there's no
income from holdings that they have, no distribution. So it wouldn't be from that either. So yeah, that would be my guess is that they're doing additional raises specifically to fund new acquisition.
Slava Rubin (32:16)
So ARKVX, somebody asked how do I buy it? So it was just on the previous slide where you could just go to ARKVX and be able to buy it directly with them.
How do these IPO's do? What percentage are successful over? Well, you know, a lot of IPO's don't do well. They pop and then they do what Figma did. No offense to Figma, but Figma was a hot IPO. We talked about Figma as a matter of fact, it was a pretty IPO conversation. And you know, it actually now is down 80%. So you have to make sure that you're thinking about how you wanna trade this. Is this a near term exposure? Is this a long term exposure?
when the company goes public, do you then wanna buy it through the public markets and get rid of this exposure? So that's for you to think about. So what's wrong with FinTech? So again, this is my opinion, there's nothing wrong with FinTech. Just like there's nothing wrong with DefenseTech or LLMs or AI or HealthTech. It's just, you need to pick what you like and what you don't like. And I'm just not a guy that thinks that you can get.
massive companies. There has never been a trillion dollar fintech company. So I just like the idea of a company being able to become absolutely massive. And usually that's not by fintech alone. Again, one man's opinion, don't overthink it. Feel free to do what everything is appropriate, not investment advice. So here's a fun question, which is what prices did you buy and sell VCX at? Why did you sell? Just arbitrage or was it holding? So
For me, I thought that VCX had the potential to pop as part of the IPO because of the holdings versus its nav. So that's why I did it. I also thought its holdings are really strong. For what it's worth, it did kind of jump the shark and went straight up and then straight down. If you look at the chart, it has like a mountain view to it and it comes straight down.
If you actually do the cost of the parts analysis and you factor in what Anthropic being priced at 800 now or a trillion versus the 380 billion that it's listed, if you think about SpaceX as potentially two trillion versus directionally one trillion that it's listed at and other interesting things that are happening, I do think entering at a three, four X NAV is fair. Let's just round the NAV at $20 to use a simple multiple.
as something like 19, but just let's use 920 as a simple round number. I do think if you see anything with a seven handle, meaning a 70 something, or especially a six handle, I do think that is a really nice entry point. For what it's worth, I even bought some today and traded it when it got down to the low 80s, and then it back up to 90. So I actually think anything in the 70s is attractive. I do think it's gonna keep on.
having to find its own price. And keep in mind, it will be an unlock six months from when it IPO. So that could be potentially pressure on the downside. But between now and then, there's gonna be all the hype related to Anthropic and SpaceX and Androl. So, you know, it's for you to navigate how you'd like. Everything I just said is non-investment advice. All right, so we got a lot of questions here continuing. So,
Somebody's commenting about XOVR for SpaceX. So that's a perfect transition. So we're gonna transition now from these funds to now single asset names. So let's move on. Okay, so now we're gonna do something interesting that maybe some of you know and somebody who just sent a note asked about exactly, which is how about trying to get proxy exposure to some of these names via other public companies that already exist. So we're gonna go a little bit faster here.
Let's talk about SpaceX first. Jan-Erik go for it.
Jan-Erik Asplund (35:59)
Yeah, so as the questioner points out or implies, you can get access to SpaceX through ETF. It's a private public crossover that has, know, SpaceX has about 40 % of its holdings. So yeah, if you're interested in that one, I think the ticker is literally XOVR. But, you for this, we wanted to primarily look at kind of these proxy companies because there's some very interesting names here that...
that can get you access to companies or exposure to companies without the fund, without the management fee, without all that. So with SpaceX, were three big ones that popped out. One is Alphabet Google, which was one of the earliest investors in SpaceX invested $900 million in 2015 for a 7.5 % stake, which today gets you about 3.5 % direct exposure.
⁓ through direct equity with Google being on the cap table of SpaceX. similarly, ⁓ a company you may not have heard of, a fund you might not have heard of is Scottish Mortgage, which is a, you know, it's a Bailey Gifford managed trust. And it actually holds about 100 companies, half public, half private, bunch of UK startups. And, you
maybe somewhat surprisingly, gives you 4.5-ish percent exposure to SpaceX because they took a two billion pound stake a few years ago, direct equity. So those are two big companies you can invest in to get exposure to SpaceX that are not ETFs or funds.
Slava Rubin (37:32)
So mean, this is just super interesting. you can get some exposure to SpaceX just by buying Google. I mean, I think that's fascinating and you don't have to pay any fees. Now, obviously all of Google doesn't own SpaceX. Google is not SpaceX, but to know that it has a 7.4 % stake, I mean, that's significant. Cause we were just talking about these funds that had 3%, 4%, 5%, 15%. So here you are, you can buy Google and then EchoStar.
I mean, you're getting a big chunk of SpaceX exposure via EchoStar, which is not a surprise if you look at, I'm just doing it real time, if you look at the SATS ticker symbol, the stock symbol that in the last, what is it? Since the acquisition, so we're looking at a company that went in virtually the last year from $16 to $130. That would have been a nice trade.
⁓ if you knew about that potential acquisition. But that then rapidly moved up. So keep that in mind, we're not the only people that know this. So is it really worth as much as it should be? Is 131 really a good price to enter in that? No investment advice here, just telling you that people are trading EchoStar, Sats, SATS, as if they're trading SpaceX. So.
All right, somebody wrote I thought SpaceX is circa 16 % of the Scottish Morgan Nav.
Jan-Erik Asplund (39:02)
well.
Slava Rubin (39:03)
That is not, that's not what it is, right, Your Honor?
Jan-Erik Asplund (39:08)
I don't think so. I'm confident on the destiny numbers being correct. And I'm pretty sure this is right, I could be wrong. Do your own due diligence.
Slava Rubin (39:18)
Okay, perfect. So somebody asked about ARKVX. It is available in SoFi or Titan or through agents or brokerages. Okay, so let's move on to the next one. So if you wanted exposure to Anthropic, which everybody and their mother wants right now, considering they just mentioned that they hit a $30 billion run rate of revenue, which is absolutely nuts.
Let's not debate whether or not that revenue is accurate or not. Obviously that's diligence and reporting. But how do I get exposure to Anthropic without buying Anthropic or these funds?
Jan-Erik Asplund (39:49)
Yeah, like you said, 30 billion, know, sort of some question marks around exactly how the revenue is reported there, regardless, growing extremely fast. And yeah, right now, you know, it's a bit sparse. The two best ways to get access are through two, you know, equity investors and partners, namely Amazon, which has sort of been the main partner of Anthropic and then Google, which has come in slightly more recently as a big partner, but also has a big stake.
Again, if you want to invest in the leading coding model and enterprise model in Anthropic and growing the fastest, can invest in Google Gemini, which has Gemini, which invented the transformer, which has maybe the most broad AI program in terms of doing 3D, doing video.
having a leading image model, doing LLMs, all that kind of stuff, you can sort of double dip there. Or with Amazon as kind of one of the key hyperscalers doing the infrared side of AI, both get you a modest exposure to Anthropic through their equity stakes.
Slava Rubin (40:53)
All right, perfect. So there's a question, what happens to all this stuff as SpaceX ends up being a down round from where it's trading today or comes out hot? Well, what happens is all these various exposures will move up or down accordingly because the market tries to be efficient. So people factor in all these movements very quickly. So if it's a super high IPO, all these proxies will go up significantly. And if it's a terrible IPO, these proxies will go down. Let's go to the next one.
Jan-Erik Asplund (41:23)
Fortunately, a SpaceX down round will not make Google's stock price go down too much. So you have that if you go over the proxy. OpenAI is a little bit more sort of accessible to the public just because, or primarily because you have, you know, Microsoft, right? So Microsoft and OpenAI have had a very deep partnership for a long time. Microsoft took a huge stake in the company about 25 % a few years ago. And so, you know, today, if you...
want the clearest kind of, know, clearest kind of comp and index on OpenAI. It still is Microsoft, I think. Although you can also invest in obviously Amazon and Nvidia as well. You know, also worth mentioning SoftBank, which most people will remember from kind of the 2020, 2021, 2022 era being one of the key players backing a lot of the big
big capital, know, capital demanding companies of that period, like WeWork, they are sort of back, you know, the new strategy is basically to back OpenAI, right? And so they've secured, you know, 40 billion, they did a $40 billion financing for OpenAI recently this year, following up on, you know, a 30 billion previously. And so, you know, that...
Softbank is largely kind of building itself out now as like an open AI investment vehicle, which you can invest in. So that's another option.
Slava Rubin (42:58)
Yeah, so the interesting thing here is you actually have really good proxy exposure to OpenAI if you want, right? Microsoft has massive exposure. SoftBank has really solid exposure as well. And really, Nvidia and Amazon have pretty big exposure as well, right? So you're not getting a pure play OpenAI, but I think OpenAI is probably the easiest one to get exposure to without actually going through one of these funds or without prim-
paying any extra fees just by doing the proxies. Said very simply, you can kind of just buy Microsoft, which is an incredible company itself, and you kind of just get a bunch of open AI and you get all the benefits of Microsoft. A question here is, how sticky are these holdings for the managers? When we went through the top five holdings and such, are they like trading them in and out daily or weekly or monthly?
Not really, these are really like buy and hold strategies, essentially, but the manager does have the right to transact as needed. But most of this is quite sticky. Jan-Erik, would you have any agreement or disagreement there?
Jan-Erik Asplund (44:01)
I completely agree. Yeah. As far as the company's on there now, I think again, what we'll see will be interesting will be later this year over the next 12 months as these companies start to go public. And what's going to happen with how the reshuffle is going to look, I think will be really interesting.
Slava Rubin (44:17)
Let's go to the next one.
Jan-Erik Asplund (44:18)
Perfect. real, yeah, probably is, you know, I think in keeping with the theme of Anduril, probably the most challenging, um, sort of one to get any of this kind of proxy exposure to, um, you know, you're not really going to be able to get, um, any effective exposure. Um, there is a very small amount, uh, from the, the, the fund that was mentioned earlier with regard to space X. So you can get, you know, about 0.2 % exposure.
So it's very on the small side. And then sort of just, you know, to give you a sense, know, Palantir, Palantir is a partner and is sort of part of the same wave of defense tech companies. know, AI is a core element and kind of tech startups is a core element that are gaining a lot of traction, especially with this administration and this administration's emphasis on what they want to spend money on in defense. So.
Do not buy Palantir thinking you're actually getting exposure to Andriil, but it's more of an operational partner that they're somewhat indexed on each other's success to an extent. They're not tightly coupled, but it's way to invest in the trend behind Andriil that obviously has had a very exciting ride in the stock market over the last year as well.
Slava Rubin (45:36)
So yeah, this is, I would say probably the hardest one to try to get the public market exposure to. And the reason Jan-Erik was sharing Palantir is because that's not even a direct exposure. That's really an indirect kind of off the same theme. So I would agree with that. But if you're looking for pure play defense tech, Anduril is quite unique. It's hard to really invest in Lockheed Martin or Rayfion.
or Boeing and really expect to get the same growth and the same returns, even though they're in a similar market, Palantir is already worth quite a bit. So I think they have the potential to grow similarly, but they won't be, you know, identical at all because while Palantir does serve a lot of defense oriented things with governments, they also have a whole lot of other things as part of their business. So yeah, Anduril,
I would say is the hardest to get that direct exposure to via the proxies. next. Databricks.
Jan-Erik Asplund (46:37)
Yeah, so Databricks is a simultaneously easy one to kind of get exposure to, but it's one of the least, it's one of the less clear ones. So you have a long list of companies that have invested. have Google Alphabet, which has come up several times, Amazon, Microsoft. You have a few other names, different names like Salesforce. Actually Meta was a backer last year. NVIDIA is a backer.
So you have plenty of these kind of blue chip tech names, fang names that are invested in Databricks. We just don't have access to, know, holdings or the effective exposure that you get as a result of investing in them. you know, worth it, you know, just to understand maybe what an investment in Amazon or Google or Microsoft is getting you access to, you you can sort of add Databricks to the list. But yeah, it's...
Definitely a small exposure.
Slava Rubin (47:38)
Alright, perfect. I Databricks is a very mature company. Probably be going public at some point, maybe not soon, just because they raised a recent round. you know, you have these huge companies that get you exposure there, like we mentioned. Alright, and the last one.
Jan-Erik Asplund (47:51)
Yes, Stripe is another one that has very few kind of clear, you know, public market companies based in the US that own large stakes, but this is the return of Scottish mortgage, which holds SpaceX and has a bunch of other interesting private market holdings. They have a roughly 5%, you you can get roughly 5 % effective exposure to Stripe.
And then Bailey Gifford US as roughly double that. So you actually can get pretty decent exposure to Stripe. If Stripe is a company you're interested in, it's hard to get sort of access otherwise, much like Andoril. The shares are pretty tightly guarded and there's not a lot of proxies or funds that hold it. So these are one of your only options here with Stripe. If that's a company you're interested in, obviously one of the top fintechs and has been for.
for a long time.
Slava Rubin (48:47)
All right, well, this has been an interesting conversation. Obviously, it's very timely. There's a high probability that SpaceX is going to be going public in June or by the end of the year if any reason it delays. Not that I know anything. And everybody's talking about will Anthropic or OpenAI be going next, et cetera. Everybody's trying to figure out how to get access. And it's really tough in the private markets. There's a lot of players that are quite fraudulent. They're gouging with fees, et cetera.
So be careful out there. That's why we are offering and showing these opportunities for you to go through the public markets, which a lot of them are quite interesting, especially the single name proxies, knowing that you could get exposure to open AI via Microsoft, knowing that you could get some exposure to Stripe via the Valley Gifford US Growth Fund. So these are just scenarios that if you want to try to get the proxies, it's really interesting. So yeah.
None of this was investment advice. Obviously we want to just make sure that everybody's aware of what's going on. Hot off the presses, there's also another private opportunity, not public yet, called USVC, which is Angelist's offering of trying to invest into a venture fund into private names before they go public. And then in case you haven't heard, I just feel like I had to say it, which is Allbirds, the shoe company, sold their shoe assets, and now they are Newbird AI.
So when we thought, that's right, the shoe company is an AI company. So when we thought by adding the word crypto or blockchain was crazy, now we have all birds adding AI to become an AI company. So be careful with your investments, know that this is frothy times. That doesn't mean that there's not some incredible assets that might be worth 10X from here, but you have to be careful, do your diligence and make sure you think about.
where you're allocating your money and how you're investing. With that said, thank you everybody for joining and we'll see you again next time.
