FULL TRANSCRIPT
Slava (00:00)
In this episode of Smart Humans, we talk with Shane Neman from Neman Family Office and Neman Ventures, a serial entrepreneur who then gets into the world of venture investing and all types of alternatives. We talk about Sandbox AQ, Figure AI, the Ferris Wheel in Los Angeles, or even baby food. He's an optimist at heart and believes our future is bright. And of course, he gives us his picks for three years out.
Slava (00:53)
Hello and welcome back to the latest episode of Smart Humans. I am super excited for today's guest. We have Shane Neman, who's principal at Neman Family Office and Neman Ventures. Shane, I'm excited to have you here.
Shane Neman (01:07)
Thank you for having me. I'm excited to be here, Slava. It's it's been a while since we hung out.
Slava (01:13)
I know. So we've known each other for a little while, but here we are turning it into an actual podcast so our listeners can learn from your brilliance. But before we get into the details there, let's start with where did it all come from? Meaning, how did you get into this world of alternative investing and specifically for you, into the world of pre-IPO venture, startups, et cetera? Take us back to your kid, high school, college, jobs. How did you get into this world?
Shane Neman (01:41)
actually it wasn't until I was maybe in my you know early twenties. I was in med school actually, so I hadn't I didn't know anything about investing when I was younger. That's probably my one biggest regret is I wish I had learned about investing and invested, actually invested back when I was twenty. That would have been like thirty years ago. and you know, I'd I d
I'm very blessed. I'm not, you know, I'm not complaining, but it would have been an enormous outcome, you know, to invest 30 years ago. But anyway, I did a, you know, I dropped out of medical school to do a startup during the dot-com boom. I was convinced by my roommate at the time who was working at Goldman that we could become gazillionaires and you know, got my first it that didn't happen, by the way. we
made awesome software that and I have a degree in computer science so that's why he wanted me to do it with him and he was the finance guy. I learned a lot about investing in VC because we had venture capital backing. That's how I learned from the startup and I also learned how to fail because we made amazing software that
nobody used and was way ahead of its time. we were doing it at a time when the word cloud didn't exist, the word app store didn't exist, the word SaaS didn't exist. So even trying to sell something on a monthly basis was a a novel idea. So that's that's how it started. I did two more startups in the SaaS world where I
Slava (03:19)
This is the early
two thousands.
Shane Neman (03:21)
yeah, it was the early two thousands through two thousand thirteen when I had my second exit. I then bootstrapped, I vowed that I wouldn't take venture capital and I became very conservative in my investing. So I didn't really do much VC for another, let's say eighteen years, because I was, you know, focused on building my own startup.
and not going broke like I did last time. so I think, you know, my mindset was not of abundance, but of you know, it was in in an abundance in my business, but not in the investing part of my life, right? It was it was very conservative. and I was doing things like real estate and you know, bonds and savings accounts.
because I had kind of tasted going broke and never wanted that feeling ever again. and, you know, it wasn't really until after my second exit and I had moved from New York City to Miami. for many reasons.
Slava (04:23)
What year is this?
Shane Neman (04:24)
This was in 2014. so I had my my exit my second exit late like December of twenty twelve and then about a year later
I moved to to New York Si from New York City to Miami and I di I realized that I didn't want to do another startup and I was ready for a new chapter and that I needed to figure out how to not suck at investing pretty much if I wanted to do that. which I'm still trying to figure out by the way. That is an ongoing thing. but
That that's the journey that I've been on for, let's say, the last you know, twelve, thirteen years now.
Slava (05:03)
Super interesting. So just going back, so your first company, you drop out of medical school and you start a company, you get some venture capital and you guys go bust. and then you
Shane Neman (05:12)
Yes, two years later. Yeah.
Slava (05:14)
you then do your next startup, which you don't take any venture capital. Is that correct? So is that bootstrap?
Shane Neman (05:19)
No, I
just kind of really did it on my own. I coded it on my own, you know, sold it on my own, got a few customers, you know, started it really organically and then, you know, built it up into a pretty big business actually.
Slava (05:33)
What was the space of the first exit?
Shane Neman (05:36)
So we built the tech stack that most of the nightclubs and bars used, if you can imagine that.
Slava (05:42)
Nice.
Shane Neman (05:43)
it was in two thousand two. you know, no one was really looking in that niche. And then we built one of the first ticketing systems that was accommodating venues that, you know, just maybe had a a few thousand to a few hundred people going because Ticketmaster was not doing that. and yeah.
Slava (05:59)
Awesome. So you
do that exit from a bootstrap and then you go to a you start another company. Is that bootstrapped again?
Shane Neman (06:05)
Yeah. So I used actually capital 'cause I built I built profitable SaaS businesses
Slava (06:12)
Fascinating.
Shane Neman (06:14)
that were, you know, I never intended for them to sell them. I really thought that that was gonna be my career and my job. And that's also probably why I did it for so long. and so, you know, did it sustainably and used the capital from my other profitable
Business that I told you about to start another business, which was in the SMS space. So we built ease I built Easy Texting, which is pretty much like MailChimp for text messaging. Doesn't sound so novel, but in 2005, that's like three years before Twilio even existed. and from what I know and my own research, I could be wrong, but we had zero competition.
matters, which makes me think that we were the first platform in the United States to do that.
Slava (07:03)
Amazing. And when did you start the Tech Stack for ticketing?
Shane Neman (07:07)
That was well, I started that in two thousand two but didn't maybe until another year or two do the do the ticketing portion of it. And we
Slava (07:17)
So were you doing
the ticketing company and the texting company at the same time, like in two thousand?
Shane Neman (07:20)
Yeah, there
was about a two year overlap. That was the texting company came out of the realization that email efficacy was really kind of going down because that was part of our tech stack for the nightclubs and bars. you know, they had everyone's emails and then, you know, there it you were getting an email from the club, the promoter, the DJ, the DJ's grandmother, you know. and so the efficacy of email was really dropping and we realized that
that they also had everyone's phone numbers. and so we were trying to cut through the noise and that that's how the idea for easy texting kind of came came about.
Slava (07:59)
Yeah, texting's already big at the time. It's funny. Sometimes you're even paying per text. smartphone hasn't
Shane Neman (08:03)
That's that's how we started.
We were charging five cents per text actually.
Slava (08:07)
Yeah,
it's wild. I mean smartphone hasn't even come out yet for our younger listeners, right? That doesn't come out until
Shane Neman (08:11)
Yeah, that was
the only reason why it started in two thousand five. you know, most people were not texting in the United States. It was much more prevalent in Europe and maybe Asia and other countries. it it it was the Blackberry that kind of, you know, catalyzed that, I would say.
Slava (08:29)
Awesome. So then you're making some money, you're being pretty conservative with it. and then at these times you're just kind of like money market, like index fund, bit of real estate.
Shane Neman (08:37)
Yeah, yeah.
Yeah. And then and then when I came to Miami and I realized that I wasn't gonna start another company, I kind of shifted with the help of other really smart investors and advisors that took me a while to kind of build that network, that I needed to shift to shift my mindset to a growth mindset. if I wanted to
kind of not have to s do another startup and you know, sustain myself and and grow myself over the over, I don't know, the next God willing, if I live another fifty years or so, you know.
Slava (09:21)
Do remember that first investment? Or directionally one of the first investments?
Shane Neman (09:25)
actually for me, even public market exposure was very very novel, right? yeah, correct,
Slava (09:32)
Meaning individual stock picking or even any exposure.
Shane Neman (09:35)
correct. So I remember my advisors like, you understand Google, you understand Facebook. I mean, you have to understand this is like 2014. He's like, You should put a you know, I'm not gonna say the number, but like a like a
A very large number for me myself at that time, think, you know, for someone who'd never invested in stock, you should put one into each of like what's called the Mag Seven now, you know, or like let's say a million dollars into each of them, right? And and I was like, This guy is out of his mind. Like the thought of that was like just mind blowing. But you know, I I agreed not to the degree.
Slava (10:11)
Where wa where was this
money at this moment? Was it like in a money market?
Shane Neman (10:14)
It was like
basically, yeah, it was either just sitting in a bond or in a you know, thing. And and real estate was a little bit more palatable to me because I had some experience. My parents did that, you know, they were immigrants. it's cash flowing, it's tangible. You can actually, if something goes wrong, you can physically maybe do something to help, right? so it was, you know, and I and I came from
A place of being a startup founder where I felt like I could fix or do anything. and so that was a much more palatable investment for me. but as it turns out, the mindset of a of a founder is not necessarily compatible with that of a good investor. So so you know, it took me a while to unwind some of those habits and and relearn.
or or learn, not relearn, learn how to to be a good investor over time.
Slava (11:11)
So
just to contextualize for listeners, can you just give us some like high level summary of now you've invested quite a bit just so people understand? Can you just give us like to date kind of like the highlights?
Shane Neman (11:22)
Yeah, so I I did a lot of real estate investing when I came to Miami because quite frankly there were no tech people here. and that seemed to be the the thing that a lot of people did. I the timing of that was very good because of COVID. I couldn't have predicted that. So it was just luck. and also, you know, the move to South Florida. So did a lot of like what I would call commercial. We did you know, shopping centers, industrial.
I did a lot of cold chain logistics, which actually worked out during COVID very well. and then then I shifted more, and then then I did public markets, which I learned. And then and then over a couple of years, I learned how to analyze stocks. I'm not a trader, I'm a more of a buy and hold conviction investor, and learned how to analyze public companies.
and use what I know as a startup investor and in tech to to make decisions. Although I don't exclusively invest in tech, I also in invest in other other categories as well. So got to the point where I was comfortable kind of managing my own portfolio and not having a not having like a an advisor or anything like that. That took a while. and then got into private equity and learned how that worked.
First in funds, learning from fund managers. And then w you know, we d did a couple of notable more private equity or late stage investments. One of them, let's say a couple of years ago, was we we bought Pacific Park on the Santa Monica Pier, which it and I did that as a group with a group of other family offices, which is a really interesting
Asset because it's like one of a kind. And when you tell everybody about the Ferris Wheel in Santa Monica Pier, it's like an iconic asset. No one like most people know what that is. And it's very it's very rare to be able to buy something like that. not to mention it's a cash-flowing business, it's you know tourism driven and that kind of thing. And then you let's say about eight years ago, I started to get heavily into venture, mainly because
you can only keep a startup founder from doing another startup for so long. And I and and by the way, I had that issue where I've went really far and almost started something and had to stop myself because I had to come back to like center of what I really wanted out of my life and how I wanted my life to be. and so I decided that that I could get that fixed by
working and investing with into other startup founders instead of doing it myself. And I focused really on two kind of themes. One of them being frontier tech, right? I always liked physical, even though it was really let's say five or six, even seven years ago, that was not what people wanted. Hardware was not a place where people wanted to invest.
that's really kind of flipped on its head recently, let's say in the last few years, but did did a bunch of investments, you know, smaller angel investments and then eventually larger investments in robotics companies, quantum companies. we did some med tech that I think is interesting. and then on the other end of that theme, and and and I did a couple of AI stuff too, like
Perplexity and those things. But I really didn't like software actually. Even from five, six years ago, I I didn't see the I didn't see the AI was gonna replace the moat, but I saw that the the the moat in general with software was going away because everybody and their mother was starting a SaaS company. So I didn't really love that.
And the other side of that coin now has been, you know, durable businesses that I think would, you know, that the idea is like, do can I see this still being around in 20 years because of the nature of the business or human nature? So I'll give you two examples of that. We we did a company called Flex, I invested in a company called Flex Storage.
That is a pods competitor. So if you know, pods, they bring the storage unit to you, they do it better. And I can go through why, but let's say it's tech enabled and it's on wheels, and there's a lot of other reasons why it's better. But in my mind, in 20 years from now, people are gonna still store their stuff, right? or we did a baby formula because you know, I think that in 20 years from now, you're gonna still be feeding your baby baby formula, and I think it's a great category.
and there is there's that that hasn't had innovation in it for a very long time. and then, you know, so so so those are like it's almost like a barbell, right? Like it's like these frontier tech companies that are changing the world in ways that you can never imagine and we can't even predict. And then these like these companies that will
probably not be affected by them or I don't have a good enough imagination to see how they could be affected.
Slava (16:49)
so you mentioned something which is you have your entrepreneur mindset and then you also have your investor mindset. Those are very different mindsets and for many people that's a difficult switch. Can you just double click on that a little bit and just give us a little bit more color? What's the difference? What's
Shane Neman (17:04)
Yeah, so entrepreneurs tend to think that doing, which works for them, doing more and and doing a lot tends to get them better outcomes. in investing that could not be further than the truth. The more you do, let's just even say in trading or you know the more deals you do or whatever do doesn't
doesn't necessarily in many cases actually it's detrimental to you, right? when you're just kind of doing things off the cuff and just trying to iterate and quick and you know break things. I think there's a bucket for that, right? but for investing, you really I think to make sus sustainably make money, you have to be able to be a long term investor.
And that means sometimes just shutting up and sitting still and getting through it. and just being patient, right? it's very hard for entrepreneurs. And I mean, I'm not a patient guy. You I don't think you can be when you want to be a when you are a startup person. it's very hard for me to control that, right? And I still struggle with it all the time, right?
it's it's a it's a struggle to find that that right balance of doing and not doing and being thoughtful and being you know short-term oriented versus long-term oriented. so there's no perfect answer to this. everyone has their own style. And you know, it it just takes time to find the confidence to to get your own style, right?
and that it it took me a better part of I would say five or six years before I felt comfortable in my own skin where I could make bigger bets and, you know, even lead rounds or things of of that nature, right?
Slava (19:02)
Awesome. So let's let's change change the chapter here for your own personal net worth. So you're obviously a smart investor, you've gone through different chapters of how you invest from real estate to PE to venture to these durables, all kinds of interesting stuff. So today, if you were just going to break down to percentages of your 100% of net worth, the typical old school portfolio is 60% equity, 40% bonds.
zero percent alternative investments. You obviously have more than zero percent. What will be your three numbers? Public equities, bonds, alternatives, as one big giant bucket first. So what will be those three numbers?
Shane Neman (19:46)
So I've zero to bonds. if I were if I actually took the marks, which I'm not delusional enough to do, I'd probably be ninety-five percent in VC because
Slava (20:00)
Sorry,
let's just start let's just start in alternatives. So all of alternatives versus your
Shane Neman (20:05)
so
all I if you say V C is an alternative, then I would be ninety
Slava (20:08)
Yeah it it's a subclass of alternatives, yeah.
Shane Neman (20:10)
Yeah, so if if I actually took the marks, it would be ninety five percent because I had some outliers there.
Slava (20:17)
So it's five percent
public equities, ninety five percent alternatives.
Shane Neman (20:20)
Yeah,
pretty much. And then, you know, I've actually I still real est I I've s in the last two years, I don't know if you're counting real estate as alternatives, but in
Slava (20:31)
Outside of your
yeah, I would. Outside of your primary home, it would be an alternative.
Shane Neman (20:35)
Okay, yeah. So then it would be like that in the marks, and if not, it would be like almost fifty fifty if I didn't take the marks.
Slava (20:43)
Got it. So
Shane Neman (20:46)
So pretty much 50% alternative.
Slava (20:48)
Can you explain what taking the marks means, just so people understand?
Shane Neman (20:51)
Yeah. So when like let's say you invest in a company's A round or in their seed round or their B round or something, and then they do another round, let's say a year later or two years later or whatever, hopefully they're raising at a higher valuation, which means that your the value of your stock in that company.
Theoretically, at least in the private markets, even though it's not liquid, should should increase. And and when you do venture investing very early stage, typically if that company is a hit, you can have very large upmarks, meaning, you know, very large valuation increases. and so the stock that you own in that startup can be worth a lot of money.
if they do very, very well and it's you know, and time has passed. And that's that's been kind of like magnified with AI, I would say, especially because I did let's say Frontier Robotics Quantum companies early, right? Like I started that four or five years ago. And so that's why I say if I actually and and and the reason why I say if I actually take the marks and I'm not delusional is because
That number was set by some other investor, some other VC, some other group, some other private equity firm, whatever it may be, where they funded that company at that valuation. And I my style is to also go into the subsequent rounds as well. so I typically also invest in that round if I was an early investor. if I have a chance to and I have Pro Rada or that kind of thing.
And so it's a little bit delusional because it's not like liquid. I can't just go and for example, in one of the companies that I back back, maybe a robotics company, just go and sell that stock in the open market. There it's gotten a little bit better because there are these secondary markets now, like Forge and Hive and stuff, but
as you've seen with Anthropic and these other companies recently, they they're not down with that. They don't want you going around selling your stock and they won't they won't allow it and in many cases, you know, it any it requires approval and those types of
Slava (23:17)
Right. So just to double click on that, the thousand dollars that's in somebody's bank account, when they want to pull it out and use it, they can do it instantaneously. Or when they have some Google stock, you know, if they it's worth
Shane Neman (23:26)
They can sell it right away.
Slava (23:27)
it's like worth four hundred bucks or whatever it is, they want to turn it into cash, they can sell it pretty instantaneously through Robinhood or whatever it is that they want. In these private companies, there's various reasons that it's not easy to just sell it immediately and it's not clear about what the exact price if it would be able to be sold would be.
Which is why there's a little bit of difference between potentially what you're calling the marks and potentially the cash that one will get in their actual hands if they were able to transact. So
Shane Neman (23:51)
Yeah. Typically
it's like zero because it's the chances of transacting on these things are very low, right?
Slava (24:01)
Right.
So zooming in on the bucket which you call altern which we're calling alternatives, inside of alternatives is crypto, equ sorry, real estate,
Shane Neman (24:10)
Yeah.
Slava (24:11)
private credit, venture, art, collectibles, etc. If there's a hundred percent basket of alternatives, how would you slice your alternatives basket across those different categories? Is it yeah, exactly? So
Shane Neman (24:24)
That that I'm invested in, you're asking me? Yeah, so
I would say it's still ninety five percent V C and five percent. I did I was early in crypto. So I was I did in twenty twelve I got introduced by my my programmers in Kiev that you know to to to Bitcoin. They put a miner on my on my Mac at the time and so I got some Bitcoin and I also did some stuff on Coinbase. So I do have
I would say a good exposure to to to crypto and and and actually you know for my ki I have I set up like accounts for my kids and stuff. And I think that like those are good investments for them because like I don't have to look for look at it in twenty years. And I'd say more probably than not, Bitcoin will be worth a lot more in twenty years than it is right now.
Slava (25:16)
What
percentage out of a hundred would you say is your crypto exposure for your alternatives?
Shane Neman (25:22)
probably like two percent. but that's
Slava (25:25)
Got it. And then we
Shane Neman (25:26)
only because the marks on the alternatives have ballooned so much. We've had some really big outliers. If it wasn't that case, it would be more like ten percent, I would say.
Slava (25:36)
So
the those private equity Ferris wheel style Pacific Park investments, what percentage
Shane Neman (25:42)
Yeah.
Slava (25:43)
of that would you put in an alternatives as your alternatives best?
Shane Neman (25:45)
I would say
that's about real estate and private equity kind of would be in the five five to ten percent writ range as well.
Slava (25:52)
Each of them.
Shane Neman (25:53)
Yeah. yeah. Yeah, you know, private equity is very weird now because you know, what traditionally was private equity, which were late stage companies, is now considered VC because you know, you can have like a
A startup have a billion dollar valuation from the beginning.
Slava (26:15)
I
guess I guess the difference though, like with Pacific Park, there's like a yield orientation there and so yeah.
Shane Neman (26:19)
Yeah, ca yeah. So I
I would say yeah, I would say that okay, so the yield oriented stuff is about five percent as well. Yeah.
Slava (26:29)
Okay, great. So does that leave, let's call it like ninety percent is in venture? Is any
Shane Neman (26:35)
Yeah, I would say.
Slava (26:36)
is anything in art or collectibles?
Shane Neman (26:39)
Very little.
Slava (26:40)
Okay.
Shane Neman (26:41)
maybe my my son's Pokemon cards that he thinks because he uses Perplexity to like, you know,
Slava (26:48)
I love it.
Shane Neman (26:48)
sh grade them, but like, you know, there's like not worth what he thinks it's worth. But that's about it.
Slava (26:54)
I love it. And in regards to crypto, you mentioned that you're still long there. Can you give us your sixty seconds on that? Because it's trading pretty low right now with Bitcoin and the alternative markets in crypto.
Shane Neman (27:06)
I I I've met Michael Saylor several times. I believe his thesis on it. I also, you know, there's there's a I'm not gonna reiterate what he says, but the portability of it and the the scarcity of it is real, I think. And I think that it's now institutions are invested in it and you know the legal framework is working out for it.
So it may do something like gold where it doesn't do much and kind of like sucks for a while. and then, you know, gold, you know, hit all time highs in the last few years. so so you may have these like lull moments in it, but I do think it's probably undervalued based on
Slava (27:48)
So in the last
eighteen months, has there's been a little bit of a cooling in the space, have you found yourself selling out of any of your position there or trading into any other assets?
Shane Neman (27:55)
No, in fact I've been just adding to it here and there.
Slava (27:58)
So you've been trying
to dollar off cost average in a little bit more.
Shane Neman (28:01)
Yeah.
Slava (28:02)
Okay, great. So let's transition that into the economy. So you're obviously a smart guy. You have to think about what's happening at the global level, at the US economy level. You gotta check out what stocks are doing. So just give us like you know, you're on a soapbox Shane's point of view on the economy and the stock market. Very open ended.
Shane Neman (28:25)
I'm an optimist in general. so I don't think I'm smart enough to really predict macro, but I think that AI in general is a good thing. And I s I, you know, I'm I'm in abundance three sixty with Peter Diamantes, and I and I love I wouldn't say like I'm a huge Elon fan, but I I like him a lot. And I think that
you know, we probably are headed to an age of abundance. where where the economy just ends up doing much better. You know, we we're a lot more productive and people can do a lot more with a very little. And so I tend to think that things, even though there's this like doomsday scenario,
possibility of an outcome. I think that things will continue to do very, very well. I also think that this SAS Mageddon is overdone. you know, if I was an AI, and and and if the AI was smart, it would use existing tools instead of building them from scratch. And that's what smart people do, right? They they know how to, you know, bring in
existing tools to accomplish the task at hand in the s shortest amount of time possible instead of building something from scratch. and you only do that when you have no other alternative. So I don't ascribe to that. and I you know, I just think that the world is going in a good direction. maybe that's the optimist in me, but that's that's how I feel and that's how I
invest. I I obviously have a safety net, right? Where I keep a certain amount of cash or whatever whatever you want to call it, liquid or whatever, in c in case I'm wrong, right? And I can kind of survive out the one to five years or something that th things may go may may go sideways and I can pay my bills, right?
And I'm I'm I don't make a point.
Slava (30:31)
W where is that money?
Where do you keep that a one to five year safety net money?
Shane Neman (30:35)
I I'm just
in a s in a like a high yield savings account, I would say. or there there are there are some like really safe mortgage REITS or something like that that I would do it in that that kind of thing. You know, kind of diversify it a little bit to get a little bit more yield. but or life insurance, actually.
life insur I remember you had your the guy who did the big ki Bitcoin life insurance on your thing on your podcast that I found fascinating by the way. and I was like this close to doing it, which I I still would consider it. but life insurance is actually a really interesting thing. People poo-poo it a lot, but it has a lot of qualities that you might want that will get you better yield than leaving it in the bank.
But you can you can access it when you really need it.
Slava (31:25)
So you sound like quite the optimist on the economy, which is totally good. I'm gonna put you on the hot seat though and ask you for some very specific opinions on what's gonna happen in the next year. And you're obviously
Shane Neman (31:35)
Mm-hmm.
Slava (31:36)
gonna hedge and say, I don't know, but I'm gonna need to hear your opinions.
Shane Neman (31:38)
Yeah, yeah.
Slava (31:39)
Which is we're gonna do a lightning round here, which is recession. 12 months out. Will there be a recession or not? Yes, no. So,
Shane Neman (31:50)
No.
Slava (31:51)
no recession.
Shane Neman (31:53)
Yeah, I think that's a very low likelihood.
Slava (31:56)
Okay, so inflation up, down, flat from today, twelve months out.
Shane Neman (32:02)
That's very war dependent, I think, but I would my best guess is flat. My best guess is flat. Yeah.
Slava (32:06)
Well this is your narrative, so you so you get to predict it. Flat, okay.
Shane Neman (32:12)
My best guess is flat. It may it may fluctuate between now and then, but I think at the end point of that it'll be flat.
Slava (32:20)
Unemployment up, down, or flat twelve months from now.
Shane Neman (32:28)
I think it will be down.
Slava (32:31)
Down.
Shane Neman (32:32)
Yeah, I think that people will start businesses. A lot of people will start businesses.
Slava (32:36)
Sorry, so unemployment is in the low fours. So you think it's gonna go down to what?
Shane Neman (32:42)
Maybe just slightly, but not I mean it can't go that that much more down. But I think a lot of those people who were working for someone will now become their own bosses to some degree.
Slava (32:54)
Give me a number. So
Shane Neman (32:56)
I'd say it may c it may come down to three, maybe a little bit less.
Slava (33:03)
Three
zero or three something?
Shane Neman (33:06)
Three zero.
Slava (33:07)
Whoa, that's pretty low. All right.
Shane Neman (33:10)
I
think I think people are underestimating AI. And I think it's it's it's normal to do that because you know, you're not supposed to think
Slava (33:16)
Well, I had somebody,
sorry to interrupt, I had somebody on my platform here, you know, just a few guests ago who I believe said closer to twenty percent unemployment. So it's gonna be shocking
Shane Neman (33:25)
Yeah.
Slava (33:26)
unemployment, obviously because of AI. You know, that's obviously a perspective and a narrative. You're quite
Shane Neman (33:28)
Yeah. Yeah.
Slava (33:31)
the opposite, which is wonderful. This is why we have all these guests. Can you just
Shane Neman (33:35)
Yeah.
Slava (33:35)
give me like another 60 seconds as to why it'll actually go down and not up?
Shane Neman (33:40)
I think that I see even children using AI. My my daughter who's, you know, twelve just downloaded Perplexity and and these other things. I think a lot of people haven't even tried it yet and are and and and and we're just beginning. and I think that they're gonna find use cases for it to make money.
And and the definition of what employment is might change a little bit, but you know, I think of employment as either self employed or working for someone. So
Slava (34:16)
Fair enough.
Great. So the Fed rate. A lot of talk about that these days. Is the Fed rate twelve
Shane Neman (34:22)
Yeah.
Slava (34:23)
months from now gonna be up, down, or flat? We have Kevin Warsh and the new Trump.
Shane Neman (34:28)
flat,
I don't think they're gonna know what to do. It's too hard.
Slava (34:33)
Even twelve months from now it's gonna stay flat.
Shane Neman (34:35)
I think it's gonna say flat.
Slava (34:37)
Wow. Okay. And then all of this, no recession, flat inflation, unemployment down, Fed rate flat, what's gonna happen to the stock market twelve months from now? And you the stock market you could think of like the Dow or
Shane Neman (34:50)
The stock market just doesn't
Slava (34:52)
the QQQ or the S and P.
Shane Neman (34:54)
I think the stock market goes up.
Slava (34:56)
And it goes up by like the quote unquote average eight percent year over year, or more than that or less than that.
Shane Neman (35:06)
Ha ha that's a really hard question, man.
you know, because I think productivity will just increase a lot and I think that the SAS Mageddon will unwind that that that that whole like depressed trade will unwind to some degree. I th I think it'll probably be more than the eight percent.
Slava (35:28)
Wow, so we're looking like another bullish year. So this would be potentially like four
Shane Neman (35:31)
Yeah, so
Slava (35:32)
years in a row.
Shane Neman (35:34)
Yeah, but I I don't think that's anomalous given what's ha happening. I think it's anomalous historically probably.
Slava (35:42)
It is.
Shane Neman (35:43)
But but I don't think I think we're li we're living in a time that's unlike any other in history. And I know that's dangerous to say and you know, people
Who say this time is different get usually whacked. but I think right now we're going the stock market's going through this uncertainty right now. I mean, it's been down pretty bad you know, the last couple of months. but I think that, you know, as time goes on and people see
How astonishing AI is, not just the digital AI, but physical AI. And I think that you're gonna start to see this year the deployment of robots. I personally think that you know that's gonna change things a lot. and you know, it's just it's gonna be abundant, I think. It's gonna cause abundance.
Slava (36:33)
And so if I was to counter you for a second and be like, actually it's an overspend right now. There's like the hyperscalers are overspending on CapEx, there's an overbuild on AI infrastructure, you know, the robots, the AI, the deep tech, it's all wonderful, but it's not actually gonna be relevant in the next year or two. so this is actually all gonna, you know, bring down the stock market and it's gonna be a bit of a collapse.
Will be your agreement or counter to that?
Shane Neman (37:03)
I think that's possible. It's not it's not impossible. I think you have a valid argument. but I think it's more probable that what I'm saying is gonna happen than what you're saying, mainly because I actually, you know, I'm not smart enough to understand AI to the degree that the experts are, like Jensen and
I mean, I listen to the Moonshot Moonshots podcaster. There's one guy in particular, Alex Wisner Gross, who's who's really awesome. I think he's he's a very smart guy. there's a you know, a lot of other sources that I use that, you know, even on X and stuff. I think the general consensus from the people who are in it and are on the front lines is that that's not true. and and and there are financial people
who argue otherwise and they have valid points, I just I I think we're on a freight train that's almost impossible to stop.
Slava (38:02)
All right. So on that optimistic note, tell us some more about Neman Ventures. So it started out with you as, you know, I don't want to do startups anymore. I need to figure
Shane Neman (38:13)
Ha ha.
Slava (38:13)
out how to have a sustainable personal life and family. It's turned into this massive result, great, you know, on paper gains, you
Shane Neman (38:22)
Yeah.
Slava (38:23)
know, some incredible early investments. Can you give us a bit more color as to
the AUM you're now managing, what kind of investments you're doing, you know, the listeners, can they get involved in any way?
Shane Neman (38:35)
Yeah, absolutely. So I have two different things or two different hats that I wear. One is, you know, I have my own capital and my own family office. And then I have a venture venture firm called Neman Ventures. you know, what it's it started out as something that I was just kind of
doing on the side because I started doing a lot of these venture investments with my own checks. And I still do, by the way. It's not the and my friends were like, hey man, why don't you tell me about that investment? I would have done it too, or you know, that kind of thing. And so I believe it was like 2000 tw 2021. I had
You know, the first deal was a company called Sandbox AQ. It it spun out of Google X. It was the only other company that came out of their Way Waymo was the other company that came out of Google X. it's headed by a guy named Jack Hittery, who's like one of the foremost quantum experts, and Eric Schmidt's on the board and it was his project in Google. And you know, they did a sp spin out and I and and you know, not too many people were talking about quantum or quantum
Computing or quantum algorithms and these types of things. This is pre-Chat GPT and pre-all this kind of, you know, abundance that's gonna come, right? so you know, I was like, you know, this is the kind of deal that my friends would like. And you know, they keep asking me for it. And I, you know, I had a friend of mine who is a VC who was doing it, and he's like, Well, why don't you set up
you know, a fund and you know you know, put your own money in it and then ask your friends to invest it and then you can take a ca I didn't even understand the co concept of a carry or anything like that. And he's like that that way you can amplify your own investment. And if it's a good investment, your friends will will make a lot of money too. And so that was how I dipped my toe in it. And
before I knew it, that first fund was like, you know, eight or nine million dollars we we invested in the in in the in the company. It was exhausting. It was very hard to do. And you know, the as is anything that you try for the first time. And I made some mistakes and those types of things. But you know, there there was a good outcome for that because then they th there was a mark because the, you know, the next year or so they did another
I don't remember if it was a year or two or whatever, they did another around and everybody was really happy and quantum computing came into the spotlight. And then people were like, Hey, you know, maybe you're not such a shitty investor. so you know, and then I just kind of built upon that and have been doing these kind of one-off you know, they call them SPVs, right? Or or or special purpose vehicles, where
when I find a I don't the litmus test I use is is kind of weird and and and and hard to describe, but it has to be something that I
Slava (41:38)
What are what are
some of the check boxes on the Shane deal?
Shane Neman (41:42)
Well, it has to be in that category that I really believe in. I I do you know, I I'm not saying I'm the only VC that does it, but this is my style. I've even gone and worked at the company for a week or two and spent a really long time with the founder. It's very founder focused. It has to be something interesting because, man, you know, like if I'm if I'm not having fun doing it, then what's the purpose of doing it? I like deep frontier tech and stuff like that.
and I'll again I'm an optimist. And then it has to be something where I've kind of been convinced where I want to put a fairly large check in myself. and then I have a good enough relationship with the company where I can get the data that I need, create a data room, organize it, do do a deep dive investment memo that convinces myself. and then
I open kimono and give it to my friends or or other investors that we you know share deal deal flow with. And I bring the the the the founder on a Zoom. they do the presentation with me. then there's a QA session. they can follow up with more questions, and then the choice is the my friends. I'm not making the choice for them. Whereas you see a lot of funds.
not just there's real estate funds, there's, you know, private equity, there's crypto. I'm in a couple of crypto funds where I say to the person, okay, I'm gonna give you, I don't know, $100. I'm just making up a number. You know, invest this hundred dollars in the niche that you know very well. And just, you know, they're gonna probably invest it in 10 to 20 companies that they find over three years. And I'm not part of that process. You know, I'm trusting that fund manager to do what they do best.
and I think that family offices, other t other entrepreneurs, high net worth guys, they want to be empowered, you know, and they wanna make the decision themselves and they wanna kind of amass their own portfolio of companies, whether it's direct and they go and do what I'm doing themselves and you know, do it, or they appreciate the work that I put in and, you know, maybe trust me a little bit in terms of my judgment.
And you know, they join me through through this SPV, right? And they have a c and and by the way, I invest in other people's SPVs too, right? Like sometimes you just can't get access. Like I've I invested in Neuralink, right, through an SP a Kathy Woods you know, one, you know, or something like that, right? That like I just never will be able to get that that access, right? So that's
Slava (44:19)
Can can you share some
like high level numbers, whether it's like number of people that have invested with you or the dollars that have come in or the AUM or the number of deals?
Shane Neman (44:25)
So our our most our
most recent AUM with the markups is something north of eight hundred million. that mainly has to do with we were early investors in figure AI and also sandbox AQ. So figure is the humanoid robot. So we did a a fairly large investment in their A round when everyone thought we were bananas. and and you know, no like
very well known VC came into that round, let's just say. And then the next round, we did an even larger investment when Microsoft and in and NVIDIA invested. But we've invested in a company called Andiatics, which makes a micro robot that you can swallow. We did Flex Storage, which is a pods store pods competitor. We did Fort Robotics, which makes us the safety mechanism that goes into all the robots and the
Autonomous vehicles because the thesis is there's gonna be billions of these and in order for that to happen they have to be absolutely and unequivocally safe if they're gonna be around humans. we did Hark Labs, which is k Brad Adcock's new AI company that is
Slava (45:40)
Brett being
the CEO of Figure AI.
Shane Neman (45:43)
correct. b that that came out of that relationship that that I had with him. we did a company called Narrow Organics, which is a a baby formula, Paradomics, which is a Neurolink competitor. Actually, even the BCI looks like Neurolinks, but they've been around for like 10 years now out of Austin. we did a company called Paragon, which is a SDK. This is software. This is the only software one we have. well, mostly software one.
That actually has thousands of integrations of SaaS companies in it. And with just a few lines of code, you can integrate into any natively integrate. It's a difference to native versus Zay Zapier, which isn't native native, to do that kind of thing. And then that works for a lot of the AI companies because they want to ingest all your data, right? So if you're an AI company, you want to make as many integrations as possible.
We did Sandbox AQ, which does a lot of things, but mostly they're a quantum AI company. and then we recently did a company called Scout AI, which is a defense tech company.
Slava (46:50)
Awesome. Are you are you going for a per second or stage? Are you looking for first money in, A round, pre IPO, or are you open to any of it?
Shane Neman (46:59)
I'm mostly open to any of it, but the majority of that we've done is either is a round because
Slava (47:07)
What is the A round these days for our listeners?
Shane Neman (47:10)
Well for Scout it was a hundred million. you know they they raised a hundred
Slava (47:13)
What is the what
have they accomplished or not accomplished to be an A R
Shane Neman (47:16)
so typically at that point they have either some sort of contract or revenue or bookings, or they they also have a working prototype or that that kind of thing. or they you know in MedTech they have some sort of FDA cle clear or or path to FDA clearance. you know, I think when I look across those that we've done.
They've been mostly A or B rounds that we've done.
Slava (47:45)
Great. So you're obviously a super smart guy. what is it that you like to listen to, read, or watch that helps make Shane Shane? I mean, you did w mention wood podcast before, but what is it that
Shane Neman (47:58)
yeah,
I listened to the Moonshots one right religiously because I just you know, they're very on top of it. They they it's very recent. So it's like, you know, they come out with one every couple days and they're talking about all the really great stuff at that time. I really like the the Knowledge Project of by Shane Parrish. it's really, really
really well done and he has the probably the top guests that are from business to science to those types of things. I listen to the Nova podcast because I'm like kind of like I like science a lot and th those are the things that I that I like to t to talk about talk about and read about. I mean th those are pretty much I mean I can open
my podcast thing and see what else I have and and it but that's about it.
Slava (48:46)
No, that's good. That's good. it's
better what comes from the top of your head. All good. So
Shane Neman (48:51)
Yeah.
Slava (48:51)
as our final question, we always like to put our guests on the spot here, which is to make predictions for what we call three years out. So what's one public company that you like for three years out? and why? And then what is one non public investment that you like? I imagine you're gonna be selling your own book, but it's
Shane Neman (49:10)
Okay, this
is not you know, so this is not investment advice. You
Slava (49:14)
Right. Yep.
Shane Neman (49:14)
know, please don't, you know, you know, I have disclaim of this, right? Like,
Slava (49:17)
Our listeners are very used, but this is not investment advice.
Shane Neman (49:20)
you know, like I'm not giving you investment advice. These are just like this is for entertainment purposes, okay?
Slava (49:25)
Exactly.
Shane Neman (49:29)
so I actually think because I think the SaaS trade is overdone, like the the SAS Mageddon is overdone.
I think there's a lot of there are some BDCs out there that that lend to those companies and tech companies that are lending at like you know 30 to 50 cents on the dollar, and their stocks have been absolutely demolished as well. Right. And so if you want to play something where you have a lot of upside on the stock price appreciation.
And you probably are getting a really crazy yield on them because BDC is, you know, they're lenders, right? a
Slava (50:14)
What's a B D C just so the listeners know?
Shane Neman (50:16)
business development company. So usually like Blackstone, KKR, those, those guys, Blue Owl, they have a BDC arm that are that are middle market lenders. They they they lend to to to those types of companies. And so there are specific lenders that lend to SaaS businesses or tech companies.
For the most part. If you look at these SaaS companies, right, they're not like in distress, right? They're actually hitting all-time revenue numbers and all-time EBITDA numbers, like Adobe, for example, or many others, right? yet their stock is down like 90%. it's the same case for the the the companies that lend to them, but
What's even crazier is that they're lending at 30 to 40 cents on the dollar on you know first lien collateral, right? On the assets of those companies while these companies are continuing to make fresh highs in revenue and Ebida. So the my my thought on that is that the the the the risk of default is very low.
And so, you know, you're buying the the BDC that's lending at 30 to 40 percent on the dollar, and that stock is down 50% of the BDC though.
Slava (51:34)
So which one do you pick?
Shane Neman (51:35)
There's one that I like that's Blue Owls which is OTF that I like. Correct. It's you know, people think
Slava (51:40)
OTF. Blue Owl. Blue Owl's the one that was in the news, right?
Shane Neman (51:45)
it's it's very contrarian, just as a practical matter. So, like, you know, you have please do not
This is entertainment. Okay.
Slava (51:53)
All good. No, we love hearing your opinion. And then
in the private markets, i.e. the non public equity markets, what will be your one pick and why?
Shane Neman (52:03)
so I'm gonna talk about a VC company a company that I backed, a venture capital comp you know, venture capital investment. I like the synthetic, I think the synthetic biology space is very interesting. No one's really kind of thinking what happens when you apply AI to to living organisms and and and how that could be used. There's a company that I back called Taxa.
that I really like. I personally backed it.
Slava (52:31)
T A X A.
Shane Neman (52:32)
yeah, taxa technologies. And they they've figured out a way
Slava (52:35)
Then this is in this is a private company.
Shane Neman (52:37)
it's a private company. Yeah, it's a private company based in San Francisco. and they create they've figured out ways to re-engineer the skin microbiome. You know, everybody thinks of the microbiome in your stomach or in your intestines, but they to re-engineer it to make a new type of deodorant.
Right. So if you can think of, you know, the you you know, you have you have a mu a biome under your armpit, those can those those microbes can be engineered in a way that they don't make body odor, and you can apply that new microbiome and you know, it's a new type of deodorant essentially. And they're about to I think I think they've commercialized in in Japan recently.
Slava (53:23)
I love it. We have covered Shane a lot of ground from dropping out of med school to start your first company, which was a fail, but then springboarded you to two awesome exits. You're first in the the space of ticketing with bars and promotions, to then getting early and texting. You then needed to figure out how to make money sustainably if you weren't gonna do another startup. So you got into private equity and real estate, Pacific Park with the Ferris wheel, moved to Florida, obviously, and then really got into investing.
Now 95% into alternatives, you count the marks, and in those alternatives, about 95% in the private markets, even though you dabble a little bit in P real estate and a bunch a drop in crypto. you do like to have your cushion for your cash for one to five years, which sounds super smart. And your point of view is very abundant, abundance 360. Even when I put you on the spot
Shane Neman (54:13)
Ha ha ha.
Slava (54:15)
with the lightning round.
No recession, flat inflation, unemployment actually down, quite optimistic. Fed rate flat, quite optimistic. And the stock market more than 8%. I mean, you are optimism like 101 here. Neman Ventures has been doing amazing building off of your family office work. you're looking for you know amazing founders that are interesting, that are doing deep tech, frontier tech. You want to try to get in with a check. We have a good communication with the founder, you might be willing to even work there for a little bit.
You present them to your audience and let the audience pick because you want to empower them. You now have over eight hundred million dollars in AUM, which is incredible, with lots of great companies featuring Figure AI and Sandbox. you
Shane Neman (54:55)
Yeah.
Slava (54:55)
told us lots of good content, but specifically moonshots that you specifically love. And then you did play the game for entertainment purposes only, which is two picks.
Shane Neman (55:03)
Yeah.
Slava (55:04)
One is Blue Owl, OTF, and two is Taxa technology, Synthetic Biology. Shane, we covered a lot of ground.
Shane Neman (55:10)
You you did a better
you did a better job than Claude the there. How did you do that, man? I mean
Slava (55:15)
Don't let people
know, but my nickname is Claude. Thank you, Shane very, very much.
Shane Neman (55:19)
Thank you so much. Thanks for having me.
