E62: Elizabeth Holmes verdict, fraud origins & takeaways, navigating "The Great Markdown" & more

Happy New Year. Happy New Year. Guys, listen. Look at this. It's now... It's candle season. Oh, God. Look at the equanimity. This is... Look at this equanimity. This candle costs $24,000. It is an extremely rare Brazilian sandalwood. You literally have to go into the Amazon. You basically have to...

Find extinct trees. No, bro. You got to tear out like two acres of rainforest, and then you find this one tree completely sacred, and then you chop it down. You make this delicious... Then you reduce it, and it lasts for a full 45 minutes. How do you like that, Sweater Karen?

Happy New Year. Candle Karens are going to be calling you. Candle Karen. Candle Karens are calling you right now. The DMs are coming. You guys want to hear about poker last night? Oh, did you go? So I go down. I take my eight-hour drive down south to Chamath's house.

And I pull in. And the security guard greets me nicely as always. I walk in. And I walk towards the poker room. And everyone's in there with the door open like someone just got shot. Masks on, freaking out. And Chamath is inside the house. And I wave. And he's like, get in here.

And then I go in. He's like... Who was positive? Max, the dealer, tested positive. And everyone's been hanging out in the poker room with no masks on. Uh-oh. Uh-oh. And so... No, they're super... Super spreader. The only two people that were exposed to Max we sent home. Yeah. So everyone starts freaking out.

He shuts the poker game down. Chamath kicks everyone out, sends everyone home. And then he's like, all right, let's go have dinner inside. We're not... We're going to... We open up all the doors. We're going to kind of Lysol the room tomorrow. We all go in and have dinner.

Or Chamath and I go in and have dinner with Matt and the kids. And then Chamath starts thinking, you know what? It's okay. They were only exposed for a few seconds. Let's call Phil back. Okay. Let's call Shivel back. Let's call... Let's call Keating back. And then they all come back for dinner.

And at this point, it's become like a dinner party. And then a couple of glasses of wine in. And then it's like, you know what? The room's probably safe. We should go and play poker. I mean, the whole poker night went through the entire cycle of psychology of COVID.

The whole pandemic. It's like, oh my God, get everyone out. Lock up. And then by the end of the night, it was like, you know what? Let's go in the room and just play poker and give each other COVID. They got to acceptance. They got to acceptance. They went through the whole emotional cycle of the pandemic in one hour.

Does anyone know anyone? Who's a serious case of Omicron? No. I mean, I know dozens of people at this point and they all say it was a cold. Yeah. Dozens of people. And that's just from your holiday party. Except for J-Cal was on social media. Except for your holiday party.

J-Cal was on social media, giving everyone the update. Like, oh, I sneezed today. Oh, I still tested positive. He's like showing his positive test. And then he's doing the ski slopes. My super fans, my stans were concerned. It's the only good test result J-Cal's ever had. Yeah, exactly. It's the only positive.

It's the only positive. It's true. Let your winners ride. Rain Man, David Sass. And it said. We open sourced it to the fans and they've just gone crazy with it. Love you guys. Nice. Queen of Kinwa. Elizabeth Holmes has been found guilty on four counts of fraud. Faces 20 years in prison for each guilty count.

They would be, I understand, served concurrently. Most people I hear speculating four to ten. Ten years. And then I think you can get 15% off for good behavior. Again, I'm no expert on that, but that's what I read. Guilty counts were two counts of wire fraud and two counts of conspiracy to commit fraud.

She was originally in charge with a total of 11 counts of fraud. Four were guilty. Four were not guilty. Three were a split verdict. The jury said they were unable to come to a unanimous verdict on three of the counts after more than 45 hours of deliberation. Quote from the Wall Street Journal article.

Juries were persuaded that Ms. Holmes conspired to defraud investors. This outcome could be significant because it means hundreds of millions of dollars of Theranos investors. That Theranos investors loss could be taken into consideration during her sentencing. It's big numbers. The jury was split, however, on which of the six investors who testified were defrauded.

The jurors convicted Ms. Holmes on three counts. These included $100 million from the family office of former education secretary. We know the details, J. Cal. I was like doing it for the audience. So anyway, thoughts on. The legal. Technicalities of the case. Counselor sex. Well, we've talked about this before.

I mean, I think so at the end of the day, she was convicted on the counts related to deceiving investors. She was not on the counts related to patients. I think. That makes sense in that her obligations to investors are very clear. Whereas I think the patient related duties are, I mean, she had them, but it's a little bit less clear.

So, I mean, look, it's, it's what we've always said here as a founder. You know, you. You can be as messianic as you want to be. You can promise, you know, anything about your vision and what you intended to the future. But what you must do is be accurate about the current state of your business.

You cannot lie about the deals that you've made about the current capabilities of your product. And she was putting, you know, logos of customers she didn't have in her deck. She was lying about the military being a customer. So she simply misrepresented where she was at that time at the, at when these investors invested.

And that was the red line she should not have crossed. And I think in that sense, it's a pretty simple case. I think, you know, the part of this again, you know, the piece of this that's interesting is not the case itself, but really the media coverage. Because the media wants to portray this case as an indictment of Silicon Valley and the thing you keep hearing.

And I think that's the thing that's going on. And I think that's the thing that's going on. And I think that's the thing that's going on. And I think that's the thing that's going on. And I think that's the thing that's going on. And I think that's the thing that's going on.

Well, I think it's a super interesting point, because if you talk to the previous generation of VCs, what they will tell you, who are retired, is when you ask them, well, did you get anything for your partnership share in the firm, not just in a fund, but in the firm, they'll tell you no, they basically just gave it away to the next generation of partners, even though they built the firm.

And it's because of what, historically, the belief on the part of VCs was that there was no value to VC firms, other than just their interest in each particular fund. But you're right. Yeah. Yeah. So I think if they do achieve a much greater level of scale, and they can go public, then there is actually value in the firm itself.

And you look at the term evaluation of Blackstone as indexed to AUM, you know, once you pass a couple hundred billion of AUM, you can trade point to towards point 1.2 times. And so, you know, if you have 50 billion of AUM, there's $10 billion market cap there. And if you you know, if you're calling or Andreessen or Horowitz, I mean, that's $5 billion that just appeared out of nowhere, why would you not do it?

Right? It's a little bit like Goldman Sachs, they always said that we're a partnership, we're never going to IPO because and then they did, and then they did. And same thing with did CAA do it too? No, I guess. No, what happened with CAA was Ovitz sold his position to go to Disney, so there would be a conflict, but he could have kept it and the like residuals they were getting from projects they packaged were incredible.

Didn't the Ari Emanuel one? It did Endeavor did. Endeavor did. How are they trading? I haven't even looked at Endeavor. I'm not sure. But let me tell you, like, it's actually but think about if you're not like the current, like partner owners of the firm, but you're like on a partnership track there, and you're working your way up to partner, like by time you get to partner, it's gonna be a very different economic equation.

Because instead of getting your one over n share of the pie, when you eventually become partner with n being the number of partners, or some version of that, now the company is owned by the public, and the public or the board of directors is determined. And the board of directors is determining your salary.

And maybe you get a salary and bonus and some, you know, essentially, options or equity participation, but you're not going to be a true owner anymore, because the firm is gonna be owned by the public. Wait a second. What if we take each of our businesses, put them together, and then take them public as all in capital?

We get the good I'm good. I'm good. Yeah. We got the startup studio. We got on a conference. So I don't think flower is that a degree on the decor and flowers. I'm good. I'm good. I'm good. Yeah. for our one day event in Miami. - That's because the amount of work you guys wanna do is slagging me in a chat room.

- No, what we want is someone to do the work. - We wanna hire a professional. - I had been doing conferences for 25 years, stop slagging my people. Thank you for tuning in. - You know what's gonna happen? - You launch Yammer at my conference and I put the fix in for you to win!

- Thank you, TechCrunch was a beautiful conference but for all in summit is it just the case we want people to show up and there's gonna be a stage of people talking on stage in this whole conference or do we wanna create a more magical experience a la a Davos or a Sun Valley or something like that?

- All right, everybody, thanks for tuning in to episode 62 of the All In podcast. We'll see you at the All In summit and if you wanna do us a favor, please go ahead and subscribe and rate us on Apple. We could really use that. And thanks to Spotify for including Daniel, shout out to Daniel.

- Thanks, Daniel. - He included us in their video. So now if you're on Spotify and you're listening to the pod, you can click a button as of this week and watch the video or you can watch the video on YouTube. - Hey! - That's cool. - Yeah, it was nice.

He emailed us and his team and then I CC'd him on the email. - He's the best. - Yeah, I think, would he be good for, what do you think about having him and Mr. Beast? - He's super, super, super legit. - Here's my idea for a trio. Him, Mr.

Beast, and then one other person to do a media trio, future of media. - What is your idea? You don't even know the third person. I mean, why-- - Well, I'm putting it out there and asking for a suggestion. - You're the best. - You really do just say shit.

- For a third person. - And Mr. Beast is YouTube. - You just throw this shit out there. - This is our conference impresario. - Oh my God. - Well, those are two great guests on the stage at the same time. - Let's figure out who besides J. Cal is gonna produce the conference.

Okay. - You guys are unbelievably-- - I love you guys. - Bye-bye. - Insufferable, bye-bye. - We'll let your winners ride. - Rain Man, David Sack. - And instead, we open sourced it to the fans and they've just gone crazy with it. - Love you, Wesley. - I'm the queen of kinfolk.

- I'm going all in. - What, what, your winners ride? What, what, your winners ride? What, what, your winners ride? - Besties are gone. - It's past Goal 13. - That is my dog taking a notice in your driveway. - Sex. - Oh, man. - Oh, man. - Oh, man.

- My avatars will meet me at-- - We should all just get a room and just have one big huge orgy 'cause they're all just useless. It's like this sexual tension that they just need to release somehow. - Wet your feet. - The feet. - Wet your feet. - Your feet.

- Wet your feet. - We need to get merchies are back. ♪ I'm doing all in ♪ ♪ I'm doing all in ♪

E62: Elizabeth Holmes verdict, fraud origins & takeaways, navigating "The Great Markdown" & more

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