Venture Capital, AI, and the Art of the Long Hold with David Blumberg and Bruce Taragin of Blumberg Capital

Speaker A: Hello, this is Mark Gerson and I m am the co founder and chairman of 3i members and I am delighted to have on the Three Eye Members podcast today David Blumberg and Bruce Tarragan. Instead of doing introductions which risk or guarantee being boring, we'll get right into it. And what would be covered in the introductions will, I'm sure, come out in the conversation. Now, David, you've said that when you were a young man you were considering being a doctor, and then you chose venture capital for a very interesting reason. You said you wanted to enter a profession where you could create and maintain relationships for decades. And you and Bruce have had that. You and Bruce have been partners in venture capital for 27 years. So I'd like you both to talk about the dynamic of a relationship for decades in business and otherwise, and tell us, how do you sustain such a massively successful venture capital partnership which you've had for decades, through all kinds of cycles, for such a long period of time?

Speaker B: Well, I'll start with the experience of the why I didn't go to the medical. And it may be selfish, but when I went to a career exploration day as a teenager with the Boy Scouts, um, down to Southern California, went to USC and UCLA and so on, so forth, I was fascinated by the science. I walked through these long, green, dull corridors of hospitals and, and I saw old people on breathing machines and heart machines. And I thought, God, these people are in their 80s and they're going to save them for a year and then they're going to die anyway. Like, ugh, uh, what a unfulfilling, sad, depressing life that's going to be. And I think that maybe it was very selfish and narrow minded of me. And yet what I then flipped over to was working with teams of young people that I would build relationship with for long, long times. And that's what entrepreneurs and venture capitalists do together. They average venture capital relationship with an entrepreneur lasts more than the average marriage in America today.

Speaker A: Is that right?

Speaker B: More than seven years. Which is a sad comment on perhaps on the state of marriage.

Speaker A: Right.

Speaker B: And, and, and also, if I may say so, and I think Bruce will agree, a sad state of public markets which need to have more liquidity and more IPOs and more transactions so that we can move things faster. But the average relationship with an entrepreneur and a venture capitalist is well over seven years. It's more probably on average 10 12. But the relationships go beyond that. Then Bruce and I, uh, we've worked together for, for decades. That, that's true, but I Think if we're talking more about relationship between investor and investee, that's the, what I was talking about originally when I moved away from the medical and, and toward this venture group. Because entrepreneurship is a long term business. There's no fly by night, there's no easy quick fix to building a company, as you well know. You've built Lehrman, you've built three I. Each of those endeavors take decades. Um, generally some people make it faster and it appears easy, but generally it's, you have to find a big problem, you have to assemble a team, you have to overcome competitors, and you have to change with the times. We're living in accelerated change era right now, especially in. Bruce and I are going to talk especially about this with you about, uh, artificial intelligence, which we prefer to call augmented intelligence, because I think that any point of any relationship and any technological innovation and anything that's worthy in life should be about augmenting rather than making it artificial. You know, God has given us certain characteristics and traits and we want to make those better. We want to improve and unleash the potential in every person. Solve problems in a way that is the better answer and the better solution. And that's what I think we're talking about. And so building relationships gives that long term meaning to life. And it's also easier to trust people that you've worked with for a long time. Bruce says to me and I say to him, we can complete each other's sentences because we know how each other's character is formed. We know what triggers us, we know what makes us feel content and solid. It's a selfish motive in a certain sense, because it's easier and more fun to work with people that you know and trust. But then again, if you're an extrovert, I think Bruce and I are both pretty extroverted. You are too, certainly, Mark. You meet new people and that always brings a new angle. And I think of it like, uh, a diamond with many facets. There's this beautiful stone, but you can see it from so many different angles. And each one has a different color and a different luster. And that's how I like to view humans.

Speaker A: So most partnerships of any kind, they don't last for decades. Whether that's a law firm partnership, a business partnership, a, um, marital partnership. What's the secret to your long term Success as partners? 27 years. Building one of the extraordinary venture capital firms in the world. 27 years. What's the secret to a long, happy and massively successful business partnership?

Speaker C: Mark, maybe I'll chime in. And it's great to see you and David as well. And I didn't think of that from that perspective. And I think, Mark, one thing that's just fascinating to me is Dave and I have known each other for almost 30 years and I didn't know that David was actually sort of pre med, which by the way, so was I. I was also, uh, pre med initially. My family are a family of doctors. My parents still don't really know what I do as a vc. I try to explain it to them, but at the end of the day they just kind of, you know, roll their eyes and they're not really sure. So, uh, I find it funny. And for me, similar to David, I just wasn't ready to commit the rest of my life to sort of working in, in one field for, you know, at such a young age, making that commitment for so, such a long period of time. You know, I ultimately went to law school, I went to business school. I've worked as an entrepreneur through two startups in one later stage IT company. I worked as a lawyer, I worked as a banker. I've worked on Wall Street. And then David and I have had the privilege together really of, of traveling the world for the last, you know, three decades. We both were based in Silicon Valley and I'm, uh, sitting in New York for the last 10 years. David's in Miami. We have a team in Tel, uh, Aviv as well. And so we've basically spent the last 30 years triangulating between the east coast, the west coast and Tel Aviv. I think for me, I wake up every day and feel that it's truly a privilege to do what we do. David probably doesn't really remember it, but one of our first conversations David and I ever had, and to me it spoke volumes about who he is and his character. And to me that's everything at the end of the day. And uh, he used the word tikkun olam. He's like, that is what our mission in life is. Repair the world and exactly make the world a better place. Coming from Yeshiva University, coming from my world that we just talked before about toramada of sort of this fusion of science and technology and living in the, in the, trying to, you know, be a good human being, but also in the business world, that really inspired me and stuck with me. So here we are, know, almost 30 years later, and I think David and I are both also. It's very much in our DNA and in our operating system, a sense of loyalty. My Parents were together for 75 years. Uh, my wife, my wife and I are married for almost 31 years. People have a tendency to think, oh, the grass is greener. I don't really, you know, necessarily agree with that. I, I feel for me it's been a privilege to, you know, really work together with David, collaborate and, and grow the brand of Blumber Capital and, and certain other mantras. You know, I touched on this point of making the world a better place. But I think other mantras that we stand for as a partnership and as a firm, trust and verify, under promise and over deliver, transparency. I think those are mantras that really mean a lot to who we are as human beings and resonate with our entrepreneurs. And then we've been very blessed that over the last few decades we were the first, you know, lead seed investors in companies like Nutanix, Braze and Double Verify. These are all companies that went from pre product, pre revenue, we were the first investor to going public. I think today Nutanix may be worth, you know, 20 or $30 billion as a publicly traded company. And we were the first investor pre product, pre revenue, you know, working with those founders, with those entrepreneurs. It's really been a privilege for us to have the opportunity to work with amazing entrepreneurs across North America and Israel. And David touched on it. But one of the things that we focus on, and I'm sure you can find content on our website, are the six T's.

Speaker A: So why don't we go through what the six T's are and uh, technology is one of the T's, but it's not the first for sure.

Speaker C: I mean rarely do companies I think fail on the technology side. I mean they get it better, they improve. May not be 100%, but it's rarely kind of a zero or one in that regard. So the six T's and David, maybe, you know, why don't you take half of them and I'll take half of them. But you know, it's theme, team timing, technology, terrain and terms. So what are they going after? What is this opportunity that's, you know, unique and interesting and kind of their core value proposition, the team.

Speaker A: So uh, the theme, the theme, Bruce, is what problem are you solving or

Speaker C: what opportunity, what problem are you solving for?

Speaker B: Right, correct.

Speaker C: Is know the team. Obviously again in the instance of, you know, referencing, let's say Nutanix, the founders came out of the storage space and Nutanix was building this new cloud, hyper converged storage solution. So they had a lot of expertise. They were their prior Company was backed by Sequoia. And then ultimately timing is really about, you know, are you too early or too late to market? And I think again we'll get into this conversation.

Speaker A: Is that hard to know in real time?

Speaker C: 100%. It is absolutely hard, maybe even impossible to know. And I'm also a big proponent of mazel of luck. Yes, timing. I don't want to say timing is everything, but timing matters just as much as the idea. It is challenging and we can talk later about how we try to reduce the risk and how do we enhance the opportunity that we'll get the timing right. We have an innovation council that we spend a lot of time with that I would say is one of our superpowers that enables us to try to nail the timing. We have a hundred plus members on the innovation council that we work with that are truly an extension of our team. And these are C level executives, not necessarily, not always the cto, A, uh, cio, you know, more on the information, not investment side. And so they're really the leader across their organization on innovation. That is something David and I have assembled for our firm. It's an extension of our team and I think it's a unique superpower and it definitely addresses the issue, uh, on timing. But why don't I pause and David, maybe you can take technology terrain in terms as the other three of the six T's that we frequently talk about.

Speaker B: The third T, in our way, we ask entrepreneurs to sort of prepare themselves is terrain. And that's a T word that stands for the market. What we like to see is that a team is prepared to understand how they're solving their problems or the problem in comparison with and in relevant, um, differentiation from others in the market.

Speaker A: So the terrain is what's the competitive environment?

Speaker B: The competitive environment. And we want to see that on a dynamic sense. We want to see the video, not the snapshot. Don't tell us what it's like just today, but how are the socio demographics changing, how is the technology changing, how is pricing, how is a competition? All those things about product market fit with your competitors is important for us to know so that we see, as Wayne Gretzky used to say, you know, skate to where the puck is going. These things don't stay. Remember we have this long term relationship with these founders and if they invest in them in year one, probably not going likely to have an exit of significance until year 7, 8, 9, 10, 12, something like that. So we need to know where the market will go when your product is in Market and how it'll evolve over time. That's hard to do. Nobody has a crystal ball. But you can make some educated guesses make sense.

Speaker C: Yep.

Speaker B: Okay, so then the next one is technology and interesting. That's fourth on the list. Most people in our world who are very engineering oriented come in and start talking immediately about the technology and the product and how great it is and say, whoa, whoa, whoa, whoa, whoa, who are you benefiting? That's that theme that Bruce talked about. Then who's doing it? The team, because they're the most important. A great team can make a medium technology sing. And a, ah, lousy team with a great technology will generally have it fail. So those are the orders. So technology's fourth.

Speaker A: It's important.

Speaker B: We want to know how it works. What's the secret sauce? Is it easy to copy? Is it hard to copy?

Speaker A: Also, the technology is likely to change in the 7 to 12 year period that you're interested in.

Speaker B: Excellent point. Uh, indeed, indeed, indeed. So true. And now I think Bruce and I see this every day at an accelerating pace. Right. The new version to move into AI a little bit from OpenAI and Arthro, most of that code was written by the AI itself. So it was the first time in history, it's a breakthrough that the new product was written by the old product and self improving. So that's an incredible. If you think about that in the world of how that's going to start to increase productivity, uh, gains, it's really mind blowing. So that's technology. We want to know how it is. If you have patents, great. Most software does not have patents but we're interested to know what is proprietary and what is unique and if you have an amazing team. We just invested, Bruce and I just with our whole investment team, decided on an investment. I won't name it yet because it hasn't closed. Um, from Israel with an exceptional team, I mean just everybody would say, wow, these are people who won, you know, the top defense award. They have done super cybersecurity missions successfully. They've built products, they've been in business, they've been in the government, they've been in military. So it's an exceptionally good team. So that is often, uh, a decision making criteria when this company's very early stage. They may not have a lot of product, they might not have a lot of customers, but if they have an exceptional team, you just know they're going to do something good with it.

Speaker A: David, to your point about technology, uh, whenever I see a business plan that emphasizes the number of patents we have, it's two if not three strikes.

Speaker B: Well, in hardware, in medical it may be a better thing.

Speaker A: Medical is a distinction. But when you see it outside of that one discrete area, when people talk about the patents they have, it's like those are probably economically worthless and you shouldn't be emphasizing them. Maybe you shouldn't even have them because they're not going to matter.

Speaker B: Sometimes necessary, but certainly not sufficient. Right, okay, so that was technology. Uh, next we call it traction. And that's a T word for what's your growth stage? Are you a raw startup with absolutely nothing? Do you have a team but no product? Do you have some product but no customers? Do you have some customers? If so, are they beta or are they real? Beta is sort of a trial customer that's not really paying yet. We like to see companies at all stages. Nothing is too early. At Bloomberg Capital we've even done things that we call ideation. And in an ideation play, the founders who are exceptional, they have to be come to us and they've sit in our office and they work with our team. They're providing the technological insight and market vision and we're helping on sizing of the total available market, the tam, and on finance and budgeting issues and building the business M plan and model. And we've done that five or six times to some great successes. And in terms and terms, how much money is going to require for this project, not simply in this first round because as most of us seasoned investors and you entrepreneurs know, the idea is that there's going to be an initial round, a pre, uh, seed perhaps or a seed and then there's going to be an A round and so on and so forth. And it often goes through six or seven levels before there's some kind of an exit, typically an M M and a, a merger or sale to another company or if you're really lucky and exceptional and only few percentage of companies do this, uh, would be an ipo. And then there's a new class of exit and that is sometimes a secondary sale where we could sell shares to a later stage investor, for example a private equity firm or a pre IPO buyer, things like that. But those are the really the two or three, um, gateways of exit that we're talking about. And so that traction is where are you on that journey from initial launch to some successful outcome?

Speaker A: Now, do you think it's a red flag when an early stage entrepreneur is talking or even thinking about exit?

Speaker B: No, we ask them about exit.

Speaker A: You Do. Okay, yeah, I'll challenge you on that.

Speaker B: So, because I'm make a slightly off color word, we don't like pe. Premature exit.

Speaker A: Right, right.

Speaker B: We don't like.

Speaker A: It just seems to me that if you build a great business, the exit will take care of itself and you have no idea what it's going to be. I mean, could you imagine the guys who started LinkedIn saying, oh yeah, in 15, 20 years Microsoft's going to need this. What? Like they did buy it, but it would have been completely unpredictable. But you build a great business, the exit opportunities will be available and they'll be unknowable at the outset.

Speaker B: You're absolutely right. What we're mainly concerned about is that the premature exit.

Speaker A: Right.

Speaker B: Would be suboptimal for us as investors who need to get, you know, a large exit. I'll give you a number in a moment, understand how it works. But for a first time entrepreneur, selling a company for $30 million and they take a couple million home or maybe more, five more. Yeah, that would be amazing. Right? It changes your life. If you're a grad student, you have nothing and now you have millions. That's incredible in America today. But the typical venture firm, say ours is typical. We're small actually, but you know, small

Speaker A: to medium, your returns are anything but typical. But okay, um, thank you.

Speaker B: But say a fund is about 225 million. This is like $2 million. Now to get good returns for our LPs who are looking for the return of money, net of fees after about 10 years or 14 years if the fund is average, uh, venture capital fund has to be about 3x cash on cash. Okay. Net. Now to do that, if we have a, say a portfolio of 40 companies, probably, you know, six of them have to be. Or 15% have to be returning each $100 million. So if we invest in a company with 20% ownership for uh, our example, and then it gets diluted down to 10%, that means at the end of the day, at the exit time, we have to have six companies that are worth a billion dollars each. Because then our yield would be a hundred million times six is the 600 we need to get to the 3x net to our LPs. Makes sense, right? So this is very difficult. There are very few venture capital firms that have those kind of ratios. It's tough. No, no one's saying have sympathy. Oh, woe is me for the poor venture capitalists. But it is not easy to hit those numbers because we make mistakes, we're professionals and we not every company we invest in is going to succeed. In fact, the majority, we wouldn't be called great successes. They might return capital. There's, uh, some percentage that actually fail and you lose everything. There's another bigger chunk that you get something back maybe one to three times. But the expenses of running a venture fund and the losses mean that you have to have a few that are exceptional returns 10x or above. And Bruce and I and our team have been fortunate to have a number of them that have gone 50, 60, 70 times returns.

Speaker A: I read an interview with Bruce where he said something, um, very interesting. Bruce said, uh, if the failure rate of venture capital were in any other field, the person in that field would either have their license taken away or might be in jail.

Speaker C: Well, Mark, getting back to the comment of David and I both aspiring to be physicians, imagine if you were a doctor and you saw 10 patients and six of them died and one or two of them were wildly successful. I think you would be prosecuted for criminal charges pretty quickly. So, uh, I think there's that. And getting back to an earlier point that David commented on, Mark, which you inquired about is part of our job, especially in the early days, is really, you know, being this psychiatrist and being a friend of the entrepreneur and hopefully convincing them to keep on building. Sometimes entrepreneurs are, uh, excited. And when David and I started in this business 30 years ago, there was no secondary market. It didn't really exist. And so entrepreneurs didn't have a choice. They'd sell for $150 million. They take out their, you know, 20, $50 million win and call it a day, and maybe build their next company, which we get today. I think it's really fortunate that there is a secondary market. So entrepreneurs don't necessarily need to sell, you know, companies for $100 million early. They can just raise a round of, um, $100 million and take some secondary, give themselves some liquidity, buy a nice house, have a little bit of cash in the bank, which we don't begrudge them, and keep on building. And I think that's part of the trend and the phenomenon we've been seeing at a macro level for really the last 30, 40 years. Now that the secondary market exists is companies are going public much later. There's really, to a certain degree, there's no need. And there's so much capital in the private markets that they can continue to get funded and raise these mega rounds while they're still private. So I think that can inure to our benefit. And what's shifted now is over the last 50 years in venture. And 99% of the value creation is happening in the private market, not in the public market. You as an investor want to get in on that. You can't wait till Microsoft goes public, which it did in the 80s and it raised 40 million and it was a few hundred million dollars market cap. And 99% of the wealth creation of Microsoft happened after its IPO. That's typically not the case today. And that's a structural shift.

Speaker A: As we're speaking, I'm recalling, uh, what my business, uh, partner, GLG Thomas lman, his, his father told me when around when we were getting started. It wasn't in reference to anything commercial, but what, what Lou said, uh, this would have been 25, maybe more years ago. Lou said, when I was a young man, I had five theories and no kids. Now I have five kids and no theories.

Speaker B: My mother said the exact same thing.

Speaker A: Oh, is that right? Okay, let's apply it to what we've been, um, discussing. So, uh, let's talk about premature exit. Now, we're all of roughly the same age, and we've probably all seen companies that have, in retrospect, prematurely exited. You know, you see a company that sells for could be anything, you know, a few hundred million. And now it's an extremely important part of a big company that's worth hundreds of billions. Okay. You could say it's a premature exit. We've probably also seen companies. I know I have, and I'm sure you have too, where, uh, the company gets, uh, full and fair offer. The venture capitalists say no, the entrepreneurs go along with it, and, uh, an offer of that size or anything close to it never comes up again. So how do you know when an offer represents a premature exit versus, well, we should probably take this. Yep. There's a chance that, uh, that we could keep creating value. That's why somebody wants to buy us. What's the theory? How do you know?

Speaker B: Okay, I'll give you a great example. There is no one theory, but I think it's about risk mitigation versus value potential accretion. Okay. That's the two sort of parts of this. I'll give you an example that Bruce knows well. And this is from a company called Double Verify. We were the first investors in this company and it was. We took so long to do the diligence. I think it was a year before we. And we gave them, I think, a little loan at first and ah, kind of a. And then we said, we'll give you more if you prove it. Because he had no customers, he didn't have a product, but it was a great idea. And we kept doing diligence and finding like, oh, my God, does this problem really exist? It's huge. And the problem they were solving was that the advertisers on the Internet had no way of validating and verifying where their ads were showing up on screens around the world. Sometimes they were in the wrong geography, sometimes they were adjacent to very appropriate content. And that's what DoubleVerify is able to police or monitor, if you will, and now prevent. So anyway, at the time, nobody really knew this was happening. Everyone was in denial. The ad agencies didn't know it was, uh, happening. They didn't want to be embarrassed in front of their clients seeing that was happening. So anyway, a lot of diligence, and we figured out this was a big problem and it's going to be a big market. So remember that dynamic of the market. We saw that this was going to happen. Now, many years later, we assembled a group of about eight other venture capital firms, all famous, great ones, very smart people around the table. And the company had grown significantly. And so at that point, I think we had an offer for something like 370 million from a private equity group to buy the whole company. And everyone was a yes, yes, we should sell. Because they all put their risk hats on. They were considering the change in the government. It was the election of Donald Trump and that stock, stock market could tumble or CR or go up that question. There was the stage of the company. Uh, we were making profit at that point, but not a lot. There were competitors. And so those other venture capital firms evaluated all the risks and said, we should sell. The gain is good enough. And for them, it was. We were the first. So for us at that point, it was an 8x on our money, which most people would say, that's pretty good in 9 years to get 8x, take it home and say thank you. My calculation, our calculation at Bloomberg Capital was a little different. And I said at the board meeting the following. I said, gentlemen, I think this offer is low. Based on the following facts. Here's our revenue. It's this multiple. We are already profitable, so we don't need to take other dilutive capital going forward. We can be masters of our own fate. That's number one. We were growing rapidly, and speed of growth is a factor. On the multiple. I thought we were not getting the right multiple multiple for the, for the company at that point, um, the margins were rising because we're adding new products. That's very rare. Often you start off with a new product and then the margins decline with commoditization effect of competition coming in. We were the opposite. We were adding new, we were advanced. We were the most technologically sophisticated vendor in that market. There were only a few companies in the market, but whenever we put out a new product, we were able to charge a premium for it. So that was good. We're good. So we had not done a lot internationally. So we thought, well, the market's gotta be at least one times or two times larger than, let's say us. So there's a lot of potential out there. And we were winning customers away from our competition. So it seemed to me that. And we liked the management. So all these factors, um, I'm, um, I'm shortening it, but there were a lot of factors that I thought were good. Like, let's just hold on. This is a dragon. And remember, six out of 40 are successful. If you're a great fund, often it's one or two. So when you find one out of 40 or. And remember we see thousands a year first to evaluate and then we pick, you know, 10 a year. We invest in 10. We have only a few that are successful. When you find these dragons, I say, like, hold on to the tail, let it fly some more. And I just saw at least two years ahead of fast growth that would give us a lot more value both in plain growth and revenue, but, but also maybe revenue multiple expansion. So that's why we decided to take the prudent step, I think at the time. And we sold, um, we had 8 million invested. It was worth about 64 million. We sold off 24 million and we rolled 40 into the new, um, equity group, uh, with the private equity group. We went to them, we said, look, we're the first investor and we believe in this company so much, we think the best days are ahead. We would like to roll over with you and that will benefit you because you'll require less debt on the books. We'll put equity in and we'll bring along the current CEO and the founder CEO. They were two different guys and they'll put them. And so it was a total of like 60 million that rolled. And so that had a better capital structure for the company going forward. And we said, let's invest that in the international expansion and more R and D. And so that powered the company. And later when there was an IPO, we were able to take out not 8x but a total return of I think 72x. So dramatic difference just to holding it a few more years and it was already profitable so it wasn't a terribly risky thing to do in our view.

Speaker A: A lot of key insights there and the profitability, the growth, the margin expansion, um, are certainly um, indicators of a, ah, of a hold.

Speaker C: David, I don't know if you probably recall, we had Peter Thiel at one of our CEO retreats probably 15 years back. Mark and I just thought it was a fascinating conversation with a bunch of our CEOs and in brief he, he talked about which again, I don't know how public all the information is, but effectively he sat in on the board meeting with Mark Zuckerberg from M Facebook. And Mark started the meeting by saying, hey, we got uh, an offer for $1 billion from Yahoo and this is like very, very early stages. And then Mark said, you know, we said no and he moved on to the next order of business at the board meeting. And Peter was like, what? Rewind that a second. What did you just had a billion dollars? And this was very early stage. So they proceeded to spend the next three weeks discussing, debating, you know, should they or shouldn't they sell for a billion dollars to uh, you know, Yahoo? Obviously we all know the decision, but imagine if it had gone the other way. And so to David's point, you know, you really, when you get the right jockey, the right race, the right horse, you really want to try to double down on that and monetize. And that's why it gets to my earlier comment of really from day zero we spend time. And to your question mark of, um, do we talk to them about Exit at day one? Absolutely. Hm. We want to understand what they're in for. Are they really trying to build something over the long term or do we have a sense of they're going to get an offer for 150 or $500 million and arguably sell too early if we think that long term this could be a multi billion dollar outcome, which is what it's about now. That being said, there are many times over our careers that David and I have urged and cajoled entrepreneurs to sell for $25 million because we thought it was in the best interest of the company. And to your point, it was a fair and full offer and we thought, you know, the universe was heading in the other direction and they might ultimately end up with nothing if they didn't do that. So it really does depend. It's not always rah, rah, rah, you know, go for the $10 billion, you know, gold ring and IPO. It has to make sense. We try to truth seek with the founders and ah, as I mentioned earlier, trust and Verify and do our due diligence to get a sense of is the future bright? And David's metaphor from Wayne Gretzky about skating to the puck. We looked at Double Verify and we saw they still hadn't unlocked social media and so many other opportunities where the company could continue to grow. And so we thought, we went through all this pain and suffering for the first bunch of years to get to this point, which is really hard. Finding the company, building out a board, a management team, executing like crazy, raising 100 million plus in venture money. So to sort of sell now in the shorter term for what would have been a great outcome for us, but still not compelling. And we thought the future was very bright. Thankfully there we were right, and it worked out.

Speaker A: This gets to the point that Lou Lehrman and David's mother said, which is, uh, it's no theories, it's situational.

Speaker B: Well, I'm going to dispute that. The kids maybe, and even I dispute your parents and my parents, uh, about Lou and my parents. I think there are things we know that increase the probability, not certainty, but the probability of success. And there are things that minimize the risks and the downward devils that bedraggle all of us. So all we can do, we're given certain tools by God and we can just try and aim ourselves in the right direction and avoid the pitfalls. And we're all human, so we're all going to make mistakes. But that's the thing. Try and stay in those kind of goalposts. And once in a while we're going to go outside, no doubt. But, uh, that's, it's a risk mitigation versus growth valuation exercise right now.

Speaker A: Um, uh, Bruce, you said one of the most interesting things I've seen from a venture capitalist. You said when you meet an entrepreneur, you say to him, we promise we won't screw up your company.

Speaker C: This is true.

Speaker A: What do you mean by that?

Speaker C: There's a venture fund that has actually that's been an early adopter of artificial intelligence. They basically have a black box that spits out a decision of should we invest in this company or not. They simply look at, I think at this point they have over a thousand characteristics and attributes that go into that analysis. And early days, I remember talking to one of the founders at the fund and I always found it amusing, but he said they found that the success of the startup was inversely correlated to the proximity of the investors to the entrepreneur.

Speaker A: Meaning.

Speaker C: Meaning the further away your investors are from you, the more probability is that you will actually be successful. Because venture capitalists may help on behalf of the VC community, tend to micromanage and maybe at the end of the day we might not be the smartest person in the room. And I think David and my philosophy as investors is we are entrepreneur friendly. We like to think that we've made, you know, I think it was, uh, Mike Moritz at Sequoia would sort of, you know, jokingly almost say I only have to make one hard decision to invest in the company or not. But I think ultimately there is some truth in that. We like to think that we're hopefully backing an amazing team and we can help them truth seek together, but that we shouldn't be indoctrinating driving decisions necessarily. It should be a very healthy debate. Know, as a board member, as an investor, and again, David and I have some gray hair and scar tissue. Doing this for a few decades with maybe other investors that, you know, have obviously been incredibly successful historically and, and might like to think that they can, you know, drive the outcome, can make all the decisions. That's really not our philosophy and our approach as entrepreneurs. We, we try to really, as investors, we try to truth seek with the founders and, and be supportive of those entrepreneurs over that journey. And uh, again, we've seen examples of value deterioration from other investors that I think tend to maybe have a little bit too much hubris or arrogance in that regard. So we really promise, first and foremost, we will not mess up your company. We will obviously invest capital and then we will do our best to help when and where we can.

Speaker A: David had made an analogy where he said, we, uh, as venture capitalists, we're the pit crew. You're the driver.

Speaker B: Yes, 100%. I like that line. If I can add a couple specific tactical ones, especially for the entrepreneurs in the audience. We interview you a lot, we do a lot of diligence on you. You should do the same on us. You should talk to our founders. How did we treat them? Did they add value? Were they useful? Were they destructive or constructive? All those things. And are they jerks or are they normal, nice, you know, reasonable people that can disagree but do it civilly and so on. Those are important things for the entrepreneur. Another thing to know is that there are dynamics of need and, uh, timing on the part of value venture funds that are probably unknown or not cared about very much by most entrepreneurs, but they're very important for Example, if there's a very early stage fund that's in very early, has a very low basis, uh, they have a certain orientation and alignment, often much closer to the founders. And that's often the situation we're in. When you get a late stage investor coming in that wants to have more certainty, lower risk profile, they might put on some, what's called structure on the terms, in other words, ratchets for a down round that might uh, happen afterwards or protections that give them a liquidation preference over the other investors. Then we're in different camps. They have a category of yes and no, uh, outcomes and we would have a different category. Again, often we're more aligned with the founders because we're at the earliest stage and there's still some difference between us and the founders because we're preferred shares and they're common. I'm getting a little bit technical, but these are complex things. And so you can see a dynamic where you have multiple venture firms with different timescales. In other words, the funds have a certain lifetime that they have to exit with. And if those are pushing up against a constraint, then that venture fund might be saying to the founders, you've got to sell, you've got to sell. Whereas others who are younger in the fund life or take a longer term approach like we do might say, hey, grow this thing till its ultimate natural value. So that can cause tension. And then there's also just personalities and style and we've been on boards that have been super synchronistic and working together and everyone on harmony and excellent. And then we've seen yelling and you know, all kinds of lawsuits. You, you see every bit of human nature in, in the boardroom and that can really wreck a company. As Bruce said it.

Speaker C: Mark, just to you may not have ever seen this, David, if you remember, but like 30, 25, 30 years ago there was actually a very draconian term in, in regular early stage term sheets called a redemption clause, which. Exactly. You haven't seen that in. I don't remember I've been in decades. But it was literally a redemption clause where the VCs could force typically at year five, a liquidity event like you have to sell your company and give us our money back or we can shut the company down and take the company over. That was a redemption clause. I haven't seen that in decades. But David mentioned some of these, you know, liquidation preferences that would be a

Speaker A: good example of how to screw up a company.

Speaker C: Well, yes, yes, but again, you know that that existed. I mean that was actually pretty common 25 plus years ago in term sheets.

Speaker B: And remember that uh, most venture capital is a fairly new asset class. Previously the world was about lending.

Speaker A: Right. David, I saw that you had said that when you got started in the 80s, like nobody knew what you were doing.

Speaker B: That's true.

Speaker A: Yeah.

Speaker B: Venture capital, what you adventures that you're a travel agent? No, not exactly right now.

Speaker A: Um, Bruce, you said something which is beautiful, beautiful and I think absolutely true. Now you guys have seen a lot of innovation, a lot of invention. But Bruce, you said the greatest invention is Shabbat.

Speaker C: True.

Speaker A: So why is that the greatest invention? And let's specifically talk to why it's the greatest invention for hardworking, hard charging entrepreneurs.

Speaker B: And if I may, let's translate what it is for all the non Jews in the audience because not everybody knows Hebrew and Shabbat.

Speaker C: Fair enough.

Speaker A: So, uh, it comes from the book of Genesis. Six days you shall work, and on the seventh you shall rest. So the Sabbath make sense if it's preceded and followed by six days of work. But the Sabbath is the day when we focus entirely on the important. We cease doing the urgent we do the important. We spend the day with family, friends, prayer, God, study, no work. So Bruce, as a, uh, massively successful venture capitalist, has said that the day of no work is the greatest invention known to mankind.

Speaker C: So Mark, like you, I would host many Shabbat dinners when we were in Oakland, California and our kids were young. We would have dozens of our kids friends. We intentionally live very close to synagogue. We would have dozens of the kids friends over every Shabbat and I would always quiz them and say, what do you think is the greatest invention? And you know, the telephone, the Internet, I'm like, Shabbat, I agree. And I think it's such a beautiful thing to, you know, shut down and recharge your battery. And I remember, David, I don't know if you remember this, it was, it was just, I kind of laugh. But one of our founder CEOs, Ryan Holmes at Hootsuite, uh, who was a real leader in social media and you know, he had tens of thousands, maybe hundreds of thousands of followers, maybe millions. And uh, I remember like, I don't know, maybe 15 years into the career, he put out a tweet and said, guys, you have to do this. It was amazing. I did a, uh, cleanse and I turned off my devices and I shut down for 24 hours. And I responded, Ryan, it's as old, you know, one of the oldest things in the book. Read the Bible, it's the Sabbath. And I think it's just especially today where our kids are being, you know, attacked on social media and you know, Instagram and everything is just so in your face and there's no downtime whatsoever to just have a moment to breathe, reflect, read a book that's not maybe digital and frankly have, you know, like tonight, it's obviously Friday, we're having Shabbat dinner. You know, Mark, we were chatting before this started. You know, we're having Shabbat dinner with our family, with my 93 year old mother in law, with, you know, my, I'm, I'm seeing my brother. It's his bar mitzvah, you know, Parsha. So we're going to, you know, hang out tomorrow for his, uh, you know, for the service and stuff. I think it's just really important to find balance. And again, Mark, something I really appreciate is maimonides. I've studied a lot of maimonides over the course of my lifetime and he was a huge proponent of moderation and balance in your life. And so I think this is about finding balance so that hopefully all of us can continue to work for many more decades to come. You know, David, one of your, uh, mentors, Alan Patrickoff, uh, I did a fireside chat with him and I think he's like 93 years old and he launched another fund, you know, after launching Apex and then Greycroft and now Primetime. And you know, he's convinced he's going to live till 113. I said I think he's going to live till 120, which is under the Old Testament, sort of a complete life like Moses. And the point being, you know, I think if you ask Mark, David and myself, like, oh, when do you plan to retire and hang up? Like, we love what we do, we're passionate, it's a privilege to do what we do. I think we'd love to keep doing this, you know, as long as we humanly possible. And so I think people have to understand and this is a message for the entrepreneurs. It's not a sprint, it's a marathon, it's a journey. It takes longer, it costs more, and you need to be patient. And the way to really achieve and optimize is by having that balance of the Sabbath. So I truly believe that I personally adhere to it and I look forward to it every, every weekend.

Speaker A: I do too. And I think, uh, great, uh, advice for young entrepreneurs is whatever your business is, whatever your religion is, honor the Sabbath, whether it's Friday night to Saturday night or Saturday night to Sunday night, it doesn't matter. But take 24 hour period and devote yourself to the important as distinct from the urgent. And the social science studies have demonstrated you'll be better at your job in the six days to follow.

Speaker C: 100%. I truly believe that and I think maybe I like to say that we're proof positive at Bloomberg Capital.

Speaker B: There's a new book that's just come out written by Charlie Kirk before he was so horribly murdered. Um, and his memory be a blessing to all of us because he was truly an amazing human being. I knew him very well personally. I think Mark, you did too well. And I think Bruce, you met.

Speaker A: No, I never had the privilege of meeting him.

Speaker B: So he was in my house multiple times and he saw, you know, how we celebrate the holidays and so on. And Shabbat is one of the holidays. Most people don't know that, but there are many holidays in Jewish life and in Christian life, of course. But the Sabbath is considered one of the most important. And uh, it is for just sociological purposes, if not spiritual, but they really are, they go together anyway. His new book is called Stop in the Name of God and it's beautiful call to observe the Sabbath. He being a deep Christian, evangelical Christian observes. Uh, I think actually he chose to do it on Friday night. Now you can choose to do it on Sunday or Thursday, whatever the traditional Christian one was. Blue laws. Remember when I was in college in Boston, stores were closed. And in Europe, many Catholic countries, they still are closed on Sunday. And that does give people, you know, the average worker a little bit of time to pause. And in fact, uh, just going back historically, the Greeks, the ancient Greek culture, when they saw the Jews observing Sabbath, you know, thousands of years ago, they thought, what a lazy people, how awful. And they let their slaves and their servants rest. How ridiculous is that? And their animals. And so it's a new concept, came from the Jews, but it's spread to Christianity and Islam has it as well. And I think many cultures do, but try and do that time. You know, Charlie Kirk has written a book on how you can do it in your family. And um, it just brings more meaning and intensity to the rest of the life. But it gives you, as you said, Mark beautifully and focus on the meaningful and the important.

Speaker C: So I think Mark, just two last points on that. We always say a family that prays together stays together, right? Number one. And then number two, it's interesting in the Ten Commandments, there's only one ritual that's highlighted in the ten Commandments and it's the Sabbath.

Speaker A: Very interesting and very. And very true and important. And I think a great message for entrepreneurs of any faith. Now, David, um, along these lines, um, you said that, um, one of the problems facing entrepreneurs is that people grow up with too much secularism. So, um, talk about how a religiously centered life can make somebody a better entrepreneur or business person.

Speaker B: All right, well, I'll start with how I like to shock people. I don't mean to shock people, but in Silicon Valley they're famous for doing interviews with people like Bruce, me and you. And they do these, you know, what's your life like? And how'd you get started? And they always start with or end with, what's your favorite book? And I say the Bible and they're just hit the floor and they say, what? I thought you were intelligent, I thought you're not. They see the Bible as like this old collection of myths and crazy stuff and old rules. And that's a, I would say, an uneducated view of the Bible. If you take the Bible seriously, you understand that it's both a combination of divinely inspired and human interaction, and it's literal and metaphoric, and it's allegorical and

Speaker A: it's poetry and it's the greatest guidebook for practical life ever written.

Speaker B: Exactly. And if you're part of Western society, if you're families that came from Europe or North America, et cetera, most of us came from Europe. It's the core of what Western civilization is what we really call humanity today. The laws against murder, et cetera. Murder was not wrong in many, many cultures.

Speaker A: Well, the most radical thing anyone ever said is you should love the stranger.

Speaker B: Exactly. Beautifully. And that's the most commonly repeated commandment in the Torah is don't oppress a stranger or love the stranger. Because that's so non obvious. You think, oh, there's identify friend and foe in military and usually you're with your clan or with your family or with your tribe. And so to say, hey, you have to lay off people that are different. This, it's an anti xenophobic principle that is beautifully articulated in the Torah. Um, you know, Jews were oppressed by the Egyptians for something like 400 years. And we're not supposed to oppress or hate the Egyptians. We're commanded not to. So it's a very interesting social dynamic there that teaches, I think, really good values. So, um, you asked about the Gauten thing. I'm going to give a little pitch for Prageru of the board of Prageru, Go to the website if you're listening to this P R A G E R U. We believe in promoting and expounding American values. And American values are built traditionally on Judeo Christian values. And we're not trying to be one religion or another. We're very ecumenical. And if you're a good believer of peaceful Islam or Hinduism or Buddhism, those are all great as well. Those traditional religions are wonderful. What we are fearful of I think is massive secularism. And to quote a gentleman in 19th century Britain, G.K. chesterton, he wrote very perceptively and presciently the problem with not believing in a traditional religion or traditional God is not that they'll believe in nothing, it's that they'll believe in anything. And I think we saw with the decline of religion in the 19th century what rose next was fascism, one kind of nationalistic religion or communism, a kind of utopian international egalitarian religion or, or today we might see it in the Gaia movement which is sort of a green ecological uh, religion. So people need, I think most psychologists and uh, scientists understand that human beings have a certain need for meaning because we have our daily quotidian routines and there's food and shelter and sex and basic drives of humans. But then there's something like what's it all for? Why is there something rather than nothing? Why do I have consciousness? Why do I, what is my purpose in being a father or whatever your role is in life. And that generally is better addressed by the should and the ought rather than the how and the why, which is what science answers in secularism. But the higher purpose, the transcendent generally only comes from we think, traditional religions. And so Prageru is trying to bring people to that basic understanding that these principles don't happen in, in a vacuum. I don't think America would have been formed the way it has been if it had not been for God fearing Christian, um, founding fathers.

Speaker A: Right.

Speaker C: So David, after they finish the Bible, I think maybe they should read Victor Frankl's book Man's, uh, Search for Meaning. Probably one of uh, my favorite books as well. That's phenomenal. You know, Viktor Frankl survived the Holocaust, survived concentration camps and really talked about ultimately coming out of that and really giving purpose and meaning and staying positive and an outlook on life and how all of that can shape and form one's life. And it was, I think there were people that came out of the Holocaust and came out obviously, you know, maybe not believing and depressed. And Viktor Frankl really chose the other path of pulling the meaning from that and purpose and God and, you know, it's just a beautiful story and one we should apply to everything in our lives.

Speaker B: And he also said that there's not a complete correlation, but there was some degree of evidence that people who had meaning in life. And he did. He thought that he was going to be reunited with his young bride. It turned out she had been turned to ashes in the crematorium. But he kept the hope that he would reunite with her. And people who have that search for meaning in their lives, whether it's, I'm going to do good by, you know, studying butterflies when I get out and writing a book, or I'm going to reunite with my loved ones, or I'm going to be responsible for this child. Whatever it was, that deep sense of responsibility and, uh, attachment really helped people survive the worst.

Speaker A: That's right. And, uh, David, you've talked about the, uh, magic for humanity when science meets capitalism. And as we become more advanced in our science and the pace now is faster than ever, um, the proof of the one true God becomes more and more evident to the point where, um, a great scientist that Eric and I met said that the next generation of evangelists will be scientists. Because the more you understand the infinite complexity of things, the more you realize that there must be an intelligent designer.

Speaker B: That argument works for me. And I think if you look at some of the Prageru videos on religion, we're not advocating for one religion or other, but we do have a lot of videos that talk about exactly this issue. Why is there something rather than nothing? It would be easy for the world to have just nothing. And, uh, it's static silence. Nothing happens, nothing changes. That's it. But we had the Big Bang. Why? What's that all about?

Speaker A: And the precise parameters of when and how and how much exactly happened at the Big Bang. The chances of it having happened at random is literally zero. If you define zero as zero over one to the 50th power. I mean, it's just, just impossible.

Speaker B: Great book. I forget the name of it, but it was written by the late, uh, Chief Rabbi of the British Empire, um, Jonathan Sachs. And it was a book. I forget the name, but you can find it. Um, it was about that. There is no contradiction in traditional Judaism, at least between science and religion. There are blessings for pagan astronomers and pagan, um, scientists in ancient Judaism, where we bless and honor them for what they're bringing to society. We don't deny anything. And in fact, as you're saying, Mark the view is that God, what we call God, but you can conceive of it as I put an extra O sometimes in everything that's good, whatever is good in the world, you can think of it as God created physics and chemistry. They all work perfectly and they're precise. And it's amazing how this incredible wonder of the world, uh, was created and gives us lives today. I mean, the fact that we can be here talking, having this kind of conversation compared to, you know, algae.

Speaker A: Right.

Speaker B: Washing up on the waves at the shore. We should, we are blessed. And so that it leads me to say we should be much more grateful as human beings.

Speaker A: Absolutely.

Speaker B: Think about secularism is it leads to spoiled, um, materialism and, and a lack of gratitude. And part of gratitude is not just for the material, but it's for the essential, the meaningful, the relationships, the values, um, being good people rather than just, well, to do people.

Speaker A: It's been an hour and what a great conversation. I'm sorry we didn't get to AI.

Speaker B: I was going to stop. It was going to be all about AI and then you went psychoanalyzing all of it.

Speaker A: We could do another session on AI and, and, uh, and where software is going to go in the era of AI and how AI is, is, uh, changing, um, so much of what we do commercially and otherwise.

Speaker B: Would you let me just do one little riff, please?

Speaker A: Of course.

Speaker B: So important. And Bruce can, can add in as well. We've just done a, a series of webinars that are available to other folks that are on this. If you want to hear us, contact Bloomberg, uh, Capital, and we'll, we'll make sure that we can get the information to you. But we did a webinar on what's called agentic AI. Now basic AI is essentially oversimplified, finding very good answers rapidly from massive data sets. And it's something that a human probably couldn't do in the same timeframe or certainly with that precision. So that's basic AI. It's using neural networks and so on and so forth, large, uh, language models, generative AI. But the newest thing that's coming is called agentic AI. And whereas the basic AI is giving you a good answer from a lot of data, the agentic is taking it further with agency and it's doing activities. It's, it's operating as an agent. Like a travel agent would book your ticket and choose the hotel and pay for things and so on. This is doing activities for you. So it's, uh, completing a complex workflow now that has huge Implications on productivity for American workers and beyond outside of the United States. But let's just take one statistic. The average American employer spends $170,000 a year per employee. That's wages and benefits, about 160,000 of that. And 10,000 of that is tools, the software that is used every day by Microsoft and Oracle and SAP and all the different tools that we use daily. And if you can think of all the software you use, you use a lot of different tools. And that together is about 10,000 a year per employee. And the market capitalization of those companies that make that software is about $16 trillion. But remember that 16 trillion is a tiny fraction. It's 1/17 of the total spent. Now, what agentic AI is going to do is it's going to automate a lot of the mundane, the dreary, the redundant type of work that is cutting and pasting a spreadsheet into another application or summarizing a bunch of materials that can be done by humans, but it's much better, much more efficiently done by agentic AI operating 247 at no marginal cost. So we're going to see dramatic changes. And McKinsey estimates that 57% of work hours will be transformed from human labor to agentic software. And I'll just give an analogy for those people who are very concerned, oh, my God, we're going to lose our jobs. There will be some dislocation. It's going to happen very fast. But in 1776, we're celebrating our 250th anniversary this year in America, 95% of Americans worked in agriculture. We were farmers, and we didn't have combine harvesters. We had plows and a donkey, and we did it ourselves. And it was a lot of human work and unfortunately, a lot of slavery. But at that point, it was all human. Now, those people, those 95% have been replaced today with 2% of Americans do all the farming. So 2% produce more agricultural output cheaper, better quality than those 95% did years ago. So it's dramatic, the improvement in productivity we had in agriculture. And we live a better life. And I think that's what's going to happen with A.I. uh, it'll change. There'll be different classes of folks, more people, maybe in the arts, more in entertainment, more in travel, more in, um, maybe, um, other domains, studying and so on. Because education is going to change too. It's not going to be four years and you're done with college. You're going to need lifelong learning, because the technology is changing so fast that the skills need to keep up with that change. I'll pause there. But the basic idea is this is probably underhyped in terms of impact on society and the economic opportunity rather than overhyped. Certain companies have overvalued for sure. But the aggregate value to be created by agentic AI and the AI juggernaut in general is absolutely massive, probably larger than any thing we've ever seen in American world history.

Speaker A: How's it changing your business in terms of what you're investing in or what you're not investing in?

Speaker C: I mean, to jump in there on that perspective, number one, how is it changing our business? We are eating the dog food as well. So we are using uh, AI ourselves to source deal flow, to evaluate deal flow, to help us write uh, investment memos, to analyze different opportunities. So number one, we're doing that. Number two, as David mentioned, agentic AI we already have probably in the realm of about a dozen companies that are in this agentic AI space across various verticals, whether it's health care, financial services, supply chain accounting, audit, regulatory. So it is transformational. Uh, everyone's focused on the models. The foundational models are there, they're a commodity. At the end of the day, it's really going to be about the workflow and it's going to be about operational efficiencies. It's going to be about the data that are going to transform these industries. And so we've been investing in a variety of verticals over the past few years that are being transformed. Just one example, it's one of the fastest growing companies we've ever invested in. A company called Engle Health. Uh, the founders actually came out of Palantir. They worked in government and effectively they said what would a United Healthcare look like today if it was being created today? And so it's a native AI platform. And effectively what uh, they're uh, able to do is automate using agentic, using machine learning and using big data to really automate, uh, whether it's customer acquisition, whether it's processing of claims, whether it's quote quoting. It typically takes brokers, it'll take them months to be able to put out a quote for a small business. Now across Engle Health, they can do that in minutes. And so the efficiency is unbelievable. And think about the almost the audacity to try to attack a company like UnitedHealth. I mean UnitedHealth is generating 50 billion in revenue. It's 400,000 employees as 50 million users. Yet this company has grown Faster than anything we've ever invested in to date. They're already in less than five years, approaching $1 billion in top line revenue. They are already profitable and they're doing it 5x more efficiently than other businesses because they're automating all of the workflows, all of the different processes using agentic artificial intelligence. So that's just one example. In health care, I think, uh, folks need to stop asking what can AI do, but rather they should think about what are the most expensive broken processes that we can make profitable and 10x faster. Leveraging artificial intelligence. That's the right question and it will be transforming businesses. And David, I think touched on a survey we've done with our Innovation Council, I mean an astounding percent, you know, in the 90 plus percent basically said if you don't jump on this bandwagon, this is transformative, your business will come obsolete over time. And so this is still the very early innings. And for us, for David and myself, what's very exciting at Blumber Capital is Also, I think 96% of the people that we surveyed said enterprises are relying on startups to innovate. They need to partner with the startups that are creating this. And not coincidentally, where Bloomberg Capital is based. We have offices in Silicon Valley, New York, Miami, Tel Aviv. Those are the hotbeds of innovation across the planet. Israel is number four globally in Gen AI. They have more AI developers per capita than any country on the planet. And so they're a market leader in this category. And we've been boots on the ground there for almost 30 years. So we think the future is bright.

Speaker B: Yeah, well, the future is very bright. Macroeconomic trends are going the right direction. AI revolution is going to be much more productivity and the only way humans get rich, richer and get better wages and our material standard of living increases is through increased productivity. So it's a boon, even though there's some scary parts ahead. But I'm going to want to give you one example, Mark, uh, to bring it home, I learned it's not from our portfolio, it's one of our LPs. One of our investors, his own company, uh, happens to be here in Florida, is a debt collection company. And they, uh, have trained personnel that are able to do 12 to 15 resolutions per week. And they've now trained an AI agentic bot to do this process using text and so on. I think also maybe voice interaction with customers on various, uh, phones. The first week it was put into use, it was able to resolve 126 customer issues in one week. So the 10X is not a fantasy, it's real. It's happening right now. Um, I wouldn't say this is the most sophisticated company in the world. It's a very good, well run company. But they're just, that was their first implementation of agentic AI. So the future holds even more potential for dramatic improvements in the way we do things.

Speaker A: Astonishing. What a, what a time to be alive and to be, uh, in the investing and entrepreneurial, uh, world.

Speaker B: I'd like to add one more thing about 3i. First of all, you are a prince of a human being and your wife is better. You married up. But

Speaker A: I married great.

Speaker B: But 3i is exceptional. I've been in so many organizations and Bruce has as well. And this organization, without exception, I've met only quality people who are successful and interesting and good and not, uh, everyone's perfect. I don't know and I haven't met everyone. I'm sure there's some, uh, bad apples in the, in the crate, but overall, super high marks for who you get into the organization and the relationship we're starting to build. It's young, we're only new members, but it's very additive and accretive and fulfilling. So thank you. This wonderful community of investors.

Speaker A: Oh, thank you. That is so gratifying to hear that. Thank you, David. Okay, well, David and Bruce, thank you for, uh, such a great conversation and, uh, Shabbat shalom.