Roger Ehrenberg of Eberg Capital joins Nick to discuss Building and Leaving the Iconic Seed Firm IA, Mastering Reserve Strategy, Investing in Sports and the Next Wave of Entertainment, and Analyzing the Pysche of Unicorn Founders. In this episode we cover:
Spending Time with Founders Before Investing
What Most Investors Miss When Generating Persistent Returns
Directive vs Constructive with Founders
The Future of Sports
Dealing with Issues in Real Time
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Nick Moran and Nate Pierotti of New Stack Ventures, a venture capital firm committed to investing in founders outside of the Bay Area.
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Transcribed with AI: 0:18 Roger Ehrenberg joins us today from New York City. He is founder and partner at Eberg Capital, an investment firm that empowers creators and their fans at the intersection of sports, gaming, the arts and web3. Roger is a board member and lead investor of Betr; and an advisory board member and owner, of the Miami Marlins. 0:18 Prior to Eberg Capital, he was the founder and managing partner at IA Ventures, the firm that backed some of the most iconic software companies of this generation including Wise, Datadog, Digital Ocean and The Trade Desk. Roger, welcome to the show! 0:53 Thanks a lot, Nick. Great to be here. 0:54 It is an honor to have you can you tell us a bit about your backstory and your your path to becoming an investor in launching IA? 1:01 Sure. It’s a it’s a little bit of an unconventional path. Yeah, I mean, I was a longtime Wall Street er, who had absolutely no sense of what VC was much less if I ever would become a venture capitalist. I was principally in derivatives in quant trading from the late 80s Until Until the early 2000s, at Citi and Deutsche and really loved my time there. That kind of tickled both kind of creative and quantitative parts of my brain. But in the late oh, four period, just the politics and the bureaucracy and just feeling like I surveyed the street. And it really wasn’t another job I wanted, I just decided to embark on doing something new. And I had had the good fortune of making a few angel investments in the early 2000s. Again, not through any genius strategy, just some super smart younger people on my trading desk, introducing me to founders that they had gone to school with. And after I left the street, and at the time to think about the future, I started spending a bunch of time with these companies realize I really loved the kind of the coaching and mentoring at the intersection of kind of technology and entrepreneurship, kind of similar to the trading teams that I’d built on the street. And then at the same time while I gotten to know Fred Wilson, our kids went to school together his his and Joanne’s youngest child, Josh and mine and my wife’s older, oldest son, Andrew, were a year apart in school played little league together. And so I started to spend some time with Fred and he was very generous is just kind of a mentor and a guide as I became more curious about the venture industry. And so long story short, I decided I was going to give this tech investing thing a try on my own for five years. And I basically spent the o 5209. Period in New York City, seeding 40, companies Leading six rounds, sitting on six boards, and really seeking to build a brand for myself. And to see if I was any any good at this. At the same time started writing a blog called information arbitrage, which helped really build my build my brand and awareness and network. And then towards the middle of onine, I kind of started to develop this thesis around big data as an investable theme. And felt like coming out of the GFC with really nobody quite like me investing in New York, there were really no emerging managers to speak of in New York City at that juncture, together with this kind of big data narrative that was so clear to me, just my trading back around being a buyer of basically, you know, high speed real time streaming technology for trading. But then intuiting, what the implications could be in the general technology space. That was the impetus for me to starting AI. And yeah, and then that’s, that’s kind of how it started. 4:00 Amazing. Okay, so you’ve had quite a run at ia 2009. I think it was founded, you’ve now launched Eber. Capital, let’s, let’s get the big question out of the way here. Roger, you founded in built one of the iconic seed funds? Why the decision to leave in launch? Eva. 4:18 So just to be clear, there there is distance between those two decisions. My leaving, I was completely independent of even having any notion of starting another thing. I left IA because really, probably two major issues. One was during the early days of COVID. I actually lost both my parents in a fairly short span of time. And yeah, thank you, but that that was jarring. I mean, it really affected me deeply. And it just made me kind of reassess what my priorities were. And notwithstanding how much I love Brian, Jesse, and look at I mean to this day there stewarding the lion’s share of my family’s wealth there are, there aren’t very many people that I trust or care about more than the two of them. And we’ve worked together so closely for so long. But that if anything was a relief, in terms of my ability to step away, because I knew that the firm would be in great hands. And I knew that our LPs, certainly while missing me wouldn’t be deeply concerned about the future of the firm. And so it was really that and you know, it, I don’t know what it is about 17 year periods, but just like, some 17 years onto Wall Street, I was like, You know what I’m done, I was ready to move on to something different. And then 17 years after starting in venture, I realized, I was kind of ready for something, literally these 217 year gaps, and I just lost the passion. And I, I had said to Brian and Jesse from early access that this to Brad in earliest days, Jesse wasn’t with us. But then when Jesse joined, and after we became an equal partnership, I was extremely clear that once I’d made the decision that I wasn’t 50% into it, as is my way I’m either all in or I’m not. And that if I wasn’t all in, I was not going to be one of those people who was going to be a tax on future generations, scoop out huge management fees, and basically hold on to the management company, simply because I found the firm. And so I’m very fortunate, I’ve made more money than I ever thought possible. My wife and I met when we were kids, we didn’t, neither of us grew up lots of money. So we’re super fortunate. And Brad and Jesse deserve to run the firm and garner the economics. So I basically just handed them the keys. And with the exception of being able to invest fee free in the future, and subsequent funds, it’s theirs. And so all those things taken together made me feel like I could leave, and that they would not only be fine, but they were already set up for success and had multiple wins of their own. And so that just gave me the opportunity to once again, think about what I wanted for my future. And it just happened that Coincidentally, I had really kind of reconnected with my love of sports. Now, I’ve always been a sporty guy, my wife was an athlete, our sons were both all city, New York City baseball players, had college baseball offers, like sports has been a centerpiece of our family forever. And during COVID, I’d had the opportunity to invest in the Miami Marlins, which kind of just whetted my appetite for more. And right around the time that I had kind of formally left eye and was starting to see more deal flow in sports and intentionally networking with team owners, investors, sports VCs, sports PE firms, league owners, you name it, that my sons approached me and said, Hey, Dad, you know, we’ve, we’ve always talked about wanting to kind of learn more from you and to find ways of doing things together. Can we figure this out now since you have this, and my older son Andrew, who got his degree in informatics and entrepreneurship from Michigan, he had worked for three years a data robot in product management. And then he was a VC for a year and so he was at an inflection point. And then my younger son Ethan was just getting ready to graduate from Michigan Ross School of Business. And he is somebody who’s very, very, oh, my goodness, all four of us. She was so for those for those listeners who know Ann Arbor. My wife was my waitress at Rex. No, which is one of the one of the iconic bars in Ann Arbor. Sure. And I picked her up her first sight working. I was six weeks from graduation, and she was a junior. And literally she and I’ve been together. Since we were 21. We just celebrated our 30th wedding anniversary. 9:27 Incredible congratulations. I was I was an athlete at Indiana so we would go to Rick’s and be in Ann Arbor from time to time. 9:35 There you go. So you know what I’m talking about. And then Andrew and Ethan. As I said they were they played a very high level travel baseball in high school, baseball, Upali prep and Brooklyn and had NESCAC baseball offers. Neither one of them could have played pros. They just both decided to go to the school that they ultimately really wanted to go to, which was Michigan, even though they could they couldn’t play ball there. But it is the Family School. And so, and then Ethan’s here. So he was getting ready to graduate from there and was a very sophisticated sports bettor. And he had really already while he was at school, been spending time with me diligence saying, investments in the sports betting and sports data space. So when the two of them were approached me, I sat down with my wife, Karen, and we had been thinking about, you know, what was, what was a good way to give them the exposure, but to also have them kind of feel, feel the pain and the dynamic tension of actually having your own money at risk. So we ended up arriving at setting up this family partnership called E Berg, where we basically lent the boys money against some family assets that they had, and said, Sure, we will begin investing together. And in Andrews case, it was kind of a part time gig. And in Ethan’s case, it became his full time vocation. And if you look at where we’ve gone over the past 18 months, literally what you see on the Ebro capital website is, is now the the fruits of those efforts, which is we’ve, we’ve created a real business and a real brand reputation and footprint at the intersection of sports, media, and technology. And we’re having a terrific time. I mean, I, it’s, I didn’t I did not leave IA with a notion that I was ever going to start another business. But truth be told, I’m incorrigible. It is impossible for me not to be building something, I just feel utterly useless. And my passions need to be directed in constructive ways. And this is one of those ways. So that was really the, that’s how it came about. It really wasn’t, Oh, I’m leaving IA to do this thing. In the same way that I left the street I left Ay ay ay ay, to be able to open my mind to new possibilities and circumstance and, you know, just kind of rationale, conspire to get me to go back in but just using family money in this way. 12:18 So I’ve got a captive audience here. So I want to get into a bunch of mechanics, VC and kind of, you know, get some of your wisdom here. But But you made an investment and better, right, it was a 300 million pre money or public publicly that was available. You know, if that reaches a billion you’re looking at, you know, after dilution, maybe a 3x, it really kind of needs to be a $10 million dollar outcome to be a quote, unquote, fund returner. And I know that maybe you’re not investing out of the traditional fund. So walk me through how does the math work on an investment like this? 12:52 Sure, well, what you read about was the fourth check I had written into the company. So I own a lot more of the company than you think I see. And so when so better used to be called Instapak. And Insta bat was spun out of simple bet, which I’m also an investor in, which is the leader and sports micro betting infrastructure that powers a bunch of the major trading books in their Microblading activities, the co founder of simple that the who was a brilliant young due to fellow named Joey Levy, always had the notion of having simple bet, be direct to consumer, and to ultimately be a sports book, power, but leveraging the phenomenon of microbiotic because his hypothesis was that betting live in game was ultimately going to change everything. And that sent the traditional, you know, pregame or futures bats was always going to be there, but it was not going to represent the growing part of the market, there was going to be much more engagement, much more social participatory minute to minute. The thing is, you know, the, if anything simple that was a little bit ahead of its time, and it also kind of ran into the the secular downdraft and betting stocks and challenges with fundraising in that kind of 2019 to 2020, really 22 period. And so they ended up pivoting their strategy to really be a b2b infrastructure company, which was ultimately I mean, they’re very, very successful, but it’s not the same thing as being D to C, either with the risk profile or with the upside. So shall we never lost that bug to build this DTC transformative sports book. And so he ended up spinning in Instagram at a simple pet. rebranded it better part nerd with Jake Paul, you know, the YouTuber or Tik Tok or fighter, you know, with this notion that lever lever, a differentiated entertainment business with differentiated content would help drive a lower CAC model for the LSB for the sports book itself. And so I wrote a check into the spin out, I wrote, I wrote two checks into the seed and the A and then I wrote this lead check into the hate to, which is all to say, they do not need to be a $10 billion company for me to have venture style economics. 15:43 Got it? Got it. So let’s put a pin in the sports entertainment. I want to come back to that. But talk to us about how important portfolio construction was to IAS success. 15:53 Sure, so I think of to us portfolio construction more in the sense of bet sizing, because we didn’t really think about it as much as okay, we’ve got four companies in, in Sas three and machine learning to and hard sciences, like we didn’t really think about it like that, it was much more how we legged into company investments, and how many companies we went super deep in. So I think in general, we would end up in each fund with five companies attracting a very significant amount of total committed capital, because we will have seed it we will have led precede or seed, done pro rata are super proud in a pro rata and B. And then we’re making independent decisions every time it’s just in our very best companies. 16:57 Total logos, five, get the lion’s share of the 17:01 FDA. Yeah, I would say our portfolios are generally around 22 to 25, portfolio constituents of which 567 Get a disproportionate amount of capital. Got it? And you know, there’s always there are always outliers, right? Like companies where we might own a low single digit percentage, but where they’re so extraordinary that they end up returning enormous capital, like, data dog, right? Like we were, we were part of the very first money into data dog. And we wrote another check after that. But fundamentally, that was not a core IA investment, even though we were there on day one. And but because data dog became so wildly successful, that whatever, two 3% of the company ended up being, you know, a multiple fund returner, because it was out of a $50 million fund. And then you have something like the trade desk, right? Where we co lead seed, bridge them three times invest in the B. So we had 10, and a half percent of fun one and trade desk and when they went public, we own 70%. 18:17 You did some bridges before the A on that one. Is that 18:20 Yes, yes. No, it was we call it super fabric collective, and then bridge one bridge to invest in a invested in B. And in the B It was basically it was only the B lead Hermes and us. That was it. So we had five and a half million in the company, actually 5.25 point 2 million in the company. And that 5.2 million represented seven tenths of the Venn public trade desk, 18:51 you know, as an investor myself, investing out of a 42 and a half million dollar funds, we know the ones we really like, we know the ones that aren’t working, there’s a lot in the middle, is there some sort of framework or some philosophy on how you deploy those reserves? You know, and how much to deploy at each of these, you know, following opportunities or potentially just an interim bridge round. 19:16 So I think one of the things that we, we did well, and again, this is something that, you know, we obviously made loads of mistakes, but we really refined our process and are kind of rubric over time. I think one of the things we did really well is spend a bunch of time with founders before we ever wrote the first check on what kind of measures and metrics constituted success for this first phase of the company to determine does this even does this company even deserve to raise the subsequent round? So we would go into these with the frame that Like, this isn’t experiment, it may not work, we obviously hope it will, like we’ve spent all this time with the team thinking about the TAM and thinking about their product sensibility and their ability to ship. But we acknowledge that VC is a dicey business, but we’re gonna give it our all at this very early stage to see if we can help founders sprint to product market fit. That’s really what it’s all all about. And so we learn a lot. In that first phase, we’re also extremely honest with founders that if things aren’t working, like, we’re not just going to blindly write checks into the company, like we are going to be truth tellers, and we will be helpful, we are not just going to roll time forward and continue to plow money into a company. And when it’s a perpetual, we’ll figure it out. situation, we just won’t do it. So there was there was always that incredible honesty, and I apologize for the long answer to the short question. But it’s but it’s part of it. Because self selection happens pretty clearly. See, we’re talking about well, there’s, you know, the obvious winners and the obvious losers, and there’s a lot in the middle. I’m not sure there’s a lot of middle actually, I think the there obviously are some there are some that become what you couldn’t have thought in the earliest days. And obviously, there have been some iconic companies that have been born that way where they end up morphing into something different than what the original plan was in their wildly successful. And that’s great. I mean, good fortune to those who back them. Oftentimes, that’s not us, because we’re like, we didn’t like that plan. And then they end up being backed by somebody else. That plan didn’t work, but they find another plan, like that happens. But most of the time, it’s, are they great at executing? Are they resourceful? Are they fast? And do they have grit? And if those things are true, and if they are able to find that pocket of willing early adopters that prove the high the early hypotheses, then yeah, I mean, we’re, yeah, we’re putting early money in that company. And we may seem very aggressive or slightly crazy, but that’s okay. Because we feel like, in those circumstances, we have asymmetric information, and we’re gonna, we’re gonna do it. So what we what we do try and do is maximize our effort in those companies where we can have the greatest impact. If founders are just kind of like, you know, that didn’t work, I’m gonna kind of go over here and try my own thing and a pair down bird, and they’re just gonna try, we check in with them, we help. But there’s not much we can do. And they know where to find us. And we will, and we will sit down in a periodic reviews with them. But we’re not going to spend a huge amount of time with those companies where we can’t bend the curve. And the founders don’t really need us at that point when they’re just trying to figure stuff out. So it, it starts to coalesce pretty quickly, over the first 18 to 24 months of a company’s life. There are always those that I would say the ones that are the most challenging, which are also potentially less exciting, or those ones that have platform type characteristics, which sometimes take years to play out. Trade desk, and trade desk is one of them. Right trade desk was pain, extreme pain for more than two years. But I’m saying there are even some companies that take longer than that, just because they’re trying to change a paradigm. And, you know, they may start out selling, selling something that’s fairly lightweight at the top of the stack and having some success. But it’s, it merely demonstrates that there’s there’s value in the end product, but it’s not that deep, but they have a vision for how that can actually become part of the part of the tech stack. But that is a completely different sales process. It’s a completely different economic buyer, right? It’s not like if you let’s say it’s in the sphere of privacy or security, right, it’s it’s not to the chief privacy officers chief legal officer is to like the dabs. It’s like the tech people, right that if you’re saying, oh, you know, privacy or security at the core, not just a tool for bear compliance, but something that at that, at the core of software is going to build in privacy at the code level. Well, then you’re talking about something very different, different buyer, different fit and finish different manifestation, right. It’s obviously not about the it’s not about the UI. It’s about documentation. It’s about getting developer evangelism. To open source part of it like all of these other questions, but this stuff takes time. And so you’ve really, you’ve really got to believe and have a deeply held view that a, what they’re building for is a massive transformational opportunity and be that this is the right team, and they’ve got the right people to execute that plan, which is different than selling a lightweight piece of software at the top of the stack 25:26 100% different skill sets different approach. Roger, picking good deals is paramount, of course. But what do you think most investors miss when it comes to generating outsized, persistent returns? 25:40 I mean, this is probably going to sound hackneyed and stupid, but I honestly think it is trying to think about the future without being affected by everybody around you. It is such a noisy industry, and the market is trying to tell you invest here, invest here or invest here. When many times it’s not the right time to invest here, it’s time to invest somewhere else, or maybe it’s a different take on that thing that people think is the buzzy, buzzy thing. I mean, I have to tell you like right now, I am so happy not to be in mainstream tech feasts with the AI craze. Like whenever these waves come up, and it’s and you just see all of these deals print. And people raise funds on having gotten access to this company or that company. Like I absolutely passionately hate that about the industry. And I understand is kind of a necessary evil, because that kind of boom, bust and then maturity. Like that’s just the way nature and humans work. But, man, it feels really bad. If you’re not, if you don’t succumb to that, when it’s happening, and you just feel like what does everybody else know that? I don’t know. But at the end of the day, I firmly believe and I think our returns have borne it out. And when we just kind of put blinders on. And we focus on those things that we believe are truly transformational and might look a little weird or not look as exciting. But where we find the absolute most compelling founders working on what we think are really hard, interesting problems that if they’re just able to use their wedge to crack it, then it can be something incredibly powerful and self reinforcing. I think in general, like that’s been, that has been a formula for success for us over whatever. 13 years, 27:51 not getting caught in the hype. You heard it here, I can tell that you were a derivatives, derivatives trader, at one point, Roger, direct question for you, as a board member, what do you consider your primary role to be 28:04 to be a counselor to the CEO, and to be the safe place that they can go and be real? Because most of and I’m saying like boards before your pre public, because a lot of stuff happens between like a Series A and B board and a pre public company board. And I’m happy to speak about both. Is there one you in particular you’d like me to speak about? 28:33 Well, I like that you said the role is to be a counselor, because I think a lot of people do this differently. I asked to another investor two days ago, a similar question. And he fancies himself as the Rick Rubin of VCs, you know, it’s to get the most out of the person you’re working with. And I thought it’s it’s interesting. Everyone’s kind of got a different taste. Some people are coaches, some people are bosses. Some people are counselors, and it’s open ended, you can answer it the way you’d like. 29:00 So my relationship with the CEOs on whose boards I’ve sat and set is I always want to be viewed as the truth teller always want to be perceived and recognized as the person that’s willing to say, the hard things, the hard things in the appropriate settings in empathetic ways. So I find boards tend to cluster there are those happy talk boards where boards are kabuki theater, and those the boards where I literally want to put my head through a wall. And I tell this, I am extremely directive with CEOs about what I expect. Like I expect a CEO to manage a board. I do not expect them to be reactive to a board. So if board members come unprepared or I tell our founders kick out the board members to level set. I’m going to send materials out at least three business days before the meeting, I expect for you to have read them, analyze them and company, any questions come prepared. And if you’re seeing that board meeting, and you’re not prepared, I will, I will ask you to leave, like no crapping around. Nobody has any time for this. Which is why, when we would lead, lead, see deals at IA, we don’t take board seats. Like we may never take a board seat, we use reason to take board seats much more frequently. Now, generally, what will happen is, if a company, we see the company, we don’t take a board seat, it becomes really successful. And then there are investors taking board seats and subsequent rounds, founders will generally ask one of us to sit on the board, because we have the strongest trust relationship with the founders. And they want us there. But it’s we don’t view board seats, as indicia of power. Power comes from respect and actions, not tired. So I want to always be the most important person to the CEO on a board, no matter how much capital we put in relative to anybody else. 31:27 This this philosophy, you know, there’s, there’s many investors these days that kind of take the role of cheerleader and little responsibility, and some of that may be encouraged by some of the prominent accelerators. But I think your your directive style stands out, it’s it’s different than most. 31:44 It’s directive, but it’s directive constructive? Because most CEOs that we’ve backed have never been in that position before. So how are they supposed to know what to do? How are they supposed to know the amount of power and influence they have? They don’t. And if there’s a vacuum, I guarantee you, someone else is going to step into that vacuum. And if they don’t have a great board that they were very intentional in constructing, well, that vacuum could be filled in a really, really unproductive way. So, you know, I spent, I have spent, and even now in my new life, I spend a meaningful amount of time with CEOs talking about these issues. And I think whatever it my age and stage that gets like, I just don’t, I just don’t care about saying hard things. I see them empathetic, like I’m okay, if I shake somebody up. If it’s something they need to hear, like that there is no greater sign of caring and love. And just being freakin honest. Right? And so I’m more than comfortable to have these challenging conversations. And to challenge founders, like you had said one person who said, Well, I want them to be the best they can be. To an extent. Sure, I do too. And I think a lot of my counseling falls in that being the best you can be category. But I think even before that, it’s in many, many cases, it’s just it’s education. Because there’s not like, a great course on how to be a great CEO, you know, board manager. It’s just one of those things that you kind of need to experience. And hopefully you have somebody around the table. Who a knows what they’re doing in B cares enough to give you the input and the cheat codes for has this really supposed to go? What can I actually say and do here? Because a lot of a lot of CEOs, they’re just they’re cowed by it. And they think me, 33:56 firsthand board, for many. Sure. And they 33:59 call when they put together these decks that are way too long and have way too much stuff. And most of the meeting is spent going over like flipping through pages. And I’m like, I do not want to see you flipping through a deck. Like I don’t want to see it. Everyone’s supposed to have read that deck. It should be here are these high level thematic things that we need to drill into. And by the way, one of the things I say is every meeting, here’s what you can do for me. Here’s the help. I need. Board. Right? You want it to be here. Well, let’s see it 34:35 surrendered. Tell me about the best. Right? You mentioned before. Founders need to have characteristics like grit and resourcefulness. I’m sure that any founder that gets a check from Ebert from yourself from IA is uniquely special, but what characteristic or characteristics separate sort of the multibillion dollar founders from all the rest? 34:56 Well, for sure they have they have have a vision of the future. That’s just a different. I mean, that’s right. I mean, that’s the first thing. Otherwise, it doesn’t matter how good they are. Maybe they’re a great steward of a small business, but like somebody like, like Jeff Green of trade desk, or Christo, right of wise, like these were people looked at what seemed like an insanely crowded market with no whitespace. And they said, they’re doing it wrong. Like, the incumbents are just doing it wrong. And I know how to do it, right. And I don’t care if I look dumb, I don’t care how long it takes, but I’m right. And everyone else is wrong. And that literally, it’s that kind of its vision coupled with incredible confidence and a large chip on the shoulder from wherever came from, you know, in Jeff’s case, it was having had that vision at at ACN. But wasn’t able to fully play it out and didn’t love how the Microsoft deal went and is like, Okay, that didn’t work. I’m going to make it work de novo in this new company. And again, when you had like, turn and MediaMath and data Zoo, and obviously Google and like, how can you possibly build yet another DSP? In what looks like a market with no whitespace? Well, I haven’t checked, but I’m but I think TGD probably is a $40 billion market cap, maybe higher. And somehow somewhat, and you saw, you know, MediaMath just shot down. Um, he’s, he’s vanquished everybody. Right? And so what did he have, he had the vision, right. And his vision was right. But he also was so resourceful. Because, again, those first two years like I can’t, I can’t stress it enough. It was bleak. It was freaking bleak, because they needed to deliver a tech stack that was sufficiently performant to even be in the game. Now, he had a lot of credibility in the space, he pre sold TTD before he and Dave could even ship it. But then ultimately, when they did ship it, he had kind of prime prime the market. And it started and it started to work, man, it’s just, you need it kind of like a VC, right? Like you need incredible capacity for pain, and delay gratification. Right? It’s like you, if you’re so confident in your correctness, then you will do anything to keep turning over another card. And just keep staying in the game stay in the game long enough for your rightness to be demonstrated. And with with Christo and Taavet it was a similar kind of thing. Wait, you’re gonna go up against all of those massive London based money brokers not to mention every money center bank on the planet that does foreign exchange, you’re somehow going to wade into this marketplace against trillion dollar competitors? And when? Oh, yeah, 38:08 those are the basket. Right. That’s what they did. Like, that’s what naive In addition, in a way, and it’s just incredible. 38:17 Yeah. So even though those are obviously two very, very different companies, I think the the founder makeup, pretty, pretty similar. 38:25 So So I want your take on sports and entertainment, right? You’ve launched Uber capital, you’re investing actively, if you were to pick one under optimized sport from the Big Four. What would it be in? What’s one innovation that you think is long overdue? 38:42 Under optimized? I never really thought about it quite like that. But you know, I would, I would say Major League Baseball, probably. I mean, I think major. Now look, I mean, my gosh, they actually made some concrete improvements. I mean, I love the rule changes. I think it’s made the game work more more exciting and the short and the short. It’s a much more exciting product. I I absolutely love it. I do feel that there is still there’s like there’s a lack of diversity in baseball. And I think that’s something that needs to be solved with even deeper community engagement and greater focus on disadvantaged communities. And one of the reasons why I was actually so proud of University of Michigan’s baseball team when we went to the College World Series and lost two to 120 in 2019. Is we had this unbelievably diverse team because our then Coach Eric Bach edge, didn’t believe in recruiting from the showcases. And you know, showcase baseball has now become this, this thing and so I’m giving you this ramble because it does bubble up to The ethos in the MLB. But it’s he recruited athletes, and he didn’t just focus on baseball players who had the resources and the money in the training to go to perfect game. And so that he had a bunch of inner city kids who were phenomenal athletes, basketball players, football players can play baseball, but it wasn’t necessarily their sport. But he convinced them to come to Michigan. And he fielded a phenomenal team. That was easily the most diverse team. And they timed one baseball. And I think we need more of that in the MLB. Because the MLB, you know, even in terms of its, you know, its average age of viewership, you know, it’s been this year, it’s trending down a teeny bit, it needs a youth movement. And I think it needs even more compelling personalities that the league helps to market. It just doesn’t have that same like, I look at the NBA and I say, like the NBA is the best, right? The way that they the dynamics between owners and players, the dynamics between the league in the owners, the dynamics between the players and their fans, it is much more touching the bare metal, whereas baseball still feels like there’s more distance than there should be. Yeah. And I think that that’s something that over time will address. And I mean, I’m, I’m thrilled to be part of baseball, but I do think that there’s a lot of room to run 41:37 any opinions on the in season tournament that they’re introducing in, in the NBA. You know, it’s got it rhymes with what they’ve done in the Premier League, you know, with different cuts. 41:47 I love the experimentation. I mean, it’s great. I love it all like I, I think anything that creates more opportunities for engagement, and layer layers of excitement. I’m for, like, I you think because that could like my age and being just such a stats hat and somebody that’s been a sports fan for 50 years that maybe I would be like, Yeah, you know, it’s ruining the purity of the game. I don’t think that at all. I mean, I I don’t think I don’t think sports are comparable across generations anyway, which is why like the whole goat conversations and whatever, like, I don’t really care. They’re awesome. I mean, that’s what sports are, right? I mean, and like my kids trying to convince me that LeBron James is better than Michael Jordan, you’re out of your mind, right, like, not a shot. But they’re great conversations. And like, we’ll constantly be sending each other snippets of statistics or, you know, there are all these Instagram accounts that have that, you know, pop up with these amazing statistical comparisons and stuff like that, like, love it. Love it so much. So to me, it’s not like it’s ruining the purity of the game, the game is different, the players are different. And why prize you might or want to, you know, try and say, Well, this one versus that one. How are you ever going to compare? Like, Babe Ruth to a contemporary player? You know, how are you? How are you going to compare Jim Brown to a contemporary play just like these things are impossible. But that’s the mainstream sports fun 43:15 in sports talk radio, right? 43:16 It’s a multibillion dollar industry, or ESPN, 43:19 Roger, what will be the biggest sport in the US in 2030. And what sport from the Big Four is most at risk of a drastic fall? 43:28 So I think that the rate of growth of the NBA will continue to be the greatest among the big four. I think a big question mark, about football and hockey, it really relates to CTE. And I do worry about by 2030, is there going to be enough data to know what we can do to enable the game to be played in a way that doesn’t leave a meaningful percentage of a certain subset of players really broken after they leave the sport? Like, I don’t think that’s good for anything. I am sure that continued advances in technology and rules will help mitigate some of those. But, you know, it just depends if you’re, you know, you’re a parent and you’ve got a kid, like, how do you feel about your children going into those sports? I love football. I love hockey. I love watching them. 44:31 Hard not to hear, you know, they’re amazing. 44:35 But I would, you know, did I want but my wife and I certainly didn’t want our kids playing them. Well, 44:40 the farm system isn’t good, because as I survey my friends, you know, with young kids, some of them don’t even have enough kids to feel the team, which is very different than when I was growing up with peewee football and all that. So you got a question? You know, is the talent going to be there in 10 years? I don’t know. 44:59 But that’s all So, you know, one of the one of the reasons why the NFL is going more global. I mean, NFL has got global appeal. And if you’re talking about a talent pool that’s now extending beyond 350 million to a billion. Well, that might be enough to feed the beast for a long time. 45:14 Good point. How about alternative sports? Roger, what are you most excited about? 45:19 Well, I love my sport, a Slamball. I mean, I love I love all sports in general. I mean, I think it’s super fun. And, again, it’s somebody who’s now invested quite a bit of money on the whole medium and long tail sports industry. I think people are stimulated by all kinds of different things. They want to play it, they want to watch it, they want to bet on it. They want to talk to their friends about it. They want to share social media about it. Like, like, why should sports be any different than the rest of the internet, which has become incredibly fragmented with all of these affinity groups that themselves have significant critical mass, and then you roll it up and it’s gigantic. And I see I see all sports in the same way and every once in a while, you know, every generation will probably have a few, like, like UFC obviously now, UFC was was not an overnight success, right? UFC was a 25 year project in the making. If you look at all the precursors of UFC, it’s been going on since the 90s. Right? So it’s not like, oh my god, like they dreamed up UFC. It’s it’s amalgam. And then same way that Slamball was on ice for the last 15 years. And, you know, we think the time is now. But you then look at things like you know, pickleball or look at like, lacrosse is lacrosse and old sport, but that’s pretty hot. Now, this is gonna be funny dependent, depending on your listener base, but like, in this country, cricket, like crickets, like arguably the most popular sport in the world outside of f1. And here, it’s just really calming. And there are there is now cricket game played here. Even though it’s in India, you know, it makes like, it makes the NFL look like it’s unbelievable. 47:05 Well, we got Messi coming to Miami. Right. So that changes some things with 47:11 and then you’ve got that too. Well, I’m really excited about mls. Yeah, I, I’m also an investor in Real Salt Lake. And I’m really excited about that. And really excited about the NWSL Royals, which is part of the Real Salt Lake team. And so it’s gonna be really exciting to see the the women, the women’s team launch in 24. 47:32 So to Roger, I’m not pulling punches today, building a family business is often fraught with difficulties, there are family dynamics, you mentioned your sons, you mentioned your wife, why do you think your results will be different? 47:44 So first off, I should, I should say that my so my wife, Karen, and I said, we met when we were 21. We actually even though I was in the business school, and she was in liberal arts, getting her degree in psychology, we actually, after we met at Rick’s, we met in a psychology class that we had together. So she’s a PhD in Clinical Psychology, we have talked about psychology and communication, how we want to be with each other how we want to raise our family, from the very beginning. And we have always had great intention about family dynamics and addressing issues in real time, and not letting things build up. Which is just, I think, a helpful backdrop to when we decided to start a Burg. It was a big conversation, for many reasons. One being this notion of well, father and sons respect dynamics competition. And we talk through all these issues, and also agree on kind of rules of engagement, and what kind of the behavior and conduct I would accept in that, that I would not. And that kind of we all agreed to be real with each other and as things if things built up, just confronting them. You know, my wife, while she’s not involved in the business day to day, she obviously has a seat at the table for all of the dynamics, and she has been super helpful. Because there are times when just being honest, sometimes it’s hard for one of my sons to say something to me, where it’s easier to say it to her, and then she can say it to me, and then I can broach a challenging topic that sure it would have been great if my son had been able to speak to me directly, but on that very specific, very difficult issue. He spoke to his mom, which is great. So that so there’s, I think one whole piece of it, Nick, is that we went into this extremely aware of the pitfalls but also with the knowledge that If it’s not working, we would stop, because nothing’s more important than our love and our relationship. And our closeness. I think the other big piece is that I never wanted to do this, like my rest of soul. You know, my dad was very kind of domineering, and he had always, Roger, someday you will come in, you’ll work for me, like this. And I’m like, Dude, you are the last person in the world I would never work with. And so it literally like, that had a very strong effect on me such that, when I tell you, this is not hyperbole, Nick, it never entered my mind that I would work with my children. Not one time. Never, it was never a goal. It was never a fantasy. It was never anything other than No, because of my own personal experience, my own personal feelings. And like my deeply held sense that, you know, I want my sons to be their own people. And I want them to feel their own successes, and I want them to do what they want to do not what I want them to do. I want them to please themselves, not please my wife. And so when they came to us with this, it took some time getting our arms around it for this reason. Like, again, my wife and I were not raised with money when the boys were born. Like when my wife and I got married, our net worth was zero, literally zero. At age 27. It’s been a good 30 years. So and our kids, you know, it’s not until, you know, their early teen years when they started to see like, like, wow, I guess dad’s really, like, financially successful. Like, they just didn’t know, because my wife and I didn’t raise them that way. Well, now they surely know. And it’s, it’s something we spent a lot of time talking about. And dealing with, because we’re not raising, you know, a couple of freeriders. It’s not the way it is. But fortunately, because of the seeds that my wife and I planted it and because of knock on wood, the the character of our sons, they’re extremely driven and extremely motivated. And if that means contributing to the family business, then that’s an advance. So that’s why I think, what does success mean, to me success means working together, and loving each other. And enhancing the relationship, not hurting a relationship, 52:33 another relationship of yours. I went ahead and asked a couple of collaborators of yours some questions. One that we haven’t covered was from Howard Lenzen. He asked who was the funniest founder, you’ve worked with? 52:44 Howard? Funniest founder. I mean, it’s obviously him. He’s the funniest founder I ever worked with. When when? I don’t know, did he tell you how we met? Or do you know that story? Now? 52:59 I do know. 53:01 So you know, he and I were both very early, very popular financial bloggers. And we actually met through blogging, like in 2006 2007. And I think I literally cold email them, because I thought his blog was like, he’s crazy and hysterical and smart. But like, there was nobody out out there kind of writing about finance the way he was, like, I was like, completely highbrow. You know, if you look at early information arbitrage, and oh, six or seven, I mean, I wrote these incredibly long, deeply detailed, super analytical, thoughtful pieces. And Howard’s writing his crazy analysis of a fast food chain or whatever it is. And he then had this idea for starting wall strip, right, which was this, right, this internet show about investing in companies. And you had Lindsey Campbell is the host it just the whole thing was hysterical. So anyway, I ended up leading a seed round and sitting on the board and working with him on Wall Street. So which we ended up selling the CBS interactive back in the day. And yeah, it was it was a blast and ended up it was a, a small but successful outcome. But that really was the launching pad for our relationship. And we have co invested in many, many, many companies very successfully. I’m an investor in all this social leverage funds. You know, we did Buddy Media together, I led the seed round and sat on the board, but he he introduced me to Mike last row. So it’s absolutely Howard. Well, no, you probably knew that that that was the answer. He was leading the witness neck. 54:41 Roger if we can feature anyone here on the show, who do you think we should interview and what topic would you like to hear them speak about? 54:47 So given my love of sports and entertainment, I think getting somebody who has has built and is building a great exciting and fast moving business in the space Be super interesting. So somebody like, like a Todd Boley or Josh Harris or somebody like that, that is sitting at the epicenter of this tectonic change in sports, and really this convergence of sports and entertainment. I think that would be an interesting that that would be interesting. Also somebody like Ari Emanuel, you know, somebody who’s sitting atop an agency, because they’re dealing with same thing, right? They, they don’t look at sports as sports, they look at sports as entertainment. And I do think that that’s probably the most interesting intellectual property play beyond AI for the next decade. 55:39 Love it. Roger, do you have any habits, tactics or techniques that are a secret weapon? 55:45 Routine? routine, I answer the bell. Every day, I get up. program my coffeemaker the night before, I have my cup of coffee. I triage email, I do an hour of reading. I work out a shower, and I’m ready to have an I’m ready to hit it every day, every single freaking day. And there’s something extremely comforting about routine and not asking questions. It’s not a question every day. 56:16 No choice, no decision, just do it. And then finally, here, Roger, what’s the best way for listeners to connect with you and follow along with Uber? 56:23 So please, you know, I’m super excited about our new website at Eber capital.com. And my email is Roger Ebert capital.com. If you feel like reaching out, shoot me a note and I’ll do my best to get back. 56:36 Roger, this was a true pleasure. Thank you so much for doing it. Best of luck, you know, with the firm and finding the next big hit in entertainment Sports. 56:44 Thanks so much, Nick. This has been awesome. 56:52 All right, that’ll wrap up today’s interview. If you enjoyed the episode or a previous one, let the guests know about it. Share your thoughts on social or shoot him an email. Let them know what particularly resonated with you. I can’t tell you how much I appreciate that some of the smartest folks in venture are willing to take the time and share their insights with us. If you feel the same accomplishment goes a long way. Okay, that’s a wrap for today. Until next time, remember to over prepare, choose carefully and invest confidently thanks so much for listening Transcribed by https://otter.ai