Ben Black of Co-founder & MD of Akkadian Ventures and CIO of Powerlaw Corp joins Nick to discuss Opening Late-Stage Venture to Everyone, Beating 10-Year Lockups, Why Logos Don’t Equal Alpha, and Building Power Law as a Public VC Fund. In this episode we cover:
- Details of Power Law’s Portfolio and Investment Strategy
- Challenges and Benefits of Power Law
- Innovation and Evolution in Venture Capital
- Balancing Demand and Supply in Power Law
- Regulatory Compliance and Educational Efforts
- Future of Power Law and Market Positioning
Guest Links:
- Ben’s LinkedIn
- Ben’s X
- Powerlaw Corp (PWRL)’s LinkedIn
- Powerlaw Corp (PWRL)’s Website
- Akkadian Ventures’ Website
The host of The Full Ratchet is Nick Moran of New Stack Ventures, a venture capital firm committed to investing in founders outside of the Bay Area.
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0:20
Ben Black joins us today from San Francisco. He’s the co-founder and managing director of Acadian Ventures and chief investment officer of PowerLaw Corp, a fund investing across AI, next-generation software, aerospace and defense, and consumer technology. Before PowerLaw, Ben spent 16 years in institutional secondaries. He’s backed companies including SpaceX, OpenAI, Stripe, Databricks, and Perplexity, among others. Ben, welcome to the show.
0:50
Hey, thanks for having me, Nick. Really, really great to be here.
0:53
Good to see you again. You’re doing something brand new, and it’s it’s different. Whole new adventure. A whole new adventure, and it’s an adventure for us because it’s it’s sort of a shift on the traditional approach to venture. We’ve been hosting the show for 12 years and love breaking down new models, new investment structures, pressure testing them, and of course educating the the audience. So, thanks for doing this. Power law is new. I’ve been following the announcements and the recent debut. Help me and help the listeners understand the basics. You know what is the simplest way possible you can explain what Power Law is?
1:35
Sure. Power Law is a publicly listed closed-end fund trading on the Nasdaq that contains a portfolio of 15 to 20 late-stage private companies that any investor around the globe can buy through a regular brokerage account at the click of a button. Daily liquidity, no minimums, no K1s. So it’s got a portfolio of companies like SpaceX, OpenAI, CalSheet, Deal, Stripe, Databricks, and others that we just mentioned. And the idea is very simple: the whole world wants access to late-stage private companies, and there needs to be more ways to give them that access. And we’re trying to to be the first venture capital fund to provide that access through this 19 this highly regulated public vehicle that is you know designed to hold long term illiquid assets and so rough the whole new venture that’s that’s the future for Acadia and we’re we’re all in unpower law and that’s what we’re doing going forward.
2:39
Awesome. So was SpaceX in the fund when it went public?
2:43
Yeah, yeah. SpaceX was actually a large position, so so they they got that one right there, and that that’s that’s a really interesting you know sort of question around like what are these public vehicles supposed to give exposure to? Because of course, once a company goes public, people can buy it directly, so the value of having it in a closed-end fund kind of goes down, in a way. And so, you know, we’re really focused on giving investors access to the run-up. You know, SpaceX ran up from 200 billion to 2 trillion pretty damn fast, and and and the investor, public investors, all missed out on that. And so our goal is to get that exposure earlier in the company’s life cycle.
3:23
So does that suggest that you’ll sell it down as it goes through these different tranches of liquidity on the lockup?
3:31
Of course, you know it’s totally fine to have public equities inside of a publicly traded closed-end fund. There are many of them that just are public equities, and that’s fine, you know, and we’ll face the same decisions that all investors make, all private market investors make, which is sort of like how do we handle it once it’s public and and trading out. But like, we still see that our the prime, you know, and eventually at the right time, you know, we’ll sell that position and and either distribute the cash or recycle it back in the fund, depending on what on where we’re at. So that works. I mean, really, like if done right, the closing fund will operate a lot like a like your investor in a VC fund. We face the same decisions about when to distribute, when to sell once the company is public. But we see that the point of the vehicle is to give exposure to that price appreciate, and while companies are private, so we don’t want the fund to become too much of public equities because it really kind of it that dilutes the purpose of the vehicle. So we won’t hold on to it forever. We’ll we’ll we’ll exit at some point, and we have a lot of discretion about how we do that,
4:41
right? The value here is access, right? Because the nav is going to drift from the market price, but the inherent value you’re providing to investors is access to. I mean, retail investors can get access to a lot of logos that they’re interested in that they otherwise couldn’t,
4:59
right? And and do it in a really simple way. I mean, you know, if you’re a small investor today, think about the choices that you have if you want to get access to to private market investments. You know, you you can try to sort out the crazy ecosystem of SBVs that are out there and become an LP in one of those. And you know, many of those are run really well, and many of those are not run really well, as we all know. You can go into a VC fund, but the best VC funds retail investors can’t get access to. So, of course, that’s not that’s not really vehicle. So, you know, for for you know, for really anyone, this is just a new way to get exposure, and you know, one we think has a has a valuable place in the ecosystem going forward.
5:42
So you mentioned SPVs. Does does Power Law hold directs SPVs and forward contracts? Or
5:49
yeah, well, I mean it’s important to remember our history, right? Like we’ve been investing in as a secondary fund for the last 16 years. We’ve done over 850 secondaries. You know, SPVs are one way to create exposure. You know, and when you’re secondary fund, that is sort of the key, you know, the key sort of talent is what are all the pathways to exposure, right? So we have a whole team that’s been doing this for a really long time, and so like sometimes we do SPVs, we go direct. Many times we go direct just in primaries, it’s like old-fashioned. Sometimes we do SBVs that we control. Some other ones that we don’t. Some there’s a lot of technical reasons for like why SBVs and the right hands can be really useful. Who, when you’re a publicly listed closed-end fund, you have to maintain certain diversification requirements in order to get sort of single level taxation, and SPVs can be a great tool in the right hands to manage some of those complexities of being a public vehicle around what percentages of each company we hold. So they’re a really useful tool. It’s not you know like SPVs have gotten sort of a bad name out there, but they’re just another vehicle, and these professionals to be able to manage them, and people who’ve been doing it, like understanding that we’ve run 20 something of our own SPVs over time at a pretty big scale. Like you need professionals to be able to navigate that world. It’s not a world that I recommend retail investors go try to navigate on their own.
7:20
So, so why do this, right? You’ve had a lot of success at Acadian running, you know, traditional secondaries funds, as as you you mentioned. Yeah. Of course, one frame here is that you’re providing a service, you’re providing access to retails, but but what’s in it for you? You know, why would you do this?
7:40
Well, so I mean, it’s an interesting story of evolution. Like you know, we we’ve always here at Acadian believed in innovating to create sort of benefits for our investors and being innovative. Sometimes, as industry, where we support innovation, but but VCs aren’t particularly innovative themselves around their own business. So, like, think about this: we were one of the first firms at Dove and then create helped create the secondary market, you know, when people were like loved it or hated it and said they was going to destroy venture, and like we said, no, this is a really important part of the infrastructure, and you know, and here and then we seen what happened there, you know, we went and created one of the sort of largest, the original GPLP conference, Raise Global, because we wanted there to be a place to bring GPs and LPs together, and that became its own kind of big ecosystem. So, when with that background in mind, like when we went out to do Fund Seven, we looked at the world and said, “The world is choking on 10-year liquid funds, you know, and and do we really need another one? So we started looking around, saying like, how can we build something that has kind of liquidity built into the system? Like, all investors are exhausted with how long it takes for VC for VC investments to get liquid. And and when we found the closed end fund, we said that this is kind of amazing. We can give you know we raise money privately. Those are sort of we call them seed investors. We deploy the capital privately because we want to bring a completed portfolio, substantially completed portfolio public because we don’t really want to take just a pile of cash public, right? And we realized that what this gave people was the opportunity as an LP to choose your own adventure. If you wanted three years of exposure, you could have that. If you wanted five years of exposure, you could have that. And we thought that this, as a wrapper, like closed-end funds are designed to hold long-term illiquid assets. So there are people do use closing funds for tons of things. Like people, there’s one that does uranium, all right. Like it’s just a big pile of uranium, like, and and and then people can get invested in that. We thought this is perfect for venture assets because because of the time duration that we’re all facing. Like the 10 euro liquid fund is kind. Of a lie, like does anyone believe that any of the VC funds that they’re in are going to be wrapped up after 10 years? I got I got one for 2012 Still got two things in it.
10:10
I’m with you. Extensions, continuation vehicles. I mean, they’re they’re long cycle vehicles. Part of that can be a feature instead of a bug, but certainly for LPs that want liquidity, it’s it’s often considered very difficult to wait.
10:27
Well, people, for example, like one of the knocks on closed-end funds is they can trade at a discount to NAV, right? So because the price of the fund and the price per share and goes up and down, it trades independently the valuation of the underlying assets. So people are like, but Ben, what if this? What if your vehicle trades below NAV? And my answer is, do you know what really trades below NAV? A VC fund in year seven or eight. That’s 50% off a NAV if you want to get out. That’s a good point. So like that’s your bar to that you’re comparing it against,
11:02
yeah. I mean, GP LP trying to sell a stake, you know, in a fund is not going to get 100% of NAV. No, you got to go
11:10
to a bunch of sharks like me who are like going to be like 50% off NAV. Take it or leave
11:15
it. So, so Ben, what happens with early stage venture? You run Raise Global, probably the most respected conference connecting GPs and LPs. There’s definitely an early stage focus at yeah,
11:29
absolutely, yeah.
11:30
And we need early stage funds, right? There’s companies being founded, and your vehicle isn’t going to replace Formation Capital. So, so what happens with VC, and how do we, you know, square the circle here with the the long hold?
11:47
Well, you know, there’s been a lot of writing out there. Obviously, like I’ve written about like the fact that the venture capital business is sort of fundamentally different than it used to be, right? And right now, we have you know the vast majority of capital goes into a small group of of firms, and then you have like the long tail of 3000 plus funds that are out there doing seed and early stage, and you know there’s a lot of concern over what’s happening to those managers because we’ve been through like the most difficult five year craziness in venture, and there’s been a massive amount of creative destruction in early stage, and the single stage VCs have been under tremendous pressure, right, with with their own models. I can just tell you that I just got done this morning selecting the top 100 GPs that are going to be invited to raise this here,
12:41
all right,
12:41
just today, and I am so excited about what I’m seeing because we’re now seeing from the sort of ashes of of 23 and 24 just a tremendous amount of innovative new teams that are coming into the industry. There’s always going to be this beautiful sort of entrepreneurial spirit at early stage, where I think a tremendous amount of capital is going to be is going to be made and of returns if you compare your choices that are a mega fund, because that’s kind of where it is now, right? So, so I am actually after reading these 100 decks, super bullish again. If you ask me that last year, how to been much less bullish? And two years ago, I was in the depth of a great depression about what was happening because so many funds were just you know they were just they had such a hard time navigating you know COVID to Zerp to collapse and that just destroyed a whole bunch of funds. Well, what’s emerging from the ashes is super exciting, and I think that’s that’s the world we’re going to see. You’re going to see a whole group of small specialist funds that that that know that build ecosystems that give that have competitive differentiation, and there are a lot of new names, and those are going to of course feed the mega funds. And in fact, one of the things I tell managers today that is different from before is that you one of the things that young managers need to do is the sort of seed stage and and even series areas is make sure that they’re really building deep connections with the mega funds because that’s their downstream customer,
14:19
100%
14:20
and and that that has to be like an anchor in their business, and I look for this in in funds that I look at, and we know we we have our own small fund of funds ourselves, and so I want to see managers who have that connectivity to the mega funds because those that’s the beast you’re feeding, right? And so, but the returns I’m seeing from the funds this year are amazing, and so yeah, the ILPs are going to be shocked by what they see when they come to raise.
14:48
I mean, the the tailwind of AI is is insane. Yeah, and and now we’ve got you know new super cycles starting with the application layer, and. And you know there’s a lift across the board in in startups, which is very exciting, and hopefully many of them get to to that stage where where you can enter. So so another question on that. So let’s say you want to put an additional position into the pot, into the fund. How how does that work? Where does the cash come from? You know to take on a new late stage position in a I don’t know a data bricks or
15:25
well so it’s important I would think about the actual underlying vehicle right like we have the the holding company that holds these assets but it’s run a lot like a VC it’s very similar to a VC fund we have cash the difference is we don’t call capital we raise all the capital up front, but so right now we have over $100 million of cash that we can deploy into new opportunities, and so you know as and and you know we we’ve found the ability like you know one one thing that is I think underrated is we can exit positions in the secondary market too, so we’ve already had some exits, and then of course, that cash gives us the ability to to redeploy into new names. Now, there are two parts of closed-end funds that are really underappreciated in terms of raising capital. One is there’s a whole industry that will lend that will put debt on a closed-end fund, which is non-dilutive non-dilutive capital. That’s one. The second is that you can do what’s called an at-the-market offering, where you actually can go out and sell shares at the market and be a certain percentage of your float with newly issued shares that also put cash into the business, into the into the fund for new investments. And of course, when we have exits, then we you know we have to we can we have capital that we can redeploy from that as well. So, with those two caveats, there, there’s, you know, if you compare VC like you know VC fund to a closed end fund, you know, we have the ability to raise more capital in a much more interesting way than a VC fund does. You know, I mean, which is something that people, you know, as I discovered when I started looking at it, I was like, this is amazing.
17:00
What, what, what’s the the debt ratio that you can do? You can go up to 33%
17:04
of your NAV. So we have about you know call it roughly you know I think current NAV is announced as 662 so we could theoretically put $200 million of debt. I’m not saying we are. We’re a public company. Do not. This is not a forward looking statement, but like that is an option.
17:23
Okay, and it’s it functions different than like your CCL, the the repayment period and interest rates is is this like an asset back?
17:33
Yeah, it’s an asset back loan. You know, it has an interest rate that’s going to be you know I would say these days would be somewhere like 8% if you’re deploying that into things that are generating 25 30% you know you’re gonna be in great shape. But you know that’s just one option.
17:49
So, so Ben, costs in the category tend to run higher than you know a typical closed end fund, partly because you’re holding private shares through SPVs, and there’s that layer. Break down the cost structure for us. You know, where does the money go, and and what’s the case? Yeah, yeah. What’s the all-in cost?
18:07
Yeah. So I mean, the the all the all-in fees on our vehicle in the first year we about 3.6% There are some yeah, and that is you know certainly an issue. Like like compare that to a VC fund that’s two and 20 because we don’t have carry. Like keep that in mind, right? So that’s a really good point. So and it’s important to know, like all in anyone investing in the private markets, it’s a relatively high fee, high you know, it’s an expensive project to create exposure in the private markets. There are some other expenses here that are that are specific to close down funds, like regulatory compliance, legal, like it cost us millions of dollars to do that to to to to make the vehicle public, and and also like just for example, like our audit, yeah, we’re we are not like I’ve for 16 years I did private funds. Right when I did my first public company audit, like it’s unbelievable the level of detail they go into. It’s it is an order of magnitude more intense and an order magnitude more expensive.
19:15
Welcome, welcome to the publicly traded fund. Right, right,
19:19
and so you know. So at the end of the day, like you know, that all of our performance is net of fees and expenses. So like people are gonna have to judge it based on the performance of the funds. We gotta we gotta show them that we can earn that the private assets are generating good enough returns to cover the fee, the sort of you know expensive part of running this business.
19:40
Do you think that fee load comes down over time? Yeah,
19:42
I do. I do think it comes down over time because we get leverage. A lot of these are fixed, right? So, so you know, as example, we’re gonna have an annual, you know, whatever we pay for lawyers. Like the first year is the worst, right? That fee comes down.
19:58
Yeah,
19:58
you know when. You think about your audit; that fee probably is the same, roughly the same. But here, your NAV is going up. So as a as NAV grows, fees go down, and that’s why people who have done really small closed end funds, their fee ratios are kind of insane, because because it’s just so expensive. You kind of need one of the reasons why we went to a bigger, you know, portfolio was because we wanted that fee to be a percent, a less of a percentage of the fund.
20:29
So Ben, how do you balance demand for logos and the right logos? Right. I was last week. I was in the Bay Area chatting with one of the founders of DCVC and Lux, and we were having this discussion about what LPs want and what they need. Right, and sometimes those diverge. Right, LPs may want what’s hot, or you know the trending logo. And if you just invest in what’s hot in venture, you’re probably going to do pretty poorly because you got to be a little ahead. So how do you balance, you know, putting the anthropics in into power law and then also putting some stuff in there that they may not know what it is? It might be obscure, but it’s it’s something that you believe will have tremendous appreciation.
21:20
No, and that’s a great question. And it is like, as chief invest investment officer, this is something that I struggle with like all the time, because you know, you there’s there is this there is two sides of this business. Like you have to create retail demand for for your for your companies, and so the way I look at it is, it’s a portfolio, you know. So I’ll give you, I’ll give you some specific examples about the portfolio. You know, like a company like Deal. Like I’m a huge fan of Deal long term. Like I just think it’s a really great business. I think it’s very immune from AI. It’s been profitable for a long time, and I I think it has absolutely no retail appeal. Like nobody knows what deal is. No one will understand like why deal is a great business. And I’m like, I want this portfolio because I think it’s just a great business. And and you know, I I think it has a really bright future ahead of it. And you balance that out with logos. You know, to some extent, like you know, I mean, it’s not something like Stripe, which is in the portfolio, like is an unbelievable asset. Like I can argue with you about the prices. You know where is the? You know how fast will Nav go? I don’t know, but it’s a long-term compounder too that I know has a ton of retail appeal. And so, you know, you’re you’re on a case bike. You’re trying to create a portfolio that that can generate. Look, our job number one is nav appreciation, right? Like, you know, if our portfolio just keeps growing, the nav keeps growing, like that’s all good things happening. I’m not going to put a name in there just because it’s retail hot if I don’t believe that there’s nav appreciation in front of it. But I, but if I’m given two like when we created a portfolio, there was like 10 obvious names, right? And and then after that, it either was a great business that you know that I thought this is just great business. I wanted the portfolio, or it was something I thought retail would really like, but that still would be a good a good investment, so it does get more. It is a more complicated sort of decision-making process. It kind of has to balance, have a balance, and that’s what I. That’s all I’m about is have a balance. You know, you know. So right now, Kalshi is like the hottest name on the planet going on. Right, I think just recently, and you know it’s in the portfolio, but I think it is both. Like that is a great, great to have in the portfolio, and it’s and it’s great to. I think retail investors love it too. So that that’s a that’s that’s an easy one.
23:53
And and then on the supply side, you know, if if Nav drifts apart from share price significantly, let’s say share prices is much higher. I mean, is that a good reason to issue more supply? You know, issue more shares.
24:10
Well, so we can issue more shares because that’s where the closed end fund is, right? So, so I’m not sure I totally get your question. I’ll say that, like,
24:19
I I thought you said at the top that you could you could expand the number of of shares trading on for Power Law and and um and raise money that way.
24:31
Oh, okay. We could raise additional capital. Like so, if we do debt, you don’t you do you you don’t issue new shares. Yeah. If you do an ATM, you do issue shares, and that’s dilutive. But but the ATM is sort of inherently you can only do an ATM when you’re trading above NAV. So so each each sale of stock into the pop of markets is actually accretive to NAV because your heaviest if your NAV is 20 and you’re selling shares at 30, at $10 is added to your NAV. That was my question. Yeah, and so there’s a good there’s a good case for that, but you can’t do ATMs if you’re trading below NAV.
25:06
Yeah. Okay. So I know
25:09
this is like very it’s it’s a nerdy new world. No, I mean I I think I get the mechanics. I’m just trying to think about you
25:15
know the demand side, the supply side, the traps, and the opportunities. Right. Yeah. Totally. If you can raise more capital, and price is much higher than NAV, and the money goes into the book, so it’s all accretive. Like that’s a good position to be in if if that delta is you know healthy. So yeah, and
25:35
and there is one thing that people don’t appreciate about about the NAV that is really important. Is that there is a structural reason why closed-end funds will trade, you know, above NAV, and that is, you know, when a round is a new round is announced. Let’s say Databricks does a new round. It’s it’ll be out there in the world, like when Databricks raises a round at at you know whatever price, it’s got a new price. The market knows it’s new price. Well, we can’t take the mark until the the whole round is actually closed and and the certificate is filed at Delaware.
26:12
Oh, interesting.
26:13
And that might take three to four months. Then it’s got to get. Then we need another month. We do monthly naps, and we’re the only. I think one of the only. It’s maybe one other one. Most most closed end funds don’t do monthly navs. Who we really want to give this like very sort of up to date version of what the nav is. So every net every month we do the entire company financials every month, so we can give give investors a new nav to shorten that amount of time between these announced rounds, and when when when investors get a new nav, and because but that’s what will happen, you know, with Kalshi at 40 billion, like we got to marked at you know 22 right? And so, but it may be six months before that shows up in our in our nav.
26:56
And and are you only mark marking up at at or sorry, are you only changing nav with new marks, or will you look at comps? Will you look at you know just just the progress of the business? You know if the if the margin profile is expanding and the revenue is growing at in some of these cases, you know 10x plus per year for an AI business, just to hold it at the old mark is sort of undervalued.
27:24
We’re we’re a public company, and there are really strict rules around how valuations are done. There, you know, it’s very similar. We use the same kind of valuation type of valuation process that a mutual fund like T Rowe or Fidelity uses. All those marks are then written, you know signed off on by our auditor, right? Not not every month because that would be impossible, but like you know biannually, and that process, like they’re very strict on this, so we don’t we don’t just mark based on like secondary market prices or momentum or anything like that. We if it’s a financing event or it’s a negotiated company tender that that will create a new merc. There might be some situations where the dev gets really old, and at that point we have to sort of use more more comp based analysis. But in these companies, they’re raising money so fast, like the last round or or tender is is is really what’s driving Nav.
28:21
So so there’s this concept inventor called planned exigence, which is like when you sell a product and when the customer has success, they leave the platform. So like the classic example is a dating app. Like if you’re doing dating right, like you should be graduating people onto you know a monogamous relationship, and they should leave whatever your platform is. Right, that sort of rhymed with and reminded me of something with Power Law, but more on the product side versus customers. So a good outcome for you would be a portfolio company going public above your mark. It’s also the moment where you know the scarcity value is competed away. I mean, you have access other people don’t have, and once it’s public, they’ve got it. So once the big three are all public here, you know what’s PowerLog going to own, and how do you keep the portfolio fresh? You know, with the next generation of scarce assets.
29:18
No, I think it’s a great. And look, believe me. Right now, that’s like the topic number one for us is to deploy in the next set of companies that that are we are think are great businesses that will be the hot ones of next year, right? And we’re thinking that ahead. And you know that will you know when I look at a company like Vast Data, I think it’s a great example of that. Like you know, not nobody knows Vast Data. Like so, for people who don’t know, it’s basically the data storage software that the foundation models all sit on top of, and they have a huge market share. So every money is spent on on models on tokens, and basically vast data gets a piece. You know, because Anthropic OpenAI and SpaceX are taking. All of the air, you know, there’s going, there’s going to be a process of discovery next year, right? In the year after, and I like, there’s a lot of like, especially in AI, there’s just a lot of incredible companies that will will be the next generation, and so I’m I’m pretty confident that like that I’m actually looking forward to the day where we don’t aren’t just talking about proper OpenAI and SpaceX because I when I think about is not not in the portfolio but just another example like Applied Intuition Unbelievable Company you know retail doesn’t know it nobody knows it outside of venture capital like just a really interesting you know, asset that will be a great, great, great public company one day. And in my opinion, and you know, I think that those stories will be told in the press, and they will they will be the next companies that people are talking about.
30:56
And and Ben, Power Law here isn’t the first listed vehicle for private tech, aside from just being a better picker, you know, what are you doing differently than some of the predecessors? Some of them have gotten kind of beaten up in the media, you know, for premiums, layered structures, marks. I’m curious, you know, aside from just manager discretion on companies. Are there other things that that you’re doing? Yeah.
31:25
Well, yeah. We’re the first venture capital firm that’s done a public close-end fund. Everyone else, they’re not venture capital firms, right? I believe that that managing a portfolio through decades should be run by people who have done that? There’s going to be good times and there’s going to be bad times, and that kind of like that kind of experience is, I think, really important to to bring to this asset class, and that’s our goal. Like, I want to have I’m creating a platform for long term investors, not day traders. My customers very different, and our goals are very different. And so, like, I think that we will hopefully find our community out there. And it’s just really, you know, we’ve only been public for a month, but our I think that the intent and being an institutional you know leader in the asset class and really bringing some maturity to the asset class, like for example, like how we did our, we we created a float that was very generous to create a lot of floats so that retail investors would have an opportunity to to to buy in at reasonable prices, and that is completely differentiates ourselves from some of the other people that are out there. You know, we don’t want to be a meme stock. We we we want we want an RIA to be like, hey, look, this thing trades at a reasonable, you know, valuation with an incredible portfolio, and and like I I can just put this into a brokerage account, right? And and I think that expands. Like you know, we’re in the early days. Like I feel like I’m the early days of secondaries. Like we are, it’s the wild west time. I was in the wild west of secondaries, and like we’re just learning with this new asset class, like how to make it professional, and that’s our goal.
33:11
Do you have a sense for the percentage of holders of power law that are institutional versus retail?
33:17
I do not. Rumor has it that there’s something called I’m learning through this all the time, but we get a 13F if it doesn’t come for a period of time, and I know that we will have visibility to the shareholder base, but I don’t have it yet, so I have no idea. I mean, in terms of the public investors, obviously, the private investors, I know, you know, so yeah.
33:38
So, so part of the big bet here is that the pre-IPO access shifts from institutions and insiders to a much broader pool, and you know, in general, the less sophisticated buyers are the ones most likely to pay a premium. So, what sort of guardrails, you know, have you put in place, you know, that sit and and govern sort of responsibility for the fund and limit you know regulation and and exposure to the regulators.
34:10
Well, so I mean you know I think the regulators are are learning as we go. You know they they took a lot of education. The process with the SEC took a long time because they they’re like within the SEC. I don’t think that there’s a lot of understanding of these vehicles, you know. And so, just sort of depends where you are in the SEC, you know. But like any stock, like it should always be bought on on the fundamentals, and you know everyone should look at what the NAV is, what the premium from NAV is, but most importantly, like what’s the quality of the portfolio as a whole. And a big part of our, you know, the hardest part about closed-end funds is how we can educate investors about about the portfolio. Because, for example, in leading up to the to our direct listing, we were in the quiet period where we couldn’t say anything, right? And then around direct listing, there’s all these rules about like can’t say anything because you can’t promote your listing.
35:16
Well, I know because we were we were chatting many months ago, and then we delayed this this recording to today,
35:23
right? And so, you know, we are really right now working through content, you know, a whole content marketing effort around how to best educate retail investors about the what’s in the portfolio in a way that is compliant. We have to comply with two sets of laws: the Advisers Act and the 1940 Act. Okay, so every piece of content we create has to be put through this lens of compliance, where the rules are uncertain, they’re difficult to apply, and they weren’t written for venture, and so we’re working really hard to educate the market and the world about how to think about closed-end funds. And we’re in the early days of that, but it’s one of my personal missions, you know. And that’s what, and that’s our that’s our a big part of our job for the next year is educating the world about these vehicles and how to look at them and how to understand them and how to make reasonable choices about them. But that’s that’s just a job to be done.
36:32
Currently, you have 15 logos in the funds. Is that right? I
36:36
think it’s about 2020. Yeah, depends. I think about 1818. as of 18 as of 530 but we just did our 630 numbers, so there’ll be there’ll be some more.
36:47
Is that the right number, or do you expect that to potentially double in in the coming years?
36:54
Power Law was always intended to be kind of a flagship, you know, sort of best of the best kind of product, like you know, and you know, I think that like if you, I’m I’m a big believer in concentration in venture. I think venture you you buy for alpha. Not if you want to if want to get massive diversification, you do an index. And I don’t think an index of venture is is is exciting as a concentrated portfolio. And so, so we’ll always be pretty concentrated. Like it may. It’s going to vary, you know. There’s a whole bunch of reasons why it may go as low as 15, as high as 25 But I don’t see it going outside of that.
37:30
What What did we miss on Acadian Power Law Raise Global? Anything else you want to share with with listeners?
37:38
No, I would just I would say this that that that you know, people under like you know people really sometimes don’t get my motivation for doing this, and you know I guess I did mention it, but like it really is, you know I think that people in venture we sit here in our little bubble, and there’s a whole world up of people out there that are really tired of 10-year liquid funds, and I can think I can actually really embrace those people and bring them into venture by giving them a different wrapper, especially international investors. You know, when I go out and I talk to international investors who many times haven’t been treated very well by venture capitalists, feel very burned. Feel like they kind of like get their money and get you know get get kind of used and and get taken for fees and expenses. And when I talk about, hey, look, this is a public structure with public company accounting, public company reporting. You know, an independent board that can fire us every two years. You know, with KP and G doing public company audits, they really do get excited by that as well as the the built-in feature of an off-ramp, whenever you want, and so I think people just take away that that view. Like that’s that’s the most important sort of view of trying it out there.
38:50
Good stuff, Ben. If we could feature anyone here on the show, who do you think we should interview, and what topic would you like to hear them speak about?
38:57
Man, I would say get if you can get Ira Aaron Price on your podcast that he would be my number one choice by far. For people that don’t know, because Ira has like very little public profile. Ira is the first investor in Tesla, first investor in space, like early, very early in SpaceX. He’s on the board of Tesla. Ira, he’s the he runs DBL Investors, which has done incredibly well in the impact space, which is also amazing, Ira has also been just an incredible guy, and he’s incredibly brilliant in how he thinks about venture. And he doesn’t he doesn’t really care about his public persona very much. And I think is one of the most underrated. You know, he’s not out there fighting you know Twitter battles with people. Like he’s just out there building great businesses and with the best entrepreneurs and is an extraordinary person to listen and sit and talk with.
39:49
Ben, give give the listeners a book, article, or video that you’d recommend.
39:54
You know, I I would say that the. One, I say that one book. There’s a book I can’t remember the title of it right now, but like right now, I’m spending a lot of time reading the Stoics. Yeah, you know, like the basically like just like reading the Sto the Stoic philosophy. Um, one of my, it’s really hard being this entrepreneurial, you know, when you’re in your 50s, and I think that like, you know, when you’re doing these things that are very and I’m being very public for the first time, like I’ve kept a really low profile, and now I have to be public, right? When you’re doing when you’re building in public and you’re having a lot of criticism and you’re having a lot of day-to-day fights with you know SECs or vendors or whatever, it’s really good to have the Stoic mindset and and sort of remind yourself of what the Stoics say every day. So I’d say go deep in Stoic philosophy.
40:50
Love it, Ben. Do you have any habits or behaviors that are a secret weapon?
40:56
I would say that the the the one the one habit that I have is I try to go to very I I don’t love going to tech events I’m super selective even though you host one of the biggest one of the reasons I one one of the reasons I created it was because I was tired of running to everyone else’s events right yeah so I am a huge believer in like when I spend my time at events, I do a lot of thinking about what I’m going to go to and why and who’s going to be there and making sure that that there’s going to be like a real intimate opportunity to meet people I don’t know that that I would that are very much like outside of my world and listening to people that are outside my world and we’re in a bubble. You know, I mean, like one of the best things I’ve done is because of Raise. Like we did Raise Latam, and then I got to know all of these Latin American fund entrepreneur. You know, probably like early stage VCs, a bunch of VCs from Latin America. Spending time with people outside the valley who are building ecosystems elsewhere will give you a sense of perspective that I think people here really need. And so, like, get out of the bubble. Make sure that you do not live your life in the bubble. Get out of it and get to other parts of the world. You know, go to slush, like amazing spot for like tons of people from all over the world. That’s where
42:21
we met up. Yeah, yeah,
42:22
that’s right. So, like, I mean, highly recommended. Why get you need to get out of the bubble? Because if you’re just in the echo chamber, it really is going to constrict your thinking. And I think listening to to people from all around the world is is a huge benefit.
42:36
Good stuff. And then finally, here, Ben, what is the best way for listeners to connect with you and follow along with your efforts.
42:43
You know, believe it or not, I would say just reach out to me on LinkedIn. I’m I’m really pretty good about and pretty open about connecting with people on LinkedIn.
42:49
What’s the current share price of Power Law?
42:52
It is not trading today, thankfully, so I am not going to answer that question. Okay, no, I’m just kidding. It was like 1530 or something like that yesterday, but today I’m thinking about the days the market’s closed. All
43:04
right. Well, Ben can’t sell it, but I can. You know, pick up a share of Power Law if you want access to to late stage great venture investments and logo. Make
43:15
sure you read the prospectus before you do it and understand all the risks,
43:18
all the T’s and C’s. Well, Ben, this is a blast, man! Thanks for doing it. Congrats on the success and the debut, and we’ll see you again soon.
43:26
Thanks a lot. Appreciate it. All
43:33
right, that’ll wrap up today’s interview. If you enjoyed the episode or a previous one, let the guest know about it. Share your thoughts on social or shoot them 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, a compliment goes a long way. Okay, that’s a wrap for today. Until next time, remember to overprepare, choose carefully, and invest confidently. Thanks so much for listening
