"AI resembles the nuclear weapons of our age, a genie out of a bottle that will manifest differently. Space law illustrates this challenge: because Americans, Japanese, and Chinese all claim jurisdiction, no singular law governs space. Everyone argues over ownership while waiting for a catalyst, such as a Chinese satellite crashing into the International Space Station and destroying various international modules. Such an event would create a massive conflict where parties argue to death over which jurisdiction, tribunal, or judge should preside. We are effectively waiting for something to explode before people truly argue and threaten each other with lawsuits." - Jeremy Au, Host of BRAVE Southeast Asia


"Major tech companies like Google and Meta face intense scrutiny from regulators in the EU and the US who view them as monopolies that require new legislation. A primary concern for these courts is the historical trend of these giants acquiring smaller startups to maintain market dominance. While Meta successfully acquired Instagram, WhatsApp, and Oculus in the past, the company now finds future acquisitions difficult due to this heightened regulatory oversight. Similarly, Apple is facing legislative pressure to open its App Store, as critics argue the company holds a monopoly over its own devices."- Jeremy Au, Host of BRAVE Southeast Asia


"Startups and companies must decide whether to proactively shape legislation by acting as collaborators in the regulatory process. As a startup scales into a 'Goliath,' it may attempt to influence laws in friendly cities with minimal opposition to create favorable precedents. This tension is evident in the differing strategies of industry leaders: Marc Andreessen expresses frustration with CEOs who support regulatory barriers that essentially form a 'cartel' of government-blessed AI vendors protected from new competition. In contrast, Sam Altman has publicly advocated for collaborating with governments to help write AI legislation."- Jeremy Au, Host of BRAVE Southeast Asia

Jeremy Au explains the intense friction between startup growth and legal boundaries. He describes how founders and VCs negotiate high-stakes IPO prices while navigating the "Goliath" power of industry incumbents. The talk explores how startups use customer bases as political shields and why late-stage investors rely on liquidity preferences to survive messy market exits.

00:00 The IPO Pricing Tug-of-War: Jeremy details the messy negotiations between founders, boards, and banks when setting public share prices.

06:44 The Liquidity Waterfall: Understanding why late-stage investors often take all the money during an "underwater" IPO.

08:58 Regulatory Capture and Lobbying: How incumbents like Verizon or Comcast use the law to crush startup competition.

11:10 Permission vs. Forgiveness: Comparing Uber’s aggressive expansion against regulators with Didi’s experience in China.

18:38 The Hidden Hand of Think Tanks: Jeremy reveals how tech companies fund the research that shapes future AI and privacy laws.

Who decides the IPO offer price? Jeremy Au: So that is a weird negotiation between the founders, management team, the capital markets, and the investment banks. So what will happen is that people knew that the equity price effectively was $39,000 per share. And so obviously the founders and the management team and the board would've gone to the investment bank and said, "Hey, we want this price to be $45,000". And we will sell those shares at $45,000 because we believe it'll pop to $50,000 on the first day of trading. But we're going to sell that to our corner store equivalent for $45,000 per share.

And now obviously they ran out the market; they went to see whether there's interest, etc.. And then the investment bank was like, "Hey, we can't get it at $45,000. Nobody wants to buy. But the price that the market will be willing to provide you because you want to raise $100 million, let's just say—the price at which they're willing to give you $100 million would be roughly around $9,000". And then people at the board will go back and argue, and the board will say, "No, if it's $9,000, we're all going to lose money immediately. This is a horrible decision to make".

And then the other team will be like, "You know what, if we don't raise this money, we're going to not have enough money to survive as a company". So everybody's value is going to go to zero. So better to raise $100 million at $9,000 per share rather than have the company go bust. So you imagine that huge conflict at a board level. Welcome to Brave Learn, from Southeast Asia's best tech leaders build the future. Learn from our past, and stay human in between success.

Investors, when they negotiate a legal contract, often have the clause of a pro-rata, which means they have the right to maintain the ownership percentage that they have. Let's say a company does 20 investments; you normally buy 20% of the company, right?. So when you buy 20% of the company, and let's just say the company's value doubles in the next round—if you did not top up your money, your 20% will effectively become roughly 10% of the new company size.

So you're allowed to top up with more money to let you buy up an additional 10% to maintain the ownership percentage of 20%. So you normally have a pro-rata clause that's relatively well respected because every investor knows that if you start disrespecting the pro-rata clause, then everybody's going to start disrespecting your pro-rata clause. So all the investors will normally play nice on the pro-rata clause on average, unless you're an angel, in which case then everybody says, "Thank you very much".

If you're a fund as an emerging fund manager that has less track record, they are more likely to negotiate and say, "Hey, we need less management fee" because you don't know how good our returns are going to be. So the one way to minimize that is to be at a cheaper price. So you charge less for fees or charge less for carry versus, I think, a more experienced fund that has a proven track record would just be like, "Take it or leave it. I'm thinking two and 20". I think in some markets even they were thinking like more than that—two and 25, for example, because they're so good at the job.

So it depends on that. So the equity price equivalent of $39,000 times the number of shares will equal the total enterprise book value of that company at a point in time. The number of shares will be fixed. So every round the total number of shares will go up because you're granting more shares—more paper certificates to people—to dilute the earlier people. But once the round is complete, then the total number will be fixed for that period.

Let's say you're raising $100 million; half will be for your first investment and half of that quantum will be reserved for follow-on investment. Does it make sense? Because exactly of this scenario, which is that if you see a winner that's a home run, you want to double down on the investment. So we gave the example, which is if you have a $100 million fund and you're making 20 investments, for example, you may deploy $50 million in 20 of those startups.

So you are investing $2.5 million checks in 20 of those companies, right?. But out of those 20 companies, you may say, "I'm only going to see two home runs of that lot. Let's say five out of 20, the top 25% of five that are left, I think will become the home runs". I'm going to deploy $10 million each. So that's how you deploy your two tranches, right?. It's $100 million: $50 million for a $2.5 million check, and then your second half, a $10 million check for the remaining five companies that you think will be the home run, right?.

This gives you the ability to double down, right?. And this is a very important strategy for VCs. They have to do this; otherwise, you can't generate it because for your first check that you wrote, you don't have that much information. You see the founder, blah blah blah, but you don't have much information on the guy, right?. But for a follow-on check, you sat on the board for two years; you've seen them work and everything. You should have almost much better information to make that bet, right?.

Because everybody knows that VCs can make a double-down bet. If I know that Sequoia didn't double down on you after your investment, it can be a negative signal, right?. So it's quite common because Sequoia has a Surge program. So they basically write checks to pre-seed to seed companies; they write relatively small checks for their size. But it's quite well known that the reason why they do this is because out of the cohort of 40-some companies, the top number one or number two, they're going to snipe it before anybody else has a chance to see it.

And they're going to do a Series A and lead an aggressive Series A for them. So for the rest of us, when we're looking at them because we don't have that program, when we see this thing and say, "Hey, why do we get to see a deal? Why didn't Sequoia stack the deal already?". Because you're a Sequoia Surge company, then there's some question—a negative signal is what they call it. Because from our perspective, Sequoia should have doubled down on you if you're already a rockstar.

The fact they didn't double down on you means that there's something not fantastic, right?. And so some founders will choose not to go to Sequoia Surge; they'll choose to go for specialist single-stage funds in the early stage. Because they want to avoid that happening. So they'll say, "I'll go to YC, I'll go to all these programs, but I'll not go to Sequoia Surge because Lightspeed will not feel comfortable coming in".

But that being said, I think there's other analysis that says, you know what, if you're good, there's all kinds of reasons for why you say it. Lots of founders will say, "Oh, it's not that we didn't get picked by Sequoia for the Series A, we just wanted somebody else. I didn't break up with you, you didn't dump me, I dumped you". So there's all kinds of reasons that people have. So I don't think it's a death sentence if you went to the Sequoia Surge program.

But it is something that is a known risk. I think there are many seed programs because they're now doing a lot of multi-stage. So that's something that happens for multiple funds. I think negotiating internally to compensate later-stage investors with early-stage blah blah is not really a straightforward mechanism. But it has happened before, but it's very difficult. I think normally what happens is that there may be other mechanisms to compensate them.

First of all, and when we think about it, the late-stage investors will also normally invest in a liquidity preference stack. So proceeds will go to them first, right, before it goes to the early-stage investors. So these late-stage investors are not clueless. They already have liquidity preferences that will actually control for this dynamic as well. And then there can be all kinds of other levels, right?.

Because there are many actual late investors that, for example, pre-IPO or the later stage—they often also invest at the IPO stage and on our public markets. So they actually invest on both sides of it. There are ways that they can get compensated later, if that makes sense. But it can be quite circuitous and quite difficult. But in general, I think the most likely scenario is that if the IPO is going to be underwater, as in it’s not going to go super well, nobody is happy.

But from what I've seen, it can be quite common that only the late-stage investors get some kind of outcome because of liquidity preference, right?. So the founders get nothing, the early employees get nothing, etc.. So the liquidity waterfall is actually one of the most important components to it. And some advice I normally give to founders is that if you can, try to keep it common equity; try not to give liquidity-preferred shares over time.

It can be very difficult to do that, but that's the best way to ensure that you have a good outcome over time. Okay, I'm going into regulatory affairs. So my favorite quote, led by our dear Alessandro: "It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct or more uncertain of success, than to take the lead in the introduction of a new order of things".

Because the innovator has for enemies all those who have done well under the old conditions and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents who have the laws on their side, and partly from the incredulity of men who do not readily believe in new things until they have had a long experience of them. So Machiavelli, The Prince.

And so Peter Thiel, the founder of PayPal—he likes to say, and it's a great book called Zero to One, I really recommend this—and what he says is that all happy companies are different. Each one earns a monopoly by solving a unique problem. All failed companies are the same; they fail to escape competition. Alright, the corollary of that statement is that anyone who has a monopoly will pretend that they're in incredible competition.

And here's the corollary to that is that anybody who has a lot of competition will pretend that they are a monopoly in a pitch deck, right?. He's saying that a company that is a startup David versus Goliath becomes a Goliath, becomes an incumbent. It becomes a billion-dollar company with a hundred million dollars of revenue with high profitability margins because they have managed to earn a monopoly, right, and therefore are able to earn monopoly profit, right?.

And so Peter Thiel, obviously we know PayPal, we know Palantir. Also if you think about unicorns that are there, you look at Google, look at Facebook, Meta—they're under attack by the EU and the US, right?. Because they're saying that these are monopolies that need to be legislated. And so for example, one of the big issues that's happening right now is that there is a lot of court scrutiny of these companies because these companies often acquire startups, right?.

So Meta acquired Instagram, they acquired WhatsApp, and they also acquired Oculus, right, for VR headsets. But Meta finds it difficult to acquire companies these days because they're under scrutiny, because they're seen as a monopoly, right?. And we see Apple, for example, getting legislation to open up the App Store because it is argued that they have a monopoly over the Apple devices, right?.

So one thing to think about is regulation versus regulatory capture. And so George Stigler—he's the winner of the 1982 Nobel Prize in Economic Sciences—as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit. We obviously have David Sacks, right, who is the current US administration's AI Czar, and obviously we have lots of other folks, right, that are also doing a lot of regulatory work as well.

Bill Gurley describes in his talk about how Benchmark had invested in a company, a startup, to provide free wifi services across their downtown areas. And they were gonna make money through advertising and so forth because the wifi is cheap. And so they saw the opportunity to provide free wifi in other cities. But he said that in this case in Philadelphia, they collided with commercial interests, which is incumbents of powerful lobbyists like Verizon, Comcast push through bills that basically made it impossible for startups to provide free wifi services there, right?.

Because you imagine that providing wifi obviously disrupts the telco services. And so all these regulations then spread to other states. So yeah, so it's interesting to think about because some here you are lawyers, you represent the law. The law are the regulations industry, and these people are claiming that you are actually representing corporate interests, right?. So it's something for you to think about because we're gonna start talking about why these things are happening.

Now what I wanna tell you is that obviously when you think about regulatory affairs is obviously highly dependent on your political structure of about how you engage with regulations. This is a two by two, I think it is relatively straightforward. I think on one axis is democracy, which is that one person, one vote versus highly undemocratic, which is imagine a kingdom, right?. One person has all the votes and everybody else has no vote, right?.

So there'll be democracy. Obviously you have the other axis, which is liberalism which is do you allow other people to have like, freedom of speech or to be decentralized in terms of expression around policy and so forth, versus the centralization of it. So that ranges of liberal democracies, illiberal democracies, dictatorships and undemocratic liberalism. Let's not argue about which countries fall into which quadrants then if it has a huge debate all of a sudden.

But I think the key thing is that you can imagine that if you are a democracy then obviously you may choose to advocate for policy through referendums, for example. And you actually see this a lot in California through propositions where tech companies are advancing referendums for regulation like AI versus highly centralized economies like China that we talked about.

Where China policy there's no point doing a public poll of Chinese citizens, about what they think about AI, blah, blah, blah. That's probably more of a playbook for democracy where politicians are trying to accommodate what democratic preferences are. What you'll notice of course, is that for technology startups that are often regulatory inaction, right?.

And what I mean by that is what George was talking about is that AI right now is advancing over the past two, three years. And most countries in APEC actually don't have regulatory action, right?. And so you need to figure out from a startup perspective, why is there regulatory inaction. Is it because they are confused maybe because they're just too busy doing other things?. Is it because they're regulatory capture by the existing industries?.

So do they report to a centralized party or regulator or department, or is it, do they report to a certain politician?. There's a political appointee, right?. Does your business approach open up a can of worms that people just don't want to think about?. And if you are able to get this legislation going, will it become a precedent for other legislations?.

And so you can imagine that many companies, if they can, will try to go to technology or startup friendly legislations to get that first piece of policy up, and then they'll go to other adjacent countries to do that. So, for example, in Singapore. Singapore has a leader in policy of good governance. And so a lot of companies try to lobby in Singapore to get policy through and then use that as an example for other countries in Asia Pacific.

So for example, if you look at Handy, Handy was a company that basically does cleaning services in the USA. And so there's something called W2, right?. W2 is basically a full-time employee. And if you're a full-time employee, you have to have benefits. You need to have pay for your insurance and so, so forth, right?. And so for Handy they're using independent contractors.

Independent contractors means that you don't manage them as a workforce. They have to set their own timetable, they set their own service standards, but in return, you don't have to provide benefits or health insurance. But what was interesting for Handy for them was that they wanted to provide a benefits package to these independent contractors.

But of course that faced a lot of resistance from the controlled cities and states because if you can give benefits to independent contractors, then it lowers the power or the value of being an employee. And if you're not an employee, then you can't be a union, right?. And so, Handy eventually went to the Republican states and cities to get their policy approved to be able to give benefits, and after that, they cascaded that policy out to more states from there.

So you can see there's something similar for Grab and your ride-hailing services in Singapore. There's no such thing as an independent contractor effectively. All employees have a union under NTUC, the National Trade Unions Congress and so forth, ride hailers drivers, they were not represented. And then eventually the compromise was reached under new legislation where they were recognized as a job.

And then they also set up a mini union, I guess, under the NTUC banner as well. So you imagine that this independent contractor debate has been slowly cascading from the US in Republican states to Republican and Democrat states, to Democrat states, then to Singapore, right?. So the same debate is cascading across the world. There's a ripple effect that's happening across the world.

The other thing you think about is that startup is whether you're gonna ask for permission or beg for forgiveness when you scale, right?. So you know, in this jurisdiction, can you work with them or can you not work with them, right?. Can you get your grassroots supports from customers to lobby for you?. What's a narrative compared to incumbent disrupting, right?.

Is the press a viable counter attack against the legislators, right?. What are existing laws?. What are the consequences for forgiveness?. If you break a law? No consequences?. Is it cash penalty? Is it jail? Is it execution in this society?. So that's something that your startup founders are thinking about, right?.

And when you do this, you had to go all the way, right?. And so, for example, if you look at Uber, right?. Uber when it was a startup was ride hailing and they received a threat from Bill de Blasio, which is the New York City mayor, and they basically wanted to ban Uber because at that time, the taxi medallion, the yellow cab fleet it is it was protected effectively, union or guild of taxi drivers and that political power, and they're pushing back against Uber, right?.

And so Uber, as you remember, those days basically continue operating. They had apps that would be only visible to consumers, but if you're a regulator, you could not see the Uber app, right?. And they started counter attacking through the press, right?. Putting a lot of money into politics by basically saying, hey the yellow cab fleet the commission analysis to say that these yellow cab fleets primarily work in the rich neighborhoods, but they didn't operate in low income and therefore minority neighborhoods.

And so Uber was a much more fair platform that allowed people of any income status of any minority of any time of the day to be able to receive ride hailing services. Right?. In contrast to the regulated yellow cab fleet. So this was that counter attack angle that it had at the press. And eventually based on the public outcry they had the New York City media back down and allowed Uber to continue operating right.

Now Didi is a different example. Didi is a competitor to Uber, Didi competed with Uber in China. Uber was scaling in China. Uber lost to Didi. Didi said they wanted IPO in America, the regulator told them they should not regulate IPO in China. They still IPO in America. And then after that, they suddenly decided that they would delist from the US right?.

So yeah, there was no lobbying, there was no whatever, the regulator said, do not proceed your IPO, right?. And done. So two very different types of regulators you imagine, right?. I think it would be hard for us to imagine Uber in China doing what they did, which is like selectively deactivating the Uber app in the regulators arms, or et cetera, et cetera.

It just wouldn't fly, right?. And another example we saw is like TikTok shop in Indonesia, right?. So TikTok shop was growing very aggressively and then they received a requirement to get a license to operate, which they did not achieve. So they had to effectively shut down TikTok shop. Then eventually a few months later, they acquired right from GoTo in order to continue operating.

So again, this is the regulatory action or maneuvers that startups had to do in order to continue operating in reverse jurisdictions. And of course, you had to figure out whether to mobilize the customers to advocate for you politically. How much do your customers care about what you offer them?. Are they passionate?. Do you have enough customers to mobilize?.

Do the politicians require electoral votes?. Do they care?. And can you motivate them?. So for example DraftKings and FanDuel, they had to do effectively sports gambling fantasy football. And they were competing against the gaming industry, so competing against the casino industry. And so for them, they got a lot of pushback. They received a lot of bans and so forth.

But then they were able to activate their consumer base. And it turns out their consumer base was actually really important because the type of people who play fantasy football are actually swing voters in many American states. They tend to be male. They tend to be middle aged or relatively young.

And if you put a giant poster in your app saying that your mayor wants to prevent you from playing fantasy football and betting money on your sports teams, then they get very angry and they email the local mayors, the legislators, right?. They were able to successfully activate their customer base. However, you look at Airbnb, Airbnb is banned in Singapore, right?.

I think the hotel industry in Singapore pushed back against Airbnb saying that this is not good for the hotel industry. And then if you look at the Airbnb's customer base, if you think about it, the people who support Airbnb, either landlords who can rent it out, but the customers that they have are primarily tourists, right?.

And tourists are not voters in Singapore, right?. And so actually what you see is that Airbnb is increasingly getting pushback out of cities. Because cities are facing rental or cost of housing crisis. The local population wants to vote for lower pricing. And so legislating against Airbnb is a good way to pushback against the landlords, right?.

Singapore and New York City have both banned Airbnb as a result because they are listening to people who vote and don't like Airbnb, right?. So, that's something for you to think about. And of course, what you need to think about is that whether you as a startup or a company, do you choose to proactively shape legislation?.

Are you going to be the good guys who help legislation happen?. So if you are a startup and you're becoming Goliath, can you shape the legislation in a way that helps you, and can you do it in the best test cases or cities that are the friendliest and have the least opposition to do so?. And what's the inside game?. What's the outside game?. How do you do it?.

Marc Andreessen from a16z has said, hey we are frustrated because there are CEOs who stand to make more money if regulatory barriers are erected that form a cartel of government blessed AI vendors protected from new startup and open source competition. Interesting, right?. Because he is a VC who invests in companies that become unicorns. In contrast, you see Sam Altman. He's in Singapore in this university.

And he basically was saying we want to help collaborate and write AI legislation together, right?. So that was pushback from Marc Andreessen against OpenAI because OpenAI was working towards drafting more legislation. And you know what's interesting of course is that we just saw George. I mean, what a nice guy, right?. So helpful. So kind, so thoughtful talking about legislation and while look at all the research he did on privacy and forum, right?.

So what a nice independent think tank it is. How is this think tank funded?. Speaker 20: Right?. Speaker 3: Is he a volunteer?. Well, it turns out that 75% of its revenue, the foundation's revenue comes from about 300 technology companies, right?. So it's not the hotel industry, it's not the airline industry, et cetera.

So it's your Meta, it's your Microsoft, it's your Google. They're all corporate members of this forum, right?. And so they contribute membership fees for this independent think tank. Obviously they have an independent board. They say their programming is independent, right?. So what they're doing, the talking about legislation, their crime policy, he's gonna be so nice.

He's gonna sit down with the Singapore government, explain privacy, and say, look at all the different standards you have. You can have the hard version like China, or you could have the light touch metal though, right?. What are you gonna have?. Look at Japan. All the countries at APEC are all competing with one another to be AI friendly.

And then imagine you're like Singapore regulators, like, oh Speaker 22: damn. Speaker 3: Do I wanna be a loser in this competition?. So, I like Josh. But I mean, he's doing us a favor, right?. He's doing analysis, he's doing research, but I think you always understand that's these think tanks, right?.

So you have RAND, RAND in America, obviously you have that bar in the US you have all kinds of think tanks that are happening. And now these think tanks are really apolitical, right?. Funding has to come from somewhere. And they all represent some level of lobbying or policy or a regulatory group. So legislation is written by humans, right?.

So whether you are a democracy or not a democracy, there's always some path for some level of influence over the process, right?. And the truth of the matter is that from a policymaking perspective, you actually should solicit views from industry as well, right?. I mean, you don't wanna be writing AI legislation without soliciting opinions from the industry as well.

And so every politician in the world would work with these organizations, right?. Look at World Health Organization, right?. Technically it's an independent institution that does health, but it's funded primarily through industries and companies. And we saw that during the COVID Pandemic, right?. There was a lot of debate and pushback.

Some people argued that the WHO was too pro-vaccine, for example, right?. Obviously I think WHO stuck to the facts and stuck to the science. That's my personal opinion on it. But I think you imagine there's a, there's always that pushback, right?. I think AI is interesting because it's kind of like the nuclear weapons of our age.

Like nuclear weaponry was like the, this big genie in a bottle, right?. And I think AI is really gonna be that thing, but I think it'll be very different. What happens in the world where anybody can genetically edit their embryos, right?. What happens in the world where AI robots say that they're human and claim they're human, and people will try to marry their robots and give their property.

Somebody's gonna try to die and try to give his inheritance to his AI robot who says that they're real. And then the human kids are gonna be like, this is pure fantasy land and then some person in a Western society is gonna be like, well, if this person can give money to his parrot, he can give money to a robot. And these examples are all sci-fi speculation.

But these are all theoretical cases that are highly problematic. And my favorite example is my friend and he's a space lawyer, which is quite cool. And basically the key thing about space law is that there's no law in space. Like, because in space there's, like, the Americans say there's law. The Japanese say there's a law. The Chinese say that the space is governed by them.

So everybody's all arguing that space belongs to them. And so everybody's waiting for like some, imagine like a Chinese satellite crashes into the ISS, and then it is all the modules break up in the EU, the Japanese, the Russian, all the modules break up. And then there is gonna be giant hot mess where everybody is gonna argue to death about which jurisdiction space should be in. Which tribunal or court or judge could be in. And so there'll be a giant hot mess.

But what we're waiting for is waiting for something to explode first before people start to argue and start to threaten each other with lawsuits. So I think in many ways, I think we have to wait for the technology to emerge, then wait for the conflict to happen, and then the court will slowly swing the action and start using like precedents or examples or case law to try to finally legislate the issue.

And then write the final policy. And it's happening in America now. Because of the investment laws around Chinese nationals, right?. Or Chinese majority owned businesses. So a lot of companies cannot sell secondary stakes to Chinese nationals. But conversely, there's actually a lot of demand by Chinese nationals and Chinese companies for American assets 'cause they wanna diversify with American assets.

So there's actually quite a thriving middleman economy where there's all kinds of BVI or Cayman Island, or SPVs or SPVs, to create that bridging effect. And you see lots of kids, like they're all so, they're Chinese looking, they're all now Americans and they're all Canadian and they're all like, investing. We're like, yeah, this guy's like Canadian, but we know his father's CCP big three, right?.

And you're like, okay. Then you're like, hey he is like, we can invest we're Canadian. And I'm like, that's the American administration take. And it can be a real issue actually. So it can be an issue. VCs can help a lot actually with founders. 'Cause founders obviously they're raising the capital, creating the value.

But VCs are obviously a longer relationship. They tend to be more senior. So they often have a lot of back channeling efforts. You must also remember the VCs are often very much subsidized or supported by their national governments, right?. So the US VC industry is supported by the US government in many of these because they're commercializing IP and patents.

For example, you can imagine that when the US government's thinking about copyright law and AI law, et cetera, they're often talking very much to VCs, right?. Because they wanna talk about, hey, there's copyright or IP or generative AI. So they're talking to the VCs. Many VCs actually have lobbying arms. Task, VC task ventures is actually, a hundred percent their value add is like, we are very good at lobbying, so we should take our money to help us with your lobbying efforts.

But yeah, there's lobbying efforts. So, if you look at David Sacks, right?. He's a crypto czar he's republican. And this year has been good for crypto, right?. VCs can add value there, right?. The other VCs like Ron Conway, et cetera, they're much more Democrat affiliated, for example in the US I think it's more clear over there.

I'm sure VCs are thinking about the good of society and good corporate citizens and also thinking about we're making the world a better place. And the world's a better place 'cause we now have independent contractors that give you your food and are not employees. And the world is now a better place because we are bringing nuclear power plants back.

And the world is a better place because we are pushing for lower custom duties on solar cells and turbines, right?. So I think it's very difficult. What VCs are, is I think they're kind of in a dilemma in the sense that every startup they're investing in, there's a home run or unicorn is basically creating a new category.

AI, crypto, NFTs, digital land. Why?. Well, they're always creating a new category. So the rules have not been written yet, and they have to be eventually be written. So the VC will see this problem over and over again, that they have to work with government more and more over time.

I think the VCs will have that dual mandate, obviously, which is one is maximizing economic value for their home runs. But of course, they also have to keep writing the rules for the new startups that they are underwriting every year. Thank you for listening to Brave. If you enjoyed this episode, please share the podcast with your friends and colleagues.