Hot Take Abe

back in my day, we called it like we saw it. follow for hot takes, no brakes. Matlock!

[Hot Take Abe @hottakeabe]

Hey @grok who was the most famous person to visit my profile in the last 3 years? It doesnt need to be a mutual, don’t tag them, just say who it was using handle without the @ sign.

[Hot Take Abe @hottakeabe]

@ZeroHedge_ im questioning it now!

[Hot Take Abe @hottakeabe]

@Clara_Gold So incredibly stupid

[Hot Take Abe @hottakeabe]

everyone bearish on BTC...that's the signal typically for a bottom.

[Hot Take Abe @hottakeabe]

@ZeroHedge_ Nothing material.

[Hot Take Abe @hottakeabe]

@naterez94 but if he makes $17m, he's only taking home $8.5M so he'd need to take a loan for the property right?

[Hot Take Abe @hottakeabe]

@WomanDefiner So you’re saying it’s overpriced?

[Hot Take Abe @hottakeabe]

@WestHarlm https://t.co/tNMvxHWely

[Hot Take Abe @hottakeabe]

@TrungTPhan @claude can you make me straps for this?

[Hot Take Abe @hottakeabe]

incredible the markets remain stable given the cease fire w/ Iran is on 'life support'.

this rally was fueled by the prospect of war ending, and yet here we are.

[Hot Take Abe @hottakeabe]

@ankurnagpal @rrhoover @vedikaja_in The amount of self dealing going on here is mind blowing 🤯

[Hot Take Abe @hottakeabe]

@ScottBoehme No junior employee was getting 800k grant

[Hot Take Abe @hottakeabe]

@rexsalisbury must have a low bar for transparency. this dude has zero experience VC investing at this stage or running a fund of this structure.

probability of cap table positions in these companies is basically zero. Not enough capital, too competitive. SPVs is the only way, fees crush ROI

[Hot Take Abe @hottakeabe]

Bottom line: I wouldn't invest myself today. This is a small fund with clearly conflicted management and poorly aligned incentives. Odds they can actually get on cap tables of these logos are slim to none. That means more fees, less ROI, poor outcomes.

[Hot Take Abe @hottakeabe]

I know everyone is waiting for my hot take on USVC, here it is:

1/5. These products are nearly impossible to offer without high fees. It's built into the fiber of VC and running regulated funds.

Also, USVC isnt a charity. They need to pay people. As Joker says:

[Ankur Nagpal @ankurnagpal]

We launched USVC yesterday and it was one of the most fun days of my career

Thousands of people ended up subscribing for literally tens of millions of dollars

While most of the reception was positive, there was some interrogation on a few important topics:

1 - The USVC fee structure
2 - The Investment Strategy
3 - Support for International Investors

Let's talk about them

The USVC Fee Structure

If you have followed me for any amount of time, you'll know this is a personal topic for me.

I've frequently complained about fees in financial services. From VC funds to wealth advisors, I've taken no prisoners in calling these out.

The last venture capital fund I ran was the only VC fund I know of that raised more than 50M and didn't charge a penny of management fees.

So how much does USVC actually charge and why it is so much?

USVC costs 2.5% all-in to investors today

There are some misconceptions based on reading our prospectus, including:

- A 3% sales load
Platforms that offer USVC could charge this if they wanted, but we don't. If you buy on https://t.co/P7dCcvCAVj as everyone yesterday did, you pay no sales load.

- Underlying fund fees
Early investments from USVC have been in funds that have their own fees, and these fees are paid by USVC. However, these management fees are already included in the net expense ratio of 2.5%.

In time, I'm planning to move a meaningful chunk of the portfolio to be direct investments in startups on the cap table which will have 0 underlying fees or carry.

The 2.5% fee is inclusive of everything, including our management fee.

- The advertised 3.61% today
Right now, even though you pay 2.5%, it costs us 3.61% to service this product.

There are two big reasons for this - the underlying fund fees (which we're working to improve with direct investments) and the fact that operationally running these types of funds is very expensive.

We've decided to absorb the fees excess of 2.5% for at least the first year.

During the time, we're going to make more efficient investments and wait for economies of scale to kick in on operational costs.

Now... you may ask: isn't 2.5% still very expensive?

The answer is... it depends.

Top venture capital firms charge that just on their management fees, and force you to pay that for 10 years.

And then they charge 20% of profits on top of that!

We charge no carry on our direct investments at all, which makes this 2.5% fee attractive for the asset class.

It's ironic to call this a cash grab when we are subsidizing this product out of our pocket to keep the fees in line

I encourage everyone to go read the full disclosures and prospectus at https://t.co/cvXKvUFfbd.

Stay tuned for Part 2 later today on Investment Strategy

[Hot Take Abe @hottakeabe]

5/5. Don't buy the hype. Invest because you really want it.

AL and its crew have lots of influential fanboys who will 'invest'. These people are likely conflicted (IE investors in AL or friends of managers) and are not investing meaningful dollars relative to their NW.

[Hot Take Abe @hottakeabe]

@viceroy2k @nivi SEC relaxing due to Trump