EVERY SPOKEN WORD
150 min read · 30,074 words- DRDavid Rosenthal
obviously, the context is we're doing this episode because of FTX.
- BGBen Gilbert
Right. It's a related party transaction, one could say.
- DRDavid Rosenthal
It's like LJM. [chuckles]
- BGBen Gilbert
It's like, you know, the Raptors.
- DRDavid Rosenthal
You know what LJM stands for, right?
- BGBen Gilbert
It's his kids and his wife, right?
- DRDavid Rosenthal
[laughing]
- BGBen Gilbert
What a psychopath. Can't possibly be fraud if it's named after my family.
- DRDavid Rosenthal
I feel like this story is like American Psycho in Houston.
- BGBen Gilbert
Yes. Oh, my God, yes!
- SPSpeaker
Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Is it you? Is it you? Is it you? Sit me down, say it straight. Another story on the way. Who got the truth?
- BGBen Gilbert
Welcome to season 11, episode seven of Acquired, the podcast about great technology companies... Well, sometimes not so great companies, [chuckles]
- DRDavid Rosenthal
[chuckles]
- BGBen Gilbert
and the stories and playbooks behind them.
- DRDavid Rosenthal
Not so great companies, and the stories, and cooked books behind them.
- BGBen Gilbert
Oh, there you go.
- DRDavid Rosenthal
That's a dad joke.
- BGBen Gilbert
That is a dad joke. I am Ben Gilbert, and I'm the co-founder and managing director of Seattle-based Pioneer Square Labs, and our venture fund, PSL Ventures.
- DRDavid Rosenthal
And I'm David Rosenthal, and I'm an angel investor based in San Francisco.
- BGBen Gilbert
And we are your hosts. Well, listeners, it brings me no joy to do this episode, but it seems all too appropriate in this moment in 2022. Today, we tell the story of Enron. It was the seventh biggest company in America by market cap. It was heralded as the pioneer of a new business model during a new technology era. Executives had endorsements, or at least friendships and public appearances, with multiple US presidents. It had the Houston Astros baseball stadium, Enron Field, bearing its name. It was even named Fortune Magazine's Most Innovative Company six years in a row.
- DRDavid Rosenthal
Including in 2001, the year it went bankrupt.
- BGBen Gilbert
Unbelievable. Less than a year after its stock hit an all-time high, Enron filed for the largest bankruptcy in American history to that point. This story is every bit as crazy as the FTX story that we are all watching play out in real time. The parallels are totally uncanny. A financial trading company that got over-leveraged, thought they could do no wrong, and got tangled up in a web of self-dealing to try and paper over their problems. Individuals profited richly, while shareholders were none the wiser. The biggest difference really is that somehow Enron managed to do it all as a public company in plain daylight the entire time, and with much bigger dollar amounts.
- DRDavid Rosenthal
We have a big thank you to say here. The idea for this episode came from our good friend and past Acquired guest, Andrew Marks. I was in New York on the way back from Lisbon, and I had breakfast with Andrew, and we were talking about FTX, of course, and everything going on, and I was like: "How can Acquired add to the conversation right now about FTX?" And he was like: "I've got a good idea. You guys should do Enron." And I was like, boom! That is what Acquired can add to this conversation.
- BGBen Gilbert
Well, on the FTX note, suffice to say, we will definitely be appending a new intro to that episode.
- DRDavid Rosenthal
Indeed.
- BGBen Gilbert
Well, for our presenting sponsor this episode, we are back with Fundrise CEO Ben Miller to share more about their growth tech investing business, the Fundrise Innovation Fund.
- DRDavid Rosenthal
So you've now been investing out of the Innovation Fund for a few months. Give us the pitch. What's the offering?
- SPSpeaker
So right now, what do companies need more than anything else? It's funding. They have to have enough capital to get across the next 18 to 24-month downturn. So we are providing $10 million uncapped SAFEs for technology companies with at least 10 million in revenue and high growth. So 10 for 10, I'll say.
- DRDavid Rosenthal
It's like ESPN 30 for 30, the Fundrise 10 for 10.
- SPSpeaker
Yeah. So uncapped SAFE, so we don't set the price, the market does.
Episode duration: 3:32:42
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