Alexis Ohanian on Reddit's potential IPO & more

Jason speaks to Alexis Ohanian of Reddit and Ron Biscardi of iConnections. (00:00:00)

• Reddit's longevity is attributed to the power of its community.
• Despite being neglected by its parent company, Reddit's community kept it alive and growing.
• Reddit's success is a testament to its community and the early decisions made by its founders.

Jason intros the show! (00:01:41)

• Jason attended the I connections Global alts 2024 conference in Miami.
• He interviewed Alexis Ohanian, co-founder of Reddit, about the Reddit IPO, his VC work, and anonymity on social media platforms.
• Jason also interviewed Ron Biscardi, CEO of I connections, about the state of the market and the relationship between LPs and GPs in venture firms.

Alexis Ohanian joins Jason to discuss the history of Reddit and its potential IPO. (00:02:48)

• Alexis Ohanian, founder of Reddit, discusses the company's history and potential IPO.
• Reddit's longevity is attributed to the power of its community, which sustained it even during periods of neglect.
• Ohanian highlights the importance of building a strong community and enduring brands in a world filled with distractions.
• Reddit is considering an initial public offering (IPO), which would recognize its significant revenue and global traffic.
• Ohanian refrains from commenting on the potential valuation of Reddit.
• Ohanian emphasizes the significance of community and pseudonymity, which were initially disregarded but are now recognized as essential for building durable businesses.
• In a world with numerous distractions, building a near-fanatical community ensures endurance and success.
• Genuine brands that people truly love will thrive over superficial brands that rely on subscriptions.

The one thing Reddit really got right and the one thing they missed initially. (00:07:30)

• Reddit focused on building communities rather than individuals.
• Reddit lacked a follow button, which made it difficult for content creators to build a following.
• Twitter's follower model allowed content creators to easily build a following.
• Reddit's focus on pseudonymity and thoughtful or clever discourse fostered a candid and honest environment.
• Reddit users held the platform accountable for its mistakes, which helped the platform improve.
• Being the CEO of a community-driven platform requires a different approach compared to a physics-based company.
• Reddit users' criticism often came from a place of caring and could be constructive.

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Alexis discusses his VC tool “Cerebro”. (00:12:38)

• Alexis Ohanian and the host have similar career experiences, having created successful internet properties and then investing in companies.
• Alexis created a VC tool called Cerebro, inspired by Professor X from X-Men.
• Cerebro tracks mutants (companies) and helps investors track how they're helping them.

The advice Alexis gives people starting out at his firm. (00:13:51)

• Alexis Ohanian, co-founder of Reddit, emphasizes the importance of building a reputation through consistent actions and results, especially for venture capitalists.
• Ohanian introduces the concept of "receipts" to create a culture of accountability within his firm, allowing founders and teams to track their progress and performance.
• He stresses the significance of scaling his time effectively by providing founders with direct access to his network through a searchable Rolodex.
• Ohanian reflects on the lessons learned from economic cycles, emphasizing the importance of adaptability and resilience.
• He discusses the potential for Reddit's initial public offering (IPO).

Alexis explains his tormented relationship with the All In podcast. (00:18:39)

• Alexis Ohanian, co-founder of Reddit, discusses his involvement in the All-in podcast and his investment strategy.
• The All-in podcast offers a unique perspective on the tech industry by featuring diverse viewpoints and expert insights, complementing traditional media sources.
• Ohanian emphasizes the importance of community-driven content and expert insights in providing a more comprehensive understanding of various topics.
• He criticizes the lack of originality in recent tech-focused podcasts and expresses his desire for more podcasts featuring operators from different fields.
• Ohanian cautions against empire-building and emphasizes the value of incremental improvements and consistency in maintaining the success of a podcast.
• His investment focus is on seed and Series A rounds, with a preference for pre-seed and seed stages.
• He emphasizes the importance of optimizing for enjoyment when selecting companies to invest in and work with.
• Ohanian highlights the accelerated pace at which startups can now reach the market and stresses the significance of community, brand, and solving problems for people as key factors for success.
• He believes that talking to existing portfolio companies provides valuable insights for making investment decisions.
• Ohanian expresses admiration for the work being done with Cerebro and predicts tremendous success for Ohanian based on his approach and track record.

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Ron Biscardi joins Jason to tell us all about the iConnections conference. (00:27:00)

• iConnections assembles the alternative investment industry, including institutional investors, family offices, endowments, foundations, pensions, sovereign wealth funds, hedge funds, venture funds, private equity, private credit, and real estate.
• The conference provides a platform for investors and fund managers to network and set up meetings.
• An app called iConnections allows attendees to request meetings and the algorithm clusters meetings for LPs (limited partners) to optimize their time.
• The conference takes place at the Fontainebleau and Eden Rock Hotel in Miami, which is a massive campus.

Ron explains the vibes coming out of the Zirp insanity and market turmoil. (00:29:29)

• The alternative investment industry faced challenges in 2023, particularly in Q3, due to rising interest rates and portfolio adjustments by allocators.
• Fundraising slowed down in mid-2023, but there has been a recent surge in signups from both limited partners (LPs) and general partners (GPs).
• Private credit has gained popularity due to interest rate moves and market opportunities, especially for small businesses that face difficulties in dealing with banks.
• Long-short equity, traditionally the largest category in investment events, has declined from 30-35% to around 20% in the current event.
• Interest rate hikes have negatively impacted private equity and venture capital portfolios, leading to a cleanup process, particularly in growth funds.
• Private credit funds have benefited from interest rate moves, but a potential future interest rate cut could reduce demand for private credit.
• Investment strategies and portfolio focus continuously adapt to market conditions, with LPs adjusting accordingly.
• Brad Ker's discussion on the venture market highlighted how companies have adapted to changing market dynamics, emphasizing the need for venture-backed companies to operate more traditionally.
• Venture funds are facing fundraising challenges due to the lack of exits and tight public markets.
• Reddit's upcoming IPO, after nearly 20 years as a company, demonstrates that companies may take time to reach an IPO.
• Market sentiment is optimistic that the IPO market will improve in the second or third quarter, potentially driven by Reddit's IPO and other companies like Stripe.

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Discussing the trend of globalization in VC. (00:37:21)

• Sovereign wealth funds from the Middle East, Southeast Asia, China, and India are now attending VC events in person and taking direct meetings with fund managers.
• Sovereign wealth funds are meeting with venture funds, private credit, and private equity firms.
• Classic endowments in the United States are slower to deploy capital and may only select one or two new managers a year, but they are still attending VC events in large numbers to keep track of interesting funds.
• The sales cycle for institutional investors is long, and it can take years for emerging managers to secure funding.
• Limited partners (LPs) need to build a case for investing in new managers and often prefer established brands.

Advice on nurturing the relationships with LPs. (00:41:35)

• Emerging managers should focus on mitigating business risk to attract LP investments.
• LPs prefer emerging managers with a proven track record and long-term collaboration, reducing the risk of fund dissolution.
• Building relationships with LPs through meetings provides insights into their investment preferences and strategies.
• Strategic partnerships and investments in innovative areas, such as leveraging social media influence, can attract funding for emerging managers.
• Reddit, led by Alexis Ohanian, considers an IPO and seeks investments that enhance event visibility and prominence.
• Strategic investments include Jay-Z for investor meetings and TRU guys for event visibility.
• Unique investments include Brad Gersner from Altimeter, known for his successful adventure investing.

The future of iConnections includes a unique expansion of their app. (00:47:01)

• Alexis Ohanian, co-founder of Reddit, plans to expand the functionality of the company's app, I connections, beyond coordinating meetings at events.
• A new roadshow module will be added, allowing users to coordinate schedules, travel, book hotels, and transportation for meetings outside of events, with the assistance of a concierge team.
• The app will also feature a matchmaking feature that connects users with accredited investors and qualified purchasers in the cities they are visiting.
• Ohanian emphasizes that the app is not a brokerage platform and will not charge commissions on meetings arranged through it.
• The app's membership model will remain the same, with users paying a fee to access the platform's features.
• Ohanian suggests adding a phone number to business cards for easy contact and recommends deleting or archiving emails that cannot be immediately responded to, using an assistant to sort and prioritize emails, and embracing the high volume of emails as a sign of success.