New podcast! How & Why We Lost a Deal

https://www.vernehq.com/post/how-we-lost-a-deal-asset-vs-equity-purchase-differences

[00:00:00] Colin Keeley: Hello. And welcome back. This is Colin Keeley here,

[00:00:02] Brent Sanders: And I'm Brent Sanders,

[00:00:04] Colin Keeley: and we are two guys buying and building wonderful internet companies.

[00:00:09] Brent Sanders: indeed. And today we were hoping to do a bit of a retrospective on a deal. We lost. I don't know how far we want to go into the details. We're going to keep it vague. But, we worked on a deal for about what four months. We had a letter of intent open. That is probably the most indicative thing it's slowed down and started taking forever.

And, specifically wanted it to dig into one of the sticking points on this deal, which was a big question for a lot of folks out there that are doing this kind of work, which is an asset purchase versus an equity purchase. Collin, what's the difference? Assets, you're purchasing all the assets of the company and none of the liabilities and equity purchase, you're just buying shares of the company and assuming a hundred percent ownership.

Is there anything else it's as simple as that.

[00:00:54] Colin Keeley: Pretty much so equity, it doesn't have to be a hundred percent purchase. Often what we see is like the founders want to get out and, but it's possible that they could roll equity. They could roll 10, 20, 30%. It's called, like taking another bite at the apple. So many like smarter founders that really believe in their company will do that, but then it ties them in.

But yeah, the distinction is asset purchases traditionally are easier. So you're just acquiring the assets that you want. You don't have to deal with any of the liabilities necessarily. And then the company that remains the founders or whatever, have to shut it down and deal with any liabilities that are left.

So you could structure equity purchases, and have a bunch of rules saying, they take responsibility for our liabilities and all that stuff. It's just a little more complex.

[00:01:38] Brent Sanders: Yeah. Any attorney you talk to will, maybe not any attorney, but our attorneys generally have been very hesitant to get into an equity deal. Cause it's like the onus is then on you to identify all the things under the sun that could come back and bite you and carve those things.

[00:01:53] Colin Keeley: Yeah, Yeah, but so the issue is we're going, gonna issue in more depth, but GDPR. So any European deal often has assignability or like change of control provisions that has prob that are problematic, or it seems also with like enterprise customers, you'll have these change of control or assignment provisions where.

You'll basically be thrown into the fire of having to be approved again. And that could be like a two month process and in a big company you'll end up in procurement. And the way procurement often works is like they're incentivized to cut software X. So they all really deeply look at your contract and be like, ah, we actually don't use it.

Or we don't use it as much as we currently are. Now. We'd love to cut you or cut you back to a smaller plan. So it's a kind of the game of you want to buy all the good stuff and you don't want to jeopardize anything in the transition.

[00:02:45] Brent Sanders: Yeah, it's a delicate balance. So the liability thing is huge. The idea that you have to go back to all your customers, depending on what type of software product you are, that might not be a big deal. I feel like if we have smaller businesses using it, you put up a modal, you put up, some sort of electronic communication, but then this is where.

Writ if you have larger enterprise clients, these written contracts is they're all really tricky and you have to have really clear and clean. I guess you get, you need to have a really organized seller that has all those contracts still in order knows, who the contact people are, because think about it, if you buying a ten-year-old business or a five-year-old business, and at these companies getting a hold of these people are.

Time, if they perhaps don't still work at the company or, as you said, getting in front of procurement, it's you don't really want to say, Hey, I've been charging you this amount and now's a great time to reevaluate, completely give you an out. And furthermore, I don't know the rules around.

Off-boarding customers with GDPR, but generally the best practices is to offer a way out with their data. So for some businesses that could be, pretty intensive to then export all the data, give them everything, give them a way to take their data and walk, which is just a bummer.

So it opens the door for all these, like sure. You're going to be saddled with more liabilities, but it could potentially hamstring your cashflow.

[00:04:05] Colin Keeley: Yeah. And then I think it really matters how much trust is involved in the deal. So you're always taking on risk and doing an acquisition. And any time you lose trust, you just kill the deal. Like an asset deal, you just take the good stuff. You don't have to have as much trust, in the counterparty, but an equity deal you're taking on everything.

So if there's some hidden thing that could buy you, it could be really problematic. And you really wouldn't want to go down that path unless you were. Trusted the counterparty and really understood the business.

[00:04:33] Brent Sanders: I guess one of the, one of the questions is how do you build trust in a, a 30, 60, 90 day period, the difficult deal, closing time frame. It's tough to know. It's one of those things it's like intrinsic. You either feel it, or you don't.

[00:04:47] Colin Keeley: Yeah, I think it's history is like the best way to do it. Do people operate in a trustworthy manner over a period of time, whether each other or not like people have public profiles or they have a history of operating in a space. And so the longer you've been around and the less you've screwed people over is probably the best way to look at it.

If you don't actually know the person.

[00:05:07] Brent Sanders: Going back to the GDPR aspect of this is this specific to GDPR. I guess you could have, if you had something in your, if you're a US-based company, you technically do need to have. Yeah. Once you're big enough, you're going to have European customers and then you do fall under these GDPR rules.

So it's it almost applies to anybody who's hits a certain scale, even I know blink cell, we have a large amount of, International customers. We have customers in Europe. We have customers in Australia. Every continent, there's a, almost every continent. I don't know if we have any Antarctic, blink cell users, but we're all over the map.

So it's I don't even know that it matters whether it's European based or not.

[00:05:46] Colin Keeley: Yeah. At some scale, but then it's the question of like how much value is at risk, right? If you're really big and you're 5% of your customers on your own. Maybe you still go through with an asset purchase and you just notify them and hopefully you don't turn folks, but yeah, at some point you're just always dealing with it and, yeah, it's just a pain it's Yeah,

Like this whole process is much messier than I ever thought it would be from outside.

[00:06:10] Brent Sanders: Yeah, it is. It's too bad. I, and hopefully that's something that changes, looking at it from a best practices perspective, like if you take on a company. Informing them of a change of control. Seems like a good idea, but again, you don't want to rock the boat. If you have, contract with IBM or somebody like that.

And they just need a reason to take another look at costs. So I think as, especially as we start to see. In the future, a down cycle where, people are really trying to cut on software costs, which I think everyone is doing, but I feel like COVID has actually turned the table on it, spend and things are going to be accelerating.

Even still, everyone's trying to save money. That's there that's procurement's jam.

[00:06:51] Colin Keeley: Yeah. So do you want to talk about this a DOE lost and kind of the story.

[00:06:57] Brent Sanders: Sure. Yeah. Where should we start?

[00:06:58] Colin Keeley: So I guess start?

with introduction. We'll keep it vague, tidy all the details that matter. So back in may, I was introduced to a company through a friend in Europe and so another European company, and they had an offer on the table for pretty low multiple. And he's this is, this company is looking to sell, they have this offer on the table.

If you're interested, happy to connect you. So it's yeah. At that price, definitely want to. So we made an offer after talking with them, this may be like 20% above that offer. And that was back in may. So for PR perspective, now it's November. And we got an LOI signed and we progressed, it was really slow to get information out of them and and, they kept going back and saying, we got to go talk to our like minority investors and get it approved. It seemed to all be progressing, although very slowly. And then it came all the way to September 24th of this year, where they finally said, we're going to pass. We went to minority investors and they decided they want to test the market again and see if we could raise venture capital.

And I guess that whole time they did throw out that idea. You really want to do majority control? Do you want to just do a minority investment? It was like, no, that's not what we do. And we're only interested in majority. But this, we thought it was a dead deal. We didn't really talk about anymore.

It's like a bomber. We wasted a good amount of time on it and we were excited about it. But, recently I talked to a competitor, another fund that, acquire software businesses. And he's I know you guys were working in, on a deal in this like small country. Yeah, I just want to run it by you and see if it's the same deal, because there's probably not a lot of software companies for sale in that country and it's the same deal.

And so they seem to have passed on us and moved on to a competitor and there was no overlap when the discussions were happening, as we compared notes, but it hurts. It's a bummer for sure.

[00:08:40] Brent Sanders: My feelings were mainly hurt. That's basically, I saw your message about this and it's we did lose the deal, so that's okay. But it was, and it's likely for economic reasons, because I feel like we, Maybe in economics, if they didn't like you, Colin, they probably liked me, but no, in all seriousness it's possible.

We rubbed them the wrong way. I think that we started to get a little frustrated about how long everything took and a level of organization was difficult. Like they, we were facing this idea of asset first equity, and then trying to audit these contracts and, It just didn't, we're getting conflicting views.

People, one person would say this and other person would say something else. And it was very difficult because the person we were negotiating with was also, distanced from the business. So he would pass us to other operators and they would give us conflicting information.

So the funny thing is that wasn't the. That was definitely a red flag, but that wasn't enough of a red flag to be like, all right, let's abandon this deal. Cause we still liked it. Especially if the multiple we were looking at and it was, it seemed like a great fit for our playbook and what we could do with it.

And anyways, yeah, I wasn't personally offended. I was a little hurt, but yeah, sad to see that opportunity go away, but I think. In my head, I knew we had lost it once the velocity of conversation started to dip. I got a little nervous cause I always, we've closed deals quickly.

And those, I don't know, there's something about velocity the longer it goes though. It's like an inverse relationship to its ability to close. It's just it takes way too long.

[00:10:18] Colin Keeley: Absolutely. Yeah. I think time kills deals like the longer something is out there, the more likelihood there is that something pops up and kills it. So I don't know what killed it. In this case, my three guesses would be price. They didn't like us or they didn't like our plan. So I do think our price was low, but it was above.

And so I guess the way to look at is they did this to the previous offer as well. They found an offer that was higher. So I think that could be the case here. I don't know what the offer is on the table right now, but I would guess it's higher than ours. They didn't like us, which is possible, although I don't think we did anything that offensive.

So it seems unlikely or they didn't like our. So our plan, basically, as we told the majority owner, was that they just hired a new CEO who, I think it says something, if you, on a company RA you hire a new CEO and then you're like, now's the time to sell it. I don't want to get out of here.

So our plan was basically to be like, let that new CEO go and hire a new one. Which seemed obvious, but maybe they didn't like that. And maybe they're more attached than we realized.

[00:11:18] Brent Sanders: Yeah. If we lost some price, that's okay. I don't feel bad about it. That's all, that's good for them. I'm happy they are progressing on. What do you think? So looking at it retrospectively, like what went well, I feel like we, the tech side of things, the tech diligence and the tech sort of diving into it was, that was well organized.

It. It was a real clear case of the original founder, got fed up and, had done everything. They could being the individual like CTO. And then they brought in somebody new and, it was a revitalized investment. It's just, it was very, I don't want to say typical, but like understandable and, getting information.

them was on the tech side was great. That worked really well. What I think didn't work as well was just trying to unravel once we dug into this realization that we need to start a dialogue with every customer, which I think would have been, I was like, that's fine. We can do that. And even if some turn we're still okay with it.

Once we start getting those, trying to uncover those contracts, it was, it started to get very vague because there's, there's entries in a database of here are our customers, but then there's like these written contracts that we need to dig through in those and sift through. And those were like very unclear.

And, that was once we started going through that, I was like, ah, I don't know. And then things really started to slow down at that point.

[00:12:39] Colin Keeley: This is something I struggle with. And I don't know what the answer is of sometimes it's just really hard to get information out of founders or whoever's selling the business and you can't twist their arm. You can't make them give you basic information. I don't know how to deal with that.

And it could just like, we've move at their pace and it automatically slows down deals.

[00:12:58] Brent Sanders: Yeah, I wonder, I guess it's communication, right? It's like communication style and that's just going to jive differently with everybody. And they've got their own, especially. I'll say this, like across the pond, it's just a different culture. Whatever country it is, it's just a different culture, different society, and maybe different values and also different time zones.

That also plays a factor. Unfortunately, I love, I work with people all over different time zones and I love when it works well, but I hate when it doesn't, it's just so painful. If it's. I don't know if you, I don't know if you like getting slack messages at three 30 in the morning that are like, Hey, can you chat?

It's no, I can't. Some people will prioritize that and make it work. I am not, I w I'm a sleeper. I need my sleep.

[00:13:39] Colin Keeley: Yeah, I never sacrifice my sleep, but, this week, taken a number of calls, after dinner time, just cause that's what it works out with, with negotiating, with people, different parts of the world.

[00:13:48] Brent Sanders: Which I love. That's probably one of my favorite things about doing this work is the international aspect of it. Like in, from both the deal side and the tech side it's that actually Jew, I don't know why, but that part of it really juices me up. And I, the idea of. Getting on a plane and visiting these people too.

I can't wait until that becomes, accessible. Who knows when that'll happen. But, yeah, our borders generally opened, by the way. I know this is a little off topic, but it's

[00:14:14] Colin Keeley: Yeah, I went to Ireland and that's all open most or all of Europe is opened. I'm going to Thailand in January, February. I don't know if I told you that we booked their flights. That's just opened up January 1st.

[00:14:26] Brent Sanders: Is that your honey?

[00:14:28] Colin Keeley: Yeah, much delayed honeymoon. So we're going there for two weeks booked.

Our flights can take 26 hours, I think, to go there, which is just nuts. It's going to be a long time on a plane, but we figured like this is the time to do it. It's eight hours from Japan. It's so this is about the most remote you could go. We don't have kids yet. So take advantage of it.

[00:14:49] Brent Sanders: That's awesome. Yeah. Travel. You're traveling your ass off. That's the best. We did a lot of traveling before kids and, we never took a honeymoon. We did a lot of traveling and honeymoon like vacations. We definitely prioritize travel and I was always, I still have the mindset like that's until I, it gets, I should say, that's what you spend your money on is like, Travel, those experiences are priceless. So enjoy it. I'm jealous and yeah, I'm like getting a little bit of the cabin fever. I'm ready to go. I would love to go visit some of the people that I work with on the regular. They're all over Europe, all over in a different parts of the world. Just be, I don't know why that seems like fun to me.

It's Hey, let's go spend a weekend in south America or Brazil or wherever.

[00:15:32] Colin Keeley: I do it. I have flights are super cheap still. I do think there's something with a, so after nine 11 security really tightened, it never really loosened again. I think this is a situation where Africa. All this, like healthcare, screening stuff is really tightening up. And I feel like it's never going to go away again.

Whereas like I got tested maybe three times, even though I'm, triple vaccinated to go to Ireland. And I feel like that's just going to be reality of like constantly getting tests to fly anywhere.

[00:16:00] Brent Sanders: So it's funny when I, before COVID there were SARS is related. I believe it's a respiratory disease and traveling in Japan, which I've been a handful of times is like they were, AUC mask wearing there. And it's always been that way. But, They were doing the medical screening.

They had the cameras with the thermal imaging and before COVID I was like, this is crazy. This is so weird. Why would, it seems a little extreme and then you see, what can actually happen in the, obviously the population density is much greater on a small island.

[00:16:31] Colin Keeley: Yeah, I think that's going to be a reality of like mass and testing and it sucks everything that's Like.

more and more friction to travel. I don't think is great for society, but I think that's what the reality we're looking at now.

[00:16:44] Brent Sanders: So looking, going back to the steel that we lost, like the good, we talked about the good and the bad, what would you do on the next deal? What would be the one point of improvement? And I'll give you my answer right off the bat, which is, I think. Have a much clearer deadline, like set deadlines of Hey, here's our typical schedule.

And it's almost like going through the RFP process. It's like from LOI to maybe creating other milestones of we need to finish tech diligence here. We need to finish contract diligence here and having a little bit more structured and then applying dates to those things, because I think. It probably adds a little bit more pressure and it would probably just maybe it'll turn people off.

However, I think we won't go, and it's not like we wasted a ton of time. We just, the duration of time. It's not like we were only working on buildings for four months. It was just lagging. But to me, setting timelines would just separate these misfires, I think

[00:17:42] Colin Keeley: I liked the idea of providing the structure, right? Because most entrepreneurs only go through this, once or maybe a couple of times in their life. And we go through it all the time. So we should be the leaders here of this is how it works. This is the dates we'd like to hit. My hiccup there.

People do these like exploding allies. And they said this LOI is only good for five days or something like that. And it's always bullshit. If you want the deal, now you're going to want it in seven days. And so you could set those kind of arbitrary deadlines and maybe that pushes things along.

But it is mostly made up to me. And I guess, I think you're definitely right. That we are going maybe too much on the entrepreneur. Like schedule and being super founder friendly, but it puts us in this weird spot where things just like moving at a glacial pace.

[00:18:28] Brent Sanders: Yeah, Thing that strikes me as if we're working with somebody and they're owner operator and they're trying to run their business and they're growing their business and they're, we've, we have other deals like this, where it's Hey. We're launching a new part of our product.

Let's pick up the conversation in the next quarter or next month. And that's okay though. Obviously those aren't under LOI or anything, but still like once in LOI is signed, I feel like we should include a schedule of some sort around it, because I think after 30 days, if there's like a point. We don't have certain things or I don't know.

It's hard to know because every business is a little bit of a snowflake in terms of what we'll need and what arises because, do we need, do we have all written contracts? Does this business even have written contracts? It's different for every.

[00:19:10] Colin Keeley: Yeah. And I'd love to contrast this with building a relationship with a founder over years is fine. And that's awesome. It's really fun to connect with people. And this is definitely a long-term game situation where a founder may not be ready to sell today, but maybe in two years, they will be.

And that's cool. This is much more like when an acquisition is going to happen or an LOI assigned, like how do you actually get it across the finish line? Because it seems like a lot of. No slow playing so much.

[00:19:34] Brent Sanders: Yeah. Lessons learned. It's been, I wouldn't do it again any other way. I'm glad I'm, now that we've come full circle on this and flat, it happened how it happened. I would love to have a, own that business, but, this is I'm glad we didn't kinda go down the path and then go any further.

Cause it's we avoided, I guess they avoided it for us. We didn't go down this path and I'm okay.

[00:19:56] Colin Keeley: Yeah, I guess the finish the story out. So our competitor was, very kind is I, we don't want to step on your toes if it's your deal, it's your deal. Like we'll back off. And I was just like in our minds, or at least in my mind the deal was dead. So it's it was already dead.

We weren't like competitive. We weren't stepping on each other's toes. So I was just like, I wish you the best good luck. Hopefully it works out for you.

[00:20:17] Brent Sanders: And that's how cool this space. I got to say, that's awesome to, sure. The intelligence around and understanding like what happened, in a prior, negotiation, that's helpful, but I appreciate that people are at least would even offer something like that. It's not so cutthroat as the regular PE.

[00:20:34] Colin Keeley: Yeah, I thought it was extraordinarily kind. And I guess it is like a small space. It's crazy. A competitor that we know was competing for a deal like across the world with us. And I guess that is, just the reality of internet based businesses.

[00:20:48] Brent Sanders: So cool. That's the part I love. Yeah. It's a small world, right? It's not that big. If you remove geography, speaking of which you have any other internet news that are popping off on Twitter.

[00:20:57] Colin Keeley: So the big one, it sounds ridiculous. I don't know if you've heard anything about this, but constitution Dow, the auction happened last night.

[00:21:04] Brent Sanders: Oh, yeah. Yeah. Did they get it?

[00:21:06] Colin Keeley: So we did not get it.

[00:21:07] Brent Sanders: Oh, we write nice.

[00:21:09] Colin Keeley: So the situation, I just, some backstory, one of the 11 copies of the constitution, went up for sale with Sotheby's and the estimated price was around 20 million and the auction happened last night, roughly a week ago.

Some folks on Twitter's wouldn't it be cool if we raised a bunch of money in a Dao, a decentralized autonomous organization and bought it. And so nothing like this has ever happened before. And the goal was to raise 20 million, they did it, they raised over 40 million. In this, like you basically just connect your theory and wallet and you give them money.

And it was really like slick process. So nothing like this of this scale has ever happened before, where it's like a crowdfunding with crypto of this pace. And so 40 plus million at the auction happened last night. I watched. It ended, it started at 30, it went for 41 and it was really unclear. I guess I've never watched one of these, like high-end art auctions before, but it's just people taking phone calls and being like, all right, we bid.

And so it doesn't say like, all right, winner is, constitution doubt. So we thought we won because I knew there was at least 40 million in the. But apparently with fees and all this stuff, we didn't have enough money. So someone outbid us and the little intricacies there of Sotheby's required all the theories to be turned into cash at 6:00 AM that morning.

So there was no ability for some wealthy whale to be like, all backstop, you, you need 10 more million dollars. Are you covered? So though we just kinda got screwed where maybe the counterparty new. How much money we had. And then as soon as the one above it, it was no ability to bid higher and we lost

[00:22:49] Brent Sanders: That's it, is there any way that this story could be spun that like you can have the constitution at the bid, but oh wait, you don't have the gas fees. Sorry.

[00:22:59] Colin Keeley: that's basically what happened. Yes, exactly.

[00:23:01] Brent Sanders: That is so what do they say, foisted by my own petard, it's That is awesome. It's, so number one, really cool to see that, there's that many degenerates out there willing to throw a couple of hundred ether or a couple hundred bucks at this, but I checked it out. I, what was the platform called?

I forget, but it was cool. It was really neat. I liked, they had a pop-up that said, if you give us this money, there's a chance that you can totally lose it all. And I'm not sure what the intention was. Maybe it's more of a security thing, but.

[00:23:27] Colin Keeley: It is, so I can talk about this it's the sec. So they couldn't tokenize the ownership of it. You just had like tokenized control and that some distinction with sec of I don't know. But it's definitely bending, really bending to the point of breaking the laws of the sec to do this kind of thing, but.

I think this is super interesting. Oh, the platform is called Juice box.

[00:23:51] Brent Sanders: Juice box. Yeah.

[00:23:53] Colin Keeley: And so it's super easy way to just drop it there, him. But I don't know what else this is gonna tackle. If you could raise this much capital this quickly, like a lot of private businesses, a lot of passionate fan bases can buy out a lot of interesting things and then, take ownership of it.

And the fan base owns it makes decisions from there.

[00:24:09] Brent Sanders: It sounds like the green bay Packers to me. So like sports teams, I could totally see this with sports teams, if you got everybody to jeez, if you think about what people pay for football tickets, like it's two to $300 for an NFL ticket to one game, one seat, one game in a, in an okay spot.

And so the fact that, how many people, I think I did see that the average was around $200 per and there was like 17,000 people. Does that math make sense?

[00:24:37] Colin Keeley: I don't know that the total of people that contributed, I would guess it's on that scale. I know last night there were roughly 10,000 people watching on YouTube, this whole auction.

[00:24:45] Brent Sanders: My math's wrong though. So it's obviously right. 17,000 times two 50, like an order of magnitude low on that one. But. If you've got 170,000 people to give you 250 bucks, it looks like you could have, I don't know what sports teams trade for these days though, but think of it this way. What if, it would throw the decentralized part of this is really interesting.

The, we talked about this on a prior podcast of is money just going to rule everything though. Is there a. I guess it already does. If you think about it, the people that buy these teams, they make these decisions. They're the ones making the final calls, but there are things like salary caps, and this, my brain was going to okay, you're going to get like the New York Yankees of Dow's that, I love that idea though. If. Convert these to, each of these teams into their own organizations. And then you've got 42 million to work with. You could feel the team with a, respectable coach and.

[00:25:37] Colin Keeley: I bet that's like the next step here. You're not going to buy an NFL or NBA team, but there's a lot of I don't know, third tier soccer teams. They, you could buy out for Like tens of millions of dollars. That would be

[00:25:47] Brent Sanders: Like a racing team. I could believe that if you were in a racing or something, yeah. There's just fanatics out there and that I could, the next thing is for the nerds is probably films like it, which is already when Kickstarter came out that I think the latest super troopers movie was mostly crowdfunded.

Which I don't know if the world needed to see or not. I'm a big super troopers fan, so I was happy to see it happen. But, yeah, I could see, cultural pieces like this, where you have, really excited fan base. And if you can get, 170,000 people to give you 200 bucks, that's all they need 250 bucks.

I should say. You can get things done.

[00:26:20] Colin Keeley: Yeah. You have an economic incentive if you own one of these NFTs. So you could do like a crypto punk movie and everyone could participate and that would probably increase the value of everyone's crypto bunks, or anything along those lines would be

[00:26:33] Brent Sanders: So speaking of which there's been some press about it's on Bloomberg or something, just these tanking value of the NFTs, which I think we talked about a little bit. It never has really made a ton of sense. I was loved and I don't spend enough time on Twitter, but I love when people comment on NFT.

Materials. And it's a pic, it's somebody talking about the, oh, I just bought this NFT. And then they show somebody right. Clicking it and hitting save as they're like now it's mine. It's like never quite understood and still don't really understand. I understand what an NFT is. I don't understand the appeal, other than speculative value, but it sounds like a lot of these entities are

[00:27:10] Colin Keeley: yeah. Many it's like our world, but yeah, a lot of them, they're not productive assets, so they're not producing anything. It's just a big bed of.

Hopefully someone buys us for more money than I did. And so Yeah.

trillions of NFTs, they're not all like super rare. Most of them are going to zero.

The originals of some form will be there like a expensive art and we'll appreciate it in time. The 99% to probably going to zero.

[00:27:31] Brent Sanders: Easy come, easy go. Is that what they say?

[00:27:34] Colin Keeley: Yeah, I'm not in that world either. I own my a dot eith domain, but that's about it and NFTs for me.

[00:27:41] Brent Sanders: Have you ever been a, were you ever a collector? Cause this is what it seems to be geared towards or like the Gary V's of the world of the baseball card junkies, the collectible fans.

[00:27:51] Colin Keeley: No. I'm very much like a minimalist. Like I do like art and appreciate art, but I am not a collector of anything. I'd love to own as few possessions as possible.

[00:28:00] Brent Sanders: That's wise? No, never. Never, I was always the kid that wanted to open the package and play with the toy, not stick it on the shelf and save it for 20 years or whatever. I had a couple of friends that were really into that world and they would get, tables at card shows. They were just very, at a young age, they're very economically minded.

I was like, let's just enjoy it. Let's play. Let's like use the, let's use the stuff, let's break it and ruin it. Let's do whatever. But, I think it's a certain mindset it's you just are built that way in a sense, or you get off on that or you get off on the trading of things. And that's cool.

I really liked that. But, on the art side, I love art. Spend, I don't know why I live in a digital world. I spend most of my time on the computer, but I really do enjoy, tangible art hung on a wall, or I love sculptures. That's that to me. I have multiple bronze sculptures that I have on my wishlist, but it's just out of bronze.

It starts at such a high price point, but I'm a big fan of art. Definitely got a lot all over the house and I bought some. Over the years and just collected it. But, it's one of those things that I feel like I, I can give to my children, when I pass away and they have a home and they can think of me and associated like art does a lot of funky things.

I don't know. I went to art Basel once, and it feels very similar to that. The NFT craze, these are the, those two worlds colliding where it's like this feverish. Almost like Las Vegas pays for it's like people have funny money, they, I shouldn't say Vegas in our bottles are really the same thing, but, this like super high-end world of trading these things where it's like, the things don't even matter, but the tangible art always, it always to me struck me that like people were spending money to make them feel cool.

Which if that does it for you, why not? And you have the money to spend it. I don't see. There's that's what clothing is. I've talked to my wife about this. Like she, she bought an expensive purse once and we dug it and she's I feel really bad that I'm buying this. It's a lot of money and it's just a thing and it's stupid, but I want it.

And it makes me feel cool. And it's Hey, if it does that, it's worth it to you. Why not? So I guess that's the allure of NFTs makes people feel cool.

[00:30:07] Colin Keeley: So the cool.

thing about art is it's not really spending money. It is like good art is an investment like asset class that actually performs really well. So it's more like putting your capital, your investment in a different form that you can appreciate that's in your house. So like that form of art investing makes a lot of.

And I think NFTE people would say that their digital arts is on that same spectrum, that in the future, there'll be awesome ways to display it. I think they're right. I think there's digital forms of most other assets. I don't know why art would be different, but Yeah. I, think the vast majority is John and, some of it would be cool and really appreciate it like normal arts, but most will not.

[00:30:45] Brent Sanders: I honestly thought about starting a mint NFTs, just to Try it I'll go through the process. Like I'm such a, I think I've talked about this for, I'm such a, like a, I don't get things to use them. I'd probably do them, so I was just, I'm not an artist by any means, but just going through what goes into minting one and I'm not trying to sell it or anything, but it would be cool to go through that process.

So that's one thing I want to try out in the next week or two.

[00:31:08] Colin Keeley: I've done it, it's really easy, actually. I did it just cause it was like, how do people do this all the time? Yeah, it's pretty quick. There's some platforms that let you do it for free others. You have to pay a gas fee. And the ones that are free, it's like, it's not really properly minted until someone purchased it.

And then it's you have to be the guests. You then.

[00:31:25] Brent Sanders: got it. with going back to the constitution, do you get your money back?

[00:31:30] Colin Keeley: Yes. You could log back in to rainbow or whatever it's called and, grab your theory. There's some discussion of like you got, 40 million. Some people are going to leave it in there. What else can you do? I thought an interesting idea today was like, can you become like the NRA of crypto where you're like, just say activist organization for crypto and constitution.

Dal is like a perfect name for that.

[00:31:51] Brent Sanders: Just turn into a lobbying organizations. Yeah, I suppose so.

[00:31:56] Colin Keeley: But I'm going to take my money back most likely, unless someone has a really cool idea. So I lose out on my gas fees cause it was all on Ethereum and a little expensive, but I participated in a fun cultural event.

[00:32:08] Brent Sanders: Sounds good. Sounds good. That's, that's what's going on the internet these days. What's next we'll find out next week,

[00:32:13] Colin Keeley: so next week. All right, take care, everyone.

[00:32:15] Brent Sanders: Thanks for listening.