Episode 67: NFT Investing in 2022 with Les Borsai of Wave Financial

Ben Lakoff, CFA
April 25, 2022
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Today's interview is with Les Borsai

Les is a GP at NFT Fund from Wave Financial. I’ve known Les for some time now and know that he’s quite an early adopter in the crypto world, he’s deep in the NFT space and we chat all about the state of the NFT market and some of the possible paths for it to go from here.

Enjoy this podcast episode with Les of Wave Financial!

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Show Notes

0:00:00  Welcome and context    

0:02:47  What is your background?    

0:06:46  What is the state of the NFT market right now?    

0:10:05  What are some of the blind spots of crypto?    

0:14:10  What are you doing now at Wave Financial?    

0:17:31  How is the NFT fund operated like?    

0:20:04  What do you do to get people to enter crypto?    

0:22:10  How do you determine NFT investability?    

0:29:20  Is there any sort of style that the fund is drawn to?  

0:31:30  What do you think about music NFTs?    

0:34:40  What type of regulation do NFTs need?    

0:38:21  What gets you most excited right now?    

0:43:16  Are you worried of someone monitoring your fund activities?    

0:48:16  Advice for first time NFT investors    

0:52:26  Where can people find out more about you?

Show Links

Les on Twitter

Wave Financial

Helpful other Alt Asset Articles

Episode Transcript

[00:00:00] Ben: Welcome to the alt asset allocationpodcast, exploring alternative investment opportunities available to theeveryday investor. Here's your host Ben Lakoff. Hello and welcome to the altsasset allocation podcast. Today's interview is with less side less is a GP atNFT fund from wave financial here.

I've known Les for quite some time now and know that he's quitean early adopter in the crypto world and he is very deep in the NFT space. Inthis episode, we chat all about the state of the NFT market and some of thepossible paths for it to go from. I'm also starting to do a lot of thesepodcasts live on Twitter spaces.

I do them from my personal account at Ben lake off, as well asthe podcast account at invest in alts. Hope you can join one of these and askquestions. I'm cutting out the questions for now for the podcast forum, butmaybe I'll add those in a bit later, but please join their super. Before youlisten, please don't forget to like, or subscribe to the podcast or even betterleave a review.

If you're watching this on YouTube, please subscribe to thechannel and, or give the video a thumbs up. This helps more people find thepodcast and really keeps this thing going. All right. Enjoy this podcastepisode with less of way of financial on all things nFT.

Less welcome to the all to asset allocation podcast.

Excited to have you on.

[00:01:34] Les: I'm excited to actually do this with youbecause you know how much I love everything you're involved. Yeah. Thank you,

[00:01:39] Ben: sir. It's been well, I've known you for awhile now. I mean, I met you right in the middle of COVID. I remember we hadour meeting and you had me sit about 25 feet away from you on the other side ofthe table for safety purposes with COVID.

I'm glad that the next time we run into each other, it won't benearly. Tara like peak fear, a part of COVID that's for sure.

[00:02:04] Les: It was funny. The funny thing is, is howmuch, you know, in my head everything's changed. I took a vacation thisweekend. You know, if you want to call Las Vegas vacation And I don't thinkanything's changed with the whole COVID thing, but I sure felt a lot moresecure being around a bunch of drunk people.


[00:02:22] Ben: it's true. I mean, it's well, it's, it'scrazy. Wherever you are. Kind of berries in the How people feel about it, butyeah, no, that's, that's that's for sure. Well, I, at risk of going off on atangent on COVID for a long time, let's let's kick this thing off a little bit,intro about you and how you got into the NMT world, where you are.

[00:02:46] Les: You know, it's so funny, you know, I'vetold this story a few times and I'm wondering if it's just going to bore theshit out of people pretty soon. But stories, the story, my background wasprimarily in entertainment. And I think, you know, it's funny when you, whenyou're a young. Person, all you want to do is figure out a way to get intoentertainment or at least, you know, in 1988 or 1989, it was like, oh, thosepeople are going to a Grammy show that looks like fun.

How do I get into that business? And I guess the answer, mycase was you run away from home and try to figure out how to make a living byborrowing warehouses and throwing parties, because that seemed like the bestway to make a living at the time. Kind of rolls into. Of course, you know, Iwas doing something a little bit different, so I got hired by concert promotioncompany, because that's what they care about, better business models.

That was my first disruption, I suppose, but, you know, as Ikind of stayed in the, in the music business and watched it change and, youknow, I watched it not really embraced. And this was like, you know, watchingthings like the Napster guys come around and just not be supported. Peoplecared more about the content that they owned at these labels and wanting todefend it through holding back.

And I always thought it would've been more interesting to getto the innovation quicker. And I think, you know, the fact that it took so longto get these streaming services was. The fault of the labels and, you know, thepeople who didn't want to embrace this innovation and that always pissed me offbecause I thought they should've and they were just holding back this greatthing and was a long answer.

How you got into NFTs, but I think it's important because itreally crafted my thinking. So after kind of all the music stuff, it was 2013and I didn't want to spend $200 on Bitcoin. It was far too risky. So I said,I'm going to find another one. And I spent a lot of time kind of staying up andlooking at Reddit and Reddit groups.

And somehow I discovered. This kid. I think his name was JaredSims. I'd have to go back and check, but he had created this wallet called purecover and it was the first XRP wallet. So I met Jared and I ended up gettingthe chance to meet Chris Larson. And somehow through just pure charm, Iconvinced him to let me be an advisor.

Which is looking better these days, considering their positionsimproving. And then in 2014, I did the theory in pre-sale and again, you know,the component here, that's really comparable to the music, businessescommunity. And I started building a community and crypto and in 17 came alongand we saw the ICO is that I got involved in.

The crypto punk moment happened. So I was fortunate enough toget one of those and then fortunate enough to lose it. Although my friends whoI told, you know, to buy a few dead so my first purchase was a crypto punk. Mysecond purchase was a whole bunch of crypto kitties. I didn't lose those. Butthey weren't very good.

So it's. Point when people figure out the 7 21 standard and thecrypto kitty connection, maybe there'll be some value there, but that's how Igot into it. And really, it was just trolling online for lots of hours andfiguring out what was out there.

[00:06:15] Ben: Oh yeah. I say doing weird crypto thingswith my internet friends, you know, those late night sessions, but that'ssometimes when you find out some really, really uncovered gyms amazingbackstory and kind of how, how you ended up where you are now looking at theNFT landscape, knowing that you've been through this speculate.

Euphoria of 2017. I mean, let's, let's start off with just thestate of the NFT market right now. And this is being recorded end of March,2022.

[00:06:51] Les: Well, I mean, it's a good day for me totalk about the NFTE market, because I was fortunate enough to buy apps and, youknow, they are the gift that continues giving and I, and I love what they'redoing.

You know, the fact that so much has happened with them. Overthe last handful of weeks, whether it's, you know, the larval labs purchaseand, and that's really cool because it's going to be interesting to see whatthey do with the rights with me, bets in the punks. Obviously ape coin, thething everyone's talking about this week the Anna Malco component, I mean, it'sjust so thought out and I think it's just going to help the space and it's justso great to be able to see.

You know how different it is today from 17? I mean, I think alot of people had questions about what this was about and I just look at itkind of vastly different, at least I think I do tell myself I do. But I, I'mnot really super, super interested in a lot of the, one of ones necessarily atthis point.

But I'm kind of interested in the economy as a whole and thekind of vertical integration from different companies and different platformsto create the single everything we look at. And I could talk about that forhours, but I'll just pause there before I go too deep. Yeah.

[00:08:11] Ben: Yeah, no, there's, there's a ton going onand for the listeners, so boardy yacht club The company behind them, you willlabs ended up buying plunks, which was like the iconic PFP of the industry, andthen launched a token shortly thereafter.

So I think I read somewhere that every board ape purchase. Sooriginally for 0.08 Eve ended up being a. Almost $500,000 into this, like thegift that keeps giving. So w because of the mutant and, and the ape claim andall of this. So it's, these are real life changing sums of money for people.I'm curious, have you seen the YouTube video line goes up

[00:08:56] Les: which YouTube videos.

[00:08:58] Ben: It's called either line goes up or numbergoes up. It was like a skeptics take on crypto and then FTS. No, I,

[00:09:07] Les: you know, I don't really watch theskeptics take because I mean, I just hear it so often and you know, too much ofa good thing. I mean, I try to limit my skeptics to. So, no, no.

[00:09:19] Ben: Well, I mean, so for me, I, I'm kind ofalways stuck in my echo chamber of true believers, people that believe in thisspace.

So I, I like to hear people that say, you know, this whole thingis hogwash. It has a, a bit of like the financialization of everything focusingon price. To me, you know, these valid, valid concerns, but I'm curious, like,from your perspective being excited about the space overall, I mean, what getsyou, you talked about the vertical integration, but w where could we be?

Like our blind spots and this utopian vision of crypto eats theworld sort of.

[00:09:58] Les: I mean, look there, I think the blindspots, you know, aren't really blind spots. I think we know the volatility isan issue. We know, you know, there's regulatory issues. We know like othermarkets there's, you know, a ton of market issues.

But I don't look at that either. And it's funny because as I'vegotten a little bit older, I think I've become more of an optimist and, youknow, being a guy, you know, Left home went well, I think, you know, it wasfunny. I was talking to my mom. She said I actually left home at 14 the firsttime. So I think, you know, always having that kind of rebellious spirit, youknow, you, when we go back and kind of really take a look at like Eric Hughesand Tim made, you know, the cypherpunk manifesto and all that stuff, which Ireally, you know, for, you know, I'm always drawn to that rebellion.

And I take a look at what's happening today and. Wall streetbats was that moment for me. The fact that someone gamified banking or a groupon Reddit, you know, gamified banking to go long you know, on the hedge funds.I thought that was funny. Maybe not just from people, but I really thought itwas interesting.

And it was funny because I don't, I don't think we've ever seenthat. You know, a group of people kind of the hive mind is Jeep says. You know,coming together collectively to, to gamified banking. And when I take a look atthe economy that's being built that's why the PFP. Drops are so interesting tome.

It's the volume of what's being dropped in the secondary salesand the air drops. And when we take a look at that kind of expanding you know,into larger geographies cross chain, it's really, really robust. So when youtalk about, you know, what are the pitfalls. That hit my blind spot. Well, Ikind of look at how fast innovation is happening.

What this kind of robust economy that's been created. So thatmakes me wonder pretty closely about the regulatory stuff. And if it has theability to catch up, which it doesn't, you know, in the same way, because. Wehave layer ones here and layer twos and you know, all the cross chain stuff.And. Play to earn and stable coins and soon create to earn and everything elsethat's coming.

And it's global. And it goes back to your skeptics comment. Thefact of the matter is, is everyone thought Bitcoin was going away because only,you know, vagabonds, thief, some terrorists used it along with cash, of course,but the fact is Bitcoin has had to weather some pretty incredible situations,whether it's.

Being illegal in China, along with other cryptocurrencies orMt. Gox. And it seemed to weather all of that. So when you ask about the blindspots, I mean, what are the other blind spots? The technology completelybreaking down? I think we know what the blind spots are. I mean, currency'sbeen around a long time.


[00:13:07] Ben: yeah, and it has no, and I mean, youbring up a great point. The whole gamification of banking, the us versus themis super, super powerful. And I almost see crypto as like an entire movementcentered around that. It's like rebuild the banking system on this, this morefair decentralized version. So it's very, very powerful.

You know, I, I actually, I think we should take a half stepback. We talked about your background and how you got into the space, but Ithink highly relevant for this conversation would be little bit more about whatyou're doing now with wave financial and in that.

[00:13:47] Les: Well, it's interesting, you know, beingan entertainment, as long as I've been in entertainment, I think it's alwayseveryone's goal who is an entertainment to get the fuck out.

And I think I tried to do that for a long time. So, you know,when all my friend always used to say, Hey, last, if the music business doesn'twork out, don't worry. There's always the movie business. And, you know, Forme, it was just, I wanted to do something that was completely different andit's going to sound like a joke in some ways, but finance was you know, being amanager, you, you do think about finance for an artist and what they're doing,what their future looks like.

This was much more interesting because. It was just somethingthat never done. And, you know, I partnered with David Siemer and David's teamor had done it. And we had a friendship before and we started a company calledwave financial and out of the box, we were regulated as an RIA in California.

And then the sec, and really what wave is, is. Venture fundsthat do early seed stage investment in blockchain and crypto companies. Andwe've been doing that since the end of 2017 and ecosystem fund for Cardonawhich really. You know, G goes to and speaks to all of the interesting thingsare happening in that world.

And then treasury management for high net worth some protocolswhich we've been really successful at. That's been fun. And then creating funproducts really just. Financial products that are, you know, based on Bitcoinor ether or other native tokens that are wrapped in a fund structure that aremore traditional in nature.

And most recently we launched the NFT fund, which I didn'treally want to do. But my partners, Ben and Dave said, you should really dothis. And I'm like, why I don't get it? What's it have to do with what we do.And finally, they're like, do we need to explain to you that arts and asset,you're an asset manager it right.

And we ended up doing it and, you know, In a different way.Vege surfer and Jeeves, and these guys that are so important to the wholeecosystem, you know, do a fine job of running that product. And I mean, I'mjust kind of obsessed by it because. Stay up all night looking at this stuff,and I'm just fascinated with what's coming next, but these guys really do, andit was just a different way to approach it, you know, to have these guys at thehelm that really understood.

What was coming next and what projects are really good. And Ithink that's why we're having so much success. I mean, Lord knows it's not me.

[00:16:31] Ben: Well, I, with the NFT fund in particular,it's talk about the investment thesis or style or how that's kind of run from afun perspective.

[00:16:45] Les: Well, I mean, I always loved thecollectible component and so it's 70% collectibles.

It's 30% give or take equity. You know, liquid equitiescollectible side. And this is the good thing about, you know, beingcollaborative with people. You know, I would say badge, you know, likes some ofthe fine arts stuff better, which were tried, like, you know, I, I definitelylove the average Sano stuff.

And I definitely love some of the empowerment stuff that he'sdrawn to because that's a big tenant of all this for me to sell. Art in thisworld because it is art too. It's about building community and that's the thingyou can't do with the traditional art world. So if you build a community, itdoesn't matter who you are.

You can actually do what you love and you know, this is avehicle to help you bolster your career and make some extra money. And I thinkthat's really cool. I, I guess I like the projects that are a little more wackyand I think definitely I'm a little more scattered. What's the things that Ilike.

I don't know. I think I just like buying shit, to be honestwith you. I might not even Pete that I like any of it, you know, it's like, oh,Hey, those crypto covens. They're cool. I get some of those await those killergirlfriends. No, no small brains. I was like,

[00:18:10] Ben: So some of the things you hear yourselfsaying, and then if

[00:18:13] Les: 2 50, 3 years old, I'm 53 years old.

And I think I just said, oh yeah, those killer girlfriends.Yeah. They're awesome. Because they're like Anna Mae assassins.

[00:18:26] Ben: I found that. Talk to telling my buddy,you know, to buy a fluff because then you can claim a thingy and that gets youa free mint into the party bear, which will unlock the boroughs.

And it's like, what the hell did I

[00:18:37] Les: just say, man? Well, I guess, I guess ifyou're going to go totally vertical, what you forgot is ASM and the brain, buthe's

[00:18:45] Ben: paying attention. Yeah. Yeah. And then,you know, of course you'll, you'll be able to get your seeker and drugreceipts.

[00:18:53] Les: That's all. And how sad is it out ofeverything we just met?

Yeah, I have multiples of all of them. So it's insane.

[00:19:00] Ben: Yeah. So I I'm curious when talking toinvestors, like, obviously there's a bit of, if they don't get it, then thefunds, not for them, I'm sure. But like pull over the line of if they justdon't get it, because I still have those conversations and they say, you know,I've listened to your podcasts.

I know, but I just don't get it. What

[00:19:22] Les: do you, it's exactly the opposite. And tobe honest with you, I mean, to get, tell you where my head's at. All my friendswere pissed. I didn't tell them about like the wave fund. And I'm like, Ididn't want to take your money. They're like, we're adults, we'll give youmoney.

If we want to give it to you, it's not your call. So, you know,when I'm talking to someone who may or may not want to invest, it's not a pitchfor me. I, you know, I really don't give a shit. Which is counter-intuitive,but I just want to educate. You know, with what I know and, and tell them I maybe right.

I may be wrong, but this is the way I see it. And I thinkcuriosity and the fact that I spend so much time. Learning and looking atwhat's happening is the part that really energizes people to be involved andinvest. I mean, I never dreamt that this fast, it would be up as much as it is.And we would have protocols invested in the fund and corporate corporatesinvest.

I said it twice because I still can't kind of believe it. Youknow, but when I asked them and this is a traditional company, it wasn't acrypto company. And I'm like, well, why do you, why? And they're like, becausewe don't know. So it's exactly the opposite. It's what they don't know thatmakes them into.


[00:20:45] Ben: a fair bit of trust, right? They would beyour reputation and the fund. They, they recognize that you wouldn't just jumpright into this thing without thinking through it a little bit more closelythan number go up. We need a slice,

[00:21:02] Les: right? Yeah. Now to solve, let them know.I would just jump into it because it looked cool.

[00:21:09] Ben: Well, so I mean, on that topic, like.Everybody's a bull market genius. The, the NFT world is shifting and tons oflike, you know, whatever the NFT market is alive and dies every other week. Butlet's just pretend that it's still a raging bull market when looking at collectioncollectibles, which make up like 70% of the fund.

How do you determine investability duration of holding when tosell? Like, what are, oh, I've got this isn't this

[00:21:43] Les: is an easy answer. You know, look, Imean, in terms of the criteria, a lot of the DNA of our company is venture. So.The guys that are understand diligence. You look at the team, you can get apretty good read on a team that's had success and a team that actually has athoughtful roadmap with good engineers.

You know, that that part is kind of just arithmetic. I thinkwhen we go back. This thesis of community. You know, when I was young, I wastalking to someone about this yesterday, you know, I got to see you guys areall too young for this, but Nirvana at the Roxy. And you know, the ability tosee Kurt Cobain played for 500 people before he played at the forum was really,really cool.

And it was just because I was part of the community that toldme it was happening and. I do believe like in this new world, the metaverse andIRL, you know, web three, I mean, there really are no walls up. It's all of thesame thing in some ways. And to live in discord it's not unlike going to someof those clubs, you know, where you socialize, you're just doing it online.

Or, you know, when you have these immersive experiences andshow off your, on cyber gallery, all of that's. It's just a new way ofthinking, but it's still the same behavior. We adapted during COVID really wellto taking meetings on zoom. And after a while it felt normal, it didn't feelany different.

And for someone like me that loves to isolate it was actuallybetter. So I think being part of the community and connecting with the peoplethat are creating that you're drawing. Is the way we really look at projectsand every now and then there'll be something we just love that we'll getinvolved in.

And we will, you know, at least on the PFP side, when it's abigger drop, sometimes we'll cover the cost basis, but. By nature, acollectible is something we want to hold. It's called a collectible for areason to get out of positions. It's really easy. Don't talk to me about itbecause I'm that idiot that won't sell anything ever.

I think, you know, personally I have so many of these thingsnow but when we started the fund, the fund took first priority on everythingand thank God, you know, Jeeps are there because they actually like to get outof positions and they know when to do it. And it's also a matter of justknowing what's happening, you know, around the company in the market what'scoming next.

And it's a little bit tricky because, you know, for instance,artifacts, right. Buying those virtual sneakers and buying those sneakersbecause you had a. For what three, 3000 bucks or something, and then holdingit. And then I think in the midst of it, someone offered me like 140 grand orsomething. And of course, you know, that's me.

I don't sell anything. And I didn't know why I was beingoffered so much money. You know, someone obviously knew something or just likedthe virtual sneakers and the real sneakers and I held onto it. And then I endedup getting six clones and. I just love how all that stuff's not interconnected.And you know, it's not about the money necessarily in that case, but, but it'scool to have loyalty, you know, because that's another thing it's a disruptionof, you know, loyalty programs.

And these, this younger generation, you know, having theability to. Have resources to innovate. And again, for the skeptics, you know,there's a lot of innovation happening and, you know, Ben, you know about thisbetter than anyone because you're one of those guys. And if you had to go pitchto Andreessen versus doing it the way you're doing it, I'm pretty sure I know.

What's easier. Yes. Ben. Why don't you talk to that? Snuck amoderate in you now? No, it's,

[00:25:43] Ben: it's totally true. That, especially withthese pre-seed rounds at like 50 million or, or it's, it's crazy.

[00:25:52] Les: Well, yeah, it was a different way ofthinking. So if you feel like you want to innovate and you know, you do havethis streak in you that just wants to create without the bullshit.

Like, I don't know, you know, it's like, And having to pitch toa VC is really messed up. Sometimes, you know, I had to do that when I wasyounger and it sucked. And then having to report in, you know, once you got themoney, God, I hated that. I mean, it's just so much fun, more fun to do thingsand have it audience support it, you know, versus mom and dad with thecheckbook, like fuck that,

[00:26:29] Ben: you know, that's, that's a very.

That's something. A lot of founders that I talked to a lotabout is the, the philosophy of raising funds that it's no longer just youdriving the ship, you know, you want to pivot and do whatever else. That'scompletely opposite from what you're doing now. And you can. You have otherstakeholders who have a vested interest in you and the vision that you pitch.

So that's, that's very important for people when thinking aboutthat, that's for sure.

[00:26:59] Les: And, and, and I feel really bad becauselike Twitter is an example, right. I get people reaching out all the time andas it's gotten busier, you know, it's funny, like I have this like sympatheticside to it now because like I always used to get so pissed off with people whodidn't answer.

And it's like a fucking email you didn't answer. And what I'mrealizing is it's hard to answer all of them, but you want to, and I got it. Igotta be better about that because like, I actually don't care where it comesfrom. You know, I'm not that way. I just want to kind of see and hear aboutwhat people are doing.

And, and I owe so many people emails and I swear to God, I'mgoing to get. All at some point, it doesn't mean that you can't. But that's whythey're doing things the way they're doing. The part that I love about all of thisis, you know, we heard for so long that the boomers, you know, had left theworst economy in the world to this generation.

I guess this generations that go fuck yourself. Yeah,

[00:28:03] Ben: well, I mean, that's a big part of thismovement, right? This counterculture, this kind of a us versus them, whichagain, I think is super, super powerful. When, when like circling back to PFPs,I mean, the. Is there any sort of style or aesthetic that you guys at the fundare particularly drawn to?

Or is it just kind of based on that?

[00:28:30] Les: I mean, the last look when I bought thatZuki, I bought it clearly because that brown, fluffy hair looked like mine whenI was a kid. So I was feeling nostalgic. Yeah, there's always something you'redrawn to. And, and there's one mean. And then, you know, there's the ones yousell and they shouldn't sell.

But I remember minting, you know, world of women you know, andI got rid of those and, and I'm pissed. Those were great. And, you know, familysquat, it is, I guess I kept those, but I mean, that's how it is for me. That'snot how it is for the guys who run the fund. I mean, I think they're much moremethodical.

They understand what the roadmap looks like. They understandwhat the functionality is and, and the things that I'm really into now. Are thegala stuff, you know what they're doing with the play to earn and what that'sgoing to become will have influence, you know, I remember just staying on thatand trolling asteroids with the crew, you know, that were in FTS.

So there was a whole bunch of nostalgic stuff coming back, likedope pores. Everything that we're doing with that. It's cool. And it's in thepart that really, from another philosophical standpoint, that's so cool for meto watch is, you know, how, how are the Microsoft's, you know, with theiracquisitions going to compete in this world when you know, these othercompanies are doing something vastly different and is it just going to splinterthe market?

Probably, but I just don't see. Microsoft taking crypto risk.Whereas you know, the risk takers throughout history, we've seen them reallyended up excelling because they took risks as things change.

[00:30:11] Ben: Yeah. I have started to see Microsoft ontwo cap tables of the companies that I've invested in. So they're waiting intothis case of all the companies.

Oddly enough, they've popped up twice now, which I thought wasa pretty crazy. W so the NFTE space collectibles is obviously a big focus. I'mcurious with your background. I mean, what is your stance on music and emptiesor in general?

[00:30:50] Les: Loaded question for me, especially acouple of the music things I've done when I got re-engaged deeply into NFTs itagain, it was this, you know, convergence of ideas of what an NFT could be. Andit was avocado tree that I became an advisor for. And I, and I, you know, I wasinstrumental in putting the little pump into that game because little pump wasa funny meme for them.

So we did little pump wearables, and I thought that was. Ithought, you know, we bought that blouse track and we got rid of it prettyquickly. We wanted to hold on to it, to be honest with you, but it was justsuch a good deal in such a short amount of time that we wanted the artists tobenefit kind of in the spirit of collaboration.

But what I really wanted to do is a reg D offering with it andjust create. Collaborations and multiple versions because I know a fair amountabout music rights. I wanted to do things that had nothing to do with the waymusic, business licenses, music because I thought that was interesting. Andreally now, I mean, I wouldn't want to do anything with it because I've spentso much time in music, but there are.

Disruptive thoughts I have in the middle of the night. I wantit to, you know, as it relates to streaming services and rights. And thenthat's why, you know, going back to what we talked about earlier, the wholecrypto punk rights and board ape rights, the way they flow, it's going to bereally interesting to see how you can benefit from those as the guy that ownsit.

So that's the stuff I'm really excited about too.

[00:32:20] Ben: Yeah, and it's definitely still earlydays on a lot of that. And a lot of these things are promising the moons, butwe still got to take baby steps in a number of ways, especially withregulations and the unfortunate fund, things like that,

[00:32:35] Les: you know, on the revelation, you know,you saw, you know, they're going to be looking at NFTs and I think it's not ashard as everyone makes it out to be.

I mean, you kind of. When it crosses the line to be a securityand when it's collectible. And I think that comes down to the way theinvestment works and, you know, are you tokenizing it or not? And you know, thewhole, the whole thing about it is, is I'm not afraid of that. Because I thinkyou can color within the lines and still be really innovative.

And I think it's important to have the regulatory frameworkmapped out, but. We're not seeing that now. I guess, you know, non regulationsare greatest form of regulation.

[00:33:18] Ben: Yeah. That's for sure. So everybodyalways says the space needs regulation. If you could wave a magic wand andchange something from a regulatory standpoint, what would it be?

That would be like the catalyst to kind of help help clarifythis for people? Or what do they mean when they say the space needs?

[00:33:37] Les: I look, I mean, w when you haveregulation, you know, you know exactly how to, to work in your field. The linesare specific when. It's left really kind of ambiguous it, it creates a pauseand I think it allows for time for the regulators to kind of figure out howthey want to approach it once the next move is.

But I would say that that part, that concerns me is I thinkthey're still thinking. You know, layer ones and stable coins and the gap intiming. I just don't know how the catch, you know, everything's happening. Imean, the stuff is global, you know, when I buy an ex rabbit or, you know, aready player cat out of China you know what, my wallet allows me to buy it.

So, and, and FTS were legal in China and cryptocurrencies, notso the global component. Complicates it further when we think about theregulatory components. And, you know, look, if the worst thing in the worldhappened and all of a sudden someone woke up and said, NFTs are illegal here inthe United States.

I mean, it's really a terrible thought because where's theinnovation going to happen, then? Where are you pushing it? And why would youwant to do that? And it's so funny because so much of it was about consumerprotection. But when the sec gets involved, the people that get really hurt orthe consumers, in most cases, if the companies have enough money to defendthemselves, they're not getting hurt.

It's the consumers that have invested in that company, whetherit's a utility or security they're getting hurt. So that's the problem with nothaving clear regulatory frameworks.

[00:35:25] Ben: Definitely definitely agree. And it'squite a bit of game theory, you know, if the us makes it illegal and pushes itout what, what happens globally because it's, you can't really stamp it out andyou can put the genie back in the bottle, so it's going to happen somewhere

[00:35:42] Les: well, and I think the, the executiveorder, you know, was a lot more positive than anyone expects.

I think everyone expected, you know, the sky is falling well,nothing was coming and it actually was relatively optimistic. And to be honest,I mean, look, we see Goldman making an announcement with Charles Schwab. It'swhy we got in this space when we did, we knew it would happen. That was ourbet. And we got into this space at the right time.

And now it's happened. Everyone has. Position you know, when edhaunted Al cash at bank of America put out a report on cryptocurrencies. Imean, that's the most, you know, known bank. And so it's definitely headed inthat direction. And as you said, you said the Jeannie left the bottle and justsay the train left the station just to be different.

[00:36:33] Ben: Big, big, loud pan, you know,

so you, you spend a lot of times, they end up late, deep in thediscords. Let's and of course, this is not financial advice, et cetera, etcetera, not expression of your fund, but you as a human, what are you obsessedwith right now with them in the space?

[00:36:53] Les: I'll tell you what, I'm not obsessed withdiscussing.

I don't like discord, like I've had more problems. Like I'm notvery good. Technically yet he went, this court is so fucking hard most of thetime. And I don't want to be in discord. I find myself kind of more trollingaround often seeing Twitter and telegram, you know, all the telegram group.That's fun.

But let's see what. Did I buy recently? I love the cryptos. Iseem to keep buying those. They're just so cool and grumbling. Human. So I lovethose. I'm trying to think of what else I bought every now and then I'll justbuy some weird thing. I almost need to open up my computer to see but I boughtsome of those crypto Cowden's that we were talking about.

I liked those, I like the witching this house. I want to getsome more of those. Actually. I keep threatening to go get some more worlds ofwomen that just haven't done it yet, but I really love. Trying to think theriot girls, you know, naughtiest thing, but those recently, none of this isspeculation.

This is stuff that I bought, not really talking about what thefund has bought which I guess I could, you know, the fund has definitely boughtsome things that are different and I'm just trying to think we bought afterparty passes. Which were interesting. I don't think I can get to the, to thefund purchases quick enough for ya.

But I think I can look at my. Just real quick, so we can talkabout what I've got and

[00:38:26] Ben: yeah, I've seen you tweeting about cryptoads. I figured there was some sort of speculation about just toads.

[00:38:38] Les: Yeah. I love the pixelated toads. I, youknow, I wanted to, you know, I meant it, those two and I wanted to get a hoodieand I finally got one, is it, look, here's something I got the other day, justbecause.

And it, I know nothing about this project. Actually, this is apersonal bias, not a fun buy, but the alphas goals it's called Genesys force. Idon't know. I just really, really liked those for something for some reason.And then I bought these Astro girls for fun and these ghosts trends. I mean,none of these are investments.

You know, these were just things I kind of liked and wanted tobuy the hero galaxy heroes. I, you know, these aren't the investments I go, Iguess if we look at you know, what the fund bought, it's kind of a verydifferent thesis. I'm not really driving what the, what the fund purchases aremost of the time.

But if you look at the collectible

[00:39:34] Ben: stuff, it's frenzies and obviously theartifact stuff

[00:39:38] Les: and. We, we love the forgotten rune

[00:39:41] Ben: wizards. I know the fund has a bunch ofthose

[00:39:43] Les: and cool cats and yeah, I mean a lot ofinteresting

[00:39:47] Ben: collectibles and a lot of interestingkind of,

[00:39:50] Les: Equity deals as well. The BFF friendship,

[00:39:53] Ben: bracelets.

Apparently we got a lot of those. I haven't even seen those. Soit's funny how some of these things just completely fly by you in the space.There's just too much to keep track of it all. Okay. A light enough

[00:40:10] Les: and you'll see it all. And you'll just belike, oh wait, I want those. And you know, that's the funny thing about it.

I remember like early on. I bought these corgis. And I think Ibought, like, I don't know how many I got, I got so many of them and theyultimately just like went to nothing. But that's the funny thing about thisstuff, because you never know what's going to come back for what reason? And soit's kind of like buy what you, like.

I thought they were cute. They were fun to give away as well.

[00:40:43] Ben: I actually have a bunch of crypto corgisas well. It was had a hackathon project since they launched them. And I justbought a bunch of like that day. Presumably I still have them all in my wallet.

[00:40:53] Les: Okay. Well fucking Stoney.

[00:40:56] Ben: He was no, actually, yeah, he tweeted it.

He was in the hackathon as well and tweeted it right after

[00:41:02] Les: and we ended up. Buying shit, tons ofthem, but they're cute. And you know what? That eight bit pixel thing you knowis cool. So I think, I think that was my up. Come around again.

[00:41:14] Ben: One day there's enough, a bag of home

[00:41:17] Les: parties or common goddammit one day.

[00:41:21] Ben: Well, so you bring up a good point. Imean, like, presumably you're just opening up your either scan and checking outyour recent transactions, having a NFT fund. All of these transactions are onthe block. So if somebody knows the funds address and maybe it's, I should havelooked in

[00:41:40] Les: before. I mean, it's, it's, it's just calledthe non fungible fund and you can look at NFF underscore dot E's.


[00:41:48] Ben: so you guys are public and transparentabout this, but with market. Moving potential buys. I mean, are you worriedabout people monitoring it in front running? Or

[00:42:02] Les: no, because I mean, by the time we're in,you know, we've, we've already made the buy and some of the bigger positionsare actually, you know, investments into companies that we believe in that wethink are going to be great companies.

And. So, no, I mean, and again, you know, with collectible, ifwe were a fund that traded NFTs, you know, trading fund, I mean, we're notbecause I really, I have art, you know, I have art at home and. You know, Idon't go out and sell my art every single day. Hey guys, here's a RichardPrince. Let's sell that today.

You know? So it's like, why would we treat this any differentlyif we're collecting something because we like an artist and where that artistcomes from, we're going to stick to it for the most part. Now we have soldbefore it would be a total bullshit. If I said, you know, we hadn't done that,but we've, we've sometimes covered the cost basis depending upon how big thebuy was, but we've done pretty significant.

And then we calmed down a little bit because the market justfelt a little bit off. But now it's coming back kind of in a different way. Sothat's the exciting part is just kind of all the new projects that are.

[00:43:14] Ben: Yeah, fascinating. It's a, it's a crazyworld. I mean, with tsunami, pseudonymous people and open public transparentblockchains.

It's a, it's a whole nother like variable to think about as afun. It was, I, I mean, I just think you own X percent of the supply of somecollectible and start unloading because you have a capital call or whatever.But you know, you still might be bullish on that, but if somebody is monitoringthat and could see it as a negative, it's just a whole nother whole notherthing.

And full disclosure. I believe, you know, this sort oftransparency would be a net net good for all these funds. But

[00:43:55] Les: look, I mean, we're fortunate. I think,you know, we're, we're able to deploy in projects that we want to deploy in isthe whole purpose of having a fund that continues to grow and continues tobuild.

And you know, the transparency look, I think if a hedge fundbought. They probably have it on display so more. So, you know, how's it anydifferent on the collectible side, you should be able to see what you'veinvested in as an LP.

[00:44:24] Ben: Yeah. I mean, talk about perfect transparents for the LLP. Yeah.

[00:44:30] Les: Why, why not?

And why not? You know, I can't worry about bad actors, youknow, I can't worry about. People that are going to take advantage of thosepositions. I mean, people do that and I just have to like, keep my side of thestreet clean and know why I'm doing something. Do I want to support an artist?Do I want to support the work or do I just love the work or, you know,obviously we're fiscally responsible and we're doing this to make money.

I mean, that would be bullshit if we didn't say that. And thereare advantages that we see because we're early and I think it's harder to frontsomeone who is early. And that's the point, you know, being in the space sodeeply and being early, that's where our advantage comes from.

[00:45:16] Ben: Yeah.

[00:45:18] Les: Speaking of knowing.

I mean, that's the point, right? It's like when we talk about aproject that you may or may not be involved in, you're not telling me becauseI'm going to go make that investment necessarily, but it doesn't mean I don'thave the information.

[00:45:33] Ben: Yeah, totally. I am thinking about this.I mean, because we are so early and we're so deep into this, I meet a lot ofpeople, smart investor friends that, you know, recognize that there's probablysomething there in, in FTS.

They want exposure. They probably don't want to throw theminimum required for some of these funds. What sort of advice do you givesomebody who's just. You know, air quote, once to invest in, in FTS for thefirst time, I mean, it's

[00:46:06] Les: simple, you know, it's like making anyinvestment for the first time. You know what, what's your risk tolerance anddon't spend more than you can afford and take a number and probably divide itdown further.

As you're getting. Exposed to this. I mean, I know I've beendoing it a long time, but I still mess up, you know, I still send things off.Well, not too often anymore, but I still mess things up. I mean, I got to tellyou yesterday I was doing something with my ledger. And it was a pain in theass.

Like it was not connecting and it wasn't functioning. So it'slike, go love, do the easy things first, you know, get a coin base and a metalmask and start. I didn't do it with an amount of money that you can afford tolose, you know, and do 50 bucks, do it with a hundred and see where it goes,you know, do it for a thousand.

I mean, one of my set, my second aid, you know, I bought for athousand, there's a lot of cool things you can buy for a thousand and. It'slike, do the research be part of communities because you know, I always talkabout how well, my 14 year old nephew's done, but what I don't talk about oftenis he's been embraced by the community, the small brains, arbitrary community.

It's really amazing actually. And I don't help him. I don'teven talk to him, but he's like figured out this way to really be connected.With these projects and he knows more, more about them than I do, becausethat's what young people do is they get, you know, they're part of something.And for me, it was music.

I always go back and think about Richard Branson in London and,you know, before Virgin really ever launched, it was just a bunch of guys inthis store, listening to music, smoking weed and bean bags. And this is justanother version of that.

[00:48:00] Ben: These kids, or even older than

[00:48:04] Les: kids, you know, meeting each other andyou know, an immersive environment using an Oculus quest.

It's the same thing. Just different.

[00:48:16] Ben: Nope, totally valid. But I guess, I, Iguess kind of, double-clicking not going to let you out that easy on thegetting involved. I mean, people understand, you got a little amount they wantto put in, but starting the research process, a lot of my friends just ended upon that open seat homepage and they're like, I don't know what to do

[00:48:38] Les: the way I would do it.

I mean, you know, for lack of better, you know, Idea. Let's sayI like fashion. You know, I would go into Twitter and put fashion and Ft. Seewhat comes up, start reading, put my interest. Then it's going to take you tothe NFTs that are out there and it's going to be connected to your interestsand I'll make it more real for you.

And that's how you learn when you see something you want,because you know, if you're into fashion and you happen to like Gucci, well,then there's a Gucci NFT. You're going to write about it. You're going to learnquicker. So. Then you might go to open sea to see what's for sale on asecondary or see a drop coming.

So that's the way I would do it.

[00:49:23] Ben: Yeah. That makes sense. I mean like thatimpressed


[00:49:27] Les: Ben was not impressed by that answer. Imean, it's not fair. I've been doing this awhile. Okay. You know, just becauseyou can like. Call up metallic and ask him what kind of TZ likes a lot of thesekids. Can't so you have to start somewhere that's digestible.

They understand Twitter. You can't just, you know, immediatelytake them down the rabbit hole.

[00:49:54] Ben: Maybe, maybe that's my issue. I just, youknow, Spartan kick them right down the rabbit. Yeah.

[00:49:59] Les: Yeah. I got go take them straight tooptimism. Yeah. Take them straight to optimism.

[00:50:05] Ben: Yeah, we're just going to cross chain,then we're going to put it here, then we're going to use it as collateralbecause we don't want to sell it.

[00:50:11] Les: Yeah. You got to remember that. Most ofthe people out there who spend less time at this, there has to be. Thattransitional digestible way to do it, you know, and, and not every buzzword isFalana. It's true. It's true.

[00:50:27] Ben: Well, less, this has been awesome. We'lljust wrap up the podcast portion. Where can listeners find out more about you,the fund?

Where would you like to.

[00:50:38] Les: I never really thought about that. Iguess Twitter is the best place I've got to be better about answering, butthat, that, you know, that it's Twitter until its lens.

[00:50:49] Ben: Yeah. Right. Wait, was that too deep?Well, most people went right over their head, but I got you. And well, I mean,you've got the Twitter, the verified check mark.

So hopefully that, that carries over to whatever decentralizedalternative we end up on. I doubt that it will. Thanks. Let's really appreciateit. Ma'am there you have it. Thank you for listening. I really appreciate your.Show notes, transcript links, and more can be found on [email protected]

If you'd be so kind, please share this with anyone you thinkmight be interested or get some value from this conversation. If you have anyquestions or comments, please reach out. I'm always happy to hear. Lastly, ifyou're on YouTube, please like the video or subscribe to the channel. If you'relistening to the audio version of this, please subscribe to the podcast and, orleave a review.

This really helps more people find the podcast. And I reallyappreciate it. Thanks again, and hope you have a fantastic day. Happyinvesting.

Ben Lakoff is an entrepreneur and finance professional. He has developed strong global finance experience through 10 years of international assignments in the US, Brazil, Afghanistan, Southeast Asia, Czech Republic and through the award of his Chartered Financial Analyst (CFA) certification.