Ignite VC: The Capital Markets Hack Founders Are Missing with Jonathan David Nelson | Ep279

**Jonathan David Nelson** (0:00)
We're all product people, we're all engineers, designers, operations people inside of startups. It's no longer sexy to have a former investment banker as part of your fund. So VCs have forgotten how to do financial engineering. We've largely forgotten how to do exits. Everybody's like, you got some of that liquidity, man. I would love it. Can you buy a secondary from me, man? I heard that's the thing, you can buy my stock from me. And so like Silicon Valley is kind of stuck. We're all just kind of trapped in this liquidity thing. It's taken 14, 15 years now for a company to IPO. So my best performing company is in my venture portfolio. My investors have to wait 15 years for that. Like that's a lot of crabby investors for a long time.

**Brian Bell** (1:03)
Hey, everyone, welcome back to the Ignite Podcast. Today, we're thrilled to have Jonathan Nelson on the mic. He spent the first part of his career as an ER and ICU nurse before stumbling into Silicon Valley, that is an odd path, building Hackers and Founders, which grew from a bar meetup for programmers into one of the largest founder communities on earth, spanning dozens of countries. Over 15 years in and around Venture, he's advised SEC on the Jobs Act and crowdfunding roles, worked with the White House on immigration as economic growth, and contributed to studies on building tech ecosystems across Latam. Today, he runs HF Capital, which he describes as an AI native investment bank focused on IPOs, secondaries, and M&A. He's one of the more contrarian voices in the market right now. He thinks the US public markets are broken, interesting, for everyone short of a dekakorn. This will be a great conversation. He's evangelizing the London and European exchanges as a real alternative to Series B, and he's been publicly torching the wave of sketchy, anthropic secondary vehicles flooding people's inboxes. He's blunt, he's funny, and he'll disagree with me on air, which is exactly why he's here. Thanks for coming on, Jonathan.

**Jonathan David Nelson** (2:09)
No, I won't. It's me here, Brian. Love it.

**Brian Bell** (2:11)
Yeah.
Love to start with your origin story. What's your background?

**Jonathan David Nelson** (2:15)
I am a strange kid. I grew up in Latin America. My parents were missionaries, so I was the only white kid at the end of six hours on a dirt road in a tiny little village at the ascent of Honduras called Minas de Oro, Honduras. I was programming, managing dad's mailing list of 100 people that supported kind of what they were doing. When I was like seven years old, way back in the early 80s, came to the States and was saying I was going to be a missionary. Dad said, yeah, get a trade first. I was like, great computer science. Love me some computers. Dad was like, you know, I don't want you playing video games the rest of your life, son. You should be a nurse. Like your mom was a nurse. It was very helpful when you're in the jungle. It's like, okay. I was fresh off the boat. So I studied being a nurse. Did that for a while. Dropped out of seminary. Grew a ponytail. I worked as an ER trauma nurse for a number of years. I threw my back out and eventually injured out. Went back to school for software engineering. And I heard that you could sell ones and zeros. And I know how to copy and paste. So I was like, I can build an app, sell it for a dollar, copy and paste five million times. I'll make five million dollars.

**Brian Bell** (3:22)
So easy. Where do I sign up? How does this work? Yeah, I want to invest in that.

**Jonathan David Nelson** (3:26)
Yeah, hell. So I moved to the Valley and I was working a couple miles away from Google's HQ while I was finishing up a software engineering degree online. And drove my wife crazy. She kicked me out of the house one night a month to go to this Hackers and Founders meetup that she helped me organize. And things went viral from there. So yeah, weird backstory.

**Brian Bell** (3:46)
That's so random. And then at some point, you started Hackers and Founders. What was the impetus to do that?

**Jonathan David Nelson** (3:53)
Driving my wife crazy, talking about Startups all the time. So I'd be like, oh my gosh, programming language this and nerdy things that. And she was like, honey, I love you, but you gotta get out of the house one night a month. For the love of God, you gotta, let me help you build your business network, honey. So we started this meetup called Hackers and Founders in 2008 And after the economy collapsed, a bunch of people started showing up at the meetup. Like 2009, we were having a couple hundred people show up at the meetup. Like it was my bar night, dude. And we started having it twice a month and then once a week in SF San Jose, Mountain View, East Bay, just kind of all around. And people started peppering me with them. They'd come up to me and say, hey, I'm here for two weeks on my visa and I need to raise $5 million.