The Behind-the-Scenes Mess Now Facing the VC Industry

**SPEAKER_1** (0:00)
How is Gen. AI impacting the tax function?

**Tyler Tringas** (0:03)
Here are some thoughts from EY and Real-Time Insights.

**SPEAKER_3** (0:06)
The best way I can analogize, if you think back to 30 years ago with spreadsheets, at that point in time, most tax planning and processes were done with a pencil, paper, and a calculator.
But everyone thought that was going to remove the need for tax professionals. The reality is that they learned how to code spreadsheets, they learned how to build better business insights, worse scenarios, and years and years later, there's more tax jobs than ever. And so we see AI as having the same impact.

**Tyler Tringas** (0:27)
Learn more at ey.com.

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**Tracy Alloway** (1:23)
Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

**Joe Weisenthal** (1:28)
And I'm Joe Weisenthal.

**Tracy Alloway** (1:29)
Joe, it is brutal out there.

**Joe Weisenthal** (1:31)
Yeah, it really is wild. It's relentless, it's compounding. There's a lot of fear, I guess, due to elevated inflation. People are really feeling like we're in no man's land, at least with respect to the last several decades of how the economy worked. People don't know, people don't have confidence that anything's working. So people are dumping stuff and they're buying dollars.

**Tracy Alloway** (1:55)
Yeah, we are recording this on June 13th. It's Monday, Black Monday is trending on Twitter.

**Joe Weisenthal** (2:01)
It's not like, it seems like a little exaggeration.

**Tracy Alloway** (2:04)
It's early in the day.
So we'll see what happens. But what I will say is on Friday, I think the S&P 500 was down 2.9%, something like that. And it has been just incredibly painful for a lot of stocks out there, but tech stocks in particular.

**Joe Weisenthal** (2:22)
Yep, tech stocks in particular, as everyone knows, have gotten crushed. And then, of course, that feeds in a very linear way to private tech companies. And of course, we've had this big private tech boom, VC, all these startups and everything, and every late stage private company aspires to IPO. So if the IPO window is plunging or falling, then that hurts their values, and every mid-stage company aspires to be a late stage company, and every early stage company aspires to be a mid-stage company.
So there's no way to avoid the sort of follow-on effect. Like individual companies can do fine, but as a whole, what we see in the stock market, I think pretty straightforwardly translates down into less liquid, riskier private tech companies.

**Tracy Alloway** (3:04)
Right, so you would assume there's some effect, but obviously because a lot of these companies, while all of these companies are not listed, you can't actually see what's happening to their valuations in real time. So we can look up the S&P 500 or Amazon or Alphabet or whatever and see what's happening. It's a little bit harder with some of these startups.

**Joe Weisenthal** (3:23)
The only thing you can do, you can see VC returns and what they tell their investors. But even still, the only time you'll often get a true mark, as in mark to market, I think, is when they do a raise. And of course, no one wants to actually do a down-round raise.
So you never actually get it. So anyway, it's a...

**Tracy Alloway** (3:41)
This is the irony, right? When valuations are going up and people are doing repeated fundraising rounds at higher valuations, everyone issues a press release and talks about it. And then when things are going in the other direction, it's just silence and crickets. So I'm very pleased to say that today we're going to try to figure out what's been happening in the world of venture capital and startups. We're going to be speaking with Tyler Tringas. He's the founder and general partner of Calm Fund. So Tyler, welcome to the show.

**Tyler Tringas** (4:12)
Hey, thanks so much for having me.

**Tracy Alloway** (4:14)
Tyler, maybe just to begin, you can tell us a bit more about Calm Fund. What is it and how does it differ from a traditional venture capital firm?