E7: California's collapse, how SPACs are opening the markets for growth stocks & more

Friedberg said a private call with Governor Gavin Newsom and roughly 18 participants changed his view on leaving California. Newsom argued the “exodus” narrative is cyclical and said the much-discussed wealth-tax proposal came from one assembly member and never reached committee.

Chamath Palihapitiya said he was not leaving California partly because his tax affairs were structured so the state could not reach most of his assets. The disclosure came as the group discussed higher taxes, remote work and prominent venture figures relocating from California to Austin.

On AB5, Palihapitiya argued the real fight was over who captures Uber and Lyft’s economic surplus, not whether part-time drivers can still work. He said employee treatment could cut market values 60–70%, while Sacks argued union-backed regulation would reduce flexibility and make service uneconomic in some places.

The group said Uber was considering a franchise model in which local operators could control territories such as the East Bay while supplying rides to the wider network. Palihapitiya and Friedberg saw franchising as a potentially asset-light answer to transportation’s fundamentally local economics.

Palihapitiya argued that near-zero rates and public-market liquidity had weakened the traditional return advantage of private investing. He contrasted private SaaS valuations near 20× ARR with public multiples of 30–40× and said fast-growing companies around $50 million in revenue should consider listing by years five or six.

Palihapitiya said he personally commits at least $100 million to every SPAC deal and that his first vehicle took two and a half years to execute. He argued successful sponsors need operational credibility plus public-market expertise, and expected only a small number of operators to dominate the category.

Despite the recessionary backdrop, the investors said their venture activity accelerated during COVID. Calacanis said he had invested in roughly twice as many companies as during the comparable pre-pandemic period, while Sacks called some pandemic-era opportunities among the best deals he had seen.

Jason Calacanis said pandemic isolation made him wonder whether he was depressed, but three days away from Twitter while camping made him feel markedly better. He connected his distress to relentless coverage of deaths, riots and fires while his investments were thriving, capturing the surreal divide between financial markets and everyday suffering.