Billionaire tech investor Chamath Palihapitiya and the return of centrism

An inside glimpse of the seismic forces that are radically transforming the investment landscape — from SPACs and tokenization to data autonomy and virtual learning

Chamath Palihapitiya is one of Silicon Valley’s most successful tech investors, and he tells Real Vision CEO Raoul Pal that he wouldn’t be where he is today as CEO of Social Capital without failure.  

 “People have found that there’s a secret that’s hiding in plain sight in Silicon Valley which is that when you fail, you learn,” says Palihapitiya. “The people that are the most respected here are the ones that have had some spectacular failures by conventional measure, but in reality, they are incredible learners, and then that’s caused them to have some huge outcomes.” 

 He calls it a “feature” in Silicon Valley, whereas it may be viewed as “a bug everywhere else.”  

 “Everybody else points to and laughs and mocks failure, and whereas here, it’s a real badge of honor,” he says. The more failures you have means the more knowledge you’re acquiring which means the closer you are to figuring it out.” 

 The Sri Lankan native moved to Canada at a young age after his family filed refugee status. He reflects on his childhood, growing up on welfare as his father bounced around jobs, and the federally subsidized healthcare and education opportunities he received.  

 “I had the benefit of every single social safety net possible, and so a lot of my politics and a lot of my beliefs are governance because of that,” he says. “But despite all of that Canada wasn’t super accommodating for somebody like me because I was willing to fail.”  

Palihapitiya made his first fortune as an early executive at Facebook, but he started his career as a derivates trader, working for Bank of Montreal and trading cross-currency swaps. 

“I started out as a coder kind of like helping to design sort of path models and then was able to be a part of you know running a book and managing risk,” he tells Pal.  

But a wake-up call – which he calls his first really big professional failure – changed all of that. 

“I thought too much for myself and I was pretty arrogant. I had become not as good as I was when I was hungrier and more humble,” he admits.  

Palihapitiya moved to the U.S. in 2000 to return to his engineering skills, working at a number of different startups. He has since multiplied his wealth as an investor with a portfolio of bold healthcare, education, and financial services companies.  

Why Chamath Palihapitiya loves SPACs 

The outspoken venture capitalist has big bets about the future. He’s been at the forefront of the hot investment trend — SPACs, the acronym for blank check or special purpose acquisition companies. He is behind major SPACs including space tourism startup Virgin Galactic, real estate platform Opendoor, and Medicare insurance startup Clover Health.  

He explains how SPACs are a necessary innovation, opening up the investing ecosystem for everyday retail investors.  

“I think that there is a democratizing effect here which is very important and powerful,” he says.  

Palihapitiya admits that the only place to make money in the private technology market is through a Series A funding round, but the returns are extremely long dated.  

“The returns that are available in the private markets are still blocked. There is no access for average ordinary normal folks to get access to that return stream,” he says. “The SPAC basically does that. It allows you to pull forward the IPO, two or three years into the typical decision-making process that the company has, and then you can own that in an exchange tradable, or a market tradable security.” 

Not only does speed play a key role in SPACs, but it also allows Palihapitiya to ”act as a principal” while he takes a company public.   

“Selfishly for me, I can use my balance sheet to basically empower companies to fulfill a mission that I believe in underwriting, and then I can be a big part of them as they grow in scale,” he tells Pal.  

Why it makes sense for an entrepreneur, he says, is because of the SEC Form S4, which is filed by a publicly traded company to register any material information related to a merger or acquisition and allows you to talk about the future – including future prospects, strategy, and cash flows.  

The new world of finance 

He sees the coronavirus pandemic as a catalyst that is radically transforming the investment landscape 

“I think that this was an opportunity in the pandemic to actually experiment more with putting money into the hands of individuals, and then observing which businesses that they pick on the presumption that is actually a better implementation of efficient markets theory.”  

Palihapitiya argues that old structures of capital formation, which prioritized buybacks rather than Research & Development (R&D) and “efficiency” rather than resiliency, will give way to a new future in which fintech companies will replace “too big to fail” banks. 

“It actually should be the opposite,” he tells Pal. “No bank should ever be too big to fail that it matters. We should have many, many small banks of which there can be umpteen failures and the system just moves on and it can self-heal.”  

He sees incentives in financial organizations being rewritten. 

“I think the banking industry will not have some fatalistic deathblow,” he says. “We are seeing now the emergence of an entire class of fintech companies that are slowly eroding the value proposition of entrenched financial institutions. It will take another 10 or 20 years for us to see it happen in enough scale.”  

When it comes to Bitcoin, he calls it “a hedge in a portfolio against the sort of traditionalist financial infrastructure.”  

He thinks there is a stigma around Bitcoin because it’s being played up.  

“We have to dial it down,” he says. “If you want to see Bitcoin get to mass market scale, the most powerful thing that you can do is describe it in simple pragmatic terms that don’t require zealous belief… This zealous rhetoric and dial up pragmatist rhetoric is what we’ll get your mother and your grandmother to have Bitcoin in their wallets.”  

What about tokenization? He says it will serve as a digital ledger for every financial transaction. He thinks it’s more beneficial for shareholders than for the company itself.  

It’s the unit allocation of ownership of things that the companies will want to create to then pass on to its unit holders or stakeholders. 

“I could see a company… with a token that you can redeem for a free vaccination,” he says.  

How climate change technology will cause a geopolitical paradigm shift  

Palihapitiya is pivoting his own firm to focus on issues like climate change. He views climate change as the great equalizer, calling it the simplest way to fix our problems with Russia, China, and the Middle East.  
 
“I think like the destruction of energy will have the most important impact in reallocating and reassessing geopolitical power. It actually solves most of the big pernicious corrosive issues that we have geopolitically,” he says. 

He also believes solving climate change is what will create the world’s first trillionaire, characterizing wealth as a “complete, accidental byproduct of problem solving.”  

“Very few people become wealthy by focusing on getting wealthy. Of all the rich people that I’ve met they’ve always been focused on solving a problem. The byproduct is that the bigger the problem is that they solve, and the more powerful the solution is that they deliver, the more wealth that they create,” he says.  

The way social media reallocates power  

Palihapitiya acknowledges social media is becoming highly fragmented because of the tendency to seek confirmation bias 

“There’s an emerging realization by both the left and the right when it comes to social media, and it’s the idea that social media reallocates power and influence in a way that disrupts the allocation of power and influence.”  

He specifically references the U.S. election as a prime example of how the establishment reacts to social media 

“The 2016 election was about castigating Facebook. 2020 has really been the election of throwing Twitter under the bus,” he admits. Donald Trump I think is the canary in the coal mine. It’s much more likely that future leaders of politics are really people that can coalesce movements online, and in that you’re much more likely for the Rock, or Kim Kardashian, or Charlie D’Amelio to be the next great politician than you are. You know some person who’s steeped in policy and who really understands what to do.”  

Palihapitiya sees the return of centrism in this new media landscape. On a broader note, he sees it as a movement that will democratize across the globe.    

“Balance, moderation, centrism, pragmatism. It wins. And it’s the boundary conditions for incredible innovation,” he explains.   

RELATED CATEGORIES: Market Analysis, Technology, U.S. Economy

GET REAL VISION'S FREE DAILY BRIEFING DELIVERED DIRECTLY TO YOUR INBOX EVERY DAY AFTER MARKETS CLOSE

Get the latest information as we analyze the next phase of our new global economy and discuss what we think is to come.

Mark Yusko

Morgan Creek Capital Management, Co- Founder, CEO, & CIO

Mark Yusko is the Founder, CEO and Chief Investment Officer of Morgan Creek Capital Management. He is also the Managing Partner of Morgan Creek Digital Assets.

Morgan Creek Capital Management was founded in 2004 and currently manages close to $2 billion in discretionary and non-discretionary assets. Prior to founding Morgan Creek, Mr. Yusko was CIO and Founder of UNC Management Company (UNCMC), the Endowment investment office for the University of North Carolina at Chapel Hill. Before that, he was Senior Investment Director for the University of Notre Dame Investment Office. Mr. Yusko has been at the forefront of institutional investing throughout his career. An early investor in alternative asset classes at Notre Dame, he brought the Endowment Model of investing to UNC, which contributed to significant performance gains for the Endowment. The Endowment Model is the cornerstone philosophy of Morgan Creek, as is the mandate to Invest in Innovation.

Mr. Yusko is again at the forefront of investing through Morgan Creek Digital Assets, which was formed in 2018. Morgan Creek Digital is an early stage investor in blockchain technology, digital currency and digital assets through the firm’s Venture Capital and Digital Asset Index Fund.

Mr. Yusko received a BA with Honors from the University of Notre Dame and an MBA in Accounting and Finance from the University of Chicago.

Anthony Scaramucci

SkyBridge Capital, Founder & Co-Managing Partner

Prior to founding SkyBridge in 2005, Scaramucci co-founded investment partnership Oscar Capital Management, which was sold to Neuberger Berman, LLC in 2001. Earlier, he was a vice president in Private Wealth Management at Goldman Sachs & Co. In 2016, Scaramucci was ranked #85 in Worth Magazine’sPower 100: The 100 Most Powerful People in Global Finance. In 2011, he received Ernst & Young’s “Entrepreneur of the Year –New York” Award in the Financial Services category. Anthony is amember of the Council on Foreign Relations (CFR), vice chair of the Kennedy Center Corporate Fund Board, a board member of both The Brain Tumor Foundation and Business Executives for National Security (BENS), and a Trustee of the United States Olympic & Paralympic Foundation. He was a member of the New York City Financial Services Advisory Committee from 2007 to 2012. In November 2016, he was named to President-Elect Trump’s 16-person Presidential Transition Team Executive Committee. In June 2017, he wasnamed the Chief Strategy Officer of the EXIM Bank. He served as the White House Communications Director for a period in July 2017. Scaramucci, a native of Long Island, New York, holds a Bachelor of Arts degree in Economics from Tufts University and a Juris Doctor from Harvard Law School.

Michael Saylor

MicroStrategy, Co-Founder

Mr. Saylor is a technologist, entrepreneur, business executive, philanthropist, and best-selling author. He currently serves as Chairman of the Board of Directors and Chief Executive Office of MicroStrategy, Inc. (MSTR). Since co-founding the company at the age of 24, Mr. Saylor has built MicroStrategy into a global leader in business intelligence, mobile software, and cloud-based services. In 2012, he authored The Mobile Wave: How Mobile Intelligence Will Change Everything, which earned a spot on The New York Times Best Sellers list.

Mr. Saylor attended the Massachusetts Institute of Technology, receiving an S.B. in Aeronautics and Astronautics and an S.B. in Science, Technology, and Society.

Alex Saunders

Nugget's News, Founder & CEO

Alex Saunders is the founder and CEO of Nugget’s News, a digital media company focused on all things crypto. Alex has been captivated by cryptocurrency since 2012 and in 2017 he began educating globally on the benefits of cryptocurrency and how to safely acquireit. Nugget’s News has been listed as a top-20 podcast by Business Insider, ShapeShift and Lifehacker and has over 120k YouTube subscribers with 9 million total views.Alex is also heavily focused on his cryptocurrency education platform Collective Shift which currently serves over 4,500 members. provides his unique perspectives by utilising his expertise in fundamental analysis, technical analysis and market sentiment. He is working towards his mission of making it easier for everyone to understand the financial world.

James Putra

TradeStation Crypto, Inc., Sr. Director of Product Strategy

James helped launch TradeStation Crypto’s offering which utilizes a true online brokerage model that self-directed investors and traders have come to expect for equities, futures, and foreign currency markets. He is a reputed crypto asset specialist and blockchain thought leader focused on helping people find innovative ways to participate in this space. He is active in the blockchain community with speaking engagements, TV appearances and mentoring. James has over 15 years of experience in the Fintech industry.

Raoul Pal

Real Vision, Co-Founder & CEO

Raoul Pal is the Co-Founder and CEO of Real Vision, the world’s pre-eminent financial media platform, which helps members understand the complex world of finance, business, and the global economy.

Real Vision members also have access to Real Vision Crypto, a cryptocurrency and digital assets video channel watched by over 80,000 people. In addition, Raoul has been publishing Global Macro Investor since January 2005 to provide original, high quality, quantifiable and easily readable research for the global macro investment community hedge funds, family offices, pension funds and sovereign wealth funds. It draws on his considerable 31 years of experience in advising hedge funds and managing a global macro hedge fund. Global Macro Investor has one of the very best, proven track records of any newsletter in the industry, producing extremely positive returns in eight out of the last twelve years.

He retired from managing client money at the age of 36 in 2004 and now lives in the tiny Caribbean island of Little Cayman in the Cayman Islands. Previously he co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul moved to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe. In this role, Raoul established strong relationships with many of the world’s pre-eminent hedge funds, learning from their styles and experiences.

Other stop-off points on the way were NatWest Markets and HSBC, although he began his career by training traders in technical analysis.

Peter McCormack

What Bitcoin Did, Journalist

Peter McCormack is a full time journalist/podcaster covering topics such as Freedom, Human Rights, Censorship and Bitcoin. Peter created and hosts the What Bitcoin Did Podcast, a twice-weekly Bitcoin podcast where he interviews experts in the world of Bitcoin development, privacy, investment and adoption. Launched in November of 2017, the podcast has grown to over 100 episodes with a guest list that is a testament to the diversity of knowledge and opinions that represent the broader Bitcoin community. Expanding his growing list of human interest recordings, documentaries and films Peter has recently launched the Defiance podcast and DefianceTV.

Caitlin Long

Avanti Financial Group, Founder & CEO

22-year Wall Street veteran who has been active in bitcoin and blockchain since 2012. In 2018-20 she led the charge to make her native state of Wyoming an oasis for blockchain companies in the US, where she helped Wyoming enact 20 blockchain-enabling laws. From 2016-18 she jointly spearheaded a blockchain project for delivering market index data to Vanguard as chairman and president of Symbiont, an enterprise blockchain start-up. Caitlin ran Morgan Stanley’s pension solutions business (2007-2016), heldsenior roles at Credit Suisse (1997-2007) and began her career at Salomon Brothers (1994-1997). She is a graduate of Harvard Law School (JD, 1994), the Kennedy School of Government (MPP, 1994) and the University of Wyoming (BA, 1990).

Hunter Horsley

Bitwise Asset Management, CEO

Hunter Horsley is Chief Executive Officer of Bitwise Asset Management. Prior to Bitwise, he was a product manager at Facebook, working on advertiser products including the multibillion-dollar sponsored content ecosystem and ad breaks in videos. Before Facebook, Horlsey was a product manager at Instagram, responsible for multiple advertising products generating several hundred million dollars of revenue. He is a graduate of the Wharton School at the University of Pennsylvania, with a B.S. in economics. Recently, Horsley was named a member of Forbes’ 2019 “30 Under 30” list.

Luke Gromen

Forest For The Trees, Founder & President

Luke Gromen has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst. He is the founder and president of macro/thematic research firm FFTT, LLC, which he founded in early 2014 to address and leverage the opportunity he saw created by applying what clients and former colleagues consistently described as a “unique ability to connect the dots” during a time when he saw an increasing “silo-ing” of perspectives occurring on Wall Street and in corporate America.

FFTT caters to institutions and sophisticated individuals by aggregating a wide variety of macroeconomic, thematic and sector trends in an unconventional manner to identify investable developing economic bottlenecks for his clients. Prior to founding FFTT, Luke was a founding partner of Cleveland Research Company, where he worked from 2006-14. At CRC, Luke worked in sales and edited CRC’s flagship weekly thematic research summary piece (“Straight from the Source”) for the firm’s clients. Prior to that, Luke was a partner at Midwest Research, where he worked in equity research and sales from 1996-2006. While in sales, Luke was a founding editor of Midwest’s widely-read weekly thematic summary (“Heard in the Midwest”) for the firm’s clients, in which he aggregated and combined proprietary research from Midwest with inputs from other sources.

Luke Gromen holds a BBA in Finance and Accounting from the University of Cincinnati and received his MBA from Case Western Reserve University. He earned the CFA designation in 2003.

Meltem Demirors

CoinShares, Chief Strategy Officer

Meltem Demirors is Chief Strategy Officer of CoinShares, an investment firm that manages billions in assets on behalf of a global investor base, and is a trusted partner to investors and entrepreneurs navigating the digital asset ecosystem. Meltem oversees the firm’s managed strategies group and its New York office and leads corporate development.

Previously, she was part of the founding team of Digital Currency Group. As a veteran investor in the digital currency space, she has invested in over 250 companies in the ecosystem.

Meltem is passionate about education and advocacy, and teaches the Oxford Blockchain Strategy Programme and co-chairs the WEF Cryptocurrency Council.