Do you think some of this changed? Obviously, youngest female self-made billionaire headlines everywhere.
I would actually say no. I think it really changed when I learned to become very confident in myself.
You've heard the Wall Street lore, the college dropout who made it big in tech, the founder who left a tech unicorn and built their own. But Lucy Guo has lived the lore. She's a college dropout who co-founded the unicorn Scale AI. Now she's running Passes. Today she tells me about the wildest, scrappiest money stories you will ever hear.
He took my laptop. I sprinted out the door.
Yeah. And I caught him like I would say like a mile, mile and a half in.
I just like lunged myself at his backpack and tackled him.
God, look. Money tips she learned after becoming a billionaire.
So, what a lot of people do, I could then take out a loan against my shares and then I would be able to take out a loan at a very cheap price and then be able to make money off of that and never pay taxes and then as those assets grow continue to take out loans.
And what it's really like to work hard and play hard.
I have an ex who closed a lot of deals at strip clubs and I always wondered like if there was an equivalent for women closing deals. I have like done diligence on companies at concerts and raves.
You are going to love this episode with Lucy Guo. I'm Nicole Lappen, the only financial expert you don't need a dictionary to understand. It's time for some money rehab.
Lucy Guo, welcome to Money Rehab.
Oh my god, you look incredible.
Oh, this is my DJ outfit. So, I think that hanging out with you now is going to give me some cool points. I don't know. I need.
I mean, you seem very cool to me.
Thank you. Thank you so much. It's nerd cool, but I'll take it for sure. And you said that right after this you were going to Barry's, which are.
Oh, no. No. I Barry's at 6:00 and 7:00 a.m. I 6 and 7.
Yeah. So, I do 6:00 and 7 a.m. every day, but I was just like, you know, I woke up at 5:55. I was a little groggy. I was like, I'm just going to pull the first thing I see, DJ outfit. So, here we are.
I love it. We haven't had this much sparkles on the show, but never forget your first. I did Barry's yesterday morning in your honor.
Um, by the way, I'm not like the number one Barry's champion of the world, but you know, when I show up, like I do feel better for sure.
I think it's all about the effort you put in, right? Like as long as you put in effort, you're going to get that serotonin release and you're going to feel good because you tackled a challenge that day.
I mean, I had a baby last year, so like thinking about vulnerability that Brené Brown talks about. It's not like live streaming your bikini wax. It's like showing up postpartum to Barry's was a very vulnerable thing.
Most badass people at Barry's are always the pregnant woman. Like I stare at them and I'm like, 'Oh my god, you're like pregnant and you're literally kicking ass.'
I love it. Okay, so you are all over the place from double hitters at Barry's to all the podcasts to all the conferences to all the things. Do you feel like you still work as hard as you did, hustled as hard as you did from before you were successful?
I would say so. My routine hasn't changed at all. Like I think I've always believed in the power of routine and like, you know, waking up early in the morning to work out to get your day started. And I think that like there was at some point in time where I let go of that routine and I felt like I wasn't working as hard because I wasn't getting as many hours in a day. But I'm back on that routine, right? And that was how I lived when I was first trying to build companies. And that's how I live right now where every single day I'll wake up between like 5:30 and 5:50 and then I'll get up, go to Barry's, do two double workouts, and then just go straight to the office and work.
I mean, even take me back to childhood, right? You grew up in an immigrant family like I did. I feel like there's a different mentality around needing to make money or the strive to make money. So you've always talked about the idea that making money was a goal for you. Even back to like Neopets days. Where did that come from? From your parents.
I had Chinese immigrant parents. So they always emphasized the importance of education and money. But education was to make money. Which is why in Asian culture, everyone jokes that like, oh, like my parents want me to be a doctor, lawyer, engineer, or else I'm a failure at life. Because those are three well-known jobs to make money. I think where I like wanted to make money really young though was the fact that like I was bullied in school. I never had like the coolest clothes or like the cool toys, etc. And these are things that I wanted to get that my parents wouldn't get for me. So, I figured out how to make money on the internet so I could get these things myself.
It's crazy cuz I have a very very similar story. I've actually never heard anyone else talk about it, but when I was growing up, I was also bullied for like wearing fake Doc Martens and they're called like nurse martins because, you know, like I couldn't afford it. I remember like on the playground someone told me like, 'Hey, like if you wore Abercrombie and Fitch, you'd be considered cool, but like and like maybe we'd be friends with you, but you're wearing like Aeropostale.' In my head, Aeropostale was this like expensive brand, right? So, I was just like, 'Wow, I splurged on this.' And you don't like this? That hurts.
I mean, and look at you now.
Well, I mean, this is actually really cheap. This I got in Mexico. Yeah, also true.
So, how do you feel like that has stuck with you? Because even like today I've done, you know, a lot of things that people would find impressive. You have done all the things that people find impressive, but like somehow the bullies from high school like still get to me. Like I can talk to anybody. Um, except sometimes when I hear like these girls' names from middle school come up, I'm like viscerally upset by it in a way that.
That actually surprises me cuz I think I'm the exact opposite where now I'm just like so happy and so confident and so grateful, right? Like every single day I just like am thankful that my life is how it is. And I also think like my mentality has shifted a lot to where when like bad things happen to me, I just think it's a lesson that I need to learn. I'm like, 'Okay, like this sucks, but I am just going to take this as a lesson. Look at the warning signs.' And I almost like postmortem everything in my life, I guess. So, I'm like, 'Okay, and then like this isn't going to happen the next time cuz these are going to be the preventative measures.'
Okay, I need to adopt that. How did you get this really healthy mentality?
At some point, I just became really happy and I was like, 'Okay, like I have this like support system around me. Like, I have the best friends in the world who I would do anything for and they would do anything for me.' And I think that hatefulness really does stem from jealousy at the end of the day. Like there's no other real reason to think about someone and just be like so angry at them. It could be someone with like a nasty personality, but like you might still be jealous about like what they have, right? So yeah, I'm just like whatever. Like haters are always going to be haters and like you're doing something right if you have haters.
Yeah. I mean comparison is the thief of joy and it's also the idea of like taking poison and hoping the other person will die because really it's like poisoning yourself.
Some of this changed. Obviously, youngest female self-made billionaire headlines everywhere.
I would actually say no. I think it really changed when I learned to become very confident in myself. And this actually happened back in when I during COVID I moved to Miami and I guess I was always like a little bit bullied within friend groups before Miami and Miami was the first place where I received like this extreme like selfless love. I can't really explain it. And I think it like started a new era for me. Um, and I think also like as my confidence grew and like the energy around me was more positive, I was able to just start blocking out all like negative energy.
Oh, I got bored during COVID. No. So, not a tax situation.
Not a tax situation. I actually I am paying like I obviously have my liquidation event like last year, right? And I'm paying like all my California taxes.
Yeah. Yeah, I had the opportunity to escape. But at the end of the day, I'm like I think it's worth paying the taxes to be somewhere that like you need to be whether it's because it makes you happiest or like whether it's professionally, right?
Yeah. Yeah, it's a sunshine tax.
When you surpass the certain net worth, did you feel like that added confidence or had nothing to do with it?
No, it didn't have anything to do with it. I was not really liquid until like quite literally last year, like a few months ago. But I felt this like I would say like I turned much happier literally in Miami which was 2020.
Love that for you guys. Like field trip to Miami. Let's go. Was it weird like when that headline became public?
I wouldn't say it was weird. I would say I expected it but it didn't mean anything to me because for me I'm like okay like this title is going to be taken over. Like it's whatever. It's not liquid. At least it wasn't at the moment. I believe that like with anything illiquid things can go to zero, right? So I was like it's all paper money but I would say like it opened doors like new opportunities. I suddenly had a lot of DMs from famous people like who I can't say.
But like in a sexy way or like in a business way cuz I get I don't get any sexy DMs. I'm sure you're not shocked but like I get businessy type DMs. You want to invest or that that stuff?
I would say obviously a mix of both. Um, the ones I was obviously excited about were probably just like old celebrity crushes.
Okay. Okay. My imagination is running wild. And with these superlatives that we hear around like youngest billionaire on all of this, how do you feel about the youngest component of it? Because I had that early in my career. I was like the youngest anchor on CNN or CNBC and then I wasn't. It felt like a weird shift for me like that moniker. How do you think about that?
I think the way I think about it is just it gives people hope maybe that they will achieve it one day, but like in reality like you're going to have the title for like a few months and then someone else going to stake it, right? I think someone else already need to take it. Like how she co-founder, she's like so cool. Won't let me invest in her round because it's closed but so cool. So.
Oh, I totally DM'd her and I was like, 'Hey, like is the round closed?' The answer was yes. But in the moment, right? Because I think every single person is different. So when they see someone that like looks like them, grew up in the same like lifestyle as them, etc., they get hope. Like the Kelsey co-founder is very different than me, like she was, I think, an athlete. And like that's just so different. But like other people will like relate more to her than they relate to me and get that hope. And I think that like as new people get this title every few months, it just gives more of the world hope. And then like hope drives a lot of like people, right? Like they work harder because if you don't have hope, like why are you on this planet doing anything?
It's really interesting that you say that cuz I know that you've talked about not being a role model or not considering yourself a role model, but it sounds like you do know that you give other people hope.
I know I give other people hope. Like I'm not sure if I'm a role model, but like I give other people hope and I always try to like give my advice in the bluntest way possible and like I like giving back that way.
Yeah, I think when people, you know, see those types of headlines, they assume that you have like a billion dollars in your bank account. So for people that don't understand like the liquid not liquid thing, can you explain because you know we talk about the idea don't mourn paper losses or don't rejoice paper gains, but you really live by that which is incredible.
Yeah. So I guess the best way to explain it for people is if you start a company, right, and it becomes worth, let's say, like $2 billion and you own 50% of it, that $2 billion is dictated by like whoever invested in it, but it's not really actually like $2 billion. Like one person could decide, oh, it's $2 billion, so I'm going to give you this valuation when it could really in reality be worth zero. And there's actually a lot of investors that are just, you know, stupid and they'll invest, let's call it, $200,000 at like multi-billion dollar valuation. A founder could literally say like, 'Oh, now my company is worth a billion dollars even though there's like $200,000 in the bank.' I think another like maybe easier to understand example is let's say your family gifted you a bunch of Picassos and suddenly you have like billions of dollars in art but like you still have zero dollars in your bank account and like are you going to be able to sell those Picassos? Like you don't know how much you're going to sell it, when you're going to sell it, etc. So there's a very different like it's very different when you have like money and things versus actual cash.
Were people hitting you up for money after that cuz they didn't realize?
I mean I would say people have been hitting me up for money even before I had like a dollar really. But yes, a lot of people hit me up for money constantly.
And do you do you lend people money?
I don't lend people money. No. That's like a big no no for me.
Yeah. Or like friends or sometimes when friends ask me for money, I give it to them and I just think of it as a gift like I write it off.
Yeah. I would say like if a friend was like homeless, right? Like what I prefer to do um which actually just recently happened is I'm like, 'Oh, here's like a room in my house. You can stay here however long you want.' Right? But if someone asks for I guess money, I usually ask for something in return just cuz I think it's principle. Whether it's like, 'Oh, will you like be my PA for a week then in exchange for let's call this $5,000.'
Mhm. I've actually done that too with a friend. I gave her sort of like a token job. And I think that gives people a sense of worth too around it versus just charity.
Exactly because you never really want people expecting free things from you. And I do think that like you for the most part can expect the money is never paid off. I've only loaned one friend money ever. And it's because um I mean he comes from a very wealthy family and he makes a lot of money just like in his line of business. It's you know you need to reinvest it all right. So he's always pay me back early and gives me a large percentage on top of the money that I loan him.
Okay. So you're like a bank.
He just needed like cash flow it sounds like.
Exactly. It was more of like a business transaction. But yeah people say decide what you want more. The friend or the money if you loan friends money. So, did you have a bad experience? Just you're just really cautious.
I would say I have gotten scammed by a friend. It was more of an acquaintance friend, but it was like almost structured like an investment, but the investment was in a document as a loan, but he pretended to run this like memecoin crypto fund and showed returns. He showed me a cold wallet with like millions of dollars saying that like if he lost the money meme coins, he would back it with that. Turns out he stole someone's cold wallet. Yeah.
And so, did you give him money?
I didn't give him money. Yeah. No, it's a whole FBI case now.
No, I feel lucky cuz I didn't give him my net worth, right? But there were a lot of people like childhood friends that have known him since they were like 3 years old, 5 years old. They gave him like their net worth and like that's much worse.
Like they gave him all their savings. Yes. Do you think you have a lot more people hitting you up for investments?
I do have a lot of people hitting me up for investments. I think I need to stay disciplined obviously to make good investments and my thesis with investing has always been invest in the best engineers and I go early stage. So um like my hypothesis just like they can live off of ramen until they give up essentially because otherwise like engineers don't need to hire other people. You can continue pivoting different ideas and like I actually just had an investment exit where he tried ideas for a decade. It failed after failed after failed never gave up just like you know lived inside our apartment in Oakland on a couch like eating junk food and he just sold his company to Anthropic. So decent return for me. I'm pretty happy. Um yeah and I'm very happy for him and I think that's just like I've had so many investments go that way where it looks like a dead company and then the founder never gives up strikes gold.
But you see that because you know what that's like being like a scrappy engineer.
Do you have an idea of an amount like a fund or you're just sort of ad hoc?
So I have been doing it with personal money that being said happened like a week ago but I had an LP interested slash it's just moving along so it's probably going to be closed by next week so I'm starting a new fund.
Knowing you, $250 million fund yeah let's go.
And proven founders too get a lot more cred and get a lot more money. Like it sounds like you were raising for your next company and just sent a bunch of texts which you probably couldn't have done before you got that successful.
Yes. So that was just I mean that was just a blessing. I was like okay great cuz I was a little bit nervous. I was running a fund and I was like oh my god are like my LPs going to be mad that I'm starting a new company. So the first thing I did was allow my LPs to invest before letting other investors in. And it was a whole mess. It was way over subscribed. I think it was raising like 2 million, ended up being 9 million.
Very high cost problems to have.
If someone's watching and they have an idea that fits this thesis, how can they pitch you?
They could just email me at like lucypasses.com. Actually, I have a new one.
[email protected]. Is that what it's called?
Yeah, we're calling a VC. As of now, I mean, we came up with that name. Like when I say literally this all happened within the span of a week. I was like, 'Well, I mean, what can she not do?'
Can they slip into your DMs?
Yeah, they slip into my DMs. I actually read them and like just send me like a doc send. I like reading about the founder, too. So, like a LinkedIn and a doc send is nice.
Good to know. And AI doesn't have to be AI.
Um, doesn't have to be AI, but like I like seeing how a founder like uses AI in their daily lives to make like running their company more efficient.
And what do you think is the thing that's going to gain most traction within AI? Because like 5 years ago, if you had AI anything, I mean, you were doing AI before it was cool, but people would invest more because it was like the buzzy thing. I think now potentially prediction markets is like, you know, the buzzword for investors, but where do you think there's like specific resonance? Agentic AI or what?
Yeah. So, I think at the moment boring industries that are implementing AI to be more efficient are going to be the like big killers. AI is extremely good at like repeatable tasks and like analyzing like long form documents for example. So, I think that like Harvey AI legal, it's a huge huge market. I think that AI is better at like doctors or radiologists at like you know looking at images and detecting cancer etc. these tasks that like require like extreme memory, extreme computer vision, like just analysis, the more data, like if you enter an industry where there's tons of data you can just pour into the software or into a model um to learn from, you can 10x efficiency, right? I think that where it's going to improve is probably industries I'm not even thinking of because I'm unaware of like how the industry works, but like very old industry.
Yeah. The boring. Yeah. The boring.
Yeah. And when you worked on the other side by taking money from investors, did you ever have like a weird experience that you want to do differently now that you are an investor?
Honestly, my fundraising strategy has always been the same as like, you know, a founder, which is cause FOMO and then through that FOMO like jack up the price of the valuation.
To cause for like make them want like be like this is a rocket ship. Like if you're not on this rocket ship, you're missing out kind of, but like also just plant seeds without telling who you're talking to. So say like, 'Oh yeah, like I would rather be like, 'Oh yeah, I'm going to Sand Hill Road. I have a few meetings, so like this day at this time works because then they're like, 'Oh crap, like who is she talking to? Sand Hill Road has all the best VCs. Like this is going to be a killer deal. I need to move fast.' Right? Like that causes FOMO even if you're not going. So, I try to time like all my meetings around the same time. So, then I get multiple term sheets at the same time and then make those term sheets bid against each other.
How did you learn that? Cuz that it's an art. Like there are some people that are really good at fundraising and then there are people that are really good at sort of this 3D chess of like playing people off each other.
I think it's a lot of it is psychology. So, you know, there's like a Kickstarter method where when like 80% of like the Kickstarter is filled like it's going to get oversubscribed. People have like a fear of missing out. So I like the best advice I always give founders is start at a lower valuation. Say you're raising less than you want to raise. So you're trying to raise 2 million. Say you're raising 1 to 1.5, right? Because then you could say oh like there's barely any left. It's oversubscribed. And then for like the next like call it 500k to like let's say you bump it to 3 million. So 1.5 million that you try to raise you can jack up the valuation which a lot of people do.
Like it's better to beat low expectations.
Yep. Because like if you like tell like like if I tell you like hey I'm raising 1.5 million like a whole million is taken already. You're like oh shit like I don't have much allocation left. But if I'm telling you hey I'm raising 2 million I have 1 million raised. It's like oh you're I'm not even at like if I'm at 50%. Right. It's not that great.
Totally. This is like what happened in real estate a few years ago especially in LA. People would put their homes on the market for like one something.
Yeah. But I think that's why you want to give like a facade of like I don't need the money, right? Because that makes people more confident that you will make them a lot of money.
Kickstarter method because you don't need the money when you but you do need the money.
Yeah. I mean, are there any other psychology tricks that you would give founders?
