Funding a Charter City: A Venture Capital Perspective with Patri Friedman

Venture capital and charter cities are an unlikely pairing, but it’s one that presents interesting possibilities. Today's guest, Patri Friedman, is the founder of Pronomos Capital, the Seasteading Institute, and a veteran in the charter city and competitive governance space. We kick off the show by learning more about Pronomos Capital, and why Patri decided to start a venture fund dedicated to charter cities. With his Silicon Valley experience, Patri brings a unique approach to charter city thinking. From there, we discuss some of the factors that have led to the charter city movement gaining traction, including shifts in government and investor mindsets. After this, we dive into the Seasteading Institute and what spurred Patri to establish the organization. We then delve into founding a charter city. While there are capital constraints, Patri believes that the shortage of capable founders is one of the biggest obstacles in the space. Founders need to have a unique skill set, where they are visionaries along with some on-the-ground, embedded local knowledge. Next, we look at how charter cities overlap with and diverge from Western governance models and how they can apply lessons as best practice. We round the show off by discussing some of the opportunities that COVID-19 has created in the charter cities space, what’s in store for charter cities in the next five years, and what Patri’s most excited about. Be sure to tune in today!Key Points From This Episode:•  Learn about Pronomos Capital, the first venture fund dedicated to charter cities and its motivation.•  Why Patri believes that the legal system of a charter city is similar to low marginal tech.•  The shortcomings of viewing governance as a product rather than a service.•  Why Patri believes the charter city movement has gained the traction it has recently.•  Changes Patri has seen in the charter cities VC space over the past two and a half years.•  How the shifts in thinking about charter cities have happened for investors and countries.•  Seasteading’s founding story, some of Patri’s influences, and the institute’s mission.•  Why good founders — and not capital — is the major binding constraint Patri sees.•  Some of the characteristics needed for a great charter city founder.•  What charter city would-be founders can take from successful startup founders.•  The importance of a roadmap and more educational materials in the charter city space.•  Insights into the potential industrial organization of charter cities and influencing factors.•  How Pronomos approaches early-stage valuation for charter city companies.•  Learn more about floating cities and why they need high economies of scale to work.•  Charter cities versus western governance: Where it overlaps and where it diverges.•  Patri’s take on overcoming the first-mover challenge.•  Thinking about charter cities in high-income countries and some obstacles that come with it.•  How COVID-19 will shape emerging markets in the short and long-term.•  What’s on the horizon in the charter cities space in the next five years.•  Find out some of the projects that Patri is most excited about. Links Mentioned in Today’s Episode:Patri Friedman on TwitterPronomos CapitalThe Seasteading Institute