00:20:54 · Molly O'Shea, Israel Slodowitz
[00:20:54] S1: And just the onslaught of Silicon Valley becoming so big and all these with huge equity values. [00:21:00] S0: Yeah, it's insane. The legacy models of buying an airplane, running it through your business, and taking tax write off, it doesn't quite work for these people. Their net worth is in capital gains, not an ordinary income. So we actually built an exchange fund, which is a very old financial product or financial structure where people can diversify. A bunch of people can contribute their stock into a fund pool together, kind of like a potluck, right, where everybody comes with a dish and they walk away with a meal. And and one of the rules for these funds to exist is that there needs to be an operating business in the fund as well. And historically exchange funds have used real estate and public storage units in Albuquerque and self storage, things that people don't care about. What we did was we took an already existing thriving operating cash flow business. And we basically layered an exchange fund on top of that. And what that allows us to do is it allows us to offer the members in the fund access, premium access to these plans they wouldn't be [00:22:07] S1: able to get otherwise. Wow. You have VCs on your website. Did you raise venture capital? Like, how did this start? Well, it actually just started by understanding that
00:22:21 · Israel Slodowitz
[00:22:21] S0: my problem was their problem. My problem was that I realized that when I had a single airplane, I had a very volatile P and L profit and loss statement. So one month we had very profitable, the next month it was very unprofitable because there was some sort of maintenance issue or a pilot left. And what I realized is as I started adding more airplanes to my fleet, I realized that the volatility started to come down and then while one airplane was down, four airplanes were flying and one airplane was down, six airplanes were flying. And I realized that the customers that I was flying had the exact same issue. They didn't really have a private aviation issue. There are many options when it comes to private aviation, all very good ones. But what did have was a stock problem. A big part of their net worth was concentrated in a single company. They were one article, one news report away from losing 13%, 14% of their net worth in a day. IBM lost 13% of its value in a single day. I think Broadcom just now, just this past week, lost like 10% in one day on a single earnings call or a single article that Anthropic is building some sort of software. So people who have now built this generational wealth for the first time also had a volatility issue. And I realized that I had the same problem my customers had. And that's when I started to learn about exchange funds and understand how they work and their mechanics and do a deep dive and ultimately came to my customers and said, hey, this is what I'm building. They were immediately very interested. And that's kind of how we we pivoted into this exchange fund model.
00:24:03 · Molly O'Shea, Molly O'Shea, Israel Slodowitz
[00:24:03] S2: Sorcery is brought to you by Brex, the financial stack trusted by more than 30,000 companies, including one in three venture backed startups in The US. Nearly 40% of startups fail because they run out of cash. REX is literally built to help founders avoid that. Unlike traditional banks that let your money sit idle, chipping away at it with fees, REX is designed to help you spend smarter and move faster. Their all in one solution combines checking, treasury, and FDIC protection into one powerful account. You can send and receive money globally at lightning speeds, get 20 times the standard FDIC coverage through their partner banks, and even high yield from day one. With same day and even same hour liquidity, access your funds anytime. Companies like Scale AI, DoorDash, Service Titan, HIMS, Anthropic, Flexport, Robinhood and Plaid trust and use Brex. Start today at brex.com/sorcery. That's brex.com/sorcery. Turing is training the next generation of AI with tasks that require real expertise and real world judgment. That's why companies like Nvidia, Anthropic, Salesforce and Gemini partner with Turing. Turing builds realistic reinforcement learning environments and data systems based on real operational traces, the kind of infrastructure Frontier Labs need to train superintelligence. Visit turing.com/sourcery. [00:25:33] S1: Okay. Izzy, we are now flying. We're in air. It's actually not that loud. I was really worried about that. [00:25:40] S0: It's pretty quiet.
00:25:40 · Israel Slodowitz, Molly O'Shea
[00:25:40] S0: It's pretty quiet. [00:25:41] S1: There's pilots in the cockpit. You just walk through the different types of financing and ways to fly private. But what is the most economical way to fly private? [00:25:55] S0: On a friend's airplane. Okay, [00:25:58] S1: it's free. How do you find these friends? [00:26:02] S0: That's the key question. I think like, the the truth is, like, flying private is not economical. There is no real economical way to do it. It's a very expensive thing. And it's really a matter of, like, priorities if it's something that is important to you if you see, like, the utility of it as important to you in life. But flying private isn't cheap. There is no there is no cheap way to do it. [00:26:24] S1: Yeah. Last year in 2025, I think it was publicly reported that Alex Karp spent around $17,000,000 on flying, and it if you if you kind of, like, do some of the math on the price and the per per hour, it came out to around three months in the air.
00:26:24 · Molly O'Shea, Israel Slodowitz
[00:26:24] S1: Yeah. Last year in 2025, I think it was publicly reported that Alex Karp spent around $17,000,000 on flying, and it if you if you kind of, like, do some of the math on the price and the per per hour, it came out to around three months in the air. [00:26:42] S0: Yeah. Yeah. I I think I I saw that that report, and it's probably like the I think they have, like, two airplanes. I think maybe the way they they leased it back from to the company, they they they did some they they probably structured it as, a dry lease or something. But, yeah, that's it sounds like they're in the air a lot. I mean, you see, like, SpaceX, Elon Musk, like, they're he's flying, like yeah. I I'm sure you've seen that clip of, like, you know, one year of his flights. Like, you just there's just things you can't do without private aviation. You just can't do it. Like, what we're doing today, just being able to go to San Francisco for the night, have a few meetings tomorrow, then come back when we're done. You just can't do that. [00:27:18] S1: LA is the best commuter place for people in San Francisco. If you don't live in LA, you don't get it, but it's very beautiful. Okay. I have a really fun question. Who do you think flies more? Elon Musk, Alex Karp, Jeff Bezos, Taylor Swift, or Jensen Huang? [00:27:37] S0: I think if the answer is easy, Elon Musk. Elon? Absolutely. [00:27:40] S1: Even though it's mostly domestic? Yeah. But I
00:27:40 · Molly O'Shea, Israel Slodowitz
[00:27:40] S1: Even though it's mostly domestic? Yeah. But I [00:27:42] S0: mean, I I think first of all, he flies international as well, but, like, I mean, he's running what? How many companies? A lot. Going between each company, and he, like, goes in office and and is there in person. I remember when I was, like, just get get like, starting to starting to fly out of Hawthorne Airport. I see his plane come in and land and see him get off and on, and it was just, very inspiring. [00:28:01] S1: So Preston makes a lot of content around the financing of private aviation. What does he mostly cover? Like, what should people be reading? [00:28:10] S0: Yeah. So so Preston Holland, he has a podcast. He talks about aviation finance in general. He's a broker, so he's good. If you're looking for if you're looking to buy a plane, you're looking for a loan, he'll help you find a bank. Financing a plane is kind of like financing a car. Right? The bank a bank will want to securitize the aircraft. They'll file a lien on the airplane, and then they'll also want to look at your personal financials and make sure you have the ability to repay the loan. Financing fractional is a little bit more difficult. So if you go to, NetJets, for an example, they have their own in house financing department, so you can get a loan there. But most other fractionals, there's only a select few banks that will that will do finance. Actually, a a fun fact is that only 30% of aircraft have loans on them. [00:28:56] S1: Really?