🍪 Barstool's epic run

Happy Thursday, friends. This is Bite Sized Beta. We take the best ingredients in tech and roll them up into the perfect burrito for you. Plus, the guac is free!

Here’s what’s going on this week:

• 💸 How Barstool went from $551M to $1

• 🍪 Cookie crumbs: 5 bite-sized headlines

• 🤖 Startup of the week: Anthropic AI

• 🍫 Chocolate chips: 3 of our favorite finds

• 🗳️ Poll of the week: do you feel poor or rich?

• 😂 Snickerdoodles: memes for the weekend

FRESHLY BAKED

BARSTOOL’S EPIC RUN

Imagine selling your house at the top of the market.

Times are good.

You close on a great offer and move out.

You’re happy, your wife’s happy, and your bank account’s happy.

The guy that bought your house though? Not that happy.

‘Cause that same year, he realizes he’s in waayy over his head with this house.

He’s now gotta foreclose on it, so he offers it back to you for $1.

Deal of the century, right?!

Well, that’s exactly what happened to Dave Portnoy this week.

He bought his company, Barstool Sports, back for $1 after selling it for $551M in February.

Here’s how it all went down:

Dave started Barstool as a newspaper company back in 2003, and eventually launched an online blog for news and advice on fantasy sports and gambling.

The brand attracted a cult-like following, because their whole schtick is about saying what they want and giving no f’s.

Eventually, the unfiltered brand became a huge mainstream media business and was acquired by PENN Entertainment this year for $551M.

So what happened?

PENN Entertainment originally wanted to roll out a sports betting product under the Barstool brand, but ran into a bunch of problems:

• Barstool was a small fish in a large pond with virtually no market share compared to the major sports betting platforms like Fanduel and DraftKings

• Sports betting is a highly regulated industry, and Barstool being the anti-corporation made them a target for regulators and often got them into hot water in the press, which tanked PENN stock on several occasions

• PENN couldn’t get any Barstool products to take off - they even tried opening Barstool branded bars in different cities, but saw limited success

So they decided to cut their losses with Barstool and look for a more promising partner.

And this week, they announced a new sports betting partnership with ESPN, which has 117M unique visitors/month compared to Barstool's 8M.

Good for them. But what about Barstool?

Does Dave just get it back for free?

Not exactly.

Part of the deal is that Barstool can't compete with Penn, which means they can't launch their own sports betting platform or take ad money from other PENN competitors.

The other part of the deal is that PENN gets 50% of any future liquidity event, so if Barstool eventually sells, PENN gets half of the proceeds.

Buuut in return, Dave gets 100% of Barstool, and now no one can tell him how to run his pirate ship.

Plus, he says he’s never going to sell Barstool again.

It’s kind of a win-win - PENN gets to move onto bigger things while eliminating a competitor, and Dave keeps his bag and gets his company back.

But wow, what a wild ride.

COOKIE CRUMBS

BITE SIZED HEADLINES

FROM THE COOKIE JAR

STARTUP OF THE WEEK: ANTHROPIC

Anthorpic was founded by 11 employees that left OpenAI, and they’re building AI assistants for complex business tasks.

AI startups these days seem to appear faster than you can yell, "hype cycle," but this one’s a little more interesting…

Anthropic just got $100M of fresh funding this week, and has now raised a total of $1.55B, making it the second best funded AI startup behind OpenAI.

It’s still a ways away from OpenAI’s $11B from MSFT, but it’s now basically the leading non-blue-chip AI startup.

Keeping our eyes peeled on this one… 👀

CHOCOLATE CHIPS

OUR FAVORITE FINDS

• Founders, listen up - someone created this AMA database called the Startup Archive, where they’ve aggregated all the best startup and company building advice from people like Zuck, Sam Altman, Patrick Collison, and more.

• This tool shows you all the stock holdings of big wig investors like Warren Buffet, and apparently the guy’s portfolio is now 51% Apple.

• Bloomberg did a study and apparently rich people still feel poor. There’s even a fun calculator where you can put in your income and see how much richer or poorer you’d feel living in different places.

FROM THE COOKIE JAR

ARE YOU FEELING POOR OR RICH?

If people with millions still feel poor, we wanna know how our readers are feeling. We’ve got mostly tech employees, founders/execs, and investors in our audience, so let’s see if “rich” is really a mindset - how are you doing with your current income?

SNICKERDOODLES

THURSDAY MEMES

 😂 

What'd you think about this email?

• 🍪🍪🍪 Top notch!

• 🍪🍪 Meh... could use more milk

• 🍪 Undercooked, do better