class we have seen that if you have given a minimization problem and it is subject to linear equations. And objective function is linear and subject to the constants the constant also linear then it is called as a linear programming problem. And we have given a basic idea how to solve that type of problem by considering that two variables two class of variables one is basic variables another is non-basic variables. Then non-basic variables which are the we will assign as a non-basic variable that variables values we are assigned to a 0 and in turn we get a basic variables values. Then we shift one of the non-basic variable values we convert into a basic variables and one of the basic variables is converted into a non-basic variables. And which non-basic variable which basic variable will be converted into a non-basic variable and non-basic variable which one will converted into a basic variable that we have discussed yesterday. Let us see that what we can do with the what is called in algebraic approach matrix and vector form. So, numerical method of solving the linear programming is known as the simplex method. So, let us call the algebraic we are just discussed the algebraic approach to solve linear programming problem. This method is an algebraic approach the algebraic approach or numerical method that way we will solve the linear programming problem is known as the simplex method. So, let us call our minimization problem minimize f of x, x dimension is n cross 1 and decision variables are there and that we have written into a c transpose x n cross 1.  So, this we partition into two parts this c transpose matrix we partition into two parts c b transpose partition c d transpose that c b transpose will be associate with the basic variables x b and x n non basic variables which is denoted by n. The dimension of this x b vector is m and this dimension from here to here this dimension is n minus m. So, and subject to what this objective function is linear function and subject to our constant and that constant is a set of linear equation in terms of x variables and x is n components. So, we have a x which is n components are there is equal to b and we have a m number of linear equations. So, this dimension automatically it will be m cross n. So, this also we have partition accordingly our what is called basic variable associate with the basic variable and non basic variable the matrix a is partition into two parts b partition d. Then this x b then x n is equal to b cross 1 and this dimension immediately you see this is m rows and this is b as m rows and this as a you can say this as a n minus m rows. So, this a is partition b into b and d. So, and we are then x all components of x is greater than equal to 0. In other words we can write this x is partition into two parts x b which is a basic variable that values are non 0 and x n which is a non basic variable this values are also greater than equal to this value is equal to 0 this is n is equal to 0 this. So, this we have partition that x values are greater than 0 then we have partition x b and x n. So, if we consider that our non basic variable are x last n minus m variables are non basic variable that values will be assigned to a 0. So, this dimension is n minus m into 1. So, from this is let us call this is a set of equation which is equation number of 1 this. So, if we consider the non basic variables x n x n is equal to 0 then from 1 we can write it from 1 from 1 we can write it c b into x b plus d into x n is equal to b. But this value is we have considered non basic variable which is is equal to 0. So, we will get a basic solution and that basic solution must be a feasible solution feasible solution means x is greater than equal to 0 and we have to all constant must be satisfied and this naturally it will be satisfying this one. So, our therefore, our x b is equal to b inverse into small b. So, this is our basic variables we got it. So, our basic variable solution now.  So, this is these values are greater than equal to 0 to this one. So, let us assign this equation number is what we got it this x b value this is a 2 and this is equal to or this equation you give it 2 forget about this equation number you will recall this equation once again. So, and this equation is equation number 3. So, now we can find out that whether there is a next question is what is the corresponding cost function value f of x because we have we have assigned out of n variables. If you see we have assigned n minus 1 m variables is 0 and remaining m variables values we can get it by taking the inversion of b inverse b and that is called basic variables. So, basic feasible solution that what we got it basic feasible solution is this one. Then corresponding function value we can find out what is this function value if you see the our objective function expression this is c b transpose into x b plus c d transpose into x n. So, x n value is 0 and this values we got it is c b transpose and x b value we got it you see b inverse b inverse small b say that value is 0 z 0 say and that is equation number 4. So, basic step of simplex method is there we are now we are now having a feasible solution x from there that vertex if you move to another point in a feasible region. Then we want to see whether that point will reduce the function value from the present vertex or not if it is reduced then we will accept it. So, this is our basic idea of what is called the simplex method what are the feasible solution is there now basic feasible solution we will move to another adjacent feasible point or feasible vertex and at that vertex if the function value is less than the previous point previous adjacent point function value then we will accept that one. So, let us say how logically we will proceed that one. So, this basic step of simplex method is to move to another adjacent feasible point. So, that the function value so that the function value means cost function value value is reduced in such movement in such movement that is the basic idea of simplex method. So, let us call we have a set of linear equations are there and this is the vertex of this one and these are the all feasible region is inside this polygon and this is the vertex let us call this vertex is x u or you can write y this is y u b w z this is y. So, if you move the adjacent vertex I can move to adjacent vertex is here or at this point I know the function value at this point y point. If the adjacent point if I move it if the function value is less than the value of the function at point y then we will accept that feasible solution of this one one of the feasible, but that feasible solution may not be what is called minimum. So, you have to look that any one of this vertices will give you the minimum value of this functions agree. So, this is not the adjacent not adjacent to y adjacent to y is u u is adjacent to y this is adjacent to y z, but w is not adjacent to y. So, you will move immediate adjacent to our present feasible solution whatever we got it. So, let us say with this one that what happens next question will be what happens if the one of the non basic variable x n all non basic variable we have assigned 0. If we change one of the non basic variable to a basic variable means non basic variable all variables value is 0. If one of the non basic variable we make it non 0 then what will be the function value will increase. Next question which non basic variable will increase out of n minus m variables which non basic variables will increase it. So, this is the question. So, if we increase that if we just move that point naturally function value will change increase, because function value will increase that which variable will move it depending on this one function value may increase may decrease also. So, you have to take the judicial decision that which variable of non basic variable will increase its value. So, now question is here what happens if 0 component of x n x capital N it has a n minus 1 component all components are 0s increases to some value. So, what happens if 0 component of the increases to some value the non 0 component of x you see the non 0 component the non 0 component of x b that basic variables values are non 0. The non 0 component of b must drop by b transpose b inverse d x n to maintain equality to maintain equality constraint equation 2. So, equation 2 you see this one. So, if because you see now this d is a matrix all elements of x is 0 out of all this in one element if I increase it if I increase it increase it and corresponding column that corresponding column of d which multiplied by that element of that x n agree. This corresponding element if you multiply by this one that value will not be equal to b until unless there is a drop in this components agree. So, we can write it now from this equation that is what we have written it i minus b i not minus i b inverse d x of b minus b d inverse x n and x n must be equal to the right hand side b inverse b. See here what I did it both side I multiplied by b inverse agree. So, x b now it is writing b inverse d x n agree and right hand side is b inverse b.  So, naturally the corresponding element multiplied by that corresponding column of that one this product agree this vectors will is added with this one previously it was 0 is contribution was 0. Now, it is added with this one. So, in order to satisfy right hand side b there must be some component of this one it has to be drop out. So, this is now coming to the picture. So, this I can write it now if you see this one that x n into b if you multiply x b into this then x b inverse what is called b inverse d x n it will be cancelled and ultimately it is x b is equal to b inverse b inverse b. So, this part is increasing and from the x b this part is drop out. So, this is the condition is there if you change one of the variables of x n if you change it there must be a drop in from x b some component of x b must be drop out. So, this now total change or that you can say that changes the cost function is see this curve what is our c b transpose into x b what is x b x b. Now, this whole one x b minus b d inverse x n plus c d transpose this is our perform ending objective function c d transpose into x n this one. So, if I one of the element of x n that out of n minima if one of the element if you change it there must be from x n some x x b vector some has to be drop out. So, that this equation is satisfied this is the thing. So, if you readjust this one I can write that c transpose b and x b x b you can write it this x b is nothing but a b inverse small b plus this term minus this into this c transpose x n minus c b transpose b d inverse x n this is x n this is x n. So, now this is c suffix this is c suffix b c suffix b. So, this is some c suffix b b inverse b this is a our previous point objective function value what is the previous function value. If you change x n to some other value then this changes are coming c d transpose minus c b transpose b d inverse whole x n again I think I here I have written c b c b. So, this is not a c b inverse d b inverse d. So, this is if you manipulate this one c b d inverse this agree b inverse d b d inverse not d inverse b inverse just a minute. So, what we got it that one this is b inverse sorry here you just make it correction because this is b inverse this is b inverse this is not inverse drop this is b inverse this is not drop out agree when you have just x b value is this one then this is your b inverse this is not there this is b inverse this is not there agree this is I mistake here b inverse. So, now you see this term if you see this term f of x is coming f of x is coming z 0 the original point objective function value plus that your c d transpose minus c b transpose b inverse d into x n and let us call I consider this is a r d this is the row vector this is the row vector of dimension n minus m into 1 this because this dimension is n minus 1 n minus m in n row this is the column vector this is row vector. So, I write it is a r d transpose into x n now see this one this function value if I change the non basic variable value from 0 all values are 0 from there if I change it some value some of the element if I change its value. Then the total value of this one is coming the next point is z 0 plus r d transpose into x and this quantity is a scalar now it depends on whether the function value will decrease or increase it depends on the row vector elements of row vector of r d transpose because one element we have to increase because r x x n non the variable is greater than equal to 0 we have to increase it. So, this function value will decrease when if corresponding element of x n corresponding element in r if it is negative because x n is x n that which element you have considered is a positive that corresponding element in r d transpose must be negative. Then there is a possibility of reducing the function value that means. So, we have it this you can write it the cost value you can write the cost value goes up and down up or down that depends on the value of depends on the elements of or you can say on the sign of the vector that means r d transpose is equal to c d transpose minus c b transpose b inverse d this one. Now, let us call if this is a row vector if you consider the all elements of this row vector all elements of the row vector r d transpose all are positive and the x n how many elements are there in of x n vector non-basically there are n minus m elements out of this one element. Let us call I want to change its value from 0 to its value I want to increase it then this function product of this function will be a positive because all elements of this if I consider positive then this product will be positive. So, objective function value is increasing. So, we are now away from the our goal our goal is minimizing the objective functions this one. So, if you think in other way if r d transpose is less than equal to 0 or the elements at least one elements of r d transpose is one element is negative and corresponding element of x n element of x n is positive then product of this one will be a negative one. So, there is a scope of finding the value of f x is finding the value of f x to be reduced agree or to reduce the function of value of f x if you move that point. So, whole thing whether function value will increase or decrease that depends on the r d. So, in short now we can write it that if r d transpose is greater than equal to 0 that means all elements of r d is greater than equal to 0 then r d transpose x n is greater than equal to 0 since x n is greater than 0 you have consider one at least one of the element is non-zero that. So, the best decision is to keep x n is equal to 0 suppose r d is all elements of this and if you consider all elements 0 then x you want to increase it then this product will be greater than 0. That means function value is increasing then it is better whatever the point you are earlier at that point that point you keep it as an optimal point of this feasible solution agree. So, another choice is that as a all the elements of this if at least one element one component of r d transpose is negative at least one out of how many elements are there and minus one elements of r d out of this at least one element is negative then corresponding x n element which is multiplied by x n element that element if you change from 0 to non-basic variable to basic variable to 0 to increase this value the function value will decrease. That is why if at least one component of r d is negative then the cost function cost value can be reduced by increasing by increasing the corresponding component of x n by increasing the corresponding component on x n. So, now if you find that there is a the r d that row vector r d transpose row vector if there is a more than one component more than one component having a negative sign of that r d transpose that row vector element more than one element is having a negative sign then which corresponding I mean variable of that r d you will consider as a basic variable the most negative sign of that numerical values will consider as a basic variable because that will give you the reduction of the function value much than the other negative value of in r d transpose. So, after r d is completed after r d is completed the entering point entering basic point basic variable let us call x i is determined by the largest or most largest negative coefficient of r d transpose it allows that component x i to increase from 0. Next is we have increased this one. So, just now you have mentioned it here if you recollect. So, one of the basic one of the non basic variable is now chosen as a basic variable. Now, one of the basic variable now we have to select as a non basic variable out of m basic variable which basic variable we will consider as a non basic variable that we have to select it next is how now which component of basic variables x b will treat as living basic variable. That means that very basic variable is living and entering as a non basic variable which basic variable will consider that is the next question entering as a this which basic variable living and entering as a non basic variable. So, now recall this our basic expression that is i b trans b inverse d x b x n is equal to b inverse b that is our basic that is our what is called equality constants are there we have written if you recollect b we have recollect this one we have written b partition d then we have a basic variables x b then we have a non basic variable x n is equal to b. So, both side inverse this is a square matrix this is a square matrix both side I take the inverse all this. So, it will come this way now you see I have this if you consider the i th component of x n is non zero remaining element is how many components are there here x n n minus m out of this i th component of x n is non zero other is zero. So, if you multiply by b inverse d with x n agree if you multiply by this b x. So, first component of this one x n will multiply by first component of b inverse d plus second component of x n will multiplied by second component of b inverse d and so on. So, I have considered the i th component of what is called x n will be multiplied by i th component of b inverse d that component will be multiplied that will be non zero other remaining element will be column will be zero. So, I can write it now let us call i th component of i th component of b inverse d is equal to this small b into I am considering i th component of this one multiplied by x i agree this is this then what is this component will be there here x b plus is equal to b inverse b.  So, this is you can write it this v is what v is is the i th component i th column not component i th column i th column of b inverse d this. So, this is equation number we have come up to equation number 5 6 let us call up to 5 this is 6 this is the equation number 6. Now, we can write it see this one when this component will be zero when you see this i th component of i th column of b inverse d I am multiplied by x i because x i is non zero corresponding column of b inverse d is multiplied and this is b inverse capital b inverse b when this component this component that is it has a m components there out of m components out of m components you say which components because this x b components will be zero when this equal to this and how many components of this you have b you have a m components are there. So, it will be a this b 1 x i b inverse of b if this is equal to same x b you will zero now out of all this in which element of x b that basic variable will force it to make it zero agree that is our next question. So, let k th component of x b so how many components are there here m component out of this m th k th component of x b will drop to will drop to zero agree then from equation 6 from 6 what you can write it the k th component of this is assigned zero.  So, if it is a force is zero then this equal to this and that is also you have to consider k th component of b and here also you have to consider k th component of b inverse of b. So, that is why I am writing here the k th component and this is also k th component that this vector is you are having a m cross 1 column vector of m elements out of this that m th component I make it the x b m th component I am forces to the zero that means in other words that basic variable is entering as a non basic variable that x k th component x b I am assigning to zero. So, this equation then this equation must satisfy it. So, then I can write it x i is equal to is k th component of b inverse of b divided by k th component of b and this must be greater than equal to zero that is let us call equation number we have given six that is seven this is why it is greater than equal to zero because denominated part cannot be negative why it is greater than zero when you will compute the basic variables expression from here you see when you will compute the basic variable expression here this the k th component of this one I can write this k th component of this one minus if you take that side minus k th component of b k th component of b agree into x i into x i since x i value is greater than zero this that minus v i and x i this will be zero this will be zero provided v that this coefficient k th component of this one is positive. If k th component of this one is positive if you take that side it is a scalar quantity k th component of v is scalar quantity if it is a positive if you take that side it will be negative agree and then k x i is a your positive. So, this positive quantity minus whatever that this quantity this minus of this quantity it has a chance of making this is zero and if you if it is a negative this one agree if it is a negative of if the k th component is negative it goes to the net right hand side as a positive multiplied by positive quantity because x i is now is the basic variables. So, this added with the positive quantity agree. So, this value will increase we will not be able to force it to zero that one. So, that is why this is greater than zero this we have to consider the smallest. So, we have a such type of things there may be possibility we have a such type of x i choice m choices there out of this the smallest of this ratio will be treated as l b b living basic variable say x j. So, x j say x j. So, our new corner point or new vertex will be what at the new vertex new feasible solution you can say or new vertex or new corner point x i has become has become positive and as j has become zero agree with this choice. So, keeping all this thing in mind which we will say now how to solve this problems how to solve that our linear programming problem using the simplex algebraic approach simplex method using algebraic approach. So, we will take our earlier problems what we have discussed that minimize f of x is equal to x 1 x 2 plus 5 x 3 minus x 4 and subject to x 1 plus 2 x 3 plus 2 x 4 is equal to 6 and x 2 plus x 3 minus 2 x 4 is equal to 3. So, this is and your x i is greater than equal to 0 i is 1 2 3 4. So, if you recollect that last class we have just consider that problems this problem where x y x i x 2 x 3 x 4 is greater than equal to 0. That is we have considered last class that one agree and we have seen that which component we have to consider a non basic variable and basic variable to reduce the function value from previous point to new point the function value must reduce this one. Now, we will see that this algebraic approach how can be applied to solve this problems. So, first you identify the matrices A matrices and our other matrices. So, first is initialize initialize. So, see the our A matrix is that one quickly you can write it 1 0 2 2 that is 0 0 1 1 minus 2 and you can think of it this is the x 1 coefficient x 2 x 3 and this column when you think of it x 1 into 1 x 2 into 0 x 3 into 2 x 4 into 2 is equal to b, b matrix is your b vector is 6 3. Similarly, you can think x 1 into 0 x 2 into 1 x 3 into 1 this one plus x 4 into x is equal to 3 this. Now, our which one is our first iteration which one is our basic variables basic variable we will consider this one agree which are in the canonical form these are canonical form x 1 is involved in equation 1 x 2 is involved only equation 2. So, this 2 we can think of as a basic variables that are non basic variables are x 3 and x 4. So, we are now partition x 3 our x 1 x 2 our basic variables x 3 x 4 are our non basic variables. So, this is written as x b so x n agree and what is our c c transpose matrix you see 1 1 this. So, our c matrix is your if you see here 1 1 5 minus 1 and this corresponding to x 1 and this corresponding to x 2 this corresponds to x 3 x 4 this you can think of it x 1 into 1 plus x 2 into 1 x 3 into 5 this one x 4 into minus 1 is equal to our objective functions or cost function.   Similarly, we can see that our c b c b transpose is equal to 1 1 and c d transpose is equal to 5 minus 1. So, this we have been.  So, let us say our b d multiplied by x b and x n this value is non basic variable we have considered 0 is equal to 6 3 this one. So, our basic variables solution is x b is equal to 6 3. So, if you get any component of x b is negative this indicates that solution is not feasible because our problem was x is greater than equal to 0 this one. So, now let us say that our initial. So, we can write it now initial vertex or corner or initial feasible solution we got it vertex or corner is what x 1 is we got it that is x we got it 6 x 2 3 x 3 0 this we got it. Now, what is the cost function value cost function value is c transpose into x which is equal to c b transpose x c d x b c d transpose plus this is plus c d transpose x n agree. So, this value is 0 and this value c b transpose this into 6 1 into 6 plus 1 is c b value is c b transpose is 1 1 and this is c b is 6 3. So, if you do this one it is 9. So, our objective function value is at this point is 9 now we have to say whether we can if you move one of the non basic variable to basic variable and basic variable to one of the basic variable to non basic variable whether the function value can be reduced or not. So, now compute to know this one or to show this one compute r d transpose if you recollect this one we have derived r d transpose c transpose c d transpose minus c b transpose b inverse d. So, this equal to c d you know nothing but a 5 minus 1 minus c b you know it c b is 1 1 b transpose b I know is identity matrix agree. So, d is your 2 1 2 minus 2 see this is our d. So, if you compute that one ultimately you will get it here 2 minus 1 this. Now, you see r d measures that this coefficient because r d multiplied by what is this x n if you think of it is a multiplied by x n means x 3 x 4. So, it is multiplied by x 3 x 4 r d. So, there is a minus sign coefficient reduction coefficient. So, if you change x 4 value from 0 to some positive value there is a possibility of reduction in cost function below or x 3 is 0 I have not changed it. So, there is a possibility if you do this x 4 value you change it to non 0 values that means, some increasing value. So, x 4 will go act as a non basic variable and x 3 it will remain as a basic variable. So, I will stop it here today next class I will continue the remaining part of this problem.


Glad to be speaking with you today and appreciate the opportunity as well. Yeah, the reason why I reached out to you originally is, you know, I have a lot of friends who are VCs themselves. I've been in the startup scene for a long time and this question comes up quite frequently, especially as of late. And that's a question of like, should an entrepreneur and I know this is not a black or white answer, there's never black and white answers, but it's a great discussion to have is, you know, should an entrepreneur accept and take venture capital of money. And so, you know, you have experience, you have history in that on both ends. And so I just kind of want to have this natural conversation with you and discuss like, what are the pros and cons of taking VC money? Totally. So I've actually done that both ways. So right now I'm a VC at Hustle Fund, a fund that I started two years ago with Elizabeth Yen, we're up in Canada quite a bit actually. But before that, I was actually a bootstrapped entrepreneur for nine years in the education space. So I avoided venture capital. And I think my short answer for you is, and to your listeners who are thinking about VC is avoid it if you can, quite frankly. I mean, you know, there are certain classes of businesses where it makes a lot of sense to do venture capital, particularly those that are capital intensive. Let's say that the two of us want to start like a new electric car company, pretty hard to do that in a bootstrapped way. But I actually have an, I'm in the opinion that many, many, if not most businesses, even those that are trying to scale to startup speed, could potentially do it with maybe a bootstrapped model or perhaps even minimal venture capital money put in or angel rounds. So, you know, the real bummer when it comes to doing venture capital is one, it's distracting for the founders, right? You got to do both your business as well as run a process for raising capital.  So taking some time off to run VC, or run a VC process is really hard.  You know, one of the big things that I enjoyed most about running my own business was, I was running my own business. And I didn't have to answer to anyone, I can control the pace of my execution and so forth. When you're on the VC route, you know, there's an expectation that you're going to continue to raise. And we can sort of talk about the motivations behind the visas for why they really encourage founders to continue to raise. But you're expected to go at these milestones that are quite fast. You may even have a board at a certain stage, which is essentially your boss and they can fire you. They can control your product strategy and so forth. So, you know, I'm pretty skeptical about the value of VC, ironically, as a venture capitalist myself, for a lot of classes of business. So if you can avoid it, find ways of just growing your business, even if it's at a slightly slower pace, while scurrying like outside funding, that actually I think is a better long term outcome for most businesses.  Interesting. And it's not kicked out as an get out of here, but they're either bought out or there's clauses within the term sheet or contract saying, for whatever reasons, you're not the right person to take this company to 100 million dollars of revenue, goodbye. Sure. Yeah. So I think that most term sheets at a certain maturity, you know, when you're past your series B, probably has language around like succession planning or management control or board control in terms of approving or rejecting hiring decisions, including your own job as a CEO. You know, there's a belief that it's rare to find a founder who can scale a business from the seed stage all the way through an IPO and beyond. And I largely agree with that. I mean, I found actually when I was a founder myself, once we were hitting like 5 million in revenue or something, I kind of was like a crappy CEO at that point. Like I didn't know how to grow a team beyond like that amount of revenue or more than 20 people. So I was very much a pigeonholed kind of and like a really early stage kind of founder. But there are certainly cases where founders can scale beyond that. And depending on and also venture capital sometimes are really supportive of that plan too. And they try to surround you with better lieutenants, more coaching to get you to that level, because there is something to be said when a founder can see the journey all the way through through the end. And, you know, that itself is also really helpful for hiring and just building culture and so forth, that kind of longevity. But to answer your question, I'm sure it's built into most term sheets at the later stage. That was the option to do so. Have you seen within your network, you don't have to name names obviously, but have you seen clauses where there's an expiry date on the return on capital? Let's say there's a cliff like 10 years and no matter where your company is within that 10-year cliff, they're looking for a liquidation event. That's less common. So the expectation is that there's a couple of different sets of expectations depending on the fund. So for a seed stage fund like us, we're almost always designed as a 10-year life fund. So I invest in the Meers company now, and I assume that's going to take in between seven, 10 years to find liquidity, usually through an M&A event like an acquisition or an IPO. So there's an implicit kind of expectation that there's going to be some sort of an exit exit or liquidity event at that time. The more later you get, let's say that you're a series C shop or something, maybe those fund lives are a bit quicker, like between three and five years because you're much more mature and closer probably to the liquidity event at the point of entry. But when it comes to an expiry, it's not really common to see that because just because it's so hard to control something like that, it's just difficult to time an acquisition. You don't know where the market's going to turn at that time. It could happen sooner. It can happen much, much later. So there needs to be some flexibility when you're in this kind of class of private equity of not being in control of those kinds of timelines. Sometimes I see something a little bit more exotic, or I haven't seen it, but I've heard of it, which is there might be an occasion where we invest in Amir's business and he never has to raise again ever. And he's just going to grow this business into like hundreds of millions of dollars a year and then collect a 40 million dollar paycheck a year and just do that until he's dead. And that's actually a great business for him and his team potentially, but not so great for your early founders who are trapped by not having liquidity. In those cases, the couple of things happen.  Maybe there's also like a dividend model. That's also something that they've been increasingly hearing about, where we can do a little bit of profit sharing for some period of time until the principal plus some very generous interest is given back. Well, if you look at the stats, the IPO has diminished drastically since even the early 2000s compared to now. And that's why there's such a crazy high in the crypto space with tokens and instant liquidity. And so it's like, are our VCs for the most part opposed to having dividends returned if the company's highly successful? I know they're looking for liquidity event, whether it's like maybe an RTO, IPO, or acquisition. But let's say you're at a position of a company doing 300 million revenue and pre-tax profit is like 40%. So profits are healthy. Why not just take some dividends in the meantime until you have a liquidity event? Well, I think that's the problem there is actually, again, comes back to the life of the fund. So the expectation for most funds is that they conclude after 10 years with maybe one or two years of extension. So the issue is maybe dividend is a pretty good long-term model, especially if the business appears to be a going concern for many, many years. But you may not be able to pay back entirely your investors before the fund itself expires. So then you have to roll this into some other new fund and it gets a little bit complicated. Just wholesale liquidity in one shot is always easier. And frankly, this is where there's a bit of a misalignment between venture capitalists and the founders is what's good for the VC isn't necessarily good for the founder. Like perhaps, you know, for the founder to think they're thinking they're providing a great deal of dividends. But for the VC, they're thinking about, hey, I got to raise my next fund. So I got to show some real cash on cash return here. And dividends are cool, but you know, getting $100 million at once is cooler. So I can tell that story, raise money from like, you know, a sovereign wealth fund or whatever. Yeah. So that clash always has been bothersome, I think, for me personally. Where do you see the space going though? Like obviously, like I mentioned, IPOs aren't very common, but we have new forms of liquidity, maybe like Reg D's and Reg A's. I think security tokens will be interesting in the next five to 10 years will offer something. But where do you see the space generally moving? A couple of ways. So the first is there's a rise of secondary funds that are coming to bear. So you know, if you're running a VC fund like myself, even before an IPO or an exit can happen, there's a new class of funds who can come in and say, okay, we'd like to buy some or all of your shares into a team that we think is really promising and we'll negotiate this price that the three of us find amenable.  I'm very excited about we're drawn to crypto quite a bit in our fund simply because, you know, even though we're in the down cycle since 2017, 2018, very long this notion that there will be other alternatives for capital raises that aren't dependent on VCs. And this is actually something that scares a lot of venture capitalists. I love this creative destruction that could potentially happen in our industry, where you don't necessarily need to go after angels or VCs as your primary source of pooled capital. The notion that like any high net worth individual or regardless of where they are geographically can just be a part of this and you can align incentives through smart contracts and like defining these rules up front. I think that is ultimately going to be the future. This is like the great dream of crowdsourcing that was meant to be. We got so close to that, so close in the last cycle. So that's I think the other path and, you know, security tokens I think are going to be one of the avenues for doing that in this next wave hopefully coming soon. And then I guess the last sort of class of capital that I'm getting really excited about our new forms of venture debt. So I've been closely tracking a Canadian company, actually a Toronto based company, ClearBank. I know ClearBank, yeah. Yeah, yeah. Andrew DeSousa. Yeah, I've never been personally before, but we're huge fans of this model, you know, so they have, they're bringing out something that isn't entirely new, but I think they're marketing it well.  So RBF is just like, this is not debt. It's just, you know, we're going to loan a mere $100,000. He has to pay back $106,000, but it's going to be paid back via a share of profit over some period of time or just like an undefined period of time until we get that money back. And I love it. I mean, like the founders aren't going to be giving up any equity. The bank, I guess in this case like ClearBank gets their principal back and they're chasing like a pretty reasonable yield. And I also think by the way that this is very much a good crypto use case as well over time. I'd love to see a ClearBank on crypto at some point in the future. So a lot of interesting things happening in the market to get access to capital that aren't necessarily like traditional equity. Do you think, for one, I think this is just my viewpoint, a credit and investor status needs to be updated. I think that's a big barrier to a lot of people. It's like, for example, my mom can buy a house, go into debt and mortgage and have a foreclosure. I consider that an investment, but she can't invest in my startup. She can go to the casino and blow a million dollars. That's totally fine, but she can't invest in my startup. And so I think for the crowdfunding platform, whether it's like Reg D's or A's or any type of smart contract, they need to loosen up these so-called accredited investor laws. I agree. I mean, this is actually something that I'm seeing as contributing also to things like income inequality. There is a class of investments where you have to be accredited and defined in the United States that's more than $1 million in net worth excluding our primary residence or earning more than I think about $250,000 a year in income. So it's a pretty high threshold. Most people do not have that. There's some very exotic and certainly high risk, but also high alpha kinds of investments that you can participate in suddenly, the moment that you cross that threshold that just a normal retail person can't. So the word also gets so vague. If you want to take a talk about the accredited investor rules for crypto investment in the last cycle, it's totally legal for me as a retail investor who's not accredited to participate in Indiegogo and these other kinds of traditional crowdfunding that isn't quite aligning incentives in terms of revenue outcome, but I can invest in that kind of crowdsourcing. To me, the great dream of crypto investing, particularly in the STOs in the future, is quite similar. This is just a different kind of crowdfunding. How is this really different from Indiegogo except I get a piece of the upside that's very well documented and coded. So it is kind of a bit of BS, I think as well, that there's this kind of bias. And at the same time though, at least in the United States, the people who are writing the laws are also fabulously wealthy themselves and may enjoy the fact that they are in this gatekeeper position where only their wealthy friends and themselves have access to these great kinds of investment opportunities. So I'm a little more skeptical about the incentives behind driving change here. Where I think I'm a little more optimistic though is like in Asia. So like governments Singapore, which are really trying to produce like more equitable engagement for investors beyond credit investment, they're really seriously, I think, trying to rethink some of these laws. And they might be the ones I point to as the future kind of leaders and understanding greater accessibility for retail investors in this regard. Are you familiar with the JOBS Act? Not really. So it's an exemption for credit investors. You can invest, I believe, up to $25,000. It's interesting, but the paperwork, think about like, let's say we take our mom, right? And she wants an investor to start up. She has to read like 50 pages of paper. And for her it's like, before she even begins, it's over. Like no one's going to read 50 pages. Get out of here. The law should just be, it's like, you're loud. You're loud to invest in whatever you want. And that's it. You have $100, we'll put $100 in my startup, and it'll get 0.11% of my shares in my company. Yeah. So I heard a pretty horrible perspective from a congressman on this issue. I won't name him. But there's a very paternalistic attitude that the government has about this kind of stuff. And the TLDR of what I heard was just like, so you're not allowing retail investors to participate in these kinds of deals because you think that they're not smart enough or sophisticated enough to actually do it well. And we'll bet the house on the terrible crypto project and lose all their money. So that was kind of the feeling I got was this attitude of just like, if you're not wealthy, then you're kind of too dumb to do this. And I was of kind of two minds to that. One was just like, okay, a part of me is like, yes, I sort of understand the notion of protecting people from themselves. And there are certainly vulnerable parts of the population that can be tricked by like shams. And I see that happening. But on the other hand, I take a more libertarian attitude, which is like, yeah. Yeah, but if that's the case, why is gambling allowed then? Dude, I mean, like, I don't know. Yeah. It's like, okay, well, I know we'll allow the most addictive form of behavior over here. No problem. Right.   No problem. But no, you can't invest in this startup. Forget about it. Yeah. I mean, my most like negative take on that with gambling is a very interesting use case to bring up, right? I mean, like, you can extend that to everything that we invest in. Like if I put my money into an index fund, that's still gambling. I mean, there's an expectation that that money is going to grow, but that's not guaranteed. My guess is that the casino lobby is very strong. Right. And like certain kinds of vice categories that seem like they could should be illegal and certain principles are, you know, if you line the pockets of the right people correctly, who's making their decisions? What advice do you have for people who might be in that position that need that large amount of capital from VCs? What are some questions they should be asking the VCs that they have relationships with? Yeah, great question. So a lot of ways we can go here. So if you decide that you're a founder who is building a business in the category that requires venture capital, then there's a few things that I think a lot of funders miss. The first is actually how old the given fund is. So this one's a nuanced, but critical one. So most funds invest all their capital in a 10-year fund in the first three years. And the thinking behind this is like, you just need to, as an investor, you need to put in your bets sort of early so that they can mature and produce cash on cash return before 10 years is up, right? So the first three years. So if you're talking to a VC and they're in year one, that's great. That means that usually there's capital available. If they're in like year three, they actually might be very, very picky about what deals they choose to fund or they may not even have the capital available. And we'll just like, this is like a terrible scenario by CSALOT. It's like they'll string you along.  We're going to put in a million bucks. Just wait six months so we can fundraise the next fund. And then of course, you're going to miss that. Wait another six months, and then your business is dead. And who knows what the fund is too. So where in the life of the investing lifecycle for the fund is very important? The second is, you know, if you can, I guess, talk to other founders over coffee, however you can get them, to give them perspective about their own VC.  Hopefully, you'll never hear that feedback about someone like myself or Elizabeth or she and the other GP and her fund. But that kind of backchallenge that kind of reference checking so critical because there are VCs that have a reputation of doing the thing that you actually said earlier in this call, which is they have their reputation around series A or B just like kicking out the founders and totally screwing them over. And that's a deal with the devil. It may be the right deal sometimes, because that's all the money that's available and you need to survive. But, you know, you got to go into that eyes wide open to protect yourself. Those are good questions. I mean, sorry, good answers. Yeah, it's interesting, man. And I get, you know, I'm still, I don't know, I've never taken VC money yet. Yeah, I work with them on a daily basis, both advising on different deals and sharing deal flow. Totally. It's a very interesting one. I'm excited.  Sure. But those are the rarities in the space.  They just got to make money and a story, because we got to rate the next round and get their 2% and then get their, you know, 220 to whatever model they have. So I'm really, I'm really interested and excited in the next couple of years to see the evolution of this space and different ways that startups can raise capital, non-dependent on just giving up equity or ridiculous amounts of equity. You know, I have one more follow-up question. Actually, as you're speaking, you reminded me of that I think every founder should ask their VC. And it's actually the exact same question that I asked my wife before we got married, which was, do you want to grow old with me? And what I mean by that is a couple things. One is a reminder and recognition that, especially at the seed stage, like if Amir chooses to take my money as an investment, do we feel like there's a complementarity that we can, and a good relationship we can build over the course of the next 10 years, assuming it's 10 years, from start to exit, right? So, and it's not just implied in that, it's not just a complementarity in terms of skills or market knowledge or whatever, but also personal relationship, right? Like, do I feel compelled that, you know, over the course of 10 years, we want to grow into each other's lives, like understand, like, do you want to meet my kids and my wife and my dog and vice versa? Because, you know, all that stuff is also important. I mean, if you take on a bad VC and maybe not a bad VC, maybe like, let's say like a slightly annoying VC in year one, by year six, this could be like an insufferable relationship, right? And then doing a startup, as you know, is already hard. Why invite even more exogenous pain by taking someone that you hate?  I've been in deals where I knew other investors, and I'm looking at the term sheet. I'm like, this is a great business, but I can't be sitting next to this person. And I purposely did not invest because I knew for a fact how this person is.  Gone. What kind of cues did you see that made you like, totally deal breaker, totally red flag? And how did you sort of pick that up and how quickly? So, for me, like, I'll do some small angel rounds myself. We have some syndicates. Good. And I'm more or less kind of a slow investor. I bet on the entrepreneur per se. So I'm big long-term instead of saying, like, for me, it's like, can I have dinner with this person for the next 10 years? And I'm betting on the person because I'm not deploying the capital to company A. I'm deploying the capital to person, right? So people always stay confused. I think I'm deploying the capital to the people, right?  I'm not because I'm not a fun manager. I don't have to worry about it. I'm not running a million dollar check, maybe 10K check, 25K check, 50K check, angel rounds. And so for me, it's like, this person, can I have dinner with this person for the next 10 years, right? I do a little background check and I sit down with them and I eat with them. I see how they communicate.   You know what I mean? But I take my time, but for me, it's not about quantity, it's about quality, man. I just want to see great people do great things. Yeah, I think very similar in terms of my approach. I'll tell you like one of my favorite things to do, especially if this is a deal that seems pretty high stakes and we have to invest a lot in each other from a founder or just even a partnership perspective is I love doing family barbecues. So the thing that I like to observe is how is this founder treating her partner, right? How are they treating their kids, right? And, you know, it's not necessarily, I think, the best signal for a lot of people because, you know, you can argue this isn't something that's as related to how they're going to run their company, but you get to see at least the soul of the person. I think it is, man. There's a saying, how you do one thing is how you do everything. I subscribe to that. Yeah, I subscribe to that.  And, you know, someone, I have kids, I love my, I love children, right? And it actually breaks my heart when I hear about kids like being hurt by their parents, especially. So it's just like, I can't shake that on my brain. You know, like it like brands someone to me when I when I see that kind of rudeness, because like, you know, we're in this business, we're doing high growth startups and it's sexy and fun and all that stuff. But at the end of the day, if everything were to collapse, like at least I got my family and, you know, they love me. And that's the most important thing in the world. And they need to be recognized as such. And I try to find that in other people that I work with whenever I can. Yeah, our good friend Jason Gayner, he runs an event called Mastermind Talks. And he has a saying, it's show me your network and I'll show your net worth, you know, like say, let's say everything fell down for me, let's say I gambled all my money through very unwise decisions. Let's say I'm broke today, right?  Yeah, yeah. Add me to your your contact list on your iPhone, please in that scenario.  That's a whole nother topic. I mean, we can spend an hour on this, but you're absolutely right. And I love that mindset as well. Cool, man. I think we covered a lot. You've answered many of the questions I had. I appreciate it. Thank you. I thank you for your candor and honesty. Of course. Likewise, if people want to know more about your fund, what you do and everything, what's the best resource? The website's good. We're at hostilefund.vc. Dr. Charlie, you know, please contact us there. We look at every single deal that comes to the website. In fact, we put every we require every single person who's a who's considering investments to go through our website form. And then I'm pretty active on Twitter. I'm Eric Bond, E-R-I-C-B-A-H-N. That's my Twitter handle. And I love talking about these sort of things. You know, my themes aren't necessarily just discussing trends and venture or founders, but I'm in this journey. And I think you are too, Amir. I'm just trying to figure out how to live the most fulfilling life, right? I think it's all intertwined. So talking about running a startup as a parent, you know, that's a whole different conversation. Exactly. Very big into like understanding how what we can do to contribute to diversity, inclusion among the founders that we back. These are all topics I love. But, you know, at the end of the day, what I love about this work and probably what you get to do as well is just tell stories, hear your story, share mine. And then occasionally, the Venn diagrams overlap where there's something that we can do together. And that's when it's fun. And we love working with teams that we can align with that way. Beautiful. Beautiful, man. Thank you so much, man. I appreciate it. Thanks for the opportunity.


Hello everyone, I would like to welcome you to today's lecture where we will continue with the discussion of the Phetazones reagent which we introduced last time. We saw that the Phetazones reagent which is basically a adsorption of silver carbonate on the surface of sea light and that allows the different kinds of oxidations of primary, secondary, allylic as well as benzylic type of alcohols and especially it is useful for the oxidation of a diol to form the lactone via lactol. So last time what we were discussing about the various aspects of static factors and the polar factors towards the end I mentioned that an example of this kind which basically has an alcohol which is having a double bond versus another alcohol in which no such double bond is present. So this particular alcohol reacts much faster than this alcohol obviously because there is a competition for the alcohol to get adsorbed on the surface of the reagent with the double bond which also tries to participate to act as a kind of nucleophile for the surface of the Phetazones reagent. So there is a competition between the double bond and the OH and therefore this particular alcohol reacts slower than this alcohol which is devoid of such a double bond. Due to the mildness of Phetazones reagent and its sensitivity to minor structural features, minor structural features something I just mentioned that if there is a double bond versus there is no double bond. Therefore this oxidant that is Phetazones reagent is particularly well suited for the mono oxidation of symmetric diols. Now we have a symmetric diol like this here and we can carry out a mono oxidation that means between the two of them only we can oxidize one of the alcohols even if we use excess of silver carbonate because it is slow reaction and therefore one can monitor and stop when the oxidation of one of the hydroxy groups gets oxidized to the corresponding ketone. At the same time we can also obviously take up an example where there is say you have a hydroxy group which is secondary hydroxy group and then we have another hydroxy group which is say for example here tertiary. So if this is secondary hydroxy group and this is a tertiary hydroxy group, tertiary hydroxy group we can specifically oxidize this and it does not get oxidized. Obviously it will not get oxidized because it is tertiary but at the same time we can also take another example in which hydroxy group is secondary and at the next carbon you have another hydroxy group which is tertiary. Now substrates of this kind have been found to have problems for the C-C bond cleavage with other oxidizing agents such as chromium based or other oxidizing agents but that does not happen in the case of phytozons reagent and what one easily can get is this type of hydroxy ketone without affecting the C-C bond cleavage. Now a phytozons oxidation allows the preparation or obtention of the desired alpha hydroxy ketone of this kind which is exactly what I mentioned before that if we have a tertiary hydroxy group here and a secondary hydroxy group here then the oxidation can lead to the alpha hydroxy ketone without any cleavage of the C-C bond whereas Collins reagent PCC pyridinium chlorochromate pyridinium diachromate produce an oxidative cleavage of the C-C bond. Similarly, Jones and Moffett oxidations yield complex mixtures whereas CoD chem oxidation does not give any oxidation and gives back the unreacted starting material. What it indicates is it is a mild oxidizing agent and therefore it is useful for the oxidation of a substrate having a hydroxy group which is a secondary hydroxy group and the tertiary hydroxy group here to form the alpha hydroxy ketone of this kind. Now the following alcohol is oxidized with phytozons reagent in the presence of dialkoxy alkene. Now this is example where we have this dialkoxy alkene there is an alkene on which you have two of the alkoxy groups here present. So therefore this is a very reactive substrate and of course when it was reacted with PCC there was cleavage and there was no oxidation of the alcohol that means the C-C bond was cleaved and there was no alcohol oxidation. On the other hand phytozons reagent allows the oxidation to take place even though the yield is low still oxidation does take place and the reagent allows oxidation of such a allylic alcohol which is a sensitive substrate. Now we will move on to a new oxidizing agent which is ruthenium tetroxide or we can also use a combination of ruthenium trichloride and sodium metapariodate. But let us first see what was initially done that it was found by Carl Jarasi in 1953 that olefins can be cleaved the C-C bond can be cleaved using ruthenium tetroxide in carbon tetrachloride. This was found to be a very powerful oxidant and it basically involves oxygenation and hydrogen abstraction. We will discuss about the mechanism a bit later. It is comparable with osmium tetroxide in terms of olefin dihydroxylation which we will also discuss in a while and it cleaves the C-C bond to give ketones, aldehydes or even acids. It is a very aggressive reagent hence room temperature is good enough for the cleavage of the C-C bond taking place. Hologenetic solvents such as CCl4, dichloromethane are used because ether, benzene and pyridine react very violently with the ruthenium tetroxide. If one sees the structure of ruthenium tetroxide then you have 4 oxygens attached to the ruthenium and therefore the ruthenium here is highly electrophilic. Therefore the ether, benzene and pyridine all of them they react very violently with ruthenium tetroxide. Unfortunately the yields of the products are variable that means it depends on substrate to substrate. But at the same time it has been found that instead of using ruthenium tetroxide if one tries to add sodium metapariodate as a co-oxidant is a co-oxidant the yields can be improved. What it means that the ruthenium tetroxide when it oxidizes or cleaves a double bond it gets reduced to the low valent ruthenium species and that can be re-oxidized using sodium metapariodate. And that is where the efficiency of the reagent increases by the addition of sodium metapariodate that acts as a co-oxidant in these reactions. On its own ruthenium tetroxide is volatile and highly toxic and is also reported to be known as an explosive. The reaction therefore can be performed conveniently in a biphasic medium using ruthenium trichloride or ruthenium tetroxide in catalytic amounts. Since ruthenium tetroxide is an expensive reagent people have tried to make use of other ruthenium source such as ruthenium trichloride or ruthenium dioxide in catalytic amounts along with co-oxidants such as sodium metapariodate or pariodic acid or sodium hypochloride as co-oxidants. Ruthenium tetroxide is soluble in organic solvents and it is consumed in the reaction and moves into the aqueous layer as ruthenium dioxide. Ruthenium tetroxide when it oxidizes the substrate or oxidatively cleaves the double bond it forms eventually ruthenium dioxide and therefore if one uses a biphasic medium containing an organic phase and an aqueous phase and in the aqueous phase the co-oxidants such as sodium metapariodate or sodium hypochloride or pariodic acid is used. So when ruthenium tetroxide which is soluble in organic solvent oxidizes the substrate to the corresponding oxidized species either cc bond cleavage or whatever and in the mean in the process it forms ruthenium dioxide which passes to the aqueous phase and in the aqueous phase the oxidant the co-oxidant which is present reoxidizes the ruthenium tetroxide ruthenium dioxide to go to ruthenium tetroxide. So one can start with only catalytic amount of ruthenium tetroxide and this reaction can be done. However initially Sharpless used ruthenium dioxide only as a reagent since it is cheaper than ruthenium tetroxide and later he used ruthenium trichloride in place of ruthenium dioxide. So right now now lot of people who want to use this protocol prefer to use ruthenium trichloride and sodium metapariodate as a combination of reagent which is a source of ruthenium tetroxide. However there are some problems which are observed for example if one takes the ruthenium reagents so there are cases where it has been found that the reaction becomes slow and there is an incomplete reaction. Now this happens in cases where carboxylic acid is formed. The sluggish reactions which are observed are due to the inactivation of ruthenium catalysts with carboxylic acids that form low valent ruthenium carboxylate complexes such as this. So such kind of complexes with the carboxylate reduces the activity of the ruthenium catalyst and therefore the reactions are slow and incomplete. At the same time it was observed that the inactivation of catalysts like this can be prevented if we add acetonitrile as a solvent or a molecule of acetonitrile now will have competition with the carboxylic acid or the carboxylate to form the complex that we saw that is that forms with the carboxylic carboxylate complexes. So the nitrile blocks the site of the ruthenium species and does not allow carboxylates to form complexes. It only temporarily allows the site protection and therefore the oxidation is completed. And for example we can see here the C-C bond cleavage of this double bond with ruthenium trichloride sodium metapariodate in the presence of CCl4 and water gives 17% of the corresponding aldehyde and 80% of the stati material is recovered. On the other hand if acetonitrile is used as a solvent then one gets the 88% yield of the corresponding carboxylic acid and all the stati material gets completely consumed. So therefore the inactivation of the catalyst can be prevented if one adds acetonitrile. So the protocol which is now generally followed is this protocol in which one takes ruthenium trichloride and sodium metapariodate in a reagents solvent system such as CCl4 water and acetonitrile and then the oxidative cleavage occurs. Now ruthenium tetroxide is powerful oxidant and especially it is useful where say for example ozone, osmium tetroxide or K-monophore type of reagents do not cleave the alkene. This is an example which is a tri cyclopentenoid example in which there was a need to cleave this bond and this bond cleavage was not easily possible using the reagents such as ozone, osmium tetroxide that K-monophore but ruthenium tetroxide which is formed by from ruthenium dioxide in presence of sodium metapariodate allows the cleavage of the C-C bond to form this product in 53% yield. So there are advantages of this reagent and therefore it is used in organic synthesis quite a lot. Interestingly, when you have a substrate of this type where there is a primary alcohol and that primary alcohol under these conditions of ruthenium trichloride sodium metapariodate allows oxidation to give the corresponding carboxylic acid in a very short time such as 1 hour. Now it is a non-selective oxidant. I have been telling all the time that the ruthenium tetroxide is a very violent or a very aggressive reagent and therefore it reacts with many other functional groups such as multiple bonds, multiple bonds like double bond or triple bond, diols, aromatic rings, ethers etc. Now for example here we take a diol of this type which undergoes a cleavage here to form eventually via the corresponding aldehyde the corresponding acid. So there is no resimidation or there is no rearrangement that occurs during this process. So which is an advantage by using such a reagent which is a bit of aggressive reagent but then reactions are done at milder conditions and therefore there is no side products that are formed. Now we have another example in which such a complicated tricyclic molecule can be converted to the corresponding carboxylic acid which is normally difficult with using other oxidizing agent. So this example simply illustrates that how the primary alcohol can be oxidized to the corresponding acid under these conditions. What exactly happens is if we have the aldehyde then the ruthenium tetroxide will react to form this intermediate because we can write the ruthenium tetroxide under the water medium to be somewhat like this. So the hydroxy group here attacks onto this aldehyde and you move this electron pair from there to form this intermediate and that undergoes oxidation here like this to form the corresponding carboxylic acid and during the process you release the ruthenium low valent ruthenium substrate which again of course reacts further. But it is interesting that when one carries out the reaction with a double bond one can also stop the reaction at the diol stage because this is the diol that undergoes further reaction and allows the cleavage to take place. So this cleavage can be prevented if one stops the reaction at the diol stage by keeping the reaction time short. So if one carries out the reaction say at 0 degrees and only allows within 5 minutes to check if the reaction can be stopped at the diol stage so one can isolate the corresponding diol. So this is an interesting observation which was published in 1984 that means that you have an alternative as compared to the osmium tetroxide to go to the corresponding diol and if one wants this diol to be converted to the corresponding di aldehyde bond for the cleavage of the CC bond then of course you can allow the reaction to go further for a longer time and the cleavage can take place. But getting the diol is also an alternative and which is a good alternative for the reaction. Interestingly a phenyl ring can also be cleaved to the corresponding acid because an aromatic ring is basically nothing but having several double bonds. Since the ruthenium tetroxide is a very aggressive reagent is a powerful oxidant so even the phenyl ring gets oxidized to the corresponding acid. These kind of conversions of the aromatic rings or electron rich aromatic rings to the corresponding acids have been utilized in organic synthesis. Now here we have another example in which we have a lone pair of electrons on the nitrogen blocked by the using of this protecting group which is a BOP group which is nothing but this kind of where the lone pair of electron on the nitrogen is in conjugation with the carbonyl group. Therefore the lone pair of electron here is not available for the oxidation for the oxidant to give any problem. And therefore a substrate of this kind can be cleaved to the corresponding acid without any problem even protects the nitrogen here as a n BOP protection. So the conversion of such substrates to the acid can also occur readily with using the ruthenium tetroxide formed in situ by ruthenium trichloride and sodium metabolite. It is also observed that if one uses a nitrogen ligand of this type we can convert an olefin to the corresponding epoxide. It is interesting reaction because the lone pair of electron on the nitrogen will react with the ruthenium tetroxide to form this species. Now if this species comes in contact with the olefin one can have a 2 plus 2 cycloaddition of the ruthenium oxygen double bond and the double bond of the olefin here forming this intermediate which can undergo a cleavage forming the epoxide and low valent ruthenium species. So this is one of the very rare examples of conversion of olefins to the corresponding epoxide but nevertheless one can carry out such a reaction in the presence of nitrogen ligands. Essentially what they do is to reduce the activity of the ruthenium tetroxide by this particular nitrogen ligand. There is another important reaction which is conversion of ethers to the esters corresponding esters or to lactones. So if we have an ether of this kind one can get the corresponding ester. If one starts with a cyclic ether one can get the corresponding lactone. In a similar fashion this cyclic ether goes to the corresponding lactone. Even this type of cyclic ether having many functional groups and a site where there is a possibility of lactone formation can allow the lactone formation to take place. Now why should this happen? This happens mainly because as we have discussed earlier the ruthenium tetroxide is a very powerful oxidant and we cannot use solvents such as ether or pyridine or benzene such solvents because they can also react. This is precisely the reason why ethers can form the corresponding ester or the cyclic ethers can form the corresponding lactone. Now we will stop at this stage today and next in the next class we will try and see what is the mechanism by which these ethers which are a cyclic or cyclic ethers are converted to the corresponding esters or lactones and further developments of the ruthenium reagents for other reactions that we will see. You can go through these nodes and then get ready for the next class. Till then goodbye and thank you.