Mask off

Happy Halloween! I’ve never been a big costume person, but I do remember how hectic Halloween was during college and in our 20s. Living in New York and going out during Halloween was always a shitshow that was fun but awful.

I was out working at coffee shops with Sophia on Saturday and realized that we were caught in a middle of a gigantic pub crawl on Polk Street. I was happy to see San Francisco have energy again, but it was also another reminder that I am past my partying prime.

On another note, my daily meditation on my Calm app today was Halloween themed. Tamara Levitt discussed living life with your mask off, as your true authentic self. This has and always will be one of the keys to happiness in life, but I believe it to be even more relevant in today’s society.

In the age of social media and clout, I often see individuals (myself included) chasing things for the wrong reason. Status, likes, followers, etc. I like to think I don’t get caught up in this, but deep down as I meditated through this, I realized that I do succumb to the pressures of today’s society.

We can probably all forgive ourselves for occasionally chasing clout occasionally, but I thought this meditation was a timely reminder to live life as my true self, not to please anyone else. It was a great start to the week after a great weekend of rest and productivity.

Catching up

I’ve had the most relaxing weekend in at least over a month so far. It’s been exactly what I needed. September was a busy product launch month and I went straight into traveling for personal and work almost all of October. A weekend of rest, sleeping and catching up on work/life was exactly what I needed.

I spent yesterday with Sophia going over a lot of the details of the wedding and we made a huge dent. There’s still quite a bit of work to do in the coming weeks, but I feel really good at our 1 month away mark. We’re through the hard parts of the planning and now just focused on the fun stuff like the music and the welcome party.

As for today, I plan on holing myself up at the office to catch up on work and research. I’ve got one major item on my list that’s been killing me the last two weeks. I need a solid 4-5 hours of uninterrupted time to just grind it out… time which has been nearly impossible to find the last couple of weeks.

After I grind that out, I’m going to spend some time researching the Generative AI space. It’s too interesting of a space to ignore right now and I feel already behind.

Earnings szn

Big tech earnings came and went this week. And they unfortunately largely disappointed. Apple may have been the savior of tech as it bounced 7.5% today. Nevertheless, the markets see trouble in the slowing growth of tech as Google, Amazon, Meta and Facebook lost over $350B in market cap.

This does not translate well for us at tech startups. The trouble will continue as investors grow vary and multiples continue to shrink.

I was hoping that the waters would calm toward the end of the year, but all signs point to more turbulence ahead. We’ll need to continue to hold on and make adjustments to weather the storm.

Money2020 Recap

I got back from Money2020 yesterday and as expected, I was absolutely drained. It was absolutely worth it though and I was absolutely impressed by the turnaround and the show. Money2020 is FinTech’s premier event and it absolutely lived up to it’s billing.

After TC Disrupt last week and Money2020 this week, I’m going to playing catchup for the next couple days and over the weekend on life and work. In the meantime, I figured I’d do a brain dump of some of my notes from over the week.

• There seemed to be significantly more people attending this year than last year. I want to say that it was probably 4x the amount of attendees and possibly more.

• FinTech has taken it’s blows over the last year, but based on this event, we’re on the rise.

• Crypto was much less noticeable compared to last year, but there was definitely a big web3 presence

• Many notable web3 companies that were present last year were missing from the event this year

• There are so many companies issuing credit cards

• I noticed quite a bit of Latam activity, especially from Brazil. The Nubank effect?

• A lot of Neobanks that I saw last year were missing at the event this year

• I need to do a much better job planning meetings next year. There were a lot of people that I wanted to see that I didn’t. I figured that I could just run into them and go grab a beer, but everyone is busy and schedules rarely line up.

• Time with the team in person is invaluable. Next year, we all need to come in early and do some working days.

• There’s a lot more to Vegas than the strip and I had a good weekend coming in early, but 5 days in Vegas is quite a bit of time

• Chinatown Vegas has some absolutely fire food

Money2020

I’ve been in Vegas since Friday hanging out with my childhood best friend who moved here four years ago. We’ve spent most of our time golfing, hanging out, and just eating good food. There’s a lot more to Vegas besides the strip and it’s been cool to see.

Money2020 officially kicks off tonight and I am excited. There’s a lot of old friends I’m pumped to see and lots of opportunities for Secfi as we finally go big at Money2020. Our CEO, Fred is on a panel on Tuesday which will be fun to watch. We’ve also got a big booth and hope to introduce Secfi to those who have not yet met us.

I need to ensure to pace myself. There’s a lot of fun to be had in Vegas and I need to remember that I can’t hang like I used to in my 20s. Top of mind for me today and tonight is to get a good nights sleep so I can be well rested for a long day tomorrow and Tuesday.

TC Disrupt

I’ve been swamped the last two days at Techcrunch Disrupt. On top of meetings, I hosted 4 roundtable discussions where we discussed equity compensation and the changing landscape with the market.

I was really pleased with the attendance at the roundtables. All sessions got to the point of standing room only and it was really cool to see founders and investors really care about the future of equity compensation.

I was admittedly a bit worried as there were some really interesting speakers and talks that were perhaps more “intriguing” to the younger generation. I had expected NFTs, crypto, interoperability, etc. to be the headliners of these roundtables but perhaps I underestimate how cool stock options and taxes can be.

A lot of really awesome people came up to speak to me after the sessions. It was inspiring seeing a lot of young talented builders wanting to ensure that they are setting up equity programs the correct way at their companies.

I forgot how exhausting these conferences can be. I came into the week tired from the weekend but after a good workout Monday night, I was ready to go Tuesday morning. As I write this on Wednesday evening, I am absolutely dead mentally and physically. I had tried to go on a quick run to rejuvenate couple hours ago but my legs felt like tree trunks and after a sad 1.5 miles, I decided to walk home.

Once again, it’s another reminder that I am no longer in my 20s and I need to give myself and my body a bit of break more often.

Conference szn

It’s October which means that it’s conference season for Secfi and I.

We kick things off this week with TechCrunch Disrupt in San Francisco. I’ll be hosting 4 roundtable discussions at TechCrunch Disrupt on Tuesday and Wednesday. And have a few meetings with some potential partners.

Next week is Money2020 which is fintech’s super bowl. I went to M2020 last year and I had an absolute blast and met some awesome people who I still speak to today. We’ve decided to go big this year and we’re bringing 12 people and have a booth in the exhibition hall.

I’m excited to see some old friends and make some new connections. Perhaps if I have time, I’ll also sneak off to the craps table for a couple hours and let off some steam.

These conferences are a lot of fun but draining. I’m not sure if it was the pandemic or just being in my 30s now, or a combination of both, but every time I go to one of these conferences, I need a solid 3 days to recharge my batteries. I’ll need to be cognizant about getting sleep and proper rest these next 2 weeks.

Tired

I’m dead today after a big weekend. I had a long week at work and by the time Friday came around I was pretty brain dead and was ready for the weekend. I took the night to relax and go to bed early.

Saturday morning was filled with work and wedding planning. It was a stressful morning and I didn’t get as much done as I had hoped before I had plans to meet up with friends.

I ended up going out with some old friends and didn’t get home until 2am. It was a big night for me and while it was fun, I was absolutely dead this morning.

A friend from out of town wanted to golf today and I should’ve canceled to rest and get some things done, but I felt bad and ended up powering through.

As I write this on 7:44pm, I am absolutely zapped and realized that I definitely overdid it this weekend. I’ll be paying for it tonight, but hopefully will be catching up on some sleep tonight in light of a big couple of weeks. It’s another reminder that I need to be treating my body better.

Four years at Secfi

October 1st marked four official years at Secfi. It’s been remarkable to think how fast the years have gone by. It’s even more remarkable to look back and realize how much we’ve accomplished and what we’ve had to overcome in those years.

I couldn’t see myself at any other place besides Secfi and I’ll forever be grateful that I got introduced to these two Dutch guys starting a company from a friend of mine. When I joined Secfi, I was coming up on five years at PwC and was really lost. I had thought about starting my own business, traveling for a year, and going to business school.

I had met Fred and Wouter, the co-founders of Secfi, at the perfect time. I was ready for a change and a new challenge. Secfi was a startup at the perfect intersection at everything I knew and wanted to be part of. Secfi fell on my lap at the perfect time. One thing I’ve learned over the years in my career and learning about other people’s careers is that when you work hard, you set yourself up to get lucky. That’s exactly what happened to me and I couldn’t be more grateful.

Remote working abroad

I had lunch with a friend today who has been consistently traveling with his girlfriend for the last year and half while working remote. He’s lived in Europe, multiple places in the U.S., Mexico and South America during this period.

I’m pretty jealous - it’s pretty cool to be able to travel the world and live somewhere new whenever you want to. I’ve always had the travel bug so this is something that I would’ve loved to do especially earlier in my career.

I’ve met quite a few people who have been doing this the last couple of years. I’m curious to see if companies allow this to continue to happen in the next few years especially being in a bear market right now. On one hand, remote working tools have made this possible and we’ve seen very successful companies being built remotely.

On the other hand, I’m not sure I’m a believer that employees are giving their full potential when traveling. I spent a month abroad in Mexico and while I made it work, I admit that I would’ve been much more productive going into the office every day in San Francisco.

It’ll be interesting to watch whether employee happiness or employee productivity wins out in the end.

International teams

One of the best parts about working at Secfi is the fact that we are very international. We have offices in San Francisco, New York and Amsterdam with remote employees scattered from Brazil to Spain. We have people from every continent except Australia and Antarctica. (I’d love to hire an Aussie soon though)

The diversity of the team makes for a really fun work environment. Learning about different cultures, food, and traditions is a daily occurrence within Secfi. Furthermore, the diversity between countries allows different ways of thinking that brings out the best in all of us.

Of course, there are some difficulties to navigate. Cultural differences play a big factor when working with each other. To keep things simple, cultural norms in the U.S. and Europe, for example, are much different. Little things from Slack and emails over the weekend to the way we give feedback are all different enough that we need to be aware.

One thing that I’ve done to try to bridge this gap in understanding with those that have never worked with me is that I lay it all out on the table the first time I meet them when they join the company. During my 1:1, I let them know a bit about my personality, how I work, and my boundaries.

For example, I always emphasize that I have a strong and opinionated personality and to not take things personally with me. I believe that health debates (arguments) can be good for work if done in a mature and controlled way. I also let them know that I’m always open to feedback and they can let me know anything at any moment.

By being upfront, it helps people understand who I am and how I work and I also encourage everyone on my team to do the same.

Gratitude

I was dreading this past weekend as we were taking a red eye to Baltimore on Wednesday night and attending Sophia’s cousins wedding. It wasn’t that the wedding was bad, but it’s just a real long way to go for a weekend especially on a red eye. It ended up not being as bad as I had thought and the weekend overall was really fun.

My negativity and pouting the entire week ended up being worse than the actual experience. I think I often forget how lucky I am to be able to travel across the country, explore a new city and spend time with friends. I believe all this really comes down to gratitude. Instead of being annoyed that I have to travel on a redeye and go to Baltimore, I should be grateful that I have this opportunity.

We have today off for the U.S. employees for indigenous peoples day. It was a nice welcome day off after a few long weeks of travel. I’m going to do a bit of work, but use most of today to get caught up on errands and life.

As much as I want to spend most of today grinding, I know we have a gauntlet of events and things to do in the next 3 weeks with Techcrunch Disrupt and Money2020 coming up. I need to take the rest when I can get it.

Companies that raised at insane valuations last year

I can’t believe how many companies I’ve looked at recently that raised rounds at 30x+ ARR multiples back in 2021. The number is staggering and what’s even crazier is that most of these companies are on a growth rate to earn back that multiple in likely 3+ years.

Let me illustrate using a company that had $50M ARR that raised at a $1.5B valuation in 2021. They raised at a 30x ARR multiple. Assuming they are growing at 50% YoY, then their ARR will look like the following:

2021: $50M ARR

2022: $75M ARR

2023: $112.5M ARR

2024: $168.75M ARR

Assuming a pretty damn high growth rate at 50% YoY, they will need to get to $150M in ARR in 2024 in order to get back to a 10X ARR multiple which would be consider high, but reasonable at this point in time.

Now a few things can happen. The market can come back and ARR multiples can go back up. Revenue growth could also accelerate. But the opposite can also happen…. ARR multiples can stay stagnant and revenue could also decelerate which tends to happen with most tech companies.

Time will tell what will happen to a lot of these companies, but many could be in a lot of trouble when they run out of cash and will need to raise another round. Most will likely end up with that dreaded down round.

Hello Q4 my old friend

And just like that, we’re back to Q4. I can’t believe how fast time is flying… I feel like I was just writing about going into Q4 the other day. Football is back, the pumpkins are out and the holiday season is upon us. What a time.

We had hoped that September would be the bounce back month for investors, but unfortunately, we have yet another low month of VC capital being deployed. Times are undoubtedly tough right now with the market continuing to worsen and geopolitical events on the horizon.

Unfortunately, I can’t make the markets come roaring back or force capital allocators to pump money into the startup ecosystem. What I can control is my attitude and mentality going into Q4 and that’s exactly my plan.

Heading into Q4, my teams will be absolute relentless in the market. Instead of waiting for the markets to come back to us, we’re going into full attack mode. It’s no surprise that things are much easier in a bull market for us, but we don’t care and we’re going to embrace this challenge of working in a bear market.

We’re going to grind, build and close in order to ensure that we end this year strong. It’s going to be a hell of a quarter.

Generative AI

Crypto? NFTs? Web3? See you later. Hello, Generative AI.

Yes, this is a bit of an exaggeration as I don’t believe web3 is dead, but it is a bit funny to see the attention shifting to the new latest trend in tech which is generative AI.

As impressive as the web3 wave was, I believe that the output and content created from these Generative AI startups is even more jaw-dropping. We’ve got computers now making art, writing stories, and creating stock images from word prompts.

We saw a glimpse of Generative AI a couple years ago with GPT-3 and I believe we’re just touching the surface of the realm of possibility. This will be fun to watch.

At bare minimum, the cheating scandals in colleges with students using Generative AI to write essays will be hilarious.

An employer market

Save for a few minor blips such as COVID, the last 10 years have largely been employee markets in tech. Employers raced to increase compensation and benefits in order to recruit and retain the best talent.

We’ve seen free lunches turn into full on fine dining spreads. Tech salaries have outgrown inflation by a large margin. Summer Fridays have turned into complete weeks off to "recharge”. Companies have gone fully remote and some have explored with a 4 day work week.

While work-life balance is important, I think we’ve seen quite a bit of employee privilege over the last few years, especially in the post-pandemic life. Employees were demanding more and companies were appeasing these employee demands in order to not lose talent.

Enter the 2022 recession and I believe we will start to see this completely flip. Employers are well aware of quiet quitters and that they have quite a bit of “fat to trim”. Boards and markets are dictating a stricter environment where goals and spending will be under greater scrutiny.

While I still expect tech employees to command high salaries and great benefits, I think we’ll see a significant clamp down going into Q4 and 2023 with companies putting their foot down.

Back to the grind

I had a great 9 days down in Mexico. The original plan was to do a long weekend in Cabo for my bachelor party. But that soon evolved to a 9 day vacation combined with a bachelor party at the end. I had been needing a vacation and things lined up nicely to for longer trip where we golfed the first 5 days, and then the “party” portion started.

I had a great time and was able to unwind and put away my computer for a bit. The one bummer about the trip is that quite a few friends had weddings over the last weekend and were unable to come. Ultimately there were no perfect weekends and we had just to choose a date.

I had written that weekends like this will likely be very limited in the future as we enter our next stage of life. I’m not sure on the next time we’ll have a chance to do this again. I was just grateful that we were able to spend time together.

On the work side of things, I’m back today trying to get caught up on everything. It’s going to be a hectic and busy October workwise and personally. Lots of exciting stuff workwise ahead but it’s going to be a grind to close out the year strong.

Secfi Wealth

Today we announced our launch of Secfi Wealth. It’s been a work in progress and my biggest focus for the last 12 months. We started with a small beta program back in February in which we started signing on select clients that we loved working with. The initial reviews were great and confirmed our hypothesis that startup operators wanted more help with their overall financial picture, starting with their stock options.

It’s been a fantastic ride. We’ve made a lot of mistakes, learned a ton, and built a ton in the last 12 months. I couldn’t be more excited that we’re officially launched and ready to take on more clients.

I’ll be resting this week and weekend on my vacation in Cabo. When I’m back next week, it’ll be game on. We’ve got ambitious goals and while we are all celebrating today and this week, we know we have a lot of work to do.

Cabo

Well, I made it to my vacation week in one piece. It was an especially tough week as I was feeling like shit in the earlier part of the week. Regardless, the work is done and everyone is prepped for the next week while I’m out.

I’ll be flying down with 3 of my close friends to play golf and eat some tacos for the first half of the week. Then on Thursday, a few more of my friends show up and we’ll start the “bachelor party” side of the trip.

This will likely be the last of my bachelor parties for at least a couple of years. I’m going to try to savor this as much as possible as I know the times where our friends and I get together like this are limited.

We’re at that age where kids are going to start becoming a reality and while I’m excited for that next stage of my life, I’m always trying to savor closing down my young adulthood phase.

Failing your way to success

One of the more frustrating aspects of writing this blog and my job is that I can’t write about specifics due to confidentiality. I work with so many amazing companies and aspiring entrepreneurs that I’d love to write about them more, but I can’t. I’m hoping that one day I’m able to come back to these blog posts and reveal the identity of the company/individual though.

Today, I had one of these amazing stories that I hope to discuss more in detail once I can. I had a due diligence call with a couple executives at a company we’re looking to partner with. The company had a difficult start out of the gates as they severely struggled to grow revenue the first few years. They had a great product that their customers loved, but they operate in a somewhat commoditized space and they had to compete heavily to acquire customers.

The offering itself was not differentiated enough and they were burning cash and revenue was not growing. That’s normally a startup death sentence.

After a few years the company decided to go with a fintech pivot and change up their revenue model. Instead of doing what their competitors were doing, they decided to start offering ancillary services and switch up the model a bit. That turned out to be a pivotal decision that changed the trajectory of the company. Revenue has been growing significantly ever since and they have been blowing up the last couple of years.

What I love most about this startup story is the culture of the company. They were a company that experimented and failed often. They understand that not everything they try will work and stick. But when you find that winning formula, amazing things can happen.

That’s exactly what happened in this instance as clever entrepreneurs realized what they had was not working and sought out to fix it by trying something different. The eventual solution was of course not the only thing they tried. Out of this success story comes many failed experiments and a lot of hard work. They tried, failed and failed again until they found the winning formula.

That’s what a startup is all about. Experimenting, failing and iterating until you make it. We often only hear success stories of startups, but every successful startup has had their failures.