YouSaid · the spoken record

Logan Allin

lines on the record: 46
first: 2022-01-21
most recent: 2022-01-21
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Sure. On the venture capital worlds, only have one book recommendation. Brad Feld's venture deals. He's on volume four. He's the only book that when anybody asked me how they should learn about venture capital, that's number one. Number two is Paul Graham's blog is probably 20 years old at this point in some cases, not the age Paul, but that is an awesome resource for any founder that's looking to learn more about building a company. He obviously built YC, which continues to be prolific producer of companies. So those two resources, I would absolutely point to. And then we really try as a firm to put out thought leadership. And you can follow us on LinkedIn and Twitter. And then our website, finBC.post slash news. We really try to put out content looking to be open about where we're seeing in the markets and be transparent with our own IP because we think it will benefit.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Picture. Hopefully, you get some more clarity around how we're going to handle Omicron and future variants, and you get more certainty around the inflation picture and the supply chain picture. For us, again, we're fairly insulated from those four factors and continue to be very constructive on this acceleration of digitization trend that took hold in 2020, and we think we'll continue to be the story and headline going forward for fintech and adjacent.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Comfortable on a long term view of a business, we're very happy to take that long-term position from the early stages all the way through to taking the company public and holding on to that position into perpetuity. And so very much like Warren Buffett and others having that long view, understanding the compounding effect of those dollars and ultimately dividends and so forth, that's a much better position from my perspective to be in. In terms of outlook, bearish versus bullish, I mean, I think we're short-term bearish and have been really since Q4 of last year, given the Fed speak and everything else we were seeing from the markets in terms of inflation, in terms of supply chain, in terms of the Omicron emergence and so forth. But I think that second half of this year, going into next year for fintech stocks in particular, you're going to see meaningful recovery as you get more certainty around the interest.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“I definitely think we are in a period of caution, but as an enterprise software investor, I would rather be playing my hand today than people who have been heavily investing in consumer and are overexposed to consumer. And Chumat's facts were all heavily invested in consumer, certainly one with Virgin Galactic less or so, but certainly long tail consumer in that case. And so he chose to go down the consumer route, and that was obviously where his bread butter was from his Facebook career and writ large. And that's great. He felt like he could add value and have ball control there. For us, our differentiation, our ability to have pattern recognition and underwrite businesses is very much in this enterprise SaaS space and the intersection of fintech where we have an edge. And so where we feel like we have an edge and can get”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Partner that will support them into that journey and for our LPs, anybody who wants to sell in the private markets through secondary certainly can if they want to transfer their position to a public market holder, they can do that as well. But for us, we don't want to be sellers if the company is going to continue to compound extremely well and start to generate free cash flow and be a long-term success story. Why would we sell that position? So I think the spec allows for that full life cycle continuity and is a huge benefit to the investor base and the company and the ecosystem.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“We think SPACs are a structure that are here to stay, that the flight to quality will be in PEBC sponsors where this is a natural extension of what we do every day. And third, there is going to be a massive amount of runoff in the SPAC market this year. You've already started to see a lot of it, and many of the SPACs that have taken fintech companies public, MoneyLion, and others being great examples, are now trading at way below their par value. I think Dave is...”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Venture strategy, you get massive drag on performance. And that's Kaufman Foundation data, Cambridge Associates has looked at this. Everybody's pretty much decided that you shouldn't raise a venture fund that's more than $400 million because that will be a detriment just purely from fund math and the historical return math. And yet everybody's still doing it, right? And Andreessen raised a $500 million seed fund, as did Greylock. And so I'm not sure how they're thinking about deploying that and allocating it. There's some really smart people around the table at those firms. But for us, we look at that historical math. We look at the portfolio construction. Then we look at bandwidth in terms of serving our companies and obviously being good fiduciaries to LPs and wanting to make them a 3x net, which is obviously all of our hurdles. And it becomes a much more difficult problem versus separating all these.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“To execute on the investment strategy that you want to support your founders, provide value as a fiduciary to your LPs, public market listing could be a pretty significant distraction, and I don't think a very interesting outcome ultimately just in terms of how those businesses are getting valued. But we have a lot of respect for the general species and what they've built. We work very closely with a number of the generalist VCs across our portfolio. I think for us, we've chosen to be stage disciplined and size disciplined. And that's why we have four separate fund strategies across our four verticals from pre-seed to early stage to growth to late. And we plan to continue to do that. And at the end of the day, you look at the quantitative data around venture returns. If you go above 400 million in size in a”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“I think you look at Sequoia and their asset base and certainly others like Andreessen that I've obviously grown assets under management really dramatically. I think the challenge for asset management businesses is they don't tend to trade well in public markets. You're certainly seeing that trend from going from an exempt reporting entity under the venture capital rules to an RIA. I don't know that you'll see a ton of venture firms deciding to go public, mainly because again they don't tend to trade very well on an asset basis. Their enterprise value is right around 10% of their AUM, right? So if you're valued at 10% of AUM and you have pretty thin margins, it's a tough, I would say outcome for the founders versus staying private, being able to leverage either exempt reporting laws or the RIA laws.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Practically a different route or an alternative to a traditional IPO path, but rather an alternative to a pre-IPO round where you don't take on that dilutive capital, you get public more quickly, the benefits of that, and you still get certainty around how much growth capital you're going to be able to raise to put to work on the growth side without leaving any money on the table. And so we think that's going to be an interesting dynamic for higher quality sponsors going forward.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely. And there's been quite a bit of, I would say, articles and thoughts written, I think rightly so, that venture capital dollars can be a dangerous drug. And so if you're a CEO and you're continuing to take on more and more capital, particularly in quick succession without really having the metrics to support those rounds, and there are very specific benchmarks that we lay out for our companies through our operating playbook for seed all the way through to pre-IPO. I think public market”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“And invest while others are fearful. Classic buffet recommendation. And so there's going to be a very strong have-nots and haves kind of type of divisiveness in the market as a result. And it's going to really depend on where you are in the space as to how you're allocating dollars and whether you're out raising capital. Now, there is a significant amount of capital on the sidelines. If you're able to take in capital without taking on massive dilution, it's absolutely something we're recommending to our companies. So they have optionality and the ability to continue investing in growth, continue hiring the best people, and to probably lengthen the period of time between fundraising rounds so they can hit more meaningful milestones that have to be absolutely solid before they hit their next series. So I think all those things”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“The biomedical field is coming out now with pill forms on being able to take in more antibodies, and I think they'll continue to be innovation around that, which is great. And so I think that first issue I raised in terms of COVID uncertainty will dissipate. But those founders that have in the fintech world and many of them do, balance sheet, credit, interest rate concerns, and or impact from an inflation or supply chain perspective need to consider edging and moving more towards profitability, reducing ratcheting down growth, improving gross margins, doing all the things to make sure that they're insulated. And I think you're going to see down rounds, flat rounds, increasing venture debt, et cetera, in certain types of business models for certain SaaS companies, particularly those that have had headwinds from adoption perspective that we spoke about earlier, they're going to be able to take advantage and continue to accelerate their growth.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“I think we saw this in Q1 of 2020. Sequoia came out and said, bouting down the hatches, indexed to profitability, trim OPEX raise as much capital as you possibly can, increase your debt lines, right? So those five things were the big pieces of advice from Sequoia and many of us in Q1 of 2020 under a great degree of uncertainty. I think in Q1 of this year, you're starting to see some of those same recommendations coming back. I don't think we're in anywhere near as bad of a climate as we were in Q1 of 2020. And I think hopefully Omicron, just looking at the data coming out of South Africa is a bit overblown in terms of the potential longer-term impact. And we'll get through that quickly. But I think the uncertainty around other strains and this being something we're going to have to live with into perpetuity. Good news is, you know,”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Effect to pre IPO rounds. I think pre-IPO rounds SPACs are certainly giving significant Ford revenue credit and the terminal value equation that we all do is happening on next year's forward revenue or multiple years out. And that will continue, but your discount rates absolutely change. And that's going to have some multiple compression and these pre-IPO rounds. But the flight to quality, the insulation, et cetera that I've spoken to are all still going to be there for SaaS oriented businesses.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Plus range. And so that's why I think you've seen flight quality in SAS, and that will continue. And so we're, and frankly, there's more insulation if you think about the And so you have to look at obviously who the end customer is, but writ large, those four areas aren't as big of a concern for SaaS companies as they are for the broader market. So that's why I think you've seen less compression. So my favorite example on this multiple story is DocuSign. They were trading at 100x trailing sales at the end of October. 100x. That's a crazy multiple on any dimension. And as we all saw, they got really hit hard through year-end. less of a hit on their multiples, less of a hit on EV as a consequence. And they're going to be the first to really bounce back as hopefully we get some recovery here in Q1, Q2. But to your point, that has and always will have a non-”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“So, I think on the SaaS side, you've seen less multiple compression than you have in the consumer and SMB-oriented spaces. And I'm speaking more about this intersection of fintech, obviously. And I think that's because public market investors look at a consumer business or an S&B business. They see a balance sheet. They see credit risk. They see regulatory issues. And I think tangible book value, right? Versus in a SaaS company where there's true IP, ARR, some level of churn assumptions, typically sub 10% for the top decile, 120% plus net dollar retentions for the highest quality names. And they get more comfortable that that revenue into the future is sustainable and real, regardless of growth rate. And there's a gross margin that's helping protect that at 70, 80 percent versus consumer and S&B oriented names where those gross margins tend to be in the 20th to 30.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Four names like SoFi and others, but it's going to take several strong earnings showings from SoFi and others in order for them to get out of this cycle, unfortunately.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Updated that in December to say we're going to accelerate, we're going to continue that through March and the CARES Act aspect of this is simply a consideration for student loans and allowing people to effectively get in their student loans written off. And a big part of SOFI's business is student loan refinancing. Ergo, less loans in play to potentially refi public markets view that fairly negatively. But it straight it down to $12,000, $13 today, which is an all-time low for the stock posts back. And I would say that interest rate concerns is absolutely a big part of that. But that's hit the overall NASDAQ. And I think we'll continue to be a headwind. So I don't think you're going to see any relief in all these fintech names until earnings here in mid-February. And I think Q4 earnings should be fairly attractive.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Galileo is a B2B software platform that helps companies issue debit and credit cards and is a banking as a service platform. So that was SOFI's ecosystem play and not only vertically integrating their own tech stack to be able to leverage Galileo, but also leveraging Galileo's capabilities in servicing the rest of the FinTech market with players that include Chime and Robinhood. So I think that was a brilliant acquisition. It looked expensive at the time, but based on Galileo's growth weight and their contribution margin to the overall SOFI enterprise, I think it has been a big part of reducing volatility in the name. Our view also is that SOFI has been hit by the extension in the CARES Act. So Biden came out and said, you know, earlier last year, he said, we're going to extend the CARES Act through the first part of Q1.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“And lowering cost of capital, being able to recruit more, increasing their brand value, and so forth. And so we were very supportive of the timing of the IPO and that trajectory. But as you said, the stock is traded in a highly volatile way. I would say that's the case in the last call, two to three months for the entire fintech space. And what you've seen is that the fintechs that have had the most volatility are consumer-oriented, right, highly regulated. have interest rate sensitivity, may have some inflationary sensitivity as well if they're touching the consumer and the consumer basket. And I've had in some cases some pretty significant issues with regulators, a la Robinhood, Coinbase, and so forth. And in SoFi's case, they took a very interesting approach to bolstering their business model and advancing going public by acquiring”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Question, and we have four to six IPOs conservatively this year, which I'm pretty excited about, those coming out of our growth portfolio and then our SPAC, which we listed in October of last year. It trades under, and we're out in the market having discussions around that spec today. And we will be serial SPAC sponsors. And SoFi was really the first major fintech company to go the spack route. They decided to go to the SPAC route, and this was what they positioned publicly because of the quality of the sponsor and heterosophia and social capital, which Chamath is at the helm of. And we think very highly both parties, and we felt like with SOFI's consumer orientation, they would be great partners and help take the company into the public markets and support them with both growth capital as well as obviously the advantages of being a public company, particularly with a balance sheet.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Companies and people are starting to ask questions about how sticky is this revenue? One of my favorite metrics that I like to use in the SaaS world is net dollar retention. So that is how much revenue you're making from a customer today and then how much additional revenue you got out of them over a period of time. So the top 10%, and this is actually the number one indicator of enterprise value in a SaaS company or there are multiple, I should say. And the quality of that multiple and the sustainability of that multiple is net dollar retention and 120% plus is the kind of top 5% returns for Massa benchmarking perspective. And so we look at that very carefully. So we could spend all day on SAS metrics, but we talk to our companies all the time about this and we really try to be prescriptive with how they should be thinking about it.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely nowhere close to 50 million. And so I think more has to be done around guidance in this space, certainly FASB and others have provided some views on how they define all these things. So we actually have a Microsoft document that we sent out in PDF or Microsoft Word to all of our finance teams and our CFOs that says this is how this is calculated. This is what the definition is. This is what you should be reporting, nothing else. Because if you're reporting anything else, it's definitely, it's probably non-gap already. But if you go into non-gap territory, the amount of wiggle room that's provided today is pretty massive. We want our companies to be representing themselves in the right way because sophisticated investors are going to dig into the P&L and the balance sheet ultimately and figure it out. So I do think this is an emerging problem. And frankly, now you're seeing the public market pull back around a number of fintech companies and Saskatchewan.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Issue. The other big part of the issue is calling vanity metrics and SAS. So we all remember that we work example in terms of adjusted EBITDA and all these games that are being played. Well, the same thing's happening in the SaaS world. So my favorite is contracted ARR. Well, what does that mean? So it's in the bank. Well, no, it's not in the bank. It's something where the contract is almost done. Okay, it's almost done. It's not signed. It's in your pipeline. So pipeline revenue versus bookings meaning the contract is signed and the revenue hasn't hit your bank account yet versus realized ARR versus gross revenue versus net revenue. There are so many areas of gap earnings that get misconstrued in the SaaS world that it's comical. And so we'll get these investor pitch decks where they're talking about 50 million of ARR and then you dig into the numbers and it's out.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Sure. So the number one issue that we find in call it Seed Series A companies is they go to market is their pricing model is almost inevitably broken. And we look at average contract values or ACBs as a SaaS investor. You want to see ACVs over 100K in a kind of a top decile type SaaS company, generally 200, 250K plus. And early days, our companies are mispricing or pricing their IP and their offerings way too low. And then they're getting stuck at that ACB. So they're pricing it somewhere in the 25 to 50K ACV range. And then when they go to renegotiate, it's hugely problematic. They have MFN clauses in their contracts, creates long-term, long-term issues. And so we've built pricing models and best practices in our operating playbook, which we share with our portfolio companies. So that's one big part of the”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Tech and Web3 space spaces in the last several years, and will continue to do so. Third, you do have, I'll call it the exchanges and the fund admins, groups like SS&C, NASDAQ, et cetera, have been hugely acquisitive in this space. And then you have asset managers and insurers. And then lastly, you may have the banks. The challenge for the banks in acquiring a B2B SaaS business is they become the sole customer to that company and the revenue opportunity becomes less interesting. And so our companies very much try to stay Switzerland when they look for a strategic exit to maximize the TAM and the opportunity set that they have to go after. And if they only work with one customer, then that's not a hugely interesting outcome over time. And so that's how we think about the exoprofiles. But from a commercialization distribution perspective, we have strategic LPs in the asset management world, in the insurance world and the bank world and in the wealth management world. So we're absolutely looking at that match.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“We are from a commercialization and distribution partnership perspective, but we're not from an exit perspective. So the most likely exit outcomes for our portfolio are IPOs or SPACs or strategic exits, and the number of strategic acquirers for B2B fintech is actually much larger than it is for B2C, B2S and Boriented business models. So that includes the legacy or old school fintechs, as I call them, FIS, Pfizer, PayPal, Intuit, Square, right? So they're all being hugely acquisitive. PayPal has a budget of $5 billion per year per Jan Shulman that he's looking to spend on making acquisitions. You can put Visa and MasterCard in that category as well, who have also been hugely acquisitive. Secondly, you increasingly have big tech, Salesforce, Amazon, Google, Facebook, Apple all have made acquisitions within the Finnish.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“And that is not your core competency. Focus on the customer experience, whether that's retail or commercial customers. Own that, make it incredible, make sure it's stitched all together in a very seamless way. Don't focus on building the middleware or the back office or any of that functionality. So I think you're slowly starting to see that adoption. JP Morgan announced that they're taking their entire core banking system and moving it into the cloud without thought machine, which is a UK-based company. That's an incredible milestone. And going back to the Gartner research coming full circle, Gartner also shows you a breakdown percentage of spend by the banks, percentage of spend on internal applications versus third party. 2022 will be the very first year where third party spend will eclipse internal spend. So there's hope.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“That data, that functionality, and actually migrates to the cloud. These projects typically entail hundreds and hundreds of Accenture and or IBM consultants. Literally, it's subtracting this data using effectively flat file formats and then trying to figure out how to parse it together, putting it in places like Data Lakes and so forth before they migrated ultimately to the cloud. It is a massive industry issue and I think we'll continue to be. And then I think the second piece is mainly internal policy. And a lot of CTOs at large banks very much still have the mindset that they should be building everything. And I always tell bank CTOs when I have the opportunity to sit down with them and many of them are OPs of ours that they should be building anything. There is an API and a solution third party for everything out there who is spending all of their time, money, and effort on that very specific piece of IP in our.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“And how do I shift that into public clouds, private clouds, multi tenant clouds, whatever the structure might be, which lowers the cost of ownership dramatically, allows you far more scale, allows you to tap into more functionality and all the other benefits of the cloud. It is actually not a legal issue. It is not a regulatory issue. It is not a privacy issue. The OCC actually does not care where your data exists. If you're a bank, they just want to make sure that it is appropriately risk managed, compliant, cybersecure, et cetera. And I can tell you that a AWS or a Google Cloud or an Azure cloud is far more secure than having a server farm in the middle of the Midwest. And so it's amazing that this transition has not taken place on a more rapid basis. And it is principally because of the legacy mainframe technology and how difficult it is from a technical problem perspective to abstract.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“So Gartner puts out a survey every year where they look at budgets in terms of how much the banks are spending, financial institutions in 2022 will spend, let's call it roughly $1.25 trillion on technology. That sounds like a big number because it is. They're the number one spenders on technology in the world beyond any government or other industry. And then they put out kind of the league table around cloud adoption. And they are consistently and dead last around cloud adoption. So what is the disconnect? They're the largest spenders on technology, dead last in cloud adoption, which means, by the way, their license enterprise SaaS, which is cloud native or multi-tenant. And the industry calls this a massive lift and shift problem. So how do I take data and functionality out of legacy mainframe technology that's probably on premise?”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Finance the CFO tech stack or anything that touches the treasury function, asset management and capital markets, insure tech, blockchain from an enterprise application perspective. And then lastly, what we call infrastructure and enabling technologies. That's things like regulatory technology, big data analytics, this massive cloud migration problem, leveraging quantum computing, et cetera. So those six subsectors are where we focus proactively and going out and sourcing. And so just as an example on the portfolio, we have a company called Natomi. They are a customer success platform driving omnichannel customer automation through email, which shockingly is still about 80% of customer service traffic, a text message, social, agent assisted, and what that allows companies to Do and publicly, they have customers like Brex”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely. So we have a very top-down thesis orientation to where we think the white space exists in fintech. Again, within that Venn diagram of B2B SaaS, and we have identified six subsectors today that are on our website. We're very public about where we're constructive that we think represent the largest areas of white space and then very specific theses within those. market map companies back to those subsectors and those theses and look to select one category winner within those with what that results in is no overlap in companies we don't want conflicts in the portfolio but a significant amount of potential synergy in portfolio companies working together and so just in short on those six subsectors we are the most excited about embedded”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Unfortunate by that. And now we're in a place where Omicron obviously fully being short and accelerated here, we're going to see some return normalization, but I think that digital adoption curve and that rate of adoption is still here to stay.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“They needed to move really quickly. And so people have talked about six years of digital movement taking place in six months. I'm not sure what the order of magnitude is, but it happened quickly and certainly more quickly than we all expected. And so we had massive tailwinds in our portfolio as a result of that. Our investment box entails that we are investing full life cycle from pre-seed through to taking public companies public out of our SPACs. But we solely focus on B2B SaaS. These are capital light businesses, no balance sheet, no credit risk, typically not regulated or lightly regulated, and just very capital efficient high gross margin businesses, which thankfully were fairly insulated in COVID and are fairly insulated from inflation rate environments and then supply chains. And so we sat back and looked at our portfolios had some of their best years and months on record and so felt very humbled.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“I would say COVID for all of the unfortunate repercussions and everything we all live through did serve as a tailwind and a digitization catalyst. And I think this is pretty well trodden territory at this point from a data perspective. We couldn't go into bank branches. People couldn't go into call centers. And the customers that our companies serve, those being banks, asset managers, insurers, I will call them the larger fintechs like PayPal intuitive and so forth. And then corporates, both retailers and big tech, they recognize that whether they were already financial services businesses and they needed to vertically integrate digital capabilities on an accelerated basis, or they were corporates that were trying to vertically integrate financial services and maintain their digital distribution models.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Of VCs, guys like Roloff at Sequoia, guys like Brian Sigerman at Founders Fund. And they all said, you need to go keep operating. And so I did that for a number of years. And it was great advice. And I always tell people who are at investment banks in consulting or at business school that they should be getting operating experience before they go into venture capital. And that's fundamental to that pattern recognition comment I made, having credibility sitting across an entrepreneur that you're looking to invest in, frankly being able to add operating value beyond capital as you work with that entrepreneur. And so for me, I think this is the greatest job in the world being able to leave an impact on a legacy on a massive industry, be able to work with entrepreneurs to help them execute on their visions every day. I don't feel like I should be getting paid for what I do. So that is a very good sign.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“I decided to leave and Vesco and join SOFI as an early team member. And that really changed my trajectory. And from there, I really saw what was happening in both the entrepreneurial ecosystem and company building, but also in the VCs that were providing them capital. And in looking at venture capital, what I saw was a portfolio approach to working with entrepreneurs. And I had been taking a portfolio approach in my consulting life to working with a number of large institutional enterprises. And so it felt familiar to me. And then secondly, I started to really gravitate in my early days after SOFI towards back towards enterprise software, which is where I had focused initially in my consulting career and recognized that instead of licensing that technology and implementing it, I could be investing in it. And that felt like a dream job to me. And so I got great advice from a number.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“So, I started my career in management consulting and I fell into it as I've publicly commented on in the past. I did an internship at Citigroup in my junior year at Duke and coming out of Duke, I really wasn't sure what I wanted to do. And so I decided to go into consulting, which is largely what everybody does when they're not sure exactly what they want to do because it provides this really interesting breadth and depth of opportunity sets. And they looked at my resume as I was going into Capgemini and they said, oh, he did an internship at Citigroup. He must be an expert in financial services. Let's put him in the financial services group. And so that's literally how I got into FinTech.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“What they learned as part of selling that business and afterwards, in terms of the gaps they saw in the market that helped them come up with a business idea for Pipe and then execute against that. So you can absolutely rise from failure as well. And that's an important outcome. But as it relates to our kind of criteria, we would have certainly preferred you knowing what success looks like to be able to better replicate that in your new venture.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“We prefer, obviously, to see success and the right trajectory. We have a top 50 fintechs that we track on. We use a platform called Lighthouse.ai, which we leverage to source companies and source founders. And we run an algorithm on that vis- ⁇-vis founder DNA. And prior entrepreneurial experience is absolutely part of that. And part of the scoring is whether the prior company succeeded or not. But they still get credit for having that entrepreneurial experience. And so they pass that at least threshold in terms of our minds that they have the founder DNA to start something new. They've learned those lessons and so forth. For example, I know we're going to chat a little bit about the company Pipe, which you'll hear a lot about from Jason Calicanis and Shamath and others. Pipe is one of their favorite topics as well. We led the seed in March of 2020. And the prior exit from the founders, as they are one to admit, was not that exciting. They sold their first business to fair.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Been an evaluation of the data, but also in sizing people up. If this is your first entrepreneurial gig, there's been fairly binary outcomes in those regards.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“I think so, and it also applies to poker. I play poker occasionally as well. And I think sizing people up and reading the person is a huge part of chess as well, particularly in Blitz, which is accelerated chess. So typically you only have five minutes per person or 10 minutes total to make all your moves. In those situations, you can read a lot about the person. You can also read about how they open, much like a founder opens up a meeting. And so I think there's a lot to say about founder judgment and evaluating founders. We as a firm, for example, only invest and repeat entrepreneurs, preferably repeat founders. We do not invest in first-time entrepreneurs. We'll invest in first-time CEOs, but we will not invest in first-time entrepreneurs. And so our profile is very much somebody who's been in a startup environment, been in an entrepreneurial environment, walked thousands of miles in those shoes, and now is starting a new company or possibly their next company.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Learn and dive into any subject and learn it and study it and grow significantly in your knowledge base around it. Number two is pattern recognition. So in chess, you see patterns emerging in terms of positions and how things evolve. That definitely applies to venture capital, where you have your gut instinct or your pattern recognition in terms of investing in a company, monitoring a company and its growth trajectory, monitoring a situation where there might be a board question or an issue with a founder or the like. There's a lot of pattern around that and things that have happened before that you can take into consideration. So those two absolutely map, in my view, to games generally, but particularly chess, which is a growth mindset and this idea of pattern recognition.”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, no, it's great to be here, and I've been a big chess fan. I'll call myself a chess nerd since high school. And my dad taught me chess when I was in grade school. But I was captain and founder of the Duke Chess team and undergrad and ended up building out Duke's chess team and helping the university provide consideration for chess, which I'm really excited about. But the lessons from that are, one, a growth mindset. I've studied DWEC as I think a lot of your listeners have. And DWEC always talks about a growth versus a fixed mindset. And in chess, there is just habitual learning, particularly with the advent of computers and that becoming more and more prominent as I continued to play, which is you need to continue to study openings. You need to continue study your middle game and basically look for and review master competition games from all around the world. And that drove me to understanding that you can really”
2022-01-21 · We Study Billionaires · TIP415: Adventures in Fintech with Logan Allin · IDENTIFIED FROM THE TRANSCRIPT