#1053 Brandon Arvanaghi On Offering Corporate Treasury On Crypto Rails

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Brandon Arvanaghi is the founder of Meow, a brand new company focused on corporate finance on crypto rails. In this conversation, we talk about yield generation, their brand new fundraise, why the industry is so quickly adopting corporations and their balance sheet, and what exactly the risks of this type of technology and these use cases are. I really enjoyed this conversation with Brandon Arvanaghi, and I hope you guys enjoy it as well. Before we get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by Avalanche. Crypto wallets and browser extensions are outdated, limited in features, and don't meet the needs of today's Web3 users. Core, the free non-custodial browser extension built by Ava Labs, is more than just a wallet. Core is packed with features that give Avalanche users a more seamless and secure Web3 experience. Did you know you can also bridge Bitcoin natively across the Avalanche Bridge and take advantage of the thriving DeFi ecosystem on Avalanche? This is just one of the many innovative properties that make Core so powerful, giving users an all-in-one operating system that brings together Avalanche apps, subnets, bridges, and NFTs in one high-performance browser experience. With Core, any crypto user can easily swap assets, display NFTs in a beautiful interface, and store your assets in a Ledger-enabled wallet. Plus, you can put real dollars in your Core Wallet in just a few clicks. Go to core.app to access the full power of Web3 on Avalanche today. This episode is brought to you by LMAX Digital, the number one institutional crypto exchange. They offer clients the deepest pool of crypto liquidity on the planet, underscored by 100% uptime track record through volatility spikes. They leverage LMAX Group's liquidity relationships and ultra-low latency technology. LMAX Digital is the market-leading solution for institutional crypto trading and custodial services. LMAX Digital features a central limit order book that streams various cryptocurrencies, and it's all paired with US dollar, euro, and yen. They also allow you over the internet to execute your crypto trading strategy with precision. LMAX Digital— you may never heard of them, it's because they only serve institutions, but they're secure, they're liquid, and they're trusted. You can learn more at lmaxdigital.com/pomp. Again, check it out at lmaxdigital.com/pomp. This episode is brought to you by Valor. Valor represents what's next in the digital economy. They provide simplified, trusted access to crypto, decentralized finance, and Web3 investment opportunities. Institutions and investors can gain diversified, secure, compliant, and easily tradable access to a diversified set of industry-leading equity products and protocols through a single stock purchase on a regulated exchange. They're currently listed on the OTC at DEF TF. And on the Canadian NEO exchange at DEFI. For more information or to subscribe to receive company updates and financial information, you can visit their website at valor.com. That's V-A-L-O-U-R.com. Valor.com. Go check them out today.

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Brandon, welcome back. How are you?

Thanks, Pomp. Doing great. Great to be back.

You guys raised a lot of money. Why do you need so much money?

We were kind of going for it all here. Like, we're not just going for yields right now. Businesses can sign up with us and earn up to 4% potential yields. We have a conservative yield offering, we always have. But Phase 2 of the company is why we raised the money. That's not the end-all be-all. We're going for the entire corporate finance stack. And we think it can fundamentally be done better when built on crypto rails, but without making that clear to the end user.

Okay, what is corporate finance for those that don't know? Like, explain, is that just like counting, hey, how much revenue we have, what our expenses are, or what does that entail?

Sure, yeah, specifically things like invoicing, things like treasury management, things like spend ultimately. Forex is a big one. But these are like the practical use cases of crypto, not the cosmic brain things. Anyone could pitch anything in 2021 and get funding.

Correct.

We come from the ground floor of an exchange, so we know what actually people need. And that's kind of what we're going for. And that's what the money is going to be used for.

So people, so far, until recently, they come to Meow, which I'm saying it correctly, right? And they look for treasury management, like yield generation, meaning that rather than have cash sit in the bank at whatever bank and earn 0.03%, I think is the average in a deposit account, they can come to you and earn up to 4%. Where does that yield come from?

Yeah, so that's a great question. So how we've done things differently from day one, and this is back when we started in April of last year, 2021, we made it so that the customers actually had to pick exactly where their funds went. So it's not like a black box. You give the money and it says, all right, we'll give you an interest rate. They have to pick. Do they want it to go to an institutional lending desk like Genesis? Do they want it to go to this desk? Do they want it to go to a DeFi protocol? Their money goes exactly where they want it to. And we also only face accredited investors. So we don't face retail. So those are the two differences for us. But it is mostly institutional lending desks that traditionally lend to crypto hedge funds, et cetera.

[Speaker:BRANDON ARVANAGHI] So when I run a business, let's say I'm the CFO at some large corporation, I'm staring at tens of millions of dollars sitting on our balance sheet. I'm like, damn, we're getting crushed with inflation. I want to earn a little bit more yield. I come to the platform, and I'm able to pick who the counterparty is in the sense of the actual lending desk. And there's a yield that is associated with that. What kind of diligence can I do, or like, how do I decide, right? If there's 10 different options or 5 different options, like, how do I, as just a regular CFO that doesn't know that much about crypto, know who to go with?

Yeah, so it's kind of painful for us, but we have to write like 30 pages of like the risk profile of everything and explaining exactly what could go wrong with everything. And we get on calls with all of our customers, and we make sure they understand the risks fully. We send them documents, we send agreements. And when they are accredited and when they understand the risk profile of these offerings, They pick what makes sense for them. Some corporates like to do pretty aggressive high-yield stuff, ranging in like 6%, 7%. Now, we never dabbled in the 20% stuff that a lot of the retail apps did. That just didn't add up to us. That was sketchy from day one to us, but we definitely curate to some extent, but it's ultimately up to the investor.

[Speaker:TREY_LOCKERBIE] 4% sounds a lot closer to what you'd see in the traditional world than there was people running around offering 10%, 11%, 12%, 13%, crazy numbers. Why did those high numbers sound so risky, and what is your analysis as to what people were doing there that you guys don't do?

Yeah, it's a great question. So unfortunately, retail only competes on one vector. So retail yield apps, for example, it's the rate. And retail investors tend to be uninformed. And that's why they go after the highest rate possible. And so one retail app would be offering 10%. And then the next one would try to one-up them and say, we offer 12%. And that would keep going and going and going. And the only way to do that in the crypto world was through the anchor protocol. That was UST. So pretty much all these retail apps, or the vast majority of them, were taking people's cash, converting it to UST, putting it into the Anchor Protocol, which as you know, UST blew up, and giving a dollar liability to their end users. Even though the interest in the Anchor Protocol went back to the asset that was UST, the yield app was saying, we're going to pay you in dollars. That was where the mismatch came. When UST lost its peg and went to zero, that's why they lost a lot of money. Those were the incentives for retail. Corporates is a totally different story. They care about being conservative. They care about risk-reward. They care about understanding the risk profiles. But that's why retail apps got in a lot of trouble this time around. Now, not all of them, but most of them.

Most of them.

Yeah.

When you look at the corporate finance world today, of your customers, what percentage of their balance sheets are they putting in— I'm assuming it's mostly stablecoins. Maybe it's other things. But what is the percentage that is exposed to yield generation in this new financial system versus staying in the old financial system?

Yeah, so it's mostly something like 10% to 20% of their balance sheets that they put with us, or excess cash they weren't planning on spending anytime soon, at least. And they deal with dollars. They don't need to own a wallet to come with us. They go and they transfer this from their bank account like they would an ACH or a wire. And it's mostly Web2 companies. That's what we're very proud of. That's why we were able to get a Series A done, is because we proved that Web2 companies want a compliant bridge to these yield sources.

Are you able to name any of the companies publicly?

There are some testimonials on our site. Those are the ones that I'd be able to. Alt is an example of that. Yeah, and the site has some other ones, yeah.

OK, and when you see this, talk a little bit more about— I'm sitting there as the CFO. I've got this cash. I basically just ACH you. What is technically happening for me to then get exposure to this as a corporation?

So we have the relationship with the different lending desks. We have the bridge to a DeFi protocol if you'd like to do that. Our team is some of the founding engineers at Gemini. So we built the rails to convert your dollars to the stablecoin, put it into the DeFi protocol if you pick that. But if it's an institutional lending desk, we have an incentive rate from them. And we just need to take your dollars and batch it with other people's and send it to that desk and pass you through the potential rate that you're earning. So from your perspective, it's one bank transfer, you're done. You see your interest accrue daily, compounding yields, and you can withdraw in 1 to 3 business days in almost every offering that we have.

So what's interesting about this is if you go back to the late '90s, internet company, internet company, internet company. That's all anyone wanted to talk about. Companies, right? And quote unquote, the internet. One, the retail users got normalized to it. So if I want an answer, I go to the internet. If I want to do something, I go to the internet, right? But two is also the user experiences. The user interfaces have kind of abstracted away a lot of the technical components. And simple example being IP addresses, now they're human-readable domains, and many, many others. How important is it for all these different rails and all these different technologies that are being built today, which most people in the industry talk about, they kind of wave around, they say, look how shiny look how shiny and innovative this is, look how cool it is, look what I made the technology do, versus no, that's all gonna go in the background and 10 years from now when true mass adoption is occurring, people will have no clue what we're talking about.

Yeah, abstracting everything away is the right answer right now. Historically, the companies that make real money in the crypto space have been a bridge to the IP of crypto effectively. So Coinbase was a bridge, OpenSea's a bridge, et cetera. And that's what we are. It's mostly been speculation to date, frankly, Coinbase and OpenSea and things like that. But I think stablecoins are going to be pretty much the first use case that is not fully speculative. I mean, it is a superior payment rail to ACH or wire, especially when going internationally. And we want to be the first company that provides access to businesses as easy as their existing payment rails. So they think they're sending a dollar effectively, and it's really going to a contractor It's as seamless as sending a bank transfer right now. Yeah.

How much money did you guys raise?

We raised $22 million.

$22 million. And when did you raise the money?

Just a month ago, actually.

Okay. So you fundraised during a market downturn. What was that process like and how did it differ from when you raised, I think, in 2021?

Yeah, 2021. Like, literally anyone— you say you're Web3, it's over. Like, here's your money. Like, any company could do that. The thing that allowed us to raise in this market, which was egregious, by the way, was the fact that we had revenue. So we were built on fundamentals. We were very close to being profitable. If we didn't have revenue, it would have been a very different story. No one was pitching on narrative right now. No one's getting deals right now, period. This month to the previous month is night and day. That month to the previous one is night and day. But fundamentals are very important to us, having revenue, being lean. We're only 9 people. Yeah, that's really how everything's changed. Everyone cares about revenue.

[Speaker:BRANDON ARVANAGHI] And what about the actual fundraising process? Did you have to go talk to 2 or 3 times more investors? Was it just, no, we knew who we wanted as investors, and the conversation was different?

Yeah, we were thrilled with Tiger very early. I mean, the process took about a week, and there was intense diligence. And we had multiple term sheets, which we're very grateful for. Really, really good people, but—

Oh yeah, people competing.

Yeah, ultimately. Tiger was clearly like, you know, we were so thrilled. I mean, they're no nonsense. They do intense diligence, just so professional in all this. Yeah, we're very happy with them.

What was the diligence process like? Intense is a unique word to use during a diligence process. What was so intense about it?

Yeah, so I mean, this is no joke. I mean, compliance is a big consideration now, because a lot of the— a lot of the yield apps are facing that scrutiny. We've been built compliance first from day one. So explaining that story clearly with our lawyers, with counsel on the other end, and there's a lot of, I mean, they make phone calls to people 10 years in your past in the diligence, so. But yeah, we're—

So they're calling like old high school buddies and stuff?

Yeah, feasibly. I don't know exactly who it was, but yeah. Yeah, exactly right.

All right, and now talk to me about outside of just the treasury management, you mentioned kind of all corporate finance functions. So things like invoicing, like how do you think about where invoicing kind of intersects with this, like, brand new financial world?

Well, yeah, you know, the 24/7 nature of, like, stablecoins, low fee— that's just practical, right? I mean, this is, like, really the first non-speculative use case for crypto besides Bitcoin being the greatest store of value in history, in my opinion. Um, that's pretty powerful. Um, and things like contractors overseas, I mean, they prefer stablecoins already. If they can get their hands on a stablecoin, that's, that's what they want to do. People in Argentina, for example, the inflation is 20%. They want to hold dollars. And it's a nightmare trying to get a bank account or hold dollars. So that's what we're focusing on is international payments. We think foreign exchange is really interesting as well. And basically, we have the fundamental thesis that corporates and crypto is a very inevitable convergence. And if we build practical rails for them, that's— it's— every corporate's going to want to use us instead of their traditional bank account, ultimately.

When you say foreign exchange, that's something that I think in crypto, most people just say either I'm in the crypto I'm in the crypto universe, or I'm in the Bitcoin universe. There's really not any exchange between those two assets. How do you think about foreign exchange and what you guys can do for corporations?

So Circle just came out with a euro stablecoin as well, right? And the markets are nowhere near as deep as traditional finance. Forex is very deep for the major currencies. But feasibly, if they get as deep, the trading pools, for example, between USDC, USD/Euro, then you have a more efficient system. Anything done on-chain involves less pen and paper less transaction costs, 24/7, weekends, you can have your money. We definitely see that happening. I mean, DeFi definitely proved that it works in this downturn. They were the ones who got paid first. They were senior on everything from all the crashes.

Explain that more. Like, there's centralized finance, there's decentralized finance. You said that DeFi works, and they got paid first.

What do you mean? Yeah, so some of the people who paused withdrawals, for example, They had— they were borrowing from DeFi protocols. And if they didn't pay back those loans, they would have had their collateral liquidated. Now, in CeFi, there's things like bankruptcy, there's cronyism, there's favoritism, et cetera. DeFi protocols are dumb in the best way. They're dumb in the best way, which means you can't call someone. You get liquidated if you don't actually pay your interest, pay your loan back. It's over. And that's what you actually saw on-chain. There was no nonsense with them. So that's product-market fit. I mean, there's no question about people rehypothecating or repledging collateral in two different places, for example. It's just, you give the collateral in the form of Bitcoin to a DeFi protocol or ETH, and you have to pay or you get liquidated. And that transparency was so key in downturns like this.

When I hear people say that DeFi worked and CeFi didn't, I think that it's probably too much of a reductionist perspective of like, obviously, Luna, UST, that kind of ecosystem did not work. And then obviously, on the centralized side, there's companies— take a Coinbase, right? Zero issue, all of that. So how do you think about CeFi versus DeFi, given what we've watched play out over the last 3 or 4 months?

So DeFi, I think, is very good at overcollateralized lending and borrowing, because it can automate a lot of that. That's not a giant market, though. Ultimately, if more of this kind of lending activity takes place on-chain, it's more efficient, and it's at lower cost. So this world of kind of CeDeFi is coming out, which is really CeFi but on-chain. There are protocols like Maple Finance, for example, that are doing that. And when you have these protocols on-chain, you avoid pen and paper, you avoid Telegram chats, you avoid a lot of the issues. So there is certainly a place for both. DeFi is doing very well on overcollateralized right now. Undercollateralized is a different story.

I've seen people pitching undercollateralized on-chain lending. Is that possible? And what are your thoughts in terms of how viable that will be in the DeFi world, but without the overcollateralization?

It's extremely hard, and it's not viable, like, It's in the long run, it probably is, but what is missing is the regulatory aspect. If someone doesn't pay you unsecured, you have to go to court ultimately. You don't have my collateral if that happens. We don't have police forces, we don't have court systems on-chain right now. There's no concept of credit scores on-chain. That's why collateral is king on-chain. That's why overcollateralized lending is the first lending that takes place on-chain. When you have these kind of court systems on-chain or regulatory bodies that recognize that this is a loan on-chain, and they come in and intervene, that's how you can do unsecured lending or credit scores on-chain.

You just said collateral is king. When the finance world of Wall Street, kind of traditional system, sees collateral is king on-chain, why don't they all just run and be like, oh my God, we'll never lose money as long as we have overcollateralized lending on-chain?

Yeah, I mean, because it's a very small market. That's not the point of credit in most cases. It's mostly— when you do collateralized lending, it's mostly for traders, and there's margin lending and stuff like that. But that's nowhere near— I mean, the entire financial system runs on unsecured lending. Now, getting that on-chain is going to be a longer process than most people want to admit. But the overcollateralized part is running like a clock, and that's what we should be grateful for.

Can you decentralize unsecured lending in the sense where reputation, credit scores, like all these things that we know the centralized system relies on, whether they work perfectly or not, like that is how the centralized system works. If you look at something like Bitcoin, the whole idea is that, hey, we can build these banks without rehypothecation. We can essentially go back to kind of a strong financial system that isn't built on this huge credit component. Is the idea of bringing unsecured lending to the DeFi or on-chain world just trying to recreate some of the problems from the legacy system in the new world? Or how do you just think through— What are the pros and cons of doing that?

Look, unsecured lending is going to take place whether it's Bitcoin, whether it's ETH, whether it's dollars. It can be done more efficiently when you have basically an open API, like a compatible API everywhere, which is on-chain. So it's going to happen whether we believe in it or like it or not. And yeah, things like decentralized credit scores and stuff, I mean, it could be the case. We have big problems with oracles right now. The truth is, what we need is— what you would want is enforcement if someone doesn't pay you back. And there's no way to enforce it on-chain currently. You need someone to hold you accountable, a court system or something like that. And we're a long way from that, obviously.

One of the sayings in the Bitcoin and crypto world is code is law. And to a degree, as you said, collateral is king on-chain. And so the code is the law in that scenario.

Exactly.

As we get more of these kind of recreation of the traditional world, like unsecured lending and many others, will some of the thought process that around something like code is law change? Or is it just somebody has to figure out how do you take the law and actually codify it so that it's enforced on-chain?

That's a very good question. I think the code is law thing is its own kind of saying. And it's a great saying. And that's why Bitcoin is so solid. There's only going to be 21 million of them. And then, yeah, for unsecured lending, it's regulatory bodies written on paper is law, as we have with the traditional financial system. You're exactly right. It's very different. They're two different kinds of law.

When I think of the decentralized financial world, I've said now for months, maybe even years, that it's not about decentralized finance, in my opinion. It's about automated finance. And the reason why is some of it will be centralized. Some of it will be decentralized. You could look at— I'll use USDC as an example, second largest stablecoin based on last time I looked. They have centralization. They are not a decentralized stablecoin, right? But the technology is definitely superior to the legacy financial system. And so when you look at that, is that considered DeFi? Or is that like this, you know, I call it automated finance, because now you can actually use economic value, uh, stably backed by a dollar, right? And, and use it across the world in an automated fashion, but it's not decentralized.

Yep, you're exactly right. Yeah, I was using the word efficient, you're using the word automated. It's exactly right. That's what we're talking about here. I mean, there's the hard assets like Bitcoin, then there's the efficiency automated aspect of the centralized world. And you can cut so many costs. I mean, the internet, what it did for efficiency— the internet was really just an efficiency improvement at the end of the day, right? So like, I don't love the internet Web3 comparisons necessarily, but the efficiency improvements from kind of the crypto world is going to change the world as well, just from the efficiency improvements, not because we're recreating what government is. or think like we have more data on what government is than anything in the world. It's the efficiency automation that is extremely, extremely valuable.

The Bitcoin world would argue decentralization is really important for security. Obviously, Bitcoin is the most decentralized network in the world. It's the most secure computer network in the world. As you mentioned earlier, it has proven to be a fantastic store of value over a long period of time, you know, decade plus. Most of the other components of the industry, they talk about decentralization. If you go and talk to regulators, they, they have this concept of a dyno, decentralized in name only. There's an idea within the community of like a spectrum of decentralization. It starts out centralized and eventually will become decentralized. But it sounds like you're actually making a different argument, which is like maybe the ultimate goal of some of this technology is not decentralization because the security component of it isn't nearly as important as the efficiency. Like if you think of those two as a trade-off, you get security or you get efficiency at the layer 1. It sounds like you're making— no, the efficiency is where there's tons of value to unlock.

Yeah, I'm not sure there's a ton of value to decentralize the US dollar. If people want to send US dollars, they could do it more effectively. Yeah, we've seen that. We've seen people try to do that before. But yeah, for the Bitcoin world, that is the most important thing. Decentralization is king. Bitcoin is just a child safety lock. We're protecting ourselves from ourselves. And that's why it exists. And that's why it's going to be a tens of trillions, hundreds of trillions of dollar asset. But for the US dollar, I mean, Businesses want to send US dollars places. That's the world we live in currently. And you have a way more efficient way to do it. There's no need to be cosmic-brained about this. I mean, a dollar is a dollar. There's going to be centralization on the back end. Now, if that entire regime is going to fall, that's a different conversation. But there's no need to decentral— I mean, you just need reliable proof of reserves. You need an easy on-ramp for that. And you get more people involved in the ecosystem, that's good for Bitcoin ultimately, which is the decentralized store of value that we have.

You mentioned that Bitcoin is a child safety lock. What does Bitcoin as a child safety lock mean?

It's, you know, it's just there's a fixed money supply in Bitcoin, and we can't bring ourselves to do that. It's like that scene in Limitless where he says, oh, you know, there's no safeguards for human nature. You know, why don't we just crack a beer and live off the interest? We can't do that. That's the innovation of Bitcoin is we are preventing ourselves from inflating the currency. There's no way to change the currency value. That is a child safety lock, and that's why it's valuable, just protecting humanity from its worst inclinations.

So I think you, myself, many people are watching this, they get that. Do the corporations yet understand this, or are they so focused on efficiency and the kind of the conservative approach to their balance sheets that that is a secondary thought they may have later, but right now they're just focused on dollars?

The truth, I would love to have a company that like 24/7 focuses on Bitcoin on the balance sheet, but it wouldn't be much of a company. Like, we wouldn't do a Series A. We have that as an option. We kind of, you know, nudge people like, hey, Bitcoin's great, right? So we're going to do our part there, just to be clear. But what they care about is 24/7 settlement right now of US dollars, low-fee transacting, things they can't get from Fedwire and ACH, things they can't get from their legacy bank accounts. So we are— at Meow, we believe we've built a better solution for them. And that's largely on the US dollar rails with the ability to buy Bitcoin seamlessly from that same account.

What about things like payroll? One of the big problems in the legacy financial system is that people only get paid every other week, twice a month, or once a month. And there's tons and tons of studies that show, I think it was in 2019, the top 4 banks made like $8 billion of overdraft fees. And when you go and you actually analyze those overdraft fees, in many cases, it's not that the people don't have the money, it's that their grocery bill came in on the 12th, then their car payment came in on the 13th, Netflix hits on the 14th, bam, they get paid on the 15th, but they actually overdraft on the 13th and 14th 'cause the paycheck hadn't hit yet. And so if we were simply able to pay people at the end of every day, it would drastically eliminate, one, the overdraft fees and that kind of whole part of the legacy banking system, but also two is, that it would give people more economic freedom and flexibility. And so is that something that stablecoins or kind of these crypto rails could help solve?

Yeah, certainly. You can't really do that in legacy finance. I mean, it's not a good UX. Things like Layer 2s can help with that. Right now, the gas is too high to do like microtransactions on a fraction of a USDC. But things like Layer 2s can help. And you can even do that partially in a database, partially on-chain. But yeah, you're certainly right. That's a real use case. Like when we talk about real use cases, I think stablecoins are dominating. For legacy finance. Stablecoins are, are king, and we, we see their adoption about to blow up in a good way. And I think that's ultimately very, very good for Bitcoin. I mean, it gets everyone thinking about this space and they start thinking, okay, this is how I'm using my payment rails. There's a much easier way to buy Bitcoin now with this. And that's, that's kind of where we, where we plug into that too.

You mentioned that you guys only have 9 employees. That's a small number compared to many other companies that we've seen, uh, both in the crypto ecosystem but also, uh, just in technology in general. Why do you only have 9 employees and what the hell do they do?

My co-founder says when everyone says it has a slightly uncomfortable amount of work, then you're at peak efficiency. And everyone's slightly uncomfortable with the amount of work we have. And it's very much the FTX model. I mean, FTX, there's rumors that there are 20 people, there's rumors that there are 60. I don't know exactly how many, but they punch above their weight. I think it's like 250 to 400. Is it really? Okay, that's good to know. I like that. I like knowing.

It's a moving target. And I think that actually part of the beauty is that they don't want people to know.

Yeah, exactly. Yeah.

Because then everyone thinks they have 20 people.

The lore is fantastic. But I mean, you have things like automated infrastructure you can stand up and tear down in AWS. You have partners that eliminate the complexity. This is not like, it's much easier to build a company now than it was in 2004 when you'd have to build your own servers and bring them into your apartment or something like that. So if everyone's busy 24/7, you got a very good system, and that gets us to profitability, that gets us to a lot of things sooner. It's the only way to build a company right now, I think.

[Speaker] Yeah, when you were out fundraising, what part of the business did people get most excited about? Was it what you've already built and kind of let's go scale this to the world, or was it, okay, this is a great start, this will get people kind of onboarded, and then let's go build out all the technology and services around it for the rest of corporate finance.

Yeah, it was a little bit of both. What they got very excited about was compliance. No one was pitching compliance to them on the corporate treasury side. They got a lot of pitches. And the other thing that excited them was going after, you know, when I told them, you know, the treasury angle is very much a wedge to get into the entire corporate finance stack, things like payroll, things like invoicing, things like spend. That excites them because they know when you have a, superior payment rail, lower cost one, you can pretty much beat all the incumbents, which are, you know, decacorns, on margin. You have a lower cost way to do things, and you can pass those savings on to your customers. So, yeah, they were excited about that part for sure.

When you guys go sell the product into some of these corporations, who's making the buy decisions? CFOs? Is it CEOs? Is it a combination?

Yeah, on the treasury side, if it's like a Series A company or earlier, it's very founder-led. Now, when you get to Series B, Series C, the founder has sway, a lot of sway, but it comes down to the VP of Finance or CFO at that point. And the things that they care about are very different. So at the seed and Series A level, they might like partially overcollateralized offerings. And when you get into bigger companies, they want fully overcollateralized. Like, we have an offering where we have 150% collateral in Bitcoin against any dollars that we loan out. So that one has really good product market fit with the Series Bs, Series Cs, et cetera.

And when you start to think about your process of selling, the company's name is Meow. That sounds insane, but also is memorable. Why did you name it that? That? What was that process like? And then have you had anyone be like, we can't take you seriously because your name's Meow?

Yeah. And you know, we had no business naming the parent entity Meow Technologies Inc. when we started out. That made it really hard to get bank accounts and stuff like that. But there's like an S-curve value to this name. We know what we're doing here. I mean, ultimately, it's a name that can be anything. It's a name that's in a high entropy space, like the crypto world. You need to be able to be nimble. And it's kind of a burn the boats name, you know, like we have to succeed. Like, there's no, it's not a hedge. Like, we're telling everyone the name's Meow, and so we have to succeed. So that's the idea there, and it's memorable, and the shirts are soft, so that's the plan.

Has anyone said anything, any of the customers been like, uh, is this a real company, or like?

You know, it's, the people who were actually turned off by it are the people who never would have been customers in the first place. Interesting. They're like the Wall Street people who wouldn't, they like to pretend that they were, you know, oh, they would have explored this, but the name is Meow, I can't take it. They were never gonna be a customer. They're never open-minded enough to do this kind of thing.

Yeah.

But no, people like the brand, and I think we've, you know, we have product-market fit, so I think we're past the hard part now.

How do you measure that you have product-market fit?

I mean, the revenue and the metrics, like, in the bear market, like, I don't think there's many funding announcements in, like, June, May, obviously, so that was based on solid fundamentals. We don't take that for granted. We care about the customer very much here.

What are the metrics that you look at on, like, a day-to-day basis that you find most interesting?

Things like AUM, things like, you know, our conservative kind of risk management approach, like, protected all customer funds, like every single penny. We didn't lose a penny for customers in this downturn. Things like revenue, month-over-month growth. And yeah, now that we have a lot of runway, the ability to scale the team, we can do the more ambitious swings for pay and spend. We have free USDC on our site, which a lot of companies don't have.

What does that mean?

It's like from your cash account, you can send USDC at no gas, no 2% trading fee or something like that. And it's really just like Circle and Coinbase that have that. And we're— Coinbase is a great company, but they're not targeting corporates. They care about the top 50 institutions in the world, like the biggest 50, like hedge funds, for example, and retail. So there's this corporate gap, which is just totally underserved in the market because no one thought it was a real market. And that's because retail is the early adopter of things. And we come around and we say there's a corporate market. And that's, that's kind of what we're focusing on.

And when you look at the customer base today, do they start out with like 1%? And then go to 2%, then 4% and 6%, and like they're growing into it, or they just show up and they're like, hey, let's do 10%?

Some people get their feet wet with like 5% of their treasury, et cetera, and they grow to like a, you know, 10, 20%. Some people like to go 60%. There is like a scaling up, there is like the build the trust relationship, and that's very important to us 'cause we want to be around, we want to grow with them. That's why we also like serving startups that, you know, raise like $6 million, $7 million, because we get to grow with them. When they do their subsequent raise, were around as well and to be part of their picture of the treasury effectively.

That makes sense. You mentioned revenue. That's a wild concept for some folks to wrap their heads around.

I know.

How do you guys make money?

We're able to take the difference in the interest that we pass back, but ultimately, we think it could be a SaaS play with the suite of offerings that we have for corporates. And just, yeah, we're going to go head to head with the big dogs soon, I think.

I mean, What does that mean?

I think the Decacorns—

Call them out, let's go.

Who you going head to head with?

We're going to war, let's know who the enemy is.

Things like Brex, for example, you know, like one of our branding, like our value props is like Web3 Brex. That's kind of what we're going for.

Why don't they do this?

They're a great company, just to be clear. They're great. We think we can make a wedge that is kind of Web3, you know, and they can, but we serve different markets to some extent. We just wanna be like, head-to-head with these people. And, you know, I think we have the wherewithal to do that.

Got it. I'm an investor in Ramps, so it'd be nice to—

Oh, Ramps? Yeah, they're both great companies.

Yeah, Braxel— no, I'm joking. When you start to think about this market specifically, you mentioned regulation earlier. What needs to change in order for people to get more comfortable to actually start to use some of this technology?

I think it'll happen. I don't think it'll— I think regulation won't come as quickly as everyone wants. I think there's a lot of pending lawsuits that the SEC, for example, wants to see resolved before they make a larger statement or make things super easy. But I do think there should be a little bit more transparency in these DeFi companies of what they're doing with the funds. The terms of service will say, oh, we use Yearn, we use Yearn, and they're offering 6%. Yearn would be offering 1.2% at the time. In our heads, when we saw that, we're like, what's going on here? Someone needs to keep these people accountable. Whether your ethos is that's like a regulatory body or it's like pure policing, There has to be more accountability, certainly.

Yeah, that makes sense. What's your like 30-second pitch on anyone who's watching this that they say, hey, I want to learn more about this? Who's it for? And what do you guys do?

Yeah, if your business wants, you know, free access to USDC, compliant way to buy and sell crypto and hold it, or a compliant high-yield strategy in dollars, you can go to meow.co and sign up. And we'd love to chat with you. That's the website.

Meow.co is still the name. Name cracks me up.

We have xyz, too.

Meow.xyz?

Yeah, that's the Web3 things. Yeah, yeah, yeah.

By the way, the guy who— I know a guy who had the.co domain ending, and that was the business, was go convince everyone to buy.cos. And he targeted the startup world. That's why it took over in the startup world. He was explaining to me, and he's like, yeah. I took.co, and I ran around, and we went to accelerators, and all this stuff. We were like, hey, you go try to buy the.com, but the.com's expensive. Instead, why don't you get the.co? And you want to know what the breakthrough for them was?

What happened?

Twitter deal.

Really?

If you ever see a shortened Twitter URL, it's t.co.

Interesting, yeah.

And then it exploded, because if it's good enough for Twitter, then every startup is like, hey, I guess I could use that too.

The.co is like Columbia, right? I think that's where it comes from.

Yeah, whatever it was, right? So it's like, when you learn about how some of this stuff works, similar to you all, right? It's like, it's one or two deals, and then— And then it's game on.

Yeah, we don't need.com, it's fine.

Trust me, the guy or woman who owns meow.com is sitting there saying, somebody's gonna pay me a lot of money for this one day.

We explored it. How much was it? It was a million plus, it's not happening.

A million dollars for meow.com?

Yeah.

I don't know if I'm surprised that it's over a million, 'cause that's high or low?

I think it's like right around, but we're not gonna do it, so yeah. If you guys want to play ball.

Well, I've seen people even do like a little equity exchange, like, hey, rent it to us. We'll use it. We'll give you like, you know, $50K, $100K of equity. And if we become the next Facebook, then like, you're a genius. If not, then like, you still own the domain.

We wouldn't do that, unfortunately.

I tried to help you, jam.com. All right, where can we send people to find you on the internet?

Yeah, @joinmeow is our Twitter handle. Check it out. That's me. It's my last name. It's killer. It's Arvanaghi. But join me as our handle. We'd love to chat with you. If you have any questions, just talk to us. We're happy to explain the space, explain what we do. Yeah. If you need USDC or you need to, you know, high yield strategies for your Treasury, I would love to chat.

Arvanaghi.

Arvanaghi. Yeah.

You know how many times I said your last name and I never said it right?

Have you actually said my name? It's always Brandon.

This is Brandon.

Yeah.

Well, because I— listen, here's a secret. If I see a last name I don't know, I'm not even— First rule of content is don't make a fool of yourself by trying to pronounce people's last names. Uh, last question for you is, uh, given the bear market, sleep schedule, has it changed at all since last time? One of the sponsors is Eight Sleep. I slept 8.5 hours last night, so I feel like a fucking boss right now. What's your sleep schedule changes, uh, in bull or bear market?

Yeah, no, bear market's quieter. I guess you sleep longer. Eight Sleep, I have that too, so let me— yeah, it's great, great product.

Uh, you sleep longer during bear market, so you're not as worried because you're like, oh, there's not so much noise.

It's quieter. Yeah, it's just— no, it's not about worry or anything, it's just like quieter. You don't get as many like People, like, the lookie-loos go away in the bear market. That is true. It's just us again. It's just like the—

The people who have been here and are going to be here in the future, not the— We're both in Miami. And what was it? Art Basel? Basel? However you say it.

Basel.

Basel. Obviously, I can't speak English. But when that came to Miami and the NFT crowd and all that, I literally was like, this is insane.

You can't do it.

There was people with yacht parties and this party and that party and everything. And it's like, all right. Too much.

Yeah, we deserve the crowd. We deserve this party.

Probably is not going to be sustainable. All right, man, thank you so much for doing— congratulations on the fundraise. And anyone wants to go check it out, go to meow.co and, uh, and learn more. But I appreciate you coming on.

Thanks a lot, Pom.

All right.