Kendrick Nguyen - Creating Republic.co to Democratize Startup Fundraising and Investing

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What is going on everyone? Casey Adams here. Welcome back to the Rise of the Young podcast. On today's episode, we have Kendrick Gwen, the co founder and CEO of Republic, here with us. Republic started as a crowdfunding platform with a mission to democratize fundraising. In a vision to become a true marketplace for private investing, Republic's family of companies now provide end to end fundraising, distribution and advisory solutions targeting token and equity sales to retail and institutional investors. Republic is an industry leader in this effort through equity crowdfunding, syndicated investments and direct VC. Introductions. This conversation was absolutely amazing and I actually got introduced to Kendrick through one of my good friends and mentors, Aristotle Loomis, which was one of the first individuals to launch a campaign on Republic. So huge shout out to Aristotle. But before we get started, make sure to take a moment to share this episode with a friend. Especially anyone who has a startup. This episode will be very valuable to them. And with that being said, enjoy the episode with Kendrick. Gwen, if you've been listening to this podcast for a while, you know that I never run ads. But I've made an exception because I truly believe in this company and actually use the product myself. So here we go. Today's episode of Rise of the Young is brought to you by Katch, a free tax withholding and benefits platform for anyone. Whether you're a podcaster like me, graphic designer, hairstylist, entrepreneur, or all around hustler. You can tell Katch to automatically take a percentage from each paycheck or payment you receive to be set aside for your taxes, time off or a rainy day. Catch also offers retirement accounts even if you have student loans or debt. It's never too early or too late to save for your future. With Catch's percentage based contribution system. It doesn't matter if you receive $33000 or $30000. They'll put away whatever percentage you'd like each time you're paid for free. So sign up now with promo code Casey2020@CatchCO to get $10 after you save $100 in Catch. Here we go.

All right, what is going on, everyone? Casey Adams here. Welcome back to the Rise of the Young podcast. On today's episode, we have Kendrick Wen with us, the co founder and CEO of Republic. Thanks so much for coming on Kendrick.

Casey, thank you so much for having me. It's really an honor to be on Rise to the Young.

I appreciate it. So I'm a huge fan of Republic, man. I've been checking out the platform for the past couple of months through friend Aristotle Loomis, and I am just amazed at what you've built. And the first question I want to ask you, Kendrick, is when did you create Republic and where did the idea come from?

First of all, I just want to say, like, again, thank you so much, like coming from you and that, you know, about Republic. I mean, that means so much to me and your team and our community. But we're just cross our fourth year anniversary, so we launched back in 2016. And you know, an interesting question on, like, how one does something, I think a lot of it is a combination of intention and then just opportunities in life. So I think we all have this like, desire to do, you know, more and if you're happy, then you want to help other people around you. So that intention manifests whether you're a parent or whether you're a friend or whatever it may be. In my case, having a legal background and also having a venture background. So it just happened that there was a change in law under President Obama that made crowd investing possible. So this kind of like confluence of opportunities and intention, I think how we came into existence and I think that's how people do what they do in most cases, right?

Yeah, totally. That's amazing. So prior to Republic, you said you had a legal background, is that correct? Yeah, yeah.

I started out as a securities lawyer and then went back into, you know, to venture. I was angelist general counsel. And for those of you who don't know what angelist is, they basically one of the more well known investment platforms out of Silicon Valley, if not the most well known. We raised the very first million dollars through Angelis. Now it's only available to millionaires or accredited investor. And that's all fine. And Good. But obviously the vision or the dream that we at Republic have and we hope that people find relatable is that you don't have to be a millionaire, that you can be a college student investing in your friend's tech idea or that you can be a single mom from Ecuador investing $10 in SpaceX. You know, so that non that retail kind of like investing for the masses. That's what we're doing. And that was new then and now we're four years into this whole new industry.

That's very cool. Can you talk to me about the power of crowdfunding? Because I know, I'm sure a lot of people have heard the word before, but you guys are doing it in such a unique way and I'd love to get your thoughts on just the power of it and where you see it going.

You asked a very interesting question because on our side we've been trying to not use the word crowdfunding because it's so confusing. Right. So I'll just give a very quick recap of like the term crowdfunding. So Indiegogo and Kickstarter started out now well over 10 years ago, allowing people to just buy things before they were made. So it's, you know, it's called. Yeah, basically donation based, but basically buying products. Then just the whole thing of like gofundme where straight up philanthropy, people just giving away money for different causes. Angel is actually in 2013 started the very first trend of the public investing into a company or two. Again only for millionaires. So what's the difference between buying a product and investing? One, if you buy a phone and once you done using it, you're done using, has nothing to do with Apple as a company. If you invest in Apple stocks and you don't buy a single phone, but they sell like a gazillion of them and stock price goes up, then you get a little bit of something. The same idea applies to private companies. That is skin in the game rather than just consuming and that's crowd investing. And so we want to start using the term micro investing or crowd investing between donation and buying product.

I love that. I want to ask. There's a lot of entrepreneurs that listen to the podcast, whether they have a team tech startup or just any type of business. What are the requirements to get on Republic and how does one do so if they're not familiar.

Yeah, we very much believe in funding financing startups that are adding value and they don't have to be in Silicon Valley or already backed by Andreessen. Horowitz. But at the end of day, it's an investment platform, so they gotta be credible, right? If you're gonna offer profit share, then we gotta believe that the company, they will be profitable. So out of like over 30,000 applications in the past four years, we have selected and launched less than 250. So it's a very, very high curative lens. Now that said, we're gonna, you know, over time add on new verticals of business models so that it's not just tech companies. But hey, if a restaurant that has a lot of potential and want to give up a percentage of their revenue, that we can accommodate that as well. So we continue to grow and take on more types of companies. But yes, there's a high curative lens on credibility that we do apply.

Totally. Speaking of different types of companies, I know that I just had Janine Urio on the show from Compound, which I know that you guys recently acquired. I'd love for you to touch on that. Just the conversation I had with Jeanine was amazing and how she brought that model to real estate. And I'd love to ask you, now that I have you on the show, is what made you interested in that acquisition to bring it into the Republic branch?

Yes. Janine and Jesse, founders of Compound, joined us to launch Republic Real Estate last month. Hard to believe there's been but the whole notion of that is everyday people investing small amount in residential real estate over time will add their real estate product as well. But I got the question a lot in the first couple of weeks that hey, aren't you guys all about startup financing and startup investing? What's up with this real estate thing? Well, startup investing has the all or nothing return potential. So for every one Uber, you probably have 100 companies that launch on Angelist that didn't work out. Right now Uber, if you invested $1,000 in Uber in the very first round that once it went public was worth something like $5 million. So it's a huge multiple. Now that is that kind of like return value proposition is not all that there is. And some people want something else. So a lot of people tell us that like, hey, yes, and I do want to invest privately, but I don't want to invest in something that is a high risk of losing everything. And I don't care to make 10x or 100x. I just want to have like 30% upside potential. Real estate is obviously an investment in asset class, has been around since the dawn of humanity, and we'll be the last one to Go right before we disappear thousands of years from now. So it's a natural thing that we bring it onto our platform and introduce that to our community. The question is, do we have the expertise to do that? And we didn't do that at launch because we came from Silicon Valley, we came from Venture. I didn't know real estate. I still don't know much about real estate. Janine and Jessie and her team, I mean, they have like, such incredible depth, you know, having worked for, like, major asset firms. And so bridging knowledge and expertise and the foundation that we have was kind of like a match made in heaven.

Totally. And I wanted to touch on it too. How have you guys transitioned with everything happening now? I know that on your Instagram stories, I'll see you doing the team Zoom calls, but how have you guys transitioned throughout 2020 with everything that's unfolded?

We're lucky in the sense that our team has always been spreaded out in different cities. New York is the home base, the headquarter. We have team members in San Francisco, in la, in Eastern Europe, even in Kuwait. So the transition from like an office based mainly in New York and San Francisco to predominantly remote hasn't been a major challenge for us. What has been a challenge is that we've had a lot more products to ship and a lot more initiatives and merger acquisition that happened in the past three, four months. Things that the company would take a year or two to do. So it's been a lot on everyone, but we managed to have had some of the most productive time that the team has had.

Very cool. As the founder of Republic, how do you maintain company culture in your organization, especially digitally?

Oh, man, that is such a tough question, I gotta say. There's no and there isn't a one size fit all. And I obviously don't pretend that I have anything to prescribe or to teach. It's just my own experience and how we as a team at Republic operate. But I think at the end of the day, navigate however you want, but the one thing to look out for relentlessly, it's just positivity are people interacting with one another in a positive fashion. Do you see slack messages getting out of hand and jumping in and encouraging that, hey guys, take a break and jump back on Zoom, Right? And so fostering that positive culture so that people, both internally and when you work with business partners, that shines through, I think is just the number one driving Cadillac North Star for us. And so we're entering a different and interesting time in navigating that it used to be that off site company retreat. I mean, those are meant to foster team culture and positivity. Well, now we pretty much everyone is truly separated and communicating on zoom. And zoom only goes to a certain extent. So I'm basically thinking about the potential of basically doing a lot more smaller but frequent off site, smaller groups to get together at maybe once a month rather than once or twice a year and basically on site to do off site for like the foreseeable future. But I probably will have more to share from our own experiences a year from now. It's going to be interesting. Very cool.

Are you personally based in San Francisco?

You know, I used to be based at airport. Hardly ever stay in one city for more than like a week or so. But you know, I'm, you know, technically New York City's home. But I do go back and forth between California and New York, like very regularly. Even now, even in the past month.

Okay, I'd love to, you know, go back in time, you know, before legal and then before launching Republic. What were some of your early ambitions and goals throughout your childhood? Because I think that's important, you know, for people to hear early on, where was your mind at? What were you focused on and how did you that define who you are to, you know, get into legal, which led you to launching Republic?

You know, it is a rather interesting story, but if you don't mind, I'll just walk, you know, back on memory lane a little bit. My, my family immigrated from, from Vietnam to the U.S. and you know, we settled down the Bay Area and I skipped a few, you know, classes a few years. But the notion that you're in, you know, the Bay Area, Silicon Valley, you hear these names, you know, Google and Amazon and Facebook, and they were all private companies and you know, you hear them, you were never like part of the story, right? And you know, like most Asian immigrants, you got to be a doctor or lawyer. And so somehow I kind of like got nudged into the path of my law. But the notion of like, it's very clear to me that entrepreneurship is what going to define how we live and work, much more so than before. And even when I went into law, the companies that I worked with, some of whom were tech startups, but I still couldn't get in. Even when you're, even if you're a law firm partner, even if you're a retired doctor, it's not like you could invest only in Facebook. So that notion of like, hey, here's this one thing that will change the world as we know of it, how do you let more people in? And at first it started with like, how do I get in? Or before that it was like, how come I can get in? And it seems like my parents couldn't get in either. So that notion of like, hey, I want to feel relatable to the headlines in the news was, and I think is still that driving force. It just kind of like manifests itself in different ways. And, you know, I did law not because I thought that law would be a key, a solution to that. It ended up being a key component of it. But, yeah, intention and opportunities in life, I think.

Totally, absolutely. I'd love for you to tell, you know, a founder out there, just, what's the difference when it comes to like, founder focus? That's what you guys are. If someone goes and raises $100,000 from just, you know, seed, pre seed, round investor versus raising $100,000 on Republic, I'd love you to, you know, compare them and talk about the differences because I know as founders that are listening to this show, there is major differences and, you know, the access and control and, you know, increased valuation. Just to give some insight on what that means for the people that don't know, I'd love for you to dive us in there.

That's a broad question and fully loaded. Let me try to answer it. If I kind of, like, rant a little bit, I think probably the number one advice in looking back, thinking back about things I didn't know, that I wish that I knew when I undertook this journey that it's actually much harder on the one hand than anyone. Then, even though people tell you that, hey, being a founder is really hard, it is really, really, really dang hard.

In a sense.

You gotta set aside, like, whatever hurdle or like, mental, you know, issues or drama to give it your all, then maybe, just maybe that it works. And secondly, definitely don't let people's like, naysaying or don't be discouraged by no. If you look at my background Republic, one would think that fundraising would have been very easy. And outside, it may look easy, but it has not been at all. We're now financially more stable than we ever have. And yes, we have, like very long Runway right now today, looking at you. At least three times during the past four years, we were like, teetering on the verge of, like, running out of cash because despite, you know, pitching probably over 250 VCs and we got warm intros, we got the meetings, the model of what were what we were aiming for back then seemed so unrealistic and seemed so far fetched that it was like, no, no, no, no. Even though there were thousands of hours committed to fundraising and you just gotta like keep on to the best extent you can, just keep at it and no one has the answer. Just because Sequoia and Tristan Horowitz decided that your company is not right for them at that time, it doesn't mean that there are better, more value add investors. So take every no with a grain of salt and use it for whatever lessons you can take away from it. But let it roll off your back and don't care about it so much.

I love that. It's amazing. If you were to give yourself advice when you were starting Republic four years ago with everything that you've learned now, what would you tell yourself?

I probably would tell myself that four years from now, you guys, meaning Republic will be just fine. Because when we started four years ago, I knew it would be like a tremendously difficult business model. You're building a two sided marketplace place and new industry that no one, 99% of people out have never invested privately. So it's a lot of work to get there. And so there were a lot of like anxiety and we needed, you know, just validations to believe that this is worth doing. So there were a lot of unnecessary anxiety. I think at one point I just got into a mindset of like, you know, I'm just gonna go all in at all cost and just. And I wish I had that mindset back in 2016. It would have, I don't know, just made it a little bit less in the early months.

When did you guys launch your first campaign on Republic and how did you feel that day?

Oh, man. So my dear friend of Alice in eyewear, I mean, that's one of the very first campaign that launch on Republic.

Yeah. Shout out to Aristotle.

Yeah, yeah. It took us a full year to deploy $1 million into the first 10 companies. And especially when you just launched, you know, convincing, for example, like companies now that go to Republic. You know, we've had a long record of history. Now we have 700,000 community members and we routinely raise for people. There's a methodology. It's not a hard sell. Yes, proven Aristotle. To believe in Republic. A wholly unvalidated platform to go through all of the hoops and hassle of launching a campaign. And so it was kind of like a personal debt for me to do whatever I can to make sure that they could close successfully. But it took everything we had and more and as well as partners like Aristotle and their end to be able to do that. Glad to report that now it's a lot more streamlined. And if a founder follows exactly what we tell them to do, which is a lot, they're going to meet their funding expectation on the lower end. There's no question about that.

Love that. How did you and Aristotle meet?

How did we meet? I can't remember. I think Chicago had always been an ecosystem that we deeply interested in. It's a amazing, beautiful city, obviously a financial hub, but somehow got ignored by tech back then. Right. So you have Silicon Valley, Silicon Alley in New York and in Boston and Chicago or like quote unquote represent this like vast area of United States that have been ignored. Given that our focus is on access and inclusion, we think that talents exist everywhere. And so we had that focus in Chicago and build relationship together with Scott at Tecnoiri. And I think that's through whom we met, Aristotle. Very cool.

So you guys have launched, you said around 250 campaigns, is that correct?

Yes, we have. I don't have the exact count, but yeah, mid-200s, like looking into the next.

Four or five years, how many campaigns are you guys expected to launch year over year when it comes to the growth? Because I'm sure as you're vetting more deals and have more track record, like you said, you can identify more companies that you want to bring on the platform. So looking forward, what are you guys expecting to do when it comes to campaigns and the numbers?

Every year since 2016, we have grown exponentially. Triple digit either between 2x and ax. Now it's really hard to benchmark a fixed number of campaigns because the end goal is to bring on as many compelling investment opportunities as possible. And our goal is a little cheesy, but we really do want to be Amazon for private investing, that is investing in small amount as quickly and easily as buying products on Amazon. Right. If you love a tea brand or you know, a phone case, you should be able to invest in that if you like it so much. That's the thesis. And you can't really be Amazon of anything if you just sell books. If you just have like 20 companies selling products. So obviously the end goal is number numerosity. But how fast we get there depends on a number of factors. Depends on, you know, the market's appetite for tech companies. And we now bring in on real estate, we bring on game development, financing. We basically we acquire a platform called FIG back in April. So by expanding into new verticals and being Sensitive to like the demand of our community investor base. I do hope that like in a year or two, in two years, that the number of companies that have closed on Republic would be in the thousands rather than in the hundreds.

Totally. No, that's awesome. The Amazon of you said Trout investing. Is that how you said it? Private investing, The Amazon of private investing. I love that. That could be the title right there.

Thank you.

I have a couple more questions before we wrap up, and one is just when it comes to Republic and its core values, when you first started it, did you see it how you see it now or has it changed over time with the successes and struggles that you've had throughout the journey?

Many things have changed in the past four years, but one thing that has not changed is our general mission. And that mission is essentially making startup financing and startup investing more accessible, more inclusive. Out of that is the notion of wealth equity. If you look at the wealthiest among Americans have up to 30% or more of their personal assets in private investment, in real estate, in startup and whatever else. And we want more people to be able to do that. And wealth equity I think is a solution to social inequality. Something that is very much that lens has never changed. And on day one, we made some decisions that were highly unpopular among our advisors in venture. For example, why do you set up an office in New York when it's easier to fundraise in Silicon Valley? You should never hire team members with an MBA because you know, if they're not an engineer or product manager, they're not tech enough. In reality, if you aim to introduce a business model that's relatable to all different demographics, you gotta be able to recruit and learn from the experiences and differences and talents from people of all different background. So I think our team and the way that we've been growing today and our lens, that has always been, and I think for as long as I have anything to do with Republic is probably that and positivity with the two values that hopefully will be our defining attributes. Love that.

What's your advice to someone starting a tech company when it comes to, you know, working with the right developers and the right designers to actually create a working product? Because I know going from A to B in that world, there's a lot of complexity there and you've done it very well and I'd love to hear your thoughts on that.

Yeah, I'm really excited to share and share as a non technical founder at that. Right. Obviously it depends on the business model that you're building, but in short, in the near term get whatever developers or team that you can execute the quickest and dishing out, you know, version B, C, D, E, F and pivot as quickly as possible. So building fast and being able to validate quickly is very, very important at the outset. But you gotta almost immediately once something starts to work, build a team that knows how to build that foundation. Because otherwise, and this is a learning for many companies that had, you know, dealt with the same issue as well, you end up once your beta version, it was very quickly dish up, started to work, you just add on more and more and you build basically a castle on like four, you know, flimsy sticks. And then at one point to rebuild that foundation is going to be an inordinate, you know, extraordinarily difficult effort. So that'll be my take. And for any non technical co founder, having a technical co founder, which I, you know, very fortunate to have had is a key thing. And if you're a technical co founder, consider adding senior team members right off the bat. If not straight up a co founder which strong either business or community expertise so that you can balance it out. It's more comforting to have people with the same background have the same, you know, language in conversation. But down the road that diverse diversity in background experience will prove to be a major strength.

I love that, love that answer. That was amazing. Last question before we wrap up. Kendrick is just what are you excited about moving forward with Republic? I'm sure there's lots of things you guys have coming up soon but what are you personally excited about?

I'm just really excited that we're basically thanks to again, you know, people like you, Casey, sharing what we do that we're I think about to see mainstream adoption that more people see about it. So I'm just excited to see the growth or like kind of like if you look back in like the 70s and recycling, there was a moment in time I'm sure that people were like huh, yeah, recycling. Obviously that makes sense and you know, if I could, I would love to go back and watch that year in like you know, fast track, right? So now I think we're at that point when it's self explanatory. People go to Republic co they kind of like look at it and I'm sure 9 out of 10 be like huh, compelling. They're going to read more if not necessarily invest. So that that adoption and how quickly I think retail capital will change the narrative around investing is something that I think all of us will will witness in the next year or two, Republic just happen to be in the ecosystem, but I think there'll be many forces. So, yeah, I'm just excited for once, you know, be at the tips of like a real shift in wealth generation and private investing and see the different iterations that come out of that.

I love that. And it's crazy too, because whenever I first saw Republic, it was so compelling to me. And I spend hours of my time digging into more about what you guys do and your vision and, you know, be about it. And I tell so many people personally. And so a lot of my close friends and family members, like after I interviewed Janine, I invested into one of the Miami properties. And it's one of those things where, like you said, it creates that conversation of being a part of something which you normally weren't able to be a part of unless you had millions of dollars to, you know, invest proper privately. So I'm super excited to watch you guys grow and I want to share.

That, Casey, that we very recently rolled out our own digital token. I don't know how many people on the call listening in, crypto enthusiasts, but in short, it's basically an instrument, a digital securities, almost like a point system, like airlines mileage point, but that it pays out profit from Republic. The whole notion of that is so that we can incentivize and thank partners and other people who send deals, you know, refer friends to go on the platform. And as Republic continues to grow, so will the dividend potential that will be paid out to the token. And even though we do a public sale now, down the road, we're going to have just a grant program that people who do certain things without investing, even just visiting and telling a friend about it, they can earn these notes. And down the road, I'm going to be able to get some economic interest when companies on Republic do well and go public or get acquired.

Very cool. Well, I'm excited about it. I'm going to make sure to link everything down below so that everyone that's been listening today can go check it out. Last but not least, Kendrick, I just want to say thank you again for coming on the show today. It's been such a pleasure and huge shout out to Aristotle for connecting the two of us to been such a pleasure having this conversation today.

Thank you so much, my man. It's truly an honor to be here and really looking forward to coming back whenever you would have me.

Yep.

Monarch Legacy of Monsters, an Apple original series. The world is on fire. I decided to do something about it. On November 17th. This place. It's not ours. Believe me, the most massive event of the year arrives. If you come with me, you'll know everything. I promise.

Oh, my God. Go. Go.

Go.

Monarch Legacy of Monsters. Streaming November 17th only on Apple TV Plus.