S11E7: The Future of Fintech for Founders with Mercury Co-Founder and CEO, Immad Akhund [LIVE]

I did that first startup in London and it just felt like there weren't that many investors. And then you'd read on the internet, this is happening in San Francisco and all that. And I had a couple of acquaintances that had got into Y Combinator and moved to San Francisco, Silicon Valley. And my previous startup wasn't working out. So I was like, okay, I'm just going to do a new startup, come to San Francisco, and this is where I'll do my thing.

Welcome to The Room Podcast.

I'm Claudia Laurie.

And I'm Madison McIlwain.

I'm Madison McIlwain. We are on a mission to open the door to the room where it happens, sharing the stories of some of the world's most iconic founders and funders. We're recording this introduction the week before our 11th season launch at the Forbes 30 Under 30 conference in Cincinnati. After making it onto the 2024 list for media, we've hit multiple milestones, including our 100th episode and our first ever all-day conference. Inside Summit with over 120 attendees July of this year.

Authentic storytelling is core to our community as Madison and I are both founder and funder. It all started as two best friends who met in the heart of San Francisco as product managers in 2018, then realized as we were making career transitions into myself founder and Madison funder that we wanted to talk to the entrepreneurs that had built great companies. Since starting the podcast in 2020, I founded Pryve, a commerce payments startup. Raised venture capital, and faced a ton of challenges that I ask our guests. Madison became a partner at Defy VC and was the first institutional investor in my startup and is now at HBS and is a Pear VC fellow, bringing the funder perspective to the table.

Scroll back to find our conversations with the founder and CEO of Zillow, Spencer Raskoff, to Michelle Zatlin of Cloudflare, Grammy Award-winning artist Ciara, and the creator of Next.js and CEO of Vercel, Guillermo Rauch. Everything from consumer to enterprise, we've got you covered. The best way to get to know our community, both online and offline, is by subscribing to the podcast and our newsletter, which you can find at theroompodcast.com. Before we dive into today's story, we have a few short messages from our sponsors. Perkins Coie supports the most innovative entrepreneurs and investors in fast-moving and high-growth sectors, addressing their myriad of legal needs. But the firm doesn't just provide end-to-end legal and business counseling to its startup clients. It also facilitates introductions to key advisors and sources of capital. Perkins Coie's interactive website, Startup Percolator, offers access to programs, resources, and rich dynamic content designed to assist entrepreneurs on their startup journey. To learn more, go to startuppercolator.com and perkinscoie.com. Coie.com.

This podcast is brought to you by Mercury, the banking platform businesses like The Room Podcast use to simplify their finances. It's time banking did more than hold your money. Now it can. With Mercury, you can pay bills in seconds, close the books faster, and even send invoices. Not only does Mercury do away with a patchwork of tools, it eliminates guesswork, giving you complete and accurate visibility into your business's finances. All from one account. Apply in minutes at mercury.com. Events have always been a cornerstone of The Room podcast, and we've been proud to host dynamic gatherings since SF Tech Week's inception in 2022. This year was no exception. Last month, we partnered with our incredible sponsors, Mercury and Perkins Coie, to host a live recording in the heart of San Francisco during Andreessen Horowitz's Tech Week. With the generous support of CBRE, we had the privilege of interviewing Mercury's founder, Imad Akhund, in the historic Bank of America building. The event was a resounding success, drawing over 350 signups and selling out completely. Imad shared his compelling journey as a 4-time founder, highlighting how he built Mercury, a banking service now empowering over 200,000 customers with their financial needs. Our conversation delved into Imad's life story, beginning in Pakistan, followed by his move to London at a young age, and eventually in his entrepreneurial rise in San Francisco. We explored his insights on fundraising, the genesis of Mercury, and how the company has navigated consumer demand amidst the challenges of a volatile banking landscape in the United States. This episode is packed with invaluable lessons, including a 7-step framework around raising venture capital. How to find growth through non-obvious partnerships, and the power of transparency as your greatest leadership tool. Let's open the door.

Hello everyone. Thank you for coming. Hope everyone's SF Tech Week is going well and everyone's not too exhausted. It's only day 1 of 7, so get ready and get your coffee. I'm Jessica North. I'm a corporate lawyer at Perkins Coie. I focus my practice on working with startups and venture capitalists here in the Bay Area. For those of you who are not aware, Perkins Coie is an international law firm dedicated to helping clients solve the legal and business challenges of tomorrow. For more than a century, we have represented clients at the forefront of technological change, from aviation to artificial intelligence. The lawyers in our emerging companies and venture capital practice support the most innovative entrepreneurs and investors in fast-moving and high-growth sectors across the country. Addressing the myriad of legal needs that arise when fundraising and scaling their businesses. The firm's tailored legal services are informed by a deep understanding of each client's discrete needs. Perkins Coie is proud to sponsor The Room podcast, and we are thrilled to have worked closely with Claudia and Madison to bring together the next generation of movers and shakers. So The Room podcast is hosted by Claudia Laurie and Madison McIlwain. It's a top technology podcast founded in 2020. With the mission of opening the door to the room where it happens. They've done so across 11 seasons of conversations, which have included Sridhar Ramaswamy, the visionary behind Neva and the latest CEO of Snowflake, Cristóbal Valenzuela, the driving force of RunwayML, Guillermo Rauch, the mastermind of Next.js and Vercel, and Michelle Zallen, co-founder and COO of Cloudflare and more. This year they were named to the Forbes 30 Under 30 in media, which I think deserves a round of applause. So Claudia and Madison met originally in San Francisco in 2018, where all the magic happens. They were both product managers and they've established their careers together as the respective founder and funder. Claudia is currently the full-time co-CEO and founder of Priv, which is a subscription billing platform for CPG brands. Madison is an angel investor and a former partner of Defy VC's seed practice. If you haven't subscribed to their podcast, please do so after tonight. And with that, I'd like to bring Claudia and Madison to the stage to kick things off.

Thank you everyone for being here. Uh, we are absolutely so thrilled. This is our I think 4th SF Tech Week event. We've been doing them since 2022, and it's our first time doing a live recording. Thank you for believing in us. If you're a fan of the podcast, for being a subscriber, and if you're a first-timer, for being here in the room with us.

On this very hot day as well.

Very warm, very warm day. No, we're super thrilled and just want to first start off with a few thanks to our partners. We have Perkins Coie and Mercury who are full season sponsors. We could not be here without them. And our sponsor CBRE, who helped us get this space. Many of you may know that this is actually the original Bank of America building and that we're here and having Mercury in it today is full circle. A little bit of the old, a little bit of the new, which hopefully is us as well. But without further ado, we know that you're here to learn from this guy, Ahmad Akoon, the co-founder and CEO of Mercury. Raise of hands, who is banked with Mercury? Let's go. That's a pretty big cross-section of your customer base in the room.

We're missing a lot.

But I like that mindset. Not enough. Not enough.

Hopefully they haven't started their company.

Yeah, we can talk after this. But you're a fourth-time founder and you also are a recent podcast host, Founder in Arms. You just launched about 4 weeks ago. So also check that out after The Room Podcast. But we love to start at the beginning with all of our conversations. So could you share with us a bit about where you grew up and how that shaped your view of the world?

For the first 9 years of my life, I was in Pakistan. So I was born in Karachi. That's where my family was. And then when I was 9, I was rudely taken away from that by my parents and moved to London, which is where I grew up. Computer science as an undergrad. Did my one and only job at Bloomberg. I worked for a year and I accidentally kind of went into entrepreneurship and did my first company in London. And then did the next 3 companies in San Francisco.

And I would guess founder journey, because you've done it so many times, it's pretty endemic to who you are now. But did you always think that you were going to become a founder?

My dad was an entrepreneur. He owned a garage back in Pakistan. Okay. And he once said this thing that really stuck with me. I really hate working for people, and I think I'm quite similar to him. But also those little things when you're a kid stick to you. So I always thought, oh, I'll eventually found a startup. But back then, especially in the UK, I didn't really know how to do it. And I thought the normal thing was just go get a job, make some money, and then eventually you'll have enough financial freedom that you can go build a company. But then I was about one year into this job, and me and my friend, who were both engineers, and we would look at TechCrunch. This was 2006, and something would launch and raise a bunch of money. And we were very naive engineers. We were like, oh, we could build this. This seems easy. And We really didn't know what we were doing, but we thought we would just try. And I figured I could just always get another job. I really did see it as this job is boring. I'll just try this thing for a few months. I feel like big decisions are always better when they're made naively and when it doesn't feel that big.

I'll let Claudia weigh in on that decision to become a founder as well. At what point did you make it over to the States?

I did that first startup in London, and it just felt like there weren't that many investors. There was almost no angel investors, not that many companies doing things. And then you'd read on the internet, this is happening in San Francisco and all that. And I had a couple of acquaintances that had got into Y Combinator and moved to San Francisco, Silicon Valley. So I decided that's just what I had to do. And my previous startup wasn't working out. So I was like, okay, I'm just going to do a new startup, come to San Francisco, and this is where I'll do my thing.

And that's a bit of what SF Tech Week is all about, right? Like the belief and conviction that this ecosystem is still making things happen despite sometimes remote work. Despite a global pandemic. And you're alluding to a lot of different startups, but before Mercury, there was HazeApp, 2016. Tell us a little bit about that entrepreneurial journey and maybe some of those lessons learned, particularly with HazeApp that launched you into Mercury.

I started HazeApp end of 2008, and we sold it in 2016, and it was a very difficult startup. We raised a relatively small amount, $4-ish million, And it went on for 8 years.

Wow.

And we were profitable in the last 3 years, but it was really struggling for most of that time. And we did 4 full pivots. Any normal person should have really given up in that situation, but we just were like very stubborn about it. And eventually we sold it for $45 million. So it worked out. I feel like I made most of my mistakes as an entrepreneur there that I then learned from and applied those lessons at Mercury. But also the idea for Mercury kind of came while I was there. So Yeah, like a lot of entrepreneurs, I would always be thinking about ideas. And when I started being an entrepreneur in 2006, all the things you use to run a business kind of sucked. Payroll was really painful. I remember this person came with a big kind of binder just to set up my payroll at ASAP, and there was no Slack. We used to use like Skype for all of the communications at our business, and then banking was painful and you had to go to a bank branch. Everything seemed so antiquated, like It was like, I have to send a wire and I have to call someone. It was going to take several days. It was very frustrating. And over time, all of those things improved apart from banking. So in 2013, I was like, wow, it's pretty obvious someone will improve banking, but I figured someone else would do it. But it was just an idea on my kind of mental map of ideas. And then by 2017, when I'd gone through my earnout and no one had improved it, we kicked it off.

So 2017, you co-founded Mercury, but you did so with two of your previous co-founders from Heyzap, Jason and Max. Co-founding relationships need a lot of trust. So tell us a little bit more about how you decided to start another company with the same set of co-founders.

So actually, they weren't my co-founders at the previous company. Jason and Max had joined straight out of college, Heyzap, but I'd worked with them for 5 years and I guess I won't speak badly of my previous co-founders, but I had struggled with co-founders in my previous companies. Not my previous one, but like I'd done 4, so I'd gone through all the co-founders issues of various sorts. And what I had learned is it's much better to co-found with someone you've worked with and you know how you work with them, their strengths and weaknesses in like a fairly deep way. My first startup, I'd co-founded with someone who I did work with, but we were on different teams and we didn't really work together. And this one, I, you know, I knew exactly what was really great about Max and Jason and all their weaknesses. And I think they probably knew mine. And we had complementary ways of thinking. Like, I think culturally we're very similar. We're all fairly humble, direct people, and we had complementary skills. Max is engineering and Jason, he was the sales leader at that time. At that point I was like, wow, he can just do all the sales for Mercury. Although he ended up leading our product and I ended up doing a ton of the sales. That's fine.

We have a lot of co-founders and founders in the room. What are some piece of advice that you have around maybe resolving conflict with a co-founder?

I think the best way to resolve conflict, and I actually apply this to everything, like this is how I work with my wife too, is to have kind of what I call like domains of control or domains of excellence or whatever, where this is my thing. And at the end of the day, if there is a conflict, whatever is my opinion wins in that thing. And there's another set of things that are their things. And if there is conflict or disagreement, that's their thing. It's fine. It does involve trust because sometimes they'll be wrong or I'll be wrong and they think I'm wrong. But the idea is these things won't fester. It's like, okay, if it's an engineering decision, it's on Max. If it turns out he's wrong, that's fine. That's his decision to make kind of thing. And I'm not gonna get worked up about it. And then lastly, have a clear CEO. And if it's really something that If it's a business strategy question or something like that doesn't fall into someone's domain, then the CEO is the tiebreaker. I feel like sometimes people bring their emotions into their choices. If I feel like when we disagree, yeah, I never take it personally. If things are very obvious, then it's not an interesting question anyway, right? The reason people are disagreeing is because the question is interesting and it's very reasonable to have different opinions on that.

Yeah, it's a great take. Let's focus a little bit more on Mercury and the product. You mentioned driving to a bank to open a bank account. It's not really the greatest consumer experience, but banking is a large sector. A lot of folks are innovating in this space. Out of all of the challenges, how did you know where to start?

I really focused on my own personal journey and what I would want, and I really wanted to make a product that would work for an immigrant entrepreneur and give them an operational bank account. And we were just always very focused on that. I think it's much easier to build a product for yourself than to Imagine some use case and try to imagine what product you would want for that use case. And although banking is big, I would say even now there's not that many fintechs that go after it. And most of the market share of banking is still owned by the incumbents. So, but definitely in 2017 when we started, it was a very open space and I did explore, should we go after freelancers and gig workers instead of startup entrepreneurs? We explored a few different things, but in the end it settled down to like, I know this space, I know how to get distribution, let's do that first.

So you started Mercury in 2017 and you really launched your product in 2019. And Mercury is fintech, not a bank. So I imagine in those 2 years you were navigating some challenging dynamics with banks and being a company that is allowed to take folks' money. So could you tell us a little bit more about that time in Mercury's lifecycle?

The first 9 months we didn't incorporate or really get working on something. I was supposed to be taking time off. But I have a hard time sitting around, so I'd never done a fintech company before. My previous company was a developer tools company. So the first 9 months I really talked to a lot of fintech entrepreneurs, talked to a lot of lawyers, just tried to get a handle of all the things that I didn't know and what were challenges I would face. I knew how to build a product and get customers, but doing a bank partnership, building up a compliance and risk organization wasn't something I was familiar with. So That was the first few months. And actually part of that was also just validating, is this even possible? I started the first month saying, okay, is this even a good idea? And then I remember about a month or two in, I was like, I'd have a conversation and someone would mention ACH. There's a lot of acronyms in the fintech space. And I would be like, I have no idea what these people are talking about. But over time, you know, build up your understanding of the space and understand what is really known. And I remember in 2017 thinking, wow, these people know so much. This is going to be really hard. But Actually, in 2017, I was still extremely early to the neobank space. In some ways we were a pioneer, but back then it felt like we were late because people would be doing it for several years. So that was the first bit. And then once we got started, obviously we raised a funding round and Andreessen Horowitz was our seed investor. Our main challenge was getting a bank partner, and I went to Money2020, which is a big fintech conference, and I did this thing where I scraped who was attending. And every single bank I emailed and said, hey, we're coming, we raised from Andreessen Horowitz, be our bank sponsor. Ended up doing like 20 or so meetings there. And through that and a few other things, we picked a bank sponsor that we were working with. We actually did the whole integration with them. And throughout that time, they promised us a set of features. And I was really quite stubborn about what the feature set needed to be. I was like, we need wires, we need support for immigrant founders. Which I guess is not that complicated, but both of those things no one had ever really done. No one. I don't think anyone had launched a neobank that had wire support. Anyway, they promised us they'd be able to do these things. We did the full integration. 9 months in, every month they'd be like, okay, it's coming next month and next month. And then it never came. And we were like, okay, this is not going to work. So then we had to rip that out and do another bank partnership. And that really slowed us down quite a bit. But it was a blessing in its own way because it meant that we could really tune the product. Like, we basically rebuilt the front end completely, the whole onboarding flow, the whole send money flow. And a lot of the time we invested then still pays off today because a lot of those experiences just started off very polished at a very high bar, and they haven't really actually changed that much even today, 5 years later.

Finding a banking sponsor, doing full integration, realizing it's not going to work out. It's stressful, especially as a young company. I'm sure there are founders in the room that are also dealing with regulatorily complex spaces or kind of ambiguous challenges that might be a go or no. A no-go, what advice would you have?

The most stressful thing is when you are about to run out of money. And I've, I've been through that a lot. So this time, A, we raised a lot and I really said, hey, this could take 3 years to launch something. Because really in 2017, it wasn't obvious at all how you get a bank sponsor. Very few companies had done it. It wasn't obvious that it was going to be in any reasonable timeframe. I had a really long runway and we didn't hire that many people. We only had 8 people. And the idea was if we have infinite time, I don't need to stress about running out of money, which I think is the most painful aspect of this. Obviously we still had the urgency and we wanted to drive, but we just didn't have to like stress about money running out. And then I think the other part of the regulatory side of things is it is possible to learn things very quickly if you surround yourself with experts in that space. Yeah, actually I found lawyers the most useful in this. So I had this whole list of lawyers that were fintech lawyers and Sometimes if I was trying to get free advice, I talked to one for 30 minutes and all the questions that they didn't answer, I talked to the next one for 30 minutes.

Okay, don't do that, guys.

No, they're actually, I think, okay with that to some extent because eventually we did engage some of them with full-time work, but you can learn a lot if you're talking to someone smart and you have very pointed questions, you can get to understanding like what's the unknowns, what do you need to really understand? And then we had a few contractors that were also really useful. But I would really spend time if you're in a regulated space going, what are the laws? I don't personally love reading laws, but I think you can learn a lot from just speaking to people in the space.

You mentioned fundraising a couple of times and the importance of having that capital. So let's talk about your fundraising. You've raised over $163 million in venture capital from the likes of A16z, Coatue, CRV, incredible funds. Who was the first person to say yes to Mercury?

Our first fundraise at seed was very quick. The whole speed of it was kind of enabled by Andreessen Horowitz. So it was a funny situation. I was talking to Alex Rampell, who's one of the GPs there. We had literally nothing. We hadn't written a line of code. I'd just been exploring the space. I really thought of this as, hey, let's just have a chat. I didn't at all expect ABC would be interested because we felt so early. So I was just having this kind of very casual conversation, just giving him an update. And he's like, oh, this is great. You should come in for a partners meeting on Tuesday. This is a Thursday. I was like, I guess so. But I was like, this is like not the way you fundraise, you know, because my fourth company, I was like, if you're doing a VC fundraise, you want to have 10 VCs lined up in that week and then really have momentum built up. So I felt dumb that I'd fallen into this like VC trap, but it worked out because they ended up funding us. So for the partners meeting, like I was quite nervous. I always get nervous with these things. And there's a Starbucks right next to Sino Road that I always go to. So we went into the Starbucks and I get my latte in the morning. and I didn't put the lid on top of the cup, and I started drinking it, and I just completely poured this latte all over my shirt, but then walked into the room with the partners meeting, and like Marc Andreessen's there, everyone's there, but they turned the lights all the way down because there's like a presentation. So it worked out, at least no one mentioned it, and they gave me a term sheet.

So that's incredible. You are known as an incredible fundraiser. So what's a fundraising hot take that you might have?

You know, one of the good things about Silicon Valley is nowadays knowledge is so dispersed. I remember in 2006, no one knew anything about fundraising. You could really say something really obvious and everyone thought you were a genius. I would say one thing that I think people still don't do well is I'm a real believer in like just concentrating fundraising down to the shortest time period possible. I really think most people can do a seed fundraise within 3 weeks. And my methodology is number one, you want to have a pretty large network of other entrepreneurs that have done a fundraise. Because most of fundraising, you need introductions, and you can't build that network in like a week. Meet the people around here, spend time networking and building that network. If you don't have a network, yeah, I don't know what you've been doing, but you just have to have a network if you want to fundraise. So that's step 1. Step 2, you get a list of every single investor anyone can introduce you, and maybe you have some core people that you're going to email, etc., and you have a list. Step 3, you make your deck, you make a very simple data room. You have some like projections about what you're going to do, how you're going to do it, etc. Step 4, you just practice. You go to all those entrepreneurs that are in your network and you say, hey, I'd love for you to hear the pitch. And you just get used to saying the same words over and over. Do that maybe 5, 6 times and you get pretty good at it. Step 5, try to get introduction. I try to phase it. I have one set of investors that I'd still maybe take their money, but I don't love them. And I try to do those first so I can practice with them. And I have another set of investors that I love and I really want to get, and I want to do those second. And that's it. At the end of week 2, you should probably get a term sheet.

We have Imad's 6-step protocol to raising venture capital.

$163 million later.

And actually the same thing I did for Series A, I did the same thing for Series B. Yeah, it keeps on giving that process.

Well, it's clear you are on a rocket ship. About 50% of the founders here are already using Mercury, but today you're at over 200,000 customers, which is an incredible accomplishment. How have you thought about go-to-market and then the subsequent business model strategy as you've grown and scaled?

You know, Mercury go-to-market is tricky because it's a very broad product. Anyone can use a bank, but mostly you want to bank right at the start when you first start a business and you— it's much harder to get people to switch later on in their journey and getting someone at the start, it's very hard to do a sales motion or something like that. What we've always found is organic word of mouth product-led growth has been the key for us. And this really actually comes from the fact that people really love Mercury. So when every time I use any product as an entrepreneur, I don't go Google, what should I use? I go ask some friends of mine. I'm like, oh, who do you use for X or Y? And that's really how I think most entrepreneurs make decisions on what vendors to use. So that's really been the key for Mercury's growth. At the start, it was basically 90, maybe even 100% organic. Today it's about 50% organic and We've tried a lot of other things. We do Google Ads and actually some people do search best business bank and then click on the first link and sign up, which is great. And then the other thing that worked really well for us is whatever your product is, try to identify something that's just one step before it and see if you can partner with that. So for us, incorporation is one step before it. And actually we had Stripe Atlas became a partner very early on, basically about 8 months after we launched. And that's been a really strong partnership for us. It has to be a partnership where you can give to both sides. Like the Stripe Atlas product is much better if they have a very great bank that the entrepreneurs can sign up to. We just want users, so we get users out of that relationship. But I feel like most products have that kind of complementary kind of partnership idea, and neither side really did it for money. We did it because we wanted to deliver a good experience, and that's the key to partnerships, I think.

Well, core to your go-to-market is partnering with startups from day zero, right? Pre-even a bank account. And of course, the goal is for those companies to become the next Mercury, the next big unicorn on the block, but your product is geared towards those early SMB customers. So how have you thought about scaling your feature set and product to meet the scaling needs of your businesses?

I mean, I don't necessarily think our product is geared to those early companies. If you look at a lot of really good PLG-led companies, they do a pretty good job of starting really small but also scaling. And I don't think there's any reason you can't scale personally. So we've added A lot of features since we started that have scaled with companies. One of the things that I had no idea would be so complicated, we have a whole team that's dedicated to, is user permissions and controls. We have at least 20 different toggles of you can have a user, but they need permission if they're going to send more than 100K, or they can maybe manage the team but not send any money or view the accounts or which accounts they can view. So there's so many different ways to cut controls and permissions. And that's been one of the biggest consistent feature requests from customers as they scale. And they have a finance team and they want more controls and things like that. The other thing we've added is separate financial products and software products. So we launched credit cards or corporate credit cards about 2 years ago, and that's been growing really fast for us. And then this year we launched bill pay and invoicing. And actually later this year we're launching employee reimbursements. We've already announced it, I think. Okay, we think, or maybe I just announced it. It'll be great. The key, I think, with all of this, and actually I'm I think product development for companies that are already using you as they scale is some of the easiest product development. Like you just go ask, what do you need? And just be very receptive to listening. And we've just done that for the last 5 years. So by now we've kept iterating and iterating the product.

That's awesome. You've been through ups and downs as a founder, but your entire industry had a seismic shift in 2023 with the liquidity crisis at Silicon Valley Bank and their acquisition of First Citizens. Can you take us back to that march and what that was like for you as a founder?

Yeah, it started on Thursday. That's when everything was going down. And initially it was— I probably shouldn't say it was fun, but it was exciting for us because we were just getting a ton of signups and I didn't think it was going to be a big deal. I just saw whatever, people are freaking out. But if you want to sign up to the service, as we talked about distribution, it's not easy. So we, we were just really focused on how do we enable people to sign up and give them a good experience, especially since we were developing a backlog and we ended up pulling a lot of resources and focusing on getting these people bank accounts. So that was like the Thursday. And then Friday, everyone was freaking out, including us, because SVB basically stopped sending any wires. And we were still getting a ton of signups because everyone was still needing a bank account. But we were definitely worried about it. And I remember that Friday we were really focused on, obviously this happened to SVB, why should people trust Mercury? And that's a very reasonable question that people were asking us. And I would always say the same thing to them. I'd be like, hey, actually we have extended FDIC insurance of $1 million, which is what we had at the time. And you can put money in US government T-bills through other product, Mercury Treasury. But I was saying the same thing over and over. And then on Saturday, I was playing tennis with someone actually, and I had this idea where I was like, okay, why don't we just put this in a product? And then I got up there, everyone was still on Slack because it was the weekend, but everyone was like already working through all the signups and everyone's just kind of keep it crack. And we were like, okay, we're going to build a new product on Saturday called Mercury Vault. And we worked all through Saturday and Sunday, and I was on the phone with the bank CEOs we work with to extend FDIC insurance. And the team was working to build this whole new interface, and we managed to launch it on Monday morning. I feel like on Friday, and without that product idea, we felt a little rudderless. But having something to build and something that really spoke to the moment really galvanized the team and gave us a real focus and it felt really good to launch something really that quickly.

Instead of just reacting, you reacted back to the market.

Yeah. And we were already a big company. We were about, I think around 300-ish, maybe 400-ish people back then. When you're a bigger company, you're not all working on one thing, but it's fun when you get like just one objective and everyone's working towards that one objective. It's quite nice to have that focus.

It's been a crazy 18 months since the fallout of that, and Mercury has only continued to scale and grow into the ecosystem. You yourself are a very active member of the founder community. You've invested in over 350 startups yourself. Notable names— I'm going to get them wrong because there's so many of them. We got Rippling, Airtable, Rappi, Jasper, Deal, Substack, and more. What trait sticks out to you when you're evaluating a fellow entrepreneur to angel invest in?

So there's two things I focus on. Number one, how big is the market? Literally, like, is this already a $10 billion market or does it have a path to be that big? But also, like, how interesting is it for the future? Like, in 10 years' time, will this market and this opportunity be huge? And then the second thing about the founder is, like, really look for grit. How have they shown resilience, and how motivated are they about this problem? I think it's really hard being an entrepreneur. So if someone feels like this is their life passion and they're going to do this for 10 years and go through all this kind of hard work, that's something you can kind of sense by asking them questions around it.

Yeah. That's super helpful. I think founders everywhere right now are asking questions around how to keep going in this slower environment, both from a fundraising standpoint, although hearing it's picking back up also on the M&A front. But Wall Street Journal recently announced that they believe the software buyout market might be ticking back up, perhaps a reaction to interest rates. You yourself are an acquired founder. We talked a little bit about that with your last company. If this is an environment where more acquisitions are going to be coming, what advice would you have for founders who are thinking about going down the path?

We actually made an acquisition a month ago as well. Oh, exciting. It's interesting being on both sides of it has given me like an interesting perspective. I really think it's hard to try to be acquired. So my previous company, we probably tried for 2 years, so we became profitable, but we were like, okay, we don't see how this becomes huge. And we spent ages trying to sell this company. We talked to everyone, we talked to Apple and Google and and just, it wouldn't happen. Most of these corp dev departments, they're like VCs. They'll take meetings, but doesn't mean it's going to lead to something. And often the PMs and all those people also find it interesting to talk to entrepreneurs, so they'll take meetings too. And then you can waste a lot of time in this stuff. And then we actually gave up on trying to sell the thing, and instead we just focused on our final pivot. And that became really successful. It was a dev tools product used by kind of top 3 games in iOS and Android for a while. And then suddenly we were like inundated with acquisition offers. We had two companies that we ended up having terms from that we kind of fought against, and it worked out really well, but it was at a time where we like literally stopped looking for it. And I guess the biggest lesson to me is it's better to just focus on building something that's valuable and acquisitions come from that rather than trying to manufacture something for an acquisition. The only other part I would add to that is it does help to make relationships with people who could be potential acquirers, if that's something you're interested in. If you're doing something interesting, people are willing to talk to you, but not in the context of like, I'm trying to sell to you, but in the context of like, oh, you know, how could we work better together, etc.? Because if they know you, then they're more likely to fit you into their strategy. Yeah.

Madison McIlwain, you mentioned that right now it's a really interesting time in the ecosystem from a fundraising perspective, but also just from a building perspective. Imad, what's your outlook on the future of fintech and building in fintech over the next couple of years?

Generally speaking, it's just so much better to do things when no one else is doing them. I think the worst time to start a fintech company was probably 2021, and I think right now it's a great time to start a fintech company. I mean, one problem is, at least in fintech, a lot of the idea space was really explored heavily in 2020 and 2021. So you really have to have a new and original idea. But I bet there's a bunch of ideas that raised too much money and failed just because they raised too much money and actually not that well explored. So in that sense, I think if you have a really good idea and you feel really passionate about it, I think it's a great time to do it. It is much harder today to get a bank sponsor and work that route than it was in 2021. People still do it. It's hard, but you want startups to be hard. Otherwise it's probably not a good idea or everyone else is already doing it. Yeah.

Well, you mentioned an upcoming launch already, but tell us what's next for you personally and for Mercury.

I guess just more. Let's see, we launched a lot of products this year actually. There was a big launch year for us. Next year we'll probably be refining a lot of them. So we have a personal banking product that we launched in May that's still on waitlist. We'll be bringing that out either later this year or sometime next year. Launch is just like a step on the journey of making a great product. There's still a ton of work to do to improve our invoicing and bill pay and all of our other products. 90% of what we will do is gonna refining and like listening to customers and improving our products.

Well, we'll keep our eyes peeled. We're excited for your roadmap. We are going to ask our last question and then we'll open things up for a couple of audience questions. But it's our hero question for the podcast. Who is a woman in your life that has had a profound impact on you and your career?

I was actually married relatively early in my entrepreneurial career, so I'm, I'm 40 now and I got married when I was 23 and actually 25, but I started dating when I was 23. And my wife has just been such a supportive partner. She actually ended up becoming a kind of a CEO coach to other people as well, but she does a great job of making me feel like I can do anything. And then we also have 2 kids, and obviously I was a startup entrepreneur all through that time. I tried to give a lot and be there, but she really had to be the pillar at home. And recently she started her own company in a fashion design thing. So I guess I shouldn't announce it too much. I don't know if she's publicly announced it. You should check it out, it's a Sharky.com. Absolutely.

We'll link that in the episode.

Yeah. So it's fun for me to give her some support as well with her own startup.

Ahmad, thank you so much for joining us in the room today. It's been a real pleasure to tell your story and get to have an audience hear it live. We'll also be putting this on our podcast as a part of Season 11. Before we let you all go to happy hours, I want to give a final shout out. Thanks to you, Elizabeth, and the whole Perkins team, Jessica as well, and then Kelly and the Mercury team too. This day really wouldn't have been possible without their help. And of course, the space brought to you by Lucas and CBRE team. With that, let's give Ahmad a round of applause and let's get some drinks. Thank you so much for joining us at The Room Podcast. If you want more from The Room every week, subscribe to our newsletter at theroompodcast.com/newsletter. We'll be back next week with a new episode, an inspirational guest Tuesday. See you in the room. Perkins Coie supports the most innovative entrepreneurs and investors in fast-moving and high-growth sectors. Addressing their myriad of legal needs. But the firm doesn't just provide end-to-end legal and business counseling to its startup clients. It also facilitates introductions to key advisors and sources of capital. Perkins Coie's interactive website, Startup Percolator, offers access to programs, resources, and rich dynamic content designed to assist entrepreneurs on their startup journey. To learn more, go to startuppercolator.com. And perkinscoie.com.

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