Fintech, Forecasts, and Stocktoberfest: A Conversation of Social Leverage

Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. You want tech and tacos, Tacos and tech, you know we got it.

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Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. You want tech and tacos, tacos and tech, you know we got it.

Hey.

And welcome back to the Tacos and Tech podcast. I'm your host, Neil Bloom and I've got fellow north county investor extraordinaire Fintech financier Matt Ober, managing partner of Social Leverage on the pod today.

Hey, Matt, thanks for having me. Good to see you.

You too. Good to have you on here. And I know you've been in San Diego a little bit now, but I thought it'd be good to, you know, formally introduce you to the tacos and tech community that is San Diego.

Thank you. Yeah, three years actually just the three year anniversary recently.

Oh, wow, amazing. Well, after six months you're local so you, I'm sure you're living it up north, north county wise. Take give us a high level of social leverage just for those who are, who are new to, to the brand and the organization.

Sure. Firm's been around about 17 years. We're a seed stage venture fund. We're actually on our fifth fund which is closing here shortly. And partners Howard Lindsin, Tom Peterson and Gary Bennett, two of us are in San Diego, two in Arizona, and we've got another three on the team. And you know, mostly focus on Fintech and vertical SaaS at the seed stage. So early stage investors.

Early stage investors with all backgrounds and operators. Right. Everyone's really been deep in industry before, which is pretty cool to have that expertise around the table.

Yeah, I think for us, like we, we invest in what we know, whether we're users of the product, users of competitors or something. Something we feel like we can be really hands on with.

Yeah, well, for you, I know you not only are new to San Diego, but newer to social leverage, obviously, compared to some of the partners. Take us back. How did you get into the investment world? It comes from finance. I know, right, but where did it all start for you?

So I went to Chico State out of college, grew up in the Bay Area. Then I worked at Bloomberg for about five and a half years, know, learning Bloomberg Terminal and the markets. And then I joined a quantitative hedge fund called World Quant, which is actually part of Millennium Partners. While there, you know, World Quant had this thesis, if we could consume more data than anybody in the world, we could manage more money. And it was like me and 60 PhDs and I was in charge of just buying as much data as I could. And that's actually how I met Howard. I cold called Howard when he started Stock Twits and We used the StockTwits API data feed as one of the. We were spending a few hundred million buying data and StockTwits was one of the data feeds we bought. We quickly grew to 30 billion in assets and we started doing venture investing. And so I actually started investing alongside Howard and Tom through World Quants Venture started going to early Stocktoberfest events and paloozas that Howard would throw. And then I moved to become chief data scientist at a hedge fund called Third Point, which is run by Dan Loeb, who's probably most well known for being an activist and taking over companies. And so there I ran Risk Data analytics, we did private investing, SPACs. I continued to invest alongside the social leverage guys, but also became an lp and then I joined the team as a partner about four years ago. So after five years of working for Dan Loeb in the hedge fund space, it was felt like it was the right time. We were in New York, we were excited to, you know, maybe make the move. And so we moved to San Diego. And so I've been with the team for about four years, but I've been an LP for over 10 and have known the guys for almost 17 years.

It seems like, wow, incredible. Oh, well then it's possible we cross paths at some of the early Stocktoberfest days, I think.

So we both younger.

Yeah, probably. I had just moved to San Diego and Howard was the first to kind of welcome me in 2013 and be like, hey, come to this thing I'm doing at this theater in Coronado.

I was there. Yeah, all of those. I mean, when you're living in New York, getting to Coronado in October is a nice way to keep the good weather for as long as you can.

Totally. What's the. From a financial technology standpoint from then to now? Like what do you. What has changed a lot? Like data still matters a lot. What do you think over that ARC period, what's changed?

I mean, data still matters. I think people more aware of it now, but it's like, I still don't think like it's being leveraged or used and, and building data companies is hard, you know, like we do on the fintech side. Everything from retail. Right. We were first investors in Robinhood and Etoro and Alpaca, but I think we do a lot more on the B2B side as well, given my background. We look at compliance stuff, things that would be maybe more used in, like the, you know, banks and hedge funds. I think there's just, you know, whether you believe AI is changing everything or not, I think the day job of everybody is changing with these tools, right? Everything's becoming more efficient, easier access to data is becoming more important. And so, you know, we're excited about that. And I think that like, kind of blends into, like, you know, I think Howard was a, you know, early Robin Hood investor and, you know, that was all about, you know, trading tools and investing tools changing. And we're still excited about that, but now we're also, you know, a lot of people have money now and how is wealth management and wealth technology changing? And so we spent the better five years really diving deep into that world as well.

Interesting. A lot of things to unpack. Robinhood and Etoro like, completely exploded the consumer investment market. Right. And crypto right on its heels from that. Is that still. There's still areas just in consumer to do or does it feel like all the frontiers are crossed there on consumer finance?

I mean, listen, I think given we still. Howard is at stock twits, I sit on the board there. We still see all the new consumer things. I think what's changing is, you know, investing in the degenerate economy and everything's blurring, right? Like prediction markets are now in your Robinhood. Like, I can place a bet on NFL games or predictions on NFL games this weekend, while also adding to my Tesla, buying some options and managing my, you know, retirement account all in one place. So I think the worlds are blending. Like, you know, I think, you know, gambling in general will just be part of investing apps. You know, I look forward to the day where I can, you know, do a parlay long Tesla ELON saying humanoid 13 times on an earnings transcript and the NERS winning the Super Bowl. Right. 20 to win 2000. So I think those worlds are all like blending together. So I think consumer is changing. I think it's hard though, like customer acquisition, like, how are you going to catch up to Robinhood? I'm a personal investor in Robinhood stock and every day I ask myself, like, how is it not going to be 10x bigger than it is today?

So you mentioned betting, and a few of these are really kind of explicitly connected to regulation. That part has always been this like, thing that doesn't change. What do you think's changing there, regulation wise that'll benefit fintech?

I mean, listen, politics aside, I think we're in a world where there's a lot less regulation. We're in a regulation friendly environment, right? Crypto is everywhere, right? From treasury companies to tokenization to every. You know, it's a lot easier for Robinhood to be in crypto. Like what is Coinbase do now? Right? That was kind of like the thing like why do I need a Coinbase account if I can do everything almost on Robin Hood? So totally I think it's all kind of blending together. I think whether less regulation is good or bad, I do think it allows for more innovation and like if we get more clarity, that's good. Like I think we didn't have any clarity in the crypto markets for too long. Whether you believe in some of the coins or not, like, you know, there are a lot of use cases for crypto blockchain technology specifically. And so I think that we're going to see a lot of innovative products out there, right? Perpetual futures, leverage, tokenization of everything, investing in everything from private companies to rally road, one of our portfolio companies. You can invest in dinosaur bones, you can invest in horse racing through commonwealth betting, gambling, investing. Everything's kind of blending into one, one place, one app.

One app. So speaking of that, stock twits might be the thing missing from Robinhood, right. Is getting the chat that could actually, which Bloomberg really championed originally, right? Like actually being able to talk terminal to terminal and others and get consensus from the chat, both public and private. Is that an area that people need to see alongside their trading?

Listen, I think stock twitch is, you know, 17 years largest financial investment community, right? Like crypto stocks, FX, they just announced a huge partnership in the predictions market, right? So like if you think about it that way, like you're going to be able to stay see people's predictions, right? How exciting is that to like think about that around earnings and everything. So I think that's all blending together. You know, Robinhood announced their own social component coming out. I think that you make stock foots even stronger. Like Robinhood is one platform if you think about all the brokerages there are globally.

Yeah.

So I think that's a positive for stock twits. You know, would you like stock twits to be embedded in Robinhood? Maybe it's not easy to manage a community, right? Howard will tell you the headaches of the learnings from all the years of stock twits. But I Think, you know, Robin Hood waking up to the fact that social is important is only going to make stock twits more important for the. The broader world.

Agreed. Man. I remember it was late 2015. I'm on the ETH channel in stock Twits. ETH was less than a year old and we are just learning how to build our own mining rigs when ETH was at seven or eight dollars and we did it and a bunch of us just like shared notes on how to hack gaming towers together. And we also started mining Ethereum and I learned that all from the stock from. From a channel that probably had 100 followers at the time. Right. Ethereum, like there is some power in social.

Yeah. And I think what like Bozello and the team are doing at stock twits to make, you know, crypto Twits and crypto easier. Right. Like, there isn't arguably a good place to talk about crypto. Right. And so if you think about it like, you know, I love going on and seeing what people are saying about specific stocks. And you know, I write on Beehive, my own newsletter, and now integrate stock twits in. Right. I can like put the dollar sign and it has the cash tag embedded into Beehive on my newsletter. I can write about like a specific stock and it all ties back together. It's pretty cool.

That is pretty cool. The big thing you guys added, I know in stock is the, the earnings piece, which is amazing.

Right? Watch earnings live with other people.

Yeah. What have you seen from that? Like from a data side, like, what is that? What are people doing uniquely with that?

I mean, I think it just makes the data content and feed, you know, long term, more and more valuable. Obviously. You can bet there's the idea of like other firms embedding that into their own applications and there's a whole data and API team to talk about that with. But like, if you think about like the value of that data, like how people are talking in real time and you can get like a new version of sentiment and like there's the bull bear, like all that happening in real time. Like, you know, as a data guy, especially if you think from a quantitative background that I have like two, three years from now, how is that going to look for some stocks? Right? Like how many people are on live? That's, that's a data set in itself. What's people are talking about? How many chats are happening? How active are is everybody? How bullish and bearish are everybody? Like, how does that change before and after and during the, the earnings call. I mean, I think like earnings are cool. I also think like the events themselves are. Right. You think about like days when Apple announces new products or Google announces new products or whoever it is, you have so many like live events you can now do through stock twits.

Pretty amazing. It is pretty cool. But nothing beats in person sometimes. And I know we're about to get together here for Stocktoberfest. What's, what's unique and different about that? About being in person compared to, you know, digitally?

Yeah. I mean, listen, October 20th to 22nd on Coronado, which, you know, it's nothing better than being at the Dell on the beach especially, you know, now it's all fully remodeled. Nothing beats in person. I think like everybody could still argue Covid fatigue of just doing zooms. And like when you're in person, I think that's where relationships are made. Right. And like your network becomes stronger. Like, you know, for as many calls and zooms as I take a day, like getting out and seeing people, that's where you build the stronger relationships. You know, have, have a meal, have drinks, hear like exciting speakers. I think this year for Stocktoberfest, it's probably like, you know, some of the most exciting presenters because you have everything from like traditional financial investors to, you know, financial executives. You have the whole crypto world now and like, you know, treasuries are being, are booming everywhere. Right. Multi Coin team just brought one out in Solana. We obviously have what's been happening with Bit Miner. So I think it's an exciting time to see what is possible. And then obviously prediction markets. So you're kind of getting a blend of everything now with stock twits.

Yeah.

Which I think, you know, very similar to like if you open up your Robinhood account, like you get everything.

Yeah, yeah. I remember last year the opening night at the bar for what bar that was. But man, it was Nikki Robbins. Yeah, yeah, yeah. Like just, just within fintech there's so many subcategories and it's, it's a lot. I feel like we almost need to like build subcategory versions of these events just because there's so many people in just one aspect of it.

Right. And then you have just this different tools. Right. Like if you think about it, there's people on stocks that just care about charting. Right. There's a whole host of people that hate charting.

Right.

And they're just fundamentals. Or you know, you have like Chris Camilla who shows up, who's really like social arb. And talking about, like, how do you know, like, spot what's happening, you know, from a social perspective. So, like, you know, it's, it's exciting. You know, you get a good mix of people coming. I always say, like, the best conferences are the ones that are not in, you know, New York City or Vegas or San Francisco because, like, you go to these other cities, you can, you know, go do other things. You have meetings with clients, you're going to other dinners. If you come to Coronado in San Diego, once you're on the island at the, at the hotel, you're not really leaving, which kind of like, leads to the best networking. Right. Like, you're going to be out on the deck at night at 8pm unless you're going to bed. That's where you're kind of like, everybody is. So I think it's, I find that to always be the best events where they're kind of in a unique location.

I agree.

Yeah.

And this year I'm staying over. I'm getting a hotel room and staying because, yeah, totally.

Like, you got to be awake for that Navy SEAL run in the morning.

Exactly. And, and like you said, it just goes late. Like spin off conversations, turn into another, turn into, let's grab a, you know, late night and just keep chatting because everyone's there. Like, the density actually matters. And once people are there, they don't want to stop talking because it's like, well, I won't see you for a year.

Right. And it's a more intimate event. Right. We're not talking tens of thousands of people. No, I think, obviously is better. But if I think back to the early Stocktoberfest years, right. Like, you have like the biggest financial firms in the world with people there. And, you know, I think back to probably my own network. And this goes to like, social leverage and just leveraging your social networks. I think, like, you build a lot of good connections from these type of things.

100%. Yeah. And, and you have Howard, Howard's commentary on everything, which is legendary, hilarious, and really poignant. Always. I mean, he's just straight to the point and gives it to you, Rob. But it's always, you know, great to have Howard's kind of color commentary right alongside everyone.

You'll get the full insights from him. Right. So this year we have Stocktoberfest. And then, you know, for social leverage for our venture firm, we have our big, you know, we call Social Leverage Palooza the day after.

Oh, wow.

Our founders and LPs will be there. So we're going to have a, a good mix because a lot of our LPs and founders will be at Stocktoberfest as well. So a nice large audience.

Yeah, that's great. Yeah, I met a few of them last year too. I met Yoshi from Alpaca which was cool to finally meet them.

I'll be back. That'll be great. They're doing a lot in tokenization these days.

About awesome. And let's go over to wealth management real quick because you did mention a whole other set of tools. What's different about that? And now like it's always been like a very bespoke, bespoke people and then there's just add a par. What else is exploding within the wealth, wealth tech space.

Howard always says we like to invest in things that we use and I think that we all have wealth managers. There's obviously things that we think could be better. I think you know, going back to fund three and four, we were doing wealth tech and now Even in Fund 5 we've made two investments now in the wealth tech space. And I think like for every Morgan Stanley, Merrill lynch big firm and then there's like the PE roll ups of wealth managers. There's hundreds and hundreds if not thousands of like independent wealth advisors. You know, I think of our own LP base. We have wealth advisors that are managing as little as 100 million to some that are managing over 15 billion. But they're just independent firms that you've probably never heard of that are all over the country from Michigan to Ohio and everywhere in between. And they use a whole host of different softwares. They want to be innovative. They want access to the latest AI tools, they want access to the latest alternatives. They don't want to just like put their clients money in, you know, KKR and Blackstone and Andreessen funds, right. Like they're looking for quote unquote alpha. They want access to private deals. And you know, it's a lot of that stuff is not been made available. And then I think like, you know, there's even the boring stuff which is like in wealth management people are getting, there's a lot of compliance, right? And there's a lot of like advisors that are getting fined every single day for like text messaging even, right? Like it's laughable that like your advisor, quote unquote probably can't text message you. But we made an investment in a company called Archive intel which like is just such a simple solution. But like why not like use like something that archives it so you can text your clients but also maybe not archive your messages with your wife and buddies about fantasy football. So you know we, we like the wealth tech space. I think it's hard, it was hard for venture five years ago. Maybe we were more non consensus, nobody got it. I think now we kind of have like a divide in venture world of is it the tech and the tools, is it, you know, some of these guys are you know investing in wealth managers directly and think that they can do a roll up. We don't have a lot of public market companies in wealth management like pure plays. So like there is a whole conversation of like you know, what is the public exits look like. Thankfully as seed investors we don't need all of our companies to go public to have really good success for LPs. So yeah, it excites us. And you know you have some really exciting founders in welltech that you know, either come from the advisory world and want to see things differently or bring an outside perspective.

Yeah, I would say broadly fintech founders stay in fintech because they're like I solve this, there's a lot more to go solve. Which is also great, right as an investor. But you mentioned non consensus. I mean as seed investors that's our whole job as make non consensus bets. And yet downstream of us the people writing series ABC checks are the opposite sometimes. And it's like where you have to, where's the flip? Right? Like we have to believe that the future is better but not but still will be non consensus all the way through the company going public. So that part's kind of tough to deal with the VC community downstream of us I guess in that regard, I.

Mean thankfully it's season. You know, we have to have a 10 year view of things, right? We're long term investors. We have to make sure we have founders that realize that like money's not easy to raise and depending on the vertical and the niche you're focused on, it might be even harder. And so you know, how do we make sure that they realize that it's not, you know, you can raise constantly and you know, money's free that you have to, you know, build a real business.

So true.

I think it's been a, a change in, you know, mindset for a lot of founders over the last five years.

Yeah, that's true. Coming out of the finance capital of the world, New York to San Diego, you know, obviously great to come visit but to do business here from a fintech founder, what's that been like for you? I know We've done a few fintech founder events, some lunches to kind of pull the local scene together. What are you summarizing by seeing local fintech builders here?

I mean, listen, I think it's tough to build a fintech company here, given, like, New York is, you know, probably where a lot of your clients are. There are some guys doing it and also guys doing it here that then have teams or they travel. Like, it's definitely doable. I think it's probably easier if you, you know, it's easier for me to be here because I already have my network and I don't need to go to a happy hour to meet somebody or, you know, these small little events to just, you know, try and build out a network. But, like, flip side of it is, is like, it's also good to, like, get on a plane once in a while and go to different places. I think San Diego, you. You have two different months. If you have the mindset of, like, you're, you know, personally hungry and you can motivate yourself, then San Diego's great. If you get distracted, like, I could walk outside my office and be at the beach in two minutes. Like, you know, 11 out of 12 months and the weather's great, then like, yeah, like, the focus is hard. But, like, also for me, I. I also think about it as, like, I probably get more done living out here because I'm not taking, you know, unnecessary coffee meetings every single day. Like five, six in a row. Like, you're in New York, you could have 15 coffee meetings in one day. You know, like, there's always somebody to meet with and people flying through. So it's a nice way to focus. I also like the early morning, so it doesn't, you know, if I'm up early enough here, I'm still on, you know, east coast hours.

That's true. Yeah. That is pretty nice. You can be done with the day and be with the family, you know, for lunch and dinner and bedtime, for sure. San Diego, also known for his taco scene, which is true, you've got. You're now embedded in downtown Encinitas, so you're walking distance to a few. You got a favorite taco spot?

I mean, I am in downtown Encinitas, so I feel like the taco stand is still top of my list. You know, a lot of great places. I feel like it depends on, like, the type of Mexican you want, but, like, I think I default to always going to the taco stand.

It's a great spot. And the line's always there, that's for sure.

Yeah, get there early. 11am Lunchtime is probably better than going at 12 or 1. But from tacos to burritos and even their breakfast burritos, like. Yeah, it's hard to argue there's anything better.

It's true though. The lion at times have. Has forced me down the street a little bit to City Tacos. You've been there yet?

I have not been to City Tacos.

Oh, then let me take you to City Tacos sometime soon.

There's the other one up the street a little bit, right near the 7 11.

Oh yeah, Rigobertos or Aliberto's.

One of those, I think, with Regobertos. But also great, right?

Yeah.

And I also think if you go over to moonlight beach, they have the little snack shack there, their breakfast. Oh yeah, there are actually amazing.

Yeah, it's true. Really good taco snack shop at Moonlight Beach. Good call for sure. All right, well, we have a little taco tour to do. Maybe we do a fintech founder taco tour.

That's what we should do. We did a social leverage taco event in downtown San Diego about a year ago during one of the LPL Wealth Tech conferences. A little divey taco spot. And I feel like for a lot of out of towners, they were a little scared and then realized it was the best food.

Totally. All right, well, let's do a North county edition for sure. Done. Matt, thanks for being on, but thanks for also being a member of the community here and helping gather and build good founders locally and abroad. Because we need it. We need our fintech community to be strong so that our lives are easier. That's what fintech is.

I appreciate it. You welcomed me and I always tell people you are Mr. Community when it comes to the San Diego startup scene.

So thanks. It matters a lot, right? Like the social aspect enables people to actually build faster. And that's why you do Stocktoberfest, right, Is to actually build bonds and linkages and relationships, not just. Not just to grab a drink. It's actually to share notes and networks and it really works and it pays off. So thanks for being a part of.

That everybody there, whether day or all three.

Yeah, I'm signed up. Fred Greer is signed up. We definitely are representing, bringing the community out with us and. And look forward to seeing everyone at Stocktoberfest in late October. Awesome. Thanks, Matt. Appreciate it.

Tacos in Tech is on smash for the green guacamole. Keep accountants counting beans. Contador Quentan frijoles found us trying to raise some queso la vida San Diego school of rappy rapping Fire tortillas round jalapenos in these modern times a craft beer and coffee My coding yoga posse fold the body origami we be surfing coronado eating tacos El gordo the taco standing puesto lucha libre and sombrero Got a shout out to cost angels by the ocean watch the sunset La Hoya shores Entrepreneurs trying to get funded When San Diego Startup week is popping in the summer Ocean be full of hustlers from couch surfing to penthouses right on the beach Tech leaders who believe stars are within reach we interview and founders who be shooting for the Moon SD TechOS with your host, Neil Bloom.

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Startups get the party Startups get the party started. Startups get the party Startups get the party started. Startups get the party. Startups get the party started. You want tech in tacos, tacos in tech, you know we got it.

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Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. Startups get the party Startups get the party started. You want tech in tacos, tacos in tech, you know we got it.

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