Fundraising for a Startup vs Fundraising for Banks with Treasury Prime

With Wendy and Chris. So as an interactive session we'd love to hear from you too. So we encourage you to keep your videos on so Wendy and Chris can see your faces and to jump in with any questions they have. A few questions for you guys along the way too. You can feel free to unmute yourself, raise your hand and I can unmute you or also use the chat function. So feel free to join the conversation throughout the next 50 minutes and we really look forward to hearing from you all in the session. Wendy and Chris, without further ado, I will let you take it away.

Great.

Well, thank you. It's an honor to be here. So Chris and I will I think I'll start give some background information on the bank and on Pierremont's fundraising experience and some of the lessons learned and Chris will do share on treasury prime and then we can go into questions as Taylor mentioned that we'll have much more fun and more productive if we get into more interactive discussions. So Pyrmon Quick Background was launched July of 2019. So Piermont is my second startup. My first one was back during the first.com wave back in 9798 which is a long time ago so raised 12 million from VCs and sold it back to my investors. So this is my second tour. 26 years in financial services have raised a lot of money in terms of both for clients as well as for my own startups and have sold companies and taking companies IPOs. So as I mentioned earlier Piermont was launched July 2019. We're headquartered out of New York City so we are actually first of our kind as what I call a hybrid bank fully chartered with insurance with the FDIC we are geographically agnostic, completely digital and focusing on commercial serving the commercial businesses. So when we started launch Pyramont we I recruited a number of very experienced bankers and entrepreneurs alike. So we got investment bankers, commercial bankers as well as founders of tech companies and the whole idea was to build a from clean slate a new kind of bank that focus on essentially banking supporting the whole fintech ecosystem. We're very tech driven. We run our philosophy is speed, relevance and scale that we need to run and move as quickly as our fintech partners and clients. So on the fundraising side we raised total of 48 million to date. So the c the initial founding funding excuse me was about 10 million. We actually raised that back in 2018 which was five months before we even submitted our application to the regulators. So the initial round was lots of it's actually from old clients of mine. They Saw and identified with our business model in terms of how we're going to be addressing some of the pain points that they have experienced on the other side of the fence. So clients, family offices, members of my management team, as well as two institutional funds. With that initial funding, it was just like one presentation, one deck. It wasn't actually very difficult based on the track record that my team and I had given that we have taken banks, IPOs, we built DE novo markets because also the strong following of clients. So we were able to actually pretty easy to raise that initial $10 million. The challenge there was really about helping investors understand regulatory limitations. Because unless you have run a bank before, it's actually quite challenging for investment communities and others outside of our ecosystem to understand the pros, the cons, the limitation of being a fully regulated bank. So it didn't take a lot of time, but it took in terms of my team, but it took mostly my time. So the pitch was primarily just me a few times bringing my CFO along when we had to discuss projections. We raised 38 million in our series A round. So that was right before the bank opened. So the risk, you know, I always said the risk really sat with my first $10 million investors because that was pre application. By the time we were out in the market raising the 38 million at that time we already had approvals from the regulators, we had the charter in the hand, we had FDIC insurance, so it was a much easier story to sell. But at that point we were speaking with institutional investors. So we're full data room, five year projection, down to monthly balance sheet details, lots of time pitching, due diligence process. So that's the big difference when you raise money from I think institutional investors versus high net worth, individual family offices or a relatively smaller fund. And we can spend more time on that for those of you who are interested in really understanding the difference. And it also involved time for my extended members of my executive team. So that was challenging because we have a bank to open, bank to run. And that was a ton of time. You know, I think one thing before I hand it over to Chris, I think from just a high level standpoint in terms of learning, it's really about recognizing that different investors have different goals and they may or may not some often they do not align with what you're looking to build. So you really have to. I see Chris is smiling. You really have to be very confident and sure and certain of what are you looking to build. Because otherwise, especially the early initial round, you can be Pulled into different directions because you're like, oh, well, X, Y and Z is looking for this. They think that you really should be focusing on Y segment because that's potentially more scalable. You really got to go in there and spend the time and understand that what's your bottom line? What is the value proposition? Otherwise it's going to be quite challenging to manage. A few other points to share is that the first three minutes, people will say the elevated pitch, 90 seconds, whatever that is. But the first few minutes of the pitch is critical. It just sets the tone. Because a lot of these investors, they hear in so many pitches that if it's really not what they want initially interesting enough, their attention span just drops significantly. So even if they give you another 25, 30 minutes, may not be as productive. So really focusing on getting your first three minutes down path, like, you got to know exactly what you want to convey to these guys in the first few minutes. Take what you need especially early on and add some room for growth sort of capital, right? That stretch goal, because that comes down to valuation issue. Because you take too much too early on, you give up too much and you're not really fetching the valuation that.

You practically, frankly deserve.

Projections make it realistic, add a stretch component. Because the really savvy investors, they do know as much as we all believe that we have the most trailblazing new business concept, but they hear so much that they really do know. So if you give them something that it really is sort of that pie in the sky, they will start questioning your ability to execute against that and.

How much you understand.

And most importantly, whether or not you fully comprehend the risk component of building a business model with that kind of projection. Again, it has to be lots of time. And especially if you don't have a big team, it's your time. You need the time to build out your business, build the beta, hire people. And these pitches take so much time.

Again, right, Chris?

I think the very last thing I would say is that not all dollars are created equal. If you have an excellent idea, you have a great team and you got people chasing you down with money, take.

The long view, go with the money.

That can bring that additional value and can be there for your next race. I think Chris will share more about that because I think Chris really had that positive experience on this part, right? That having investor who can be there for you at the next race. And by the way, my investors from the initial round step up during the Series A and they will continue to maintain their percentage as we Raise the next round. So because the valuation is not as critical during your early rounds, because if you're successful, it will make a huge difference for you if you just fetch a few bucks more during the first round. So I think those are my big takeaways.

Chris?

Yeah. Hi everyone, I'm Chris Dean, one of the founders of Treasury Prime. Let me do a few quick housekeeping notes. Very interactive. If you have some questions in chat, if you have some questions, drop them in chat. We'll get to them, you know, either interactively now or you know, at the end. Wendy and I are kind of in a unique position is that, you know, I'm the Silicon Valley tech person and she's the tried and true banking person. We know a lot of things about this problem, about raising money, about banking, about fintechs, about this stuff. And when we were thinking of ideas to make, there are too many. Right. So I expect you'll all have some questions that we can talk about how banking works, how fintechs works. But for the start, we're going to talk about our fundraising journey because I think it does offer a lens into, you know, how both sides of this problem works. So very interactive and you know, like I said, it's all recorded and everything. So as far as our agenda, we'll run through the history, we'll talk some details, what worked and what didn't, lessons learned and then, you know, go to questions and here we go. So I'm like Wendy said, you know, I'm an experienced entrepreneur. Treasury prime was founded in, we launched in 2018. I founded five startups. You know, some of them did very well, you know, hundreds of million dollars exit. We, some of them have face planted. Treasury prime is like, has done very well where turns out we're very capital efficient, unlike some of my other businesses. And we've raised $30 million across multiple rounds. For us, we were very lucky. We had options to choose who our investors were. Not everyone always has that option, but we did and we actually had our first choice. Investors for everything. I'll get into the initial story and funding, but that's just the most amazing thing to me is that I think that if we hadn't got the investors we have, we probably would have needed to raise a significant amount more. But the investors we have have really helped us, which is surprising because most of the money I've held in the past has been dumb money. Right? They just write you a check and they're actually not valuable. But our investors have been super valuable. I can tell you what treasury prime does as a business and then we can go on. Randy and I go back and forth after that. Treasury prime is a technology platform that connects fintechs and banks together. We have a network of fintechs, we have a network of banks and we connect them to, to each other. And it turns out there's a seemingly inexhaustible supply of fintechs who want to work with great banks. But a bank like, even a well run bank like Wendy's and hers is super well run, is it can only do so many deals per year. You know, they can't do a million deals a year, just too many. And because of that we try to find the best bank for the fintech and this has been a great business for us, a great partnership with Pyrmont and I'm happy to talk about our funding. Do you want to add anything Wendy, before I do my piece?

No, no, please go ahead.

Yeah, sure. So here's a Treasury prime story. I'm going to take you step by step by step. We'll interrupt in the middle. It's going to be great. So Jim and I, Jim Brewster, my co founder and I were working at Silicon Valley Bank. I was running the fintech, Jim and I ran the Fintech group there. They had purchased our last company and we got, we started, we left SVB Silicon Valley bank and raised a two and a half million dollar seed round. Our investors are who we wanted. They're Y Combinator. Deciens suse. These are all people, you know, known for years. Sastor did some and the learnings here was that I think for us people generally consider Y Combinator for a startup, for a tech startup to be very expensive because they take a big chunk of equity. But what our calculation has been and continues to be is actually it's cheap. And it's not so much that the network is great, which it is, and the partners are great, which they are. It's the fact that having the YC label on the outside really helps with further fundraising. Like we got probably a bigger valuation than we would otherwise have done just because of the YC label. I think that offset very nicely the, you know, how expensive YC was. So what we did is we went out, it was just the two of us, Jim and I. Backgrounds are, you know, we're technologists, we're engineers, so we're lucky in that way and we could just do everything. So two of us actually launch the product by ourselves, we raise the money by ourselves. And that was stressful and hard, but it Was great because we never were worried about running out of money. Our burn rate was incredibly low because we just had to pay ourselves. And for the computer, time is really easy. But even though it was easy, I can tell you some things were super hard. Jim and I are not great at pitching. We understand our problems so well and all we want to do is talk about it all day. And I can tell you, like Wendy said, they want the elevator pitch. Right. Those first few minutes matter. Like when we, you know, when we just rely on the data and show that in the screen, there's big yawns all over the place. We have to lead with the story. You know, we've tried different ones. I think the ones that we ended up working out for us were great. I can go into them a little bit. But at the end with the pitch that really worked was we went to people we know, kind of like Wendy went to people she knew and said, look, we've made you money before, we'll make you money again. And here's our idea and here's why it will work. And it was a 30 second pitch and that was the hook and that actually worked. And then there was another hour talking about data and markets and everything. But you could tell in the first minute they'd already decided to do it. And I think that's true of a lot of investors. They decide like in the first few minutes and then the rest is just verifying. And sometimes they undecide, but it's pretty rare that they go from I'm definitely not going to do it to oh yeah, I'll do it. And one last thing I'll add here before I get into some details is that the pitches here we assume that people would be interested in how banking work because that's what we do, right? We connect these fintechs and banks. No one cared. No, like Silicon Valley investor knew how banking worked. We spent the first few pitches educating people. Boy, it was a terrible idea. No one cared. And they would fall asleep and they would argue with us about how banking worked. They would say, that's not true because my banker does this. Yeah, it's because you're a billionaire and you have a banker on speed dial. They'll do whatever you want. A regular company doesn't have that. And this did not go well. So that was the funny thing that we thought. It's like something that's so key to our business. Investors at that seed stage, they could care less. They weren't betting on data, they were betting on us. So that's all the real data we had is that we were good and we'd made money before anyway. You want to add anything?

No, no, it's so true because especially for the earlier rounds, it's about. They're making investment decision on the people, right? Again, for the savvy investors is that everyone can come up with excellent ideas, but it's about execution. So, okay, you have a great idea, you have a great business model. Do you have. The people are the people sitting in front of me can actually execute and make me a lot of money. So that's. They're investing in people. So you really got to bring. Figure it out which part of you and your team that are most relevant to put in front of these guys. So. And you know, I did the same. I made the same sort of mistake as Chris did, right? Started telling them, here's the market void, here's what the big banks don't do well. Here's how the little banks don't do well. This is where we come in. They're like, they tune out. So, you know, you got to focus on, okay, how are you different, basically and what exactly. Quickly, what exactly are you going to do and how are you going to do it, right? Because every business idea, you can explain till the cows come home, that why there's a need for it, right? But it's about how you're going to get it done, right?

Yeah. 100%. For us, when we raised early, we didn't need to raise very much. We went into it knowing that since we're a network of banks and fintechs and we need a lot of banks to work and that we need good banks. And, you know, there, there are a lot of banks and I know a lot of them and most of them aren't really well run, frankly. So it's like hard to find it. It's hard to find a good one. We knew going in it would take a long time. So we wanted to raise enough money that we felt we could have a team of 10 or 12 people work with no revenue coming in for years. That's what we wanted because we thought that might happen, right? It might just take that long. So we ended up raising two and a half million dollars, which in our calculus worked. We pay people a very small amount. There's not that many of us. We've got a lot of equity, so that's good. We were lucky that we actually started making money very quickly. And so our Runway actually went up really a lot. But in the beginning, we raised 2.5 million and you have to decide how much money you want to raise. We were in Y Combinator and we had talked to our partner, Aaron Harris. He's great about how much to raise and like, you know, we came up with this number. But then when we started doing pitches, everyone would ask, you know, how much we wanted to raise and why. And I would go into these long details about, you know, banks are, you know, banking structures this way. This is the banking. I would explain banks all over again. And boy, did nobody care. And it wasn't until, you know, we went back to, you know, Jim and I went to, back to Michael, who's another YC partner who's also great. He didn't even remember what we did, right? We got a 20 minute meeting with him. He said, tell me what you do again. And we spent five minutes explaining once again what we did, how banks work and all that. He says, okay, just stop. And then he gave us a 30 second pitch, which I still use and it's still better than anything I had come up with. And it's basically, you guys are great, you've done this before, you've made a lot of money. This is a growing market. That's it, right? And so for us, I would say, yeah, I founded Merced Systems. We sold that for $200 million. Jim was an early engineer at Facebook. We recently ran the Fintech group at Silicon Valley bank from having sold our previous company, standard treasury to SVB. And that growth at SVB was amazing. It was 10x every year just based on, you know, our little product that we had. And here we're going to do it again. But we're going to do it as a commercial enterprise and we're going to like grow this to a multi billion dollar company. And we can do it because we have the insider knowledge that nobody else has, that we know how banks work because we worked at a bank and we know how startups works because we're startup people and everyone's like, great, that's a great story. And then we would go over the numbers about market size and stuff like that. But really that's all they cared about. It was those 30 seconds. And I can tell you Jim and I did not come up with that pitch with somebody else with Michael, who's way better than we are.

And you know, funny story was for me, in terms of fine tuning, the pitch was actually using the pitch that we use for regulators because we start off, as I said earlier, start talking about market and stuff. So when we go to the regulators, you know, they don't care about the market, they don't care about the business model, so to speak, because they're chartering a bank, right? So what they care most about is, hey, are you guys going to be able to run a bank so that we don't end up with a failed bank in our hand? So the pitch was, hey, we've done this, look at us collectively, we got over 100 years of banking experience, right? And plus some we have taken, you know, poor performing banks out of trouble. We did turnarounds, you know, we have acquired banks. We've done it like nationally, across the US different geography. So that's actually the more important pitch, ironically, that actually, you know, the first few minutes we spent with the regulator was the one that actually resonated, you know, best with even with potential investors. So again, but caveat there honestly is also about who you're pitching to. Because if you're looking for that early, early C round and you are still going to more so called friends and family and a little bit of a few early, very early stage angel type of investor, they may look for different things. Because your risk profile is very different from when Chris and I are back out there for series A or B, right. Because then for me it's about growth capital. It's no longer we already taking care of the risk end of it. Like for Paramount, we turn a profit seven months ahead of schedule, right? So as I'm back out in the market, we're no longer talking about proof of concept, proof of business, proof of our ability, the management team's ability to execute. This is about how big and how much faster we can grow. So different time, different rounds, different risk profile. And just keep that in mind and make sure that you reflect that as you do your pitch, right? That what risk level you're presenting to your investors. Because the horizon of between the pitch, them putting money in to that IPO day or to that whatever the liquidity event is going to be, it's just that much longer. So you got to make sure that you also make sure you at least make them understand that you understand that and that you are, you got it. And it's baked into how you're gonna be as an operator.

Right?

Right. Yeah. When we raised our Series A, it was like that. So, you know, a while later when we did our seed round, half of the seed round was just, you know, based on, you know, dreams and wishes. And then the other half, because we did them a few months apart, we actually had, we had something to market, it had no traction basically, but it did work. But the Series A was different. We actually had real clients, we were making a good amount of money. Our product is an API that allows fintechs to open bank accounts, do deposit operations, they can open bank accounts, wires, ACHS bill pay, they can issue cards, they can do all sorts of complicated things. On that side it's a great product and it's still the best one out there. That was the pitch More it's like look, we have this product, it's in market, this is our growth pattern. Here's how much our API usage is growing, here's how much our revenue is growing. You can tell historically that the revenue growth lags the API growth. So if you can see the API growth, just look, that means in four months it's going to be this other number. We can very consistently show that that's a story that resonated but you can see that's a number story. Right? And so drafting on what we learned in the seed round, that's not what we led with, right. What we led with was stories about clients and how stories about how people used our product. Like we have, I will pick the one we actually use. But now we have a client, Wendy and I who they pay truckers, gas at truck stops, right? That's what they do. This sounds like an easy problem. It sounds like a problem that's been solved already. Boy, did they do have a much better solution and did they need a lot. They didn't. But what they needed was a modern technology stack and a good bank. And you can't find that in one entity these days you have to have two entities like we're a great technology stack and Wendy's a great bank and boom, you're done. And we would tell these stories to the A investors and that worked great. And I can tell you that we were preempted by two, three separate firms who were like heard about how good our product was and the first one we pitched, we did terribly, we face planted, we started to argue with the partners about they were talking about how banks were going to work in the US and I'm like that's not how it's going to happen. That's crazy. You guys don't know. And of course when you're asking someone for give you $10 million, which is what we ended up raising, arguing with them and telling them they're dumb is not a good strategy. So yeah, great. So what we ended up doing is we were lucky we were going to wait six months and raise more because like I said, we were very capital efficient. And then our first choice, we actually had two first choice investors. One came to us at Money20 20 and said, hey, let's talk. And very quickly we did a full partner meeting and we closed a deal. And our second, we had two first choice. And we're like, one of them will never say anything, but I just reached out and said, is this a good deal? Can I trust this guy? It was Amaya Scaredy at qed and he's like, oh yeah, you can. Plus I'll do, I want him too. And that was it. And that shows how valuable some of these relationships are. It shows how valuable some of the firms are. The fact that we had a long relationship with, you know, one of our leads and that QED is such a good brand that made the rest easy to close. QED is a great fintech brand that worked great. Lots of stuff didn't work and we can get into that, but that part worked great. We raised money then. And I'll just jump to the end here. We raised a series B. A while later we hadn't actually spent any of the A, but we wanted to raise a B at the beginning of this year, we, you know, raised another 20. It's actually more than that, but 20 plus million dollars. And again, it was just our insiders, right? We had interest from other people, but our insiders have been so good and so valuable that we just stuck with them, I think. And all they cared about, they already knew us, they heard the story. We did full partner meetings again, but we just showed them the same numbers and told them a story and that worked. It's easy to raise money easier rather to raise money when you have a good story and when you have real good numbers. I've raised money. When you have bad numbers, it's way harder. Like we did a full process for the series B, which you didn't really do for the series A. And that took all my time and almost all of Jim's time and it was just this huge time sink. But at the end of the day, the reason it worked so easily because it was easy. We had a good story and good numbers and that's it. Previous companies have had bad stories and bad numbers.

Anyway, Chris, maybe before we go into questions, I think one more thing is that in terms of business model, meaning that if you're building first in class business model, meaning that you're truly presenting something that's industry disrupting business model versus you are presenting A business model that it exists, but you have identified a new niche segment and you'll be targeting that, that you'll be overlaying a more, a better product suite of products. So it's very different because if you're presenting a business model where it's first in class. So in Paramount's case, for example, everybody knows what the bank looks like, right? So whether when I went to the investor or the regulator and told them that, oh no, no, this is going to be a bank, but it's going to actually operate like a fintech, you know, their head starts spinning. Is that, okay, well, where do I put you? Because everybody likes to put you in a bucket. They have different categories, different buckets in their head. And that's where they're going to put you, right? They put you in the bucket where it says, you know what, this one, these guys, potential unicorn IPO status, this.

Is the guys, they were like, they.

Will do us well. But you know, they're probably only going to get to this point. So they put, when they make that early on decision, that first impression, they.

Put you in that bucket.

So for Paramount, for example, like for us, it's about speed, right? So we do our credit turn in three days. We do, when we do integration, integrating fintech with treasury crime with Chris's team, we're looking at weeks, not months. So when you start presenting a business model that's entirely different from what anybody, everybody out there, what they think of what you do or what your industry is like, you need to bake that into consideration when you do that pitch, right? Because you need to be ready to answer some hard questions because the, you know, the initial reaction, not just only the initial reaction, the reaction is going to be if no one has done it, how are you going to do it? Right? It goes back to the earlier point about it's can you execute? Can you make it happen? So if you have truly first in class business concept, you got to be ready to spend a lot more time and be very prepared, right? Not aspirational, aspirational goals or aspirational like, you know, we hope. No, no, it's not we hope I will have this. We will build this. We have done this. We have built this. That, you know, the verbs that you choose to use becomes a deal breaker, so to speak. So that's sort of my last ad in terms of, you know, things to keep in mind when you do that, when you do have a chance for the 30 minute, the one hour pitch meeting, right? So yeah, we're Open to questions. Oh, I have. Why do we need so many Internet banks these days? What do they offer? The traditional banks don't. Chris, you want me to go first?

Let me start. I think a neo bank is what I call that like a regular bank is a commercially chartered bank. It's chartered by some governmental entity when he's chartered and a neo bank is not right. And traditionally banks, chartered banks are great. They're really top notch. Two things people just, they ignore this. The two things they're great at is risk management. They're just really good at it and customer relations. Bankers are really good at having great relationships with their best customers. They're really good at it. The things they're not good at is technology generally and going after new markets and marketing. And so the neobanks often are doing that if you look at the chimes of the world, great at marketing, just really good at it. If you look at some of our customers, like I have a customer which manages. It's a neobank that manages landlords. And why are they good? Because it's not a market that a bank would really go after. Like it's just not big enough for most national banks and it's too spread across the US for a small regional bank. So it's a hard thing to do and there's technology needed and so on. But I'm interested in your answer. Wendy, what do you think?

Yeah, no, I think I have always, I tell My fellow bank CEOs right, the more traditional bank CEOs. I said the reason why fintechs, the neo banks exist is because the traditional banks, they say no. So we're creating that market opportunity. So what do they do better than traditional banks? Chris nailed it. It's marketing, it's the ability to quickly innovate and create that relevance. So early on I said, I mentioned that for Pierremont, we care about speed, being relevant and being able to scale and being relevant is what the traditional banks have increasingly sort of deteriorated in terms of their focus on how to be relevant to the marketplace. So that's what the neobanks are good for. Why are there so many? It's not about so many, it's about the market is actually that big. So the neobanks tend to have a very niche focus. So for example, Chris and I, we have fintech clients where you know, they are starting a new bank to focus on the gig economy, you know, workers only because then they only they're thinking of how to resolve pain points for that particular demographic and that's why it's so interesting actually for a bank like Pyrmont to be sort of to power the Neo banks, right? To be the bank that supports the product development and the payment solutions and et cetera behind it. So hopefully that answers the question, how do fintechs and startups build trust with end customers? How do they know they can trust a bank or fintech? Well, you know what personal experience and opinion obviously is people, because I've always said, now Chris can speak to the tech side of it, but for banks, I've always said we are a people business first and second, we are a risk management business. Making money is almost the last part, the third, not the last, the third part. So in terms of building that trust is that when you, if you're the fintech and you're looking for a bank partner or looking for API partner, you know, what are they even making? The head of innovation, head of banking, a CEO, Are they making them available to you? Are they even bothered to take the time, right, to speak with you, to understand what you're building? Who's your target demographic? Right. And are they giving you the honest opinion or they're just saying that, oh yeah, we can do everything for you. Listen, in my experience, anybody who tells me that they can do everything, whatever I need for me, usually it's not the case. At least they don't do it very well.

Right.

So how do you trust, how do you know that you can trust someone is get in front of them, have that FaceTime. How do you relate to them? Right, Chris? I don't know. Can you have something to add?

Well, I mean, it's pretty obvious from my perspective. Don't screw up. That's how you build trust, like promise things and then deliver them, especially to your end customers. Right. If you have a consumer or small business or you have a lot of them, the way you build that trust is you provide them things they actually want. One thing that we see over and over again at treasury prime is that when people start out, they're small, they have 10 customers, 100 customers, 1,000, whatever it is. And as they grow, the complexity of the problem becomes so much bigger that you really have to make sure that you're doing the things that a bank would normally do. Like if you're a fintech. And that's why I always say it's like your number one thing I see with fintechs at scale is they have a great banker and they have a great relationship with their banker. And if you don't have that, I Think you're probably doing it wrong so plan to do that from the get go. This is the whole reason for Treasury Prime's existence. You might say we have the best API. Great, we do. You might say we can get someone on live faster than anyone else. Sure we can. But really it's the fact that you can call Wendy and say I have a problem and this isn't working. Wendy and I know there's one today. And the fact that the fintech is working directly with folks on her side to solve this very hard problem, that's what builds trust with their end users. So I think don't screw up. It's my main idea.

So the other next question, who will be the biggest loser from the huge change in fintech going on?

What I have seen is it's not.

Just fintech, it's that when you deviate from what you know how to do best, like what you're good at. Because so for example, for fintechs to start thinking that they can be operate like a charter bank, just because they are a successful neobank doesn't mean that they can be a successful charter bank because it's a whole different set of risk management, compliance, product knowledge, etc. Etc. And investor expertise. The shareholder expectation of a charter bank and a neobank is entirely different. Right. So for example, for me, my investors, they keep asking how quickly can you turn a profit? So when I was able to tell them that we were return a profit seven months ahead of schedule, everybody frankly think I'm the best thing. But in the fintech ecosystem is about how much more market share can you grab. Like we don't care if you make money or not. Right. So I think the biggest loser is the one that who's going to start focusing thinking that they can be the other person. So for me to sit here and be like, hey you know what, I can be as good of an API provider as Chris, yeah, that's not going to go as well.

Now is it possible if I decide.

To replicate the entire team and start deviating from what I'm good at and focusing on that maybe is that a good idea? No. Right. Should I have the proper alignment in terms of tech stack at the banks so that we can be even more efficient and could go even more faster along with Chris's team? Absolutely. Right. So focusing on what your true value is, your subject matter, expertise in my view is important and if you don't, you become the loser.

Yeah. I say generally we're going through a sea change in the banking system in the US Financial. The financial industry is the largest single part of the US economy. Banking part is huge, huge, huge portion. It's going under a gigantic change. My general opinion is rising tide is going to raise all boats. Everything is going to get better. I think there are some things that are going to happen. Generally there's been a consolidation of banks. The US has an enormous number of banks, far more than other countries. What is it now, Wendy? How many banks are there?

5,300 something. But that includes from the credit unions all the way up to B of A. Yeah.

And yeah, I think what's going to happen is the smaller ones or the less well run ones probably are. They're, they're not going to disappear but they're going to merge. Right. They'll be bought by someone else. This is generally, you know, B of A will buy a bank all the time but these smaller banks are going to get squeezed up. So the, the winners I think are going to be the people who embrace this change. The fact that there's a lot of activity going on directly as banking moves into the Internet to your mobile ph and for both for business and commercial things, for business and personal things. The losers are going to be the people who don't recognize there's a change happening and they'll just get bought out more. Diversity. You should answer the board diversity one. That's good.

Here. Let me start on this one as well.

So I couldn't believe it.

Our head of marketing had this triple check this fact. So Pyrmont bank is the only bank out of that 5,300 something that I just mentioned that has a female founder, female CEO, female board chair and a majority minority board. You would think that we're not the first one and the only one, but we are so. And I can tell you that it has benefited us a great deal by having this level of diversity both at the board level as well as at the management level. Because it goes back to one of my three key sort of pillars. It's being relevant. Right. So when we open, you know, people were questioning like how are you? How much marketing dollar are you gonna have to dump to get people to just, you know, find out about Piermont. We did a grand opening, we did a press release and we literally had these women owned business that's been around for 20 years, 30 years calling us and said hey, we've been with one of the big money centers for X number of years. Can we talk to you? So being relevant and they feel that hey, since look this bank looks different, says they're going to do things differently. And they look like they have people that actually looks like me and behaves like me, thinks like me. Let's give them a shot. So that diversity helps a great deal because that equates to your ability as an institution to be able to be relevant to just that much broader and wider in terms of segments of audience. And also the advice that you get right by having now I'm talking about the board level being able to contribute. That's been tremendous also for a bank based on the. We even get more support from the state, from the city, from literally our department of treasurer, treasury, from the central government, actually, in terms of both capital support and programmatic support. So it's been. It's.

It's been one of the best thing we did.

So that's good. I can tell you, our team diversity is good and it's important because you need the diversity of opinions. And also, I think if you end up being not diverse, you're actually. You're leaving money on the table here. Is that just because someone isn't the like, you know, white guy, went to the fancy school, that means they. Those are the only people who know how to do anything. That's just wrong. If you don't have a diverse team, there's something about your hiring practices which are screwed up in some way. You know, you can fix that. So do fix that. I can tell you the board would help a lot. I don't talk about our board makeup very. A lot because it's not very good. We have the same board we've had since the very beginning, which are just people we all know, like Amayas, who's a QED partner and is on our board, and Dan Kimberling, who's, you know, Desien's. Desen's been on our board since the beginning. And Jim and I, we're all four white guys, you know, we're just right. You know, the only diversity has that. I'm older than most people, like. Great. That's not much. Yeah, it's. I. Jim and I have decided that, like the next board members we have, whether it's outside or, you know, you know, observer or anything else, it has to be someone not, you know, not like me. It's like Jim and I just. It's terrible. The problem is we haven't added anyone so in so long. It's been like this forever anyway.

But you know what, Chris? At least you have board members who does understand, right? Who appreciates the importance like you know, like Elias, you know, I spoke with him, right. He totally appreciates, he gets it, you know, he sees the value.

So oh yeah, they're all great, just not as good. Here we go. Are there too many fintechs? Is there a shakeout coming there? There are not too many fintechs I can tell you. There's a seemingly inexhaustible supply and the vast majority of them that we at least we deal with have great businesses. They're not made up things. They're not like cast your mind back 25 years, 20 years or whatever to the dot com days when people are doing all these stupid ideas. When we talk to you there, these are legit ideas like a neobank for gig economy. That's a good idea. That's a different market than before. Paying a new way to pay for gas at truck stop, that's a good idea. That's going to keep going and they just keep coming up with ideas. I look at this as what's happened is banking in the US has been artificially constrained for 20 years by there's not been as much innovation as there has in other countries like go to Singapore or something. Just so much better. We're trying to catch up to everyone else. We still have five or 10 years until we're caught up. What do you think Wendy?

Oh, I'm hoping we get there way faster. Right. So I think that if it takes 15, 20 years then it's good use for Pyrmont. But I'm hoping that my fellow colleagues in the banking industry wakes up way earlier than that. No, I think if there aren't too many, will there be a shakeout? Sure. When and where? I think we're still very early because you're looking at a lot of these actually really excellent business model. Still needs some time to season and to scale. Right. Because it's hard to see where it's headed until you have enough of a population cutting across the various different segments within the fintech ecosystem where they reach a certain scale. So we don't have as many yet. So it's hard to see that the shakeout will come anytime soon. So.

Oh well, I think Chris and I.

Are both very bullish on this. It's needed because that's where the consumers are, right. That's where the marketplace are. That's how small business, big business, that they operate differently, they carry inventory differently, they get paid differently. The expectation of the turn time, whether it's payments, delivery, all have changed. And I've said if there's not One thing positive that pandemic did, it's just that it changed that overnight migration of those die hard brick and mortar users to online users, to digital users. And I've used the example of my 80 year old father trying to use iPhone to see his grandchildren. If it wasn't for the pandemic, he would have never bothered. He'd be like no, no, you come see me. So without getting too personal information, but it is material, it's meaningful, it was practically overnight and that is going to help I think create a lot more fintechs in the near future actually.

Yeah, I think that's right. I think we're coming up on time. So I will say to everyone, you know, thanks so much for coming. I can, I'll give a brief pitch for treasury prime, then you can do one. Wendy. So if you want to start a fintech that services commercial clients, retail clients, cards, anything like that, like treasury prime has the best in class platform, it has the best in class technology, we have a great team, just go to our website, treasuryprime.com and contact us. We'll be happy to help. I think the thing that we're best at, the technology is great and the banking network's great, but it's really our customer success team is just fantastic and really can bring you to market faster than anyone else can. And I can tell you that if you are deciding on a fintech problem that you're wanting to work on, think of it from the bank's perspective and find a great bank. You can't find a great bank to work with, you're.