#1302 Leif Abraham | Bitcoin Is Taking Over Stock Trading Apps!

Leif Abraham is the Co-Founder & CEO of Public.com. They are creating technology that makes building a multi-asset portfolio fast, secure, and frictionless. In this conversation, we talk about the shift in investing trends, bitcoin ETF, technology vs financial advisors, giving revenue back to users, and operating the business. ======================= Trust and Will has simplified the process of creating and managing your will or trust online. They leverage a data-driven, design-first approach and amazing customer support to help you protect your legacy from the comfort of your home starting at just $159. Sign up today for 10% off using ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://trustandwill.com/pomp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ======================= Introducing Espresso - the world’s most interactive portable display. They have a portable screen that is incredibly light, comes with a nice stand, and the user interface is very easy. Anyone who listens to this podcast can go to ⁠⁠us.espres.so/pomp⁠⁠. They have a brand new offer waiting for you. ======================= Pomp writes a daily letter to over 250,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Today's episode is with Life Abraham. He's the co-founder and CEO of Public.com. Public.com has millions of users. And so we start the conversation talking about the shift in investing trends from five years ago to today. Who are these people? What

• 0:45Anthony Pompliano?

  are they buying? How are they buying these assets? What are the amounts they're putting in? And are they using financial advisors? We then start talking about the Bitcoin ETF, why Public.com is now a multi-asset platform that allows you to buy everything from Bitcoin to bonds, royalties, options, and public equities. And then Life finishes up explaining to us how he actually operates a business of this size and scale, how they've grown so quickly, why they raised hundreds of millions of dollars, and where he sees the future of the fintech industry. I really enjoyed this conversation, and I hope you all do as well. Here is my conversation with Life Abraham.

• 1:21Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:45Anthony Pompliano?

  Today's episode is brought to you by Trust and Will. I've gone through a number of different changes in my life over the last few years. I got married, I had a kid, and I had to start thinking about how could I ensure that my wife and my child would be okay if anything ever happened to me? That's where trust, wills, and estate planning come into play. Now, most people, what they do is they get introduced to a friend, an uncle, or someone in their local community. It tends to be someone who's really expensive, a lawyer. Lawyer, an accountant, or somebody who does estate planning, and they just simply are using a one-size-fits-all template and just telling you, "Pay me thousands of dollars and I'll use the same thing for you as the guy down the street." But that's not what Trust and Will does. They have a trusted online estate planning product that starts as low as $159,

• 2:28Anthony Pompliano?

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• 3:14Anthony Pompliano?

  Today's episode is brought to you by Espresso, the maker of the world's thinnest portable display. Now, listen up. If you're like me, you feel like you are at a command center when you sit down at your desk. I got a gazillion tabs open and different windows for different activities. There's my web browser, my text messages, I have Slack open, and I got a Notes app. I normally work on a desktop and can be very, very productive. But everything falls apart the second I leave my desk. If I'm traveling, if I go to a coffee shop to do some work, or just want to work from the kitchen table, my laptop doesn't have enough screen space. I lose my command center and my productivity falls off a cliff. It's a major problem. But this is where Espresso comes in. They have a portable screen that is so beautiful that you think Steve Jobs came back from the dead to create it.

• 3:57Anthony Pompliano?

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• 4:40Anthony Pompliano?

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• 4:48Anthony Pompliano?

  All right, guys, bang, bang. Uh, I thought a great place to start this conversation would be around the changes in investing trends. Right. Uh, public.com is a very large business today. Uh, you've got a huge user base. The way they act today is very different than maybe investors were acting five years ago. What are some of those trends that you're seeing that have really allowed you to build such a big business?

• 5:06Speaker 02

  Yeah, I think what you've seen in the, in like the last, call it five years is that realtor investors have really gone through a lot of different market cycles. And because people are really learning by doing, they had a lot of learning experiences that usually take maybe a decade or a few decades to really go through. Right. But if we really look back, we launched in September of 2019, to be precise. And at that point in time, you had, you know, two something percent interest rates, you know, markets were doing its thing. And then literally, you know, what is it? You know, five months later, you had the COVID drop and the circuit breaker hits in the stock market multiple times within the day. Something that hasn't happened in, call it 100 years or so, right?

• 5:51Speaker 02

  And, um, and so, uh, that obviously was like one massive kind of learning moment. And obviously that drove, you know, a lot of retail into the market. They saw it as like an opportunity to kind of, you know, buy the bottom, which a lot of them did, as we've seen in our, in our numbers. And then obviously throughout COVID, right? Stock market was the only arena that was open, sports were off. Uh, people want to have some teams to be rallying behind. Those became, you know, stocks and companies that drove a lot of, uh, uh, volume, of course, and just there are people being loaded home and stuff. And then suddenly, you know, you have interest rate changes happening and like each of these cycles has, I think, asset classes attached to them.

• 6:33Speaker 02

  And if you look throughout COVID, you had your COVID stocks, right? You had, you know, your, you know, travel speculation, you had work from home theme, you know, healthcare, things like that. Then suddenly, you know, in 2022, you know, you went into a, you went into a, into a market where, you know, people were suddenly looking at, you know, crypto rallies and things like that. I'm trying to, I mean, sorry. And then 2022, you know, things were kind of like rejiggering. People were flying back to things that felt more value again. And that all happened within like three years, you know? Interest rates started to rise again and suddenly things like bonds became interesting, right?

• 7:14Speaker 02

  Like US Treasuries, like the six months T-bill was the number one investment on the app last year for us, like the number one asset, you know, which is something that was unheard of because bonds were pretty much, you know, like non-existent for a decade plus. And so I think seeing all this happening in such a compressed timeframe was quite unprecedented. And so people that entered the markets before like 2019 and then went through all that learning period have really changed their behavior literally on an annual basis. And that's what we've seen. Like we've seen people that started out in like a chiba Ino coin and now put, you know, serious money into US Treasuries, which is like two extreme ends of the spectrum, right? So.

• 7:59Anthony Pompliano?

  Now, what do you think is driving that change, right? It's very fascinating. If somebody could buy kind of the meme coin and then they can go buy US Treasuries, did they get smarter? Did they learn, you know, kind of more knowledge about the legacy financial world? Did they understand what they were doing when they were buying the meme coin? It was just like, you know, loose monetary policy and meme coins go up or what was really happening?

• 8:21Speaker 02

  I think, again, people learn by doing, and I think people learned, you know, by seeing what's happening as they are involved. Often say that investing is a forcing function for financial literacy, where if you have skin in the game, you will care. As you care, you will automatically be more attentive and educate yourself and read the news more properly and things like that. And so I think people being invested, I think, is just generally a very good thing for society as a whole, because people are just get more involved in things they might have not been involved in otherwise, because they have skin in the game. And I think what happened within crypto specifically was crypto was the first asset class that was born retail.

• 9:04Speaker 02

  So the first people that got rich on crypto were regular people. It was not the big hedge fund managers or anything, it was regular people. And that is a story that is obviously something that is a pretty attractive story to people. And so, and then the other end, you have to think, a lot of crypto had was just a lot of community that was built around it because of that. And so, you know, people want to be part of something. The same reason why you support a sports team and go to the game and hang out with your friends to have something to talk about. I think that same happens in communities around anything else. And, you know, that anything else can also be a cryptocurrency, for example. And I think that's what you're seeing with also, especially these like community-driven coins like, you know, Shiba and Dodge and whatnot,

• 9:47Speaker 02

  where people know pretty well that there's, you know, no underlying function under that really than the thing itself, you know, kind of like a piece of art, to be honest. And so, from that point on, I think, you know, people like that brought people into the markets. And then as they entered the markets, that's when they started to educate themselves around, you know, how does yield really work? You know, what are the market structures? You know, when something goes up, why does it go up? You know, et cetera, et cetera. And then that brings them into other asset classes like stocks. And then that brings them into other classic classes like, you know, bonds and treasury suddenly and so on. But I think the question is like, what pulls them into the market in the first place? And what is an initiating kind of driver?

• 10:30Speaker 02

  And I think what you've seen in specifically 2020, 2021, was that crypto was for many people the initiating driver. There was the entry into the markets as a whole, not just the crypto markets.

• 10:41Anthony Pompliano?

  So how do you think about something like the Bitcoin ETF, which, you know, some people would argue is going to pull interest away from the actual cryptocurrencies themselves? And now people can just go buy this stock that gives you exposure to Bitcoin. And maybe it's the industry itself is maturing a little bit and kind of becoming more sophisticated as well. But do you expect capital flows to change? Or no, the people who would use public or kind of some of these other brokerages, like they are very much, they want to own the coins. They want to have direct exposure and the Bitcoin ETF is more for like Wall Street investors.

• 11:08Speaker 02

  Yeah, and this is exactly what we're seeing. Like what we've seen so far is that, yes, the Bitcoin ETFs are up there in terms of some of the most popular ETFs, you know, as like so far at least. And but we still see more flows into the into Bitcoin directly, into the actual Bitcoin cryptocurrency. And it's interesting, I don't know if I can like describe exactly the thinking there. Maybe it's just also people getting kind of into it and maybe they just want to add to positions that are already there and things like that. Because there's an obvious price difference between going directly into the cryptocurrency versus, you know, investing into the ETF. I guess, you know, let's be honest, ETF is much cheaper.

• 11:53Speaker 02

  But what we've seen so far is really different behavior there. Generally speaking, I think the ETF is very good for the industry. And to your point, I think it is a sign of maturity. It's a sign of that, you know, crypto as an asset class can mature, you know, and so on. And, you know, what I talked about this the other day, I kind of, you know, got the comments of like, oh, you know, something like the government regulating crypto, like that kind of goes against it. I personally think, you know, there's a few things. I think there's a difference between crypto, the asset class and, you know, blockchain, the call it like, you know, a ledger as a function for potentially being used as a financial system in some regards. And those two are just very separate things. And, you know, one's a technology we can use for many things we might want to build.

• 12:38Speaker 02

  But the other one, you know, like the coin itself can be an asset class by itself. And the ETF just kind of carves out that function of it. And puts it into more markets and makes it more accessible to more, you know, people and brokers and all that kind of stuff. And so for that aspect, right? I would say it's very, very good that there's also something that is that has a little of oversight. It is more regulated because I personally think that, you know, like the, the, the financial markets have matured over, you know, a hundred plus years in the world. And, you know, humans have a lot of learnings and, you know, it can be easily like, I think it's too simple to just be very binary and be like, regulation is good or bad. It depends on what the regulation is.

• 13:19Speaker 02

  And there's a lot of things that, you know, I think are baked into the financial markets that are quite good to also protect investors and so on. And having that layer around part of the crypto ecosystem, I think is a very good thing for the crypto ecosystem itself as well.

• 13:35Anthony Pompliano?

  What's fascinating in talking with you is already in just a few minutes, we have talked about ETFs. We've talked about meme coins. We've talked about treasuries. We talked about value investing. We talked about Bitcoin, et cetera, right? Like you all have this like bird's eye view. And now it seems like the product that you've built has become this multi asset platform where people can do everything from options to crypto to traditional stock investing to bonds, et cetera. Talk a little bit about maybe the philosophy of like, what is the product ultimately that you're trying to build? And like, how do you measure success?

• 14:03Speaker 02

  Yeah. And so how we think about internally is from our business goal perspective, we want to be people's primary account. And then for the user, I think that means is that we very much believe that if you can manage all your assets in one place, you will end up likely making better investing decisions because you can move money around different asset classes and different investing strategies within the same place. And that holistic view that you can have yourself over your assets and your money will, you know, will just make it easier for you to have, you know, a better understanding of it and, you know, potentially make smarter decisions for yourself. And you know, that falls into things like we've done a lot of work to build, we call internally

• 14:46Speaker 02

  the holding system, which is like basically like the tech layer that sits on top of everything. There's like a real time, you know, ledger, basically, which enables, you know, real time money movements between all these asset classes. And that means, you know, I can, you know, sell part, like I can sell a U S T bill right now and move that money directly into a cryptocurrency a few seconds later. And like that type of, you know, uh, uh, uh, technology, so to say, like the, the, the ability to move money around between different asset classes and that kind of speed and so on, um, and just having that kind of, you know, direct overview of everything, um, I think can be just very powerful for people's, you know, before your management, if I could put it well, but just like how they manage their money in general.

• 15:29Anthony Pompliano?

  When you see kind of this management idea, legacy investors, uh, the, you know, wealth transfer that's supposedly coming that everyone keeps talking about for, for the last decade, um, they have financial advisors, they had, you know, I give to someone else and I kind of like forget about it to a degree, maybe I meet with them twice a year, uh, but that person, they've got it, they're going to figure it out, uh, they're going to go allocate sixty, forty, you know, global portfolio and, and really kind of go with the academic theory. Or the people are using public, talking to a financial advisor, is that kind of getting kicked out of the industry or, or are you kind of a workaround? How do you look at the technology versus maybe the human side or the advisor side of a business like this?

• 16:07Speaker 02

  Yeah, I think the spectrum was historically always thought about just as either it's asset, like either it's, it's, it's a active or passive and passive often meaning it's being managed. In theory, if you have your money into like an ETF, it's managed within that fund, right? So there's a big part of it's already, you know, so to say, the way we think about it is that it's just, it's not that binary, it's way more nuanced and that spectrum is much wider. And so internally, we even talk about things like there's guided investing, there's automated investing before things, before something is even managed, right? And in that world, I think, you know, folks are not either or, you know, you want to have the ability to, you know, do a speculative options trade one day, potentially even just because you think it's fun.

• 16:50Speaker 02

  Whatever, you know, and at the same time, you wanna have, you know, money in, uh, you know, the NASDAQ ETF and just let it sit and, you know, compound over decades. And I think that duality exists for most people, really. And, um, the other side of it, I think, is also, I think, a lot of people, and that's what we're seeing, obviously, because we're also an active platform, you know, as a default, but is that people do wanna have some control over themselves. And that doesn't mean that part of the portfolio might not like, uh, uh, could be managed. You know, back to even an ETF technically is managed in some regards. Um, but it just means that, you know, people like the sense of that they have control.

• 17:35Speaker 02

  And, um, I think this, this notion of you completely give it to someone to manage and just like, don't look at it and move away. I think it's gonna go away more and more, especially also because what we've seen specifically through all the last few years is that, you know, financial education through social media and whatnot has so damn accelerated. You know, like when we launched, like we launched T-Bills on the app, um, you know, Q1 last year. And when we, when we launched it, we jumped on with reporters to talk about it, like we had, you know, really deep financial markets reporters, so we had to explain, how does a T-Bill work again?

• 18:15Speaker 02

  You know, like, because it was so, you know, these are like professionals in the space and just because it was so, you know, just like irrelevant for such a long time, you know? Within the public community, you suddenly like, it took a week. And you had people talking about building, uh, uh, building ladders for, for the bonds. You know, basically, you know, meaning, you know, you build like a bond ladder, so you, you know, kind of get cash flow through a certain period of time, asking which maturity and like different maturity lengths and something like that. And like that, you know, it went from like people borderline have not really thought about or heard about or understood how these things work to people talking deep strategies within like a week.

• 18:56Speaker 02

  And I think that type of like rapid education in these like bite-sized formats is just what exists today, which didn't really exist 20 years ago, and so that generation didn't go through that. And I think that just makes people also much more comfortable, comfortable and confident that, yeah, they could potentially run part of that portfolio themselves.

• 19:15Anthony Pompliano?

  You guys recently launched Options and one of the interesting parts is that you're going to give 50% of the Options revenue back to the user. Obviously, this gets into payment for order flow, a lot of different platforms, kind of how they think about their relationship to the user versus maybe other constituents that they work with. Why are you giving 50% of your revenue back to the user? Like, how exactly does that work?

• 19:35Speaker 02

  Yeah, so you might remember that in 2021, we actually stopped participating in payment for order flow on the equities trading side, like in the regular stock trading. And we did that for a few reasons. Number one, you know, it leads to better price execution for the user and just creates, you know, just like more transparency for people to know that like if you execute a trade in public, you know, a partner will do its best to make sure it executes at the best price. And then another piece of it is that payment for order flow generally, you know, it incentivizes a company like us for that, you know, we want people suddenly to trade a lot, et cetera, et cetera. And it kind of creates this like misaligned incentives between the brokerage and the customer.

• 20:19Speaker 02

  And, you know, that impacts things of how you think about product development and what features you do and, you know, things like lifecycle marketing in the app and all that kind of stuff. And, you know, and so like just thinking of that, like your, your business model impacts your incentives, which impacts how you design things. And when we launched Options, which was one of the most requested features we had kind of ever, right? The thing was, we looked at, again, those market structures and we were like, okay, in the market structures in Options, you actually cannot get rid of the market maker as long as you don't necessarily become one yourself, which is obviously quite a process to do that. But you cannot get rid of them, right? And so payment for order flow, because market makers are so baked into that market structure,

• 21:03Speaker 02

  you can't really get rid of it. Now, we were like, so what is a more transparent way to align our incentives with the ones of our users and kind of continue that thinking throughout also in the, like, you know, also in the, in the, in the Options markets? And that was a sense of like, okay, what if we actually give part of the payment for order flow revenue that you make on Options trading and give it back to the user? Because it creates this transparency for them to really understand exactly how much money do we make? On each trade that you're making, because you're making the same amount, you know exactly how much we're making, so it creates some transparency. Therefore, understanding like and having clarity of like what our incentives are as a business in that moment, you know, and in options trading, we make money on that. And so therefore it's like, yeah, some of the trades more, we will make more money on

• 21:48Speaker 02

  that. But it's better for the user to understand and know that, you know, and have clarity there and transparency than not. And and then generally speaking, you know, that just adds a little bit transparency, just like the market structures as a whole, right? The stuff is super complex. I literally just, you know, scratched the surface here. Like, we could talk about the whole podcast about those market structures there. But it is, you know, something that has been fairly intransparent, that is important, I think, you know, for people to understand, so they understand incentives, so they understand, you know, how things work and also if these things change in the future, that they know what that means for, you know, their assets for the future as well.

• 22:23Anthony Pompliano?

  When you think about building the business, i- it's a big business today, right? I don't know how many employees, revenue, like whatever numbers you could share that just kind of give people a sense of like how big this business is. And then maybe we can get into like the actual company building, operational stuff that you've done to to get here.

• 22:37Speaker 02

  Yeah, so we're a few million users. And again, we launched a little over four years ago, so there's now a 50 year market officially. And and obviously, you know, how you can think about it is what you've seen throughout 20 and 21 was a lot of user growth. A lot of people went into the markets, but also the behavior was, I would say, in most cases, a little bit more speculative. And what you've seen throughout the last, you know, two years now, roughly, right? Or soon to be two years, is that that behavior has changed to be called it, you know, less speculative, more fundamentals driven, et cetera, et cetera, which also means people

• 23:19Speaker 02

  are actually moving way higher dollar amounts into the markets. And so like we've seen, for example, our like first deposit of people that sign up and deposit for the first time into the app, that 20x. Throughout the last, call it eighteen, twenty months. And then you see that just like the, the, the behavior has drastically changed, you know, of those people and so on. And that's how you can kind of think about it. And so, you know, in these markets, you see maybe less people creating new accounts. But the people who are coming in are way more, uh, um, you know, kind of like serious about, you know, their investing, uh, assets as they get started.

• 24:03Anthony Pompliano?

  Now, as you've built the business, um, four years, millions of users, you've had to hire very quickly. You've probably moved offices multiple times. Like there's all these things that go into hypergrowth. How did you keep the culture, an area where people wanted to come work here, the people who were working there didn't want to leave?

• 24:22Speaker 02

  Yeah. Um, first, I think tenure is the wrong thing to look at, to be quite honest. Because, um, um, you know, uh, we have the board, we have Jessica Neal, who was the chief of ten office at Netflix. And, you know, I personally love the, the Netflix, um, you know, employee handbook, for example. And just like this whole notion of a company is a sports team, not a family. And, you know, if you take the sports team analogy, right, the best players stay. And so it's really fine that you potentially have players on the team who, you know, will do a phenomenal job and will really fit into what the company is for a year or two or three. And then they might not, and that is completely okay. And so I think tenure is generally the wrong thing to look at because it's not necessarily a sign of success, right? There may be certain people that shouldn't work with you.

• 25:07Speaker 02

  What we rather look at is the ratio between voluntary and involuntary churn of your employees. So how many people that you want to be in your team actually leaving your team? Versus how much are you in control of who's at the team, AKA the people that you let go? And generally speaking, I think, you know, that if you are more in control of who's on the team, AKA the ratio of people that you let go is actually higher than the people who are quitting themselves. That I think means you have, you know, generally speaking, a more healthy culture. Because culture is really just how you work in order to make the company successful. You know, and, um, you know, and that's, you know, versus like ping pong tables and parties and whatnot.

• 25:46Speaker 02

  Um, and so, you know, and so I think that's, that's how we like rather, like, just like rather look at that, right? Um, yeah, so sports team, not a family.

• 25:57Anthony Pompliano?

  How do you go about evaluating talent, both as they're coming in to work at the business? And then also whether they are one of the top performers or you may need to part with them and go find someone else for the role?

• 26:08Speaker 02

  Yeah, and I think our view on that developed over time. Like, we had this moment where we raised a ton of money in 2021. We hired a bunch of people. Team grew really damn quickly. And we reached this time where we were like, okay, now let's like, you know, bring the experienced manager and who comes from a little bit of a bigger tech firm, et cetera, et cetera. And then suddenly, what turned out, you had also people on the team who maybe, you know, rather have one on ones with people than, you know, actually be deep in the work. And what we've really, I think, learned for ourselves, which kind of became a little principle at Public Now for Management, is like, at Public, every manager is also an IC.

• 26:49Speaker 02

  And you must have a love and an obsession for the craft. And that falls into, you know, my co-founder Yannick is really deep in Figma files with, you know, the direct IC designers, right? Like, literally yesterday, I was really deep in like, you know, copy docs of some lifecycle emails that we're sending out and like, stuff like that. And I think, you know, everyone needs to be really deep in the work and has to have this like love and obsession of the craft. Because I think that's really what everything kind of comes back down to. And I think there's too many of these like management mindsets of like, which leads to people wanting to build armies and whatnot, where they think their worth and the value to the company increases with, you know, the more budget they oversee, the more people they oversee and whatnot,

• 27:34Speaker 02

  versus the actual value they drive for the company. And hiring should be a last resort, not the first option. It should not be a strategic move of like, we want to do this, let's hire someone to do that, right? Hiring should be the last resort of like, we cannot figure out a different way to do this. Therefore, we now need to hire. And, you know, and so on. So like, I think there's really the sense of that. The biggest thing we care about is people that are completely willing to get their hands dirty and, you know, think that is, and that's what they get their joy out of, right? And so on. And I think that culture just needs, like, that needs to be there at all times. And I would say we had a small moment where we lost that, to be honest. And I think through all the last 12 to 18 months, we've been trying to aggressively, you know,

• 28:19Speaker 02

  make sure that that's truly what every single person hears.

• 28:23Anthony Pompliano?

  How do you think about fundraising? You've fundraised in really good times and you've also, I'm sure, evaluated doing it in bad times as well. How has that changed and maybe what are some of the lessons that you've learned there?

• 28:34Speaker 02

  Always raise more money than you think you need because you don't know what's gonna happen. That's for sure. Like when we raised, like the last time we raised was in 2021, it was February 2021. So we're still running on that money today. And at that point in time, we raised 220 million dollars, which was nuts. Just, let's be honest, effing bonkers, right? We were 40 people, 45 people when we did that, you know? And also at the time with very little revenue, like we were in the middle of GameStop, there was a lot of momentum behind us, right? But we were 18, or less than like 15 months in market, like super young product, super small team, and we raised a ton of money on that.

• 29:17Speaker 02

  And at the time, like I remember the first term sheet was for 100 million dollars. And then we just like talked and whatnot, and we were like, should we make it 200? Because it seems like we can. And to be honest, it was one of the best, best, best decisions we've done. Because our future would have looked very different if you would have raised half of that, right? And in that moment, that money was just ridiculous. 100 was just ridiculous. So 200 was just stupid, you know? And, but it was one of the best decisions, to be honest, because we're still running on that money today. And it was, you know, like we could have predicted the future of how the market's gonna contract and whatnot. I think generally speaking, what's happening right now is very healthy.

• 29:59Speaker 02

  I think what happens in the zero interest rates, you know, environments is that, you know, Yannick and I had this term where we talked about of like the, the, like the, so entrepreneur, so someone who, you know, in a zero environment becomes an entrepreneur because it's easy. And that is all washed out, which also means you just have more talent density, you know? And I think in these markets, people get focused again on like, what are we doing here? We're here to try to build a really healthy, good business that ends up making money. That is the number one purpose of a business, not all the other distracting things around it. And I think, you know, in those zero markets, I think we also all like, as an industry as a whole and everyone, got very distracted to suddenly care about a bunch of things

• 30:43Speaker 02

  that maybe we shouldn't have cared about as much. And you know, that affects company cultures, that affects, you know, how you think about money, that affects how people build teams and whatnot. And, you know, I honestly, you know, I entered the workforce in like before O eight, right? And I moved to the US in two thousand and eight. And then suddenly, you know, I was, you know, the person in the job where around me, everyone got fired. And then you had ten years plus where a bunch of people entered the job market that did not have that experience. And so I think having this moment right now is very, very healthy for people's perceptions of what's the purpose of a business truly, you know, what do economics actually should look like, et cetera, et cetera.

• 31:25Speaker 02

  And, um, you know, that's obviously means that valuations contract in the moment in time, but they will expand the world at some point again. You know, maybe not as crazy as twenty twenty one multiples, but you know, prices go up, prices go down. And, you know, we raised a lot of money in twenty twenty one at a very healthy valuation at the time, you know, and we'll raise money again at some point likely. And when we do, we'll see what the valuation is at that point, and that is totally okay, right? If anyone in the stock market knows, everything goes up and down, and it's better to be realistic on that than, you know, you know, try to get too crazy.

• 32:00Anthony Pompliano?

  You said that the business would be very different today if you had raised half or less than what you did raise. What would be different? Like, what, where do you think the business would be?

• 32:09Speaker 02

  I think it's two things, right? I think, um, um, first off, um, this obviously company strategy would have been slightly different in terms of how you deploy the capital, because if you have less, you deploy likely also a little less. Um, so that's, I think, one thing, um, at least in the, in the, like, in the, you know, call it like the, like twenty twenty one years. Now, though, on the other end, it would have me, it would have still meant we would have likely needed to raise money by now. That was my assumption. And, you know, that meant we would have needed to raise money likely exactly at the time where valuations would be crazy compressed. And, um, you know, and also

• 32:53Speaker 02

  and then in that moment, I think, you know, you still have a business that runs the way it was running in 2021, early 2022, you know, and how startups that ran on venture capital were operated at the time, AKA, you know, likely less efficient than people operate right now. Um, and it's definitely true for us. Like, we're now running way more efficient than we've done in those years, right? And, um, and then you would have raised, need to raise money at a time where, you know, everyone's minds already adjusted to the new market conditions, but you didn't actually have time for your business to adjust perfectly to that yet, or to at least show the track record that you have, you know, and then you have to raise time and money at a time where the valuations contract. So that combination, I think, is deadly,

• 33:38Speaker 02

  right? The combination of looking at how you run your business, still being in the old world, the new world having adjusted, and valuations contracted, I think that kills companies. And so very, very lucky that we were in that position.

• 33:51Anthony Pompliano?

  How do you think about, uh, regulation? Obviously, you are in a highly regulated, uh, industry. Um, there seems to be a lot of maybe gray area questions, concerns at the things that are like the furthest out. Crypto, uh, maybe even royalties, like these areas that are not really the mainstream financial assets, uh, have a lot more regulatory questions than obviously a public stock on, you know, the New York Stock Exchange. So how do you think about, you know, navigating that while also trying to innovate?

• 34:20Speaker 02

  Generally speaking, I think there's a lot of regulation still behind, right? If you think of, you know, things that, you know, that you have to be accredited and how to become to and how you can become accredited in order to invest in multiple private companies, you know, and things like that. I think that is still outdated and needs to change, to be quite honest. On the other hand, you had some innovation, right? So, you know, it's now five years ago, Reg A Plus was introduced, which is basically an ability to turn any type of asset into a SEC-registered tradable security. And that has been used to, you know, turn things like a piece of art or, you know, royalties and make that an investable asset class and you can buy and sell shares in, right? So we acquired a company a few years ago called Otis,

• 35:03Speaker 02

  um, which basically used Reg A Plus to do that and be integrated into the app. Where, you know, now on public, you know, there is even, you can put, you know, you can buy a share in a bank C or you can buy a share in the Shrek music royalties. So anyone who watches, you know, a Shrek movie, you'll suddenly actually make cash flow on that, right? And actually, the yield on that when we IPO'd that was higher than most, than most, you know, bonds out there and stuff. And it's completely uncorrelated to the financial markets because it's, you know, based on content consumption, you know, not the financial markets. And so, and then the ability to add it to your portfolio, et cetera, et cetera. And so like Reg A Plus, for example, thing was a good innovation that actually came out of the regulatory environment to enable these types of things.

• 35:47Speaker 02

  It's so, you know, expensive to, to do it, et cetera, et cetera, like as a company. But generally, I think we, we, we had some innovation that's good as well. The Bitcomm ETF is another one, right? Good that that happened. Um, but I think there's still a lot that needs to happen. Generally speaking, like our name is obviously public. And so we often think about this way of like, it's on us to constitute, like, like, is it us to define what constitutes a public market? And, you know, things like making music royalties actually tradable and accessible to anyone to participate in that asset class, you know? Um, uh, is obviously, you know, kind of cool and a good innovation, I would say. And I think you will see much more of that just like securitization of every, uh, of everything happen.

• 36:30Speaker 02

  Um, but it will take still likely a decade plus for, you know, that to trickle into more asset classes, more into all asset classes.

• 36:37Anthony Pompliano?

  My last question for you is, it is your job to understand where you've been, where you are today, but also where this entire industry is going. What are maybe one or two things that you think are going to happen in the future that either people aren't thinking enough about? Or maybe things that everyone believes will happen and you're like, ah, I'm not so convinced that that's actually going to be where the world goes.

• 36:57Speaker 02

  Um, first, I think interest rates are going to stay higher, longer than people expect right now. Uh, that's my little macro take here. Um, yeah, I mean, Jenny's thinking again, like number one, it's the it's the securitization of everything. I think you're going to see um more liquid markets around private securities happen at some point. I know CADA just had to now close it down. I think it was actually bad for the industry that, you know, they were kind of forced to do that, you know, despite the maybe questionable tactics that potentially were unveiled there. But nevertheless, I think it was actually bad for, you know, the private markets that CADA suddenly closed down their efforts to try to build, you know, like an exchange for private securities.

• 37:42Speaker 02

  I think that was kind of the stupid outcome for everyone, to be honest. Um, but I think that, you know, uh, those are, I think, some of the, you know, more you know, exciting things. The other one, sorry to be that, but like AI, I think is going to have a massive impact. Right? Like we launched Alpha on the app, which like a research assistant, which we basically, you know, which is just like basically like an L and M that we've um trained with earnings call data and analyst reports and you know, just like historical fundamental data, et cetera, et cetera. And so now you can just swipe down on any stock and ask for any question about the stock. And it's phenomenal how well that thing works.

• 38:25Speaker 02

  And I think the next step there is obviously for those tools to be personalized to our portfolios. Doesn't necessarily mean that an AI will like trade for you. Um, or you know, if that's good or bad, but um, but just a sense of that, you know, what's like the impact that AI can have on just like portfolio management and giving you insights quickly around your portfolio. I think it's going to be awesome, awesome, awesome to see.

• 38:52Anthony Pompliano?

  Where can we send people to find you online? Or if they want to check out Public, get an account, where can we send them?

• 38:58Speaker 02

  Yeah, go to public.com to sign up. And obviously you can find me on Twitter at @liveleifthunder. There's a whole other story to that handle, we'll talk about it next time.

• 39:10Anthony Pompliano?

  All right, sounds good. We'll definitely do this again in the future.

• 39:14Speaker 02

  Cool, awesome. Thanks for having me.