FAMILY OFFICE INSIGHTS

Family Office Connections: FinTech

Richard Perez, Chief Strategist, sits down with leaders within the FinTech and Family Office space. Logan Allin, Managing General Partner at Fin VC, Johnson Cook, Co-founder and President of Greenlight and Suna Said, Founder & CEO of Nima Capital discuss the state of the industry, trends, and impacts on the next generation. Listen now.


Transcript

Richard: Hello everyone, welcome to Family Office Connections. My name is Richard Perez, Managing Director and Chief Strategist at Boston Private. Today we have the great pleasure and honor of welcoming a distinguished panel to discuss the state of FinTech in 2021 and beyond.

Joining us on the panel today are three incredibly accomplished individuals with significant experience in the FinTech space, and each bringing with them their own unique perspective, given where they sit in the landscape. One from the head of a family office, one runs a large FinTech venture capital fund, and a third runs a FinTech company. So those three different perspectives we think will provide quite a bit of insight and should hopefully make for a very interesting conversation.

I'll start by making a quick introduction for everybody. First, Suna Said of Nima Capital, he's the founder and CEO. Nima Capital is a family office investing across all asset classes, geographies, industries, and stages. She has a very keen focus on FinTech and has spent quite a bit of time in the blockchain space as well. And not only that is very dedicated to philanthropies across the globe and through her Suna Said Foundation.

We also have the pleasure of having Johnson Cook, cofounder and president at Greenlight, a FinTech company focused on family finance, with the mission to help parents raise financially savvy kids. The firm is based out of Atlanta, Georgia.

And last but not least, Logan Allen, founder and general partner of Fin Venture Capital, global based venture capital firm focused on the intersection of financial services and technology with a dedicated team based out of Palo Alto but looking across the globe and across platforms in FinTech companies.

With that, love to get started. But again, thank you to all three of you on the panel for joining. I'm really looking forward to our conversation. I thought I'd get started with you, Logan, given your perch sitting on top of your firm focused on FinTech across the globe. The last 12 months have obviously been a really unique time, not only in FinTech, but across the globe, with the pandemic remote learning, remote working, etc. It's really seemed to accelerate the investment and development of companies in the financial technology space. I'd love to get your perspective of what you've observed, where you think we sit and how you're looking forward in FinTech.

Logan: Yeah, thank you rich, I appreciate the opportunity. And thanks to my fellow panelists for carving out some time. I think what we in the Fin VC team observed in 2020, it was a massive year of digital acceleration. We primarily focus on b2b enterprise tasks. And from that perspective, I think the banks and legacy insurers recognize a massive strategic imperative towards digital. You know, whereas it once might have been a nice to have given obviously work from home and distributed work environments and COVID, you couldn't go into a bank branch to open up a new account. And banks recognize that new account opening and digital onboarding as well as digital customer service can no longer be under invested in.

And you've got players like Greenlight and Johnson is here with us today, you know, it's a significant uptick in bank driven partnerships, as they recognize the value of FinTechs in creating those digital experiences for consumers and commercial customers.

And so our view is that 2020 was a massive accelerant and that 2021 is going to be the year of inflection for FinTech and frankly, a year of IPOs and SPACs, where incumbent names like JP Morgan and Goldman Sachs's of the world will certainly be spending significantly on digitization. But if you look at public market investor mindsets, they're going to be increasingly focused on these new FinTech public companies.

And we've already created a name of backers for the bank equivalent of FinTechs. And so I think you're going to see a ton of increased focus from consumers, commercial customers, and then public market investors in FinTech and it's going to be a huge year of inflection on a go forward basis. And we're super excited to be FinTech nerds with capital at this point in time.

Richard: That's great. And just piggybacking off that, as it's accelerated, sitting where you are, how is the competitive landscape and in terms of sourcing these opportunities, the amount of capital coming into the space, and how do you navigate that both taking advantage of this inflection point, but also realizing that the competitive landscape is changing?

Logan: Yeah, there was over $150 billion put into deals last year in the US alone. And interestingly, you saw a significant amount of uptake and average valuations in growth in late-stage rounds. And a flat kind of curve if you look at seed in series A rounds. So our view is that the competition is lesser, and entry points are more advantaged in seed and series A entry points.

And then if you look at growth in late stage, you've got to get very comfortable with valuation and see, you know, the types of upside that we want to see from a venture and growth equity perspective.

So the competition is certainly real and that has driven up valuations, particularly as later stage type players have come down market into more growth and expansion stage opportunities. And it's more and more a situation where we have to massively differentiate ourselves with our companies, or our prospective companies. And we have to pitch the VC versus being pitched by the company.

And we're fine with that because, you know, we can add deep expertise in FinTech and bring our operating playbook to support our businesses. But it's the factor of life at this point in being in a VCC. But I think if you can be thoughtful about entering an early stage and try to get in before it's obvious to everybody else, as we like to say, that's a great entry point opportunity.

Richard: That's interesting and makes a lot of sense. Suna, you know, I'll pivot to you, given that kind of bigger picture on the FinTech investment landscape and someone like yourself, who's really sophisticated in the space, but sitting at a family office seat, not a VCC. How have you thought about accessing, you know, venture in general, specifically in the FinTech space? Partnering with folks like Logan or others, going direct call investments and the like, and how do you approach that from your seat?

Suna: Well, as Logan alluded to, it's really all about value add. And I think a lot of family offices really underestimate their ability to add value, and often see themselves as just plain allocators into funds, when they actually can be a lot more directly involved. Even if they are invested in some of the great venture funds, like [inaudible] VC, they can still ask the fund managers, okay, what portfolio companies do you really love? Which ones can we add value to? What networks do we have that are complementary? Or they can help your company scale out? Or what institutional relationships can we bring to the table?

And then that is a great source of accessing earlier stage companies because what happens is the fund managers as well as other founders are happy to spread the news that you've added value in multiple ways, and then you get direct access to things. And to me, I find that a lot more fun, a way to live, where we're just, you know, helping founders grow and scale and globally distribute really important products that help democratize finance, especially the same way Johnson is doing for the next gen.

Because democratizing finance is a huge passion of ours as a family, as well as a business. And I think it's no coincidence that Johnson and Logan and I and you are all connecting around this concept of families, and FinTech and banking and taking it into the next generation. Because as Johnson and I said earlier, so I have a 9- and 11-year-old and I really don't ever see them going into a bank branch, like I think that would be so foreign to them, because they're so internet native, they've been on their iPads since they were, you know, three years old.

And so for them, something else that I think is really underestimated by the institutional world is the extent to which kids really see their world inside, you know, their iPads, inside their phones, and being able to contribute to that, both as investors and as family is just so great.

And getting back to the point around value add and how do we access things... It really is that win-win upward cycle. If you add value, you get access to companies, which allows you to add more value which gives you more access to companies. And where I think a lot of family offices underestimate their ability to add value is that typically if you've made it to a position where you have a family office or in a family office, you've probably gotten there by having some kind of expertise in some area and some broader network.

And if you can bring that to bear and connect early-stage founders to larger worlds where you have a subject matter expertise and then are able to build that out, it's a one plus one often equals 1000 kind of paradigm that you're creating.

Richard: That's very interesting. It makes a lot of sense. Because I think a lot of families where they hesitate is they wonder "Do I have the expertise to actually bring anything to the table?" And it may not be specifically in that vertical, but to your point, if you can bring the expertise of the family, how they generated their wealth, where they have that value add, there can be connectivity. So that's an interesting angle, because I think a lot of folks’ struggle or are hesitant to try to inject themselves without specific domain expertise.

Jumping on that, you've gotten well up the curve in FinTech and blockchain, how have you educated yourself in terms of scaling a team? I think a lot of families are curious how they build out this effort and feel comfortable doing that for investment professionals in house.

Suna: To your point, we have really built out our teams in the different verticals. So as you alluded to earlier, we work in all geographies, all asset classes. So we're a typical family office in the sense that we spin everything from, you know, bonds and risk management to internal hedge funds, a fund of funds, private equity, everything else, venture and blockchain, and we were pretty early in the blockchain world.

And the way we've thought about it is we have the unique...or most family offices have the unique advantage of being able to be very flexible, very neuroplastic, very nimble in terms of being able to pivot into certain areas at certain times really easily.

So what started happening around 2010, we started getting more and more into the early statement venture world. And then around 2011, my venture partner Bill Tie [SP] was mining Bitcoin. So we started getting fascinated about that whole world. And again, that is one of the advantages to a family office of being close to the ground with founders and other venture investors, you find out about trends earlier on, and then cannot only start pivoting into them or focusing more on them, but the definition of a family office is that you have next generations involved, so then you can teach your children about them so that they're not caught behind the curve. And so that you don't get caught in the shirtsleeves to shirtsleeves in three generations type of paradigm.

And let's face it, what's the point of having a family office if you're not going to try to allow the next generation to then come in and be happy and successful and fulfilled, and whatever they want to do, by being at the forefront of whatever the world is entering into. So I feel like it's a great platform for that as well.

So the way we've thought about hiring teams is...so as we were finding about Bitcoin and mining, and all of that, and starting to realize this nascent industry that has just some of the smartest people in the world in it, it became just very intellectually fascinating. And we've had kind of an insatiable appetite about understanding DeFi and the underlying technologies in the marketplaces that are building out, that we think are 99% likely to be disrupting a lot of the larger markets out there.

Because whenever you have something that's more efficient and more geared towards a new generation, it just organically displaces things that are less organic to the way a new generation just sees their place in the world, etc.

So we started hiring into that vertical and then it just kept growing. The blockchain and the venture and then I started spending most of my time organically on those areas. And then just found other people to hire to manage the other parts, the bonds of private equity, the fund of funds, etc. And then I'm much more spearheading the other areas and realizing that, by me understanding the tech myself, I'm able to understand the product market fit and how these nascent technological evolutions that are literally developing on a daily basis can be expanded and create ecosystems, and really not just be at the forefront of the thought curve, but actually pushing it forward by having these internal development teams that are helping the technology evolve on a daily basis to expand how much capital we can put into them, as well expand the ecosystem as a whole and how it relates to larger institutional investors, family offices, or other portfolio companies.

And integrating them all where it's that point of the efficiency frontier curve that keeps growing and evolving with all the players, you know, helping in an iterative way, add value to one another. And that's how these global systems ultimately grow together and around the new generations that are entering them.

Richard: Now, it's fascinating trying touch upon those and see how they all come together, get that flywheel going, and of education. But you touched upon a couple of things that are clearly at the forefront of the challenge for family offices is educating across generations. Continuing to advance, but even at the lower level, so you know, at certainly lower levels of wealth and Johnson, this segues into kind of your business, in terms of navigating how families and the next generation banks, how you educate them. It's a concern across all areas of net worth.

Love to hear, Johnson, you just talk about your mission, how you attack that family finance issue, and how you think about the next generation and what's important to them and cultivating them as a client. Not just for today, but for the future.

Johnson: Thank you. Yes, that's exactly what we think about every single day. And I'll start when I tell the Greenlight story, I'll kind of add one more piece to what Suna said, which is this great work on focusing on new technologies. But you know, I think what made Greenlight work in the early days was we were focused on a consumer problem way before a technology. And the consumer problem was how do parents give their children money? Very basic, right? They need to go to the movies, they need to shop online, they have phones now, average age of kids getting smartphones is nine years old.

So there's all these kind of macro trends coming together that kids need a debit card, and we just very simply started the company seven years ago just focused on that problem. But very immediately, once we had the product in market, we saw this opportunity which became our mission, which is help parents teach their kids about money. It's not about giving the kids money. It's about teaching the kids money, about these financial concepts, which are, in some cases very basic, like you have money now, you swipe your card, you have less money.

And just showing a child that on a screen, whether it's their screen or their parents screen, you just bought the Pokémon cards, now you have less money, that is financial literacy 101, right? And I've seen this with my kids, I have three kids, they're 15, 12, and 9. So I have my own focus group right here in the house for all these products.

But Greenlight, we do believe our mission is to help the parents teach the kids about money. And that is across all areas of personal finance, right, which we now call family finance. But it's not about teaching in the way that financial literacy has been approached before where we're not thinking about slideshows and quizzes and you know, presentations and eBooks, we're all about learning by doing.

And so our product allows a parent to sign up, sign up their whole family, all the kids, both parents, give them a green light service that is like seven accounts in one. It's a spending account with a debit card with great controls. It's a savings account where they can learn to set goals and parents sets the interest rate by the way. So they actually learn about compounding interest where they're not going to learn that with their, you know, Wells Fargo account today. Whatever interest rate they're going to get.

I pay my kids, I'll admit it, I paid him 12% APY, its easy math, monthly, but our average across Greenlights several million families is 18% APY. So there's a lot of parents who do like 100%, it's like a matching, right, but they're really...the kids are watching their savings grow in ways that they would not see in the real world.

Richard: Banking with a parent is more profitable for sure.

Johnson: Yeah, yeah, mine's getting up there. My kinds have been growing these savings accounts, so it's getting a little painful. We have a giving account where a portion of their allowance can go into the giving bucket and that money can only be donated to charity or you know their church or Humane Society. Whatever causes are important to them.

And now we just launched, early this year, we're super excited a new product called Greenlight Max, which includes a brokerage account for kids. And kids are actually able to learn how to invest in stocks and ETFs with parental controls, so it's really the world's first parent-controlled investing account where the kids can do the research on their own. And we have these great little, you know, I'm not going to go out on a limb and say they're as cool as like a TikTok or Snapchat video, but we call them Invest Nuggets.

So these quick little nuggets, right, on the basics of investing. What is investing, what is diversification, what is risk/return? How do you think about these things? And then we built the app in a way where if you came in as an adult, and you just want to trade stocks, you can all day, but the default is the app is in what we call learn mode. So if you're looking at a quote screen, or you're looking at, you know, your portfolio screen, when the app is in learn mode, you actually have everything explained on the screen the way you would explain it to a teenager or a preteen.

So they're actually able to look at what is a PE ratio? What is market cap? What does that actually mean? And actually explain it to them. And then when they go to place a trade, everything goes to the parent for approval. So I can just tell you, my kids did request to buy GameStop a few weeks ago, I quickly declined that trade. But I asked them to go write down the price at the point they would have bought it and then we're going to have a conversation, I said then it was in two weeks. And we're going to talk about if you would have made that trade, what would have happened. And of course it went my way, and they were they were happy for those parental controls.

So we are all about like teaching kids these financial concepts by giving the family tools for the kids to learn by doing.

Richard: Interesting. One question I had, and this will be a broader question for the panel too. But this will start more specifically with you, Johnson. You've recently partnered with Chase on their first banking platform. Big Banks like JPMorgan and Wells Fargo have been investors. And I'm curious, how do you foresee collaboration with incumbent banks and FinTechs when these banks can ultimately decide to try to build things like this on their own?

And the reason I say it's a broader question, Logan, you can jump in as well and Suna, when you think of larger tech companies having huge budgets to build these things on their own, where do you see smaller FinTech companies falling in the in the ecosystem and their ability to survive and succeed? But go ahead Johnson, sorry.

Johnson: Yeah, sure. Yeah, we're very excited about the partnership with Chase. And we are excited about future bank partners that we will announce. And I like to think about this in a couple of ways. For one, we have a direct-to-consumer business where we are signing up thousands of families every day, every hour. And it puts us in a nice spot where we are really focused on those consumers.

Because we are focused on those consumers, we know how they use the product. We know how they behave, what they spend, what they load, what the kids want, what they hate, you know, like we know how to do it, we have that laser focus on this family. That is something that the big banks don't have, right? They have everything, they have giant mortgage businesses, investment banks, they have everything, they don't have a team as focused as ours is on this market. And that's our advantage that's why partnerships make a lot of sense.

Because, yes, they can build anything, but to do it on their own without the insights of our kind of live consumer base is a much riskier proposition. And you know, in a world where a bank executive might be watching their quarterly OKRs and watching their stock price for their bonus, it's really hard to make a business case on "I want to spend millions and millions of dollars to get a bunch of 10-year-olds a debit card," because, you know, it's just a very different kind of business case to build.

So partnering makes a lot of sense because we can de-risk bringing a product into this market just because we know it so well.

Richard: That makes a lot of sense. And Logan, I guess pivoting slightly as you think about the Googles, the Amazons, the Facebooks becoming, in essence, you know FinTech vendors, and partnering with the banks, and providing better interfaces, but leveraging those platforms, how do you think about the smaller FinTechs in that kind of ecosystem where they're these big gorillas in the room that are putting quite a bit of capital to work in this space?

Logan: I think Google Amazon, Facebook, Apple, right, all four of them started in payments, but very quickly added other capabilities and financial services. And these digitally native players are vertically integrating financial services, using embedded finance and enterprise software to accomplish those goals.

And I think that all of them will naturally add additional product verticals to their growing consumer and commercial and SMB customer bases. I think their only challenge will frankly be DOJ and antitrust issues. And they will push the envelope as far as they possibly can to monetize those existing customer bases and get closer and closer to, you know, the core of financial services versus outsourcing and partnering on a lot of those activities.

And I think to your question to Johnson, you know, the banks feel very similarly, they can try to build a lot of these things. But I think they recognize that the R&D and the IP that's being generated by enterprise FinTechs is just a far stronger proposition. And they can partner and license that capability set and be able to innovate much more quickly, because it isn't part of their core DNA historically. And I think they've proven that it's a very challenging thing to execute on, as it relates to developing innovative financial products and digital consumer and commercial customer experiences.

So we think that, you know, you've got kind of the legacy banks, insurers and retailers, everybody from Walmart to Goldman, in one camp, and they're, you know, coming from more of an analogue world. And then you've got the Googles, Amazons, Facebooks and Apples, they're coming from a digitally native world. And they're converging on what is $25 trillion dollars per year of financial services revenue. So they're all going after that big bucket of revenue. And then you've got the FinTech sitting in the middle, we're more consumer and SMB oriented.

And overlying all that you've got enterprise SAS focused players that I think are trying to play neutral and partner with all of them. And so that's where we see the biggest opportunity. And I think the next wave of the big FinTech players are going to come in from that category.

Richard: Very interesting. I'm going to make a hard left on topic of the day, but it's been growing for quite a bit, and you touched upon it a bit, Suna, is the cryptocurrency space and blockchain.

So obviously, crypto's been in the news for many years, but accelerated in the last six months, call it, even three months with blockchain and the like. But you spent a lot of time on blockchain, I would have looked back two or three years ago, you know, a lot of quote unquote, thoughtful investors said forget about crypto, blockchain is the future. Maybe not everybody said that, but quite a few. And but, you know, crypto certainly dominated the headlines.

So I'm just curious how you think about the state of blockchain, how you navigate that space, and then how you think about crypto versus the blockchain enterprise space?

Suna: Well, admittedly, I've become quite obsessed with it. Um, and, like I said earlier, it's just become like an insatiable, intellectual fascination to me. So to that end, for example, you know, we have some really young, amazingly brilliant folks working with us. Like, for example, Forest, who's 22, and is truly one of the smartest people that I've met. And he'll spend four hours with me taking me through some of these nascent marketplaces that are still very small, but that are showing real promise.

And right now, similarly to, for example, you know, the way a Bill Gates might have looked at, you know, nascent, you know, internet systems in the 70s or 80s, you know, it takes real technological expertise to get into these systems to understand them to learn how to navigate them, and work with them. And sometimes, like 40 different steps, and it's like, clunky and cumbersome, and you can only put very small dollar amounts on them.

But that's where it's so exciting to get in at this stage and understand deeply exactly how all the technological pieces come together. And to have the patience to spend four hours to understand those 40 points, that you need to get deep into, because then one can really add value and say, "Hey, wait a minute, can you build this kind of platform, or this kind of leverage, or this kind of synthetic market on it," in ways that some of the younger tech folks might not have the overarching perspective to be able to add into. And then just see how we can help the ecosystem grow, even if it's tiny, incremental amounts every day.

And then over the long run, over the next five to 10 years, it will make a big difference. And again, you know, the Internet of the 70s and 80s, right? It wasn't Google. And it seemed very foreign to people, and again, clunky and cumbersome and hard to enter if you didn't have the deep technological expertise.

And that's where I just see it really as a huge honor that I'm able to get in deep and learn. And that folks are willing to spend the time explaining all the steps to me when their minds are working a million miles a minute, right?

And then to see, how can we help that grow. And, to that end, also, to me it seems inevitable, that when we look back, you know, 10, 20 years from now, the same way now our kids and three-year-olds can use Google, and it's so easy, that the technology will evolve the same way it did from the 80s until now, where it was hard to go and search things in the 80s. And now, again, we have Google, we have all these different platforms to go on.

Literally on a daily basis, the technologies are growing in such a way where I think they will be a lot easier to access in 10, 20 years and cheaper, and most importantly, the democratizing functions globally, for financial access will hopefully make it a much more level playing field for people of all generations and all socio-economic, you know, statuses to get in, and to be able to have a piece of the pie.

And I think that's the promise of blockchain technology, where you can not only participate in the system and have access to the information and the ability to participate financially in these systems, but instead of giving a piece of the pie, of fees, into banks, and, you know, frankly, coupon clipping activities, you know, that are, you know, some young people feel are subsidized corruption, frankly, right?

And not just subsidized corruption, but frankly, subsidized by the retail investors, the victims, really, who are the last people, you know, to get into some of these areas, like the IPO markets, you know, where banks will take 20% and then, you know, a lot of the institutional investors get in after it discounts. And then again, it's the retail investor that gets stuck with getting the worst pricing. And you know, again, subsidizing the largest players for really no merit and no real value add when you can have a decentralized system, that not only are you then not subsidizing, you know...what, in any other system, if you take a step back and look at it objectively, is, in a sense, corruption, right? But then can participate and actually gain value from your participation.

So instead of paying a fee to the system, you're actually making a fee by your participation. And then, for example, you can even decide to own a token, that then gains value upon value through its interest rate and then through your usage of the platform, your token goes up. And, like you said, it's a multiple dimension flywheel that accrues to the value of the individual, and the retail investor, and where you put the dollars back into their pockets. And that's where our passion truly lies, and why I spend those, you know, four hours, just like my brain wracking itself to keep up with how these technologies are evolving.

Richard: That is commendable, Suna, because it is inaccessible, it seems inaccessible at the outset, and you can dig deeper and deeper in it. And it's a real challenge. And I think it's a high hurdle. And it kind of pivots into another question I have more broadly, because I think that's one of the reasons why folks have done less or it's less on the forefront, the blockchain space and what that means. And crypto has been a big thing that you've seen, I think a lot of it is you've seen the power of social media, in financial markets. We saw it in terms of democratization, rebellion against kind of the established norm like we've seen with GameStop and Reddit, etc. These are all kind of disparate themes, but I think going along those lines.

I'm curious, maybe I'll put it also to you, Logan, when you think about blockchain, and these technologies starting to come to the forefront, do you see kind of that inflection, we've been talking about FinTech inflection, you see an inflection point where these solutions, what people have called solutions without a problem, to actually start to kind of become implemented?

Logan: Yeah, absolutely. And giving full credit to Suna, it is no easy feat to get your arms around this. It's just a constantly evolving one that I feel like every day I learn something new and think about this problem differently.

Definitely believe that enterprise blockchain is at an interesting inflection point, but very early days on from a technology stack perspective. So we think about the digital asset world in buckets, we think about the crypto asset management world, which is basically taking the traditional asset management world and replicating it in the digital world. And then we think about blockchain enterprise applications. And that's simply using blockchain for problems where blockchain is cheaper, faster, better, right?

And so we have a company in our portfolio called Figure that's using blockchain for a variety of use cases, the largest of which is asset backed securitizations where blockchain can really take out and disintermediate a number of expensive rent takers and serve in a place where it is cheaper, faster, better to support ABS across a number of markets.

And so that's how we think about enterprise blockchain. There's companies like IBM that have their hyper ledger fabric platform in which a number of FinTechs and blockchain companies are building on top of, and we think there are going to be applications in capital markets, and insurance, and healthcare and all these other verticals where blockchain is going to be transformative.

Mark Cuban came out, I guess, a couple of weeks ago and said, "Hey, blockchain is going to be bigger than the internet." And I think, you know, for us, there was the internet, there was the cloud, and we truly believed blockchain could be a third, you know, application and platform or pillar that is that transformative because of what it enables in terms of distributed ledger, in terms of validation nodes, smart contracts, immutability, and trust lessness, to be able to enable certain processes.

And if you think about the financial services world, it is one of the first industries to adopt blockchain as an underlying technology, whereas it's been dead last in adopting the cloud. So it's kind of ironic, you know, the financial services industry spends a trillion dollars per year on technology, it's 25%, on average of global IT spend, it only has 8% of its data in the cloud. And so it's last in cloud adoption, but it's very much first in terms of blockchain adoption, which I think is pretty fascinating. But I think that trend line is here to stay and will only accelerate.

Richard: Interesting. That's fascinating, as you see these verticals grow, and take hold. Johnson, pivoting a little bit, though, away from the blockchain side to the crypto side, because it's so top of mind. And your client base, the ones you're educating, the next generation are typically the first adopters, the ones most interested. As you think about the light is being shown on crypto and new products, how are you going about thinking about product lines, or educating folks in this space? Because obviously, it's something that will attract the client base that you ultimately want on board.

Johnson: It sure will, yeah, it's definitely a question that comes up a lot. And Suna and I were just talking about this this morning. The way that we think of that roadmap is really just super, super engaged, like always, always talking to the customer. Which is the parents and kids. And crypto is something that they kind of ask about, but when we are forced to do a stack rank of priorities of what are we going to teach the kids about, there's a lot on the list before crypto, and you know, currency arbitrage and the things that we could be getting into really advanced topics, but we first want them to understand credit, right? Understand insurance, understand investing, and we have a lot more work to do on just core financial concepts before we start getting out there.

That said, you know, we know that like our advantage in a very competitive space is our lead on product. And we will maintain that and always innovate as fast as we can and ship things even before we think, you know, the customers are asking for it. That doesn't mean that we're asking people what kind of, you know, horse do they want, right? We are still like trying to stay ahead of it. But at the same time, like when you’re so mission driven like we are, it's just really important to make sure we get the main subjects first.

Richard: Absolutely. That makes total sense. It's almost like a fiduciary responsibility to educate folks on the fundamentals of investing. So that makes total sense.

Johnson: That, and I don't have the patience that Suna has to go sit down...

Richard: You and me both, Johnson, for sure. It is interesting, though, because the news, particularly now with the news cycle being so rapid, Twitter, Facebook and the like, and social media just generally pushing information right or wrong, incorrect, or not correct. Does that change the way you guys think about investing? Has that put pressure in certain areas, either through valuations or areas that you want to focus on or areas that your LPs might want to focus on? Logan, I'll throw that out broadly, just the impact of social media and financial services, because there's just a lot of information being out there. And it drives markets that we've seen, but it also can put pressure on folks in the way they invest and the areas that they look at.

Logan: Yeah, I'll take the past that, I had a CEO yesterday on a call I was taking on a Sunday night, told me I needed to up my Twitter game. That pretty much tells you everything about the space. And he said something very prescient...

Richard: How's your TikTok game, though, Logan, that's the question.

Logan: I have zero TikTok game. I do not have a TikTok account and I barely have an Instagram account. So I've got a lot of work to do here. But what he said is, "Look, you guys, Fin VC is building brand on expertise and obviously performance, and that's great," he said, "that's cool." But he said, "If you can combine that with credibility and a brand on Twitter, then you really have something." And that was advice that I said, "Wow, we really need to figure this out, our Twitter account is pretty dormant." And so it's something we're going to talk about on our team call today.

But I do think having a combination of both and frankly, that having a voice on social media, whether that's Twitter or increasingly, Clubhouse, where, you know, we're contemplating holding a couple of events in the near term, it's really critical. And that's a way to get your voice out. And frankly, a lot of the CEOs and teams that we're talking to about investing are from, you know, millennial, but increasingly, you know, younger generations where that's how they are used to engaging with thought leaders. And so no longer is it a place of, you know, purely social media, it is very much a place of professional media, I think we've done a good job of doing that on LinkedIn, but we need to carry that into Twitter, and other channels that are increasingly more credible for professional means and not just social means.

So I think it's a huge impact from a venture capital perspective, from a startup standpoint, and increasingly, you know, a place where you can get meaningful signal and sentiment in terms of what's happening in the market from an investment perspective. And it's one that we should all take very seriously.

Richard: Johnson, you talked about your investment nuggets trying to reach the younger generation. Has social media, and obviously, there may be some regulatory issues around it, too. Has social media been a part of your strategy as we think of how to market to the next generation?

Johnson: Definitely, and just that the parents are our customers remember, so we don't market to kids, kids can't sign up for Greenlight, they can't open an account with Greenlight. And because we are so focused on parents, moms especially are pretty heavy in our, you know, target demographic that sign up, and, you know, Facebook and Instagram, all the digital channels work very well for us.

Suna: Yeah, and along the lines of what Logan and Johnson were both saying, it's also interesting to see how technology is allowing voices and participation to converge together. So, for example, the fact like Logan said that people are empowered now to share their voices and the way that moves the market. You know, an individual voice can move the market, you know, and in aggregate they can move the market. Like with that whole Reddit, GameStop movement.

And it's also converging in the sense that voices and financial participation, I think, in some ways are soon going to also be able to be rolled into one. We just invested in a decentralized social media platform called BitClout, it's going to come out really soon. And we were in the seed round of that, and where individual voices can also be monetized through their own particular tokens.

So for example, Johnson can have his own profile up there, and people can basically invest in his voice and then see that token, for example, go up.

So I'm just seeing this incredible convergence of democratizing access to getting one's voice out there and democratizing the ability to participate financially in one's own voice and into voices in aggregate. And that's the beauty of technology to be able to bring all these pieces together. And that, you know, again, point on the efficiency frontier curve, community building way.

Logan: I'll give an example of that, just because it's so great. We launched back in, I think December, the very first, and it was experimented first, we call it "My Greenlight Challenge." And we posed a question to the kids, now they have to do this with parents’ permission, it has to go through the parent, but we wanted to see could the kids teach other kids some financial concepts? So the very first one was what is the difference between a debit card and a credit card? And they had to create their own videos, submit them to, you know, any social channel with a tag My Greenlight Challenge, and you should go look up these up on Instagram, TikTok as well. #MyGreenlightChallenge, all one word.

It was amazing. I think we had like 2,000 videos submitted in the first week. And these are kids of all ages, 8 to 18 submitting to these. They really wanted the $1,000 cash prize. But we had, you know, we gave them awards for like most entertaining, funniest, most innovative, you know, most educational. I think we could have done some awards for like complete, like the farthest from the truth, that were all just wrong.

Had one kid that said, "A debit card," I forget the description, but "A credit card is like you can just pay that whenever you feel like it, you don't even have to pay it back." It's like a video. They were so funny, but we had such like massive inbound. So then the next one was, "What is investing." And we're going to now do these the full calendar year, and we're going to have these contests every month, or maybe even more frequently than monthly because the kids just love it.

So I mean, what better, more inspiring thing can you think to do than to engage the kids to teach the other kids. I mean it speaks to everything that you guys are saying around like people want to be heard, and they want to help and they want to participate. So yeah, we're slowly finding ways to be a part of that.

Richard: That's fantastic.

Suna: Yeah, and sorry, to add to what Johnson is saying, and in terms of democratizing voices and access, by Johnson being so close to his customer base and listening to what they want, and then being able to immediately translate that into product that can further empower them, which further empowers them to contribute with what they want, and creating products and creating then the demand for the products. And I mean, I think that's so much the name of the game.

Richard: Yeah, absolutely. I know, you guys have been super generous with your time and we're running up against it. But I just want to open it up, we tried to tackle a very broad space in a very short period of time. But I'll go across the board, if anybody wants to chime in on anything that's particularly of interest right now, an area of focus, or what things you'd like to highlight for our audience out there that you think is relevant and helpful to them. We'll get started with you, Logan, if you have anything in mind.

Logan: Sure. I would say that, you know, for us on the family office side, we were really humbled and grateful to work with a number of large families as LPs. But we have many family offices where we started as simply a sounding board for Financial Services and FinTech. And I think, you know, starting with, you know, very slowly in the space, really digging in deep as Suna has on the domain, but reaching out to your network and asking for help and support as you want to write specific investments, whether that's in an accompany or starting to play in the digital asset world, it's really critical to partner and syndicate those types of opportunities.

And then I would say, secondly, allocating and thinking about fund relationships, as well as direct co-investment is a good place to be starting. And then ultimately, you know, being fully able to simply directly invest in and drive your own decision making is, I think, a great trend line from an asset allocation perspective.

But I do think, overall, that hopefully, the takeaway here is that FinTech is an important exposure to have in your overall portfolio. And, you know, it's an exciting space that's really still early days, and that this inflection point where there's much more room to run and super excited to be a part of it and have great partners like Suna and Johnson on the journey.

Richard: This has been incredibly helpful. All the insights you provided, the perspectives that you have, honestly, I think it'll be extremely valuable to our families, partners and all the folks who listen in on our podcast series.

So with that, I just want to thank you again, Suna, Johnson, Logan for joining me today. For the folks listening, if you'd like to get in touch with him, please send an email to us at familyoffice@bostonprivate.com. I'd also recommend You check out our website where you can find numerous resources, sign up for our newsletter, and learn how we can help other family offices.

The website is BostonPrivate.com/familyoffice. And be sure to subscribe to this podcast on Apple, Spotify or wherever you prefer to listen. Thank you all for joining us today and check back for new podcasts from us in the future.

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Richard Perez is Chief Investment Strategist, Senior Managing Director, MFO with KLS, A Division of SVB Private. He is responsible for advising family offices and closely-held business owners on investment strategy and portfolio execution. Mr. Perez brings 20 years of financial services experience and family office expertise.

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