Jeremy Tsui on Raising Debt as a Startup

[00:00:00] Jeremy Tsui: Startups and their lenders kind of remind me of just kind of the average consumer and maybe their mortgage loan officer. You’re applying for a mortgage, you think, “Oh, why do I need to send in pay stubs, and why do they need to know where I bank?”

[00:00:15] But it’s really just to protect both sides, it’s to protect kind of the mortgage company from knowing that you’re gonna be a good, good tenant, good mortgage applicant. And so, similarly, there’s all sorts of rules that startup borrowers have to comply with when it comes to entering these relationships with capital providers.

[00:00:31] Intro: Welcome to The Role Forward, a podcast for the next wave of finance leaders, especially those looking to transform their roles by making smarter, faster, and more profitable business decisions using the power of technology and a forward-looking approach to finance. Listen in to learn how to get out of the back-office trenches and become a more strategic partner within your organization.

[00:00:55] Joe Michalowski: Hello, and welcome to another episode of The Role Forward podcast. My name is Joe Michalowski, and this episode is brought to you by Mosaic, a strategic finance platform that transforms way business gets done. Today my guest is Jeremy Tsui, Co-Founder and CEO at Finley. Jeremy, thank you so much for joining me today.

[00:01:09] Jeremy Tsui: Thanks for having me, Joe. Stoked to be here.

[00:01:11] Joe Michalowski: Yeah, really, really, really excited when you guys reached out to, to collaborate on this, your background’s awesome, and speaking of background, would love to hear more about it before we get going, so you mind if giving everyone quick intro of who you are and how you ended up starting Finley?

Jeremy Tsui Introduction

[00:01:25] Jeremy Tsui: Let’s do it. Hi, everyone, I’m Jeremy Tsui, CEO of Finley. We provide software to help companies manage debt capital. In a former life I was a debt banker at Goldman Sachs and saw how corporate borrowers constantly kind of made the same mistakes in managing their capital strategy and debt, and knew there was a ton of room for innovation in the space.

[00:01:47] Joe Michalowski: Love to hear it. Yeah, really, really excited to dig in, and because of that kind of background about Finley, I wanted to write the, or do this whole episode about debt versus equity financing, thought it’s a topic I’ve wanted to cover for a while, never had the right person to talk about it, but you seem like the perfect person to talk about it.

[00:02:03] And so, to sort of set the stage, I saw an interview that you all did, with Billy Libby from Upper90, and there was, like, a quote that stood out to me in the headline, it was, he said, “It’s not how much you raise, it’s how much you own.” 

[00:02:15] And that felt really indicative of this, like, debt versus equity conversation. So, can you just set the stage by giving your take on what Billy was talking about there and why it’s so important for startup founders?

[00:02:28] Jeremy Tsui: Absolutely. Billy has been an incredible partner for us at Finley, and I think he, he nailed it when he kind of said, “It’s not how much you raise, it’s how much you own.” My take on it, for strategic finance leaders and founders managing capital and capital strategy, it’s probably one of the, the less sexy things you deal with, but oftentimes it can mean the difference between your business thriving and being healthy financially and,or kind of stagnating.

[00:02:57] At Finley, you know, we’ve talked to hundreds of startups and companies in this space who are kind of at that crossroads for debt and equity and what type of debt. And what we’ve found is that a lot don’t have a clear strategy for kind of the capital market side of the house, and oftentimes, capital strategy can even be as important as go-to-market or product strategy, depending on the type of company you’re running.

[00:03:24] Joe Michalowski: Yeah, I think, uh, one thing that stood out to me is, I wanted to ask, is this an area that you think founders don’t put enough thought into until it’s too late, or is it something that is just so complicated that, you know, they know it’s important but maybe aren’t sure how to approach ’em? Curious, like, what that foundation is for most startup founders?

[00:03:44] Jeremy Tsui: Yeah, I think it’s probably a few things, it’s really complicated. So, there’s kind of complexity that’s native to the sleepy world of debt. And then, personally, I think, you know, information and technology around debt is probably where it was for equity 10, 20 years ago. In equity, you got Carta, an angelist, and Crunchbase, and then when you look at debt there’s really not much out there.

[00:04:10] You kind of have to call up your banker from a Goldman or JP Morgan if you’re really big and a client of one of those banks, but otherwise, in addition to the space just being really complex for a strategic finance or leader or founder who’s got a lot on their plate, there’s just not a lot of resourcing on the topic, unfortunately.

[00:04:31] Joe Michalowski: Well, we’re gonna change that today ’cause I, I felt the same way, I, when I do content for Mosaic, I’m like, okay, like, I know that this is an important topic, but when I try to research it myself I have the same issue, like, I can’t find that much, especially dedicated to the startup world,

[00:04:46] you mentioned if you’re really big, like, you’re already a customer of, like, Goldman or JP, and like, it, it’s different in a corporate environment versus, you know, I’m a Series A initial finance hire, or I’m, like, a founder who hasn’t even hired someone in finance yet and I have to figure all this out.

[00:05:01] And so, you mentioned equity, it’s, it’s the big one, every, it gets all the hype, it’s the startup ecosystem darling, if you raise around, you can post it on LinkedIn, you can post it on every social platform imaginable and it’ll get all the attention and debt just isn’t the same way, 

[00:05:15] there aren’t endless amounts of articles about connecting with, you know, debt providers and things like that. So, I’m curious, you know, you mentioned it’s really complex, what are some of the challenges of debt financing that prevent it from getting the kind of attention that equity financing gets?

Challenges of Debt Financing

[00:05:33] Jeremy Tsui: Yeah, part of it might be, maybe the debt firms aren’t as good as branding and promoting themselves as the VC firms, so just knowing who, who could even provide you debt is a challenge. And then, I think part of it is, debt is often harder to raise than inequity, we don’t typically see companies maybe at the seed stage or for the re, first round of financing really qualify for debt,

[00:05:58] and that’s because, you know, oftentimes you need to show business performance history in order to secure that first deadline, or, or a credit facility. So, that might mean, as a founder or a finance leader, you are raising equity for that first round, that seed-stage round, and then maybe a Series A, and then not until your second or third round when you have some business performance history, do you qualify for debt?

[00:06:26] Joe Michalowski: Gotcha. So, you know, a question I wanted to ask was, like, how the challenge kind of evolves as the startup matures? So, it sounds like, you know, earliest possible stage seed Series A, like, you just don’t have that historical data. 

[00:06:38] As you mature and you do have that historical data what kind of challenges do you face still when trying to raise debt? Other than what you mentioned, which is just knowing who to go to, which is, you know, step number one, which we’ll talk about in a little bit, but curious.

[00:06:52] Jeremy Tsui: Yeah, I think for companies that qualify for debt, maybe they have a year, a few years of track record. I think knowing why you’re raising debt or what you’re trying to achieve with your capital strategy can be just as challenging. Few examples for questions we get from, you know, tons of founders and leaders that we work with,

[00:07:13] it’s kind of, hey, how much capital do I need to hit that, that Series B, that Series C milestone? How important is, or how should I weigh the kind of the ownership question versus the runway question? You know, do I think debt terms will be more advantageous three, six, nine months, or three years, four years out? 

[00:07:35] So, I wish we had a crystal ball and all the answers, but these are some of the questions that are top of mind and really inform, you know, why companies might go with equity or debt or different types of debt.

[00:07:48] Joe Michalowski: Makes sense. I think that’s really what I’d like to dig into for a bit here is, you know, figuring out when it does make sense. And so, I looked at Finley’s website long enough to realize that I think the vision you all have is that there’s a proper mix of debt and equity, this is not like a, “Hey, like, stop raising equity,

[00:08:08] it’s not important, like, go with the debt.” This is really about finding your mix. And so, the first question I’ll ask about this is, is like, when does it make sense to pursue debt financing rather than equity? What is, like, the milestone a company has achieved or what is, like, the situation they are in that says, okay, like, you know, we’re gonna go with debt at this point rather than another equity raise?

[00:08:30] Jeremy Tsui: Yeah, that’s a great question. For milestones, I think it really comes down to the type of business you’re running. So, one example is we work with a lot of FinTech companies as, yeah, kinda like a primary kind of use case or customer, so we’ll work with Ramp or Parafin or TripActions.

[00:08:54] And there’s a similarity to these FinTechs where they actually need debt to power their operations. So, in that instance, the milestone, and kind of what you need to prove is really closely tied to the type of business you’re operating beyond kind of the milestones and the type of business or industry that you play in.

[00:09:15] I actually think that having the right capital provider can be just as important as knowing when to raise debt or what type of debt to raise. Oftentimes we try to be prescriptive that your capital provider, whether it’s, you know, a Silicon Valley Bank or, you know, a city, they might be your business partner for the next 2, 5, 10 years. So, just as important as knowing where to get milestone-wise is who might be the best partner help you get to that destination.

[00:09:45] Joe Michalowski: That makes sense. So, if you’re a founder, as you are actually, so how do you think about finding your right mix, or actually, you know, let’s start with where you just ended with, finding the right partner? What are you looking for in partners, like, let’s say I’m gonna go the debt financing route, and if that’s so important, what am I looking for when I’m gonna go find a debt lender?

Finding the Right Debt Lender

[00:10:04] Jeremy Tsui: I’m looking for great terms. No, but in addition to, to kind of what’s, you know, what’s in the contractual relationship with the debt lender. I look for one thing, I look for a capital provider who understands my business, you know, as a startup founder, you’re oftentimes venturing off into a land of uncertainty,

[00:10:28] you’re building software in a new category, you’re assembling a team, you’re building in kind of an uncertain macro environment. But one thing I think your capital provider does owe you is understanding your business and showing you, “Hey, I have helped other Series A, Series B companies get to Series C and D and beyond,

[00:10:47] I understand FinTech or software or whatever, you know, category of business you’re creating, and here’s my track record.” And so I, I would look for capital writers who show that they understand your business and have a track record of extending capital to similar businesses.

[00:11:07] Joe Michalowski: Yeah, that makes a lot of sense. Don’t wanna go with somebody that is fully on board with maybe, like, an e-commerce business and come in as, like, a FinTech with a lot of lending needs and say, “Hey, I know you have no idea what we do, but please, we need some money here.” And I think that makes a lot of sense.

[00:11:22] I wanna dig deeper into the right mix. So, if I’m looking at a balance sheet, how do I know if maybe my ratio, I don’t know, even know if there is a right ratio of, like, debt to equity for a startup founder, but it, if there is, like, how do I look at my balance sheet and say, “Hey, like, you know, maybe I should go out and raise debt instead of equity here.”

[00:11:43] Like, what’s the thought process there? And yeah, how do I make the right mix on my balance sheet so that I’m, you know, building my business efficiently, and, as you said, owning as much as I can at the end of the day?

Finding the Right Mix of Debt and Equity

[00:11:56] Jeremy Tsui: That’s a great question. This might be easier to just talk through examples of successful companies. Two examples that, that we run across a lot, or maybe common types of companies that, that YC and other VC investors like to invest in. I think historically, software companies have not had a ton of debt on them on their balance sheet, and so that might be because equity was really easy to raise, debt

[00:12:25] investors were scared by software companies. But we’re starting to see that change a little bit more now, I would say software companies, if they were light on debt, now they’re maybe a little heavier on debt. And so, founders, CFOs are starting to think about, “Hey, should I take out more venture debt to get ahead of the game, even if historically software companies didn’t take out a lot of debt?”

[00:12:47] So, that’s one example, and I would say another, or maybe, might be FinTech where historically you had to raise a good amount of debt to scale your credit card company, your buy now, pay later company, and you still have to raise debt to, to scale those types of companies, but now we’re seeing the best leaders think years ahead of, years ahead of when that capital raise might be to set themselves up for success.

[00:13:15] So, it’s, “Hey, who’s my debt capital partner at the Series A? Do they have a track record of helping companies graduate from a, maybe a smaller credit fund to a bigger, JP Morgan, or Credit Suisse at the Series C? And how do I set myself up with the right people, tooling, performance to get there?”

[00:13:36] So, just a snapshot of FinTech and software and, you know, really how, how different profiles of companies might have completely different balance sheets and both can be successful.

[00:13:48] Joe Michalowski: It makes sense. I think, so, you know, we had a question outline that I sent over ahead of this. So, I’m actually gonna skip around a little bit ’cause there’s something I wanna follow up on, it’s, so part of this conversation about finding the right mix is, it’s a lot of process. So, you mentioned, you know, having that finance leader or the founder in seat who can look at that balance sheet and really look years ahead and figure out where they want to be.

[00:14:12] You mentioned earlier Ramp, and I saw Alex Song was on the website, we had Alex Song on the podcast, really smart guy, and has the same kind of investing background that you have, and so he isn’t just head of finance, he’s head of capital markets, and so he, someone like him has, like, an advantage in this standpoint where, you know, he is from that world and maybe knows a little bit more about how to navigate it.

[00:14:36] But if we’re talking about process for someone in Alex’s position, or another finance leader or founder looking at debt, you mentioned that this is a really complex process. So, how do you actually start it? So, like, we’re, we’ve decided, like, hey, we, maybe we should raise debt, we’re looking years down the road and this is the right approach from us. But like, what’s my step one for going out and figuring out how much I can raise, what the term should be, and things like that?

[00:15:07] Jeremy Tsui: That’s a great question. I think we mainly see two approaches for companies, and both can work. One is building up in-house expertise, so that’s, maybe that’s the founder, several years at a time, is thinking, learning, building the relationships with debt capital providers, or maybe hiring someone who comes from the other side of, maybe from a bank or credit fund with the expertise.

[00:15:33] And then, we’ve also seen companies go with consultants, maybe it’s a, a founding team that it’s kind of spikier in, in product strategy or it’s a very sales heavy team that’s very strong in go-to-market. There are consultants as well who can kinda help navigate what is a pretty spiky process in itself,

[00:15:54] you’re kind of talking to, you can be talking to 10 banks at once, and then, you know, three months later have your debt raised, and, and really your day-to-day could look a lot different as a finance leader. So, I’d say in-house expertise, and then going with consultants works as well when you’re starting to evaluate debt options.

[00:16:13] Joe Michalowski: You mentioned that it’s a spiky process, all the different, you know, bankers that you might be talking to. Can you give me, like, an example or two of kind of what I’m facing, as I’m going through this process, if I’m talking to all these different banks, like, what am I looking out for?

[00:16:26] Like, how am I evaluating all these different people? And something I wanna ask after is, you know, the different types of lenders and things like that ’cause I know we talked about that a little bit, so we’ll get there, but yeah, curious a little bit about that spiky process, I want to feel like I’m in, in the shoes of someone ’cause I, I never will be, it’s not a world that I’m ever gonna be part of, but yeah, I would love to learn more about it.

[00:16:47] Jeremy Tsui: Yeah, I love it. I can nerd out about this stuff all day, so.

[00:16:50] Joe Michalowski: Please. 

[00:16:50] Jeremy Tsui: Let’s, yeah, let’s, uh, let’s do it. Yeah, I think in the debt race process, generally like to think of it in three phases. One might be the, the relationship-building or introduction phase, so you’re just meeting lenders, you’re learning if they’ve worked with similar profile companies,

[00:17:09] it’s kind of the dating phase. I would say the second phase would be the term sheet phase. So, this is when you might start receiving a few different term sheets, maybe more than one if you’re lucky, and starting to evaluate kind of different commercial terms, what might make sense for your business,

[00:17:28] how they’ll let you use the debt that you take out. And then, once you’ve executed a term sheet,going from deciding if you’re gonna evaluate to deciding if you wanna purchase the relationship with a lender. Yeah, it’s really kind of the, the legal process where it might be one, three months for more complex debt agreements where you’re working with lawyers, and really working to formalize one relationship with a lender who could be a business partner for the next, you know, five or ten years.

[00:17:59] Joe Michalowski: Man, I don’t envy anyone in these positions, mostly because, like, it just, it’s, I know it’s a lot of work, I’ve seen, you know, as an employee here at Mosaic, I know the effort that our founders go through for, you know, equity raises when we raised our Series A, Series B. And so, to add on top of that, you know, what you call spiky process for raising debt at the same time or evaluating the two, yeah, I’ll never, uh, never envy the finance leader position, I’ll stay over here in my content land, and you guys can handle that, it’s, uh

[00:18:29] Jeremy Tsui: Me as well.

[00:18:30] Joe Michalowski: Yeah, you got out of it, you were like, okay, like, I’ve seen enough of this and I’m, you can go start a company that, I think that should say a lot about how complex it is, it’s, like, I’d rather run an entire company that deal with the traditional process that I’ve been in this whole time, it’s crazy. I think, one thing I want to get to is an article that you all shared with me ahead of this, it was from Andreessen and it’s all about debt versus equity, I’ll share it in the show notes ’cause it’ll probably give a better background than definitely I’m gonna be able to sum up here.

[00:18:59] But there’s a, a good overview of different types of debt and different types of lenders that you can look at, and I want to get your take on this because I know it’s something that’s important to Finley and that you guys talk about a lot.

[00:19:12] And so, I’m curious what your take is on how fi, founders and finance leaders should look at the different types of debt and the different types of lenders and what that relationship looks like.

[00:19:23] Jeremy Tsui: Yeah, yeah, like I mentioned, I think in the early stages, if I could only choose one, I think the most important thing would be finding the right partner. So, it would be, hey, like, borrow nothing, give me a, give, give me a partner, give me a debt capital partner who has worked with similar stage companies,

[00:19:45] could be software companies, FinTech companies, just whatever industry I’m in as a, you know, as a corporate borrower. So, that would be incredibly important to me. And then, when I think about the nuts and bolts of debt, probably the, the one thing I would think through is, or the top thing is what is the debt being used for?

[00:20:07] So, all of the time there, there’s gen, there’s generally a lot of legal lease with these debt agreements, there are hundreds of pages and a bunch of rules that lawyers and accountants have to track in spreadsheets. But one item that comes up with lots of founders and customers of ours is, “Hey, what can I actually use this debt for?

[00:20:28] Can I use it to make payroll? Do I have to use it to, you know, launch a, a new product, or maybe I can’t even use it until I use up all my equity first.” And it’s really just like a, a last line of defense for the company. So, that, that would be my intuition, it would be, hey, find the right partner who will kinda work with you, 

[00:20:55] grow with you in different stages of your business, be a great partner regardless of macro environment. And then, second to that, it’s just really getting back to the basics of, like, hey, if you extend this debt to us, what can I actually use this for? And will this help me kind of get to my business calls.

[00:21:14] Joe Michalowski: I think, uh, something that you all mentioned to me after I sent the questions along, and this is something I hope you can teach me about ’cause I’m not even sure how to ask this question, but I guess what I’m hearing is that, you know, there are different regulations or rules about when you can spend certain types of debt.

[00:21:30] And so, the follow-up I got from you all was that, you know, thinking about venture debt versus asset-backed, backed debt, and possibly other types, but I’m not sure. So, I’m curious, can you dive into maybe the differences between those two and if there are any others that you should be looking at or maybe founders should be aware of as they’re looking at all these different term sheets and talking to all these different banks?

Different Types of Debt

[00:21:52] Jeremy Tsui: Of course. Yeah, I like to think of it as two main types of debt, for startup founders at least. Outside of Silicon Valley, there might be, like, 50 types of debt, which I’ll have to…

[00:22:03] Joe Michalowski: We won’t, we won’t get too far into that, we’ll, we’ll stick, we’ll stick to our little world of the startup ecosystem of the Silicon Valley type thing ’cause, man, we could be here for days, I guess, or teach a whole course on the rest of it.

[00:22:14] Jeremy Tsui: Yeah, I would say it’s mainly two types of debt that we see startup founders evaluate, I would say it’s venture debt, and so this is typically debt that is raised in conjunction or around the time of an equity round, it’s debt where there’s kind of fewer, fewer restrictions can be used for extending runway, can be perhaps

[00:22:43] just kind of kept as a rainy day policy and hopefully never used. So, that’s one, that’s venture debt, I would say that’s the more universal type of debt, and we’re seeing more and more companies raise it. And then, the other would be asset-backed debt. So, at Finley we are. Most of our companies actually have asset-backed debt.

[00:23:05] And this is debt that’s raised for a very specific purpose in the instance of, of a lot of our customers who are FinTechs, they’re raising debt from, uh,you know, in Atalaya or a Jefferies or, and while these deadlines are much, much bigger than venture deadlines, there’s one of the key kind of elements of the contract are, hey, you can only use this deadline for certain purposes. So, launching this product, acquiring that company, and if you don’t, it could go against the rules of your credit agreement and there could be kind of big implications.

[00:23:43] Joe Michalowski: Wow. Why is it, I mean, maybe a dumb question, but why are there such strict rules on that side of debt versus venture debt that seems like it’s a little bit more, let’s say manageable, to make it a little bit nicer, but yeah, it just seems really complex on the asset-backed debt, I’m so curious why that is?

[00:24:01] Jeremy Tsui: Yeah. So, I’ll caveat that I’m not a debt attorney, unfortunately, but yeah, the way I like to think about it is, yeah, as the, the deadlines or the loans get bigger and bigger, oftentimes in the tens or hundreds of millions of dollars, there generally has to be more kind of legal and other requirements to make sure that both sides are protected. 

[00:24:38] So, we’ll see these asset-backed lines get to $200, $300, $500 million at times, whereas the venture deadlines are, are generally a little smaller in scale. So, I think be, for that reason alone, just bigger dollars means more restrictions and guardrails, and don’t get me wrong, venture debt can be complicated as well, but yeah, that’s generally one trend that has stayed the same regardless ofthe environment or the lender and borrower.

[00:24:56] Joe Michalowski: Yeah, I think, uh, you know, we talked about Ramp, or we mentioned Ramp a little bit, so I’m thinking, someone like Ramp who, who is, like, corporate credit cards, and there’s a lot of lending that they do, they need that asset-backed sort of version to have the big credit line to actually support all of the customers that they have.

[00:25:12] Are there other examples of companies that, you know, even though they’re maybe in the startup world would actually need that asset-backed debt, or is it kind of relegated to those FinTechs that are kind of acting as lenders themselves?

[00:25:27] Jeremy Tsui: It’s funny when, when I was at Goldman Sachs, I actually, yeah, had the chance to work with startups, but a lot of my time was actually worked with companies outside of technology and in Silicon Valley as well. So, from gym franchises to, to waste companies to retail stores, we’re seeing asset-backed debt become kind of used more and more widely in, in all sorts of industries you wouldn’t expect.

[00:25:59] So, I think, and I like to think what happens in, in tech and how you’re seeing FinTechs and other companies use debt will start to see influence a lot of how kind of debt is, how debt is used more broadly, it’s really exciting.

[00:26:13] Joe Michalowski: Yeah, I think it’s a common thing for people in Silicon Valley startups, tech startups to think that is like the whole world, but it’s such, like, a small sliver of the overall, like, ecosystem of different businesses you can run. So, really cool to hear, like, you know, wasn’t expecting gym franchise or waste company to come up in this conversation, but makes a lot of sense and probably important for,

[00:26:37] you know, people to realize that there’s so much more that goes into these thought processes depending on what your business is, and that’s why, you know, you’ve kind of said it a few times that finding that company or that lender that aligns with your type of business is kind of step one and it’s almost the most important thing that you can do. So, yeah, it just makes a ton of sense to me.

[00:26:57] Jeremy Tsui: I think that’s right, and even just reflecting on, you know, why debt might be more complex than equity, I think, you know, I’m biased, but it’s just much bigger than equity, I think in, you know, we see all types of companies used, uh, can be 

[00:27:14] used for all these different reasons, oftentimes the rounds are much bigger, so, you know, all these are reasons that lead to why there’s just more complexity and a wider range of capital providers you might date to find the right fit.

[00:27:29] Joe Michalowski: Yeah, I think where I wanna take this and kind of how I wanna start wrapping up, ’cause I wanna be mindful of your time is, you know, you’re building Finley to solve a lot of the pain points, the challenges that, that we’ve talked about today. And so, yeah, let’s talk tech for a little bit.

[00:27:43] So, curious, in your background, you were at Goldman, you were at other investment firms, what are pain points that you’ve experienced personally that told you, hey, like, we can’t keep doing this maybe manually or spreadsheets, like we, companies need a tool that hasn’t existed before to, to kind of resolve some of these point, pain points. Curious what your, your personal experience was there?

Solving Capital Management with Tech

[00:28:05] Jeremy Tsui: Oh, yeah, I like to think I’ve been on both sides of it now, you know, at Goldman on the, you know, kinda on the dark side of things, chasing corporate borrowers for their month-end reporting, and then, now, coming out of YC and kind of running a venture-backed company, working with so many different founders on educating, you know, what would contribute towards a healthy relationship with their, with their capital provider or lender.

[00:28:33] One analogy I like to use, why the problem might be so overwhelming and important to begin with is, you know, startups and their lenders kind of remind me of just kind of the average consumer and maybe their mortgage loan officer, kind of at times, and you’re applying for a mortgage, you think, oh, why do I need to, you know, send in pay stubs and why do they need to know where I bank?

[00:29:04] But it’s really just to protect both sides, it’s to protect kind of the mortgage company from knowing that you’re gonna be a good, good tenant, good mortgage applicant. And so, similarly, there’s all sorts of rules that startup borrowers have to comply with 

[00:29:19] when it comes to entering these relationships with capital providers, but taking a step back, there’s oftentimes hundreds of millions of dollars at risk. So, the legal requirements are just there to make sure both sides are protected.

[00:29:32] Joe Michalowski: Yeah, makes sense, and I know, I think the Finley website is Finley, you know, CMS, and so I know you’re not the traditional CMS, but that’s what it feels like to me, it’s kinda like your central hub for all things, sort of debt management, credit management, things like that. I’m curious, you mentioned on the website, like, Finley’s assistance in helping or changing away finance team scales.

[00:29:55] I’m curious, like, how does that work? Like, what is Finley doing that kind of either takes the place or supplements a hire that maybe didn’t exist before? What are processes that you would probably have to hire for as a startup that now, you know, a tool like Finley can kind of help out with?

[00:30:12] Jeremy Tsui: Yeah. So, at Finley we see ourselves as a, a standard part of the CFO stack. So, as a CFO, there’s so many things you need to run your business, you know, process payroll, you know, kind of manage your taxes, maybe get audited. We don’t do any of that,

[00:30:32] but the specific high-stakes problem that we’re solving is, we’re empowering the CFO, or capital markets team, or finance org to,to really streamline the way they interact with their lender.

[00:30:46] So, the Goldmans and JP Morgans of the world. One example might be, you know, CFOs of, you know, leading companies and customers of ours are logging in daily or weekly, and then actually able to request funding from their capital providers through the web app and kind of track everything in one place.

[00:31:09] So, in the old world it’s kind of putting accounting data and spreadsheets, requesting wires via email, and in the new world, similar to how, like, a TurboTax or Bill kind of put everything in one place. We believe that the future of capital markets is, is centralized and, and happens kind of in-app.

[00:31:32] Joe Michalowski: Yeah. Love it, I mean, as you know, what Mosaic’s building is the same idea, but for FP&A really is like that financial planning analysis. So, anything that can get those finance leaders out of the weeds and the kind of grunt work of anything, whether it’s emailing about wires or things like that,

[00:31:50] if you could centralize literally any part of a finance person’s day and automate wherever possible, it really just opens them up to be more valuable partners in the business because if you’re wasting all your time kind of in the weeds,

[00:32:02] in the background on things that could be automated, getting those accounting, getting all that accounting data organized, and spreadsheets, probably not, probably just don’t have time to be as valuable as the company needs you to be, so I, I love that.

[00:32:15] Jeremy Tsui: You gotta do a lot to, to run the business. So, you know, we’re trying to make their lives easier in just one, one component.

[00:32:22] Joe Michalowski: Love it. I want to kind of wrap up here with a question that we ask everybody that comes on. So, if you’ve ever listened to the show, you know where it’s going, but it’s my favorite question, so I will ask. What is one thing that you know now that you wish you knew at the start of your career in finance?

[00:32:38] Jeremy Tsui: Oh, that’s a great question. One thing, yeah, I think, for me, maybe this is just specific to me, but I think just not being afraid to ask for favors, ask for help. I think back to early times in my career, whether it’s, or something, like, wanting more responsibility at work or maybe even something sillier like getting picked to, to go to that sporting event that the office had tickets to.

[00:33:03] I think fast forward to now, one of my favorite things about Silicon Valley is just how everyone has just been incredibly generous in wanting you to succeed. I think in building a company you need a lot to go right, you need a little bit of luck. But kind of one constant I found is, you know, asking for help, for introductions or early partners from a product standpoint, or even kind of, you know, finding forward-thinking, talented young folks to irrationally join an early-stage startup.

[00:33:35] I found that so many people want to help, want to be part of the journey, but oftentimes it can be kind of daunting and, and you’ll never know unless you’re willing to ask first.

[00:33:47] Joe Michalowski: I love that, I think, the reason that’s my favorite question is that the lesson, and I say this a lot, but it, it’s never like, ah, I wish I knew more, I don’t know, Excel shortcuts in my younger days, it’s always something that is a bit broader and applies to anyone, like, it’s not just finance. So, I always learn a lot from those questions, and I take away a lot away from it.

[00:34:06] One day I will collect all of these tips into something career oriented for the finance community, but that is yet to come, but anyway. So, Jeremy, just wanna say thank you for taking the time, I know getting into the weeds on debt equity, things like that is not, you know, maybe the most fun part of your day,

[00:34:24] you probably left investment banking for a reason to start the company. But yeah, I learned a lot, I think a lot of other people will, too.Want to turn the floor over to you. Where can people go to connect with you, to learn more about Finley? Anything you want to plug or promote, the floor is yours, take it away.

[00:34:40] Jeremy Tsui: Thanks so much, Joe. No, I had a pleasure today, I could nerd out about debt and equity and capital markets on end, so thank you for cutting me off. No, I, I really don’t have much, I think, you all have done a great job with content, and then for anyone else out there,you know, we’ll, we’re growing, we’re hiring at Finley and excited to kind of revolutionize the

[00:35:02] sleepy world of debt capital markets, and feel free to drop a note at jeremy@finleycms.com if you have any questions or feedback or just wanna get in touch.

[00:35:13] Joe Michalowski: Love it. I’ll plug all the links, the contact info, in the show notes. We’ll be promoting out on social things like that, but really excited to get this out in the world. But Jeremy, just wanna say thanks again for spending time on The Role Forward, hope we can do it again sometime, had a good time, so thanks, man.

[00:35:28] Jeremy Tsui: Thank you, Joe.

[00:35:28] Outro: Thank you for checking out this episode of The Role Forward. This show is powered by Mosaic, a strategic finance platform that transforms the way business gets done. If you enjoyed what you learned in this episode, make sure to follow The Role Forward wherever you listen to your favorite podcasts, or visit mosaic.tech/podcast to get immediate access to all of the latest episodes.