FULL TRANSCRIPT
slava (00:02.651)
Hello and welcome to another episode of Smart Humans. Super excited about today's guest, been friends with Eli for a while here. So it's one of those great entrepreneurs that we get on the show and we get to learn about their perspectives on alts. So Eli, welcome to the show.
eli (00:19.818)
Hey Slava, it's nice to talk with you. See you again. It's been too long. I'm excited to be here. I've been checking out the podcast and really enjoying some of the guests you've had on.
slava (00:33.003)
Oh, thanks so much. So as you know, you probably have heard from the other episodes, we always like to start with, how did you even get into alts? Where did it start?
eli (00:43.086)
So I guess the real answer to that is unbeknownst to me, I started in alts in the early 90s because I was in middle school and I had developed a sports card collection. I didn't think much of that, right? But I was collecting some basketball sets which seemed expensive at the time. You know, I spent some savings on that. And I think like, you know, invested if you will.
a couple thousand dollars. And then there was a run-up at the time, and then I sort of put them in a shoe box and set them aside for a few decades. And then all of a sudden, in the last couple of years, this collectible space has exploded, and sports cards and other memorabilia has become a big part of that. So I went back and checked on some of my Michael Jordan rookie cards and some of those related things, and I was like, wow, okay, some of these things are trading for some real money, some six-figure money.
slava (01:38.191)
Oh, you have the 86, 87 FLIR rookie cards?
eli (01:42.014)
I do, yeah. I use some of my Bar Mitzvah money and some stuff from my grandmother. Yeah, I got that entire 86, 87 set and then another rookie cart. Yeah, so it's not graded, right? And that's like, I think as anybody who's been in that space dabbling or serious in that space knows, the grading thing has become such an obstacle.
slava (01:48.783)
I love it.
slava (01:55.599)
And do you have a grade? Is it graded or?
eli (02:09.778)
So it's this project that I have sort of set aside for one long weekend to put every all them in sleeves and send them off. And then there's that long waiting list. Uh, and. You know, I think that game has changed. That game is so controlled by the grading services and they're like a gating issue. I, and I question whether some of the slow pace is just a, you know, a way of controlling supply, but I got to do that.
I'd like to see where they were grayed out. I think one of those Michael Jordan rookies would actually grayed out reasonably high, probably not a 10, but it might be a nine.
slava (02:43.419)
That's amazing. I don't know if you know this, but that's how I started into alt as well. Literally the same exact story, not Michael Jordan's rookie car, but David Robinson's rookie car. So it's so fun. And one of our other guests is actually the CEO of collectors universe, which is Nat Turner. So yeah, so that's so fun. He's going to love hearing that. So that was, um,
eli (02:56.588)
Oh nice.
eli (03:01.91)
I never grabbed that David Robinson rookie card. I tried to buy a bunch of those packs where you could see through. Now we're really geeking out as guys in their 40s, but I never got one of those.
slava (03:09.584)
Yeah.
slava (03:16.443)
So, okay, so you started with cards and then how did it then move forward? Was it straight then into starting Betterment or anything besides that?
eli (03:23.914)
Yeah, I mean, I'd say the farthest thing from a straight line between early, uh, pre teenage years of collecting cards to, um, you know, being serious about the off space, uh, you know, kind of went on with my education and wound up, uh, you know, I have a background in law and I was practicing as an attorney for a couple of years, but I always wanted to do something entrepreneurial and, uh, I broke out of the big law job.
so I could try my hands before it got too late at a few different business ideas. And wound up starting BetterMip with my partner there, John. And that wasn't, you know, I didn't have a background in financial services. Nobody at that point had any interest in FinTech, but we saw an idea for how to help people manage their wealth and their money better and didn't think that anybody was properly using.
really, I think at that point in time, Web 2.0 to help facilitate that. And again, I think that's almost like the farthest thing from all. It's like what we did, I think, is try to solve traditional investments and traditional asset management.
slava (04:34.759)
Got it, and we'll talk more about Betterment later in the episode. So you've been able to parlay all of your amazing entrepreneurial experience, and now you're an angel investor and beyond, right?
eli (04:46.282)
Yeah, that's right. So, you know, the FinTech space, and we can talk more about this, but you know, it's really, you know, it grew up at the same time that my first company, Betterment, was growing up. And after operating Betterment for 10 years, I was excited to start spreading wings in FinTech because I saw a bigger, broader opportunity. So, you know, that's really where I focus when we think about alts. I think about FinTech.
That's my area of focus. That's my area of expertise. I began angel investing, but two years ago, along with my partner, Jeff Cruttenden, who was the founder at Acorns, we launched our own fintech venture fund called Treasury. We are two, I think, reformed founders. We still love building. We think that when it comes to backing founders, particularly at the early stage,
They want builders on their side. And we didn't see enough of that in FinTech. We did see that the space was getting bigger and bigger, is getting more and more competitive, but there's a ton of opportunity ahead. So Treasury is now investing out of our second fund, and we've been fortunate to back, you know, a range of incredible founding teams, sometimes in the US, but often abroad and overseas.
slava (06:08.967)
Great, so you're into sports cards, at least from your youth, you're getting back into it, you're into startups and investing there. What about some of the other categories? How do you feel, and it's okay if you're not into them, how do you feel about NFTs?
eli (06:24.51)
Yeah, so I think I'm cautious on NFTs. I am, and I think I'm part of the crowd here, but I think Web 3.0 and the capabilities to build on top of that, incredibly exciting. I think NFTs are a very viable format for art creatives as a matter of speculating on NFTs.
Well, you know, when it comes to assets that where the, the prices disconnect from the intrinsic value, not my area of expertise. And when I dip into those places, I wanna do it in really well established markets. So traditional art would be a place where, you know, I would be more comfortable because there's an established market.
And when something that's moving really fast and frankly just extremely nascent, I think it's important for people to realize that there's a select few folks who are completely in the flow of those markets in some ways kind of controlling those markets. And I would be especially cautious about over indexing on one of those assets.
slava (07:48.459)
And you mentioned traditional art. Do you invest into that as part of your allocation?
eli (07:52.99)
Only, you know, only lightly. I'm not an expert. I think you've had, you know, other guests who are far more expert than I am. I have been involved in, you know, I'd say in, you know, art and some others, some of the online platforms that are helping to democratize some of these asset classes, I think is super exciting. So, you know, I've been an advisor to Masterworks since the start of that company. And I love what that team is building. And I think Scott's done an amazing job.
of establishing that asset class to a whole new breed of investors. I've been an investor in Rally to bring back to collectibles for a second since their early days and I think, you know, amazing team there who were early in understanding. But again, you know, that was a category that people were excited about and they wanted to demystify it and they wanted to, you know, help others access it in a more user-friendly way.
slava (08:51.711)
For a guy who doesn't call himself an alt guy, you're connected to all these alt opportunities and all these alt platforms. I love it. And then how about like real estate? Besides like a primary home or something like that, do you know, are you a real estate investor?
eli (09:06.27)
not a real estate investor outside of personal use.
slava (09:10.063)
Yep. Okay, great. What do you think changing the page here? You know, what do you think of today's market? And it's a very open-ended question, obviously in regards to the more recent, you know, stock market performance, you're seeing a lot of red and without leading the witness, just what do you think about, you know, where we sit in the economy, in the market and just your high level thoughts.
eli (09:37.806)
Sure. Okay. First, I'm going to say something I probably shouldn't say, which, you know, because of my kind of investment religion, but, you know, I generally don't believe in trying to read the markets over the short term. I think that is very difficult. There's a very small number of people in the world who have a kind of enough data points and proven track record that they're successful in doing that. There's a lot of other people
who have maybe had some success, but it's off.
That said, I think, you know, geopolitically, we've entered an era, a long-term era where we're living just in a more turbulent world, where there's these, you know, going to be these massive global disruptive events that play out over several years at a time and will come at us and, you know, kind of waves faster than they've come at us over the last few decades, really over
most of my lifetime. So whether that's, you know, obviously war, or that's, you know, related to COVID or environmental issues, I think we're going to see more of that. So I think we should get ready basically for bigger waves in the markets. And, you know, when I think about the public markets, I think that brings it back to the thing that I've been trying to help people
eli (11:11.298)
Public markets, most investors, certainly retail investors, should be thinking long-term. They should be thinking about diversifying. They should be thinking about what's the right asset allocation globally and domestically, but also between income yielding and equity securities, and then ride that out. I'm always concerned when I hear about unsophisticated investors.
who are trying to make macro bets or even make micro bets. So that's a bit of what I think about the public markets. Now, as it relates to, you know, where we spend our time in the startup ecosystem, whether that's building and operating, or whether that's backing other builders. Well, we've seen a lot of margin compression in the public markets. And I think the smart people out there,
We're saying pretty quickly, like this is going to start to trickle down into the private markets and I'm hearing that, I'm seeing that. I think that we're getting word, but people keep it quiet that a lot of later stage deals are getting done, either at down rounds or with a lot of structure, or maybe it's insider rounds that are helping to bridge companies who aren't able to successfully raise some of those.
pre-IPL or late growth stage rounds. I, yeah.
slava (12:42.235)
Sorry, sorry, real quick. So as definition, so down round being a price that they last were priced at like X, like 100, but they weren't able to get a higher price. They were able to just maybe get the same price or a down round, even lower, like 90.
eli (12:55.906)
Exactly. Right. Yeah. So for listeners out there who don't do much or have much exposure to venture investing, when you raise money as a startup company or as a private company, you're usually looking to step up your valuation. You're making progress, you're growing the company, you're having more success. And the financial...
kind of marker of that is that you raise new capital if you need to, and it's at a premium to the prior round. Sometimes it's a down round. And that's really difficult for a company. There is a lot of momentum lost when you raise money at a down round. Your existing investors, they're in the red. They're unhappy. You want your investors to make money. But-
I think more importantly on the team side, right? Most great startup companies have strong culture, strong mission or strongly mission oriented. And when the team feels momentum shifting, that's a really difficult thing to manage. Great thing, great managers, great leaders out there do manage through that. And some of them are going to have to because these things are out of their control.
You know, this is a market condition thing. If you're a high quality company, not necessarily something about the company's performance or the quality of the team or the quality of the product. In the earlier stages, yeah, go ahead.
slava (14:26.275)
Yeah, I read, sorry, no, I read that even for example, like Netflix in the public markets where their stock going down so much that many of their employees are frustrated. So they're trying to figure out, you know, how to get more equity or how to get more compensation because they always counted on that equity value to be part of their compactage too. So this can happen in the public markets or the private markets, like what you're saying in terms of how price of, of the company can really impact company culture.
eli (14:55.002)
Yeah, and especially challenging for some later stage private companies that are growing, having lots of success, not profitable yet. I think for a long time, we've seen those companies get squeezed on talent because they're competing with maybe earlier stage startups who could offer lots of equity and just an opportunity to come in and really help.
create at a younger point in the company's trajectory, which is exciting for obvious reasons. And then, big tech giants who print cash and can just shower great talent with outsized cash comp. So that's been a challenging spot for growth companies for a long time, for over half a decade, I'd say. And now it's even more challenging. And then...
Just to kind of come back to what we're seeing in the markets, I remain and we remain at Treasury extremely optimistic about the opportunities for early stage venture investing in categories where there's huge growth opportunities. I think when you look at that, you know, when you look at that type of a category for alternatives, right?
eli (16:20.638)
you're looking to find teams running after really, really big problems, challenging problems, and back the highest quality teams. If they hit it right, if they do well, they're going to build multi-billion dollar businesses, even in challenging market conditions. So, it may take an extra turn or two on the calendar to get there. But...
but I still think you're backing the fundamentals at that point. The fundamentals of early stage are very different than the fundamentals of a mature business. That's not looking at price to earnings, that's looking at what's the problem and the market opportunity that a team is trying to tackle. What is the makeup of that team and their ability to build into that problem, to create great technology?
differentiation and attract great talent. And when you think about building a venture portfolio, you're backing 20 to 30 of those types of companies out of any given fund. Even in these market conditions, if you have the ability to find an outsized number of those amazing teams going after great problem areas that are gonna solve...
issues for big numbers of users or customers. I think that's still a very exciting, compelling market opportunity.
slava (17:53.671)
So piggybacking right off of that, given that you are investing and the market is challenged right now, has it impacted any of the way that you do invest or is it exactly the same? More specifically, are you investing into less companies? Are you investing purposefully in lower prices? Or is it, you know, you have to just find the team and dream and it doesn't matter if it's last year, this year, next year, it's all the same.
eli (18:24.086)
Yeah, so, you know, we're always very stepwise, right? Long-term minded. So even in, you know, the frothiest kind of moment, which, you know, maybe that was 12 months ago, nine months ago, the, what, you know, what we're looking for are, you know, first of all, we focus entirely on FinTech, right? So I'm looking for people solving big problems. There's no shortage of that in financial services.
There are an endless slew of age old billion dollar problems out there. We all have ways in which financial services just doesn't serve us well. I mean, I think about the way that I can hire a car and it'll be outside my door in three minutes. I can have anything delivered to my door. I think about how I can control my home with voice commands. I can fire up any sort of content I want.
and watch it whenever and wherever. And then we all think about our financial services and I think, you know, things are changing a lot, but on the whole, we're still let down. We're let down as consumers, people who work in financial services are let down, people who are trying to build financial services don't have still to this day enough infrastructure around them. But that is, you know, what's particularly, I think changed in FinTech. You know, FinTech has become the most valuable sector
in technology over the last five years. One out of every five venture dollars goes into a fintech company, and one out of every five unicorns is a fintech company. Again, for folks who aren't in the venture space or aren't in the startup space, a unicorn is a company that's achieved a billion dollar plus valuation. It's really, I think, the most important space. There's a few others that I put on the short list.
to be paying attention to. And we continue to, you know, kind of maintain our focus. Yeah. Well, yeah, I mean, listen, I think FinTech isn't, you know, kind of like rarefied company. I look, you know, health tech and biotech, you know, I think those two areas, right, financial services and our healthcare system, they, you know, they touch and impact such a big part of our lives. They're such a big part of our economy.
slava (20:29.05)
Sorry, I don't want to let that slip by. There's a few other categories. Is that what you said?
eli (20:52.554)
So to me, you know, they're two of the leading, most important categories to be thinking about when it comes to startups and venture. So I was just going to finish my thought on, you know, where we're at. We're looking for top decile founders, you know, founders who have a big idea they're going after, often in those dusty, dormant areas.
of financial services, often building the rails or the plumbing that enables other financial services. I think that's a way you can build long-term competitive advantages, moats around your business, and often index the space. So everybody listening here is familiar with some of the consumer facing at a minimum innovations and financial services over the last years. You can access lots of alternative investments. You can get...
You can get access to credit in ways that you didn't used to be able to get access to you home buying is different There's you know, there's tons of ways obviously wealth management is different Those innovations often sit on top of rails Well ways that founders can build so much faster. It took us Five years really to get better meant from an idea to anything that was like starting to generate some momentum and scale And in a customer base I see founders today
who can go from idea to having something in market that's a meaningful product within three, four months, which is incredible. So it comes back to really the founders. That's what we were looking for in the frothiest days. That's what we're still looking for. I think early stage is still pretty hot because the value proposition is there for investors, but I want founders who aren't afraid to tackle those hard problems, who understand the-
regulatory challenges around their business, right? FinTech is a specialized space and there's almost always a regulatory matter to solve for and I want founders who understand that themselves, they're not outsourcing it to their lawyer and they're gonna own their regulatory destiny in some way, shape or form. And they can tell the story of what they're trying to go after. You have to be able to tell the story and articulate your vision and your dream so that you can bring in incredible talent and partners around the table.
eli (23:13.702)
And then who are focused, you know, understand there might be a world of different ideas that they can build after, but they have a very clear sense of what their core product is and they're going to focus on that and start to land and win that market before they go do everything under the sun. And finally, who just execute and move, right? So when I look at a company that I want to back and a founding team I want to back, you know, usually there's a first meeting, you know.
maybe another meeting in shorter order thereafter. The ones who are the best, the most exciting, I see them two weeks later, four weeks later, and there's a whole new set of updates, right? This is what we built in the last couple of weeks, right? This is the progress with the team. We brought in these incredible engineers and these incredible product people who are gonna be amazing team members. We started conversations with some great outside partners. I wanna see fast progress.
slava (24:12.559)
Nice, and then the prices, have they changed for you or are they the same?
eli (24:20.97)
I'd say not much change yet in the early stages. I've talked to founders raising B and C rounds, which is not where we focus at Treasury. We focus initially at seed and A round. We'll sometimes do later rounds, but you know, I do see in Bs and Cs, I'm seeing kind of a little denial, a little head in the sand, hearing from founders that.
They're looking to go out and raise at 50X revenues. I don't know if there's a ton of appetite out there for every company under the sun. I think there's going to continue to be quality companies to back, quality investors to back them, and the deals are still going to get done. Deals are still going to get done at healthy valuations for the very, very best companies.
the I'm sensing a pullback on, you know, every B round under the sun being done at, you know, incredible valuations. That correction is coming. At the earlier stages, I still see, you know, I still see pricing generally where it's been. And I think that's because the value is still there, right? I mean, if I'm thinking about building a portfolio, and, you know, I have confidence.
that a handful of these companies are going to be unicorns, it makes sense to still kind of pay 2022 valuation numbers. I mean, let's just do the math a little bit, right? So if you're an early stage fund, $100 million, $200 million fund, which I think is about the sweet spot for an early stage fund size, if you're really optimizing for returns, you're not optimizing for AUM fees. Well.
You're gonna back 20 companies, maybe 20. Yeah, assets under management. And so the way that private equity funds are generally structured is they charge a 2% fee on all assets under management, and then they get a piece of the upside. I'm geared around how do we invest and back the best builders, help them be super successful, and the LPs, the limited partners who we manage money for, we wanna create great returns for them.
slava (26:16.299)
AUM being assets under management.
eli (26:45.875)
And share in the upside. That's what we're focused on. So what do we do? We go out, we take our fund, and we're going to back, let's call it 25 companies. That's kind of like right in the middle of the number of companies that we'll probably back out of our second fund, which we just started investing out of. Well, we're going to own something like 10% of those companies initially. There might be some dilution over time. It might be a little less than that.
If you're in a space where every company that you're investing in has the opportunity to be a unicorn company, a multi-billion dollar company, because the market's that big, and you're being super selective about the founders. Often it makes sense to back founders who are on their second or third company. They've had success. They have team members who want to follow them. They'll follow them into war, if you will.
And those are the ones who tend to call us because they want the builders on their side and before they're starting the next company, they say, hey, we want you to be involved in this. Well, listen, I think you have an outsized number of those companies that are gonna go on to build multi-billion dollar companies. So you take that initial $100 million, you invest it across 20 or so companies, you wind up owning five, 10, maybe 15% of the companies, you work that backwards, and you've turned $100 million.
into 500 billion, a billion and a half dollars. And that's my job when I think about it from the perspective of the LPs I'm managing money for. When I think about it from the perspective of the builders who I'm trying to partner with, it's we wanna work closely with you. We wanna make sure that you're making the absolute best of your opportunity, that we're putting really smart people around the table and on your team to help go after that.
and we're focusing you on the best decision-making process. Because I think that's one of the biggest things about having builders on your side. I made some good decisions when I was running Betterman, and then I made some decisions I'd take back again. That experience matters. And it's different when you had that experience operating the company versus kind of sitting at the board level the whole time.
slava (29:02.911)
Speaking of Betterment, what year did you start, Betterment?
eli (29:05.846)
So we started building in 2008. We launched the company in 2010. So that's like an eon in today's startup timelines. It's certainly an eon in FinTech timelines. Like the world has changed so much. But FinTech wasn't a space back then. Nobody in...
slava (29:26.467)
That's actually what I wanted to ask was 2008, that's a long time ago, and for people listening, FinTech, like you mentioned, I didn't even know this, but one out of every five unicorns in FinTech, one out of every five dollars being invested in FinTech, I mean, that was not the case in 2008, right? 2008, I don't think the hottest market to go after was FinTech. Actually, that was one of the areas to often avoid if you're doing startups. So what is it in you, your...
eli (29:28.034)
Yeah.
slava (29:53.947)
personality, what you thought, like, why start this company? Why start Betterment?
eli (30:00.426)
Yeah, so Slava, listen, I wish I could say, I was a genius, I had total crystal ball, and I could have told you 15 years ago that the financial services world is gonna be completely turned on its head. That's not really the truth, right? The truth is that we had, there was a problem, there was a specific problem out there around what do I do with my money, helping people get access to good, high quality advice and guidance.
I think most people, they want some mix of, just do this for me. I want experts and guidance to help me figure it out, and then they want to add in some of their own personal perspective, some of their own taste. But nobody out there was really helping people in a smart, sophisticated way just figure it out. You could go...
build a portfolio on E-Trade or Schwab, you could hand it over to your traditional money manager, which is not, clearly we understood that people wanted to move their finances online. You could see that from like really, really early things like ING Director, as I already mentioned, E-Trade. But there wasn't a great easy way to do it and one that you could trust. And I think that's the other piece of it, right? I mean, consumer preferences have moved towards
demanding some level of trust with their financial services providers. And, you know, those are the things that drove us to start Betterment and think about how we could build a brand people trusted that solved this kind of core problem of long-term planning for them. And it was, it was a slog because yeah, you know, the tech world was thinking about social and gaming.
And, you know, I think you'd measure the number of dollars going into a regulated financial services company based on, you know, from venture in pennies, not in dollars.
slava (32:09.519)
And then how is it that many companies, being alive for three years is a long time for them, but you're still around practically 15 years later?
eli (32:24.542)
Yeah. Well, listen, there's a big opportunity, right? So I actually think, you know, Betterman as a company is still in early days, right? And expanding quickly into, you know, other really important realms of people's financial lives. So, you know, it's a long-term, durable company, right? It's going to manage money and wealth and financial services for people for their lifetimes, not for a couple of years. It's not transactional.
It's about being there throughout the decades of people's lives. And it's a huge market, right? So the company has had a lot of success, manages $35 billion for hundreds of thousands of customers. But if you compare that to the size of the retail investment market, it's just a small slice and there's so much more to do.
So, in recent years, Betterment's expanded from just offering direct retail accounts to working with many, many employers on their 401k plans. So one of the cornerstones of people's long-term savings and retirements and totally broken part of the financial services system. I think unless you have a Betterment 401k account, you're likely...
Sorry, I'm gonna pause there, because my dog got nuts.
eli (33:55.582)
Okay, I think she's better. Nope.
Woof! Viper!
eli (34:06.422)
Come here.
eli (34:19.496)
This could go on for a minute Slava, hold on. My turn.
eli (34:26.428)
Come. Come, come, come.
eli (34:51.31)
Okay, ready? Okay, great. So listen, unless you have a better than 401k, you're probably pretty unhappy with your 401k experience. It's clunky to use, you don't know, you don't understand the options you've been given to invest in and most importantly, you don't understand what's needed to get you to a comfortable retirement amount and you can't just push a button and get you there. So I mean, I think that's, you know.
slava (34:53.478)
Yes.
eli (35:20.086)
That's a huge area of opportunity for Betterment to solve that problem for lots of people. And you're seeing now Betterment move into other key areas like helping people with student debt, a massive concern for so many individuals. And now you're seeing also Betterment starting to help people understand and demystify crypto investing. The company made a recent acquisition. Sorry.
eli (35:59.062)
My elevator keeps buzzing, so she thinks we're getting out of here.
eli (36:09.582)
All right, we'll keep trying. So you're also seeing Betterment now move into the crypto space. We recently announced plans to launch crypto investing and help people really demystify it in the same way that we've been demystifying investing in traditional equities for over 10 years now. I think that's about building smart, intelligent portfolios that are...
diversified and where you don't have to have a PhD to figure out what to do and to get some exposure to that asset category.
slava (36:47.835)
So yeah, I appreciate that you touched on that. So I read that Betterment acquired Makara, I believe it's called, so helping some Makara works in the crypto space with like asset management there. You know, I don't typically think of Betterment dealing with crypto. So I thought that was really fascinating. How do you think about, you know, the concept of where crypto sits in the portfolio mix of an allocation for somebody who has, you know, public equities?
eli (37:16.81)
Yeah, so I mean, listen, I think it's just a natural evolution, right, to help investors, you know, who want exposure to that asset category, right? Customers were asking the company, you know, how to approach that issue because, you know, it's become an important asset category, right? And it's early days. But if you have a trusted financial relationship, right, I think it makes all the sense in the world to help solve that question.
with the people you're already doing business with. And so the Macara acquisition was really about accelerating the timeline for something that was on the roadmap, opportunity to partner with a really strong team that was already in place who had built some of the early technology to enable that.
slava (38:04.923)
So is crypto the first alt category that betterments can be getting into, but they'll be getting into more.
eli (38:07.702)
Look.
eli (38:11.754)
I think, you know, time will tell there, right? You know, the idea really is that, you know, betterment can help with a whole range of kind of financial needs. And yeah, that's probably the first alt category, but I see many others that could be a FED.
slava (38:27.183)
Awesome. So I asked you before about your point of view on the market and obviously I was very thoughtful, but you are like one of the experts in all things FinTech. So you mentioned before that lots of things have been solved in FinTech, but there's still lots of challenges. At a high level, what do you think are three or four big opportunities that people still be taking on and entrepreneurs should be solving in FinTech?
eli (38:52.398)
Sure. So I'll start with a personal favorite, which is tax, which is the thing everyone loves to avoid and loves to hate. And we just haven't seen a lot of innovation in that space, whether it comes to tax reporting or tax filing. And I think, again, go back to kind of early days of when I started Betterment and I thought...
Wealth management works really well for the super wealthy. So does tax management. And then everyone below that, it's pretty broken. I think tax infrastructure is a really big missing piece of the FinTech puzzle. I think about what's going on globally with supply chains and big disruptions there. We're gonna have to figure out.
ways to get supply chains working more efficiently again. There's probably opportunity to ultimately get supply chains to work more efficiently than they used to, but it could be a bit of a road back to that. And I think financial innovation has a big role to play and entrepreneurs who are building services and solutions around those supply chains are going after big opportunities right now.
And then, you know, thinking again about, you know, big picture stuff, right? We see the world increasingly focus on ESG. So and, you know, that's an important space for people personally, it's an important space for corporations, no matter what your viewpoints are, right? But enabling people to express those viewpoints, to...
take those issues into consideration when they're investing to connect to the companies that they're shareholders in, whether it's a private company or a public company. I think those are super important areas for the next few years and places that I want to be investing in, places that I want to be helping builders build into.
slava (41:19.067)
So, you know, you obviously have so much knowledge and so many of our listeners want to be more like you in terms of what you've accomplished or what you know. What are some of the things you listen to? The podcasts, what are the things you watch? The shows, what are some of the things you read? Whether it's short form, long form, the books. Are there any like here are some of the things that I like to do from Eli?
eli (41:40.814)
Sure, I'm a podcast junkie, really. So when it comes to work-related podcasts, I've become a big fan of Invest Like the Best. I think Sean's show is great. He has just super entrepreneurs or investors on and is incredible at kind of diving into their businesses and understanding them and kind of.
recently I remember kind of learning about the Amazon reseller world, right? Something I knew nothing about and cannabis, which is a space that I'm total lay investor about. I love that. I love that show. I also really, really enjoy people I mostly admire, the Steve Levitt podcast. That's good for personal reasons, but it's also so helpful.
professionally. So if you don't know that show, and I'm sure everybody knows Freakonomics, or most of your listeners know Freakonomics, but Steve Levitt is one of the authors there. It's a new podcast that he started doing in the last year. And he just has these incredible in-depth conversations with people from kind of all walks of life. Sometimes they're academic, right? And it's a great way to take academic learnings and popularize them for folks like you or me or our listeners. And sometimes they're, you know,
They have nothing to do with that, right? I mean, I think one of the best episodes he's had recently was, you know, spent an hour talking to an NBA ref. And I, you know, as a big basketball fan, I loved that, but, you know, that's like, you know, talking to a judge.
slava (43:18.216)
Who's your team?
eli (43:19.402)
I'm a Boston Celtics fan. I grew up in Massachusetts and I bleed green. So.
slava (43:21.925)
Okay.
slava (43:25.955)
You don't have to say it was shame. You're allowed to like who you like. I mean, it seems like they have a good chance this year.
eli (43:29.126)
Yeah, are you a basketball fan?
slava (43:33.015)
I'm a very big Hawks fan going back to Dominique Wilkins. So, you know, we're already out.
eli (43:38.898)
Yeah, nice. Well, so I'll give you an alt investment, right? I feel pretty good about the Celtics chances, right? So I've made a little investment in their future prospects. I think that they're probably the strongest bet to win the championship, but they're in the middle of a tough series against the Bucs right now. So we'll see how that comes out.
slava (44:01.739)
So sorry, is the investment like buying Jason Tatum's rookie card or betting, you know, Vegas style, uh, long the championship.
eli (44:10.678)
Vegas style, I'm longing the Celtics to win the Eastern Conference, longing them to win the NBA Championship at pretty good prices. This is going back to before the playoffs started.
slava (44:20.575)
Oh, nice. I mean, so do you consider that FinTech, that market?
eli (44:25.816)
You know, I think the enabling technologies, right, around money movement and, you know, around KYC and anti-money laundering concerns, that's FinTech, yeah. You know, I think, you know, I think the rest of it kind of lives in its own sort of, you know, sports and entertainment world. But, you know, FinTech touches a lot of things.
slava (44:41.679)
Absolutely. I appreciate it. It just shows how many things you touch. So you mentioned a couple of podcasts. Is there anything else that you'd like to read or watch on your shows? Or are you really just like, as you said, a podcast junkie?
eli (44:53.59)
Um, you know, on the, you know, on the work related side, um, you know, it's like, you know, it mainly comes from pockets. Of course, like I read the regular sources, Wall Street Journal, New York Times listings, but like nothing, you know, nothing that stands out. I think it's like, you know, like if anything, like I'm, you know, regularly peppering friends with, you know, episodes of my favorite podcasts. Um, and you know, like probably the last one in the, that I'm always listening to is fresh air. Um, I just love Terry gross. Um, sometimes there's work related stuff. Um, and, uh,
And sometimes it's entertainment, but I just think she's a superb interviewer. Just the most prepared, insightful interviewer who I listen to. I'm just kind of always astonished. She'll ask questions and her guests will often be like, how did you know to ask that question? And they're often surprised. So I really enjoy that.
slava (45:46.3)
How do you listen to your podcast? Like where in your day?
eli (45:50.254)
Um, Jim, commuting, uh, sometimes it's like, you know, where, you know, how I unwind before bed. How about you? Are you a podcast guy?
slava (45:59.63)
Awesome.
You know, I'm becoming more of one since everybody now asks, what's my favorite podcast since I have a podcast, but I just like talking to the guests, you know, and getting to have these conversations. Um, but yeah, I, I just as our final question, which we always put everybody on the spot and I know you might hedge, but you will have to be put on the spot here, which is if there's one investment and you can't say the Celtics, which is that three years from now, we're going to look back and say, Oh, look, he was right or look, he was wrong.
not an abstract concept, not a market, but an actual investment, what would that investment be? And you could pick any market, anything you want, but it has to be, it has to be an alt.
eli (46:38.99)
Sure.
eli (46:42.538)
Yeah, sure. Well, listen, I think the world is moving rapidly towards clean energy sources. So I'm going to look in that area. It's not the be all end all, but I think that's a strong place to look. So looking at investments in renewable energy sources, wind, solar, I think those markets still aren't efficient necessarily.
And so there's a great opportunity, there's probably some arbitrages to be found in that space.
slava (47:15.631)
Is there any specific investment you have in mind in that space?
eli (47:20.174)
Um, not that I can share publicly. Sorry, Slava.
slava (47:25.42)
Mmm. That's exciting. All right, but we'll use that at the end of the show.
eli (47:29.558)
So like, maybe how about this, I'll write it down on a piece of paper and I'll share it with you after the show and then we can come back and revisit in three years.
slava (47:39.471)
Yeah, but we're trying to tell our guests so they can hear about these things as well. But it's all good. I told you I was gonna put you on the spot. This is the only thing that we put people on the spot about. But we appreciate it. Sounds like there's exciting opportunities. Can we triangulate there anymore? So you're thinking winded and solar, there's an opportunity. Is it things that people can find on exchanges or do we have to find a company and invest into some startup?
eli (47:54.878)
Yeah...
eli (48:02.622)
I think at this point, you probably have to find a company to invest in some startup. But listen, if you want something that people can go put their money into today, I think there's...
Let me think about what's out there that people can invest in right now that's new and different.
eli (48:42.05)
Huh. Well, it's tough. I, you know, there's a lot of things I can't really talk about Slava.
slava (48:49.339)
It's all good. This is the only question.
eli (48:50.174)
Right? Like they're all early and...
slava (48:54.383)
I guess the takeaway is in the markets of renewable energy, specifically in solar and wind, to try to find great entrepreneurs or great early stage companies that are starting to show traction because there's an opportunity where the market's not efficient yet to really over the next five, 10 years create a lot of margin. Is that right?
eli (49:14.262)
Yeah, I think that's probably right. You know, again, you know, I'm sorry, I don't wanna, I can't get specific, right? But I would be looking right in that area, right? I'm sure, you know, Vincent is a spot where you can find some other opportunities in that area. So I'm personally excited about it.
slava (49:32.159)
Awesome. Well, thank you for the plug for my company, Vincent, but really awesome to have you on the show. We covered so many things, everything from the fact that, you know, the 86 Flair Michael Jordan cards where your entry into alts, the fact that I didn't know this, but one out of every five unicorns is FinTech and one of the huge markets that are out there. And of course that tax and all that infrastructure is completely broken and so many opportunities.
Thank you Eli for joining. This is so fun. I can't wait to have you back on the show and we'll talk again.
eli (50:02.85)
Thanks, Slava. It's great to spend time with you. Take care, bud.
