The man who built a bank for people banks don't want - Jason Wilk [Dave]

Speaker A: Every great company starts with somebody having a bone to pick with some big problem and the pain of the $34 overdraft charge on a cup of coffee we look at your cash flow data, not your credit score to offer you a $75 microman and we went from being a $5 billion company to a $50 million market cap company within a matter of nine months.

Speaker B: Today on Billions I'm m sitting down with Jason Wilke, four time founder and the CEO who took a a 98% stock collapse and turned it into one of the greatest comeback history in FinTech. His first company Gold Club for a dorm room. His second a nap tech playout of Y combinectors that sold for $85 million. He used that money to start a war against one of the most predatory fees in American banking. The $38 overdraft charge that quietly bleeds $30 billion a year from the people who can listen afford it. He called his company Dave as in David versus Goliath. Jason, welcome to Billions.

Speaker A: Thanks so much.

Speaker B: Can you maybe like explain to people why you decided to start Dave in the first place?

Speaker A: Personal pain point. I think every great company starts with somebody having a bone to pick with some big problem. And for me that was going through high school, college, starting my first business and the pain of the $34 overdraft charge on a cup of coffee or a tank of gas was just incredibly punitive in a time in your life where you need every penny counts to make it through. And I knew if I had that problem there were lots of other people that might be having the same issue. And it turns out it's over half the country is dealing with things like overdraft fees, not having enough credit score to afford mainstream credit products and ultimately just the banking system is too expensive for the everyday America.

Speaker B: So how do you attack such problem? Because you know it looks like a uh, banking system is huge. Like uh, how do you get started with it? Like how do you create your new bank?

Speaker A: I think the way we started actually led to a lot of our success in the sense that I knew we always wanted to offer a full suite of banking services but to offer that back in 2016 there was, it would have been a tremendous amount of work to either get a bank charter or go through the bank partner process. At the time that Dave was launching there had been several neo banks around previously that had not really seen a lot of traction. And so I had in the back of my mind that people's excitement to open up a checking account was really not there, but their pain point around short term credit was. And so we decided to start with that part of the spectrum first. And so a company launched in 2015 called Plaid, which was the conduit between fintechs and large banks. And there was only one interesting company that was using the service that I had seen so far, which is a business called Acorns, which was connecting to your primary checking account, looking at your transactions and rounding up your purchases to put into the stock market. I said, that's really interesting. If we could use that same cash flow data to underwrite people for effectively a micro loan in the US that should eradicate the need for traditional overdraft. And so Dave's first product was a app where you connect your checking account, we look at your cash flow data, not your credit score, to offer you a $75 micro loan, smallest loan in the country. And this model had worked in places like India and Africa where micro lending was a real thing. But no one had really tried it in America as a way to solve sort of short term gaps. And the real vision there was that short term credit of this small dollar amount. FICO is an irrelevant score because that's based on long duration credit, your ability to pay a mortgage or an auto loan. And we've really proven out that your cash flow data in your account is very, very valuable. And I knew that to be true because I always knew my paycheck was coming in. I was a great customer for my bank, but why charge me such a high rate when they know that I'm good for the money? And so that was really the foundation of the business. Start with the credit, migrate to banking later. And we really followed, um, along that journey. We didn't launch banking really until 2021, where people could make Dave their primary account should they choose.

Speaker B: And can you maybe like walk us through the equity story? Like, did you have to raise fund in the early days? Like, were, uh, your investors? Like, was it easy?

Speaker A: The seat round was fairly easy because I utilized most of my investors from my previous company. One of our investors I had a deal with that whatever they made in the previous company, they would automatically write me a check for the next company site unseen for 50% of whatever their profit was. So that check was real easy. It turned out really great for that guy because he never would have written that large of a seed check usually. And it's, I think that stake's worth over $150 million now. So he's uh, done quite well. And then two of my other Lead investors from my last business also participated. We rounded out the group with Ron Conway and SV angel among some other people in the seed round. But that was a $3 million round which we use basically to buy the domain name, give us some capital to hire the early team. And also we needed some principal capital to actually lend out to users because we didn't at that point had no credibility with private credit and certainly no bank was going to be willing to lend us money with no experience.

Speaker B: And uh, the second round, like uh, how exactly did it go? Uh, did you feel like you had to work a lot harder or like

Speaker A: uh, the second round was really difficult because we clearly had product market fit, customers were loving the product we were scaling. Our CAC was really low, but our loss rates were really high. They're like 20%. And so it wasn't quite clear that this customer profile that we were underwriting was going to be able to be able to lend to profitably. And so we had that going against us. And also every venture capitalist at least that I spoke to had never really even heard of overdraft fees so they didn't recognize it as a major problem. And the third was that neobanks historically had not gained a ton of traction. The most successful exit thus far was I think bank simple, which sold I think for $150 million. So you know, not great comps, not great loss rates problem that investors don't really understand. And it took me about 120 meetings to get the Series A done. And ultimately it was with an investor that wasn't even writing checks into fintech. It was just a connection with one of our board members who said, trust me, it's a smart team. Jason's hard working, you know, he'll figure it out as he always does. And so that really was the catalyst of getting the check there. We had a tremendous performance from that $10 million check. We got loss rates down to a few percent. We were scaling users, we got to think close to a million users uh, in the first couple of years. And we didn't raise our next round of funding until we reached a billion dollar valuation in 2019. And that was a big deal because there weren't that many unicorn businesses back then. We weren't in a hurry for raising more capital and so we'd be more patient. But the traction we had at that point was sort of irrefutable at that uh, point in time. And so raising around was a little bit more competitive and we brought on a great investor, Norwest Venture Partners. Who led that round entirely. And that $50 million equity check lasted us all the way to the IPO. So it was incredibly capital efficient. I think around 63 million of total primary capital raised. And, uh, the next round was our public transaction.

Speaker B: How exactly do you prepare for an ipo? And when do you decide if you're ready or not?

Speaker A: Well, we were really quick towards an ipo. More so, more so than most. I think as of January next year will have been a public company longer than it, uh, being a private company, which is really interesting. And so it's almost like we've forgotten life as a private business and don't miss it that much. And be honest, we like the rigor of the quarterly reporting we sort of got ourselves in this quarterly reporting mindset leading up to the ipo. And fortunately, what gave us a lot of confidence is our business is very forecastable. We can, we have a lot of cohorts that have been with us for a long amount of time. We have a very heavy repeat users and we want like we thought the business was ready even though we were early on to become a public company. As of January, we'll have been a public company longer than being a private company. And don't really miss it that much because our business is, is very, a lot of repeat customers. And so we feel like we can forecast the business really, really well. I think that's the key for a public company. And investors want to be able to build models they can rely on. And given we have 98% of our customers every month are our repeat users. We just felt very confident, a lot of confidence in the core model. So aside from that, just building up the management team, getting the public board ready, and then going on, uh, the roadshow process to find our lead investors does not too dissimilar from a private capital raise other than you have to convince 50 people to validate your valuation as opposed to one. And I think that's a major difference in public versus private. It's just your valuation in public is more consensus versus private is literally can be just the opinion of one person.

Speaker B: And how long did it take you from, uh, okay, I think we should IPO to let's ring the bell. Like, uh, what was the timeline?

Speaker A: Well, the market was ripe for IPOs. Actually. We were marching our way there. We thought we had a great opportunity to go public, Decided to wait a little longer to see how the market was going to continue to play out, and ultimately decided to go public in January 2022. The market looked a Little soft when we went out, but we had a great ipo. I think we were the best performing stock of the, of uh, the first couple months. When we went out, valuation got to over 5 billion. And then the market fell apart. The interest rates went up, which led to Fintech being a bad name. Anything being a, lending being a bad name. And then with growth capital effectively coming to a halt, if you were a company that was losing money with the expectation you had to possibly raise some more people, just underwrote your valuation effectively to zero. And we went from being a $5 billion company to a $50 million market cap company within a matter of nine months. And we were trading for less than our uh, cash value for a good amount of time. It was a really challenging place to be. But ultimately we loved our business. We knew that all we had to do was grow our way out of this, which was not a really great narrative at the time. But our plan was to keep burning capital until we could actually cross the user threshold required for us to reach profitability. And to us as an already mean business, that was really our only pathway to success because we couldn't cut our way there like most businesses could do that. We were a very lean team. We're still a very lean team with only 300 people at the company today, actually a little bit less than that. And um, just we kept our heads down and got there and here we are today, nearly 4 billion our market cap and um, teams. Happy investors seem to be pretty happy and we think there's a lot of room to run from here.

Speaker B: Yeah, I mean I've looked at the stock. I think uh, it's quite insane to see the growth you guys are doing. So congrats. And I'm actually curious to understand, um, when your stock start thinking, how exactly does that affect the company from uh, day to day operation because you still have your customers, you still have like, I uh, mean you're still generating cash, uh, is just basically like a valuation that the public market is giving. But does that affect you like uh, from a day to day basis, like in, in like bad ways or.

Speaker A: Well, the only way it would really affect us if we needed to raise capital, we were dead in the water. I mean imagine trying to raise $50 million when your valuation is 50 million. That wouldn't be a really great place to be. And so fortunately for us, we didn't need more capital. We knew we didn't need more capital, but that would have been a really tough place to sit should we needed that. But look Taking a step back, you want to be a public company because you have public currency you can give away to employees for valuable stock options. You want currency for M and A. And then you want the ability to tap what is an easier way to raise, uh, equity capital. And the challenge we have, being a public company with such a low market cap, you can't take advantage of any of those things. That really was like a waste of time and money. Cost at least a couple years ago, close to $10 million just to maintain being a public company. And so you want to have those benefits. Otherwise there's not really much of a, of a point.

Speaker B: And um, from like, from your side, like, because when the, when the valuation of the company is like uh, at a certain like is getting like lower and lower, does. Does it um, does it make the company like a target for uh, acquisition potentially, or like, you know, because if you see a company that's actually like valuable and you see like their stock going, their stock price going down, you might want to acquire it, you know, at a much lower price. Like, is it something that, uh, you know, when we talk about hostile IPO or this kind of thing, like, uh,

Speaker A: I'd say that's the one, you know, big benefit from going public was that the. My shareholders gave me the. A different share class. And so my stock converted into, you know, controlling vote, which when you have that, it keeps a lot of the activist shareholders away or any hostile takeovers. It would have been very easy to build a position in our company and you know, try and acquire it. But the fact that I had the ability to approve any M and A through my control vote kept a lot of people know, on the sidelines. And so that was a, uh, a big benefit of, of going public and you know, would recommend that for other founders who are going out. You know, it's. Is in many ways in the best interest of the company.

Speaker B: That's super interesting. And I uh, think like Tiger at some point was, was part of the, the one, you know, like, uh, helping you to go public and investing in uh, when, when you start the ipo. But usually these investors, they have some sort of like lookup period and they have to kind of like keep their shirts for a long time.

Speaker A: That's right.

Speaker B: And in their case, I think they decided to sell at some point. Like, can you explain a bit like, uh, how does this work and how can an investor. Was a lockup period is actually like able to do these kind of things.

Speaker A: Yeah. So generally you have your, your private investors leading up to an ipo, all agree to a, uh, sort of a standstill mockup provision, generally six months. But the investors through the IPO process do not have any sort of standstill. At least through the process. We went to go public. And so Tiger and others were free to sell from day one. That didn't help us because Tiger had their own issues through April with a lot of people redeeming in their fund due to the market crashing. And so it was nothing against our business independently, but they just sold everything that was in growth. And to lose your anchor investor that quickly prior to a mockup, when your valuation still has a lot of value appreciation from early people, which also put selling pressure on it, just led to sort of perfect storm of disaster for us. And fortunately for us, it had nothing to do with our business. But from a just timing, market landscape perspective, we were in the worst of every storm.

Speaker B: And as the company was, uh, when it was at the very bottom and you knew that it has like, tremendous potential as a founder, like, did you, uh, acquire more shares at that time? Or like, did you, uh. I mean, is there a way, you know, like to benefit from it in some way?

Speaker A: Yeah, I mean it's hugely beneficial actually. So we, we couldn't afford, because the valuation was so cheap to just give people, you know, better stock packages at today's price. But we did structure this performance stock unit structure where people actually would get more shares at certain prices all the way up to, I think the stock price got as low as about $5 post split. And the needed relief for a lot of our employees was that the Stock could reach 100, 200 worth of value. And that's like 20x return. But it's amazing, uh, to see that everyone that stuck around and got those performance units have fully realized that. And we made more millionaires post IPO because of that drop than we did pre ipo just from the amount of people that we hired and that stuck around.

Speaker B: Uh, that's insane. And for the ipo, I think you did like, uh, a spac. Um, can you explain to people what it is and how concretely does that work?

Speaker A: Well, SPAC versus traditional ipo, you are effectively merging with an existing public shell whose sole mission is to go find a company to combine with that. Public shell has no operating business. They have capital that they have committed from investors to go find a target. And the benefit of going public that way is that the shell is already public and you're able to negotiate your valuation and how much capital you're going to raise through your investor syndicate well before your IPO date. Whereas in a traditional IPO you don't really know what the value of the company is going to be until you start to build your book right before the IPO process. So there's a lot to like about the spat and just there's a lot more certainty, especially for a young company, you want to be able to count on the proceeds if you're going to go through the process that you want to be sure is going to, going to succeed, not failed yet. There's a lot of IPOs that go through with testing the waters at the end and don't like what they see. So they, they pull back or they wait. You've seen that before with, with others. And so the big, I'd say that the downfall of the SPAC came from the types of quality of companies that went public because a lot of them went out of business. Valuations were not based in reality. So SPACs got kind of a bad name. But they're still a perfectly viable vehicle based on the reason I just explained.

Speaker B: And why do you think it got like uh, a bad press at some point like the spac?

Speaker A: Well, too many companies that never should have been public went public through that process. And that was just the environment of interest rates were nearly 0%, the market was super hot and the appetite for underwriting companies losing significant amounts of money with negative unit economics was at an all time high. And so the, just the challenge of all these companies that weren't great is what put pressure on the SPAC process. Had ah, we only kept it to high quality businesses which we believe Dave was one of them. Then spacs is still a great name and I think it'd still be a very popular way to go public. But unfortunately I think um, you know, the negative stigma uh, is there.

Speaker B: And what was your uh, revenue like whenever you did your uh, SPAC ipo?

Speaker A: I want to say it was around a couple hundred million of a run rate at the time of the IPO. And I believe in 2022 we burned 100 million. We raised 210 of total proceeds. We had a decent amount of capital left. But if you were to just take uh, a run rate of our burn rate at the peak, I could see why some investors would say this company is not going to actually make it through to the end. But you know, we always knew that there was this pretty clear line and once we started to get cleared towards that line and could really clearly communicate to investors that once we reached 2.1 million paying members, every incremental user was going to be contributing to profitability because I don't need a bigger team to grow the user base by you know, the next a hundred thousand, two hundred thousand members. And now it's just amazing to see. I mean our guidance for 2026 is over 700 million of revenue at the midpoint and over 300 million of EBITDA. That's just a $400 million swing on earnings in just a few short years. And the investors that believed in us have made just tremendous amounts of return.

Speaker B: And how do you uh, plan for it as a founder? Because we see a lot of people raising a lot of money and saying hey, we're going to reach that point where uh, things become like profitable and we have a great business. Like I mean you hear this story a lot. The truth is like very few people manage to do it. So how exactly did you plan for it and how did you manage to uh, to really succeed?

Speaker A: Plan for what specifically?

Speaker B: Playing like, planning for like the, the profitability like uh, points uh, that you would get to.

Speaker A: Well, I think we knew what we needed to build our, our platform that could scale and to us that was the 300 people we needed to build the core systems. It would be hard to think we could do that with significantly less people than that. And so we sort of drew our line in the sand that this is the amount of people we have. We, we did a hiring freeze. We didn't do any, any layoffs. We just said here's we're going to keep it steady here. That only do backfills of people that leave and just really kept our heads down, avoided all distractions. Any new products that weren't core to achieving profitability went on the back burner. And a lot of our work went around just margin improvement, renegotiating contracts, adding more users, driving more CAC efficiencies, improving onboarding, conversion and underwriting efficacy. And it was just a real big push across the company to turn profitable. I even got my CFO a hat that says EBITDA on it for his birthday. And he was really driven. Kudos to him because he was really the driver of all the profitability initiatives within the company. And we succeeded in it even more so than we could have expected at this time four years ago.

Speaker B: And as a company, uh, and as a CEO, whenever you raise fund and you're non profitable and you're spending a lot on, I don't know, like hiring on acquisition on all of these things, like the vibe in the Company is a bit different versus when you're bootstrapped and you're looking at like, uh, how much you should spend. So you're always like profitable. And for you, like, you also went from okay, we have money, we spend it to we're profit, like we're profitable and we need to stay profitable. So how exactly did the company like, uh, culture kind of change, uh, with that change?

Speaker A: Well, it's, it's tough depending on what stage of the business you, you are at. You know, I'd say we, you know, in our later, you know, potential later rounds, the fact that we were a profitably growing company mean, mean, meant that we didn't need to raise more capital. But also had we raised a lot more, we probably could have grown quite a bit faster. And so to attract some of the best and biggest venture capital investors in the world, they like seeing the heavy burn, right, because they want to put more capital to work. And so we, we lost out on a couple funding rounds of competitors who were burning three or four times as much as we were to chase user growth faster. But ultimately that wasn't the kind of business we wanted to run. We had really healthy growth while maintaining profitability. Early on, we took the business to running at a loss to build the platform of which we believe was needed to build for the long term. But it's really a matter of preference on the founder. You know, do you want to raise a lot of capital? Want to raise a bunch of pref. I never liked sitting behind a lot of prep personally, because it just becomes a dangerous game of having to clear that prep stack in an M. And a transaction could be quite challenging. We still see a lot of our smaller competitors who thought they were worth a billion dollars. They raised several hundred million of venture capital, and it becomes a curse in the end. And so I think for businesses that really need it, like these AI hyperscalers, there's no other choice. But I say for some founders, you got to really look at this VC money you're raising is like very high APR debt. I think about the effective APR we paid our Series A investor. It's worse than any loan shark in the world when you really take a step back. I mean, if I had that much confidence in the business that early on, I wish I did that 10 million round as, as venture debt in the business, not giving away very valuable equity in the company, which is worth, you know, so much now.

Speaker B: And what's like, uh, would you say is the, the biggest challenges for you, like in the, in the Coming years

Speaker A: biggest uh challenge for us. Yeah we are becoming uh multi product company. We just announced our new credit card. We're excited to scale that and it's always ever easy for companies to build multiple go to market leading business units and uh, we're really excited about that as the future of the company. And I think that's our maybe biggest challenge is proving out our ability to have multiple things working at scale.

Speaker B: And on your side, uh, how do you decide to launch a new product when you have something that's already working, already growing? Is it because you want to get like more uh growth? Is it because you want to get better retention? Is it a bit of both?

Speaker A: Like well one it just comes back to what our customers want and we have the benefit of having millions of customers, we can talk to them. And going back to my days at Y Combinator, the, the number one lesson from Paul Graham was always to talk to users and we do that all the time through user research. Really important to understand what they want. We also have the benefit of having a connection to our customers primary checking account and so we can actually see all the products that they're using. And so that's amazing market intelligence for us to go decide what else we need to be doing. But in the end yeah it's you know building customer happiness and if we do well there that's going to lead to better lifetime value through you know either more ARPU or better, better retention or both. And that's sort of the name of the game.

Speaker B: And is it like uh, like how exactly do you do you decide like uh, about a new product? I know like you're going to talk to customers et cetera but why did you choose uh, a new credit card and not something else?

Speaker A: We wanted to lean in on where we thought our differentiation was versus our scale NeoBank competitors and to us that is our AI based underwriting of cash flow information. And it was working incredibly well for our extra cash product which is giving people up to $500 between paychecks. The beauty of that product is the payback is very short. The downside is that the customer's willingness to use that for multiple different purchases is quite low. You tend to use our core product for gas, grocery and rent, all these sort of non discretionary expenses. But we aspire and we could see through the cash flow data that our customers are using things like BNPL and some prime credit card for discretionary purchases of uh, which we had 0% market share. And so when I think about areas where we think we have the right to win. Our customers love us for credit. We think we can expand the credit and give them a different use case of how to use the company made a lot of sense and so it felt very clear to us as to what to build. We just had to go back to sort of uh, core principles of the business of what we want to disrupt. And it is these expensive fee streams from banks and credit card companies and just like overdraft fees are really hurting Americans. Revolving credit card APRs and credit card late fees are over 100 billion a year. And so I like the idea of eating other people's margin through better products. And we're going to do the exact same thing with this product.

Speaker B: Yeah. And you have already like the, the user base and you know like the. So, so it's whenever you deploy like you know you're going to have like a, a large uh, addressable market from the start. So it's uh, it's quite smart. And um, I was wondering because earlier you mentioned, you know that the interest rates uh started to kind of change and it affected like uh, your uh, your company. So how exactly do you plan. Because you're essentially offering like short term loans. So obviously you are a bit dependent on the macroeconomics. So how exactly do you plan? Plan on things that are a bit outside of your control.

Speaker A: That's hard because the, the market just tends to swing naturally from things that are out of your control every day. You know things like the war, uh, impact the stock even though that should actually be a tailwind for our business because things getting more expensive, more people turn to our products. But it's hard, you know, in a world where the stock market is largely traded automatically at this point. It's nearly impossible to avoid being pulled by the macro with respect to interest rates though because our capital turns over so quickly. Even with our new credit card product which is a uh, pay in forward duration, we're not really reliant at all on private credit markets or the cost at which it takes to borrow because we're not taking long duration risk. And that's one of the thesis we think that investors should really pay attention to in our story is that we don't have that risk whatsoever because our average duration of credit is about eight days and the return profile we get on our credit transactions far exceeds even the highest of uh, interest rates to borrow over the last uh, 25 years.

Speaker B: So what's kind of like the default rates you try to focus on what's the highest default rate you can go to in order to have like a business that works.

Speaker A: Well I think we just talked about our last earnings call. Our, our gross spreads on every credit transaction are over 5% and we return that capital every 8 to 10 days. So you know that's arguably our ceiling of what we could go to on credit. And if you look at our 120 day loss rate at this point it's nearly 1%. So the spreads are there. We've, we originate millions of these micro credit transactions per quarter. So it's very, a lot of visibility into performance and don't expect that to erode in any kind of cycle.

Speaker B: And with the new uh, AI M models, because you mentioned that you were leveraging AI uh, uh, and machine learning I assume to kind uh of predict uh, the default of one customer. So therefore you can know who you're going to pay, where you can loan money. Um, so how does the new model affect uh, uh, your company? Is it uh, in a positive manner? Do you see your algorithm getting better every single month or do you see no real impact because you already had something that was working?

Speaker A: It's all incremental. There's two things going on with our business. One, because the duration of these credit transactions were so short, the models burn really quickly as to what actually works in comparison to like uh, an installment lending business that's lending capital for a couple of years. So hard to use AI or cash flow data to predict performance because so many things could happen. The economy can shift, there can be changes in the customer's employment. But with such short duration credit we're able to learn so quickly on what actually works to full maturity of the entire book. And that is so valuable. And so every time we m launch a new version of our models, we're inputting another 100 or 200 features that we can test to see if it's incremental to credit and know within a matter of weeks or a few months the performance outcomes. And so it's just a really powerful place to sit. You combine that with the fact that almost 90 uh, 8% of our originations per quarter are going to repeat users, we can always start to increase credit per user just by the fact we start to know our members more. So with both those dynamics happening at the same time leads to a really stellar financial performance.

Speaker B: Yeah, really interesting. And from the team management perspective because now I think you have like uh, a team that is quite lean like with 300 people and uh, a high valuation and a public company, how exactly uh, do you manage Uh, a lean team. Uh, maybe you could give like, uh, I don't know, like some tips of the things that you've seen working well for retention, uh, for talent retention, I mean like for helping uh, people grow also within the company.

Speaker A: Well one, we focus on having a high, high quality team to start, you know, some, some people that really inspire others to uh, to want to work there, I'd say. Two, we have a lot of great rituals at the business. We have a recurring, uh, quarterly business review where we bring our management team together plus key directors to go over the quarterly performance and look at what's, what's ahead. We have a very rigorous weekly business review over going through all of our Key Core uh, KPIs in the business told ourselves accountable there. And we work on having a very clear mission, vision, strategy that we communicate to the team to make sure everyone's sort of rowing in the same direction. And lastly we use okrs as well so that there's just really a lot of clarity around uh, what we want to build and how that maps back to the mission of the business. So I think those are, that's a great foundation. The fact that we're a Virtual first company as well I think really helps, especially in fintech. We've got a great team that lives in uh, various parts of the country and there's a lot to like about that model. I know a lot of people are trying to go back to the office, but we feel like this is a differentiated way to recruit key talent. The people that want to be Virtual first absolutely love it. And so I'm not a CEO that's out there promoting Virtual first as the model, but company dependent, uh, it works well for us.

Speaker B: And what is changing, uh, as an employee, when you go from it's a private company to it's a public company, are these things you're allowed to say, not allowed to say, do people who work have uh, a specific agreement that states clearly what this can say, what they cannot say? Can you maybe walk us through the different changes uh, that uh, the company has to undergo?

Speaker A: Mostly just the sensitive information. You've got to trust your team's not going to go trade on that. We have our standard quarterly blackout periods where people can't trade the stock. But ultimately we, you know, need to have a lot of rigor around just compliance as a business being a public company.

Speaker B: Okay, okay, okay. Super uh, super cool. And um, yeah. So for you, like, I mean, I think now it's been a bit more than 10 years since uh, you built uh, Dave, so how do you see like uh, the future? Like do you see yourself uh, as like a uh, lifetime company? Like this is going to be your, your one project and uh, and yeah, and continue forever? Or do you think that eventually in a time of a business, when it's public, you might uh, want to have like a CEO join or like someone else? Like uh, how do you see it?

Speaker A: It's too early to tell. You know, I've been doing this for, for 10 years at this point, which is, you know, you never know how long is how long you're going to be running these things for. I think any great company takes at least 10 years to just to get it to what is a success. I think for me it's really hard to think about building another company and Mike Dave, of this size and scale, I think to achieve a business that does nearly a billion dollars of revenue, those don't come along every day to build a really amazing team that you like to work with that's high performing. I don't really want to go back through that process of building the team again and going through all the different cycles of the types of teams you build because it was so different. The early team versus the team. You have it, IPO and beyond. So I'm definitely not in a hurry to go start another one. If anything, you know, maybe would become an investor or something at some point. But I don't envision starting a new company and I hope I'm working at Dave for uh, many more years to come.

Speaker B: And how is uh, your time split at the moment? Like uh, how much time do you spend, I don't know, like on hiring, managing the team. Like how exactly is it split?

Speaker A: It depends. We're trying to hire an executive. We'll spend a lot of time on that. I, I'm also help with hiring board members as well. So spend a lot of time thinking about the quality of our team, the quality of our board, the quality of our teams beneath our leaders at the company. Spend uh, a lot of time thinking about company engagement across the board as everyone. What can we do to improve the company and the management? And it depends on the time of the quarter, but Post Earnings has spent a lot of my time after the print. Go in a speech to investors, go to at least a couple of conferences, get on the road, go speak to shareholders, some new, some existing, and then obviously spending time with your analysts too, which we have over 12 analysts, so making sure they're understanding the story and the models. There's um, your time really shifts, you know, I'd say two, three weeks post earnings. It's very outside focused. The rest of the time is the internal quarterly business review thinking about everything going on internally at the company. So it's kind of maybe like 70, 30 internal versus external at this point.

Speaker B: And can you explain maybe like uh, how does that work with analyst and you know like uh, when it's like post earning, like what's going to happen? Like how exactly does you know like uh, the, the whole situation and stock price work?

Speaker A: Well, stock price we, we can't predict. But you do have your analysis of which we catch up with afterwards and you know they both comment on the earnings call. But also we have private conversations with them following and they have their key questions, you know because they have, each of them have built their own financial model. And so after the quarter we sort of look at how uh, our model compared to theirs and discuss you know, what they got wrong, what, you know, what potentially we, we got wrong or, or, or more right than we thought. And then they go to the next quarter and they update their numbers, update their price guide. Hopefully it's always increasing and they update their buy sell overweight rating. That tends to be how it works with the public analyst. A lot of the buy side investors though, our hedge funds or long onlys, they all have their own models too. So they'll talk to some of the bank analysts. But largely they're very reliant on the internal models that they built. And the same thing we'll catch up with them to see who got what right and they go, they go from there.

Speaker B: Okay. And uh. Yeah, I'm wondering, you know like uh, whenever you have like this uh, this kind of like uh, earning calls and uh, and how, how exactly like um, I mean you've seen in some uh, in some companies where the, the stock is uh, is basically like moving a lot and it's not really tied to the company's performance. So we can see companies you know, who are like still growing, still generating a lot of cash flow and getting you know like very different valuation versus what their earning shows. So how exactly do you like um, how do you maintain you know like uh, the vision and the long term vision as like uh, a public company, uh, CEO when uh, you know you, you also need to think from a quarter to quarter basis. Like because I think you mentioned like structuring your board. So maybe this applies a little bit with it.

Speaker A: Well one, I think you have to have a really strong core business of which you Know you can really see strong growth within that and that allows you the ability to have some freedom for thinking long term about future roadmap items. Like I'll take the credit card for an example. We don't need that credit card to work for many, many years to support our longer term growth algorithm. And that's thanks to having a great core business. And I would recommend no company go public unless they have a lot of confidence in the forecast for their core.

Speaker B: Okay, okay. Okay. And uh, you mentioned you know like, uh, structuring your boards and potentially like having different people. So how exactly do you structure a board? Like who do you look for? Um, and can you maybe share like tips on how to structure like a ah, grade board?

Speaker A: It really depends on the business. Right. And so for us, well every public company needs a great person in sort of audit that's fairly standard. That's going to be somebody who is a former CFO most likely and we've got a great one on our team. And then you sort of fill around the board of people you think are going to be helpful to your industry or business. One of our private credit investors is on our board. One the of we have um, a capital markets guy who can help us understand how to talk to analysts and recruit different new shareholders. We had a regulatory lawyer that understands all the regulatory complexities. Ultimately you want to have people that when you spend the time to get together for these quarterly board meetings of which last three to four hours, want to make sure it's useful. And so people you think that you can rely on for you know, input on strategy, make sure the company is following all the, all the rules, but it's going to be added to the business, not, not detracting.

Speaker B: And how exactly does that work? Like do you give them shares or is it like a yearly package?

Speaker A: And uh, yeah, it's a yearly package. There's some equity and some, and some cash.

Speaker B: Okay.

Speaker A: And the recruitment sort of starts. You either find people that you know or now oftentimes people will use recruiting agencies specifically for executive board recruitment. And so we've done a little bit of both.

Speaker B: Okay, and what, what do you prefer? Like do you see hiring agency working well on, on um, this side or

Speaker A: I think it's always best to use, you know, internal if you can go that route. But one, not everyone wants to be on a public company board. And two, finding people with the experience, you know, it's not always within your network. And so I found that we've had a lot of success. So using recruiters for board roles.

Speaker B: Okay, okay, okay. And uh, is it like ah, from like a pure like growth perspective you mentioned earlier, you know that eventually if you had raised more cash you could have gone a little bit faster. Now you're at a stage where you're like profitable. So how exactly do you balance, you know, that uh, speed versus sustainable growth and how do you envision the future? Like uh, do you want to keep this uh, very lean team and uh, growth uh, that is uh, kind of mastered or do you see things in a different way?

Speaker A: We're not trying to constrain the team to 300 just to do so. I mean we really do believe we build a highly scalable platform. We are adding to the team this year we're going to go from 300 to 3 23, 25 in. So we are doing that because we believe that the investments we're going to make there are going to lead to significant multiples of revenue once we deploy the products that they're working on. I'd say for us we've had quarters where we've grown the business 60 plus percent and have not seen our multiple expand as a public company. And so that tells us a little bit that we're not really being rewarded for growth. To us we really try to communicate a very sustainable growth algorithm to uh, grow users single, um, mid double digits and revenue per user by low double digits. And if you believe in the combined effect of both of those metrics, it's going to be a 30% plus growing type company for many years to come. And we're totally fine with that. And you know, if the multiple we trade off is what it is, that gives us an ability to launch new products of which we think can hopefully lead in multiple expansion. From there, when people realize that we can generate revenue from, from more than just a couple units.

Speaker B: I'd love to pick your brain on something. So what you're saying is like the, the high growth is not always like rewarded from public market. So from your side, if you had let's say like uh, two companies, one companies that year, uh, one is growing, let's say 10%. Year two they're growing 200%. Year three they go back to like 20%. Year four like it always changed like this. And there is another one, company B that's growing, let's say like 35% every single year for like five years. Do you think that uh, company A will not get like a uh, higher stock than company B just because it's not as predictable?

Speaker A: Well it depends because the company that grew 200% may have some insane revenue multiple. And so, uh, I know CFOs ah, are companies like that and they tend to envy our position because we have, we traded a very modest multiple with every opportunity to try and do things to expand that versus they're thinking of every way they can preserve this potentially unrealistic multiple. And so I'd rather be in the more conservative world where we have a great core business growing at a rate we feel very confident in, with a model profitability and flexibility to launch new things that can get investors excited about for future growth.

Speaker B: Yeah, I agree. And uh, I know we're almost running out of time, so that's going to be the final question. Uh, what would be uh, an advice you could give to uh, anyone who wants to uh, to build a company and ipo?

Speaker A: Well, I'd say these things take a long time, they take a lot of effort. And so you really better love the idea you're working on. And I've seen a lot of companies that started sort of copycat businesses because it's a great place to be or, you know, interesting space. But you've got to love what you do. Feel like you have an edge and a reason for a right to win. And everyone we've seen that tries to have copied Dave in the past and mostly sold our company or fluttered because the founder wasn't in it to, for the mission. They were in it just to try and capture what was, you know, the hot company idea at the moment.

Speaker B: Great advice, Jason. Thanks a lot, uh, for uh, being here. Where can people follow you and follow Dave's updates?

Speaker A: Uh, you can follow Dave on x or on LinkedIn and you can follow me on, on LinkedIn. Not, not super active on, on Twitter, but LinkedIn, I, I post post sometimes.

Speaker B: Awesome. Um, thanks a lot, Jason.

Speaker A: Thanks so much.