From Blackstone to Building Crypto's Leading M&A Firm - JP Grabs, Areta

Speaker A: Foreign.

Speaker B: And welcome back to Finality. Today marks the 10th episode of Builder's Diary. If this is your first Builder's Diary episode, this format sheds light on the amazing people behind your favorite web three projects, chains and applications. Let's find out what visions our fellow builders and founders follow, how they got where they are today, and what future developments they anticipate. Today we are joined by JP who is the founding partner of Areta. And we are going to talk about all things in M and A in crypto as Areta is one of the biggest, if not the biggest M and A bank in the industry. Welcome to the show. Thanks for joining jp Thanks a lot Yuri.

Speaker A: Great to be here in a very interesting market week for sure.

Speaker B: For sure. Yeah. What a uh, what a week to record this episode. I am uh, sure you are very busy at the moment but before we dive into all of these um, vectors that are worth uncovering and to basically also have like a small forecast into M and A and the crypto industry, let us start at the very, very uh, beginning of everything. So um, you started your, your journey like the classic finance bro. I would say you, if you go, if someone would look at your LinkedIn, you basically see like all the boxes checked. So to say you also studied here in Frankfurt uh, where I'm recording from. So before we also get into that, when did you first discover that you had like kind of a passion or like an interest into finance and the, and the economy?

Speaker A: Yeah, it's, it's a, ah, great question. And um, probably a lot of people discover their interest in finance during business school days and maybe undergrad studying finance or business administration and probably to a certain degree also true for me but weirdly enough and um, I, I had this interest in, in business and finance already during high school to a certain degree or more than probably a lot of other high school students. I remember I was reading actually this Frankfurtiger mine in the German newspaper from Frankfurt around about the uh, which has a bit of a focus on, on business finance every, every day basically. And my parents thought I'm probably a little bit strange. Um, I wasn't that nerdy necessarily back in the days but uh, definitely had had interest in business and finance and you know started some small entrepreneurial unsuccessful things probably during high school as well. Um but so relatively early on uh found, found business quite interesting. Um, and then also decided to, to study business, uh, information systems which is a little bit of mix of yeah business and computer science if you will. But you know Frankfurt business schools are very Much more focused on business and finance. And that's also where I, you know, put my focus then, uh, throughout my studies and later on in the early years of my career. Um, but so, yeah, I think, uh, those actually back quite many years and it was just, uh, it became clear to me during studies that's where I want to be in business. Um, it's sort of what interests me the most and probably, you know, matches my skill set relatively well. And maybe it's also, um, basically a function of, you know, what are the alternatives and what else could you imagine doing in your life. And then business just sets you up in a very broad way, which I found really good. So, uh, you could have a lot of, you know, opportunities. Even if you figured out later on that finance, for example, wouldn't be the right thing. There are tons of other things you can do in the business world that have nothing to do or very little to do with finance. And so I thought it's also just a great starting point and you can develop, you know, more. More expertise in certain subfields later on in your career.

Speaker B: Yeah, interesting. Because let's have a closer look at that. Um, because, yeah, once again, your path took you from Frankfurt, uh, Business School of Frankfurt, uh, Finance School, then to, uh, Zangan, where you did your master's, I believe. Right? Yeah. And then bcg, Barclays Partners Group, and then finally Blackstone. So again, that's like the, like the dream career. The dream, uh, yeah, academic journey that one who is targeting a big career in finances is looking for. So, um, before we get like, more into the specifics of, uh, M and A, I mean, it's a fairly hard, um, A fairly hard path. Not specifically from a university perspective with regards to studying all of these things, but the grades that you are targeting and then also basically all of the internships, it's not, um. It's like one of the hardest internships, uh, you can probably do at Barclays BCG with long working hours. So what made you stick to the journey? What, uh, was like the one thing where you said, okay, that's. I know what I'm doing here. That's the one, number one thing, uh, that I want to do in life.

Speaker A: Yeah. Yeah. And private equity, then again, is. So going back to basically what we discussed before is a very specific niche and sort of field within business more generally and even within finance. Right. So that's something serious that takes a lot of time to sort of figure out what it first of all is hearing about it and then also, um, trying to get a job in that field. Uh, so I think there were a lot of different steps in between. And um, basically when you get into business school, especially in Germany, also private business, uh, school environment, it's very much career focused. Right. Um, and I really appreciate my time at Frankfurt School for example, uh, which you know, was a completely different environment than what I was in, in a public high school in Germany where it's almost in a lot of instances uncool to be ambitious and have goals. And uh, and, and then you suddenly come to this business school where basically everyone you see is, you know, I mean most of them are very smart and very ambitious and you know, have certain goals and even though they're pretty young, they don't really know what it will look like, but they want to be successful. And then you get to know like all these firms and different career paths and what are the different steps to take in order to land such a job. Right. So you're just in a very different environment that probably for me and for most young people then triggers something and becomes pretty admirable. Like you want to be successful, right? Uh, you uh, want to. Yeah, like at least also try different things. I guess it requires a certain level, a level of curiosity, like everything in life, um, in entrepreneurship but also in finance of business. And for me I actually like one step that you forgot to mention is I uh, essentially started my career at the uh, uh, kfw, which is basically a uh, public Development bank of Germany. And I did basically dual study program which is a German specific thing, I'm sure you know it. But essentially I had to work at this bank three days a week. Um, and then three days a week I had university classes. So essentially started my undergrads with a six days week which probably also helped a little bit because you're basically 18 years old and you get from, you know, very chill and relatively unambitious public high school environment to this private business school plus three working days a week. And so you suddenly have a huge workload which on the one hand side is a bit of a different student life. Although I would say we had an amazing time and really uh, great uh, like most of my best friends are from that time and uh, you know I had amazing exchange semesters. But you basically start very early on like working hard and you know, gaining first work experience and then also still at the same time being in this business school environment where you also have to I guess go the extra mile and sort of perform well, uh, because you want to maybe open doors to different career paths and new jobs. And so um, you really basically in a unique setup that you don't find in many other, I think, uh, um, high undergrads or even business school setups. They where you just try to get the, you know, max out of yourself and, and you know, um, gain a lot of experience in a very, very early in your career and life and in a relatively short period of time. And then that leads basically to the next steps which are the things you mentioned, right. You become familiar with, you know, let's say consulting firms, which is very common field. So you, you try that, um, then finance especially in, in my case back then, uh, sort of studying in Frankfurt where most or a lot of people end up in the finance world and investment banking becomes something you want to try. And in any case, I guess an industry that you know, has a certain myth and sort of interests, interesting like characteristics and uh. Uh yeah, it's a very specific industry that I guess as a young guy, you know, you, you find interesting to try it out and also plays with a lot of downsides. But certainly you learn quite a lot in relatively short period of time. And so then basically that leads you at some point to private equity. I mean definitely not everyone. Um, but in my case it's a combination of okay, having worked in investment banking, strategy consulting, which are usually the two main fields where private equity firms recruit from. And so um, it's a bit, it, it's a bit of a combination of the skill sets you gain at you know, those previous jobs. And um, you know, then it was also in mindset, a bit opportunity driven. Um, so I uh, had the chance to do an internship there. And so that's how I then really for the first time understood what that job is about. And then you know, it was a good opportunity to, to start full time, which is typically relatively rare after university because know, private equity firms mostly recruit uh, investment bankers or consultants with like two, three years of experience. Um, and so then you know, uh, I think I just want to take that opportunity and try it out. And so I ended up basically in private equity. So there's a lot a long way basically with many different um, coincidences and sort of steps that I took and um, was eventually um, happy and grateful for that opportunity and I think was also a great learning experience.

Speaker B: Yeah. On the other hand, I mean you mentioned it like starting from the age of 18 you passed uh, your weight with this kind m of success story. Right. So it was not just pure coincidences and uh, luck left and Right. It was like um, a journey. That was a very dedicated one. Right. So um, yeah, six, um, basically six days a week spending time in the university and then working in a very sophisticated field. Um, yeah, also requires a lot of, yeah, a lot of time. Also a lot of pain I guess. Um, but yeah, um, you ended up in London and correct me if I'm wrong, but I would say the major finance hubs in Europe are uh, London, Frankfurt, maybe Paris. But these are the top two dogs. Top three, maybe Milan.

Speaker A: Yeah, I guess London is still by far the biggest. Um, and you know, Frankfurt, Paris, Amsterdam, Zurich, etc, all great hubs as well. Uh, but London is probably, you know, with New York and then the Asian major finance hubs like Hong Kong and Singapore, probably the uh, finance up in Europe. So that's also. There was another reason why I ended up in that job and sort of took that opportunity versus starting in, you know, strategy consulting or investment banking in Germany or so. Because it's just a very unique and massive hub where you get to work on transactions or um, projects across Europe basically and you're in a vegetable international environment.

Speaker B: So it's like really like internationally. It's like you have New York, London, Hong Kong, Singapore, like these four and the rest are like, like these for the S tier and everything below is like solid eight here. So for example Frankfurt, Paris and. Right, like this is how you would basically construct um, a tier, a tier table.

Speaker A: No, yeah, kind of. I think Dubai is probably also up and coming nowadays. Wasn't the big thing back then when I started my career. Tokyo and there are probably a few other hubs, but um, yeah, I think internationally, uh, New York, London, uh, for sure, Hong Kong as well as Singapore. So yeah, it was within Europe basically the um, and still is the, the biggest happen that was actually pre Brexit, I guess, not just after um. So it was a, it was a, yeah pretty, pretty good career opportunity especially um, for the first years.

Speaker B: Yeah. So tell us more about, you know, the lifestyle of working in private equity in London. I understand that probably are also a lot of cliches around that some of them might also be true. But you know, what was life, you know, as a young, uh, man living in London, working in pa, um, what can people basically expect from this life when they um, when they start this journey or like in this position as, as yourself, uh, where do you live, how long do you work? What's like work, life balance, um, do you actually have time, uh, to spend the money that you earn and what are the financials here, like um, kind of a rundown would be much appreciated because also to make it like, okay, you worked at Blackstone, uh, right. Which is like one of the, also like one of the S tier firms you can work in in this sector, right?

Speaker A: Yeah, yeah, it's probably, probably more boring than you would think in terms of uh, it's, it's not this Wolf of Wall street kind of environment and lifestyle. You live necessarily as a junior in finance. And then private equity is probably on average a lot more normal than uh, starting a career in investment banking where you tend to work longer hours and of times also tend to be to live a little bit of a different lifestyle. But uh, yeah, it was an amazing time to be honest because I was, I guess in my mid-20s, um, just graduated, started a job in London. And what's cool about it is that in finance basically, um, all the new analyst classes start around the same time. So you can imagine basically you know, Morgan Stanley, Goldman, um, J.P. morgan, all these banks, they have a new intake of let's say 50 to 100 people had just graduated from university, mostly all across Europe or even beyond that internationally. And so you have a lot of young people moving to London at the same time, you know, getting to know each other, working hard, but then also you know, having a good time in London. And um, luckily a lot of my really close friends from university days also started their career in London around the same time. And most of them at different firms. So you get to know a really big group of uh, like minded people of the same age basically in, in the first few weeks and months, uh, in London. And so you have a really great community. And uh, I think that was, was quite interesting. It was basically, it basically felt like another sort of um, few years of university or even exchange semester. You're in a new city, right? Um, of course on the other side you also work relatively hard, um, so it wasn't exactly the same, but I would say in terms of hours it really depends. And it's super volatile. Especially in private equity. You can basically have weeks where not much happens in terms of, you know, electivity. Maybe it's, it's market driven or fund driven. And so you have pretty normal days, uh, you know, where you go at home basically after dinner. You go home after dinner, uh, around like 7:00pm um, but then you also have weeks when you work on a live transaction. And that's the same for all the big private equity funds or investment banks or also law firms like all these, you know, transaction driven, uh, Services firms, you very, where you can work basically until uh, after midnight and every day and you know, six, seven days a week or so. Um, and then suddenly such a deal might die and you basically start uh, from scratch again and you uh, have more normal hours. But um, I think the trickiest part for me was that it's always outside of your control especially as a junior. Um meaning really you don't have any kind of freedom. Uh and even though you don't work every day until midnight or 2am but you really can't control it. So there were instances where I, I for example um, didn't, didn't work as much and sort of you know finished work at like 6 7pm in spring or so and you know I had my summer holidays planned and then suddenly you get to work on, on a life deal and the week before you have to cancel your summer holiday plans which would have been the first holidays of the year or so. And so um, things like that I think can be really frustrating. And for me as someone who values freedom and control over my life uh much more than, than most other things, um, that was at some point something I, I wasn't really or I didn't really feel that it was a great trade off to be honest, um, especially at that age and so, and I still don't think so um, but uh, so yeah coming back to your question, I think uh lifestyle can be very interesting. You know you're obviously also uh earning a good amount of money for that age and so yeah you have a pretty interesting lifestyle uh where you know you still can't afford a nice apartment in London for sure. Um, what are like the entries salaries

Speaker B: there, what are the entry salaries there and what amount do you need to plan for, for rent? Like I, I imagine London be uh being like very similar to New York, like closer York then to let's say Frankfurt pricing wise.

Speaker A: Yeah and it has changed a lot I think since uh I started. Um, I think the salaries have increased quite a bit since then. Uh at least that's what I hear now from my colleagues and, and and basically other people in, in traditional finance. Um but to be honest back then I mean the entry levels depend also a lot on the firm and private equity is usually a little bit better than in banking. But I think in banking even at the biggest banks some would make like 50k annually pounds, um base salary and then you have a ah, bonus on top which can be 50 to 100 or more than 100%. Um but that is obviously only paid at the year end. Right. Uh, and then you have uh, to pay relatively significant m taxes and Social Security in England as well. And so uh. And yeah, flat is basically uh, similar to, I mean higher than Frankfurt or Germany for sure and probably any other part of Europe lower than New York. But uh, yeah, you end up paying, I don't know, uh, maybe one and a half K monthly on, on a room, uh, for a room. And so there's not much left actually in terms of base salary. So you clearly don't live that Wolf of Wall street lifestyle. But it frankly for most people also doesn't matter too much in the first years because ultimately uh, you know that you would make pretty big jumps if you stay in that industry. And um, at the end of the day you get a nice bonus at the year. And so um, I think very few people are trying to optimize for short term, uh, base salary, um, as it's you know, uh, just good enough to basically fund your lifestyle and not a crazy lifestyle. Uh, and so yeah,

Speaker B: yeah. So you are looking probably like after a year if we would look at private equity and investment banking, it's fair to say that uh, the top talents could earn uh, around the 100k benchmark partially, uh, even more. And um, after two or three years you could actually go very, very fast towards 200, 250. Right. Like within the first years if you stick to that, if top up the bonus a little bit like um, yeah, but, but as soon as you reach basically the summit then things tend to become a little bit easier. But you have to survive the first two or three years. Right. Where you also have to give up a lot of freedom.

Speaker A: Yeah, exactly. And then by switching jobs and switching from investment banking to PE or hedge fund or so you make even better jobs. But yeah, in the first year, uh, it's definitely realistic to make significantly more than 100K. And then yeah, as you say after two years, 200 plus and, and so on and you know at some point you make half a million or so. Um, but not a lot of people stick around for that long and uh, it's always a trade off. Right. Um, and uh, you're obviously surrounded by also pretty smart and talented and ambitious people. And there are also opportunities elsewhere which a lot of people realize. Um, but it depends, it all depends a bit on your risk profile. And so if your risk profile long term is relatively low, but you're willing to sort of exchange your time and control of your life with sort of um, compensation, then it's a fantastic um, and risk adjusted it is overall a fantastic career path. Um, but it depends on how, how much risk you're willing to take and sort of how much control you want over your life and sort of, yeah, what I guess long term your ambitions are. Um, for me it was always also the way I looked at it in the end was a bit like if I keep doing this for the next 30, 40 years or so, which a lot of people end up doing, you know, pretty much what the outcome will be, how much money you can earn, what kind of role you will have, what you're going to be doing on a day to day. And for some people it's, I mean it is sort of potentially a big amount of money and it is very desirable for a lot of people. Um, but for me it was always in my mind, okay, if I look back in my life in 40 years and this is all I had done for basically 40 years, um, would I not regret missing out on other things, having tried my own thing or you know, having um, moved somewhere else, having sort of started my own company or tried a new job opportunity or so. And isn't it always possible to go back um, to that industry if you really wanted to and you know, if you try something else and fade after a few years or so and it was always a bit my framework. And then it also really felt like a no brainer if you have some level of risk appetite. Not for everyone I think, but um, that's the way I looked at it and uh, but it is very difficult I think, um, you know, if you young and, and sort of starting um, a good career and, and then also having worked for it for so many years and having put so much into it, uh, and then sort of leaving all of that behind. But yeah, yeah.

Speaker B: And I think this leads us to the founding part, like founding Areta but before that, like when was the first time you first heard about crypto and when did you get in? I think that's like the, the first thing. Was it during your time in, in London or even before?

Speaker A: It was actually before um. So funny enough I studied business information systems. Right. And one of the sort of, during the final year or so, um, I, we had this course, uh, which was basically a project course where as a class we had to develop uh, something on Ethereum. And so we basically had this professor and that was like very early days of Ethereum. And so this professor basically was a big advocate of blockchain and taught us.

Speaker B: Right.

Speaker A: No, actually not him, it was a uh, different one. Rosbach was his name. But, um, he was basically teaching us about blockchain and Ethereum. And he was saying, literally what I'm teaching you guys now is like, you know, real money at some point. And I'm, uh, teaching you, you know, something, uh, that will could change your life. And yeah, I guess, um, in your case at that time it was.

Speaker B: Huh, in your case it did.

Speaker A: Well, basically I basically didn't take it too seriously back in the days. I think I had bought a little bit of BTC and ease at the time or before. But yeah, definitely not enough. And uh, at the same time, I also didn't, uh, take it seriously enough to consider making a career in that, uh, that space. I mean, that wasn't even an industry back in the days, of course.

Speaker B: What year was it? Roundabout 20. 15, 16.

Speaker A: Right around. Around that time, yeah. Okay. Um, yeah, so basically that was, I guess my first real touch point with industry. And then I very successfully ignored it and instead decided to double down on the finance career. Um, and then really got back into it, I guess around Covid or so. So, um, bit more than five years ago maybe.

Speaker B: Yeah. And then I think it was like in 2020, I think you told me covert, uh, times, you still experienced that in London. And then, uh, what happened? Like, I think you've co founded Areta in 2021 or something. So that was like between getting back into crypto and founding Areta. Wasn't that much time in between. Uh, like, how did this happen?

Speaker A: Yeah, it was actually a quite natural transition. So I was basically, I spent a few years at Blackstone and I knew already since I started at Blackstone that, or actually I knew way before, but, uh, it was clear to me, my first hit Blackstone, that I wanted to do something entrepreneurial in my life and I was, you know, willing to leave after a few years, basically. Um, and so like the first few, few years, besides working and, you know, enjoying London, it was also about figuring out what that could be. And that's actually incredibly hard. If you're working a lot, uh, you're in a very comfortable environment, you make good salary, you have a decent career trajectory. And so really, and starting a business or even like identifying the right opportunity or industry is like incredibly difficult, uh, and especially in parallel to working in finance. And so for me, it was a bit coincidentally that I kind of discovered crypto gamb, actually before, uh, doing that. And I was exploring a few other, um, sort of areas to start a venture in sort of, uh, outside of crypto, but intake or tech enabled industries. And then kind of getting into crypto was a bit coincidentally I had some friends who were spending a lot of time in crypto, um, especially during like 2020, 2021 and you know, kept talking about it and I kept ignoring it successfully and uh, but at some point I was like, I was actually quite bored at some point during COVID and uh, had a bit of time, there was not much to do. So I started uh, you know, trying some defi protocols and uh, fell really down the rabbit hole and back then, and then I started really spending most of my time outside of working in private equity and in crypto for a few months and realized okay, that's where uh, the risk reward profile is super unique. Uh, for someone with a background and interest in finance and tech, it's uh, the very unique combination. And at the same time, yeah, basically the creation of a new asset class and technology that not a lot of people grasp its potential yet and it has a lot of flaws or had at the time still has, but you know, improving a little bit. Uh, and so I just felt like this really once in a lifetime opportunity that I didn't want to miss out on. And then it was just about finding the right business model or what, what could we do, could I do in, in the industry. And uh, at that time close friend of mine who I met at Blackstone, basically he, he was already uh, spending a lot of time in crypto as well. And so we were basically experimenting and um, trying to figure out what could work for us. And also with our skill set, if you're pure finance guy, then what can you really do in crypto? Right? Um, ultimately a lot of people were launching venture funds at the time and, or I had launched them already before. Our background was obviously in investing or sort of asset management, but not, not really venture. Plus there was also very hot and competitive market and so we kept looking for, for different things and um, yeah, then really at some point found this opportunity and uh, decided to call in on that and.

Speaker B: Because there was not much going on, right? There was not much M and A going on. There weren't many M and A banks or professionals. Right?

Speaker A: Yeah, there was first not much M a going on, but there was obviously suddenly an industry emerging, um, that was still super immature but where there was a lot of capital flowing into it and some really good talents starting to build in companies and you know, actually making use of this technology that was created some years ago. And so ultimately that in our eyes sort of would lead to an industry A legit industry that will also have uh, some level of consolidation and most importantly that we need the crypto native investment bank that understands this asset class, understands basically the ecosystem, the different players and um, really caters also its services to the specifics of that industry. I, I don't think I would have ever imagined trying to build an investment bank coming out of private equity. Um, and it's generally not the typical business you found, but only in this specific industry, um, it, it made a lot of sense and you would be able to create a proper mode and um, yeah, uh, be able at some point to compete with bigger banks. And so uh, it felt like very unique opportunity that not a lot of people realized at the time and at the same time something that really uniquely matched our backgrounds and profiles. Um, in this specific industry, um, having sort of crypto native understanding and interest and the appetite for taking this risk and believing in that industry long term and also having this long term time horizon which uh, also not a lot of people in crypto in particular had around the time or still have. And so yeah, it felt like basically that it matched on a lot of aspects and so uh, we decided to go all in on this.

Speaker B: Yeah, I think now it's the right time to also basically cover the market dynamics a little bit. Because you mentioned in the beginning immaturity, not much M and A activity and so on so forth. Um, but yeah, how did things accelerate? And uh, then one point, I mean we worked on one M&A idea together back in the days with friends to swipe. I also know that uh, I mean I think it's also fair to say like whenever I get asked, hey, I'm also looking to do like uh, mergers and acquisitions I would say. Okay, happy to connect you to JP and the team at Areta. And what I like what it looks on the outset is that currently they have very busy times at Areta. Uh, your team is growing, you can see that on LinkedIn, deal after deal. So now that the industry is like really consolidating and we are getting into this in a bit why this is the case, it's fair to say that now it's like kind of the, the golden, the golden times for having an M and A bank. Right?

Speaker A: Yeah, um, I think it's been definitely changing a lot as you say. I think in the first, you know, one or two years when we started this business it was almost no activity. Uh, and so besides mna, then we also uh, started to basically adjust this model more to the crypto world. And you know, became active in governance and uh, decentralized organization, um, started doing more capital markets transactions which we also, which we still do a lot today. And, and so but from M and A perspective it was very different. And plus you know, it was the beginning of the bear market. So from a purely business and revenue perspective the worst point in time but at the end of the day for us with a long time horizon was the best time to start a business because it means you have a few years until there's potentially a new bull market to really build the company, um, you know, expand your track record and network and be in a position where you can get access to bigger deals in the bull market. And I think that in hindsight worked out really well for us. Um, although it was very hard time in the first few years. And also as a first time founder we were extremely young, especially for founders of such a company typically, I mean when investment banking boutique or so is founded, which also doesn't happen that much anymore but typically founders you know, are investment bankers with like 20 years of experience. And uh, so it was a very difficult time I think to start in an industry that just went or just started going through this incredible, incredibly tough bear market. With FTX collapsing, a lot of doubts about the industry plus then first time founders bootstrapped. Um, but I think the good thing is that we stick to it. And then really um, had to grind through the bear market and build this track record, slowly start building a team. And so we were in a position where by the time the bull market started a lot of people actually already knew us. We you know, had a decent client base, had a running business, had a team and so then throughout the bull market could expand that team further and you know, double down on the opportunity. Um, so yeah, I think last year has been very busy. I hope it's not going to be less busy in the next few years. But uh, I'm very confident that yeah, we've put the business in a way where I think um, you know, it's not as cyclical as the industry per se and uh, also the industry has grown up a little bit. M and A is also somewhat uncorrelated or at least not strongly correlated to short term token prices and noise. Um, but yeah, uh, it's been a very exciting year and I think for us as an organization also to grow from small startup to really a bit more of an established player. I think in M and A, in digital assets. As you say, we've become the market leader last year with more than 10 completed transactions. Um, there obviously still big transactions that happen without us and um, and also with any of our direct peers. Right. Um, for, for the big deals you would compete with, you know, the Goldman Sachs and JP Morgans of this world and so on. And uh, it will always become or it will always be remain challenging, especially as an independent firm. But at the same time the interest from traditional finance banks also comes and goes with you know, market cycles, uh, which then again looking forward, hopefully it creates another opportunity for us. So you basically have all these big banks, you know, come and go whenever there's a, ah, an opportunity and the industry and the pie grows and it becomes relevant enough for them. But um, I can also see a scenario where many of them disappear. Again, I think the bottom was always a little bit higher after such a bull market. And probably there's a lot more institutions that have built conviction in the last few months. But ultimately I think by just sticking around and doing a good job and um, building the right connections and doing some good transactions, um, every bear market represents a new opportunity for us to grow as a firm and establish ourselves even more.

Speaker B: Yeah, I believe, I mean even basically becoming potentially also incubated by another bank. Right. I mean you guys have such an extensive network, you know, almost everyone in the, in the industry for JP Morgan to basically for example get started, um, like it's an uphill battle for them. No. So would you also think that for example, radar could be like an interesting M and A target?

Speaker A: Yeah, I mean, let's see. But I think if you look at sort of the you know, early tech days and around the doom bubble there were a lot of these specialized tech investment banks that were acquired at some point. I think it's a business that you know, just compounds on um, like insane level because you get to know a lot more people every year and you know, you do more transactions with every deal, you get in touch with new buyers and so um, I think it's, it's and also more than I expected before we started this business. But it's just an incredible business model if, if you do it well and if your time horizon is just long enough, ah, it's not necessarily a business you want to sell soon. And um, frankly it also takes a lot to establish this platform that someone will want to acquire. But so it's definitely not our, our goal. But yeah, you never know. And of course there can be also merits of combining it with another bigger player. Especially as the industry matures, becomes more competitive and requires also different Types of services, um, and capabilities, capital and so on. So we'll see. But I think for now we're very happy with the bootstrapped and needs set up and being independent and very sector focused.

Speaker B: Yeah, and you mentioned the term maturity. So maybe like a small, small outlook into crypto. Because like I was actually on a panel about M and A, because we were like involved in this, in this M and A transaction in uh, 2025, um, 2024, 2025 as you know. Um, but uh, yeah, like whenever I had these conversations about seeing the market, institutionalizing, seeing the market becoming more mature. So um, what do for the next couple of years for the industry itself if we just consolidate like everything to like a big pie and then all of a sudden the this you know, ecosystem, uh, yeah, uh, that uh, that usually contains many ecosystems, uh, many players, many projects and teams become basically like more like a monopoly M style thing, uh, like the crypto industry. And we are just becoming like another arm of the financial uh, sector. Because if you talk to a lot of people in crypto right now, this is like what it seems like a little bit, right? Like centralized, stable coins, banks building their own tech stack. Um, all of a lot of OGs left the industry. I read uh, two days ago that Kaisermani said I'm leaving crypto. So um, yeah, what's the takeaway, um, what's the takeaway here? What's the, what's kind of a forecast? Because I believe M a place maybe the biggest role in all of this. Um, bringing everything together, like consolidating everything.

Speaker A: Yeah, yeah. In my opinion it's always difficult to make such predictions very early in the bear market or you know, after um, these last few weeks. But I know a lot of people are saying basically that this crypto native wide west days and sort of the vision a lot of us got excited about initially and joined the industry on, it might be over. And it's uh, just becoming this technology stack that a lot of non crypto native technology firms and financial firms, traditional finance companies will leverage and uh, build products on potentially. Um, I do definitely think it has changed and we see it a lot with you know, all these networks and crypto native protocols that have launched and focused actually not on getting traction or sort of the more traditional metrics but uh, instead focus on, on other things and their token. And uh, and I think that has basically, I think that time, time has changed already before this market correction. I think before that a lot of people realized okay, we have to grow up as an Industry, we have to focus on real metrics. It was really difficult suddenly for you know, these infra coins to track capital because also suddenly there was this M and A exit path and IPO exit path leading to more appreciation of real businesses in crypto also by VCs and that's where a lot of capital would go. Uh, so I think already before potentially this beginning, at the beginning of this bear market, I think the industry grew up a little bit or came to certain realizations. And it's just a, uh, logical consequence that now some people that, you know, believed in it for this bigger crypto native vision are leaving or uh, losing some excitement and some of the businesses building on that foundation or struggling and dying. And I think that trend would just accelerate as the industry consolidates and uh, markets are turning red. So uh, we've already been seeing it actually in the last few weeks that you just got a lot more inbounds from smaller businesses that are struggling, running out of cash, struggling to raise and looking for M and A. And um, that's typically bear market sign to certain degree. Um, and so I do think that this trend will accelerate. What the end vision really is for crypto I think is a bit unclear than it was for, for years, for, for most people a few years ago. But for me personally it's more positive than it was a few years ago just because you have this, you know, fundamentally healthy tailwinds and also uh, really attractive use cases for the first time that have this clear product market fit. And yes, you know, a payments stablecoin payments business might be centralized and might not exactly match what some cryptologies envisioned it a few ago, but it does leverage blockchain technology um, to certain extent or maybe in the same way as sort of we were hoping for a few years ago. And it is actually incredible to see that there are now real businesses being built on top of that by, run by founders that are maybe not the crypto native guys that made bitcoin money early on, but still actually believe in this technology now and are taking advantage of it. Um, and, and then you have regulation and, and, and so there's a lot of things that actually make me a lot more bullish than I was probably in the last bear market. And um, and I think, you know, it's just this process of cleaning in the industry. And yes, it would look completely different again in five years or in 10 years in the next bull market. Um, but you know, history has repeated itself, especially in this industry and some people will be leaving. Uh, there are Other opportunities in tech, AI robotics, uh, have become really interesting and were in such a thing in the last bear market. But there will also be a new group of people that will enter the industry or that will continue to believe and adapt to the new driving forces of new flows of capital, institutional adoption. And therefore I think the industry will continue to develop itself. What the end state exactly looks like, whether you know, we're just building basically a new form of technology layer that you know, real businesses will leverage and own more in the long term versus a completely decentralized um, world, it's really hard to tell. Um, but I do think also AI and agents robotics can play a really huge role in the adoption of crypto itself. And that space is moving so far that I think it's really tough for anyone to make a prediction to what extent and crypto will be used going forward. But I, I think it still remains, you know, a super attractive industry from a risk reward perspective and especially if you have this long term horizon, it's I uh, think right now in a unique position and bear markets are usually very good time to build and, and you know, focus on, on the industry and your business and yeah, if you keep believing in the industry and we, and I personally still have very strong conviction and probably stronger than ever before, uh then I think it can be quite an exciting optimistic future.

Speaker B: Yeah, um, as it's uh, always been the case, bear markets are very ideal, just ideal for, for building. So heads down and to get the work done. Um, yeah, J.P. pleasure is always talking to you. Was uh, a lot of fun uh, uncovering all of the angles from MNA and crypto. I also think, I just do want to add that I think if you look around in the world right now, uh, across all sectors, you see a bunch of M A activity.

Speaker A: Right.

Speaker B: It's not only a crypto, uh, phenomenon. You see it like in all sorts of industries and, and sectors that uh, things are coming together, things are consolidating a little bit also because I think like the big like, like the world as it is, it's uh, it's just, it's just consolidating more and more and more in many ways. So yeah, that's like something that uh, we all need to keep in an eye out for. But yeah, thanks again for joining. Where should people go to when they want to get in touch with Areta? Uh, maybe want to learn a little bit more. Maybe they're like people looking for ma opportunity and are uh, looking for someone who can advise them.

Speaker A: Yeah, sure. Um, always feel free to reach out to me directly. LinkedIn, Twitter, our website, Areta IO, um, and yeah, always happy to chat. And, uh, as always, pleasure speaking with you, Yuri. Really enjoyed our conversation, and all the best for your future, and I'm sure we see each other soon.

Speaker B: Thanks, man. Was a pleasure.

Speaker A: Thank you. Bye. Uh, bye.

Speaker B: I'm sorry, my friend, but this episode has come to an end. Please keep in mind that all information in this podcast does not represent financial advice. But if you like this podcast, why not subscribe to it and give us five stars? And with that being said, I hope I will see you at the next time.