Rich on Paper, Stuck in Reality: How Startup Employees Borrow Against Their Equity

The best people in all these major tech companies, frontier tech companies are very rich on paper, very stuck in reality. The demand is huge. We've got over around $500,000,000 in collateral posted to the platform now. We're basically saying, hey, keep your equity, get cash now. We called every bank on the East Coast, the West Coast. If you own a $100,000 in shares, they're not even gonna quote you. To be entirely honest, they're just declining outright.

The banks, the lenders, all these incumbent guys running on legacy legacy systems are pricing a lot of the assets across deep tech as speculative venture. We, as tech dollar, don't share that view. I don't understand why a bank would price this stuff as terribly speculative and terribly risk on when it's really civilization scale technology. We come from venture background, not a credit background. We want to be one of these assets.

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If you want an intro, you can ping me on x or go to latitude.xyz to learn more. Alright. So, Terrence, we're back. Thank you for joining us here now live on Stable Minded. It was fun to get to know Tech Dollar a couple weeks ago live on the show, but I don't feel like we had a chance to really unpack, one, your background, but also go into some of these concepts and the industry that you're really challenging here. There's so much nuance to it that I think there's more to unpack, so thanks for taking the time.

Definitely. Thanks for having me. There's always more. There's always more. There's always more. Okay. So you're CEO, cofounder of Tech Dollar. Give us the... How you kind of intro Tech Dollar to someone when you just meet them, and then back us up into the progress

thus far of the business. Yeah. So Tech Dollar, it's still prelaunch. We're half launched, basically. We're live for borrowers to come in and request loans. What does that look like? Right now, the best people in all these major tech companies, frontier tech companies, are very rich on paper, very stuck in reality. The biggest line item in total comp is equity. But that equity just sits and it doesn't do anything for you until an IPO happens or a tender window opens up.

Largely, tender windows don't line up with life events or when you need money, so that's where we kind of come in. We come in, we say, hey, you own x amount of shares in company a, you can borrow, we'll give you cash now, rather than, you know, six months, a year, two years from now. So, yeah, it's pretty timely. It's like you see a lot of these new companies start getting towards IPO windows like Anthropic. You know, they're opening up, but a lot of employees will still be sitting on lockup periods.

And, yeah, that's where we kind of fit in and cater these guys. Give us the... I'm a senior in college. I know nothing about how startup equity works,

what is normal, how these things are distributed. Like, I'm imagining from your perspective, you've seen, like, what is typical if I'm working at a start up or a frontier company,

how employees are typically treated. What is the narrative of equity, which is why you go work for a company like this versus, like, an established liquid already public? What is normal for this cohort that people need to know? So when you're joining these companies, you're buying the dream. Right? Buying the dream that you're gonna build. So you're basically signing on saying, hey. I wanna contribute towards this massive mission.

And part of that equity is promising to you that mission's gonna be worth something, right? Like I said before, the problem is in the time that you're building this mission, might not be compensated in line with what you think the outcome is, Right? Now, that outcome might translate differently for different people at different stages. Investors that come along and back that company that just hired you at a seed stage might have already seen a good return on paper.

Might not have recognized it yet, maybe they've seen their book markup, their investment markup. And that doesn't translate to employees. That doesn't translate to you. You can open up wherever your equity lives. Traditionally, is somewhere like a Carta or a Pulley. And there's some new platforms like Cake. That's another company we're working with. And you know, you log in, you see a number. It's a dollar number. And most people only understand that much.

Most of the employees, most of the borrowers we talk to, sometimes it's literally the only asset that they have outside of, you know, dollars in the bank. Usually, it's maybe one of the first assets they've ever had, especially younger kids coming out of college that are, know, taking their first engineering role, product manager role, whatever it might be. A large part of early stage companies is obviously incentivizing attracting people with this equity. The problem with that is that's all they can really do.

They can incentivize you. They can attract you. But you can't spend it. You know, the bank cannot see that you are worth x amount when you open up a card or a pulley or wherever your cap table lives, wherever your shares live. So, you know, you can't get a mortgage on this. You can't pay prior tax bills with this money. You can't pay your tuition. You can't pay for a car. You can't pay for a down payment.

So traditional banking systems, lending systems, are totally blind to this equity, and they're blind to the growth of it as well. Previously, was companies, large banks that were working in the venture debt space that would give funds lines of credit against their equity. It wasn't always available to founders. Definitely was not always available to employees. Still is not. We spent a lot of time making sure this was the case, obviously, before building the product out.

And, you know, we called every bank on the East Coast, the West Coast. We found these banks, if they would price anything at all, they would offer you terribly low rate. If you own a $100,000 in shares, they're not even gonna quote you to be entirely honest. They'll just decline it outright. But if you own north of 10,000,000, maybe they would give you a $34,000,000 line of credit. Now, most employees aren't sitting on $10,000,000 in equity right away when they join a company. So it doesn't serve anyone. Right?

It only serves founders, investors.

And people with a ton of certainty. Exactly. And their bags are huge already. Yeah. People that are maybe early at Ramp or these companies that are like, okay, obviously, there seems to be like more of the pie here that we're missing. Yeah. So companies like Ramp, Databricks, Anthropic

Strife, which is super late stage. Yeah. Late stage, massively invaded valuations. There's a lot of guys that have joined, you know, like say a year ago, two years ago. They've invested one year, and now suddenly their shares are unlocked, And they're presented with still only one option, which is selling, which is literally the most suboptimal outcome you can imagine if you own these shares.

You know, there's a kind of like this saying that goes around, especially in, like, older kind of money circles, which is buy, borrow, die. Right? You know, buy your assets, borrow against them, die, and then those shares get transferred over to your kids, and you don't own the IRS tax bill, which is crazy because most people don't even, you know, get into this position in the first place. A lot of these people are getting into this position now for the first time and what might be their family's existence. Right?

So you've guys, know, Ramp, Stripe, whatever it might be, that are staring at 8 figures now on paper, and they're thinking, what do I do with this? Companies in San Francisco or people in San Francisco are now buying houses directly with equity. Right? Like you've seen online, there's people trying to buy homes with open AI equity. What does that look like right now? Right now, looks exactly like that. Looks like, hey. Transfer my shares to this guy. Incur some tax bill. Right? I'm not a tax adviser.

So, like, I own a house in San Francisco and, like, I'll I want shares. Sell it to you because I want these shares. It's more valuable than cash. Exactly. This is stuff that, you know, no one's stopping me from giving you my shares and you from giving me your house, right? Mhmm. So if we both mutually agree on the thing, that transaction can happen.

The problem is there's no counterparty to say, hey, I'll give you my shares, you give me money right now and a year from now, I'll pay you back because I wanna own the thing. I don't wanna sell my most valuable asset, but I also don't wanna pay a ridiculous rate. So, yeah, that's where we come in. And we, you know, give you equity now. Actually, was just thinking on the car ride over here. There's an old commercial. I don't know if you thought of it. J. G. Wentworth. Yeah.

It was these guys called one eight seven seven cash now. So it's tattooing your brain. Yeah. You can't get rid of that. You know, I'm gonna try and get that inside everyone's Why did that pop in your head? Because we're doing the same thing. Right? Like, we're basically saying, hey, keep your equity, get cash now. That's like, kind of our end goal.

Be able to kind of, you know, inside of a five day window, if not, you know, two days, be able to get people cash now, but also let them keep their equity, keep their upside. It's super important. Right now, like, if you needed $300,000, right, and you are sitting on ramp equity, in order to get the $300,000, you're not selling $300,000 with a ramp and taking all that money into your bank account and spending it. Right? You have to account for taxes.

It's not like a It negligible would cost you around, like, $1,100,000 to put that $300,000 in your bank if we're looking at, you know, surrounding a three x upside, paying your tax bill. It's crazy. So, yeah, you're basically taking home a third if that of the value if you sell this stuff. So... What is the proposed alternative? So proposed alternative is never sell. Right? Yep. Proposed alternative is get to own your most valuable asset. Yeah. So basically just, you know, I own my equity in Ramp.

I don't wanna sell the thing. I shouldn't have to sell the thing. I want to repay my college tuition, pay down my college loans. If I just started working at Ramp a year ago, maybe now I'm at the point where my shares are vested or starting to vest. You know, maybe I'm at my cliff or something like that, and there's a small portion that just unlocked, I've got, oh, $25,000 of shares have vested. Cool. If I sold that $25,000 worth of shares, definitely not paying my college loans down, probably taking home $67,000.

We can, you know, give you that full value upfront, charge you a very reasonable rate, somewhere around 1% a month maybe, similar to what you're paying on your credit card bills. And you can keep your upside. You can keep your ramp equity. You can wait a year. You can pay it back at the end of the term. You can pay it back earlier. We're giving people either full loans, just entire cash advances, or we're giving them spend cards.

So the next progression of our business as we kind of take this thing to market and offer it more broadly is how do we scale up the amount of borrowers we have? The demand is huge, to be honest. We've got over around $500,000,000 in collateral posted to the platform now, and the loan requests are every single day. We're seeing more and more. And just today on the way over here, it's something from Cognition, Flutterwave, a lot of new companies, a lot of older companies. Right?

A lot of companies where founders were replaced by c suites, didn't want to sell their assets, sitting on a bunch of shares. Who's typically reaching out here? Like, I can definitely understand the

I'm an employee and I want my liquidity here in some way Yep. Versus like who is typically driving the we want to work with tech dollar? So it's everyone, to be honest. Everyone with benefits. When

we started building this product out, it was originally supposed to be a solution for GPs, you know, funds that were sitting at large paper gains and kind of, you know, what was going on in the market and still is what's going on. Funds will go out and they'll, you know, present this large markup on their book to their LPs and they'll say, hey, you know, fund is up this much. We can't sell yet. Equity timelines have stretched. Right? Now we're looking at IPO windows which are taking north of ten years to happen.

Previously, this was about half that, five, six years. So they're playing gymnastics, LP gymnastics, raising continuation vehicles. And this creates a terrible dynamic. Right? Because eventually, like, that train stops and, capital dries up. And then what happens? Fund is forced to sell shares at a discount maybe on secondary markets, least optimal outcome possible.

So initially, it was, you know, cater to GPs, provide this liquidity solution that doesn't exist after there was the venture debt crisis a few years ago. And what we kind of found in conversations with investors and advisers was that the bigger part of the picture is employees, founders. Right? If 20% of every major tech company is giving their equity to employees, right, to incentivize people, that's an enormous, enormous amount of money. I think the secondary market now is...

I just was reading earlier today that secondary markets now, like, these pre IPO secondaries. Sorry. So, like, private markets where these things, you know, don't even exist. Hundreds of billions of dollars. Employees are majority of that. Right? You have guys that are working on Anthropic. I think we saw a year ago, Anthropic starts clamping down on SPVs because everyone's taking their shares, wrapping it in a vehicle, selling it.

And then suddenly you have, you know, multi letter deep SPVs where, you know, I might be in a, you know, four layer deep vehicle with exposure to something like Andoril that strikes down all transfer restrictions and people are still wrapping the thing and selling shares in it anyway. There's no underlying there. Right? What happens if the company hits you with a roofer restriction? That's terrible.

And the guys that just sold you the shares are, you know, making a killing and they're basically selling you, like, is the equivalent of, like, vaporware in crypto. Right? I actually think this problem is going on a lot today now as well. You see these people pairing coins with tokenized stocks. Just over the weekend, right, we saw one with... Paired with AMC, another one paired with Nvidia. And I think people will have a rude awakening when they realize that there is no underlying there. Right?

I saw people speculating, Oh, know, they've squeezed up the shit. They're manipulating these tokenized stock markets. Makes no sense. It's not possible. There's no redemption mechanism. Right? Interesting. Where suddenly my... I think it was HIMSS is the company. It's trading at, you know, like three times what it trading in the actual market. Interesting. And people are like, Oh, what's gonna happen Monday morning when the market opens? Nothing happened.

Because realistically, there's no redemption mechanism for HIMSS to HIMSS on New York Stock Exchange, the same way there is for AMC or something like Nvidia. So, yeah, I think people will quickly realize that if there's no underlying, there's no claim. And that's what happened with SPVs, and that is kind of what we are filling the gap for. Yeah. So if we're seeing an issue with a publicly traded tokenized stock like AMC or HIMSS as well Yeah.

I can't even imagine the complexity in private markets where these things like the liquidity and the markets like are so much different and smaller and Yeah. In some ways more more blurry. It's super fragmented, super opaque. There's really a big reason why people haven't been able to lend against this stuff in the past is, you know, how do we appropriately mark this thing? How do we price it? How do we even gauge for secondary depth? But, yeah, like, you know, now as things...

Inevitably, these markets grow and now they're over hundreds of billions of dollars, you know, the depth is getting there. So now we can look at, you know, live secondary pricing

and we can accurately price your shares, not look at a stale last valuation. We can say, okay. You know, okay. So like, this is more of a philosophical question, but I feel we've arrived at this moment where it probably makes sense to ask you this personally. As I'm hearing you describe this, it's like I'm struggling to to differentiate. Public markets versus private markets. Bad markets and good markets. That's a very different equation. Like Yeah.

As private markets become more public or, like, accessible, whatever the word is that you wanna use, hopefully they do. And I love the work that you guys are doing to make that the case. That becomes more liquid, more available. They start to become operating similar to public markets. In certain capacities. I'm sure there's so many differences though too. How do you see the moment that we're in just as a thought leader here and what's happening with private markets?

Because historically, public markets for a startup was the only real path for liquidity outcomes. That's

no longer the case anymore. What do you see here? Well, the number one thing is that, yes, these things converge. Right? Inevitably, you know, when you get improved fintech tooling, crypto tooling, you get better liquidity, depth, private markets get all the same things that public markets have. The other piece is the equity timeline stretching. So these things going from five to six years, now eleven plus years. It's by virtue of the fact that it's actually sometimes in a company's better interest to stay private.

You know, being a publicly traded company has a lot that comes along with that past just liquidity. Right? And, yeah, staying private does have a lot of edges to it. You know, have the board stay smaller, have the c suite smaller, have... Know, some people would even argue that a lot of depth for these private shares or private companies is intentionally, like, opaque and not deep. Right?

Some people, like, argue this even with the private credit stuff as well that, you know, slow marks, quarterly reporting is better than real time pricing because, hey, something blows up on a Monday, we actually don't have to report the thing or deal with it till the end of the quarter. Right? Obviously, we don't agree with that. For us, like, we're looking at these shares and we're thinking, how do we price the things we can underwrite it? Super simple. Right?

We have willing lenders that want to earn a great rate that are looking for diversified, you know, risk and yield in the market. And then we have borrowers on this side that hold very valuable equity even without this real time pricing or active, you know, secondary markets. So if we can fix both of these things, then you have a really great product. So what I think is I think it's better for a company to stay private for a lot of reasons. The company can always run a liquidity program.

It doesn't have to be as expensive as running a tender process. A big part of what we're doing now is offering embedded liquidity programs, where if you're a company, right, and you are spending a $100,000,000 to buy back your employees' equity, you're providing a liquidity program. And this is when you say you can sell can sell. So this is an employee selling back their equity to their employer? Yeah. So... You said earlier that it's like typically not the best deal. No.

It's not because selling is selling no matter who you sell it to. Right? Yeah. Company buying back your shares probably means a company, you know, sees some value in buying back the shares. So you as an employee, I think anyone, even not an employee, anytime in life someone's like, hey, let me buy this from you. Probably for a reason they wanna buy it. Right? Now the truth of things like everyone loves cash. Right? People have to spend money at the end of the day, you know, regardless where you are in life.

So if a company's only option in the past or an employee's only option was only offered by a company is to run this tender window which is like you said, a buyback period. That tender window is periodic. So it's not consistent. It's not always going on. It's not... You have no leverage. Yeah. There's no leverage. You're not like an engineer that's like, hey. Need to buy a house. Call up my company and have them run a tender window. No. And they set the price. They set the The company sets the price.

They set the timing. They even set the amount that they will buy from you or the amount that you're allowed to sell to them. Right? So we've actually had people that have gone through tender processes with great companies that run lots of tenders and, you know, some companies are really good at this. They run liquidity programs all the time. Targeted at execs typically or like big... It's broad. Yeah. Usually it's, you know, if it's vested shares, it's vested shares.

Usually a company is running a buyback because they want to run a buyback, so they want to clean up their cap table. Right? That's a big reason why people run tenders. It's a big cash outlay. Out of the $100,000,000, your employees are then gonna spend 30% of that money paying taxes. What a company could do instead and what we're trying to guide a lot of companies towards doing is embedding us as a solution where they can offer their entire workforce a credit line. Right?

They can take the $100,000,000 and they can say, we are gonna fund this equity value program, is what we're calling it. And, you know, every employee will get a credit card. And that credit card is entirely collateralized by your equity in the startup. And, you know, the money they put up funds those loans, employee pays it back. You can even be a revenue driver for the company. Right? Because then they're earning the interest rate.

And the beauty of it is if the employees don't pay you back, you as a company are the counterparties that loan, you're buying back the shares. Right? Perfect. So they get to clean up their cap table. They don't have to outlay nearly as much capital. Employee isn't responsible with their cash. That's okay because you're buying it back. And they can still set the price of the buyback at where they would have ran the tender price anyway.

So, yeah, it can give employees much more actual financial freedom, much more tangible realization for that largest line item in total comp, which is equity, and they don't have to sell it, which is, you know, not just an employee retention solution, but it's also an employee, like, talent attraction benefit. Right? Like, if I can go to... I know myself now as a founder, people ask, are you running this at Tech Dollar? We've only been around for six months, eight months, so not yet. Not yet. But I would. Why not?

Right? Like, what am I gonna do? Tell my workforce, hey, here's equity. Here's employees, you know, one through 10, and they all own a very sizable chunk of my business. What am I gonna do? You know, let them vest, come to that two year, three year, four year point and say, hey, we're gonna buy you out now. See you. And then I have either people that are gonna stick along with me and they don't own as much of my business that they're building anymore. They're not really like bought into that dream. Mhmm.

Or, they're gonna sell it and move on. Terrible. Yeah. It's

terrible for all parties involved. So, like, lot of people ask us like, what's the catch here? It's not a catch. Like, it's just a very also aligns It's a lot. Incentives deeper. Yes. Like, I believe in it so much that I'm actually willing to take A loan. A loan on this Yeah. Because I believe in where it's going so much. Like, yeah, the practical needs of life and like, you know, I don't wanna sell yet. Like, it's really, really interesting way that it aligns both parties. Why has this not existed yet?

What is getting in the way? What are the big hurdles that you are climbing? Because I'm hearing this and I'm just like, of course. Like, yes, we're going through this proliferation of private markets and real time markets and like stuff that I find extremely fascinating to cover right now. The stuff with prediction markets, I'm sure, has, a really interesting tailwind as, things become... Things that we didn't think were markets before can easily become markets Yep. In real time.

So there's all these tailwinds, but I'm imagining that the market has tried to do this in different ways. Like, what's been getting in the way of this? So, yeah, the biggest thing is that things we discussed earlier. So, like, liquidity, secondary market depth, real time pricing. This is just, like, technology advancing. Right? So now you have platforms. We're a very close partner in this company called Caplight.

They provide us, you know, insight with data across 500 broker dealers. We can see where shares are trading, when they're trade... Trading, you know, the type of shares. So maybe we have insight into where those shares are coming from. And that provides us a lot of insight. Right? We can more accurately price things. We can more accurately say, this company is running lots of buybacks. They're allowing lots of transfers. They're not.

So that's a big piece of it, just like technology progressing to a point where you can underwrite things appropriately. So the Caplight gets the data from the private markets about like... Yeah. There's a ton like this. So like... Who sets the price ultimately of these things? Seller, buyer. Right? Like, it's the same as anything

else. You are willing to sell your shares at this price, these platforms just aggregate where people are saying yes on both sides of the So StableDash is a small private company right now Yeah. Wants to go sell you some equity Yeah. In theory, like under Cap Lights, like, what they're trying to guarantee is that if a transaction happens for companies that are large enough, like, will be some sort of, like, reporting around that? It happens, like, across the board. It's just like what you see on, like, a Crunchbase.

Right? Okay. Like, okay. Here's a fundraising event. Here's a tender window. These things are made public, usually. Is the hygiene of that data pretty pretty strong right now? Yeah. It's pretty strong because it's coming from directly from brokers. Right? So it's people that are sitting in the middle facilitating these transactions. So within good reason, we can pretty much rely on the thing. Right? It's been attested to. And if not, we can go directly to the company. Right? We can ask.

A portion of this stuff, if there are transfer restrictions, which we'll see through these platforms, is going to these companies and getting these transfer restrictions waived in advance or just getting them cleared in the event of a default. So if you don't pay back your loan, what we do to make our lenders comfortable is basically go to these companies in advance and say, Hey, you know, if this guy doesn't pay us back, are you okay with us selling the shares if, you know, we sell them back to you?

Or, Can you give us a list of exclusions, companies or funds that you don't want us to sell them to? Basically, We'll help you clean up your cap table. The reason it hasn't existed or still doesn't is because largely lenders are pretty predatory. Right? We learned this calling on banks and getting quoted terribly punitive rates, terribly punitive LTVs, which is just the loan to value. If you have any any stories of that without naming names that... What does that actually look like calling a bank?

Like, what do you do? So you're calling, a credit desk. Right? Myself, my cofounder, like, two months. We, you know, shopped around as if we owned 8 figures of equity, 7 figures of equity in lot of these companies. We very quickly saw that, you know, if I own less than $10,000,000, they're not even pricing anything. Right? Like, if I own, you know, a million dollars of equity, even if it's in a company like maybe an they say yes to, but, you know, something like a ramp, just declining to price it.

It's just by virtue of the fact that previously, I think a lot of the companies, lenders, banks doing this took too much risk. The OpEx is crazy to do it. Yeah. It's It not costs a lot for, like, the size to make sense. So it's below that collateral threshold. Yeah. And also just, like, it blew up in the past super candidly. Like, that's what happened. People were over leveraged, borrowing too much. Banks were being too generous with the amount you could borrow against your equity.

And, yeah, it just blew up in a lot pieces. Have have other platforms approached any, like, famous companies that have attempted this in the last few years that... So lending, like, venture debt world has not really been hot after SVB blew up, obviously. But there's been companies that have financed things on the side of getting your equity in your hands. There's a lot of companies out there that will finance NSO executions, so so your stock options.

Usually what happens is an employee is working at a company, company balloons, becomes worth a ton of money, and now it costs them 50,000, a $100,000 plus to execute on their options. They don't have that money in the first place. So this is a great product. It's not something we do because it's financing to sell. Right? These guys are basically giving you the money in advance to buy the shares. Nine out of 10 times, these guys are going out there selling the thing.

Will Tech Dolley maybe one day finance for execution towards borrowing? Maybe. Right now, no. But, yeah, no. No one's really doing it. They're declining the pricings outright. I personally think, like, this whole business is founded on this singular thesis, which is that the banks, the lenders, all these incumbent guys running on legacy systems are pricing a lot of the assets across deep tech as speculative venture. We, you know, as tech dollar, don't share that view.

We don't think that these assets building on the frontier of, like, AI, robotics labs, defense, machine learning, chip adjacency... I don't know. I'm 26. You're young also. I think that, like, our kids, our kids' kids are all gonna be using this stuff. Right? Yep. Maybe, like, robotics aren't there yet, but they're definitely getting there. Maybe AI isn't fully rounded out, but it 100% will be. Like, I literally can't remember life before using something like a clawed or not. Like, I just discovered Grock Bot.

It's, like, blowing my head off. So I don't understand why a bank would price this stuff as terribly speculative and terribly risk on when it's really civilization scale technology, and it's gonna continue to trend that way. Mhmm. Right? So that's like our core thesis, which kind of enables us to underwrite this stuff. Do they just benefit because they control the price?

Like, I'd imagine that there's like a really, really

unfair incumbent advantage that they have. It's size. It's money. Right? Like, it's... They're controlling the market. The edge is they have all the money. Right? Do I think we will reprice venture debt across deep tech forever? No. Of course not. That'd be crazy. I do think we'll do it really well for the next four or five years, maybe even longer. Right? I think, like, we can definitely lead the way there. Someone has to.

But inevitably, you know, someone could come in and they could have billions of dollars and they could say, hey, we are now gonna underwrite all of this stuff. They're not gonna do it for now because, you know, the size is below their threshold to where it makes sense to make money. We might have, you know, hundreds of millions of dollars in collateral.

But even still, like, you know, we have people that are borrowing to finance engagement rings, houses down payments, tuition, kids tuition, tuition debt, like, you know, like this is like not enormous, but it is considerable. It's the point where we can make a really good amount of money doing it, and we can provide a really good service to borrowers. But, yeah, I think, like, you know, as these things come to scale, the market inevitably corrects.

Right? Inevitably, these things will be priced appropriately. Hopefully, we're first for a very long time. Mhmm. Yeah. I've personally... I don't know if I shared this on the last call, but the unlock mentally of Bitcoin with me... Like, I own Bitcoin. I don't wanna sell my Bitcoin, but it has been an interesting challenge because I've been accumulating Bitcoin for... Since 2017. I've really been thoughtful about it, and I think still the majority of my net worth is in Bitcoin. Yeah.

And it's been a really weird challenge of like, okay. How do you approach operating your life as this has gone through many different phases? But, like, ultimately, okay. I'm going to, on Coinbase, get a more... A Bitcoin backed loan on Morpho, and it kinda reminds me effectively of what this is. Where it's, like, here's this very... It's probably more clear because of the market depth and all these things, but as a user, it's been great to say, okay, I'm not gonna sell my Bitcoin.

If it plummets and goes to a certain amount, I know what that looks like. And there's like safety guards, safety nets for Coinbase and Morpho or whoever is like providing me the the extension.

Is that a fair way to think about this? Super fair. It's a perfect analogy. I really like the analogy also of a home equity line of credit. Usually a home is someone's most valuable asset. Same for me, it's liquid stuff, Bitcoin, whatever it might be. I don't wanna sell that. Like, it's my most valuable asset, and it's most valuable to me because I know ten years from now it's gonna be worth way more. Yep. So it's totally interchangeable. Your home, your Bitcoin, you know, your equity at Anthropic.

These are assets you shouldn't sell. Right? And they're assets no one wants to sell. Fact is, sometimes you need money. Right? Sometimes you need to draw down against stuff. Or, hey, maybe you're just like a very smart guy and you're like, I'm packing all my money into these assets like Bitcoin. Right? Like you're saying. And you don't wanna sell.

You wanna have cash when you need it, and you can draw against that Bitcoin, you can let the asset appreciate, and there are certain platforms, right, that even do like self repaying sort of stuff. Same thing with the startup equity. You have a company, you're working there a year, you're planning on working there for maybe five years, ten years, but you're a year into working there and suddenly you're with your girlfriend for six years and you wanna get engaged. Or, you you have a baby.

Now you need to pay for a lot of baby stuff. Don't know how big. But There's a lot. There's a lot. So, like, how are you gonna pay for that? Right? What's... What are your options? Go find another job? Terrible for you, terrible for your company. You're gonna leave all those shares on the table that are maybe not vested. Are you gonna take your vested shares? Are you gonna sell them and keep working at that company, give up your upside?

In your case, are you gonna sell your Bitcoin before it's at a million bucks plus? Right? That sucks. Yeah. And you don't wanna be in a position, right, maybe two years, three years from now, where that asset has appreciated. Right? Like I said earlier, if I need $300,000 today, I'm probably gonna have to sell around a million dollars of equity in my startup. That's crazy because that's considering today. Considering three years from now, right?

Maybe that million dollars in equity is now worth 10 or like we're on this crazy growth trajectory right now, right? Maybe it's worth a 100. And your most valuable asset, you gave up to what, repay your student loans? Terrible. Yeah. So it's terrible for everyone involved and hopefully these companies get aligned on this kind of thought because

it really does benefit everyone. Yeah. Right? And it's very low cost. Yeah. Okay. So last kind of key thought here of like how does this take shape? Like, the user experience that I will have as an employee Yeah. As an employer. I think at dinner, you mentioned some of these, like, different go to markets that you're thinking of of, like, partners or integrations,

if you will. How do you imagine... What's the delightful user experience you imagine here? Yeah. Cards and, like, where that fits in? Exactly. Delightful just from, like, a lot of our talking. And last few months, we spent, like, all of our time talking with, like, early customers, early borrowers. And what a lot of these borrowers look like is, you know, younger people with their most valuable asset being something they log into a website and they stare at and they don't know what the hell to do with it.

When we send from them and we're like, hey. You want a card in your Apple Wallet that has half of that value? And they go wide eyed. And that is, like, how simple I would like this to be. I'd really like it. You know, right now, you come into our platform. You drag and drop whatever you have from a platform like Cardi or Pulli, and our platform will basically say, okay. Here's how much your shares are worth, and we'll get back to you twenty four, forty eight hours.

And in the meantime, behind the scenes, there's a lot that goes on, but from a, you know, user perspective, all you know is, oh, I'm dragging, dropping, inputting potential amount of money I might want. It's noncommittal. It doesn't like cost you anything. It's totally private and blind to your employer. So we do a ton of like protecting the borrowers.

And then, yeah, we come back with a quote and we will either give you that money in stablecoins, maybe our stablecoin, dollars direct to your bank account or on a card. And all of that is like really the most important thing because it's really not about like hey, when am I gonna take this loan in? Am I gonna take it a stablecoins? Am gonna take it in dollars? Am I gonna take it on a card? It's about the single fact that like you are taking a loan to spend money. Right?

Whether that's investing in something, investing in yourself, or paying for something. Inevitably, you're gonna spend money. So we're really not trying to build a platform that boxes you in in terms of, hey, spend this way or spend here. We want to give you money. Right? I think that was actually a great takeaway from last time we chatted. Like, you just quote tweeted you like We'll give you money. We'll give money. Literally what it's about. Like No. It's like the... I think it was like the best...

One of the best performing quote tweets we've seen in like the last month or two. Well, hopefully we have more of them because I would love to give more people money, honestly. That is what it all comes down to. Like, we have this shared thesis, is, hey, your assets are valuable, the companies you're building are valuable, we'll give you money. What that looks like, you tell us. Right? Like, if there's a form of money you want that we aren't offering you right now, happy to figure that out.

Happy to figure it out with your company. Happy to give your company, you know, these embedded card programs where you don't even have to worry about it. Right now, have to request a loan. Soon, hopefully, we have some embedded partnerships with, you know, where your money lives or where your shares live already Yeah. So you can request a loan just... That's when it gets bonkers. That's when it gets crazy. Right?

Or when you're at a company and the company says, know, you don't even know who we are or what we do, but your company says, hey, welcome to start up a. And here's your card in your Apple Wallet, and all that equity we promised you, guess what? Six months from now, you're gonna be able to access half of it. It's a part of the onboarding. Exactly. And it's super attractive if you're trying to join a company. Right? Yeah.

Like, if I have two companies side by side, and one of them says, hey, gonna we're give you a million dollars of equity. See you in four years. And the other one says, Hey, we're gonna give you a million dollars of equity and, you know, six months, a year from now, whatever that vesting schedule is. Or your signing bonus just goes to the card. Even better. Yeah. Yeah. We should work together on products. That'd fun. Yeah. That'd be really fun. Yeah.

It's like, hey, I'm gonna send you this contract in this portal and by the way, like, the signing bonus is right here next to it. Exactly. You can see the number. And it could even save these companies the cash outlay. Right? Because then rather than giving someone a dollar amount of a signing bonus, they could give you additional equity And then they're even further aligned with your company. And, yeah, they're not costing you anything. They're drawing down against yourself.

What I love so much about Tech Dollar, and I'm... I think I'm finally, like, putting my finger on it after a couple of these chats, is, like,

so many companies and people that are building in this space, they look at the tech and what's possible with the tech, and then they kind of cobble these interesting things together. What you have done is you have said, we're gonna see these macro things with things like stablecoins and stablecoin backed cards and prediction markets and real time markets and more companies are staying private.

But, like, all of these things put together into this really, really interesting business model where you're like, let's go to where the value is already and where is it trapped? Yeah. It's like value is trapped. And instead of, like, building this zero to one thing and then playing the game where you're trying to... And not that this is a bad game, but I think a lot of founders are like, wow. Look at all these primitives. Look at these new things.

And there's a ton of business to be done and and money to be made in these, like... Go after these new markets that don't exist yet. What you're doing is, no. Here's this, like, existing massive value that is locked, that's stuck, and we can, like, be in the business of unblocking it.

And then the trickle down product, what it sounds like, is structured in a way where we actually can build economics into this trickle down If we build it right, you essentially become the custody, the spending, the trust, the embeddedness. You build this... I mean, it's fascinating. I'd love to hear more about stablecoin in parts specifically, like, how you're thinking about that. Because for us, like, this whole podcast, I think we're, like, nearing episode 60 with you.

We've just been exploring the different ways that stablecoins find themselves into these different models. I'm curious how you imagine a stablecoin fitting into this one. Yeah. It's

it's everything you just said. I don't want to, like, reinvent the wheel is, like, my big thing. I think, like, a lot of this tech is great, but I've, like, seen a lot of this tech, spent a lot of my time working on it, working around it. You know, previously, co founder and I were working on some stuff with some major institutions like Galaxy and Nomura at Laser Digital.

And we were, like, really astounded by the fact that, okay, you know, these rails are in place, people are using them, but you still have, like, compliance teams or custodians that don't know how to execute a smart contract. Right? And what does that even mean? Right? Like, I don't need my borrowers to know how to execute a smart contract. It's not worth spending sixteen months, a year trying to dilute these things into something that's understandable.

Like, let's just meet everyone where they already are, which is, hey, I own all this equity and I need money. Right? Everything past that can totally be figured out and it's not my customer's problem to figure So, it when it comes to like stablecoins or... Or care about it. Yeah. Exactly. Why do I care? They don't care. This is the thing. Like, it comes down to we'll give you money. Yeah. That is what they care about. Past that, they don't... Know how many people I ask, oh, do want stablecoins or dollars?

I don't care. Give me the money. And the thing is with stablecoins, like, they are pretty consensus understood. Right? Like, everyone, whether you're, like, in deep tech, you're working in Silicon Valley, you're, you know, you're in New York working a ton of crypto, globally, stablecoins are understood. Right? It's a dollar you can send it on the Internet. Past that, most people really don't understand more. People don't understand the difference between like a Tether or a Curve or like a DAI nonetheless. Right?

And most people don't even know they exist, and they don't need to. Our platform intentionally does not mention stablecoins, does not mention... Like, literally you have a dollar balance, and you can withdraw it to, you know, stables or you can withdraw it to your bank. That's it. Yeah. It literally automatically loads up your cards. So how do you think about when you're building what could be a stablecoin or you're doing this now, like, what options?

Like, I'm putting myself now in the builder's shoes of, like Short answer is rails. Rails. Like, stablecoins, I really think are great, but they're good for us for two purposes. Rails to my borrowers or rails for my lenders. Right? On chain yield for LPs, lenders in the space, sucks. Right? There's no other way to put it. Everyone is earning the same rate, farming the same farms. You have, you know, Pendle markets, PTs, YTs, which are across the board not doing great.

Those rates are pretty stagnant around, you know, 6%, which is not much higher than, like, the risk free rate you can get with, a treasury bill. So if everyone is earning the same rate, then stable points for me are super valuable because I can go to my lenders who already have money on chain. Right? They understand the whole use of money on the Internet, and they want to allocate where their capital already lives. So they wanna be able to say, hey. I wanna take my USDC, and I wanna earn more than 10% on that.

We can very easily give them that. Right? So that is where it works on the LP side. Rails for on chain capital to earn an above average market rate. On the borrower side, it is, hey. I want money, and I want it fast. Yeah. What is faster than me opening up a wall and sending you USDC, USDT? For us, dollar. Right? Like, tech dollar is not supposed to be this crazy convoluted stablecoin that earns all these diversified... No. That's ridiculous. I want a rail that I know who's using it, who's accessing it. Right?

Compliance is a big thing for us. Like, in a regulatory world where you wanna build something onshore so that you can work with US companies and so that you can, you know, cater to US assets, you wanna be able to have, you know, a token which can facilitate payments, and I can know exactly who they're being facilitated between. So our SIBLE coin, it's essentially a receipt for whatever the collateral is behind it. We'll have two versions: yield bearing, non yield bearing.

Non yield bearing will function for my borrowers to repay a loan and to receive loan principal. They won't even necessarily touch our stablecoin. Right? Because most people still spend money USDC, USDT. I personally don't believe that, you know, spending day in and day out hunting, building a million stablecoin integrations is more effective than working with those that are already embedded. Now could we do that? Yes. I've spent my whole life and career in DeFi. Right? And so has my team.

We can spend our time going about those partnerships, but I don't think that's a better use of time than going and getting in front of a 100 borrowers or a 100 companies rather than unlock a thousand borrowers. And being able to tell them, hey, yeah, your guys want stablecoins, they'll get USDCUSDT. Our stablecoin tech dollar on the back end will facilitate all that stuff and it'll, you know, be a big driver of volume and swaps.

But past, hey, I wanna spend money on stablecoins or hey, I wanna earn money on my stablecoins, that is like where our line kind of stops for your tech dollar. It's just settlement and rails. And these are like the only things I think that are proven out in cryptos, like, staying power. I'm sure this is wrong slightly, but the idea of thinking of the infrastructure that you're building as what an exchange

kind of is, where you have, like, balances, credit, sendreceive, like, markets, like, it's kind of like you're almost building an exchange. And like an exchange business, you have a USDG or an issued stablecoin that you're like... It's kind of the first class asset on platform. Yeah. And then that's, like, maybe how you do inter transfers. Behind the scenes.

Exactly. Yeah. It's like you come into Tax Dollar, you request a loan. Okay. I want it in USDC. Cool. We're gonna, you know, be able to attract capital by our counterparties coming into our pool depositing USDC, USDT. We're gonna have to nominate everything in our stablecoin. In order for lenders to access our originated loans, it's gonna have to be in our staked pool of assets. And that way we have insight into where the capital is flowing, who it's flowing from, and who it's flowing to.

The exchange parallel is quite good actually because what we are is an origination engine. What we aren't is, like, anything past that. Right? Like, we're not even... We're a very capital light business. Tech dollar isn't actually lending any capital of its own. Yeah. We're providing a venue for other people to earn a great...

So sort of like what I did on Coinbase with Morpho and Bitcoin, just like really focusing on that experience to start and then building the kind of services and utility I need around that Exactly. For private market companies. Yeah. You're posting your Bitcoin to a pool and you're drawing down whatever dollars that you want to spend. But on the backside, like from Morpho or something, you're really withdrawing a stable coin. Right? Yeah. It could be USDC. It could be USDG. Yeah. Could be USDT. Who knows?

And for you, that's tech dollar. For us, that's tech dollar. Yeah. For us, all the loan repayments will be done in tech dollar. Now, that doesn't mean a borrower has to buy tech dollar, spend tech dollar. They can repay with USDC. They can repay with dollars.

The back end, like, we're just using smart contracts to track this whole system, make sure all the collateral is real, it's tangible, all the loan principal is, like, actively being repaid, these loans are being serviced, and doing them, like, a very transparent way. Yeah. So... Like, LPs can have total insight. Yeah. So... Last question because I have to ask, and I can't help myself. If this isn't public or you don't wanna go there, totally fine. But this strikes me as like a really, really

forward looking model of how to think about money and finance and building different systems. I'm curious what partners or companies you've built with on top of that you feel comfortable saying like, yeah, we we went through this process. We looked at a lot of them. Like, we chose this company for x y z purpose. Like, the system you've outlined and the like the functions that you're looking for would be really valuable

for others to know what... Where you've landed on that Yeah. Versus maybe we're not... We're building this in house. Yeah. So, like, the same way, the product is really great for all borrowers, all companies, you know, parties involved on the lending side as well as those that are, you know, taking out loans. The product is also really good for also everyone involved. Right?

I'm super cautious as a founder of, like, putting myself in a box in terms of, like, allegiance to one blockchain or one stable coin or, you know, one partner on the lending I think it makes sense in certain cases, but I think today more than ever, like, there's no reason I can't be really great for everyone involved. Yeah. We're working with lots of stablecoin issuers, and we're working with lots of companies, like, in the real world side.

Our biggest, like, component where we have counterparties involved is that, like, stablecoin side, because we ourselves are not an issuer. Right? Tech dollar is a receipt for the underlying collateral. Now we do, at the end of the day, say, hey, you can only mint tech dollar with these stablecoins. We do have a few to start. We'll go to market allowing people to mint tech dollar with Agora's AUSD, USAT from Tether, potentially USDG, not sure yet. Robinhood chain is hot right now.

But I think that, you know, a lot of it comes down to what assets where lenders hold. Blossom of USDC, lots of AUD, USAT is just heating up. And I think there's, like, a lot of, like, relationships that can become more symbiotic over time. Right? Like, crypto, stablecoins, it comes down to, you know, how much supply is being minted and how much is being sat in that coin. We are working with the companies that are just as helpful to us as we can be to them, and we'll probably say that way.

In terms of chain stuff, I mean, we're working closely with Curve. We'll have some pools on Curve, but not boxing ourselves into one blockchain because what if I have a borrower that wants stablecoins on, you know, chain a or I have a borrower that wants stablecoins on Mainnet? Right? But do you think that borrowers...

To your last point, do you think that... I would guess that you have the leverage as the behind the hood partner to really choose and drive, which... Like, that's what seems to me putting you in leverage is, because no one cares, no one cares. Yeah. And you can choose, hey. We're gonna work with this card issuer, stablecoin issuer,

blockchain. And, like, I feel like you guys have the power in those relationships. We do. For sure. Right? Like, it's just like an exchange saying, hey. We're gonna only allow deposit assets of, you know, whatever the token might be. It's a great position to be in, but I I don't think it ends up being really great for our customers. Right? Like, even if they don't know and we're handling all this settlement on the back end, inevitably, everyone wants exclusivity. Right?

The amount of, like, chains we've talked to, issuers we've talked to that are like, hey. What if you only mint this thing with us? Like, I get it, and it's really great for them. But I think, like, you know, running a super solid business that has legs in crypto is about what has longevity. And I don't wanna be the guy to pick and choose what has longevity based off, like, what underlying foundation we've set with partners. We'll work with all of them.

We'll work with those that are, you know, building in a way we are. Right? Onshore issuers, people within The US that are handling settlement the right way on this PPSI track. Yeah, that's a lot of what we focus on. But past that, yeah, I think exclusivity puts everyone in a bad position in the long term. Yeah. Yeah. But having those companies compete with each other and fight for your business, I think, is a good Oh, it's a great position to be It's great for our lenders.

Lenders that want to see additionally incentivized pools, we'll see them, and we'll have that. Right? We'll have some really great pools with Agora, for example. Yeah. And they will be incentivized by us, they'll be incentivized by them. We'll also have pools with other payers. Maybe they'll have different thresholds of incentives, but we're doing our best to make sure that everyone is met where they are in terms of the assets they have and the assets they want. Yeah. Yeah. Paris, this has been awesome. I...

Yeah. I've loved this conversation. Anything as we close here that looking toward the end of the year, this episode will probably come out, you know, September ish? What can we expect

year... Into the end of the year and end us on, like, a forward looking note? So by the time this podcast comes out, probably, Tech Dollar will be live or almost live. Cool. So, yeah, we're looking to finally take Stablecoin live this month. We spent a lot of time working with regulators to kinda get to that point. So, hopefully, there's some good progress there. To get the stablecoin live. Yeah. So, well, by the end of September, we're looking at stablecoin being live. That's exciting, man. That's really cool.

I I can imagine, given what you just said, how integral that is to everything else. It's huge. Like, mean, like, eventually, like, we're now exploring some stuff like fund level financing and other things. But, yeah, having, like, a pool of on chain capital ready to deploy to meet, like, all these borrowers as we get them, like I said, if we're getting, like, just today, got, like, three or four. If I can fill these loans the second I get them, it's such a good product. Right? Borrowers can get money like this.

They don't have to wait four weeks for a quote from a bank. Lenders can earn rates that are good,

right, over 10% secured by frontier assets that they wanna own anyway in the event of default. Cool, man. So series a, b, c, like, what's, like, the best company listening to this if they're working? Like, what's, like, the best round or valuation typically where it's like, yeah, we're... Asks this question. Like, where does the underwriting start? Is it a bad is it a bad question? No. It's... It is a good question. Because I don't think we're in the market for, like, a small company, but like... Let's see.

So this is kinda the tip.

Where is the tip? It's everywhere. Like, I want to embed with companies that are early stage. Right? Like, we are early stage. If this was not me building this and I as a founder had, you know, a company come up to me and say, hey, you're hiring. I'm making your first 10 hires. You should, you know, be cognizant of the fact that these guys are gonna be met with a time where inevitably they either have to sell or not sell. What if we give you a third option?

I would wanna keep that in mind now, like when my company is under 10 people, and I would wanna do that just as much as I was doing a billion dollar series a, series b. Yeah. Like, there's really no floor because early on, you wanna be embedded as a employee benefit, right, for the entirety of a workforce such that, like, a founder understands your product well.

And even later stage, obviously it's very easy because if you're worth a billion dollars and your option is to run a $100,000,000 tender, you know, fund a facility for your workforce through tech dollar, awesome. Later stage companies will inevitably have more capital to deploy. They'll be the ones that have this option of, hey, don't run a tender. Early stage companies will get to offer this And employees to drive it. Like, once employees know, like, It's a thing.

We don't go to companies saying, hey, what if we let your guys borrow? We go to them saying, hey, we have 10 people at your company that want loans. Yep. And if you don't say yes to us, they're gonna sell. Like, why would you say no? Yeah. Oh, you're worried about them not paying it back or what's gonna happen if I take the collateral? For one, I... Like, you know, we come from a venture background, not a credit background. We want to belong these assets. For two, we'll sell them back to you.

Like, you cannot waive that ROFR, allow that pledge anywhere except for to yourself or outside of this list of excluded, you know, funds. So early, late stage, we'll work with you. Cool. Yeah. Terrence, this was fun, man. Thanks for the time. Likewise. Thank you.