20VC Exclusive: Mercury Founder Launches First $26M Fund | Why Founders Should Take the Highest Price | Why Serial Entrepreneurs are Better | Why AI Is So Overhyped | The Future of Venture Capital with Immad Akhund

25:26So I think that set of it is much more sustainable. Do you think we have no defensibility anymore? And what I mean by that is you see people very quickly moving from you know cursor to a windsurf And it seems like the moat or switching cost is almost Replace now. Do you think we've lost most I mean we're still in the kind of flashlight slash part apps era of AI if you know what I mean There's gonna be so much change and turn in the next few years But eventually things will settle down and then we'll have the same defensibility that like sass apps and other things I've had forever, which is like, what's the strongest brand and like, who do people say like, hey, I love this thing.

26:07I used it forever, et cetera. And that brand is going to be able to continue investing more and more in the product because they've consolidated a market position and they can like keep improving the product and they'll become multi product. Now, now you're getting like two or three things from the same place and, you know, that's sticky in its own way. And they built up the enterprise connections, et cetera. We're just in this place right right now where no one knows anything, everyone's trying to try everything, but I don't see why the same things that allowed people to create big companies, like HubSpot and Salesforce, et cetera.

26:38I think most of those things will exist with the modern AI stuff, but we're just in this moment of extreme change. What do your team use engineering -wise internally? Is it windsurf, is it corsa? What are they? Corsa is still by far the biggest one. I haven't heard too many people using windsurf internally. Given the productivity gains that it provides in engineers, HubSpot recently said that they are producing more code that they can ship in features. Salesful said 20 or 30 % of their code is now written by AI. Will you have more or less engineers in five years' time? Maybe I'm could draw in about there a little bit, but to me, if my engineers get more productive, I'm going to come up with more things to do.

27:19Like I'm going to have so much stuff that I want to do. Like, I have like infinite ambitions, so I think that just like unlocks more rather than like constraints like means that like you don't hire people. Hey man, what have you strategically not done with Mercury that with the benefit of hindsight you think you should have done? Yeah, the obvious one and the data we had at the time, I don't know if we would have done any differently is, you know, we launched Mercury banking in 2019. And at that point, you know, Brex was the main player in the credit card space. And I was like, hey, we'll do banking, you do credit card, we're all good.

27:55And then what happened is, you know, Brex then entered the banking space. And the later ramp came along and they launched a new credit card. And at that point, I was like, okay, that was a little silly that like, we didn't just launch a credit card because, you know, it wasn't in some ways, the credit card was just, was easier than banking because we already had debit cards. So we didn't end up launching our credit card until 2022. because I was like, let's just focus on banking and like, let's go really deep here. And I think that was a mistake like we could have launched our version, you know, in 2020 probably.

28:25Like we instead worked on some other products. So in hindsight, I think we waited too long to launch that second product. And we decided to kind of focus longer on banking. And it wasn't like a mistake that couldn't be corrected. Like we did launch in 2022 and now Mercury, four Mercury customers, Mercury credit card is bigger than all other products. kind of corporate credit cards on the platform. But it was, you know, it was two years later than it should have been. How do you think about competition? You are in the most competitive environment now, as you see with Brax, with ramp and with you all very well funded, all doing very well.

29:00Like, ironically, there's not one that's not doing well. How do you think about competition when you go to sleep at night? I have two responses. Number one, yeah, I've been doing startups since 2006 and And every single year, there's been some competitor that was like better funded, that was seemed really scary. 99 % of the time it didn't matter. Like what mattered is just like focusing on customers, building a great product. And you know, most of the time if we failed, we all failed because it was a bad market. And if we succeeded, it's because we did our own thing and we just like listened to customers and had that long term vision.

29:36So I think it's really dangerous to be very competitive focus. like I don't let our team speak about competitors very much. I'm just like, hey, you know, if you have something you want to do, tell me why the customer wants it. Tell me why it's like part of the long -term vision of the product. But if anyone says like we should do this because like someone else did it, I'm like, I don't care. Like it's not, this is not a reason we do anything at Mercury. So that's one thing. I think most of the time it really doesn't matter. And if you're copying someone, you're copying their mistakes as well as their successes.

30:06poses, holds an alternative counter positioning, one of seven powers. You know, ramp and Eric looked at Braks saying, hey, spend more get points. And when, what's the opposite? Save more and have that as your incentive mechanism. And so they use the inverse as their valley prop. Maybe that worked for Eric and go on. That just doesn't resonate with me. Like, I, you know, I approached this market and said, hey, I want to be your first bank account. No one else has actually approached it like that is like we want to be at inception with you and you know We have 200 ,000 plus customers. We are scale is much bigger than Brexit rampant Not because like they're doing something bad They just in a different business right they have bigger companies.

30:49They do more enterprise stuff Whereas we're much more at inception stage. You're gonna hate this question So forgive me for it if you valued it five billion and you're the first bank camp 200 ,000 companies Why are they valued then at W? Yeah, I mean, each company has to prove out its own thing. So I don't know if valuation is like the thing I focus on personally. It's a different market, right? Like people understand enterprise, like, SaaS and payments a little bit more than they understand banking, you know, apart from Mercury, like, who else is at scale in banking in the US? There's not that many companies, right?

31:28Like, chime in a few others. So it's a different market. It's just value differently. My question to you, my friend is the angel ambassador is going so well, 350 and then we're like, you know, what we're going to do a fund? Why is that? What was the decision making process fee from transitioning from angel to fund? Those kind of two factors for me that drove it, maybe three. Number one, I had a bunch of LPs recently approached me saying, we're not going to put money in your angel list, but if you set up fun we will back you. Secondly, my deal flow kind of went up another level when 30 to 40 % of all startups use Mercury, everyone knows about me and then that tends to mean that a lot of people want me to invest and I got to a level where I just can't look at all of these things.

32:14So I really wanted to work with someone on the deals and on the fund. I don't like doing things badly and I felt like I was being a bad angel. I can't even look at all the things that are coming at me, like how can I do a good job of it? Okay, so I get all those reasons. And so why do we decide to raise 26 million? Can you talk to me about the thinking behind that? So, you know, what's a little unusual about the fund is it's a fairly diversified fund. The idea is to invest into 60 companies. The reason that works is, you know, we're doing these non -lead checks. That makes sense. Like, I'm active CEO.

32:47I can't lead around because I just won't have that time for the company. But also on the other side, I get a lot of deal flow. The best entrepreneurs won me on their cap table. But isn't it better if the coio or founders fund is leading around and I get to invest alongside them because I'm not competing with them? So the average check size is going to be 150k. So if you do the math, if you're doing non -lead checks with a small -ish kind of average check size, at least we're targeting 60 company portfolio, it doesn't make sense to have 100, 200 companies in one fund. So then you can kind of just dive into it.

33:23So see times 150. We're putting nine million out the door in initial checks. Yeah, I mean, there's gonna be a few other, like the strategy also involves like some kind of initial conviction checks, like if I, yeah, if I know someone for years and I, you know, I could put like a million dollars into the, okay, they're seed round it. So, do we do reserve some of those? Reserves, but I wanna be kind of more selective about it. I've never believed in this like every company gets a pararata check because that's just what I do. much while ago like, can I be so rude as to advise you? Don't have a reserve strategy.

33:57You have access to great later stage capital, but what happily do SPVs? For your personal finance, I would suggest you do a spray and pray with as large a check as you can get into these rounds. I think 1 ,500 is probably there. But then just do SPVs in the best with a deal by deal, carry. I find that SBVs, like entrepreneurs don't like SBVs. And I think entrepreneurs don't care if it's from someone they like and respect. And it's done in a timely manner. If it's, imagine you being a founder, yeah. And one of your friends is like, hey, dude, I want to work with you. It really means a lot to me.

34:33I'm really bored because it's a deal by deal. Do you mind? You'd be like, no, sure. Yeah, maybe. The other issue I've had with SBVs is like, normally the FOMO SBVs, where it's like, like, oh yeah, you know, some lead check comes in and you're like, okay, you know, let me give me an allocation. Let me go do this. I don't like that game. Like I want to do these reserves when I'm like, hey, I invest in the seed stage. I look at their progress and like, you know, within six months, whether that company is going to kill it, right? Like, at least that's been my experience. I do want it. Do you think you do?

35:02Because I tweeted the other day, the opposite. I was in clubhouse, be real. And my point of that is, like, if you actually know in both directions, like, you have signal. I mean, it doesn't mean you have a guarantee, but like six months later, if you see that progress, like, and if you, I would bet that Harry, even in your portfolio, if you, six months later, if you invested in every one of the things that you think will be ahead, like probably 50 % are going to get it. No. I didn't. If I look at my phone one, I've got like linear, I've got link tree, I've got captions, next health, agent sync, which will like really solid 50 million about revenue companies.

35:41I would say they were all pretty slow burns actually. And they weren't that obvious. Maybe it's because they're enterprise. Yeah, maybe. I mean, if I look at mine, like, Rappy definitely knew within six months, True Bill definitely knew within six months. Rippling, I mean, Rippling was just hard to get into, but like, it was pretty freaking obvious. Air table definitely knew very early on. So, there's definitely like air table even, like, you know, there was like a three -year period where they kind of took a while to kind of ramp up. So I know, maybe six months is like too early, but you definitely know before everyone else knows because you're in the company and you can see.

36:15You care about price, first check. I mean, you end up being a price taker as like a non -lead. So I care about it. If it's silly, I won't do it. But often the seed market actually as a whole is a little silly. And I've ended up, especially recently, avoiding AI. I think AI is overhyped and overvalued. Yeah, but pause on that. Why is AI overhyped at seed stage? It's so hard to do AI. I mean, I don't know what you're seeing, but like it's like the fourth time I've heard the pitch of the same idea, the founders raising it like a 40 million valuation and you know, they even have like great investors.

36:51There's a little bit of traction, but the math is just so hard right now in AI. It's so every now, I mean, I'm still doing it. So like, you know, in the last eight investments that we were just looking at four of them AI. So it's hard to avoid AI completely. I'm just way more selective. And there's actually a lot of, like if you look at FinTech or I'd end up doing like a lot of space tech or hard tech, there's not that much competition there right now. I think as a seed investor, you can't be doing like too many investments at the top of the hype cycle, right? Like this same thing happened in 2021, right?

37:22Like 2021, I mean, there was everything bubble. All the AI companies that you've done that, you said you ate the bars higher or kind of the qualification person in your mind is kind of tougher. What did they have that the others didn't have? What did you need to see to get excited? A, the founder needs to be probably more of a second time founder where they deeply understand that space and they happen to be applying AI to it, but it's not like AI for the sake of it. I did one where like really deep in prop tech and they have like a really specific AI application there. So either that or this is like, you know, they already have the traction like this is like already seems like a rocket ship and I really believe that that traction is real and yeah, the valuations are a little high but I like you have to kind of jump on some of these rocket ships.

38:07So those are like probably the two that I am still doing. But the vast majority of AI at seed out there does not have traction is like someone doing like the, you know, the fifth time the same idea is getting funded right now. Like, you know, that's just what you see mostly happening. And but like great VCs are funding these things, right? like everyone is doing them. One of the biggest changes from 5 or 6 years ago in Basing, there was always two or three competitors in everything, 5 or 6 years ago. But now there's 15. There's 15. And they're raising like 10 million plus. It's not like they're like some early beds.

38:41Yeah, it's crazy. Totally agree with you there. So yes, you mentioned space tech. Dude, you're literally having to go to another planet to find the deal. I mean, literally, and I know nothing about space tech. No offense, do you know much about space? Can you help me actually just fuck it help me? How I think about is when I enter a new space that I don't know that much about I will make a couple of investments and I'll try to learn from them. So I made my first space investment I think 2016 or 17 it was a momentous space. They ended up doing a SPAC that didn't work out. But when you make a few investments and you know to make one or two investments you end up speaking to maybe ten people right.

39:17And these people tend to be like you know they're the edge of their space. Yeah it's like people from SpaceX and do originate. So you end up like learning quickly about like, okay, what are the markets? The thing about space that you know, maybe is unobvious is like it's no longer that hard to get into space, right? Like SpaceX is very repeatable like these people are not doing space Well, they are doing difficult hardware things, but they're not doing scientifically impossible things, right? The literary saying like hey, I'm gonna put a computer in a satellite. I'm gonna put it on space It is tricky though like there's three I don't know how deep you want to go in space tech here, but there's like basically three existing markets in space tech There's rockets right like getting things up and down which obviously space X dominates There's taking pictures from space and that's actually like pretty big market like 40 billion dollar market And then this communication which likes obviously Starlink and other people are doing those are the three markets There's almost no other market in space right now and I have investments in like I did stoke space which is like doing reusable rockets.

40:16I did Albedo, which is like taking very high resolution pictures from space. Are there other grounds for these companies, not MEGA? And if the rounds are MEGA, they're very high -price. Not at Seat Stage. I mean, at Seat Stage, these companies are like, I mean, they're like better than these AI SaaS companies at Seat Stage. Because they're like, you know, you get there and like, these are like, it's hard for them to raise big rounds like when they're just starting out. And then they have to proof some stuff out. I can't remember the initial stoke round was probably like 20 million valuation. You know, they had to prove out like a rocket test and then they got like funding from the government and that now they've raised I don't know how much they've raised like more than a hundred million But yeah, you do have to take the time and be careful to understand it I don't personally do bio because you know I speak to someone and they're like we've killed cancer and I speak to the next person They're like we've killed cancer.

41:00I'm like, I don't know you sound good But I really think space is not like as hard, but yeah, I have like spent like years kind of trying to understand it 60 companies in that you're a pretty busy guy you run an amazing company already when a founder takes to check from you They do expect to be able to have you return their calls How do you think about gating in that and preventing a free -frew? Honestly, I am so surprised how considerate people are and I wish they would actually ask them all for help So normally I'm like, hey, here's my phone number just text me if anything comes up And most of the time you can actually be pretty helpful in like a 10 minute conversation and you know, I can slot that in most times.

41:39So I would say I end up speaking to an entrepreneur maybe three or four times a week. But like I think one thing that people don't understand about time is like time is about energy not time. The things that like drain your energy and those are hard to do and they like suck up time. And then there's things that are fun like I love talking to entrepreneurs and helping them out. So like it doesn't like I can do that like I'm literally like I'll go for a walk to like go get lunch and I'll just like talk to an entrepreneur and it's like so easy and it's like it's just like having a child with a friend.

42:08So we've got four pillars in banjo. We've got sourcing, you got selecting, we've got securing, which is winning. And then we've got servicing. Which do you think you're best at? And which do you think you're worst at? And why? I mean, I'm very good at winning right now with the strategy we have of like non -lead checks. Yeah, I mean, I've done rounds recently where the round is fully done with like some hot shot VC and then I still get my 150K and after the round is fully done. So winning is like definitely like easy right now. I would say the most fun is those kind of selecting side of things in the sense that like you know you have these entrepreneurs that are like really teaching you the future.

42:46Like I think it's just so fun to like talk to entrepreneurs and like go like oh shit I'd never thought about that like that's super interesting. You know I did this company etched it does like a sec - Gavin chip or yeah transformers and it's like super interesting. I like that's my only ever semiconductor investment. I probably won't do another one, but you learned so much in just like a short conversation. You're like, oh, wow, I had no idea it works like that. When we think about funding this, we have $26 million. How did the fund raise process go? Honestly, it was surprisingly easy. I have a really good track record and obviously that made it easier.

43:21What did you, what did you, don't you, Joe, side it, man? Did you just like, what's a lot of mates and be like, hey, I'm doing a fun job. I mean, I didn't want to have, even to get to 26 million having a bunch of mates with like 250k each, it takes forever. So yeah, we had like three kind of ankle piece that are like more fun to funds. And actually the biggest, the easiest ones are definitely like, did you get a send -on? Yes. But yeah, the easiest ones are definitely like a mate that I'm like, hey, do you want to invest in them? Like, you don't even have to pitch them. They're just like, hey, there's a million or whatever.

43:50But yeah, it was a quick process. I mean, actually the hard bit is getting the LPA done is ridiculous. Like, I don't know how you all do it. Like, it's like a multi -party negotiation for like these kind of esoteric terms. I mean, there wasn't like any real staking point, but it just took like a month and a half to get it done. And I was like, this is a silly process. How long did the race take? The actual like getting the core allocations done was basically like three weeks. Okay, three weeks. What's the biggest check? Not who, but just what is it? It's 7 .5 million. 7 .5 of 26. That's a lot.

44:22Shit. Yeah. I mean, it made it easier. It makes it much easier. What was the biggest surprise of fundraising for a fund? Oh, maybe this is a little harsh. It's boring. It's very boring. Obviously, when you're pitching a company, you're seeing the same story again and again. But you do learn something from the questions you get asked and like you kind of do change the story over time. Like, I feel like pitching a fund like there's not much to learn in the process. this is very much do a bunch of very repetitive meetings. I don't know if that's surprising. Yeah, I'm sure you know this, but yeah, I was less fulfilling than I wanted it to be.

44:54I wanted to go like, oh yeah, I'm going to speak to some small people and learn something that I was like, okay, you know, I didn't feel like I really got that much out of it beyond doing the process. What's the composition of the LPs? It's like, fun of funds. How much percent is that? Like 50 percent? Yeah, fun of funds is like 60 -ish percent, and then a bunch of entrepreneurs and GPs is like the bulk of the rest of it. Can I be really rude? I have a problem with founders that raise money from VCs and that's your responsibility to build a company. And then you raise money from other LPs where you have another responsibility to optimize the value of a portfolio.

45:34I view them at odds. When I raise money from someone, that deserves my time. And then I might be pulled away with another responsibility. Why am I wrong to think it's wrong for founders to raise external money for funds? And you think it's different when it's like an angel list rolling fund or you're saying same right here. I'm kind of saying the same thing. If you're raising a digital. I mean, angel money is totally different. It's your money, do what you want with it, cool. But raising additional money from additional different Alps. Hey, if you're very transparent about it, like this has always been the story I've said, like I'm a successful CEO and this is what you're getting like and that, you know, Mercury's my main job.

46:15So I think that's one thing. Be does a work for both sides. So I have always done it like even before I started Mercury, I was an active investor with other people's money and then during it I was and I would say part of Mercury success has been my connection with early stage founders, you know, actually like the from the first 30 kind of alpha customers as a Mercury, I think 100 % of them are like companies I'd invested in. So like it's always been a core part of like building Mercury has been my invested journey alongside it. And I talked to my co -founders about it. I was like, Hey, I do this like do you mind?

46:46And they were like, No, like this is part of why what makes Mercury successful. So that's one side of it. And then on the other side, Mercury success, you know, gives me access to that deal for gives me the ability to win. I do invest in a lot of like B2B companies and FinTech companies where I have like this unique perspective of being an active, kind of, uh, fintech entrepreneur. So I think as long as it works for all sides and like it probably doesn't work for all entrepreneurs like Mercury is in a unique position where we do South to start up and, you know, that ends up being like, you know, my investing is helpful to Mercury is helpful to my investing and my investing is helpful to Mercury.

47:20That's probably not true for everyone. The other question that I have was with absolute respect. You have a lot of Mercury and you can sell secondary. Why bother raising external money? No offense. If you look at Carrie, like 20 % on 26 is 5 .2 of your own money. I know 5 .2 millions a lot of money. I'm not belittling it. But you could easily sell 5 .2 million in secondary. Many people will buy it off you. I bother. Yeah. I mean, I think it's fun to build institutions. You know, I'm working with Yash on this fund. I think it can be bigger than just me and just a few angel investments and what you want it to be.

47:57I don't know exactly like this is the first fun so I'm not coming at it like yeah I'm coming at this like oh let's explore it but yeah I want to be helpful to entrepreneurs and I think I can be helpful to entrepreneurs and I can scale that and working with someone to get the best investments to get a scale that portfolio approach and doing it with more money allows me to have a big impact and yeah you know eventually there'll be opportunities where we maybe are the biggest check at the seed stage, or maybe instead of doing 60, we do 150 in one fund. Or maybe we incubate ideas. I mean, I have a lot of ideas.

48:29So everything's on the table, but at the same time, it's the first fund, and I'm definitely approaching it with like an open mind. I think seed is very, very hard to say, because the multi -stage fund product is so efficient. They are so good, fast, and their cost of capital is so different to a pure play seed funds, which is like many, meet much smaller funds. Do you agree that multi -stage funds have made seed very difficult with such efficient seed products? They've made it difficult for you, but not for me necessarily because I can't. I'm just like, okay, sure. In recent reading, leading a ride, let me join in.

49:03Yeah, there's only, there's not that many multi -stage like billion dollar funds, right? Like there's like eight or nine that like have a brand seed is like by definition, there's so many unknowns and those, those multi -stage funds are only going to do a certain flavor of entrepreneur, right? Like, off in it's a, it's either an exec from a big company that's doing like this thing or it's like a multi -time kind of entrepreneur. So if there is that flavor that like ticks the boxes for those kind of multi -stage big funds, yeah, it's very hard to try to lead around against them. But there's entrepreneurs come in all flavors and, you know, I don't think like these first -time entrepreneurs that are like hungry and don't know a space but like fake stuff out.

49:44Those, you know, the multi -stage funds like have a much harder time with those. How do you expect Vansh to change in the next five to 10 years? That's a great question. I mean, it seems inevitable that a few of these multi -stage funds will IPO and be public companies, right? Like we heard some stuff about GC doing it. I think that's just gonna happen and actually think more and more money is gonna come to this space which like ironically, you know, we as investors are like, oh, we better if there's less competition, less money, but I think the big changes, right? like these companies are huge now, right?

50:12We have trillion dollar companies, right? When I started investing, the 100 billion dollar company was huge. So the end result is so big that people want to put more money in the space. And I know we're in a current liquidity glut, but I think that will work out through the system. Yeah, probably bigger multi -stage funds and their public. I think the bit that's probably hard is, you know, there's this kind of idea of like the Babel kind of stuff, right? Like, people like me that are investing kind of smaller checks, like we'll do fine and the multi -stage ones will do fine. I don't know what happens in the middle.

50:44I think the middle will have more fun issue. I think you do suffer because you pay higher prices. That definitely impacts your returns with the multi -stage seed product. I would say you've mentioned that liquidity glard. I'm interested to hear your thoughts on this. You know, the Colossums have said very publicly, why do we need to go public? We don't need some biker remember which brand of bank. So I don't want to misquote them. But a brand of bank, 25 -year -old, to tell us that margins are important. And the question is, why would anyone go public today? I think about it as well. And I want Mercury to be like a legacy long -term company.

51:20So being public is inevitable. But yeah, why do it today? And not five years from now, on six years from now, or seven years from now, and obviously, stripe. And a few others have delayed it, multi decades even. I think the biggest issue is kind of structural issues in the public markets. So the two things are number one the cost and rules around being public are just so much right now So it's just not easy being a public company. So you might as well delay it longer and the number two There's so few active investors in public markets now, you know between the passive index funds like if you're not gonna Being the S &P 500 or one of these other index funds.

52:00It's hard to get anyone's attention as a sub -scale public company even if you're like a five billion dollar company in the public market, it's like, you can hardly get an endless to look at you. So we've created these like kind of structural things that just mean that, you know, you want to be as big as possible. I mean, Stripe could definitely do it obviously, but, you know, you don't want to be a mercury -sized company in the public market. And I think most people are saying like 10 billion is probably the minimum before you want to be a public company. So, yeah, I mean, I don't know how to fix it.

52:27I mean, ideally, we'd make some like actual structural changes to make it easier to be public. Otherwise, we'd just all have to wait. I would say there is a lot of liquidity now in private markets. Have you done secondaries for the team and for yourself? Yeah, we just did a tender employee tender. And even without that, there was a lot of people selling secondaries along there since 2021 when we became a unicorn. There's been a lot of early investors, early employees selling secondaries and there's a pretty liquid market for it. So, you're okay with that. Like, NICCAT Ravolute is incredibly tight on secondaries, especially in between rounds and concept prices, it can cause some problems if you're not careful.

53:06My take on it is like if we were a public company, we're getting priced all the way in every direction, right? It's better for employees to feel like they have a relatively liquid thing as comp. I don't want this to be a lottery ticket that you get at some point if I decide to go public. I want this to be actual valuable stock that you feel that ownership and you feel the outside part of that is like a viable liquidity option. So I'm like relatively open about it. So far it's not been an issue. I'm mad who when they send you a deal, are you like, oh, this is gonna be a good one because it came from them.

53:42So that's me when E -Lad sends me a deal. I'm like, oh shit, I'm paying attention. He sent me agent sync and he sent me Vanta. I did agent sync, I didn't do Vanta and I fucking should have done Vanta pre -seed. Yeah, E -Lad's great. I really like 50 year, you know, 50 year fund because they do like this, like, yeah, certain, I'm an LP in the fund as well, but they do like these real long -term focus, like often strange seeming deals that I kind of like the entrepreneurs they invest in, I think they're high quality. You know, other people, I mean, I'm a big fan of SHIELD and Jake, better tomorrow ventures.

54:16Yeah, they do fintech specific stuff, but they really know that space really well as well. So yeah, I tend And to for deals that I receive, the easiest driven funds are not that great. Like I think it's better to have like a broad investing strategy. But for deals that I receive, I kind of like the easiest driven funds because I'm like, okay, they know that's face really well and they tend to be good at picking it. Listen, dude, I want to move into a quick five. So I say a short statement, you give me your immediate thoughts. Does that sound okay? Yeah. What have you changed your mind on most in the last 12 months?

54:47Yeah. I don't know if I've quite changed my mind all the way on this, But I would say 12 months ago, I was very skeptical we're going to get to advanced super intelligence. Now I'm like a lot more, I don't know whether we'll get there, you know, very soon in the next five years, but the advancement in AI has just been like relentless and it's going to persuaded me more on the train that like, it's probably going to happen sooner than we think. What is your favorite AI tool? I use ChatGPT for everything. Like actually, I was just doing a presentation yesterday and I basically like, just talk to chat GPT for 30 minutes about the presentation and I was like, oh, this and that and it's basically like at the end I was like, okay, can you write that all in like a slight format and it just did it for me and I was like, okay, that's pretty freaking cool.

55:31What do you know now that you wish you'd known when you started? You're one thing that has been really powerful in Mercury and I tell everyone to do this. It's like first thing when there's like three or four people write down what is your company culture? We wrote down like six attributes and these things have to be like things that you know have some trade -offs to them Like you know and you're gonna go like the hardest one is you know We we look for humble people and often Yeah, especially like really successful people on very humble and you have to kind of make that trade off You're like oh this is like a six -exful exact and they seem great But like they just have a massive ego and we'd never hire those people But we wrote that down like day one and we've always talked to and we came up with like we had these six attributes and we came up with like interview questions against them and we always encourage them internally and it's really helped build, you know, even at like a, you know, near a thousand people, we have this like really strong cohesive culture, but it's because we did our day zero and it's very hard to do it later.

56:26I asked you earlier, what did you not do that you wish you had done and you said about launching credit before? What did you do that you wish you hadn't done? Probably like the most obvious thing, but anyway, it's probably fine. It's like we raised too much money in our seed round. We raised 6 million at 23 million valuation. This was because I was like, okay, FinTech is hard. I want to have so much money that I can go on for three years without raising again, etc. But it was such a high dilution round for us. It's by far the highest dilution thing we've done at Mercury. In hindsight, if I knew we would be instantly successful when we launched, I didn't need to raise that much money.

57:01So you would have preferred to raise three on 23? three and a half is probably the exact amount of money I would have needed to like get to my series A and have like a buffer. So I was a little too conservative. I was like, okay, you know, we need to be like really safe and have a lot of money and I could have raised that much, but but yeah, very high dilution. Final one for me, Emma, can you paint the bull case for Mercury being a hundred billion dollar company? I mean, we're in like these two huge markets, right? Like banking in the US is a $2 trillion market and then financial software tools is another $500 billion market.

57:37And to me, these two markets should be the same market. You have your bank account, that's what you do in voicing, that's what you do in Bill Pay, that's where your credit card and employee spend tools are. The only reason these markets are separate markets is because banks don't know how to build software. I think in 10 years time it'll be obvious that your bank is really powerful and can do all of these things and it's all fully integrated. So yeah, that's just a freaking huge opportunity and yeah, that's just the US right like there's there's a global opportunity around it There's like lots of different types of businesses lots of consumer kind of financial stuff as well So yeah, I think this opportunity is like ridiculously huge That's why like you know when you are like oh, it's so competitive.

58:14I'm like, I don't know I mean I like for how big this opportunity is I'm always like this seems very uncompetitive If you think about all the B2B SaaS companies out there, there's thousands and that market is smaller than this market. Yeah, I'm pretty excited about it. I'm so excited for the new fund. I hope that we can do some deals together. I'm less of a space investor. And so if you do some on this planet, I might be more game. But I'd love to see some together. And thank you so much for doing this with me, man. Yeah, thanks for having me, Harry. This was fun. Such an exciting time ahead for Imab with the new fund and if you want to watch that episode you can find it on YouTube by searching for 20VC, that's 2 -0VC on YouTube.

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1:02:12As always, I so appreciate all your support and stay tuned for an incredible episode with Jason Lemkin and Rory O 'Driskel and me on Thursday.