Mike: Welcome to Around The Coin podcast. Today's guest is Eric Chok, the CEO and founder of Link Money. Link Money has raised over 30 million to date building out pay by bank infrastructure for merchants, so for mid to large scale, over a hundred million revenue businesses that want to. The transaction costs to accept payments from customers moving away from credit cards.

Link Money is an option. They connect directly to your bank account and allow people, customers to pay direct to merchants. This trend is happening all over the world outside the United States, and Eric and his team at Link Money are bringing this into the us. We talked in the first half of the podcast.

The investment landscape, what's happening in the world. We discussed some of the psychological patterns and market patterns of investing in macroeconomics. Eric previously was a investor at Governor's Lane, a hedge fund. We talked about why he started Link Money, why he moved out of hedge fund investing what he's learned so far at Link and what the.

Layers of the tech stack in banking are, which I found really interesting. Hope you enjoy this conversation. If you do, please give us a thumbs up or a like share Wherever you're listening to it and hope you enjoy here is Eric.

Mike: All right, Eric. Thanks for hopping on. I'm excited to dive in with you. Why don't we just dive right into the deep end on this one. So, a little bit, a few minutes ago we were talking about your background and just the view of the market in general and the market being, let's define it as early stage funding in.

Maybe FinTech, maybe more broadly how do you sort of view where we are today? And we're recording this for listeners early March, March 6th, 2023 for context. How do you sort of see our, our trajectory and funding cycle for startups?  

Eric: Yeah, so I think if you take a long-term kind of zoomed out view of, of, of what's happened since the financial crisis.

We, we've basically had. Extremely large asset bubble which was driven by basically quantitative hazing and 0% interest rates. And if you look back, we had effectively, you know, really post since, since the financial crisis, we've had basically 0% interest rates for a super extended period of time.

Rates were starting to normalize in in 2018. And then they've had kind of got a little scared. And then obviously we had Covid and Covid led. Unprecedented quantitative, using plus unprecedented fiscal stimulus which led to a combination of animal spirits that resulted in the insane blow off top in 2021, which resulted in a wild amount of uneconomic business models getting a wild amount of funding completely unprecedented.

And, and this isn't just. , you know, venture capital, if you take a, again, a zoomed out view, this has affected every asset class. So if you look at real estate you know, you had people doing Airbnb, roll ups and multi-family and all these kinds of crazy things to get four to 5% yields. When now, if I just check my screen, you know, the one year government bond is over 5%.

So what does that mean? So it means you can sit on your butt and do absolutely nothing, not take any duration risk, and get 5% yield from the government. G. So that's gonna completely reset all asset classes. Real estate, venture capital, private equity, though the stock market hasn't really gone down a lot yet.

I think, you know, we, we shall we'll see. But I, I think it's gonna completely change the paradigm. And, and so I think about it, if you think about it from a venture capital perspective, you know, a lot of the quality businesses that got funded post financial crisis especially in the kind of the, call it 2010 to 2013 context.

Were, you know, decent quality companies, often marketplaces where the unit economics made a lot of sense and they had to raise in, in a down market. And so they built fundamentally stronger businesses with better unit economics. And this went from, you know, some high quality platforms. Let's, let's say like Airbnb as an example of a pretty high quality business that, you know, still probably is overstaffed and has too much cost, but like the fundamental unit economics of the business are really good to 2021 when we ended up.

You know, 25 food delivery companies that were doing negative 70%, you know, gross margins that were six months old raising a billion dollars and, and basically pissing away all the money and giving away to customers. And so that was the lifecycle. That's over you know, all the funds that were, I, I, you know, I'd say very simply, any round that was done in 2021, if it is a mediocre company, is, you know, going to end up down probably 70 to 80.

If it's a bad company, it's gonna be a zero. And if it's a good company, it should be down probably 50 to 60%. And that's just based on if you pull up you know, non-profit, or excuse me, unprofitable tech or, or speculative SPAC type companies or other similar companies on public markets. So you pull up something like arc, which is an ETF of loss making, or, or you know, not super high quality generally software companies or speculative software companies.

You know, it's down 70, 80% from. And things that are worse are down 90. You look at something like Carvana, it's down like 95 and something that's higher quality, like an add-on which I'd say is probably one of the highest quality businesses and payments and slash software, it's down 50. So just, you know, being super disciplined and just doing that basic analysis, that's the reality.

And so this hangover is gonna last a long time. You have a lot of VC funds that obviously raised huge amounts of money. In 2021 off of these fake marks that generally weren't really, a lot of it wasn't realized. And so there, these guys are all sitting on a lot of dry powder. And so I think there's this view that basically because there's all this dry powder out there that's gonna offset this down cycle and they make it more palatable.

I don't think that's true. You know, there's examples from the tech bubble where there. You know, plenty of funds that that had been raised. And, and basically what ended up happening is these funds just got deployed over a much, much longer time period instead of funds getting deployed within, within a year or two, which is what was happening recently.

You know, the best example probably being Tiger, which deployed you know, a fund in like six months at, at the top or SoftBank. You know, those funds are gonna get deployed now over four to five years. And so the, the cadence of deployment is gonna be much, much. And so because of that and because of what's happening in public markets and because of what's happening with the normalization of interest rates and, and potentially a recession, we'll see either way.

But I, I don't think it really matters if there's a recession. I think the normalization that's gonna happen in venture capital and the resended valuations is gonna be kind of a multi-year process as it always has been, as it was in the tech bubble, as it was in post-financial crisis. That probably lasts three to five years, let's say, or two to five years if you want, like.

Huge confidence in a role and valuations will go down again. On average, you know, 70% peak to trough, or 80% peak to trough. And the companies that will get funded at this point are gonna be higher quality companies that are solving acute pain points where the union economics fundamentally make sense.

And they'll do it at valuations that even at this point are, are good, but they're, they're gonna be down dramatically from the peak of 2021.  

Mike: And, and, and if I'm sort of distilling this down to the crux of the cause of this, if, and I even hesitate to use the word cause cuz nothing is independently caused by it, but do you view the interest rate and the centralized monetary policy as being the influencer over the, the amplitude of the rise in the.

I mean this, certainly there are, there are, you know, trends and patterns to boom and bus cycles, but they seem to be amplified given the monetary policies at the time. Is that your view is that this was just poorly managed from a Federal Reserve perspective and that that created so much capital and low interest rates in the market and kind of, yeah.

The short fed, fed the animal mind, as you say.  

Eric: Short. Yeah. I've had the animal first short answer, a thousand percent. Yes. I mean, it, it's, it's, it's actually kind of insane. But if you, if you take like that, this is even like a mystery, but if you just zoom out, if I told you the risk free, meaning you're, you're fundamental cost of capital in the market is 0%.

You're gonna be like, okay, well basically you're telling me that everything I do that generates a return makes sense potentially, cuz you're telling me the cost of capital is Zero. Right. You just zoom out. That's like mm-hmm. , that's mm-hmm. for 15 years. The government basically told us the cost of capital. You know, if you, even, if you look at, that was the short term, obviously fed funds, right?

If you look out at what the 10 year bond was, which is probably the more fair way to look at it, okay? But it was still like 2%, two and a half percent, whatever the, the 10 year was before the recent mover, the last year and a half. So it's basically zero, right? You're looking at 10 years and you're barely getting any yield, and so what that signals to the market.

Basically go deploy capital in anything that's kind of above that. And if you get some modest compensation for your risk, that makes sense. And, and that's basically what happened again in every single asset class, stocks, real estate, VC art, like you think it's an accident that crypto just came out of nowhere with, you know, post , you know, in this recent period it's not an accident.

So you have like fake coins that you know, have no purpose or no actual use case. Tens of billions or hundreds of billions of market caps. So it's not an accident. And I think what what ended up happening was because of that, you know, and, and zooming it back down to vc you know, huge amounts of capital got attracted to the space.

And when huge amounts of capital get attracted to space, future returns suck. It's just the axiom of finance, huge amounts of capital chasing limited amounts of opportunities. Your forward returns on deployment are gonna be. And so by definition, that peaked in 2021 with huge amounts of capital chasing a lot of companies, a lot of which were, you know, full of bad, it was a bad pond, a lot of adverse election.

And so the forward returns of capital deployed in 2021 were gonna be really, really probably the worst they've been in, you know, since the tech bubble. Mm-hmm. . And so, you know, that's, and that's not different. You know, I come from a public markets background and I've spent time in a bunch of spaces including like oil and gas.

You know, you can look this up, but the 2014 to 2021 oil bear market really sounds a lot like what's gonna happen to tech. Basically, you know, 2014 oil prices crashed because basically shale really started to scale up. And a bunch of these publicly trade shale companies attracted huge amounts of capital.

And same in the private companies because they were telling all these investors that the forward returns on. Wells and the Permian and Eagle Ford in these places in Texas were really, really attractive. 50% IRRs left and right. You could spit in Texas and get a 50% irr. And so huge amounts of capital came into the space.

High yields, bonds, equity, pe, all these sorts of things. And there was tons and tons of drilling and what? Too much capital, too much drilling, too much supply of oil, oil prices, crash. They went from, you know, a hundred dollars a barrel. To, well, in covid they went negative actually. But like, call it 20 to $30 a barrel.

And so all you know, there's been a huge reset, huge multi-year bankruptcy cycle. All these publicly traded oil companies have had to transition from a growth only mindset. Basically grow at all costs, drill, drill, drill to a return on invested capital mindset. What's our cost structure look like? Are we deploying capital responsibly?

Let's cut our cost structure. And this was like a seven or eight year bear market, and it's not an accident that last year the best performing sector in the public markets was actually oil and gas. And by the way, oil prices were actually not up last year, by the way. They peaked at one point post the Russian invasion.

They actually, oil prices were pretty much flat last year, yet oil and gas stocks were up the ton. Why? Because they rationalized their cost structure and. You know, profits have have done very, very well. And so that's probably what's gonna happen in tech. You're gonna have a multi-year period where companies are redesigning their cost space, looking at their cost structure, thinking about whether they're deploying capital in a rational way and moving from a growth at all cost mindset to a mindset of growth at reasonable cost with unit.

That makes sense And it's not an accident. Again, you see like Salesforce, good example the other week, like reported good earnings. It's really cost. But they have like 10 activists, not 10. There's like five that are, you know, activists on Salesforce telling them to realign their cost structure. And Salesforce is a really good sticky software product.

And so they'll be able to do that. But this migration from grow at all costs to discipline capital deployment and having a responsible cost structure, it's really painful. And you don't necessarily wanna be around and own these stocks for that period, or these private companies. If you look at what happened, oil and.

It was really painful. Seven, eight years default companies going bankrupt stocks did not do well, and so it's gonna be a long and painful reset. .  

Mike: And so it seems like it's a combination of both the centralized monetary policy, but in your example there with oil and gas, that didn't seem to be a influence or a cause of a monetary policy.

That was just human beings getting very excited about an opportunity, and in that moment this animal spirit kicks in and they mispriced future earnings. They get greedy effectively, right. Is that how you, I mean, what, what, given that we're fairly close to the tech collapse and the farther that we get away, the harder it is to remember how we felt in those moments.

Because everyone is excited about, you know, NFTs and, and all the things that are growing. And there's a lot of, I was talking to a, a head hedge fund manager in healthcare, so he's managing. varies, like completely orthogonal to mm-hmm. , NFT and crypto, and he's getting pressure to invest in things that are just way outside of the bubble of what he's typically investing in.

And he's like feeling depressed. He's like, man, my, you know, I'm flat lining. I'm not growing and everyone else is. It's like a gold rush is happening across the street and you're sitting there, you know, boiling water. Do you, do you feel like there's a, a real lesson? Like how, how do you view. The lesson that people can pull from this given that they've just lived it and not make the same mistake again.

And maybe even for on a personal level.  

Eric: Like it's inevitable that this will happen again in both in tech and in other asset classes, cuz this is just how markets work. But what I would say is tech was a unique combination of, yeah, the example in oil and gas was much more idiosyncratic. But this, it was still in the back trip of low interest rates.

I'd say tech was. The epitome of basically both because tech, by by definition, tech companies or unprofitable companies, all your cash flows are far out in the future. It's just definitional, right? A lot of these companies, you know, mm-hmm. , you're growing really fast now. At some point you'll make cash flow in the future, and so they're long duration assets.

And so in an environment that has artificially suppressed long-term mistress rates, the assets that get most public are long-duration assets, which is tech. So it's inevitable that monetary policy that. Was probably inconsistent with where it should be showed up or led to the largest, the largest bubble manifesting was tax.

That's not an accident. Right. Then you added Covid, which there was a fundamental piece to this. So the fundamental piece to this was effectively, you know, post covid e-commerce went from, you know, 10% to, or 12% to at one point, I think in the low twenties, 22% call it, and the market and VCs and everyone basically concluded that all Covid did was pull.

A decade of e-commerce secular growth and software entrenchment and things like that. And that, that was gonna be the permanent new base of market penetration. And then everything was gonna compound from there. That was like the, if you go look at, you go pull equity research notes or go talk to VCs circa, you know, post covid and especially, you know, late 2020, early 2021, mid 2021.

That was the consensus. And so that started with, you know going up, you know, 20 x and having a larger, I still remember this like September, I think, of 2020, or maybe it was a little earlier. Maybe it was like June of 2020. Someone can fact check me on this. When Zoom market cap exceeded ExxonMobil and that actually was the peak for Zoom.

And since then Zoom is down, you know, 90% and Exxon is like three. So the point is the, it started with, you know, people saying, okay, everyone's just gonna sit at home all day and zoom all the time. And Zoom is the dominant platform. It's the Facebook of, you know, teleconferencing or whatever. And, you know, this should be a 300 billion company, and then it, it went to e-commerce.

You know, you look at companies like Shopify, you look at Amazon you look at other, you know, streaming services, Netflix, fubu, whatever, all these other things, software. And so it was  

this view that basically Covid just pulled tech adoption forward by 10 years. That was completely wrong. E-commerce went right back to basically on trend, completely normalized.

If anything it seems like, you know, all Covid did, which makes sense, was create a lot of pen up demand for real world services. Mm-hmm. , I know I go to, I know about you, I go to restaurants around in Miami and everything's packed and insane and hotels are insane and flights are insane. So actually those are the still the strongest areas of the economy cuz.

People are trying to offset the, the year or two they think they lost. And so it did increase adoption in certain software areas. It definitely, you know, has changed, you know, work from home habits and things like that, but it didn't really increase tech adoption or software adoption E-commerce adoption anywhere near what the market had under ridden in the middle of by the middle of 2021.

And so that's what everyone just totally got wrong. And if you then pull up a graph of earnings expectations for Amazon or Shopify or Netflix or, or Zoom you'll see they've come down very, you know, people's estimates for this year and next year. Earnings are down very, very, very dramatically from what people thought in 2021.

Probably like 80%. Yeah. Yeah. And so, and that's, that's really, so it's the combination of that fundamental. Right incorrect thesis plus the fact that, again, tech is by definition the longest duration asset, and so was most impacted by the artificially low interest rates. We had through, kind of call it middle of 2021, before people realized that inflation was actually a huge issue that was about to brew.

Mike: And so I'm most interested in this, in this narrative. Why are, why, what's the cause of most people being wrong? You know, you think in a democratic society we have this backbone fundamental idea that if the best way to find truth is market demand, like whether it's a stock or whether it's voting for a politician, we put it out to the masses.

And then the market, you know, it it goes back. Adam Smith, right? It's like the market will will bubble up the true price of something. And that's, there's a truth to that. But there's also seems to be like a massive exploit or, or a vulnerability in how people think. And I, and I tend to think, tell me what you think of this is that it's mm-hmm.

an individual. If they're, if an individual is making an assessment of, say, a stock or a company that if, if you have a, a million people making a million independent decisions, then you get to. The, the closest form of truth you could get, assuming those people put in actual work to make that conclusion.

However, the market is more transparent than that. You can see the other, you know, nine, 900, 900,000, 99 people. So you can see everyone else in the market making the decisions, real time given the price. And so people take a shortcut, right? If you're like the last person in line, well, why bother if everyone else is already concluded

But the reality. There's a balancing game between who's actually doing the work to evaluate c. And, mm-hmm. and who's just piggybacking on everyone else. And you, you, there's not a real way to determine that. I mean, you see the price, but there's like, how do you know if everyone is putting in the work? And when everyone is looking at everyone else and what their test results are then, and no one's actually putting in the work to evaluate whether it's a real estate property or an investment in some company.

Then that's where the train gets, like far, far off the rails and then, and then it course corrects because reality always, always hits. Does that resonate with you? I mean, when you think about. individuals making the decisions. Like same thing in voting, right? It's like go out and vote. Mm-hmm. , and there's peer pressure just to say this is the right answer, versus like, okay, you have to do actual individual work to conclude what's, what the best answer is.

Eric: Mm-hmm. ? Yeah, I think, look, markets are generally right and intelligent over time, right? But no one guarantees that that time is, you know, today or six months, right? So I would say the market, I, I'm a strong, like if you participate in public markets and. , you know, you believe that markets anchor to valuation and fundamentals over time as I do.

Then by definition, you have to believe that they sort themselves out over time, which I do. But again, over time can mean a long period of time. Yeah, right. You, you know, you look at the housing bubble, right? That, that really kind of went on, really started cropping out, I would say like shoddy lending schedule, let's say in like oh two or three, right?

So that. , that was like a six year type ordeal. This, I think, kind of overvaluation tech has really been brewing since like probably 2018. So you know, and, and if you go back and look at some of the bubbles and let's say commercial real estate and things like that, this has been going on since like probably 2014 or 2015.

So these things can take a while.  

But I do think the markets are really good over time. When and when they wake up, they wake up. Like you've seen, you know, the revaluation in in unprofitable tech companies in public markets have been absolutely savage. You know, really these things went down like 80, 90% in like six to nine months.

So when the market wakes up and switches its paradigm the change can be very, very fast. Now, when it's going to decide to switch that paradigm, it's harder to assess, but I think markets do a really good job over time. And then the other thing I would say is, you know, if you look at other asset classes, we take venture capital as example.

There's structural inefficiencies embedded in the market, and what I mean by that is, so in venture capital as an example, your risk reward of, you know, being a GP and running a fund when everyone's deploying money, let's say into crypto or you know, grocery delivery apps or whatever it is in 2021. So if you don't deploy and you don't participate, and you're like, I'm smarter and this is all zero and this is going to blow.

Well, you're gonna get a lot of pressure from your LPs and if it, these people are right and everyone's involved and you're the one person who's not, then you have a real problem. Then you have a benchmarking issue, right? Then the benchmark is up a lot on all of these deals and you didn't participate, and you're the one fund in the crowd that didn't, and so you're gonna look really bad.

So it's kind of one of those situations where if you do participate and everyone kind of syncs with the ship, well then you could just be like, well look, every other fund deployed into stupid shit in 2021. And I also was an idiot. Whatever. Right? Right. Everyone's, and then you make up some narrative that you were slightly less dumb than everyone else, and you deployed a little bit less into the worst stuff where you didn't deploy as much.

And then, so therefore, we're better than the other ones and you should invest in us. And that by the way, that that get that narrative happens all the time. . It's true by the way, public markets do. It's the same reason, like if, if you're fine, then you were down last year, right? And the market's up this year, you can't afford to be up less than the market this year, right?

You have to chase because then like if the market kind of goes back up, then you look really stupid. Oh, you underperform the market last year. Now you're underperforming again. Right. So it's tough to be like, Hey, I think the market's really overvalued and it's gonna come down over time and I'm okay missing the short term performance.

It's tough. You get pressure from your LPs and so in a lot of cases this is true in public markets, true in BC it's better to just kind of go with the crowd and, and, and sync together. And if everyone loses money, whatever, everyone loses money cuz you don't look as bad. But it's much worse to miss out and be the only one who's not making money.

Even if that could potentially bring the word. You're the person who doesn't lose money when things go south.  

Mike: Yeah.

So effectively you're, you're bringing up this idea of like a like a social price, right? You have the actual price of the company and then you have the price of me not making the correct decision when everyone else made the right, the correct decision or, or decision that  

Eric: Well, you're thinking as a, it, it's you thinking as a, as a individual actor, as a business owner of your.

Mm-hmm. you know, a manager of your fund and your, your incentives and your personal risk reward and the risk reward of the fund as a business is fundamentally very different from the risk reward of your LPs, potentially depending on who they are. Right. And this is true as in the hedge fund industry before this.

It's like, you know, if you think about, you know, what makes sense for the fund as a business, and if you're trying to optimize the. Versus like actually putting up returns. They may or may not be. Often they're not the same thing. So that's true in venture capital. It's true in hedge funds. It's, it's kind of true everywhere.

And so there's, you know, you're not doing a bad, I mean, you're supposed to, you should be thinking to kind of probably optimize your, the returns of your investors and put up the best numbers. But the reality is, you know, you're thinking about it from as a rational actor and you just have really different incentives.

Mike: Hmm. Yeah. Yeah. Cuz even, even your, your investors, they don't just want the highest, absolute rate of return. They want a, they want a slightly better return than everyone else. Even if everyone else is down and you're slightly less down, maybe they're happy and, and you're, you're really optimizing for their happiness.

Right. Because if they're happy, then Exactly. This is a slightly slight difference.  

Eric: Exactly. This is like, it's, yeah. What you just said, it's completely right. It's, it's basically some weird matrix. . They care about return absolute returns on, on to some extent, but they also care a lot about relative returns.

And so like they would trade off, you know, they would trade off probably having slightly worse absolute returns if it meant like they looked better on a relative basis. Cause remember, yeah, the LPs themselves, let's say it's an endowment, they get benchmarks versus their peers. Mm-hmm. , right? Everyone goes, okay, this endowment was up.

Yeah. Let's say the endowment was up 20% for the year, you'd say on. basis. That's fantastic. Like, markets go up six, 7% of year on average, like 20 is amazing. Oh. But this other university was up 27. So we look back, right? Mm-hmm. , it's, it's, again, it's, it's like life. It's it's comparison. Yeah. Comparison.

Personal. Yeah. It's, it's comparative game. So the lp, you know, the institutions themselves, the LPs themselves also have a weird kind of incentive structure. That's, again, not everyone's aligned on really, or I should say most people are not aligned on putting up the. Kind of absolute returns.  

Mike: Okay. So, so tell me this.  

So recently, you know, AI's been the talk of the town and AI's typically been looked at through the lens of creative work. Like, there's Dolly that's creating beautiful works of art visually. Mm-hmm. , there's all sorts of amazing texts that's using large language models. Do you view what we've been talking about so far is kind of these like human heuristics that people get caught up in these emotional games.

There's differences between the actual rate of return of what they're. Optimizing four, which might be, you know, like we're talking about relative rate of return of other portfolios. Mm-hmm. , do you view that maybe this is already happening? I, I don't know, but could you take into account using a AI model that takes into account all the communication that's happening

on the internet with like Twitter, and it's looking at the different prices of oil and all the other exchanges of all the other countries and looking at past data, and it's aggregating all the world's financial and social economic data together. And it's saying, Hey, I think we're in a bubble in the automotive industry, or we're underpriced in this or that.

Mm-hmm. , do you think that'll emerge as a, like people will. 30 years from now and say, wow, hedge fund managers, were making decisions of sitting around a table like it, it'll look kind of primitive. Or do you think that's overstated?  

Eric: I don't, I don't think so, because I think. , the reason people get paid, or I should say the reason people who've put up really good long-term track records have put up really good long-term track records.

Look at Buffet as an example. It's not because they're smarter, I think it's a false notion of investing. You know, I, I think you don't have to, in many cases, to be a good investor. It's not about being that smart. The basic arithmetic of thinking about a multiple on earnings is, is. Math as second grader could do.

Even in dcf, if you're, you know, you're, you're taking the long form approach is not that complicated. So it's not about that. It's not about being better at math or better at data analysis or having, you know, yes, it's important to have good information, but a lot of times that, you know, with the internet and a lot of services out there, a lot of that data's already accessible.

So it's not really about that you actually get paid, I think for a few different reasons in investing. One is, and, and one of the ones Buffet would talk about, and I think one of the best forms of earning. You know, alpha or, or excess returns in markets is duration arbitrage, meaning you just fundamentally have a longer time period than the market.

The market is now, Dom, you know, this is a crazy stat, but basically half of all options activity now is zero day options. Meaning options that expire today, so effectively gambling. Okay? So that's the current state of the stock market in terms of behavior and, and duration. So if you could take a five or 10 year view on a.

you know, the market may not be willing to ascribe value to certain pieces of that business or think about the business in a certain way, that if you have a a bit longer of a time horizon, you can. And that's how Buffet in a lot of ways made a lot of his money, right? He's taking a longer time perspective on some of these businesses.

Maybe they're cyclical, maybe they're going through his secular change, whatever, and he's appreciating, you know, that they're fundamentally strong businesses in a way that the market is not because he has a longer time horizon. So that's a great way to get paid. Another one is just. Pain tolerance and the ability to resist getting caught up in, in price action.

Right. Like, you know, give an example right now and we can revisit this in a year. You know, right now basically the yield on the s and p and, and for sure the yield on the nasdaq. So what companies are earning as a percent of their market cap is less than the one in two year bonds. Okay? Right. The one-year bonds is over 5%.

The s and p earnings yielded right now in current run rate earnings is probably about. On declining earnings. And I know for a fact on the NASDAQ it's meaningfully less than that. So right now you can earn a higher yield just giving your money to the government totally risk rate than you can owning stocks, which right now have basically declining earnings.

And, and probably, I would argue, the worst fundamental picture in terms of margin reset and, and kind of demand picture and interest rates going up and all these sorts of things. You know, probably worst picture they've had in, in, in a decade. . So, is that right or not? I don't know. But people, you know, the reason people, you know, a lot of times will not sell stocks and go buy bonds is because they need to be involved in the market.

Or like, markets move a lot. So like, you know, you can have a period where the market goes up five, 6% in a week and yes, you just, if you sell, you made five, 6%. So there's a lot of these other, you know, dynamics, you know, that you get paid for. I think, you know, duration, arbitrage ability to have pain tolerance and not get fo.

Is another great way for like investors, if you look at the track records they put up in order to be able to put up the, you know, good numbers you need to have and be able to sustain periods where you look wrong and you don't get fomo. Right, because you wake up every day and the market prices doing what you don't think or what you don't think it should do.

And you have to say, I think this is incorrect, and. Hmm. Right. And so I think this a long-winded way of saying it's not about AI and being smarter. The reason, if you decompose the reason good investors you know, put up really good long-term track records, it's not because they were smarter or they had necessarily better information.

It's really about these other facets of, of being able to, you know, have a different or longer term perspective than the. Which I don't think ai, you know, again, AI can maybe make that recommendation mm-hmm. , right. But the human has to actually act on it. Right? Yeah. So at the end of the day, that's the, the key piece of the puzzle is, is, is really that it,  

Mike: well, the human has to trust that the AI will perform better.

And right now there's, that's what it seems to come down to. Most people would trust in either it's an ETF or a hedge fund manager.  

Eric: But I'll give you an, I'll give you a not zero. I'll give you a really easy example. Okay. Let's, let's, let's run back to 2021. Mm-hmm. , let's say I had an AI and I asked him, Hey, I could probably go into chat G p t and, and ask you this.

Do you think food delivery is a good bu good business model? And if chat G P T is decently smart, and maybe it is, it's gonna say, Hey, Eric, no, it's not. Because in 2001, Cosmo tried to do food delivery out of a van and the company was a zero and it's never worked. You know, selling sushi for $20 and dropping off at someone's apartment when the minimum wage in a lot of these states is 15 to $20 an hour and you don't have density, and the customers aren't that repeat and there's 10 different competitive apps.

This is not a good business model. Okay? So the AI is gonna tell me it's not a good business model, but then all my VC buddies are deploying tons, hundreds of millions of dollars into food delivery apps. . And so now what do I do? I have fomo. My LPs are saying, oh, this is a hot new space. Why aren't you doing anything in it?

I'm like, oh my God, what if it is, it's working this time. The AI's wrong. They figured out the model. It's actually gonna work. And now if I'm not involved, I'm screwed cause I'm gonna be the only fund that's not in food delivery. So what's, how good's your AI that? Hmm. Right. So it depends on the person, right?

Yeah. Yeah. And that's like something like, again, I think most people are, you know who, who, you know, a lot of these investors have, you know, fancy. pedigrees and good backgrounds, and they're pretty smart people. And I think anyone, like if you just showed them, if you, if you, if we zoomed out of the situation and I just showed you the unit economics of food delivery and I explained the business to you, I didn't tell you what it is.

I think you would say, this does not sound like a good business. If you had to rate on one to 10 scale, you'd be like, this sounds like a two. .  

Mike: Yeah. And maybe that makes, doesn't matter. Maybe it makes sense for the individual, even if they know that it's gonna like, like maybe it's like, Hey, for my 24 year old resume, raising 15 million, building this company for three years, and then it's gonna crash into a wall as the market collapses.

But I'm better off as an individual. Maybe that's the reality of it. So,  

Eric: Yeah. And also maybe, and, and maybe as a vc, right? Cuz you invested early, it gets picked up a lot. It's still a lot of good hype. Maybe it ultimately fails, but that's a good no rider for your fund, you can raise off of that you were able to raise Yeah.

In that period. Yeah. And so you can actually have a situation where it's like soup to nuts, it's nothing. But you were able to raise a fund and there's a lot of good hype and press and so, Yeah, and this happens all the time, by the way. This is like, you know, this happens every cycle.  

Mike: Yeah, yeah. Well, the question is like, does that happen, does that become a figment of the past given that the sophistication of the investment decisions become enhanced through, you know, ai?

I don't know. I don't know, but  

Eric: no, I don't think so cuz the, the fundamental human nature incentives that exists is the same. Mm-hmm. in all these spaces. And that, that's just like, that's the accident that that doesn't change. Yeah, that's true.  

Mike: So let me ask you this.  

So you were working at hedge fund Governor's Lane for a while.

It seems like you're very passionate, knowledgeable, you got good at what you're doing. You met, you had your co-founder from Wharton that you were, guys were pitching this, like pitching ideas back and forth. Did you wanna start a company? Were you getting kind of bored in hedge fund land? What was. Kind of impetus to start Link Money.

Eric: Yeah. I was, I was getting a little antsy and, and wanted a bit of a change. Also, you know, I'd always believed that as an investor, that actually being an operator and working inside a company and seeing how a company works and actually having to build something is or could be useful as a, as an investor.

And it's like a good skillset to. And, you know, could potentially make you a better investor. So that was always my paradigm and I always wanted to kind of get involved in the company. I just didn't know how. And so I started my first company, Adam Finance, which was you know, somewhat adjacent to the hedge fund world or the finance world.

It's a investment data and research platform for public markets. This was aligned with kind of my career up to that point. And even that was the, the first thing I started and, and got involved with. And I learned a lot, you know, building. that company and, and, and getting it going. And you just have to move from a mentality of observing and researching to one of bias to action, actually having to start some moving from scratch.

It's really hard. It's, it's not an easy transition coming from a, a finance background. And so, you know, did a lot of learning there. And then I started Link Money little over a year ago on the paradigm and thesis. Open banking and open banking related services would increasingly kind of exist in the United States.

And the US was really far behind Europe and other places in terms of open banking and, and related payments. And so wanted to start a company in that space and really narrowed down to our current product in market, which is a pay by bank product, which means users can pay a merchant from directly from their bank account.

And so what we enable via our Link Money pay by bank product, is we allow merchants to. Bank account based payments from their customers, and the cost of processing for those merchants is 70 to 80% cheaper than accepting payments on carts. So it's cheaper, more secure payments which is great for the merchant and great for the entire kind of ecosystem.

So that's what we're focused on and do and pay. My bank is, starts to really grow really rapidly in the. And in markets like Europe where this has been more prevalent for some time, it's something like 20% of digital payments.  

Mike: And is the main platform, e-commerce, are you looking at in-person or both equally?  

Eric: It's a mix. So we actually have a solution for in-person as well. You, the merchant can simply text the customer, email the customer a link to the payment flow, so works in person as well. Our main focus is on merchants that have a payment type. Is repetitive. So there's a repeat purchase from the customer to that merchant.

Doesn't have to be subscription. It could just be, Hey, I have a, a storage unit and that's on auto pay or insurance premiums, or I'm, I go to Amazon a lot and I buy from Amazon a lot. Or, you know, I go on this. Ticketing platform and buy concert tickets once a quarter or whatever. It's, so anything where the purchase amount is a decent size, it's not like a $5 cup of coffee.

Mm-hmm. and it's more kind of repetitive. And the reason for that is those are the situations where removing cards and, you know, switching to pay via bank account can save the merchant, you know, 70 or 80% and the dollars are, are really meaningful for. And so that those are the kind of payment areas we focus on.

Mike: And how is that different than today if some, were you just a debit card, which comes straight out of a checking account?  

Eric: So from a merchant perspective, the, the way we set this up is it, it's a seamless UX for the customer. They literally just pick their bank. Mm-hmm. Click the logo and then either put in their user credentials or authenticate with face id.

And it's the same as if they logged into their bank account. They do this on the first payment just once. That's it. And then it functions like a safe payment information, just like a credit or debit card, one on the merchant's website or, or app or portal. . And from an emergent perspective, we guarantee the funds and we move the money.

And so for them it's just like a card. It's the same kind of behavior that they know the funds are guaranteed and then, you know, processed generally next day except it's 70 or 80% cheaper.  

Mike: Hmm. And did you see, I mean, plaid has been around for a while. Is that, is that a similar are they targeting something slightly?

Eric: So cloud started really with kind of data aggregation and, and selling data access to bank accounts. You know, really to fintechs. Mm-hmm. . And originally they were doing screen scraping, which we don't do. All our connections are direct OAuth connections. We don't store user credentials. It's super secure.

But really, you know, ultimately Plat customer base is really FinTech and a lot of their volume and focuses on either providing this data to fintechs or doing kind of wallet or neobank account. That's not what we do. We're a enterprise payments company with a complete merchant driven focus. We work with merchants.

Everyone on the team is, comes from really a payments background. A lot of folks in the sales team from add-on. We have people on the engineering products, teams from Amazon and eBay and Zelle place like that. So we're really an enterprise payments company focused on merchants, traditional merchants and with the sole goal really being to lower their payment processing costs and save them money.

Mike: So merchant would be like, Like a large merchant, small, like somebody on Shopify or somebody.  

Eric: Yeah. So we usually target merchants with about a hundred million plus of, of revenue or, or tpv. Mm-hmm. . So really enterprise. Mm-hmm. , so not as much. We have some small Shopify customers, but our real focus is on merchants are doing, you know, hundreds of millions of revenue or payment processing.

So that could be so it could be e-commerce, but also, you know, we have partners in the remittance. You know, cuz in remittances you're sending, let's say, a thousand dollars a month to Mexico. Mm-hmm. . So that's actually a great use case for us. That's often on, right now on card rails today. So it, it runs the gamut.

It could be e-commerce it, it could be quick service restaurants, it could be storage units, it could be insurance companies. Anywhere again, where the amounts of the transactions are, are really, we, we like to focus on areas where they're. Ideally above like 20 to $30. Mm-hmm. per transaction and then pretty repetitive.

Mike: And why is this ha, why, why now? Like is the US somehow technologically stifled in like bank transactions or is there not an incentive for customers to use it?  

Eric: Yes, yes. Yes. , yes. I would, so the US is, is always behind in payments. Mm-hmm. Because we have a more fragmented banking market, port fragmented infrastructure.

So that's just, that's just part for the course. So that was definitely part of it. And the technology and ability to do. Didn't exist three or four years ago. Now you can, cuz you can set up some of these bank account connections. It's still super hard because we do not have realtime account account payments in the United States.

We obviously have ach, ACH does not settle realtime. It's a huge issue for doing something like this. Europe obviously has realtime payments, so does markets like Brazil and India. So there's the technology infrastructure piece, which we had to kind of get through and was not possible three or four years ago, is possible now, but is really, really challenging.

You. Piece together a ton of infrastructure and build kind of a whole decision layer and a lot of technology on top of this to make it work. Unlike Europe, where you can actually, these integrations are open pretty much, and you have real-time payments, so it's much, much easier to set this up, which is why you have more of these open banking payments companies in, in Europe.

You have a still, not a, a crazy amount. There's a few that are large and successful, but it, it's more competitive since number, you know, that, that was the other point. And then the last piece is, yeah, the, I. So no one really has an incentive to push this in the United States. No one's on the side of the merchant and is aligned with them fundamentally in terms of saving them money.

Existing companies, merchant acquirers, you know, it's, it's nice for them to have a 10 or 15 basis point, take rate, a missed two and a half or 3% total cost of processing. It's much better to have a, a, you know, a sliver of a much. Cost. Cause you don't get noticed. So they don't want lower cost of processing.

The banks and card issuers obviously don't, because they make money off of interchange, they do not have an incentive to push an alternative cheaper payment method. And so for us, this is great because every merchant for us is a new merchant. We don't, we don't work with them already. And so we have every incentive to pride cheaper payments and help the merchant save money and ultimately drive the total cost of payment processing in the US town.

But the incentives are just fundamentally not. In the US in the existing payments ecosystem to want this to work. But the good news is that given the macro backdrop and everyone's focused on reducing costs and you know how important that is and where kind of interchange rates went merchants I think finally reached the point where this has become top of mind and they understand the value of.

And the incentive to act and to want to adopt something like this now is extremely high.  

Mike: Interesting. So the merchants are feeling a greater pressure financially, and so they're looking at areas where they wouldn't have typically looked at including merchant payment processing fees, and that's why this is now Yeah. Top of mind for them.  

Eric: Exactly. And, and, and really, I, I would say that there was a huge shift from, let's say three or four years ago where a merchant would just be like, let's just have every payment option a. It doesn't matter the cost. Apple wallet, this, you know, it doesn't matter, right? Or sorry, apple Wallet.

Sorry. Apple Pay , you know, cuz the view is just like, let's just make it easy for the customer and that, that mentality is totally gone. Now it's about we need to optimize our cost structure. Growth is slowing, our unit economics don't work as well. Recession, whatever it is. And hey, taking, you know, two and a half to 3%.

And turning that into 1% is a huge deal. Mm-hmm. , if we can cut our cost of processing 70%, you know, pay by bank is much more secure cause you're actually logged into your bank account. It's much more secure than a cart which can get stolen or mm-hmm. used. So we actually help the merchant cut down actual fraud.

In addition bank accounts are much more stable and sticky, then it'll get closed as often. They don't expire like cards, so there's less involuntary payment churn. So if we can take someone's total cost, including cost of processing plus. Plus involuntary payment churn from three and a half percent to one and change.

That's a big deal for them. And so that's really what's driving this adoption.  

Mike: Interesting.  

And I, I wanna learn a little bit about the, the layers here, the tech layers. So you have the banks themselves, which they manage probably from the third party builders, but they have their own infrastructure. And then is there a layer on top of that that has made what you're doing a lot easier to integrate into? Like, is there a, an aggregator of, of banking APIs that you can then plug. Or like what are the layers going up all the way?  

Eric: Yeah, so there's obviously the individual bank account. Mm-hmm. And the data associated that which is controlled by the individual bank. And then there's a few, a handful of data access networks in the US is what they're called, which have basically rolled up and integrated with each of these banks for API connectivity.

So we have a mix of working directly with the banks and having direct linkages as well as leveraging data access networks for the banks. You aren't as large, obviously, again, there's 10,000 plus banks and credit unions in the United States. You're not gonna have direct linkages with all of them. That that doesn't really work.

So that is what we tap into both our direct connections as well as the data access networks to actually pull in. When you give us your, sorry, give us, when you pass your user credentials directly. Through the link, the connection to the bank, and you log in basically in your bank account. We are then able to get the response and pull some of the information from your account.

Things like your balance and your account and routing number, which we need to actually move money. So that's the information that's fed to us. And then we take, you know, we look at the balance in your account, the transaction the payment amount and we kind of make sure that you have enough money.

Cause we need to make sure that to guarantee the funds of the merchant so we're not gonna lose tons of money and have people paying for things when they don't have any money in their account. And then we use the account routing number to actually authorize and move money via ACH rails. And then there's the whole kind of infrastructure and front end component that we have to work with.

You know, Nate, the API infrastructure for the merchant to ping. For it to integrate with the merchant's payment stack. There's obviously the front end user experience and then there's the all the backend kind of reconciliation and natural money movement that happens as well. But fundamentally, it's about customer providing access to information from their account, which enables us to pull things on balance, transaction history, account rounding number, because that's the decision, the customer to make sure they have enough money for the transaction.

And then ultimately we move money via ach. And guarantee the funds to the merchant. And so, again, despite the fact that ACH isn't real time, you know, and, and there's all these issues and the infrastructure's super complicated and we need to have all these integrations from a merchant perspective, there's a simple user flow with a button that says Pay by bank.

The user clicks, it authenticates, it's done. And the merchant just tells us how much the payment amount should be, and that's it. And so for a merchant, again, it works just like a. Except it's, you know, 80% cheaper.  

Mike: And would, as a company, does Link Money float that capital. So would that be money advanced in the merchant, like same day or instantly and then you raise money to float the, you know, there's probably what, 95%, 99% completion rate on those ACH transactions. So you're basically running to model?

Eric: Yeah. So there's, there's not that much of a timing discrepancy depending on the situation. So we can move money same day. Mm-hmm. Or next day or a little bit slower. That will depend on what the merchant asked us to do. If they want the money same day or next day or a few days.

And then that money will flow to them. And then on the guarantee side, yes, we true up with the merchant basically consistently. So if we authorize a transaction, , the money doesn't actually make it outta the customer's account cuz they don't have enough money or whatever else happens. Obviously we provide that, those funds to the merchant and we make them whole.

That's our guarantee. That's a huge part of the value prop to the merchant to allow them to complete the commerce and, and the transaction in a way that's effectively real-time. Even though, again, under the hood, we don't have payments in, in the United States. So that's, that's how it works. But you know, generally there's not as much of a, a timing issue and especially for the kind of merchants we're focused on who are large enter.

You know, the money coming today versus tomorrow versus two days isn't the huge issue necessarily. They obviously quicker settlement times, but it's really that they have certainty of funds.  

Mike: Mm-hmm. .  

Yeah. Okay. That makes sense. And then, so you looked at this and you said there's probably a new company or couple companies out there that are that data aggregation layer.

And you said maybe the market's gonna go through a recessionary period, which means merchants will be trying to cut costs and then you wanted experience person. The other thing you mentioned was that this technology, the bank payment, customer bank payments were being made outside the us.

You saw that and you said, this is gonna happen in the US and all those things, those pieces came together. Is that, are those basically all pieces?  

Eric: Yeah, I'd say that's a very good summary. I'd say the first, like the first anchoring principle was really seeing. How, and I, I covered financials before seeing really how paid by bank have grown so rapidly in Europe and, and markets like Brazil and India and just the adoption and how that took share from cards.

I think that was the bedrock thesis. And then you had to take one leap from that to say, I think eventually at some point in the next 10 years, pay by bank is going to be a big thing in the United States. It's inevitable it's way cheap. Merchants are thirsty for it now given the macro conditions.

Mm-hmm. . And so it's only a question of when, not if, and that was the, that was the core thesis. Like, yeah. Once you have that view, then it's more about, okay, can you actually build this? Which we didn't know right, by the way. Right. Was unclear, very unclear that we could actually pull it off and, and that the infrastructure was there and that we could make it a good user experience and get merchants to adopt.

But the fundamental bedrock thesis of this is going to be a thing, a big thing in the United States in the next 10 years. It's an inevitability. And it's really just a question of who is the dominant player pushing pay by bank in the us. That was the core kind of essential thesis. And the, because this isn't my first company, you know, I, I think there's a lot of things I learned in terms of like picking the right market, picking the right idea, how to build the team, getting folks who've done it before and setting up the company in the right way.

I think that helped a lot here to make this work better. Had this been my first company, I don't think I would've been able to do it Candid. I think it's too hard of a space to go to. Market's too complicated. It takes too long to get traction. The kinds of people you need to hire are too tough.

At least not for me. I, I don't know if I would've been able to do it kind of as a, as a first company.  

Mike: What is it that you wouldn't have known who to hire? I mean, or you wouldn't have been able to reach out to them in some way?  

Eric: I think, I, I, I think it would've been tricky to commit. I mean, cuz some of the places we hired from, you know, A, we have a lot of respect internally for Aian.

I think Aian is, is the best example of a European payments company that's done a great job in the us It's probably, I, I really, honestly, the only, if you wanna say it's a FinTech, but really payments company or FinTech that has been successful in the United States from Europe. I actually can't name, I really can't name another one to be honest.

It's a super profitable company. You know, much less hype stripe, but actually way better union economics. Mm-hmm. Higher quality business. really based on, you know, my understanding of the culture from the people we've hired and, and I have some friends who cover the company in public markets, like really, really well run in discipline companies.

So we have the utmost respect for Atian. And so that is why we obviously try to hire people from Atian. But I can tell you that hiring people from Atian is not easy because it's a great place to work and they pay people really well and the company is successful. So I, I just think, you know, hiring people from great places like we have as a first time founder without that kind of cred.

It is really, really challenging. And then the other thing is getting investors to believe in the idea and give you the leeway to build out the good and marketing traction. I mean, it took us a year to really get traction at least. So. Because it's an enterprise payments sales cycle. It's not, you don't just show up to, you know, a large billion dollar merchant and be like, great, add me to your checkout flow.

They're like, who the hell are you?  

Mike: Yeah. Yeah. What, that's a, that's a,  

what was your first customer? What did you have to do? Some kind of like solid before you build it approach. Like, did you go out there early with a deck and start selling it? Figure out customer needs and that sort of thing.  

Eric: Not really, because we hired people who had built in payments before.

And built not this obviously, again, this is a new product, mostly in the United States, but built similar things. And so we generally knew what the merchant requirements would be in terms of the backend infrastructure, the SDKs, the APIs, the reconciliation, billing systems they would generally want. So that part we had figured out these, excuse me, specific verticals we wanted to target was a little more t.

We had to really think about where the economics made. That's why I kept harpy on like, you know, larger transaction sizes. Mm-hmm. , repeatability, these kinds of things. Cuz we really spent a lot of time thinking about what are the transaction types and flows where the value prop and the economics and the savings, the savings for the merchant on the lifetime of the customer make the most sense and make this the most compelling to want to adopt today.

Cuz you know, it's great if someone wants to adopt three years from now, but we want traction now , you know what I mean? To, to, you know, start. growing the business. So we really thought a lot about those kinds of things. And we, we really start pushing the product aggressively onto merchants until really it was ready for primetime.

And we started with some smaller e-commerce merchants that were only doing 5 25, 50 million of, of, of revenue. Some of them were on Shopify. Mm-hmm. . And we still have those merchants and still like to have people. But that's kinda where we started to get the initial traction, make sure the products worked well.

Obviously there's tons of things we still had to figure out bugs, additional systems we need to. Built, excuse me. So that was the process. And then we worked our way up to now having, you know, kind of large multi-billion dollar merchants using the product.  

Mike: And so funding wise, you guys must have raised, was it 30 million?

Like what was the first funding that you raised to build out that early product? Because I mean, you, you needed a, so actually you needed a bunch of engineers, designers, product people to build out even that first version.

Eric: Yeah, so actually myself Edward Lando, my co-founder. Put in the first capital into the company.

We funded ourselves, and then we also partnered with John Orange, who's the founder of Shutterstock. And on our board who did the call it? The, we did the pre-seed. Mm-hmm. . He did the, the seed, if you will. And so that was the initial funding we needed to, to get the product going and hire some of the first key employees.

And then we did a round from tiger and AMLO and Quiet Capital. And then we did another round from ve. In the middle of last year.  

Mike: And that was, what did you do? Pre C seed were all before First few customers?  

Eric: Yes. Yeah. Okay. Yeah. We had to it's hard to sell, it's hard to have customers, this kind of product without, you know, raising somebody to build it.

This is not a, you know, and it just, it takes time. Yeah. That's ultimately, yeah.  

Mike: No, that's why I'm most interested in these kind of businesses where there is a large upfront infrastructure that's necessary for enterprise. But it's kind of a harder chicken in the egg. You know, consumer is easier. Like there's some companies you can just, even b2b, you can, you can sell something before you build it.

You know, it's relatively simple. There's like market dynamics or marketplace dynamics where the more people to use it, the more valuable, but this case it's just, you know, raw horsepower to build what you needed to build.

Eric: Yeah. And I, and I think the thing we had that gave us conviction is the thesis was so clear.

Again, we, we still don't know what the ultimate adoption's gonna be and the timing and the cadence and, and all these kinds of things, but I think it's really hard to imagine to say the world where pay by bank is not a meaningful share of digital payments in the United States in 10 years. Whether that means it's five or 20, I can't tell you, but that, like we fundamentally believe.

The other piece is the value prop of the product is so clear. Like every time we, you know, 90 plus percent of merchants we get intro to, they wanna have a conversation with us cuz we say, Hey. Are you interested in saving 80% on your payment cost of payment processing? And they usually say, that sounds interesting.

Yeah, let's dive into the details. Who are you guys? Does this make sense for us? But that's at least interesting enough to get a conversation and having such a clear and compelling value prop is very, very rare. Often in B2B sales or staffs or even payments. It's more like, ours is better than the competition we think, or We're selling you this new thing.

Right? Right. It's gonna help you in some other way. It's not. We save you 80% on your payments and they can use, that's it. So  

Mike: sorry to interrupt you. Can they use credit cards concurrently or would they have to give up credit cardacceptance?  

No,  

Eric: no. So this is, they just add this as a payment, sorry, a payment option.

So it'll say credit card, pay by bank, PayPal and whatever. So it's just an additional option and the more volume they drive to it, the more money they save. And so because of that because the op, you know, the risk reward for the merchant is so good. Mm-hmm. and the value prop is so clear. You know, we were able to have conviction even though it took a while.

Actual traction after we built the product. And then you have a long enterprise payment sales cycle. But the beauty is once you're on the other side of. You know, enterprise payments tends to be a pretty decent business. Yeah. And so, you know, it, it tends to be stickier and higher quality, but it's not easy.

It's a long time to build and yeah. The sales cycle, the reality is just, you know, enterprise sales is, is, is, is tough. Yeah. It has cycle.  

Mike: It has reputation for a reason. . Eric, this has been a lot of fun. I really enjoyed hearing your thoughts in the market and, and diving deep into the, the ways that people invest and why they invest and nuances there, and then what you're doing at Link Money.

So thanks for coming on. Are you active online? Are you writing, tweeting? Anything you wanna throw out personally?  

Eric: I have a LinkedIn? I post once in a while. Not that often, but you follow me on LinkedIn? I do not. I have a Twitter that's kind of low key. I don't tweet.

I've never tweeted, but I, I, I actively follow and read.  

Mike: Oh, cool. Sweet man. Well thanks again and good luck with everything. I hope you guys keep crushing it.  

Eric: Appreciate it. Thanks for having me.

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