Cadence Founder and CEO
Rutgers University B.A., Economics, Political Science
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How did you get to where you are today? What incidents and experiences shaped your career path? What inspired you to work on this startup idea?

Summarized By: Jeff Musk on Tue Oct 13 2020
Yeah, absolutely. It's a great question s Oh, I actually do have a background in finance traditional finance. I was in Merrill Lynch BancAmerica BlackRock for about 2.5 years coming out of school. But before then, I was kind of a little bit entrepreneurial in the sense that I tried to do things that I was passionate about, things that I was personally interested in, much to the dismay of my parents who wanted me to focus on school. Eso my my father at least, was an entrepreneur in his own right on DSO. He had his own company, and he encouraged me at least try things out. But he still obviously wanted me to pay attention and do well in academics. But I kind of shuttle that and put that aside eso, as I went through college realized that, you know, with everything going on in the world, it was going to the global financial crisis. Better to have a more stable job and so kind of cut my teeth in traditional finance corporate finance on realized. It just wasn't for me. Wasn't the life for me. It wasn't what I wanted on. I felt like there was an opportunity to kind of do my own thing. Eso I kind of leverage everything that I had picked up in the past from just being, you know, pursuing my own personal passions. Andi came together to launch at least hopefully a startup or something along those lines. What ended up happening was effectively, I was broke right out of money, burned through all my savings and finance from finance Andrea Lies that the only thing I could do was be a consultant. And so I launched a strategy consulting firm out of the ashes of me attempting to do a startup after finance on it was modestly. It was pretty successful. It reached a point where, you know, we helped companies raised about $300 million in venture financing. I had built up a team that could build products to marketing on do you know, build out and design. Um, you know, user experiences and the user interfaces eso from there. It just was very natural that to say hey, look like services and consulting is fine, but interested in doing things the old fashioned venture backed way. That's really how cadence came to be. It was an opportunity to, um, find and source capital to grow out Ah, company at scale that could really reach and build and become maybe an iconic financial services firm. S o e Think everything I've done to date has taken on borrowed from past experiences, whether it's my finance background, whether it's my consulting background building products, speaking to investors on just pursuing these type of things that interest me at a very early age, it's all factored into where we are today.

What is the elevator pitch of your startup? What problem does it solve? How were your customers solving their pain point before your startup?

Summarized By: Jeff Musk on Tue Oct 13 2020
Yeah, So that's ah, loaded question for the industry that we're in S o. I would say people are pretty familiar with equities on Do you know stocks and things like that they could trade on a regular basis. There's an entire world of private capital markets that people don't see, and it really is actually what powers the global economy. Eso within private capital markets. There's things like private equity, real estate, infrastructure, venture capital, things like that. And there's a huge chunk called private debt on. That is one that almost no one knows about. But it is actually the fastest growing asset class in all private capital markets. It's growing at 20% annually. It's reached a trillion dollars. But the problem is that it actually has the most opaque and non transparent way of looking at asset performance. Eso When you talk about private debt, it's things like small business lending, consumer loans, all these very certain types of lending products that have risen as a result of the banks not lending to the space anymore, eh? So you have a ton of demand for these products. You have a ton of lenders out there and none of them actually have the data needed to actually do trans actually efficiently. So you think about what we're really trying to do is to bring transparency essentially organizing structure the world's private financial data, to be able to create efficient markets for private debt markets at the outset on hopefully we can expand beyond private debt into other areas of private capital markets. Be private equity, um, infrastructure, real estate, things like that. Eso in the same way that Google organized information on the Web, we're organizing as a performance for private debt and creating all these transactional and work full tools on top of that to make it all work.

Can you walk us through your first few weeks when you started working on this project? How did things change over the next few months?

Summarized By: Jeff Musk on Tue Oct 13 2020
Yeah, it's I think I've gone down this path multiple times before, So the first few weeks we're not too dissimilar from the last few weeks. I guess in a sense that, you know, we we always knew that we had product market fit. We knew that we would. If we created a better mouse trap than what other people had on the market, we could at least get off the ground and be competitive. And that's proving itself out more than time and time again thes days. So first few weeks was really more operational, like getting the company incorporated, setting up the rearrangements, finding the right team to come on board at the outset on I was fortunate in the sense that I had my entire consulting company. They're still to tap into the full blown product marketing, branding engineering team that I can use to be able to get it off the ground. So it was all in all, pretty efficient, on pretty seamless. I would say the biggest pain point was probably the fundraising process, which is the case for everybody. I think raising money for a seed stage company or pre seed stage companies always challenging without a real track record of having built in exited companies before, You always need a challenged on a lot of different parts. Um, that was probably the more challenging part than actually kind of getting a company off the ground. But my entire background, having built out that consulting company, meant that I had, ah, lot of experience and network in the venture capital space to at least pull on. So hopefully lead tomb or, you know, successful conversions of investors coming through. But the first round of financing it was just $2 million. In January of 2019 I had pitched 160 different investors on Dawn Lee, maybe like 15 crossed s. It's a terrible conversion rate that's about right for what it's gonna take at an early stage.

What were the challenges in building the initial team and how did you overcome them? How much time and resources did founding team members commit?

Summarized By: Jeff Musk on Tue Oct 13 2020
Yeah, eso I've always held belief that if they're not working full time, that's not good enough. So you need to. And that means that you didn't sell well enough either because you have tow convince people that this is something that's worth pursuing with all their heart basically on dso everyone that we found at the beginning A czar, you know are and point number one employee number two of them play number three. We're all full time eso the building initial team is always hard. And I would say you don't really figure out how the team dynamic works until you're probably about a couple months into. It s so we have had zero turnover at this company in terms of employees leaving on their own to pursue something else. We have had to let a couple people go as a result of just not being the right culture. Fit not being the right performance fit things like that on that stuff you just learned over time. And so, um, it's been a very educational journey, at the very least, understanding what works and what doesn't. But it was a it wasn't that difficult to get the team at the outset. I mean, we had a big enough network to pull on. And again I keep your first question was very relevant because I think I would came from a very fortunate position in having a network of investors and having a team toe lean on that has built product and companies before Andi experience in this space, both in traditional finance and kind of fintech. So all of that together made for a relatively painless all things considered start to the company.

How did your venture get its first professional funding? What were the challenges and how were they overcome? How'd your fundraising efforts change in subsequent rounds?

Summarized By: Jeff Musk on Tue Oct 13 2020
Yeah, it zits. Never easy. And you think the rule of thumb, especially when you start out, is that you should probably budget six months to fundraise eso. We were fortunate in the sense that through the consulting company I had built up a network of investors like I mentioned, and one of them was one that I had advised. For a while it was a multibillion dollar Chinese family office. And so when you heard this idea that we were building and we wanted to accomplish, hey believed in it enough thio basic. Give us the 1st 300 k to get off the ground on good terms, obviously because he was the first one to write a check. But that was enough for us to be able to build out a team to start kind of kicking things in hive year. It really start to accelerate our own growth in our own development. Eso 300 k is fine. But to convince people to give you an additional 1.7 is a whole. Another question. When you don't really have a product just yet and you're just basically selling a dream eso it's It's an exercise of persistence. I would say it's never easy. You're gonna get a lot of nose. And like I mentioned, we had probably less than 10% said yes, eso you're just basic hearing note left and right for whatever reason. And they're gonna bash your idea, saying it's, you know, the dumbest thing they ever heard of the entire life. It happens like that's fine. You kind of just got to take it in stride s the that the first round of financing you speak to enough people. It is a numbers game. You will get people thio come across, uh, in some way, shape or form. It will take six months. But you it realistically, as long as the idea has legs and is decent, um, you'll you have a good chance of getting too close that as we've kind of built out that list of 161 180 different investors we've ever spoken with, we kept them in the loop throughout the progress that we've had, right, so every single thing that we launched every single milestone that we hit, we let them know and it kind of keeps them up to date on our own progress and so it makes future financing around a lot easier. Eso I spoke 260 in the first round. We spoke Thio 80 in the second round was a $4 million round that we closed in January of this year and then through cove it because of covert we just started to raise some, like extra cash just to be safe. It was like a rainy day fund. And in that round I spoke to like 40 investors. And so you narrow down the list over time. Just because you get smarter about who is actually a good fit and they having followed you for so long, you don't need the full update on you know how things were going. What do you do and things like that they're aware on it becomes a question of you said you were going to do this. Did you actually do this? And if you did, then this becomes a lot more interesting. And I think we've everything we set out to do. We've accomplished in some way, shape or form, and I think we've over performed in some areas as well, where we've gotten very fortunate and lucky, but every company is a little bit of luck at the beginning. Thio be successful and I think we're definitely we'll take advantage of that as best we can.

How did you set the scope for your minimal viable product? How did you get to product-market fit? How did your product evolve over time?

Summarized By: Jeff Musk on Tue Oct 13 2020
Yeah, eh. So what we are doing today is very different than what we are, what we originally set out to Dio. But it's just a, I guess, natural evolution. So anybody who knows what they're doing, if we start out with what we originally set out to do, would see that the bigger opportunity is what we're doing today. Effectively eso the scope for the minimum viable product for us was to basically launch a investment platform for investors to be able to invest into short duration, high yielding private debt opportunities. Right. So we create the products, we make it available to them, they can invest in it. So the barest, minimal features that requires to get them on board. We will do Andi in private beta. That literally meant I will create your account for you. I will set your password for you manually because we don't have an on boarding process on. Then you can see all these deals that are very poorly put together on the back end. But it looks fine on the front end. And then if you make an investment, I will physically a ch out of your account manually through my bank account on DSO. That's all you needed, right? I mean, effectively, that was enough for people to understand what you are, what you offer on. Get a sense for whether you're legitimate or not. And so, um you know, way started in man. I think August of 2019 is when we July 2019 when we kind of first launched the platform Live were in private beta for a couple months. But we had, like, I don't know, 40 investors, then 50 investors. Something like that. And we've increased that by 2030 40 fold at this point just because of natural scale, I guess from from being able to drive on, understand what investors are looking for eso at over time, we would constantly refined the experience. But we knew we have product market fit like what I mentioned earlier, simply because there are other people out there doing it and we are the best at it, compared everybody else. And so in the same way, um, that you don't care if you take uber lyft as long as whichever one's cheaper, I'll take that one where the cheaper one, no matter what happens, eso that in of itself makes it very easy to steal customers away from competitors

Who were your early users? What marketing channels, approaches, and marketing tools did you use to contact users? What worked and what didn't?

Summarized By: Jeff Musk on Tue Oct 13 2020
Yeah. So the 1st 1st users of our platform as an investor was the parents of different team members. Basically eso we got them into a deal, tested out major works, make sure the pipes work. But when it comes thio growing that, you know, it's it's pretty standard. You try and set up landing pages that you feel like you're gonna convert, you see how they do you run ads against them either on Google, Facebook or whatever on does tend to work out the best. So we knew our competitors were using those same channels. And so again, if you tend to tout better a better products than they will and you see the ads side by side, you're gonna click ours, obviously, and that that's made for a very, very cheap and efficient conversion rate. Um, after they sign up, you can use the usual email marketing tools if you have content to push out if you have new opportunities that you want to talk about, like that's all part of the strategy here, I would say I've been surprised the fact that Facebook has worked so well given, you know, I think most people perception is at least that most people have left Facebook. Um, it tends still convert really well for us in some way, for some reason on Google, just tend to be more expensive, but obviously it's a it's targeted. Reach out based on what they're searching for. So that's still obviously converts. Really? Well, um, but yeah, I think some of things that didn't work that we hoped or thought would work better. I think in general, just the content marketing piece is tough. So doing things like this, obviously we share our own network and it does really well. But in terms of just using content to our advantage to build a drive, additional traffic, that hasn't worked out quite as well. But I think also with content, it's tricky. You need to build up enough content that you get picked up in certain places and s e o starts ranking pretty high on. Then, at that point, you start to people start to find you a little bit easier. Up until now, you know the only places really on our block, and so it'll be hard to get conversions that way. So we're still plugging away at it. Content takes a while. It takes a lot of money, usually to do it properly, so yeah,

What changes would you attempt in customer targeting, acquisition process, and marketing tools in the later growth phase? Why?

Summarized By: Jeff Musk on Tue Oct 13 2020
Yeah, it's a it's a different audience. Like I mentioned earlier. What we do today is very different when we first started. So we're far more than just an investment platform at this point. And so we're targeting. You know, different lenders out there were targeting. Different investors were targeting a really wide mix and just different sizes of investments as well, based on different stages in the life of these lenders. Eso it's it's interesting. I would say that capital markets in general is just a very complicated business. And so, theoretically, we actually have, you know, three different customers that we have to find Andre need toe talk to each other very efficiently on our platform. And so each one of those has their own acquisition channels on and different features that they expect to be able to convert on. Do you know we have to come up with all that differently and uniquely eso? We've adapted it dramatically and bring on board lenders, eyes the whole different challenge and bring on board investor. They expect different things. They want different things. Eso it's it's been an exercise and just kind of figuring out what resonates I would say investors, you know, the good news is that if you give them something, they will come. There is no no shortage of cash out there looking for these types of opportunities on the lender front, a little bit more challenging. We're still trying to figure out what that looks like. Like how to reach them, whether we have partnerships weaken build out that make it easier to acquire them. Um, it's just it's all part of process. So I'm not gonna sit here and tell you I've got it all figured out. We have everything we've gotten thus far has been inbound on the lender side. It's just direct organic interests, so obviously not scalable, but we'll take away and get right now, given that it's, we have mawr more than we can handle at that moment.

How'd you hire, incentivize, and track the progress of your sales and marketing team including agencies and part-time workers to scale user base?

Summarized By: Jeff Musk on Tue Oct 13 2020
Yeah, I don't eso I think agencies are great for augmentation, but I've just had not having run an agency myself like it Zraly Not the same as doing things in house, right? So if you could hire in house, you should always try and higher in house When it comes to the sales and marketing teams. I mean, incentive is ations. Our incentives are interesting. I mean, I think, um, that role in general specifically is very tied to, like compensation and incentive compensation, especially if you, you know, we're hiring a bunch of former bankers and people used to work in finance. That's the model they understand on DSO. We've try to adopt a banking like structure when it comes to compensation to incentivize them properly. And the soft spoken or the unspoken incentive is the fact that they're working at a startup that has a far better culture has a far better upside. And it's just in general, better people to work with than you would at a traditional social bank. So the soft skills and the heart of the soft incentives, the heart incentives all come into play here at the end of day. But yeah, when it comes to agencies and and part time workers. We don't really bring them on unless we really have to. And if we dio, we tend to silo them off into specific projects that are very vory metrics and deliverable driven. And if they don't hit it, then we can't continue to work with them. So it's very we try to make us black and white. It cost.

Who were your competitors when you started and how did the competition evolve? How did you create a competitive advantage and a unique selling proposition?

Summarized By: Jeff Musk on Tue Oct 13 2020
Yeah, there's there's no shortage of competitors out there in the same way that uber and Lyft and you know there were a bunch of others at the time. Eso There's no shortage of crowdfunding investment platforms out there specifically for private debt. The things that we focus on, um, the I think the good news is or we got very lucky with Covic in the sense that it allowed us to, um, stay afloat because everyone else's portfolio and and loans and investments were too big. They had several hundreds of millions of dollars kind of left out in the open. And when a shock to the system like Cove, it happens. You have you get paralyzed, right? You actually don't know what to dio Onda. A lot of times things just start to default left and right and things Look, people stop paying, you know, loans start, stop getting paid back things like that. So because ours was so short duration, we got lucky in the sense that we were able to kind of see this coming and redo these notes and redo these investment opportunities to better account for that risk. Eso between the fact that our total notes. Outstandings were a lot younger, was small, and the fact that our situations and of the investment was so short, we had the ability to come out of this really relatively unscathed. And so when it comes to, um, competitions evolving, I think our competition is trying to figure out what to do right now. Given all the issues that have been having on their side seven Cove, it and, you know, just I think, poor underwriting standards as a whole versus for us. We don't have that baggage. We don't have that legacy, um, that we need to hold on to. And so we're brand brand new and refreshed, And so it makes things a lot lot easier, and we could be a lot more adaptable, a lot more nimble, Um, in terms of our own competitive vantage again, we touched on this earlier. We just have a better mousetrap across the board. Shorter durations, higher yields, lower minimums than anybody else out there. And because our business is not dependent upon one specific line of business, the ones that are most valuable to us, we can be very competitive because our revenues don't all come from that. So it makes for a much more, uh, much more compelling proposition for anyone who wants to work with us or anyone wants to invest with us.

What were the major exciting and memorable moments? Were there also any moments that almost got you to quit? How did you get past them?

Summarized By: Jeff Musk on Tue Oct 13 2020
eso we've been like I mentioned, we've been lucky in a lot of ways, and, you know, we've taken on things that could blow up in our face. If things don't go the way according to plan, it could be. You know, there's a lot of things that could grow in a startup, and I think the usual mantra for a start up is nothing ever goes away. You expected to. So if you keep that in mind, you'll probably be OK. But there's probably the most exciting one. Waas are, um, closing on a $40 million institutional deal that we did in the first week of March for a public company S O. That one was one that everyone told us. Don't do it, It's not it or like it's risky or, you know you're in over your in over your head because you don't even know this space at all. Like we just kept getting told, left or right. This is not the right thing to Dio on DWI persisted, and we thought that, you know, the company had a lot of potential. We thought that people weren't valuing it properly, and we believed in in the the team at the company that they can pull this off. And so somehow, miraculously, we close that first deal for $40 million in March of this year and has led to so much new business coming our way. So don't let the detractors get you down. Don't let the people who, um, don't believe in you get you down because you're you have the ability. It's all in your control, right? So you can push and you can, and you can charge for it as hard as you can. And if you feel like you give your best shot, that's good enough. But don't let anyone tell you out. Anyone else tell you that you should just stop right there on a mantra that I've always lived by is the fact that nothing is over ever as a good as it seems, and nothing is also ever as bad as it seems. Eso when you go through a startup, you'll have instances where, you know, you just had a great meeting like this is gonna convert. This is amazing. It's gonna change our business, and then two weeks later, you never hear back from them ever again. And There's days where you know something goes significantly wrong. You're like This is it. We're done like this. It's over and the sun shines comes up the next day. The team is still there. They're still working with you, Andi. It's gonna be fine. And you end up realizing it's not quite as bad as you thought. So keeping a level head even though it's hard as it may be throughout the startup life cycle is the most important skill you can have. Um, and I'm kind of literally emotionless, so it makes life a lot easier, I guess. But generally, being ableto stay cool eyes is going to add tremendous value and just stave off a bunch of stressful situations that would normally break most people. You could just kind of let it roll right off your shoulders and you'll be fine.think I have been through the experience that I had, especially launching the consulting company. Um, it was a crash course in startups, but in a safer environment in the sense that you're generating company, you're generally profitable. And so the downside is not that bad on DSO you start to go through these roller coaster of emotions, right? You start to see like, Oh, man, great client pitch. Um, that was fantastic. And then you don't get the deal, and it would have been a transformational deal for your annual revenue, and you just don't get it. Now you gotta pick yourself back up and do it all over again on Then you have a client who is super pissed at you and you know, they they're gonna tell everyone that you suck or whatever. Maybe on did you realize that they don't do that and they're over it and you resolve it and they're done, and that's fine. So three abilities just kind of see the forest from the trees is super important here. Andi. Yeah, no meditation necessary. Just don't get up in and don't take things personally, and things will be fine.

How did you set the scope for your minimal viable product? How did you get to product-market fit? How did your product evolve over time?

Based on experience at: Co-Founder, MySupport (Acq. by RISE Services)
Summarized By: Jeff Musk on Tue Oct 13 2020
was another, I think learning experience for me it was a thief. Founder was someone who I had known in high school. Andi. He was very well known in this in a space that I was definitely not savvy and which was Medicaid specifically on in healthcare eso he had the idea for the M v P. He knew the market very well in the same way that I knew the market for cadence Really well, just because it's the world that I've lived in, hey lived and breathed Medicaid and long term care pretty much ever since he graduated high school and college. Eso these scope was effectively what he knew it would take to get off the ground. And we actually had contracts from insurance companies ready to go. If we could ship a product, basically, which is a very fortunate position to be in a in terms of evolution. Over time, it was very just demand driven. So as users look for more features and asked for more things and the insurance companies requested more more additions, the platform, we just added it on board. So it was very, very just feedback driven at the end of the day,

Who were your early users? What marketing channels, approaches, and marketing tools did you use to contact users? What worked and what didn't?

Based on experience at: Co-Founder, MySupport (Acq. by RISE Services)
Summarized By: Jeff Musk on Tue Oct 13 2020
So like I mentioned, this one had insurance companies with clients paying clients at the beginning. Eso the underline user was somebody who needed long term care and someone who could provide long term care. It was like a marketplace right to find home care workers. But the ultimate insurers were the ones who could disseminate the information, let their user their users know that this this platform exists. Eso is a very simple acquisition process and you leverage their entire network able to get off the ground so, like network effects are incredibly powerful. Just in general, you have to be able to figure out a way to get there s oh, my support had the insurance companies backing and you had a huge network thio takeoff from already with cadence theme the ability for organic growth through people talk to each other about it. And just being recognizing industry means that success begets success. So it really it depends on the company you're going after, and then the sector you're going after. But being able to find an easy way to scale demand based off of whatever works for you and for that specific sector is super important you have to figure out sooner rather than later. Otherwise, acquisition costs become incredibly expensive, and it's just it's not sustainable as a company, especially early stage company.

What were the major exciting and memorable moments? Were there also any moments that almost got you to quit? How did you get past them?

Based on experience at: Co-Founder, MySupport (Acq. by RISE Services)
Summarized By: Jeff Musk on Tue Oct 13 2020
my support was interesting. It wasn't Obviously I had my consulting company at the same time, right? So this is more of a be leading the team to help them out as a company and getting equity along the way. I think seeing the founder and the CEO be able to close insurance company deals like fairly easily was was pretty impressive. All things considered, um, but I think the challenge with that business is also you kind of live by The insurance company died by the insurance company. And so, uh, in the same way that if there is not demands or if they decide that it's not worth their time anymore or whatever that may be, you basically are broken, right? And there's not much more you can do at that point s Oh, that was a learning experience for me at the at least and saying, You know, you can't have all revenue streams tied toe toe one thing or one entity or one, um, one type of product. You have to diversify on that Z. Yeah, that's sort of how we landed where we were ultimately with my support, like it was, it reached a point where it just didn't make sense to keep the platform up and running. And so we started Thio for potential buyers who would be a strategic fit for for the company. And we found a good one in ride services who, you know, lives up the same mission in the mantra that my sport was my sport had, which was Thio provide quality care for all. Andi. They've done a really good job of that as well. So it's found a really good home on, and I hope that they can continue to keep the platform up and running. Thio, you know, follow and continue with that mission.

What college programs did you attend and what were their best parts? How did each of your college programs prepare you for your career?

Summarized By: Jeff Musk on Tue Oct 13 2020
I will give a good answer. I'll give an actual answer. S o. I would say college is important. Um, it does, I think, give you the ability, although remote college probably not so important. Not so great. But college in person does teach you a lot of social skills. And at the right universities, you build out a network that you literally cannot get anywhere else. Unfortunately, have any of that? So I went to a university that I was not a huge fan of, but I went for free because I got a scholarship. Andi, I decided that I was in graduate in three years, so I successfully completed a double major and a minor in three years on board policy. Economy philosophy. Um and so I had no no free time and no time to, um, do any of the things that a normal college kid would do, like, you know, socialized people and party and things like that s O. But I did manage to fill that. I was Fortunately, things might be too much information, but I was dating someone at the time who had the same majors as May. And so I just she took a lot of the notes in class and I was like day trading. That was a lot more fun for May on. Did it worked out? Well, it made some money, and then I lost it all in 19 But, you know, learning lessons. Obviously, Andi, in terms off college programs, printed career me specifically didn't really help too much. But I know that there are a lot of opportunities at the right universities. Uh, that could do that for you And I've met. You know, I've made stuff become very good friends with people who had great experiences that league schools and other places like that where the network they built their second. And I've had to build that on my own, like after college is over, which is significantly more difficult. Eso play your cards right in college and you can build out a network and a friend group that will last your entire life. And it will lead to Onley. Good opportunities. Um, that opened up in the future. Mhmcrashed. So yeah, I was trading through 0708 and I was I thought I was a genius. Everyone thinks you're a genius in good times. And then it 09 I was like, This can't go that much lower And then, you know, kept going lower. And then I was like, This can't go that much lower and it kept going lower. And so you learn how to read the market a little bit better, at least on my obviously I didn't make that same mistake. This go around in 2020 with co vid and take all those learnings and applied here, so Yeah, but it was It was It was great for two years and it sucked for three months effectively.