The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:53:30 · Harry Stebbings, Jack Zhang
[00:53:30] S2: He flew to Shanghai? [00:53:31] S0: Yeah, he flew to Shanghai. Probably the first time he went to Shanghai or second time, I don't remember. How was the day together? We went through the product in the morning and we just talked the whole vision about the company and the future. At that time, we're kind of thinking about going to build merchant acquiring, essentially competing with Stripe, because Stripe was not really in APAC at the time. And we already built the payout rails and the FX, and the pay in is just a natural evolution of connecting the end to end part of the platform because all our customers that are paying out to contractors, developers, suppliers, tuitions around the world that need pay in, right? They need process online payment and offline payments, and we kind of have to do that. And then Patrick basically said, Oh, we're going to build payout because we have all these pay ins around the world and we need to do payout and we haven't built anything. Kind of makes sense. We either sort of work together or maybe we should buy you guys. And I was like, kind of weird. You know, like you have the best fintech company in the world that talk about potentially going to buy you. And you literally just like one year in the business. I mean, obviously we started for more than three and a half years at a time, but the real product market fit only been like ten months. You really started even getting product market fit. [00:54:45] S2: So what happens then? Is it, we should work together or we should buy you? What do you say?
00:54:45 · Harry Stebbings, Jack Zhang
[00:54:45] S2: So what happens then? Is it, we should work together or we should buy you? What do you say? [00:54:50] S0: He said, let's just spend more time together. So he started this whole documentation on Google Sheet and just 10, 20 pages long and asked me to make comments. So like I made comment and we just worked out. Was like, wow, the vision of the company in the next decade is kind of very much the same. We all wanted to build AWS for financial services. And obviously, Stripe is much, much ahead of us. But this is before COVID. I mean, Stripe is like a $9,000,000,000 company. It's very similar to the scale of Airwallis today. And I kind of really liked Patrick, and he's like, this guy is so smart. He's, like, much smarter than [00:55:24] S2: me. Can I ask you, what makes him so smart? The Collisons are always hailed as, like, you know, aren't they geniuses? What do you think makes him so smart from ideating with him, from working with him on a Google Doc?
00:55:24 · Harry Stebbings, Jack Zhang
[00:55:24] S2: me. Can I ask you, what makes him so smart? The Collisons are always hailed as, like, you know, aren't they geniuses? What do you think makes him so smart from ideating with him, from working with him on a Google Doc? [00:55:34] S0: I mean, it's not that the Google Doc that make me think that he's smart. He's just like so intellectually honest about everything. And also, he's like able to go deep in multiple dimensions. He read about China history. You know, he knows China history more than me. And he knows about quantum physics. He knows, you know, biology. All this field that I have never gone into. And he's able to talk about it for hours. And I'm just like, how can one person able to go deep in multiple dimensions? If you talk about fintech, I think I'm as good as these guys, right? But if you're just talking about biology or quantum physics or China history I mean, I'm a Chinese. I feel ashamed that he knows more China history than me. And it's just like, how can you read so many books and just understanding so much? It's like before AI, you know. [00:56:20] S2: How do they table a 1,200,000,000 offer? [00:56:23] S0: So essentially it's complicated deal construct. Essentially it's $800,000,000 on the cap table and $350,000,000 to me and my co founders. And I think it's a $50,000,000 or I think $25,000,000 to the core employees, close to one point two one point one one one point seven five or something. [00:56:40] S2: What happens then? You sit down with your co founders. How does that conversation go?
00:56:40 · Harry Stebbings, Jack Zhang
[00:56:40] S2: What happens then? You sit down with your co founders. How does that conversation go? [00:56:44] S0: He invited us to San Francisco, and we had a great conversation. I kind of, at that time, I kind of almost get convinced. And he sent his whole team to Melbourne. They did like a whole week of due diligence with all the senior people from Stripe. I met with Claire, the CEO at the time, and I met with the whole team. I was really impressed. And I kind of basically said, I think we're going to do it. But I was thinking, you know, like, it just kind of, you know, are you really going to do it on the back of your mind? And I fly back to Melbourne, and I was working in San Francisco two weeks and tried to figure it out. I couldn't figure it out. I mean, I was like 70% wanted to do it. But like this voice in my head is like, are you going to do it? Are you going to do it? I ultimately be like, Okay, so if I sold a business, I was I think, 34 at a time, 33 at a time. And it's a five year lockup, right? So I'll be close to 40 when I finish the lockup. And what can I do, like, a 38, 39 year old? [00:57:42] S2: Can I be blunt? How much money would you have made from the deal? [00:57:45] S0: If I knew Strive was going get to $100,000,000,000 I mean, I would probably make at least $3,000,000,000 At that time, Strive was going to raise the $20,000,000,000 round. We know that we probably can raise another round at a billion. It wasn't really a valuation. Was like financial was not really what I've been thinking about. [00:58:03] S2: I said, why did you know?
00:58:03 · Harry Stebbings, Jack Zhang
[00:58:03] S2: I said, why did you know? [00:58:04] S0: I grew up in Australia. I didn't live in a very luxury lifestyle, right? So I didn't need any money. There's no even like hot in the shops, right? Billionaires and anyone that just go to the same supermarket. So it's a very sort of socialized society. And I think with like $200, you can live a pretty good life. And I didn't know what to do with the money anyway. That's not what I actually thought about at the time. And I really thought about is what's going to make me happy. And I went back to Melbourne, asked my co founders like, let's just vote, right, because I really can't figure it out. Lucy is like, I don't really care because my family is wealthy and I don't need more money. I really enjoy it. I think we should keep building. My CTO, Jacob, is like, it's really up to you, Jack. I mean, is your mission and your vision. And we're all here to help you. And then ultimately, it's your call. And Max is like, I think I'm Okay to sell. I mean, like, that's a lot of money. [00:58:58] S2: Good old Max. [00:58:59] S0: And then we were like, we couldn't decide. And we asked our senior leadership team to vote. Surprisingly, only one people wanted to sell. Like, literally, like, 90% of people said, you know, they think we can build a bigger business. [00:59:12] S2: So you fired that one person.
00:59:12 · Harry Stebbings, Jack Zhang
[00:59:12] S2: So you fired that one person. [00:59:14] S0: Well, that person joined Stripe even worse. No. Yes. The whole story. Yeah. I mean, we all kinda tried to hire her afterwards, and I kinda sued her, and that was a... And he sued me. She sued me. That was a whole complicated story. [00:59:29] S2: That vote was a very telling sign, wasn't it? [00:59:32] S0: I mean, don't think she's that great anyway, so it's kind of fine. But just she has so much proprietary knowledge of our network, and we were worried about she's going to give it away to Stripe. That's a long story. Yeah, I mean, that's... Really, I went back to Melbourne and changed my mind. I was like, I don't think I want to be doing another start at 01:38. I think I'm going to give it a shot on this one and put all my life into it. And that's it. So one thing that really inspired me from talking and spending time with Patrick is that I said, oh, what's a long term thing for Stripe or for yourself? Are you going to be here forever or blah, blah, blah? And then Patrick just said to me that he's going to build Stripe for the next twenty, thirty, forty years. And I've just never heard a founder told me people who dedicated their entire life to building a business. That was so inspiring to me. That's what I want to do, you know? It'll build a real economic infrastructure that changed the world, impacting millions of businesses growing on the internet or growing globally.