The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
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.
00:59:32 · Jack Zhang, Harry Stebbings
[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. [01:00:35] S2: So we turned that down, and we're now back to business, baby. We need to scale volume. We have Shein, and we have this other large provider. Is it now, like, just all hands to the pump scale scale scale? [01:00:51] S0: Yeah. And we've got the money from DST, so we've another $100,000,000 and a bunch of other investors. When you raise
01:00:51 · Jack Zhang, Harry Stebbings
[01:00:51] S0: Yeah. And we've got the money from DST, so we've another $100,000,000 and a bunch of other investors. When you raise [01:00:56] S2: a $100,000,000 and you suddenly have, like, quite a lot of money, is it difficult in terms of constraints that are now removed and just spending Yeah. [01:01:04] S0: And I didn't understand what that means at the time. I don't know what is financial discipline. So I don't have a budget. I'm just like, hire as fast as possible, blow it all up. And realized at one point that we're running out of money. Like, I was like Yeah, [01:01:18] S2: you didn't have a budget.
01:01:18 · Harry Stebbings, Jack Zhang
[01:01:18] S2: you didn't have a budget. [01:01:20] S0: Yeah. And we went from like, I think like 100 something people to like 600 or 700 people like in a year. And then I realized our volume grow, but our revenue didn't grow as fast. We kind of really need to raise another round. And we also the vision kind of started evolved after Series C. After rejecting Stripe offer, I'm like, Okay, we're going to compete in long term. And, you know, I mean, obviously, Stripe is a payment lab business. We are banking lab business. But at that time, we're not a banking business yet, right? We're just like a global money movement infrastructure. We were like, Okay, we need to become a true global new bank. And then we need to build our card issuing infrastructure so we can issue corporate card. We need to build merchant acquiring infrastructure so we can handle the payment side of the money flow as well. So we basically need to evolve from a single product company to a multi product company, an end to end platform with infrastructure and software to supporting global businesses. I basically put most of the money out of the $100,000,000 to build this new product and not investing in the existing product. And that is the biggest bet I made. Essentially, you've investing like more than half the money you raise onto the product that you're not gonna have any revenue for the next three or four years. [01:02:32] S2: Did that not strike you as alarming at the