Music.
Your podcast and YouTube blog covering the German startup scene with news,
interviews, and live events.
Hello and welcome, everybody. This is Joe from StartupRate.io,
your startup podcast and YouTube blog from Germany.
Today, I do have a guest from the S, Annelies. Hey, how are you doing?
I'm great. I'm super excited to be here, Joe. Thank you for having me.
Totally my pleasure. We may tell the audience we had quite some fun preparing this interview.
So let's see how this is going. At first, you are a very interesting person.
Your PR agency reached out to me because you published a book.
But I found you much more.
So sorry, no offense intended than just an author.
You did quite a lot of work before. Can you run us a little bit through your
CV and what you did in order to arrive at being an author for Wiley?
And we should also tell your book is called From Hoodies to Suits,
Innovating Digital Assets for Traditional Finance.
And at the end, you have to explain what this title means.
Sure, absolutely. Absolutely. So, yes, I've had a storied professional experience.
My favorite kind of when I graduated from university, I went over to Ukraine.
And so that was my first experience in startups.
I was asked to, I was helping out with a political history project,
but then I was asked to help start up an advertising agency because Coca-Cola
was coming to town. So that was interesting because I am not Ukrainian.
And so I was actually at the time learning Russian while I was there because
that was the language that was spoken in business.
And that was wild. It was just interesting trying to figure out,
I think it teaches you flexibility, which is, I think is super important in
the startup world about how some things are a lot harder than others,
but you just figure out how to get it done.
So I did that. And then I worked in commercial real estate there.
And then I moved I moved to London with Jones Lang from Ukraine to London.
And then I went to business school and I came to New York for business school. I have been.
Here's Sense. After business school, I was trying to figure out I wanted something more corporate.
And so and I also was super interested in the finance side and I'd done commercial
real estate, but I really wanted to focus on kind of the money and the flows.
And so I started, I had a great opportunity with Moody's, which was doing commercial
mortgage-backed securities.
Which is a very interesting way of financing that shifts the cost,
shifts the risk from banks to
bondholders that were generally insurance companies and large companies,
for the most part, investors, kind of all the way down the risk,
up and down the risk spectrum. But it decreased the cost of financing.
So if I was a building owner, I could borrow cheaper and I could borrow more
money because of these bonds that took the risk off the bank's balance sheet.
So that was interesting.
That was started in 2003. And then I was there 12 years.
And we did all up and down through the financial crisis, which,
again, what's the right rating of a bond and what's the right way to look at valuation?
And then after 12 years, I left and I wanted to go back into kind of the entrepreneurial world.
And so I did a number of things, kind of consulting with hedge funds,
private equity, family office.
And then I did a lot of board work as well. And I was asked to join a regulatory
task force for ICOs and ICOs were initial coin offerings.
And I had no idea about them, really. I knew the idea of blockchain and I absolutely
knew the idea of Bitcoin, which was digital currency. But I was this was not my thing.
And so it was really focused on regulation, which I understood.
And this group of this group was so persistent that I finally agreed to meet
with them. But to meet with them, I had to understand what all of this was.
And when I learned about blockchain, to me, it was just an eye opener of how
much more efficient it could make finance and finance being traditional finance,
being kind of the Wall Street capital markets world.
And so that launched me into my first startup, which was in 2018,
which was my partner had a broker dealer and we looked at creating digital assets,
which is in essence securities, but built on blockchain for traditional financial markets.
For that, we may add how antiquated the capital markets have been at the time.
I was myself in capital markets 2008 till, let's say, 2018. Yeah.
And basically, at the time, it was not uncommon to have armored vehicles driving
around between banks in London to have like physical paper based securities still delivered.
It was not uncommon to have somewhere, most of the time in India,
large back offices where people did a lot of manual work, including a lot of
faxes for clearing and settlement.
And there was always a very high probability for those transactions,
especially internationally, to go wrong.
So it was at one point in a computer. Then somebody faxed it to somebody else.
Then they manually put it in
a computer again. And there was always manual problems with all of that.
And that's basically where the ICO came in, right?
Well, that's where blockchain comes in. I'll tell you about the ICO in a minute.
But blockchain, there still is people, some companies still use faxes.
So it's crazy that this is still kind of backwards.
Some companies still accept checks, which is just interesting.
That's so much easier to transfer money now than it was 10 years ago.
So it's interesting. It's just interesting at this progress.
So I always think I have three teenage boys and they are never going to know
what a pay phone is and they're never going to know what paperwork is, right? Right.
So because think about we would always talk about paperwork,
but now everything is digital for the most part, not everything.
I actually have to go once to a museum with my boys to show them those rotation
dial phones. Yes. Yeah. Yeah.
So it's just so funny. But part of this is the is the point that the technology
increases and it makes our lives more efficient and it will be increased even
faster with AI because AI will help us program quicker.
And so it's just recognizing, so it won't take as long. So I think that's exciting.
So anyway, I got into the startup space,
I have done three startups prior to me joining a blockchain.
So now I'm actually at a blockchain.
So I have done a lot of the in the early stages, too.
So working with seed financing, working with Series A and B,
trying to figure out revenue generation, staffing up for growth,
which is actually what I'm doing right now.
So a lot of different angles. I've also worked at a family office.
We invested in companies and then we invested in they kind of merge them in and help them.
To help them kind of with revenue growth. I also have worked as an advisor to startups.
I'm currently at Fiat Advisors, which helps startups with a number of different
things that they're looking to do.
And then... Sorry, for one interruption.
A lot of very early stage entrepreneurs, they have the notion you build a good
product and the customers will be coming.
I've been working with such startups. You have been working with such startups.
Would you say that statement is false? A hundred percent, sadly.
It's also not always the smartest person in the room that wins.
Even if you go back and look at, or the first mover, right?
Look at Yahoo, AOL and Google, right? Yahoo and AOL were ahead.
Look at, you can look at Kodak or Blockbuster. or people didn't change with the time.
AltaVista, AltaVista. Yeah, right?
For a lot of the audience, I may need to link the Wikipedia article for the
AltaVista search engine down here, I believe.
Right? So you might have a great product, but if you can't get it out to people
and if you can't market it,
which is what so much of this kind of startup world I think is focused on,
but also I feel like marketing is different, takes different channels now and
it's more direct with all the digital world that we didn't have.
15, 20 years ago, especially with social media. Um, so yeah,
so I totally agree with what you're saying.
So fast forward. So that's kind of how I got to where I am today.
Um, really I love to learn.
Um, I wrote a book because I have worked with, my focus is creating,
um, more better financial structures.
And to your point, manual error, when I was at Moody's, we would work with,
um, people that paid out the bonds and they would manually input Excel spreadsheets
and And they would do it wrong.
And so then this is ridiculous. This could all be programmed and can be checked by people.
It's not totally autonomous, but I think I think sections of finance will become autonomous in time.
But I feel like it's baby steps to get to where we want to go.
So I've been working with institutions helping use this technology,
which is more efficient, faster, lower cost.
It's trans. You can see what happens. You can trace it. So there's so many benefits.
But it was right after FTX failed. So Sam Bankman Freed, I'm not sure if the
audience is familiar with FTX. It was an exchange that was also, okay.
So there was $10 billion of fraud there.
And a number of people stopped looking at blockchain innovation.
And one of the banks said, we have a cease and desist, which is a legal term,
which is a strong legal term to talk about anything in blockchain.
And to me, that was just an eye opener about cryptocurrencies and fraud are
not the same thing as this technology that's going to make your banking rails so much more efficient.
And so that is why I wrote this book. The book is really focused on it. It's not a textbook.
It's really just ideally a light or read for something in digital assets with
stories and things that we can relate to.
But the goal is to explain Bitcoin and blockchain are not the same thing.
Why blockchain is such an amazing technology that's going to help Main Street and Wall Street.
It's going to be behind a lot of what we do. It's going to affect our lives
in retail from both a payments perspective and from an investment perspective.
It's going to give us more opportunities to invest in more things.
It's going to give us opportunities to actually be able to lend out,
like to be the bank in the middle. So that's the goal.
The goal of the book is to be an entertaining and educational read on how this
technology makes a difference for both us, but also for the big companies.
And everybody who would like to purchase your book, down here in the show notes,
wherever you're listening to this or watching this, down here in the show notes,
there will be a link to a very well-known online marketplace where you can buy books.
And, of course, it will link your book. Thank you so much. So,
yeah. So, I'm super – so, it launched a couple weeks ago, two weeks ago.
And it's been great. I've had great reviews.
I've had – you know, I feel like they always come from the places you don't
expect. So it's been wonderful feedback.
I'm happy for anyone that reads it for feedback.
It is broader than just digital assets as well, if you think about how an industry
is trying to move forward and different steps along the way.
And there's also a bunch of tangential businesses, I think, that can work together with that.
But, you know, it goes into kind of how PayPal is creating a stable coin and
a stable coin, if you think about it, is is faster and easier in the sense that we can transfer.
I can transfer money today to you and you can use it immediately,
which isn't always the case if you're dealing with like cashing checks.
I had cash to check. It took five days to cash. And also the company had to
mail me a check. They couldn't wire it into my bank account.
So this way you get money right away and you can put it out right away.
And companies are going to want to do that because you can allocate your money right away.
Remember when I came back from Texas, I was working on campus and I still had
a check from them sent by mail.
And it took something like almost a month until the money arrived in my German
bank account from this US-based check. Yep. And cross-border transactions.
You'll decrease fees so substantially with cross-border transactions.
And so that's where I think stablecoin will make a difference for all of us.
But also there's a bunch of opportunities from investing is that there'll be
more wealth is in our hands now than companies.
From a global perspective, it's 51% in retail hands and 49% in companies' hands.
Companies that are looking for investors are going to start going to retail.
And this technology allows that to happen, which actually you asked about ICOs.
So ICOs were initial coin offerings.
And then the thought process of like, if you think of an IPO,
an IPO is when a company goes public and it's a very established company.
Well, and it's generating revenue and it has a valuation.
The ICO is at the beginning of the company's ideas.
You and I can create an idea and we can have an ICO because we have an idea
and essence and business plan of what we want to do. And then people fund that.
Well, to me, what was interesting is that globally, it had raised billions of
dollars for the ice, like the idea of ICOs, because people wanted to find ways
to invest their money, that they missed out on the tech boom,
right with the with the original tech boom.
And they thought, I want to have an opportunity to make money like these companies
and private equity firms do.
And so they wanted to invest in an early stage opportunity, which is really venture capital.
And so that was an eye-opener to me that there's this whole world out there
of people looking to invest and generate returns that other people have had
opportunities to, but they've been shut out of.
Do you think, you've been talking about wealth, institutional versus retail, company versus retail.
Do you think a lot of those very brave initial retail investors have been burned
with a lot of the stuff that has been going on with ICOs, cryptocurrencies.
And so on in the last few years?
Absolutely. Well, ICOs, there was a lot of fraud associated with them as well,
which was both probably intentional and then also unintentional in the sense
that if two people who were 18 years old and had no experience in business decided
to start a company because they had grand ideas and schemes and Mark Zuckerberg did it,
and they tried and it didn't work, right?
So a lot of people invested money in the idea and they lost money.
Which is why regulation so i think that was unintentional but
i do think there was a lot of intentional fraud where people took people's money
and ran away with it so um i do
think that's why regulation comes in so regulations is really around to protect
investors but where do you find you know with innovation and how do you find
a way to regulate innovation when there's more ideas coming out with this technology
which is something that we're having you know difficulties within the I think
Europe is much more forward-thinking.
Talking about US and Europe, that's something we also want a little bit contrasting
because you're very knowledgeable. And I wanted to...
Get the opportunity to have like, a kind of a guide for people,
especially FinTech entrepreneurs from Germany,
Austria, Switzerland, but also from all over the world looking at the US right
now. And I have a few questions for you.
For example, how can FinTech companies in the US navigate and mitigate the risk
posed by potential economic downturn and funding shortages?
Of course, the funding funding got less and less, especially in light of the
recent collapse of small banks.
You remember all the small banks?
There have been stories, Silicon Valley Bank, just one prime example,
and the bank that bought it.
The background a little bit to the question is,
it seems like from the outside right now, that in the US, the concentration
of banks is always working a little bit more and more towards It's Wells Fargo,
Bank of America, JP Morgan, and so on and so forth.
And it kind of sucking up like all the small competitors and how could fintechs
compete there, especially if a downturn is coming? It's tough.
So if you, well, okay, so we have the big banks, right? And then you have kind
of smaller regional banks and community banks.
I do think there was almost a run on the banks before when everyone pulled their money out.
And that was a big issue with the banks trying to. and increasing interest rates.
So if they had bought treasuries to counteract their deposits.
Those treasuries weren't worth as much because there were higher interest rates.
So the newer treasuries were worth more. And anyway, so a lot of people pulled
their money out and that was a run on the banks.
And then I think some banks went under.
Silicon Valley Bank is still around actually. They sponsored a book event for
me actually in San Francisco, which was great.
And they are one of the problems in our space in the kind of if you call it
the crypto space, even though it's blockchain oriented, is that people don't
necessarily want to bank you because they're,
People look at crypto. Crypto is the technology of cryptocurrencies or cryptology of blockchain.
It's one of the few technologies that any banks in the United States,
if you touch it, you have to tell your regulators you're going to touch it.
So you don't have to touch it. Like if you're working with AI or quantum computing
or any of these other steps along the way, you've never had to tell your regulators
you're using using this technology, which I think is which is strange.
Right. It's kind of like if you think about technology, cell phones are technology,
you know, different things in your kitchen are technology.
So that I think is kind of a ping against crypto and blockchain.
And a lot of the banks don't want to bank, don't want to let you open an account.
And so what happened, what was before is a bunch of those banks actually had
crypto accounts, were actually banking crypto companies.
So then it was even harder for startups to open a bank account.
Or if you had negative, if you had something that had happened in the press,
like if you were in discussions with the sec then it's difficult that
you it's even harder to open a bank account so how do you how
do you make that work as a startup company it's kind of
you know it's like you have the deck stacked against you but
i do feel that um there are companies that
will do it it's just and more now i think especially now if you look at large
institutions are using blockchain technology for tokenizing funds blackrock
the world's largest asset manager uh has tokenized funds um and jp JP Morgan's
the world's largest bank by market cap,
and they have a lot of blockchain projects as well.
And they are saving money with their blockchain projects.
So I feel like that's helping change the tune of this not being about volatile
cryptocurrency, but more being about blockchain technology, if that makes sense.
So I feel that, yes, it's been a difficult, like any startup,
it's harder to get banked than others, especially with using the tech.
So I think that's, you know, that's you are. Also, let's go back to this.
The idea of Bitcoin came out in 2008.
In 2008, you had Occupy Wall Street sitting downtown trying to take the power
away from the banks because the banks were in such control.
And so Bitcoin and this cryptocurrencies actually offered you a way to get rid of the intermediaries.
Right. It was a peer to peer payment system, which is how it was set up.
So I think the idea of Bitcoin and which is kind of the idea of cryptocurrencies
was kind of anti anti banking.
But it's interesting kind of how that actually helps the banks, too.
But it will help put the money back in your hands. So if you if I hold if I
hold stable coin and I hold it in my wallet, which is technically like an account
that I've opened, but I'm holding say I have a million dollars in stable coin.
Otherwise, I'd probably have a million dollars in the bank. And the way the
bank makes money is the bank lends out that million dollars to other people
and they make a spread on the interest.
Right. But if I'm holding it in my wallet, then I'm holding that million dollars.
And I can actually there's there's opportunities in different companies that
you can lend that money out to other people. And I make that spread.
Right. So I can make interest on my stable coin. So then I'm becoming the bank.
So I do think so. I'm kind of going to the side of the question that you asked,
but I tried to answer that and then kind of extend.
But there are ways that this current this technology can cut out banking.
But I don't think everybody wants to be the bank.
And lend the money out themselves, sometimes, you know, they might just want
the little bit of interest they can get by putting their deposits in a bank.
Because my mother, for example, is 80 years old, and she does not want to be
the bank herself. She'd rather have someone manage her money.
So I do think that banks are going to have to figure out how to work with this
technology, or they're going to lose revenue streams.
I was really smiling when you said, now I'm holding it in my private wallet.
As you said, they make money on the interbank market.
But also what I realized there were a lot of people listening at Finanza and IRS right now to this.
And their toenails were rolling back because they were not sure if they could
tax it properly if it's in your private wallet.
So I do believe there will be some challenges to this in the future.
Maybe also the requirement to hold it in a bank's wallet or something like this.
But I get your idea. Yeah, it's something different, and you can really,
really accelerate international transactions.
You can make them more reliable, but you also have to do some more steps privately
to keep them secure than with the bank would do.
Yes, I agree. But I also will say that the IRS has been working with the wallets
in the United States, like Coinbase, for example.
So there is a tie to be able to, it wasn't that way before, but now it's much
more for income reporting of gains, so they can be taxed.
But there are a lot of like, this is a global, this makes us even more global.
And so that is, you know, there's always been kind of money in different places,
but it's harder to track when you're using international companies.
Mm-hmm. Talking about fintechs here, competition, how can they differentiate
themselves and compete against the banks?
Well, you've been talking about growing revenue.
You cannot do this if you're like a product like everybody else.
You have to be different. You have to be differentiated.
Can you spell a few secrets, like one or two tricks, how it worked for you clients in the past?
Sure. So FinTechs is a very broad term.
I think FinTechs has a lot of the payment space has been FinTech based.
I haven't worked in the payment space.
I will say that. But I do feel like the people that were able to differentiate
themselves in the payment space, it might be something that's less sexy, but obviously needed.
I feel like that way, if you look at Plaid and the way Plaid created,
which is really the banking,
anything in banking system now you can i can transfer money
because it connects through plat uh which is really kind of
like apis for a difference so i think that was that was super interesting um
so okay so how do you
one i think partners are
super important you get a lot of business from partners uh right your partners
in the space as in like you everyone's doing slightly different services uh
and so when you have bigger companies coming in they'll talk or paying clients
right they'll talk to one and And they'll introduce you to someone else that
provides a different service.
That, I believe, is how the community is so important.
I think it's very difficult. No one is on an island that's going to go out and
make a whole bunch of money by themselves, unless you're day trading, right?
But you're probably getting information from other people as well.
So maybe you're not on an island. But anytime when you're in the startup ecosystem,
networking is super important. it.
And finding those people that provide similar, like different services that plug into yours.
That's how I've gotten a lot of, a lot of different business because it's also,
they're vouching for you in essence, when they recommend your service.
So that I would say is probably the number one.
The number two is making sure that you, making sure that you know what you're talking about, right?
You put together kind of a good pitch. You recognize how, when you approach
a client, you recognize how you can add value to that client.
And everyone I call a client, right, with a mindset to think of how can I provide
them a good or service that benefits them.
So I feel like that is helpful to getting in touch with the right people and
then making sure that I'm looking at that when I'm sitting down with them,
with my team, so it's not just me, as in it shows like there's more people focused
on this and it kind of builds credibility,
then you're showing how you can help them. And I think that also, I think those.
Are probably the two main like when you're approaching this
recognizing that that you're offering you're
doing something for them thinking about it that way um
and i think you have to be flexible right as a startup
um i've we've pivoted i've pivoted uh and people my first my first startup i
was told that was a dirty word but i don't think it's a dirty word right because
you have to recognize what you thought was the right business line and then
maybe you have more more interest on another side.
So, Hey, let's use the same technology, but approach business this way.
And so a bit of a pivot. And so I think that that's what that actually shows
that you have done your research and that you, you know, you've put yourself behind it.
And the other thing I would say is don't be afraid of failure because failure
is what we learn from and build off of, right?
If you couldn't, like, I wouldn't be where I am today if I didn't,
if it, if it had worked out the first time, right?
That would have been different. But we were way too early. Like in digital assets,
we were way too early in 2018 to say, this is what institutions,
this is how we can change capital markets.
But I think it's a slower crawl because you're dealing with big institutions
and you're turning a tanker.
It's not kind of as maneuverable as a bicycle, say. And so it just takes longer.
And so I feel like we're moving to get there. But I definitely say say,
work together with other people, recognizing the benefits you add,
and then be flexible and don't be afraid to pivot.
You've already talked about a lot of stuff that I have for you for my next question.
I was just curious because we just come out of a pretty tough downturn,
especially for startups and especially for fintechs here within the startup space.
How would you recommend Recommend startups building resilience for the next downturn.
I know tip number one is raise more funds. I know, but besides that.
It's budgeting, right? It's also recognizing, I know a lot of startups,
and I have worked at Sun generally after this has happened, but when they raise
a bunch of money, they spend a bunch of money.
And so I think that you have to have the mindset of how are we,
what do we need and what would be the nice-to-haves and the must-to-haves.
Um, but I do think like budgeting and understanding, I think growing too quickly can be, growth is tough.
You have to manage it so that you do grow quick enough, but you don't overgrow.
Right. So how do you, how do you find that? How do you have that fine line?
Right. You need to have people in place to for growth. Um.
So what else? Funding. I think funding has been, you know, it obviously slowed
down. I feel like it's coming back now.
Valuations. I feel like it ties in with valuations. There's a lot of money looking
for investments in the U.S. for sure.
I've worked with venture capital as well, and I've invested in a few venture
funds and some startups, but it's finding the right, you know,
it's finding the right partners, because also if you take money from someone,
they are your partner, you are married to them.
And you also have to recognize how, how they think I was at a family office
and we invested in companies and there is, there was a company I said,
you know, don't take our money because they think a different,
like the family office thinks a different way than you do.
And it would, it would be, it wouldn't, you wouldn't work together.
That marriage wouldn't work very happily. So remember that whoever you're taking
money for, ideally, are strategic partners.
Who can they help introduce you to?
Obviously, everybody wants kind of money, but people that invest money also
want to work with other people they know that are investing money.
So it's almost like a club that if you find somebody that's really interested,
ask them who they like to partner with.
And then it could actually, that could help you fill out your fundraising.
A little different than the question you asked, but it's just kind of different approaches. purchase.
The other thing is I would just be show up and be around, create those networks
because those networks are going to help you when it comes to finding financing.
Also, when you're in a downturn, those networks are super important if you need
to find some sort of bridge loan.
Um because they're the ones that are gonna because in
the venture world it's people right it's like people and ideas for the most
part right and uh you just want to make sure that you have that that connection
because whatever we're doing in technology is fantastic but it is still people
that are making the decisions because these decisions are fiduciary and you have to trust,
um i know so those are those are a couple ideas you actually answered already
the next question that I had that there's only one left on the US fintech side.
The role that regulatory changes and government policies will play in shaping
the future landscape of fintechs in the US, especially how can they foster innovation
and customer protection?
That is one of the hardest questions, right? Because how do you regulate?
Yes, Yes. How do you regulate innovation?
It's really difficult because you're continuing to innovate.
You don't want to overregulate. So you can't actually innovate,
but you still need to have rails in place.
So I think Micah in Europe has done a great job for kind of the blockchain industry
to give ideas, blockchain slash crypto, give ideas of this is this is what you can and can't do.
Right. You need you have to be black and white as opposed to gray.
The problem in the US right now is that if there's no rules,
then you don't know if it's black or white. You can't play in the gray.
And so I do think it's difficult, but I do think that what regulators should
do, and now this is becoming political because it's an election year with crypto regulation.
So I think you just need to talk to industry leaders, right? Right.
That's another reason I wrote the book is to educate. So so regulators can understand
the thought process here and not be afraid of it. I think people are afraid of change.
And how can you regulate this innovation?
Learn more about what it what it is. Right. And what it does and doesn't do.
So I feel like there's a very there's very negative mentalities in the US.
There's something that came out with custody that there are a number of banks
that are custodians that were looking at actually offering custody services for for cryptos.
And there some legislation came out that said or actually was an accounting
standard that came out and said, if you hold if you custody a crypto,
you have to hold the same cash on your balance sheet, which makes it not work.
Right. That's it's just it's just onerous.
And so I feel like that's not listening and understanding the technology.
I think it makes much more sense to work with.
Industry leaders to figure out what's best for this industry and how do we move
forward? Because the US is a superpower, a financial superpower.
And I think they're hurting themselves right now with having not clear regulation.
And there's a lot of regulation by enforcement, which is horrible, right?
They say, you can do this. And then they say, oh, no, you can't.
We're going to charge you.
Actually, they never really tell you you can do it. They tell you you can't
do it. But then you think that you've worked with them.
Coinbase, for example, had just gone public, so they got an SEC approval,
and then they get a Wells notice from the SEC saying they're doing it wrong.
But there's not the conversations in the middle. That's the problem.
Just yes or no, one and zero.
Yeah, it doesn't work that way. it needs
to be kind of an oh if if let also another thing
is a lot of the legislature is older
or regulators are older and this technology is newer
right if you look at gen z and millennials grew up with this technology or just
technology in their hand whereas if you have people that are you know in their
70s that is not the case and if it's not fit if it's not broken why fix it which
is a terrible idea um in today's age but it's you know you're comfortable with
what you're comfortable with.
Why do you want something else coming in and messing it up?
But we would still be riding horses if that were the case. So all things to think about.
Going a little bit from focus on the US to a little bit comparing the US and Europe.
Given that FinTech companies in Europe need to file for regulatory approval
just once and then just notify the national regulator that they're doing business there.
The understanding of many startups is you have to file for 50 approvals in the
United States for each state where you want to do business in.
What do you think is the impact there in terms of cost and speed for fintechs in both regions?
Very slow. So it depends on what you do if you have to file in every state.
So obviously banks have to file in every state. Securities have to file in every state.
But there's also more, like, I guess when you're starting up,
you're starting up smaller. So you're not starting up from a national level.
But I think it's tough. It's onerous. It's, you know, you're dealing,
every state has its own government, which is why it makes it just difficult
to get through the government and that process.
Finding partners is a great way to help you, but then it's how to,
you know, how do you find partners?
You have to, you know, start somewhere, right? Start somewhere and figure out
what's the best and biggest market for me and start making inroads there and
then it is expensive and it's a lot of legal fees.
There's a lot of legal money that goes into startups, which is good and bad.
You want to work within the laws, absolutely, but then it's kind of ridiculous
how much money a startup has to pay because every startup is paying that same amount.
Um, so yeah, it's difficult. It is difficult to work within regulation,
uh, as in from a financial perspective.
Absolutely. We work within regulation, but when the regulation doesn't necessarily
make sense, but if you're providing it like a SAS product, then you're not having
to register in all the different States.
So if it depends on what service you are providing, if you are a money transmitter,
then you need to register, uh, in, in the different States.
So it's just that defines what you're doing what the registration is and and who your regulator is,
because there are many different regulators and banks there's
even different regulators for banks it depends on how you fall uh bottom
line i do believe talk to a smart lawyer yeah yes and you know what also i think
i you know there's lawyers are different prices but i would i would prefer i
have learned that i would rather not pay my lawyer to learn so if you if you
have usually the lower like a cheaper lawyer, you're paying them to learn.
And I would rather have someone, I'd rather pay more money for less time when
they already know it. So food for thought.
Okay. And the last question to kind of close this interview,
do you think there are lessons that you as based fintechs can learn from the
European counterparts?
Absolutely. Look, I think, well, I think regulators, US regulators can learn
from European regulators, but both, right?
I feel like there's, I think that regulation helps encourage innovation in Europe.
So right now for blockchain, I'm looking to a lot of companies in Europe and
what they've created and actually working on focusing, focusing on Europe because
there's more, there's more guidelines in Europe, there's more regulation.
So institutions are more comfortable working within that.
So there's, you know, there's a lot of loans, loans, debt, corporate bonds that
are being created on chain in Europe digitally that aren't in the US because
of that regulatory question.
There's stablecoins that are launching. I think there's a lot of innovation
that comes out of Europe.
If you look at telecommunications, cell phones were much bigger in Europe than
they were in the US. It took a while for US to adopt.
But what can we learn? You know what? I also try to always find smart companies
and see what they're doing and kind of what can I learn from them,
even if they're slightly, they're not exactly the same thing.
And then getting to know them, right?
Getting to know, reaching out. Because again, it's that community.
I would rather learn from someone else's mistakes than have to make the mistakes myself.
So I'm happy to, I have made mistakes myself, but you know, we can help each
other by learning from others as well.
I think that are amazing closing words.
So as long as enough people here on StartupBright.io share their mistakes,
I do believe there's always opportunity to learn.
Absolutely. Absolutely. And I think this podcast like yours are super important.
I listen to podcasts all the time and I think that's sharing of ideas and knowledge
and thought leadership.
So thank you, Joe, for doing what you do and sharing this.
Thank you very much. Annelies, It was a pleasure talking to you.
Best of luck. And as always, we'll link your LinkedIn profile,
the website of your book, as well as the book itself.
Fantastic. Thanks so much, Joe. And thanks, everyone, for listening.
My pleasure. Have a good day. Bye-bye.
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