 Perfect. Hello Piotr. Hi. Great to be here. Thank you so much for sitting down with me for this conversation about One of the most exciting trends in European tech right now. Thank you for having me. Thank you I just wanted to start off and maybe talk a little bit about your founder journey and what was the idea behind on capped How did you found the company? Yeah, great question. So, um prior to starting on capped I was a VC and And I met literally thousands of companies which were good businesses But didn't really fit venture model that this is are looking for the unicorns deca-corns but if you're building a good company which Doesn't really have a potential to become this billion dollar business. You really struggle to get funding to get any capital to grow your business and They realize there must be a better way for these companies to scale on top of this a lot of founders were Giving up all these shares all this equity Just to get money which they went spend on Google and Facebook So, you know, this is what had, you know, gave me the idea for a cup to create a new model for the companies to scale and You know as long as they have positive in economics, they should get that funding which allows them to scale without any delusion Amazing. So talk me through a little bit what exactly you guys do Yeah, tell me if I were five years old, how would you explain to me what you guys do? So essentially We are looking for the companies Which have a proven business model and proven economics and they know that For every pound dollar euro they spend they can generate a bit more of of returns For these companies we offer essential essentially unlimited capital, which they can spend on advertising inventory team To scale our business they come to us we connect to their data and within a couple hours. We give them the funding offer Which they can then leverage and use to deploy the money and grow their business amazing and You know, what what is the appeal of this kind of funding compared to going to a normal VC and raising equity? absolutely, I Think the key differentiation differentiators between us and VC is First of all speed as a founder if you're fundraising, you know, I've been through this on many side on both sides both as a VC and as a founder Several times it takes months. It's very just it's a huge destruction You're you know preparing for materials talking to funds doing all the legal stuff all the due diligence You can't run the business for several months It's actually a huge cost a huge like operational cost for a founder Which we completely minimize we don't Expect any input from a founder. I've been just couple clicks and a quick call with us How does that like form look like how many questions is on the form? There's no form There's no form you come to us you give us access to your data So we connect to your stripe PayPal Shopify we accounting software to your Google Facebook bank account So just couple clicks We have a quick call to a founder to understand what are we looking for and then same day next day We're getting a funding offer. That's all they have to do And you know, we don't take any equity. We don't take any warrants any covenants It's completely unsecured and you know, they have complete freedom to to scale the business So one thing is speed right another thing what I said is no dilution I think today, you know, average founder at exit owns about 5% of a company like it's nothing right like as a founder It's your baby and giving up this baby is so painful And I think we want to enable founders to scale the business without giving up this equity We have a crazy story of a company called Marshmallow It was one of our first customers they came to us where they were doing a two million around and that like 10 million valuation you know, we allowed them to Get only one million of equity and we found it everything through the debt Today this company two years later is a unicorn and this one million will help them to save Probably, you know, the founders managed to save tens of millions of equity for themselves So this is a proposition we have to the founders, you know, like keep control Keep higher ownership of a business, right? Can you talk me through a little bit more? You know, what are the conditions of the debt that you're giving to founders and how does that potentially compare to other lenders that a founder might be able to access? Our debt agreement is very very simple. We literally six pages long and we have no covenants Nothing really crazy. There's no security Don't take any any equity any equity The only condition we have is we wants to make sure that You pay us back like, you know, we ask you to not do anything bad Don't take any other debt which who could you know put us in a bad position But as long as you play fair by the rules, this is a super super simple simple agreement for you Okay, interesting. And what kind of companies? What's the right company? What kind of company do you want to work with? So 80% of our business is e-commerce companies But we found it many other businesses, too We do work out of SAS businesses, but at the end of the day, we can work with any tech enabled tech business With a proven business model. What we are looking for is companies which really found their product market fit and They know they can scale our capital is To enhance them to get to the next level. No, we don't only provide them with a capital We have a whole team of VC partnerships, you know and other kind of partners accelerators Technology companies who we can plug them into we can help them fundraise We can we help them with such decisions. It's much more than just capital As you know our vision is to become the next generation new bank for startups. Yeah and today If you if you look back 50 years ago The banks Were very local and every founder just know what no founders were entrepreneurs who are going to their local bank And they were getting funding there They were talking to the bank manager and they were getting advice. They were getting noticed very personal relations connections Yeah, exactly. Yeah, we are now working to bring it is back to the tech world So we want to be the partner for every company from the moment They start their business to the IPO where we'll give them the funding We also give them the tools to scale their business will give them their relationships will give them the contacts to give them the knowledge Amazing and so I guess that ties into my next question My next question was going to be you know when a founder goes out and they think okay I want to kind of tap into this new kind of financing and they compare you to your competitors And as we were talking about backstage there are many which is a great thing for the ecosystem You know, what what do you think? How should they compare compare you to your competitors? And what do you think you have to offer? I think a lot of First of all, I truly believe we are the most founder-friendly company of the market When we started to set up the terms of our agreement, we made sure they're truly founder-friendly This is the this is the document by which we want to always stand by and make sure there is nothing Founders to be scared of I remember we were drafting this agreement And you know it took us so much time because the lawyers were coming up with agreement Which is very tough to read difficult to read not understandable and we're like no we want the founder to Understand every single word of his agreement and really know what we're signing signing up for so you know We don't have any clauses which many of our competitors have with any like Covenants or early repayment fees or like forcing companies to repay early We are truly the most funder-friendly company out of all and maybe just to dig into that because I feel like some of those words Maybe kind of intimidating or people might not be familiar with those terms What are some of those you know Maybe clauses or things that people should look out for or words that people should be looking for when they're reading some sort of an agreement sure so, you know some of our competitors are for example Forcing some forcing companies to have minimum marketing spent like you know You have to spend X amount of money on marketing. Otherwise you the loan is defaulting or you know, they're claiming it's Revenue-based finance were at the end of the day. There is a like long-stop date Which means that like after six months you have to repay full loan, which we don't have There are some you know other covenants which force you. Well, you have to have X amount of capital otherwise the loan is defaulting we believe that when we understand the business we don't need this and We have no clauses of this kind in in any other agreement, but this is only one part. I think the second part is How we work with the founders? I think you know when I speak to the founders why they chose us over over competitors is We truly understand the companies when we give them our capital We really analyze the business deeply and make sure we tailor the offering to the Business this means we really have to understand you know the payback period of a customer, you know How are we cash loss operating? What are they looking money for? What's the risk of a of a profile and we tailor this offering to the individual company? It's not one product fit all right? It's custom-made for for every business Interesting and how have you tweaked that product as you've scaled the business like were there things that you kind of were surprised By or didn't expect to happen that have fed into how you've how you've built the business It's a good question. Um, I think we're tweaking the product every day, and I think that biggest realization can't comes from talking to the customers and Offering new we started by you know offering a very standard product And then over the time we realized that the clients want like have different needs and for example, we have to allow the customers to not repay us for Several months early on because they have a very long sales cycle and we have to tweak it or They need something more like not a simple loan But the revolver line where they can draw on on which they can draw on every day or we have to make the loans much Much longer because if our customers as business and they their sales cycle is 12 months We have to give them the loan which will be like 12 14 15 months So, you know every day we're working with a new client and tweaking products to them But also we're launching a new product. So next month next quarter We're launching complete new product where we allow the customers to tap into the funds They have on the payment processor much faster. Okay, our Amazon like, you know, there was a black Friday last week, right? And a lot of our customers use Clara and turns out that Clara Takes several weeks to pay them these funds and it's a big working capital problem to his businesses So next quarter will allow them to get these funds immediately And so that's sort of something that you you hear from your customers You hear them struggling with this and you're like, okay, how can we create something exactly help them interesting and again, you know revenue You know, this sorts of financing is really new I feel like it's you know Still a very small part of the market and a lot of founders are not familiar with it yet What are some of the misconceptions that you hear from founders when they talk to you? Very good questions Wow, are you really surprised me with one? I Think the biggest misconception is about That the price of a product I think the truth is it's very tailored to each of the customer And really we want to make it work with a really in the economics. I think some founders are sometimes worried about Repaying our loan too early But you know, we tailored our product now to make sure this will never happen with a customer Other founders are worried about how our product works with other debt providers Right, but you know at the end of the day a lot of our customers are also Taking venture debt are taking any other debt funding and this products are very mutually compatible Yeah, a lot of founders are worried. Well, if we use you can we work with can we take VC money, right? We actually work with every single VC fund in Europe and like VC VCs are actually the biggest source of clients to us because they really love the custom Startups to use our product because it allows their portfolio companies to scale faster without dilution without diluting both founders and funds Interesting. And so what is that introduction like flow look like, you know The VCs just come to you and say hey, maybe you should talk to this company. What does that look like? Yeah, absolutely. So VCs come to us and you know, they reach out. Hey, Piotr or you know someone to my team Hey, we have this amazing company. We really think they should accelerate They should spend more money the marketing we should, you know, hire more sales people and we really think, you know They should do the round maybe in six twelve months, but for now we want them to accelerate it They should they should be using you We practically reach out to the VC funds and build a relationship with them But also we introduce the companies to the VC funds because very often we see amazing companies and we're like like Hey guys, you're doing really really well. We really think that you know, we want to help you But you really Could and should raise some get some VC funding So then we'll help them with introductions and introduce them to the best VCs Which we know would be very very interesting working with them And in that case when you're you know, the company has raised first debt and then they're looking to raise equity Like what kind of a profile of a company would you recommend for that? What do you mean? It's like, you know, you see a company. They're doing amazing and you're like Actually, I think you should probably talk to some VCs. What kind of the company would would be right for that? Do you think? Are they like growing super fast exactly? I think you know, we know We know what works right? I think the beauty of our company of our businesses We are looking now at like tens of thousands of businesses every year and like we can Categorize them benchmark members each other and we know was the best in what's best in class What's average and for the best in-class companies we want to make sure they are even bigger like you know, we want to We really are fully found our friendly even if we're to lose the business We do want to make sure that we are the ones who made the introduction and we want the client to succeed because we know That it will pay back in the long term. So when we see this type of client We will tell them hey, we're gonna keep funding you But if you wanted VCs, we know five ten funds who will be very very interesting talking to you Do you want the intro and very often they say yes Interesting. Do you ever get any questions from founders when they're considering you versus maybe going and raising more traditional VC funding around like Brands, you know, of course if you partner with a VC There's like a lot of brands that that can bring to you and you have you have the the big headline in sifted Raising for such from such and such VC. How do you like talk to founders about that that aspects of fundraising? You know, it's very funny. We had some customers who actually announced that they took money from us You know as a part of the press release they said hey, we are raised this round and on top of this We got X and X of money off of funding from from one cup. I think you know, we are very We are not for everyone. We really work with the best companies and you know to work with us You need to have a solid business told you in the economics because we take much more risk than VC funding Like we know we make much less money and we can't afford to lose So if you take funding from us, it's actually a very very strong signal to the market So our our you know portfolio companies raised from the from the best funds Across I also think that the market is changing, you know like founders You know tiger shows that five founders don't care about VC so much You know money is money. They just want to make sure they get funding and they keep on the growing the business VCs, you know are great. And I think everyone loves to announce the round at the end of the day In reality, it's not a positive news. You just sold half of your like part of a company It's you know, maybe it's not something to be really really happy about Interesting interesting take on that And and why more generally like you mentioned tiger and there's like diversification and VC and strategies and fundraising that we're seeing Why do you think that more founders are interested in these kinds of alternative financing methods? um, I think Founders are realizing that managing the cap table is more and more important and I think this crazy rounds are actually Doing something changing the market in a very interesting way the best companies are able to raise at the amazing valuations But if you look at the number of Investments, it's actually slightly decreasing and this means that this average companies or or other founders are actually struggling even more because VCs are looking for you know next hoppin or next remote.com or you know next Next Deca corn and everyone else is struggling so founders are realizing realizing that and they know that they have to be much more prudent With their shares They really have to avoid the dilution and they're looking for the smarter ways to build their business And you know two years ago, they didn't have any options and now finally they can talk to us Well, what changed like we're seeing so many companies like you guys like emerging right now Is there something like behind other than you know, I don't know people looking for the market itself maturing and Expanding is there anything else behind? Yeah, I think it's a great white wine our question and it comes to I think two factors or three First of all market size. I think you know five years ago. Frankly, there are just not enough companies To lend to to make it viable business model. I think if we started then I don't think we would be able to scale to one fifth Of what we are right now. Okay. Secondly, it's about the technology Open banking, you know open APIs There's proliferation of data now and it finally allows to make underwriting fast and smooth and efficient and allows us to scale the business and I think third thing is a very slight Change in a VC mindset to to lending businesses I think you know couple years ago if you had a lending business like ours. It was very very difficult to Get funding from VCs ourselves Yeah, then, you know Clara and our by now pay later companies never success Successful companies showed that actually you can make money on lending and finally VCs are again interested in giving capital to companies like us Interesting definitely and so what do you think about there's also like kind of the other side Which is that you see do see some V's actually VCs moving into this space themselves So I'm thinking about like general catalyst that announced, you know earlier this year that they're gonna have a fund where they're gonna buy Future revenue of startups, right? So what do you think of the potential for VC is moving into this space as well and becoming competitors to you? Huh, you know, I genuinely think they underestimate how hard it is to build this company like, you know We are almost hundred people right now I think if you have a small team of of investment professionals you will Never be able to match the product of ours like in terms of the quality speed execution the capital and You know doing all these needs. I think people think people underestimate how hard it is To build this business and how hard it is to really deliver outstanding value proposition to the customers So I think we're all up for a huge appointment when they realized what are we up to and I think we'll be much better off just giving capital to us Very Bush, I like it. So my next question would be around like what keeps you up at me What's the thing that concerns you or worries you whether that's about external competition or changes in the market or just scaling your own business Good question. I think you know like everyone I think I'm most worried about the general macro environment I think you know with interest rates changing and you know, everyone knows that the stock market is Crazy and everyone is looking for this big crush, but no one knows when it will happen You know, some people are for last 10 years are little I'm saying go talk tech stocks are too high We're gonna have a crash and they keep doubling and doubling But I think the day of recording will come one day and this is the day when us and everyone else might wake up in a Very difficult position. Yeah So, you know, we have to make sure that our company is ready for this and our clients are ready for this And we can support them through for this, you know, we are also very impacted by big trends like covid and vaccination and changes like in summer There was a definite like Decrease in the lockdowns and it will start to go on holidays and in our data We saw the huge decrease in the revenue across all e-commerce sector Interesting and e-commerce is you know 80% of our business. So like for two months It was really really scary So this big macro trends with lockdowns or lack of lockdowns actually has a huge impact on companies like ours Interesting. And so what's next for you guys? You talked a little bit about your vision and being like the neo bank for for startups and for scale ups What else is there? What's your expansion plans? Yeah, I think Building a new bank. I think we started as a lending business, but I think the startups need the better operating system To run their company. I think today. There's no real banking product for tech companies I think there's second value bank with frankly very average product offering, you know, we are a customer and it's it's so painful to even open the bank account And I think this is what we want to change We want the startups to have the best experience in opening the bank account getting funding Managing that managing their business paying invoices having a credit card for startups Basically having one stop shop to fulfill all their financial needs. So this is what we're building and this is what we're launching in next quarter Amazing. And so geographically where do you want to focus on next? Well, the big areas of focus for us right now is both Germany and the US. I think this is, you know We are very strong in the UK. I think, you know, we were the biggest Lender for startups in the UK and I think next ambition for us is to conquer these two next big markets Amazing amazing and I also like, you know in terms of funding as well I think it's kind of interesting maybe to hear about your experience as a company that lends out to startups But you've also raised funding yourself like how does that feel? Yeah, it's a very interesting discussions for investors, right? Because you know some of them are asking you Oh, are you are you trying to kill my bees kill my business? You know, how are you changing the game? You know, I Think, you know at the end of the day the best investors know that To make money you have to disrupt yourself Right, and I think we are the you know the next generation of disruption in the in the ecosystem So I think if you want to diversify your business, I think this is the safe bet to To hedge yourself. Yeah, definitely It feels a little bit about like when sifted raised money and we write about startups raising money about like super meta Exactly Definitely. Well, thank you so much for all of this I want to kind of leave everyone with some things simple takeaways Especially the founders or operators in the audience with some simple takeaways like what they can remember So if you were talking to a founder and you are gonna give them three things that they should remember about revenue Back to finance. What should they remember? What are those three things? I think first of all It's no dilution. So you don't give up any equity Secondly It's very fast. You can get funding in, you know, 24 hours And thirdly, uncapped is the best Amazing. Well, thank you so much for your time. I feel like I've learned a lot and there's one more surprise we had What there's one more surprise we had there is one more surprise. Yeah. Yeah, so for everyone here We have a stand somewhere over there and we have a special promotion for slash attendees If you would like to try out our product We are offering up to 50,000 of capital for marketing without any fees. So you can boost up your marketing spend For next couple months without any fees amazing Someone's excited. Okay Well, thank you so much. It was amazing chatting with you. Thanks