This week, I'm thrilled to have Jeremy Tsui, co-founder of Finley, on the podcast. In this episode, we delve into the challenges of managing debt for startups, particularly the complexities and compliance issues involved. Jeremy shares how Finley is transforming corporate lending by applying consumer finance tools to make the process faster and more streamlined.

We discuss:

• The intricacies of debt management in the tech industry and the need for a platform to simplify the process.
• Current trends in business lending, with a focus on the lack of standardisation in private credit.
• The importance of innovation and automation in debt management.
• Balancing professional and personal lives while navigating the startup world.

Jeremy also offers personal reflections on his journey, the lessons learned, and where he sees the future of fintech heading.

Don't forget to follow, like, and share the podcast!

‎The This Week in Fintech Podcast: TWIF Podcast: Jeremy Tsui - Finley Technologies on Apple Podcasts

‎Show The This Week in Fintech Podcast, Ep TWIF Podcast: Jeremy Tsui - Finley Technologies - 4 Jun 2024

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Transcript

Helen Femi Williams 0:00

It's really nice to get a chance to speak to you today. Where are you calling from?

Jeremy 1:32

Hey, thanks for having me. I am calling in from San Francisco.

Helen Femi Williams 1:36

San Francisco. Amazing. I've never been to San Francisco but have always wanted to go. I'm calling from Lisbon. I’ve been living here since October, and I love it.

Jeremy 1:49

It's a great, vibrant place out there.

Helen Femi Williams 1:52

Yeah. So, I guess the first question I have is, what do you do? How would you explain your job to a family member or someone who doesn't know anything about fintech?

Jeremy 2:04

Sure thing. So everyone, I'm Jeremy Tsui, founder and CEO of Finley. Finley streamlines the debt capital raise and management process. The example I like to use with my family and friends is: if you're a consumer, it's easy to get a loan or credit card. You have tools to check if you're pre-approved and manage your credit. But if you're a business needing a $10-100 million loan, the process can take up to six months with different banks asking for various documents. It's completely unstandardised. We apply tools from consumer finance to corporate lending, specifically private credit.

Helen Femi Williams 3:34

That’s amazing because it makes sense. Personal finance has many fintech products focusing on different elements, becoming bespoke to their users. Why did you, Jeremy, decide to focus on debt management for businesses?

Jeremy 4:02

I remember this distinctly. In 2019, I was working as a debt investor at Goldman Sachs, extending loans to growing middle-market companies. We realised we spent most of our time in spreadsheets, chasing down compliance issues and missing documents. It was incredibly inefficient. I vented about this to my brother, who was in Silicon Valley with a software background. We put our heads together, applied to Y Combinator, and the rest is history.

Helen Femi Williams 5:49

So, how long have you been around? How did you go from the idea with your brother to where you are today?

Jeremy 6:14

We started in earnest in 2021. We've been lucky to have support from Y Combinator, Bain Capital Ventures, CRV, and others. Our challenge was understanding why nothing like this existed in the space. We approached it from first principles, talking to thousands of founders and alumni who had taken out debt, asking what would make their lives easier. We aimed to make the debt management process as seamless as consumer finance.

Helen Femi Williams 8:11

Talking about the user brings me to my next question. What have you seen in the overall industry? Are there any facts or stats about the debt management space you’d like to share?

Jeremy 8:52

One exciting industry trend is the growth of debt or private credit. Even as venture investing pulls back, debt continues to expand. More companies are eligible for different types of debt, like venture debt or asset-backed debt. This diversification is filling the market, especially as VC investors pull back.

Helen Femi Williams 10:11

That makes a lot of sense. You’re creating a new way for businesses to develop. I have a broader question about society. Do you think there’s a trend in the types of people or businesses looking for funding?

Jeremy 11:29

Yes, more and more diverse people are starting businesses, and lending has become more creative. Previously, lending was centralised through big banks. Now, there are numerous non-bank lenders, creating a need for standardisation in corporate loans. This fragmentation is where we see the opportunity for Finley to make a difference.

Helen Femi Williams 14:04

That’s really interesting. I think of fintech in general as evolving rapidly. In Portugal, traditional banks still dominate, unlike in London. Fintech and neobanks cater to specific audiences. Is this what’s happening in the debt management space too?

Jeremy 14:52

Absolutely. There’s no reason it should take six months to decide on a loan. The future will see businesses operating like a stock market with standardised protocols, making debt transactions seamless and much faster.

Helen Femi Williams 15:36

Can I ask another question not on the list? You mentioned regulation and standardisation. How does this impact Finley, and do you think Finley is leading this change?

Jeremy 16:09

There’s an active push to decentralise lending, making it more costly for banks and inviting more non-bank lenders. This trend will continue, similar to how VC firms have proliferated. Finley aims to create a platform where borrowers and lenders can interact seamlessly, reducing switching costs and friction. Our vision is a unified platform where all requirements are met, making debt transactions as simple as buying stocks.

Helen Femi Williams 18:59

That makes a lot of sense. Do you find this the most exciting aspect of debt management or fintech in general?

Jeremy 19:08

Yes, the early stage of this space is exciting. At Goldman, we used outdated Excel templates for transactions. Today, there’s more receptivity from finance professionals and existing fintech infrastructure. This progress is why Finley couldn't have existed five years ago.

Helen Femi Williams 19:50

I used to work in trade credit, so I understand the manual processes involved. Small businesses especially struggle with cash flow and implementing large systems. Reflecting on your career, can you share an "aha" moment or a challenging time you overcame?

Jeremy 21:53

One "aha" moment was realising we needed to bridge the gap for investors unfamiliar with our space. We compared our work to equity management, showing how our platform could streamline processes just like Carta for debt.

Helen Femi Williams 23:44

That’s awesome. When you're close to a problem, you understand its nuances. Have you had any bizarre moments while pitching to investors?

Jeremy 24:23

In early meetings, some VCs didn’t believe companies took out debt, thinking only venture capital was valid. We had to step back and educate them on the types of funding available and the challenges we faced.

Helen Femi Williams 25:38

I have one last question. What should we ask the next guest on the show?

Jeremy 25:48

I’d love to hear what small miracles enabled their company to succeed. Startups are a series of miracles, from meeting the right investor to having a supportive family. I’m curious about the pivotal moments for other founders.

Helen Femi Williams 26:59

Great question. It’s important to acknowledge those who understand and support us along the way. Thank you so much, Jeremy, for coming on the show. It’s been a great conversation.

Jeremy 27:35

Thanks for having me, Helen.