Micky Malka - Building Ribbit - [Invest Like the Best, EP.401]

Transcript from https://podmenti.com/t/8a34ef75dc856231

I know firsthand how complex the tech stack is for asset management firms.
And seemingly every new tool and data source makes the problem even worse, adding more complexity, more headcount, and more risk.
Ridge line offers a better way forward, one unified platform that automates away the complexity across portfolio accounting.
Reconciliation, reporting, trading, compliance, and more, all at scale.
Ridge line is revolutionizing investment management, helping ambitious firms scale faster.
Operate smarter and stay ahead of the curve.
See what Ridgeline can unlock for your firm. Schedule a demo at ridgeline.ai.
Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best.
This show is an open ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money.
Invest Like the Best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at joincolosis.com.
Patrick O'Shaughnessy is the CEO of Positive Sum.
All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of Positive Sum.
This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of Positive Sum may maintain positions in the securities discussed in this podcast.
To learn more, visit psum.vc.
My guest today is Mickey Malka. Mickey is the founder of Ribit Capital, one of FinTech's most influential investing firms.
Ribbitt's mission is to change the world of finance through financial innovation rather than through financial engineering.
Through Rivet, Mickey has backed transformative companies like Coinbase, Robinhood, and New Bank from their earliest days.
We discussed his perspective on FinTech's evolution, including his provocative declaration that fintech is dead.
And explore his theory of the grit, how knowledge, wealth, and power are being transformed by technology.
We also dive into his deep interest in digital art, which he sees as an early indication of broader cultural and technological shifts.
You'll soon hear how he is taking a truly generative approach on all fronts.
A final note for me. The world just needs more people like Mickey.
He's one of the kindest, most alive people that I've met in this business. There just aren't many people like him.
Please enjoy this in depth conversation with Mickey Malka.
So Mickey, I know this is a hard question, but I'm gonna ask it anyway.
I wanna just have you describe what Ribit is.
It's one of these firms that's if you know you know type
Firm.
But there's basically no information of any kind.
about Rivet anywhere.
You can learn if you ask lots of great founders out there.
But that's kinda how the word on Rivet has spread. It's through founders, not through normal channels.
Can you just describe what it is today and
What it was when it started, we'll ask about the origin story, but I know it's a hard question to answer because it's an amorphous.
Entity.
But what is Rivet to you? How would you describe it?
That's the hardest question I think you're gonna ask me today until probably the next one.
We are a bunch of rebels.
Let's start there.
And from the inception we always use Star Wars as our motive and our decks and our presentations.
And we're a bunch of rebels, and the way that we describe it is
Wherever
The status quo grows bloated.
Wherever there's not enough innovation, wherever there's nothing new that benefits a customer.
You're gonna find us there.
As rebels, trying to find the rebels who are gonna change the status quo.
And that's who we are.
And there's no bigger
status quo in the last twenty years and financial services.
And that's where we started.
It wasn't innovating, it wasn't bringing new services to the customers, it wasn't bringing anything new to the businesses.
And we were like, This cannot be.
Where are the people that are gonna change this?
So we dedicated the first
Take it of our lives just to do that.
How did it start? What was the first couple months? Who did you raise money from? How much did you raise? How did you think about it? The firm is structured in a very unique way.
And I know you've been super intentional about the structure of the firm dictating what it will then do. What was the first moments like?
The first were like thinking.
If we're gonna be rebels, what's the right structure to be a rebel?
We spent like a year figuring out
Hey, it's the fun.
The right structure really?
Is that rebel enough? That feels like cookie cutter.
And having a fun it's not
We struggle with the structure until we say, You know what, let's start here and we'll figure it out where it goes in the future.
And that was in two thousand and twelve.
And then we raise the money from
A bunch of entrepreneurs that had known me because I was entrepreneur for a long time.
And they were like, Yeah, this guy seems like
He has an idea on what to do, let's give him some money.
It wasn't until it's a
A friend once told me if you wanna take this serious
You're gonna go really
Think about institutional money also.
It wasn't obvious on day one.
Question on the institutional partners.
Having been through this process myself, I know that there's a wide range of types of people. What attributes did you select for? Like what kinds of institutions can back a rebel alliance?
Our first deck.

More Star Wars analogies than anything. I had no investor track record. I had a bunch of records as an entrepreneur.
And so if the conversation started by saying but wait
Who else is here and what's your track record and I will say, you know what, this is not meant for you.
So they would look at me and say, Wow, you're willing to say that I'm like, Yes, that's who we are. We say what we think.
So it took a while until we found the right people that understood and were
confident that it if I had hired thousands of people in my life and I had fired thousands of people in my life
we were gonna be able to build a team that we are proud of.
Can we talk about the foundations of Ribit?
And specifically the founding principles that you've talked to me about before.
That make all this possible because it seems that most investing firms
In order to raise money.
define a strategy and then many times they become enslaved to that strategy.
And Ribbit's been the total opposite.
The funds look so different from each other and we can walk through that history. But it seems like they're really
grounded in those core founding principles. Can you describe each of them to us and how you came to them?
So
In two thousand eleven I was
finishing my fourth startup with my co-founder, which we had done in all together around the world in financial services, we're here in Silicon Valley. And we decided that
That one in particular called Lemon.
It was the first wallet on the app store.
You didn't need the two of us to be full time CEO.
So we've played this role multiple times, so we agreed he will be the CEO and I'll be the chairman. So I get to fire him. And I spend the whole year
Just travelling the world and talking to everybody
all the entrepreneurs that we have met or people that we have interacted with or work with
Um
One thing was clear, I didn't want to be a VC.
And I didn't want to be called an investor.
Because until then the whole life was entrepreneurial. I had started four companies, I had lived in four different countries.
All of these things. And yet
I think the foundational
mindset was one of saying
Where is the passion
driving you and where can you be the best version of yourself.
So working through that
We've road.
Some
Commandments of life.
on how we wanted to operate. I don't wanna be boxed. As somebody who didn't grow up in America, one of the things that I've learned is that
Anybody here has a label?
They put labels on you. You went to this school, you went through this career, you are a good student, you are a good math. And
I did not grow up like that. It was
Uh
Fun and social and it was a lot more
melting pot kind of Latin American vibe than it had been labels.
So the first rule for me was no labels.
And hence why
From day one.
Some of the principles were
We're not a venture firm.
That's why it was called Reveal Capital, not Revit Ventures or whatever.
I did not know if we were gonna be able to do that.
early stage investor or late stage investor or public investor. Actually in two thousand and twelve when we started
I think we were the only fund that in their documents allow for buying crypto.
No one else could do it because they didn't have a
Permission to do it.
We could. We could do anything.
We had it structured like that.
I looked around.
Silicon Valley and around the world with all these firms.
And they behave like firms. They were a bunch of
Partners working together.
But were they truly working together?
Or they all together because combined they can do other stuff that they couldn't do by themselves.
Engage in a different way.
So for us it was much more about
Let's build a company.
That happens to be in the business of deploying capital.
Let's behave like a startup.
Let's build systems. Let's
Open anybody in River can read anybody else's
Inbox email from day one.
Everybody agree with
Has access to the same data.
When you align
And as an entrepreneur
Anytime you start a company, you put a lot of your set equity and your capital equity to your startup because you fund it.
So when we did that and
But a lot of
bunch of my capital into our first fun
We align incentives.
the incentive structure of charging fees just to manage capital.
To me seem completely
Broken.
It didn't align long term with your partners the same way. So we changed that. We had a budget system. Anybody that joins a team
no matter when they join, they have retroactive looking because you have just one team. So no matter if you join us in two thousand and twenty three or two thousand and fifteen, you will have
exposure to all of it. So it's a bunch of rules around
What to invest in.
What stage?
How do you want to be known?
We have no brand.

Fine, there's no there's barely a website. You can not even contact us on the website. So all of those things were by design
From the beginning. They were not accidents. Some of them were.
But a lot of them were by design.
Maybe say a little bit about the first fund or two and what you were seeing and what you were doing, because
You were extremely early to this big world trend, both crypto and fin tech.
What did you see in the world?
That demanded
your interest in these solutions that you then backed.
So
We had these thesis in back then super early
You walk back a few years before that.
Two thousand and nine financial crisis. Oh eight or nine financial crisis. The trust for incumbent brands or for established brands goes to negative. Nobody trusts them, nobody likes them, nobody feels identified with them.
They get overly regulated.
And what happens is their innovation disappears.
In in the late nineties and early two thousands, they were building this entire tech stack to run their back ends.
Because before then there were paper.
You walk to a branch, bank branch in the nineties, was still paper based, completely paper based. So they had modernized the back end.

Never build the last mile.
And when the App Store shows up in two thousand
Ten eleven.
It's a perfect storm.
of a mobile divis
With an app store, which allows you to compete.
As a new channel.
To acquire
Attention and customers.
That the incumbents were
Way behind on.
And that infrastructure that they had built in the nineties and two thousands was good enough to find
bridges to connect to it and offer the last smile.
So our whole thesis
In the early days was let's go around the world finding the teams and the
companies that are building that last mile that will touch consumers and businesses
with financial services.
The crypto angle.
Game.
As somebody who grew up in Venezuela
As somebody who
Experience.
over max inflation of
Triple digits.
In any given year, in your teenagers, as somebody who
As my first startup, I was seventeen in financial services in Venezuela, and when I was twenty or twenty one
half of the banking system collapsed and disappeared as somebody who saw the dollar devaluate and saw what happened in Argentina and was in Argentina doing business when the Corralito happened when they took the peso out of the peg of the one to one or the Real in Brazil because I also was there.
I didn't need to go to school, I already had a life lesson.
on macro and governments and currencies.
more than people have in a lifetime. So when we saw Bitcoin early two thousand eleven before even starting Rebid,
It was super obvious.
That this was something really big.
So the first businesses there that we were investing in those early fans were
Who's gonna connect the fiat rails to the crypto rails?
And one of the first ones was Coinbase and Brian and Fred at that team there. And so we did all of these things that were
In the early days of connecting
The last mile.
of financial services.
to consumers and businesses.
You're probably the most famous private fintech investor.
And yet last year
You told the world that would listen to you that FinTech maybe was dead.

Can you explain just that moment in time and what led you to say that?
We had a slide in our annual meeting. It had this cemetery.
And it said fintech and it had a Tom and it said fintech.
Two thousand and twelve.
Two thousand and twenty three. And it was there. And you could see people's faces were like
What is this?
Team just telling me.
Um
The reality is
I think
To play an infinite game.
to play a game that you get to reinvent yourself, to play a game that you enjoy
There's no winning or losing.
And once you're ahead, you have to change the rules of the game, so you fall behind.
And we were seeing slowly and slowly that there was
Every other day somebody else was trying to do something else in the same space.
And we look at each other and said, What is this?
Should we keep doing this or should we just say you know what?
It's dead. It's done.
Everything that needed to get started in this last
Twelve years.
Did it.
So the nice thing about the mentality
is to say yes, we were ahead.
For a long, long time.
But let's change the rules of the game so we fall behind again.
Because
The game is better played.
When you're trying
To get ahead.
Not when you are ahead and trying to avoid people from
Being ahead of you.
So changing the rules is the best thing in life.
It's so interesting that you're allowed to range around
public businesses, private, late stage, early stage
How do you know where to focus at any given point in time as you think across all the funds, which themselves have been so different?
And when is it
more common for a very late stage, let's say higher valuation opportunity to get you more excited than an earlier stage one that
by definition is a lower price, maybe a higher potential upside.
What draws you around that range that you're allowed to move through?
I think it's this combination of
Finding
Amazing people
that you can see through their soul, through their motivation, and you can see that they will do whatever it takes to win and to build that
mission that they find themselves to. At the beginning, when you start backing them super early, you don't know.
You just don't know. But you try to see signals and follow
Through them.
Before we set
to our investors, hey FinTech is dead.
It didn't come out of the blue.
A year before or eighteen months before.
We presented this pyramid and said
There's three thousand companies I got backed in the last decade in financial services around the world.
We think there's fifty
winners. There'll be fifty companies that are gonna compound for the next
fifteen years. They have asymmetric
brand, knowledge, they know how to use time, people, they know how to deploy capital in ways that they will just be compounders for a very long time. The kind of sufficiency is that the virtual hathaway that the world would love to have.
Which in many ways, if you look back at Berkshire, that's what they did in the seventies and eighties, when they started to buy American Express and Geico and the Wells Fargo, they looked at compounders when it was not obvious that they were gonna compound for that long. And they m they hit the macro right.
And then we say there'll be two hundred companies
that own an asset
A license, a software, a customer base, a product.
that will be acquired by these compounders. So they'll be taken out one way or the other through MA.
There was gonna be another five hundred companies.
that are gonna get to profitability because liquidity was drying up, the market was starting to get out of favor for this space.
Moving more to AI.
And those companies will get profitable and they will trade out a multiple of earnings and just do fine and
private equities will buy them or they'll live in a cash flow business.
And there was a thousand five hundred that should not exist.
And they will disappear over the next number of years.
So that thesis
Pull all of our attention to look at
All right, who are the compounders?
Other public?
Are they private?
Are there both?
Do we know which market who?
And we spent over a year and a half just studying that.
Um
Placing beds all over the world around it.
What's an example of one?
of a compounder just to make it bring it to life.
The first one that comes to mind is
Probably
Robin Hood?
I'm on the board, so
I gotta be careful with what I said, but uh
It's a company that
Every time.
They have time.
The millennial customer in a way that they're growing with them. So think about it, Vlad and Bage, you start a company when they're 26. The oldest of the millennials.
They're now thirty seven, thirty eight. They're the oldest. Probably the oldest are for exactly are forty.
So Dave time and they started to offer
the first trading account when you needed one, when no one gave you one.
And now they add a retirement because guess what? That generation now has kids and they're thinking about it and they're adding
All of these products
that they have a chance to wake up in twenty years and be the schab of that generation.
Because they grew with their customers for a very long time.
That power of compounding generational wise doesn't happen overnight.
It takes
a long time to build, but you can see where they're going and they're growing with their generation. And every generation
If you look in history has one of those, or at least one of those.
Very few will
Cover very generations.
But at least there's one winner per generation.
E Trade had that chance for my generation.
But he tried got into mortgages.
Too early.
With a very weak balance sheet and blew up and
They became a sleepy
company. They had a window. They lost it because they used their capital base wrongly.
I think Robin Hood is doing a much better job.
Vlad told me this story and it's an incredible story.
And it speaks to the sort of relationship that Ribbet has with its companies and the founders that it back. Can you tell the story of that crucible moment when things were going sideways for Robin Hood and
You were a huge part of getting them through that.
Yeah. That January of twenty
Twenty, twenty one?
I think the story starts nine months before.
There was a moment in I think April or May, right when lockdowns were happening and
where their growth because people were starting to trade and open accounts and get into the markets because of all the subsidies and incentives.
that their system went down for two days or one day of trading.
Because they collapsed. They were just helping too many accounts. They had anybody remote. It was bad.
And then a lot of bad press.
Um
Remember having a call with Vlad that afternoon and saying, Hey
Is this gonna happen against us? I don't think so. I think we have a solution.
Okay, you're growing way too fast. What else do we need to we always think about this framework about brand, how do you communicate
about people, how do you talk to them, about how you invest your time and capital. So we went through it.
And in the capital piece we said, How is your capital base right now to sustain this level of growth? He says, We're fine.
But it can it could get stress if this keeps going.
So
Nine months before
We started with Jason and Sheep, which is a part of the finance team. Jason is CFO and Sheff works with him.
and our team here and we
Put together a term sheet.
That had
All the terms.
With brackets ready.
on what it will take to put emergency capital in.
We thought about it, we wrote it, we discussed it, we went back and forth, we didn't need it.
And we both agreed it was perfect and we put it in a drawer. We never knew why w we could need it, but it was a good thing to just know that we had it there.
So you fast forward to January
And game stuff happens and all these meme stocks happen and the regulators come with this
Super crazy unheard.
Rule.
out of the blue.
Saying you have to put all your customers
exposure that they have put on in the last day.
From your balance sheet.
In collateral while the trade settles. It's unheard of.
So the request was for three billion dollars.
At five in the morning before market opens.
Exactly. It's insane. So I get the phone call and Flat tells me this, I'm like
No.
So what I mean? No. No. You go back and you say no.
That's crazy. That's unheard of. They're doing the math wrong. This cannot be I mean the customers' money was in the bank. But you're gonna touch it. It's their customers' money, you're gonna get touched the day of settlement.
So
Understanding this business.
Because I had built a brokerage dealer when I was seventeen.
I build an online broker there. We understood everybody here, understood the business model, so we knew there was no capital risk, it was all
requirement of some liquidity risk. There was no liquidity risk, it was capital constraints.
So
He calls me back and says.
We're gonna talk to them.
But I need the money.
So I said okay, give me
Half an hour give me an hour.
Um
I wake up
The CO of Silicon Valley Bank.
Back then, Greg Baker.
And I said, Have I ever asked you a favor from you? And he says, Yes, once and it was very painful. And his favor was helping Coinbase get bank accounts in two thousand and thirteen because no one will open that account to them. Oh, interesting.
And it was the first bank account that Coinbase had for the first three years.
I said well I need one.
And he says
What's up, he says.
I need to over draft every line that Rivet has.
For five hundred million dollars.
He says what?
By when? I said by nine in the morning.
And he says, What happened? So explain to what happened.
He said
Let me call my team.
And our team here, we were multitasking with Robin Hood team.
On the terms she already had it done, we were just
Feeling the brackets.
At the same time talking to Silicon Valley Bank, defining how to do this. And by
Their credit by nine thirty in the morning we were
Wiring.
Five hundred million dollars.
To Robin Hood.
Wow.
Lot of capital follow later that day and later that weekend.
What an incredible
Okay.
Where does that rank in the craziest days of your career?
You know there are those days that you remember where you were. Yeah, you can picture it. You can picture everything. I tend to walk when I'm on the phone, when I speak. I'm not good seating.
I will tell you that that day I looked at my watch.
I had done a full marathon walking on the phone. I had done almost
Twenty four miles.
Of walking in a room in an office just walking because I need to think and react and call. So I will never forget that day.
Thinking back on it.
What lesson do you take from it? What did you learn that you didn't know prior to going through that experience?
A lot of different aspects. Number one
You always forget because I was there for a long time in that seat, it's very lonely to be the CEO.
Um
To be there when that happens.
That call doesn't happen if you are not
spending time for the previous seven or eight years since we're investors, getting to know him, getting to know his family, getting to know his team.
Getting to know the company.
Because those solutions w don't come out of the blue.
And if they do, they're mercenary and they try to kill you.
Number one. Number two is
The mindset and the culture
Of being flexible.
Of taking asymmetric
Inform risk.
When you understand the variables.
You sleep better at night.
And you're comfortable with your skin when you're doing like that, when you truly deeply know what you're doing versus guessing. We truly understood what we were doing. We made one mistake in that day.
We didn't spend enough time.
Understanding
the brand consequences that will be so long lasting for something that the entire market did wrong for one day. And Robinhood became the child
Star of the game stop.
Saga, to the point of having movies.
Now there's a saying that says it doesn't matter what they say about you as long as they talk about you. So you could you could take that argument. But on the other hand
It took
Vlad and be you and it took the team and it took the
market almost two and a half years.
To get out of that PTSD.
Um
I think
The biggest lesson is not that day. The biggest lesson is being there for those next two and a half years.
As they navigate out of that.
Psycho.
I'd love to zoom to the present now.
You focused a lot on
money in the first chapter of Ribbit's existence and
I think the grid concept, the sort of global digital grid is something that you're focused
very carefully on today.
Can you just describe
how you came to this idea and what you mean by it.
The green is
Our version of the matrix.
of that interconnectivity
of different aspects that make us who we are and how we transact and live in this world.
And you could think about the grid as
If you think about
The internet.
It's a grid of itself. It's a grid full of data and knowledge.
If you think about
money and wealth, there's been grids for the last fifty years that allow you to move money in real time in
Delay time in slow times you got
V some networks, MasterCard
Pedwires, A C H, UPI
They're all
Financial
Design grids.
And then if you think about
Electricity?
We think about the electric grid.
And we think about towers and
Power meters and transformers and high voltage and all of those things.
What will happen
If you actually
Thought that they were all
Combining to one.
They actually need each other.
There is no knowledge grid.
Without power.
And there's no
Power without money.
And if you
Combine them all together.
And you think about them as just one single grid.
That has to connect all of these things at the same time.
It's quite rare and unique because
It hasn't happened
In a long time.
This creates
I've been independent forever.
The financial green has been independent for five, six hundred years.
The internet the data grid has been independent for twenty five years.
the electric grid has been evolving for just a hundred and forty years.
But now
We hit a moment in time.
when the three of them are converging in a way that we have not seen in almost five hundred years.
And the last time we seen that was probably in the late fourteen, fifteen hundreds.
With a printing press.
What people have to understand is that
The printing press
By itself was not the event.
The printing press what it did was it allowed you to
Print.
All the knowledge that was
Written.
Three, four hundred years, thousands of years before that.
The same way AI right now.
is the print in press moment, but it's only possible because we have digitized every single piece of content for the last thirty years.
So
What took hundreds of years of human
Scriptures to write.
history and contents back then for the printing press to print.
Has taking
Thirty five years now or forty years to digitize.
So now the AI engines can actually work on it.
And tokenized.
And so you have knowledge in ways that we've never have been tokenized.
You have money.
Getting tokenized.
In ways that we've never seen, from crypto rails, token existing rails.
To the way all of this
aspects of smart contracts are working and you have electrons.
Which are
becoming more and more decentralized, which are powering all of those at the same time.
So this moment is probably the most interesting moment of the last hundred years.
In terms of
The opportunity sets that it's gonna come from it.
So when you take those things and you put them all together, you say, Okay, what does it mean?
It means that knowledge, money and power
Are interconnected in ways
that allows you to create use cases that we've never seen.
AI agents are gonna need access to money.
AI agents are gonna need access to the crypto rails to do that.
So when we think about the grid as a concept, we look at it and say, Oh my God.
How do we invest into this?
How do we think about
If you buy that vision of the world
Which we have bought ourselves into.
And then you start to ask a question.
How do you deploy capital in it?
How do you think about the opportunity sets? What needs to come first? What needs to come second?
what are the use cases that we should expect to see in ten years.
In five years, in one year.
that will show that this is going the right direction.
That's what we mean with the grid.
It's probably the most exciting
opportunity says that I've seen in my life.
How do you dig into aspects of that?
mean it seems correct that
Everything you just laid out means that the world
is already different and changing so quickly around these dimensions.
How do you go from that insight down to
Tangible.
Opportunity.
So
I don't have a great answer. There's no libel that I can tell you, Hey, this is what we're doing.
But
There's always a butt.
First
You go from the macro and then you look at the micro.
The most
smaller aspect where I can see this happening.
It's actually in art.
So to me
Artist.
Are called artists because they're always ahead of society.
In many ways artists always tell you where the world is going.
That's what they did. The best
Sci fi films when we were kids.
Shape where we are going. Mars.
The way we think about lens, I was talking to
Matt Vaughn the other day with the kingsman, he was saying
I had the meta r lenses on my movies ten years ago. Like all of these things, they'll tell you where these things are going.
And if you follow art today and you see how they're using all of those aspects at the same time, you're seeing artists using
AI in different ways.
D
The Silicon Valley engineers are using it.
You're seeing how they are
Using N F Ts.
as a method of distribution.
of ownership. People will read in the media and if these are there, I think they're wrong.
when you really look at how they use artists are using it, it's just different. It's
And the way they're using
power and knowledge to express
Dynamic
Aspects of the world. So
If they can do it in art
And they can express it visually like that.
Where would it
Take off in businesses. So then we sort of
appeal that and say, okay, what next? What are the first variables that we need?
Do we need to figure out
Identity.
Is identity a big component of society solving a lot of these things? Because right now
We have I D, but we don't have an identity.
That allows us to connect our knowledge to ourselves.
ourselves to our money.
ourselves to the grid.
So
Can we go and find stuff happening there?
Can we find the grid on financial services that will be decentralized? What will be the way
it will operate. How will AI agents
Speak on your behalf and move money on your behalf and sign contracts. Because a piece of NFT
A piece of art that lies on an F T.
It's a smart contract.
Now imagine an AI agent using that on your behalf to do something. What would it look like?
So when you start to go down that path, we try to figure it out what are the use cases.
It's funny that we're having this conversation behind us is this piece of art that
is radically changing on the fly.
Generative art.
based on what we're saying. So literally it's so fun for me to have this conversation. Literally behind you, I can see the topics visually on the screen in this remarkable way.
And it does feel sort of like seeing the future. It does feel like
Everything is gonna be a version of this.
That reflects back on the individual.
And it
I D
digital identity is a key linchpin of that.
Why don't we have it yet?
What do we need it for? Why is
somebody that nails digital identity.
And what that means to you, so important for what might be possible.
In the future.
If you listen to Open AI when they do their presentations or you listen to the earnings calls of Visa.
the payment rail network or you listen to Mark Zuckerberg and meta
Everybody's using
An analogy called tokenization, or tokenizing data so they can
Compute.
They tokenizing payments, they're tokenizing
Other aspects.
I think
Tokenization.
Is
Still misunderstood what it truly
Will become.
And if we don't tokenize your identity.
you will not be able to connect to all of these data sources.
you will just not be able. It will mean a lot less.
The iPhone is a token instrument.
It has
All of those entities sitting there.
But they don't talk to each other.
their silo. What would happen if Apple allows you to really
Use it as an identity, not as an ID.
What will that do?
It has the most knowledge that you need to do.
Will they win?
Well they're we allowed to win.
Will there be somebody else? Will there be multiple players? So I think that
If you don't have this
you're not gonna be able to connect to the grid of knowledge and to the grid of wealth.
In the same way.
Because you will not be able to argument yourself the best you can.
So that tokenization aspect is number one. And a proxy to this
Patrick is what happened in India?
We're very active in India, we've been there for a decade, we've done a lot of investments.
And when we got there in two thousand thirteen and fourteen, the first thing that they built was the Adahar system.
It wasn't
ID national system.
It was the first time ever a country even at that scale.
created fingerprint.
to one point two billion people identification. Like you needed just your finger to do anything in India.
When that was put together
their identity system now has OTP, it has multiple ways to connect to it.
Then they turn on.
The payment grid.
Call UBI.
And then they turn out the e commerce crate.
And then they turn out another grid in transactions between physical stores and B2B.
It is all
Logarithmically growing.
If they hadn't solved the first piece
It wouldn't happen.
If you think all the way back to your original
investments in the crypto ecosystem, you're probably
the earliest of the well known investment firms that was involved in Bitcoin very early and then tons of businesses in that space.
What
has surprised you about
How crypto has evolved.
based on your early expectations in twenty eleven, twenty twelve.
And how do you think about it today?
When we started doing this, people looked at me and said
What are you doing? The only people using this are drug lords and money laundering
But yes.
If you read history
Money.
always starts with those use cases. It always finds low hanging fruits. But then
Over time.
It just gets better. And it gets
clean and but actors move on to something else and
I think that's what's happened here.
Well it's blown away if if you ask me in twenty eleven or twelve.
That in two thousand twenty four.
in the presidential election of the USA.
The topic of Bitcoin as a reserve
For the country will be
a debatable aspect that candidates will be talking about, I will say no F way.


Or that we had a listed ETF in the same year that the SEC chairman said
Never. Never.
Or that countries around the world have bought it as a reserve currency in their balance sheets.
It's been only fourteen years or fifteen. It's insane. I mean, gold has been here for thousands of years.
And yet this
instrument this technology, this aspect is doing it in fifteen.
I cannot imagine what the next fifteen look like. It's just I'm more
Energy.
Venezuela
My mother gave me a little note.
that I wrote when I was eight or nine.
Asking the two fairy to give me
dollars because I didn't trust my currency. This is before the first maxi devaluation the country had in thirty years.
And when my kids
W
losing their tooth, I was giving them bitcoins and it was twenty dollars. So give my oldest kid has like two or three bitcoins just from her tooth and
And my other one has less, and the third one has much less. And for them it was automatic and you can see it. So
When you see young people
Understand concept.
Our role as we get older is to see through their eyes.
Use our knowledge.
But see through the rise.
And that's what excites me about where this is going. I think we're super early still.
Can you explain?
The importance
And just like general concept of stable coins as you see it and the role that they play in the world that's unfolding.
So
Growing up in the early eighties and mid eighties in Venezuela.
We were having max C devaluations, like the dollar was four point three
bolivars to the dollar for like thirty years and
By nineteen eighty three
It started to devalue by nineteen eighty nine it was probably
Almost ten thousand believers to the one dollar.
So the only way you could save
My family's safe and there were doctors and
Middle class family was
We were buying
American Express trouble checks.
Every week. I walk with my mom to the bank branch. We did a line.
And whatever Bolívar we had in this private practice in the private practice we will buy travel checks.
And we will store travel checks.
And once a year, once every couple of years we'll go to the US and deposit them in a savings and loan institution.
That's how we saved. Same.
It's insane.
But what was it about the trouble check that gave you the safety?
She had the American Express logo.
It was dollars.
It had a serial number.
You kept it.
You if you didn't sign it both times, it was yours.
Stable coins.
Are trouble checks.
In today's world.
Іріс інстант
Dollars anywhere in the world.
That you can control and move.
Anytime at a cost of zero.
And they're back by guess what?
Dollars.
In treasuries actually. To the point that
When you think about the size of stablecoin market right now, there's almost two hundred billion dollars of stablecoin.
People are willing to forfeit making four percent or four and a half percent of yield.
In order to k have it at least saved in dollars.
So imagine the opportunity cost where they're willing to sacrifice their yield
Just to be able to have access to dollars.
So the use case of the stablecoin
First it starts with consumers always. All these cases start with consumers.
Consumers, real time, anywhere in the world. Not for America, so we can get dollars on our
checking account on our Robin Hood account on our Venmo and our
Square cash, we have dollars everywhere.
But if you're outside the US
And you don't trust your currency or you want to diversify, you will love stablecoins as a way. And that was a low-hanging fruit. That was the minimum use case.
Funny enough, that's what one it started. They started
Because there were exchanges.
crypto exchanges all over the world and it was so hard to get into the fiat rails and come back.
that somebody said, we're gonna put a stablecoin and people can just move it around. And that was the true case. It was trading and moving dollars from one exchange to the other.
Consumers to get over.
What we're starting to see now is
Companies and treasury management of companies.
Using it.
It lowers their cost of capital.
It's instant. There's less resistance, they have a lot more control.
So
the volume of stablecoins movement in any given month is now
You can graph it against Visa Networks.
Primen vodje.
And it's not crazy off anymore.
And that's only with two hundred billion. Imagine when there's a trillion dollar sitting there and two trillion. It will get there.
What will this mean for Visa and MasterCard and some of the
Big, important incumbent.
financial institutions.
That have also been some of the best stocks to own with some of the best business models.
I think for them it's a problem. And
People like Visa, led by Ryan, understand this and they're probably doing a an amazing job on trying to be present in the crypto rails and
make the network connect efficiently and tokenize dollars and be part of this and make sure not to lose that business time will tell.
But
They get it. He gets it.
But when you listen to the other extreme to Jamie Diamond
Same.
This is all evil, this doesn't work. I do it myself. I have our own JPM coin. I can do it on my own system. Well, they're defending
The castle. The castle, which they have to do. It's their mandate. He's doing what he needs to do. There's nothing wrong with what he says.
But that's the battle between
the established nation states or
To the new network states.
So if we got we have this grid that's changing on the bottom layer.
Above that is
identity and the incredible important role of data.
And then you've talked about compounders as well as a key area of focus for your investing discipline today.
What else in that middle piece is most exciting to you?
What does it feel like the world needs?
in terms of technology or companies or products or infrastructure
You and I've talked about a couple companies attacking the the identity piece specifically.
What else has you most excited about, like people that are serving the world's, you know?
Technical mass and giving it what it wants.
Oh, there's so much. It's such an exciting time to be doing this. I think there's an intersection between AI and crypto.
That is really exciting to us.
How those roles
Yeah.
Collide.
AI
Will need crypto.
Crypto definitely needs a lie.
to really build the future because AI in many ways
generate so much more content and so much more tokens.
That you have to be able to
Regulate.
Um
Tokenized and use and
applying to smart contracts and there's no tech better than the crypto rails to do that. That intersection is super powerful to us.
We've spent a lot of time trying to understand
Who and how and where
And funny enough
follow the young minds. A lot of the young engineers that started with crypto in when they were in college are now moving to AI.
Because it's where the attention goes.
But both of them combined have the knowledge now. And you're starting to see people that understand both worlds and starting to interact in those. What sort of thing could that unlock?
So imagine
Let's say Tesla's robotaxis. The car needs to interact with third parties.
The car needs to get paid.
Collect.
Define hours of work, all of those things. Now their software can do it.
But if they're gonna interact with the third world
There's nothing better than a blockchain smart contract to figure this out.
Because at scale you cannot do it any other way. Can the car directly talk
To the visa rails?
Not yet.
Is Visa trying to do this? Yes. But what are they using? They're using crypto rails to get it done.
That's why they're partnering with Solana and trying to tokenize
Tokens on Solana because it's those networks are better than the traditional Rails to do this. Those other networks are pool networks, this is push. So all of those aspects will come into this world in ways that we just don't imagine.
And so the way to think about it is
We're gonna need streaming data and money everywhere to enable these automated services. And it's the people that understand the two
fields and the intersection of them that can build things to solve that problem. You said it better than me. It's really exciting to think about.
One of the things that is amazing is this little napkin
at your office, it says the eye of the tiger on it. You're holding it up right now.
And
It's sort of this cheat sheet for what to look for in people, I think. I'm sure both
People on your team, people you back, early stage, late stage, whatever.
And I'd love to apply some of the ideas actually to you.
You personally and to people and Rivet itself.

gain a even deeper understanding of you and the business and what drives you.
And so the five that I want to ask about are energy, conviction, heart, dreams, and obsession.
You say the energy of a scientist, the conviction of a missionary, the heart of a partner, the dreams of an athlete.
And the obsession of an owner. I just love this list.
At what point in Ribbit's history
Did you feel the need to inject that energy the most?
Every day.
This is a daily daily thing.
In this world, if you believe that energy doesn't get created, it just gets transformed.
And the amount of energy that exists is always the same, it just gets moved around.
The best way to capture as much as you can and recharge as much as you can is to have a purpose.
In a mission that you are very identified with.
So when you meet people who are Isla Tiger and you're one, Patrick, you are an Isle of Tiger. Somebody had to say it, what do you say about Patrick? There's a lot of things I would say, but you fit this bill.
You have that energy, you have that conviction, the heart.
You have the dream.
You love to travel, you have the conviction of a missionary because you love to travel, so
When you start to think like that.
It's something that you don't have to
Give it on a particular day versus another day. You give it every day.
And you don't live by these principle, so you don't meet somebody that does it, it's a day that you lost.
That's the way we think about it. And not only it applies to the founders that we
Wanna partner with, that we get the good fortune to partner with, or the people in our team.
It also applies to
Who do we take money from? A partner is a partner.
And we think of all of them in the same way. If they cannot fit this napkin, they shouldn't be our partners.
Oh, Nennik was het wie.
I'd love to learn how
that same idea has applied to you because you're the founder of Ribbit and it's a business. You treat it like a business.
It has adapted like crazy. I mean, we won't say the returns, but they've been spectacular.
And those returns have come across wildly different styles of investing and different portfolio concentrations across the different funds.
What has been the hardest part about being able to continually grow and adapt and not get sucked into
Oh, Rivet's a firm that's had success doing this thing and they're gonna keep doing this thing. That's nice to say. I think everyone listening would agree, like, yeah, I wanna do that too. I wanna grow in that way, I wanna be adaptable.
But it's hard, obviously, otherwise more people would do it. So what have been the hardest parts about
keeping that in your DNA.
The owner
It's
Being willing to kill the things that got you here.
This concept about
Personally I always go back to this idea
I grew up in an amazing community in Caracas.
in an amazing high school.
My class is
could not have been better in everything. Our teachers, our school, my classmates. It was
Literally.
I cannot even explain to you how good it was, how good we had it.
And I always think about going back to our reunions.
And looking at somebody and saying, Oh my god, that guy peaked in high school or that guy peaked in their five year union.
That concept in my mind does not allow me to even I wanna peek the day I'm in the cemetery. The day I died. That day I wanna say this guy peaked today. So that mindset

This behavior that
we have here that uh we've worked so hard to have, which is
Burn the bridge that got you here.
Whatever got you here will not get you to the next phase. What got me to come to the US in 2007 is not what will make me be happy 2024. Just be willing to change and change and change and don't look back one day at what you did in the past. Just
Don't forget where you came from.
Don't ever forget where you came from, but always be looking where you're going.
One of the great joys of this business
For me is picking sides.
deciding that you're gonna throw your conviction behind somebody who's going after something.
What does convict feel like to you? Like if you had to describe the feeling of conviction when you get it and have it.
How would you describe it?
As a team here we have
The conviction we just don't listen to anybody else.
We just don't listen. And people will say no, but this and that I'm like Yeah. Thank you.
Conviction.
is one of the most important
Traits I think for any human.
If you don't have conviction.
You end up
Diversify.
And I was a wine is lack of conviction.
It's not an investment philosophy. It's just lack of conviction.
So
Most people
That are successful in life and find joy in life.
It's because they
Found.
A handful of things in their lives
That makes them very happy.
You need fifty, you need diversification.
You don't think of that. You don't have
More kids to diversify. You have more kids because you have conviction that you can be a good parent.
All of those examples.
I just
The ways we sort of think about it.
I think heart pairs incredibly well.
With conviction.
You're one of the biggest hearted
people that I've met in this business.
What is the role that Hart plays in Rivet's story?
It's core and center.
It's central.
It's the central system of everything.
First and foremost
We're all humans.
And we all have flaws.
And we all have
Attributes.
You're not willing to embrace those?
Both of them.
Then you're in the wrong business.
We have had a share of
Founders that have found themselves.
In controversies.

Fun for them or their families.
And we end up
Going out.
Reaching out to them.
Calling them, meeting them in person.
And then even backing them.
For the next venture.
when that occurs in their lives and being there from early days. Why? Because we had conviction. We got to know them. We saw them. We
did our work and no matter what you read out there.
No matter what people say.
If you really understand them as humans and they recognize
that there was a mistake made and we're all humans, we all make mistakes. I wouldn't be here if a lot of people
Allow me to make mistakes.
And keep leaving.
But there's times in society
When that's not allowed. But we should not forget that that's hard.
Where do your personal dreams come from?
What are the source materials, the ingredients?
This concept
Oh
Making money better.
Um
That has driven me since
I was five or six years old and it will probably drive me until
My last day.
In this planet.
Which this concept of every time money becomes better

Doesn't mean more money, it means better.
money. It means it's easier to access. It's easier to save. It's easier to get a loan. It's easier to
Do
aspects with it that you couldn't do before so you can build your vision and your life.
So the metrics that I care the most
I read.
It's more than number of people that we touch every year.
In trying to make their lives better.
Because that will probably drive the output of what investors want, which is returns and impact and all of those measures. But right now we touch nine hundred million people every year with financial services.
That we make their life better.
I would like the number to be
Couple billion.
Maybe it's a great excuse to talk about
an investment that you made, a very big one.
That was very creative and very different, which was a partnership with Walmart.
maybe tell us the story, but use it as an example of how
You and your team at Ribbet work.
Where did it come from?
What was the process that
happen behind the scenes for you to get excited about it and shape it.
The things that you cared about as investors. I want a couple of excuses like this to ask you about the process. Like once you find something, what then happens?
But this one was so unique and different.
And I know you've done one or two others like it, but maybe could you tell us the story of the
Do an venture that you did with Walmart?
This is goes to that point we were discussing about during the Covid era.
You had
FinTech or financial services blowing up around the world, growing up to the right, everything was becoming digital.
People were stuck in their homes, they were
Using more and more financial products.
But also the cost to acquire customers, the way to get the attention of them, the way to build a brand that they trusted.
What's becoming more and more difficult.
So we sat on a whiteboard right before Covid and saying
Who could be a great partner?
To build a financial services company with a brand that

That we could go and do something completely different, but
Digital.
From inception.
And Walmart was one of the top two brands that we had on that list.
So I uh through
Sarah Fryer. I had a chance to meet Doug Macmillan, the CEO of Walmart.
And he left the unoffered, Hey, if you're ever in Bentonville, drop me a line.
I don't know why I would go to Ventoville except to see him. I texted him in January and said, Hey, I'm gonna go to Ventoville. Can I stop by?
So we went to see him.
Before that we had walked the Walmart stores, we have
transacted every single financial product that you can imagine from the money center to the prepaid cars to the remittances. We had tried everything.
And we had all of the user flows and all of the things and we had found two bugs.
In their systems.
So when we show up in their office
I sit down in the room with Doug and I say, Hey, listen, before we start, I wanna tell you that we try every product and we found
Two bucks and here they are and I show it to them. And he literally
Gets out of the room.
Leaves me alone on his conference room and
Comes back.
Five minutes later.
We've had twenty dollar bill.
And he says, You're twenty dollars says, What is this?
This is a bug bounty we pay at Walmart. And he gives me twenty dollars. And what I learned from that experience.
Was
They are playing an infinite game.
They're here to serve
hundreds of millions of customers and they really, really care.
About
Making their lives better.
And we sat down and we
sort of structure with Dog and John Furner, the C of the US.
This idea of building
A new company from scratch.
With the right team led by Omer and David that we
Convinced to
Join from inception from the beginning.

A next a
Company that was gonna serve their hundreds of millions of customers with digital financial products.
And shut down all of the services that they had been built since nineteen ninety.
that had never accrue more than one percent of their sales.
And so we did that. It's a company called One App.
It's on their second or third year.

Why big inside the Walmart stores. If you wanna pay inside Walmart with your phone, the only way to do it is through one, the one app.
And the beauty of working with them
We got to understand what it was to work with a big company from inception.
What are their data sets? What are their concerns on privacy? What are their concerns about regulatory? How to build these kinds of ideas?
Um
It's very unique.
In the sense that you have the trust
of their millions of users.
From inception to go build something. So
That was what we were doing during Covid.
versus trying to do a lot of other investments later stage and pay higher multiples. We were building from scratch.
Something that right now we're starting to see
The joy of it.
Do you think there's more opportunity for big companies like that that have these huge advantages to work with
nimble technologists that have a very different perspective and
build something that big from scratch, like it's capitalized to be very big and
It's a huge customer base.
The degree of difficulty is probably pretty high, but do you think there's more opportunity to do things like that?
I think there is.
We're just starting to see
The CEOs of these companies are all people that now
Grew up with the internet.
One way or the other.
So they're much more native to Utily.
Than if you had to have this conversation ten or fifteen years ago.
So their appetite to understand what are the limitations they have inside that they can now replicate.
Versus what they can do with
technologies and build something that has
Hey.
Independent life.
But tie to the mothership one way or the other.
It's much better now than any other time in the last four years.
You were an early investor in New Bank and
David Veles is one of the most incredible entrepreneurs of this generation for sure.
What did you learn watching him build?
uh digital first
Bang.
What are the key lessons that you take away as you think about something like one?
I agree with you. He's one of the best in the world by far.
From inception, the talent of people he convinced to move to Sao Paulo.
They had no Portuguese, they had not even ever been there, and yet they were moving and

Stanford business class and other friends he had
It's just insane.
So
Differentiated talent.
was number one the way he always thought about it. And
He has kept that high bar even to date.
They are known for having some of the best talent worldwide.
And they're loyal and they wanna stay there and wanna build brands. So that culture that he did was very unique.
The second thing was
She
Kept his head low.
For as long as he could.
If you went to Brazil in those first five, seven years, they will laugh at Nubank.
No one knew
A number no one knew a
technology stack they were building, no one knew anything about them.
And the less they give out, the better.
So they had no distractions.
David was super focused on not getting distracted with any
External
metrics or
Validation.
And you see it on the way he built our captable.
Same investors were there.
All the way from the beginning, all the way to the end.
You didn't have a bunch of people coming in or coming out or changing. He just wanted to maintain
Discipline on how
He did what he did.
And on the digital side.
She just
truly understood always what was the customer's pain.
And was willing to address it
Directly.
I remember when he started and if you were transacting with your credit card and they saw that you were
Paying for a vet.
They will send you cookies to your house because it meant that the
Animal was sick.
They were just really thoughtful about how to build that trust and that brand loyalty, which is so critical.
For the success.
And even today when you hear his earnings call
You fast forward fifteen years now?
Or fourteen years.
And you hear his earning calls and you leave the earnings call?
It's exactly the same thing he was saying ten years ago.
Or fourteen years ago.
So our joy to be able to be there.
On those first conversations.
And to be as an investor still
In those earnings calls because we bought more shares in the public market or whatever. It's just consistency. We look at our notes from David from our firstborn meeting.
When I was there in two thousand and sixteen or seventeen to now, it's the same.
I'd love to talk about
How you see
skill and talent in other investors and specifically on the people on the Rivet team.
Your style is so
big and sort of in the flow of the world as it's changing, as the money is seeking its new spot.
I've gotten emails from Nick, your partner.
on a company.
That are more
analytical and rigorous and like thorough. Stunning emails, honestly.
I can't think of other people that have written emails like he's written.
And his style is totally different than yours. Oh, yes.
How do you think about
Complimentarity of skill.
When you're recruiting investors, what are you looking for? Just say a bit more about the team and how you've built it.
I
Never
Believed in titles.
And never be leaving job.
descriptions. Or
Hey, I'm looking for this and here's a job description. I thought it was
Again, that's those are labels.
And the mindset of labels.
I think
You gotta start backwards. Start just finding amazing people.
No assholes.
Nick is
One of the smartest
Persons I've met in my life.
By the way, he's the only Ivy League guy we have in the entire Riddle team, so that tells you. There's a lot of joy in that story.
He's
Ten years younger than me.
He's much smarter, much more thoughtful.
And from day one
There was one thing that I remember from our first
conversation was I gave'em a case study to go look at. It was a company
in Europe that was one of the first big fintechs and I said, Go study it and we'll have breakfast and chat about it.
And he came back
And talked about this company.
But talk about the founders by name.
And that was
The moment where I said
He gets people.
He didn't start by talking about the numbers or the market. He just said
X name and X name, they came from this company. This is what they be my guess is this is their behavior. This is the way I write, the way they speak.
And it's what they're saying. And it was just so human.
So I think fundamentally from the beginning and then we added Nikolai a little bit later from Bulgaria and he was a Morgan Stanley.
But we've just added people
That had grit.
Had passion.
For the space.
And had this ability to truly
Be humans first.
Literally just good people.
And after that you just work on the skills. So our culture has been
Bring them young.
Train them in our ways.
grow them in an organization that has
No titles, no job descriptions. You will change your role multiple times on any given day, week or month.
Or year.
We will shift. You gotta be able to
Бі гуат селф експресінь казю хату ті.
Every moment you come back from a meeting, you gotta teach back everybody else. We're only as good as the knowledge that you transfer to the rest of us.
If the not stays with one person.
You're fried.
It's a dead end street. That has no output.
So
That by itself drives a different kind of people.
We don't bring stars.
Everybody has become a star being here. There was nobody oh he was great there, what brought him here. No. They don't jail because
The team wins.
As a whole.
So that joy that comes from working together only comes when you have that. Once you put
something different to the inside that model, it can break.
Or the inertia just expels it off. So it's very different.
And we tell that with companies like
company said, Hey, but am I gonna talk to you? Am I gonna talk to Nick or Nicolai or Justin or Eva or
So it's only got up to everybody.
You will find
that you will call
Justin for something and you will call Sach for something else and you'll call Eva and you call Cindy.
And then typically typically.
When the shit is a fan.
That's when they call me. That's a call I guess. When something goes really wrong. The other calls everybody else gets, but that's how it works.
How much do you think about returns?
I don't.
I don't think about returns.
I think returns is an output
Metric?
And I focus a lot more on the input and I let the output take care of itself.
Now one thing that I
A friend of mine, a dear friend, told me early on
In this journey.
Prevy it was
Great work. You got your first fundraise.
But guess what? You only truly win your stars on your
Shoulder.
when you return capital.
So that stuck with me.
It stuck with me in so many ways that from early on I was always thinking about it.
Instead of trying to build an empire of AUM and I
Always looked up at Bershir since I was
A kid?
How they compounded and compounded and compounded the balance sheet.
I understood that.
I was playing a different kind of game than that, and just the differences on that.
So how does that manifest in
Something like price. We were talking before about a company that
has all the trappings of an incredible
found or opportunity at the edge of what's possible.
And the price is to say nosebleeds would be understating it.
How do you think about a situation like that?
Warren Buffett used to say that if you graduated from business school or college and they give you
Yeah.
Scar with like ten
Twenty punches on it, that one. Yeah. Yeah, exactly. That's all you should do in your life and be very careful.
I think
We each wanna have one of those.
to just back amazing people regardless of value.
So you're not gonna do that every day.
You're not gonna do that every year. But I put myself in your shoes and say, Okay.
Patrick, you have interviewed
almost every smart person there is to interview in America and eventually you will do this around the world.
You have met them, you've seen them vulnerable, you've seen them speak, you seen them interact, you talk to them online, offline.
And then you find somebody who blows your
Minor way.
What
in your w framework does not give you the right to punch that card.
Why get stock on value?
When you have
Array of exposure to people.
And as you get older
Your gut overtakes your brain.
And you gotta trust it more.
So
That's a way
I think of it.
I said
Am I gonna
Build the
Business like that?
Probably not because
It's not the right way. It's really hard to do it and you end up gambling a lot more than you are investing.
But
Would you make an exception when you find somebody unique?
And just
Close your eyes and said
Don't look at it for literally five years, ten years and just
See if this person became a Mason, and if not learn why.
Definitely you should do it.
It makes me think of other singular things and fin tech for sure.
With exceptions, of course, like Robin Hood.
I wouldn't say is an area that's associated with amazing brands.
You and I spent some fascinating time together.
learning from some of the people that have built the most iconic brands in the world.
How is your view on the importance of brand?
evolve. Like what is a great
Brand me too.
It's the topic that I've been spending the most time the last two years.
these trends and what we need to do here.
You have some of the greatest podcasts on Brand Stories too.
I think
At the end.
Brian is
To
Under promise and over deliver on anything that you do.
And that's how grey brands get built.
So
If you can do that and you can be a great storyteller of that under promise and over deliver.
In no matter what area you are, you will win.
Now
What I find interesting is that most people are not trained to think about brand.
No one taught them about
this concept they didn't study it in college, they didn't
grew up in an environment even though America's brands around the world are some of the best
In everything.
When we were building
Revealed.
I always said
Why are we not doing
active speaking or marketing or
Twitter because
Our brand needed to come from the founders.
I run into comments when you ask any founder who is the first person you call

Will they say rivet?
And if we win that battle
That's our brand.
So what I've learned about it is that
When you talk to entrepreneurs in our space, in spacing around e commerce or
Digital financial services or cripto. Crypto has a terrible brand, for the record. Who came up with the Bitcoin logo? There's no brand story there.
And despite all of those things, look at what it has done. Imagine if you had a grip. One day that will happen, but not yet.
When you look at the best companies around the world, you took at Samir from Fompey or David from Nubank or you talked to
Nikolai Revolute, how they build it. They never spin
A lot of money on marketing.
All they did was
Over the liver.
On what they promise.
And that's what it takes.
Such a simple
An incredibly
Elegant concept.
Thinking about
visual parts of brands make me think about art.
And
Your commitment to
How art is changing.
It's certainly
the most interesting of anyone that I've met.
You clearly love it.
You mentioned it earlier as the way to see the future, that artists see the future, so you can piggyback on their
Experience.
How have you approached this?
Yeah.
And again, we're sitting around some of the most incredible beautiful
Art, but art that's very different from what you would see in a normal home or fancy art collection. It's new, it's interactive, it's
Unique.
Why are you so interested in this and how have you approached this world?
Growing up in Venezuela, my wife and I are both from there.
Venezuela had some of the most amazing artists in the world.
when we were kids. So in the fifties and sixties
Venezuela had the highest GDP per capita in the world. It was Saudi Arabia.
before we were even born, but
And the Venezuelan artists were leading some of the best art movements
Worldwide.
Um
It was
present everywhere.
In the universities.
Індешопін центр інде місіюм з юсо.
Everywhere.
See.
Modern beautiful
artists and their concepts.
And
When we started on this journey, she's the one that
got us back to that journey together in the last number of years.
But then during the two thousand and twenty two downturn.
When things started to cool down a bit and we had more bandwidth and I had more free time.
I had missed
Completely the NFT craziness of the first
Vintage of nineteen to twenty completely missed it. Like we were so busy with other stuff. I
Hadn't seen anything. I was like what are these things? People are trading this
Tokens, I feel like it was like game stuff, kinda meme stuff.
But then in two thousand and twenty two.
stumble upon as I had even more free time.
And
RP.
That suddenly looked like something from the nineteen fifties.
That we knew.
But it was completely different. It was the same, but it was different. It was dynamic, it moved. It was the same kind of concept. And we was like
What is this?
This looks like real this doesn't look like a meme.
Mania. This looks like something completely different.
We went down that rabbit hole.
And then
Said.
What are the crypto banks? Um
Oh wow, there's only ten thousand of them and they're the first ever
generative art ever put on chain and what does it mean and
The community of crypto banks.
It's stronger than
Any other community.
Literally.
I think it's even stronger than the community of people that own a Ferrari around the world.
On how they speak, how they relate, how they identify themselves. These are truly aspects that I have not seen.
You're seeing network states. A lot of talk about network states.
There are network states getting built around some of these movements.
And you can see their movements now. They're not just one artist doing one thing.
So
We slowly started to
get into this. And then we started to meet these artists. And guess what?
These artists are
the most amazing people to go hang out with.
There's no
prima donnas there's no language I gotta maintain or way of speaking that I gotta say about
The uh or some of the
Genuinely
People that were
Artists of their lives, so they have to study computer science because they had to get a job and they could never express themselves and suddenly they can. So
You just go you meet people, or you go meet some Sprat, or you go meet the MP Cos, which is a piece that you liked here, or
Scott from the Dream Machine.
And there are just
amazing human beings and artists. And you can see what art looked like in Paris in the nineteen twenties when they gathered all their coffees and
It felt like going back to a Bitcoin conference in 2013 when the first people were starting it. It's just
That kind of energy that you cannot see.
And then
My wife and I start to look at
The museums of today, the Mommar and others.
Um
They feel
Like bank branches.
Feel.
Like why would you go to a band branch anymore?
Really? A teller? A window? What is this?
And the museums feel like that they're white.
They're sterile.
They have these big walls with one piece of art and a little plaque that you gotta
Just bend over and read.
Or you listen on your headphones.
The two things you can do is either take a photo
Good luck. Seeing it again on your phone, you will never again
See it on your phone.
Or take a selfie of yourself and there's no immersive, there's no ownership.
How would it feel if you go to a digital art museum?
That is.
Born to be digital.
With physical.
But the walls are digital.
There's physical in the middle, you're immersed
In the peace.
In the way it was built, in the story that I was trying to say. It w talks to you, it lives to you.
And you can tap somewhere and leave with some
A piece of that how will that feel?
in your story in your life.
It definitely feels a lot more richer talking back to where people are heading.
And so
That to me is a proxy of where the world is going.
On everything.
And art is just
I hate.
But that's how we're gonna feel about a a lot of our things. And
All the podcasts that you've done around
IoT, AI engines, and where money's flowing and how people are investing, all those things will show in this
Things in the next couple of decades.
I wanna ask a little bit more about what you said earlier that this deep dream and passion of yours
Is it every time money gets better, the world gets better?
Can you just say a little bit more about
the dimensions of that that you've learned.
What are the mechanics of that? Like why is that
True. Why is that the foundational belief?
'Cause I also want to ask a little bit more again about this grid.
Of which money is a part.
and the way the world is shifting around.
But what's behind this foundational observation of yours that if you improve money, everything else improves.
Why is that necessarily true?
Because if you're sitting in
Karachi or Bangalore or London or Caracas or Riad.
And all of us have access to investing our money in the same product.
The level of transparency on opportunities
Oh, investing are unique.
Why does a customer only need to be at a private bank?
Super high end to get the best products.
So if you can save the same way anywhere in the world, and that's the promise of crypto.
In many ways, the crypto rails, the grid
giving you access to the same product anywhere in the world, then people will have
Bitter.
Risk.
return adjusted income.
Which will probably allow them to buy a better home or get their kids to go to a better college or
Pay for tuition or have less debt.
And the same on the dead side.
If you have to take a loan to expand yourself, to bet on yourself, to buy a car because you need to get a better job so you can drive there, or
Buy a home closer to whatever whatever kind of loan.
You wanna make sure
They're not paying
high out of market rates. You want to make sure
They're not thinking about getting their knees
Broken with a bat.
Because they can not pay.
the talk on their neighborhood, but they're getting it from somewhere
institutional that has a process, an underwriting, a credit score system.
A discipline of
Losses and gains.
That's why money
Makes life better.
When you can access those things because suddenly
If you can barely get a loan to pay for unto the next payroll, but now you can get a loan to buy
A car, a mortgage.
Or build your own company.
It will make life better.
If you think back on Rivet's whole history, the firm, let's pretend that you had to go start Rivet two point oh.
For whatever reason.
Rivet disappears. You gotta start Rivet two.
What mistakes
From your history at Ribbet.
Would make you
Most
Prepared.
To do an even better job.
in Ribbit too.
And I'm sure these are all things that you're doing anyway, but
That's a fun thought exercise.
Wow.
I thought you had asked me really hard questions. This is hard.
Yeah.
I would say
For as much as I
Told you about concentration.
I will even be more concentrated.
Even more so.
Wow.
I try to correct that on a daily basis.
Definitely.
A lot more concentrated.
Um
The other m mistakes that are probably
Correct.
Two
I think we already are on Ruby two, so maybe Ruby three.
Yes.
It's probably
The use of our time.
The more time we spend

Founders.
And spending time with them, like really getting to know them and become trusted.
The more valuable and the more joy we have.
So
Even though I I feel really good that we have
A bunch of friends
And the best metric of that is that
Almost every founder that we've backed has later become
An LP or a an investor in our funds.
just because of that relationship, I will still double down and spend even more time with them.
Say a little bit more about the conviction one.
I think of you as a pretty concentrated investor.
Why even more?
Because the impact you can have is limited by the amount of people that you can touch.
And the more
Concentrated you are there, the more impact you can have.
And the more present you can be.
And I think
For example, if we do a good job on understanding the grid
And we do thesis driven work on what needs to happen there. How do we solve identity first and how do we do this? And we find
The one or two or three things that matter the most on i identity.
We should do that and not do anything else.
And then think about the second chapter of the grid and then do the same.
But you don't have to do fifty things to express that opinion. And I think that's where it gets diluted.
It's not us.
But I will even do less.
What unexpected plot twist.
In the story turned out to be a great blessing.
Oh my God. So many
For example, two thousand and twenty two.
When everything started to blow up.
The attention to this space died two thousand and twenty to twenty two was probably five years condensed into two.
Because of Covid and lockdowns did so much to this space.
That accelerated everything.
If we hadn't had
Air to breathe then.
And to take time to think.
We will have made a hundred mistakes.
So the plot of actually the market
Slowing down dramatically.
was one of the best blessings we had because we saw
That thing they was dying.
And if we hadn't stopped
We wouldn't have seen it.
We will have missed it.
And make a lot of mistakes.
So you have to bless
market cycles when they give you time to think.
And embrace it as a moment to think versus trying to say, Oh, the momentum is gone.
I remember a conversation we had then, I think it was the first time we ever met.
And you said I'm not an investor right now, I'm a risk manager.
And it's such an interesting time that was the beginning of now of this new foundation that you're building on.
So cool to think back on.
What makes you emotional?
In all of this.
In a good way or bad way? I'm curious about both.
In a bad way.
It's when somebody lies.
I have no room for lying.
Of any kind.
My way of being, the way we're at home.
We've our kids, we embrace mistakes.
We embrace
Multiple mistakes.
But never lying.
Line is a one.
scene that really just gets me emotional.
I always start by trusting everybody a hundred percent.
And all you can do is lose the trust.
Three polygons
are the opposite. They give zero trust and as they get to know you, you get to a hundred percent or maybe fifty percent.
I always start at a hundred.
And that part emotionally drains me.
Takes away my energy when there's line.
What gives me energy and where do I get emotional?
Is when I see people around me having joy.
When you see that they're doing what they're meant to be doing.
when you see that they wake up and they are asking and they're learning and they're interacting and they're building what they wanna build.
That gives me joy. And the younger they are, the more joy I get.
We had an interview on the platform with Steve Young, the quarterback recently.
And he talked about this part of his life when he realized that he was part of the forty niners at the time, which was
the first place he called it a platform he had ever been.
That allowed him to experiment with how good he could be.
And that supported him in that?
And taught him agency.
Which is basically what you're saying now.
How do you do that?
What are the literal things you do to create the environment for the young people here?
to have that experience of agency and what it might be like to find the thing they're meant to do.
What are the things you do to promote that?
I incentivise all of them to try different stuff and try different experiments and go meet different people.
we incentivise them to
Go
Deep in an area.
of any kind of area that they want to go.
As long as they come back and share the knowledge. And if they can articulate it then they're learning.
The other thing you do is
You put'em in positions

to experience that. Most people
Are afraid of sending somebody
who's twenty five or twenty six to a meeting because
They're afraid what they're gonna say.
You cannot be afraid. You gotta do it. And if they make a mistake
Own it.
Just as a teaching moment.
So we've had
many teaching moments. We had great stories here.
Of all kinds. We had great outcomes, but we had teaching moments.
And we always talk about the T Choments, and we have a wall.
With all of the moments.
That are like that.
Where we stick these things.
And we leave'em
In prosperity so people learn from it. That's a great story Nick is gonna love me to say.
We started, he had this passion for this idea of this business in the early days, and we were just starting and he was so convinced and he was enamored. He put so much time, he gave him a million dollar check to this company to start and do all these things.
And I was never committed.
From day one.
And I don't know. It's not about being right or wrong, it was just but you let them do. You risk management is
Can we afford that kind of bed? The answer is yes, that's a teaching moment. We'll see what it brings.
Long story short.
The company that's ended up working and we get a check back for ninety three cents.

So we never catch the check, but we frame the check. And it's framing this wall as a reminder of a story that works like that. It's not dissimilar than
Bush Hathaway, keeping the name of the two companies that he took bankrupt because
That was his first business. It's just reminders of who you are like that.
And so we embrace a lot of those.
What has you just most generally
Interested and excited about the world today.
You see so many parts of it.
You're thinking big about
These changes.
Forced to zoom in on something.
What gets you the most excited?
I feel
that there's so much still to be done in build that I get excited in so many different directions.
But more importantly, Otto, you
It's when you travel the world.
It's what gets you more excited. When you spend time
And you meet people anywhere in the world, on any country, on any situation, on on a vacation.
On a work trip on an airport, and you just meet
These people.
All of them trying to build ninety nine percent of people in the world are good people.
And you get to meet them.
And you see their energy and you get energized by that. I mean, I end up travelling a time.
Not because I like
to get out of here of Silicon Valley, but actually
Because the world is much bigger than Silicon Valley.
And I get a lot more energy from outside that I bring back here when I'm home with my family, with my kids and at work.
Um
That is what gets me excited when I meet these young people.
I was uh
the crypto conference in Singapore a couple of weeks ago was my first time in a conference in ten years. I've never been to one in ten years.
You know what got me excited? I heard over thirty five languages being spoken in the booth.
I counted them. That was so energizing. It's just a reminder that this is much bigger than one tends to th than Gary Gensler, for example. Yeah. It's just a those things get me really excited. You mentioned earlier that
A call you always get is when something's breaking, when there's a crisis.
Why? What is your method?
You get a call right after this and something's gone horribly wrong.
What do you do? How do you respond?

So
I'll probably say, Okay. All right, let's go figure this one out. So we just start the conversation, right?
And it always goes by asking a few questions, clarifying questions.
And then it goes to this path that says hey, what do you thought about your options?
And double click on those a little bit. And typically they know the answer.
They just haven't
thought through it. So y where I have the most joy when I get those challenge calls.
Is that
I can really help them figure out the first decision they need to make.
Not all of them, just the first.
And the most immediate one.
And when that happens, they can unlock the rest.
But sometimes they're stuck in making just the first simple decision.
And it's not simple, but it in many ways it's always
He's from the outside.
I'm realizing that so much about you and this story.
Almost everything is about movement.
And change.
obviously growth is like good movement or something.
Even the art.
Everything
Moves.
Nothing stands still.
Do you think that's a fair summary of you?
Listen, I can swim in a river
I can swim in an ocean. I cannot swim in a pool.
Or a hot top.
Or sit on one. It doesn't move. Everything
That I enjoy has to have movement. I walk every day. Nothing is static.
It's amazing.
It's very cool. Good catch.
If I had to give you a napkin here in closing.
You get one napkin.
Two
Leave behind. You have to leave Rivet for two years.
Or something. You're still a part of it, but you have to disappear for two years.
And all you can leave behind for your team is one napkin.
What do you write on it?
Wow. I will ride.
Never forget where we came from.
Always remember
Less decisions is best.
Um
Be genuine to yourself and to everybody around you.
I'm sure they will do great.
I wanna ask you about Rick Elias and then I'll ask you my traditional closing question.
Rick's one of the most unique
And generous people that
I've encountered in
Many years.
I know you know him
Much better than I do.
What have you learned from him?
Oh my God. We can do a whole podcast just on this. First, the world was not ready
To see Rick live.
this planet and that's why that US air flight
amongst other people had a reason to survive.
What he brings in terms of
value systems in terms of motivating
Everybody around him. What he brings in his energy.
And he's
charisma to always say what he thinks no matter the consequences it's quite
Spectacular to watch. And he's only getting better as the years go by.
I think
What
Taught me the best.
is to live a life full of joy.
on how he can do it at all different levels. He's older than me, so I can always look up and see what it looks like in the different faces.
I've learned how to manage the different cycles as one gets older.
But more importantly.
Not to forget where you came from.
And you can see the full loop on him now.
Embracing even more
His roots to Puerto Rico.
And I think that full life cycle
Office.
Family
His work, his community.
His inner perspective.
And his roots it's very unique to see.
Beautiful.
Anything about Rivet that we haven't covered?
Or just like your philosophy of the world and how you operate.
That you think is really important.
For me
For what this means.
Is
Are we gonna be around in five years or ten years? The answer is I don't know.
Are we gonna be doing what we do today or something completely different? The answer is I don't know.
Will we ever race a farm again?
I don't even know.
What I know
Yeah.
When you put
A group of people together that are passionate
About
Meeting others.
And engaging.
And learning.
And the inputs into the machine.
Are
Things that will make the world better.
The output on the other side is magical.
Beautiful soul of the business.
My closing question for everyone's the same.
What is the kindest thing that anyone's ever done for you?
My father who passed away a long time ago.
When I was sixteen years old.
I remember after
Being
In high school.
Sitting in the couch.
Watching T V at four PM and he looks at me and said
You don't deserve to be in this couch.
You should be active.
You should be doing something because the world has
Big ambitions for you.
And that was it. And he turned around and left.
I started working the next day.
I won't apply for a job.
And started working.
I've never stopped.
And he was right.
That message, that moment, a dar each.
At that particular day was what I needed to hear.
to get the confidence to get up and start.
Mm.
Something in him knew that it was there and I was just not willing to initiate it.
The lesson that I've taken from getting to know you and Ribbit
And the way you guys approach
the business world. You are investors. You are deploying capital.
You've done a very good job of it.
is the generative nature with which you do it.
That
Yes, you're capitalists and you're trying to do well.
But the way that you've done it is this creative generative
backing people who want to create new things and try new things in the world.
I think that's an amazing lesson for all of us. And I know you don't do this very much or ever.
And so I'm really appreciative of the example that you guys have set. It's definitely impacted me in a major way.
And I hope you know that it's done that for lots, not just founders, but other investors too. So thank you so much for your time.
Thank you, Patrick, and what I've learned from this time together with you.
Is that you have this amazing gift.
To know
How to get to know people.
And you have this amazing gift to look.
uh beyond what most people see.
So
Stupid.
Do whatever you're doing because
I think the best of Patrick is yet to come.
I appreciate that and that won't be a problem. Thanks, Mickey.

If you enjoyed this episode, check out Join Colossus.com.
There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning.
You can also sign up for our newsletter, Colossus Weekly, where we condense episodes to the big ideas, quotations, and more, as well as share the best content we find on the internet every week.