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FOUNDERS & FRIENDS PODCAST

With Scott Orn

A Startup Podcast by Kruze Consulting

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Scott Orn

Scott Orn, CFA

Ben Verschuere, Co-Founder and CIO of Treasure FI, talks about how startups can use Treasure FI's cash management platform to reduce risk and increase yields

Posted on: 03/12/2023

Benjamin Verschuere

Benjamin Verschuere

Co-Founder and CIO - Treasure FI


Benjamin Verschuere of Treasure FI - Podcast Summary

With interest rates increasing, founders need ways to safely improve yields on cash. Ben Verschuere, Co-Founder and CIO of Treasure FI, talks about how startups can use this cash management platform to reduce risk and increase yields.

Benjamin Verschuere of Treasure FI - Podcast Transcript

Scott: Welcome to Founders and Friends Podcast. Before we get to our guest, special shout out to Kruze Consulting.  We do all your startup accounting, startup taxes, and tons of consulting. We’re whatever comes up like financial models, budget to actuals, maybe some state registration, sales tax, VC due diligence support. Whatever comes up for your company, we’re there for you. 750 clients strong now $10 billion in capital raises by our clients, I can’t believe it. $2 billion this year. It’s been a crazy awesome year. So, check us out at kruzeconsulting.com and now onto our guest.
Singer: (Singing). It’s Kruze Consulting. Founders and Friends with your host, Scotty Orn.
Scott: Welcome to Founders and Friends Podcast with Scott Orn at Kruze Consulting. Today my very special guest is Ben Verschuere of Treasure FI. Welcome, Ben.
Benjamin: Thanks, Scott. Pleasure to be here. Super excited to talk to you.
Scott: I’m fired up. We’re talking to a badass fixed income expert, and you can tell everyone what Treasure Fi does, but just I feel like, I have a CFA and you’re like 10 levels above me in knowledge and experiences. I’m excited for the Kruze client base and community to hear you talk about how to manage their cash.
Benjamin: Happy to spread the knowledge. Hopefully the people listening can take a little bit of information and find it super useful. So, happy to spread the knowledge.
Scott: I think they will. Well, maybe you can start off just by telling everyone how you had the idea for Treasure Fi and how you got going?
Benjamin: Yeah. So, Treasure Fi in a nutshells cash management platform build for businesses and then to go back to your question, so my career started I know 15 years ago in the bank industry at Morgan Stanley on their fixed income trading floor in London. After that I had the chance and printed to move to the US, moved to California, worked for probably one of the best micro-hedge fund led by Peter Thiel. Worked there for 10 years together with Peter, managing large portfolio of fixed income securities. And when I was there, I had a pretty cool vantage point about what was happening in the finance industry. And then, on one side you had sophisticated player, for example, hedge fund being able to employ and deploy super complex and optimized strategies. And next to that you had very, very little opportunity for even at the corporate level and for businesses. And that dichotomy always stood out for me. And then, that’s basically what made me think about basically trying to build something which is as strong as a hedge fund and making that available for businesses. And it makes a lot of sense. I mean if you are a wealthy individual or even a bunch of your listener, you have access to some type of wealth manager. It can be a robo wealth manager, it can be an investment advisor. But then on the other side, if you’re a businesses, and actually you have a lot of resource on your balance sheet for some reason people haven’t had access to somebody who can help you grow, maintain the purchasing power of that ioCash. And that’s very much what Treasure does with a really cool investment team that we are built in house.
Scott: Yeah. I feel like they’ve taken everything in your brain and all your experience and put it into a product. It’s been productized it, we’re kind of the same way. We’ve taken everything in Vanessa Kruze’s brain-
Benjamin: Yeah.
Scott: … and productized it and it’s like for the audience, we did a call probably two months ago where we first introduced and you totally blew me away, that’s why I wanted to do the podcast. But Kruze, we use Treasure Fi like we’re on the platform, very easy to onboard. Let’s talk about this in a second, but there’s like levers you can pull. You can put your money in different places, you can be actively managed. There’s a lot of different stuff you can do and it’s kind of like, “Hey, you can do the set it and forget it and make sure it’s ultra, ultra-safe,” which I’m a big safety person.
Benjamin: Yeah.
Scott: Just I’ve had some bad experiences, auction rate securities and things like that.
Benjamin: Yeah.
Scott: And then, there’s a little bit more of a risk tolerance/active management, maybe not even riskier, just more active-
Benjamin: Yeah.
Scott: … management. And I feel like you guys have done a very good job of setting it up, making it easy for the customer. And as you said, there’s lots of companies with a lot of cash, they’ve never even experienced this kind of service, never able to talk to someone or use a product like this.
Benjamin: Yeah. I mean in this environment with rates being higher and also with the push towards businesses to become much more efficient, in my mind it’s a no-brainer to deploy treasury management strategies. The big question is how are you going to be able to do that, right. Because there is two challenge. One is on the friction side, how can you get access to really, really good cash management advice and action and then secondly, getting that cash actively managed, which makes a lot of sense-
Scott: Yeah.
Benjamin: … on our side. We’re a strong believer of not only having different type of allocation on our platform, but also have it actively managed by or co-investment team that we brought on from large pension, pension fund, large asset manager. And that is the real value add. For cash management, if you’re not actively managing it, you are missing out on lot of potential return and also potentially opening up yourself to some potential risk. So, we strongly believe in-
Scott: Yeah.
Benjamin: … active management and having the resource to do it. It’s very much what treasure provide to our customer.
Scott: Yeah. I love it. Maybe walk through the… There’s money market fund and then there’s different variations of active management.
Benjamin: Yeah.
Scott: Do you mind spending a sec, and this is all… Just so people know when you go to treasurefi.com, you do this in the walkthrough as you’re onboarding, you have choices, but maybe just kind of spell it out for people.
Benjamin: So, super easy to onboard on the platform, six minutes to onboard as you might have seen on your side.
Scott: Yeah.
Benjamin: Whenever a customer onboard, you can directly start allocating your fund. We have a different type of allocation, we have a cash allocation, we have a money market allocation that we actually manage. We track 500 different type of money market fund, constantly allocating to the best performing ones, so that if you’re CFO, you don’t need to look at the Wall Street Journal and trying to analyze where is the yield at. We also have a manage treasury allocation, same thing. We are actively managing that portfolio on behalf of the customer. Each treasury bill has different type of maturity and we’ve removed all the guesswork and very much deploy strategies to optimize that and basically generate a higher yield. And we also have a managed income allocation, which is allocating to very safe fixed income mutual fund. And on that I’m proud to say that we are last year the top 1% performer across the thousand mutual fund that we track. So, I think the-
Scott: Wow.
Benjamin: … proof is in the pudding and by basically using active management, you can massively outperform passive investment and that is to the benefit of the end user.
Scott: How is that possible because… And forgive me here, but I’ve always heard this is more stock market, not bond market, but like S&P 500, index your money kind of thing for buying stocks.
Benjamin: Yeah.
Scott: And most investment managers don’t outperform their benchmarks. How do you folks do that? Is it just savviness? Is it experience, is it information? Is it that your agile? How do you do it?
Benjamin: Yeah. Yeah. I think, it’s basically… Or experience. If you look at our investment team combined, we have 60 plus year of experience in quant investment management. So, one is experience.
Scott: Yeah.
Benjamin: Secondly is building automation around it. We are using a quant investment team, so we have signals which enable us to go to cash whenever things get a little bit more complex or being playing more offense and basically enabling, it’s the same thing as a lot of hedge fund or outperforming the market. And that’s what we provide-
Scott: Yeah.
Benjamin: … to the customer just by using us. It is the idea of active management help you outperform, minimize your risk, and also having a very strong partner next to you. So, that’s helpful.
Scott: Yeah. When did you have the idea to… Or when did this feel possible to you? Because it’s like there’s a lot of great money managers or traders or hedge fund people, but you’ve built an actual product-
Benjamin: Yeah.
Scott: … the experience. It’s tough to do. It’s almost different skill sets. When was the moment where you’re like, “Wait a second, I think we can do this.”
Benjamin: Yeah, I think the interesting thing about what strike me is that most of finance people don’t know how to build product and product people don’t know finance. And you have this weird dichotomy again, which is happening, and I think that’s creating a big open field in the market where if you know finance and you can team up with people who know product and then combine that into something which make it very, very seamless. I think with the advancement in terms of like KYC, KYB, that was a big-
Scott: Yeah.
Benjamin: … preventer for us to or for FinTech to move forward that has been automated. We have built a lot of automation also on the cash movement and also a lot of automation with custodian. So, I think what has happened in terms robo-advisor on the consumer side has been basically paving the ways from our businesses to get access-
Scott: Yeah.
Benjamin: … to those type of tools.
Scott: It’s very similar but you’re doing it for the corporate market.
Benjamin: Exactly.
Scott: And for us, we’re startup, we focus on startups at Kruze and it’s like, “We can refer you and have a lot of confidence.” That was what was interesting was when we first talked, you were actually talking about the risks and downside and because I had this formative experience in 2008, 2009, 2010-
Benjamin: Yeah.
Scott: … where I was at a Venture Capital Fund and the auction rate security market froze up and we had a couple portfolio companies that had 30 million dollars in auction rate-
Benjamin: Yeah.
Scott: … securities and the money, they couldn’t touch it for a year and those manage teams got fired, and the board was horrified and all this kind of stuff. And I remember talking to you about that and you’re like, “Yeah, safety.” What’s your philosophy on that? Safety yield? How do you do that tradeoffs?
Benjamin: Yeah. So, basically it comes, I mean, safety, liquidity and yield, right. That’s the way we tend to look at things. And again, I mean I think what you’re mentioning about that experience, I think it’s very important. And again, put emphasis on working with people with experience in the market. I mean, I studied my career before 2008. I’ve seen what happened when things go bad and I’ve learned a lot of best practices from that. So again, I think in terms of cash management, in terms of investment, you want to partner with people with deep experience in that because obviously-
Scott: Yeah.
Benjamin: … there’s a lot of money involved, and you want people with a lot of experience doing that. That is super important.
Scott: Totally agree. And for me, it’s safety and having an investment policy, something that the board has ratified that “Hey, this is how much risk we’re going to take. This is what our expectations are for return and we’re not going to deviate.” Hey, it’s Scott Orn of Kruze Consulting, taking a quick pit stop to give some of the groups at Kruze a big shout-out. First up is our tax team, amazing. They can do your federal and state income tax returns, R&D tax credits, sales tax help. Anything you need for state registrations, they do it all.They do it all and we’re so grateful for all their awesome work. Also, our finance team is doing amazing work now. They build financial models, budget actuals and help your company navigate the VC due diligence process. I guess our tax team does that too on the tax side, but the finance team is doing great work. And then, I think everyone knows our accounting team is pretty awesome, but want to give them a shout-out to. Thanks, and back to the guest. Do you intersect with the startups, their board investment policies? How do you handle that?
Benjamin: Yeah. Yeah, we can very much, and we have done that with multiple of our customer, help them frame some investment policy that their board is very comfortable with. On our side, I think the benefit is that the platform that we have built is there’s a lot of automation and then there’s also a lot of customization. So, we are able-
Scott: Yeah.
Benjamin: … to cater to a wide spread of customer or smallest customer has a $100,000 with us or largest as more than 40 million with us. So, there’s widespread and each of those customer have different type of needs and interest and we are able to cater to that one more time. Just automation, customization and doing that again in a very fully compliant way to the benefit of the customer.
Scott: It’s amazing. When you first got it going, did you have any of those super happy surprise customers? They’re like, they try you out a little bit and then they’re like, “Wait a second, this is amazing.” What are some of that feedback you got?
Benjamin: Yeah. Yeah. I think, I have a cool story about one of our customer join, sign up from our landing page. It’s super easy. You can come on the website, we don’t need to talk to any of our sales team. Open an account. And actually, they did that during their… The CFO at the one-on-one with the CEO and they were able to do it during the conversation. It’s like, “All right, directly six minutes.”
Scott: Yeah.
Benjamin: Boom on the platform, they put a little bit of money with us and then after seeing the type of returns we’re able to generate, they basically increase the amount of money by what 50X and they’re one of our happy customers now and we basically I think helped last year to add one month runway to their-
Scott: Oh my God.
Benjamin: … operation and all it took was six minutes of their time and effort to get to that.
Scott: I love it. Yeah, I did mine. I got us onboarded on a Saturday morning. I think I was embarrassingly up too early because I wake up early and I got on and I don’t know if you’re like this, but sometimes you have… It’s quiet-
Benjamin: Yeah.
Scott: And I have a kid and everything, so I was able to get some work done and I just onboarded in the morning at 6:00 AM and sure enough, we have money being managed on Treasure Fi now.
Benjamin: There you go.
Scott: I was like, “Super easy.” Also, I forget his name. I want to say it was like Scott, I can’t remember. Someone at your shop was super awesome and even, which I don’t expect, but they did respond on a Saturday with on a question and I don’t know, I believe in work-life balance and things like that, so I don’t want to make it too big of a deal. But they were really nice and responsive. It was a really good experience.
Benjamin: Yeah. I think also what we want to provide to the customer, which is impeccable customer services. I think it matter a lot. We learn a lot from our customer. We really appreciate feedback and I think ultimately, we try to help them. So, I think being in that mindset we exist because of them and helping them generate more revenue on their cash balance is not just coming from our investment team, but it’s also by providing impeccable platform and also customer service. I think it’s part of the full suite-
Scott: Yeah.
Benjamin: … of service that we provide.
Scott: Well, you know what? I also, I like about the automation and the platform is for those don’t know if we still, we’ve been doing sweeps amongst our client base because we still have clients who have it in zero interest bearing or 1% or something really suboptimal really bad.
Benjamin: Yeah.
Scott: And they just don’t know and maybe they’re not reading the emails from us or things like that. And there’s a very common misconception. If you don’t ask your bank or whoever has your cash for a higher yield or do something about it, you’re going to get nothing. You’re going to get zero or one, you have to be a little bit of the squeaky wheel. And that’s what I find so fantastic about you guys is, because for them like a bank, the cost of the interest they pay is basically a cost.
Benjamin: Yeah. It’s a cost.
Scott: It’s a very direct cost in their business. Whereas you guys have an orientation that’s completely different and are looking to supply upside because it aligns with your business.
Benjamin: Yeah.
Scott: Two different sides of the coin and I think that’s just really, really powerful. It’s like having a… I really believe in specialists and specialization and best of breed and you guys are best of breed cash management and you’re not worried about the cost of funds of higher interest rates is actually an opportunity-
Benjamin: Yeah.
Scott: … for your client base.
Benjamin: Exactly. I think, we fully aligned with our customer. We have fiduciary responsibility.
Scott: Yeah.
Benjamin: We are like an RA, we are registered with the SCC, which is very different as you mentioned, than banks. Like banks, I mean if they can basically pay as little as they can on-
Scott: Yeah.
Benjamin: … your deposit, that’s for them aware of generating more cash. Whereas on our side, we want our customer within the framework that they want to generate as much as they can on their idle cash and that’s the reason why we exist. And then, I think we are able to provide a good service. We know the customer will be very, very happy and that’s basically what we want to achieve.
Scott: And people don’t know, but the banks kind of put up some red tape, they’re very slow to respond to you. It takes when you ask for like, “Hey, what’s my yield, and where do I need to get to be market,” it’ll take you a good two weeks to be responded to easy.
Benjamin: Yeah.
Scott: Right. Whereas that’s cool about Treasure Fi is, it’s a self-serve system, so you just get on there and you can do it yourself. That’s what was happening with me. It was like 6:00 AM on a Saturday and I was kind of just sick of not really getting anywhere.
Benjamin: Yep.
Scott: And so, I was like, “I’m just going to sign up for this and get it going.”
Benjamin: Yeah.
Scott: And this amazing empowerment that the customer feels really cool.
Benjamin: I think that’s the idea of it and that’s basically why we exist is the idea of that for a business to have always their cash put to the best use, managed by the best of the brightest in the industry and making that super seamless. Like for you, being able-
Scott: Yeah.
Benjamin: … to do that on Sunday morning just before a cup of coffee, you’re up and running and you have that peace of mind that you don’t need to look after that anymore. That task is being taken care of by, and then it is being done by a very sophisticated investment team and basically using cutting edge technology enable to achieve that.
Scott: Yeah. There’s a point you made earlier, but I want to just expand on it a little bit. How you guys all have, you’re all finance market veterans and you’re building a FinTech because before we turn the camera on, you had an interesting point, which do you want… I don’t know if you remember what you said to me, do you remember?
Benjamin: Go ahead.
Scott: Basically, there’s a lot of people who are building FinTechs who actually don’t know anything about finance-
Benjamin: Yeah.
Scott: … or haven’t lived it. And I’ve seen that even with people we end up competing with who have no idea what they’re talking about, but they’re in the fake it till you make it zone.
Benjamin: Yeah.
Scott: And you’re like, “Oh god.” And sometimes it’s hard for the general startup founder or corporate person who’s going to have their money managed to tell the BS from the actual experience. And I really like that about you guys and that’s why I wanted to have you on the podcast.
Benjamin: Yeah. Yeah.
Scott: Because in a 30-minute call two months ago, I was like, “Oh my god, Ben is just a walking encyclopedia about this stuff.”
Benjamin: Yeah.
Scott: And I think that’s a real differentiator.
Benjamin: Oh, no. I absolutely agree. I think ultimately in order for us to provide great service, we need to have expertise. You need to have like that. In house, you need to have… I mean if you are providing an investment advice, I mean you need to have experience in the field. I mean otherwise whatever you’re going to say, whatever you’re going to do is useless, right. And I think the benefit of what we’re seeing is that on our side, the proof is in the pudding. We are seeing great result, as I mentioned, we’re top 1% performer last year in some of our location and that is the type of firepower that we provide to the end users. So, using people with expertise, experience in the field, in my mind it is a no-brainer, especially when we deal with large amount of money.
Scott: It just drives me crazy because the figety make people are not aligned with our customers, especially in these kinds of markets where things get choppy or tough and all of a sudden they make some mistakes and they impact the customers and they don’t care, they don’t bear the cost. It’s more like the customers bear the cost. So, anyways, I just find that super refreshing and I love what you guys are doing. Well, I should probably let you go. I mean this is phenomenal and I really recommend people check out Treasure Fi. Do you want to tell everyone where they can find you and how to work with you?
Benjamin: Yeah, happy to do. So, it’s super easy. You can log on treasure.tech, that’s super easy to finance you can. If you want, you can book a demo or if you want you can even sign up online as I mentioned, six minutes to open an account and move money in and sort generating a high yield on your idle cash. And we’ll be more than happy to basically turn your finance department into a real revenue generator, helping you extend your runway, hire more people, spend more on marketing. That is like what we have seen from what our customer able to achieve by using us.
Scott: I love it. And keep it safe.
Benjamin: Exactly. Yeah.
Scott: That’s my number one thing. I always tell Founders, the VCs didn’t give them money. It’s for them to run a hedge fund. They want them to make the money safe and make it grow in a conservative way. And you guys can do that for the startup founders. It was really amazing and with all your experience you’re in good hands, which is really, really cool. So, Ben, thank you so much and give my best to the Treasure Fi team, and thanks for being a great partner.
Benjamin: Scott, it was great to talk to you.
Scott: All right, buddy. Take care. Bye.
Benjamin: Bye.
Singer: (Singing) It’s Kruze Consulting. Founders and Friends with your host, Scotty Orn.

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