This week on the Building Interest Podcast, we are joined by Vitaliy Schafer, Director of Startup, Technology, and Venture Capital Banking at Leader Bank, and Aaron Beydoun, who holds several leadership positions within Greater Boston’s innovation and technology landscape, to understand their entrepreneurial journeys and the challenges they have overcome as leaders within the Technology, Startup, and VC world. 

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Episode Transcript

Greg Farber: 
Welcome to the Building Interest Podcast presented by Leader Bank. In season two of our podcast, we've been exploring what it means to be a leader through conversations with leaders from within the communities we serve, as well as from across the world of banking and technology. Each conversation focuses on our guests personal leadership journey, while providing insights on what it means to be a good leader. In our last episode, we were joined by Jess Mader, Human Resources Operations Manager here at Leader Bank, and talks about his experience learnings as a leader, the importance of corporate transparency, and how building trust within a corporate culture has evolved over the years. Today, we are joined by Vitaliy Schaffer, Director of Startup Technology and Venture Capital Banking at Leader Bank, and Aaron Beydoun Who holds several leadership positions within Greater Boston's innovation and technology landscape, to understand their entrepreneurial journeys and the challenges they've overcome as leaders within the technology startup and VC world. Welcome.

Aaron Beydoun:
Thank you. Welcome,

Greg Farber: 
Gentlemen. Thanks for being here today.

Vitaliy Schafer: 
Good to be here.

Greg Farber: 
It's funny we were we were kind of chatting before the episode started how sometimes there's a certain report and things and usually when we do this, I at least have some report on on on the guest. Or for that matter, I'll go and I'll do some research. And I'll find out what makes them tick. And I and I kind of hit a wall with the two of you. And I would love for you to introduce yourselves, give your background a little bit and just talk about who you are and what your roles are today. So we have a foundation to kind of go from. Vitaliy if you want to start.

Vitaliy Schafer: 
Thank you for having us, Greg. I'm Vitaly Shaffer, I'm the director of like, you mentioned Startup Tech VC here.

Greg Farber:   
Which is a brand-new role

Vitaliy Schafer: 
Brand new role three months ago, we started it. My journey has been in various fields. Prior to coming here to Leader. Funnily enough, I was hired when I was 19, which was I want to say their youngest hire ever. And I think that they never hired any other. Anybody else that age since.

Greg Farber: 
And this was already in like a VC startup type role?

Vitaliy Schafer: 
I was a digital specialist back then. So in that role, I went to companies, businesses, basically their their corporate offices, met with the CEO, CFOs help them with corporate align treasury management, work one on one with these leaders. After a couple years, the private banking team that primarily focuses on alternative investments, basically told me to come join them and work with them, because I already have this experience working with their clients. So basically, right after I graduated college, I got into the world of tech and VC. And it's been like that for almost the last 10 years.

Greg Farber: 
How about you, Aaron?

Aaron Beydoun:
My journey was a little different. So I actually started the first half of my career, I worked in agriculture, which is probably one of the least innovative industries in the world. In fact, I think it was agriculture that initially catalyzed the creation of the world's first banks in the first place.

Greg Farber: 
I was gonna say there is some innovation in agriculture, just maybe not in the last couple 1000 years.

Aaron Beydoun:
That's probably right. And depending on when, you know, you consider history started, these are the Mesopotamia or Italy, but the point is, yes, agriculture actually catalyzed banking. So those are probably two of the oldest industries in the world. And so that's where my career started. And I've been working in digital ag and digital technologies and breakthrough technologies, depending on you want to frame it for the last 12 years, in different roles. And on different sides of the equation, if you will, on the founder side, on the entrepreneurial side, on the investment side, etc.

Greg Farber: 
So I feel like I'm already gonna get right off course here. Digital ag. I when I think agriculture, of course, yes, there are machines, I think tilling the earth and planting seeds and things like that, what is digital ag?

Aaron Beydoun: 
Yeah, digital ag is a loaded term as loaded as Foodtech or ACTEC. I would say digital ag and the way I'm defining in a more generic or broad sense of the word could be anything from computational genomics. So from the genomics, so from the agricultural side, from that side, on the genetic side to anything using things like AI, machine learning, computer vision, etc, a lot of imagery, satellite imagery, etc.

Greg Farber: 
Automation.

Aaron Beydoun: 
For automation, or for understanding crop health, crop yields, etc. And everything in between.

Greg Farber: 
And how did you become interested in that as a line of business?

Aaron Beydoun: 
Oh, well, as I mentioned, so I was, I was a commodities trader, actually, for the first part of my career. So very traditional, very conservative, family owned businesses that have been around for two, three hundred years. And the epitome of tradition, let me just say it that way, where one plus one equals two, and it's a very, very, I mean, they call them basic commodities or raw commodities. I mean, this is really the building blocks of commerce, if you will. And precisely because there was such little innovation. I translated my domain expertise instead of, you know, men having the benefit of being in a city like Boston being educated in a city like Boston, which is on the other side of the spectrum. I like to bring the two together that's bridging that gap. So

Greg Farber: 
how does the guy from the venture capital world meet a guy from the digital agriculture world?

Vitaliy Schafer: 
Great question. We met actually about six years ago. Initially, we just opened a checking account for Aaron, as a lot of banking relationships start, right? But my always goal was to just build deeper relationships with clients. It was I never wanted to be a traditional transactional banker where you come in, we do a transaction, and then you leave, and maybe we'll never see you again. My kind of focus in getting into this whole space was to build long lasting relationships, where we can work with the portfolio companies, you know, for example, from venture capital firms, help them from the beginning to IPO. Right. That's the goal. At the time when I met Aaron, and I was a private banker in our first republic office, so we started with a checking account back then. And then over time, Aaron needed a mortgage. We helped with the mortgage help with a his personal line of credit.

Aaron Beydoun:
My wife who's...

Vitaliy Schafer: 
Yes.

Aaron Beydoun:
From overseas, helping her open a bank account aswell.

Vitaliy Schafer: 
Trust accounts, nonprofit for you.

Aaron Beydoun:
Yeah.

Vitaliy Schafer: 
So this, everything we do is seamless, right? So we know our clients very well. I mean, I've known Aaron very well, for many years. And that's just the premise of building a long lasting relationship.

Greg Farber:   
Now has this relationship morphed to where you genuinely work together now, as opposed to obviously, you have sort of the client and the bank relationship? Initially?

Aaron Beydoun:
Initially, what do you mean?

Greg Farber:   
Well, now you guys actually work on projects together?

Aaron Beydoun: 
As Vitaliy mentioned, we've had a relationship that has developed organically over many years. It's a family relationship as well. Now my wife also knows Vitaly, quite well. And that relationship has kind of morphed now into this role that now Vitaliy is in, by virtue of I'm also plugged in and working in across the startup ecosystem, if you will, here in Boston. And so naturally, there's, there was a natural fit and a natural way to collaborate. So we've always collaborated personally or professionally, but now also, I would say professionally as well.

Greg Farber:   
So let's back up a little bit, maybe for the listeners, what does that mean, a startup or venture capital? Like, very basic terms? What kind of an entity says, I'm a startup and I need capital? How does that work?

Vitaliy Schafer: 
There's so many I feel like aspects of this. I think the traditional definition is somebody that has a disruptive idea that can enter a market and make money. I think that by definition is sounds about a startup, right. A lot of startups, I would say, biggest majority, somebody just has a really great idea. But they don't know how to put pen to paper. That is the biggest challenge for startups. And I think Boston is a very particular place for this because you have so many great engineers, scientists, mathematicians, from, you know, MIT, Harvard, all the universities here. But they don't know how to run a business. They don't know how to talk to investors, they don't know how to pitch their idea. They don't know how to scale. So what Aaron also and I have been working on is just tried to come up with ideas and different ways to basically engage these startups right to help them scale, help them grow. Because as a bank, that I feel like the role of a bank has kind of moved along with time it needs to evolve. For a bank to be successful, you have to have beyond banking, resources and solutions.

Greg Farber:   
Well, that was kind of going to be my next question, right? I mean, people may wonder why this is a bank podcast. Why do we care about startups? We brought you in, we were excited to bring in someone for startup and VC. And but why would a bank care about a startup. And ironically enough Leader Bank in a way is its own startup, we have an entrepreneurial startup mentality, we are a company that's barely over 20 years old, we've had to navigate some of those same challenges that other companies do when they first are starting out. And in some ways that may have uniquely positioned us to help and understand some of those. So what role does a bank play in your space? What What purpose does the bank serve when you're trying to help a company get started?

Aaron Beydoun:
Personally, you know, I guess I would say from the entrepreneur side, the startup side. For me, it's, you know, I think, being in an innovation center, like Boston, which is one of the most innovative places in the world, a lot of interesting technologies, breakthrough technologies, if you will, are being incubated here in Boston, as well. So a lot of the foundational science, the entrepreneurs, VIP, in fact, is here in Boston. So I do think it's a natural fit for a bank like leader, and just banks in general to be here. Why? Because ultimately, you need to match these ideas, these ventures with capital and pools of capital. And I think that wall in between pools of capital and pools of ideas is a natural fit for a bank to play that role. And in terms of what happens around that in terms of not just being transactional, I think is it kind of your point. I think it's, you know, what founders are looking for, I can speak from that perspective and what's you know, entrepreneurs are looking for is guidance as well. So I'll say something provocative. I probably wouldn't say this at any other bank, but I'll say it here. You know, one of the pioneers of this innovation economy that we're in today, the founder of Microsoft said, one time in the 90s said, "We'll always need we need banking, But I'm not sure if we need banks." And I think he said that in the context of, and I'm paraphrasing, by the way, I think he said in the context of the traditional bank and the traditional services offered by a bank. But I do think there needs to be a rethink and a reset in terms of the types of services and all the analogs around that service that are provided to entrepreneurs. I think people like Vitaliy understand that they appreciate that. And they understand the nuances that it's not just transactional, there's a lot more around it to enabling, enabling, and catalyzing all these investments.

Greg Farber: 
Yeah, I mean, I agree financial innovation is a big part of kind of adapting to the current landscape, we actually have two folks at Leader whose specific title is Bank Innovation. But I guess, right at the core of it, people think banking, they think conservative, low risk, people think startup they think high risk, how do you bridge that gap? Is there is there a way that you get through that sort of that trust barrier? How does how does a company that has a brilliant idea, that's perhaps just as likely to fail as succeed? Convince a bank that, hey, this is the right place, that there's some stability, there's some financial future here.

Vitaliy Schafer: 
I think everybody needs a bank. First of all, if you're a startup or not, if you're an individual, you need a bank. I think the difference is startups are now going to be looking for a bank that helps them support their mission helps them make connections in the industry. Because if you think about traditionally, right, startups will go to let's say, like an incubator, but that one incubator might not be the right fit for them. Or this accelerator might not be the right fit, or how do they even get introduced to these accelerators or incubators. So a bank is a good intermediary, in a way, kind of like a broker, but we're not really getting a mean, financially, you know, we're not charging them for the service. It's more of like we're helping support them. And give them the resources, not charge them exorbitant fees. Basically, it'd be a friendly bank to help them grow. Right. That's, I think, what startups are looking for, I mean, from our perspective, in the last three months, I mean, just kind of telling you being in a nimble bank is very different from the world I came in where it was very large, there was a lot of red tape, a lot of different kind of people, you have to go through to get something done. Yeah. Smaller bank like Leader, I mean, just being here three months, we've been able to turn around a lot of new projects. Because at the end of the day, we have to continue to innovate, we have to continue to evolve. We can't just stick to the traditional, you know, bank-think where clients are just gonna come to us, we just provide them an account. And that's the end of the relationship.

Greg Farber:   
I do want to come back to something you said a moment ago use the word nimble. But I was curious to hear Aaron from you also, do you have a different perspective or approach to the trust factor here? Perhaps even seeing it from not the bankers side? But maybe seeing it from the actual company side? How do you get how do you get in the door with a bank?

Aaron Beydoun:
Yeah, I think you know, it's interesting, I guess I'll answer in two parts, I think, or at least one and a half parts. If I could say that. The first part is, you know, I think it alludes to what Vitaliy talked about, initially, just our personal experience, getting to know each other, I think, meeting founders and meeting entrepreneurs where they are. And being a part of that journey is really, really important.

Greg Farber: 
If you can randomly meet, so can other people who make the connections, and then can build a relationship,

Aaron Beydoun:
But building the relationship most importantly, because there are a lot of beings out there. And there's a lot of entrepreneurs out there. And the thing that people don't say, but it is statistically a fact most startups fail. Overwhelming majority of them.

Greg Farber: 
That's what I mean, banks want to be conservative and startups are risky. But you have to somehow balance the two or you're not going to be able to bank a startup.

Aaron Beydoun:
Yeah. And I think part of the reason or part of the challenge slash opportunity is is actually understanding the inherent risks behind some of these startups that I don't think a lot of banks actually understand. And so that's why they usually refer back to let's keep a very basic transactional relationship. Well, you know, it'd be very linear, and we'll do it now. And, you know, we don't I don't want to we're not that vested in terms of what your journey is. And likewise, it's the opposite. I don't, I don't think there's enough understanding on both sides of the equation of each other's businesses, and the incentives on both sides of the things. You know, risk is a broad term. And there's a lot of different types of risks inherent in a startup.

Greg Farber: 
So being transparent in that, and not just falling in with the first bank that you meet, or falling for a flashy PowerPoint presentation of a business idea both ways, but digging underneath that what both sides really need to flourish. Yeah.

Aaron Beydoun:
Because you know, when you think about being risk adverse, and I think sometimes we look at risk and innovation kind of against each other counterintuitive, and I don't think that's necessarily the case. Personally, from my perspective, again, just from the perspective of somebody on the startup side or inside these companies, I think, you know, again, to kind of alluding to what Vitaliy was talking about, when we say the word risk, is a total failure risk is a regulatory risk. Is it operational? Is it technical, and there's so much inherent risks are different types of risks in these different startups, depending on the different technology areas that they're focused on, that I don't think most banks actually understand. And I think that's where the the gap is. And vice versa. By the way, I don't think a lot of the startups actually understand what banks can offer them, or is it just transactional? And I think what you guys are trying to do at leader, it's not just transactional, we're trying to build that support system around it. And I think that's where you have a very interesting combination.

Greg Farber:   
In a word, is that what you meant by nimble?

Vitaliy Schafer: 
Yes, getting things done coming up with ideas to help startups that you know, maybe traditional banks aren't doing?

Greg Farber: 
Is there an example you without saying names? Or is there an example you were able to give where? No, you didn't just give them a checking account and walked away. But but something creative, something innovative?

Vitaliy Schafer: 
Absolutely. I mean, just to kind of give you an example, we're launching a partnership in January with a startup community, in a way an incubator, where startups that we meet, they all have challenges, you know, whether it's challenge or their pitch, or maybe their IP, or even finding a good CPA. So we want to give by partnering with this company, you know, we're given them basically free strategy to help them grow, something that typical banks will not do. So having those partnerships, and then also looking for those, obviously, cutting edge technology startups, right. They are the ones that already have a brilliant team, they have commitments made, I mean, I'll give you a great example. I'm working with one right now they have 1000s of hospitals that are committed, including the military, however, they're just having trouble finding VC funding. So I've been going out there and contacting VCs for them to essentially for them to be able to pitch. But to get to the point where they're pitching to these startups sorry, to these VCs. You have to have them refine their financial model, refine their pitch, make sure they have the IPs in place, before any VC is going to look at them seriously.

Greg Farber: 
Is there a typical timeline from kind of when a startup might first realize, okay, we need money, this is an idea that's viable, too, when they can actually have a functioning business.

Vitaliy Schafer: 
I mean, I'll kind of defer to you. But I think it's depends completely.

Greg Farber: 
It's years, not months, right?

Aaron Beydoun:
I think it depends on the industry. I mean, starting there, I think it depends on the industry depends on the type of foundational technology that they're actually using, if it is technology, not services as an example, or there could be technology below those, beneath those services. But I think you know, if you think about biotech as an example, we're here in the seaport of biotech companies, biotech is inherently much longer timelines as an example. And the other thing is, I think, oftentimes with entrepreneurs, so I do some advisory work with some of the local universities here. And so I get matched with a lot of scientific entrepreneurs, or, you know, different universities have different types of venture incubation or grant funding mechanisms. Let's just say it that way generically. And so I meet with entrepreneurs, I meet with scientists, oftentimes, and I think another challenge sometimes is a lot of scientists or entrepreneurs think to have a brilliant idea. But it's not, not really, its just not. It's just not, right. And I think understanding that or, or you might have really interesting technology, but in terms of your go to market strategy might be completely wrong, we're operationally it's wrong. Or trying to understand from your banker having a trusted confidant that you can actually speak to of understanding, okay, you're not a VC investor. And so you're a bit more of an independent arbitrator. How much money should I raise? What type of capital should I be after? Is it debt? Is it equity? What should I do? What type of valuation should...

Greg Farber: 
What am I not thinking about? What expenses are there that I haven't?

Aaron Beydoun:
And is there a big big gap? And I think a huge opportunity for a bank like Leader. That's why I get excited when I talked to Vitaliy because I think that's that's the gaps that are these are some of the gaps that are there that I think a lot of entrepreneurs would benefit and by default, the whole ecosystem would benefit because you want good companies to get good quality capital as well.

Greg Farber: 
So what happens if you build these relationships and then I mean, these days change seems to happen rapid fire sometimes markets grow exponentially and then collapse suddenly.

Vitaliy Schafer: 
We were just talking actually with Aaron, how a lot of these startups and well funded companies raise so much money and they were very flashy about it online. Many millions but now they're all having down rounds and it's very difficult for for their business and they're having to close down yeah, really great companies are closing down left and right.

Aaron Beydoun: 
It's pretty bad.

Greg Farber:   
And that's because the market went away or because they didn't follow the right advice and they didn't manage their...

Aaron Beydoun: 
Do you wanna answer first? and I'll give my...

Greg Farber:   
Sounds like we might have two different answers. Go for it Vitaliy.

Vitaliy Schafer: 
Its a combination. I think there was is a big lot of money during the pandemic, especially in 2021, rates were extremely low money was very easy to come by. So these companies are raising a ton of money. And their only focus is we're just going from fund round to fund round to fund round without really thinking about generating results, creating revenue, right, right. And now when the money's dried up, and they can raise additional funds, they have no choice but to do massive layoffs or be forced to shut down.

Greg Farber: 
So why was so much more money available during the pandemic?

Aaron Beydoun:
I mean, interest rates were low.

Greg Farber: 
So it's basically just a matter of borrowing availability.

Vitaliy Schafer: 
Borrowing availability. And then I think there's a big tech boom, of course, in 2021, with everyone staying at home. Yeah. We saw a lot of software companies getting funded. I think today there is money. But if you look at who's getting funded, it's usually you know, your AI companies, or really phenomenal biotech companies with a new drug on the market. I've seen robotics companies get funded, hydrogen fuel cell, quantum computers, those kinds of industries. That is already viable today. Right. The technologies...

Greg Farber: 
But their still flashy, people get excited when they hear about it,

Aaron Beydoun:
I think. I mean, personally, I think that one of the biggest issues just more generically across different sectors. Because I totally agree with what Vitaliy just said, in terms of some of those sectors in terms of their appeal.

Greg Farber:   
You're going back to rapid changes in the market?

Aaron Beydoun:
No, I'm gonna go back to just the fact of it in terms of availability of capital, if you will, I think part of the problem right now is price discovery. How do you value some of these startups? Because the valuations are so inflated.

Greg Farber: 
How do you value a startup?

Aaron Beydoun:
And while the I think there was a less, I hate to use all the cliches, but I think it was it was Warren Buffett says something around now that the waves have passed, you realize who's been swimming naked.

Greg Farber: 
Interesting.

Aaron Beydoun:
The truth is, I think a lot of people have been swimming naked, a lot more than we expected. And I think now price discovery, and a lot of people are sitting it out a lot of funds are sitting it out and saying, okay, even if you are a great startup, and we believe in your team, and there are a lot of really good companies out there. Unfortunately, the rest of my portfolio is taking a hit. And so now I'm not I have my LPs asking us about our performance.

Greg Farber: 
So we want to see some results before we give you any more.

Aaron Beydoun:
Yeah, or let's we're gonna exactly and some others that are just sitting it out and say, hey, you know what, let's let's sit this out. And let's at this wave pass, and it's really hard. I mean, a lot of startups raise more money than they're actually worth over the last couple of years.

Greg Farber:   
Is securing financing. Let me rephrase that a different way. securing financing is a challenge for the startup. What are some of the common challenges to get to that financing? Now, you mentioned the swimming naked part. Obviously, if they've sort of been exposed as as not coming together. You mentioned earlier Vitaliy, not having sort of certain organizational principles or understanding some of the finance and accounting that goes into running a company. Are there other common sort of pitfalls that startups will fall into that hinder them from getting that financing?

Aaron Beydoun:
Yeah, I think I think if we take a step back from some of the things that we're talking about that are really, really I mean, it's a situation we're dealing with right now, I think oftentimes, startup founders are just over overly optimistic, they underestimate a lot of the risks. And when we talk about risk, going back to operational risk, can you execute, I think, one of the biggest failures of startups in general, and this is a little academic, but it's true, statistically, it's true. Oftentimes, entrepreneurs will build products and then try to find a market or build a service and then try to find a market. It's counterintuitive, and it doesn't work.

Greg Farber: 
But don't you have to believe in your product. If you want it to succeed, you shouldn't have to go in and say this is going to work, even if maybe it doesn't, right.

Aaron Beydoun:
I think you you you should but there's a healthy level. I don't want to say skepticism or naivete. But I also think you need to come and approach it not from I'm a scientist or I'm an entrepreneur, I can do this really cool thing.

Greg Farber: 
Therefore I'm brilliant, and it must work.

Aaron Beydoun:
And it could be really interesting, but nobody wants to buy it. Versus let me start with a market need and what actually somebody wants, and I'm actually solving for that. And I think some companies actually do start that way. But what they can actually produce and create afterwards is not quite there. And I think that's a problem. There's other things. I mean, from the on the biotech side, regulatory risk. That's a huge issue that a lot of people don't think about, I'm not talking about just therapeutics, but even on the agriculture said, we're talking about biotech, and there's a lot of biotech companies focused on agriculture in Boston and Cambridge. We underestimate that a lot of these technologies, face regulatory hurdles in different parts of the world. And again, we're under estimating these things. So I think there's a lot of different types of risk beneath the word risk.

Vitaliy Schafer: 
There's a great book called Lean Startups by Eric, I forget his last name, but one of his kind of main principles is startups today. The way you build a successful startup is you don't fully launch a product, right? You don't build it out completely. You do. You basically spend the minimal amount of money to try...

Aaron Beydoun:
Prototype

Vitaliy Schafer: 
Exactly yeah, to create something out there. And then you get your early adopters to come on and give you feedback. And if you're not getting any sort of traction from that? How are you going to get traction if you continue to invest thousands, millions of dollars into a product that people are just not going to use? And I think financial projections are also just overvalued, I think people think that they're going to sell a lot more than they actually do.

Aaron Beydoun:
Yeah. I think part of it is part of part of the incentive, I think behind that is capital was really, really cheap.

Greg Farber: 
So bringing this back around to leadership, you joked around a little bit, and you mentioned the the brilliant scientist who has an amazing idea that they just know is going to work. And maybe it's not that brilliant. So maybe they're not the leader. Right. So maybe they're not inherently a leader for their product. Are you to the leaders for that product? Is that is that your sort of leadership role here? What are what are you doing to? Or does the company have to have that within them? Or is there is there a quality in that startup in that company in, in the folks having that brilliant idea that embodies their leadership somehow that makes it more likely to succeed?

Vitaliy Schafer: 
I think in general, we can't give them that sort of guidance. I mean, we can help them push in the right direction, connect them with the right people. But for each industry, there is a company that's doing something similar likely to what you're doing. So talking to other owners, other strategists that have experience in this field who have success, raising funds, or going through an IPO, they're going to be better leaders for them. Right? For us, it's, we can look at the big picture, right, and say, Maybe this will work, maybe this won't work. But here it talks to these, you know, strategists who actually understand the nitty gritty of your business that can tell you what you're doing right and wrong.

Aaron Beydoun:
Yeah, I agree with that. I think part of the part of the challenge, if you will, is in terms of leadership. I think sometimes some of the traditional funding models favor functional expertise over domain expertise. And so if you've been a CEO before, we don't really care per se which industry, but if you know how to operate a company, you know, in a tech company, then you know, you can operate any tech company, or you mean people will tell you, I'm a serial entrepreneur, I think having domain expertise is critical. And I think it's underestimated. And so you have a lot of really smart people doing trying to match really innovative, exciting technologies to certain industries that they're not necessarily from. And they underestimate the nuance, they underestimate what it'll actually take to get adoption. And I've seen it over and over and over again.

Greg Farber:   
So in a vacuum, the idea sounds really appealing. But functionally, it might not fit into the industry. Operationally.

Aaron Beydoun:
I've worked in startups where they the philosophy, just put a bunch of smart people in a room and they'll figure it out. That I think was permissible, because capital is a lot cheaper. But that's I don't think that's permissible going forward. And I think going forward, it'd be a lot more, at least in the next, this next cycle, this next phase, I think, really, really good startups will come forward. I think there's a lot of really, really good investors. But I think the signal to noise like an engineering terms is so high, and it's really confusing. And so I think that's another value that people like Leader and Vitaliy can bring this clarity to a lot of these founders. And I think that's super helpful as well.

Greg Farber: 
Are there certain leadership skills that you're looking for, that you see in these these pitches that come to you that say, Oh, this, this is why I want to chase down funding and help these these folks out? Because this particular leadership quality that I've seen here has merit Nevermind the brilliance of the idea itself, or necessarily the operational plan, but just there's there's a spark, there's something that you see.

Vitaliy Schafer: 
I would say, it's, it's in a way, I wouldn't say it's easy to gauge. But if somebody is really committed to their idea, they're working on it, you know, day and night, they're putting their life into it. They're trying to meet people every day to help them get to that right place. They're bringing on, you know, really good strategists as their board of directors, they have a financial model that they're updating, you know, every week. Non stop thinking about that business versus it's kind of like a side project. I'll work on it here and there. I don't know, like not really committed committed to it. Commitment is a big part of his work. Obviously, the biggest is, is this a cutting edge tech, what who are your competitors? You might say, I don't have any competitors. That's probably not true. They just don't know who the competitors are. They just haven't done the market research. Yeah. And likely, there's already companies that are doing something similar. But again, good strategists can help them find that so it's just finding someone who's very committed and also obviously brilliant ideas is huge. I mean, for me, as in my guest position as a Leader, I want to build the best banking product possible and connect people and startups to resources to help them grow. And that's kind of been my passion is to see companies that are very small, go from idea on a piece of paper to getting well funded, and put an amazing product in place to improve somebody's life for just in general technological advancement.

Greg Farber: 
So I kind of want to connect back to this whole banking thing, right? So I'm a startup, I come to you. What am I asking from you? And what are you actually giving me? Because if you're just giving me advice, what's in it for you? What what what is the what is the advantage that I get by having a bank that caters to me? Am I actually getting funding from the bank? Is the bank connecting me with these outside funds? And how and then how is that advantageous for the bank?

Vitaliy Schafer: 
Usually, I mean, when I speak to founders, I usually ask them for what they're looking for what challenges they're facing, obviously, explain of the business, like ask them certain questions like, Have you done your financial model? Have you done this or that? And then I connect them to the right people. And to me, my question to them is, is your bank asking you these questions? Is your banker asking you these questions?

Greg Farber: 
So it's a means to earn a banking relationship with a benefit on the side,

Vitaliy Schafer: 
In a way, I mean, it's, it's helping them and then just giving them a good bit banking platform, right, we can't be a startup friendly bank, if the only thing we do is just offer a free checking account, right, we have to give them the resources to help them grow. And in return, they'll give us their business, I mean, just naturally, it's, it's a natural relationship, right, you build a relationship with someone, it'll take time, it's usually not going to be overnight. But if you help someone secure funding, or help someone, you know, improve their financial model, more often than not, they're going to come back and want to work with me, or any banker that they're working with in general.

Aaron Beydoun: 
And that relationship is very synergistic, I think, when you think about it this way. And it's not just transactional, but there is this ecosystem or platform and the words of Fatale, I think it's actually synergistic for both. You know, most startups are managing their cap table on an Excel file. It's not very sophisticated, managing just little things like that can make things a lot more sophisticated. And that gap doesn't really exist. I'm sorry that that gap hasn't really been addressed. It's not necessarily your investors role. And a lot of the founders don't have the financial aptitude to do that, unless you hire a CFO. And a lot of these startups are too early stage to have that type of infrastructure. And so I think meeting them where they are in the spirit of meeting them where they are, these are the types of things where I think meeting these founders early on where they are now. These little things can make a big difference that fills that gap. I think so. And I think the gap that a bank has a natural, it's a natural place for a bank to play. And it's

Greg Farber:   
funny that you mentioned that, and I'm not going to put you on the spot by asking you if you listen to it, but we had our CFO on an episode earlier. Okay. And he basically described when he first started day one of Leader Bank, he was running the bank in a spreadsheet. That was what we had.

Aaron Beydoun:
Oops, sorry. Sorry, CFO, hope I didn't offend you.

Greg Farber:   
No, because I think you're absolutely right. That's what those are the tools that you have at the time, and that's whatever startups dealing with right now in there. So it's really interesting to hear that that's that's actually hopefully you see that commonly out there all

Aaron Beydoun:
the time, then hopefully yours this podcast because I think a lot of people are dealing with what he or she dealt with many years ago and and I think it's a maybe they can actually create the product because I think it's actually very useful to

Greg Farber: 
Talk to Brian find out how to convert the spreadsheet into a bank, there's the solution.

Vitaliy Schafer: 
Maybe there's a startup out there.

Greg Farber:   
So on that more funny note, let's just go a little bit on the personal side, you have this drive you have this this this ambition you have this this innate desire to help these firms that are starting out. What are you passionate about? On a personal level? What is it that kind of keeps you going when you're not working for the bank? We all take time off sometimes. Yep, absolutely.

Vitaliy Schafer: 
I depends on the season right? Winters around the corner. So I love to go skiing away from the phone, you know, you're on the mountains enjoying they're going hiking as well. Because I would say most of the week, three or four times a week, I'm usually going to events very busy. I'm always checking my phone so it's nice to be able to disconnect on some weekends and enjoy that and then in the summer it's different right? You can't go skiing so usually like to travel obviously. Been to say like half the states in the US. A lot of parts of Europe.

Aaron Beydoun:
That's incredible.

Vitaliy Schafer: 
Yeah, and do road trips, obviously where we can. And then yeah, we love hiking.

Aaron Beydoun:
That's cool. So my wife and I just had our first child.

Greg Farber: 
Oh, Congratulations.

Aaron Beydoun:
Thank you very much. Been five months, Vitaliy knows that you opened up her trust bank account, maybe I'm not sure but anyway, we I think just being cute. I've always been curious as a person, just naturally curious. And I think with a child now, being curious with her and learning through her being curious for her and with her, I think it's kind of just transformed my life

Greg Farber: 
It's amazing.

Aaron Beydoun: 
It is absolutely incredible.

Greg Farber: 
You can relive all the things that were fun when you were a kid that's right in a way through the eyes of a child.

Aaron Beydoun:
Or seeing things that we look at, like the tree in front of my outside of my window. In Back bay, just the awe the sense of awe in the child's eyes just staring at them. Like wow I got to stop and appreciate these things. I think it's, it teaches us as well to kind of slow down and remember, there's beauty in everyday things as well. And I think that's really important.

Greg Farber: 
No, that is really cool. I appreciate you sharing that. Yes. So obviously, we've been talking a lot about kind of the leadership qualities in the companies that you've seen and you've worked with on that side. But what about yourselves, and you've obviously made a mark in your industry, you've been very successful with what you're doing. What is it in you that maybe is a standout quality that you have that's allowed you to move forward to to get where you are today,

Vitaliy Schafer: 
I would say probably being persistent. Never really quitting or stopping. Always willing to innovate, just looking for new ideas. I don't like to just basically become frozen, right? I don't want to just do one thing one way. And that's just the way it's going to be done. I like to continuously think of new ideas to grow, to innovate, to help companies.

Greg Farber:   
Don't get too comfortable keep challenging.

Vitaliy Schafer: 
Continuously challenging. And that It keeps me up a lot at night. But I think it's helped a lot in the last decade.

Aaron Beydoun:
I think just by virtue of kind of industry that we're I trained in and personality wise, I'd like to at least keep one foot on the ground and try to reach as high and as far as I can outward. But I think trying to be a little bit grounded. I'm a bit traditional. So you know, for me, one plus one will always equal to, irrespective of whatever industry you're in. And I think some of that basic common sense, traditional attitudes can be beneficial when you're around such innovative people.

Greg Farber: 
So you can kind of be the rock in the face of this innovation.

Aaron Beydoun:
I think it's important. I think it's important not because and that leads to people trusting you in your opinion. And also to be you have to build tangible value to build tangible value. And I'm being very deliberate with the words that I'm using, I think to build tangible value that's important as well.

Greg Farber: 
Can you guys share something that you think is a standout type of idea that really, really works for for for investment, capital and things like that.

Vitaliy Schafer: 
There is a technology that that I've been this company I was working on for several years, and they just had an idea basically on paper. And then after I met them, and now they're finishing up their clinical trials for this new women's contraceptive that is like revolutionizing, like IUD. And it's basically completely painless process. And just seeing them get VC funded, and go from just an idea to getting the funding and going through the trials and growing that way, and then being able to be a part of that is it's really been very special.

Aaron Beydoun:
I think some of the things that excite me the most thematically are some of the most basic things. So a lot of the innovation, a lot of the brightest minds in our community are going to focus on some of the most complicated problems using some of the most complicated breakthrough technologies. So when you're talking about quantum computing, and things like that, as an example, or we were talking earlier about computational genomics, and things like that are getting really complex here. I'm excited about basic things as well. So you know, I met private equity friends, and they're investing in companies that are focused on HVACs, HVAC systems for homes and trying to make them more efficient, or more affordable air conditioning units for homes and other parts of the world that don't have central air. You know.

Greg Farber:   
Innovation for all, not just ones with physics degrees.

Aaron Beydoun:
That's right, and innovation for all and for most people in the world. And I think that excites me a lot.

Greg Farber:   
I think that is really cool. Well, thank you both so much for for being here for taking the time. This was a great conversation I learned a lot.

Aaron Beydoun: 
Likewise, thank you Vitaliy for thank you all and thank you, appreciate it thank you very, very much appreciate.

Greg Farber:  
All opinions expressed by Aaron Beydoun are his own and not the opinions of Leader Bank, N.A.. For more information on today's subject, visit leaderbank.com. In addition to past episodes, you can also find our corresponding blog entries for more insights. This podcast is a production of Leader Bank and equal housing lender. Member FDIC. NMLS #449250.