TechCrunch called him a fraud at 18—then he built a $10M ARR fintech. | Sahil Phadnis, Founder of Affiniti

Sahil Phadnis (00:00:00):
What growth is not going to happen. You're going to read a bunch of articles on TechCrunch or whatever. Where you're seeing startups raise billion-dollar rounds, and you're sitting there, and you're still seed-staged founder. Stoicism, play the long-term game. Think about where you're going to be in 10 years and not one year. And get comfortable having bad days. What I kind of came to after these like 30, 40, 50 books in a summer was life is about one thing and that's experience. That's just exciting for me. You should never know what the future holds for you. You should just live every day like it's your last.

Previous Guests (00:00:37):
That's product market fit. Product market fit. Product market fit. I called it the product market fit question. Product market fit. Product market fit. Product market fit. Product market fit. I mean, the name of the show is Product Market Fit.

Pablo Srugo (00:00:49):
Do you think the Product Market Fit show, has product market fit? Because if you do, then there's something you just have to do. You have to take out your phone. You have to leave the show five stars. It lets us reach more founders and it lets us get better guests, thank you. Sahil, welcome to the show, dude.

Sahil Phadnis (00:01:04):
For sure, man. Thanks for having me.

Pablo Srugo (00:01:05):
Dude, so you're 22, your founder's 20. You guys just raised like a $17 million Series A. Raised an $11 million seed round, you know, not long ago. I think less than a year ago. But you started this in 2021, which means a few things. First of all, it's actually been like a decently long journey to get here and second of all. You were 18 and your founder was 16 when you started this. Which is just absurd.

Sahil Phadnis (00:01:30):
Yeah, I mean, we're like the epitome of businesses aren't built overnight.

Pablo Srugo (00:01:36):
So let's walk through that, man. I'm curious, I mean, I just remember myself in high school. I got, you know what I mean? I was not ready to start a venture scale business. I'm curious to see, yeah, what's happening in that. Let's start at the beginning, right? Like 2020, 2021. What's going on?

Sahil Phadnis (00:01:50):
I actually started my first company in high school. What's quite interesting was I'm one of the lucky people to know what I wanted to do for the rest of my life pretty early and what I mean by that is in high school. I was stuck in the rat race of going to the best university. So my dream school at Stanford, I wanted to be a valedictorian. I wanted to get the best SAT scores. Do the best in school and I was working really hard to make that happen. And then. 

Pablo Srugo (00:02:20):
So that you could be what by the way? What was your was it lawyer, doctor? What was it?

Sahil Phadnis (00:02:24):
I just wanted a study engineering be able to comp sci it was kind of appealing to me. I was coding at the time. So, yeah, like an engineer didn't know where else I wanted to take it with. But I liked coding. That's all I really knew. When COVID happened, it was the first time in my life where there was no more stimulus to chase. What I mean by that is, oftentimes we all get caught in the wind of life. Where all leaves, where you just go on with the wind, right? And that was me. I was looking forward for the next test, the next club, the next thing to do for college applications. When COVID happened, it's like there is no next. You're like, oh, look, during COVID. It was a weird time. It was like, oh, all your tests were canceled. Oh, yeah, all schools canceled and you're just like, oh, okay. Look, what do I do for the next six months of my life? So when that happened. I was like, I actually fell into an existential crisis. I was 16 at the time. Because I was just like, what do I do next? What do I actually do?

Pablo Srugo (00:03:27):
And you're what? So this is what? Grade 11?

Sahil Phadnis (00:03:29):
Yeah, grade 11.

Pablo Srugo (00:03:30):
Okay, and where are you? Which city?

Sahil Phadnis (00:03:32):
In Charlotte, North Carolina.

Pablo Srugo (00:03:33):
Okay.

Sahil Phadnis (00:03:34):
So, I'm questioning what do I do? And then, it led me into this thought where I was like, what do I actually know about anything? I don't know what I truly want to do with my life. I don't really understand why I'm here. I don't understand what I'm gonna do. What does 10 years look like for me? I don't know, which is a daunting thought. So I fell into this existential crisis. Then all summer, I started reading books. Look, I was like a monk. I was just reading all day. So I was reading, like, philosophy, history, biographies.

Pablo Srugo (00:04:06):
Things are still pretty shut down, right? I mean, this is June 2020? July 2020, right?

Sahil Phadnis (00:04:11):
You can't go anywhere. You pick up food from restaurants, you play tennis, social distancing. I'm sitting there reading books in, like, my patio.

Pablo Srugo (00:04:20):
It's actually crazy thought. Just like as a high school, I mean, I had obviously we all went through a different ages, right? Like, but as a high school student, I just think back like, yeah, it's a wild time to go through that.

Sahil Phadnis (00:04:29):
Yeah, I mean, I think it was the first time in everyone's life. Where society's norms were all broken. How we've all operated our lives, you had to change, which is really surreal. I still look back at those times and I'm like, wow, that was a really weird time. Social distancing, wearing masks in public, and saying no to hanging out. Because you're scared that someone has COVID, totally different times.

Pablo Srugo (00:04:57):
And what pulled you? I'm curious, on the philosophy side? Was it the existentialism? The Sartre? Was it, yeah, that kind of stuff?

Sahil Phadnis (00:05:04):
The existentialism, right? So look, I was trying to get perspectives on what life truly means. And what I kind of came to after these 30, 40, 50 books in the summer was life is about one thing. And that's experience, but that was my takeaway from that summer. Why do we like eating different food? The experience, why do we like traveling? The experience, why does Elon Musk want to go and make us a multi-planetary species? Because it's fucking cool, the experience, exploring another planet. So what we as humans innately is, what we love to do is chase experiences. What is the single highest leverage function I can do for myself? And in turn, it can impact society, and change others' experiences for good in entrepreneurship right back home. And specifically when I read Steve Jobs' biography. That really was what kind of pushed me into being very compelled by entrepreneurship. But this guy, was not supposed to walk the path of life he walked. He was like an orphan. His parents were not entrepreneurs. They were like blue collar workers. He was a monk for a year. He grew up in, or he went to college in Reed College, I believe, but nothing.

Pablo Srugo (00:06:23):
Sort of typography. You know what I mean?

Sahil Phadnis (00:06:23):
Typography, right? There was nothing that was telling you that this guy was going to create the largest company in the world. But no signs pointed to that direction. Yet, he walked a path of life you could never replicate. Look, I will never walk that life, you will never walk that life, Elon Musk will never walk that life. Because it's a unique journey and that's what's compelling to me. Look, if I were to be a lawyer tomorrow. Most lawyers, not all but a lot of lawyers have very similar paths. You study for the same exams, we stress about the same things, we all have that one corporate client, we hate it for a corporate lawyer, we have these shared experiences. Entrepreneurship is one of those things where we don't really have shared experiences. It's like, oh shit, you got sued by the US government? Like, yeah, I can't say the same thing and that was what's super compelling is you get to create these independent variables of new experiences. And that was super compelling. And then the best part of it all, is you get to change. You have the opportunity create those independent variables in other people's lives. Now, I get to take the fruits of labor from Steve Jobs, because I have an iPhone. That's created a million experiences for me that I would never have gotten luck meeting Aaron. If Instagram didn't exist, I would never have met Aaron. Just think about that optically. He created an independent variable in my life. When I knew I wanted to be an entrepreneur, I was like, let me just start a company. I know how to code. I'm not trying to start Apple, but I'll build websites for restaurants.

Pablo Srugo (00:07:58):
But to be clear, what drove you then. It wasn't the money, at least then. It was really the combination of things, at least if I'm pulling the right thread. One is, you call it experience. I don't know if you've read Victor Frankl's book. I think it's called, like, something about meaning. I forget, but one of the most powerful books I read. It's all about, his philosophy is that the thing that we're all after is not happiness or power, but it's really meaning, right? And that's why people put up with so much. People go to war, that's why, you know, whatever. So it's like, you call it experience, I might call it meaning, but it's that kind of an idea and the other one is this unique path. Just chart your own course. It sounds like that was the other thing that compelled you.

Sahil Phadnis (00:08:36):
Exactly, right? Both of those things, meaning, purpose, experience and I don't want to know what I'm going to be in 10 years. I think that's a really depressing truth. If I know where Sahil is, what Sahil is doing next year, even. That scares me, look, I love the fact. Like when I was 18, dude, I could never tell you where I'd be right now. Look, when I was 18, I was like, I'm going through a lot of shit right now. But that's just exciting for me. Look, you should never know what the future holds for you. You should just live every day like it's your last.

Pablo Srugo (00:09:10):
So you have that idea that you want to be a founder. Which a lot of, at that age. I was in a similar, for a different reason. I actually wanted to make money, but similar situation of and I think it was 22, not 18. But, you know, I just want to start something, right? And you have this desperation of like, what's the thing I'm going to start? Because you don't know that much about the world.

Sahil Phadnis (00:09:30):
Totally yeah, I mean look I wasn't starting out like Steve Jobs at in high school or like Michael Dale selling, you know, monitors. I was building websites for restaurants to add their food items to their menu, right? I was just solving super small problems that I knew existed and I knew how to code. And these restaurants were using Wix sites or Square space that didn't really allow restaurants to have much modularity and I tried it out, and it was pretty. I learned a lot, I learned a lot about how people are really mischievous in business. They will not pay you, sometimes they won't pay you on time. Sometimes they take advantage of your age and make you do services that the market traditionally charges $1,000 an hour for, or $10 an hour. Because you're 16 and you just say yes to it, right? So yeah, I learned a lot and it was a really. I think a pivotal experience, not because it was a large outcome. But rather it was every day was different. That's what I was chasing.

Pablo Srugo (00:10:42):
You still care about schoolwork, by the way? Or you just let that go?

Sahil Phadnis (00:10:44):
No, I actually ended up graduating valedictorian in high school, still. I still cared. Aaron was actually my co-founder, is actually where I totally stopped caring. He was the lunatic, he was like we need to dropout. The first hour I met him, I literally hit him up on Instagram and he's telling me 30 minutes in, dude, this idea is going to just disrupt the world. We need a dropout, send the resignation letter right now and I'm going to calm down.

Pablo Srugo (00:11:11):
Walk me through that. So you're a valedictorian, you go into what college?

Sahil Phadnis (00:11:16):
Berkeley. I was going to study electrical engineering and computer science at Berkeley. At the time, I shut down this dev shop for restaurants, business, and I was building crypto products for fun. Look I was building Stripe for crypto. Which is now apparently sold for a billion dollars called Bridge.

Pablo Srugo (00:11:33):
Yeah, buddy. That was a good one.

Sahil Phadnis (00:11:36):
Exactly.

Pablo Srugo (00:11:37):
Bridge they were on the show, actually. Before, crazy fricken story, man, yeah.

Sahil Phadnis (00:11:40):
Abrams?

Speaker 00 (00:11:):
Yeah exactly Zach was on.

Sahil Phadnis (00:11:45):
Exactly he, you know, the difference between him and I is. He was like the CPL of Brex and I was like.

Pablo Srugo (00:11:49):
Yes, exactly. That's right, that helps.

Sahil Phadnis (00:11:52):
Exactly. It helps a little and so I was building this crypto payments product. And I was looking for co-founders. I was like, it's pretty boring to build a business alone and I was like, okay, I'm gonna be the tech guy. Look, I need my business guy. Look, it's the traditional mindset of all startup founders. We need to have business tech. So look, I was hitting up a bunch of Berkeley kids. Most of them didn't take my stuff seriously and I don't blame them. It's like 18 year old trying to start up Berkeley. How many of these stories have we heard? But Aaron, was fun. He was like, let's get on a Discord call, right now.

Pablo Srugo (00:12:28):
But how do you? By the way, where do you see his like? What do you see that makes you reach out to him?

Sahil Phadnis (00:12:33):
Oh, he posted an NFT on its story.

Pablo Srugo (00:12:36):
Oh my God, that it.

Sahil Phadnis (00:12:37):
And I like crypto, right? He was into the Tom Brady autograph, if you remember. When he partnered with Autograph and they would do signed cards. The Autograph cards and then minted as NFTs, and you'd buy them. So I was like, oh, this guy likes crypto, let me hit him up and see if he thinks this idea has legs. So I hit him up, within 12 hours, we straight up start the company. We're building, we like didn't really have any clear direction of a business model for how we're going to charge money or who was our right customer or any of that. We were just like, let's just start this man. Let's just build this crypto payment API thing.

Pablo Srugo (00:13:15):
He's 16 in high school then at this time?

Sahil Phadnis (00:13:17):
Yeah, cause he skipped two grades I believe. So like,

Pablo Srugo (00:13:21):
So wait, is he in high school? Or he graduated?

Sahil Phadnis (00:13:23):
He was, he graduated. So he graduated at 16.

Pablo Srugo (00:13:26):
So he's going into Berkeley, with you. But he's two years, okay, this is a smart guy.

Sahil Phadnis (00:13:30):
Yeah, exactly. He's smarter than me.

Pablo Srugo (00:13:35):
So, yeah. So what happens? You guys start building, what? What's the first product? How does that go?

Sahil Phadnis (00:13:40):
We're building all summer and you in fintech, crypto, anything like regulatory. You reach this point where you actually need money. Cause, if you want to do banking services, you need a partner at the bank. Banks are expensive. If you want to sell crypto services, you need money transmitter licenses. Very expensive, so you could only build so much. So we hit this tipping point and we were like, oh man, we got to raise money. We had no clue how to raise money. So we were at Berkeley at the time. So all summer, going into Berkeley, we'd grinded. We hit this point, so Aaron starts like, we started going to San Francisco every day. So we stopped going, we never really went to class, but we started going into the city every single day. Going to these happy hours and a lot of times we couldn't get into the happy hours. Because of our age. So we'd stand outside the happy hours and then as people walked in, and walked out. We would grab them like, hey man, this is what we're building. And there's a famous photo on Twitter of us. There's this guy named Nik Milanović, I believe. He started The Week in FinTech. Where he used to host these FinTech events and he was taking a selfie with us. Because he got kicked out of his event and, it was me and my co-founder. We were doing this, we were hustling, and we started getting a lot of traction in the sense of meetings. And look, here's another learning. When you're young, naive, first time founder, you think of meetings equate to success. Which is far from the truth. That is far from investment decision. But we were like, oh, my gosh, we're meeting this VC from this.

Pablo Srugo (00:15:17):
Dude, it's so true.

Sahil Phadnis (00:15:19):
Yeah, right. Exactly.

Pablo Srugo (00:15:20):
Like getting it now, I'm obviously on the venture side. So like I take so many meetings, but even I'm pitching LPs. It's just like it's the beginning of potentially probably nothing. But at that age, dude, it's like, oh, my God, it's done.

Sahil Phadnis (00:15:32):
Oh my, exactly like, wow. They're on my Google calendar like, whoa. They won't meet with anyone. Like, I must be special, right? So we were pumped. We had 200 meetings set up. That's over 30 dates, all rejections.

Pablo Srugo (00:15:50):
Dude, 200 for real?

Sahil Phadnis (00:15:52):
200 might be over. Definitely 100, like minimum 100. It was in that range. We were hitting up everyone, like angel, small funds, big funds. Rightfully so everyone that's passing and you would think like this is 2021 peak degeneracy. Everyone else is raising monster rounds. Not our age though but people were and so we were like, what are we doing wrong? This doesn't make sense. So finally, we meet this investor and he's the first real investor to be honest, like, dude, yes, I get it. You want to build this crypto payments app, whatever, and disrupt the markets. How do I know anyone wants to use your product? Mind you, this crypto payments API thing evolved into a USDC stablecoin wallet. So, through iteration feedback. We kind of threw away that idea of a bridge and we wanted to build a consumer neobank for stablecoin users.

Pablo Srugo (00:16:53):
That's where you were in 2021. Which again is actually a decent, it's a pretty solid thesis, I think.

Sahil Phadnis (00:16:57):
It's a great thesis if you're in Chad, or if you're in Syria. It's a horrible thesis if you're in New York City or San Francisco with Federal Reserve.

Pablo Srugo (00:17:06):
Right, the fantasy called USD.

Sahil Phadnis (00:17:11):
Yeah exactly, right? So it's like I wish I was in Africa and doing this. Because I think it had long legs. Unfortunately, our currency is too stable. Which is a good thing, right?

Pablo Srugo (00:17:19):
Good problem, yeah.

Sahil Phadnis (00:17:21):
Exactly, it's a great problem. We are pitching this and finally this semester to show me proof that people want this. We went around all of Berkeley campus, knocking on dorm rooms, like every dorm room, you know, one, two, three, Clarker. Asking people to Venmo us. Telling them we will return them 12% on their US dollars. Essentially, we were running like an illegal mini hedge fund. Where we would put their money in DeFi strategies, and then get a bunch of yield, and then return it back to them. Kind of like traders, we were all cash fund traders. Yeah, we straight up collected $25,000 in 24 hours. We returned 12% within a week, returned all the capital, everyone was made whole and even more than their principal. We were like, wow, we just need $250 million to do this at another scale. So we go back to the investor and he's just like, guys, I'm going to pass. And we were like shocked.

Pablo Srugo (00:18:16):
What?

Sahil Phadnis (00:18:18):
The investor told us, yeah. Investor told us to do something, we do it and they pass. I wonder why, right? Another learning, investors generally don't tell you why they pass. They're not incentivized. So we were bummed out. We were like, oh, maybe we might be screwed. We might need to pivot the idea. But we were convinced that like, hey, what if we went from $25,000 to $50,000? And maybe we'll get more traction. So you started ripping calls again. This time, instead of dorm rooms, we were ripping calls in our network and there's this 18-year-old in New York. Who'd look, you guys are crazy, I'm not loaning you money, but I'll be your first angel investor and we're like, oh, shit. He's like, be here 6 a.m. New York City tomorrow. So we're like, oh, shit, it's like we're looking at our watch. Oh, shit. It's like 8 p.m. San Francisco time. So we dart to SF like red eye. Meet him, it's 6/7 a.m. in Soho. We are sitting down sleep deprived. He writes $30,000 check within a week, we raised $2 million.

Pablo Srugo (00:19:26):
Whoa.

Sahil Phadnis (00:19:28):
It was during NYC NFT week or NFT NYC week, or whatever. So all the crypto investors were conglomerated in that area.

Pablo Srugo (00:19:35):
Did you stayed in town then for that week? Did he introduce you? How did that happen? That first $30k and then he made a couple of intros.

Sahil Phadnis (00:19:42):
He made five intros all converted.

Pablo Srugo (00:19:44):
Oh wow.

Sahil Phadnis (00:19:48):
It makes sense, right? Because the type of investor in his business, young, hustler, crypto. They like crypto.

Pablo Srugo (00:19:54):
Who is he?

Sahil Phadnis (00:19:55):
His name was Aadi Bhanti. He's running this company called Hike Medical now. Which is for foot orthotics. It's totally not crypto anymore. But all his investors liked this young hustler crypto thesis.

Pablo Srugo (00:20:12):
He was in the crypto space then?

Sahil Phadnis (00:20:14):
Yeah.

Pablo Srugo (00:20:14):
I see.

Sahil Phadnis (00:20:15):
Exactly, he was building like gasless NFTs at the time and so it was quite. I think they just liked this type of niche, kind of like, yeah. You know, there are certain VCs who like young founders more than other VCs and so it's why I think our conversion rate was pretty high. So we raised $2 million and we're like, holy crap, this is like insane amount of money and then by the end of the month. We ended up raising $6 million in total from Y Combinator and a bunch of other.

Pablo Srugo (00:20:44):
So you applied to YC in that timeframe?

Sahil Phadnis (00:20:48):
Yeah, look, after we raised the $2 million. We applied to YC and we got in. I think, I don't want to quote myself on this, but we were one of the youngest founders there. Aaron was still 16, I was 18 at the time. So we thought we got hit with the Midas touch. We thought we were on the trajectory to be like Mark Zuckerberg. We were like, oh my God, this much money raised. This isn't, what's next here?

Pablo Srugo (00:21:11):
You probably were one of the ones that had raised the most too, no? At that stage in YC?

Sahil Phadnis (00:21:16):
Oh, yeah. Yes, exactly. Look, we were like, I think, top 10 in terms of mounts rates and look. It was funny because some bachelors would be so pissed at that. Dude, I'm like 10 years AWS, Instacart, freaking veteran and I'm raised one half. And these are like two kids, no credentials.

Pablo Srugo (00:21:40):
Complete degenerates building NFTs.

Sahil Phadnis (00:21:43):
We were on top of the world.

Pablo Srugo (00:21:45):
And by the way, who was in that? Was it like VCs? Was it mainly angels besides YC?

Sahil Phadnis (00:21:49):
It was a party round. So there were tons of investors. It was like 30, 40 investors. It was like Light Shad Ventures. Which is still an investor in every single round subsequently, even Affiniti now. YC was part of that. GFC, Selma Capital, it was like a lot of micro checks. So like $250K to $500K checks thrown in there. So yeah, we like pulled it off, built the product. January 2022, built the product, launched it.

Pablo Srugo (00:22:14):
And this was the USDC wallet, right?

Sahil Phadnis (00:22:17):
We launched it. I think it was May, we launched officially.

Pablo Srugo (00:22:22):
2021?

Sahil Phadnis (00:22:23):
No, 22'.

Pablo Srugo (00:22:23):
Okay.

Sahil Phadnis (00:22:23):
2022. It was May 2022, we launched it. We're like, let's go! We're like, we're on top of the world. We just launched this project. We're going to change the world and then like, oh my God, the next 60 day sequence. Honestly, the biggest life changing sequence like ever. She kind of wired me differently as an entrepreneur. We launch, we get bad press. Our biggest competitor, they write a hit piece on us on TechCrunch. Like, these two kids are corporate espionage. Like they're going through our support flows, asking our support people questions about our business, yada yada yada.

Pablo Srugo (00:23:03):
They're accusing you copied their product? That was the big accusation?

Sahil Phadnis (00:23:06):
Yeah exactly, it was like they're copying our marketing terms and conditions. Whatever, like, accusing us of copying them.

Pablo Srugo (00:23:14):
Had you?

Sahil Phadnis (00:23:16):
I mean, look, we were young, we were dumb. Look, we made a lot of mistakes and I think we were not as original as we were supposed to be. And look, yeah, we took elements. That company had raised $90 million from Andreessen, L. Catterton. So you think they're doing everything right. That's another learning in this journey. Money does not mean absolutely anything. VCs will give money to what is a hot commodity. Someone will give them up round and you can go to your LPs. And say, hey, I'm up 90% on my portfolio. We had none of this foresight. We're just like, Andreessen Horowitz, these are 10 good firms that we know are in. So they must be doing things good. So they are coming after me and my co-founder, like, oh, you guys are copycats. Tweeting at us, like it's blowing up and we have a sequence of just horrible events happening to us. State government sued us, not sued us. Like that's an over, they subpoenaed us. Subpoena is essentially like if you don't cooperate, they will sue.

Pablo Srugo (00:24:19):
About what? What was their big issue with it?

Sahil Phadnis (00:24:23):
They thought USDC stablecoins were securities.

Pablo Srugo (00:24:28):
I see, right.

Sahil Phadnis (00:24:30):
Certain state governments think they're not securities, that they're more commodities. Certain governments think they're securities. It was why Coinbase also did the same thing as us, subpoenaed. But still to this day, don't think a dollar denominated stablecoin is a security. In that case, every dollar is a security. But that's beyond the point. It wasn't worth fighting a state government, I'll tell you that. So when you have bad press, you freaking get subpoenaed. Business model was not working. So after a TechCrunch launch, you think people are flocking, nobody's flocking. Our revenue was trash, like everything was against us.

Pablo Srugo (00:25:13):
I would have almost assumed that all the bad press would get you users, funny enough.

Sahil Phadnis (00:25:17):
It got us users, here's the thing. In consumer facing applications, users are relative. If you have a thousand users, it doesn't mean shit. You need like a million to build a big consumer business, right? So if you're enterprise, a thousand customers, bro, you're probably like Siri CEO. You have these $50 billion companies paying for your services. So we had literally a thousand or two thousand consumers using us for our wallet. It's like you're making maybe I think $8K MRR at that point. It's like, we're not really. It's not really like we're solving the problem. I think people in the US who use stablecoins, we've got a lot of adverse selection. Because the only reason you'd want to use stablecoins for domestic transactions is if you were doing something shady. You know, like, look, I don't know, buying drugs or something. So, we had a lot of fraud and it just wasn't a good business. Honestly, and so we had to miss all this bad news, and bad events happening. Look, we just straight up had to pivot. Look, we shut the idea down, we fired everyone, Aaron and I moved back into our parents' home. So I went back to Charlotte, Aaron moved back to LA. We were sitting on a boat.

Pablo Srugo (00:26:40):
This is also, by the way. The whole macro starts crashing second half of 22' outside of the stuff that's happening with you.

Sahil Phadnis (00:26:48):
Fortunately, all our VC firms. I'll say this, were super behind us this entire time. Like even with the bad press and it's why partnering with the right people matter so much is. They never turn their backs or they never stop taking our calls. They're like, hey dudes, you're young. There could have been a lot worse, we've seen a lot worse. Learn from this, learn what you need to fix about yourselves and come back stronger. You have a lot of money in the bank. We still had $4,5, $5 million. So that's exactly what we did, is what we learned.

Pablo Srugo (00:27:25):
And none of them said, hey, why don't you just return the capital? Do something else. They were just like, keep going, that's cool.

Sahil Phadnis (00:27:30):
Yeah, they're all keep going and, you know, I think that's why we're quite fortunate. I had a lot of founder friends. Where these VCs started acting weird. They were like, hey, what are your plans? Founders are like, I'm trying to figure it out. Why don't you return the cash and we'll fund you for your next startup. A lot of my founder friends had a lot of weird behaviors, like pursuing and so we never asked that. Which we're really fortunate about. So we pivot, I'm at home but now I have the biggest chip on my shoulder and Aaron. We pretty much just got blamed all over the internet. Our names are, we're like, God, everyone thinks we're copycats and look, we're not original. And we're, these kids who can't build and who just copy. And look the markets are crashing. And we're crypto kids. And look, we were like, we had massive chips on our shoulders. And I think this is kind of why I say this is the most pivotal moment in my life is like, you really figure out who the fuck you are when shit hits the fan, right? I think most people, when, if you got a TechCrunch article bashing your name at 18 or at 16, you're that young. It was truly a shocker. It's one of those feelings that I'd never felt in my life. There's few things in life that don't have solutions and that was one of those things. I didn't know what I could do in that situation. I don't have a friend who's been through that and so I'm like, fuck dude. How do you get through that and so with all those bad events. Instead of putting the white flag out bro. We were like fuck that, let's get back in the game. We're soldiers, man, let's go for round two.

Pablo Srugo (00:29:15):
Did you think about, like, that was the outcome, but in the meantime? Did you think about just giving up? Going back to school? Being like, you know what? Let me take four years and come out the other side sort of thing? Or was that never thought?

Sahil Phadnis (00:29:24):
I went through every emotion possible during that time. I was like, Oh, fuck, look, my career is over. To like, Oh, no, this isn't that bad. To like, dude, I should just go back to school and join Facebook. And, you just have all these emotions soon. But, after like, 24/48 hours. You start to kind of finally ruminate and you come to your senses. And at the end, Aaron and I were just like, fuck that. We're going to build a big business. We're going to come back from this. The fact that the company that raised $95 million was even worried about two crazy young kids. Means that we were doing something that scared them and their investor base. And so there's a different perspective to look at it all. And so we're like, you know what? Let's fucking lean on that. Let's fucking be forces to be reckoned with and do it the right way this time. Let's build a business the right way and combine that energy. That's exactly what we did. We went back to first principles while pivoting. I mean, I was faking toothaches. So when I was back at home, we were trying to find ideas and we didn't want to do consumer anymore. It was too tough of a nut to crack and we didn't really enjoy the problems that came with consumer. Like high-tech, LTV, all that. So we wanted to stay in B2B.

Pablo Srugo (00:30:45):
I'm really worried because, listen you've been listening for like what? 10, 20, 30 minutes now. Clearly you like it and the thing is the next episode is way better and you're gonna miss it. You're gonna miss it, because you're not following the show. So take your phone out and hit that follow button. Had you hired people before and let him go? Or was it just the two of you the entire time?

Sahil Phadnis (00:31:05):
Yeah, so we'd hired people. We had, would let him go with the pivot.

Pablo Srugo (00:31:09):
How many did you get to?

Sahil Phadnis (00:31:11):
It was, oh, it wasn't that. It was, I think, six people, six, seven.

Pablo Srugo (00:31:15):
Okay, cool.

Sahil Phadnis (00:31:16):
So it was always. We've always been lean, even in Affiniti to this day. While we were pivoting. We straight up went monk mode, first principles. I would call the lawn care guy to come to my house. Because my dad would normally do it, to mow our lawn, and then I'd go walk up to the little truck. Start asking the owner questions. Yo, how many of these, lawns are you mowing a day? What equipment do you buy? How do you buy the equipment? What software do you use to buy the equipment? Asking these, SMBs these questions. I'd fake toothaches, go to the dentist, and be like, oh, yo, dude, what's that brace called? How much do you pay for it?

Pablo Srugo (00:31:57):
But you literally, it's like any industry is fair game. You guys don't even have an idea of some industry you like, that you want to go deep on.

Sahil Phadnis (00:32:03):
Yes, exactly. It wasn't just SMBs, I was talking to Fortune 500 CEOs. I was talking to VC backed founders. I was just trying to understand, what part of this economy is hurting. Who is hurting the most? Why are they hurting? Why are they ignored? And just by talking to hundreds of different founders in all shapes and forms. It kind of led us to this premise, this thesis at Affiniti.

Pablo Srugo (00:32:32):
What were you looking for, by the way? Before you get to the thesis? Were you looking now? Because before it was like crypto was hot. It's kind of how you started and then were you now like at least were you focused on problems? I mean, that's kind of what it sounds like. I don't want to lead you, but.

Sahil Phadnis (00:32:44):
Yes, exactly. Problems, what problems are businesses facing? And the problems, we literally spent two months deep into insurance. Which, oh my God, such a boring space. Look, I'm sorry to all the Insurtech founders. But you have to really love that space to be in it and we. Look, there were a lot of problems to solve, though we hated insurance. It was unbelievably bureaucratic, archaic, slow, and there were problems to be solved. And we didn't want to be the ones solving those problems. It's kind of like TLDR after two months. So we kept exploring, and the premise we kind of fell upon is old industry. Small businesses seem to be hurting the most in today's economy and why do I emphasize old industry? It's because, look, I'm not talking about Dropshipping businesses or Blank Street Coffee in Tribeca, or Sweetgreen's, the franchise owner. I'm talking about Joe Schmo. Who started an independent pharmacy in Little Rock, Arkansas in 1958, and he passed it on to a daughter or son. And now they're running it, and now they passed it on to their offspring. And their running it. It's a third generation family-ran business that does $12 million dollars of revenue, it's that business. It's the dentist who started in 95', it's that business. Those businesses seemed to hurt the most, why? Because the stacks they started their businesses with never adapted. So the same payroll they used, the same card, the same bank account, the same software providers, the same POS system, nothing changed from 95' to 2025. And when we made that realization. And we actually took the inverse, we looked at why private equity firms were rolling up these verticals of old industry. What we realized is what PE firms were simply doing was optimizing workflows efficiency and that was their alpha of why they think they can roll up every dermatology practice in America. And flip them to 10% greater EBITDA profitability. And so we're like, oh, whoa, whoa, whoa. If we can bring this private equity efficiency to this old industry, SMB economy, which is shrinking. We could unlock prosperity and help these people thrive. And what do we know best? Fintech, why? Because we built in this intersection of fintech and crypto. And so we thought we were best primed to build financial technology, to modernize their current kind of stack of corporate cards, expense management, bank accounts, bill pay, analytics, FP&A, all accounting, taxes. We are best positioned to come in and help them modernize that part of their stack. So we did that.

Pablo Srugo (00:35:39):
Walk me through, before we go into the solution. Just some of the specific conversations that you had with these types of SMB owners. Whether its, maybe it's the first one? Or maybe it's a key one? That you can walk me through and what you were hearing from them.

Sahil Phadnis (00:35:52):
There's this one conversation I remember that was very. That stuck with me is, I was talking to this business owner. He ran like a $60 million HVAC business, still like an S&B. He has like 50 to 100 employees, but he runs it like an SMB and I asked him. I'm like, hey, man, how do you know what your employees are buying. Look, you have 50 employees. You're not managing them every single day and he's like, oh man, I just issued them an Amex card. And I'm like, okay, do you know what they're buying still? You can buy something at a gas station that's $13, but do you know what that $13 is made up? He's like, now that I think about it. I actually don't know what they're buying. So I'm like, okay. Okay, so your employees are going, your fleet drivers, they call it. Are going to these gas stations and they're buying $13 of BP. And you don't know if that's gas or beer, or cigarettes? He's like, no, and I was like, does that not scare you? And he's like, no, I just trust my fleet drivers. I was kind of confused. I was taken aback, honestly. I was like, why is he not worried about that? And then what I realized was, because small business. Like the industry of small business is such a trust oriented industry. I wouldn't say he doesn't know better, but he doesn't. I guess he's not underwriting every scenario of this business and so what actually happened was we onboarded his business. We gave him cards and within one month he fired an employee for abusing the cards. Because what he had found out was the employee was buying batteries. On his tab for over a year, that he had not caught. Because, Amex does not require you to upload receipts upon spend and so for over a year. Someone was buying patterns on his tab and when he saw that. There was a sudden, oh, okay now I'm understanding why this matters. I think SMBs and this was disappointing initially, but when he got it. I got excited because I'm like, okay, this is why people have not penetrated the small business market. Is because small. Look, Steve Jobs has a great quote about this. People don't know what they want, until you give it to them and SMBs have the similar mindset. Where they're stuck in 95'. You have to show them what's possible in 2025. Because if you want to compete against KKR, Blackstone, BlackRock. You need to have the same workflows and efficiencies as KKR, Blackstone, BlackRock and so when we showed him that. Look, now this guy adopts every product we launch. Cause he's like, okay, well, these guys are like seriously enhancing my everyday financial workflows. So that was a great example of like, from pitching him, hearing him out to him, actually getting on our platform. To us actually unlocking productivity and showing him outputs, and outcomes.

Pablo Srugo (00:38:53):
Was there another one that? You know we talked about problems, that really kind of surfaced up. Well, I mean, because you have the macro problem that you see KKR, Blackstone, etc. But they, I don't know that in a small. At most SMB see that until it's maybe, it's too late. You know what I mean? But what? Were there other conversations that actually surfaced? Like the day-to-day issues some of these people were facing that they knew about?

Sahil Phadnis (00:39:13):
Oh yeah, I mean, there was one business. They were using their personal card to fund their SMB. Look, he had a personal Discover credit card. He would hand his personal Discover credit card to his employees to go to Best Buy. Go to this thing, go to this thing and he was sharing his personal credit. Here's the crazy thing. With personal credit cards, utilization affects your credit score. So this dude was putting $30,000 worth of purchases and his credit score started nosediving. So his mortgage payments started rising and then the loans for his businesses all hiked in terms of pricing. And so we were underwriting this guy's business, when he told us this entire backstory. Because we were his first SMB card and we're like, dude, well, why did you not apply for a business card? And he was like, you know, man. I didn't really understand the difference between a personal and a business card. And we were like, dude, you've been running an HVAC business for three to five years. Like, look, what do you mean? You don't know what a personal versus business card could look like. For some people, they see it as points in cashback. They don't see it as anything else and I think that's largely what the SMB economy looks at cards for. And that's what makes this compelling as well. We're trying to show them that there's software value to financial products.

Pablo Srugo (00:40:37):
So these are the problems and you decide you want to build this. Bring this efficiency. First of all, what time are we talking, like second half 2023 at this point? Where are we at?

Sahil Phadnis (00:40:46):
Where we launched this?

Pablo Srugo (00:40:47):
Yeah, where you're starting to build whatever V1 is.

Sahil Phadnis (00:40:50):
Oh yeah. First line of code, December 2022.

Pablo Srugo (00:40:53):
Okay and what do you decide is that MVP?

Sahil Phadnis (00:40:58):
Oh, we launched a really shitty card platform. Like, oh my God, the first transaction. Like the first hundred declined, for her, our SMBs. Look, we onboarded these 10 businesses through email marketing. Because look, we'd found them through a leads list and we were emailing the leads list. And we got them to apply, and at the time we had to do video calls to verify. Because our KYB, KYC was pretty shitty as well. So we would look at our video call to see if they're real and the first day it's like they start using the card. Decline, decline, decline, decline and they're freaking out. Because they're like, dude, what the hell is going on? It's embarrassing to be getting declined this many times. We're freaking out. We're like, why is it declining? And here's the problem with fintech payments in general. There's so many third parties that, you have to figure out which third party is fucking up the payment flow. So like, okay, we resolved it. They swipe again. Fuck, now it's another party that's failing. We resolve and it was just like, it kept failing. We had more declines than approvals in the first couple of days of the cart.

Pablo Srugo (00:42:12):
And then, but you saw that. But what? Are you just building Brex for SMBs? What's the idea?

Sahil Phadnis (00:42:18):
Yeah, exactly. I think the main alpha that we're trying to uncover, is we're not actually trying to build for finance teams and that's what Ramp and Brex do, right? Their whole focus is we want to build for CFOs, but SMBs don't have to. What we're trying to do is we're trying to be their finance team and what does that mean? And it's sort of why this AI agent play. It's what we're really focused on helping come to fruition. I think in organizations, there's two types of people. There's catalyzers and there's maintainers. Catalyzers would be like an engineer at a VC backed startup. They're building that new product and they're catalyzing the growth of your company. Then you have maintainers. Maintainers are, finance people are going to hate me, but it's CFOs. They tell you about your business. They're not going to two to three X your valuation tomorrow. But they're going to tell you, here's your cashflow, here's your monthly statements, this is your accounting, this is what your balance sheet looks like. We think maintainers are the ones that are going to get disrupted in this AI revolution and what better way to disrupt a maintainer than to be the maintainer for SMBs. At the end, most SMBs in America will never hire full-time finance functions. They're just not big enough to afford a CFO from Wharton, to go run their books every single month. So the idea here is if you want to become the maintainer, you have to have the same knowledge base as a CFO. So the same understanding of a business. So why did we go with the credit card to market? Now we start knowing what they're spending on. Why are we launching bank accounts and bill pay? Now we know what's going through their bank accounts. Now we understand what they're ACHing to. Why are we doing things like accounting integrations, point of sale system integrations, accounts receivable? The more data we collect on the business. The better understanding we have of what's going on and what does that actually translate to, is you could potentially start to make financial decisions. Exactly what a CFO would do. You could generate monthly statements, P&Ls, balance sheets, cash flow statements. You could build things like runway models. Exactly what a CFO function. You could provide this platform for an owner. So if I'm a small business owner, I log into my platform and I click the CFO tab. And I could do something like create the last three months P&L for me, and we can leverage the data. Because we are your platform for everything. We could create a pretty accurate P&L for the last three months. That's where we want to go and it's a pretty ambitious vision, right? To be able to get that data, it's going to take time. But the beauty is, with each product we launch, we make money. So, this is at scale what it looks like as an AI CFO. Right now, what it looks like is a Ramp or Brex for SMBs.

Pablo Srugo (00:45:19):
It's interesting, right? You think about the long term vision. That's obviously AI enabled and that's the kind of, you know. You think about timing, why now? But when you just mentioned, right? We're just doing Brex for SMBs right now. I mean, Brex comes into play. Yes, they serve finance teams today, but it kind of comes into play. Because it's like, hey, startups are this new revolution of things. I mean, existed for a long time but this kind of professionalization of startups is creating a whole class of things. Banks can't serve them. So we'll serve them. Because we know which startups should get credit and which one shouldn't. But in the world of SMBs, that's been around for a long time. Banks been around for a long time. Credit cards been around for a long time. So what are you bringing in with your wedge that's giving you so much traction today? Because the SMBs, they might be interested in five years. But they're going to buy a real product that works great now.

Sahil Phadnis (00:46:05):
Of course. Here's the thing, seventy to eighty percent of our SMBs. Do you know what they're using for us? Community banks and credit unions. So small businesses in America, you must look. People ask the question, how are these credit unions and community banks existing? There's the big four, and then there's Fintechs, SMBs. SMBs primarily work with the local banks and credit unions. Seventy to eighty percent of them use these banks and credit unions.

Pablo Srugo (00:46:35):
Why is that, by the way? Is that just historical status quo stuff? Or is there a reason?

Sahil Phadnis (00:46:39):
I think a lot of small businesses, at least the ones we work with. These old industry ones, it started as a local relationship. Grandpa or grandma went to whatever first federal credit union of Little Rock, Arkansas, and they knew the CFO. And they built a relationship, and it's just lived.

Pablo Srugo (00:46:58):
Status quo, but no big reason to switch. Yeah, that makes sense.

Sahil Phadnis (00:47:01):
Exactly, right? So you have this thing and then it's on the flip side. Now that you have all these businesses that are on these old credit unions and community banks. On the flip side, SMBs have an exposure issue. What do I mean by that? Why do people not come after the markets we go after? It's because we have a differentiated go to market strategy. To acquire these customers. So look, I get the common question investors come to me with it. Look, what if tomorrow Ramp and Brex come? They want to compete with you guys in the same market. I say bring it on. The reason I say bring it on is, because the way we go to market is, we partner with trade associations and unions that represent SMBs. We leverage their brand, network, data, trust to acquire these SMBs. At a very, very significantly more efficient CAC. If I'm trying to acquire ten pharmacies in Nebraska, and Ramp is trying to acquire ten pharmacies in Nebraska. I can almost guarantee you we're going to have twenty-five percent of the CAC costs that they would pay. To acquire those ten pharmacies, because we are leveraging the brands of the National Community Pharmacists Association. Where their CEO is smiling with the card in his hand. He's saying, I'm an industry veteran. I'm using this for my pharmacy, you should be too. Versus, oh, these guys raised that $16 billion valuation from these investors and Joe Schmo doesn't care. He doesn't even know what VC is. He's not making his decisions on those metrics or requirements.

Pablo Srugo (00:48:47):
How do you land on that, as they go to market?

Sahil Phadnis (00:48:50):
There's this bank back in the 90s called MBNA. They're one of the largest banks at the time for credit card issuing. The way they went to market was they partnered with affinity groups. That's why our name is Affiniti. Because affinity groups are when you partner with non-profits. So look, co-brand versus affinity. People ask, aren't you just co-branded cards for trades? I'm like, no. Co-branded cards are with for-profit groups. So like, American Airlines and JP Morgan. Affinity cards are with non-profit groups. So like, American Medical Association. If I did a credit card with them, it's an affinity card and so, MBNA was the largest affinity card provider. They'd partnered with all the universities. So, if you went to Harvard and you got a Harvard credit card. It was an MBNA card. Back then, they partnered with all the trades. So, American Medical.

Pablo Srugo (00:49:41):
And is it the same take? They get interchanged? That's the upside of partnering with you?

Sahil Phadnis (00:49:45):
Exactly, right? They get some sort of economic incentive as volume increases and so, their helping us acquire had lowered CAC. And now what we look like, Pablo, to them is novelty. Because I'll be totally honest with you. We benefit from the fact that they don't know that Ramp and Brex, and Mercury exist. They know First Federal Credit Union exists and JP Morgan exists. So when you bring Affiniti, this new fintech, modern card platform, expense platform, sleek UI, like you can issue employee cards within 10 seconds. You offered this novel fintech platform. To them, it's like, holy hell, where has this been? And so we're benefiting from acquiring populations. Where to me and you, a lot of what we've built today is table stakes. But to them, it's novelty.

Pablo Srugo (00:50:44):
And how do they penetrate the market for you? You have an association, what are they doing? Do they have events and they show a banner? How do they get SMBs on board?

Sahil Phadnis (00:50:53):
Direct mail, emails, conferences, trade conferences, old school marketing men. Literally some of them have people driving around the state.

Pablo Srugo (00:51:04):
Do you support that marketing expense? Or you just give them a share of economics and they take care of it?

Sahil Phadnis (00:51:09):
Both. So look, some of it's off their balance sheet. Some of it's off ours, but look, we'll support them.

Pablo Srugo (00:51:17):
Because this is the thing about SMB is you have to find a scalable, repeatable, and relatively cheap. And differentiated way of going to market. And especially for something that's non-trivial like this. Which is, you got to get them to switch credit cards. They probably got to understand how the whole thing works. You can't just be calling these guys. It's not going to be a great conversion.

Sahil Phadnis (00:51:38):
Totally. I mean, the awesome thing with us is we'll never need to hire account execs. Cause our sales cycles are literally off one email or off one DM. Look, like, yeah dude, we acquired 2000 small businesses within like fourteen months. We have one growth guy and we hired him seven months ago.

Pablo Srugo (00:51:58):
You don't do demos? Like there's no demos? They just onboard, they self-serve?

Sahil Phadnis (00:52:02):
We don't do demos. We don't have any. This is purely off our marketing landing pages. Where they're scrolling through and they're like, oh, employee coverage, expense management.

Pablo Srugo (00:52:17):
Yeah, what's the thing? That's the question. What do you find is the biggest hook? Is it the amount of cash back? Is it the employee management? Is it visibility? What's the thing that really gets them to switch?

Sahil Phadnis (00:52:25):
Yeah, I think, look it's different per business. Some businesses really value rebates. Other businesses really value controls. So they would rather have the majority of their setup be, spend limits, expense, receipt management, accounting integrations, and they don't care about the rebates. So how we structure our cashback is, if you pay us faster. We give you more cash back. Because we take less credit risk and so we'll have like a portion of our platform that cares a lot about rebates. They pay us back faster. Then you see the flip side where we have a portion of the platform that cares about float, expense management, like controls, accounting and so on. So we built this platform where we could serve every type of use case for an SMB.

Pablo Srugo (00:53:19):
So when was the public launch? Like mid 23' or so?

Sahil Phadnis (00:53:22):
No, it was March 2024.

Pablo Srugo (00:53:26):
March 2024 and then by the end of 2024. November, you raised $11 million seed round. Where's the business at that stage?

Sahil Phadnis (00:53:32):
We were about $3 million of revenue. We had 800 customers. It was like we started really ripping towards the end of the summer.

Pablo Srugo (00:53:43):
And you charge what? I mean, there's interchange fees and stuff like that. But you also charge what? Per seed or per what? Per card?

Sahil Phadnis (00:53:48):
So we charge, right now it's technically custom. So certain larger customers, we charge them a really large fee for expense management. But smaller customers, small businesses, we charge about $60 to $120 for expense management. But honestly, that's a nominal, yeah, per year. So it's recurring software. That is not a ton of our revenue. I think software is about fifteen, ten,  fifteen percent of our revenue. Majority of our revenue comes from interchange today. I think our philosophy is, why charge a customer today when I can give them this platform. I could replace ten things and then I could charge them more tomorrow. I would rather take that route than try to figure out the profitability game tomorrow. Because I would be super naive to sit here and say I could justify a $5,000 platform fee today. I can't do that and I think that's why I kind of admire Ramp, actually. Is because Ramp realized this. Ramp would, I'm not going to be able to justify a charge to a startup founder in 2020. When all we do is receipts and cards. Look at Ramp today, travel, procurement, treasury, cards, look literally ten different things. Now what's Ramp? Ramp, it's charging now for seats and I think they look at $100 million of software revenue already. Could now, they've actually allowed their platform to mature enough from a value proposition perspective. Where they could justify charging and I think I take a very similar approach there.

Pablo Srugo (00:55:29):
I mean, and the other thing. I mean, there's a lot of SMBs. There's a lot of credit cards spent. So if you get a share of that, there's a huge market right there.

Sahil Phadnis (00:55:35):
Oh, yeah. I mean, the average business on our platform spends probably close to a quarter of a million dollars a year on cards.

Pablo Srugo (00:55:43):
How many people are you now?

Sahil Phadnis (00:55:45):
We're right now 15, soon to be 18.

Pablo Srugo (00:55:50):
Oh wow. So you're still a small team, because you're doing what? You're probably getting close to $10 million?

Sahil Phadnis (00:55:55):
Yeah. We're, I think we'll be there in the next like forty-five, sixty days.

Pablo Srugo (00:55:59):
That's awesome. Maybe tell me just quickly how your series A happened?

Sahil Phadnis (00:56:03):
It was really quick. Within three weeks we got a term sheet and we got it done in a month. How did it happen? Pretty much we were growing so fast, we were gonna die in like 60 days. The problem with hard businesses is they're very capital intensive. So you have to lend money, you have to put it as collateral, you have to stomach losses and so it kind of gets complicated.

Pablo Srugo (00:56:26):
And you're using your balance sheet for that at that time?

Sahil Phadnis (00:56:29):
At the time we'd raised some debt.

Pablo Srugo (00:56:31):
Oh, you had debt, okay.

Sahil Phadnis (00:56:33):
But even with the line you have to collateralize, some of the loans. So it's like, we're growing way too fast. We're like, shit. We're gonna be illiquid. So that's the problem, right? We're not typically out of money.

Pablo Srugo (00:56:45):
Yeah, you're not insolvent yet.

Sahil Phadnis (00:56:46):
Cause you have to collateralize, exactly! So we're like, okay, we have to raise the next 60 days. So, Aaron, like we make the classic joke. Where we're like, we tell all the VCs, we're gonna be in Sand Hill Road 30 days, that's all. You either see us or you don't and so Aaron literally does that. And he takes 100 VC calls in person in SF. We do a rodeo and got term sheets. Ended up choosing SignalFire and yeah, went from there.

Pablo Srugo (00:57:21):
When did you close it?

Sahil Phadnis (00:57:22):
Well, formally? Or a term sheet? Or definitive?

Pablo Srugo (00:57:27):
I mean, I guess. Well, yeah, definitive.

Sahil Phadnis (00:57:29):
Definitive close, I think April.

Pablo Srugo (00:57:32):
Okay so that was a few months ago.

Sahil Phadnis (00:57:32):
So, yeah, they did all the DB. They have to do cap table reviews, preferred board seats, all of that. Yeah, took quite a long time.

Pablo Srugo (00:57:43):
That's awesome, man. Dude, well, freaking crazy story, buddy. Crazy story, appreciate you sharing it. Let me ask just the last few questions that we always end on. First one is, when did you feel like with Affiniti. When did you feel that you had true product market fit?

Sahil Phadnis (00:57:58):
When customers kept calling in to ask us to build new products for them. That's when I knew we had product market fit. I think every day now, we get one call that asks us for a new feature. Which means customers want to move more and more of their financial activities to our platform. Because we're obviously delivering on something that is drawing them to come back for more.

Pablo Srugo (00:58:23):
And then last question. If you had one piece of advice for other early stage founders. What might that be?

Sahil Phadnis (00:58:30):
Stoicism, this is a game of stoicism. Honestly, you have to be able to stomach bad news consistently, every day, but growth is not going to happen. You're going to read a bunch of articles on TechCrunch or whatever. Where you're seeing startups raise billion-dollar rounds. That started in 2021 or 2022, and you're sitting there. And you're still a seed-staged founder. Stoicism, play the long-term game. Think about where you're going to be in ten years and not one year. And get comfortable having bad days. Most of the time in life, people try to strive to have good days. I want to be happy. I'm going to make sure everything in my life is perfect on this Sunday afternoon. That's not the life of a startup. Customer's going to turn, employee's going to quit, you're not growing fast enough, VC's pissed off, get comfortable. Be stoic. That's my best advice.

Pablo Srugo (00:59:33):
Awesome, man. Dude, thanks for jumping on the show.

Sahil Phadnis (00:59:35):
For sure. Thanks for having me, Pablo.

Pablo Srugo (00:59:38):
Wow, what an episode. You're probably in awe. You're in absolute shock. You're like, that helped me so much. So guess what? Now it's your turn to help someone else. Share the episode in the WhatsApp group you have with founders. Share it on that Slack channel. Send it to your founder friends and help them out. Trust me, they will love you for it.