The DealMakers podcast features entrepreneurs that have been successful with M&A transactions or capital raising efforts.

Subscribe To DealMakers

Bill Clerico is the co-founder and CEO of WePay which is a leading provider of integrated payments for software platforms. The company raised $75 million from SV Angel, Highland Capital Partners, Ignition Partners, August Capital, and founders of YouTube and PayPal. Ultimately the company was acquired by JPMorgan for a reported $400 million.

In this episode you will learn:

  • How to grow as a leader when your job is changing every six months
  • How to build a powerful network
  • The four things to consider when selling your company
  • The only thing that can make your startup fail


SUBSCRIBE ON:

About Bill Clerico:

Bill is the CEO & co-founder of WePay, a leading provider of integrated payments for software platforms that was acquired by JPMorgan Chase in December 2017. Bill founded WePay at the age of 23 and lead the company as CEO through a challenging pivot, in the process raising five rounds of financing totaling over $75 million. Under his leadership and with a hard-working, values-driven and world-class team, WePay grew revenue to over $100 million annually and achieved profitability.

Now a wholly-owned subsidiary of J.P. Morgan Chase, WePay is headquartered in Redwood City, CA and has offices in Providence, RI, and London, UK. WePay processes billions of dollars every year for e-commerce and software industry leaders like GoFundMe, Meetup, Freshbooks, Toyota & BigCommerce. With over 300 employees globally, WePay has won numerous awards for customer service, sales, operational excellence and being a Best Place to Work.

Bill is a frequent speaker, angel investor and advisor to entrepreneurs and technology companies and serves as a part-time partner at Y Combinator.  He was named one of Bloomberg Businessweek’s Best Young Tech Entrepreneurs, one of Goldman Sachs’ Most Intriguing Entrepreneurs, and named an Inspirational Entrepreneur to Watch by Entrepreneur Magazine.

Bill is an avid pilot and skier and lives in San Francisco with his wife Katey. He holds a B.S. in Computer Science from Boston College.


Connect with Bill Clerico:


* * *

FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone and welcome to the DealMakers show. I am thrilled to have the guest that we have today. We’re going to be learning a lot about fintech, a lot about building, a lot about fundraising, scaling, exiting, you name it. And also, the financial service space as a whole. So without further ado, I’d like to welcome our guest today. Bill Clerico, welcome to the show today.

Bill Clerico: It’s great to be here. Thanks for having me, Alejandro.

Alejandro: So originally from New Jersey. How was life growing up there? 

Bill Clerico: It’s good. You know, being from New Jersey you learn firsthand that nobody’s perfect. But I love where I’m from. I grew up just about an hour south of New York on the beach, and so it’s just a fantastic place to live. I got to spend lots of time in New York City, which I loved.

Alejandro: Very cool. How did you develop this love for computers, computer science, and all of that stuff?

Bill Clerico: Yeah. My dad had actually served in the Air Force, and then worked construction and taught himself how to program computers in the ’80s, which was a great time to learn technology. So that active teaching himself about computer programming changed his life, and that was something that he wanted to pass on to me his son. So when I was probably six or seven, I started programming, initially just making some text-based games with my dad, and it grew from there. So it was a love from a young age.

Alejandro: Got it. Then you went into Boston College. So how did you land in Boston?

Bill Clerico: I was really fortunate to receive a scholarship to go to Boston College. It was called the Presidential Scholarship, and as part of that scholarship, we had to fly up to Boston to interview for the scholarship. In the airport, as a senior in high school, I sat next to a fellow student from Florida who was also interviewing for the scholarship named Richard Aberman. I didn’t know it then, but six years later I would co-found WePay with Rich. So we both made it to BC as part of that scholarship program and became really fast friends.

Alejandro: Very cool. So what did you do right after college?

Bill Clerico: I left BC. It was 2007 when I graduated. If you remember, 2007 was sort of the heyday of investment banking and private equity. So I got caught up in that and said, “That’s what I want to go do.” So I went and became an investment banking analyst at a firm called Jefferies doing technology M&A advisory in Boston. So basically, advising software and tech companies. I really learned a ton in my first year. One of the great things about being an investment banker is you get to spend a lot of time with clients. The more time I spent with clients, the more I realized they were passionate, and they were building really exciting things. They were building these amazing organizations. They were building these really cool products. I decided that was actually the path that I wanted to take. So after a year of doing investment banking, I decided to quit. I took my bonus, and that became our seed money for WePay.

Alejandro: One of the most important things I would say about building companies is also the dealmaking, like getting the deals done whether that is a fundraise or selling your own business, which you’ve done both, and we’ll get to that in just a little bit. But at Jefferies, what did you learn about being effective at getting deals done?

Bill Clerico: That’s a great point. I think as an investment banker, you’re an advisor to companies doing really important transactions. There are different types of transactions. There are some transactions where the seller has a lot of leverage and is running at auction and just cares about the highest price. But I always found the best transactions were ones where the buyer and seller knew each other well, had built a relationship over a long period of time, really trusted the other party, were willing to compromise on important things to make it a win-win for both parties. Those were the deals I thought that had the best chance of success for both parties in the long-run and the seed invest banker got to see different types. You kind of had a feeling that those really were the ones that were going to work out. That was definitely a philosophy I tried to take into my own dealmaking as an entrepreneur.

Alejandro: Were there any patterns from the operator’s side like anything that you saw that maybe those folks were doing that really helped to move things forward when doing deals? Because obviously, when you do deals, there are a lot of egos. There are a lot of people that don’t listen and a lot of people that want to impose. So what did you see in terms of qualities from those guys that would get things to the finish line?

Bill Clerico: I think it was really the ability to see the other side. I think when an investor is trying to do a deal or an operator is trying to do a deal if you can’t see the other’s perspective and you’re just focusing on optimizing for yourself I think you leave a lot on the table. There’s a lot of creative solutioning in the middle that can solve for both sides. Right? That can solve for an investor’s concern about returns, around liability, software and operators’ desire for flexibility, and then to minimize dilution. So I think when parties treat it like a zero-sum transaction, I think you leave a lot of that creative middle ground joint problem-solving collaborating on the table and it really just becomes an aggressive arm-wrestling contest for who can win the most points. I think the best deals are the ones that are the most stable that drive the best overall return for both sides, I think, where the operator or the investor can see the opposite person’s perspective.

Alejandro: Let’s talk about the moment where you say to yourself, “I’m tired of wearing my suit every day to work,” or “It’s time for me to really go after this dream or this idea that I have.” How was that process?

Bill Clerico: We were working really hard. In the back of my car I installed a suit rack and I would hang blazers and shirts there in my car because there were many nights, probably at least two or three nights a week where I actually wouldn’t go home. I would leave. I’d go sleep in my car. I’d go to the gym the next day to take a shower and come back to work. So we were working really, really hard. The nice thing was that you learned a lot, but the downside was that it was just a very brutal pace. I thought it became a bit repetitive over time. You know, you sort of start giving the same advice, you’re preparing the same documents, the same analysis. So for me, I was ready to do something new and flex that creative muscle. On some of those late nights, I’d pick up the phone and call Rich, and we’d talk about different ideas or where we wanted to go. Rich had taken a year off and was ready to go to law school. I think he was having some similar thoughts just around, “I want to pursue a more creative path.” So we started kicking around different ideas and eventually getting more and more excited about making it easy for friends to collect money from friends for ski trips, for splitting the dinner check. We called it group payments and got excited enough that we decided we were going to go for it.

Alejandro: What was the brainstorming process like of those ideas?

Bill Clerico: I think it was a lot of just conversations. We would talk about what problems in our life that we thought technology could solve. We talked about new technologies that would enable new types of experiences. We would survey friends. We’d collect feedback from people. It was a very collaborative open-ended process. I think some people think that when they have an idea, they can’t tell anyone because it’s a secret. But what I found is if just having the idea is what makes you different or what makes you special, and someone else that just hears it can just pick it up and run with it and just go do it, then it probably wasn’t that great of an idea after all or you’re probably not that great of an entrepreneur. So we had confidence in our ability to execute on these things. We would share them with everyone that we knew and get feedback. Really, we heard a lot of excitement around making it easy to collect money from friends. We looked at and saw a bunch of really exciting new technologies like the iPhone App Store, like Facebook Connect that were going to enable better social experiences around payments.

Alejandro: This also was triggered by a party that was put together by Rich’s brother. Is that right?

Bill Clerico: You know, there were a couple of different things at that point in our life that we were doing as a group of friends. We’d go skiing a bunch. We would go out to dinner. We would travel as groups. It’s just a use case we saw over and over and over again. I think as two 23-year-olds or 22-year-olds at the time we were just very convinced there’s a big market around group payments. 

Alejandro: So what was that point where you and Rich said, “Hey, let’s make this thing happen.”

Bill Clerico: For a couple of months of brainstorming and testing it out and asking people, we said, “You know, we’re never going to be at a point in our lives where we have less obligations and responsibilities. Now we don’t have a lot of experience, and we don’t have a lot of resources, and we don’t have careers. That’s a disadvantage in some ways, but it’s a huge asset in other ways.” We thought that was the time for us to – you know, there’s a time in our life to take a big risk and that was the time. Rich deferred his law school admission, and I quit my job from investment banking. My first year I had saved up some money for a bonus, and we said, “We’re going to give this a shot for a year. We’re going to work on it fulltime, and we’re going to try to progress this.” That was the moment. There’s a big mind-shift change that happens when you go to doing something part-time to fulltime. Part-time, it’s kind of fun. It’s a side project. When it’s fulltime, and you don’t have a paycheck, you think about it every minute of every day. We just really started moving faster and faster and began developing the idea. Yeah.

Alejandro: And you were in New York City, which is kind of like the capital of the world, arguably. The capital of the world for financial services, and obviously now fintech, it’s moving here. Why moving to California?

Bill Clerico: Yeah, we were actually in Boston at the time. We spent a lot of time in New York, but I was working in the Boston office of our investment bank. I think in Boston, we quickly got to know the technology community there, tried to pitch a bunch of investors. As an investment banker, I thought the playbook for starting a business was, write a pitch deck and try to go get some money. I think in reality that failed, particularly in the Boston market, which I think at the time was less receptive to early-stage investing. But we kept going. We eventually applied to YCombinator, which was a seed-stage investor based at Silicon Valley. They told us to come on out for an interview, so again, we flew out. We went to that interview. We told them about our ideas and about our progress to date. I think they were impressed by our determination because it had been a year and a half in Boston of trying to raise money, of trying to do early prototyping, and they funded us. So literally, we flew back to Boston. We sold our furniture. We drove to California all within a span of a couple of days. It took us 46 hours to drive across the country. We didn’t stop for a hotel. We just traded off and drove straight through, and we set up shop here out West. That was a big turning point because we got to see the Silicon Valley playbook around focusing on your users, focusing on your product, and putting that above raising money and the other activities that come with running a business. That was really a turning point for us. When we started focusing there, then we found the investors were much more interested in what we were doing, and we went on to raise our seed round.

Alejandro: What was then the main difference between what you had learned and perhaps what was missing when you thought that it was just grabbing a pitch deck and going out and raising the money. What was missing then?

Bill Clerico: The product was very conceptual, and the market adoption was very conceptual. You know, when you’re just a pitch deck, it’s like your opinion versus that of the investor. Everyone has different opinions. There aren’t many investors that are 23 and traveling all the time with their friends. So it was hard to prove that there was a real market need there, and it was also hard to prove that we could build it. So it was just very conceptual. Then once we joined our YCombinator batch, we just said, “You know what? S*** that.” We set it aside, and we really went deep on building the product. We started talking to users. We talked to fraternity treasurers at San Jose State. We talked to people planning ski trips and running ski clubs. We heard about their problems. We built simple prototypes to get there and put them in front of them, got them actually using the product, got the feedback, and iterated on it, started to see some real growth. That was a big mindset change. Then we went to talk to investors. We weren’t convincing them that this was a thing. We were showing them the traction and growth that we were getting from real users, which was pretty exciting.

Alejandro: That’s very interesting, and I’m sure that there are a lot of people that are listening now and really trying to understand how perhaps they can be more effective at listening to their customers or potential customers to iterate the product. So what have you learned about that?

Bill Clerico: I think it’s really hard to get people to use an early-stage product that isn’t built out. So why would a fraternity treasurer use you to collect dues instead of PayPal, which is an existing product? Now your vision might be bigger, and your vision might be better, but you barely have anything written at that moment. So we actually got kind of scrappy. We would host barbeques at our house and invite them over. We would actually go to them and go to their dorm room and actually watch them use the product, and encourage them to do it. We were really, really hands-on and scrappy and convincing the people to give our stuff a shot. We made them feel invested in the company. We were responsive to their requests. So after a couple of months of doing this, they saw that they could give us feedback. We’d act on it quickly and build another product and actually started to become better than the existing solution. I think people sometimes get a little bit too obsessed with like, “Oh, well, it’s not scalable to go visit all of our customers in their dorm room.” Yeah, it’s not scalable, but I think in the beginning, you have to do things that don’t scale. You have to get really scrappy and gain that knowledge that you can’t really get anywhere else by getting out in the field and really getting in front of your customers.

Alejandro: How was the experience of YCombinator?

Bill Clerico: It was excellent. I think for two 23-year-old founders that had never started a company before, much less had never worked in a technology industry, it was just such a great introduction to Silicon Valley, to innovation, to the capital markets that exist here. I think we had to spend a lot of time with Paul Graham and Jessica Livingston. They are just world experts in starting companies and in funding early-stage companies. That advice was just invaluable. You couldn’t trade it for anything for two people that had been trying to figure it out on our own in Boston to get here, to get to Palo Alto, to be meeting with world experts and getting their advice. It was a 10x change in our viability as a business.

Alejandro: So, let’s talk about the 10x change. What was the before and the after being in YCombinator?

Bill Clerico: I think it comes back to what I was saying before around just focusing on the product. When we did that, we started getting real traction. From traction came investor attention. We were able to raise some money. We quickly based some momentum and that raised some more money. It really took us from JV to – you know, we felt like we were on the varsity team. We were talking to the best venture capitalist in the world. We had great momentum in our core product, and that really helped get us off the launchpad. I will say, that momentum did not last. So YCombinator helped us really get things off the launchpad, but I think as we were continuing to build over the course of the next two years, we realized that while group payment was a real problem that people had and needed, they were not willing to pay for solutions. So it was really difficult to convince people to pay transaction fees, and our whole business model was built around transaction fees. In the meantime, Venmo had raised the money and was giving away similar services for free and really took off with a bunch of momentum behind them. We were scratching our heads because we wanted to build a real independent business that had a revenue model, but we didn’t want to give away our services for free. But it turned out the market just couldn’t really support that, and we had competitors that were taking a much different strategy. So two years after YCombinator we were left scratching our heads a bit trying to figure out where to take the business next, and that was when we ultimately decided to pivot the business and do something completely new.

Alejandro: And pivots are scary, so how was this process?

Bill Clerico: Yeah. We were still growing, but we weren’t growing as fast as we were before, and we were starting to think about what experiments we could run to continue to grow the business. So we built different types of functionality. We built an invoicing tool. We built an events tool. We built a donations page, and we built an API for customers’ use. So we were running all these different experiments, and what we were seeing was that with each tool that we built, there were other companies out there that were just doing that. They were like a best-of-breed solution in that category. So, for example, we had a really simple invoicing tool, but FreshBooks was a world-class company doing invoicing. We had a donations page, but GoFundMe was a world-class company doing donations. We had an events page so that organizations could sell tickets to events, but Eventbrite was a world-class event company and always had more features than we could build on our simple piece of functionality. But we built this API and we realized that maybe rather than build all this different functionality, and all the different ways that people collect money from each other we could actually just build an API, focus on payments, making the payments experience really easy and simple, and let all these other companies build best-of-breed solutions in whatever market they want to go after leveraging us for payments. So that was the eureka moment. We built this API. Some early customers started building on it because there really weren’t other great solutions out there, and we started to see huge momentum and traction. We got to benefit from these other entrepreneurs that were figuring out these very nuanced markets, but they could use our technology on the backend and basically bring us into these markets. So that was the eureka moment where we got conviction to pivot.

Alejandro: Because at this point, you had already raised some money. Right?

Bill Clerico: Yeah. We had raised somewhere around 20 or 30 million dollars at that point. So we had really capitalized the company. We needed a way, a path towards building a real business. People might look at that and say, “Oh, that’s really great that you had that money in the bank, but to us, it felt a little bit like an albatross. Like, “Wow. We’ve raised this money. The expectations are actually really high. We have to return a multiple of that. What are we going to do?” And it felt incredibly stressful knowing that if we didn’t figure it out, we were going to leave a 20 or 30-million-dollar crater in the ground.

Alejandro: Yeah because if you’re getting the 20, they’re expecting at least a 200-million-dollar outcome. So I guess for you also, this was very risky for the business because if you have institutions like you were having really sophisticated folks and you do a pivot, and perhaps things don’t work out, and they don’t reinvest, that’s kind of like the death penalty for the business because then other investors are going to be like, “Hold on. The existing investors are not investing. Perhaps there’s something going off with the business. There’s something wrong.” So how did you keep your existing investors posted during this process?

Bill Clerico: I think it comes back to what we talked about at the beginning of this podcast, which is around how do we do the deal-making and building it on relationships? I think from day one we really went out of our way to build deep relationships with our investors. One of our first investors was Peter Bell, who actually was an advisor and a part-time professor at Boston College. I’ve known him for years and years and years before he invested in the company. One of our other early investors was David Hornik, who I’d gotten to know really well through the YCombinator experience. I spent a bunch of time with him getting to know him. That really helped because two or three years later when we needed to take a big risk, we had the strong relationship. We had trust. They were excited about what we intended to do as a business, and they trusted us to be honest with them and to get it done. It’s a great example where we had done sort of a zero-sum financing where we weren’t compromising and working together and building that relationship. I’m not sure if they would have participated in the pivot because it really looked way different than the business that they had invested in. So I think it came back to the way that we built those relationships in the financing process. 

Alejandro: I’d like to talk about how you guys scaled from there and how this became a massive success but just a quick story that perhaps we can share with our listeners. So what happened with the 600-pound block of ice?

Bill Clerico: Yeah. In the early days, we were trying to get as much awareness as we could, and we had this momentum, and we were trying to sustain it. I think when you’re a small company, marketing is really hard. You can’t spend a bunch of money on billboards. You can’t spend a bunch of money on digital advertising. You’re competing with folks like PayPal who have these massive budgets. But what you can be is really scrappy and creative and maybe more aggressive than the incumbents can be. Rich and our team had the idea that PayPal was a bit infamous at this point for locking down and freezing people’s accounts just randomly without recourse to let them unblock it. It was really causing some negative press and some negative sentiment around the company. We thought that we could capitalize on this. So we rented a box truck, and a pallet jack, and we bought two 300-pound slabs of ice. We froze a bunch of money in-between those slabs, and we put a little message inside that said, “PayPal freezes your accounts.” We fused those slabs together, loaded it up in the truck, and dropped it in front of their big developer conference in San Francisco at the Muskogee Center. Then we called TechCrunch, and we told them to go check it out. I think to this day might still be our biggest traffic day ever. It just went incredibly viral. I think we struck a chord with people around just the negative customer experiences that PayPal was really associated with. For us, it was a relatively simple marketing effort and cost us maybe $500 all in. And so, it was a really big success and helped put is on the map. 

Alejandro: Wow. What an incredible story. Going back to the pivot, then once you guys knew that you had achieved product/market fit and that you guys were really feeling good about this new direction, how do you think about scaling up and growth. What did that look like?

Bill Clerico: The pivot itself was a scary moment because while we had a lot of excitement about our API, and we were seeing good growth, 70% of our business was still our consumer stuff. The consumer stuff was not growing as fast. We didn’t think it was the future, but it was taking up a lot of resources. So, we had a really tough, really honest board meeting where we said, “We want to shut off our consumer business. So we’re going to literally overnight lose 70% of our revenue in hopes that we can focus all our resources on our API.” I think to the board’s credit they really supported me in that. We made that change, and we took a revenue decline 70% over the next day as we shut off our consumer product. But we started seeing faster and faster growth on the API. We had been getting all these phone calls from friends saying, “Hey, we’re building this type of software, and we need to build payments into it. Can you guys give us some advice?” We said, “Yep. Not only can we give you advice, we can help make it easier for you.” So that was a huge moment for us. We started to really grow. Some of our really early customers like GoFundMe that started with us when they were just a two-person company had huge success and therefore us, as a partner to them, has had huge success as well. It’s been quite the journey, and we’ve expanded beyond some of those early use cases now. Now, we really have a big belief that there’s all this small business software that’s out there. A lot of it is SaaS, and these small businesses are using software to run and grow their businesses more than ever. Payments need to be an important integrated part of that technology. When you walk into a restaurant, and you see that iPad there where they’re managing their seating or their menu, it makes a lot of sense to also pay that restaurant using that software so that they can have all of their data in one place, so that their operations can be more streamlined. We realized that we were at this inflection point for a new market around software integrated with payments. That’s really been the market trend that we’ve built our business on.

Alejandro: Really cool. I remember for one of my previous companies we were actually using you guys. So we were very satisfied with the service. Really, really cool. So as you were scaling up the business, how were you scaling yourself too?

Bill Clerico: That’s a great question. I think one of the things that defines entrepreneurs in my mind is just the ability to learn quickly. You’re basically inventing a new technology. In some cases, a new market, and almost always a new product. So you have to be a really good and ferocious learner to be a successful entrepreneur. To your point, the other part of it that doesn’t get talked about as much is that you also have to learn how to be a leader. That leadership job changes every six months. Right? The leadership required to get two people into YCombinator and move across the country is a lot different than what it takes to manage and lead a five-person team much less a 10-person team or a 50-person team or a 500-person team. You know, the difference between a 5-person team and a 50-person team may not seem that much when you just think about the numbers, but it’s like ten times more complicated. You have ten times the number of people, and that just happens over and over and over again. To go to 50 to 100 again doesn’t sound like that many more people, but the organization is twice as complex. So if you’ve got someone that’s a first-time CEO or first-time entrepreneur that needs to not only scale their business exponentially but needs to scale themselves and their leadership exponentially. So for me, I was really fortunate to have some really great people around me that served as advisors. So I just went and said, “Who would the best possible people be that I could learn from who are these great CEOs? I tried to spend as much time as I possibly could with them, picking their brain, and coming to them when we had problems, and being really transparent and honest with our shortcomings as a company. That was the only way that people could help. That was hugely, hugely helpful for me.

Alejandro: So how do you build a meaningful network like that?

Bill Clerico: I think it comes back to those relationships, and it feeds on each other. If you can build really close, trusted relationships with great people, great people connect you with other great people, and it’s a flywheel that you can build from there. I think it comes back to starting with the people that you know and not just taking in those relationships, but giving and building a really trusted two-way relationship. I think from that, good things come. When people feel like you’re a giver in those relationships, they connect you with other people, and you find your way around. So I think it’s really about how you show up with the people that are already in your life. That’s the ticket to growing your network.

Alejandro: So how much do you think it helped on showing up and building that network to be able to raise the money that you guys raised?

Bill Clerico: I think it’s hugely helpful because when you think about what it’s like to pitch and raise money as an entrepreneur, you’re trotting up and down Sand Hill Road. You come into a conference room. You meet someone for the first or maybe second time. You ask them for like 10 million dollars or 20 million dollars or 50 million dollars or however much money you’re raising. You just met for the first time, and there’s a lot of trust in investing that much money in someone. Trust that what they’re saying is true. Trust that their insights about the market are right. Trust that their ability to execute is there. It’s really hard to meet someone for the first time and walk away in the span of a couple of weeks with that type of capital. I think trust is better built over a long period of time where you know someone. You talk to them. You’re helpful to them. They get to watch you grow. They get to watch you build your business. Then you come back. Talk to them some more, and over the course of months or years, you build trust, and you build those relationships. I think it’s critical to raising money is having that trust and that never gets built over the span of a long period of time.

Alejandro: Because for you guys, prior to the acquisition, how much capital did you raise?

Bill Clerico: We raised a total of 75 million over the course of four different financing rounds.

Alejandro: Got it. I see incredible investors. We have Highland, August you have in there as well, and then fantastic people like founders of PayPal or YouTube; a diverse background here. So how helpful do you think YCombinator was to kickstart the network in this regard?

Bill Clerico: I think YCombinator is usually helpful. You go through this 10 or 12-week program where you’re refining your business, and there’s a demo day at the end, which makes it really easy to meet large numbers of people. But we initially didn’t have great success even at demo day raising money. It was really once we got a couple of key people interested that knew the business well. One was Eric Dunn who was really well known, a fintech executive and one of the early employees of Intuit. The second was David Hornik, who was a venture capitalist at August Capital. When the two of them really dug in, understood our business, and said, “We want to participate in this,” and it was really their stamp of approval that helped build a lot of momentum. That was when we had tons of people coming to us asking to invest. It changed the dynamic a lot. So sometimes, it only takes a couple of really great people that know your business really well, and you have a strong relationship with to get things started.

Alejandro: How many employees did you guys have prior to the acquisition?

Bill Clerico: Prior to the acquisition, we were just under 200. Then today, we’ve probably grown by about 60% or 70% since then. It’s actually been a really great post-acquisition process for us. I think J. P. Morgan’s been a great partner. They’ve invested a ton in the business, and helped us grow our team, helped us grow our market share. We’ve got some really great and interesting capabilities that we can only do because we’re now part fintech, part bank. So I think in terms of acquisitions, a year and a half in, it feels like it’s going pretty well. It, too, was built on the back of strong relationships. It took us a year of getting to know the team at J. P. Morgan before we felt comfortable being acquired by them, and it took them a year of knowing us before they felt like they were comfortable buying us. The trust was built there over the course of a long period of time, and that’s what helped ultimately get the deal done and build this great business that we have now.

Alejandro: Did you guys have a partnership, and then the partnership discussion went into an acquisition discussion, or how did that happen?

Bill Clerico: Yeah, something like that. We definitely started talking about ways we could partner together, which was great because it gave us an opportunity to really explore and get to know each other. Think about the ways that our technologies could be strategically combined. And it was really only after six or seven months of that, that we realized we could do a partnership and that would be great, but if we really put these businesses together in a more formal way, we could do more. That was a logical conclusion that we both came to. And we came to it with trust that had been built on both sides where I really felt like this was a team that respected our technology and product and culture and wanted to set us up for success and knew that our speed and agility and all that were key to our success. They knew too that I wasn’t just looking for a payout. That we really were excited about the mission and what we could build together, and that we really were convinced that J. P. Morgan was a great partner for us. But you could really only authentically build that over six or seven months of talking about different ways to partner together.

Alejandro: This is something that you knew from your days at Jeffries when it comes to getting deals done. I’m wondering what was the difference that you saw from being on the advisory side to being on the operator side?

Bill Clerico: On the advisory side, it’s really easy to be kind of hands-off and to say, “This is just a transaction. All that matters is price. How do we make this move quickly and get this to a close?” And it’s good to have advisors in the loop that can think about that and make sure we’re looking out for shareholders and all that. But I think on the operator’s side, it’s just a much more emotional experience. It’s not a hands-off, just the transaction. It’s a transaction, but it’s also a job interview. It’s where you’re going to go spend the next couple of years of your life. It’s your legacy as an entrepreneur. It’s the legacy for the company you’ve built from scratch and making sure that it’s going to be able to continue on and achieve the mission it set for. You have a huge responsibility to your team to make sure that these 200 people that have trusted you with their livelihoods and have built this amazing culture and these great products, that they’re allowed to continue their work, and that this transaction is fair to them. There’s just a bunch of different stakeholders and a bunch of different considerations that when you’re an advisor advising a board of directors on a transaction, that you don’t have to consider as you do as a CEO or an operator or as an entrepreneur.

Alejandro: Make us be insiders here for a minute. What was that day when you finally signed the asset purchase agreement and finally, let’s say the company was acquired by J. P. Morgan? What was going through your head?

Bill Clerico: I think I was just tired. I was excited to sign, but I actually remember very distinctly where we were and what we did. One of my colleagues at J. P. Morgan at the time was a gentleman named Ron Cameron. He and I were negotiating the final points of the deal. We were actually together in person, and as with any large, complex transaction, there are always a bunch of small legal points that need to be ironed out. So our lawyers were going back and forth and back and forth for days. He and I just said, “We’re going to sit together until we get this thing done. We were at dinner, and we each had to duck out for a quick call with our attorneys. So finally, we were standing on the street in downtown Palo Alto, and we finally got the news that we were closed and signed. So we went to the Old Pro, and we had a couple of drinks to celebrate. That’s what we did.

Alejandro: That’s amazing. Did you buy anything? Any indulgence? Anything that you wanted out of curiosity?

Bill Clerico: For me, that’s not really where I’m from. I kind of grew up very humble and from New Jersey. I did some stuff for my family, and my wife and I did buy a cabin up in Mendocino County. So we spent some time up there and getting away from the hustle and bustle of the city on the weekends.

Alejandro: Amazing. Good choice. I understand that the deal was valued at about 400 million or such. That was reported by the media. So really good stuff. Then I see that you’ve also been very much involved as well with YCombinator as a part-time partner. So what does being a part-time partner at YCombinator – what is that?

Bill Clerico: Yeah, that’s something that I did for a while, and then now really just try to stay involved in the early-stage startups and helping companies whether they’re YCombinator or otherwise. Really my goal here is to stay relevant and plugged into the next generation of entrepreneurs. There are all kinds of exciting innovation happening. The things that we’re working on at the scale that we’re at today are just different than what an early-stage entrepreneur is thinking about. So it’s really helpful and interesting and engaging for me to work with the next generation of entrepreneurs. I do some angel investing on the side to be able to support entrepreneurs and ideas that excite me, and it’s a lot of fun.

Alejandro: I would like to ask you here because I’m sure that you see a lot of trends. Where do you think that fintech, and especially where you’re really sitting, where are things heading as a whole?

Bill Clerico: I think there’s a tremendous amount of innovation from technology companies, and I don’t think that was true ten years ago. But really over the last ten years, we’ve seen innovation in payments. We’ve seen innovation in asset management. We’ve seen innovation in insurance. We’ve seen innovation in banking. So the large banks are still really dominant players in the ecosystem, and I think they’ll continue to be for a long time to come. But there’s definitely a lot of innovation from technology companies that are finding smaller markets that are building really great products in those markets, and then you can see expanding beyond those markets at some point. One of the things we’re trying to do at J. P. Morgan is to figure out how to best partner with that ecosystem. So we do some strategic investing. We do a lot of partnerships. We spend a lot of time with early-stage companies trying to get to know them better and trying to help them because it helps us to think about our innovation agenda. It helps us to participate in technologies and in markets where they may not move the needle for us as J. P. Morgan Chase today, but they’re definitely the ones we want to be thinking about for the future. So we’ve really been trying to make a big effort in partnering with fintech companies.

Alejandro: Got it. And what do you think is next for Bill?

Bill Clerico: What’s next for me? We have a lot of work left to do here. I’ll tell you that. We’re only a year and a half into our partnership. We’ve been hiring like crazy. We’ve been building like crazy, and really over the next six months, we have a ton of really exciting product announcements talking about different ways. Not just products that we face-built but also products that take advantage of being both J. P. Morgan Chase and WePay together. We think that many of these products no one’s ever seen anything like them in the industry before. So we’re super excited to roll that out. I’m laser-focused on all we’ve got to get out the door in the next six months right now.

Alejandro: Got it. And I guess for you as well and obviously for your team, too, it’s quite a transition from really driving and designing and doing the architecture for your own path versus perhaps now doing everything under the umbrella of a larger corporation. So how is that shift in change, especially for you?

Bill Clerico: The way I like to describe it is it’s like the difference between big companies and startups is, it’s a little bit like the infantry versus special forces. Special forces can go see a small opportunity, can seize on it really quickly, can work really fast to get stuff done. But if you need to go occupy a country or you need to really do something big, you need the resources and capabilities of the infantry. The infantry may not be able to deploy with two hours’ notice, but when they do, they can really move the needle in a big way. So I look at our job at J. P. Morgan as to be a little bit of special forces. To be out there looking for the next trend, to be moving really quickly, to be scouting opportunities, to be working with the latest and greatest technologies, and then knowing that we have the power of the infantry behind us when we need the firepower, the resources, the capabilities of one of the world’s largest and best financial institutions; we have it. So it’s a pretty cool combination, and we’re having a lot of fun with it.

Alejandro: Very nice. One of the questions that I typically ask the guests that I have on the show is knowing what you know now – it’s been quite an incredible journey that you’ve had already. Knowing what you know now if you had the possibility of having a chat with your younger self, let’s say the Bill that was giving the notice at Jefferies before launching your own business, what would be that one piece of business advice that you would give to your younger self and why?

Bill Clerico: I think it would be just about persistence. I think the journey was much longer and much harder than I would have ever imagined at that point and probably much scarier as well. I think knowing that persistence and determination can get you through a lot. I think I would have reinforced that in my younger self. I think one of the amazing things about startups is like really a startup only fails when you give up. There’s no way for a company to just end. Right? It’s when you give up that a startup company fails and so, one of the pieces of advice that I always give younger entrepreneurs is just persistence. There can be some really tough times, but if you can hang in there, good things come.

Alejandro: Perhaps there are some people that are listening that are going through one of those dark moments now because the journey of being a founder is tough. You have the ups and the downs, and the downs are especially tough. So any recommendations or tips for being able to hang in there during those times?

Bill Clerico: I think it’s just about trust in yourself and your team. If you have a smart group of really committed people, yourself included, that smart group of really committed people may wake up some days, and there are some big obstacles to climb over. But usually, when they spend a couple of days or a couple of weeks thinking about those obstacles and working on those obstacles and all the sudden, the obstacles get smaller. So I think just having trust in those people and being really honest and open with those around you and asking for help. I think that humility with that persistence is an incredibly powerful force.

Alejandro: I love it. Asking for help. That is critical, Bill. So, Bill, for the folks that are listening, what is the best way for them to reach out and say hi?

Bill Clerico: Twitter is usually great for me, so I’m just @billclerico, and I would love to chat with anyone there that wants to talk.

Alejandro: Amazing. Well, Bill, thank you so much for being on the DealMakers Show today.

Bill Clerico: Thank you for having me. It was a lot of fun.

* * *

If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic, and if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help whether it is with your fundraising efforts or with selling your business, you can reach me at alejandro@pantheraadvisors.com.

Facebook Comments