Financial Institutions Need To Solve This Problem! | Andrew Rossow

And these CEOs probably don't have as much innovation in their behemoth organizations as a young entrepreneur sitting in the basement typing out code and solving problems to make DeFi faster, smarter. I think we're going to see a lot of change, a lot of disruption, a lot of turmoil, and a lot of incredible investment opportunities into DeFi in the next two years.

Coming into Wonderfi, in this just incredible project, how did you become involved with Wonderfi, and how did you and Josh Richards meet? I just found him so interesting because he was a person interested in becoming an entrepreneur and becoming an investor, and so we really hit it off from that perspective. Obviously, we do a lot of work together in social media and television. But when I sat down with him, I said, "Look, what do you want to do?" He said, "I'm really interested in what you're doing in DeFi. I'm really interested because that's the future." And he's right.

It's when you start investing in things like decentralized finance—that's where the puck is going. That's the classic Gretzky story: you want to invest where the puck is going, not where it is right now. And where the puck is going in financial services globally is DeFi.

And so the biggest challenge, and why I got into Wonderfi, it was originally called something else—DeFi Ventures. I met the team there: Ben and his whole team—amazing entrepreneurs. I was really interested in becoming an early investor and a partner. When I find great teams, I go all in.

So I started talking to their team, saying, "Look, what can we do together?" Because what he was talking about and the whole team's mission is to democratize DeFi. In other words, if you are an institution and you want to put, you know, $100 million to work in USDC, you're going to go to an FTX, you're going to go to a Circle, and set up an institutional account. But that doesn't work for 100 million Americans who want to have DeFi, maybe make some interest off their Bitcoin or their cryptocurrencies, get some income off it.

You can't do that easily. And so what Wonderfi is all about now is making it really easy to go into this space and start investing in it. For me, the reason I got into DeFi in the first place is right now I make basically nothing on my cash, as you know we're at the lowest interest rates in history. But now, when I go into DeFi, I can actually make three, four, five, six percent—all through DeFi. And I want Wonderfi to make that really easy for me and a hundred million other Americans.

And that's really what Josh and I have piled in together. And, you know, from a networking perspective, you know, I'm 31 years old. I fell into the media completely on accident when I was 26 in my first year of legal practice because I took and just stripped apart Pokémon GO as mobile AR gaming and those legal implications for consumers. I found myself in this whole new world, being able to network with individuals like you and Mark and Robert, and just fell in love with bridging the gap between law and media.

Can you talk about how today's younger generations, whether it's millennials or Gen Z, are often missing out on valuable opportunities to connect with people like you and Josh? You know, how has networking played this instrumental role that you and Josh have come to with Wonderfi? When you want to become an entrepreneur, don't think about it as a destination; it's a journey. It's something that you're going to do for the rest of your life. If you catch that bug, it's not for everybody, but it's not about the grade of money—it's about the pursuit of personal freedom.

All of these investment opportunities and the work I do with teams like Ben's at Wonderfi or Josh Richards or any of the other entrepreneurs—30, 40 of them that I've been invested in—is talk about my own journey and try to help them take the higher road. In other words, try and avoid making the mistakes I made. That's what every single entrepreneur does for the next generation: say, "Look, here's how I did it that time. Here's what worked. Here's what didn't."

And it's kind of like a mentoring, coaching aspect, but at the same time, we're investors together; we put real money up. So, you know, Josh's team, as in Michael growing and some of the other guys there, are really into this. I met them, you know, years ago on the set of Shark Tank, and Michael's been around a long time and he's well known in the community.

For me, it's sort of—I think this investment fits with what you're doing. Josh and I can really be a part of, you know, looking at this with you, and we can do some great stuff together. Obviously, when you're talking about a consumer good—in other words, Wonderfi is going to be an app, something you can either get onto with your laptop or download onto your smartphone—and that means customer acquisition costs matter.

So I've got millions of followers on social media, Josh has millions of followers; we're going to get the message out. The whole idea is to help the company get people to try the app. And that's the reason you would want to take, you know, two teams that are really supporting social media—my team and his team—and say, "Let's do it together. Let's blow this app up because it's good for everybody involved." All of these are, you know, sort of in our thinking and how we can work together. That's exactly what we're going to do.

Do you feel that this relationship is any different or something new in terms of that cross blend? Well, you know, it's always something new, it's always something different. It's always to, you know, talking to each other about what everybody's doing. I mean, the entrepreneurial space, you know, gets you up at five in the morning, and you're not in bed until one at night.

There's so much stuff going on right now. This is a golden renaissance in our economy. We're going to achieve probably 9, 10, 11 GDP growth in Q4 this year; that hasn't happened since the 50s in America. At the same time, you've got this whole digitization occurring. I call it the great digitization 2.0, America 2.0, because everything's direct-to-consumer, including financial services.

And so Wonderfi is part of that trend. You talk about fiat currencies, and we're printing, you know, a trillion dollars for infrastructure. We're not going to print that money in paper; that's going to be digital money. And every currency is eventually going to be digital. So if you want to be part of this transition, you've got to place your bets today in deals like Wonderfi.

Find teams that are cutting edge, we certainly have that. Form partnerships with these big players at the same time, which I'm doing, and investing in them. You know, I have to tell you, in the last 12 months, when I look at our deal flow, more than 60 percent of my time today—every day—is spent on DeFi, looking at opportunities, investing in DeFi, managing our DeFi accounts.

Consider that change in the last 18 months; maybe it was three percent 18 months ago, now it's 60. That's a huge shift. You know, for those interested in becoming part of Wonderfi's, you know, eventual ecosystem, do you have any takeaways, whether it's one, two, or three, that you would want consumers and even some of your colleagues to walk away with?

You know, I'm sort of an ambassador for DeFi now, and the reason I've done Wonderfi is I want to be able to tell people, "Try it." The whole idea is try it. Put in $100, $200, $300. Start to learn the mechanics of this incredible market and this change in financial servicing that's occurring.

And the role that Ben and the team have to do is they have to make it simple; they have got to make this really easy. Their number one mandate is so that anybody that's not familiar with DeFi can download that app and use it, and that's the real opportunity that's at hand. And then, once we've got that—and we're getting very, very close; the team's working 24 hours a day, eight days a week—we're going to send that out to the market and let everybody test it.

And that's what Josh and I have to do: wave that flag and say, "We're here. We figured out a way to make this really easy to use, and now you can try it." And that's exactly what's going to happen.

Is there anything that scares you, Kevin, at all about the DeFi space? And this isn't to twist this into a negative context, but is there something that maybe not really concerns you but still has you a little bit hesitant that says, "Look, we've still got to pump the brakes a little bit even though we're exploring this, we're excited about it?" You know, is there anything that kind of jumps out at you?

Yes, there is. There is something that keeps me up at night—it's called compliance—the regulators and compliance. I do not ever, given the size of my holdings and all the financial services companies I'm involved with as an investor, want to be non-compliant. I am not interested in being a cowboy or being in the Wild West, and there's a lot of people that think that way about DeFi.

But the point is, this is an institutional product emerging, and I come from that subset. I have to be compliant. So I tell every one of my CEOs, whatever you're doing, I want it to be compliant with the regulators. I want to know with certainty you've checked the box there.

Everything I do with every company I invest in—when I deploy capital into crypto, I want to make sure my own compliance team knows exactly what's going on and that we're reporting it correctly. You're absolutely right: that is the area of my greatest concern because I believe that the way we can make cryptocurrency a standard globally is to be compliant with it, set the regs and rules up so we can make it a standard globally.

And I want to be part of that as an investor, but not on a non-compliant basis. If you were able to provide some sort of advice, consultation, to some of these traditional financial institutions, whether it's JP Morgan, Chase, Capital One, about the future of DeFi or just the future of banking in general, what would you tell them?

You know, we've seen Chase's CEO kind of back and forth over the years. I mean, what would you want to tell them if you haven't already? Well, that's an open dialogue that happens every day in the markets as people make decisions where they're going to deploy capital. You look at what's going on right now in capital generation: look at the deals that have been publicly announced. Circle, $500 million, in addition to another $400 million they just raised; $900 million under their balance sheet, they're a private company.

FTX, $900 million—all of these private companies in DeFi are raising capital in amounts that have never been seen before in terms of the size of this for private companies. You know, at least these deals are huge, and that shows you where the deal flow is going. Now those investors could have invested in money center banks, but they chose not to. These were institutional clients that said, "We don't want to be back there; we want to be where the puck is going."

And so we're going to take these really big bets, and these are big bets when you start talking about hundreds of millions of dollars into private companies like Circle and FTX. You know something's going on, and so that is what's happening. Capital is moving to where the puck is going, and that's DeFi.

That doesn't mean the role of money center banks is going to go away, but certainly, they have to understand the competitive landscape for financial services is going through a really rapid transition. These CEOs probably don't have as much innovation in their behemoth organizations as a young entrepreneur sitting in the basement typing out code and solving problems to make DeFi faster, smarter, you know, and more liquid and lower cost.

You talk about some of these platforms that charge a fraction of what money center banks charge. So there's a lot of democratization going on here, and I think what's going to happen and why I'm an investor in all these private companies is that I think these things are going to get acquired by the money center banks after they prove their business models because these money center banks that are behemoths need these services inside of what they do.

So I think we're going to see a lot of change, a lot of disruption, a lot of turmoil, and a lot of incredible investment opportunities into DeFi in the next two years.

What can our millennials—what can my millennial generation and the Gen Zs do better to contribute to be of value in this fintech space, in this DeFi space? What would you like to see from us? I've told my son the same thing. He called me up and said, "Hey, what's this Wonderfi thing about?" And I said, "Look, this is an opportunity to democratize investing, make it less expensive, make it totally transparent, make it so that people can use crypto and get interest off their holdings and get income."

All of these things are happening. And so I tell everybody, "Try it! Just get yourself exposed to it. Try it. You don't have to go all in; just educate yourself," which you can do online. The barrier to entry is very, very low. You download Wonderfi as an app, and you try it, and you learn from it. That's the whole idea. This is a massive educational process we're going to go through here, and people are going to realize, "Wow, I can actually use this to have an investment strategy where I can make some income."

Which is really all I wanted in the first place when I started investigating this two and three years ago. It was, "Look, I've got a lot of cash on the sidelines. I sold some real estate, and I need to invest it and make two or three or four percent interest." And where did that lead me? Wonderfi! That's where it led me, and that's where I am today with Shark Tank.

You know, I've grown up watching you for years, and all I have to say is thank you for doing what you do. It's taken somebody like myself who, you know, we've gone through college and never really appreciated the financial responsibility. But having individuals like yourself, Kevin, where yes, it's TV, but there's something to learn from how you talk, what you teach.

How does DeFi and this world of digital money, if at all, change the future, in your opinion, of Shark Tank and maybe some different ventures that you consider on set while you're filming? Does that come into play at all, or do you anticipate that coming into play?

That's a great question, and you're dead right on this. Shark Tank is actually a snapshot of what America looks like—what it's going to look like in two years. We are so far ahead of the market now because we have a hundred million eyeballs to see the show each year in syndication.

Everybody knows that every entrepreneur with a new and exciting, disruptive idea wants to come on Shark Tank. Now they know that what they're doing is going to be very important in 24 months. So I like to look at Shark Tank, and we're in the middle of shooting it right now, season 13. Every deal I'm seeing right now is looking at the digital America 2.0 that's going to be here in 24 months: direct-to-consumer plays, financial services deals, everything around sustainability and ethically sourced products—all of this happening now on Shark Tank.

It is a forecast of where America is going to be in two years, and I'm loving it. You're dead right: there's all kinds of digital deals this year that you could have never thought of. You know, they step out on that carpet, and I say to myself, "Why didn't I think of that? How is it I didn't do that?" That's what I love about Shark Tank.

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