Gen-Z Beating Millennials In Crypto?! | Ft. Josh Richards

[Music] All right, so it's Marshall, Mr. Wonderful, Josh, and Ben. Now, we're all here to talk about multiple things, but mostly about investing. Now, you guys have a new fund.

We do! Let's talk about that. What is the purpose of the fund?

Sure, and I thought that the purpose of our talk today was just to talk about how great denim shirts are and how good I look in that! I think I look spectacular with this.

I think you do, but I mean, we coordinated it. We got the text messages going this morning. So, in all seriousness, we started Animal Capital back in March, and the fund is called Animal Capital.

Yeah, okay. Is there a reason? Sometimes the name says a lot about the mission.

It might be a better question for Joshua. Josh, you can tell me if I'm misspeaking here.

Of course! I think it's really the idea of an animal just aligned with our hustle—that there's nothing that we will not do to find a way to work harder and to work smarter.

Yeah, and then they get the animal they're hunting for those investments, right? It's like, the investments are our prey, and we're the predators. So, no matter what's going to happen, we're going to be the animal that finds out.

It's exactly right! Whether we're hunting for LPs in our fund or hunting for things to invest in or hunting for ways to drive value for our founders, that's—it’s what we have to admit. I see a lot of fun names. I talk to a lot of fund managers. I've never heard of Animal Capital.

It's a great name, thank you!

Just out of interest, animalcapital.com—we own animalcap.com, and we own the name Animal Capital. Period. That's very important!

We really started this fund out of interest in people aligning with our investment strategy. Josh was nice enough to want to work with me about a year ago, a little bit more than that now. People were offering Josh and, some of you know, his housemates and Michael Gruen, our other business partner, equity in these young businesses where they really well...

You know that fits because Michael is an animal!

I know Michael—that's a fact! See, there are multiple reasons, right? It's not just one. It was called Animal for like—now I really get it!

Yeah, but if it was just Michael, it'd be called Predator Capital!

But we, you know, they were getting offered equity in all sorts of things. So, I mean, really what's going on here is Josh is such a huge player in the influencer space. Every guy and his dog is coming after you to get an endorsement, right?

Yeah, so if you're going to endorse something, why don't you own it?

Exactly! That's what our strategy became. It really became, we want to own everything we touch. We want a piece of everything we're involved in. And then when we were going to start investing, we realized the value of ourselves in the advisory shows as well. And then we were bringing people like Marshall to really help us out on that side. And that kind of became our game plan when we were going in and investing in these companies is being able to be everyone's best friend, being able to provide so much value, and really getting to also have the advisory side as well to help out.

Let's talk about the criteria.

Yeah, because that's really what matters. You look at it through the same filter every time, right?

Of course. Okay, so hit me.

So you say the same filter every time? I would say the initial things are, you know, our general scope. And I said John said this to every investor in every master investor coach. If it's not making people's lives better or more fun, we're probably not investing in it.

I know that seems almost like flippant or silly, but it narrows the scope for us to things that we really believe are making people's lives better. So we think about fintech, life sciences, a little bit of consumer, primarily better-for-you foods—certainly better foods. That's the space that we've not only gathered and we're significantly invested in and hope to get some of our founders under Shark Tank at some point.

And founding ourselves, so that's one of your products, right?

Yeah, yeah! So this was essentially more lifestyle-type drink compared to an energy drink—the healthy version of an energy drink. So less calories, less sugar. What it's actually, the caffeine is used with—it's used with green coffee or green tea beans instead of going into actually a lot more like the chemical side of things.

So yeah, it's just a healthier variant of an energy drink now.

Why we're all sitting here together is because we have done this together, unfortunately.

And so, which is great. It's called Wonderful. And I have been fascinated with, you know, decentralized finance now for three years because I'm using it now, you know, to do all kinds of sort of different things.

But I've realized that it's really complicated and hard to do. I've had to hire three different people inside my firm now that just deal with all this stuff, and I want to simplify it. And we've got the CEO of Wonderful right here!

Let's talk about this. So, Ben, what's Wonderful?

Wonderful is really just focused on making DeFi simple—like really simple for people.

First of all, what is DeFi? Because most people have no idea what it is.

DeFi is probably the most important sector to pay attention to right now. That's obviously, I'm biased, but huge growth potential is kind of a subset of crypto which is giving people the power to own and control their own assets.

So instead of sticking your stuff in a wallet like Coinbase, you put it in a decentralized scenario—a platform like Wonderful?

Yeah, exactly! And you retain control over it. You're not giving up control to somebody that could do something fraudulent with it or something like that. So there's a big movement behind this. But we're really only in the very early innings of DeFi. So with Wonderful, we're really trying to bring this to the masses.

Now, why I like it and why I got involved is very simple: you can stake your assets and make interest. In my case, I'm using USDC as a stablecoin, lending it out and making between five and six percent.

That is very cool because you can't make that in a bank account, right?

And so that's what we're going to be able to do on Wonderful and simplify it, right?

Yeah, exactly! And it's something where, again, there's a ton of potential, but it's only people that have like, you know, 24 hours a day to spend learning crypto and DeFi that are able to access it right now.

So the whole mission is, you know, democratizing finance. But you can only—the only people that can access it are like, you know, engineers that are like, you know, in their basements, like dealing with this stuff like 24 hours a day.

So I think there's a really important, you know, goal here that we have which is just making it accessible. For us, getting, you know, you guys involved has been a key part of that because it's, you know, it's really important to get the message out.

So the investment thesis, sure, let me see if you agree with me, Marshall. You know, of all the people in this room, yeah, I've got millions of followers, but nothing like Josh has, particularly with Gen Z.

And Gen Z is more hip to crypto than any other generation.

100 percent! So my thought was if we get together on this, I can do millennials and baby boomers, and Josh can do Gen Z, and we'll have a massive amount of people we can show this product to and tell them about it—tell the story of the company. Is that the way you see it?

Yeah, I mean exactly like that! I think for me, that's why I was so cool to be a part of Wonderful—that we all have this aligned, this aligned, I would say, passion and it's empowering the youth.

It's bringing in all these different ages together to really learn about a space that is so important to know about, right? Really be able to teach people what they can do with their money, with financial literacy coming in and investing.

And like you said, Gen Z is the most hip generation to crypto. They are talking about it every day. They're seeing it on their social media every day. They are sometimes putting money into coins that they aren't getting any information on.

There's no one advising them; they don't have a financial advisor telling them what to do. So this platform is so important, I think, to not just me and Gen Z but so many different ages to really learn about what they can do with DeFi.

Yeah, because I would like to make sure that—and this is the one thing that I made sure when I invested in, you know, the company, you know, along with Ben and the team—we need to be compliant. We need to get our tax forms out.

We got to do stuff that doesn't get us in trouble. I don't want to be a crypto cowboy. I don't want to do something that gets the tax guy mad at me. Like I want to pay my taxes if I make money. I'm cool with it and I'm fine with that.

But most of these platforms do not report, but this does. And that's what I think is so important.

Ben, I do have one question for you because we talked about this a lot. And Josh, I had the chance to talk about this on a couple of different news networks. The concept of lending for yield and why that's such a big deal—you just walk through the really, like, five-year-old version of what on earth it means lending for yield.

Yeah, I mean it basically means putting your assets somewhere and then generating interest on them. So, you know, we're used to depositing money in your bank account, and right now if you do that with, you know, Bank of America or, you know, Scotia Bank, wherever you are, it's like, you know, 0.25 percent that you're getting.

So it's just, it's really—that's not beating inflation. Inflation is, yeah, so people feel like, like for—I'm a millennial—for millennials, they feel like they’re losing out; they’re getting left behind when that’s where they’re putting their assets.

And I think it's really interesting—like Gen Z definitely has a different—they look at money differently. Kevin's generation looks at money differently. They have different objectives.

But really it all kind of comes together with, you know, lending for yield is locking your asset in somewhere and then, you know, generating a significant amount of interest in it, which really puts it ahead of what you can do with a bank.

So what has it felt like or how has the platform changed since you introduced Kevin and Josh and myself to your lives, and you've given us your cell phone number and access to you and your house?

Yeah, I don't know, Kevin doesn't sleep!

I guess not! No, it’s been great. Like, I don’t know if I’ve told you this story, but one of the conditions that Kevin had coming in as an investment was that you guys could co-invest.

Yeah, yeah! So I think you told me that story!

Yeah, yeah! I just thought it made a lot of sense. Like, it’s a perfect—I mean, look for other things to do together because you’re obviously, you’ve got a mandate to invest in it—you’ve got the fund, you’ve got to find ideas. I think it’s really good financial service is the biggest market in the world.

But let's talk about what did happen. You took it public; this company trades on the Neon.

Yeah, we took it public. But just on your question, like, I think it’s—it’s what it’s done is it’s kind of changed my perspective on how different demographics look at finance.

Because again, Josh has, you know, you guys have such a good lens on Gen Z and what the needs and desires are and issues. And you know, Kevin’s audience is more kind of traditional investment community.

And there’s all these—it’s super interesting because again, everybody has different access to finance. And what EFA is trying to do is lower the barriers to entry and just level the playing field.

So you can't do that by just having one demographic that is representing your company. So this has just opened it up where we're like, okay, we have boomers, we have millennials, we have Gen Z. We're working on getting more female representation—other underrepresented groups—so it's really cool.

I think that's like the driving force—the fire behind kind of what we're doing. So I'm super excited about that!

What really got me was I was, you know, my daughter was listening to a podcast I was doing with one of the crypto guys, the Pomp. He's legendary!

Yeah, yeah!

And I'm talking to Pomp about how complicated it was just to set up my first staking on USDC, loaning my first USDC out there. It was like mind-numbing hard!

Yeah, I mean, it was brutal!

And my daughter heard it, Savannah, she's in New York, and said, "Dad, I want to do the same thing! I want interest off my cash in my bank account! How do I do this?" I said, "I don't know how to do it! I have to hire guys!"

And the whole idea of Wonderful is that she's going to be able to download and do it and be compliant and everything else. That’s, you know, making this something democratizing and making it something the consumer can use is the whole mission. I think we're going to kill it!

Yeah, nobody's doing it like you. Look at what we have versus all the DeFi apps right now. They’re just catering towards, again, people that are like so ingrained in the space.

And it’s just—it’s the early adopter problem—you see with a lot of different technology where it’s just serving more and more to that early user. It’s getting further away from something that, like, your daughter can just pick up and understand.

That's not adapting to try to obtain new users.

No, it's not! It's just serving that existing fan base.

Exactly! Exactly! I know it sounds silly, but it really feels to me the same way that now you see like two-year-olds at the dinner table with the iPad, and they know what they're doing!

You see them swiping or, like, pausing a video. I mean, even Josh and I didn’t know how to do that at the time at the dinner table.

It’s the exact same thing with this! When you think about your savings account, you think about the way that you're going to make money and save for the future.

We're just trying to teach people that level of, like, in the background, bring when I trained here, I'm going to college, this is what I'm going to do, I’m heading my Wonderful account and this is going to be the way that I begin to build that, you know, real base for the rest of my life.

She'll just be like a second nature! Like, it's just—you know, so I think with Josh and I, our job is to get people to try it, honey—that's it! Just try it. That's the key!

So if you're listening to this and you haven't downloaded Wonderful yet, do it! What are you? Come on, exactly! Try it!

I mean, learn something. It’s real easy, and start making interest on your money, which is really, I think, kind of paramount to long-term investing where you want to go with your career.

Josh, why are you an investor anyways? You were just a dude on TikTok.

I think for investing, why was so cool to me was just being a part of the future—like having that responsibility and, really, that power at the same time to know, like, I'm going to be involved in decisions at the next Amazon and at the next Uber and be a part of this business world for a really, really long time.

You’re taking care of your own future because one day you will be 65.

And you've got to have something in the bank.

I know! I gotta make sure I'm able to feed my family, buy my mama a house when she retires, and make sure my younger siblings are set for life. That's setting FI with investing—that's going to be able to set myself up for exponentially just growing!

Well, you can’t do it unless you invest. That’s the key. You've got to learn how to do it, and the way you guys are doing this for the fund, like from a founder's perspective, is amazing, because you just get more bought-in like that.

You were talking about the equity versus kind of like the other pay promotion stuff, and it's way different when you're a founder.

Like, I've worked with paid promoters before, and it's much more like, you know, one and done, and you don't have the buy-in on like the long-term mission and objective.

So it's not authentic; it's not…

Yeah, exactly! It's like, isn’t it? You're representing this. And so, I mean, you guys obviously get that. That's why you structured, like, your fund like that. But it's really great from a company's perspective.

It's even—it’s honestly even a step further because I've talked to a lot of venture businesses that have—on one side, it’s a random founder in Chicago, and they've got one friend who's got a friend that has two million followers on—you, your subscribers on YouTube or on TikTok or whatever—and they want to just offer them something for free.

The fact that founders see us and they say, "This is a thoughtful decision that they're making with some of the most powerful people in the world!"

And I mean, the founders of Netflix and Android and Tinder are investors in our business. That plus everything else that we do to sort of, like, affect the outcome for you, well, it says long-term!

It’s exactly right!

Yeah, it’s not just churn and burn.

Exactly! I mean I think people are starting to smell BS with this influencer just paying for them, right?

Well, there’s a way to do it. There’s a way to do it right. I think that the creators oftentimes know what their audience likes and what they don’t like.

Right, and then you're going to see the creators that are going to go and sell out for the deals and then you're going to see some that don’t. But the people that don’t—they're going to be the ones that are going to achieve that long-term wealth.

Or the people that do sell it for the brand deal, you might have a couple of dollars in your bank account for a while, but unless you're going investing that money and using that, you're going to end up drying out.

Yeah, I really think it has to be transparent, you know? I do endorsement deals, but I have to be using the product! I gotta eat my own cooking, so I'm very, very selective.

I’m a spokesperson for stuff like StartEngine, which is equity crowdfunding, but I also became a shareholder with FTX—same thing: shareholder and paid spokesperson with Tom Brady.

You know, I didn’t know Tom was in the crypto, but it turns out his wife is Giselle! So that’s how he did that deal!

And it's real! Like, you know, I eat the cooking! I think that's my motto: eat your own cooking! If you don't eat your cooking, people are gonna see right through it!

Yeah! What for you, Kevin, when you're looking—when someone's bringing you an endorsement, what are there a couple of like the first things in the lenses that you said it has to have X, Y, and Z for us?

You know, for me, I'm in the same mode as you guys. I need sustainability. I don't want to be part of, you know, doing something that harms the planet.

That's not where my head's at. I'm one of the first guys to graduate Environmental Studies in Waterloo years ago, the first cohort, because I'm into that stuff, because I believe customers of products that know you have a mission become loyal because they want to support the mission.

It's good for business, it's not just some BS advertising—that's number one. And I also think I can send a lot of products, seem like you guys do.

I recently got sent a beverage. I'm in the wine business, so somebody sent me something that wasn't wine, and I tried it; it tasted like [ __ ].

And I thought I would so much—I would never, ever endorse this crap! If you like that video, wait, did you see my next one? Don't forget to click right over here and subscribe!