The Pomp Podcast - #1360 Cyrus Shirazi | Early Bitcoin Investor Building MASSIVE Company

Episode Date: May 15, 2024

Cyrus Shirazi is the Founder & CEO of Haven, a brand new company that is dedicated to focusing on exactly to solve all your accounting needs as a startup founder or business owner. In this conversation, we talk about how to build a venture scalable business with a service, why being profitable early on is a huge advantage, identifying great talent, operational structure, evaluating customers, and long-term vision for Haven.  ======================= Introducing Espresso - the world’s most interactive portable display. They have a portable screen that is incredibly light, comes with a nice stand, and the user interface is very easy. Anyone who listens to this podcast can go to ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠us.espres.so/pomp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. They have a brand new offer waiting for you.  ======================= BetOnline.ag is a proud sponsor of the the Pomp Podcast. Use crypto to bet on sports, play poker and enjoy casino games at BetOnline. Visit https://promotions.betonline.ag/pomp and use promo code POMP100 to receive a 100% matching bonus on any crypto deposit. BetOnline boasts no crypto transaction fees, and processing is anonymous, instantaneous and secure. ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Today's episode is with Cyrus Shirazi. He's the founder and CEO of Haven, a brand new company that is dedicated to focusing on exactly how to solve all of your accounting needs as a startup founder or business owner. Their whole

idea is to over-index on quality, talk to their customers a lot, and make sure that they provide the best customer service in the industry. I've invested in Haven and I'm incredibly impressed by Cyrus and his team. In this conversation, we talk about how to build a venture scalable business with a service, not an actual technology product, and why being profitable early on may actually be a huge advantage for a company like this. This conversation is very overarching on a number of different topics that startup founders constantly think about, including how to identify great talent, what they're doing operationally to be efficient and effective, how they can actually identify whether a customer is good or not, and what exactly Cyrus's long-term vision for this

company is. I really hope you guys enjoyed this conversation. Here is my episode with Cyrus Shirazi. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Today's episode is brought to you by Espresso, the maker of the world's thinnest portable display. Now, listen up. If you're like me, you feel like you are at a command center when you sit down at your desk.

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If you go and you deposit, they'll give you 100% bonus if you use promo code POMP100. BetOnline. The game starts here. BetOnline.ag. Go check them out today. All right, guys. Bang, bang. Cypress, I thought a great place to start this conversation is you got a really interesting background. Obviously, you've got the accounting understanding, you're a crypto native, you've been into Bitcoin and cryptocurrency since 2016, but also you've been into early stage startups. And it feels like a lot of these different experiences in your life are coming together here. And you all want to build an accounting service that is venture backable, that is profitable for startups.

That sounds like a death mission. That sounds like pulling all the things together that are impossible to do, but you guys are doing it and it seems to be working so far. So maybe describe a little bit, like, what are the problems that these early stage startups are experiencing on the accounting side? And like, why are traditional accounting firms not really able to solve it for them? Yeah, so first and foremost, the reason I love this space so much is because it's the greater of empires. What I mean by that is basically no one's reached their maximum potential in this industry. You can look at all the other players. But why do I get out of bed every day to do what I do?

Because I love working with founders and I'm obsessed. i'll probably die five to ten years sooner than i otherwise would have because i'm always on whether it's friday night saturday morning saturday night i'm always there for the customer and we're building in like a really really hard space and how are we doing it better than everyone else we're just over indexing on providing like an exceptional service quality i think that an incremental advantage that businesses kind of shy away from or have forgotten about is customer service when it comes to financial services specifically especially in accounting and the The reason I ultimately launched Haven as a full-stack firm is because I talked to probably

close to, if not more than 1,000 founders in 2023 and heard the same theme from all of them. My accountant won't answer my calls. They never get back to me on time. They don't get things done on time. And I was so personally frustrated by that. And then I was like, let's do it. And took Haven to market in August of 2023.

We had roughly 5 customers. And as things stand today, we have 117 without raising a dollar up until a few weeks ago. And so when we talk about accounting services for startups, like what are you doing on a day-to-day basis? Are you literally just like counting revenue, counting profit, counting losses, you know, doing traditional accounting or are there other aspects to it? So it's really more about being a trusted partner for them. When you're a founder and you're in this unknown world of building a company, especially for the first time, you have no idea what it means to handle your accounting, handle your payroll tax registrations, handle your 83Bs, how do you optimize for QSBS. And all those little things ultimately compound to be really, really important for a business. As a founder, if you take advantage of QSBS, you can save roughly up to $10 million in tax-free gains when you sell your company.

And so not only do we do daily accounting, weekly accounting, monthly accounting for all of our clients and ship their books faster than anyone, but we're a trusted partner that's there for them. So every single client of ours has a dedicated Slack channel or another medium if they prefer it, i.e. Telegram or Discord for our donated clients. And we're just always there. I pride ourselves on being the most responsive firm in the entire market. And previously in my career, I worked with some folks from Goldman Sachs. And Goldman has a mantra of responding to clients within 15 minutes, no matter fucking what. and we're cutting the same cloth to Haven. And I basically instilled that culture within our team.

And no matter if we don't have an, whether or not we have an answer to a client's question in real time, we're going to get that answer, but we're going to let them know in real time that we're there for them. We're proactively here helping, supporting them, et cetera,

and just guiding them along the journey. There's so many things that they don't know and there's so many things that they don't need to deal with. And the most important thing for them to do is spend all their time on product and growth. And we help alleviate a lot of the other burdens that they kind of like need to undertake

as a business owner and as a founder. And that's us. So when you think about doing that, that sounds like a great mission. Obviously, there's this over-indexing on quality or kind of customer service. How do you do it? It's one thing to say,

we're gonna respond to everyone in 15 minutes, but obviously you've got to either build systems or you gotta have a gazillion employees or like what is the secret sauce to being able to do this? So it's really a process-oriented approach. So you set up incentive structures internally for your team that basically prompt them to ensure we have the highest NPS in the accounting industry, no matter what. And what I mean by that is

basically a bonus structure that ensures that if our team is responding to clients faster than anyone else in the world, they're going to get compensated for it. And setting that up from day one so that the team is highly, highly incentivized to ensure that we prioritize the customer above all else. And in addition to that, there's also like using modern technology to kind of like automate a lot of the mundane, repetitive, laborious components involved in running a firm like this so we've got tens hundreds of ideas around how to automate a lot of the workflows that are involved in kind of like running an accounting firm everything from programmatically sending out statements and financials at scale to click on a button to programmatically being

able to have clients provide us with descriptions to transactions that we don't know how to categorize because they didn't have a label programmatically being able to data match and handle reconciliation in an autonomous fashion so that we can get books to clients faster than anyone else. So it's a hybrid approach of building an exceptional team and incentivizing them accordingly, and then building technology to be able to support them. Now, you said that you guys raised money. I gave you some money. A lot of other people gave you money. But it's weird. You want to build a venture scalable business, but you're profitable and you're doing a service. So talk about how you think about those three things mixing together.

Like what are taking three ingredients and creating the final meal? How do you do it? Yeah, so I spent my entire career in startups, was the first business hire at Meow, was roughly employee 45 at Main Street, which is a tax credit company. And while I was there, I got the opportunity to work with hundreds of amazing founders. And so during that journey, I watched so many exceptional founders raise a bunch of money and try to go build a business. and i was like that's interesting that's cool in a lot of instances 99 of the times that doesn't work out and so when i left my job with me out to build my own company i wanted to build a very different company than anyone else has like ever built one where we can write our own destiny we will be successful whether or not we can raise more money or not and we have the ability to just

revolutionize an industry in a fundamentally different way than every other business happen and so the reason we're raising money and we raise money even though we're profitable is because if you want to build a fucking massive business man you better have people in your corner who can help you kind of open all those doors bang down all those doors we need to get into every single ecosystem in front of every single founder in front of every single entrepreneur and the only way to do that at the end of the day is to weaponize or captive to incentive align amazing people across a variety of different ecosystems to help you truly revolutionize the way that a mundane repetitive laborious industry has been run for the past 100 plus years and so

to make a long story short the reason we're raising is because we want to build a huge huge business and we want people in our corner to help us do that talk a little bit as to kind of traditional you know infrastructure software uh and kind of products mixed with kind of crypto right you obviously you were at meow that a lot of the crypto industry sees kind of the changing of a currency the changing of these payment uh rails uh also maybe even like the automation and ai that's now coming into the space like how do you view some of these kind of frontier technologies great question so this is core to kind of the way that we're building haven so we're not going to be a platform that is agnostic on top of just book books or agnostic on top of just zero or not

agnostic on top of just net suite or agnostic on top of just bitways or integral or other crypto accounting related tools our platform is going to be built on top of all of those different tools And so we're going to be able to provide an experience for clients at scale that puts their mind at ease and enables them to get back to doing what matters most, which is building their business, focusing on product, and focusing on their customers. And crypto is just one part of that. And it's also a really important part to us, personally. Me and my co-founder specifically, we've been in crypto since 2016. And we've loved it basically as long as we can remember since we first found out about it.

when i was in college with my roommates never actually got it off the ground but we were ideating on creating like a crypto hedge fund and had a blast with it and we have tons of crypto clients as things stand today companies like parcel ansible labs and many others and i think a lot of people for better or worse shy away from working with the industry but it is the new frontier of traditional uh or just financial services in general and if you don't appeal to kind of like that market, you're just hindering your TAM drastically. And if you don't have crypto native people on your team as things stand today, and you're building in fintech, man, oh man, that's a big mistake, because it is going to change the future of financials.

Let's talk about kind of your longer term vision. And then we'll talk about what you're actually doing from an operation standpoint today. But what does this look like in 10 years if you're successful? So in 10 years, if we're successful, we've dominated the world of tax, not just in the us but globally so unlike every other accounting firm or accounting startup i should say whether it's pilot or zenny or some of these other players they don't do global account what do i mean by that they don't help their domestic clients who have subsidiaries across the world with the accounting for those subsidiaries and so our competitive wedge to the market is basically we do global accounting so we handle the subsidiaries of our clients that are in

australia or in like the uk we handle all of the accounting there and then push it together from a consolidation perspective with their u.s financials so that we give them the ability to have one firm one point of contact to manage all their financials end to end and how do we get to do that uh i was lucky enough to convince an awesome guy named scott clark who was the first accounting manager ever at pinterest and the vp of finance and corporate controller at zenevitz and the VP of Finance and Corporate Controller at Lime, who, when he was at Lime, did international accounting for a business

that had 50-plus international entities and knows this stuff like the back of his hand and has given us a big leg up when it comes to differentiating ourselves against the competition. And if you look at Gusto and Deal, Gusto would probably be a $20-$30 billion company today if they had decided to go into the global payroll market

much earlier. Now, I think they're leveraging remote under the hood to kind of like offer global payroll and EOR services, but it's a huge untapped market. And especially if the world's becoming increasingly remote, it's something we want to take advantage of. And I'm going to set ourselves up for a ton of success because the best businesses in the world have global teams.

You look at all the Fortune 100 companies, they have offices all over the world. And then the other thing to note is that across America, accounting is relatively a dying industry. the number of CPAs per year is substantially less than it used to be and a lot of mom and pop CPAs across America are run by elder folks in their latter years of their career and they don't have any opportunity for an earn out or roll up or an exit and a player like us coming into the fold will ultimately raise like a large debt facility to go after folks like that and give them the

opportunity to have a liquidity event and set themselves up for the rest of their lives while Also, giving their clients a home or a new home that is extremely technologically efficient and very tech forward to let them get back to doing what matters most, which is building their business and focusing on fun. As you go after this vision, obviously, you've got to be able to operate the business. It's very up-tempo, kind of accelerated view of building and servicing these clients. what are some of the things that you all do that maybe would be different or unique in most people's eyes that you think really has allowed you to optimize and operate in this way? Hands down, number one is customer service. We're maniable about it.

It is the one thing that matters most. If we don't know an answer to a client's question, we're 100% going to respond to them as fast as humanly possible to let them know we're on it and we're going to get them an answer. Not everyone knows the answers in real time, But we basically want to get rid of the days where accountants and CPAs and tax professionals don't answer their clients because they're too busy. They don't know the answer in real time. They need to go look it up.

They need to talk to one of their partners. I think that when you're in the financial services world and you don't provide an exceptional level of customer service, you start to let doubt set into the mind of your clients. If you touch someone's money in any capacity and you don't respond to them, the thoughts that start to trickle into their head are my taxes being hit or my finance is okay are my books going to get done on time are my franchise taxes going to be handled and you've lost trust in that moment and the most core fundamental element of financial services and providing exceptional financial services providing an exceptional service quality and not forgetting that these two are people on both ends of the table and making sure that you keep that top of

mind for every step of the equation and then what about like internal operations right are there certain things you guys do around meetings a certain way that you uh kind of organize your day or a certain way you all communicate that really empowers this question so we've built a lot of workflows within our slack channels that connect to all of our different systems and tools to i'm not going to call it autonomously but to some level programmatically enable us to onboard clients at scale in a frictionless manner get them onboarded faster than they otherwise would have with like another partner and we built out robust onboarding flows which collect as much information as humanly possible from the client so there's much less friction when it comes to

onboarding clients into like our practice and so that's like one core element to what we do and then we built out internal knowledge bases which detail basically any and all client questions historically so that when a new client asks the same question, even if our team doesn't know the answer or hasn't encountered that question before, they can go to our internal knowledge repo and get an answer to that question and provide it to them. And so doing things like that is going to enable our team to provide a really, really high quality service at scale for startups, SMBs, companies all across America. And then when you think about the people that you're bringing onto the team? How do you vet who's got what it takes? How do you know this is a person that

we want inside the company that's going to protect our company culture and help us achieve our vision? The two most important things that I optimize for when hiring people is trust and hunger. And determining trust is definitely tough, but there's a few different ways to do it. You basically fact check who they are, what they've done, what their work experience has been with their previous employers and then but the most important thing that i index on is hunger and the way that i sniff for that is really just a person to person and i smell it on you and typically within five minutes i have the ability to determine does this person have the chops have the hunger to put all their chips on the table and really get into the weeds and help us build a

trillion dollar company and there's other little tips and tricks like cold calling people on the weekend who are in your hiring process to see if they'll answer and see how fast they'll respond and calling them at random times to understand what moves them what makes them tick how hungry are they and aside from that every other skill in my mind is pretty teachable and once we find people who have those two characteristics we are of the belief that we can train them and teach them how to do everything else to a really really high bar but it's really just a top-down approach when it comes to hiring and finding great people are you maniacal obsessed about not only like your company as a founder but about the type of employees and people that you hire and i think

obsessive maniacal people attract those types of people and it's not for everyone but you can sniff that when you're going through an interview process are there specific things people say or do like like how do you figure out is this person that obsessed maniacal person so i just hired our first growth lead he's basically going to be a startup athlete what i mean by that he's going to do everything from growth to ops to finance to sales partnership etc and when i was interviewing him albeit he came through a very trusted partner and friend and investor in Haven but he told me the story of when he was interviewing for a former role where they asked him if he really really wanted and what did he do the kids flew to New York and

waited outside their office emailed them and said I'm outside your office let's chat and he got an offer basically like the next day or that day and when I met him and he told me that story I was like you're cut from the same cloth as I am and it's those little things that you pick up on that you understand that you see that people say that really impress upon you how maniacal how hungry how obsessed they are but it's not a one-size-fits-all sort of thing it's really context dependent everyone's different everyone has their own level of hunger their own level of session and it's just how good are you as a founder or like a hiring manager who isolate and figure that out. Yeah, that makes a lot of sense. And then as you evaluate customers, is it just like every

customer is a fit? Or is there some sort of evaluation framework there to know that you guys operate a certain way? And so you need specific types of customers to kind of fit in there and be a good service partner? Great question. So at the onset of working with a client we do what i like to call an analysis if they're a full-fledged operating business that's not like brand new and that involves typically getting access to their quickbooks doing an analysis slash review of their historical financials and making sure that they've been done well so that we can take the process over not only improve it but also operationalize it make it more efficient and help them get to the like the next level of their business

and that basically does weed out some clients from working with us but it's totally okay there's what 30 million plus small businesses smb startups etc in america and one that we can't work with just leaves a giant ocean for us to go after but at the earliest stages when a company's just getting started they don't have any accounting or bookkeeping infrastructure in place we can pretty much work with literally anyone. Why? Because there hasn't been any bad habits or bad accounting processes implemented, which would hinder a firm like us from taking things over and helping them reach their maximum potential. Got it. And then in terms of the customers who are a really, really good fit for you, what are you able to do? Do you save them

money? Do you save them time? What's the impact? And I always think about this from the perspective of how do they measure whether you're being successful? Are there certain metrics that they should be looking at internally for themselves? All of the above. We can save them time, money, et cetera. On the saving the money side of things, we help all of our startup clients with the R&D credit. The R&D credit is basically a tax credit implemented by the federal government that enables startups to claim up to $500,000 per year as a payroll credit. What does that mean? You don't need to be profitable. You don't need to generate any income. You don't need to have an income tax liability. You can use the credit to offset your payroll tax liability.

Specifically, every time you run payroll, you're paying 7.65% in FICO taxes on behalf of your employees. The way the credit works, it's going to reimburse you for that. So that's a ton of unknown, previously left alone sort of savings that we help our clients take advantage of. And then on a monthly cadence, as our team does a review and closes the books for clients, We're analyzing their vendors to determine, okay, maybe this vendor you no longer need because it's redundant across some other vendors that you're using. You can eliminate that from your stack. And then if we notice that clients don't have their idle cash earning interest, we highly recommend that they get their idle cash into T-bills or a money market account. So that's super safe, but also enables them to take advantage of the high interest rate environment that we're in.

and then there's other miscellaneous things that pop up when you're building a company oh i just hired a new employee in north dakota do i need to go and register with the department of state department of labor department of revenue north dakota how do i do that typically accounting firms will be like hey that's just not what we do like we can't help you you can go look it up on the internet or something but we take that as an advantage like an opportunity to build trust with our clients so we have the dedicated slack channel with every single client and encourage them to reach out with any question that pops up with any business building question that pops up and that gives them peace of mind when it comes to like working with us but also enables us to

go above and beyond for each and every single one of them and yeah i think that's super important talk to us about the fundraise who how much what details can you share yeah so ended up raising our pre-seed roughly i was targeting 750k oversubscribed to basically 800 why do we raise such a little amount of capital because we're profitable and we've been profitable since day one even reached over a million dollars in top line over a million dollars in top line without raising a dollar and that really set the business up for success for the long term when we went out to raise we had two hundred thousand dollars in cash just sitting in the bank were going to be deployed into growth, product, et cetera, et cetera.

And we went out to raise two aligned strategic partners who can help us get to a whole other level and who can help us get into every single ecosystem in front of every single founder, in front of every single entrepreneur. And so we ended up raising from also folks like yourself, Charlie Fang, the founder of Clearco, Eric Baum, the founder of Hustle Fund, Arthur Ramathuri, Srimakrishnan's wife from a16z lauren isford from notion and a bunch of principals partners gps managing partners at a variety of different venture funds all across the ecosystem why because those people are talking to founders all day long all the time and they then become an extension of the haven team and

family and part of our sales flywheel ecosystem that helps us break down every door get into every single nook and cranny of the kind of like startup accounting world and yeah but we'll probably likely go out and raise our seed in the fall and that's going to come in tandem with a lot of new exciting product developments things around doing employee taxes and taxes for exec teams and then ultimately give us 12 to 24 months we'll probably layer on things like equity planning liquidity planning and financial advisory services for businesses and their teams If you have 30 seconds to pitch potential clients, what's the pitch as to why they should come work with Haven?

Yeah. So starting from my story, I've been an entrepreneur for as long as I can remember. My dad worked in private equity for about 20 years, quit his job when I was 12. And I had a courtside seat for watching him build all of his companies. And from my dorm room in college, I built my first business before I knew what sales or cold calling was.

I was looking at businesses on Google maps and cold calling them. trying to convince them to let me do their social media marketing, build their websites, etc. And I'm an entrepreneur at heart forever. And the reason to come work with Haven is because we're entrepreneurs first, we're an accounting team second. So we know how important it is to move at light speed when it comes to building your business. We know how important it is to have a trusted partner who gets everything done on time, without delay ever. And so if you want the most maniacal, obsessed, attentive, proactive accounting team for your business, havens where you should go and that's us where can we send people to find haven on the internet

and then also if they want to follow along with you yeah so we're at usehaven.com and then on twitter i'm at cyrus845 and then on linkedin i'm just cyrus shirazi and yeah and then on twitter our twitter handle is usehaven.com i'm sorry just use haven and yeah awesome i'm excited to see what guys build obviously a big fan um i've been uh telling every company i know hey go check this out and uh hopefully uh some of the folks who run companies that are listening to this right now they'll come and uh knock on your door you guys can provide a great service and you'll put a great big business so i appreciate you coming on and we'll definitely do this again in the future.

Thank you, my friend. Appreciate it. It was great to be here.