Lead-Lag Live

Risk, Reward, and Raising $135 Million: The Public Story with Leif Abraham

• Michael A. Gayed, CFA

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The financial landscape is shifting dramatically, and Public.com is at the forefront of this transformation. Co-founder Leif Abraham takes us behind the scenes of the five-year journey that's reimagining what an investment platform can be for today's generation of investors.

Abraham reveals how Public differentiated itself from day one by focusing on people who want to take their investing more seriously rather than just speculating. The platform's technological innovation extends far beyond its intuitive interface – a custom-built multi-asset ledger enables fractional investing across all asset classes and real-time money movements that legacy platforms simply can't match.

Perhaps most fascinating is Public's groundbreaking work with AI through its Alpha tool, which began as an experimental project when OpenAI first released its API. Now fully integrated throughout the platform, Alpha provides contextual insights about market movements, breaks down earnings calls in real-time, and answers specific questions about companies. Unlike generic AI implementations, Public's approach combines GPT's natural language capabilities with proprietary structured financial data, creating what Abraham describes as "We are the brain, and GPT is the face of it."

The company recently secured $135 million in funding (bringing their total to over $400 million), which Abraham suggests will likely be their final capital raise as the platform continues expanding its offerings. Public's vision challenges the traditional binary between self-directed and managed investing by creating a spectrum of "guided investing" where users collaborate with intelligent systems to build portfolios that reflect their unique needs.

For investors looking to capitalize on the current rate environment, Public has seen growing interest in its bond offerings, particularly simplified "bond accounts" that provide easy access to diversified fixed income exposure without requiring deep expertise in the bond market.

Ready to experience the next generation of investing? Visit Public.com to explore their innovative platform that's helping people take a more serious approach to building wealth.


DISCLAIMER – PLEASE READ: This is a sponsored episode for which Lead-Lag Publishing, LLC has been paid a fee. Lead-Lag Publishing, LLC does not guarantee the accuracy or completeness of the information provided in the episode or make any representation as to its quality. All statements and expressions provided in this episode are the sole opinion of Public and Lead-Lag Publishing, LLC expressly disclaims any responsibility for action taken in connection with the information provided in the discussion. The content in this program is for informational purposes only. You should not construe any information or other material as investment, financial, tax, or other advice. The views expressed by the participants are solely their own. A participant may have taken or recommended any investment position discussed, but may close such position or alter its recommendation at any time without notice. Nothing contained in this program constitutes

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Speaker 1:

I want you to talk about for a moment how you dealt with stress.

Speaker 2:

Yeah, I think, obviously as an entrepreneur, as a founder, the real anxiety comes from the risk you take, and I think that's also why it's tough to be a founder, especially in the early days, because you have to be willing to kind of work through that risk and I was lucky that it's that it came out on the other end, um, but obviously you know you don't know why you're in it, right. And so I think the most anxiety inducing moments is really the ones where you know things are not going well and, um, you recognize, even for your personal career, your personal financials, you know, and so on, that, um, that you, or where you're kind of realizing the risks that you've taken. I think those are the true moments where you're getting like the true anxiety we're going to get a public.

Speaker 1:

We're going to go very public in this discussion by talking to some of the things that public is doing. I've had the pleasure of getting to know the people at public over the last year and a half, two years or so. I like very much what they're doing as a platform. So this is going to be a very different type of conversation with Life Abraham here, but one that I think is going to be interesting, especially given how much money they have raised recently, which tells you how much excitement there is in what they are building out. So, with all that said, my name is Michael Guy, a publisher of the Lead Lagrime. Joining me here is Life Abraham. We were just joking before about the raise as far as how involved Life was, and he basically said it was his life to get its point. So Life, not to make people maybe familiar with your background, but introduce yourself who are you, what have you done throughout your career and what do you do in the public?

Speaker 2:

Hey Life co-founder of Public, originally German, worked in 2008 and, yeah, public launched call it a little over five years ago, and we're essentially focused on what we like to say. People are a little more serious about their investing.

Speaker 1:

So five years is not a long time, especially the last five years, even though it felt like a long time because of how bizarre the markets, you can argue, have been Talk to me about sort of why you launched public. I mean, what was the impetus and what's that journey been like from five years ago to today?

Speaker 2:

Yeah, I mean, if you look at the call of new broker space or like the like, more modern investing apps like that first generation that came out was a little bit more focused on speculation right, cfd trading in Europe, you know, options trading in the US or, like you know, crypto only place in the US and so on. And we do have this theory that every generation kind of grows up with their own platforms, not just in investing and generally everything they're kind of using. And what we recognized was that you know, the next generation Schwab for lack of a better wording had not really been created yet, and so we saw this you know area on the market to essentially build something where you know this generation can kind of really build their like real portfolios and you know, kind of more seriously build their wealth. And that was really kind of like the first you know ignition, and then from there there were different ways on how to execute that and so on.

Speaker 1:

But yeah, how much of that is just purely UI, ux. I mean, I'm thinking from a sort of standpoint of you know, what does the end user see? Right, if it's about a generational sort of targeting a different generation? I got to assume that's like 80, 90% of this.

Speaker 2:

Yeah, I mean a lot of it is definitely design. The other thing is obviously product offerings, right, so which asset classes do you have in the app together and which asset classes do you have in the app together, and so on. But there's also a lot happening behind the scenes that even now you would take totally for granted. But you know, give an example, you know things like you sign up and you could immediately fund an account and start investing within minutes Sounds completely obvious now, but even when we started it was not necessarily that obvious and for most incumbents it did not happen like that. When you would sign up and you would deposit money, it would take a few days to get the account even rolling and stuff like that. And so even just little innovation in KYC and funding and things like that have done a lot.

Speaker 2:

And then one thing that we've had a lot of focus on is behind the scenes.

Speaker 2:

We've essentially created this multi-asset ledger to be a little nerdy for a second, and what that really enabled us is number one fractionalizing all asset classes.

Speaker 2:

Um, that means people can start with dollar amounts and so on and therefore be a little bit more holistic on their portfolio construction, no matter which, how much money they might start investing, um, or how much money they might start investing, or how much money they kind of put in every month. And then they also enable things like, for example, real-time money movements between asset classes and so you can sell a UST bill and put that money into Bitcoin right away, for example Not investment advice, but you know just and so those types of things, even behind the scenes, from a technological perspective, go a long way. And the other piece is really is very true. We've done some research, just ourselves, you know, and like. What we found was that you know, incumbent, like if you look at the top five incumbent brokers, they're essentially, you know, have some sort of issue or downtime every second trading day, and so even just from a sense of building the technological stack from scratch, using the same technologies, etc for all asset classes and so on, goes a long way in just things like stability.

Speaker 1:

So the fractionalizing I think is interesting because that's been around for some time, but to your point, maybe not as simple, across all the different asset classes time. But to your point, maybe not as simple, across all the different asset classes, across the client base. At Public, how many portfolios have fractional shares of a particular investment?

Speaker 2:

Generally speaking, you could basically say all of them, because the way you invest on Public is, the default experience is dollar amounts, and that's because it's, all you know, fractionally powered, and so the default experience isn't a safe for people to go in and be like I want to buy this many shares. You can do that, of course, but the default experience is really that everything is kind of run through dollar amounts, which, on the other end of it, means that most cases it's fractional.

Speaker 1:

Okay, so you built it out. I've got to imagine the timing was remarkably good in a lot of ways because you had this influx of retail obviously coming in post-COVID In the early days. How did you go about getting people aware of public, because it's hard to unseat the incumbents to your point.

Speaker 2:

Yeah, to your point. First off, we launched in september of 19 and if you look at 2020 covid drop, then the covid rise of those stocks, then meme stocks, then you know the interest rates going up, etc. Like the market cycles we've been through in this company now already feels like, obviously, that we are way older, um, just because you've been through so much already. Um, but the same, I think, is also true for obviously, all the investors who joined the markets throughout that time or became more serious throughout that time and, um, for us, really, where we started off was to focus on, like, specific niche communities and so on and kind of acquired our customers there and, and you know, nowadays it's like, you know, the vast majority is organic and so on, and then just a bunch of partnerships and stuff, of course, that we acquire people with, but majority is really just one of us.

Speaker 1:

And, as I recall, there's a fairly important social component in terms of the way that you built out the platform. Talk to me about that, because I think that's also where the stodgier type of brokers have failed just trying to encourage not just content but community.

Speaker 2:

And we've had a lot of learnings throughout the years.

Speaker 2:

When we started off, we had more social features than we have right now, and I think specifically through things like COVID.

Speaker 2:

Obviously social futures were great for people to connect, to have forums to talk about their investing and what they're investing in and why, and breaking down earnings calls and so on.

Speaker 2:

What we've seen in the last year plus is that actually AI has cannibalized a lot of the benefits that social had in the past.

Speaker 2:

So, like one of the core kind of post types in the social field in public used to be earnings call breakdowns of people kind of you know, just like you know, one starts, has some sort of earnings report and then people just breaking it down and so on, and that, for example, is something that now Alpha, our AI agent at the, the app, does and it does it just honestly quite better whether it's faster, it's potentially more accurate, um, you know, and so on, and so we've seen how ai actually has cannibalized a lot of the social features there, and what we're seeing with community is then still that it does happen. I a little bit more broker platform agnostic where it's happening, for example, on Twitter, obviously, or it happens in the Discord and so on, and so where we are now is really it's a little bit more like how can we support those communities living outside of the app that are focusing too much to try to replicate another community in the app as well?

Speaker 1:

As AI started getting into the public, I'm sure there were a lot of people that were surprised by. You know the extent to which it would go and affect markets. But how much were you as a company, as a founder, aware of, you know AI developments? How much were you starting to get involved in the AI side? I got to imagine, before a lot of other, people.

Speaker 2:

Yeah, we were lucky to, essentially when the API from OpenAI came out, we were one of the first to get access to that, which was great, and so we were fairly early in being able to just like tinker with it. And in the beginning we really saw it like that. We saw it more as like an internal company thing of like we have to tinker with these technologies, we have to, you know, make sure that we know how this works and what you can do with it, and so on, and then and so therefore, alpha really for us started a little bit more as a side project to see what we can do and how far it can go, and then that was quite successful. And then from there we built Alpha out further and now we can think about Alpha as really this Currently, these two components to it call like push and pull.

Speaker 2:

So on the one side, you can literally just swipe down on any stock and ask any question about the stock, and that's like when you kind of have something in your mind you want to know. And that model is fed with all the financial data, with LLS reports, with custom company KPIs and so know. And that model is fed with all the financial data, with LLS reports, with custom company KBIs and so on. And then, on the other end, alpha is kind of weaved into the app more and more, where you know a good example is the earnings call breakdown. Someone has an earnings call. We, you know, push you kind of like an overview of that earnings call. You know. Overview of that earnings call, you know the minute they hang up.

Speaker 2:

On the other end, also, like if a stock, for example, has a lot of movement going on, there's some volatility in the markets, we actually like Alpha actually, you know, tells you why that might be happening and gives you those context cues within the experience, etc. So there's a lot of kind of like more AI now weaved into the experience. It's all kind of powered by that same model, and so Alpha became more serious for us over time. Also now to a point where we've even spun it out as an own kind of watch list app. So even if you're not a public customer yet, you can still use the Alpha app itself, which is just a watch list app. Think of it as like Apple stocks meets GPT, and then it's just like a standalone product now as well, but it's, and so like it kind of exists in these two places either just weaved into the experience of the core public investing app as well as like a standalone app for people who might not yet be our customers but still want to use, also might be valuable for.

Speaker 1:

How complex is that? I got to imagine. If you're integrating with AI, a lot of the real complex is handled by the AI itself, right, but from a coding perspective, I gotta imagine it's actually still pretty challenging.

Speaker 2:

Yeah, you can think about it as, like GPT for us is a little bit the translation layer for humans. It's like the natural language interface. It's like the natural language interface. It's great at summarization, for example, and so on.

Speaker 2:

But a lot of the experience, like, if you right now go to like chagipdcom and you just type something in, there's a lot of web scraping involved, it's prone to errors and so on, and so the thing of us is like we have a little bit like built the brain with the numbers and so we're direct access to real-time data, direct access to structured data.

Speaker 2:

For example, three years ago we acquired a small company that essentially took custom company KPIs from SEC filings and so on and then turns it into structured qualified data and that is, for example, a data set that we were able then to use to train Alpha with, which just brings the error rate heavily down, because the information is coming from like actual structured numbers where you know we're kind of like looking up a table and then you know GPT just like summarizes it, puts it into human language and, you know, creates an interaction layer. But they don't. But GPT doesn't have to find the information somewhere. The information is in a structured case already and that was really one of the core things for us. But internally we talk about it as like we are the brain and then you know GPT is kind of like you know the face of it and that has, you know, I think, done a lot there.

Speaker 1:

What's been the response to the alpha, to the watch list itself? Are you seeing a lot of interest in it, a lot of people using it? I get the sense. Everyone talks about AI. I don't know how many end users actually are implementing it.

Speaker 2:

Yeah, and I think when it comes to the AI stuff, it's like to be frank, no one gives a damn if it's AI or not, Right, the question is, the value that it provides needs to be clear.

Speaker 2:

And so when you look at the Alpha app, it's really just the sense of that hey, you're using a watch list app. Basically, if you're using the Apple Stocks app right now, you should just delete that right now and switch to Alpha, because you're essentially getting the same thing that you're getting from the Apple Stocks app, but with an extra layer of context, an extra layer of proactive information about it. We don't have to go into some Yahoo Finance article somewhere to figure out what's going on, but you get the summarization snippets of what's happening in the markets in borderline real-time directly plugged into your watchlist and then from there you can dig deeper, right, you can literally ask anything about those companies there. And so that extra layer and just getting those alerts like if those alerts would be done by an army of human beings in the back of our office or it happens to AI doesn't really matter to the user much.

Speaker 2:

What matters is does it work? How fast is it? How accurate is it? What matters is does it work, how fast is it, how accurate is it, and so on. And so, yeah, I totally agree that just the notion of is it AI or not doesn't really matter, and no one should really care. What really matters is does the feature that we build actually works and do you get some value out of it?

Speaker 1:

Talk to me about your expenses as a platform, meaning where is the spend primarily going? Oftentimes, when I think about a business, I think about one of the biggest spends is obviously marketing and sales, but I guess it's obviously when you're running a brokerage platform. You've got a lot of regulation you've got to worry about, right, You've got to deal with a lot of that. So talk to me about where a lot of the spend goes.

Speaker 2:

Yeah, it's pretty straightforward For a company like ours. You can think of spend in like three buckets and it's simplified as roughly three thirds even, right, one third marketing, one third staff, one third is infrastructure. And infrastructure specifically like if you run a regulated stock brokerage, the tech stack not just from a regulatory perspective of reporting requirements and the tech you have to build around that, but the tech stack of running this is pretty damn complex. It's a pretty heavy technological challenge actually to run a proper trading app. And that comes because there's a lot of other parties involved.

Speaker 2:

Right, there is data providers, there's clearing firms, there's the exchanges themselves, there's auto execution, etc. Etc. And there's also a lot of things that don't necessarily just happen at the same time. Right, you have to be able to queue things like, for example, orders that are going to be put into the weekend that are not executing until market open at 9.30 in the morning. You know things like that, and so it's actually quite technically challenging to build a good trading infrastructure. And you have, you know, obviously like moments of high load, for example, and stuff. You have to be able to scale it up and down pretty quickly and easily, and so on, and so a lot of it goes into infrastructure and making sure it all works pretty smoothly.

Speaker 1:

Talk to me about growth of the user base and in general. I know the last five years have been unusual, but do you find that it's fairly consistent? Or you end up getting more and more people signing up? Based on low markets, based on volatility, based on whatever I mean, what causes a big surge in signups?

Speaker 2:

Our user acquisition is always tied to market events, and market events can be anything from an IPO to the market, such as, for example, spiking or dropping.

Speaker 2:

You know Bitcoin goes on a rally or drops very heavily. So, like anything that kind of sparks intent in people is when you see acquisition go up, and so it's super heavily tied to market events. And then the second thing I would say is like personal life events, right, people who you know they get married, they inherit some money events. And then the second thing I would say is like personal life events right, people who you know they get married, they inherit some money, they, you know, um, have children being born, um, they get promoted, they get paid a bonus, like any types of events where either there's liquidity coming in because they make some money in some regard or because, um, there's some you know moment in their life that just reminds them to potentially take the finances more seriously, to maybe make some moves in their portfolios, and so on. And so I would say those are the two main components market events and personal life events who kind of spark intent, and you'll always see some spikes around that.

Speaker 1:

So I alluded to it a little bit earlier. The fundraising I'm going to share my screen on this. I think it's a pretty big number, so congrats on this. But you guys just raised $135 million. Talk to me about that process. Raising money and I say this as a fund manager in general is really hard. When you're doing it from a VC, private equity standpoint, I got to imagine it's probably a lot harder.

Speaker 2:

So first, the way we've always thought about fundraising is this principle of raise money when you see opportunity, not when the money runs out, right, that's the ideal setup, right Exactly.

Speaker 2:

That's the ideal setup.

Speaker 2:

I'm not saying that that's always possible for everyone and so on, but that's historically how we've always done it, and we've raised now a little over $400 million total, and this is likely the last time we'll actually have to raise money, as long as we don't necessarily want to raise more money, which is obviously awesome.

Speaker 2:

Right To just finally be in a spot, in a position where you're not reliant on venture capital in the future anymore. And so, yeah, for us also, like, we had, you know, one investor, specifically Excel, which is like a kind of big, famous VC firm, and they've really supported us from the beginning, and so they have essentially led every single funding round in the history of this company, and so they've been a partner to us from the very beginning, and so they have essentially led every single funding round in the history of this company, and so they've been a partner to us from the very beginning, and they've also were the ones who, you know, did most of the money in this round as well, which obviously having someone like that on your side obviously helps a lot and just makes the process also much easier.

Speaker 1:

So that money that's raised? I saw the headline on AI, but I'm curious just a little more granular. Where was that? Where's that capital going to be spent and invested?

Speaker 2:

Long story short, as stupid as it sounds, but like where it's needed, and so that falls into as we grow, customer service. That falls into marketing, so that we keep growing, and that falls into just like supporting our operations. The nice thing is by now, is that you know the company is at a place where you know the broker dealer is profitable, you know, and so it's really from like a investment perspective is really mostly into marketing spend to you know, fast to keep growing and then obviously fast to keep building more, more new features and products as well. You know, as we kind of keep going the pretty straightforward stuff, to be honest, but more new features and products as well, you know, as we kind of keep going they're pretty straightforward stuff, to be honest.

Speaker 1:

But how satisfying that answer was. But yeah, well, I mean it's not an unusual answer, I just think it's. Yeah, it's a big number. Obviously, right, as you think further out in time, right as the co-founder, I'm sure you've got a much longer term, bigger vision for the company and as an entrepreneur myself, I can understand how you have a vision and sometimes it just somewhat changes as you evolve and things play out. Where do you see public in the next five, 10 years?

Speaker 2:

We have this little kind of theory and, if I take a little step back for a second, if you look at the old world in our space, it was pretty binary. It was like either it's a self-directed platform and you do everything yourself, and it's essentially tables with buy buttons and charts, and on the other end, it's the you have someone do it for you. It's fully managed. You likely talk to a human being. You yourself are maybe a little bit further detached from the portfolio, and if you look at the incumbent platforms, that's literally how they're built right. It's always a financial advisory product, which is mostly human beings, or you have your self-directed, which is tables and charts, and what we look at this is like we look at it more as a spectrum. So instead of it just being binary, kind of like spread it out as a spectrum and we're kind of moving up the spectrum. We obviously started very heavily self-directed as well and we're moving up the spectrum into more managed, but it doesn't mean that it's as binary, as you either do it all yourself or someone's doing it for you.

Speaker 2:

We believe that in the spectrum, in the middle of something we call guided investing, where you do it together with the system and AI systems like Alpha we see in the future playing a huge role in that as well where you might have initial spark. You might have a theory around a certain industry or investing strategy and so on, and you can feed that into the system. You get some feedback back and you can see how it would do us on and you might get some advice on that as well, and then you react to that and maybe you automate it from there and the system takes it on, but it's more a little bit like you have this power or you have this ping pong. The system takes it on, but it's more a little bit where you have this power, you have this ping pong with the system and the product, versus it being so binary. So you're living more on a spectrum where it's not as just everyone's being done for you and you do it all yourself, but you're kind of living in the spectrum, depending on the products you want to have and kind of what you want to do right now and then in the world.

Speaker 2:

It's like your portfolio will be a little bit more diverse in that regard as well, because you will look at things where you have a very key thesis on a company. You will self-direct it. You bought the stock and you will decide when to buy and sell it and add a position or sell from the position and so on, and you might have another part of your portfolio where it's, you know, borderline, fully managed, but it will sit in the same portfolio. It will feel more like different asset classes and such, and that's a little bit like how we envision the future there. And so, throughout this year specifically, we're going to move more and more into more products that will look like they are a little bit more managed, even though they might not be fully managed, because you know you might have some control over them, you might have some input into the creation of them, etc.

Speaker 1:

So on X I put out a post saying, speaking about my own business, which I was going through the hockey stick at a much smaller scale obviously than yours that I was joking saying that spending $10,000 to $15,000 a week is mildly anxiety-inducing, and a lot of people were responding saying if you're on Spirulina you've got to have some real, you know, intestinal fortitude. All right, to deal with that.

Speaker 2:

I want you to talk about for a moment how you dealt with stress, because I got to imagine there were plenty of junctures in the last five years where you were just kind of losing it from the amount of stuff that was going on and the pressures you were just kind of losing it from the amount of stuff that was going on and the pressures, yeah, and I mean stress, I think comes from when you feel like you might not be fully in control of everything that you're trying to do or achieve, and in that way I feel like it can be one, but it can also just be more motivating. At some points, I think anxiety is really more the sense of we always need a much. We always say in a mature space now it's a real company, it's working, we're making money right, and so it's like we're way further down the road with this one. But, for example, before this one, I started another company. It's like an invoicing app for freelancers and such and um, and when I started that my wife wasn't working, I had a newborn child, um and uh. Obviously, because I started a company with very little venture money, I paid myself very little and I was just burning every month and I essentially was on the clock and every month I was going, you know, look at my bank account and it would go less and less and less and less. I was literally on this clock to like make this thing work. And when we sold that company I think I had, like I don't know, five months of runway left or so in my personal bank account.

Speaker 2:

And so, yeah, I think, obviously, as an entrepreneur, as a founder, the real anxiety comes from the risk you take.

Speaker 2:

And I think that's also why it's tough to be a founder, especially in the early days, because you have to be willing to kind of work through that risk and you know, I was lucky that it came out on the other end. But obviously, you know, you don't know why you're in it, right? And so I think the most anxiety-inducing moments is really the ones where you know things are not going well and you recognize even are not going well and, um, you recognize, even for your personal career, your personal financials, you know, and so on, that um that you will, or where you're kind of realizing the risks that you've taken. I think those are the true moments where you're getting like the true anxiety, um, but yeah, to your point, like you have to invest and if it's directly into the company or is it's the personal burn that you have, you know, and so on. Um, I think that is, I think it's maybe impossible to truly be successful at your venture, um, without you being willing to take those types of risks.

Speaker 1:

I want to go back to Publix um audience and client base. So you know, clearly, on the retail side you're trying to democratize things for the retail investor. There is this perception out there that retail is, you know, in quotes naive, or they call in quotes the money, versus the so-called smart money which is institutional investors. And increasingly obviously, as you know, you know, the market's being driven more by retail flows anyway and retail has much more access to information. Do you get a sense that retail just knowledge-wise and I know this is kind of a broad sweeping statement but that they really have the same kind of advantages now in terms of just information access that the real big boys do?

Speaker 2:

I think the honest answer is you don't really know, because you don't truly know what kind of information certain people have access to, right, but I completely agree that this notion of like retail that's a dumb money is kind of a little bit of a dumb opinion.

Speaker 2:

Um, because it's, uh, because in most cases it's simply not true, and you have seen many moments where retailers outperforming, you know, hedge funds in massive regards, you know, and so, um, that is just a little that is just stupid, right and um, and I think even in like, even if you looked at like you know, the oldest of wall street bets and stuff, like there was some real proper fundamental research in there that people have shared and um, and so you realize that there's like a lot of really smart retail investors in the markets.

Speaker 2:

Um, now, whenever markets are hyped, is it because of, you know, a trend like ai, or because of meme stocks, or because of some crypto going nuts or whatever.

Speaker 2:

You will also always have people following and joining the markets who have not done that research, who do not have that experience, and that risk, I think, always exists. And I think where we, for example, as a platform, see a certain responsibility of like, we're not here to tell you what to do, but we do, believe a responsibility to give you as much context as we can while you're active in the markets and that's where Alpha comes in with trying to tell you why the chart was going up or down, for example, giving you the access to all the data in the best ways possible, and so on, and giving you these context cues as you're out there Because there's really you're out there because there's really smart retail out there. But whenever there's hype, there's also overconfidence and there's, you know, people coming in who may have not done their research yet and and I think that there is some responsibility to platforms like ourselves to make sure that you know those people don't fall on their nose right away.

Speaker 1:

Is there anything the Schwab's, the world of fidelity, the world can do to step in, just given the sheer number of resources, and dramatically change the way the UI, the UX, looks? I mean, it seems to me that the real advantage you have is that you're not to use a Kamala Harris line, burdened by what has been kind of thing. I'm trying to think of another way of phrasing it, but yeah, but you get what I'm asking, right? I mean, you know, it seems like you've got the agility. It's hard for anybody else to really keep up.

Speaker 2:

Yeah, and I think it's not just like I said before, like it's not just the UI, right, like, can you hire a nice designer to make something a little bit more pretty? Yeah, maybe you can, but it doesn't matter if you put the saying of you put lipstick on a pig or something right, where the infrastructure behind it is 30, 40, 50 years old and therefore all the issues keep existing and the error message might come in a more beautiful model now, but the error message is still coming. And so I think where the incumbents struggle the most is that most of the technology was built decades ago, and that's where also just the risk comes in of not just downtimes but also just the risks of data loss and whatnot. And it's like if I would be with a incumbent, that's what I would be scared about. I will be scared about the issues you can't really see because they're not part of the beautiful UI but they're in the background, realizing that the backend for this asset class was built in 1992 and the backend for this asset class was built in 2004.

Speaker 2:

And those two backends don't talk to each other because they were built by entirely different teams at entirely different times, entirely different tech stacks and so on, and the people maintaining them right now are running behind, maintaining them every single day on, and the people maintaining them right now are running behind maintaining them every single day. Like that's, I think the issue that incumbents much more have is that their tech is holding together on strings based off old technologies that they've built over decades and decades, and that's where companies like ours, who are just newer, have an advantage, because our tech stack, you know, like the oldest tech we have is, you know, call it, three, four years old, right and so on. So, which is just a massive difference for stability and everything.

Speaker 1:

Any interesting insights. I don't know if you have any off the top of your head. From an aggregate level, as far as where a lot of public investors are investing or maybe actually trading meaning, is it the MAG7? Is it levered ETFs?

Speaker 2:

I mean, where's the flow going? Vast majority just equities and called the MAG7s, and some of the retail related ones called again. No financial advice, just sharing some information here, but like the Palantirs, the Hems and Hers and so on, where there's just retail-heavy ownership, those are obviously also the types of stocks that we will see high up in the rankings as well. In our case, this is just ownership of people who own it and the AUM within it and so on. And the other piece that we're seeing a lot of still fixed income, especially now with the rate cuts. Some of them happened, called and paused for now for a better wording.

Speaker 2:

But what that means is that rate cuts are generally on the horizon. The general consensus is still that there will be more rate cuts coming, and what we're seeing a lot of people do is right now to lock in higher yields for cash they don't need in the next 6-12 months, using bonds. And if it's treasuries from the government or if it's corporate bonds from, just like, larger and more established companies, but just this notion of can I lock in 4, five, six, seven, you know, 8% yields, just like basically guaranteed with bonds. That's behavior we're seeing much more and more and more.

Speaker 1:

Yeah, and, as I recall, you built out a fairly robust bond screener tool not too long ago, so you're seeing that there's more interest on bonds in general.

Speaker 2:

Yeah, 100%.

Speaker 2:

And the other thing we have also done as well, because bonds might be a super old asset class, but it's actually fairly new to most retail, because the last time rates were this high was literally pre-iPhone, and so there's a whole generation of investors who grew up in the markets at a time where bonds were irrelevant and then suddenly rates went up now a few years ago, and suddenly bonds became relevant again, and now rates are being cut again, and so now the question is how long will it take for the next iPhone to come out before rates will be again this high?

Speaker 2:

Hence why people are trying to lock these things in. And then one thing we've done as well, because bonds are so new, and if you look at the chart, the chart will have two lines, and so it can be confusing to some people, and so we've also built these bond accounts, one with corporate bonds underlying and one with US treasuries underlying, where the experience is more simplified, where more feels like an account type, where you just deposit money, it automatically gets invested into a diversified batch of these bonds and then you just sit back and earn that yield, and so it feels more like an account. Hence we call them bond accounts or treasury account, and that is really something where we've seen most of the adoption in bonds, because it just makes it so much simpler for people and they don't necessarily have to do the research to figure out which of the bonds of Apple they might want to buy or whatever company they might look at.

Speaker 1:

I know you also occasionally do some events and on the ground marketing. From that standpoint, are you going to invite me to one of those again? I'm pretty sure you got an invite. I did get an invite. I 100% did it. I was somewhere else, I couldn't do it. I would have another meeting.

Speaker 2:

Actually one last week. I couldn't make that that.

Speaker 1:

I didn't know about.

Speaker 2:

Apparently it was a beautiful restaurant in the middle of New York. You can just pop over.

Speaker 1:

I'll be easy enough, I will not relent. Sure it'll be obvious who I am and then that's it. Okay, so maybe kind of for some final thoughts here. So futures bright for the company. Got this big round of funding, a lot of things in the pipeline. Aside from the AI end of things, anything else that you have pending that you know, maybe you can do a little spoiler alert that you know, maybe those that are existing investors in public or considering using public you know, should be aware of.

Speaker 2:

I can't really give you like a proper spoiler, um but um, we keep building out our crypto offering as well. I'll I can say that if you care about such things.

Speaker 1:

Well, whether I care about it or not, there's one thing I know from the app world and from the world in general you are not your user right. So it's like if the user wants it, then you've got to give it to them. And if Trump is the pro-crypto president which we'll see how things play out on that end yeah, I mean, clearly the space is going to keep growing and the regulatory environment is going to be favorable and actually that's a good, maybe closing direction. I'm curious if you have any sort of big picture thoughts on deregulation which is going to impact everybody. I saw some headline around, I think a certain amount of SEC employees were offered an amount to retire recently. I just saw that kind of randomly on X. But how does deregulation impact what public is doing?

Speaker 2:

Yeah, and the funny thing is in talking about crypto, it's not even deregulation, it's actually quite opposite of like actually creating regulation and the issue that around crypto was this thing of that, it was, you know, regulation by enforcement, where were no guidelines out there and then enforcement was happening against virtually all companies in the space around us. And now everyone's obviously hoping for just more clear guidelines and I do believe that will come under this administration and we'll see what those exactly will be and you'll see kind of little pockets come out, like this whole notion of like, hey, meme stocks, sorry, like meme coins are not securities, like that was already now said out loud by the SEC and so on, and so we will see more of that. But I think it's actually on crypto side specifically, is actually the opposite of deregulation, is actually finally having some rules so that some safety also for customers can be created and some clarity for the companies involved can be created. And I think it's actually super important on crypto because crypto is the one asset class that was born retail. It was the asset class that the first people that could reach on crypto were regular people. It was not the big hedge fund people and so on, and so many Americans are invested in crypto and have serious money in crypto, and so it's only the responsible thing to do to make sure that there's some proper regulation and guidelines around those assets in order to not harm the people that own it.

Speaker 2:

And I think what actually happened before through this regulation, through enforcement, that it also had a lot of negative impacts on crypto not just talking value, but also just what you can trade where and people getting liquidated in certain platforms and so on, and I would say that actually had a lot of negative effects on retail at that time, because people got sold out at moment times where they maybe shouldn't have, and so on. And so I think that is like I am excited about what's to come there. And then, in terms of like deregulation, I would call deregulation, I would call it, you know, potentially just like more business friendly, and so I think we will see that in the M&A markets just coming, you know, more to fruition again and so on. Like we were kind of in a borderline M&A standstill where a bunch of companies you know of companies started to not buy other companies anymore because it felt everything was falling through.

Speaker 2:

I remember this one case of a luxury handbag company to be acquired by this other holding of luxury fashion goods which was shut down for that acquisition to happen. And to be very honest, personally, I was looking at that and be like this is literally a luxury handbag company where things like scarcity of product is part of the product strategy and stuff like that. How is this a monopoly? How does this help to go against the creation of monopolies in luxury headband markets? It just felt so out of norm and so I feel like there's just a little bit of more level-headedness that will happen around things like M&A.

Speaker 1:

Closing thoughts here as far as those that are watching. I appreciate those that are paying attention to this sponsored podcast by Public. Why choose Public now, and where can people actually go and sign up to Public?

Speaker 2:

Go to publiccom to sign up Few things If you want to lock in some, some yield as it's here, as the yields are still high with the bonds accounts, check that out. Super nice and simple experience. Number two try Alpha. Try to break it. Tell us what doesn't work. Tell us what you can find Alpha doesn't know. We'll try to fix it and try to make it better. A lot of progress happening there and then, generally speaking, you know, if you're here to take your investing a little bit more serious, consider us, we might be the place for you.

Speaker 1:

Again, folks, this has been an edited podcast. This is a sponsored conversation by Public. I'm a fan of everything that Life is doing with his team and I think all of you should check out Public at, of course, publiccom. Congrats Life, and if you happen to throw that party I'm not far away keep me posted. Thank you very much, appreciate it.

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Michael A. Gayed, CFA

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