Andrew D'Souza: Clearbanc, Capital, and Canada
My guest this week is Andrew D'Souza, the Co-founder and CEO of Clearbanc, a fundraising alternative to traditional venture capital. The company is based in Toronto and helps businesses fuel their marketing spend – because right now 40% of venture capital invested in companies goes directly to funding Facebook and Google ads. Equity is an expensive way for founders to fund repeatable growth and Clearbanc exists to solve that problem. Here's how it works – Clearbanc gives startups anywhere between $5,000-$10 million and in exchange Clearbanc typically receives a 5% to 10% revenue share of that company's earnings until the funding is paid back plus a 6% fee. Now here's the secret, Clearbanc picks merchants by developing technology that scans the merchants' Stripe payments and Facebook ads and that way they can assess the financial health and momentum of the company. In 2018, Clearbanc poured more than 100 million dollars into 500 companies. SUBSCRIBE TO MY “MONDAY MUSINGS” NEWSLETTER TO KEEP UP WITH THE PODCAST. Show Notes LINKS: Find Andrew online: Twitter Clearbanc People mentioned: Chamath Palihapitiya Chip Wilson Tobi Lütke Sam Altman Paul Graham Stewart Butterfield Drew Houston Mike Krieger Other mentions: Clearbanc Social Capital Andreessen Horowitz Y Combinator Lululemon Little Black Stretchy Pants by Chip Wilson Groupon Dragon’s Den It’s always Day One letter Top Hat SHOW TOPICS 1:55 How Systems Engineering helped Andrew helped think about the intersections of different disciplines like Neurobiology, Psychology, Marketing, and Macroeconomics 5:36 Why authenticity is key to building great marketing campaigns and why your job as the CEO is to create the necessary conditions for success 10:12 The origin story of Clearbanc and how 40% of all venture capital goes to Facebook, Google, and Amazon 20:05 How companies build a culture that allow people to fail and how Clearbanc started by funding Uber drivers which keeps them true to their origin story 25:14 How Andrew squares the dichotomy between funding growth through social media and the idea of a disproportionate portion of VC going to Facebook ads 29:42 Airbnb and the future of how cities will evolve around self-driving cars and subscription songs 35:00 Why Andrew thinks that the advent of self-driving cars is more a policy problem than a technological one 40:48 The independence of Canadian provinces and how Quebec has managed to preserve the European culture against huge pressures 47:31 How meeting YC partners showed Andrew that VCs are just one way to build your company 50:43 How Andrew builds and cultivates relationships while building Clearbanc 55:10 What Andrew thought about traveling to Israel and thinking about Jesus as a founder of a movement 58:29 How Andrew returned to his initial passion for selling a product that he believes in through hiring people in positions which were their passion