Founder and CEO at Linker Finance
Linker Finance provides community banks with a secure and holistic digital banking platform to enhance their online and mobile banking services.
I'm actually a serial entrepreneur. I was born and raised in Honduras and came here to the US as an adult. I had this company that we ended up selling to the largest media conglomerate in the world based here in LA. So I ended up moving in January 2016 to Pasadena, California and started to do work for a lot of media entertainment companies. Disney, NBC universal, Viacom, and we started to grow, we decided to look for other fields. I was very interested in FinTech.
I got to understand a lot of fintech infrastructure. We did neobanking platforms, lending product, both for like startup, but also very large conglomerates. And this where Linker starts. Linker finance is a digital banking platform we sell to community banks. As we were growing that other business, we had this line of credit with this large financial institution that was approved. And then we started to grow. We were four people and then we were about 20 something people. So we went to the bank that we're working with and it's like, yeah, let's expand this line of credit. We have all these amazing customers. We're growing. We actually got the denied. I was actually shocked.
We had this super different experience with a local bank. It's this bank that sat with us, understood the business, met us and approved five times the line of credit. We had this amazing banking relationship and this terrible digital banking experience. I had three different logins in three different systems. I had to call to do wire transfers. I was doing all this work in fintech and then I saw this bank and I'm like, what is this thing? All these banks that do this amazing work, they're profitable, but they're losing business just because of the customer experience.
They have existing systems. There's all this FinTech infrastructure. So we took inspiration from tools like Webflow and Zapier on how do we make this highly customizable, easy to launch, white label solution, digital banking platform. And that's what we decided to launch.
Think of us as a mobile and online banking provider for community banks. The majority of them don't have a technology staff. How do we provide this premium digital banking experience for their customers? But at the same time, how do we make it easy to integrate to the systems that they have? Activate different integrations and how do we make it easy to configure and modify as well. That's our value prop for community banks. We are focusing right now on a very specific segment of community banks and business banking.
Banks don't need to leave your core in order to be more modern and more agile. We see ourselves more as an expansion to the core. We have direct integration to core banking providers. Earlier this year, we got into the Pfizer program. We do have also integration to a couple of banking as a service providers, Treasury Prime being one of them, as well to Galileo.
We have an advantage. We are not direct to consumer. We actually sell to banks. So a lot of the compliance burden lies within the bank. Having said that, we do have our internal council that is also experienced on some of the regulations. We do a lot of the compliance and regulation from the technology standpoint and because our system is configurable.
We decided to go to market starting with some fintech customers that wanted to launch a bank, a digital banking solution that don't have the capacity to build. And then, have a product move to banks. As we were progressing, we discovered a couple of things. One of them is the direct to consumer fintech space was having a hard time getting distribution, getting users, getting funding as well. At the same time, as we were talking with banks, fintech customers are not a reference for them. The main question that banks ask is, what other banks are you working with? And the other question that they ask after that is, what core providers are you integrated with? And reality was that with our Fintech customers, we were only integrated to banking as a service providers.
So although we had amazing integrations, the one that they care the most, we didn't have. So in terms of pivot last year, our main objective was close our first bank. We ended up closing our first bank in December last year, the CEO of that bank became an angel investor. In January, we decided we're not going to accept any more fintechs. And we're just going to focus on community banks very specifically. We thought it was the mostly underserved and larger market. It became clear for them why we're different, trying to solve their problems and not trying to solve everybody's problem.
We were trying to solve two markets. We're trying to solve the fintech market and the community bank market. And those are different. There's different integrations. There are different needs. The fintech customer wants more like a low code, so they can code themselves. The community bank market doesn't want that because it doesn't have the tech staff to do that. So they need no code, for example. Once we started to narrow down, then you start building the product that fits that market.
We have good signals of repeatability, a good pipeline advanced conversation with multiple banks. They're using the bank that we're working as a reference. They're calling them directly actually. They go to the same events. The bank that we're working with and other banks that we're talking to were at the same event.
So people said, hey, actually, we're talking with them. We're working with them. And that creates that loop. That's when you really find product market fit, when you find that repeatable pattern of business.
Being an immigrant makes things a little bit more difficult. But I think something that makes immigrants is that we are resilient. The hardest thing is the network. When you come here, you don't have a network at all. So building a network was something that took me years. I read this book called super connector from one of the founders of YC, the young entrepreneurs council. I remember that it was something in the realms of finding the things where you want to be connected and finding where those connect.
Well, I'm in tech and I'm in LA. So I started to find groups of tech entrepreneurs in LA, found this community of CTOs. That gave me a network. I wanted to be focused in FinTech. I started to look for communities in FinTech. I'm Latino, so I found a community called Latino Business Action Network. I applied to a program that they have in Stanford. That gave me a network of thousands of successful Latino entrepreneurs. I had already been working in my network that people were like, hey, yeah, I can connect you with this person.
At the beginning, I would hide the fact that I was Honduran, which is impossible because I have an accent. Although I have this very odd background, It's a very special story. The fact that I've been an entrepreneur that was able to sell a company from Honduras, and then sell it here. So instead of hiding and try to pretend, I decided to go all in.
But it wasn't like that at the beginning. When I moved, you have this imposter syndrome. So I would say what's your story. That's important. If you would have a trailer of your life that you can tell very quickly to an investor or to a potential customer, what's that trailer and what's the right sequence of it? So they realize that you're great, that you are serious, that you execute, and make that part of your story. And don't hide your background. I think that's a mistake. I would actually fully own it.
Fundraising is tough. Fundraising in this specific time is tough. One of the main advices that I learned was it is a process. It's about finding that investor that really connects with you. And that makes a whole difference. I had this list of 130 something investors. During the process, I have talked with multiple investors that I said, we're not raising right now, but I want you to know me and this is what we're going to achieve and I'm going to come back when we're raising. When I started the process, I didn't blast 130 something investors right away. I sent 10 emails that I knew were going to be answered potentially quickly. And potentially none of them are going to give me a deal. But I went to those meetings to validate my deck and get the questions.
Investor density is one of the best predictors of fundraising. We got to a point that we have five meetings per day with investors. We actually got interest at similar time from multiple investors, and that's what made a lot of difference. We found one investor that was very into us from the beginning. Paul Graham says that every fundraising, successful and unsuccessful, looks the same at the beginning. I can vouch for that. A lot of maybe, some no's, some silence, some slowness. And then all of a sudden, at the same time, I had three different paths of funding.
It's an emotional process to be honest. It's not much harder than doing sales, because when you start doing sales, you get a lot of no's until you understand what matters. And then then you start to get yes. So that helped. But to handle the no's, there are no's that are great in the sense that they leave you with something. Although they're frustrating, they're good. But there are no's that are very disheartening.
A fund may say no, not because of you, but because they don't have money. They just took the call, and they wanted to know more, they're doing research, they want to show all this pipeline that they have, but they don't have money. I started to prioritize funds that have invested in the last two quarters that the majority of their investments were either pre-seed or seed. Prioritize funds that are within our segment, that invest in B2B and SaaS and enterprise there are in fintech.
Like any sales or any community, you need to find the affinity to the fund just so it makes more sense for them to invest in you and you to work with them.
In the first batch, I sent an email to funds that I didn't mind if they invested or not. And then I did send to a couple that would be great if they invested, but I knew they were friendly. So even if they didn't invest, they were going to leave me good feedback. The first goal is, if they invest great, but really what you want is feedback. You want to purify your message.
I consider myself very lucky. Claudia and I don't have the same last name, but we're actually married and we've been married for 20 years now. We've worked together for over 12 years. She led the design practice at my previous company. Alejandro has been my business partner in a couple of other endeavors, including the one that we sold. I had The privilege that we are a team that already knew each other from different things and we've done things very successfully in different capacities. That was key. Having co founders is a marriage, so you have to be careful.
That expands to your founding team. I respect a lot of experience. And bank being a highly regulated established industry, one of the things that we knew was that when people saw us, they saw innovation, they saw tech, but they didn't see banking operation. So our first hire was somebody that had been talking for at least the past 3 months that was a Capital One. But, I couldn't pay. So I told him, I cannot pay what you're worth, but I can give you this and give you options. And once we raise, we can talk about a better compensation. We talked very openly and, and he accepted it. That's why I say it's like a marriage because you have to be very transparent. You have to be very honest.
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