Joe Vellanikaran of Brightvine On 5 Things You Need To Succeed In The Modern World Of Finance & Fintech

An Interview With Jason Hartman

Develop your own leadership style. There is no set mold for what a leader in finance should look like. You can be a leader that motivates your team and gets them excited to work harder. But I’ve also seen leaders who have very quirky personalities and who lead by example. These people are so good at what they do that people naturally band around them as their leader. Leaders come in all shapes and sizes in finance.

As part of my series about the “How to Navigate and Succeed in the Modern World of Finance”, I had the pleasure of interviewing Joe Vellanikaran.

Joe Vellanikaran is the CEO and Founder of Brightvine, a blockchain-powered investment platform. Joe is passionate about using Web3 technology to provide better access to parts of the market — like mortgages and other real estate products — that have been traditionally blocked to the average investor. Joe’s background in finance combined with his vision for a more accessible financial infrastructure make him an innovator at the forefront of bridging the gap between traditional finance and decentralized finance.

Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

I started my career doing investment banking in New York and then real estate private equity on the West Coast. In both these industries, I encountered a lot of issues in terms of data transparency and the lack of real-time data. I witnessed first-hand how even brilliant investors at top-tier firms were forced to make $100 million decisions based on poor data. I knew there was a massive opportunity for solving this issue — this data coordination and sharing issue — within the financial services space. When blockchain began to emerge I quickly realized that it was the solution to many of these problems. I founded Brightvine to use this technology to help update the technological infrastructure of traditional markets to bring better data transparency to the industry.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

During my senior year of college, I was attending a final round interview for a highly-regarded financial firm. Wanting to dress to impress, I had arrived early and donned my finest suit — only to realize that my belt had completely broken on my journey to the interview location. I rushed to the nearest restroom to fix it, maneuvering it every which way in order to avoid showing up beltless, but to no avail. I exited the restroom with the broken belt in hand, only to be greeted right outside the door by my interviewer. Nervous and unable to shake their hand while holding the remnants of the belt, I decided at that moment to own it and consequently offered an opening line of, “well, my belt just broke!” I have always been a believer in presenting yourself in the best light, but the best lesson from that experience was that it is best to embrace your own mistakes and shortcomings in order to build yourself to be the best that you can be. And also to buy nicer clothes!

Are you working on any exciting new projects now? How do you think that will help people?

We launched the Brightvine Portal this month. Our portal is now being used to share validated, accurate, and up-to-date information related to a securitization across a number of stakeholders. By doing so, we are increasing efficiency and reducing the number of errors across the entire transaction. We expect to be doing more securitizations over the next few months. Further on down the line, we will be launching some other exciting products, such as a DeFi protocol and marketplace.

Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started what was its WHY, its purpose?

The main purpose of Brightvine is to increase efficiency and liquidity in the mortgage market, and thus increase home ownership overall. Legacy institutions like Fannie Mae and Freddie Mac were created by the US government to increase home ownership for the middle class. But one unfortunate outcome of new regulations following the subprime mortgage crisis of 2008 is that the cost per mortgage has increased significantly. And those costs are being passed along to the borrower, which in the end means that less people can afford mortgages. However, when we increase efficiency in the securitization process, it increases the amount of capital that’s available to provide mortgages, thus bringing prices down and making mortgages more affordable for more people.

Do you have a “number one principle” that guides you through the ups and downs of running a business?

My number one principle is that nothing great comes easy. As a startup founder, there are a lot of good days and a lot of bad days. Problems come up that you don’t expect, and things happen that are very challenging. But you just have to power through it. I remind myself that even great companies like Apple, Amazon, and Google faced these kinds of challenges early on. Some days, it may feel like you’re cursed with bad luck, but getting through those days and doing the hard work is what it takes to build something great.

If a fellow business leader would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?

It really depends on the type of business you’re building. In the VC model, you have to take on a lot of capital and grow extremely fast. Companies that take VC money are not building $5 million or $10 million businesses. They’re expected to hit billion-dollar valuations. Then the question is, do you want that journey? Do you want to be sprinting for years to get to that billion-dollar valuation? Or do you want to bootstrap the business, have full control, and grow at the pace that you think is appropriate for your company? I think it’s about answering the question: What journey do you want to have as you’re building your business? Do you want this high-octane, grow-at-all-costs experience, or do you want to control your own destiny and grow at a pace that is not quite so breakneck? It all depends on what the entrepreneur wants to achieve.

What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?

To be clear, just because you raise $100 million at a $2 billion valuation does not necessarily mean that your company is worth $2 billion. I like to look at revenue (because most startups are not cash-flow positive) and then apply a multiple that is comparable to similar companies in the public sphere. I think it’s important for private companies to compare their valuation to an appropriate set of public comps.

What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill? From your experience do you have any general advice about how to boost growth and “restart their engines”?

If you hit a standstill, it is important to look beyond just internal solutions to see what partnerships and relationship-building opportunities exist outside of the business to encourage growth. Some companies struggle with an “it’s me against the world” mentality when setting and executing on their growth principles, but it is beneficial to consider external possibilities to foster new avenues of development. For Brightvine, we were lucky to find a valuable strategic partner in Angel Oak early on in our process. This partnership has allowed Angel Oak to benefit from our platform’s capabilities while providing Brightvine a wealth of information and experience that have been invaluable in growing our business and building our products.

What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?

As a startup, whether you are VC-backed or bootstrapped, you still need to move fast. But you only have so many dollars in the bank. So you have to balance cost and speed. You want to be frugal enough that you understand what is frivolous spending. But you also don’t want to be so frugal that you say no to everything. I’ve seen companies that are so frugal that employees couldn’t get meaningful things, like a computer monitor, that would improve their work lives and allow them to be more productive. And I’ve seen the flip side where companies burn through tens of millions in VC funding in a year, when they could have spent a fifth of that. Then they go to raise the next round and the VC spigot is cut off. So, it’s really about finding the right balance between spending and speed.

Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.

1. Focus on human capital. The finance industry attracts a lot of very smart, very hard-working people. You need to find strong talent, but you also need to make sure that those people are happy working for your company, or they will just go to another firm.
2. Stick to your guns: There are a lot of hype cycles in finance. At first, there are lots of people making money, more people pile into the latest risky asset, and then the market crashes. But the people who really succeed are those that understand their own investing parameters and plan accordingly, despite what everyone else in the market is doing. In other words, not falling prey to FOMO is very, very important.
3. Be gritty. Finance is a gritty industry. You have to work hard and be very tactical in order to execute and succeed. For instance, I think most people outside of finance might not understand how much work goes into an IPO or securitization. It takes a lot of hard work over months of time to actually put these deals together. Without grit and hard work, it can’t be done.
4. Build a network. An investment bank is basically a network of liquidity. To succeed in this industry you need to have a strong network of people you can call who may be interested in what you’re trying to sell or what you’re trying to issue.
5. Develop your own leadership style. There is no set mold for what a leader in finance should look like. You can be a leader that motivates your team and gets them excited to work harder. But I’ve also seen leaders who have very quirky personalities and who lead by example. These people are so good at what they do that people naturally band around them as their leader. Leaders come in all shapes and sizes in finance.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

There are a lot of startup founders who think that working 24/7 is how you win. But that’s a sure-fire way to burn out. Your body and your mind need time to rest. My recommendation is to always take at least one day off per week. If I look at what’s on my plate right now, I could work for the next two weeks and still not be caught up. But I also know I need to stay fresh and avoid burnout. Without the proper rest, you can actually hurt your company because you’re not thinking clearly or making the best decisions. Personally, I try to make sure I always take Saturdays off and not think about work at all that day.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I’d love to start a distributed ledger for authenticating what is true and what’s not true in the public sphere. It’s very hard to sort through all the noise today, especially in politics.

How can our readers further follow your work online?

Check out the Brightvine site and the Brightvine blog!