Kaia Parv, co-founder and Chief Investment Officer of CrediLinq, joins Vlad Cazacu, co-founder and CEO of Flowlie, to discuss their recent $8.1M Seed and Seed Extension raise and the unique challenges of raising capital for both a technology startup as well as a private credit fund.
Kaia Parv, co-founder and Chief Investment Officer of CrediLinq, joins Vlad Cazacu, co-founder and CEO of Flowlie, to discuss their recent $8.1M Seed and Seed Extension raise and the unique challenges of raising capital for both a technology startup as well as a private credit fund.
00:00 Introduction and Welcome
00:16 About the Host and the Podcast
01:03 Introduction to the Guest: Kaia Parv
01:26 Kaia's Career Journey and Transition to CrediLinq
03:59 The Decision to Join a Fintech Startup
05:59 Understanding CrediLinq's Business Model
07:46 The Dual Structure of CrediLinq's Fundraising
09:39 The Startup Fundraising Journey
10:09 The Seed Extension Round
11:27 The Impact of Macro Environment on Fundraising
33:36 The Importance of Lead Investors
37:09 Rapid Fire Questions and Conclusion
You can find Kaia Parv on LinkedIn at https://www.linkedin.com/in/kaiarparv/ and learn more about CrediLinq at https://www.credilinq.ai/.
Learn more about Flowlie and how the platform helped thousands of founders from 65+ countries around the world raise hundreds of millions of dollars. Build your dream cap table with Flowlie's all-in-one Fundraising Hub at https://www.flowlie.com/
Stay up-to-date with all our episodes by checking our website at https://www.thefundraisingdebrief.com/, following us on Twitter at https://twitter.com/thefundraisingd, and on Instagram at https://www.instagram.com/thefundraisingdebrief/.
The Fundraising Debrief (Ep. 9) - Kaia Parv (CrediLinq $8.1M Seed)
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Kaia Parv: [00:00:00] My name is Kaia Parv. I'm the Chief Investment Officer at CreditLink.ai. We are a Singapore based startup company and we use AI in credit analysis, enabling B2B platforms. We have raised $8.1 million in our seed round.
Vlad Cazacu: Hey everyone, thanks for tuning in and welcome to the Fundraising Debrief, the podcast where we share the real stories behind successful founders and the recent VC financing rounds.
Vlad Cazacu: My name is Vlad Cazacu and I'll be your host today as we interview Kaia Parv and follow her journey from banking operations to hedge fund investor and onwards to lead the arm of a novel fintech startup. She brings tactical fundraising advice about raising for multiple vehicles at the same time and shares best practices for navigating conversations with family offices and high net worth individuals.
Vlad Cazacu: For more information about running a fundraising round including show notes, highlight clips and exclusive scenes, follow us on Twitter and Instagram at @thefundraisingdebrief as well as on our website at thefundraisingdebrief.com.
Vlad Cazacu: This episode is brought to you by Flowlie, the all in one fundraising hub used by thousands of founders from 65 countries to plan their rounds, share their deck, and track access.
Vlad Cazacu: Now, let's dive right in.[00:01:00]
Vlad Cazacu: Kaia, such a pleasure to have you on the podcast. Thank you so much for taking the time to join us today.
Kaia Parv: Good morning, Vlad. Thank you for having me.
Vlad Cazacu: Absolutely. I mean, I really appreciate you waking up at such an early hour in Singapore to make this recording. For everybody's listening, it's actually 6 p. m. here in Miami, 6 a. m. there in Singapore. So appreciate you doing that. It's my pleasure. Always. I would like to start this episode really before CrediLinq and start to discuss a little bit more about your career trajectory because you've had quite an interesting career before joining CrediLinq.
Vlad Cazacu: You started in big bank finance right after college, and then you moved over to a hedge fund. So walk us a little bit through those first decade of your career before CrediLinq.
Kaia Parv: Sure. Vlad, as you point out, I guess I've had. Um, quite interesting or some people might call inconsistent career.
Kaia Parv: I moved to Singapore back in 2011. I'm originally from Estonia. [00:02:00] I graduated in 2011 and it was the time of post great financial crisis. There wasn't much to do in my part of the world. So as a young person ready to take risks, I decided to pack my bags and come to Singapore, basically without any job experience and just to take a risk and see what will happen.
Kaia Parv: I was extremely lucky because that was a time when Singapore had very open immigration policy, the banks were hiring. So I got an offer from Bank of America Merrill Lynch within a couple of months. Um, I spent six years with Bank of America. I held a number of different roles in technology, in operations. I eventually was moved to the front office. So I also had experience in investment banking and in global markets. So my final job with Bank of America was the head of business controls for global banking and markets in Southeast Asia.
Kaia Parv: I can tell you business controls was not the most riveting or interesting job, at least not for me. [00:03:00] It was very compliant, very procedure, very regular to regulatory related role, and I didn't really enjoy that. But what I was really good at the time was building relationships. And I had really good relationship with an ex colleague who had become a mentor who had joined a hedge fund at the time.
Kaia Parv: And I guess he saw my pain, he felt sorry for me. Um, but, but also I would like to say that he also saw the talent and the drive in me. So he hired me to the hedge funds and that was my first role, uh, within the front office, within asset management side of the business. And obviously opened up a completely new world and a completely new career trajectory.
Kaia Parv: I spent a couple of years there and in 2021, the same mentor founded CrediLinq.ai and, and he basically called me over to run the investment business for crediting.
Vlad Cazacu: Fantastic. And I'm sure we're going to explore a little bit more of the relationship with that mentor moving forward and the impact that he had on your career.
Vlad Cazacu: But I'm curious to [00:04:00] understand your thought process when he came to the idea of you joining a startup, quite frankly, FinTech startup with all your experience in larger organization, the hedge fund. What was going on through Kaia's mind during that time about making that career decision?
Kaia Parv: To be honest, for me, that was pretty much a dream job and why I say a dream job is that I got actually quite frustrated being part of a large organization because big banks Offer a lot of opportunity and exposure, but at the same time, they really limit you into this small box, which is your job description. And you are not really, aren't really allowed to operate outside of that job description.
Kaia Parv: So I felt, um, the bank of America didn't allow me to develop in a way that I would have wanted to develop. So when Deep came to me and said, Oh, I have a job for you. Um, this is the job description, but you will do everything else as well. I was actually excited and I had [00:05:00] manifested that job to myself in a way I feel, because I had journaled a couple of years ago, vlad you're going to laugh at this, that I would like to be the CIO at the Fintech company. So when he came to me, I was like, Oh, okay. There's the universe doing its thing.
Vlad Cazacu: Indeed. And I feel this is a recurring theme also, I mean, on, on two sides, one, the entrepreneur that's being stuck in a large organization and sort of the creative spirit, not really being able to be manifested, but also the same time of, um, this somewhat spiritual decision to start the company and join a startup, which feels more like a drive and what you're meant to do rather than what you have to do next. I
Kaia Parv: absolutely agree. And like I said, um, we, we really get to do everything in a, in, in this startup. I mean, and, and you know it right? Like one day I sweep the floors. Next day I speak with the central bank of Singapore. It's just the diversity and the different way you can challenge yourself.
Kaia Parv: For me, it's extremely exciting. And it's offering so much growth to me professionally, as well as individually, personally.
Vlad Cazacu: No doubt about it. But I think at [00:06:00] this point, a lot of the listeners are probably wondering, so tell us a little bit what CrediLinq actually does. Peel back the curtain a little bit on what you do and what are some of the interesting things you're working on right now and some of the biggest projects you're involved with.
Kaia Parv: So CrediLinq is a technology infrastructure company, and we enable third party B2B platforms to add a lending product onto their platform. So these third party B2B platforms can be e commerce platforms, can be procurement platforms, they can be payment platforms even. And when you have companies that transact there, often what these companies lack is access to easy credit.
Kaia Parv: Of course, you have traditional credit providers like banks, you have maybe private funds, but the process for a small company in particular of obtaining the loan is quite troublesome, especially after COVID because there was a acceleration of online businesses that took off. So you have a large universe of companies that have [00:07:00] only operated, let's call it, in digital economy.
Kaia Parv: Maybe they don't have a bank account. Maybe they don't even have proper financial statements because everything they do is online. It's done through PayPal. It's done through Aspire here in Asia. So banks look at them like sort of strange animals. So we try to fill that gap. By partnering with the platform building our API, pulling the data, mostly the transactional data, the alternative data we build credit models on top of that, and we use quite a bit of machine learning techniques. We basically do predictive analytics, looking at the historical data and then projecting the likelihood of this particular customer or this particular company being able to service the loan over the next 30, 60, 90 days.
Kaia Parv: And what we have done differently compared to other, um, I, I wouldn't say other, but I would say most embedded lending companies is that we have decided to keep the lending balance sheet separately from our FinTech business. So [00:08:00] within our group, we have two, two companies. We have CrediLinq.ai, which is the brand the logo behind me. And we also have Singapore based MAS licensed asset management company. And the asset management company is purely utilized to do the lending activity.
Kaia Parv: And that allows us, uh, Vlad to do basically two things. It means that there's no cross contamination of the balance sheets. Meaning if we do have loans that are doubtful, our FinTech business is completely untouched. And also this means that we don't have to use our own equity to finance anything because the asset management side of the business has completely different and segregated capital raising activities. So we raise money from institutional investors, from high net worth individuals, from family offices that don't want to participate in the fintech growth, but they want to earn yield from [00:09:00] the loans that we give out.
Kaia Parv: So we actually do two different types of cap raises completely different in nature but this also means that when we have any doubtful loans, we don't have to carve into our own equity, we don't have to top up that equity and we can just use that for our OPEX.
Vlad Cazacu: I think you're really getting to the meat of this episode, which is this dual structure and actually the fundraising that's happening on one side on equity, which is kind of more the traditional startup fundraising that we usually speak on the podcast, but also this interesting debt product that you're offering, separate, but also synergistic with what you're building on the fintech platform. So let's dive a little bit first in the startup raising and then we'll jump into the debt financing part as well. I'm curious how much money have you raised currently for CrediLinq and how are those rounds sequenced?
Kaia Parv: So we obviously started with the angel round which was closed in [00:10:00] 2020 and subsequently we've had Seed and we did immediately seed extension on the back of the seed round. We have raised total $8.5 million. And the reason we did our seed and seed extension so close was basically that Post announcing the seed round we had a lot of reverse inquiries.
Kaia Parv: So a number of different VCs reached out to us. They had heard about us. They had followed us on LinkedIn or maybe any other social media. And because we already had all the materials ready, we had done the model. We had done the data room. We had put together all the governance documents, the pitch decks.
Kaia Parv: It was quite easy, I would say, um, or maybe I should say it was simple, but not easy to go for the seed extension round as well. And obviously when you are offered money in this market environment, it would be silly from us not to accept it. Um, and also we had already started building a pretty strong revenue [00:11:00] base which meant that we could expand our valuation as well.
Kaia Parv: So hence it was a collective decision by our founders, by our management team to go for the seed extension round. And now we are pretty well capitalized, I would say to prepare ourselves for our series a which hopefully will happen in 2024 but we are not in desperate need or we are not short of cash, which also means we have a bit of more negotiation power.
Vlad Cazacu: Absolutely. I'm curious to understand how did the macro environment in any way influence not only the decision to do the seed extension, but also some of those valuation conversations that you mentioned earlier.
Kaia Parv: Yeah, that's a great question. A part of our management team is quite seasoned capital markets professionals predominantly our founder Deep Singh, as well as myself, both having worked for bank of America, Merrill Lynch and hedge funds. Macro conditions were pretty important for us, [00:12:00] obviously having a number of, you know, you can call them black swan events happening one after the other.
Kaia Parv: And I'm referring to the UK pensions collapsing about a year ago, we had FTX collapsing. We had, uh, Silicon Valley Bank, um, in March this year. So we felt that, Um, so When macro is not in our favor, we have to take the destiny into our own hands. So despite having quite difficult macro conditions we did our best to bring the And obviously the hard numbers in terms of revenue, our clients, our partnerships in front of investors.
Kaia Parv: And also we both know, or I shouldn't say just the both of both of us but the management team knows that things could get a bit worse before they get better. That's quite common, especially in credit cycles, because I don't think we have seen the bottom of the credit cycle yet. So we felt we would be much more comfortable going into series A with [00:13:00] having that war chest, if you will and I'm happy to say that we are actually at the place where we can grow, we can expand, we can have those additional partnerships, we can support those. Um, so it's, it's actually pretty, pretty good place for it to be.
Vlad Cazacu: I appreciate you sharing some of these insights. And really, this is the goal of the fundraising debrief is to demystify a little bit of the fundraising process and a little bit of this anti tech crunch thesis of what really happened to get you specifically there, so I'm curious to understand the difference between the beginning of the seed round and then the beginning of the seed extension and how did your business specifically progress from one point to another and how you leverage that in the conversation for the seed extension, if at all.
Kaia Parv: Oh man. The, the, the two timelines were completely different. I think seed was started in, uh, I wanna say late 2020, early 2020, actually late 2021, early 2022. That was the time I came [00:14:00] physically back to Singapore to join the company. I had, I had been in Europe during COVID times, and what seemed initially as a very early process took a completely different turn because in, you know, February 2022, we had obviously the crisis in Europe and the sentiment of the investors changed basically overnight. So we observed that not only to the FinTech side of the business, but also to our lending side of the business. So those investors that may have committed some sort of allocation or were willing to have discussions about investing anything from, let's say half a million to a million immediately pulled back and then they wanted to see how the macro is going to play out, what's going to happen in Europe, what's the impact on, you know, anything from supply chains to interest rates, environment to just generic risk appetite and even the global markets, meaning the equity markets.
Kaia Parv: Um, so that was, that was quite difficult. It [00:15:00] was, um, I wouldn't say demoralizing, but I would say it was a bit difficult and challenging to accept that so much of what we do is actually dominated by the macro environment. Like it's not necessarily how we run the business, how we built the business. It's not our profiles it's just like this holistic perspective that investors look at. It was a bit of cold shower, if you will.
Kaia Parv: However, seed extension, because we had gotten that confidence of raising money and it wasn't an easy process. We, every, everybody was involved. Um, it was, it was obviously led by our founder and co founder with the management team supporting, but we had already gotten that confidence in us that we can do this. We had gotten quite a few really, really good investors who supported us throughout the way with advice, with, with, you know. Market direction, business direction, who opened up partnerships for us, opened up their network to us. So I [00:16:00] think seed extension was already with the confidence that, you know, we can do this, we've done this already.
Kaia Parv: And when the reverse inquiry started coming in, that was also extremely encouraging, meaning that people have noticed us, what we do. it can actually have gravitas. We have a product market fit, and that was way before, Vlad, AI was a thing. So we actually did AI before AI had become so big as it is right now.
Vlad Cazacu: Absolutely. You've definitely benefited towards the seed extension of all this international excitement around AI as a category, not only through the consumer use case, but also from an investing use case, right? Like everybody started chasing some of these opportunities and I can see how a more mature CrediLinq after a seed becomes an even more attractive target for investment at that stage.
Vlad Cazacu: But I'm curious before we move into this, you know, dual race for the other company as well, help me understand the very first yes, the very first [00:17:00] believer in the seed round and how did that spiral down towards getting the seed round completed?
Kaia Parv: Sure. So, um, our very first yes was a Southeast Asia based VC called 1982 and Scott and Hurston who run the company have been absolutely critical I would say to the success of the company. They were the first hand holders. They were the first mentors. They have been with us throughout the entire journey. I can't stress enough how much they have done for us, not just from the perspective of obviously giving money, but, but again, opening up the network, always being available, supporting us through seed extension. In fact they did participate in seed extension as well. And hopefully maybe in series A. So that was, um, I would say for us morally quite important. Partnership to have, because that built our self confidence that we [00:18:00] are able to raise money institutionally and not just from the universe that we have been used to raising before with within our previous, uh, during our previous lives, which was the private hedge fund, uh, and then the bank of America context, but we can also do the same within the VC world and let's call them more traditional investors. So, yeah, I think Scott and Hurston have been with us and they still pop by from the office. They come to our company events. We have an offsite coming up. Uh, they are there to go for their advice, their views their critique, and which we always are very fond to take as well. So yeah, grateful for them.
Vlad Cazacu: Amazing. And I'm, you know, I'm intrigued now. So I have to ask, tell me a little bit about the differences between raising in the VC space versus raising in the hedge fund space. And what have you personally noticed?
Kaia Parv: VC investors obviously are the super ambitious ones, the ones who want to see your 10 X growth within the [00:19:00] first year expecting you to either fail really quickly or become successful, hopefully really quickly as well. Using a bit of stereotypes, these are the guys who come in great t shirts and jeans and I would say these conversations are very much of focusing on business strategy, market expansion, strategic partnerships, and you also see these investors coming in with a lot of support and help and guidance opening up their network.
Kaia Parv: Whereas on the other side of our business, those private credit investors tend to be much more traditional than to be conservative. Generally, they are the ones who don't want to see necessarily 10 next growth, but they want to see consistency. They want you to deliver that, let's say, 15, 16 percent yield from the loan portfolio every quarter. They are not that open to give access to their network. Of course they will help with some sort of intros if need be, but they tend to be a bit more insulated in their ways. It's almost like [00:20:00] if I have invested, maybe they don't want everybody else to invest. So these investors tend to be much more focused on capital markets. They don't look necessarily how the business strategically is growing for them. It's important that you, you do it like. the same yield every quarter. The moment you have 10x growth for them, it's like, well, what's going on? Like this shouldn't be the case. Um, so it's, it's, I would say more aggressive versus more traditional. And of course, when we scale our private credit fund, which means that we have to reach to about a hundred million worth of loan book, we are not quite there yet. We're currently about 15 million off cumulative funding. That will open up a new universe of investors for the private credit side of the business as well, or for the investment side of the business, I should say. That's when hopefully the institutional investors come in there, maybe the insurance companies, maybe the pension funds.
Vlad Cazacu: Absolutely. And help me understand this. Were you doing the two fundraisers at [00:21:00] the same time?
Vlad Cazacu: So were you doing the CrediLinq fintech fundraise as well as the private credit fundraise almost at the same
Kaia Parv: time? Absolutely. It never stops. It absolutely never stops.
Vlad Cazacu: Wow. And was there any synergy between the two? Were there any people who participated in one and the other or were not interested in the first, but they were interested in the latter?
Vlad Cazacu: Were you able to experience some of that?
Kaia Parv: Absolutely. And, and you know, that, that for us is the greatest proof in our product or rather, I should say, building the faith in our product is because a number of investors who had invested in our FinTech business also wanted to participate in the investment side of the business, because that particular lending entities is completely separate legal entities.
Kaia Parv: It's not even linked to our group necessarily. So they, there were investors who wanted to put money into the lending side of the business as well. And now as the lending side of the business is growing on its own, there is external [00:22:00] capital coming in from investors who don't want to participate in the FinTech story. They just want to earn that, like I said, 15, 16 percent annual yields. It's very low risk, right? Because it's basically, it's interest and principle repayments. They don't want to do this wild FinTech story, they just want to earn consistent income.
Vlad Cazacu: And how are you able to discover those two distinct group of people?
Vlad Cazacu: I'm trying to figure out, you know, let's back down like maybe like a year and a half ago. And if you're like, Hey, we're, we're gonna need to do a seed round and potentially seed extension afterwards, maybe that was not even on the radar at that point, and we're doing a capital raise for our private credit. We're going to need to target many more people than that are going to say yes, because there is a sales funnel at the end of the day. How did you build that top of funnel as you embarked on the fundraising journey?
Kaia Parv: Sure. So for the fintech side of the business, of course, it was tapping onto an existing network of venture capital here initially [00:23:00] in Asia. We've gotten quite a few intros from existing investors. There was an element of, I wouldn't say cold calling, but sending out cold emails as well and also we've been quite lucky because we've gotten reverse inquiries based on our social media and obviously from sending out press releases. So I think maybe being in Southeast Asia at some point played in our favor. Of course, being in the AI space has, uh, done a few favors for us. So that was on the VC side.
Kaia Parv: Now for the lending side of the business or investment side of the business, we had to tap onto our existing network because this was something that we had done in the past. So it was a lot of reaching out to existing network and this again has is likely to have the same effect as with the with the fintech business word to mouth, putting out announcements generating interest through social media, because when we talk about a capital markets product, meaning[00:24:00] a Private credit fund, as we have set up and the return on that, anything between 20, 15%, that's quite attractive. And especially with the interest rates, most likely to start going down from this point, uh, us still generating the same return, which we expect to do, um, is going to attract interest from again, initially high net worth individuals, family offices. And then in the, at the later stage, it will be institutional investors, because if you think about the profile of, of, of the investors, what they want is to balance their portfolio.
Kaia Parv: Most likely these investors have some sort of equities, public equities in their portfolio. Maybe they have some sort of private allocation. So what they want is some sort of cash generating. Fairly stable investment that would be like the cornerstone of their portfolio. And we feel we can fill that gap because we offer cash distributions from the funds [00:25:00] at the regular interval.
Vlad Cazacu: And in this world of dual fundraising with primarily targeting high network individuals and family offices, while at the same time venture capital firms for the fintech part of the business. How important was the in person component to that? And having some of those investors either have a physical presence in Singapore or traveling to Singapore, or you traveling to their HQ in order to close that deal in today's environment.
Kaia Parv: We are born during COVID time. So we are used to operating through video over a video. And that's something we discussed with you earlier as well, that luckily people are so used to speaking in front of a camera, like go back 2019. I would have been like, well, I was speaking on camera. Um, so we have leveraged quite a bit on that comfort that people have built. Um, but of course, human, you can never take away human elements. Having that synergy with people in the room, meeting up for [00:26:00] coffee, dinner, drinks, whatever it is, it's absolutely critical for us. Luckily a large universe of investors in both the VC space, as well as in the sort of more traditional investor space are based in Singapore, or they use Singapore as the hub in Asia.
Kaia Parv: So either they come, they go. And again, we have that luxury in 2023 of traveling again. Um, but now when we start expanding, targeting larger investors. It will become more important to go physically to their HQ, be it in Europe, be it in Australia, be it in the US or North America, I should say. So that will become increasingly important.
Kaia Parv: And like it or not, a lot of the big deals are still closed face to face. If you're giving away a check for, you know, 5 million and above, you want to see the person you want to have that connection and again, like that synergy. So we do expect the travel to pick up, um, [00:27:00] which, you know, it's obviously exciting, but the jet lags, the time differences and again, being in Asia, we are quite far from the US so it will have to be done at some point.
Vlad Cazacu: So how do you think the Series A is going to look differently, both from, you know, the stage of your company and how you're approaching fundraising, but also from how the world you see moving into 2024?
Kaia Parv: It's a different world in 2023 than it was in 2022. So a lot of people talk about the new normal, but I think these last few years have been just the years of transition. So we've seen from macroeconomic perspective, we've seen, you know, low interest environment changing very rapidly to high interest environment. We have seen the whole risk tolerance and risk appetite of investors changing quite a bit and not necessarily only in public markets, but also in private markets.
Kaia Parv: Gone are the days where you can raise money just with a pitch deck with an idea. This is how much I [00:28:00] want to raise. Maybe, maybe, maybe your angel rounds will get away with that. Maybe if you are a very niche company in a very hot space, like AI was at some point that could work. But I would say investors really want to see revenue. They want to see hard numbers. There's a pretty tight metrics that investors are tracking from sort of revenue perspective, anything 300, 400, 000 annual reoccurring revenue is like obvious these days, and then building on the valuation multiple on that.
Kaia Parv: So valuation multiples obviously have compressed, and the revenue expectation has gone up so we expect more rigorous financial due diligence, probably quite thorough revision of our financial model providing substantial proof and strategy for partnerships, not just in Asia, but again, it has to be global because like it or not flat Asia is big in terms of [00:29:00] population it's big in terms of business opportunities but the capital is still predominantly in Europe and in North America. So if we want to tap on that capital, we have to have presence in those markets. So that will be our next frontier to expand outside of Asia.
Kaia Parv: And this is sort of our 2024 plan. Tapping on markets that we haven't really reached at this point yet, but I think there will be much less, if I can call it fluff or narrative in cap race activity. And I think maybe you see more focus on the actual numbers that could even be audited and that's one of the reasons we have decided to go through audits with all our entities, which is done by Ernst and Young here in Singapore to show that this is not just a bunch of management team coming together and putting down numbers, but they actually have been validated by an external independent auditor with a proof of, you know, stamp that saying we have checked this, these numbers are true.
Vlad Cazacu: [00:30:00] And do you think this increased focus on financial due diligence is something that's specific in right now in the Southeast Asian market, or do you see that more globally as you know, global investors are paying much more attention to the underlying numbers behind the businesses specifically in venture capital as well.
Kaia Parv: I think it's global. What I hear from friends, partners, in other parts of the world, that's definitely happening in, in Europe and in North America as well. And it's not just the financial angle of it, it's also the tech angle, especially when you are a startup that has some sort of tech stack or you, you want to build a tech stack, you have to show that you have that capacity and capabilities to build out your tech stack and it's not just the plan that you have. It's also the execution hammer that's important and you know how difficult it is to find talent this day. Um, finding. not just in your tech team, but also in your support roles, it's become [00:31:00] so critical for any startup. And it's not just the quality, but also the quantity. And by quantity is basically the cost of what you pay for that talent.
Kaia Parv: I would say being a founder in 2023 or starting a company in 2023, probably is quite difficult because you have to find your CTO. You have to find your engineer. You have to find everybody else who aligns within that function and man, this talent is really, really costly. And that's the question we see actually, can you tell me how big is your tech team?
Kaia Parv: Where, where are they located? What is the capacity for you to add more people? Can you really support those partnerships if they do materialize? So we expect these questions to become much more prevalent and maybe also substantiated in terms of, you know, existing contracts with the laborers.
Vlad Cazacu: So is talent what you foresee to be one of the most, one of the biggest challenges coming into 2024 and as the company grows and raises a new round [00:32:00] of capital and has to hire more people of actually figure out who those people are and where they're at.
Kaia Parv: Absolutely. Absolutely. Because, um, you know, obviously the preference would be having people in low cost jurisdictions that may not be the best. If you are hours, hours far from these people, again, times of difference are important. Cultural fit is important. Having feet on the ground or some sort of oversight is important. In financial world, we talk about supply chain management, which is important for companies.
Kaia Parv: You can think about supply chain also in the terms of labor force, right? Where is your supply? Where is your supply of human capital, if you will. So being really strategic where you hire the people, what type of talent are you targeting? Do you do it by bringing people on a payroll? Do you use some sort of consultancy? Do you use recruitment company? Do you work with companies that specialize providing [00:33:00] that type of talent to FinTechs? These are really important decisions to make. And from our perspective, I think we are in a pretty good place because we have a pool of talent available to us. So far, we haven't faced the bottleneck of not having enough people to support our tech expansion, um, and hopefully that will be the case also in 2024.
Vlad Cazacu: So looking back at 2023 and all the cap raising activities that you've done so far, what do you think are some of the biggest learnings that you take into 2024 and specifically in preparation for your series A?
Kaia Parv: I think the biggest learning for us is to focus on one lead investor and really be aligned with that lead investor in terms of all that, uh, the terms and conditions when it comes to building out that, be safe note or whatever the underlying agreement is and having those additional investors. Basically based on the relationship with the lead investor. So that just eliminates so [00:34:00] much negotiation back and forth having the risk of investors withdrawing their offers at the last minute, as we have seen as well. So really focusing on finding that one partner that will be with you, that will support you and maybe also help with finding additional investors.
Vlad Cazacu: I think a lot of people are thinking about the lead investor specifically at like a, you know, a series A or a series B. I'm curious, looking back, would you have wanted to, you know, have a core lead investor from the very, very first moment, or did you already kind of have that with the fund in the seed round?
Kaia Parv: We sort of had 1982, um, who I would say acted as the lead investor. But I wouldn't say we were Strategically emphasizing that to the point that we could have. And again, that can be put on our, maybe inexperience with raising or going through those multiple [00:35:00] rounds. Um, but I would definitely encourage anyone raising capital to find the one partner being quite explicit how you envision this relationship to be between the two of you.
Kaia Parv: Um, and that puts a bit of. I would say responsibility on the investor side as well, knowing that they are leading the round and there's so much, um, you know, the, the, the future of the company in their hands so that's a bit of psychological trick as well to say that, Oh, our company livelihood depends on you but joke aside, meaning that, you know, it's, it's important to forge those partnerships and also mentorships in, in, in that way, because the relationship with your lead investor should be also a relationship. Between a mentor and a mentee.
Vlad Cazacu: Absolutely. I don't think a lot of people understand there's a spectrum of skin in the game from like, you know, smaller investors to a lead investor. And that there is, as you mentioned, like a psychological component to a lead investor having so much skin in the game to the point where it's sort of their [00:36:00] company too. So they're definitely going to do their best to make it succeed and ideally raise more capital and make sure the grounds are covered.
Kaia Parv: Absolutely. And, and, you know, we have been so lucky Vlad with, with the investors that we, we have, right. I mean, I've mentioned 1982, we've had big sky capital again, opening up their network, supporting us with intros, we have MSAD, exactly the same. Absolutely brilliant support in terms of understanding the trends, um, the focus of the investors because we don't have presence in Silicon Valley, our investors do. So, having that type of insight from directly from the source has been critical for us. We've had Ventura opening up Indonesia network for us. We have peak 15 opening up Chinese and Indian market for us. I would say, having a strong VC backing, not just financial backing, but also that relationship really is going to help you at least halfway through the journey.[00:37:00]
Vlad Cazacu: I've really, really enjoyed the conversation so far. So I'm super excited for the rapid fire section where we unpack a little bit more about you, Kaia, not just the CrediLinq. So if you're ready, I'm excited to kick it off with our first question, which is one is what is one thing that people don't know about Kaia that they should know about you?
Kaia Parv: One thing they don't know about me is that I am a pescatarian. I haven't eaten meat for the last 11 years.
Vlad Cazacu: Wow. That is quite the determination and every single time we ask this question, I haven't found a duplicate answer yet, which I'm excited about.
Vlad Cazacu: On to next, what is a recent book slash article slash conversation slash podcast episode, you name it, that has significantly changed the way you view part of the world or the world in general?
Kaia Parv: I just recently listened to a book called Chip Wars which basically talks about the history, how semiconductors industry was formulated [00:38:00] by who and how have we gotten to a point in 2023 whereby semiconductors are being used really as a bargaining chip, if you will write, and excuse my pun, but, but critical macro economic and political component. I
Vlad Cazacu: think we can record a whole new episode on that alone. That is my favorite book of this year. So I have a lot of thoughts on, uh, on, on how the world evolved over the past, you know, 40 years, the result of that. But before we get into that, looking back at your career and life in general, who is one person that you've consistently looked up to? Professionally or personally.
Kaia Parv: Again, been very lucky. I've had a lot of great mentors. Um, for the sake of this podcast, I'm going to say our company founder, Deep Singh, who is somebody with a lot of integrity, a lot of professionalism, um, a lot of strategic thinking, and somebody, most importantly, who enables the [00:39:00] team around him, and he's a type of leader who builds other leaders.
Vlad Cazacu: Fantastic. And last but not least, the tradition of this podcast is to end it with a point of gratitude. So I have to ask you who is one person, and unfortunately you only have to pick one, that you want to say thank you to at the end of this podcast for all their contributions to your success so far.
Kaia Parv: I'm gonna say my mom, I'm brought up by a single mom in Eastern Europe. So, um, she's the hardest working person I know. Uh, she's the person that has given me the values, who has given me the ethics. So, um, I, I bring up her quite a bit. So that goes to
Vlad Cazacu: my, my mother. Fantastic. Thanks so much for sharing that, and my gratitude goes to you for taking time with such an early part of your day to join us and share your experience with our listeners and ourselves. I'm really, really excited that you said yes to our invitation, and I'm looking forward to have you on the podcast after the Series A so we can debrief yet another successful round for CrediLinq.
Kaia Parv: Looking forward to it. Thank you [00:40:00] so much for having me. Really enjoyed the conversation, Vlad.
Vlad Cazacu: What a great conversation. If you enjoyed it, make sure to like and subscribe to our podcast and be on the lookout for a new episode in two weeks as we interview another amazing startup founder and debrief their successful fundraising story.
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Vlad Cazacu: That's it for today's episode, see you next time.[00:41:00]