WSO Podcast | E154: Morgan Stanley Tech IB, Khosla VC and a detour into Start-Up Land
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In this episode, Matt shares his impressive path from UPENN as a biology major to equity research at Morgan Stanley. Learn how he managed to make an internal lateral move in Morgan Stanley's tech IB team, how that opened up the opportunity at Khosla in venture capital and how he approached starting his own business. Finally, learn why Matt ended up back in the corporate world as the HEad of Corp Dev at ServiceNow and why he recently pivoted to the Head of Strategic Finance.
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WSO Podcast (Episode 154) Transcript:
Patrick (CEO of WSO): [00:00:06] Hello and welcome. I'm Patrick Curtis, your host and chief monkey, and this is the Wall Street Oasis podcast. Join me! As I talked to some of the community's most successful and inspirational members to gain valuable insight into different career paths and life in general. Let's get to it. In this episode, Matt shares his impressive path from UPenn as a biology major to equity research at Morgan Stanley. Learn how he managed to make an internal lateral move to Morgan Stanley's tech IB team, how that opened up the opportunity at coastal and venture capital, and how he approached starting his own business. Finally, learn why Matt ended up back in the corporate world as the head of Corp Dev at ServiceNow and why he recently pivoted to the head of strategic finance. Enjoy. Ok, Matt, thanks for joining the Wall Street Oasis podcast.
Matt [00:01:02] Thanks for having me, Patrick. Happy to be here.
Patrick (CEO of WSO): [00:01:04] So you'd be great if you could just get us to give the listeners a short summary of your bio.
Matt [00:01:08] Sure thing. Born and raised in Long Island, New York went to college on the East Coast in Philadelphia. The University of Pennsylvania, where I was a biology major and ended up actually going to Wall Street after college, made a big career shift, made college and decided I wanted to get some business experience before I made any long term decisions like go to med school and start off my career Morgan Stanley. And then I went on to Coastal Ventures, where I was a VC for a few years, made a shift into entrepreneurship. After that decided I thought it'd be a great idea to try and try my hand at starting. A company saw a lot of really great entrepreneurs at Khosla and to try striking out on my own and learned a lot from my entrepreneurial experience. And then after a few years of that right sided again and moved into large public companies, I work at ServiceNow doing M&A and venture investing and most recently actually moved into the finance organization just a couple of months ago, where I now lead all of sales marketing finance at ServiceNow. And I should say I live out here in California, based here in San Francisco.
Patrick (CEO of WSO): [00:02:19] Can you just tell listeners what is service now for people who don't know?
Matt [00:02:22] Yeah, so ServiceNow is an enterprise software company, public enterprise software company. We focus historically on it service management. That's our core business. So think about for real large enterprises, they have large I.T. organizations to serve their tens of thousands of employees. We are the software that helps inventory, manage and service all of that I.T. and believe it or not, that's a that's a massive market. We do billions of dollars in revenue just in that core area. We've brought in into various other businesses as well over time. We provide a customer service management software product. Think about things like Zendesk for the enterprise. We do that. We also have some HR service management products as well. So the same way you could file on it Typekit, you can file a ticket related to HR issues and a bunch of other things. And it's about $100 billion market cap business today, with about thirteen thousand employees based on California.
Patrick (CEO of WSO): [00:03:17] Amazing. So let's start all the way back at your undergrad. So your biology, so you're thinking pre-med medicine. Why is your family medicine?
Matt [00:03:25] I have an uncle who's a radiologist who I'm very close to and I always admired as a kid. I was always passionate about science, technology and liked science back in Eighth Grade Bio, and I thought I thought being a physician would be super fun. And so that's where I appointed myself when I got to college.
Patrick (CEO of WSO) [00:03:42] And so Penn was just too finance oriented. You couldn't, you couldn't you drink the Kool-Aid? And everyone was like going recruiting for investment banking and you. It's a great point.
Matt [00:03:51] Yeah, it's a great point. I mean, certainly that definitely an influence warden. I will say as an undergraduate business school and I had all these friends and fraternity brothers who are going into investment banking and wanted to know what it was all about and so went to a bunch of on campus recruiting events, learned a bunch and got interested that way.
Patrick (CEO of WSO) [00:04:08] So when you when you joined, I mean, you graduated in a pretty tough year out two thousand eight. Yeah, pretty bad year to graduate. In terms of job prospects, tell me how the whole job at Morgan Stanley kind of unfolded. So you're you were a in equity research, right? What? You started out with it? So tell me how that even transpired. So like at what point did you have like a summer internship with them and or were you late to the game? Tell me what happened.
Matt [00:04:37] Yeah, it's a it's a really good story, a story of luck and fortitude, I'd say. So actually started with those initial on campus recruiting interactions where I met a guy from Morgan Stanley who was the head of Morgan Stanley Equity Research recruiting, who had gone to Penn, who had been a French major and had transitioned to equity research. Really great personality. Interesting, friendly dude. And I said, Wow, this guy is kind of like me. He made a transition from liberal arts major into finance. Like, how did that work? And I met him at an event. I got his card. I just started following up with him, shooting him, shooting me, Email Scotland volunteer, and just j wanted to learn more about his experience. And then when it came down, game time for them to pick resumes actually didn't get picked to get an initial interview. I follow up with him that day and said, You know, hey, I guess it didn't work out. It was great meeting you. And he said, Why don't you come by later today and we'll try and try and squeeze you in?
Patrick (CEO of WSO) [00:05:33] Why do you think you didn't get picked? Because you're a biology major?
Matt: [00:05:36] Yeah, because I was a biology major and had no finance experience. I think I'd maybe taken finance and accounting one on one at that at that point in time to show my interest and also to learn about what I was talking about ended up in an interview with him, as well as another equity research associate. We'd also gone to Penn, who was the sister of. Some girl I knew from a studying abroad, and it was just this crazy confluence of knowing people, and I guess I didn't well enough in the initial interview that I got final rounds in New York, and at that time, I should say also, like, I didn't have strong finance and accounting background, but I had really strong industry interest and I was only interested in technology and I had read a bunch of the economists wrote a bunch of Wall Street Journal. I was really up on kind of what businesses were doing. That was technology business and doing that were unique. And so I had that kind of fodder to talk about it, why I was passionate about being a stock analyst. And they bought it and I got an internship which
Patrick (CEO of WSO) [00:06:38] Tell me about that. So you are well-read on specific tech, clean tech, whatever, whatever it was. Did you feel like you could pull enough from those publications to sound intelligent? Or did you feel like you were overselling it sometimes in the.
Matt: [00:06:54] I felt like I felt like I actually did know a lot. And I had I had I was pretty well read on the subject matter. And I think more generally just about industry trends. I think what gets what gets lost when you grow up and you've got a job, you get very specific and you get very narrowly focused and you sort of lose focus of industry trends. And I was I was just very well versed on industry trends and where I thought the world was going. And when you can sort of like spar with people on that stuff, I think it really looking back, I think that really resonated that like I was able to talk about, like with a semi's analyst, the influence of China and how that was going to influence semi's markets and like in clean-tech, how regulation was going to affect, know, impact your future growth drivers in oil and gas markets and clean tech markets. I think you know whether I was right or wrong, I don't know, but I was opinionated and I was and I had and I had facts to support it. So I think I think at that point being whatever it was 21 year old kid, I think that made an impact.
Patrick (CEO of WSO) [00:07:49] Did you did you specifically target technology or clean tech and semiconductors on purpose, knowing that there was a role there or an opening there? Or did you like what was?
Matt: [00:07:59] It was it was a personal interest at that point in time. It's something that I was passionate about. If you were back in twenty seven timeframe, there was a lot like that because there was a lot of talk in public media and pop culture about about climate change. Al Gore was sort of, you know, being front and center, and I was just I was personally interested in it. And so I read a bunch about it. And so therefore I wanted to work in that area.
Patrick (CEO of WSO) [00:08:22] Ok. And then so when you were interviewing and you, it sounds like you got a little bit lucky, did you, in the sense of you had that interview with with the both the guy that you had been chatting with in networking with and they grow who you kind of knew through a friend? Yeah, tell me a little bit about, but you still had to. You still had to do well on the Super Day. Yeah, that's right. So how about you still how to get through? Yeah. Tell me a little bit about just the internship, then that following summer that that following summer where you. Was it like a purely an equity research internship was?
Matt: [00:08:57] It was. Yeah, it was an equity internship. At that at that age and with my skill set, there wasn't a whole ton of value I could frankly add to the organization, and it's more, you know, hey, they're going to find the team will find some administrative tasks for you to do. And what's also important about equity research is teams are very, very small. So, you know, versus an investment banking team, you may only have two or three people between junior and senior that are responsible for covering stock names, talking to investors, creating risk reports. And so your impact can be really materially felt if you go out of your way. And I think at that age, it was just about like being. Being passionate and being willing to, like, stay late, work hard and do whatever people want and people get people to like you honestly and saying like this guy is really smart and wants to work hard or guy or gal, I should say, is smart and wants to work hard for me. And you know, I wasn't I wasn't doing. I wasn't running any models. I wasn't writing research reports. But where there was an analysis here or there, where it's like, Hey, can you help find dig up like these stats or like, tell me what we should think about this trend? Or what do you think about this company? That was really it the internship culminated in. So there was like kind of one off task. And then there was this final project week to do which was, you know, give me a stock pitch. And that stock, which had to be presented to the senior most leader of equity research at Morgan Stanley. And. And so, you know, I had to put together a pitch based on some industry data evaluation data, and I made my little presentation and I guess went well enough that I that I got the full time job offer.
Patrick (CEO of WSO) [00:10:42] What are your tips? Did you have to do like the typical evaluation? Like, did you run a DCF? Did you do trading, trading comps and prescient transactions?
Matt: [00:10:50] I did not know DCF. I don't think I really could have build the DCF at that point in my life. But some basic multiples math like how a stock was trading versus on it versus peers, OK?
Patrick (CEO of WSO): [00:11:01] And it seems like I went, OK. Any tips for doing that for interns in terms of how to do it, where you nervous when you were presenting it?
Matt: [00:11:08] I was incredibly nervous.
Patrick (CEO of WSO) [00:11:11] And do you remember what you pitched? Do you remember the stock?
Matt: [00:11:16] It was. It was one of the coal stocks. I was actually working for a coal analyst that summer. And you know, I guess I guess it went well enough, I think. I think what's super underrated in terms of being great really in any, in any, in any job where you're have to present is presentation skills. And I don't know if I was a great presenter, then I think I was a good enough presenter then I think it's something actually that gets lost on, you know, in a lot of, you know, business training is, how do you present and communicate yourself? I think it's something that I was always willing to do. I don't think I spend a lot of time thinking about my capabilities and professionalizing my presentation skills. But it was it was crucially important in terms of like how I dressed, how I spoke, not only what was on the page, but how did I present it? What were the key ideas I was communicating? I think that was super important and ultimately being a research analyst was very important that you could communicate effectively. You're telling salespeople, you're telling investors what they should buy or sell and why like that is the job of show created that you will excel at it. And so presentation skills were very important to you. You have to have like the core capabilities of like, how do you value a stock, how you think about one stock versus other, how do you think about sectors versus others like that's all in your head, but how do you communicate that ideas affect those ideas effectively? I think separates good from great.
Patrick (CEO of WSO) [00:12:42] So you made an internal transition at Morgan Stanley Equity Research to banking to technology banking. Yeah, so you did that, you were in office and you sort of have to commute down to Menlo Park. Yeah, that's right. But tell me a little bit about why. Number one, how you even pull that off because I know it's probably not easy to make the internal transition. And number two, what the switch was like was it. Did it go from like 70 hour weeks to one hundred or was it, you know, what was that like and why? Why did you even want to do that?
Matt: [00:13:11] Sure. So. I realized that I was interested in this whole finance business world, but like being a stock picker long term was never really my ambition. I wanted to get like some good finance, business training and experience, but like I can sit around here for a little while longer and keep learning, but like, this is not pointing me in the long term direction. And so investment banking was this tool that was going to unlock all these long term opportunities for me. Ultimately, what I thought on the buy side, but it turned out to be broader than that. To have both the training as well as, I think, the pedigree and stamp that would allow me to do lots of other things in finance. And that was really the ambition.
Patrick (CEO of WSO) [00:13:56] Looking back, looking back, was that true?
Matt: [00:13:59] Absolutely. I was terrified to go, work and invest in making it a heard horror stories of working till 2:00 in the morning. Seven days in a row. And, you know, blowing up weekends and holidays like this sounds scary and terrible. I don't want to do that to my life. What were
Patrick (CEO of WSO) [00:14:13] You working? Sorry. What were you working in equity research? What were your hours
Matt: [00:14:16] Then in equity? I was I was never working more than 50 60 hours a week. And if I if you're in front of the computer for 12 hours a day, like you're not cranking the whole time, maybe you're watching the stock screen, you know, talking with your lead analyst about ideas. There's a difference between sitting and being at work for 12 hours and like grinding for 12 hours, which is what you do in investment banking.
Patrick (CEO of WSO) [00:14:40] Well, sometimes in banking, it can be a slow day during the day and then you have to be there all night.
Matt: [00:14:44] Not in the Menlo Park tech bank.
Patrick (CEO of WSO) [00:14:46] They were busy.
Matt: [00:14:48] I can't remember a single day where I sat on my hands for more than an hour. So it was an intense environment.
Patrick (CEO of WSO) [00:14:56] But how do you even pull that off?
Matt: [00:14:58] Because I do get pulled the rabbit out of the hat there, too, Patrick. So I really wanted to move to the tech banking group. I knew that was a really, you know, highly regarded group. That said, Morgan Stanley obviously leveraged my tech background, which I wanted to continue to do. It was in California, which is where I lived and wanted to be. And so I reached out to internal recruiting. I said, I want to go work in that group as an analyst. They said, Well, there's no there's no hiring going on right now. Ok. All the month later, I want to go work in tech banking. There's no there's no one hiring. We can't you can't put you over there, OK? I went out and I got a job offer from another bank and I went back to recruiting and I said, Hey, I want to stay at Morgan Stanley. I told you that three months ago, can you? I'm going to go leave if you don't give me an offer. And within a week, I had an offer at Morgan Stanley.
Patrick (CEO of WSO) [00:15:43] I love it. It's a very good lesson.
Matt: [00:15:46] Yeah, it's a very good lesson. So it's risky as heck and scary.
Patrick (CEO of WSO): [00:15:50] And I could tell me where you, you tell me where you got the other offer.
Matt: [00:15:55] It was at Lazard and NSF. Nsf Yeah, the MD sat across from me and my interview went really well. Those are the cool. We had a need. They liked me. And in my first round of interview day, the MBAs think or swim, you said, Look, I think we're going to get you an offer and we really shouldn't do is you shouldn't go back to Morgan Stanley and try and like leverage this because like, by the way, if they do that for you, like you can trust those guys. It was already like countering and anticipating I was going to do that. And he was right, and that's what I did. And it worked.
Patrick (CEO of WSO): [00:16:27] Yeah, that is scary, man. That must be your heart must have been pounding when they were
Matt: [00:16:32] Like, Yeah, I wasn't ready for that type of pressure and stress. I wasn't even really sure what I was doing. I think probably at 25 years old, but I had an instinct in it and it worked.
Patrick (CEO of WSO): [00:16:41] But it's really good. You were told no two times or three times before he went at least two times at least two times. And they just said there's just not a need, even though there probably was if all the analysts were. Right? That's right. They just didn't want to bring somebody in from the of lateral
Matt: [00:16:56] End of the day. I don't like I never really got to the bottom of what was going on if like they really had a need or if it was like an ego thing of like, we just can't lose people with other banks. I think in investment banking, like they're like people are fiercely competitive about like losing people to other banks. I just I just that happens to be how they are. And I think that perhaps
Patrick (CEO of WSO): [00:17:16] It probably what it does is it created some sense of urgency. It was suddenly not, Oh, he's just going to be stuck in E.R., but like, wait, a second, is this guy good? And then they talk, they maybe talk to the people and they're like, Actually, he's good. Like, you shouldn't lose them.
Matt: [00:17:29] Yeah, yeah.
Patrick (CEO of WSO): [00:17:29] You think that's what happened? Do you think they actually called like the people in Menlo? Call to your?
Matt: [00:17:33] Oh, definitely. Yeah, definitely. And I get referrals. I had a good, a good relationship.
Patrick (CEO of WSO): [00:17:37] And did they know you were trying to transfer internally?
Matt: [00:17:40] Uh, no, I don't think so.
Patrick (CEO of WSO): [00:17:43] So you think they got a call out of the blue to your equity research?
Matt: [00:17:46] Yeah, it was like I showed up on a Tuesday with an offer I told my boss he immediately called management and then like the next day, I got a call from recruiting. It was like, We don't have a spot. We're going to try and figure this out. We'll let you know. And I think I had until like the following Tuesday, I think, to get closer to an answer. I think on the Friday, I got a call from recruiting. I was like, You've got an interview on Monday now at Menlo Park Banking. I went down on Monday. I want to say by end of day, I had an offer and then I called the Zade and said, No thanks. And then I worked at Morgan Stanley two weeks later.
Patrick (CEO of WSO): [00:18:19] So tell me a little bit about the interview for the lateral interview. What was it like? Was it? Was it really grilling you on like technicals at this point because you'd been working for two years?
Matt: [00:18:27] You know, looking back? They really didn't. It was. It was kind of a softball. I. And I don't know why. Honestly, I have thought about that before, like, why didn't they call me hard? I almost sort of feel like if
Patrick (CEO of WSO): [00:18:43] I were associates, just grilling you. That's what I don't know.
Matt: [00:18:47] I don't know. I think maybe they
Patrick (CEO of WSO): [00:18:48] Were desperate for people.
Matt: [00:18:51] I think honestly there. I think it's one of two things. I think one is perhaps there was a lot of assumed knowledge like I knew how to do valuation analysis, which is like and could crank in a model. Which probably couldn't at the same level of the banking. I know I couldn't have the same level of the existing banking analyst at that point in time. But who is? I think there's actually this level of insecurity actually from bankers towards research people that like they know more than you do about companies and industries. And so they perhaps weren't comfortable getting into the weeds with me about like individual companies that like I may know more than they do. And you know, my knowledge may have spanned, you know, two more paragraphs than theirs. But perhaps that was a or
Patrick (CEO of WSO): [00:19:42] I'm not surprised. I'm not surprised they did they? My guess is they the associates in VP's probably did want other people and it was you don't even like. Yeah. I mean, you guys are doing a ton of live deals, right? Right.
Matt: [00:19:56] That's right. It's like we've got an opportunity to increase budget.
Patrick (CEO of WSO): [00:19:59] Like, sure, you know. Yeah, we don't want our analyst burning out, you know? Yeah, that's right. So tell me, so you get there. Okay, so they give you the offer. You immediately say yes.
Matt: [00:20:11] I'll do it. I actually didn't immediately say yes,
Patrick (CEO of WSO): [00:20:14] How that all went down and tell me how your mind went through the commute.
Matt: [00:20:17] Yeah, so. So, so Lazard had verbally told me that I would be guaranteed top bucket, which I don't know what that meant. I just know it meant I'd be paid well. And so I went to the staffer, Morgan Stanley, who's still there and is a senior guy at the Morgan Stanley. Still? And I said, you know, Lazard is offering me top bucket, like, will you match that? And he was like, you thought about it for a second? And he said, well, actually, I think he said, let me think about it. And then then I think I talk to him again a day later, and he said, and I brought it up again. I said, like, are you willing to match that? And he said, Let me ask you a question, but I don't give you that. You know, I can take this offer. And I said. I will take the offer. It was a great it was a great way to put it back on me in a in a non-threatening way because I was clearly being aggressive. And looking back, I I should've been more prepared for him to say something like that. And I ended up working out fine. But like, they just weren't going to guarantee me Typekit. Maybe they would have. Maybe, you know, maybe he respected the fact that I was being aggressive and you like, want to see how much of a shark I really was? Yeah, but I just backed down when he pushed me because I was like, Yeah, no, that's normal for a twenty five year old.
Patrick (CEO of WSO): [00:21:28] You know, like, like, what do you expect? You're not like a seasoned veteran negotiator? Ok, so that's fair. So they didn't guarantee you Typekit, but you still said, No, I'm going to take it. And so they said, OK, fine, you have an offer. Yeah. And then you accept, tell me a little bit about you have two weeks to prepare. What's going through your head in those two weeks, you're thinking, How am I going to calm you down here? Could you correlate what's going on?
Matt: [00:21:52] Yeah. So I I immediately decided that I needed to move down to to the peninsula. I was like, This is going to be I need to be all in on this, like my life's shutting down for the next year or two as I like do banking. And so I was committed to moving down to to the peninsula. And like, I was like, I was like already in the works of like trying to find a place. And so I had. I'm sure I remember. I'm pretty sure I'd already found the place actually to move down to Palo Alto before I started. If not, there was maybe like a week or two of commute, actually. No, that's not right. I don't think I ever had to commute. I had that. I had that place locked down before I started.
Patrick (CEO of WSO): [00:22:32] And so it was close to the office, I hope.
Matt: [00:22:34] Yeah. I mean, it was a ten minute drive. And so that 10 minute was super painful at 3:00 in the morning. But yeah.
Patrick (CEO of WSO): [00:22:40] And so you had a car I had.
Matt: [00:22:43] You right? I bought a car and I got a place in Palo Alto. That's right.
Patrick (CEO of WSO): [00:22:46] What was your rent back then? Three dollars.
Matt: [00:22:50] There's an increase in my rent, so my rent in San Francisco was I had a roommate. It was $2500 a month to twelve fifty a person. This is in two thousand eleven. And my rent in Palo Alto, I think, was a little higher. Maybe it was like.
Patrick (CEO of WSO): [00:23:08] Which is kind of funny, right? Because you're not in the city.
Matt: [00:23:10] Yeah. You know, I was going from a, you know, a two bedroom split versus a one bedroom.
Patrick (CEO of WSO): [00:23:15] Yeah, fair. Ok, so you're you start and tell me what is the hardest thing about that transition? So within the first month? What are you immediately fed to the sharks? Are you given any training? What was it like as a lateral internal?
Matt: [00:23:31] The given any training, there was not any training, I think what they did for the first like month was I got really lucky that I also my life is a story of luck. I got I was there right before the second year were about to transition out. And so there were a bunch of second years who were like, Oh, here's this young kid. Like my life's kind of on cruise control. Like, why don't I help train him up? And so there were just a there were a bunch of guys in the bullpen who were willing to like, spend time with me and like, I got to partner up with them, like they were actually like the lead analyst. And I was just like sexually supporting them to remember that. And that was a really good way to learn.
Patrick (CEO of WSO): [00:24:14] Like a mini internship? Almost.
Matt: [00:24:15] Yeah, exactly.
Patrick (CEO of WSO): [00:24:18] How long was that? Like a month?
Matt: [00:24:19] Yeah, must. Mostly that was like, Yeah, that's maybe that's key.
Patrick (CEO of WSO): [00:24:22] That month is key.
Matt: [00:24:23] Yeah.
Patrick (CEO of WSO): [00:24:25] And because you saw pace, you got to see how they worked, how fast they worked, how late they worked. Was it was it painful right off the bat? Or were you like staying late right away, just supporting them? Or were what was it like? Were you surprised at all?
Matt: [00:24:42] I the reality, I'm pretty sure, was, yeah, I'm pretty sure it was, I mean, I wasn't like the guy on anything, but like I was like everyone was sitting around until 10 11 o'clock minimum, like making sure we're all good. So that was that was a change. And I remember I mean, this stress, the stress I put on myself was just exorbitant. And we're like lost like five pounds in the first like month because I was just so much nervous energy of like, Oh my god, what am I supposed to do? I just know that I have to be here late and like people are going to tell me things to do. Like, whenever, wherever, like I needed to be ready for, you know, for. And I was just super stressed out and probably took away from my learning capability because I was just so stressed but afraid like they're a little bit of imposter syndrome. They're like, they're going to find, yeah, totally. I was like, I don't belong here. I'm not as good as these kids. Absolutely.
Matt: [00:25:41] So you're there? Tell me when you kind of started, those kids left after a month or two. Tell me when you got put on your first live deal like you were the lead analyst and how things progress. And then we can kind of get into we don't have too much longer. So I want to start getting into why the stint was about a year the year long. From what I can tell from your like Dan or when the transition started happening and when you started thinking. So I want to say I started in like jellyfish, and so maybe like after like I don't want to say around two months after, like when they brought in the new first year associates, I got staffed on this one deal. We did the we did a public equity financing and financing for this company expansion. So I ended up I ended up doing a lot of because I had done semis and clean tech at in research. I got staffed on all these semis and clean tech deals in banking. And so I was working on this semi's deal and it was an equity debt financing. And you know, the reality is there's a lot of M&A that got done in the group as well. But with equity financing, you're doing a lot of like. Brutal analysis, it's not like I need to build a three statement model, it's like help think through the equity dilution of raising $100 million of equity. And so I wasn't like thinking through complex M&A math and valuation math when I started and building a lot of like pretty busy web pages you might call them. And so they'll like mathematical rigor wasn't that intense. The work was hard, but that's where it started. Was with the work was hard because of the hours. You mean the work because of the hours. Yeah, and you were doing more like ETM, you were doing more like ACM DXM stuff. No, no, no. I mean, like you're thinking through, is it ECM stuff? Yeah, I guess so. I mean, like I guess any equity and debt financing is is is equity capital markets that capital markets stuff. But like I wasn't trying to think through, like the ECM partners, really. Hey, this company wants to raise hundred million bucks. Tell me who the target investor should be in, like what percentage of float is like, reasonable versus we were trying to think through. Like how is impacting your, your corporate, you know, your corporate financials when doing this, you want you.
Patrick (CEO of WSO): [00:28:04] You mentioned an associate that you worked for. Was it an associate that had not been previously an analyst, was coming right out of MBA, didn't know what they were doing.
Matt: [00:28:11] He didn't know what he was doing. He was very technical. He had not been an analyst. He was very technically bright. He was just a workhorse and he just wanted to crank pages. And so we would just do it over and over and over and over again until he thought it was perfect. It was really painful. And he was probably he was the main associate I worked for that whole first year at, at, at a Morgan Stanley banking.
So was that associate that reason you started looking elsewhere for the next job? It was. Yeah, it was. It was possible. Yeah, absolutely. I mean, look candidly, I don't think anyone should be in banking any longer than they have to be, you know, as an analyst. And so my initial plan slash goal was like, I can just do one year of banking and I can try and get a P or VC job. And that was the goal. I had to tread carefully because like, they hired me with the intention of that, I would stick around for at least two years. So I, you know, but I was like, So working the right job, I'm going to jump. So working those 80, 90, 100 hour weeks, how were you? Did you find any time to even talk with? I mean, you're at least you're close to the VC land right in the Sand Hill Road, right there. And you know, I lived right there in Stanford, too. I live that I lived right there, right next to Stanford. So it's a beautiful area. So did you like to start hitting people up on LinkedIn? How did you even get in touch with these VCs? Your phone's out there? Yeah, it's interesting. I fashioned myself as like a strong, ambitious networker, but like actually looking back, I don't think I really was doing that. I actually was pretty reliant on the recruiters because it seemed like they were the gateway, at least at the time, to like all of these great VC growth, equity jobs. And so that's what I was. I was relying on.
Patrick (CEO of WSO): [00:30:02] So when did you did they call you, did you
Matt: [00:30:05] Ever reach out to me? I mean, I think, you know, maybe a handful, I was like, Hey, I'm this new analyst like, put me in your database, too. Yeah, but you know, it's pretty easy to get, get a hold of
Patrick (CEO of WSO): [00:30:15] Them and said, Did you just go start meeting them and trying to impress them with your well spoke? And you're like, Hey, I can get a job. I'm really well spoken about industries and blah blah blah.
Matt: [00:30:24] Yeah, that's right. There's this whole dance you have to play, and I loathe having to work with outside recruiters, but. And it was frustrating. I didn't like it.
Patrick (CEO of WSO): [00:30:34] But yeah, Khosla has to be one of the top VC jobs out there, though, right?
Matt: [00:30:40] So interestingly, though, that was not sourced through a recruiter. So that was sourced through. There was a woman who was the head of equity, capital markets and technology at the time, and she knew one of the partners at Khosla, and he had pinged her directly and said, Are there any analysts that are interested? And Morgan Stanley said at the time, had this philosophy of like, we're going to help all of our analysts get jobs because they're going to go to the buy side and they're going to help, they're going to get more clients and they're going to like us. And so she had like blasted the analyst class and said, Hey, Khosla is looking for an analyst this year. Anyone interested? And I was like, OK, that's me there. You know, there were the top, you know, probably the largest in terms of clean technology investor in the world obviously knew a lot about the node at the time. I was like, I was really more interested in doing growth equity as an asset class, but like, man, am I going to like thread the needle here between like clean tech and growth equity. At the time, there was grumblings of rumblings of silver like Kraftwerk starting up, which was going to be like this clean tech growth equity firm. And I was like, That's the ideal role. It was a brand new fund and like, they weren't hiring like an associate at that point in time. And so I went, you know, I went all out on getting the of the job and I and I got it, but it wasn't the recruiter.
Patrick (CEO of WSO): [00:31:50] How do you think? What do you think the odds were of you actually landing that job? How many? How many bankers, where they probably interviewing for that? And why were they interviewing bankers? Why aren't they interviewing like consultants and stuff like that? Is that typically where they pull from?
Matt: [00:32:02] So I think at least at the time, the thought was
Patrick (CEO of WSO): [00:32:05] That a lot of modeling in B.C., right?
Matt: [00:32:07] Yeah, I well, I think I think they wanted a financial analyst to think through like. Dilution analysis, term sheet capital, like how much should we value this and like. What's that going to look like and like in the second, third, fourth round of financing? Like should we put to work here?
Patrick (CEO of WSO): [00:32:25] Got it. So you're doing. Were they hiring you specifically? Not for specific industries, but almost to support people across that, like doing more
Matt: [00:32:33] Of that just to be a general financial analyst in the firm? Yeah.
Patrick (CEO of WSO): [00:32:37] So tell me what those interviews were like, theoretical thought, seeing how you think?
Matt: [00:32:44] Yeah. So so I think you know a lot about, you know, cultural fit. Can this person work with us a lot about? Tell me about an experience in a deal you led and what was that like and what did you learn? And then in one of them it was, you know, pitch me an investment you should make right now. We should make right now. And why? How did you prep for that? I actually was not well prepared for that.
Patrick (CEO of WSO): [00:33:13] So would you say you just like regurgitated your coal pitch?
Matt: [00:33:16] I, I, I had I had an idea at the time. Well, on the fly I, I thought of
Patrick (CEO of WSO): [00:33:24] A, You're telling me you didn't have a pitch ready and you were able to wing it and still get the offer. Is that right? Kind of think that's impressive if you did
Matt: [00:33:33] That, I feel like I feel like maybe I had. It wasn't like a presentation. I think I had had some notes written down, right, like
Patrick (CEO of WSO): [00:33:40] You had you had been looking at, did you trade on the side anyways?
Matt: [00:33:43] Yeah. So, you know. So this was through as a private company. So I remember what I pitched. I pitched, I pitched Opower, which was private at the time, went public and I got bought by ASAP. So and I did have some like I think I had some, some some like notes I had written down and studied about, like why I thought I was a good company. I think the reality was a second and third order questions I was really weak on. And I like it should. But I got.
Patrick (CEO of WSO): [00:34:07] But you got to the next round. That's right. And how many rounds were they like three or four?
Matt: [00:34:11] I basically had to interview with all the partners like which was, I don't know, five or six of them at the time
Patrick (CEO of WSO): [00:34:16] And said you had to go back each time to interview with one partner did.
Matt: [00:34:20] I think, well, no, I might have. I might have interviewed with like two at a time once, but I probably went to the office.
Patrick (CEO of WSO): [00:34:26] And how many analysts? I mean, what do you think the odds are? So they probably interviewing how many people like 30 40. And in that final round, and there's how many they're hiring, like two.
Matt: [00:34:36] Yeah, maybe they only hired. I was the only one. How do you
Patrick (CEO of WSO): [00:34:39] Get that job? Why do you think you got that job? You weren't even prepped for that thing. So like, I probably annoys a lot of people like, how do you get that close to VC job when you're not even like, is it? Is it confidence? Is it just a matter of factness? Is it because you're a little bit older than the other analysts?
Matt: [00:34:56] I think, look, I had had I had good experience in like being a Morgan Stanley type banking. So like check the box of like, yeah, this guy can do this analysis. But Brad was strong. I had done so. I I had taken this company souls in public as an analyst, and that was really important experience for me because they done a bunch of clean tech and two of their biggest clean tech holdings at the time, or Amoris and Cure. And so like, I had industry relevance there and could think through that for that. Okay? And so they still had other
Patrick (CEO of WSO): [00:35:28] You basically got to the OK, you basically the way I see it, you got to the right group, you did the right deals and you were confident enough in the interviews where they were like, OK, let's get sharp.
Matt: [00:35:37] Yeah, yeah, yeah. But you know, I you're right. I mean, I definitely flailed at that investment pitch. That wasn't great.
Patrick (CEO of WSO): [00:35:45] Do you feel like you were close to not getting the offer? Did you have any other offers at the same time?
Matt: [00:35:50] And any other offers at the same time. Or, like, you don't think so. No, I don't think so. I had a I think I had a final round at TCV, but I didn't get it. Ok.
Patrick (CEO of WSO): [00:36:01] So why say you're there for a good three years, I know we don't have too much more too much time, so I want to move. Go forward. You're there for a good three years. Yeah. How is it different? More conceptual, less modeling, obviously less. What was the day to day like? Get closer and then then why go leave all of that? Was it more like a two or three years and out type program? Or what? Right?
Matt: [00:36:24] Yeah, I mean, from the get go, they were like, You know, this is going to be a pre MBA program that wasn't like a program. The same way folks go to TPG and there's a class of people and it's like very set specific dates starting end. And but yeah, it was. It was a program, but day to day was very interesting. I got to, you know, sit in in lots of investor pitches and hear. You know, learn, you know, learn what great companies were doing, I got to be super helpful with the portfolio. I got you a lot of portfolio support. Help companies with their next financing and think through the next financing, I got to try and find new great ideas myself, which I probably didn't really get confident enough to do until much later in my time there. But try and build a thesis around an area and go in like have a few calls and present ideas to partners. And so, yeah, it was. It was a really interesting learning experience, but I would say it was also incredibly hard. I don't know if I was really mature enough to do the job at a very high level at that point in time. Having just come from banking where you basically just sit in front of a computer and you're told to do all day long to now go and like take your calling card and like figure out what investments we should make. It was a very tough transition. I don't think I was really even internalizing how difficult that transition was at the time.
Patrick (CEO of WSO): [00:37:38] It's super when you're told, like when you go to the bathroom to like when you go to the bathroom to like, they don't tell you anything, right? You're just like, Here's your desk. You go, like,
Matt: [00:37:47] Tell us what to do. Yeah. And so looking back, I would have done a lot of things differently. And, you know, learned a lot from the experience, but like was a very, very, very tough to me. Like if you're going to go into my recommendations, you're going to go into adventure straight out of banking. You should really do it in a place where you have like, there's more infrastructure and more people around you. Like, I see places like Nieh hiring like a bunch of associates together every year. It's like you need that support network of people to be like, You should do this, you shouldn't do this. I learned this was good. I learned this was bad and talk and communicate and figure it out together because
Patrick (CEO of WSO): [00:38:25] I didn't have enough other associates or analysts around
Matt: [00:38:27] You. Yeah, it was. It was very. It was a lot of partners, top the top, every firm. And so I was trying to learn from myself and didn't even know what I was doing right or wrong, honestly, right?
Patrick (CEO of WSO): [00:38:37] So as your third, as you're getting into your third year there, what's going through your mind? You're thinking, MBA, what's what are the options and why did you go do your own business? Yeah. I never really want to pass on that to.
Matt: [00:38:48] Yeah, sure. I never really wanted to go to business school. Maybe we can go a little longer, but I never really want to go to business school. I I did it kind of as like a safety valve. I was like, I like, I don't want a big hole in my resume. I don't want to just like leave and not just sit around. So like, OK, why don't I go and take my gym mat and apply? Like, which was a very, very rigorous process to do all that. I did it. I ended up getting into Wharton, but not going. And I was just like, Man, I can probably use this capital to, like, do something better than sit in a classroom for two years. And like, I'm really not happy about the fact that I'm just going to blow all this savings on school. And by the way, I'm also seeing all these people in my network who like have made it to post MBA type venture growth, equity jobs without a business school to be like, Man, that's a really expensive proposition, then. And I wasn't convinced that it was going to be right for me and I would be happy about it. So I ended up playing, getting in. Turning it down decided like, and I guess I had thought like, like the options were like, I can use all this money to get a degree or I can use all this money to try and build a company and create something that's like a self-sustaining wealth creation tool. And I got really excited about that opportunity, and that's the path I'm going down.
Patrick (CEO of WSO): [00:40:11] How did you get that? What was the idea and tell me how it went? So the realities of entrepreneurship tell me, yeah, and
Matt: [00:40:21] I hope we don't want to get into too dark all, but you can pull me out if I if I get to too deep,
Patrick (CEO of WSO): [00:40:25] But I like dark holes, let's get to explore them so people don't make the same mistakes and stuff.
Matt: [00:40:30] So I was always interested in, you know, if I was going to build a lifestyle business, I wanted to be in an area that was like more obscure because I didn't want I wanted to have a lifestyle business, therefore, like I didn't want venture to touch it and I couldn't. I was worried I couldn't compete if I found something that was like bright and shiny obvious in the consumer space. I was more interested in B2B. You were like, you can find some really unique problem by like digging and studying a space that was more protected, therefore, but also doesn't give you a massive market of, I found a good lifestyle business.
Patrick (CEO of WSO): [00:40:59] Yes, I like that thesis. It's smart. Yeah, it's like, you know, adventure or growth equity is never going to touch this. So who's actually going to go after and do a good job, right?
Matt: [00:41:09] And moreover, like if you think about the economics of building a nice lifestyle business, like if I had a business that had five or 10 million of top line in, like 50 percent EBIT margins and me and my one principal owned 50 percent of the company like I can draw really nice cash flow every single year like versus any other job on the planet. And like you think about like a business that does five or 10 million dollars of revenue, it's measly like it's small. So like, I should be able to rip that out of the universe. And so that was my feeling. And so I was looking around for different ideas, talking to lots of people. Do you feel
Patrick (CEO of WSO): [00:41:45] Like you were swayed because you'd been seeing all these incredible founders coming through because they thought, Oh, this is easy.
Matt: [00:41:51] Yeah, totally. Yeah, totally. You know, company creation seemed very straightforward. And so I. I ended up, you know, the story of me going after my first business idea was, you know, I owned the car at the time I mentioned and I got a piece of snail mail. Toward the end of my time at Khosla that said, like your car warranty is about to elapse, you know, by a by an extended warranty. You know, like, this is interesting. Like, I'm going to look into this. So I call my dealer and they tell me, like, Yeah, actually, your car warranty is about to run out. Like, would you like by extended warranty? I said, OK, what's the price? The detail is great. I'm interested mentioned buying it. And then I said, Why don't I try and call a couple other dealers just to price compare and I call one of the dealers and it's like they're selling a different product at different price. And I'm like, That doesn't make sense. How does that work? And learn that like, you can buy a car? Extended warranty from any dealer doesn't have to be like the Infiniti warranty. You can buy other extended warranties. And I was just like and I also realized that the piece of enamel I got actually was not from my dealer or some third party broker that bought my information and realized that my warranty was about to run out. I was like, This is an inefficient market. Did some research and I realized, you know, the car warranty premium market was like, tens of, you know, I must say it was like over $10 billion a year just in America. I was like, Wow, this is an inefficient, massive market. It's financially and I'm a finance guy like, I can figure this out. And so I did some digging and did some learning for like a month or two. You know what? I'm not ready to go and start a business right now. I need to keep learning, but I need to have a job. So I realized there was a company called Square Trade here in San Francisco that was a large electronics warranty provider, private company backed by Bain Capital. So I got to go work there and like learning this industry before I built my business. So I went there, I left Khosla. I went to work in the marketing department of Square Trade. I convinced them that I was now a marketing guy and worked there and learned a lot about the warranty. Business on the side was sort of learning about the car warranty space, which by the way, is great. Chief is not in there, you know, products, warranty space. So it wasn't competitive. And yeah, so spent a year there learning and then after that year went off and tried starting a car warranty brokerage business with my best friend from Phnom Penh, who was a Goldman private equity and then trader, and we tried starting this business together.
Patrick (CEO of WSO): [00:44:13] So he liked the idea.
Matt: [00:44:15] He loved the idea. Yeah, I mean, we were working on together for a year just kicking around ideas. The basic idea was the way the way warranties are bought and sold today primarily is they're sold at the dealership at the point of sale. When you buy a new car and you've got a car warranty finance person that will bundle in the car warranty with the with the auto loan. So basically, as opposed to paying, you know, fringe dollars a month for your car, you're paying for engine twenty five dollars because it includes the car and the car warranty, right? And the finance the dealer is making usually like it's 100 percent gross margin on that on that piece of paper. They don't have any underwriting cost. There is could just, you know, there's a third party warranty provider. They're saying here, Patrick, you should buy this, this warranty. They sell it to you for $2000. In the underwriting costs is $1000. There's a thousand dollars of margin there, but there's no cost to the dealer. So I said to myself, I want to go and basically replicate those dealers economics, but I can't compete with the dealer at the dealer. So I'm going to go and find those customers once they've left the dealership or before they've gone to the dealership. There's all these different points where people are touching a car consumer and not trying to sell a warranty. I want to be that intermediary. And so came up with a list of examples of places where we could try and sell car warranties as a as a broker basically just provide a markup on the underwriting cost and for being there at the point of sale and creating that distribution strategy, I can make a lot of money. It turns out that selling car warranties is very complex. It's a complicated financial product. It's a large aspe. It's, you know, usually two to three thousand dollars. And mostly, people don't trust car warranty providers. And so we had a really hard time. We learned a lot, but I learned a lot about like, you know, coming up with a business strategy, learning about a new market, figuring how to sell a product and how to market a product. And so I learned a lot. I didn't sell a lot. I didn't make any money off of this endeavor, but it was a really valuable experience. I subsequently went on to start a couple of other companies as well in the software space, decided that, you know, creating a and I think a fundamental overview to about that process was, I want it to be in the B2B space, but really I was in the B2B to see space being a broker. Right. I was going to a third party like, for example, we're trying to distribute through tired will stores or auto mechanics and convince those people, you should sell my warranty and you'll make money. And they said, OK, the consumer wants to buy it. They can buy it. But consumers were weren't buying, and so I couldn't control my end sale around consumption. So I was like, I like me to be. I need to just sell B2B, not B2B suit. And. Software is as a as a business model has, you know, fantastic economics, and so I had my co-founder who was he could he could code. And so struck out and tried building a couple of different software businesses. One when kind of nowhere but sold some product. Another one actually was pretty successful. That was actually in the shipping analytics space. And ultimately, after this sort of three or four year journey of square trade plus trying to start a couple of companies, I was like, Man, I did all this work. I've nothing to show for it. I've learned a lot and like people think I'm, you know, interesting and know some stuff. But like, my career is totally gone awhile and decided I needed to go back to working at a big, public, stable company to sort of reset my career. And we're still passionate about software and technology, but I was like, I need to go work at like the best branded software company I can at a big company where I can like right size my career right? Size my lifestyle. Because obviously when you're an entrepreneur, your life is consumed by that. And so I ended up working for a guy who actually had worked for at Morgan Stanley Banking, who was running for development at ServiceNow. And he hired me as a as a deal to do M&A and venture investing at ServiceNow three years ago.
Patrick (CEO of WSO): [00:48:22] That's awesome. And so like from the from the time that you decided, Okay, I need to go change things up to that getting hired. How long was it? Was it pretty fast because you just you knew the guy you just started talking?
Matt: [00:48:34] It was actually super hard. It was OK. It was not something that I think is underappreciated about. When you like, go off on your own, it's like getting back into the world can be really tough and painful because you want to know, why did you do what you just did like, you're not off the street doing what I you know, if I want to hire a marketing person or a salesperson or a finance person, like, you're not that right now. And so it was hard. And plus I had done a bunch of random stuff for the last three or four years. And so I
Patrick (CEO of WSO): [00:49:03] Just you had to kind of put it on the resume. So there wasn't a huge gap, but you could. Couldn't you just leave this this square trade stuff up there? Is that what you did?
Matt: [00:49:10] Yeah, I mean, I did. I worked at Square Trade for a year, but then I tried. I was only a year. Ok, but thing? Yeah, yeah. So it was like, what did you just do? Like, that's a really cool story. But like, you don't have much to show for it. And like, I don't really know what to make of that experience. But like, you were an adolescent seven years ago and finance like, that's cool. And I was older, right, so it's like they don't want to give me a really junior job because I'm older and like have more years of experience, so it was hard. And so I knew I wanted to work at service now. It took it took several months. Actually, I was doing consulting for another company for a time just to like, get cash flow. But I was really committed to like, I'm not going to do another high risk, unstable startup type thing. I need to go work at a big, stable company and I held out for it. I ended up getting two offers at the same time. One was that, you know, pre-IPO private software company doing kind of a similar job in corporate development and special projects working for the CIO. And then this job, which was working for the head of corporate development, VP of corporate development, and ended up deciding to go to ServiceNow because I was like, I'm committed to finding a more stable job.
Patrick (CEO of WSO): [00:50:20] Ok, we only have a couple more minutes. Tell me how you made the transition from head of Corp Dev to now strategic finance and why you did that?
Matt: [00:50:28] Yeah. So Bennett, ServiceNow for three years and in those three years, I went from being a to being the head of corporate development, which was a fantastic experience. I've learned a lot about like doing deals, you know, communicating inside of a large organization, executing deals inside a large organization. And it's a fantastic role in for anyone in investment banking, gadgetry and career development. I speak very highly of the opportunity. It's it's super fun. It's exciting. You have you have really important execution and sort of love within the company for like doing what you do and you get to interact with very senior people. So all good. I did it for three years and I was like, Man, I don't want to be doing this for the next 10 years of my life. And I've seen a lot of people go from being head of Corp Dev or even from my previous banking days, being senior bankers to being in finance. And I love being at service now, and I want to stick around who at ServiceNow, but realize that that being a senior financial financial person, you know, CFO, VP of Finance, SVP of Finance, kind of person would be a much more broader scope. Long term still get to have the experience of like making decisions off of financial data being thought of as a finance person making financial decisions. But I thought the breadth of opportunity would be much bigger going into the finance world and so moved over to the finance team just a few months ago and now leading sales, marketing finance at the company where I manage all of top line forecasting and recording so revenue and subscription billings and then all of our sales and marketing budget.
Patrick (CEO of WSO): [00:52:12] Great. I got to let you go soon, but any final words of wisdom from that? Thank you for sharing your story. Yeah, I thought it was in before we call it. Yeah.
Matt: [00:52:20] Looking at your street, as you can tell, and it's important that you learn from your mistakes, learn from your opportunities. I think entrepreneurship can be a wonderful thing, and it's also incredibly challenging. I think working at really big companies, I think it can be really fun and exciting too. And like, there's a lot of opportunity. I think that's underappreciated about working at big public companies where, by the way, people want to work at through IPO companies to see their equity. Rip, you know, ServiceNow, in the three years I've been there is up three times. So you can work at big public companies and get good equity
Patrick (CEO of WSO): [00:52:55] And still do well if you join the right horse, right? That's right. Great. Matt, thanks so much for taking the time to join and share your story. Really appreciate it for having me, Patrick. And thanks to you, my listeners at Wall Street Oasis. If you have any suggestions whatsoever, please don't hesitate to send them my way. Patrick at Wall Street Oasis. And till next time.
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