Basic Capital raises $25M Series A to let everyday Americans use credit to invest in financial assets

a pleasure.

You're the man.

We'll talk to you soon.

My pleasure.

Bye.

Thank you, guys. Cheers. and we'll bring in our next guest.

I love hitting this the the air horn for free cash flow.

Hit that air horn. Hit that hit something. Give me something. Give me the the news. Give me the Ashton Hall. Welcome to the stream. Abdul, how you doing?

Welcome.

Great.

Thanks so much.

Thank you for taking the time. Thanks for having me.

Of course. Sorry for the technical difficulties earlier.

Friend of the show said Abdul is going to be your best guest ever.

Let's go.

He's crazy in the best way. Wow. So,

okay, let's jump straight to the crazy.

No pressure.

Introduce the company really quick and give us the news. We'll hit the gong and then we'll go into some crazy stuff.

Awesome. Awesome. Abdullah Assad, co-founder and CEO of Basic Capital. Uh Basic Capital is the first and only company that enables you to finance financial assets

and to use credit to invest

instead of using credit to consume. Mhm.

Um, we've been in business for 3, four years now, operating mostly under stealth, backed by legends, uh, from Lux Capital, Henry Kravis, uh, SV Angel and others.

And recently, we just closed our series A, $25 million from Kirsten at Coreunner.

Boom.

Fantastic. You know, it's just it's just one step on a long journey, but we are really really excited to see that our message is resonating with both our customers and our investors. And now we're fired up to go like we're fired up to get after it.

There was a viral video about you guys like a month ago or something and people were controversial. Your it was your video

but people were going wild. It was the put the timeline in turmoil. Uh walk me through what happened. What What is the push back against this again? like what like what what do the haters say and then I don't know if you can steal yeah the hater the haters would say this is all well and good when numbers are going up but what happens when numbers go down right so but the timeline the timeline is not very good at nuance and and detail so uh yeah good opportunity to kind of um explain the all the different dynamics

so we've been operating under the radar our thesis here is when you're working in financial services you can't ship a halfbake product. You just can't you can't build fast and break things. There's a lot of hurdles. You're dealing with people's money. This is a massive responsibility. And we see ourself as stewards of people's capital. So, we've been operating under the radar for quite some time.

Mh.

And in May, our investors were like, Abdul, you have to launch and we want you to go out of the closet and tell the entire world about what you're building.

Yeah. And my thesis is if you're going to do something, you have to do it extremely well. So we made an incredible launch video. We worked with a bunch of journalists and we went out to tell the world our story. And our goal was to get 50,000 impressions on on

5 million probably. Basically within 24 hours we got 5.5 million impressions

and 100 more 100x that you wanted

100x absolutely blew up. Every VC and their mom is in my DMs. Every hit and their mom is also in my DMs.

Like high school friends I

Wait, the haters moms were DMing me too.

Wow. By the way, I I replied to this and you know, we were we were basically we're engaging with the public and their concern was credit could be a dangerous tool if available to everyday people.

Mhm.

And our thesis is when you want to make money as an individual, when you want to build wealth, when you want to achieve autonomy, you have two sources to rely on. You can either rely on your labor, your work, or you can rely on capital, assets you own, a stock, a bond, and rental property. Now, here is the interesting thing. Your labor will for sure depreciate over time. It's a fact because over time you get old

and you could be the best lawyer at Pwise

and at some point you're not as sharp on your feet. you're not as quick and there's a young stud ready to take your spot. And when your labor depreciates like this, when you can no longer work, what you have to fall back on is the assets you bought in your youth. And the problem that most Americans have today is that they have no assets. And our thesis was, well, let them use credit to buy assets just like they use credit to buy Coachella tickets.

Yeah. And people were like, "But capital goes up and it could go down." Yep.

And I said, "I agree. There is an uncertainty to capital, but there is a certainty that you will at some point age, right?" Like that is an inevitable fact.

I don't know. Brian Brian Johnson's going to push back.

Yeah. He'd like to have a word.

He might be listening. He might send us an angry email. I'm not going to aid.

Yeah.

Well, well, but well, let's take a step back. You might be perfectly fit like Brian Johnson, but does Brian Johnson has the same ability to compute as AI? Does Brian Johnson has the same ability to execute on tasks as computers? And the question becomes is over time as capital starts to automate more and more jobs. What is our plan as a society and as individuals for that day?

Yeah, I think we're generally pretty bullish on on getting on the ladder of having positive capital. That's very important. Love the Gersonner accounts. Um, but how is this different than uh contributing to an ETF every month or or even contributing to a levered ETF every month? You could go 2x long, the S&P, you go 2x long, the the MAG 7. You could have a mix of bonds and stocks. Uh, what is the benefit of of using credit to buy a larger stake up front?

Of course. Of course. So, credit is a tool. Yeah,

it's like a shovel. It can be used in a good way or in a bad way. It can be used to plant a tree. It can be used to knock somebody on their head and knock them dead, right? Just like nuclear. Nuclear can be used as a bomb. It can be used as nuclear energy.

The same thing with leverage and credit. It can be used in a good way or in a bad way. The devil is in the details. The devil is in the structure.

Mhm.

A very good way to finance assets is actually the mortgage.

Mhm.

Why? Because it's 30 years. It's amortizing and there is no mark to market.

Yep.

There's no rebalancing. You're not rebalancing your mortgage every other day.

Yeah.

That's not how a margin loan works and that's not how a leverage ETF work. Levered ETFs and margin loans are inherently short-term vehicles.

Yeah.

We can't get into the technicality of that, but they are inherently made for people who want to make a short bet on assets.

So, do you do you offer like mandatory lockup periods? like, can I get a 30-year loan against the S&P and be paying that down forever basically or for 30 years? That seems incredibly powerful.

That's in effect what we

So, you love it.

You put 20% down payment. Let's say you have 20,00 you come, you put $20,000 down. We open an LLC. So, the debt is nonreourse to John.

Yep.

Put 20K. We give you 80K. You pay off the ATK over 30 years. But what you have in the LLC is a $100,000 of assets. Y and these are not invested in a single name stock or bond. These are invested in diversified portfolio of stocks and bonds.

Yep.

And our thesis is

instead of buying a house, taking your entire life savings and betting it on a zip code, you can take your piece of your life saving, lever it up five times and invest in a diversified portfolio of stocks and bonds. That's the thesis here.

Yeah. Yeah. just a habit for

so who's who's the right person for this product because I'm assuming uh

long-term investor

long-term investor so that means somebody that's maybe going to retire in 30 years or 20 years something like that

if you have anything less than 10 year horizon you should not consider basic capital basic capital is not appropriate for you basic capital is a product is a bet

that over long period of time financial assets are going to continue to appreciate Now, is this guaranteed? Somebody from Twitter is going to jump in and say, "Well, you know, the stock market will go down in some." Yeah, of course it will go down. No, like Sherlock, like, "Thank you." Yes.

Well, the night the nightmare scenario is like the Japanese stock market, which had like 20some years of of decline,

stagnation. Exactly. Right. The way the way you could actually get burned on this is if you have persistent long-term stagnation in financial assets. Is that possible? Your ar your argument would be like if that if if that happens we we all have bigger problems.

My my argument is my argument is America is not Japan.

Mhm.

America is not Europe. America has a problem.

America has Silicon Valley. America is the epicenter of innovation in the world. Swedish companies like Spotify want to go public in America. CLA want to go public in America. And when you are investing in American assets, I believe there is some network effects to these financial market.

I love it. I can

I love America. So I called I called Buffet here and I say never bet against America. And if somebody wants to take the other trade, I'm happy to do it. Like we'll do a bilateral side trade.

That's literally your your business. Your business. Yeah.

Yeah.

That is fantastic. Well, congrats on the growth. I love it.

This is perfect.

No, it's great. It's great having you on and hearing uh directly and and keep the keep the viral videos going. I think next time you've set the bar high now you aim for 50,000 views. The next video you should just aim for 50 million.

50 million views. I want to see we're not going anywhere. We're not going anywhere. Our our message here to everybody is listen there is a real problem going on in society right now which is vast majority of Americans own no assets and we have a solution for that.

Y

and it may be perfect it may not be perfect.

And for the people that are out there coming after us we have a question for them. What's your plan?

Yeah it's a good point.

What's your plan?

Yeah. These are personal personal decisions. Yep.

What do we think like what's what's our plan as a society for for this? And we don't think the solution is communism. We don't think the solution is socialism. We don't think the solution is Madani. We think the solution is to make every American a capitalist.

Yep.

And by capitalist I do not mean ideologically a capitalist. I mean an owner of capital.

Are you going to last last question? Uh is there is there a way I know we have these Invest America accounts, the Brad Gersonner accounts, Trump accounts. Could we give leverage to one-month-olds

to children?

To children.

Could we help the children lever up, please?

Like, that's literally Let them Like, that's literally the perfect application of this.

They're out of the womb. They should have leverage the second they're born.

A minute later, they should be levered up.

You know what? I'm going to call Brad as soon as I get off this. I'm going to call Brad Gner and pitch [ __ ] to him. And like the administration is like is open-minded to this like like

leverage is a great tool and and so many people have made so much money using leverage and it's so condescending when we say that the average American does not deserve it. It's just disrespectful to the average American.

Yep. Well, thank you so much for joining. Congratulations.