Vinyl Equity raises $20M Series A to modernize the transfer agent infrastructure powering complex IPO cap tables

Speaker 1: investing for those who take it seriously. They got stocks, options, bonds, crypto, treasuries and more with great customer service. And our next guest is already in the waiting room. We have Rob Schroeder from Vinyl Equity. He's the co founder and CEO. Rob, how are you doing? Welcome to the Hey,

Speaker 10: guys. Thanks for having me. I appreciate it. Thanks for hopping on show. Appreciate that.

Speaker 1: Thank part. Show. Why don't you kick us off with an introduction on yourself and the company?

Speaker 10: Yeah. So my name is Rob Scoder. I am the founder and CEO of Vinyl Equity. Vinyl Equity is a transfer agent for public companies or soon to be public companies. We've been around since 2022, we just raised or just announced our series a raise today. How much? Get that going. How much did you raise? $20,000,000.

Speaker 2: Okay. Explain transfer agents like I'm five years old.

Speaker 10: Yeah. It's a good question. Most people have no idea. So you could think of transfer agent as doing for the public markets what Cargo has done for the private markets. And so when a company goes public, they have to have a what's called a master security file, and it is the basis of their equity ownership. And so transfer agents for a long time have maintained these records. You can think all the way back to the beginning of Wall Street. You used to have somebody who would take a paper stock certificate or trade on Wall Street, they'd walk all the way down to the transfer agent to record record that transaction on their ledger.

Speaker 1: It's interesting. So because I just bought a I put my whole life savings in a in SpaceX, and the guy said we didn't need to use a transfer agent. And then I saw him on Instagram. He's in Miami, and then I think he was in South America or something. Yeah. The stock certificates look like monopoly Yeah. Paper Yeah. Dollars. I'm I'm realizing now I might have needed a transfer agent.

Speaker 2: Yeah. Should call this. But but how have they how have they modernized to date? We're no longer we're no longer Is there any We're no longer, you know, walking paper stock certificates around the trading Historically,

Speaker 10: they haven't. Yeah. Long and short of it. So I I actually I started the business after running portfolio operations at AngelList. Mhmm. And we did, think, 200 plus IPOs in the couple of years that I was there out of the portfolio. And every time we worked for the transfer agent, it just felt like we were sending paper around all around the country, just trying to get our shares into a brokerage account. So tons of market exposure post lockup, and, you know, as as you look at the market today, it has changed drastically in the last six months. I mean, even just in the last six months. You've got tokenization. You've got these massive IPOs that have cap tables that are substantially more complex than they've ever been before, and user expectations have shifted. And you guys have talked about you're buying SpaceX shares down in Miami from people on the street, and but they're you're also expecting to get those shares instantaneously. And, you know, we live in a world today where you can get packages delivered in less than a day, and yet from the transfer agent to your brokerage account, by and large, you can't get your shares delivered in twenty four hours. And so Vinyl was built to solve that problem effectively.

Speaker 1: Quick question. The name. Why Vinyl?

Speaker 10: Transfer agents keep records. Oh, okay. Yeah. We spent a lot. Vinyl's booming. Spent a lot of time trying to figure that out. Yeah. That's right. Yeah. We're back, Yeah.

Speaker 2: So so with yeah. This this SpaceX IPO is insane also just because of all the layered There actually are unironically a lot of unwinding. And part of why solving this is so important is like, you know, the way markets feel like they're at least in this whatever part of the cycle we're in right now, such violent movement like twenty four hour delay could meaningfully impact meaningfully impact your your returns. How how are you guys like, what does your go to market look like at this point? Like, where where do you guys kind of like take the take the baton? I don't know if that's that's the right way to think about it. Yeah. We we generally come on board with clients as they're getting ready to go public. So they're thinking about their IPO in the in the context of an IPO.

Speaker 10: And so if they're making a switch from a cap table administrator to a plans administrator, we think that's a really good time to align. But there are companies, depending on their readiness, that will bring on a transfer agent, you know, two months before an IPO. We help facilitate the transfer of that information seamlessly. We do use APIs. We are an API native business, and so it is fairly seamless and straightforward for us to ingest those records. When we get our company stood up, we actually give them a staging environment so they can go and test all of the data and make sure it's correct. And that's an anomaly in the world that we live in. And so, you know, for a very long time, this has been a just in time industry that's operated on paper, that's operated very reactively. And we want to pull all of these motions forward so that companies can go into the public markets with certainty. I think what you guys are referring to is the liquidity process and the transfer agents involved in the liquidity process. I talked to a family office the other day who told me that on average, they see they see shares show up post lockup nine days after the lockup is lifted. And those shares will often see 10% delta in when in the pricing when from when the lockup was lifted. And so our ambition is to make a more fluid capital markets from the point of issuance to delivery. By being proactive and having more nimble systems, we're able to do that. Little bit of a

Speaker 1: somewhat related question. Bill Gurley hit the timeline earlier last night, 8PM. He said, if someone is telling you you are subject to a lockup agreement and your firm signed nothing with the lead underwriter, they are either lying or misinformed. Lockups are a silly contract with the underwriter primarily to help engineer a secondary. Prove me wrong, I'll correct. He turned off reply so you can't prove him wrong necessarily but he said also it's never been enforced. The underwriting bank would have to sue for breach of contract. He asked AI the best example of lockup breach, couldn't find one, try it yourself, find a counterpoint. Please share. I want can you explain what he's talking about? Do you have any idea what he's getting at? Is there any truth to this or do you want to push back and prove him wrong? So

Speaker 10: lockups are are are agreed on with underwriters for the purposes of smoothing out market entry and smoothing out volatility for all intents and purposes. And so, you know, as he refers to it as sort of an abstract or created construct of the age, right? It is agreed on with the company as a way to manage the inflows and outflows of securities into the markets. The vast majority of companies, you know, don't see the kind of demand that we're going to see and probably the kind of volatility that we're going to see over the course of the next several months. And so, you know, you see some creative constructs that have been proposed in in, you know, the IPO that we're gonna have on we're gonna see on Friday, and then presumably some of some of the other IPOs come down the pipe. So And then and then also

Speaker 1: the the company is signing a contract with the underwriter, the bank. And the company probably does have pretty solid legal recourse over the employee stock option pool, maybe the founders or current executives. But what he's talking about is being an early stage venture capital investor who maybe didn't sign many contracts that relate anything to lockups so he doesn't necessarily need to sign on. Course, a good underwriter might go around and say, wait a minute, there's a VC who wants who's heading for the exit who owns 20%, like let's bake that in, get them to sign a contract. But he's saying if I didn't sign anything, I'm selling on day one, guess. Something like that.

Speaker 10: Yeah. By and large, you're going to find that liquidity is pretty tightly held or gated by the transfer agents and the broker. Sure. Sure. And so and when those lockups are agreed to, they they tend to get managed pretty Well,

Speaker 1: thanks for helping break it down. I know it's a Yeah. A hairy but it helps contextualize these things. I really appreciate it. Jordan, anything Thank you for modernizing

Speaker 10: investment capital flows. Thank you for everything. It's truly important work. Thank you. Yeah. Yeah. Appreciate it. It's an area that I think nobody's really thought about for the last the last, I don't know, forever. I'm glad you And and we're excited to be thinking about it here. So It's good. Good get

Speaker 2: their shares more effectively. Yeah. Good problem for the Angelist Mafia. Sure those 200 IPOs that you went through were, you know,

Speaker 1: stressful. But Well, thank you so much for coming on the show. We'll talk to you soon and congratulations

Speaker 10: to the team. Appreciate you guys having us. Good bye. What

Speaker 1: else is going on in the timeline today? The system prompt already leaked for Siri. Is this real?

Speaker 2: Hard to tell if it's real. Siri. But you know what is real? What is real? A Colorado man has been arrested alongside his passenger for allegedly driving more than a 130 miles an hour through Northern Colorado. Mhmm. He was doing a cannonball run run, John. And I wanted I I'm just gonna assume that this is someone in the audience. They're probably not watching right now because they are in prison. But but yeah, it is a

Speaker 1: Cannonball is not for the faint of heart. It is crazy that people are still going for the Cannonball record post post COVID because all the records were smashed. So if you're not familiar with the Cannonball, it's a coast to coast race. You race from the Red Ball garage in New York City to the Portofino Hotel in La Jolla I think in in in Southern California. And it takes something like originally like days and days and days. People did it on motorcycles. People have done it all sorts of different things, electric cars, self driving cars. But the true record was you know sort of no limits. People go as fast as they can, very dangerous, very illegal. You have to wait for the statute of limitations to lift before you share your run or share the video or else you'll be held accountable for what you did. Very controversial in the car community too. Some people love it. Some people don't think it's safe and for good reason. It's very dangerous. But a lot of people bring iPads and Waze and different maps and different radar detectors and all sorts of things. Some cannonball record holders actually had friends who piloted planes that flew in front of their car. They're going 200 miles an hour. Planes going two fifty and looking for cops ahead of them. So that was the level of detail. There's multiple stopping points. They plan out the gas. They have a fuel tank in the back, a fuel cell that holds an extra 50 gallons of gas or something like that so you can stop less, a two stop, a three stop. These are the techniques. I'm I'm roughly correct here. But the during COVID, no one was driving. No one was on the no one was on the roads. And and this was before people were like, well, I can't go to a crowded building, I can go camping, I will get on the road. But even the trucks were off the road and the trucks are the slowest part because you get stuck behind a truck. You might not be able to get around. And so all the Cannonball records were smashed. Ed Bohlian from VinWiki participated and did very well. I think he held the record for a while. Maybe still does. But to go after it today in the modern era where technology is even better, The cops have better radar than ever. There's cameras and all sorts of things. Truly one of the boldest things you can do. So good luck to him on his legal fight. Maybe he'll be using a legal AI tool to get himself out of jail. I don't know. Harvey, don't make mistakes. Maybe. Maybe.

Speaker 2: Anything else? Well, folks, we will be back tomorrow Tomorrow. For a massive show.

Speaker 1: We gotta talk about the Trojan horse for the Odyssey, The popcorn bucket. The TBPN effect. We have a giant horse which might be a Trojan horse. We never opened that thing up. We don't know what's inside. That is true. Can you imagine? But the Odyssey has released a limited edition Trojan horse popcorn bucket to commemorate the Odyssey. You can get it. People were fans of the sandworm popcorn bucket. This doesn't feel like it came from the mind of Christopher Nolan. This feels like some producer, some some money man came up with this. I I like it. I think it actually looks cool. I don't know how practical it is to eat your popcorn out of this Trojan horse, but it is very fun. And I like the popcorns hidden inside the horse. Be picking one one of these up. Production team, how is the process of obtaining tickets to the Odyssey? I've been seeing that it's very stressful. Hasn't been going well. We got some. Are you securing anything? Got some. You got some? Where are you going? Where are we going? You're going to Chinese

Speaker 2: Theater? Chinese Theater IMAX. That's a good one. And you guys got tickets for like the whole team, right? Because like No. Just production teams. Yeah. All brutal. Wow.

Speaker 1: Okay. I see. Oh. Little division here. Okay. We'll solve it. We'll solve it. No. Wait a minute. We gotta we gotta get everyone out to the Odyssey. You should get your friends out to the Odyssey. Call everyone. Buy a bunch tickets. They're refundable on Fandango if you do it that way. And then The Kugen Method. Get get 20 tickets. Text everyone you know who's in town. Tell them be here at this time. You'll get some some churn. Not everyone will show up. You refund those tickets. Then you charge everyone after the fact. It's a good strategy for having fun with some friends. Touching grass, reminding yourself of what's real. It's important. Stay sane out there. Leave us five stars on that podcast Spotify. Sign up for newsletter, tbp.com. Flashback. See you tomorrow. Goodbye.