Simplifying Private Investments Through Technology with Steve Zuschin

Jack Sharry: Everyone, thank you for joining us on this week’s edition of WealthTech on Deck. Today we will speak with my good friend and colleague, Steve Zuschin. Steve has been a critical contributor to LifeYield over the past nearly six years, and to our industry for many more years before that. Steve recently became a principal and Chief Revenue Officer of Mammoth Technology. Mammoth is a technology and service company that revolutionizes the way fund managers, financial advisors, and founders establish and service funds to enhance the investor experience. He’ll fill us in on exactly what that means in just a moment. So Steve has been on our show before, but this is his debut as the CRO at Mammoth. Welcome back to WealthTech on Deck, Steve.

Steve Zuschin: Thanks a lot. Jack. It’s good to see you. And thank you very much for inviting me.

Jack Sharry: My pleasure. Good always to talk to you. So Steve, let’s start with you telling us about Mammoth Technology. What is it? What do you do? Who do you do it for?

Steve Zuschin: Yeah, absolutely. So so as you mentioned Mammoth Technology, we really aim at putting the advisor at the center of all financial decisions that an investor is making. And today, they aren’t at the center of alternative investments, very rarely, actually, are alternative or private placements made through a financial advisor. If anything, we find that financial advisors are often managing alternatives by accident. And there’s not a lot of technology to help them support as you and I know Jack, just through our own journey. And this whole idea of allowing the advisor to provide holistic financial advice requires them to have a view. And not just a view, but the ability to coordinate all of the assets that an investor owns. More and more, most financial advisors are aiming to increase the net worth of their clients kind of move up the ladder. And as they do those higher net worth clients come with alternative investments. And so we aim to provide the technology to help create a seamless experience, not just for the advisor, but also for their clients.

Jack Sharry: So talk a little bit more, how did it come about? Where did that come from? How did you wind up doing this thing?

Steve Zuschin: Yeah, so John, and Kim Mackrill are good friends of both of ours. Yes. And good friends at the industry, the wealth management industry, they’re two of my partners, and co founders at Mammoth. Together, they joined forces with Tommy Martin, who’s one of our founders, and GP, and they were actually interested in in creating mammoth investors. And that was a creative venture capital, a VC fund that was aimed at making investments in the health and technology space. And through that process, through their natural market, a lot of their clients or financial advisors, one of the LPS that came into that fund, and the technology to support just bringing investors into the fund was terrible. No one was excited about it, it was a lot of paper pushing a lot of emails back and forth, not a lot of visibility to transparency. And that lead gen chem, if anybody knows them to say, hey, maybe we can build a better experience. And so together, they sought out to build this proprietary technology, really, just to meet ends meet, it was about providing a better experience for the investors coming into their fund. But through that, it’s like, hey, maybe this has legs. And after going out to market and talking to some of the clients that we had and other prospects, really turns out that there’s a big need, again, to bring the financial advisor into this exchange, but also just to offer a better solution and to onboarding and making investments into private.

Jack Sharry: So essentially, what you’ve done by necessity is good. Jud and Kim, were going out, offering up their venture capital, the opportunity to invest in their venture capital properties. There wasn’t really a system to make the paperwork work. Do I have that? Right?

Steve Zuschin: Yeah. I mean, there are a lot of fragmented tools out there. I mean, a lot. There’s been a lot of investments in the venture capital space, it’s no secret. There’s a lot of different stats around, you know, institutionally, how much how many assets are allocated to private investments versus Wealth Management, which is extremely low. I think today, we’re down to like three or 4%. Overall Wealth Management assets are allocated to private investment in the institutional space, it’s north of 20%. So there’s a lot of room to expand to catch up. But that said, the technology that’s aimed at improving this experience or making or suggesting or helping service clients who have made private investments, it’s so fragmented, which requires you to have a pretty big allocation with a lot of revenue to support that. So we feel that there’s really a niche opportunity for a newcomer and for mammoth with our founders and our roots in the wealth management ra channel, where we really understand the technology that they use, we understand the the hurdles that they face, we understand their clients, we understand the fiduciary model. When we can bring all that together and offer a better experience. I think we can really get down to providing a tremendous amount of value and clarity be something that’s been rather opaque gotcha.

Jack Sharry: And obviously, this is not just for men with VC properties, but this is for any and all. That’s really where you guys are headed, right?

Steve Zuschin: Yeah, originally, you know, the sights were on creating proprietary funds, that would be all mammoth. And you know, if you need private equity or private credit or private debt, to allocate your models, you’ve come and use these mammoth funds. But really, I think we boil it down to the essence of the technology, there’s a lot of great investments out there. Do we all know, like the story, having private equity or private credit is interesting, and getting exposure to the private market, which, you know, I’m sure most of your listeners understand the difference. But when we talk about liquid assets is publicly traded on the markets, and then these non-liquid or private investments, people liked the story, man, you know, like, I like the story of being an investor and having shares in private small companies where I can really like connect with that. Sure. And that’s what I want to talk about, right? I don’t want to be like, oh, yeah, I have 5% allocation to private equity, you know, I want to talk to you, I want to tell the story, I want to be excited about it. And you know, when you get higher net worth, that’s the stuff that people thrive on. So we feel that we want to be product agnostic, we want to be the rails for if I’m a financial advisor, and I want to offer I come across an opportunity, maybe it’s one of my clients, maybe it’s a client of mine that owns a business, and they’re going to raise capital. And I have 20 other clients that I think might be interested in the business of this other partner, I want to help them and usher them into that opportunity. But I want to do it with my regulatory concerns smashed, I want to do it compliantly, I want to track record, I also want to be able to report on it. And so, you know, with our background and our understanding, we know how to build the integrations, we know how to handle the data, we know how to work with compliance, to make sure that they can not only be at the center of that advice, and at the crossroads of that advice, but also ongoing, they can service their clients holistically.

Jack Sharry: So essentially, you’re creating an exchange for the marketplace to be able to buy and sell and track and all the rest of it is where are you in the process? I’m assuming that’s what you do? And then please answer that. And then where are you in the process of building it out?

Steve Zuschin: Yeah, so you can think of it as a marketplace. But it’s 100% curated by, you know, our partnership with that advisor. You know, there are a lot of marketplaces out there where you can go and it’s kind of like the big box store where you can go in and you can discover new investments. And you can find funds of funds and things that will fit your needs. What we found is that a lot of advisors, as mentioned earlier, they don’t have time to go in and do the due diligence, they’re not all that interested, honestly. But when they do accidentally find themselves managing these alternatives, because their clients have made those deals or discovered those deals, they need to be able to service it as part of their wealth management agreement with that client. And part of the goal of giving holistic advice. So where we’re at in the process today is this summer, we’re aiming to launch our MVP. Today, we have a service offering where we can take a fund, and we can help they can use our investor portal. And we can invest or we can take investors through the onboarding process into any fund. It can be any fund, it can be a private equity fund private credit, venture capital, any private placement, digitizing that whole process. But what we do that’s unique today in this MVP is we allow that investor to assign any interested party so that could be their attorney to be their financial adviser, their CPA, at which point they can delegate that whole process to that trusted professional. And from there, the financial adviser can actually walk through populating the paperwork, they can figure out where the funding is going to come from. And then ongoing, they can handle the K ones, they can handle any capital calls and any paperwork exchange, they get to be the center of that they get to be the delivery mechanism of that news back to their investor, which today, there’s nothing better that exists unless you’re unless it’s just one single fund. If there’s more than one investment, it’s spread across all those investments.

Jack Sharry: But let’s back up a little bit and talk about your backstory, because a lot of what you just described as a result of all the work you’ve done over the past many years, going back to hidden levers, and certainly the great work you’ve done with us at LifeYield. So when you give us a little bit of a sense of what that will look like you’ve been involved with startups, you’re involved in yet another one. So tell us about your journey. How did it get started? And you wind up doing what you’re doing today?

Steve Zuschin: Yeah, so you know, my background. I don’t know if it’s conventional or unconventional these days, people I feel like they’re being a little bit more transparent around where they’ve been. Today more than ever before. But you know, my background, I guess I got to this space is I studied finance in college. I studied finance in college, not because I was interested in financial services. I studied finance because I had, I guess maybe a delusional or absurd confidence in myself that I was going to make money. And I wanted to know what to do with it. So I studied finance. I got there if we even go back another step which you know, I found more to get comfortable with myself in this story, but I got there because I was kind of on a fast track to nowhere. While I was bouncing around the country when I was a teenager I tried college I dropped out after one semester, and I moved out of my hometown, which was Santa Cruz, California and moved up to the Pacific Northwest and I met this guy him and I became friends. And he was a ticket scalper. And up there in the Pacific Northwest at the time, you know, the laws were kind of vague. And as long as you weren’t on the property of the venue, it wasn’t illegal. So it was just this like this game. And he invited me to come help him and I worked with him for a weekend and we worked well together. And after working, I ended up working an entire summer with him at the Seattle Mariners stadium. I made decent money, I was making really good money doing it, we would have a lot of fun. We were the first ones to bring two-way radios out. We were coordinating the buying and selling market. We were some of the first ticket scalpers in Seattle to actually look at the weather forecast. And when it looked like there was bad weather on the weekend, and we were holding a bunch of tickets on Saturday, we would sell them to other ticket scalpers setting the floor of the market. You know, while I was working with Mark, kind of developing our business at the time, which was called Ticket Boy, one weekend, we came home and he put some cash in front of me, and this was Mark’s business, I just worked for him. And he said, Hey, man, this is your money, if you want to use it to go to college. He said, there’s no reason for you to be out here hustling on the street, you should go to college. This is how every business in our society works, is buying and selling. And so I picked up the money and I went and I enrolled at the junior college and took a intro to business and intro to economics. And Mark helped translate that into what I understood at the time, which was ticket scalping and really gave me that motivation I needed. That’s great. So that’s like the origin story of Steve.

Jack Sharry: That was great. I love it. I love it. Because it is I’ve always said, You and I’ve talked about this, you either buying or your selling. If you’re on one side or the other, where you’re doing nothing. That’s it. That’s great.

Steve Zuschin: I believe that everybody is selling something.

Jack Sharry: Sure. Sure. Absolutely. Absolutely.

Steve Zuschin: Sales I don’t think it’s like a stamp on our forehead or something. But when you think about it, the most successful people in any industry are the ones that have been the best at selling their story. You know.

Jack Sharry: So talk about Hidden Levers. And what I’m curious about, as he talked about, because you really met I think had a huge impact on our industry with what happened there and then since that time with LifeYield and then I’d like to hear where you like to go with mammoth. So I’ve got a little bit of a trajectory here if you would, and just what are you proud of it lovers was bought by Orion talk about that how you got started and what role you played there and he worked with some wonderful guys while there and so on. So take us through that really proud of.

Steve Zuschin: Yeah, man I like I said I, I studied financial services and economics in college. I didn’t necessarily know how that was going to apply. I ended up working for a large insurance company for several years. And I was good at the job, but I didn’t love it. You know, I was really I got introduced to financial planning and I was in love with that service model. But I just wasn’t getting traction the way I wanted to and I didn’t have the passion. I ended up moving to New York with the intention to go into graduate school. And through a series of events, I got introduced to Raj Udeshi, one of the cofounders of hidden levers. And at the time, hidden levers was still literally in its incubator stage, we were part of the NYU poly Technology Incubator FinTech technology incubator, which was in right off Eric Street, in Manhattan. And Raj and Praveen for being in the two founders brought me on, they brought me on as the first employee to help with business development and sales. And you know, they said, Give us one year, give us a year, and see if this thing has legs before you go to graduate school. You know, I ended up spending that first year we graduated from the Incubator we brought on our first 100 clients if anybody’s interested in in the actual early days of hidden levers, even before me is employee number one, Praveen has been doing a lot of awesome blogging on LinkedIn lately, and talking about that he now has a new company that he’s investing in a lot of it is focused on entrepreneurs and helping people build business. And he recently did several blog posts about starting him levers and finding product market fit. At the time, we were focused on hedge funds. And we were focused, we thought, you know, for anybody who doesn’t know, hidden levers was a risk model. And it was built on running stress tests on publicly traded assets. And this was around the 08 09 financial crisis. So it was when the Fed was talking about stress testing bank assets. And so while we’re going out to these hedge funds, thinking that they would be interested in, in using us as kind of a predictive tool, we found, through my experience, this more retail ra space and saying, Hey, this is a really important discussion to be having with investors and helping manage expectations. And I feel that we played a critical role and we all know the players in the space now but obviously Riskalyze are now rebranded as nitrogen has taken it to the next level, but all of us at the same time, we’re kind of developing this idea of this thing, this risk tolerance questionnaire process that used to be a compliance issue. We need to bring it to the front of the house and it can be a marketing tool. or it can be a communication tool can be a business development tool. And I felt that we played a very crucial role and making that, and really bringing risk forward around managing investor expectations.

Jack Sharry: And so on to LifeYield. Remember when we first got together, and you were talking with us, and I was like, wow, this guy is different. He’s pretty cool. And it turned out to be that and then some. So what are you pleased about? What are you proud about? About the work at LifeYield? You did a lot of important stuff for us and for our industry, frankly. So talk a little bit about that. What was that experience like?

Steve Zuschin: You know, man, I don’t know. I’m a creature of habit, Jack. But with LifeYield. You know, I feel like when we all got together, LifeYield had already built an extremely successful business in the enterprise world, working with these larger companies. And as you know, I joined LifeYield to help launch more of a SaaS platform where we go to the independent RIA, and we would have a user interface that they could subscribe to with a credit card, and use on their clients. And just like with hidden levers with this topic of risk taxes, had been this thing that was just kind of shoved off to the side that your accountant would deal with at the end of the year, that was so painfully obvious when I first got introduced to LifeYield, that we had really solved a transparency issue with how taxes and the impact of taxes can erode the performance of a portfolio. So I joined LifeYield, I joined our team at LifeYield. To help launch that service. We had an awesome run, we build relationships with over 400, RIAs, and really learned quickly how we can expand that model of uncovering and assigning value to asset location, but also everything else that surrounds holistic, or what we were calling the unified manage household. Right? So how do taxes play a role, not just asset allocation, but tax loss harvesting and capital gain management and transition planning? How do we stitch all that together and make it part of the broader picture and make it more accessible to every advisor out there, not just the Uber big books?

Jack Sharry: Yeah, pretty incredible. It’s been a lot of fun. Of course, the other thing is we decided to focus on those big enterprises. Because we got as you well know, we’ve got a huge client list of huge players, like Morgan Stanley and JP Morgan and Ameriprise and Merrill, and on and on. And on a lovely list. Indeed, one of the things I found that I observed is that as good as you are at selling, and you are all that he was good to salesperson, as I know, you’re also equally good on the technical friends. So you wound up working with a lot of these big data firms and basically educating them on how to build a UMH how to build a unified, managed household. Not easy stuff, but maybe talk a little bit about that. What was that like? Because you were, you were dealing with Morgan Stanley’s and you’re dealing with somebody at the best that’s in the Orion’s and many, many more. So talk a little bit about that, if you would.

Steve Zuschin: You know, I learned a ton. So I’m like, I’m a student of the game here and every company every step of the way, I’ve continued to learn more and build on my experience, which has led it’s gone up in sophistication. And not just me, but our entire industry. I mean, when I started with hidden levers, and we were starting to talk to RAs in 2010, we were one of the first integration partners of TD Ameritrade when they opened up VEO, right VEO village, you go to their you went to this conference in 2011, I think was the first one I attended. And VEO village was 10 vendors, integrated into TD Ameritrade video, via API. Now, you could at any one of these conferences, and I think everybody’s familiar. If you’re not, you can look it up. The Michael Kitces. FinTech map is no longer even a map, it’s now just a directory. Because the logos got so small, you needed a magnifying glass to see who was in each category, right? So it’s become a more complicated industry. And the way data is used to run our businesses is critical. It’s the fuel and it’s become more and more fragmented across different service providers. And so, you know, at LifeYield, one of the things that we focused on, and what we did is around coordinating all the accounts that an investor has, so that the advisor could actually give advice and distribute that advice across all the accounts holistically, to reduce tax drag, it turns out that that’s a big data problem, right? It’s about coordinating data from all these different systems, and then taking our results that LifeYield has with our own proprietary algorithms and distributing that back out to systems and basically playing air traffic control. And so with these large firms, it became an exercise in distilling that down and helping them understand how can we get started? How can we add incremental value? How can we define milestones along the way, because when we think about it, it’s a problem that no one really wants to say, Okay, I’m going to sign up for the next however many years and solve this big problem across my firm. So we need to boil it down into small incremental milestones. And I guess I showed that that can be done and working with some of the large partners that I got the opportunity to work with like Ameriprise and SEI and Morgan Stanley on really a day to day or weekly basis, we’ve been able to show some pretty good results.

Jack Sharry: So talk about where you’re going now, where are you headed with Mammoth? It seems to be you’re on the once again at the starting point of a gap in the industry, whether it was risk a while back or taxes more recently. And now it’s just about pulling it together around venture capital, private equity, and what have you is making it easier for it to be incorporated into a household portfolio.

Steve Zuschin: Yeah, absolutely not. I mean, at the essence, I think that that’s like my north star personally, that’s what’s developed is holistic advice. I feel like if I’m going to be a true fiduciary, our industry has grown so much we are we’re you know, we’re a real force to be reckoned with on the independent ra side of the market now. Me personally, I’ve followed this north star around how do I create that holistic view? And how do I create actionable advice that improves the outcomes not just for the investors, but also for the advisors? Sure, you know, more and more private investments are becoming a big part of that. I learned this recently, and I’m gonna paraphrase because I don’t have the stats right in front of me. But 20 years ago, if you wanted to invest in a large cap equity in the United States, something like 70 or 80% of them were available on public markets on an exchange New York Stock Exchange, you can go to your broker and buy that stock. Today, it’s less than 10%. So more and more availability into our economy is going private. So to have true diversification, and to be invested in those markets, you have to go the private route. And the accessibility problem is coming down. There’s a lot of tools out there, there’s a lot of exchanges that are making it easier and easier and easier. And technology. And innovation is fueling this for people to go out and make private deals. And to get invested into, you know, smaller startups or large cap companies, I just met with a guy this last week $17 billion in revenue a year. Private Company, wow. Right. So more and more people are exposed to and getting the opportunity to go make these investments. And they’re doing it with or without their financial advisor. So coming back to that fiduciary model, if I’m a financial advisor, I want to do everything I can I want to use all the tools available so that I can be at the center of all those exchanges. And that’s what we’re trying to solve for it.

Jack Sharry: Great. So going out a few years from now, what does it look like? What do you what do you hope to accomplish? Maybe it’s not in specific, but where do you see it all headed? No.

Steve Zuschin: I mean, like I said, I think that this trend is going up and to the right when it comes to privates, when it comes to the amount the allocation that advisors are putting into private investments. And again, I think that with our background, our partnerships, our deep understanding of how data works, and how to build integrations with these partners, I see mammoth on the desktop of every firm, I see manat being the the critical player in connecting all of these different fragmented systems. And again, bringing them all down into one pane of glass one experience a delightful experience, taking something that’s been painful for an investor that they’d go through the process anyways, because they want to be able to tell this story, sir. Sure, right, and make it a delightful experience where their advisor can truly add value. That’s what I’m really excited about.

Jack Sharry: Cool. I get it, I get it, I get it. So see, this has been great. As always, you and I talk when we’re not on podcast, but fun to do it officially on the podcast and hear the story for public consumption. I’m thrilled for you. I think you’re onto something big. And of course big fans of Jud and Kim as well. So you’re doing with good, folks. So as we look to wrap up, I’d like to ask if you have three key takeaways you’d like to share with our audience.

Steve Zuschin: Yeah. I just to repeat myself, you know, one is I think that the advisor, client relationship should be at the center of every financial decision. Today, it’s not, and needs to be Mammoth Tech, we’re designing a tool to sit at the crossroads of advice and private investing. And we believe that every interaction should build trust, and create a delightful experience.

Jack Sharry: Terrific. I know you’re off to a great start. And I know you’re going to succeed wildly, and I’m rooting for you every step of the way. So our last and favorite question. You’ve answered this a few times. I’ll be curious what you come up with this time around. What do you do outside of work that you’re excited or passionate about? People might find interesting, or surprising.

Steve Zuschin: Yeah, man. I was debating what I should share. But because I’m in the middle of doing another fundraiser, I have to draw the nonprofit I’m involved with called Rally for Rangers. I’ve discovered Rally for Rangers a couple of years ago and have gotten involved and now we’ll be going on my second trip in July to Namibia. And what we do is we raise money to buy motorcycles for park rangers all over the world, generally in areas where funding is an issue for the park ranger system. And what we found is that having modern technology allows them to be way more effective at their jobs, whether that’s protecting visitors to the parks, working with the wildlife, preventing poaching, all things that I am passionate about. And I love riding motorcycles. So I think that whether that’s interesting or not, it’s really interesting to me. And I hope that at least one of your viewers finds enough interest to go check out rallyforrangers.org and learn a little bit more about our cause.

Jack Sharry: That’s terrific. That’s wonderful. Thank you. Well, great to catch up with you, Steve thrilled for your past success, your current success and I know future success. I also wish you well as a supporter of your Rally for Rangers. So I encourage others who are willing to support someone who wants to help others. Check it out. And for our audience. If you’ve enjoyed our podcast, please rate review, subscribe and share what we do here at WealthTech on Deck. We’re available wherever you get your podcasts. Steve, again, it’s been a real pleasure. I can’t wait to the next time we chat. It’ll probably not be on a podcast but good to catch up as always.

Steve Zuschin: Thanks.