Building Your Entrepreneurial Pain Tolerance: Parker Graham of Finotta

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Summary of Episode

#42: Parker Graham joins Ethan to discuss his startup Finotta, which offers banks a digital platform geared towards improving their customers’ financial health. Parker details his journey from a professional athlete to a startup founder. He discusses how his first company’s initial failures shaped his approach to creating Finotta and ultimately raising over $3 million dollars from one of his early customers.

About the Guest:

Parker Graham is the Founder and CEO of Finotta. After playing in the NFL, Parker worked as a wealth advisor and helped affluent individuals grow their wealth. He wanted to bring these wealth building tools to everyday people, and this led him to create Finotta, a personalized finance tool designed to help the average person meet their financial goals. 

Podcast Episode Notes

Bringing personalization to banking and finances [1:40]

A financial coach that helps you allocate your money to the proper channels [3:30]

Problem — how do banks serve clients when we live in a disconnected digital world [5:02]

Parker’s journey from a wealth advisor to entrepreneur [10:11]

Doing everything wrong when making a new business [15:08]

How to develop company pillars that show your values to customers and employees [20:38]

Developing values to rally around [24:16]

A hiring philosophy: the individual is often more important than their skill set [30:50]

Receiving $3 million in funding from a customer [35:22]

Deciding not to sell the company [39:31]

How to be strategic with partnerships and navigate asks for exclusivity [45:13]

The founder’s pain tolerance threshold — A startup’s success depends on your ability to persevere every single day [46:22]

How to develop grit [49:31]

Parker’s advice — broaden your network and build friendships [52:44]

Ethan: Hey, everyone, and welcome to the Startup Savant Podcast. I’m your host, Ethan. If you’re new to the show, welcome, and if you’re a veteran, you know that this is a podcast about the real experiences of entrepreneurs, founders, who are currently right now on the battlefield, in the trenches doing everything they can to build something wonderful.

Our guest on the show today is Parker Graham. Parker was a professional football player in the NFL, who then turned his sights toward business and founded Finotta, and that’s what we’re here to talk about today. So let’s get into it. Parker, welcome to the show. Super excited to chat with you today.

Parker Graham: Thanks, Ethan. I’m really excited to be here too, man. Thanks for letting me jump in.

Ethan: Absolutely. So let’s start off easy. Tell us what is Finotta.

Parker Graham: Yeah, really simply put, Finotta is a banking technology company, and we’re really here to finish what other technology companies have stopped at, and it’s really bringing personalization into banking for the first time. For instance, you go on Instagram or TikTok at this point and, basically, its whole entire goal is to just feed you content that you just really want to consume and your brain wants to consume. 

For the first time ever, we’ve really brought that same methodology into banking of all places, where a bank’s mobile app with our technology can actually bring you products and services that, weirdly enough, you need at certain points in your financial journey that you might be on. Maybe you’re trying to pay off debt or build wealth and really not know how to actually do those things efficiently. Our technology helps a bank actually tell you exactly what to do in those instances.

Ethan: So is this an app that the users of that bank use or is this something that’s on the back end of the bank? What does this product actually look like?

Parker Graham: So it’s actually an embedded platform. So we’re embedded into what we call the digital channel of the bank, so the mobile app and the online, basically the online experience. Really, it functions as a button. It’s basically a button that sits on the home screen of the bank’s app. Then once the user clicks on that button, our experience gets jettisoned and brought into view. It’s white labeled so the user doesn’t really see a difference or a change, but ultimately, it does a lot of radically different stuff than what somebody’s used to in a banking application.

Ethan: When you say radically different, what radical difference are we talking about here?

Parker Graham: I’m guessing probably the four things you use your bank’s app and you never ever think about it ever again are probably just checking your account balances, looking for fraudulent transactions, maybe taking a snapshot of a check, and that’s pretty much where all 10,500 financial institutions, banking apps really stop. In our experience, it’s actually like… think of it like a coach that basically once you click our button and you get into our experience, it actively tells you exactly what you should be doing with your money based on your financial lifestyle and the financial journey that you’re on.

Again, like I mentioned, we’re finding product gaps and services that you might need from the bank or maybe even a third party really right now being the biggest one that everybody talks about is student loans, right? Student loans are a huge problem, and we’re an easy way for a bank to provide you a student loan refi and also help monetize the bank in a new radical way. So the experience has a badge system, a financial health leveling system, and it’s a lot of fun, man, which when you pair banking with fun, that just never really happens. So we’re trying to make that difference in the world right now.

Ethan: Well, it depends on who’s having the fun. I mean-

Parker Graham: That’s fair, yeah. That’s fair.

Ethan: … it could either be really great or really scary. So it sounds like the bank is actually your customer, but your end user is the end user of the bank.

Parker Graham: Exactly. Exactly. Our customer’s customer.

Ethan: Sweet. So what’s the main problem that Finotta is out there trying to solve?

Parker Graham: Yeah. So right now, I mean, banks have done an incredible job. I mean, I’m sure we all have a memory of a banker or a bank scenario, where you’ve got some nostalgia baked in. Maybe it’s the bank that you grew up next to, the one down the street. For me, it’s SMB in Southwest Missouri. Shout out, SMB and Arvest, which is another local banking institution close to where I am. I remember opening up my first accounts there and, really, that’s where the experience for me stopped. I’m in that millennial grouping, where I do everything digitally, and Gen Zers, the group below me, they’re even more digitally native than I even am.

What’s been really difficult for banks and credit unions for that matter is making that transition from the physical branch customer relationship to the digital branch customer relationship. So we really look at the phone, the mobile app specifically as the digital branch for the bank. Our goal as a company is to really help them figure out how to personalize solutions and services for users, for customers in that digital branch just as well as they are doing in the personal relationships they build in the actual physical branch. So that’s both the problem set and the solution, how we look at solving. It’s really helping them bridge that gap from a technology perspective.

Ethan: So yeah, the app of the bank… seems to be that that is one of the most important things nowadays. I mean, for me, specifically, I use an online-only bank, and so the app app is my bank, but it’s interesting, though, before I switched to my current bank, I-

Parker Graham: Can you say who it is? Is that okay?

Ethan: Yeah. It’s Ally. I use Ally-

Parker Graham: Awesome.

Ethan: … who I know used to be GMAC, which puts some bad taste in my mouth. I don’t know why, but I just ignore it, and stay with Ally. Their customer service experience has been just phenomenal throughout the years that I’ve been with them, which is why I stay with them, but before I switched to Ally, I actually, just like you, I was using a hometown bank, also Missouri. So shout out, Missouri, that I had worked at. In my early 20s, I was a teller.

Parker Graham: Were you a teller? Oh, yeah. Okay. Cool, cool.

Ethan: I was a teller at a bank. So I switched to this bank, and even after I moved out of Missouri and had literally no access to this very local bank and I couldn’t even reach the same people anymore, I just kept getting routed to the customer service center, who did mostly fine, but I continued to use that bank specifically because of one of the features in their online services, their app. I’ve never ever found this service again, and it was basically-

Parker Graham: What was it?

Ethan: It was a cash flow calendar, essentially. It was a calendar view where I could see I’ve got a bill coming out on this day, I’ve got income coming in on this day. It would basically give you a running balance for every day, assuming that you didn’t go out and spend a thousand bucks on an [inaudible] or something like that.

Parker Graham: Very cool.

Ethan: So I’ve had to recreate that for myself. So if you could do that and then get into the banks that I’m into, then let’s do it.

Parker Graham: I mean, honestly, your point there is pretty fascinating. Banking is a commodity. It’s a commodity now. It’s something that we just are all used to, and you really can get the same, if we’re being honest, you can get the same service from any different branch. Throw a rock in your town that you’re currently standing in, you’ll hit a bank more than likely, but the crazy thing is that they don’t differentiate themselves ever on products. They differentiate themselves on customer experience, customer service, taking care of people. They give you a good feeling when you walk into a branch or deal with them on the phone.

The problem is that there’s this whole new group, this subsection of the population that does what you’re doing with Ally. They only bank digitally. They only bank on the phone, whether that’s through a mobile app or actually just physically calling somebody at the branch. What’s been fascinating to us is that banks are really starting to see, and credit unions, they’re really starting to see that now and they’re starting to put money into technologies that will make the experience better digitally. So we’re on the tip of the spear, if you will, on really helping them kind of bridge that gap because groups like Ally, Ally’s probably a great example, they’ve spent so much in developing their mobile application and developing that customer service layer that they’re pretty dang good. So if you’re going to go compete digitally, you’ve got to spend money and we’re one of the beneficiaries of those dollars spent.

Ethan: Yeah. It’s been a good experience. They don’t have every single thing that I would absolutely want. Like I said, they don’t have my little calendar, but they make it easy. I love the customer service that I get with them. That is why I stick with them, but this podcast isn’t about me and where I bank. So let’s get back to Finotta. So I want to jump into the story that you were telling us on one of our pre-calls. Finotta is technically the second company that you’ve been involved with. I use the word technically really to stand in for epic story. So your first company was Destiny and your current company is Finotta. If you could tell us the story of the switch from Destiny to Finotta, and I may not be able to help myself to interrupt every once in a while to let you dig into something.

Parker Graham: That’s absolutely fun.

Ethan: Yeah, let’s jump into that story.

Parker Graham: Yeah. So Destiny really is the culmination of what I call my PhD in entrepreneurship, if you will. I did everything wrong that you could possibly pick to do wrong. That was that company’s life cycle, which is pretty fascinating, but basically, I got my entrepreneurial itch as a wealth advisor. Got done playing football. I went and became a high net worth wealth advisor. Was really successful in that job, but just felt a calling to do something greater. I grew up really poor. So being a guy who wore a suit and tie every day and carried a briefcase, I felt like that was going to make me feel really important.

When I got to that point as a 20, I think I was 24, and I was like, “Oh, wow, this is not what I signed up for. I’m making wealthy people wealthier.” I really feel this calling to take what I’ve learned here and create a technology to help the masses and really increase what I call my impact radius as a wealth advisory one to one. So taking that technology we were using for some of the wealthy people that we had and applying it to everyone else, the everyday consumer was something I got really excited about.

So I actually spent a year just trying to figure out what I wanted to do and I came up with this idea for a debt robo advisor. Basically, what Acorns and Betterment and Wealthfront, a lot of those investment robo advisors, what they were doing for wealth I was like, “Well, shoot. We’ve got all this problem with debt in this country. It’s like what everybody talks about. Why don’t I try to do something to flip that on its head and create a debt robo advisor?”

So that’s what Destiny actually was. We launched in 2018. I raised $50,000 from my friend’s dads who were all on pension plans and stuff and just still feel very, very blessed to have had them back me. I had an accelerator with another 50K backed me here out of Kansas City, which is actually why I moved to Kansas City.

Ethan: What was the accelerator?

Parker Graham: It was a two-year long or, excuse me, it was an accelerator that was around for only two years, but it was called the Found City FinTech Accelerator. It was actually based out of KC with a bank called NBKC, which is one of the biggest mortgage banking institutions in the country. 

They’re massive. That was what got me started. It’s just funny. Quickly, we realized that we did not know what we were doing at all. I mean, I had read all these books about entrepreneurship and was like, “Oh, yeah, I’ll figure it out. It’ll be fine,” and quickly realized that, “Oh, wait. Bills cost money.” I went from a high paying job to a no paying job.

So we quickly realized we couldn’t pay ourselves anything. It basically started this journey of just learning really how I worked as a founder and the type of people that I needed around me. I had two co-founders at the time, and one of which I had known for 20 years. I mean, knew him since we were kids. Unfortunately, we found out over two years that we really didn’t work well together. It took two years for us to finally come to a head. It was just incredible timing. We had this business for two years. All three of us had stepped away to work full time elsewhere to pay for bills. I went and worked at a liquor store, as I mentioned. I went and worked as a banker, as a consultant to basically figure out, “Okay. We have this technology. We thought maybe we would want to pivot into banking itself.” So I was like, “Where else better to go than directly to the source?”

At the end of 2019 or, excuse me, at the end of 2020, so the pandemic’s roaring, we had about $30,000 left in our bank account. If we just kept doing what we were doing, we could eek that by for eight months or something because we were barely spending any money on the tech itself. We had really figured out, “Okay. We need to pivot into banking.” We had started talking to bankers. I luckily had a huge network of bankers from my previous job as a wealth advisor. We really figured out, “Okay. We could take our technology,” what was Destiny at the time, “and reconfigure it and elaborate on it and create this really cool platform that banking customers could use in a very similar way.”

It was basically going to take, if you can think about our tech, it was going to take something that was about as big as a dime and turn it into a dollar bill. That was how drastically much more code we needed. My two co-founders are both, luckily, software engineers, so I never had to pay really anything for software development. Basically, it came to a head where I was like, “Guys, listen, we need really two things right now. We need customers and/or we need investors, and we have $30,000 left in the bank. I don’t want to just eek by and die a slow death. I would much rather take that money and try to go get either of those two things, and I’m the only one that can really do both.”

So I went ahead and made that decision. I quit that consulting job. I went directly into full-time at Destiny. We were thinking about changing the name. We were thinking about all these different things. Within a couple of weeks, I think it was actually two weeks, I had actually closed $150,000 in investment.

Ethan: Heck yeah.

Parker Graham: Yeah, and we had closed our first customer.

Ethan: Where did that 150K come from?

Parker Graham: Luckily, actually, you can call it luck, you can call it blessed, you can call a lot of different things, but there was an investor conference that was digital. I’m trying to remember the name of it. It’ll come to me. Basically, you did a speed dating thing with investors, and based on all the traction that we had and the vision for the company that we wanted to build and how much money we needed, I met all those investors there and that’s what we closed at the end of it. So I think I had done that two weeks prior and then that second week closed that money.

Ethan: Wow, that’s awesome.

Parker Graham: Yeah, and then we got a customer too, which was great. So we got both. What was crazy was I got on our daily standup call and I tell the two co-founders like, “Hey, guys, we not only got the investment done, but we got a customer too.” There just was crickets on the end of the line. I was like, “That’s weird.” The co-founder that I was very, very close to called me and said he wanted to go get lunch. At that point I was like, “All right. Something’s up here.” Basically, he had seen what it was going to take to actually build the tech of the platform that we were going to need, and he didn’t feel like he wanted to do that anymore, which was a huge blessing in disguise. I was very upset about it, but hindsight, looking back, that’s exactly what we needed to happen. He left the company. The other co-founder left the company at that time. They were a package deal. So I was left by myself with money and a customer in no tech team and a product that wasn’t even close to being able to be commercially viable.

Ethan: So it was just you.

Parker Graham: Yeah.

Ethan: Were they your tech team before they left?

Parker Graham: Yeah. So I mean, they were the guys that built everything from scratch. So they had been that key component for us.

Ethan: So no freelancers or anything like that?

Parker Graham: We had had somebody build a portion of our software, but it ended up needing to be rewritten, which is what they had done. So yeah.

Ethan: Got it. Okay. All right. So you’ve got this 150K new investment, you’ve got this new customer. Your two co-founders who built the thing are now gone. What the heck? What did you do?

Parker Graham: I’ll be honest with you. I was mad for a little bit, a couple of days, and I basically had this epiphany of, “Man, I have a second chance here. I’ve got a second chance to redo this startup and really give it a good shot this time around.” So I had literally been obsessed with renaming it. I don’t know if you’ve ever tried to name a startup in general, but every domain is taken. Every type of word is-

Ethan: Every single one of them.

Parker Graham: Everything’s taken. The names that you wanted, the first name that comes to mind, it’s probably taken. If you want the name that you’re hopefully thinking of, it’s going to cost you 50 grand to get it and get the domain, right? So I had to recreate really everything, the brand, the colors, the logo, the name, and most importantly, I had to recreate the culture. I had seen myself work with those two co-founders and seen myself get very angry and upset. I think you can be a certain way with somebody that really deeply because you have an expectation of them, they have an expectation of you, and you have so much history, but when you’re trying to hire a person that you don’t know, one, you don’t know anything about them and you don’t really know who they are as a person.

So I knew I had to craft and create this vision of not only the company that I wanted to create, but also the company that I wanted other people to be inspired to go work at, if that makes sense. Really, 1,000% of my journey at that moment was also me really handing my business over in a spiritual way to God. I’m a Christian, and so a massive part of my story is being less, “Oh, I know exactly what I need to do,” and being much more of a follower in what I feel like I’m guided to do, what I feel like I’m being pushed into do.

So I actually sat down and basically thought, “Okay. God, what type of company do I need to be in to be the most successful person as a leader that I can be and also inspire the best people that come work for me and with me?” Four pillars really just flew out of my hand and they actually ended up being the four pillars that we started with at Finotta, what ended up becoming Finotta. That was lead with love, love for yourself, love for the mission, love for the team, and then eventually, love for the customer. You can’t have the end without having the beginning. The second one was radical transparency. I definitely realized that with working with engineers that there’s a lot of ambiguity unless you start upfront with not having any.

Also, working with banks, I just wanted to be open, honest, and transparent with everything that we do from top to bottom. That includes with customers, that includes with people. I wanted people that also wanted that for themselves as well. I feel like there’s a lot of tension in organizations when you can’t be honest. So having that as a pillar was a massive one.

The third one is unapologetic accountability, which basically means everybody’s an adult here. We don’t need to watch over you and you also shouldn’t need us to watch over you. It also has this row the boat mentality, where when you join our company, we’re heading towards the North Star, and that is improving financial lives for 10 million or, excuse me, for 100 million people. I don’t know if you’ve ever been in a boat with multiple people, but if everybody’s rowing in the same direction, you can get there really efficiently, but if one person is off on beat or pattern or distance or way point, one little inch at the starting point can be a mile at the ending point, right? So we really wanted that to be a huge part of it.

Then the fourth one was good times and good vibes. What we’re doing is changing the world in banking, and it’s extremely freaking difficult, extremely difficult for a multitude of reasons. So because of that, we have to laugh loud, hard and often. Those were the four that came to me and I literally just wrote them on a piece of paper and started telling that story to everyone that I could.

I found a CTO person in Kansas City. It’s where I’m actually based out of, and told him my story, told him about what I wanted to build and he wanted to join me. From there, just next person came on, next person came on, next person came on, next person came on. All these people were working for me for pennies, I mean, just pennies of what they were actually worth from a contract perspective.

We built this company together. Basically, fast forward six months from that determination and that writing the culture, hiring the first couple of employees, six months later we met our would be eventual seed investor. Six months after that, so this is a full year after my co-founders left the business, we had our next customer and a three million dollar check for our seed round.

So full circle moment in 2021, right? The company that I eventually wanted to set out and go build was Finotta, and that’s what happened over that year. Now, you fast forward a year later, now in 2022, the same season, we’re at a trajectory right now where we could literally change the industry, which is a really long story to answer your question, but that’s really how we got to where we are today.

Ethan: No, and it’s a good story, and there’s so many things that we’re going to dive in from that, and I’m just trying to figure out which direction to go first. So let’s talk a little bit about those values. I mean, did those just pop into your head or were you watching some infomercial at 2:00 AM and your half asleep brain was like, “That one sounds good. Let’s do it.” Where did these things come from?

Parker Graham: Yeah. I think when you throw Christian principles on things, you’re spirit-led and spirit-guided. I truly think that I was reflecting a lot. I was praying a lot. I was really trying to figure out, “What are the characteristics of people that I want to work with every day?” I realized I couldn’t do 10 because I couldn’t memorize 10. I played football and got hit in the head a lot. So it needs to be very simple. It was also something that people could rally around. Who doesn’t want to work for a company where love is the first pillar in it, right?

Ethan: Well, that’s a good question. Do you ever find any pushback with people that are like, “Oh, love? I don’t know about …” Do they get weird with that word or are those the type of people who you’re like, “Oh, you’re weird with that word, maybe this isn’t the place for you.”

Parker Graham: Well, first off, and I don’t know if this is shocking or not, but literally, everyone that’s their favorite one.

Ethan: Really?

Parker Graham: Yeah. We’ve never had anybody. I guess that’s a good point. We’re so open about it. It’s on our website. So before anybody does an interview with us, and we have a very specific interview process as all startups should, that’s the first thing they’re going to see on that culture page. So they probably wouldn’t apply if that didn’t speak to them, if that makes sense. We’re probably already doing a little bit of working through the weeds, if you will, or weeding through people, but no. Typically, when we get to a certain stage where people are talking to me in that interview process, they’re there because of the culture, to be honest with you.

Ethan: Right. Okay. That’s awesome. So aside of just hiring the right people, how do you keep your entire team in line with those core values?

Parker Graham: Oh, my goodness. Honestly, the coolest thing about this is that a lot of it doesn’t come from me. Our team, and we talk about the family as a team, it’s a lot less me and it’s a lot more everyone else. We all hold … This is what’s crazy. They all tie together. So accountability means that we all hold each other accountable to the pillars, right? We actually have five now. We have another one called Eternal Hope.

It’s interesting. I don’t have to do that. I don’t have to be the culture general, if you will. Literally, everyone has their own special part of it and they’ve actually also inspired growth in that area. I mean, I’ve got probably 10 stories I could tell from each one of my employees who lives a pillar in a day in a certain way. So yeah, it’s been a lot of just getting the right people in, and once you get the right people in, they want to be the ones to carry it on to the next group, to the next group, to the next group because right now, we’re at 15 employees. Probably a year from now, we’ll probably at least double, if not more, our headcount.

As everyone knows, culture’s very hard to maintain as you grow. So we’ve got to continue to hire people that that’s a big part of why they’re here because if it’s a big part of why they’re here, it’ll be a big part of what’ll inspire others when they get here and so on and so forth.

Ethan: Well, and it sounds to me like you’re setting yourself up for success. I feel as though the leader of a company really has to be the one to plant the seed, but that everyone else. So the spirit of the company is set by the leaders, but I feel as though everyone else is the folks who have to grow it. If you have a situation where your culture is being if someone is not focused on that culture or it doesn’t match with them, it usually happens from the bottom or from the middle somewhere and permeates its way out. So knowing that you’re hiring for the people who you see as those who are going to be onboard with those values, that seems like the way to start to set yourself up for that success.

Parker Graham: Yeah, and I mean, we’ve definitely made mistakes. I’ve made mistakes, and we actually have a pretty, not a robust, but very intent-driven interview process now because of the things that we’ve learned, right? I mean, we’ve had probably two, three employees turnover in the last year and a half, probably. For a small team, that is turnover, but what I think it is it’s actually you can fake things for a long time, you really can, but eventually, you’re going to reveal who your true character is. I think that being at a place where that culture is so appreciated, that it’ll stand out when you do see it.

As most startups, you have to hire fast and fire faster. We’re still trying to get better about that, but having that be a baseline really allows us to figure out, “Okay. Is this a person that can be here for a long time?” and then really hold them accountable to that. If they don’t actually get to that accountability or hold themselves that accountability when it’s like, “Hey, it’s not going to fit. It’s not going to work out because of X, Y, and Z.”

So it’s a good barometer, a good level set for everybody. It’s stuff that we constantly have to keep not only holding ourselves accountable to, but also evolving with the times and with movement and with more employee growth. There’s a saying, “Things are never stagnant. They’re either progressing or regressing.” We’re one of those shops where we want to continue to just be progressing as we get bigger and bigger.

Ethan: That’s a good mindset. Since we’re already talking about hiring, we’ve heard in the past you’ve used the term value-driven hiring, and then you just mentioned that there’s a very specific process that you all take. Can we get into those details? Can we get into the specifics of what your hiring process looks like?

Parker Graham: Yeah. So first and foremost, as the founder, I really look at our company as a team. We’re all teammates. We’re all here for a specific reason, for a specific skill set. We call them superpowers. In that, different skill sets are needed at different times. So when I say it’s a value-driven type of group and we’re looking at employees, I am much more interested in the person than I am the skill because I can teach skills. I can get you access to skills. I can get you access to people who can teach you things that we need you to do, but I can’t teach you how to be a better person. I can’t teach you how to work with me to a certain extent. This might sound bad. I don’t know if I can cuss on this, but there’s a thing called a give a shit gauge from my football days. I can’t turn that gauge up for you. That’s your own decision. So that’s a part of that. Who’s the person we’re putting in the room? That’s the first layer.

The second layer is really the interview process. So when we hire somebody, they typically meet with their manager first to make sure there’s a manager-employee fit. Then we have them meet with someone across the organization that they’ll probably never work with, but that’s more of like, “Is this a person who we could see ourselves working with on a day-to-day basis?” because especially being a remote company, you have to be really good at communication. Otherwise, you have all kinds of fractures for a myriad of reasons.

Then really the third one is just what we call a culture conversation, where you might have it with your manager and a teammate on that team or another person that’s completely different from the organization. The goal of that is basically finding people that really fit, literally fit in the organization as a culture, but then also are the right type of people that we want to empower and we want to build that skillset around. We do that because I have learned how to not hire people from past experiences and it’s worked out really, really well for us to date. 

The other cool thing about that is it gives people ownership in a really unique way that I wasn’t expecting. They have ownership not just in, obviously, like everybody that we hire as an employee, ownership in the company. They all are owners, which is really cool, but the second part of it is that they get a say in who joins the company. So that continuity and that feeling of really being a team comes down to as granular as the hiring process, which to me is as a former football player being a part of a family, being part of a team and stuff, it’s probably one of my favorite aspects that we’ve developed here at Finotta.

Ethan: So how long will that continue to be the case where everyone has a say in the hiring of each new person because I assume that once you’re at a 40 to 60, even more person company, that will become not only extremely laborious, but maybe less valuable. So how long do you think that something like that is valuable for your company?

Parker Graham: So let me correct myself if I said that. So we typically have three interviews. So it’s not everybody in the company gets a say, it’s those specific people in that interview for that person get a say.

Ethan: Okay. So there are several different positions that have a say for that person coming on, not every single person in the company.

Parker Graham: Exactly. Exactly.

Ethan: Got it. That makes total sense.

Parker Graham: The one that meets with everybody is me. That is probably the one that we will try to keep sustainable as long as we can. Eventually, it won’t be feasible. I think I remember reading about Airbnb and Brian Chesky. I think he met with everybody up until employee 150. Maybe it’s 200, 150 to 200, something like that, but then it’s not sustainable. If we’re blessed to get that big, then that’s a great problem to have, I think. At that point, I think if we’re also that big, that means our culture’s probably extremely strong. So I’ll be able to hand that off to people and pass that torch along.

Ethan: Cool. Let’s jump around a little bit. Let’s go back to funding because there was some numbers being thrown out, and I’m really interested on how you were going to go eight months on 30K. I assume if it was just the three of you and none of you were taking a paycheck, then that makes sense, but over the first few years, you didn’t raise an incredible amount of money, but then in 2021, you mentioned that there was a three million dollar round. I think maybe you mentioned that that round came from one of your customers. So I want to talk about how that situation came about because it’s not every day that somebody gets funding and it’s not VC or it’s not private equity or something like that. So how did that conversation come about and tell us more about that?

Parker Graham: Man, that’s a fun story. I’m just full of stories, Ethan. We’re going to talk a lot about-

Ethan: We love it.

Parker Graham: … some cool stuff. So basically back in roughly May, June of 2021, I was selling the banks. I had made that pivot, right? Finotta’s brand’s out there and we’re just trying to find customers. I am going on roadshows. In the Midwest, the pandemic had some things closed, other things not. It was open pretty early. So I was trying to get out on the road and get in front of people as soon as I could. So I was doing a road trip to Dallas and I was meeting with a couple of banks down there. Then I reached out to a former colleague of mine at a bank that we had worked at and he just so happened to be the market president for Dallas for this new bank.

Ethan: Nice.

Parker Graham: The bank is called First United Bank and Trust. They’re based out of Durant, Oklahoma, so a little Durant, but they’re a 15 billion dollar bank, which is a really, really strong privately owned institution. I knew nothing about them. I knew about him and I knew that if it was a bank that he was at, it was probably going to be a fun conversation. So I went and met him downtown Dallas. The moment I walked in, I realized that this bank was very different. You walk in and there’s this big giant infographic on the wall that’s like a tree that they call their stakeholder tree. It has employees, customers, shareholders, community, all these things mix and matched in there. I was like, “Dang, that’s cool to see in a bank lobby.” I looked to the right, there’s this wall with all these financial freedom books, personal finance books and just resources that on the wall it says, “Please take one.”

Ethan: Oh, wow!

Parker Graham: It’s like they just give away financial literacy stuff for free to their customers. I was like, “That’s really cool.” Then I look to the right of that and there’s this financial journey map on the wall. If you’ve heard about our technology, we basically follow financial journeys and digitize that relationship and plug products and services when you need them in your financial journey. So I was like, “Holy crap! That’s on the wall at this bank. We digitized that. That’s exactly what we built.”

I walked in this meeting with Ryan, I tell him this. I tell him, “Man, that’s exactly what we did,” and I start pitching him. Basically, I mentioned Christianity before. This is an absolute God conversation that I had with Ryan. We basically had built something that that bank had been wanting for about five years. I finished up the pitch and Ryan asked me, he’s like, “Are you guys raising capital right now?”

I was like, “Oh, we’re raising 250K. It’s way too small for somebody like you guys. It’s a small number.” 

He’s like, “Okay. Go ahead and finish.”

So I finished it out and then I leave. Thought it was a great meeting. I get back to Kansas City. The moment I hit the ground, Ryan calls me. It’s the same day. He’s like, “Hey, can you get back …” This was a Friday. He’s like, “Hey, can you get back here on a Monday? The owner of the bank wants to meet with you.”

I’m like, “Okay. That sounds cool.”

At this point, we still didn’t have very much money, so every expense was a big expense and it was like a $600 plane ticket. I was like, “Okay. I’ll be there on Monday.” So I bought a $600 plane ticket. I get up there, and I walk into their same meeting room, same conference room, and it’s like the entire executive leadership board for the bank.

Ethan: Wow.

Parker Graham: Yeah. I’m like, “Okay. This is good. This is new.” I go through the pitch and the owner of the bank, just him and I, just started vibing on the world of banking that we want to see and it’s just absolute alignment. Their chief culture officer had mentioned she had envisioned the same thing five years ago and they’d been talking about it and they wanted to build it and here we are. Then Greg asked me how much it would cost for me to sell him the company right then and there.

Ethan: Exactly. That’s what I wanted to talk about. I knew that that might be a part of this conversation. Sorry. So go on.

Parker Graham: Yeah. So he asked me that, and I was really taken aback because, I mean, the previous two years I’d starved, basically, right? It was a huge moment for me personally, and I just had this feeling come over me of, “Greg. That’s a really great question, but I’ll tell you what it is. It’s a very large number, and we’re not worth that number,” but what I would love to chat with you about is we wanted to do a three million dollar round in the fall when we had some more data. It’d be really cool if we could talk about you guys, maybe preempting that round and helping us get there.” So that was my answer.

He’s like, “Okay. Great.”

Then I finished the deal and left. I get back to Kansas City and Ryan calls me again, and he’s like, “Hey, you did a great job. I have some news for you.” I was like, “Okay.”

He’s like, “Not only did Greg love it, Melissa loved it, all these people loved it, but we want to go ahead and fully subscribe that entire three million dollars and we want to raise it right now.”

Ethan: That’s awesome.

Parker Graham: Yeah. So incredible. My jaw hit the floor. My wife and I were just … I think I cried. It was a huge, huge monumental moment to have that validation, to see this vision of what you wanted to build and have somebody like that validate it for you was massive. It took us about six months to close that money. So within six months, I mean, the company was completely transformed. All the employees that I had hired that I was paying pennies to got to come on full-time and really start doing this thing in earnest. We basically built the product. The platforms really fit to really their ecosystem, so their digital provider, their core. Now, it’s a year later and we just really finished our first couple of rollouts with their customers. Next week, we’re actually turning on for all 143,000 of their customers.

Ethan: Fantastic.

Parker Graham: Yeah. So we’re in a really interesting spot today, and all of the metrics that we’ve been pulling off of our data so far are extremely, extremely high from an industry perspective. So we haven’t [got a] stamp of approval, validated what we currently think is out there for us, but we are dang close and feel really good about where we’re at.

Ethan: That’s awesome. So when I did this research, I just knew. I just knew that whenever it was a customer that was offering this investment, that it probably started off as an acquisition. I wanted to talk more about what the negotiation looked like, but it sounds like you did all your negotiation in one sentence. So I mean, was that literally how it was? Were you just in that boardroom and those words just came to you or was it over a lunch and then you thought about it and you brought it back? What did that look like in those moments?

Parker Graham: No. So I mean, my response was immediate. That was what, again, it’s divine inspiration. He asked that question, that was how I responded to it. The amount we knew that we wanted to raise, we thought that two years’ worth of runway, about three million bucks for the team we wanted to build, all those things, that was about right. Then at that point, the negotiation was much more around the valuation. I’d had a valuation from my previous fundraising efforts. Man, I could write a masterclass on how not to do that, on how not to raise early funding and do it the right way, but it was much more around pre-money, post-money shares, all that fun stuff.

I had those two co-founders still had equity, and so we were trying to figure out how to make that work. It took us those six months to really figure that out. Also, the bank had never done a technology investment before. So a big piece of it was educating them on the industry and how to actually do it because a bank, they’re used to book value and revenue, hard asset, your business generates a million dollars, it’s worth 1,000,005, that kind of stuff. Whereas-

Ethan: Right, multiples and that sort of thing. Yeah.

Parker Graham: Yeah. Whereas in the tech world, and software specifically, especially SaaS, which is what we are, multiples are insane because of how much growth you can get in a rapid pace. So educating them was a huge piece. Then the other cool component was getting to work with them, getting to start that customer relationship, and not only customer, but investor and guinea pig relationship. We got to test all these different hypotheses with not just the board, but also the frontline, getting to really peel the layers of the onion back and make sure that our product got the engagement and got the revenue production we were hoping to get. The cool thing about banking is that if it works for one, it’s a really high confidence interval that it’s going to work for every one of them. So we got to spend that year building that story with them and now we’re finally getting to the fruits of our labor in that regard.

Ethan: Was there ever any talk of exclusivity in those conversations?

Parker Graham: Yeah, yeah.

Ethan: Really? Okay. Tell us how that went.

Parker Graham: So the exclusivity, so the bank is predominantly an Oklahoma and Texas Bank. That’s where their regions are. So to their point, I mean, they shelled out a massive amount of money for our company. So basically, we had a handshake agreement with them around other Texas banks and Oklahoma banks, and being very strategic about, “Listen, let’s build this here and then go and sell it elsewhere.” It was like this startup podcast. We’re going to talk about the behind the scenes stuff. We will have Texas banks, we will have Oklahoma banks at a certain point, but, good Lord, there’s so many to sell elsewhere that we were absolutely fine with that, and because of how we’re able to monetize the institution and help them monetize, if we get to that industry standard spot and pioneer, those banks will make us so much money that the bank will eventually be okay with us moving in that direction.

Ethan: All right. So something you had mentioned before this conversation was the, and I’ll quote you, the importance of the founder’s pain tolerance threshold. Can you tell us what that means?

Parker Graham: Yeah. So I think I’ve been in this for four years now and I’ve got a lot of friends that are in startups. I’ve seen a lot of friends build companies, quit companies, give up in my opinion maybe too early, maybe not too early, but I think the biggest thing that differentiates great founders, the ones that you hear that are, quote, unquote, “overnight successes” and the ones that aren’t is really that. It’s how much pain can you tolerate. What is your pain tolerance threshold? If you go bang your head against the wall, how many times you’re going to … Are you going to be able to actually do it and bleed a little bit and cry a little bit and suffer a little bit? How much suffering can you take? Because eventually, what’s going to happen is something’s going to break for you.

My story is not, and we’re not near where we want to be at, but I can guarantee you one thing. I’m going to die before I let this thing slip through my fingers, if that makes sense. I think that’s why people really enjoy being where we’re at is because they know that about me. I’ve proven that. Startup success as a whole, and this is my opinion, take this for what it’s worth, startup success is not having an awesome idea. It’s having the gumption to push through the pain, to actually get that idea that you have and make it great. Sometimes that’s market forces that are at play. I mean, shoot. We’re talking about a recession right now, right? I don’t give a crap if it’s a recession. I don’t give a crap if it’s a bear market, fricking bull market, rabbit market. I don’t care.

What matters is putting in the work every single day and pushing the company forward every day. Then eventually, you can look up in 10 years and hopefully you’ve hit that gold mine. So I don’t know if you’ve ever seen this picture, but there’s a picture on, if you just Google it, where there are two miners digging a trench trying to look for gold and diamonds and all that fun stuff, right? Well, in this picture, it perfectly gives a visualization as to what happens with some founders: they dig, they dig, they dig, they dig, they dig, they dig, they dig, they dig, and then they give up. Then just under that picture is a miner who does the exact same thing but keeps going one more inch and he strikes those diamonds that are sitting right there.

That to me is the biggest thing that separates good ones from great ones and some that just get scared and quit, and for whatever reason, they can’t take it anymore. That’s also valid. If you get in a situation where you just don’t think that the company is really worth your time anymore, then that’s your own decision. Again, I think what a lot of founders need to understand is that the life is not glamorous. You earn everything that you get. Sometimes it’s not as much as you might think that it is, but the journey is just as rewarding as the end, if that makes sense.

Ethan: Yeah, it does. That’s a story that I’ve lived more than once in my life. How is it that you have, and maybe even how would others, but how is it that you have developed the mindset of “I am going to keep digging. I am sure that there is gold down here. I don’t know if it’s 10 feet deep or 100 feet deep or 1,000 feet deep”? How did you develop the mindset of “I’m just going to keep digging”?

Parker Graham: So I think a portion of it … I think anybody who’s listening to this podcast right now is what I would call you’re probably off a little bit. You’re just a little weird in some form or fashion, and that’s good. That’s okay. That’s what makes you different. That’s what makes you probably want to listen to this podcast and hear stories of founders. I think that this pain tolerance threshold, honestly, the way that I have gotten it is because I went through football. It’s an absolute one-to-one. I went through high level athletics. You go through all of the different pain points that you really experience as a founder too. It’s very similar. Your reward at the end of the day is very similar.

I was also an offensive lineman. So picking division one football and professional football, you couldn’t pick one group that is less celebrated than the offensive line. The only time you’re celebrated or, excuse me, the only time that you’re known is if you do something bad. It’s like a kicker, right? You’re there to do your job, which is to block for the quarterback or the running back or whatever, and if you don’t, then that’s when everybody knows about it, right?

So you’re silently suffering and silently celebrating in that world. So I just parlay that into this realm, right? So I was very, very used to it from a mindset perspective. How others can do that and stretch that muscle is by really making sure what your goal is. Is your goal to be famous? This ain’t the job. It’s not. There’s so many different variables, and there’s so many other things you can do to be famous. I feel like a lot of founders that that’s what they want. They want to be known.

If you want to be known and you become a startup founder, you’re not going to last. You have to have what you want be the first … Excuse me. Whatever you’re wanting to build, you have to be literally obsessed with that thing existing. You have to be obsessed with it. In my opinion, that is actually how that pain tolerance threshold expands is because you’re obsessing about it every single day, every single moment that you really can’t envision a world where it doesn’t exist. At that point, you crossed over, if you will, into that world where, “I’m going to die before this thing fails.”

That all being said, some of these things don’t work out, they don’t, but you should be pushing as hard as you possibly can to make sure that it can’t exist before you give up beforehand. So I mean, you got to be a little weird too. You just got to be. You can’t be a normal person and do this job. I will tell you that 100%.

Ethan: That makes sense to me. All right. We’re going to wrap up here in a few minutes, but one last question for you. What is your number one piece of advice for early stage entrepreneurs?

Parker Graham: Man, it’s hard to pick one. So in this question, early stage entrepreneurs, that probably means you’ve already started your business, which is fantastic. If you’ve already started your business and you’re starting to move, what I would say is the best piece of advice is to really broaden your network. Ask people. I’m talking about when I first started, I felt like I had to act a lot bigger than I was as opposed to really just reaching out to anyone and everyone I possibly could to broaden that network. When I figured that out, actually, I read a book called Dig Your Well Before You’re Thirsty. I don’t know if you guys have ever read that book, but it basically goes that same process is the more people that you know, the more people that you know because they know people that you don’t know and you never know who you need to have access to be successful at a certain point.

So broaden your network, broaden your network, broaden your network as best you can. That’s almost a job, I would say. That goes into not just your investor network because you want to raise capital, not just your customer network because you want to meet prospects, but really your industry network. One of the most successful things that we’ve done is build friendships in our industry, and that has helped us with acquiring prospects. It’s helped us with acquiring investors, and it’s a huge hack that I feel like as entrepreneurs, we’re so solo sometimes and we’re so siloed to ourselves because, I don’t know, we just don’t want to be embarrassed or we don’t want to act like we’re not big enough, but, oh my gosh, the more you can get other people into your sphere and not just because you want to use them, actually build relationships and friendships because it’s a lonely world out there as an entrepreneur and you’re going to need them at some point, whether you know it or not.

Ethan: All right. Build that network. You heard to hear first. Cool. So where can people connect with you online and how can our listeners support Finotta?

Parker Graham: Yeah. So first off, I’m on LinkedIn. That’s my primary social channel. It’s a Parker CM Graham, and same handle actually for Instagram as well, but Finotta, we’re doing a lot of fun stuff. I mean, we’ve got an amazing podcast ourselves, which tells really the story. We got into it a little bit here, but our full story is on Once Upon A Startup. You can look at those on Spotify or really any other place to get your podcasts. Then we do interviews like this all the time, but really, what I would say is that if you are a banker or you’re a part of a bank, definitely reach out to me on LinkedIn because we’re always looking to jump into new prospects and new customer discoveries so we can help more and more people. We talk about affecting the financial lives of a hundred million people, and we’re not kidding. That’s our ultimate goal. So just one more person adds to that bucket so we can keep building that impact radius.

Ethan: Heck yeah. All right. Thank you so much for coming on. We are going to put all those links and everything else y’all heard today in the show notes, but that is going to be it for today’s episode of the Startup Savant Podcast. Thanks for hanging out.

So this was the first episode of season two. Obviously, things are a little bit different now and we hope that these changes are a net positive for the show moving forward. Now, what hasn’t changed at all is our hunger to bring you, our faithful listeners, the best stories, actionable insights, and inspirational founders you need to move forward in your entrepreneurial venture.

With that said, we want to hear your thoughts on the show. You can send us an email over at podcast@truic.com or you can find me, Ethan Peyton, on LinkedIn. Either way, we’re excited to hear what you think. For tools, guides, startup stories, and so much more, head over to truic.com. That’s truic.com, T-R-U-I-C dot com. See you folks.

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