How the Right Technology Can Help You Manage Your Investors With Special Guest Perry Zheng

Join our host, Attorney Kim Lisa Taylor, and co-host Krisha Young as they interview Perry Zheng, founder of Cash Flow Portal. Before founding Cash Flow Portal, Perry was an engineering manager at Lyft and worked as a software engineer at both Twitter and Amazon. He shares his experience and insights into how software, artificial intelligence and technology are reshaping the real estate investing world.

Episode at a glance:

• Explore the benefits of utilizing an investor management platform to streamline operations, enhance communication, and improve investment management for both syndicators and their investors.
• Investigate and understand the impact of emerging technology trends on commercial real estate investing, including the roles of blockchain, artificial intelligence, and the Internet of Things in transforming property transactions, management, and market analysis.
• Explore the integration of artificial intelligence with CashFlow Portal to enhance the capabilities of real estate syndicators, focusing on potential applications and benefits.

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Krisha Young:

Hello, everyone. Welcome to Syndication Attorneys’ free monthly podcast and YouTube channel, where we talk about topics of interest to real estate syndicators and fund managers, with an opportunity for live questions and answers before we sign off. I’m Krisha Young, and this is attorney Kim Lisa Taylor. I am the co-host and business development associate at syndicationattorneys.com, and Kim is the founder and all-around amazing person behind all of this amazingness that you are getting here from us today. Before we get started, please note that this event is both recorded and streamed video, and will be used for future promotion, posted on our website, or in a broadcast available to the public. You can ask questions at the end of the broadcast by raising your hand or typing in the Q&A. The information discussed during this free podcast is of a general, educational nature, and should not be construed as legal advice.

Joining us today with attorney Kim Lisa Taylor is her esteemed guest, Perry Zheng, founder of Cash Flow Portal. Before founding Cash Flow Portal, Perry was an engineering manager at Lyft, and worked as a software engineer at both Twitter and Amazon. He will share his experience and insights on how software, artificial intelligence, and technology are reshaping the real estate investing world. Hi Perry, how are you?

Perry Zheng:

I’m doing well. Thank you so much for having me.

Krisha Young:

So Perry, welcome. Why don’t you tell us about your background, and how you came to start Cash Flow Portal?

Perry Zheng:

Absolutely. Hi, everyone. That’s a lot of people on the attendees list. My name is Perry Zheng, I’m the founder and CEO of Cash Flow Portal. My background is in software engineering, so I was in a bunch of tech companies, which Krisha just mentioned. Specifically, when I was at Lyft, it was 300 people, and when I left, it was about 3,000 people, went through the whole IPO phase with Lyft. Did my very first syndication in 2019, where it was 172-unit apartment complex, and raised about $3.5 million out of the $4.3 million on that deal. I was the lead sponsor, I’m always the lead sponsor on every deal.

And on the very first deal, we were using DocuSign and Google spreadsheet. So for every investor — there were 70 investors — I sent them a DocuSign, they signed it, they sent it back, I send them an email, say, “Hey, here’s my bank account information.” And then they wired the money, and then I sent them another email saying, “I’ve got your money.” All their information is on that Google spreadsheet, and I thought to myself, with my engineering background, that this is very inefficient, and there must be a better way.

And so the company (Cash Flow Portal) is the combination of my syndication background and my technology background. We started about four years ago, so since then, we started developing it on the side while I was still full-time at Lyft. The following year, we did a 408-unit, and we used a large syndication software. The year after that, I used my own software. And I couldn’t disclose to my investors that I owned the company because I was still full-time. And they say, “Whatever you’re using this year is more intuitive and better to use than last year’s.” And I said, “That cannot be true.” So that’s when we quit my job. When I quit my job, and applied to Y Combinator, which is a Silicon Valley incubator program — they’re the incubator for Stripe, Airbnb, Gusto, DoorDash and so on. So it’s a very nice program, we got in, and now we have about 30 people in the company. So that’s a little bit of history.

Kim Lisa Taylor:

Fantastic. Wow, that’s really impressive.

Perry Zheng:

Thank you.

Kim Lisa Taylor:

And I think it’s great that you’re marrying your background in technology and real estate, and you saw a niche that needed to be filled, and you’re figuring out how to fill it. It’s so fantastic.

Perry Zheng:

That’s right.

Kim Lisa Taylor:

Great. So, Krisha, go ahead.

Krisha Young:

Yeah, and I find it also fascinating that all of this happened all throughout COVID and stuff too, so maybe a little later on we can talk about that journey as well, because very fascinated about how that happened. So why don’t you tell us exactly what Cash Flow Portal does?

Perry Zheng:

Yeah. So Cash Flow Portal is a software for syndicators and fund managers to manage their cap table and their investors. So in a typical syndication journey, you have to have investors sign the documents, and even before that, you need to have a CRM with some kind of lead-capture form that’s on your website. That’s for marketing CRM. And then once they sign out with the CRM, then you can send them these LP nurturing emails to build that reputation. We have a built-in CRM that’s really, really good, and it has a lead capture form, drip campaign, and all that. Then you move into, once you have a deal, whether that’s a fund or a syndication, you need to have the investors go to a portal to sign documents, and then there needs to be a way to wire or ACH the money directly, and then they need to know the money has arrived.

And then any addendums can be signed through the portal, and then every month, you need to send monthly updates about how the deal is doing, any financial documents. And every year, there should be K-1s being distributed. And every few months, there might be distributions that you want to be able to send them in an easy-to-use manner, to click, and then all the distributions go out. So we handle all the back office for the GPs, so the GPs can focus on building their relationship with the LPs. We are a tool, a white-label tool that helps the GPs streamline their back-end office.

Kim Lisa Taylor:

Now, I actually had a chance to use your portal.

Perry Zheng:

No way. That’s awesome.

Kim Lisa Taylor:

Because I invested in a deal where somebody had … The people I invested with had put their deal up on your… Cash Flow Portal. And so I got to experience it firsthand, and it was really cool, I really enjoyed that. It was so easy to be able to just go and look at the documents, and of course, they were our documents, so I was happy about that too. We’ll talk a little later about a couple of complications, but it wasn’t something you did, it was just information that our clients should have known.

Perry Zheng:

Awesome.

Kim Lisa Taylor:

But it was a really cool experience. Now, I’m like a gung-ho supporter, and I’m telling everybody they need to scheduled demos. You all need this, as soon as you get a deal, or even… Maybe you can handle your first deal with five or six investors on an Excel spreadsheet, but beyond that, you’re going to want to start having something more robust that you can keep track of everything.

Perry Zheng:

Yeah. So Kim, when you invest passively on the deal that has your own documents, which is awesome, did you notice all the questionnaires, or all HTML format, and then once you answer them, they just get… some of the answers get pre-populated onto the document, so you don’t have to type those out in the document yourself?

Kim Lisa Taylor:

I noticed that. There was a little bit of a disconnect on a couple of issues, but we can talk about that offline.

Perry Zheng:

Okay. That’s awesome.

Kim Lisa Taylor:

Yeah. So anyway, but largely, it works really well, I think… I guess my advice is, if you’re working with a securities attorney, and then you’re going to post their documents on any of one of these portals —  Cash Flow Portal is one of several, but I think it’s definitely one of the best — then you’re going to want to have your attorney look at that, and you need to go through the subscription process yourself to make sure that every single field is functioning before you start sending it to investors. And have your attorney look at it, see if there’s anything they would suggest you do differently, just for your own protection. Good.

Perry Zheng:

Let your attorney be the first one to invest.

Kim Lisa Taylor:

Okay, listen everybody, so don’t all start bombarding me about investment opportunities. And we’ve got a lot of clients to do that.

Krisha Young:

I have a little question here. Does it matter if it’s a 506(b) or a 506(c), in terms of the types of … because is this considered general solicitation in a way?

Perry Zheng:

Yeah, absolutely. So we support both 506(b) and 506(c). In fact, I will say, 90% of all the offerings are 506(b), only 10% are 506(c). And it is not general solicitation, because a normal person will not be able to find the offering link unless the GP sends that offering link out. Which is a single URL, they can send it through text, email, whatever they want, but by definition, they need to know the LP’s email address in order to do that. So it works for 506(b), and a majority of them are 506(b). Now, the difference between 506(b) and 506(c) on the portal side is when it’s 506(b), then there is self-accreditation, and so we digitalize those questions. And then if it’s a 506(c), then we have integration with Parallel Markets, which is one of our accreditation third-party providers. So we support both, and there’s a toggle that you can switch between the two.

And there are also some times where people move a 506(b) to a 506(c), and so we can keep track of the last funding day, and also the subscription day, so they can prepare the cut-off day. And in fact, one of the things we offer is to encode the documents for you. It takes us about 10 minutes to encode the documents, takes the GPs two hours to figure out where everything goes. And so we’ll encode it for you, and you’ll double-check— please double-check two or three times — but we can prep it in such a way that it’s ready when you go switch from 506(b) to 506(c), if that’s what you choose.

Krisha Young:

Wow, that’s really awesome. Okay. So how does using an investor management platform benefit syndicators and their investors? I mean, you just explained a big part of it there, but how else does it benefit people?

Perry Zheng:

Yeah. The best way I’ll think about it is, there are two points, the one is, when you talk about the investment funnel, it is a sales funnel. And being a GP means you own a business, whether that’s a syndication — if it has a P&L, you own a business, and syndication definitely has a business. A fund has a P&L, you’re owning a business. And being a business, and the LPs are kind of clients coming into the funnel, the easier that funnel is, the more money you can raise. And the more frictionless it is, the more amount of money we have seen people raise.

So LPs are busy. Almost by definition if they’re investing 50k, 100k, they’re busy professionals, they have success in their own career, they could easily go out and buy a single-family. They’re choosing you, the GP, because they believe that you can make better use of that money, and they don’t have to spend time landlording. And so they’re busy folks, they are people of excellence. And when they click on things and it doesn’t work, they get frustrated, go do something else, go on a Caribbean cruise, and then they come back a month later. Well, guess what? That’s delay on your fundraising. And so we think of the investment funnel as a sales pipeline, and everything we do makes sure that the sales pipeline is as smooth as possible. So it’s all the little things, like when you click on something, it should just work. We pre-populate most of the information; it should be as few clicks as possible.

And so for example, when you invest in something, you can reuse the answers from the previous deal onto the next deal, which then the next time when you invest, it’s almost like instant checkout on Amazon. So that’s the spirit. And so that’s one point, which is a sales funnel.

The second point is, your LPs don’t really care about Cash Flow Portal, your LPs care about you. And so when your portal doesn’t work, that reflects back on the GP, and the GP then reflects back on Cash Flow Portal. But LPs are not going to blame Cash Flow Portal, they’re going to blame on the GPs choice of the portal. And so we take that very seriously, so the portal is almost an extension of your own reputation. And the way I know that is, I can feel viscerally that I am a GP, so I know what it means when K-1s are delayed, when legal documents have typos, and dah, dah, dah, and so we treat those… So one is a funnel, and second is your reputation.

Krisha Young:

Yeah. I love that. And you said something about people of excellence, and I think that it’s true, you just want things to be seamless, and you don’t want to invest in something — whether it’s on the GP/LP side, whatever side of it — and it be complicated, or cumbersome, or not work properly, or whatever. So I love how much devotion and dedication that your team puts into making it work, and making the GPs look good, so that they… Like he said, it’s a sales funnel, and so that they can just not even have to think about it on their end, and just give their LPs something really easy to just come in, and nobody has to think about it, because we are thinking about so many other things, all the time.

Perry Zheng:

Yes. Absolutely. We do have some Q&As. Kim, do you want to wait until the end, or do you want to address them so that…

Kim Lisa Taylor:

We should wait until the end. We want to get through the topics that we thought were important for people to know.

Perry Zheng:

Sure. Yeah.

Kim Lisa Taylor:

And then we reserve about the last 15 minutes for the Q&A.

Perry Zheng:

Yeah. Absolutely. Thank you.

Krisha Young:

Great. Kim, do you have anything that you want to add to that one, or should I just go on?

Kim Lisa Taylor:

I think you’re doing great, Krisha.

Krisha Young:

Okay.

So Perry, what are your typical clients? Are they first-time users or seasoned syndicators?

Perry Zheng:

Yeah, great question. So maybe to give a quick summary of the company: So we are a team of 30 people. We are headquartered in Seattle. We raised about $8 million from Y Combinator and a bunch of VCs and angel investors, and we are a seven-figure business and so on. So our clients range all the way from someone that’s raising their first $1 million all the way to folks that are raising $400 million to $500 million equity under management. So that’s equity under management. In terms of asset management, it’s a couple billion dollars, our largest customers. Some of our notable customers include Goodegg Investments, and so on and so forth.

So now, what is our angle though? Our angle is that we reach the folks that are raising money for the first time, and we are also supporting the enterprise customers. So it’s very similar to Zoom, Zoom is very easy to use, you can create an account — technically, you should schedule a demo, but no demo is needed, you can just create an account. We’re the only website where you can just create an account —  and you can play with that, you can check out all the functionalities out there, and it’s free until you start raising money. So we pride ourselves in our engineering capabilities, so that you can start using it right away, and it’s very easy to use.

And then it turns out that to serve the newer customers, you have to make the program so easy such that it works well with the enterprise customers as well. So for example, with enterprise customers, we have very complicated distribution waterfalls, we have different open-ended and closed-ended fund challenges, we have redemptions, and where you can, you can have to marshal partial payments or multiple funding, so we can keep track of those, and then you can see a pipeline of all the investors on your funnel.

And so the way it works is that, because I’m a GP, a GP will come to us, and say, “We need this feature, that feature.” If it makes sense, we are a blank canvas, and we’ll implement it. Our engineers actually are some of the best; we have folks that went to MIT, went to Stanford, someone turned down Facebook to work with us, because we’re YC backed, and some folks actually represent their country in International Math Olympia. So I’m really proud of the team, and the technical excellence that we’ve built. And right now, we’re managing about $6 billion of equity under management. So that’s the size, but we actually touch on the bottom spectrum, as well as the enterprise spectrum.

Krisha Young:

I love that. Yeah, just really being able to capture both sides of that audience takes quite a bit of skill. And really listening to your customers too, and being responsive to what their needs are, and being able to have that talented team behind you to come up with solutions on how to capture both sides of the market. And what I like about this too is that there’s a lot of people who are brand new to syndicating, and they don’t have billions under assets, or even millions under assets or whatever, but… Even just yesterday, I had a conversation with somebody who was asking about, “What can we use that’s simple?” And this would be their very first syndication. And so this is fantastic. And you said that it’s free until the raise happens?

Perry Zheng:

Yeah.

Krisha Young:

And then do you take a percentage at that point, or how does that work? Or is that too complicated for this?

Perry Zheng:

Yeah. No, it’s not complicated at all, we are really simple. So to give an example, it’s not like we want to optimize for revenue by saying, “We would love to give this right now for free to the newer GPs.” It’s that I’ve been a new GP, I’ve been there. And the reason we started the company was that on my first deal, it was a $4.3 million raise. If I were to use another software, it was $12,000 for the year, and up to, say $20 million of equity. But if you have your first deal, it’s still $12,000; good luck. So the way it works for Cash Flow Portal is that it scales with you. Your first million is $149, your second million is 50 bucks more, your third million is 30 bucks more, and then your fourth million is 20 bucks more. So it starts at $149 for your very first million, and then by the time you get to $20 million, it’s 700 bucks a month.

So that’s how we charge, which is based on equity under management, how much money you plan to raise. If you have a $50 million fund — we did this intentionally — and you’re only raising $2 million for your very first tranche, you get charged for that $2 million. We have a difference between the ownership total amount, and as well as how much you plan to raise, which is the $2 million, or even $1 million if you’re not sure if you can raise more than a million, and so you’re only getting charged for that.

And so that’s much better than maybe a different type of pricing model, where you come in and the lowest it starts is $700 a month, regardless of how much you raise, and then up to $20 million, then… You have $20 million bucks to go, but it ends up being that you can work towards $20 million, whereas maybe the other pricing model will start at $20 million. So there’s that. And it’s not like we do it for revenue, we do it because there is a lot of empathy for the emerging GPs, because the future of syndication is built by you folks, and not by the funds that are already doing it.

Krisha Young:

Right. Yeah. And that’s why we have our pricing model too, the way we have it, is to make it so that it’s not a massive barrier of entry to people, because there’s already so many things that you need to pay for, and think about when you are raising capital in this way, and we’re very cognizant of it. And so our fee structure is responsive and respective of that as well. So I think that’s really great that you guys are being really conscious of where that… The level of commitment that syndicators need to put out at the beginning, especially until the fund actually starts making some money.

Perry Zheng:

Exactly.

Krisha Young:

Great ethos. All right. What technology trends do you see that are having an impact on commercial real estate investing?

Perry Zheng:

Yeah. So it’s funny, because the people who are really good with AI don’t talk about AI, and so I’m not going to mention AI, maybe I will. I think the trends that are happening in technology are things we are taking for granted now. There are shifts in terms of the money, in the way that money is transferred, the way that documents are signed, the ways the records are being kept, as well as all the marketing cycles. So to give an example … we have this tool where a fund manager or a syndicator can create their monthly updates by putting their KPIs — and KPI stands for key performance indicators, which are the metrics of each syndication or fund— and they can copy and paste those, or they can just upload a spreadsheet that has those, and it will be in our database, and that’s deal-specific.

And then you can create charts automatically out of those KPIs. And then because we have your KPIs for last month, you can create financial reports, you can create your entire monthly update using AI. But we don’t call it really AI; on our homepage, we don’t really say AI, which is like, “You click a button and your email can generate it.” But what do we use underneath the hood? Yes, we use ChatGPT underneath the hood. And being part of YC — so Y Combinator, Sam Altman was actually the president of Y Combinator before he went on to start OpenAI — and so we got a lot of free credits from ChatGPT, and so we were able to do that.

Now, that’s one example of using AI. The other example is, so Cash Flow Portal is a multi-product company. We started with the investor portal, and we have a CRM, but we also have an underwriting software, as well as a banking software. The underwriting software, the way it works is that you can upload rent roll and T12, and then you will automatically parse the rent roll and the T12 to fill out your income and expenses. And so you can use that. That’s a very, very complex problem. One of the interesting problems is how do you categorize the expenses? Different property management softwares have different types of expenses, but your underwriting has a set of predefined categories. How do you map the property management software’s expenses to your predefined expenses? So what we do is that we read it, if we could figure it out, because we already have a mapping, we map it. If we don’t have a mapping, then we are using ChatGPT to form that complete cycle.

And so you can just ask ChatGPT, “What does a turnover cost? Does that fall under repairs and maintenance, or does that fall under administrative?” And 99.99% of the time ChatGPT is right. And so you are using it in just invisible ways that, at the end, the client just needs to know that it works, but there’s a lot of magic underneath the hood.

Krisha Young:

Wow, that’s so fascinating. I’m definitely one of those that are just like, “Just make it work. Just make it work, I don’t need to know all the details.” But I love how you guys are leveraging ChatGPT and all of this AI technology, because, I mean, it’s there, so let’s use it, let’s leverage it, let’s learn from it. And it’s quite intuitive, and it learns… I’m assuming then that ChatGPT is learning from-your users, and then it’s just the symbiotic relationship that just keeps growing and developing over time.

Perry Zheng:

That’s exactly right.

Krisha Young:

Yeah. Wow. That’s amazing. Well, the next question, is there a way for real estate syndicators to use AI in conjunction with your platform? And if so, how? So it sounds like you’ve already incorporated that, but is there a way to add on an end user’s ChatGPT onto it? And if so, how? Or not just ChatGPT, but any kind of AI software.

Perry Zheng:

Yeah. So the things that we are working on, and some of them already ship, they are in the pipeline are the following, so our CRM, we want to make a very real estate-centric CRM. It’s a marketing machine, it’s a marketing tool, and so when you… The way the GPs nurture their LPs is that they usually don’t know what topics to talk about, and so we have a lot of these kinds of hand topics templates that you can just directly send to your LPs. But then if you are creative, you can also just use the tool to create new topics, and then you can make it into a template, share it with the community if you want to. And so that’s on the marketing side, there’s a lot of creativity you can use for marketing and copy changes, like, “How do you phrase this paragraph?” And so on.

The next one is going back to the underwriting. So with the underwriting, you have your expenses, your income, your rent growth, your income growth, other income growth, economic vacancy, dah, dah, dah. And you have all this data, there should be a button that can export all of that, and will pre-populate all the emails that you’re going to send out, like our business plan. Your business plan is in your underwriting, why couldn’t the technology create an email for you based on the underwriting? You can. And so that’s where my mind is going. Now, how to get there, it’s a combination of ChatGPT, which is an enabler, plus our own creativity, and our knowledge of the space. You can’t just automate everything, but it’s automating the things that you know as a GP are important. So that’s where we’re going.

Krisha Young:

This is really fascinating. I mean, the AI conversation itself could be a whole entire episode. It’s a relatively new concept, and you guys seem to be really leveraging it. And I like using it to communicate with investors too. Using it in the … Notifying them of your newsletters, and things that’s going on behind the scenes, and things like that too, and just keeping that communication open with your investors and leveraging the software for that as well. Because we are busy, and so if we don’t have to think about what to write or how often to write, that takes a load off as well. It sounds like you guys have really thought about everything. So the next question is, will having an investor management platform replace the need for bookkeepers and CPAs?

Perry Zheng:

Yeah. Good question. So the short answer is no, we don’t. The way you think of a technology platform such as ours, or any other investor portal is, it’s the hub. It’s the hub in which the other vendors exchange information. So for example, the CPAs can get a report if you invite your CPA to the portal, or you can just download the spreadsheet and give it to your CPA. At the end of each year, you give your CPA a summary of your cap table, any change logs, as well as all the distributions from last year. And so your CPA takes this information, and they will generate the K-1s on your behalf.

And so we are not in the business of generating K-1s, we’re in the business of providing information such that the CPA can generate K-1s. Once the K-1s are generated by the CPAs, which is one file for each investor, then they will send to you, or they will put it on their own CPA portal. You’ll download those, and then you can upload them to Cash Flow Portal. And we have the matching functionality such that we automatically match each K-1 to the appropriate investors, and then you just hit confirm, and then those K-1s are shared. So as you can see, it’s a dotted line between the CPA and Cash Flow Portal. We are not in the business of generating K-1s, nor should we be.

Similarly, legal counsel prepare the documents; we’re not in the business of preparing documents. But we are in the business of helping digitize and encode such documents so that you can make it readily available for your investors. And same thing with fund admin, people often ask, “Do you have a fund admin?” Fund admin is the bookkeeper. Fund admin is an executive assistant for your funds, which is keeping track of all your accounts payable, and your bank account information, and being able to reconcile them. That is a human labor job. And so what most people do is, they use us as the hub, and then they use a third-party fund admin such as NAV Consulting and whatnot, and then in conjunction with the portal. So NAV Consulting is for the actual fund admin, just like CPA and legal counsel, and then we are the technology.

The line gets a little bit blurry when the fund admin itself also has a portal. But what the customers do is that they just decisively choose that, “Hey, my investors only interact with Cash Flow Portal, and then fund admin only does the fund admin stuff.” Now, is there a future that the technology company also has a fund admin division? Yes, and that is a very reasonable approach, but in our world, we believe that we are good with technology, we like to leverage technology to solve more scalable problems, and fund admin is very much a human problem, it’s a bunch of labor that can do the bookkeeping reconciliation. So we are not going there yet, at least for the next few months, and our customers are more than okay with that.

Krisha Young:

Yeah. And it’s true, we’ve had a lot of conversations in our… We’ve got a private clients-only Mastermind/Pre-Syndication Program that we have for people, and we’ve had the conversation around AI a few times, and it is sort of like “proceed with caution” when it comes to doing your legal documentation.

Perry Zheng:

Sure. Yeah, exactly. Yeah.

Krisha Young:

For example, because you really do need that lawyer to produce those documents, and because there’s so many nuances, and the same thing with what you’re saying here with regards to the CPA and the fund manager, there’s just things that technology has its limits around. And so this is a good thing, it means that humans are not yet obsolete, so I’m happy with that.

I’m just going to switch gears a little bit here, Perry, for a quick second. Just for everybody who’s on the line here, in case you guys were not aware, we have two books on raising capital legally that Kim Lisa Taylor has written. One is for beginners and one is for more advanced capital raisers. If you want us to mail you one for free, you can text the word syndicate, S-Y-N-D-I-C-A-T-E, to our phone number at (844) 796-3428. Again, that’s the word syndicate, S-Y-N-D-I-C-A-T-E, to (844) 796-3428. You can also go on our website, we’ve got tons of articles and there is a link there that you can click to get the book as well. And if you’re interested in speaking to us with in regard to helping with your syndication legal matters, then please don’t hesitate to contact us through there. And our website is syndicationattorneys.com.

All right. Thank you. And Perry, we’ll have a chance for you to tell us about how people can get in touch with you as well. Before we go there, I have a question about your team. I was looking on your website, and I think you said you have 30-some-odd people on there?

Perry Zheng:

Yep, that’s right.

Krisha Young:

Yeah. So I like the human side of things, and I’m so curious how you managed to develop such an awesome team, and what your secret to success is there?

Perry Zheng:

Good question there. There’s a combination of luck, and also just meticulous obsession with excellence, and just not being okay with, “Oh, this is good enough,” the status quo. I have always been a high achiever, and before I got into syndication, I actually bought seven single-families in the Bay Area and Seattle. And the reason we got into syndication was that I maxed out my debt-to-income ratio. And I was a good employee at Lyft. And so for example, on our website, you’ll see a person called Jason, Jason Rosenfeld. He was actually the first engineer at Lyft, so he’s a principal engineer at Lyft, and he’s an advisor for the company. And so when he quit Lyft, he wanted to be an advisor. And why did he want to be an advisor for the company? So he just wants to help.

And I worked with Jason for many years at Lyft, and because I was a good employee, he knew… We have a mutual admiration for each other’s capability and competency. And so I’ve been very grateful for people like that in my life. I did not expect him to be an advisor by any stretch of the imagination. We did not really actively wow him, because the wow part was done five years ago when I was the employee. That’s lesson number one. Almost every person came in through a referral, and it’s a little bit crazy. Someone came in through Handshake, which is our college recruiting tool. And then that person referred one more person, and then that person referred two more people.

And so that’s four people right there. And then another person also came in through a referral, and that person referred two more people. So almost everyone came in through a referral. Now, that’s number one, which is who you are attracts your like-minded people. And there’s almost like no magic bullet.

And you can also say, I am someone that does not actively hard-sell. One of the best things we have done when I was at Lyft, and also in Cash Flow Portal, is that, so-and-so had an offer from Google, and they’re waiting for the offer from Google, and then I said, “You should wait until you have heard back from the Google offer, and then decide on the two offers. We do not have a timing bond on our offer, you should have complete information before you make a choice.”

And they really appreciate that, because every other company has a time bond on their offer letter, and I said, “I don’t care.” And I did the same thing at Lyft, and they really appreciated it, and that person from Lyft actually came in, and became an engineer manager, so I was very glad I did that. Because I wish that could be done for me when I have these offers. And so they end up choosing us over Google, because of these little things. So that’s one, which is that we are a kind and competent people, and so it’s just the human side.

And then the second one is, I do care a lot about talent density. Competency is not possible without talent density. And so here’s an example, a couple of years ago, I was actually in New York City, and I traveled to New York, and then there was one person that represented Canada in International Math Olympia, and won two silver medals and one gold medal. He goes to MIT, and I really wanted to recruit them, and I said, “Hey, I happen to be in Boston, do you want to meet up?” And they’re like, “Okay, cool. I’m free 9:30 a.m. at this coffee shop.” So, “Okay, 9:30.” And so what happens that day is, I wake up at 4:00 a.m., take the plane, get there, meet up with this kid, and then I was like… He’s like, “What are you doing this afternoon?” I said, “I’m going to just walk around.” And then afterwards, I did walk around a little bit, and I took the flight back.

We did not close them, they went to Nvidia, which also turned out to be fascinating company, but that is an example of how much I go out of the way to hire one person. We did not close them, just to be clear, it was almost like an exercise for me to know, “Okay, that’s the degree I’m wanting to go out of my way to get someone good.”

Krisha Young:

What you have described here is what I… So I do business development sales, and I’ve been doing this for many, many years, and I do not believe in the hard close. I do believe in closing, obviously, because you want the company to make money, but to do it in a way that puts the human over the transaction. And that is what I’m hearing you say here, is that there’s a transaction involved in any kind of sale, whether you’re doing it selling your software, or you’re selling the job to someone, or you’re trying to convince your partner to go out to a new place for dinner or whatever, we’re always selling in one way, shape or form. Trying to get your kids to do something, go to bed on time, selling, it’s all selling.

And so how we go about doing that, and developing that relationship, and having that non-attachment, that like, “Okay, look, here’s what we are. This is who we are. We are a company of excellence.” And you’ve used that word quite a few times, “And we’re not going to time-bound you, we’re not going to pressure you.” And I really like the fact that you gave that person that option, and said, “Wait until you’ve had all of your information before making the final decision.” And I think what that does, and for anybody listening, when you are doing sales in any kind of way, shape, or form, you’re giving that person an opportunity to really make a sound decision that feels good for them, that they’re not going to then regret, they’re not going to then want to back out of, and ask for refunds, or change their mind, there’s no buyer’s remorse or anything, you’re not dealing with the back-end issues and drama that happens when you are pressuring somebody into coming into your organization, or investing in your deal, or whatever it is.

So this is the future right here, the way that you’re bringing in employees, or team members into your company, and selling your own services, this is definitely the future, so I applaud you for that very much.

Perry Zheng:

Thank you.

Krisha Young:

Yeah. Okay. So I did want to ask about being a startup in tech, but in the interest of time, I want to get through some of these questions here. Sorry, the startup during COVID, I’m very curious about how all that happened. But let me get through some of these questions here, if that’s okay? Is that okay?

Perry Zheng:

Yep, yep.

Krisha Young:

Okay. Wonderful. So Adam has said, “Hi, can you compare a specific benefit or superior aspect of your platform compared to Agora and InvestNext? It seems high-level functionality is similar.”

Perry Zheng:

Yeah. Great question. So first of all, we highly respect our competitors, so there’s that. And we’re all trying to add value to the world. There are two types of differentiators I can think of. Number one is that we really care. We have excellent support. So for every one of our customers, we create a WhatsApp group, and you can ask any questions in that WhatsApp group. And the speed in which we respond to those questions is about 20 minutes-ish. And our SLA is supposed to be 24 hours, but we respond in two to three, like 20… Less than an hour. And then that goes not just into the speed of communication, but also the quality of communication. It’s not like we’re looking into it, we’re giving you a comprehensive answer that answered your second or third question, because all our staff is in North America, so in Seattle, and Toronto, and Canada.

That shows that we really care about… So to give an example, we have 700 GPs, managing $6 billion of equity. We have 0% churn to any competitor, 100% retention. And that’s the stat I thought is going to be broken this year, no, it still has not been. And we do have a lot of raving fans, and precisely because they know that post-sale, that’s when they see the dramatic benefits. So if you’re raising money, and you’re like, “Oh, I need this to be done.” We will listen, and we’ll give you a workaround. If we don’t have it, and within a month or even a few weeks, you’ll be sure that we have it, because we take being able to fulfill these requirements, very seriously.

And so that’s the aspect, which is the ethos aspect, is we care a lot about support and customer success. Not necessarily sales, I don’t think I’m a good sales person, per se. And then similarly, for our engineers, it’s the same way. And then the other aspect is more maybe a business aspect, is we try to be an all-in-one solution for alternative investing. And so that’s a mouthful, that means Cash Flow Portal, Cash Flow is the brand, Portal is just a feature. We have now Cash Flow Underwriting, we have Cash Flow CRM, Cash Flow Banking.

And Cash Flow Banking, the way it works is that once you raise money, and that money hasn’t been deployed, you can earn about 4% interest on that money. And so it is creating this ecosystem that can grow with your business. We’ll try to solve more problems for it. Now, you may say, “Well, that sounds really ambitious.” Yeah, that’s precisely why we need to have a good team, because a couple of people, three or four people work on underwriting, it’s not easy. So it’s this whole virtuous cycle of having excellent team members, having a big vision, not just an investor portal, but CRM, underwriting, marketplace, and so on and so forth, and then be able to execute toward that vision.

So I do believe the way you buy a software, just to be clear, it’s almost like you’re giving money to a baker shop, and our pastry is pretty good now, but maybe three years ago, our pastry didn’t taste that good, or just know that this baker is working really hard. But then they pay one amount, say $149 a month, and then it’s $149 for the same equity under management, like $1 million. And then as time goes on, without paying more, the pastry gets tastier and tastier, because we’re using your money to have better ingredients, more features, more products, more staff, and so on and so forth. And so I will say, in technology, you want to choose the vendor that invests for the future, because in a few… We are actually the latest entrant into the space, and we are doing really, really well. And that’s kudos to how fast and how willing we are able to iterate. And I can say, we are able to iterate, and we want to iterate, because I am a GP, I know how it feels for the tool to not work. So that’s what I would say.

Krisha Young:

Wow. That’s amazing. Okay, thank you, Perry. All right, we’ve got anonymous attendee here, “Respectfully, given the staff you have, did I hear you say three people?” No, I think it was 30 some odd.

Perry Zheng:

Yeah.

Krisha Young:

“How will you handle a hack or worse?”

Perry Zheng:

Yeah. Absolutely. So great question. So we are very proud to say we are SOC2 compliant. We actually compliant about a year at this point. Yeah, so we are very proud to say that. All our servers, which gets into the next question about, what are your host servers? How do you handle redundancy? We host our stuff on AWS, and so someone has to hack AWS on that in order to hack us. Now, even if they are able to get access to the database, all our data is encrypted. All the sensitive information is encrypted, so it’s encrypted at rest and in transit, and so there’s that.

But I think more importantly, there is the application risk. So one of the things by the way, if you’re a GP and you have co-GPs, sometimes you want your co-GPs not to know the investors of your LPs. And so we have this application layer of security and privacy, and we built that from… As a first citizen. So what that means is that if you have a team, and you want the investor CRMs to be separate, you are more than able to do that. So you can have multiple co-sponsors, each co-sponsor can have their own logo and their own CRM that is separate from your CRM. So if you’re a co-sponsor working with a lease sponsor that’s using Cash Flow Portal, you can be sure that your contacts are secure, and hidden from the lease sponsor.

The lease sponsor can still countersign, because that’s the legal document, but an email… A contact does not get created in their CRM, such that they can freely send the co-sponsor’s investors marketing emails. We do not allow that. And so all the little things we do there. And so there is kind of the data security, which, by being excellent engineers, we just follow the best practices, and then there is the application security that gives value, and privacy to the GPs. We do both.

Krisha Young:

Wow. Fascinating. Adam said, “Impressive team.” I agree. Elise is asking if you would show us a demo today. We won’t have time for that, but I think people could just go on your website. So why don’t you tell us, before we get to the rest of the questions here, I don’t know if we’ll be able to get through absolutely everything, but how people can find out more about you, and how people can book a demo?

Perry Zheng:

Yeah. So to book a demo, go to cashflowportal.com, and then on the upper right-hand corner there’s “Book a Demo.” And then I think either Adrian or someone is in here, you can put the demo link in the chat here as well. Adrian is our business development manager. So cashflowportal.com, and then upper right-hand corner, “Book a Demo.” And we’ll be able to walk you through it, and I think you’ll be pleasantly surprised by what we have.

Krisha Young:

Yeah. Fun. Okay. So Tarek asked, “How much eo your investors get in return for the investment?” I think that’s dependent on deal-by-deal, and that’s not something that could be answered here. I think that’s deal-specific. What do you say?

Perry Zheng:

Yeah, I agree with that. That’s a GP-specific question, and so the goal is to find good GPs, and so there’s that.

Krisha Young:

Yeah. And we already talked through pricing, “How much do you charge?” You said you start at $149, was it? For the first million, and then it just goes up incrementally from here.

Todd is asking, “Does this CRM compare to Go High Level?”

Perry Zheng:

Yeah. Great question. Todd, great question there. If you already have Go High Level, we have Zapier integration, that integrates with Go High Level. So we have all kinds of integrations with them, so you can continue to use Go High Level. If you don’t have a CRM already, then I think it’s actually really helpful to start with Cash Flow Portal CRM. Now, Go High Level — there are actually thousands of CRMs in the world, and so HubSpot, Go High Level, ActiveCampaign, MailChimp, they’re all really good CRMs —  the thing that they may lack is the following: Once you have an investor portal, there will be some investors that they are in your Cash Flow Portal and then there will be some investors’ contact in your Go High Level, and it’s going to create cognitive dissonance, that you have two databases living in two places, and so it’ll be really nice to consolidate them.

So that’s number one. But if you already have it, and you’re used to it, keep using it, and you can integrate with Cash Flow Portal. So the second one is, investor portals are only catching up nowadays on CRMs. CRMs have existed for the last 20 years or so, and investor portal only really exists for the last five to seven years. And so we really are at a place where the investor portals are developing good CRMs. So we cannot compete with Go High Level in all its functionality, no way, and I 100% admit that. And this is our nature, when we are not as good as Go High Level, we’ll say it. So we’re not as good as HubSpot. HubSpot and Go High Level are multibillion-dollar companies.

But what we do offer is the following: We have very real estate-specific content. We have these templates that you can nurture your LPs, they’re built just for GPs, and fund managers. And second is, once you use the Cash Flow Portal’s investor portal, all your investors are living in the same place. So it’s very real estate-specific, with native attributes like net worth, whether they’re accredited or not. You can build out those in Go High Level, but… So if you’ve already built that out, then yes, keep using it, but if you haven’t built it out, it’s actually a pretty arduous onboarding tasks to add these custom views to whatever CRM you use. So that would be my answer.

So not as good, but I do think that if you don’t have a CRM, it 100% serves all your basic needs, including the drip campaign, just to be clear. So it’s not like we’re that bad, we actually pretty good, it’s just HubSpot can do all kinds of things. It can do… What can you do? It can do payments through there, it can book account and linking through HubSpot, it can do things like a whole funnel, it can do… Put a pixel on your Facebook ads. Yeah, that we cannot do. Yeah, but if you don’t need that, and most GPs don’t need that, then Cash Flow Portal is a perfectly viable CRM.

Krisha Young:

Well, we’re at time here. We do have a couple more questions. Should we continue, Kim, or should we just close it off now?

Kim Lisa Taylor:

I think if you guys want to do the demo with Perry, you should do that. If your questions are for us, we would love to talk to you. You can schedule the demo at Perry’s site at cashflowportal.com. You can schedule an appointment at our site at syndicationattorneys.com. Likely you’ll end up talking to Krisha. If you want to do a paid consult, you can do one with me. We do have some low-cost opportunities for you to participate with us, and we do have a weekly Mastermind that’s getting very, very popular. So we’re actually going to be going over to a technology platform to host our Masterminds, because… Since we’ve gotten so popular. And we are going to be opening up a second one, so that we can have a little bit smaller groups that we can interact with a little better. But we do them weekly, they’re for clients only, we would love to talk to you more about that. Schedule a call at syndicationattorneys.com, a free discovery call, and either Krisha or Charlene can tell you all about that program.

Krisha Young:

Yeah. Perry, thank you. This has been fantastic. I really have enjoyed chatting with you today. Your devotion and dedication to excellence of service is kind of rare these days. And we like to do that as much as possible here, and Kim has a really high level of excellence in service and in her company as well. And so thank you for bringing that to this industry, and business in general.

Perry Zheng:

Thank you. I met Kim as well last year, and I can feel the same way.

Kim Lisa Taylor:

Thank you, Perry. I want to say one more thing. At Cash Flow Portal, we are listed as one of the attorneys there. If you use us, vote for us. We want to win.

Krisha Young:

All right. Thank you. Thanks, everybody. Bye.

Perry Zheng:

Thank you. And bye-bye.

Krisha Young:

It’s been very fun. Thanks, Kim.