Sep 20, 2019 · 34m · 20vc
20VC: Mercury Founder Immad Akhund on Why Angel Investing Makes Founders Better Operators, The Right Way For Founders To Discuss and Present Competition To Investors & How To Think About Your Initial Wedge Into The Market and How It Expands Over Time
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In this episode of The 20 Minute VC, Mercury founder and CEO Immad Akhund joins host Harry Stebbings to discuss building a modern challenger bank for tech startups, strategies for startup idea selection, cultural evolution between ventures, and actionable fundraising insights derived from both founding companies and angel investing in over 120 startups.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 32.5% of the talking time here. How this is scored →
Harry as informed peer 2.9 Guest teaching 4.6 Guest disagreement 1.8 Harry pushing back 1.1
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 24:18 Rejection of 'Always Be Raising'
Immad explicitly rejects the common VC advice that founders should always be fundraising, calling it distracting and counterproductive.
Hardest push from Harry ▶ 16:33 Host probing on wedge strategiesHarry pushes Immad on whether founders should pursue a tiny initial insertion point versus launching a full frontal assault on a market.
Biggest teaching moment ▶ 20:30 Defining true market expertiseImmad educates the host on how deep understanding is achieved when one grasps the nuanced, contradictory viewpoints within an industry.
Harry holds his own ▶ 16:33 Host citing Sarah Tavel's wedge frameworkHarry demonstrates his venture capital expertise by referencing Benchmark partner Sarah Tavel's exact theory on market insertion wedges.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Guest Welcome and Mercury's Origin Story | 2 | 2 | 1 | 0 | Harry introduces Immad with background context and mutual connections. Immad shares his origin story in a relaxed and collaborative tone. | |
| Serial Entrepreneurship: Intentional Vision vs. Opportunism | 2 | 3 | 1 | 1 | Harry prompts Immad to contrast his prior startup experience with Mercury. Immad reframes the difference between opportunistic pivoting and intentional long-term vision. | |
| Hiring Mistakes, Culture Alignment, and Idea Selection | 3 | 5 | 2 | 1 | Harry cites Bill Clerico to ask about past mistakes. Immad educates on culture alignment in hiring and rejects the Silicon Valley consensus that ideas do not matter. | |
| Navigating Difficult Feedback and Talent Acquisition Advantages | 3 | 5 | 1 | 1 | Harry admits personal difficulty with giving hard feedback. Immad provides tactical management advice on firing and highlights using Haskell as an unfair talent magnet. | |
| Balancing Startup Leadership with Parenthood | 4 | 5 | 2 | 2 | Harry quotes Tomer at Gusto, Josh Koppelman, and Sarah Tavel to discuss founder parenthood and market wedges. Immad breaks down effective versus faulty wedge strategies. | |
| The Outsider Advantage in Industry Innovation | 3 | 6 | 1 | 1 | Harry asks about outsider advantage in banking. Immad delivers a masterclass on industry blind spots and defines domain expertise as understanding contradictory market views. | |
| Perspective on Competition and Incumbent Mindsets | 3 | 6 | 5 | 2 | Immad forcefully pushes back against the VC cliché 'always be raising', explaining how it wastes founder energy and aligns with VC incentives rather than startup needs. | |
| Insights from 120+ Angel Investments and Best Investor Updates | 3 | 5 | 1 | 1 | Harry asks about Immad's 120+ angel investments. Immad shares how angel investing improved his fundraising skills and outlines the framework for effective investor updates. | |
| Quick-Fire Round and Mercury's 5-Year Vision | 3 | 4 | 2 | 1 | In the quick-fire round, Immad offers sharp opinions on pitch deck tropes, cautioning against misleading cumulative graphs and standard 2x2 competitive grids. |
Statements from this episode (25)
Harry Stebbings: British founders in Silicon Valley are among the best
“The realization is that the Brits in the Valley are just about the best founders”
Akhund: Traditional banks offer bad products and do not care about customers
“And I just really hate using bad products and they never improve. It never feels like the people at the bank really care about you as a customer.”
Akhund: Mercury grew over 40% month-over-month for its first four months
“And we've in the last four months grown like more than 40% each month, which is really exciting for us.”
Akhund: High-performing employees who lack cultural fit are almost impossible to fire
“I find it very hard to fire people, and most people do, and especially people that are good at what they're doing, but they don't fit the culture. Those people are actually, like, almost impossible to fire.”
Akhund: Startup ideas matter significantly, contrary to Silicon Valley belief
“And then the other thing that we're doing right this time is, I was kind of off the mindset that, like, ideas don't matter back then, and yeah, people go through this, like, Silicon Valley goes through this phase. Sometimes they're like, ideas don't matter, ju…”
Akhund: Flash gaming was the worst market to enter in 2009
“Like Hayzap started off in the flash gaming market, which was the most wrong market you could be in in 2009. We pivoted a lot, but it was hard to get away from those roots.”
Akhund: Five of Mercury's first nine hires were former Heyzap employees
“Five of the nine initial set of people we had at Mercury were people that worked With us at Hazelab.”
Akhund: Using Haskell gives Mercury a competitive advantage in hiring strong engineers
“We use Haskell and there's not an interesting programming language with a lot of good engineers that are interested in the programming language with, you know, surprisingly a lack of companies that use it. So we end up, you know, having that kind of edge or ni…”
Akhund: Over half of Union Square Ventures founders had kids
“We were funded by Union Square Ventures, and the average founder at Union Square Ventures is older, and more than half of them already had kids”
Akhund: Startup sustainability requires productivity and leverage, not weekend work
“It's not about working 10% more hours or working the weekends. It's much more about having a sustainable level where everyone's productive, everyone's leveraged.”
Akhund: The startup banking niche alone can support a $10B company
“We're targeting startups, and that is a niche, but the good thing about the startup niche in banking is that it's by itself a ten billion dollar company.”
Akhund: Ideal market wedge uses same core product for broader market
“I think ideally the wedge is kind of like a market segmentation, but basically the same product works on a much bigger market. I think that's probably ideal way to do it.”
Akhund: Industry insiders must unlearn ingrained assumptions to innovate
“I think a lot of the lessons that are learned by insider professionals are the things that need to be unlearned. So when you come at it from an outside perspective, you can see that a little easier.”
Akhund: True domain expertise requires understanding contradictory views within a market
“I think my level of like where you really get something is when you can understand the contradictory views that exist within the market.”
Akhund: Mercury is the only startup-focused challenger bank in the U.S.
“If you take what we're doing at Mercury, there's no one else really doing a startup focused challenger bank. I would say the zero, which is really good. The only people we're competing against is Silicon Valley Bank and First Republic and Chase.”
Akhund: Competitors rarely determine whether a startup succeeds or fails
“I do think at Hazab, there was always a, our previous company, there was always like a villain where it was like, oh, we have to beat this competitor. Like, what are they doing? Oh no, you know, they're better funded than us, all this kind of stuff. And there …”
Immad Akhund: Venture capital focus is overwhelmingly driven by $10B outcomes
“Getting into a ten billion dollar company is just so much more important than anything else. And that is the mindset of good investors.”
Akhund: Founders should reject 'always be raising' because it distracts from building
“I'm like, so out on that statement. I just think it's partly because I don't like fundraising at all. And it's partly because, you know, fundraising is not the objective. It's distracting. There's so much to do at a startup.”
Akhund: Taking early VC meetings is a distraction, not proof of progress
“Sometimes it's like investors are literally their job is to meet people. Often I hear from an entrepreneur that like, oh, you know, blah, blah, blah. Investor reached out to me or like this VC wants to meet. And like, I'm on a second meeting with them. And lik…”
Immad Akhund: Do investor catch-ups six months before fundraising
“My general advice to people is maybe six months before you're going to actually do a fundraise, Go spend maybe a week and go do like a catch up meeting or something with all the investors that you think might be interesting.”
Akhund: Angel investing improves fundraising by revealing implicit VC evaluation tactics
“I don't think naturally I'm actually that good at fundraising, but when you can understand how the other person's thinking and what are red flags, what are gray flags, green flags, I think it kind of helps a lot because you just, you know, when someone asks a …”
Akhund: Investor updates fail if founders hide actual startup problems
“And at the end of the day, how can someone be helpful if they don't know the full picture, right? So I think if you're not starting from the initial view of I'm going to be honest, transparent, say actual problems, then you've like already failed.”
Akhund: Revenue and net revenue are the most important pitch deck metrics
“At the end of the day, revenue and net revenue is the most important metric.”