#318 - Jillian Murrish - Co-Founder @ Pier Asset Management - Speciality Finance Makes The World Go Round

Chris Powers: All right. I'm going to be a student for a bit. Before I'm a student, it would be vital for you to give a little background on your career and how you landed into the role you're running peer asset management in the specialty finance industry.

Jillian Murrish: Sure. My path to running pure asset management is a windy one and not linear in any sense.

I started my career, and, in my life, as a young entrepreneur; I was always running a different business as a kid. One conversation I remember having with you was a similar one, where we were constantly rummaging up the next idea. I was selling most Girl Scout cookies, then doing a Christmas wreath and pressure washing business.

And by the time I got to college, it was the time that I started my 1st real business. I say 1st honest company that was incorporated, paid people, and made a natural product. Well, I had made actual products before, but I set them up in a much more official way. It was a cell phone case company.

So I started that in college. I learned through that process that I liked raising capital and selling the business. We ultimately sold it before I graduated college. And I knew I wouldn't say I wanted manufacturing a physical good. I wouldn't say I liked selling individual products to people, but I liked selling an idea, a theme, a brand and rallying around that.

And that was my earliest experience in forming what I like to do. And what am I good at? And I was good at raising capital getting people behind this theme. Having people believe in the vision, and so I remember talking to a professor at the time, and it was 1 of my accounting professors who was incredible.

And she said you should go into investment banking. That's raising capital and selling companies. And looking back, that's funny advice for an entrepreneur to enter an investment banking role. But I am so grateful she gave me that advice because it was this incredible platform.

It allowed me to learn how different businesses work. You know, how do they scale? Which ones were successful and why? I got entrenched in the venture capital community. By going the investment banking route, I learned the nuts and bolts of finance that I would not have known otherwise.

And I like finance, and I only knew that with your advice. So, I joined a firm here in LA and helped start the growth equity practice where we are raising capital for later-stage tech companies. So, I got to see how they wrote the Silicon Valley checks.

What sort of metrics did they care about for the growth of these businesses? You know, I learned about FinTech and financial technology for the first time at this bank. We raised capital for an insurance tech company. Through that, I realized I am an operator, like being on the service provider side, helping other entrepreneurs sell foreign.

Like, I was on the wrong side of the table. I need to get back to the operator side. It's not where I belong. It was fun, engaging, and interesting, but I needed a different seat. And so I got introduced to a FinTech company through 1 of the venture partners I had been working with on a capital raise at the bank.

And he said, Hey, we just funded this FinTech company in LA. They need another adult in the room to help grow and scale this company. And it was real estate-based. It was a real estate crowdfunding company. One of the very 1st ones out there. And I joined that firm to help bring more institutional capital markets.

This smaller emerging fintech company, it was there that I learned about this whole alternative finance space and how deals get capitalized the entire universe of investor capital from high net worth individuals through big institutions. And what role each of those capital providers plays.

And I ended up leaving that startup and helping scale a debt-based real estate fintech company. That was where I made my mark in this specialty finance space. And that jump to that company is the beginning of the peer asset management story. So, I joined that company, and it was a real estate lender.

They were using the internet to make loans to fix and flip borrowers. So real estate investors buy homes, renovate them, and sell them. And they were using the internet to find these borrowers who deliver loans. But also to raise capital from individual peer-to-peer people and use that capital to fund loans.

So I joined when they had 140 million. We scaled that to about three-quarters of a billion a year of flow by the time I left. I was responsible for the entire capital markets back end. So, 100 percent of our warehouse funding was through building out our real syndication desk, which meant selling 100 percent of the loans that we originated to Wall Street.

So we still have this kind of peer-to-peer angle, but over those years, we delivered our loans to Wall Street because we could do such a significant volume compared to crowdfunding. And it was kind of through that capital markets, wild roller coaster, where I was breaking the funding source of our company seemed like every other month because of the growth we were experiencing and just having to deal with those challenges and navigate that, that the idea for this investment strategy that I sit and run today was born.

Patch of land was the name of the company at the time. That was where I met Connor. So Connor is my business partner. The other half of Pierre is more publicly visible because he's all over Twitter, and he's very committed to that presence. And  I am a slacker, and I need to get back on it. I met him because he was running a fund that was investing in this kind of alternative loans that were encouraged by more tech-enabled platforms.

He was investing in consumer loans and small business loans. And I was producing real estate loans, so I found him at a conference, and I said, I know you buy these types of loans. Will you purchase paper from me? I will spin up a program for you to be 1 of my 1st buyers. He very quickly said, like, real estate's not my area.

I'm not going to invest in it, but we had a long conversation, and through that, he said if you are brilliant things, and I don't remember what he said, but I remembered that was insightful. I want to be around you more. There's a lot I could learn from you. And so, throughout my life, I like to collect people like those who have these kinds of comments or who are just providing a different perspective or something that I hadn't thought of myself.

So, we started getting together every quarter, talking about the specialty finance space. You know, what are you saying? What's going on in the capital markets? You see, we became these confidants. Connors that on the buy side of these assets, I sat on the sell side, so we got to give each other industry tricks like, hey.

When buying assets from a lender, you should ask about their special sub-servicers. Like, are they doing the servicing themselves or farming it out? He would say all your loan buyers get new covenants from their back bank leverage. Like, it would help if you were packaging pools in this way to meet the new criteria.

So we started being helpful to each other and continued this dialogue about our space for a few years. And that was in about 2016. We started, or we got together. I remember distinctly for a coffee in the fall of 2016. We sat down, and right when we sat down, Connor said, I'm spinning out from my firm to the significant investment for managing funds.

He's like, I'm spinning out. We should be business partners. We have complementary skill sets, very different interests, and insights. We'd make great partners. I was like, well, and I need to give him credit for being that impetus and that push to say, let's do this, and I thought coffee, we flushed out.

Hey, we've been talking about these investment themes. It'd make a great fund. Conner's always been in fund management. I've always been on the operator side, running and building businesses. And so together, we were an exciting pair to launch a fund and launch an investment firm around. The capital markets ecosystem of specialty finance and where there were gaps in funding that large institutions needed to fill.

So, we started that in the fall. We can incubate it for about six months and launch the firm in 2017. So, it's been a 6, 6 and a half year type ride for Pierre, and it's been amazing.

Chris Powers: And can you describe the size and scale of the firm as it is today before we start digging in?

Jillian Murrish: Sure. Yeah. So, we've been around for six and a half, seven years. We manage capital for institutions, large foundations, and wealth management firms. We tend money for some legacy high-net-worth clients of ours who've invested in our fund vehicles, and from a scope and size standpoint, our typical deal size is between 5 and 25M.

You know, the largest deal we've done is 50. The smallest value is 1,000,000, but we stay in this 5 to 25 000 000 dollar deal size, which makes us unique compared to the most significant private credit funds in the U. S. The names that people would know they're doing 50-dollar deals. And by saying in the sub 25 million space, we don't have to compete for our transactions.

We're the only counterpart to do them, which gives us pricing power on terms. You know, you know the drill.

Chris Powers: Okay. You wrote a tweet, and you said we like to buy performing assets from distressed sellers instead of purchasing distressed assets. You can get great prices for significant assets instead of messy ones.

What does that mean?

Jillian Murrish: So you're describing, you're describing half of what we do at Pierre. We do two main transaction types at Pierre. The first is where we go and buy portfolios of loans from stress sellers. And that's what that tweet is talking about. So imagine there's a fund in New York that's been aggregating small business equipment loans against tractors and trailers.

They've bought those from small business equipment lenders over the past five years. They've built up a book of 000 of these loans, and they're holding them. Maybe they had bank leverage on them. They had a credit facility, levering those loans and interest rates jacked up. Their funding needed to be balanced, and they were.

You know, their cost of debt was too high versus what those loans were producing. So they have to shut down their fund, sell the assets, send back whatever capital they can get, and send it back to their investors. So they would come to us to peer and say, Hey, we've got this portfolio. Will you buy it from us? It's 10 or 15 million. They can't go to a broker. He's going to sell it. It's not worth a broker's time. And they're going to come directly to us because they met us at a conference five years ago, or it's someone Connor had purchased loans from a few years back. We'll buy to buy those loans at a discount.

So, instead of paying 100 cents on the dollar, we'll pay 85 cents on the dollar and take a portfolio of loans that yields 8 or 9 percent and get them to deliver the low 20 percent IRRs by buying them at a discount. So that's a performing portfolio of loans. The fund manager mismanaged that; they put the wrong debt on it.

The loans are acceptable. They can't operate it, and they need to sell it. Or they had one prominent investor who said, I want my money out. It wasn't a debt problem. They said, I need my capital, sell the assets, and give me back my money. They will come to us to sell it.

Chris Powers: And what happens when you buy those loans from them?

The paper moves to you. Do you start servicing immediately? Does the borrower know you're the new owner, or are they just making payments? What happens?

Jillian Murrish: Yeah, so portfolios of loans can be sold, servicing retained, or servicing released. It's called, and the majority of the time, they're sold servicing controlled, which means that it's the same servicing company that will service them.

Once they're sold, like, for the example, I gave about a fund manager holding a portfolio. They were probably not. They were utilizing an external 3rd party servicer. And so, if we look at that servicing relationship, we have confidence in that entity to collect the underlying payments from the borrowers.

We'll keep that in place. You know, there's friction for moving to a different servicer because the borrowers have to get the payment rails reset. And so that you capture more value by keeping the servicing with the existing servicer. So, yeah, we move those loans over into our book. We own them. We'll create a servicing agreement with the service or face us directly, and then there's no actual payment interruption from the borrowers.

And there are other situations, which could be better, where we actually can get a lot more yield where servicing is released, and when servicing is released, there are fewer buyers who can earn on a lot. There may be fewer buyers who can handle that type of transaction because there is some complexity.

The very 1st example I gave about just the quick transfer into our name with the same servicer Is one end of the spectrum. Then, we recently did a deal, which is totally on the other end of the spectrum, where we actually restructured the loan product, created loans, bought them, and then set it up with a new servicer.

And this was a credit card company. They had a card product. And they shut down the operating company because they needed more equity capital to run the business. They had to shut it down, a common theme happening to certain specialty finance companies like the venture capital community, which had been closed for a lot of 22.

And so these businesses are shutting down, and they have financial assets they need to sell. So, in this instance, it was a bunch of credit card balances. Well, we don't want to buy credit card balances and operate them like that. We're not in that business. So we converted all those credit card balances into a fully amortizing loan, a term one, like, okay, you had a 500 ratio.

It's going to be due in 12 months. You make or in 10 months, and you're going to make ten equal installment payments over the next ten months to pay us back, and so we created a loan product with an interest rate and that payment plan and then set those loans up with a servicer and said, this is the loan product. Here's the tape. Please service them for us. It was a messy deal. It took a lot of operational work, and we paid less for that portfolio than we would pay for that 1st example.

Chris Powers: Yeah. Okay. You said that's one-half of the business. What's the 2nd half of the company?

Jillian Murrish: Yeah, so the other part is where we go and provide senior secured credit facilities to these specialty finance loan originators.

So we come in with 5 to 25M dollars of senior debt in the form of a credit facility where we're lending against financial assets. So, let me unpack that. So, the first layer of explanation that's the simplest is we lend to lenders. So, it's an equipment lender who makes loans to small businesses against their tractors and trailers.

We'll give that lender a 25M dollar credit facility. So they can make loans with it. Typically, banks are the lenders, but banks have to deposit capital from depositors. If you're a nonbank lender, where are you getting your money to make loans from us a lender? So we lend to the lender, and I'll pause there and say closing our universe to lenders and loan products is Too tiny.

We lend against other financial assets like advances fa, trading products, or other contractual cash flows. So it doesn't have to be precisely alone, but that's the most straightforward term to characterize what we had in defense.

Chris Powers: To confirm, why would I go to you all instead of just going to a bank?

Jillian Murrish: Well, before all the bank up before this whole bank turmoil, I'll give the example of a typical bank environment and then talk about today. So, even in regular bank times, where there was a lot of liquidity, banks were chasing good deals. Some 25M needs to be more significant for most banks. Like, most regional banks only want to get involved once it's 50 to 100M.

So, size is number 1. There are some community banks. If they have solid relationships with the individuals running those firms, they'll do a facility that's 15,000,000 and under. Still, the issue is that most of the assets we lend against are so bespoke and unique that a community bank needs a team to assess and make a good credit decision.

So they won't do it, which is excellent. That's intelligent bank lending. Like, for example, a deal that we did was a lender that lends to small businesses. And they're collateralized by the data assets of the small business. So, like, things like a customer list, digital assets, like the average cart value of a checkout when you're buying a pair of shoes.

How long did you stay on the web page? Like, all of that data is packaged and sold on these liquid marketplaces, and that was something we needed to learn about, and we had the diligence and dive in and learn, and a bank is not going to be comfortable taking that innovative step in lending. And so it's innovation and new types of assets that aren't cookie cutter size, and then also like, complexity, like operational complexity of the facility.

So there are needs of specialty finance lenders that banks can't meet from an operation standpoint, so maybe a bank says, we only issue draws on Wednesdays. If you want to pull down more money on your facility, it's Wednesday; take it or leave it. And that's a real example from when I was running the capital markets at that real estate lender.

And I was like, well, I don't need money on Wednesdays. We sell all of our loans on Tuesdays. We put our loans up for sale on Tuesday, or excuse me. On Wednesdays, we would do that. And so I didn't need to draw money on Wednesdays. It was very rigid, and the flexibility that these fast-growing, innovating specialty finance companies need banks can't deliver.

Chris Powers: I should have asked this initially, but is this where the particular and specialty finance comes in, as you're willing to do everything that traditional banks don't want to do?

Jillian Murrish: I like that. I've never articulated it that way, but that'll be my new answer on the next podcast.

I go on. What is specialty finance? Well, this or this intelligent guy, Chris, powers. I defined it for me as such.

Chris Powers: That's how I listened to it. Okay, this is another dumb question. I could rename my podcast, The dumb question podcast. If I came to you and said, I need a 25 million line of credit to go alone against X.

And you say, okay. And then ten more people like me with great deals come in and say, I need 25. I need 25. I need 25. My question is. Do you all have a capacity where you can't keep giving 25 out? Or is there a mechanism where you can always line up the next 25? Or is it a matter of how much equity you've raised for your funds?

Jillian Murrish: Yeah. So, deal capitalization is an exciting topic for firms like yours and mine. Like, so we manage a fund, and that fund has captive capital that allows us to go out and do this size of deal. We also have a co-invest vehicle where we bring in larger LPs Who invest alongside our flagship fund.

So when we have more opportunity than our fund can handle, we're putting that out to our co-invest vehicle. I would love if we were in the position, as you said, where it's a deal we like we're getting multiple of those back to back to before the reality of our space is it's such a niche and in the lenders are so bespoke and to succeed as a leader in specialty finance, you have to have some product angle, or you sell them unique borrower acquisition strategy, some compelling economic aspect to the loans you're making that makes it want to be funded by a party like ours, that there isn't this me too, back to back a very similar specialty finance company.

So that doesn't happen. But if it did, it'd be like, Awesome. There have been instances where our fund has kept as diversified as possible across various asset verticals within specialty finance.

And so, for example, we've done litigation finance, and we love it. There's a unique specific sleeve within litigation finance we like. And when the opportunity is too big for us to take down with our existing capital providers, we launch a new vehicle around it.

And so we're working on launching another vehicle around that specific theme because we want our flagship fund to be something other than a fund entirely made up of litigation finance. After all, it's not broad-based specialty finance exposure. So, Yeah, that's how we would address that cr: eating some industry-specific old new vehicle to handle it.

Chris Powers: All right, I cheated a little bit. I asked Connor. I said, what are some things I should ask and in bold right here, litigation finance, and you just said, we love it. So now my question is. What is litigation finance, and why do you love it?

Jillian Murrish: Yes, there's a lot of litigation finance. I wouldn't like it; I'll start with that.

There are sleeves and parts of litigation finance that are so interesting. The reason Connor said that to you is that it has been top of mind for us at Pierre; it's a very nascent asset class within specialty finance. So specialty finance has a billion verticals, everything from traditional consumer credit-card consolidation loans to things as innovative as music royalties lending to things as creative as litigation finance.

And when you look across these verticals of where institutional capital has created efficiency and therefore taking out alpha, like the opportunity to be a 1st mover, a lot of specialty finance has seen billions and billions of dollars flooding into it

Litigation finance is still this early frontier where lawyers themselves are mostly doing it. So, lawyers are setting up firms to do litigation lending, and fewer finance or capital markets minds have addressed it meaningfully. And to us, that's exciting.

When a lot of brains haven't been on it yet, and a lot of dollars haven't yet flooded into it. There's more opportunity for yields and to capture the most exciting opportunities because you're not competing with anyone again. The part of litigation finance we like is actually around IP.

So, patent infringement cases. It's funny from a personal standpoint, you; I like to work on things that I feel conviction around, and being an entrepreneur and defending inventors Who have put their lifeblood into building a business that revolves around a patent they have. If that is getting ripped off by a large tech company and they are not getting paid royalties.

That makes me mad. Like, I would love to fund those cases for those businesses that put in the blood, sweat, and tears and had the ingenuity and created an invention. They do need to be getting compensated for that, and they should be getting royalties from big tech companies. So Connor and I came across this specific vertical within litigation finance.

Thanks. I got excited about it a year ago. And there's a, there's a whole host of reasons why this specific vertical is so interesting. But the reason I like it the most is that the damages on the cases are so quantifiable because you can see, okay, what technology was used in what product?

What value of the purchase price of a product does that technology deliver? How many units have we put up for sale? And by times, that is by a royalty rate that they would typically pay to license the technology, and that's your damages in a case. So, imagine a company with a patent infringed on; they pursue a lawsuit against a big tech company.

What's the reward coming out of the case? And you can actually, it's like, quite quantifiable, which I think in other areas of litigation finance, when there are more intangible damages, or it caused theoretical damage of X, Y, Z, it's harder to model and predict and appear we love predicting cash flows, having a when we buy any loan portfolio, it's what are the expected cash flows on this book?

And so, in a lot of litigation finance, the damages can be squishy, but for IP tech specifically, it's much more formulaic. I got down a rabbit hole, but I needed to explain what litigation finance is if that would be helpful.

Chris Powers: Okay. Do that.

Jillian Murrish: So litigation finance is where a capital partner like Pierre Would come in and fund the legal budget of a case for patent infringement. So, say there's a company with this technology that a big tech company infringed on. It would cost upwards of 5 million dollars for that company to litigate.

And get to a place where they would get a settlement or damages, and it's so costly. You hire a bunch of lawyers. You have to hire tech experts to go in and say yes, we are using the technology in this patent in this product. And many small or medium-sized businesses need more money to risk that sort of case.

And so that's where litigation funding enters where you go to a finance company, and they say, great, we'll give you the money. We'll front it and then get some of the proceeds on the back end because we took this upfront risk and funded the case.

Chris Powers: Okay. So I'm ABC LLC. I'm a tech company with a significant patent, and Google's using it.

And I called Jillian, and I said, Google's using it, and I need to sue them. I don't have the money to sue them. Will you put up the money for me? Okay. And I don't know anything about litigation finance, but in many worlds, lawsuits sound great. And then you never really, the lawyer, they always say the lawyers always win.

What are you underwriting the likelihood that they will win the case? Or is there something else that you're supporting in this situation to know if it's a risk that you want to take?

Jillian Murrish: So, something significant about Pierre is that we are never the initial lender. So, in this instance, we've partnered with a litigation finance lender.

Again, we lend to lenders; we invest with lenders. So, I am not a lawyer by trade. We've spent copious hours understanding the legal process for IP. And yet, I don't have 20 years of IP litigation background. So, we partnered with a specialty finance originator run by a capital markets Veteran who has been in specialty finance for decades. Connor and I've known him for a decade, and he put up this new company and started this to do litigation finance and litigation funding consistently for all the counterparts like, you just said, so, like, ABC, LLC would express, if they came to me, I'd be like, hey. Call this originator; they're the ones who are going to decide and make a resolution to fund your case.

So, yes, they would go to this specialty finance originator. The work that they do is tremendous upfront. So, they're evaluating the merits of the infringement, like, does the product utilize the patent in the way that the spirit of the patent says, like, is it being commercialized and used?

And that's a conjunctive effort between IP lawyers and tech experts. You have to again; the cases range from semiconductor infringement to, like, cloud-based things to actual mechanical technology. And so it's not a room full of lawyers making that decision. It's real tech experts that you hire to come in and opine on that.

So it's a conjoined effort with a lot of upfront costs. Right. Which is why, again, these smaller companies can't do it themselves for them to hire a tech consultant to opine and say, like, yes, this has been b. Who can read the patent with a lawyer and do all that at footwork?

It can be and is millions of dollars. And so, Most investors have shied away from litigation finance, and it has yet to have this critical mass or has yet to start rolling down the hill because you couldn't use small dollars to test it out. Whereas, like equipment lending for 50,000 and 20,000 dollars, you can test it with a few million dollars.

In litigation finance, you need a mass amount of capital to diversify across enough cases to get rid of the adverse outcomes of 1 case being thrown out and putting up millions of dollars for that. So the unique part about the originator we're working with is they created the syndicate of over 150 million dollars of capital going out and being able to diversify across the number of cases.

And that's critical to our view wh, which is why people had difficulty getting into it.

Chris Powers: This is more just a curious question, but do often the large companies know they're infringing on patents, and they're just like, well, just this is the cost of doing business. Or sometimes they're like, oh, we had no idea, and I can't believe we're getting sued by this little company.

Jillian Murrish: Well, the little company had, the story is likely there are 2, 2 typical stories. Oh, we were working on a joint venture with tech giants X, Y, and Z. They decided not to go forward with the joint venture. And then they use the technology anyway, or it's, Oh, a year ago, we sent a letter to tech giant X, Y, Z, and said, Hey, we're you're utilizing our technology.

They've seen that and didn't respond, didn't get back to them, and said, we're willing to take the risk. And it's mainly because these companies don't have the firepower to fight them. So, I evoke the cause for the integrity of our innovative ecosystem that makes the U.S. unique.

Like, litigation funding needs to be digitized, I said. It's not litigation funding isn't a widget that the capital markets can consume efficiently. Whereas consumer loans are a widget and small business loans are a widget. So, we'll go in there and be there early.

And over time, it'll become a widget that a lot of capital can flood into and create, take out a lot of the alpha, and get these cases funded efficiently.

Chris Powers: And I think you just answered the question. You had said something else. You said, how do you know, or something about their need for more brains in litigation finance?

My question was, how will you know when the business is saturated? Alpha will be gone. There'll be multiple bidders on this stuff, and it'll just be common knowledge. Is there a particular metric or something you think about, whether it's litigation, finance, or anything when too many brains have entered the market?

Jillian Murrish: it's brains, but more than brains dollars.

So it's the sheer number of dollars chasing the opportunity. So, a particular example is that Connor made his name in consumer lending. So people follow his Twitter. He's like a consumer credit expert. He was very early to buying consumer loans off these FinTech companies' balance sheets, and he built multiple funds around than buying them.

He was delivering double-digit yields doing that. And he was seeing double-digit gains and investing that way, and then about three years later, when the most prominent institutions in the country flooded in to support the space after these pioneering institutions created infrastructure and, like, made a widget out of these loans, delivered it to the rating agencies.

Then, these huge billion-dollar buyers could come in and have the infrastructure to understand the asset class. And so yields dropped from 12 to 14 percent to 6 or 7%. And when that happened, that was around the time Connor and I had been having a lot of conversations. He's like, gosh, this primary market is no longer attractive.

It's gotten saturated, but the secondary market is attractive. And we both agreed on that. The secondary market for me. I had been selling all these real estate loans to all these fund buyers. They would call me a month later and say, Hey, I know I bought this pool. Does one of your other buyers want to buy it?

I need liquidity for X, Y, and Z reasons. So, I started making a secondary market. And then Connor noticed that the yields in the primary had just plummeted because of all the institutional capital, and the secondary market trades were still happening at great prices. So, it's more about the amount of dollars invested in a space.

Chris Powers: I will talk about two other kinds of esoteric types of things you do, but there are a few things I want to get to before that. One is just like deal flow. Do you all have the phones ring, and it's like, Hey, here's this fantastic opportunity. People know your name and weird type of lending is coming in all the time.

Or are you all going to the market saying, here are five things we want to lend on? Call us if it fits that bucket, or are you willing to hear anything?

Jillian Murrish: We're willing to hear anything. We call ourselves an opportunities fund, which means we're opportunistic. Like bring us the wackiest thing you can think of, bring us a new asset class, like data lending, bring that to us.

We'll wrap our heads around it and figure out how to lend against it. And we're reactive for specific deals. So spec, if sales come to us. We don't go out and get specific deals, but what we do is we do a ton of like stoking the fire and, like, putting kindling in the fire and making sure that the whole ecosystem of specialty finance has our top of mind.

You know, we go to conferences, we Connor's active on Twitter. We call various referral sources we know, like the equity investors and specialty finance, the loan servicers, and the lawyers. Just reminding them once a quarter, like, Hey, we've got dough to spend our way. But that's the cool part about what we do: a hundred percent of the deals are coming through someone we know, it's an actual counterpart that we're friends with, or we are calling that we've worked with in the past, or it's one degree of separation.

And that makes our world smaller since we're only marketing that way. But it makes the deal flow quality much higher.

Chris Powers: And I'm just going through a few things. Music, royalties, litigation, finance, data lending, collectibles, lending, sports finance, all these things are coming in. Are there common traits, no matter what it is, that allows you all to underwrite the risk of specific deals?

Or does every single one have a nuanced way of looking at it?

Jillian Murrish: A combination of the two. So, if we can't boil down one of those segments into the basics of another asset class, we're an expert at it. We can't do it. Like, we've got to get back to some basics. Okay. It's a ridiculous example if there is a lender that lent against or lent to consumers and collateralized it by Rolexes, and we're experts on consumer loans.

Great, so that we could boil it down. If there's no collateral, what do we expect the repayment to look like for this consumer borrower? We got very comfortable, like, no problems. We 100 percent have confidence that we're not 100%, but we have a very high confidence. You know, in those curves, what we didn't need more confidence in was a distribution network of Rolex sellers in the case that we had to repossess realized we needed a loan servicer who was in place to take Rolexes and sell them.

We didn't have, yeah, we. That didn't exist for us so we couldn't add value. We had to say, we're going to lend against this. We will lend to this lender as if there are no Rolexes. And let's say we did not win that deal. We only have a little value.

And they came back they're like pound sand. No, the collateral has a lot of value. But to us, it doesn't only have value if we can dispose of it in a systematic, predictable way. So that's an example where it's not even a complex topic. We understood the credit, but we couldn't assign value to some things that didn't have distribution.

So, we look at everything, and every type of lender can hold back to general small business lending or general consumer lending. It gets like music royalties; for example, you can boil that back to available small business lending, like the band or the rapper or the rock band is a small business.

So you can boil it back that way, and then, music royalties have an incredible amount of data, which is why we love it. And you're analyzing cash flows. Is there something similar to all these assets? We only lend against cash-flowing investments. So You can look at a stream of cash flows, whether it's coming from a music catalog or whether it's coming from an IP litigation trial, and assess the probabilities of those cash flows, the amount, and the timing to get a value today.

Chris Powers: The next one's music royalties. So I'm Justin Bieber. I've got a great song. I'm getting paid by all these different people, or somebody owns the song catalog I created. Correct? Is that a dumb question?

Jillian Murrish: No, no. That's not a dumb question. I was trying to parse it out because, for Justin Bieber, that actually might be the case. But for an example of how music royalties as an industry works, I don't want to talk about that. But for a typical artist like Justin Bieber, he would own his catalog.

Like that artist would own their catalog, and they would be getting payments in from, you know, Apple Music and from Spotify and YouTube. And they would get that royalty stream coming to them. That artist could then go to this music royalties lender and say, hey, I would like to take a loan out against the expected revenue streaming revenue of those songs and these ten songs.

And that lender would say, oh, great, let's look at your number of downloads, number of saves, number of playlists that show up on, and we can get this great curve that it shows you're going to be making 50,000 dollars on this portfolio over the next 12 months. We'll lend you 25,000, and guess what?

Apple and Spotify are going to pay me directly now as a lender. And once I get my loan paid back and a certain amount of extra payment, we'll then remit the rest to you. And this artist, Justin Bieber, can now go out and get studio time, book backup singers and backup guitarists to work on his second album, and do that.

If he didn't have access to that capital, he would have to wait the whole year, save up his money, save up his money. And then, go out and try to get that 2nd album rolling, or the artist would have to sell rights, like, really sell off the ownership of that portfolio into perpetuity to get that capital.

And so this is an interesting in-between where the artists get perpetuity value on their portfolios. But get an advance. It's called, like, I get an advance on that streaming revenue.

Chris Powers: Weird question. How many sources of royalty income does the average artist get? There's Apple, there's Spotify, but there could be a million different players online.

Are these artists often getting checks from thousands of companies, or are they the ten main ones? Where are all the reviews coming from?

Jillian Murrish: Yeah, the vast majority are coming through those specific streaming platforms. You mentioned there are tails all over the place. So, if a commercial uses the song that's going to the distributor, there are multiple layers of parties in that stream of capital.

So there's this layer, a distributor collects from all those, and then they bring it all in and send it to you as the artist. And so that's where the lender attaches to is that distribution point. And that distribution company is chasing from all these different places. Spotify and Apple are fantastic because they have your call directly into whatever that program is, and you know the region. Spotify's tech platform directly sends data to the distributor on a monthly, weekly, or daily basis. And so it's fantastic because the distributor is not chasing them for the capital, whereas they're chasing the advertising company who use the song, but you can think of it. The bulk of the money is coming from these few big streaming platforms that everyone knows the names of.

Chris Powers: And the data says a lot of money is going to come in for the first six months because people are going to love the song, and just like everything, it'll fall off a cliff, and like the new tunes will be coming out. And that's how the data curve looks.

Jillian Murrish: Exactly. That's why buying a seat well-seasoned song portfolio is a perfect area to be investing in because that curve is very constant. Like, there's just a, it levels off to a low level, and it stays like that for several years.

Chris Powers: Okay. Real quick, though, we talked about our new found up and up artist, Justin Bieber. Why would Justin Bieber not be in this discussion? I realize he's large and famous and has lots of cash, but why is he not a candidate for this type of finance? Because Justin already has so much money. He doesn't need it.

Jillian Murrish: Well, typically these large, like the prominent names, like you're talking about, like the Taylor Swift's and the Justin Bieber, it comes down to size again. Those portfolio sales are going to these 2 or 3 massive billion billion dollar private equity funds set up around this strategy to acquire those and deliver very predictable, but, you know, more single-digit yields.

So, Matt, remember the trade in the news several years ago for Michael Jackson's portfolio? The price that went out at it was such a competitive transaction because the most prominent institutions in the country could bid on it. And again, it just takes out a bunch of the yield. We would only be interested in deal sizes of that if the work is going to be higher. They're just more considerable dollars chasing it.

Chris Powers: Okay, so he's in this market just at such a scale that it's not of interest to you because there's really, it's been dwindled.

Jillian Murrish: Sure. Or, if you're Taylor Swift, from all of your other revenue streams, like this tour she just did, I wonder if financing is something she needs a lot of.

Chris Powers: I mean, go Taylor Swift. I didn't go. My daughter went, and she's putting the NFL on her back right now and saying, come with me, NFL. I'll make you popular again.

Jillian Murrish: I know that was so funny. Which game was that, The Chiefs?

Chris Powers: Yeah. She's dating the chiefs. That's a tight end.

Jillian Murrish: Yeah. Oh, man. Too funny.

Chris Powers: Okay. I want to pivot for a second. You made this comment earlier, and we're getting to it now, but this will be fascinating. I asked you something, and you said, well, in a regular environment, this is what it is, but in today's environment.

And so I want to talk about today. You get to see things. You get to see unique data points on how the economy might look or capital markets. If I say to you, what are you thinking about today? Where are we heading right now? What's been interesting to you over the last few weeks and months?

Jillian Murrish: Sure. So, trailing on the last comment we had earlier about the environment, it was around banks. Like, why would these lenders not go to banks? Why would they come to you? And I said, oh, there was a previous environment we had all operated in, and now that's the context for the question today.

Banks must be as careful as ever with lending for several reasons. 1, there are less deposits. Depositors at banks are pulling our capital out at faster rates than ever. And they're flooding into money markets that are paying, you know, 5 percent plus us treasuries that are playing paying 5 percent plus, like, why would you have dollars parked in a bank right now is the question.

And the answer is people aren't. And so banks don't have the money to lend. Like, many banks don't, whereas, okay, in 2020 and 2021. There were trillions of dollars of stimulus pumped into the economy, and they sat in banks because there wasn't, you know, there was nowhere to put your money to make, you know, there's nowhere to put short-term funds to produce yield.

So money sat in banks, and lending was prolific. Deals were getting done left and right. Real estate lending was, you know, fly-in at great prices. Banks were even getting creative with specialty finance. I saw a regional bank do a substantial music royalty transaction we heard about, which was shocking.

That would not happen today in our environment. Banks are sticking to what they know as core lending. Risk off, and there's just fewer dollars to lend. So that's the number 1 thing, so what does that mean for specialty finance and nonbank lenders? It means that there are a lot more deals, and you get to be as selective as ever.

The opportunity to capture good businesses that otherwise would have been bankable is possible now because of this lack of liquidity in the banking ecosystem. So when you say what's happening and what you think about it, I get excited.

Chris Powers: Okay, are people paying their loans?

Are people paying their music royalty loans and their litigation finance loans? The question, especially with Connor's background, is whether American consumer is paying their auto loans paying their credit card debt. What are you seeing from that side? Like the, how's the consumer doing? You have a view that only a few people have.

Jillian Murrish: Subprime consumers, who are lower earners with lower FICO scores, are struggling with inflation from an absolute dollar perspective, right? If, you know, if you make a certain amount of money and bread increases by a dollar or 2, you're struggling much more than someone who has a larger pie of capital to work with.

So, inflation is causing challenges for the subprime consumer. What's interesting is that you know, the headlines you're seeing in the Wall Street Journal that everyone's reading is, you know, the consumer is defaulting at rates never seen before, you know, that sort of rhetoric. And the truth is, we've just crept above we are above pre covid baseline consumer default levels.

So, from mid-20 to 21, at the beginning of 22, consumer defaults were the lowest. We've seen they were the lowest historical defaults consumers have ever had because of stimulus. So, since then, the default rates of consumers have just been marching up and marching up and marching up, and, you know, they're recent, you know, in the last six months have finally popped over that.

Historic baseline level. So, from an absolute standpoint today, our defaults are out of whack and just wildly higher than baselines before code. No, they're not, but they are steadily rising. And so for an investor like us, when pricing deals, we're pricing in much higher default expectations and baseline, just looking out even six months or 12 months.

But the beauty of running our strategy, which is concise duration, is something we still need to cover. We like to stay sub 12 months on our deal duration, and that's because I don't want to be in the business of being a macroeconomist like the best macroeconomists in the country get it wrong all the time.

And I'm, you know, I'm indeed not sitting here trying to be smarter than those folks who spend every minute of the day predicting these things, but what I can say is if you're investing short duration, less than 12 months, you need a buffer that, you know, can withstand 12 months of pain and then you can be reactive and agile to changes and what you're seeing real-time in front of your face and not having to have that crystal ball create your success or your demise.

So the consumer struggling, yeah, before short, the consumer struggling. It's not as dire as headlines make people think it is today, but it's not getting better before it gets worse.

Chris Powers: And then, going to what you said about short duration, you are only interested in low.

So when you're underwriting a loan, you say we only want to be in this deal for less than 12 months. What's the shortest you want to be on a loan for six months? Or is there, is there any limit to how fast you want to be on a loan?

Jillian Murrish: Ooh, that's a great tweet I should write. There is such a thing as too short of duration.

And we don't like credit card products because the repayment on those balances can be two weeks, 30 days, or 60 days. The reason you don't want too short of duration is that in a downside and a default scenario, you have to go own those loans from the lender, like if the lender goes under. You have to go secure that collateral cash is going to be coming in so fast from those underlying borrowers.

While you're trying to get your hands on the collateral and pull that loan portfolio into your fund, that lender could be taking that cash out and paying and doing other things with it. And so it's almost too high a velocity where, on the downside, it's hard to get there before the loans are squared off.

So, there's a sweet spot. Two to 12 months is the sweet spot we like to be in.

Chris Powers: I don't know if this is something that you track, but it's something that I've thought a lot about, and it falls. It's in the auto loan deal, but I'm thinking about what happened in 21 and 22 car prices went nuts.

People were buying cars left and right and using floating-rate auto loans to buy them. It was like the most obvious thing that these cars would plummet in value eventually. And so I was telling somebody it was probably six months ago. How can I short auto loans? Or I need to figure out what I would do; I'd be shorting auto loans, not getting repaid from your seat.

Is this something you're playing in? What will happen to all these auto loans that originated at, you know, close to 0 percent in 21, 22? And now the collateral behind it's wild. People's savings are going down. They won't make payments, and there will be all this auto loan debt out in the market.

Jillian Murrish: Yeah, there's a lot of activity in auto right now for other reasons than what you're saying. So, yes, what you're the picture you painted. I agree. There's going to be pain there. Interestingly, car payments are higher on the totem pole than what consumers pay.

Then, other debts they have, and that's because that gets them to their job. They can sleep in a car. The car provides much more utility than other debts. And so it's higher on the totem pole. But anyhow, there will be pain there; it's coming.

It's starting to happen today. And what is that causing banks to pull out of auto lending? Banks are out. They're drawing their credit facilities from dealership groups or auto lenders. And so these lending groups are having to pay off their credit facility because the bank is saying, give me back my money.

I don't want to expose auto loans, and they have to sell those portfolios of lines. Where do they go to sell them to us? There's a price for everything. And when you have a seller that needs to get something off the books, really needs to sell it, and has some hair, the price for the, you know, the group willing to do the work and get in there can be attractive.

So we've done a few auto deals in the last month. We did not invest in auto in any significant way. During that 2021-22 period, for the reasons you mentioned, like, for us to get in and do a transaction, we would be using, you know, a 70 percent value to the sticker price of a car versus what was in the loan tape.

And so the deal, we weren't winning contracts because we were pricing them too, though. Whereas today, we're winning deals because banks aren't touching auto anymore. There's a lot of distress on the sellers. And that's what's driving opportunity for us, but it's at an exciting price. There are a few metrics you need to look at when doing auto portfolios.

One of the most important metrics is disposition value, which you can get when repossessing the car across the industry. In general, they use 30 or 35 percent. We're using a fraction of that value when we're, you know, pricing up a portfolio.

Chris Powers: All right. You don't make these loans, but somebody was like, what is going through the lender's mind that made the loan in 21, 22?

You could say, Oh, well, they were doing it in real estate. They were doing it on a lot of things, but yeah, real estate's an asset. You can rent it. There's a lot more to real estate. We all know that cars, as soon as you drive them off the lot, lose value. Was it like, I'm not saying anybody's greedy.

Is it greed? One of the most apparent auto loans should be allowed through 21 and 22, where memes said you would have been better off buying a used Kia than investing in the S&P 500 like auto prices were increasing. And so it seems to me, okay, what would be going through the lender's mind that made the original loan?

And was it just that maybe this is the new world that we're living in, and this seems safe, or is there another incentive to keep making loans, even when there's a lot of, I don't even think this is a hindsight 2020 type of thing. Like, this was just as obvious as it could have been. What are lenders thinking that we're doing it? We can make money.

Jillian Murrish: I agree. We saw that, too. So, we weren't investing in the primary market and not. There are synonymous questions you can ask of banks who have been buying for ten years. Treasuries at zero rates that got them into big trouble. So I don't know what was going through their brain.

Do I agree with you? We decided at that time. There's some incentive for origination fees for certain originators. It's like you're making points up front and ab less. There was less concern on the back end; there was so much money out there that if you could get yield anywhere, like money was burning a hole in people's pockets.

So it's just when there's a lot of money, worse decisions are made because you're chasing deals that could be better. So, right now, it is an enjoyable time to invest because there's not much liquidity out there. And so you get to invest in the best deals. I remember in 2020, at the end of 20 and 21, and started 22.

Like, there was competition for some of the deals we were doing, like, some of the significant, big, big funds were coming down, trying to do 25 Million dollar and 10 Million dollar deals. And for the 1st time, we were competing, and we saw some pretty stupid term sheets out there; not to be rude, but wow, you're lending at 95 or 90 percent advance rates.

Like, we're not going to compete against that. We'll sit back and wait until fewer dollars are around the table. So I don't know. It was a function of just a lot of liquidity and people chasing deals, needing somewhere to put the money.

Chris Powers: All right. I'm going to run through it; we will bring it home.

I'm going to run through some of the questions that you saw on Twitter as well. They were brilliant. I only understood some of them. The first is, how do you feel about secured versus unsecured notes?

Jillian Murrish: Great question. So, every credit facility we do is secured. Loans, contractual cash flows, or advances, the question about unsecured and secure goes a layer deeper. Those loans that are collateralizing us tied to a specific asset or unsecured? Does that make sense? So, when we're evaluating a portfolio of loans, advances, and contractual cash flows to lend against, we're looking at whether there is an asset behind it or not. Secured generally refers to physical assets like a car.

So, like, auto lending is secured. Unsecured could be for, or the muse of royalties could fall under unsecured, which seems silly because you're in touch with a stream of cash flows that you have direct access to, and you have your hands around through those direct payments from the streamers. So, some people say, oh, we only like to invest in secured assets loans.

And I go, yeah, but a used car in 2021. Would you prefer that or a music royalty stream when music royalty streams can be unsecured? So, this topic is often brought up early and often in specialty finance. And I sit here, and, Chris, when we started 1, our 1st bond, we had a pie chart at the very top of our monthly reporting that shows underlying exposure to secure versus unsecured loans.

After three years, I decided, let's take that off. It is because other people think of the world this way. It doesn't mean that we think of the world this way and we don't think one is better. They're just different. My answer to this question is we're different from many typical credit investors.

Only if you can ascribe specific value and have a great disposition plan for the collateral can it distract and create Stanton value in a loan. If you don't have those first two things sorted out, so we like them, both is my answer.

Chris Powers: I like it. What percentage of deals do they underwrite needing to repo specifically at what default rate?

Jillian Murrish: So we don't use debt on our deals. We use all equity. So, you know, that's helpful. Can you reread the question? There was a second part.

Chris Powers: Yep. What percentage of deals do they underwrite needing to repo, and then specifically, what default rate?

Jillian Murrish: Oh, well, gosh, if you heard the varied assets that we lend against, you know, what sort of advance rates?

It's tricky; we have a term sheet out at 60 percent right now, and, you know, we have a deal in the book that has a 90 percent advance rate. It varies widely based on the certainty of the underlying cash flows and the duration. For, if you have a loan portfolio with three months duration left, you can pay or lend against it at a much higher advance rate. Then, one that has an entire 12-month period.

Chris Powers: All right. We're going to bring it home on two more. Ask her to argue why and why authorities should not regulate private credit firms as a bank.

Jillian Murrish: So, I love this one, but I can't remember who asked it, but no, absolutely, no, and not because it is business in my life, the lifeblood of my world, but because the fundamental operations, growth, and health of our business community.

And humans, you know, consumers would unravel and fall apart if authorities regulated finance and private credit lenders like banks. Banks cannot serve small businesses and consumers how they need to be because of regulation, and regulation on banks is fantastic because it protects depositor capital.

Like, that is needed. Regulation is necessary because people deposit there where they want to avoid the loss of principle. Specialty finance private lenders are going out with a much higher cost of capital, delivering that yield to their clients for higher risk than deposit. Right? Like, that's a reasonable trade.

We'll give you a higher yield because we're going to make investments that have corresponding risk compared to deposits, which shouldn't have any. So that's why we should regulate banks. You know, that works. Imagine this: this rock band or Justin Bieber we talked about would not be able to make his 2nd album.

If this private credit specialty finance lender existed, he would have to wait a whole year because this product exists, he gets to grow and flourish profitably scale his, his business, which is this, you know, band and like, I see this time and time again, the value that these specialty finance lenders give to this ecosystem to small business.

Yeah, it's paramount to our economy, like, and if we are ever to regulated in that way, all of that lending goes away, all of that growth and opportunity goes away for businesses and individual people.

Chris Powers: I love it. It supports the American dream.

Jillian Murrish: Yeah. And I'm on the board of a bank. And so I sit there, and I see what we're able to do and what we're not able to do.

And the pace at which we can innovate and launch new products is staggeringly different than a nonregulated lender.

Chris Powers: All right. Do you have a favorite story about buying a nonperforming loan?

Jillian Murrish: Yes. So, I'll say a portfolio of loans. My favorite is, I remember it distinctly, maybe 2018.

Connor called, or I know you didn't call me. I came into our office in Manhattan Beach, and he was sitting there with the Wall Street Journal open. Like, it's a complex physical Wall Street journal available, and he, like, by walked in, he pointed straight to the page, and he goes Jillian, we're buying this long portfolio.

That's in the journal. What are you talking about? The print Wall Street Journal has a section that shows things in liquidation and bankruptcy, and it needs to be in the online platform like you can't see it online. And the only place you can find it is in the physical paper. And like I always thought, Connor was old school, you know, getting his physical newspaper in the mail every week.

And this was precisely why I just hadn't known. So we found it in the newspaper, we chased down the receiver, you know, got in touch with the client, and purchased two portfolios out of bankruptcy.

Chris Powers: Alright, I will end it and bring it back to where we started. I have two daughters. You started this whole deal, and you said, I started businesses.

I have had this entrepreneurial bug since I was a kid, and I have to tie that back to my parents, some situation I grew up in, or how you, what gave you the entrepreneurial bug? Was it your father? Was it your mother? Was it? Some circumstances, like, can you tie back to what gave you the drive that you had?

Jillian Murrish: So, first and foremost, my parents didn't give us money. We didn't have an allowance. So if I wanted to buy anything or go to the movies, I had to earn the money. So, it started of necessity. Like, the first thing I did to make money was collect pine cones in the yard for my Dad.

He'd pay 5 cents for a big bucket, like a big bucket. It was terrible. I worked all day. And that was the only thing I could do at, like, five years old to make money. And, you know, it came out of necessity, but mainly because of how my Dad shaped my childhood. So he shaped that program around the pine cones and shaped, hey, it sounds like you're going to a movie Friday.

You know, how are you going to pay for it? I'm like, oh, you're right. Dad has to figure that one out. One of my favorite traits was I was low on cash, and I wanted this iPod Nano, and my Dad won it for I don't know. He got it maybe from work, or there was some reason he got this iPod, and he didn't need it.

I didn't want it, and I didn't have enough cash to buy it from him. And I said, Dad, I'll give you a haircut every month for the rest of my time living under your roof if I can have the iPod Nano. So, he was constantly creating these instances where I had to get creative with money. And then beyond that, he did several things to give me the self-confidence that I could do more than, you know, run a Girl Scout campaign or run Christmas wreaths.

And he always was leaving articles on my desk of these fantastic women who are going out. I remember, you know, the Forbes 30 under 30, or he'd leave an article of, you know, other young entrepreneurs. I remember in college, I returned for a break, and he had a profile on Mark Zuckerberg lying on my desk. And he asked a question as he walked away, and he was like, what's so different between him and you?

And he just left the room. And I was like, Oh, I don't know, Dad. He's this fantastic entrepreneur who started this giant tech company. However, he implanted in my brain at a young age by showing me that. These idols that I had in business and, you know, they, they were just people too.

And they had flaws, or they had, they just had similarities, and we're just people. And that was the playing field that got me on this path to say, I can do it too. And if I could think of something, or I had a dream or an idea, what would make it so I couldn't do it? And that was the lens, not starting with what would make it so I can.

It was what could make it so I can't. I have all the tools, and I have, you know, that ability inside myself to create. Also, there was one other thing my Dad did that was helpful. So, it makes me feel similar to those who had succeeded in the articles and then failed. So, he kept putting this in my brain always as a kid.

Yeah, your businesses will fail as they will, and that's fine. You're going to have an idea. It's not going to work. It would help if you started getting those out of the way. Now, while you're young, that is a good idea. And so I remember, as early as I can remember, I said, I'm going to start my 1st real business in college, and it's a safe place to fail.

And if I say, oh, well, I got a college degree. I graduated college, and I could get a job, and I did that in college, and, you know, it was a success. It was a successful thing that I got to do. And, but I was doing it to fail, which was excellent. I did not have this expectation that I had to make it work.

It would; it was fun. It was a plan. That was a plan in college to fail a company, which gave me the confidence and courage to do it. Those are my ramblings, but my Dad is probably the greatest inspiration and source of shaping my entrepreneurial lens; the other thing is that my Dad was an employee, so he never was an entrepreneur.

He worked as an employee his whole life, and he was an inventor. You know, his name is on some of the earliest patents for touchscreen technology. So the iPod Nano, Oh, I remember why he had the iPod Nano.

Chris Powers: He invented it.

Jillian Murrish: Now I remember, his chip is the touch, you know, that recognizes your finger going around the circle on the iPod Nano, that was, you know, his name's on that patent. And so he created meaningful technological innovation and value in this world for us and, you know, continued working into his sixties.

He continued to share with me that the monetary value you can get by being the owner and taking those risks is far more than you can typically get as an employee. And so I saw that in front of my eyes, you know, through his life path, and he encouraged me to take those risks and be the 1 to go out.

Could you not do it for a company? And yeah, he was an incredible dad.

Chris Powers: I'm going to end it there. Cheers to your Dad; he raised a remarkably talented person. That's cool. And I got some notes. My daughters are only six and four, so we have a bit to go, but you said you started collecting pine cones at five.

So we have sticker charts. And once we get to 30, we go to target. Or they can save so they can save for two weeks or save for more if they want to get something better. And my daughter, the other day, we're driving her to Target. And she said, Dad, we are so lucky that there's a target, like a mile from our house.

She's like, we are so lucky that a target is a mile from our house. And I was like, wow, you've got much to learn about this world.

Jillian Murrish: You know, the other thing he did when I was that age, like six. I was in kindergarten, so five or six, and to go out and sell Girl Scout cookies. He would stand at the end of the driveway of whatever house I would sell door to door. And I had to walk up by myself, ring the door, and we'd practice my pitch before we left the house.

What are you going to say? Why would they want to buy these cookies? Okay. And if they put one on the order form, how could you get them to buy more? And so I came up with these scripts like, Oh, well, do you want to bring some into the office next week for your office and colleagues? And so I come up with these little snippets are, Oh, wouldn't it be nice, you know, to give these to your, you know, to your neighbor next door if they want home.

So they didn't order any from me. Do you want to get some from them? And he made me practice those scripts by myself in kindergarten. And I always sold a lot of cookies.

Chris Powers: I love it. Thank you so much for today. It was an incredible episode.

Jillian Murrish: Yeah, it was fantastic to talk to you, Chris. Thank you so much for having me on.