Mike Venuto

Yeah. Um, it's always strange when I'm there, we're talking ETFs. And I, I remember I worked there before most of those people who help us. Um, so the internship, I thought I was going to use that to like write an expose on how greedy wall street is and all of that horrible stuff that people like to throw out there. Instead, I fell in love with it. It was very much a meritocracy. Um, from there I bounced around. I took my first job as a stock broker. Um, at, at the time was called wheat first union, which became Wachovia became a bunch of different things. I think it's owned by Wells Fargo. Now I like to say that for that year and a half, I learned everything not to do.

I learned how not to be a fiduciary. I learned, I learned how to accept rejection, um, all that fun stuff, because even though they were big firm, it still was like a, um, a bucket shop as they like to call it a wolf of wall street kind of thing. Uh, from there I jumped to horizon kinetics. I was like the third or fourth person there worked my way up through the ranks there. Um, that's where I fell in love with ETFs because, uh, we were known as a company that would buy 15 to 20 concentrated positions, unique stocks and ETFs are the killer app against that. Um, and I got to give credit to the, to the management team there. They recognize that. And rather than run from it, they said, Oh,

Hey young Mike, you, you go figure out how we're going to hedge this. Um, and our hedges were great. We became like one of the largest shareholders of WisdomTree in a two and 20 hedge fund when nobody even knew WisdomTree was public. And we financed emerging global advisors, which is now Columbia thread needles, ETF family. We partnered with ice ventures. We basically got behind all of these ETF startups back in 2008, 2010. Um, that culminated with me leaving in 2012. Um, with, with, uh, them supporting me in that they were the original, the, the partners there, uh, were the original financers of my current business. In 2012, I started this company, but I also needed a day job. I I'm sure you're going through it as well, right? Like starting an ETF

Company is so hard. I don't know why everybody thinks it's easy. Um, so my day job was I was head of investments and a partner at global X for the, for about three years while I was kind of incubating title. Um, today title is about six and a half billion in assets and we've helped about 80 ETFs come to market launch and grow. Um, that certainly wasn't the original plan. The original plan was more of a SMA shop, but what turns out is all the research content material we needed to, to, um, launch SMAs was actually much better used to grow ETFs, right? Right. That, um, our first client was global X, the direction, then the, uh, EMQQ. I was mentioning you before the show up here to see a friend

At EMQQ. Um, so today that's really what's become our core business, um, is taking all that research, IP, all the mistakes that were made in the emerging global era, the WisdomTree era, the global X era, the direction era. We try and help our clients not repeat the mistakes that, um, our team has made

Much as you think it's going to cost. Um, and, and you can't get, you can't give up every time there's a giant, roadblock. we've had so many fits and starts and then, I walk around an ETF conference or whatever and it was like, Oh, you guys are doing so great. Congratulations. Yeah. Overnight success took 11 years. Um, so it's, it's so much harder than people think. Um, and that's a big part of what we try and do. Like, um, uh, I listened to the show you did with Garrett and Garrett, I have nothing but respect for him. We're, we're competitors. We actually talked yesterday. We, we refer to each other as frenemies. Like it's, it's funny how small

The ETF business is. Um, I launched the fund on his platform at one point and I had to close it. So, so like it taught me a ton and I said, okay, this gave me an opportunity to learn something. And so having good partners, knowing it's really hard and learning from the mistakes. those are some of the things that most entrepreneurs can't get in their head and we still see it every day. we get pitched on average, three new ETF ideas a day. Yeah. Um, and the things that people think are important are so much less important and the things that really are important,

ETF business. So, I didn't think we'd get there, but, um, it's just the path that you take. So before we talk about title, cause I have a lot of questions about title personally, I always like to ask, what do you like to do when you're not working? I, you mentioned Garrett, he flies planes, which I think is really cool. Uh, I talked to Patricia Lizaraga who runs the WCEO ETF and not a lady I thought would, um, be a sailboat racer, but she is. Um, so what do you

Uh, the title brand, not only is it the navigating the chaos of water and all that, but it's also the polarity, the bull and the bear market, the ups and the downs, the rising tide lifts all boats. Yeah. Um, all of those things are kind of connected to how we ended up with that branding.

If everybody tells you to come back? Um, so, we started a little wealth management practice just to, to incubate our SMAs. Um, and it's funny that's at this point, that's like 600 million of our AUM, right? Right. But we're not even like, we're actually spinning it out into a new entity to make it. So it can go grow with a new leadership because we're solely focused on ETFs. We're spinning it out to Joshua Wilson and this entity called United Ethos. But it's funny, the part that, that, um, was the original it's, it, it still wouldn't be sustainable for the entity we have today. Um, so what did we do? The, we took all that IP and research and we ended up using a lot

Of it to help global X grow. It was a very successful partnership. And then when Guillermo and I left and Murray acquired, um, global X, uh, we said, all right, what other ETF issuers could this work for? So then we pulled in robo global, which I think is now owned by vetify. And we pulled an EMQQ and then direction as clients to use our IP, our content, our research for doing SMAs to help them sell ETFs. Holy shit. It worked. Um, right now here was the negative. It worked great for them. For us, it just kept the lights on because we didn't own the products. Right. Right. We owned, um, whatever hard dollars they paid us to use our research and content to help them get

Assets. Then they got assets and they got recurring fees. Right. We didn't get recurring fees. Right. Um, so that culminated with us saying, well, if we're the thought leaders in the ETF industry and we have all this IP and all that stuff, we came up with this amazing idea. We still run the index of it. It didn't work as an ETF, but we came up with the idea of let's do an ETF that tracks all the companies making money in the ETF industry. Right. So like we all agree that the ETF industry is growing. This is obvious. Right. So, so, it was WisdomTree and BlackRock and, um, uh, state street and, um, the index provide MSCI SMP, the New York stock exchange. It still exists. It's on our ETF

Think tank website as an index. We launched it with ETC with Garrett and Jay. I have nothing negative to say about the experience. It was awesome. We did everything right, except we never got assets. Um, so that brought us to the next idea, which was, uh, Eric Falkais, who was running directions business and was a client said, Hey guys, you just raised a hundred million for us and you're not getting any bps. Like what if I come over there and help you guys build a white label business? And not only do we help people launch, but we helped them grow. Right. And so that was kind of a nexus of what became modern day title today. Um, right. So we went from helping others grow ETFs to helping

Others launch, maintain and grow ETFs. Um, and now it's been a beautiful partnership, uh, with,

Surprising to people like the meet Kevin, the PP, um, or y'all. Um, we have some amazing ESG funds, with social justice. Um, all those things, those are kind of our core clients, um, Bob Elliott with HFND, Michael Guyad with the ATAC funds. So these are people that we're doing all the back office stuff and then we're providing sales and marketing support. Um, and something that does make us different than others is we have this eighth service, we have eight buckets, eight service is we'll also step in and take economics, meaning we'll partner with our clients.

So it's a pretty simple math, right? Uh, if an ETF costs X to run, we'll come in and say, we'll cover X percent, 20%. That means when the ETF becomes profitable, we also like to get 20% of the profits. Yeah. So those can be extremely painful deals because you're on the other side with the client. And then when they work, they can be spectacular. Um, and we do that for about a third of our clients. Um, so that's the core business. That's about out of our six and a half billion. That's about 4.2 ish. Um, then we have the next bucket, which is sub advisory. And that's where we're doing the actual trading execution and basket management for Hans trust, some Ultimus trust stuff for amplifies trust. Um, a number of different places. ETC does this too.

Um, so they got Andrew over there and they do it. And then the third bucket is where we're offering limited. I say limited because we don't offer all of our sales and marketing tools to people who are not in our trust, but we offer, um, various accesses to our network. So the ETF think tank is our research and marketing brand or media brand. Cynthia is our head of research there from, uh, Cynthia Murphy. And essentially over the last 11 years, we've curated an audience of people who like to learn about ETFs, right? And so we help those people with education. We sponsor things like research for them or getting a certificate. Uh, uh, the thing with Edelman we sponsor, we sponsor some of Darius Dale's research, or we help them with growth hacks, like their social media.

So we allow companies like state street and WisdomTree and Columbia thread needle and EMQQ that these companies are not in our trust, but they can access that network by subscribing to the ETF think tank research. And then finally, the consulting are usually clients that are probably going to launch an ETF or product someday, but right now they're more like an RIA and we're helping them understand their ETF strategy. Um, and eventually once they get past, doing it as a wealth management, they're going to want to launch a product someday. Those are the four buckets.

ETF issuers that we've talked to or been pitched. I say 70, 80. Now I'm thinking about it. It's probably way more than that. Now I think that's an old number. Um, cause we do two or three of these a week, right? So when we go through, it's, it's pretty straightforward. We ask you these questions and we say, okay, we're going to click off a number from, one to a hundred for each of those questions compared to everyone else we've asked them to. We come back, uh, two, three days later with a seven page report that says, here's where you score on strategy versus everyone else that's pitched us. Here's where you score on product. Here's where you score on sales. And here's where you score

Our marketing. Here's your overall score. Here's your pro forma of what this is going to cost. And here's our suggestions. This is what we think you should think about for the price. This is what we think you should think about for the, the, this, this is how much seed we would recommend. And then, this is hard, but occasionally we tell people no. Yeah. Right. And so this process is not only about them getting to know us and us. It's also about us getting to know them and, really deciding if we're going to get somewhere because I don't want an ETF on my platform that doesn't succeed. Right. I always tell my clients, I don't want to write you checks. Right. When, when it's not succeeding, you're writing me checks. I, I want you to be receiving

Checks from me, not, not, not the other way around. And so the strategic assessment, I, I know it sounds simple and I always feel like I try to oversell how awesome it is, but like, like preventing mistakes is way, way more important than what you do next. Like, like you can't, if you get the product wrong or you get the launch date wrong or the ticker wrong, like, like, I see it all the time. I was talking with somebody yesterday, they have a ticker that sounds cool and it's a funny word, but no advisors ever going to want to see that on their statement. Yeah. Like they get lost in things that we can help them prevent.

Right. So once we go through the assessment, it's really nice. Cause then they've got everything in front of them. They sign an LOI where, 90 days to launch from there, right? 75 days with the SEC 15 days. And like you said, we have legal in house. Um, I heard Garrett say 90 K a couple of times we charge 70. So just told him I was going to tease him about that. Uh, uh, and then, uh, yeah, we, we've got the admin, we've got the trust compliance. We have the boards, we have two trusts live today and it'll be announced soon that we're getting a third one. Um, yeah. And then once you're here, we have all the in-house portfolio management.

We also think of management as a service beyond like, so we've had clients come to us and say, I want this portfolio to be managed actively. So I've got three or four active PMs on the staff, right? So, that's where I know we're going to talk about block later. That's what we do a block, but we also have a number of them that we manage actively for Amplify because they wanted active managers in there. Um, and then we have our, our marketing efforts, our sales efforts, and we make those coordinated. We call it smart growth program, right? It's amazing to me how many people new to this business think that sales and marketing are separate things. Yeah. And if they're not coordinated, they're garbage. And then like,

Like, so it's like, Oh, but I just want a sales guy running around. Yeah. Well, what material is he using? What story is he using? What is he connecting to? What content is he following up with? Like a wholesaler with, with a fact sheet is useless. Right. Um, I was going to

With a round hill. We did chat. Um, you still can get a viral concept out there at the right time product at, right product, right time. But everybody thinks, Oh, well that was easy. Round hill has done an enormous amount of work on marketing it, getting in the right spots, getting on the right things. Like even something that looks like an indie hit that was just like easy. It wasn't easy. No, they did an enormous amount of work. We did an enormous amount of work. Um, you just, people don't see that. Um, so I, I mentioned global X earlier and I love this whole, uh, if they build it, it will come concept. I remember at the end of global X, Bruno, who was one of the

Co-founders, Bruno Delama, um, him and I were taking a walk through Manhattan and we were talking about the deal and getting out. And he says to me, Mike, I never want another person to pitch me their ETF idea. And I was like, why? He's like, well, at global X, it's not about the idea. It's about the, multimillion dollar marketing budget, the brand, the website that people go to already, the, the content that they kick out. It's the, the budgets for all these things that an idea that somebody pitches you versus an idea that, that global X launches. It's not the idea that makes it successful at global X, right? It's the same at first trust. It's the same at Pacer. Right. So like, um, that's why they don't mind being second or third to market on things.

Right. Right. Like, like, so like sometimes you got to listen to the world. Right. And then we also learned with that one. Everybody thought it was an ETF of all the ETFs, right? Like, and then I had Eric Valchunas constantly telling me, Oh, you should change the ticker to meta. And gosh, I wish I would have listened to him. Instead, Roundhill got that one and really killed it. Um, whatever they did, I don't know, but there's a good rumors. Uh, like, like, so there's so many things that we did wrong in the product, right? We fell in love with the investment concept. Like I still, like I said, I still run the index and the, the performance is spectacular relative to the S&P relative it's uninvestable performance since I don't have the fund anymore,

But, uh, it's our biggest mistakes was not understanding the market from product. Now, now let's say you get that part, right? Right. Like that's the next thing you get the product, right. You get product market fit. You've got product market timing. Um, I put in there also usually some amount of seed, right? Cause like you don't want to be talking to RIAs when you've got a hundred grand in an ETF cause how much are they going to put in? Right. Um, so if you get product, right. The next thing is the biggest mistake I see with entrepreneurs in this is they get lost talking to each other and to their buddies and to the market makers and to this and that, and the only person they should be calling is RIAs. Right. Right. Like, like I've seen that

Lost energy. Like that's fine. If you want to do Twitter spaces and some webinars and podcasts like these, these things are all building and credibility and all that, all the things that the NYSE offers or Sebo offers or whatever, like there's so much free stuff that supports it, take it all. But if you're not talking to four or five RIAs allocators a day, you're wasting your time. And I've seen it over and over again. They're calling people in there. Ah, my spread is too wide. Let me call Reggie. Reggie's not going to fix your spread. An RIA buying your ETF is going to fix your spread. So, so yeah, I, those would be my two things. That's funny. Get the product right. And then do the hard work. Dial for dollars.

Right. And I'm sure they do well, but that, that phone call is usually a waste. And it's amazing to me how people will, will make five phone calls to a market maker and zero to an RIA. Yeah. Call the RIA. Like everybody looks at like the guy on our platform with his ATAC funds. Yeah. I'm talking to him in a couple of weeks. Awesome. He does nine to 10 RIA calls a day. Yeah. Right. Like he'll send me his calendar. I'm like, can we talk to that? He'll send me a picture of his calendar. It's got nine RIA calls back to back. Right. Like it's, everybody's, there's not, not a lot of respect for how much work has to be done to actually succeed.

Know, an indie mutual fund is not, we'll get, we'll get those. I'll get them. We're doing one right now, but I don't think that's the big wave. The big wave is the giant mutual funds that need to convert. Yeah. And they're not going white label. So it doesn't matter. Um, what I've seen is the most amazing waves right now. Number one active. Yeah. You had told me active would be what it is today. Three years ago. I'd be like, no, I don't see it. Um, even though I have one of the most successful active funds early on. And when I did that, my partners were like, are you sure? Mike? And that was back. We did block 2018. And I was like, yes, this has to be active. Um, but the wave of active and ETFs

Is amazing to me. And I think part of it is that products have gotten more complex. I think rule 18 F4 has done more for the ETF industry than 60 11, which was the ETF rule. 18 F4 is the derivatives rule. Um, we've seen a massive hit on our platform with the yield max suite where, um, the guys at Zega are, are generating yield off of single security. So long, long Tesla sell calls against it and get a yield, the yields have ranged anywhere from like 30 to 80% depending on what the volatility of Tesla is that month. Um, so active is a big thing. Complicated is a big thing. Mutual fund conversions will be a big thing, but I don't, I don't think it's

Going to be a big, too big of a thing at the indie level. Most of the indie mutual funds either were successful and they're going to stay there or they weren't successful and have closed. So those are probably the three big trends that I'm seeing the most right now in the ETF

This ETF of the ETF industry. We realized the revenue was this small, started researching blockchain, was starting to buy in our SMAs, things in the blockchain space. Um, uh, because I saw it as a threat to ETFs, right? Like just like when I was at horizon kinetics, we saw ETFs as a threat to concentrated SMAs and hedge funds. Yep. I saw blockchain as a threat to ETFs. So I said, let me get ahead of this. And it was just really lucky timing. Um, we had the ticker. Um, we actually had BLOC and BLOQ and Phil Bach had BLOK and Phil was building his trading sub advisory business.

That's how we actually got to work with him. And at the exact same time, Amplify was going down the path of doing a passive version of a blockchain fund with, uh, an index from, uh, EQM and this gentleman, Gabriel Rojo. We all just kind of came together kismet, right? At the same time and said, there needs to be a blockchain fund, but we decided it couldn't be passive at the time, which was a huge difference in 2018. Like now everything's active. Like 90% of the things that get pitched to me are active. So the reason we said it had to be active was at that time, companies were just changing their name to XYZ blockchain, right? And how can an index deal with that? Um, it's ironic because that same argument is why, the one we just did with Roundhill

Chat, they went active for the same reasons. Cause they're worried that companies are just going to AI wash, right? So you had black block wash. Now you got AI wash. You've had, you've had.com wash, right? Uh, Burton Malkiel wrote about this in random walk 50 years ago. Right. So, so, uh, that's the, that's, that's a really interesting thing in the ETF world is the new form of active. It's not always about, overweighting and underweighting or tilting or some sort of factor. Sometimes it's actively trying to achieve a theme in an inefficient market. Right. Um, so block is pretty simple, even though we weren't able to say the word blockchain in the name back then, the SEC literally called us the day before launch and told us to change the name,

But we had the ticker and that made it so people understood what we were doing. And, uh, now there's, I think 19 funds that do this stuff and block is larger than the other 18 combined, which is amazing when you include like fidelity and Schwab and BlackRock and first trust and stuff. Um, I think the reason is block is an actual active fund where we actually meet with the management and know what's going on and, and it's a diversified fund. So it falls under the rules of diversification. So we're never 80% in the minors or like, I see some of the passive ones. I've seen them where they're at, 18% in a single security that could be coin base or, we never have more, we stop adding to a position when it hits 5%. Um, so block is a

Strategy where we're trying to, participate in this change over to blockchain. Now we talked about TTF, the ETF industry, 13, 14 billion crypto miners made like 30 to 40 billion. Then you have like boring blockchain, the IBM using this or that, or, or Maresk using supply chain. That's like another 30, 40 billion. So there's that product market fit, right? Like it's got the revenue where people care. Um, I think I understand like the security

Bucket, and figuring out which semi companies are actually making chips that are used in this space is not easy, but that's again, why we talk to management. What we learn talking to managements is more about the supply chain and the other companies than we do about those companies themselves. Um, we have exposure to crypto itself. So we own some of the Canadian spot, Bitcoin ETFs, and block. And we have not only do we own micro strategies, we also own his bonds. That's another thing block can do that no one else has done. We own bonds. So, um, we have, we bought micro strategy bonds the last time crypto collapsed and it was just like, okay, this is better in the cap structure. We're going to participate. And, so, um,

Yeah, so the, the waiting system is, is based on core and non-core and not allowing any segment to become more than 25% of the overall portfolio.

I'm, I'm sure we have retail in there, but mostly who I talk to about it are large RIAs and family offices and, and Morgan and Wells Fargo kind of advisors. Yeah. Yeah. That makes a lot of sense.