David Munoz is a leading figure in the global banking, financial services, and fintech sectors. With over 25 years of experience across the U.S., Europe, Asia, Latin America, and the Middle East, Munoz has proven himself a leader, adviser, and expert. Currently, he’s the CEO of Vektrust, a merchant capital and advisory firm that helps portfolio companies refine their strategies and improve their ROIs. In addition to his role at Vektrust, Munoz is a board member of Cypress Creek Funds, a full-spectrum private markets platform that invests in private equity, real assets, and private debt. He also serves as a strategic adviser to HOLT Xchange, a leading fintech entrepreneurship program.
Munoz has built deep expertise through his background in finance and entrepreneurship. He was the former CEO of Deltec International Group, a global banking and financial services business, which he successfully turned around between 2012 and 2018. He also founded FastBank, a digital banking platform aimed at serving the mass affluent banking and wealth management market in the European Union. Earlier in his career, David was the global head of credit strategy and global co-head of macroeconomic strategy for BlackRock’s $780 billion fundamental fixed income division. He was also a founding member of R3 Capital Partners, a $3 billion multi-strategy credit hedge fund anchored by Soros Capital Management. At the beginning of his career, he honed his skills with a decade as a senior banker in global mergers and acquisitions for top Wall Street firms including Lehman Brothers. He holds a degree in economics from Princeton University.
How did you get started in this business?
I actually wasn’t inspired. When I finished my last business, I was called by a friend who was starting a company. He asked, “Will you help me think through some issues and be on my advisory board?” And that just developed into spending a lot more time with him and formalizing the relationship and realizing that I enjoyed it. It was a way that I could contribute, think through issues, not have to deal with a lot of the administrative work of running a business, and just focus on the problems and solutions, and that’s what I was interested in.
Then I linked up with my partners who were doing similar projects and created Vektrust. We built the business through word of mouth — work on one project and you’ll work with a lawyer, you’ll work with an investment firm, you’ll work with an executive who moves to another company, and one person refers you to another company and you just end up having a lot of business.
It’s not a very scalable business — in other words, you can’t outsource a lot of the work that we do, because it comes from the experience that we have and applying that experience to the problems that companies are facing. Hence, it demands a lot of our own time. The thought of marketing or growing the business extensively beyond referrals just wouldn’t work. We wouldn’t be able to spend the amount of time that we need to be successful in what we do and have those referrals continue.
How do you make money?
We make money in three ways. The first is that we invest our own capital into some of the businesses that we work with. Once we’re working with them sufficiently and we’re confident in the business prospects and the management team, we might invest in the business. The second is we get paid. We get paid for our advice, for our time, a retainer on a monthly basis. And the third is we get paid in equity. Someone will say, “Will you help us with X?” which is a limited-time, one-year, 18-month project to figure something out or to get something done. Then they will say, “We can’t pay you in cash because we don’t have cash available, so we’ll pay you in equity.”
If we’re confident enough, we’ll take the payment in equity. These are longer-dated payouts. But if we believe in a business, we’ll take equity, especially if we spend the time to support the value of the business. If we’re there working with management on a day-to-day basis and can see that we can have a measurable impact on the success of the project, then we’re creating some of that value and ensuring that we get paid.
How long did it take for you to become profitable?
We were profitable in the first few months. We pay ourselves and we don’t have a lot of expenses other than our time. You could argue that given the amount of time we spend on our clients, we’re probably getting paid very little per hour. But because we want to do the best job we can, that means we’re not checking the clock. We’re just working and trying to do the right thing.
When you were starting out, was there ever a time you doubted it would work? If so, how did you handle that?
The reality is no. I didn’t think it wouldn’t work. I knew it would work as a business, but the only doubt I had was: Would I be happy doing what I was doing? Because for all of my career, I was in a decision-making position and my head was on the line. I was accountable for the success or failure. Here, we treat it as if we’re accountable, but we don’t make the final decision. We can make the best recommendation we can, and then if somebody doesn’t follow that decision, we have to be okay with that.
When it happens and you see the train going off the tracks, it’s very frustrating. So part of what we do is to take somebody out of the situation and try to open their eyes and say, “You need to look at this from a different perspective, because the decisions you’re making are impacting the viability of your business.”
How did you get your first customer?
Our first customer was a friend. It was really just serendipitous.
What is one marketing strategy (other than referrals) that you’re using that works really well to generate new business?
We only use referrals, but our best marketing strategy is just to care. We care about what we’re doing. I will answer messages pretty much any day of the week and most times of the day. We treat it as if it were our own business. I think the greatest value you can add is to care, to put yourself in the position where you always do the right thing.
So many advisory, consultancy, and investment banking-type businesses are purely transactional in nature. Having been in investment banking for 10 years, very early in my career, I can tell you it is transactional and clients sense it. You’re just there to do what needs to get done and get paid, versus what we’re doing. It doesn’t matter how many hours we’re spending. What matters is: Are we getting to the right place? Are we doing the right thing? Are we making the right decisions? Are we spending the right time to add value?
What is the toughest decision you’ve had to make in the last few months?
Early on, when we were considering whether we would make this a real business versus just a hobby. We were taking on opportunities that were mediocre to great. Now, we have to turn down even excellent opportunities because we don’t have enough hands around the table to serve a client the way we believe we ought to. We’ve had to say no to a few projects that were amazing and probably had some terrific potential and would have been interesting to work with.
What do you think it is that makes you successful?
I think it’s the combination of having dealt with so many different problems throughout our careers, the breadth of experience within financial services, and our multinational experience. It’s not one line of business experience, but across many different business lines within financial services that we synthesize into an acumen that we apply in a breadth of situations. I also think our attention to risk management within a business-building context is incredibly important.
What has been your most satisfying moment in business?
That would have been a very early-stage business. There was a kernel of an idea and we pivoted the product probably three or four times before there was a differentiated business model. When we did that, they raised capital in four weeks. That is unheard of in an early round. It was the narrowing and refining thought process around that initial idea to come up with a strategy that was differentiated. We were methodical in our approach before we were convinced the business was ready to go to market. It paid off. That was very satisfying.
What does the future hold for your business? What are you most excited about?
We have invested our own money in some of our clients. At some point, it would make sense to open that up to other investors, to have a small fund from which we could make larger investments than the ones we have, particularly in situations where we’re convinced that these are going to be successful businesses. That’s probably the next iteration of enabling the business to do more, and I think it will grow the business in terms of scale without growing employees — because, as I said, it’s very difficult to scale this business with employees.
You can scale it with capital, but it’s very difficult to scale with employees because you have to get people who have deep, diverse experience, draw on that experience but apply it to the business paradigm we are in now. The changes the world is undergoing in financial services are tectonic. They are not palpable on a daily basis. We’ll look back in 100 years and say the time between 2015 and 2035 was a pivotal moment in financial services for the world.
What business books have inspired you?
Zero to One by Peter Thiel. It’s a very powerful book in terms of its contrarian thinking about business-building.
Are you willing to be a mentor? If so, how should someone contact you?
Not at this time, my plate is very full.