All right, we're going to bring this bad boy home today. Let's go. We started at 9. It's 5:30. We're competing with a State of the Union, whatever dinner you're planning on going to. It's going to be a big league strategy party. So, you're like, who's this guy Jeffrey Solomon? We'll get into that in a minute. He's a legend, by the way, and you'll start to understand why, which is why I decided to bring him up. But part of what I want to set some context is TD Cowen has been one of our biggest banking partners over the last five years of our journey. And when you think about part of what Strategy has been doing, we're really at the intersection of DeFi and TradFi. And if it wasn't for Jeff and previously Cowen, we wouldn't be where we are today.
You know, you saw Lance speak, excellent sell-side analyst who really understands Bitcoin. You heard Peter Haynes speak, who fully understands things that were new to us: index inclusion, MSCI, all these kinds of things. And maybe most importantly, TD is a party sponsor tonight. So the drinks are literally, literally on Jeff. I think we should just skip dinner and go to the party. Yeah. Go on. So, thank you for the partnership. Last thing, when Sailor's hitting the ATM, these are the guys who are actually executing the ATM. And they've been a huge part of that, too. So, thank you for that. But so Jeff, why don't you just start with giving us a little bit of background of Cowen and then TD and sort of how that came to be and what your role was at Cowen.
So first, before I get started on that, I should, just because this is a mutual admiration society, legend aside, what you all have done for us at Cowen and now at TD has opened up our minds to a world of possibilities at this intersection of DeFi and TradFi. And if you know, when we started at Cowen, Cowen was a challenger bank. You know, we were always looking for growth and we're looking for disruptors. That's kind of what we do. We know that disruptors inherently need to raise lots of money to disrupt the industries they want to disrupt. And we're looking for partners that we can back who have a vision. And ultimately, at the end of the day, our job is to raise them the capital and to position their stocks in the hands of mostly institutional investors, which is where we live. But when I had my first conversation with Michael and then we had the conversations with you about how we could actually transform an uninvestable asset, for the most part, for most Americans, how do we transform an uninvestable asset and make it available to everybody? That is a fundamental change in the way people were thinking about that asset class. Bitcoin for sure. But then when you look at the growth of digital assets beyond that, if it hadn't been for that opportunity and your ability to open up that aperture, we might not be having this conversation. And I think it's forced a lot of other people, both in DeFi and TradFi, to stand up and take notice. And I think when we first started doing this at Cowen, it was a risk because it was unknown. There were some regulatory hurdles we had to cross. There's some things we had to do. But we were willing to roll up our sleeves on the strength of the partnership and your ability to deliver on exactly what you said you were going to do. And I just think that's a rare, rare quality. And so I want to just start by expressing my gratitude because what we've been able to do now that we're part of TD is change the way we're thinking about traditional finance and the intersection of traditional finance and DeFi and the strategies that we're pursuing and the education that's gone on, the cultural shift that we've been able to bring into this organization is in large part a derivative of the exercise that we did together and we continue to do together. And so just before we talk about anything else, I just want to express my gratitude to you and to Michael for giving us the opportunity, I like to say, when it was a lot less obvious. And then for sticking with us as we had to educate a very large, globally systemic, important bank on why what we were doing was just groundbreaking and compatible with our regulatory architecture. I can't stress that enough. Like what we've been able to do over the last three years together should show every financial institution the art of what is possible when you partner with people who disrupt industries. And there's more to come on that front. But I just think that, to me, you want to talk about legendary, that is legendary. And I just wanted to start by expressing my gratitude.
Thank you. I feel like we should hug it out, but we'll do that later. Come to excess later on. All right. So, tell us the backstory of Cowen and your role there and a little bit for those who are not aware of Cowen and sort of how that came to be.
Yeah. So, Cowen was a 100-year-old investment bank that I like to say was resilient, right? It was started in the middle of the First World War. It survived a global pandemic the first time, a Great Depression, a Second World War, and countless other things that happened, including the last global pandemic. And what we did effectively at Cowen, I started in the business as a hedge fund manager. It's so funny hearing everybody talk about all the quantitative analytics and volatility and stuff like this. This is stuff I was doing in my hedge fund in the 1990s. I started as a hedge fund manager. We bought control of Cowen and did a reverse merger and merged our firm into Cowen in 2009 after the global financial crisis on the theory, get this one, that they were going to break up the big banks, remember that, and that we wanted a seat at the table as everybody was going to be leaving all the big banks, we wanted to have a place where we could attract talent. We were wrong about that, about the breaking up of the big banks. And there's a lot of instructive stuff in here as it relates to the disruption that's going to occur that we can talk about. But what we ultimately ended up doing was finding a lane, and that lane was around disruption. So the one thing we would say is we were really good at raising money and really good at research at Cowen and equity distribution. So the things that we've put in place with you, you know, for you and for the investors and Strategy, that's what we're really good at. That's what we were really good at 15 years ago. And we chose industries that were disrupting, things like fintech and biotech and a bunch of other technology industries where there was a need for new capital so we could raise money and generate fees, investment banking fees, but also do it for companies that would add alpha to people's portfolios. And this was our big idea. You ready for this? We knew that in people's equity portfolios that over 50% of the money that was coming into the equity market was coming into indexes. And what we said was, I've never been in a meeting one time with a management team or an investor where anybody has ever said the following: I'm okay being average. Like nobody says that because at the end of the day, our human nature is that we want to win. We want to outperform. We want to generate alpha. And so our view was, even though most people are going to plow money into these passive indices and ride the wave of whatever the index was going to be doing, which you saw from Peter how important that is, we didn't think that was going away. We just thought that the portion of their portfolios that would be actively managed was going to be smaller and that the number of people that were going to be servicing that community was going to be smaller and they had to be excellent or they were going to get eliminated. And so we went right to the how do we add alpha to people's portfolios? How do we help companies outperform? How do we help investors outperform? We want to be the source of alpha. So for a long time our moniker was, let us help you outperform. And I was stunned when we looked that no other bank on Wall Street ever had the audacity to say we will help you outperform. None. And so we decided that that's what we wanted to do. And in doing so, this is what I always wanted in my portfolio as a customer. We transformed Cowen into a place where companies and investors could come if their sole purpose was to add alpha to people's active portfolios. That's what we did. And lo and behold, in 2022, TD showed up in my office. Two senior people at TD who I've become very friendly with showed up in my office. I really thought they were going to be asking me for our transaction banking business. We were about a six or seven hundred million dollar company at the time, eight hundred million dollars somewhere in that market cap. When we did the merger with Cowen, it was eighty million just to put it in perspective. And about five minutes into the conversation, they were asking me a lot of questions about culture and a lot of questions about our strategy that they seemed to know an awful lot about. And I'm like, why are you here? And they're like, well, have you ever thought about doing something strategic? I'm like, well, I think about that every day. And they're like, no, no, with us. I'm like, with you? Like with you, TD? Like, no, I never thought about that. And so they proceeded to show me what our future was going to be. And literally fifteen minutes into that presentation, I'm like, oh my god, I'm going to be working at a really big Canadian bank. Because that is how much, that is exactly how much like sense, how the industrial logic was so great of putting these two organizations together. I'm like, I can't, I got to figure out how to do that. And it's turned out to be fantastic. Like the combination of Cowen and TD, our businesses did not overlap. They complement each other. You know, you can see people like Peter, who's a legacy TDER, right? And you know, Davies Beller, right? Who is a legacy Cowen person, right? First of all, we don't even talk about that anymore in the organization, but you see how that combination of talented professionals get together and when they start to feed off of each other, what can happen? And that is essentially what we do. Last thing I'll say is one plus one always equals three if you do it right. What we've been able to do in convertibles, Cowen did not have a convertibles business. TD did not have a convertibles business, but together TD and Cowen do have a really successful convertibles business. You helped to put that on the map. We lined up for you with a team that we were able to attract because the combination of TD and Cowen is a compelling career opportunity and it speaks to an unmet need. And because of you, we've been able to move our way into the top of the league tables so that we're now able to demonstrate our prowess beyond just what we do for Strategy. And that is exactly the industrial logic at work at TD. And I just couldn't be more proud, couldn't be more proud of everybody at TD and everybody at Cowen who helped to make that happen. It's really been, that's sort of our history in five minutes or less.
