← The Bitcoin Treasuries Podcast with Tim Kotzman
The Bitcoin Treasuries Podcast with Tim Kotzman
The Latest Hiring Trends in Bitcoin with Scott Ellam of XCE
00:29:40
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- [00:00]
A
Welcome back to the Bitcoin Treasuries podcast. I'm Tim Kotsman. I'm here with Scott Ellum, the founder and CEO at xce. Scott, thanks for joining us today.
- [00:10]
B
Thanks for having me, Tim. Good to see you again.
- [00:12]
A
I'm literally reading from your post, but it looks like it's been a great first quarter. Can you walk us through this Q1 update?
- [00:20]
B
Yeah, sure. So the Business XCE Connected Excellence Group PLC is a international executive recruitment company with an integrated Bitcoin treasury strategy. My Q1 update that you're looking at, Tim, covers both the operating business, which is executive recruitment, and the Bitcoin treasury side of the business as well. So to walk you through it, I think we start on the group revenue. So half one, 2026, that is that period of time is the second half of 2025. Our business year for the, for the company runs from July 1st to June end. So in that period of time we were preparing for the IPO that happened in December and the update we did throughout that time we did 1.2 million group revenue in the half one period. Our net fee income is up 20.3% year on year. Our average fee per placement and it's worth just explaining the business model a little bit there. We place candidates at a senior level with client companies and we charge a fee based on the level of that candidate's salary. So our average fee per placement was up 12.7%. That can either be because we're placing more senior level candidates or it can be because wages are increasing as we charge a percentage of salary. And then we started the year in Q1 with our biggest revenue month yet at £250,000 in January. So our revenues are uncorrelated to Bitcoin. So the clients that we're working with and the people that we're placing a senior level, mid level, executive level leaders within professional services firms in business, advisory firms, logistics firms, AI data and intelligence companies as well. And the revenue growth of the business going forward is directly linked to headcount. Now we did not increase headcount in that period of time. We were focused on on getting to the IPO as effectively and efficiently as possible and then setting the platform for growth. So it's probably important to say that those figures are not related to going through an IPO and they're not related to Bitcoin. They're uncorrelated to both aspects. That's just the team in our flagship operating business, Spencer Eiley, working well and performing at a high standard. Then Q1 we've hired Carlos Benito Garcia as the chief performance and growth officer for the operating business and all recruitment revenue going forward. So I've known of Carlos for over a decade. He actually worked for a direct competitor in the same building when I moved our company into Leeds in I think 2020, just before the event. And that business scaled from three to over 70 heads over three years. And he was part of that key leadership team. He also previous to that managed 120 satellite offices for an executive recruitment franchise model. So either lots of individuals or lots of small businesses around the globe all generating revenues and cash flows for a franchise model. And previous to that he was in the, I think it was GlaxoSmithKline he spent time with at senior level in leadership development and performance with the sales teams. So a really key hire for us to set the platform for scaling the operating business which is reliant on attracting high billing talent into the company, which has a direct impact on revenues, cash flows and profit. We also had a sign off for. You might not be familiar with the term Tim, but an EMI share option scheme now that's a tax efficient employee long term equity scheme in the uk which means we can now on top of the basic salaries, on top of the commission structures that recruitment consultants or billing recruitment consultants are used to, we can add on the Bitcoin element which will be long dated. The more revenue you bring in, the more profit you generate, the more options you have to earn over Your career over 5, 10, 15 years and build that bank of equity. So people who are joining the business are joining the business and looking to earn ownership in the business alongside their teammates. So it just aligns everybody who's in the business now and everybody who comes into the business in the future with investors. So there's some key strategic moves to make sure that we set that foundation for operational growth going into this year. And then Bitcoin treasury we came in with 9.27 bitcoin in December. We've increased that to 52.42 bitcoin held at the moment we've got an ATM in place to be able to accrete value for shareholders in the scenarios where there's a high MNAV environment. Ideally if we can get back to it pretty soon. Tim, a really euphoric environment in the bitcoin space. And we also have rolled out the XE Bitcoin bond program which Richard Byworth who's a board advisor, Vijay Selvum who's one of our non Exec directors both helped design and with some input and some guidance as well and testing with Adam Back, one of our key strategic investors, we wanted to just design that program to be extremely attractive to bitcoin investors looking for bitcoin denominated returns. So those bonds convert when our share price outperforms Bitcoin by 20%. And I think that the first time that the bond, Bitcoin denominated bonds track for conversion price. So bitcoin price falls, conversion price falls, Bitcoin price goes up, conversion price goes up. So we rolled out that program as well and had that first bond of 10 bitcoin fully, fully subscribed and settled early on in Q1. And we've got the bitcoin executive recruitment division launched and I think there'll be some good news from that going forward as well. So that's balance sheet is the bitcoin treasury and it's an active balance sheet. Active Bitcoin Treasury. We have the opportunity and I believe we have the capital markets team to deliver as aggressive a bitcoin treasury as any of a business or a pure play as we scale it as we grow. And then we have the operating business which I believe executive recruitment is uniquely positioned to benefit from integrating a bitcoin Treasury. And I believe that because headcount directly correlates with revenue, it's about attracting billing consultants into the business. And I don't believe there'll be a better way to incentivize people to join, incentivize people to perform and incentivize people to stay over the long term than having a bitcoin balance sheet integrated into a people driven, high performing, sales driven environment like executive recruitment.
- [07:53]
A
Can you break down the bitcoin executive recruitment division? Because I know just even this week I've had conversations with people that are looking for executive level, director level positions in the bitcoin space. I've also had conversations on the other side of the coin of people that are like, hey, we need to be looking for talent. We need to always keep our eyes and ears open to. There's just not that many people for those firms looking for someone who's visible, right? Visible in public and, and has a background in both traditional finance and bitcoin. I mean you're like there's this many people, there's just not a, not a ton. But maybe that's not, you know, I would think assuming that's not the only focus of that division.
- [08:44]
B
Well, we get paid based on the scarcity and difficulty in finding candidates. So I Can talk you through that division. But what I'll do is just give you a quick summary of how the business model works with a more traditional market. So if we were retained by a. What market do you want to pick there, Tim?
- [09:08]
A
Let's talk about something that's not a realistic example. So let's do SaaS. Software SaaS, because that's booming right now, right?
- [09:20]
B
Yeah. So if a. Yeah, we don't have a SAS division, I don't think you
- [09:27]
A
need one right now.
- [09:30]
B
So if a leading SAS company said our specific software product is geared towards. Is geared towards. Is geared towards. I'm trying to think of something very specific. If we have a SaaS business, our product is geared towards insurance companies. That's our focus. And we need a Vice President of sales who can secure over $200 million worth of contracts per annum and deliver those contracts into our business. And we're willing to pay $250,000 basic salary for this individual and $500,000 based on performance as a bonus. We would then go out and our target is to find every single person who's currently working in SSAs who is a Vice President of Sales or capable of being a Vice president, whether that means stepping up into a role and delivering over $200 million worth of sales per annum for their current company and to approach them confidentially, generate interest, qualify the interest, qualify their motivations and how realistic it is for them to actually leave their role. Because that leaving a position and joining a new company is one of the biggest decisions somebody makes in their life and quite an emotional journey. Build a short list of two or three, four candidates who would who fit that bill, introduce them to the client and then manage the process through from the feedback from the first stage, the second stage, the psychometrics, the reference taking and then manage the offer process in terms of making sure we get the best deal for the candidate and the best deal for the client, which is usually the only deal that is the candidate wants as much as he possibly can get. The client usually doesn't want to pay more than they need to. So we find that happy medium where both sides are happy to accept and then we charge an invoice based on the guaranteed remuneration. So let's just call it $250,000. Now the invoice would be based on a percentage of their salary and our invoices tend to be between the lower end 15,000 British pounds, so 20 odd thousand US dollars and 100,000 US, 100,000 British pounds and just over a hundred thousand US dollars. So we've secured the candidate. Now we're opening or we open the bitcoin division. Quite often our business development and quite often the way we work is we're approaching companies for the first time with a very good candidate or they're asking us to go and find a very good candidate who's scarce. So for bitcoin it's the exact same principles in place, but it is a little bit different. The candidate comes to us looking for a role. What we want to see is the right experience for the future when demand comes for that person and we want to know their motivations. We want to know that they truly understand bitcoin and that they are, they
- [12:36]
A
are
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B
qualified from bitcoin standards in that we know they're doing this for the right reasons and we're confident their background if they're a cfo, if they're a vice president for a chief revenue officer, it's about understanding where they are now and what their skill says and what their industries and then matching them to the opportunity in the future that comes around. That's a good fit for them. And that's usually related to their current industry. It's probably similar to their current role, but it's in a business that's either in the bitcoin space or wants to find bitcoin talent. And then from a client perspective, a recent role that we're retaining on was a chief investment officer. And their mandate is either someone who's already in the industry and already speaking to investors who are going to be beneficial to us as a business. They want to increase their aum and really understands bitcoin from a bitcoin native level. So they might already be in Bitcoin, which is, is more obvious for us to target. And you're right in saying There might be four or five people who fit that bill. There might be 10, there might be 20. But that's not unusual for us as a headhunting firm to find that the long list is between 20 and 40 people who are exactly right for that role. Our job is to make sure we have a conversation with them, position the opportunity to them confidentially about disclosing the client's name and understand whether there's going to be a viable interest there. And it's worth going to the next stage where we sign non disclosures and we go into the client is we go into the depth of their background and then, and then with them decide whether they want to go forward for the interview. The nuance with bitcoin is we're also then having to look into the traditional space and with our market research teams looking at has this person ever mentioned Bitcoin on any aspect of social media? Have they ever mentioned related terms? Is there an indication that this person who's in a traditional role might be interested in this role and approach them and then advertising as well and having confidential applications coming to us and each and every conversation we're having through that process. Tim, if you can imagine some people are not interested but they're the right experience. There's nothing, there's no conversation in our industry that's not a good use of time and useful. So if somebody's not interested in a position they will know other good people in the industry who might be interested in the role and they will know other clients who might be interested in that type of candidate. So it's effectively nonstop 24 hour networking.
- [15:12]
A
Do the industries that you work in at X go through these very cyclical ups and downs where you might have more than enough qualified candidates and you know, when it's in the, the employer's favor and vice versa. I'm just reminded of, I did a lot of consulting work in the energy industry on the land side and there were times when client really needed a consultant and they were just, when they reached out to individuals, they were unwilling to leave where they were even if it was for more money because they were kind of already on a project. That makes sense.
- [15:56]
B
Yeah. Nobody ever leaves a role for money. It's always of the motivations and it's always, there's always something else underneath it. It's never just money. So yeah, you do see, you do see waves of demand for individuals and scarcity of candidates and you do see waves where there's, there's an abundance of candidates and there's not, not as much demand for them. But generally speaking, because we work across a number of different industries, if one's performing really well, another one might be, might be dropping and it all kind of evens out over the, over the, over the year. So I believe on that basis we're very resilient as a business in that if, if construction is, is, is down then consulting might be up and if life science logistics is down, then another area might be up. AI intelligence and data solutions. So we have that resilience and, and as we scale the business when we're bringing billers into the business to generate more revenue, we're adding on new clients every time, we're adding on new divisions over time and we're just building into that resilience. And another area of resilience with the business is each individual biller who's at, at their desk. The majority of their pay is based on revenue they secured and cash that's come in. So if somebody's not having a good quarter, they know they're not being paid as much as they were the previous quarter. And if someone's having an incredible quarter, they know they're going to get paid more than they were the previous quarter. So there's a resilience to the revenue and profit as well. And we saw that back in 2020 and 2021 where a lot of industries stopped and our, our Life Science logistics division was, was, was obviously going up and we moved into, okay, we'll move into safety equipment as well. And then that was going up. And at the same time, because our revenues went, went down in that period, our costs went down and we still managed to, to be a profitable business. And I think that's the importance and the reason I kind of, I'm so, so direct when I say I just, I believe executive recruitment is uniquely placed to integrate Bitcoin Treasuries because of that resilience to the downside and that, that protection to the downside and that ability to increase revenue and increase profit per head count and open up new markets. So if you can imagine, Tim, if, if we hired somebody next month who focused on wealth managers or focused on hedge funds or focused on an area that is synergized with the XE Group and our Bitcoin treasury strategy that gives us a mandate to speak to every senior leader in that industry and speak to all the candidates in that industry and also acts in some manner as a way for us to talk about the Bitcoin balance sheet, talk about the Bitcoin treasury and educate clients in different industries. And those clients, if they're in wealth management or if they're in family offices or if you're in hedge funds, are also going to get a relationship with the business, whether they're investors or whether they're not investors in the business. So I do think it's uniquely position to dominate the executive recruitment industry by having a public Bitcoin treasury strategy. And I think the resilience to this business and the reason that it's robust in that is because we've actually had a private Bitcoin strategy for four years which allows us a period of time demonstrating the model privately without the benefit of the PLC status. And now with the benefit of the PLC status, I would imagine our competitors aren't going to follow that path within the next four years. But I'm already being approached by businesses with the kind of synergies that I just mentioned where they're saying, okay, I know cash is not good to hold. I've been running this business for 20 years. There is no exit strategy for owners of executive recruitment companies that's very viable. Competitors do not buy competitors very often because the value is locked in the individuals in the business and it can walk out the door and join another company. And you rarely see private equity come into the market for the same reason that if the founder's not within the business, then there's a risk of the private equity firm who's bought next door to us losing their staff to us. And we used to most of them look at management buyouts and that used to be tax efficient in the UK and the government have just removed that incentive. So I'm sat with a competing business owner I've never sat down with before, who's competed with me for over a decade, who reached out to me a couple weeks ago. I'm sat with him and he's saying, I want to understand the strategy because I'm holding a lot of cash, I know it's devaluing. And we're having that conversation about Bitcoin and he's going away and studying Bitcoin now. But I asked him, what is your exit strategy long term? And his answer was, like a lot of owners in this industry, I don't have an exit strategy. I want the business to be as profitable as it can be. I want it to be as efficient as it can be. And I'm just going to wait until someone in the business builds the skill set to take over it from me. They're not looking for an exit. So as we scale xce Connecting Excellence Group by hiring billers and bringing billers into a business, for every 10 people we hire, we're adding between base case 2 million revenue and 1 million profit and upwards to 3 million 4 million 2 million profit. Couple that with Bitcoin treasury, that's generating bitcoin per share increases, you're looking at EBITDA increases. And usually I think the biggest PLC in executive recruitment in the UK is at a 6 times EBIT multiple and I think the largest one cornfaring world's at a 6 times EBIT multiple. So what we're building by attracting talent into the business is the EBIT multiple plus the Bitcoin Treasury M nav and when we get to A market cap that's sizable enough. And I've kind of said before, the 50 million market cap level is the level where the conversations we're having with our advisors and lawyers is. That's the level where you can comfortably start preparing for a main market uplisting. We get to them sort of stages as fast as we can. The businesses I'm speaking to who haven't got exit strategies will start becoming viable, proactive targets to acquire, switch their cash reserves into bitcoin, switch their ongoing cash flows into bitcoin. And the owners want that opportunity. They want the opportunity to stay in the business that they love for the next three, five, ten years, however long their career is, but build some kind of compounding equity. And I believe that that's most powerful when it's not just EBITDA, it's also Bitcoin, Treasury, Bitcoin per share growth and 30% compound annual growth or whatever. The, the, the, the compound growth is that we see over the next five, 10 years, which could be more than 30%. So I think we can disrupt the industry and I think we can, can build a business there that the more billers it attracts, the more businesses it attracts, the more it does that, the more it attracts more. If you, if you get where I'm coming from, it grows gravity as it attracts more people, more revenue.
- [23:54]
A
I have one final question for you. Perhaps the most important question.
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B
Okay.
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A
Is Adam Back Satoshi Nakamoto, and why or why not?
- [24:09]
B
I, I think you're referring to Adam Blackamoto. Yeah, I don't know. I, I had a bit of a text back and forth with him today, but I'll, I'll ask him for you if you want, Tim. But I think his answers are resounding. No, I can tell you what. Adam Back is Tim a key strategic investor in XE Connected Excellence Group and a great guy.
- [24:44]
A
Yeah. It's interesting that the New York Times doesn't seem to want to let this one go. And you have more and more documentaries coming out trying to figure out who Satoshi is. So just. Yeah, that was a timely question and an interesting topic that seems to be evergreen and sometimes it just pops up.
- [25:05]
B
It's a very interesting topic for everybody who hasn't studied bitcoin. I think that's the frustrating thing. The journalists don't understand the second order effects of doxing people in that manner. And Adam's probably, you know, he's had it for over a decade now, so he's probably pretty used to it. It's not a New alarming thing for to see the New York Times run that. But you think if those journalists spent as much time studying bitcoin as they have in pursuing that endeavor, then they would get to the understanding that the monetary protocol that is bitcoin is one of the most profound inventions. In fact, I believe the most profound invention we will ever see in our lifetime. And one of the. One of the least important aspects is who was the individual who was Satoshi Nakamoto. In fact, it's not important anymore at all. The protocol is far too big and far too powerful for it to matter. And that's the point.
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A
Absolutely. I mean, all roads lead to bitcoin. Everything is good for bitcoin. So maybe that's just chalk it up to. It's one of the on ramps to the bitcoin conversation is who is satoshi? Because satoshi controls or controlled the keys to 1.1 million bitcoin, which would
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B
be
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A
tough for a mere mortal to just leave alone, you would think.
- [26:29]
B
Unless they have absolutely zero access to those keys and they were as ethical and altruistic as satoshi was, he only asked one thing of us all to allow him to remain anonymous. And I don't think he was the type of character who would struggle burning that seed. Phrase.
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A
It's.
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B
I think me and you would, Tim,
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A
but yeah, it's powerful to think about and inspiring.
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B
It is incredible. It's. When you read back to those emails and especially half in his emails, it's one of the. I don't usually get emotional, Tim, but it's one of a few things that can really move me emotionally.
- [27:12]
A
Any closing thoughts? And where can people reach out to you and to xce?
- [27:17]
B
Yeah, if people want to join the journey, we have XE official on X. You can follow me. Scott, Ellen and we have a community on X as well. And by people joining the journey, obviously, that's as candidates, that's as clients, that's as investors, and that's as people who are within the bitcoin space and want to see bitcoin disrupt an industry. And bitcoin is for your friends, is for your enemies. And I believe, having done a lot of podcasts in recruitment recently, it's also for your competitors.
- [27:52]
A
Awesome. Scott Ellum, founder and CEO at xce. Thanks for joining us here at the Bitcoin Treasuries podcast today. Appreciate your time.
- [27:59]
B
Thanks, Tim. Great to see you.
- [28:01]
A
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