Interview with Mehdi Zare CFA, Founder, Bina Capital

This interview is with Mehdi Zare CFA, Founder, Bina Capital.

As a founder at Bina Capital, how would you describe the expertise and real-world perspective you bring to helping people make clearer financial decisions?

My path to founding Bina Capital grew out of my interests in finance, software engineering, and AI. Studying finance through the CFA Program gave me a foundation in investment analysis, while my engineering experience shaped how I break down complex problems and explain the relationships between different choices. Bina Capital brings those perspectives together, with financial education at its center.

That combination shapes how I teach investing and financial planning. I use comparisons and practical examples to explain how concepts work, where they differ, and when those differences matter. Rather than stopping at a definition, I connect it to decisions about risk, diversification, time horizon, and cash needs. I want people to understand the reasoning well enough to evaluate choices for themselves.

What path led you to found Bina Capital, and how has that journey shaped the way you teach investing and financial planning?

As both a software and AI engineer and a CFA charterholder, I have found that technology and finance become more accessible to everyone when you break down complicated concepts into constituent elements and understand the relationships between them.

This methodology of thinking has guided my career in tech and finance, from CFA prep to founding Bina Capital. Leveraging my experience in both areas, I use my platform to educate others on financial planning and investing. I employ use cases and analogies to help go beyond jargon and dull definitions.

For example, rather than define saving or investing, it is useful to compare and contrast saving and investing to understand concepts like risk, return, liquidity, and timelines. The goal is to arm others with resources and understanding to analyze their trade-offs and make decisions in their financial journeys that make the most sense given their situations.

When someone is preparing to make a first investment, what is one decision framework you have found most useful for turning uncertainty into an informed next step?

Before investing in something, I suggest that you assign a purpose to it. I typically start with three basic questions:

1. What is this money for?
2. When will I need it?
3. What would happen if its value fell?

Money you will need soon requires a different strategy than money you are saving for retirement decades away. How much risk you are emotionally okay with taking is different from how much risk you can actually take; you may be willing to gamble with your investments, but that doesn’t make it acceptable to invest your rent for next month in a dodgy scheme.

With an understanding of what you need an investment to do, look at some simple options and consider factors such as:

• fees
• diversification
• liquidity
• risk of loss

Hopefully you should end up with a sensible investment that you understand and are able to justify.

Building on that framework, which assumptions should a first-time investor pressure-test before committing money, and how have you seen those assumptions affect outcomes?

Pressure-test the assumptions you made in developing your financial plan:

• Can you really tolerate a 20% decline in your investments? Theoretically you said “yes,” but would you really be okay with that $10,000 investment falling to $8,000?

• Did you assume, “I can leave this invested for years”? Could there be an emergency you didn’t anticipate that may cause you to need to use those savings sooner than planned, especially in the event that they are down?

• Did you assume you are sufficiently diversified? You may own different mutual funds, but if they have many of the same investments, it’s possible your investment portfolio is not as diversified as you think.

• Did you assume the last few years’ investment results will be indicative of what might happen in the future? Such projections can lead to unrealistic return expectations and to chasing performance.

Ultimately, your financial plan needs to work not only for the best-case scenario but also in less favorable investment climates. Pairing a rosy outcome with one that isn’t so rosy will help you determine whether a financial plan or asset allocation really makes sense for you.

From your experience as a founder, how should entrepreneurs distinguish between startup funding that creates productive momentum and funding that simply postpones underlying business challenges?

Productive use of funding: The capital will help prove or disprove one of the key assumptions in your business, or allow you to scale up against proven demand.

• Build an improvement that customers have asked for.
• Try a new sales channel.
• Increase production against proven demand.

Problem-postponing uses of funding: This capital allows you to continue business as usual and avoid addressing key challenges in the business (can’t get enough customers, lose most of them after a while, don’t make enough money, etc.).

• Example: Increase the marketing budget to get more customers while ignoring the churn problem.

Given my background, I think analytically about uses of funding. What are our constraints? What are the key assumptions behind fixing them? What evidence would we need to see to invest more money there?

Before raising (or spending) capital, my key question is, “What will this capital allow us to prove or improve, and what will we do if the result disappoints?” Longer runways are only valuable to the extent that they lead to learning, and, hopefully, stronger companies. Either way, make sure you have good milestones and metrics!

What unit-economics signal do you believe founders should understand before seeking outside capital, and how can they use it to have a more productive funding conversation?

Where possible, I’d drill down into customer acquisition payback — how long it takes for gross profits from customers to pay back customer acquisition costs. This ties the growth of the business to the cash required to fund that growth. If it costs you $300 to acquire a customer, but gross profits from each customer are $50/month, then customer acquisition payback is six months (simple payback — assuming customers retain long enough, CAC captures relevant sales and marketing costs, and costs to serve are realistic, etc). Digging down further by customer cohorts and by customer acquisition channels can highlight important differences hidden by company averages.

Having this worked out (at least on an assumed basis) will also make the discussion about raising money more specific. A founder will be able to show where unit economics make sense — in particular which channels — work out how much cash they’ll need to grow the business, and explain how they’ll use the cash raised to prove out or improve the business.

Especially in the earlier days, it may be more helpful to indicate where there’s limited data and how you plan to test assumptions, rather than provide greater precision than is warranted.

How have you approached setting an appropriate cash-reserve target when balancing the need for flexibility against the cost of keeping capital uninvested?

This one is pretty scenario-based. Generally I try to understand what items are being protected with this reserve and what timeframe those cash reserves are expected to be needed. Different needs will have different liquidity requirements.

• Predictable expenditures
• Unpredictable events and expenditures
• Opportunities

For households I might think about their critical expenditures, the reliability of their income sources, and known upcoming cash needs. For businesses I might think about their cash burn, timing of income and expenditures, and the flexibility of expenditures if income was less than expected. A useful scenario to test in both cases might be: if income disappeared, how long could they last with their existing expenses?

Again, there’s no silver bullet for this. Too much liquidity has opportunity costs, just as not enough might cause an entity to raise capital or sell investments in sub-optimal situations. Generally I like to size cash reserves so that they allow an entity time to make intelligent decisions in these types of situations and to revisit appropriate levels periodically as circumstances change.

When a founder or household is managing debt alongside saving and investing goals, what practical process helps them decide what to prioritize first?

Considering debt, savings, and investments in aggregate provides a better perspective of the trade-offs among them. Having done so, and after establishing priorities (essential household and business expenses) and required debt service (minimum debt payments), we can consider how best to apply discretionary dollars. It’s helpful to maintain some cash savings to avoid taking on debt to cover unanticipated expenditures.

After that, we should be able to intelligently assign priorities for applying the next available dollar. For example, paying off high-interest credit card debt offers a certain return in the form of interest saved, which is not true of investments. The certain-versus-uncertain-return trade-off is less compelling with lower-interest debts, which leaves room for a more balanced discussion of other uses of cash, such as retirement savings (with employer match if available) and/or investment in the business, weighed against cash needs, debt maturity dates, personal guarantees (in the case of a business), etc.

I would also factor in known future expenses. This exercise should be revisited as cash needs, interest rates, and income change.

Looking across first investments, funding decisions, cash reserves, and debt, what is one financial habit that has consistently helped people make more resilient long-term choices?

Another practice I’ve made a habit of is exploring my assumptions about an investment (or other financial) decision. Specifically, I ask myself: What happens if the main assumption(s) behind this decision are incorrect? Will I still be OK if these don’t pan out?

For example, my investment strategy may be predicated on my being able to leave my investments alone for X number of years. My ability to grow my startup/business may be predicated on my customers paying their bills in a timely fashion. My ability to pay off debt may be predicated on a continuous income stream.

By contrasting my assumed outcome with a negative outcome, I can reveal my assumptions about any decision — not just investing; it also applies to emergency funds, debt, and paying for my startup. It’s helpful to periodically revisit these assumptions to make sure they’re still valid. If they change, will my strategy be OK? Being able to revisit these questions helps me change course ahead of time and keep my options open down the road. This may end up being just as important (or more) than the initial opportunity or decision.