Propel at the Presidio: Friends & Fintech
We were delighted that so many founders and friends were able to join at the 2019 Propel Summit at the Presidio earlier this month. Here are highlights from the conversations that took place on stage:
While Brexit delays were in the top headlines that morning, Jekaterina Govina from Bank of Lithuania explained how regulators in Lithuania are inviting fintech startups to enter the eurozone market via their sandbox. Will Vilnius be the new London for financial services innovation in the EU? When a central bank has its own consumer-facing chatbot, that seems like a good sign.
Consumer data and the likelihood of new regulation in the US, similar to Europe’s GDRP and PSDII, came up in a couple of contexts. The regulatory panel brought up ethical hazards such as differential pricing and the API panel predicted California will enact legislation that will pose difficulties for companies.
We’ll see a “cleaving of banks that speak API and those that don’t,” said Michael Diamond of Mitek Systems, in the discussion of just how worried big banks should be. Marqeta founder and CEO Jason Gardner said though they provide the plumbing, “banks are going to have a leaky bucket problem more than an existential one,” if they just become hotels for money.
When approaching those larger institutions about partnerships, fintechs “need an advocate internally,” advised Jamie Ramenofsky of SVB. “You have to have someone to stand up when there are challenges — and there will be.”
Is crypto so last year? Nah, turns out “it’s the best time in the world to build a blockchain company,” because the folks who were in it to to get rich quick have left and those who remain are passionate about the space, explained Robert Leshner of Compound Finance. With that, his fellow panelists dove into possibilities from the tokenization of legacy assets to the co-existence of a synthetic central bank and commodity money.
Emm Shaw from Flourish shares our interest in startups on missions to improve consumer financial wellness. She explained how employer partnerships can build trust and help fintechs with distribution. Ennie Lim, the founder of Honeybee, discussed how HR departments have embraced these programs.
In California, employer-based programs might see more activity due to an automatic-enrollment retirement savings mandate. Katie Selenski from CalSavers described how the rollout will create a new market of lower-income workers and hopefully spur innovations to serve them. She pointed to a similar program in the UK that’s been “wildly successful” over the past six years, with a mere 2% opt-out rate.
Investors and experienced founders had the same basic advice on fundraising: start talking early and keep circling back. Gary Beasley described how Roofstock “always raised before we planned on raising.” He also advised taking “a little bit more dilution to buy yourself some more runway.” Rob Frohwein of Kabbage encouraged stick-to-it-iveness and talked about coming back to investors after addressing their concerns. Steve McLaughlin, founder of FT Partners, emphasized that investors take their time: “it’s a six month process, they’ve got to get to know you.” Rob also went into detail about how he and his co-founder interview and hire, because the fintech journey is “really about people.”
We closed out the day with a fireside chat with ICONIQ Capital founder and master of connecting people, Divesh Makan. During his chat with Ryan Gilbert, Divesh shared his experiences founding ICONIQ and best practices for running businesses of any size as well as insights on the use of WhatsApp voice in the workplace.