Happy Sunday,
If you’re enjoying this newsletter, consider clicking the ❤️ button above so more people can discover it on Substack 🙏🏿
I am back off my newsletter hiatus as March has been a busy month. This week I spent half the week in Las Vegas at the first in-person Fintech Meetup.
Check this feed tomorrow for my latest podcast as well.
Let’s get to this week’s newsletter.
Sponsored content
Sponsored by ModernTax
Tax season comes and goes, but the data from tax filings can be leveraged to help financial institutions make better decisions about individual and small business customers. It all starts and ends with clean and reliable data.
ModernTax is sponsoring this newsletter because it is a business-to-business insights platform backed by real-time tax data on demand. Banks, fintech companies, and other business service providers should use ModernTax to understand the good standing, key officers, and other information for any business. ModernTax offers two products to help businesses verify both businesses and consumers for online financial services by leveraging public and private tax records. With coverage across seven million US-based businesses and millions of consumers, ModernTax helps companies stay compliant and utilize alternative data sets to save time and money, and increase performance.
Quote of the Week:
“Power isn't wealth, sophistication, or complexity. Power is the ability to make people do things they don't want to do” - Roger Lovatt
Chart of the Week:
Now that the maximum exodus from deposits to SVB has settled, I found this chart interesting to see where the money actually went. While in Vegas, I ran into Immad Akhund the CEO of Mercury., who has likely been one of the busiest CEOs this month. His startup brought on 20% of the over $40 billion in deposits that were pulled out of SVB.
If you want to read more details, Ayokunle Omojola is the founding product manager of the Cash App. He recently wrote a thoughtful piece on why big banks do not care about what happened with Silicon Valley Bank. You can find the link to the article here.
Hindenburg Research Tears Down Cash App (link)
According to a recent report by Hindenburg Research, a stock shorter, Block’s Cash App has been accused of facilitating criminal activity and fraud on its platform. The report cites former employees who describe an anti-compliance culture and overreporting on key metrics.
Additionally, many states have been trying to claw back unemployment funds that were dispersed on Cash App, and there have been reports of fraud from the small Ohio bank partner that whom Cash App does most of its business through. As alternative banking companies face backlash, the stability of products like Cash App and Chime will come under much scrutiny in the next 18 months.
As a founder with investors hailing from the Square Mafia (see Ayo above), this report is particularly interesting. It's interesting to note that many of the individuals who helped create the Cash App are no longer with the company but obviously, Hindenburg has an incentive for this to be this alarmingly bad news, but I think all banks suffer from fraud so you could have found stories about any business.
Two February Reading Recaps
Unscripted — The Epic Battle for a Media Empire and the Redstone Legacy (link)
What to check out before you read: link to Kara Swisher & Scott Galloway's Pivot Podcast episode: Elon’s Timeline Takeover, Bing’s AI Freakout, and the Sordid Affairs of Sumner Redstone
What I liked: I listened to this book on Audible and finished it when I got back home on the East Coast. I loved the writing and narration, which humanized a family and individuals that are normally difficult to relate to. Some parts of the story could even improve Succession if integrated into the show.
What I learned: As a capitalist, I believe there is always something to learn from billionaires. Interestingly, the ones that the media tends to portray negatively are often the most successful. Sumner Redstone, the main character of this story, may not have been an enjoyable person to be around, but he was a fiercely driven builder who would stop at nothing to achieve his goals. The more you read about individuals like him, the more it becomes clear why they achieved what they did, for better or for worse.
Who should read: If you enjoy TV shows such as Succession, Billions, or any shows about power, capitalism, and scandal, I recommend reading this book.
What is my follow-up: It seems that Disney Wars is the next book for me to read after this one, and of course, the final season of Succession tonight!
Rouges: True Stories of Grifters, Killers, Rebels, and Crooks (link)
Before diving in, a note from the author: I first fell in love with Patrick Radden Keefe's writing during a trip to Hawaii last year. Since devouring his book Empire of Pain, I plan to read his older works, The Snakehead and Say Nothing, as well.
What I liked about this audiobook is how the author's empathetic writing style draws you into stories of crime, brokenness, and personality. The final story about Anthony Bourdain, whom I didn't know much about before, is particularly gripping. Unfortunately, as an Audible book, taking notes can be a challenge.
What I learned was not necessarily new knowledge, but it did give me an entirely new impression of who is responsible for Donald Trump becoming president — his name is Mark Burnett.
Who should read this book? If you enjoy murder stories and documentaries on scandals, this is an easy read that will add 12 more of these types of stories to your repertoire.
What's next for me? I read this book primarily because of the author, so I will keep a close eye on his future works. eye on his next book — I do not see myself going down a rabbit hole for these types of books.
Founder reads & learnings
I interviewed Cody Barbo, the CEO of Trust and Will, and we discussed personal finance as a founder, his move from California to Texas, and his views on health, wellness, and family. We also talked about his experiences running a venture-backed company while raising a family in an expensive city. For more content like this, check out my newsletter for venture-backed startup founders and related groups such as investors, employees, operators, and aspiring founders, and listen to my podcast. The latest episode will be live tomorrow.
On Conferences — A Fintech Dating App moves in person
This week, I attended the Fintech Meetup, the first in-person version of the conference which previously established itself as a virtual dating app-style conference during COVID. As a founder, I learned that the biggest value in conferences is sales and tracking interactions and that conferences are great for in-person meetings. I also had the chance to learn about a hot company that every VC wants to invest in.
If you are into recapping the first event Alex Johnson did a great job by debriefing here.
3 Founder Learnings from Inside a Fintech Conference
As an extension of my core learnings, I attended the Fintech Meetup conference in Vegas this week for free because I was invited to give a 7-minute solutions spotlight on ModernTax.
Raising money is a novelty right now.
While at the conference, I was able to connect with old friends and make some new ones. I talked to founders who have laid off 10, 20, and even 30% of their staff. It seems that the startup funding brink trucks are running out of steam, and startups are going into a lean private equity type mode of operating. The sentiment is selling is the only thing that matters. Not growth, up rounds, or hiring.
There is a market for meeting-focused industry events.
Although AI is being rapidly adopted, in-person meetings have become more prominent in industry events than trade shows and content. Conferences are primarily aimed at allowing companies and vendors access to executives and decision-makers, with panels and presentations from leaders of big, established firms like JPM and Goldman Sachs, as well as up-and-coming companies. The Fintech Meetup focused heavily on meetings, with attendees advised to request meetings with 96 other attendees to fill their 24 allotted meetings over two days. No content was provided during the meeting hours, which led to a 100% show-up rate on the 14 meetings I booked. As a founder, the second biggest value of conferences is sales and tracking each interaction, turning them into valuable investments, contracts, or partnerships.
Being a hot company at seed right now still feels like it’s 2021.
Lastly, I also like conferences that involve startups because you get to see who is hot. This week, I learned about a company that is hot. Every VC wants to invest even during a time when many VCs are staying on the sidelines. I told the founder to raise as much as they can with the highest valuation because being the hot company may only happen once.
On another note, the Vdara Hotel, a complement to the Aria, only has a gym that opens at 8 am, which is flat embarrassing.
Closing
That is all for this week’s newsletter — have a great last week of March and I will be back next week with a special newsletter devoted to Cerebral Valley.
Back to the trenches.
Best,
Matt