In at the moment’s episode, Andrew Janssens hosts returning visitor, Rex Salisbury, in his second look on the Wharton Fintech podcast. Rex Salisbury has had a busy few years since his last appearance in 2019:
- Rebranded the “Fintech Devs & PMs Meetup” neighborhood to Cambrian (named after the Cambrian explosion when life started to proliferate).
- Established Andreesen Horowitz’s Fintech vertical as their first exterior companion rent
- Parted methods with a16z to establish his own solo-GP fund below the Cambrian title, investing $500K non-lead checks in Fintechs on the pre-seed and seed stage
Rex’s key message is straightforward: “It’s by no means been a greater time to begin a fintech firm! The market is large, nonetheless capital obtainable at pre-seed & seed and, that is enormous, it’s WAY simpler than ever earlier than to rent.
Expertise is a extra vital scarce useful resource than capital and the supply of capital in <=2022 made it approach more durable for brand new firms to rent. the alternative is true at the moment. So many firm’s I’ve backed are having a discipline day pulling in extremely proficient people!”
This dialog covers:
- The evolution of Fintech Devs & PMs into the Cambrian neighborhood
- Rex’s investing philosophy
- Rex’s fintech predictions for 2023
- And far, rather more!
We probe into why Rex determined to rebrand Fintech Devs & PMs meetup to the punchier Cambrian:
“The previous title was unwieldy however descriptive, whereas I like this title. So, the Cambrian is a geological period, 542 million years in the past, when you may see complicated life begin to emerge within the fossil file. And it’s known as the Cambrian explosion, since you go from seeing like a number of sorts of organisms to many sorts of organisms. And so , why did this occur? Effectively, there are these constructing blocks inside biology that emerge, that may be recombined in new methods to create new sorts of life. And so there’s this explosion of variety of the sorts of life you see.
And I believe the analogy used within the tech ecosystem, or within the FinTech ecosystem, is that you simply now have all these primitives that may be mixed to construct new issues quicker and higher than ever earlier than. When you take a look at one among arguably the primary neobanks, Easy, which lots of people are in all probability accustomed to, it took them over two years to seek out their first banking companion to launch a pay as you go card to perform as a debit card. And that didn’t work out. In order that they needed to discover one other bit after this Herculean effort to seek out the companion getting that stood up, I believe six months later, they realized that wouldn’t work and so they needed to go and do it otherwise.
Once more, at the moment, when you’re a FinTech founder, and also you need a banking companion, your problem just isn’t discovering and getting one, though it might be when you’re primarily based in Canada, or Latin America or elsewhere. However within the US, your problem is there at the moment are 20 banking as a service platforms. There at the moment are possibly 60 banks who’re focused on doing partnerships. How do you resolve which one to work with? And why? In order that’s a problem. However the great point as you now have, these constructing blocks, proper, this layer of economic providers you could have entry to, after which so there’s time, the expertise facet of it, that makes it actually thrilling for like, why now and why is FinTech nonetheless a factor?”
We talk about the highlights of Rex’s predictions for Fintech in 2023:
“Firstly, you by no means truly make predictions. You simply state issues concerning the present world that possibly aren’t as broadly circulated. And possibly they’re , already circulated and form of conscious of throughout the enterprise the FinTech ecosystem, however I believe typically they will nonetheless that doesn’t make them essentially unusable, as a result of even simply understanding the present state may be exhausting to do when there’s such a reporting lag by way of lots of exercise that’s happening.
So I imply, my greatest, greatest one is actually one of many ones I at all times harp on. And so this was simply one other alternative to harp on that very same concept, which is that there’s extra expertise within the ecosystem than ever earlier than. And so the prediction was that there’ll be mainly extra firms began by repeat FinTech founders in 2023 than another 12 months. And that’s simply because they’re extra repeat founders that there was once however like that’s vital to know, proper. After which the second is form of very associated to that. But it surely has to do with all of the layoffs happening later stage.
And that’s if, in case you are beginning an organization, possibly as a repeat founder, possibly not, you’re truly going to have a neater time hiring the pre-seed than you ever had been in in all probability the final 10 years. 10 years in the past, the job marketplace for software program engineers possibly wasn’t as aggressive. However the variety of form of tech native software program engineers was tremendous, tremendous low. The largest swimming pools of tech expertise, or no less than software program engineers had been truly inside of economic providers. However they didn’t essentially make nice free seed staff. Proper now, you’ve bought this enormous pool of proficient individuals who have in all probability sooner or later of their profession, been no less than a mid sized firm because it’s gone by way of development and had lots of possession of the sorts of issues we’re constructing and the right way to do it.”
Why Cambrian Ventures is specializing in non-lead checks on the pre-seed and seed stage within the US
One of many large issues I made a decision early on was I, I may have raised like 100 million or extra fund, however at that time, you’re a lead investor. And what meaning is you’re very aggressive with everybody at a16z. So if I wish to put money into an organization, I now need to beat a16z, QED, Ribbit, all these folks, to ensure that the precise to write down a $2 million verify, I believe I may be useful, however like, let’s be sincere, I’m not going to win over these names nearly the entire time.
After which if you consider the worth that I carry to the desk, it’s lots of the networks that I carry. And if I increase a smaller fund, the place I write a non lead verify, then I can collaborate with these and different lead traders. However I may that retains them extra ingrained and match them within the networks, in monetary providers or within the FinTech ecosystem, in order that I may be truly extra supportive to my firms, in some methods, as a non lead investor that I may if I used to be a lead investo. It additionally lets me have a barely larger portfolio.
After which why US solely? I believe there are re nice alternatives around the globe. I’m one individual. I additionally suppose the US is a superb market. It’s a big unified market with good rule of regulation, which could be very exhausting to say about nearly wherever else. With developed capital markets, deep swimming pools of expertise, it’s only a actually good market. All the things I do is community pushed. And if I’m getting on planes to fly to Joburg, or Dubai or Singapore, that’s an enormous price of time. And every of these ecosystem has their very own networks that don’t essentially reinforce the community that I’m constructing throughout the US. And so it’s a time in community technique as a lot as it’s like, I believe this can be a good market technique.
About Rex
Rex Salisbury, Normal Associate at Cambrian Ventures. Rex is not too long ago launched Cambrian, a solo-GP fund, after three years at Andreesen Horowitz establishing their Fintech staff. In his final look on the podcast he talked about establishing the Cambrian fintech neighborhood (previously Fintech Devs & PMs meetup). Previous to Cambrian, Rex labored in Merrill’s Lynch’s Actual-Property Syndicated Capital Markets staff and at Syndio, a mortgage-focused fintech.
About Cambrian
Cambrian is a U.S fintech fund investing $500K non-lead checks in Fintechs on the pre-seed and seed stage. The Cambrian neighborhood permits Fintech founders and operators to attach through their slack channel and common actions similar to bi-annual founder matching.
In regards to the Creator
Andrew Janssens is a second-year MBA Candidate at The Wharton Faculty, the place he’s a part of the Wharton FinTech Podcast staff. He has a ardour for the nerdy corners of economic providers, enterprise capital, and all issues FinTech. Don’t hesitate to achieve out with questions, feedback, suggestions, and alternatives at ajanss@wharton.upenn.edu.
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