Rough Economic Conditions Can Be Tailwinds for Fintech Founders and Their Investors

Since you’re reading this newsletter, it’s safe to assume you follow the world of venture capital to some degree. And so you’ve probably wondered at some point how severe the market correction has been for VCs and startups, how much the optimism around generative artificial intelligence has been just hype and where the economy is headed in the next year. 

The bottom line is all of that is still unfolding, and that’s what BCV partner Matt Harris referred to as “the fog of war” in his annual presentation on the state of fintech at the BCV-Nyca Partners FinTech CEO Summit in late May. We recently published the full video recording of Matt’s presentation, along with the deck and transcript.

Matt used the opportunity to share a set of predictions about what he sees as the “whitewater rapids” that will become apparent after the fog clears and offered some advice to the fintech founders in the audience on how to thrive amid the challenges ahead. Oh, and he predicted the “end of the American banking system” as we know it.

I encourage you to check out the full presentation, whether it’s scanning the deck and transcript or carving out some time for the video. Some highlights:

• “If what we see is in fact this increasing return to the dollars and deals being concentrated at the seed and early stage, I think we can all be really optimistic about the medium- and long-term future of financial services. That will mean the founders, like the ones in this room, are once again feeling inspired to start novel companies. And you have to have more to raise money now as a startup than you did for any time in the past five years.”
• “These years are going to be fantastic for venture returns.”
• “The conditions that allow things to change dramatically, the conditions that allow startups to beat incumbents, that force customers to do not the safe thing, but the right thing — which is often trying the new product — are messy conditions.”

Also, in case you missed it, BCV partner Sarah Hinkfuss has published a post here on LinkedIn for each of the 10 elements in the Fintech Field Notes piece she led. This last one captures another aspect of why BCV is feeling great about the future of fintech, regardless of how the macro environment unfolds over the next year.

This newsletter was edited by Richard Feloni .