Everyone loves free money! Until it's time to pay up.
In a new multipart series available now from Financial Planning, I take a look at the rapid shift that has occurred in the fintech startup space as interest rates rise and investors are a little slower on the trigger than they were in 2021.
In its most recent "State of Fintech" report, CB Insights said global fintech funding and dealmaking in the second quarter of 2023 shrunk to levels not seen since 2017. Deal count fell for the fifth straight quarter, and funding from $100 million-plus mega rounds hit a six-year low.
But as Technology Tools for Today (T3) Conference Producer Joel Bruckenstein reminds us, wealthtech is special. Sure, startup cash may be harder to come by and the insane valuations of just a couple years ago are no more.
But plenty of deals are getting done as long as the firms chasing capital have the right vision and a solid plan to execute.
"I think there was a lot of money raised that probably shouldn't have been raised for some crazy stuff. And I think that's pretty much over," Bruckenstein said. "If you go back four or five years, 20-somethings with an idea could raise $5 million and talk about how they would get into wealthtech. A few of those folks did well. Many of them did not. Many of them had questionable business plans, if they had a business plan."
With that in mind, FP talked to wealthtech insiders about how they're adjusting to the new landscape, what it takes to win in the current market and why getting a "no" from that VC firm isn't the end of a startup's story.
Check out the full story; a Q&A with Appepar and Opto founder Joe Lonsdale; a special edition of The Financial Planning Podcast with advisor turned angel investor Samuel Deane; and much more, only at Financial Planning.
Anything else on your mind? Drop me a line at [email protected]. And if you have any of that free money just sitting around, feel free to send that too. Have a great weekend everyone!
Regards,
Justin

Addepar, Opto founder Joe Lonsdale on what it takes to stand out in today's wealthtech landscape

By Justin L. Mack 5 min read

The serial entrepreneur and startup investor says loyalty and trust will go a long way as the "free money" runs dry. Read story →

Going from wealthtech user to wealthtech investor, with financial advisor Samuel Deane

By Justin L. Mack

As an advisor who relies on technology to power his practice, the 2023 Financial Planning Rising Star award winner explains why he decided to start backing wealthtech firms that create tools for planners. Read story →

Getting Cybersecurity Right: A Checklist

Use this cybersecurity preparedness self-assessment checklist to help determine whether you need to make upgrades, so that you can know exactly what to do and work more effectively with your IT services provider. Read story →

81% of US workers want a 4 day week

A $10M crypto key lost, and an advisor kept it from clients, SEC says

By Dan Shaw 4 min read

The SEC also alleges the firm's founder invested clients' money through a fund that employed his wife without disclosing the conflict. Read story →