Reflections on closing Daylight

I’m incredibly sad to announce that today we are closing Daylight, the first and only LGBTQ+ banking platform in the USA.

The final day of our banking operations will be 30 June 2023. The banking industry is in a time of great change and after a long period of soul searching, I feel now is the right time to exit this market.

To Daylight’s banking customers, please know that your money is safe and will be fully accessible for transfer through 30 June. We have sent you information about what this means for you given your personal circumstances. You are the reason we started this platform, and are extremely grateful for your support.

We started Daylight under two core beliefs:

1. That LGBTQ+ people are underserved and lack the financial services they need to live their best lives.
2. That a small group of people focused on these problems could turn ideas into solutions and offer these at scale to our community.

While we stand behind the first belief, in practice we’ve found the second belief challenging in a high interest rate environment. Daylight had a great run paving the way for US LGBTQ+ customers — we opened thousands of trans-inclusive debit accounts, supported thousands of prospective LGBTQ+ parents’ plans for their families. Ultimately, though, we couldn’t provide these services in a way that covered our costs — this is likely a job for big banks and I hope they pick up the torch and carry forward our legacy.

Some personal reflections

It goes without saying that start-ups are incredibly hard to build. You have to be incredibly passionate about the work. Founders work 16 hour days to try and bring about some change in the world. Daylight has definitely been a passion for me — ask my fiancé, Cesar; I think he’ll be happy to spend a little more time with me ahead of our marriage next month.

Building this company along with our incredible investors and team has been one of the highlights of my life. At the same time, it’s been one of the most challenging. Highs, the lows, the highs, the lows — this feels like the cadence of the life of a founder.

We really threw everything that we had at this business. Not to make money (founder salaries are, for the most part, far below market rate), nor for the get-rich-scheme (most start-ups fail). Mission carries us through the tough times.

There was even a full year when I couldn’t draw an income from the business due to covid-related delays to my visa. And yet, every month looking at my savings go down, I still knew this was the right choice.

I’d do it again for a mission I’m this passionate about. Daylight’s mission is deeply personal to me, as a queer prospective granddad (yes, you heard that right), to my own experiences of making ends meet as a young LGBTQ+ person without a financial safety net. I want a world where our community has better, more stable financial lives.

A (non-exhaustive) list of learnings

We broke open doors kept by major legacy institutions and I wanted to share some of the learnings — successes and failures — I’ve taken away from this experience.

1. Change is possible, even if it is harder than expected. We built and shipped our trans-inclusive card program in 90 days, showing that large incumbent financial institutions can, too. Delivering systemic change, though, is an order of magnitude harder.
2. All companies need a long term mission. Though ours — to build financial products that help address the wealth gap — was perhaps too ambitious. We learned that no matter how passionate, a single startup cannot solve deeply entrenched societal problems like wage discrimination and high costs of living/surviving.
3. Start-up leaders must be extremely pragmatic, often required to make tough decisions for the business, including partnering with folks you don’t always agree with, managing team performance and laying off valued team members. Building a sustainable business means taking a long-term, macro view. This can feel impersonal and in contrast to the short-term needs of individual community members. I wish I’d been better able to navigate this tension.
4. Balancing the desire to do well by our community, with the need to generate revenue is like walking a tightrope. Nonetheless, I believe we need more for-profit, queer-run businesses to attract investment into our community and to build the products and services we need.
5. Our community is large and diverse socio economically and geographically, therefore building services across disparate verticals that appeal to that diversity is hard. We are not a monolith — this means that treating the LGBTQ+ community as a single segment will always fail (or end up with rainbows). Companies and organizations need to do more to develop detailed data and segmentation of LGBTQ+ lives in order to see our true diversity of thought, belief and interest.
6. LGBTQ+ deserve best-in-class banking, and in a crowded market of well financed incumbents, this has been incredibly hard to do with a budget many times smaller than traditional banks have access to. Our younger community members need more income, our older community members have more complex financial services needs that a start-up isn’t well placed to satisfy. Perhaps a start-up can never overcome these challenges — let’s see what the future holds.
7. While we receive only around 1% of VC funding, the industry and investors are interested in learning about our pain points and willing to fund innovative solutions that improve the lives of queer people.
8. To unlock this capital, we need to tell our story using data, highlight solutions over problems, and show how this can deliver change and deliver a return on investment. On that note, working with our investors and partners to expand their worldview of what’s necessary, and possible, was one of the most fulfilling parts of our job. We cannot do this alone — allies are waiting for us to reach out.

As CEO, it’s my responsibility to navigate through these challenges. I did my best but am sorry that I couldn’t do meet the moment and I take full responsibility for the closure of the Daylight brand.

Where to from here?

I’m particularly sorry to our employees who were laid off. You dedicated your lives to our mission, no one can say we didn’t try hard enough. Thank you for your service to our company — to my entrepreneur colleagues:

I have a list of talented designers, developers, a community manager, a CX team and even an embryologist. I’d welcome some help finding them a new home to thrive — please reach out.

This work isn’t over, but one company alone cannot create inclusive banking. We need incumbents to fill the gap that we left. We’d like to offer our services to any and all fintech and financial institutions who want help meeting the needs of LGBTQ+ people. We’re handing the baton over to y’all. Do well by our community. Reach out.

Some reflections as an LGBTQ+ business leader

I’ve been building for the LGBTQ+ community for many years. While inevitably, the time ahead will be an opportunity for great reflection, I have some thoughts to share on my experience today. I believe that our community faces a crucible moment.

Will we let perfection be the enemy of good? Or will we be pragmatic and open minded about small, but imperfect steps toward change?

Let’s be honest with ourselves — America is back-sliding on LGBTQ+ rights. We have a lot of work left to do, and we’re going to need all the help and support we can get. Everyone’s contribution matters, no matter how small, how imperfect. We’ve seen from history that when we work together, across all parts of our community, our love and pragmatism can change the world.

Change is hard work

Experience shows that change is hard and happens both incrementally and over frustratingly longer periods than we would all like. But each step forward, whether perfect or not, is progress. We must approach systemic change with deep thinking and pragmatism and avoid falling into a trap of becoming those that we despise. We cannot become a community that silences different opinions, favors immediate retaliation over education, and one that chooses to selectively denounce individual negatives without taking into account the human whole. We must learn to love one another other, flaws and all.

Queer theory teaches us that no person is one act, one comment or one idea; the beauty of the queer community is in our differences. Learning to love and celebrate each others’ differences, even when we disagree with them, is an essential part of building a safe and supportive environment for us all. It’s also an essential part of the healing process. Love one another, faults and all. We must let our better angels — our hard-won compassion — rather than our fears, govern how we work together for equality for all.

We encourage queer people the world around to build upon the progress we’ve made, to channel your energies into new projects that solve meaningful problems for our community. Yes, creating solutions is far harder than highlighting problems, but do not be discouraged by those that say you “cannot.” You can, and we are rooting for you from the sidelines.

Rob Curtis

CEO, Daylight (2020–2023)