Revealing the first dedicated fintech pre-seed incubator in Silicon Valley
I spent the last decade in the Australian banking scene before coming to Silicon Valley, and although Australia, in general doesn’t support startups as well as the Valley does, it does support fintech startups, and in many ways better than the Valley.
Of course Fintech is relatively more dominant in Sydney, I suspect because the big ‘four pillars’ of banking in Australia, the major domestic banks, have such a stranglehold on the market (and hence inertia to innovate) that fintech has been borne from necessity — for the same reason it has done so in other fintech-rich countries like Brazil.
[Aside: for anyone interested in what Australia and the Australian government is doing to support early stage fintech companies, look at the two dedicated fintech hubs and how many fintechs are being churned out: Stone and Chalk and Tyro]
So I came to the Valley and set out to look for the same Stone and Chalk and the Tyro spaces here, and there was nothing! Until late last year when I first met Brett Noyes. Brett was at that stage still creating Unbank.Ventures and àà today has already successfully attracted and supported two cohorts through the Unbank.Ventures program.
I’m very happy to help get the word out that Unbank.Ventures has arrived.
Brett is deeply committed to helping early stage fintech entrepreneurs, and making our financial industry better — which resonates of course with me! He is a finance professional who launched his finance career just prior to the Bear Sterns collapse. He came to the Bay Area three years ago and ran the Draper Fintech Incubator, which served as a foundation for his current incubator. At that time, one of his key influencers was Vladimir Tenev of Robinhood, and in Unbank.Ventures he is looking for his Robinhood.
Unbank is the right name. It is positioned at the earliest stage of the accelerator funnel, where there is this gap in support for fintech companies. Fintech startups, compared with other startups, face the highest amount of risk and yet are supported by VCs who have little to no fintech expertise (and few who are dedicated to fintech).
Here lies Unbank.Ventures important value proposition, and I quote their mission and vision:
“1. Company mission statement
Unbank.Ventures mission is to provide early stage FinTech startups with education, advisory & connections to grow and scale their companies. Within 5 years we will become the most trusted and respected brand in early stage Fintech investment and acceleration.
2. Company pillars and vision
The pillars of our program are Trust — (Brutal) Honesty — Collaboration.
· We believe that the foundation of building a great company must first be built on trust. Both our companies and investors must fully trust us deeply. This can only be earned over time by continually earning it and proving ourselves to be trustworthy and of high integrity.
· We deeply believe that (Brutal) Honesty is necessary to take our companies from concept to market fit. Brutal Honesty can and should only be administered once trust is established. It is also vital for us to be fully transparent and honest with our investors regardless of the short-term consequences.
· We believe that collaboration and partnership are vital for both our success and our companies success. We deeply believe that partnership and network development will make Unbank.Ventures a vital and irreplaceable part of the ecosystem. We will encourage our portfolio companies to adopt a similar mindset.
Our vision is to become the industry (gold) standard for FinTech incubation, acceleration and investment globally.”
Unbank.Ventures provides introductions to early stage investors, accelerators and financial institutions and helps its fintech companies get the traction they need to get into a top- rated accelerator.
This help is critical for fintech companies who are facing unique challenges. They have great difficulty raising debt capital, as outlined in my previous article Mind the Gap, and surviving banks’ vendor selection process. The selection process takes on average 6–18 months, which is much longer than the sales cycle faced by typical Valley startups.
To give an example of how difficult it is for fintech companies in the Valley: a founder from Unbank.Ventures’ first cohort, a former Visa Exec and Accenture alumni, had an extensive network and no issue getting meetings with top tier VC’s and large financial institutions. Nonetheless, she was not able to get the necessary VC funding to meet the balance sheet requirements of the financial institutions. She was able to get into the vendor selection process but was not able to survive an extraordinary 18–24 month vendor selection process and eventually had to shut down.
Unbank.Ventures has had fantastic wins: Three of its companies have recently got into top-rated accelerator programs. Contract Simply formerly Renovate Simply was accepted into the current summer batch of Y-Combinator. Zikher is currently in QC FinTech, a fintech accelerator located in Charlotte. And, a Brazil based company bkper just got into Fundacity’s Seed program.
And these wins will continue. In the future, we are going to see Unbank.Ventures in over four locations globally, running two programs each year with ten to twelve companies in each cohort. Brett is currently talking to the Paris Region Economic Development Agency to open a second location by 2020. His long term goal is to create a ‘Fintech 100’ fund through which his team will invest in 100 top pre-seed / seed stage companies each year.
