Helping Accelerate Fintech Growth Companies Through Investments And Resources

By Amit Chowdhry. Originally published May 6, 2024 on Pulse 2.0.

Pulse 2.0 interviewed Cohen Circle CEO Amanda Abrams. Highlights from their conversation are below.

Amanda Abrams’ Background

“I started my career in finance as a consultant, decided after a year it wasn’t for me, and went back to school to become a lawyer. From there, I spent over a decade as a corporate lawyer – first at a large multinational law firm, then at a boutique firm, and finally in-house at a public fintech company – before coming back full circle to the finance side to help build out Cohen Circle as an asset management platform.”

“Although uncommon, my experience as a lawyer provided a fantastic foundation to move into an investing role and become a business executive. It provided me with a diverse skill set in understanding how to dissect, analyze, and think strategically through issues and processes, as well as an in-depth understanding of driving investment and exit transactions. But perhaps more importantly, from working as a lawyer with Betsy and Daniel Cohen, the founders of Cohen Circle, I was able to observe how two forward-thinking fintech operators approached investing and get to know them personally. So, when I decided to switch from law back to finance, I was thrilled to join Cohen Circle to build out a unique platform with this team.”

Evolution Of Cohen Circle’s Thesis

“Our founders, Betsy and Daniel Cohen, have been fintech pioneers for decades since founding The Bancorp in 1999, where they were at the forefront of fintech innovation by creating cutting-edge sponsor banking partnerships with the earliest fintechs, including PayPal, Chime, Varo, and others, and giving these disruptive platforms access to traditional financial rails. When we founded Cohen Circle in 2018, we primarily focused on providing late-stage fintech companies with transformative capital and access to our extensive network in the banking and fintech ecosystems. Over time, we have broadened our focus to invest across the capital stack in the fintech, health, and impact spaces.” 

“Our thesis has always centered around seeing opportunities where others don’t: finding the ‘negative space,’ or areas that are not being served today, and building or investing in platforms that can provide those services. Recently, we have added an impact lens to our investing focus as we believe access to essential health and financial services remains an unaddressed global issue. Rapid innovations in technology are generating and amplifying impact by expanding the accessibility and affordability of these services. We see a growing opportunity in this ‘negative space’ and are well positioned to address it thanks to our extensive global connectivity with leading institutions across both the public and private sectors.”

Significant Milestones

“A few years back, we started seeing regulations being proposed and subsequently passed concerning board diversity, including a recent rule generally requiring that each NASDAQ-listed company have at least one female director on its board by a specified date. We are a women-led firm with a trailblazing woman founder in Betsy Cohen and, while these proposals were a step in the right direction, we wanted to encourage companies to think of a single woman director as a floor and not an achievement.”

“In 2018, well in advance of the rule’s approval by the SEC, we did just that; we put together the first all-women board of a NASDAQ-listed company. Doing so was not only a prudent business decision given the caliber of women that we’ve been humbled to work with, but also demonstrated to the market that identifying one qualified woman shouldn’t be thought of as difficult and that it was more than possible to have an entire board composed of highly qualified women.”

Investment Success Stories

“In 2016, we took an integrated payments company, CardConnect, public via a SPAC transaction. At that time, well before the more recent SPAC ‘boom,’ most investors were not familiar with this unique transaction structure and avenue to access public markets and we accordingly spent a significant amount of time engaging both with CardConnect and public markets investors to educate them in this regard. We spent the better part of a year working on the transaction, curating a fantastic investor base, and successfully closing the deal with only a few days to spare prior to the vehicle’s expiration. At that time, I went on to join CardConnect’s executive management team, and within less than a year, CardConnect was acquired by another public company at a 50%+ premium. That exit was a win for all investors, but also a personal win for me as it was the catalyst that pushed me to join Betsy and Daniel Cohen to help them build out Cohen Circle.”

Industry Focus

“Fintech has always been one of our primary core competencies; it’s in our DNA, and we are continuously looking at opportunities in this space across the capital stack. More recently, we are investing in both the fintech and health sectors with a social inclusion lens. Both sectors are in major and parallel transformations, including with respect to digitalization, regulatory landscape, and unbundling/rebundling trends. Taking into account these transformations combined with shifting consumer demands, preferences, and demographics, we think these spaces will continue to provide huge opportunities to achieve impact and outsized financial return.”

Differentiation From Other Firms

“We invest in companies that exist within ecosystems that our team has spent decades immersed in as founders, operators, and executive leaders. Our collective decades of operational experience provide a unique lens through which we evaluate businesses and a differentiated value-add for our portfolio companies. The sectors we invest in are highly technical, regulated, and complex. As specialists who have been building companies in these spaces for decades, our intimate understanding of many of the nuances at play enables us to help founders unlock value through targeted, actionable insight and strategic advice.”

Challenges Faced

“On a personal level, although I developed a strong skill set during my corporate legal career, moving to the investment side necessitated in many ways a major shift in perspective. For example, the way I perceived risk was almost entirely shaped by legal outlook and analyzing worst case scenarios. My default was to always think first about risk-mitigation; being on the business side I had to actively work to instead view actions through the lens of appropriate risk-taking. Betsy Cohen was a fantastic mentor to have during this transition period, having successfully moved from law to business over the course of her own career, and both she and Daniel pushed me to consider business decisions from a lens outside of my comfort zone and to grow personally in that regard.”

Future Goals

“We are continuing to grow our footprint in financial and health services impact investing, with an eye towards investing in companies where we can meaningfully contribute to the acceleration and growth of the business in a quantifiable way. We have always approached our role as an investor as one where the strategic value we bring to the table is equally, if not more important, than the capital we provide. Applying this approach in our impact investments has dual benefits as our strategic support can accelerate both the financial and the impact trajectory. We are excited to support transformative companies and inspire founders as they scale both in terms of achieving business goals and delivering impact.”

5 Questions with FinTech Founders - Sure

Welcome to 5 Questions with FinTech Founders, where we sit down with the next generation of FinTech innovators to hear about how they got started, and where they are going. 

In this installment, we spoke with Wayne Slavin, CEO and Co-Founder of Sure, the global insurance technology leader that unlocks the potential of digital insurance.

A seasoned entrepreneur, Wayne stays at the forefront of innovation by creating disruptive technologies that improve the customer experience for industries relying on legacy tech stacks. 

His credentials include several successful exits. Wayne founded the SaaS company BackupRight, which sold in 2012. He was the first employee and VP of Product Management at Tapingo, named the Most Innovative Company of 2013 by TechCrunch. Wayne’s achievements are further enhanced by roles at mobile app NetSlumber, Barnes and Noble, and Buddy Media, which was acquired by Salesforce. He earned his MS from Columbia University in New York City.

1. What inspired you to start Sure?

Sure’s journey is not unlike other startups. One idea led to another idea, which in turn led to the creation of Sure. It all started on an airplane. In 2014, I was mid-flight from San Francisco to Las Vegas when we suddenly experienced some pretty serious turbulence. As I was looking around at the other passengers, I could tell it was a really scary experience for them. It dawned on me that there should be an easy way to buy insurance on the spot. In this case, it was the idea of purchasing life insurance before boarding a flight. 

So we built a proprietary app for people to purchase insurance quickly and frictionlessly, starting first with flight insurance, baggage insurance, and shortly after smartphone insurance, to name just a few. We then realized that the technology we developed was so powerful that the opportunity for Sure was so much bigger. Instead of selling insurance digitally ourselves, we could use our technology to help others sell insurance online. Sure is now entirely focused on combining our insurance expertise with our technology as a Software as a Service solution to power the digital insurance programs of large brands and carriers, including the likes of Toyota, Mastercard, and Farmers Insurance. 

2. What problem were you trying to solve in the market?

Today’s consumers have proven that they want to buy insurance differently – they want the right product, at the right time, in the right place. The truth is that the large, legacy insurers haven’t been able to deliver the types of experiences consumers now expect. The biggest challenge with embedded insurance is having the technology expertise to build these new digital insurance experiences. While large carriers obviously have the insurance expertise, they don’t always have the technology expertise to deliver these experiences quickly and at scale.  

That’s where Sure comes in. For us, unlocking the potential of digital insurance means that we are able to help our partners solve the complex problems of digital insurance distribution. That means bringing the entire end-to-end journey of not only the application, rate, quote, and bind process, but also policy administration and claims into the digital age. We provide the rails to enable our partners to reach people where they are and deliver world-class customer experiences. 

3. Describe a time when you needed to course correct.

When we started Sure, we really looked at the market and made some pretty good guesses about what would and wouldn't work. We knew very early on that we were always going to be multi-line and sell every type of insurance. At that time, existing options in the market were focused around D2C mobile apps that also had some embedded distribution — but the experience was all controlled by the mobile app of the company.  

We built the SaaS infrastructure for the distribution problem, because nothing like it existed. We quickly realized that we're not a marketing company, and that we needed to play to our team’s strengths. It was pretty clear that, given our team's experience, we were going to be the best at building complex software.  

Changing course away from a D2C strategy to becoming an insurtech infrastructure company was an evolution, not the result of one meeting. Importantly, I didn't pull the plug on a thing that was working until we'd proven we could do the other thing. Some startups prematurely pivot — but we took an aircraft-carrier style turn instead of a pivot. We did what we set out to do while going out and finding our first customers for our SaaS solution. 

The results speak for themselves: The first deal we ever closed as an infrastructure provider is still going, nine years later. It just worked, and we made sure that our team felt supported in that transition.  

4. What advice would you give to new entrepreneurs on raising capital? 

The tech industry, and SaaS specifically, has been a rollercoaster the last couple of years. Startups have had to evolve rapidly from a sustained period of growth and readily available capital followed by a challenging macroeconomic climate. That said, there is a major flight to quality. Quality companies, even ones that require substantial investment, are still able to raise capital at attractive valuations. I believe there is a lot of innovation taking place for investors to be excited about, and that emerging technologies like generative AI will continue to expand growth opportunities for new entrepreneurs raising capital.  

In the insurtech space specifically, there are so many opportunities for companies to further innovate and bring a centuries old industry out of the stone age and into the digital age. As I speak with insurtech investors who reach out to us, they are looking for companies that have found the sweet spot of combining insurance with technology to make buying and managing of insurance seamless. 

5. What lessons have you learned that you would share with other entrepreneurs looking to scale? 

Mentors can be an invaluable resource in founding and scaling a business. When I started my first SaaS business and didn't see a perfect, hockey-stick J-curve, I thought: "Somebody out there knows how to do that. What didn't I do that other people did that would've caused a different result?" As founders, we know that sometimes you build a great product, but there can be so many reasons why it doesn’t win the market.  

So when I first founded a company, I knew how to build a product and how to support it, but I also knew I had knowledge gaps in other areas. So I went looking for people who knew what I didn't know: What insights were missing from my universe? This curiosity has carried with me as I’ve progressed in my career, from successfully founding and exiting companies to building our team and products at Sure. Being self-reflective enough to know that I could still learn from other people has been really meaningful in helping me grow our business at Sure, but also in growing as a founder and as an entrepreneur.  

To learn more about Sure visit

Our Investment in Duetti

Music catalogs have drawn considerable interest from institutional investors as an emerging asset class that is both uncorrelated to the macroenvironment and generates stable cash yield.  An active market has emerged, allowing well-known artists (or their estates) to partner with large asset managers to monetize their prized catalogues. On the other hand, independent and lesser-known artists have largely remained on the sidelines, without a mechanism to monetize their current and future IP and achieve career and financial aspirations. Other financing alternatives are fraught with potential pitfalls -- record labels remain both highly selective and can often exercise significant control over an artist’s creative process and career. 

Enter Duetti. Duetti is a data-driven technology platform that provides access to catalog monetization for artists at all stages of their careers and helps them reach the next step of their journey, with a keen focus on independent and mid-market artists. Duetti utilizes a scalable data-centric approach to analyze consumption patterns and decay curves and hone in on the potential of a given track to generate reliable financial returns. 

Duetti’s founders, Lior Tibon and Christopher Nolte, have been successful builders and operators in the music industry, including through Lior’s role as former COO of TIDAL and Christopher’s experience as senior executive at Apple Music and TIDAL. Through these experiences, they had a front row seat to the music industry’s transformation and have developed understanding of its complex ecosystem comprised of artists, record labels, publishers, and platforms.  Perhaps most importantly, Lior and Chris observed that the transactional nature of the industry was lacking empathy for the artist, which they have sought to remedy by establishing an ethos of trust and transparency at Duetti, enabling them to guide artists through what is a highly vulnerable and personal process.  

The inspiration for Duetti became apparent to Lior during his time at TIDAL.  After studying the process for high-profile IP acquisitions, Lior realized that forecasting the success of independent artists was substantially similar -- these independent artists boasted millions of annual streams and hundreds of thousands of unique listeners and outcomes could accordingly be predicted through statistical analysis and curve modeling. In addition to its cutting-edge modeling capabilities, Duetti has developed a robust post-acquisition track optimization platform, which is a crucially underutilized element within the industry. This process, facilitated by data-driven management, involves strategically positioning Duetti tracks in promoted playlists and utilizing social media channels for enhanced visibility. 

From an addressable market perspective, the advent of streaming in the 21st century has catalyzed considerable growth in the independent segment as more and more artists can reach a substantial audience. Duetti estimates that its target segment is comprised of 90,000 artists that represent over $5 billion in annual streaming revenue.  

In just one year from its conception, Duetti  has partnered with over 250 individual artists, including Olivia O’Brien, Sevyn Streeter and Łaszewo, demonstrating its value proposition for artists and illustrating the scalability of its business model.  

Duetti thus addresses a critical gap in the music industry and is precisely the type of the company and founding team that Cohen Circle has always been excited to support – those which are harnessing disruptive technology to fill a “negative space” and redefine an industry or asset class. 

Visit the Duetti website for more information.

5 Questions with FinTech Founders - Instnt

Welcome to 5 Questions with FinTech Founders, where we sit down with the next generation of FinTech innovators to hear about how they got started, and where they are going. 

In this installment, we spoke with Sunil Madhu, Founder and CEO of Insnt, the first fully managed customer acceptance platform for businesses with fraud loss insurance. Sunil has spent over 30 years innovating in the Identity and Access Management, Security, Governance, and Risk and Compliance markets.

Previously, Sunil was the Founder & CEO and CTO of Socure, which he grew into what is now a $ 5 billion business and a leader in AI-driven fraud prevention and digital identity verification that powers several of the top banks, fintechs, card issuers, and e-commerce companies in the world. He holds a master's degree in Management Information Systems from Glasgow Caledonian University and a bachelor’s degree with honors in Computer Science from Strathclyde University in the UK.

Sunil is recognized as a Top 100 Fintech Influencer in the US by Forbes and CB Insights.

1. What inspired you to start Instnt?

As a seasoned entrepreneur in security, risk, and compliance for over 30 years, I founded and grew Socure into what is now a $5 billion identity verification and fraud prevention service provider. Recognizing the persistent issue of businesses bearing fraud-loss liability despite advanced tools, I decided to start Instnt, with which I also wanted to address the challenges of a layered approach to fraud mitigation and compliance, which often excluded a growing younger customer base.

2. What problem were you trying to solve in the market?

The problem we are solving is helping businesses grow without fraud losses. Our comprehensive solution spans the entire customer life cycle from the initial account opening, verification, and onboarding to subsequent logins, transaction processing, and the enhanced accessibility of additional products and services strategically upsold to them.

3. Describe a time when you needed to course correct.

When starting a business, it's common to bring a developed idea to the market, aiming to achieve a product-market fit. However, challenges such as unfavorable timing or capital depletion may necessitate a pivot. In fortunate cases, the original idea may have multiple facets, allowing for a strategic pivot by leveraging one of its components.

4. What lessons have you learned that you would share to other entrepreneurs looking to scale? 

In the beginning, when your business is growing rapidly, it always costs twice as much and takes three times as long as you think it will until you reach a steady pace of growth.

5. What measures do you take to create a culture of growth within your company?

To create a culture of growth, you have to normalize change, so people are not afraid of change. The most constant in start-ups is change. If you create a culture to not fear change, then you allow growth to naturally occur.

To learn more about Instnt visit

Spotlight on Chris Ferris

We're beyond excited to introduce our newest team member, Chris Ferris, who has joined us as the Head of Investor Relations and Capital Formation at Cohen Circle. Chris plays a key role in leading our capital formation efforts and overseeing our investor relations function.

Before joining us, Chris gained valuable experience as a Director at Franklin Venture Partners, focusing on capital raising and investor relations. Prior to joining Franklin Templeton Investments in 2018, he served as a Vice President at Bank of America Merrill Lynch, specializing in private equity due diligence. In this role, Chris was responsible for sourcing, underwriting, and monitoring private equity investments for high net worth clients of Merrill Lynch Wealth Management. His career also includes various product roles at John Hancock and Fred Alger Management.

Chris holds a B.A. in Business Management from Gettysburg College and earned his M.B.A. from the Gabelli School of Business at Fordham University. A native Bostonian, Chris still roots for his home teams, but currently resides outside of NYC with his wife and two daughters.

We're looking forward to Chris's contributions to our team and are excited to welcome him to Cohen Circle. Read on to get to know our newest team member.

Get to Know Chris

What are you most excited about in your new role?

I am excited about the opportunity to work with FinTech pioneers, Betsy and Daniel Cohen, to help continue building a differentiated investment platform that excites both founders and investors.

I believe that when investing in private assets, having access to the best assets increases your probability of successful outcomes, and in order to gain access to the best assets you need a differentiated value proposition. The Cohen Circle platform has been built by former founders, which means we have a deep understanding of the challenges to build a successful business. This understanding, our operational experience and our global networks are key components of our differentiated value proposition which allows us access to high quality investment opportunities. I look forward to building relationships with limited partners that are interested in leveraging our platform to create positive outcomes.

What recent trends in venture investments have caught your attention, and why are they significant for investors and startups? 

We still have not seen the reset in private valuations that many VC’s and allocators have been waiting for; I think there is going to be a lot of opportunity to deploy capital into high quality assets at attractive prices in the next 12-24 months via the secondary market and as companies raise primary capital again.

In the venture space, how can startups build and maintain trust with investors throughout their growth journey?

Transparency is very important. The more transparent companies can be with GP’s, the more transparent GP’s can be with their LP’s. Trust is such an important building block of long-term partnerships.

What’s the best advice you ever got?

While this falls more in line with a principle I adhere to rather than explicit advice, I do think the Golden Rule holds true, especially when trying to build long-term relationships with investors.

Director Corinne Bortniker Named 2024 Venture Capital Journal Rising Star

We're thrilled to share that Cohen Circle Director Corinner Bortniker has been named a Rising Star by Venture Capital Journal.

Corinne joined the Cohen Circle team in 2021 as a Vice President, and was promoted to Director at the start of 2023. Currently, Corinne leads the sourcing efforts for the firm's impact investments as Director of its impact investment arm, Radiate Capital.

Corinne pioneered Cohen Circle's ESG and due dilligence questionnaire metrics, which are used in assessing social impact investments. She is also actively engaged in fundraising efforts, acting as a liaison between the firm's partners, advisors, and internal teams.

To read more about Corinne's nomination and to see the full list of award recipients, visit here.

5 Questions with FinTech Founders - Nova Credit

Welcome to 5 Questions with FinTech Founders, where we sit down with the next generation of FinTech innovators to hear about how they got started, and where they are going. 

In this installment, we spoke with Misha Esipov, Co-Founder and CEO of Nova Credit, the leading data analytics company enabling businesses to grow by harnessing alternative credit data.

Before Nova, Misha was a private equity investor at Apollo Global Management, a $190 billion global asset manager. Misha started his career at Goldman Sachs where he was involved in over $10 billion in corporate financing, mergers and acquisitions.

Misha was born in Russia and immigrated to the United States. He holds a B.S. in Mathematics and Finance from NYU and an M.B.A. from the Stanford Graduate School of Business.

1. What inspired you to start Nova Credit?

When my family immigrated to the United States from the Soviet Union, it was incredibly difficult to establish ourselves without U.S. credit history. We quickly realized how inaccessibility to credit products – like a car loan – could stand in the way of opportunity. While studying for my MBA at Stanford University, my co-founders and I realized that the inability to transfer credit history from country to country was actually a global issue. In response, we founded Nova Credit to close the credit inclusivity gap that prevents many segments (including immigrants) from getting credit products, like apartments or credit cards, every day. 

2. What problem were you trying to solve in the market?

When the credit reporting system was established over a century ago, financial inclusion was not top of mind. As a result, today, over 60 million Americans struggle to access the U.S. credit system. These users represent people of every background, including immigrants, young people and those who have not prioritized building credit in the way our outdated system calls for. Without the ability to signal creditworthiness, these individuals are left without access to basic financial services.  

Nova Credit is dedicated to accelerating financial inclusion for new-to-credit and underserved communities by using alternative credit data sources like bank transactions and credit risk analytic models that show the full picture of a consumer’s creditworthiness. By using this alternative credit data via our Credit Passport® product, we’ve had tremendous success in helping thin and no-file customers gain entry to other global credit systems. Now, with Nova Credit’s Cash Atlas®, all consumers and lenders are able to enjoy the benefits of alternative data. Looking ahead, Nova Credit is excited to lead the shift away from outdated and incomplete credit reporting.  

3. Describe a time when you needed to course correct.

After our Series B closed in February 2020, the Nova Credit team was eager to accelerate our Credit Passport product – which provides immigrants with an international credit file for greater access to global credit systems, including that of the United States. But a month later, the COVID-19 pandemic shut down global borders, leaving the world frozen in place. The pandemic was a death sentence for our core business and nearly froze us in our tracks. Instead of stalling, our team built upon the initial success of Credit Passport by expanding the product to serve all new-to-credit, new-to-country, and other thin-file consumers via Cash Atlas – a cash flow underwriting tool that helps every individual access financial opportunity.

As the CFPB introduces regulation and directives driving the increased integration of open banking data, these growth decisions have left us in a better position to partner with institutions during this historic industry transformation. 

4. What measures do you take to create a culture of growth within your company? 

It can be difficult to keep a growth mindset during hard times, especially as a small startup. When faced with headwinds, many companies choose to double down on their existing product strategy. During the pandemic, however, we chose to grow and adapt our product lineup based on where the puck was heading, rather than where it was. This didn’t mean we stopped investing in our core product, but we needed to adapt to survive - and growth was the path to get us there. 

This growth mindset can be seen as risky - building a second product before we’ve fully stabilized the first. But with two key ingredients - a determined team and a rock-solid mission to rally around - we did it. We analyzed every decision, revisited strategies and assumptions, and dove headfirst into our customer’s pain points. We uncovered an unmet need - credit underwriting for thin- and no-file domestic consumers - and a clear connection to our core competencies - experience working with difficult, highly-regulated data sets and world-class analytics. Our resulting product was built on the foundation of the mission we’d outlined years prior - to power a fair and inclusive financial system for the world. 

Our decision to grow during hard times paid off in spades - we now have two core products that are thriving and growing. But beyond the product lineup, what’s really made a difference is our team. We’ve built a battle-tested, hungry team willing to break through walls to deliver for our clients, with a determined set of investors and advisors guiding the way.  

5. What lessons have you learned that you would share to other entrepreneurs looking to scale? 

Over the course of my career, I’ve learned the importance of good company. Much of Nova Credit’s success can be attributed to the network of supporters we have built. So, to any entrepreneur looking to scale, strengthen your connections and lead with a spirit of collaboration.  

To learn more about Nova Credit visit

Retail and Algo Trading: The New Giants Of The Financial World

Meme stocks are often thought of as a joke, but what if you can actually leverage them into something worthwhile? The more I’ve thought about this, the more I’ve realized that they are a natural backer of the marketplace.

Meme stocks find their growth not from traditional financial metrics, but from an explosive rise in value driven by social media hype and speculative investing. Despite conventional attitudes toward it, retail investing and meme stocks have emerged as an effective tool, providing an entirely unique avenue to capitalize on growth opportunities.

Retail investing through the use of meme stocks, along with algorithmic trading, is creating huge opportunities for investors to make money in growth companies. Together, they have become the new giants of the financial world.

Meme Stocks For Growth

Small to mid-cap companies that gain attention from retail investors can get a swarm of trading volume well in excess of their issued stock. They can then use this to issue capital and grow in a way that reduces the cost of financing. This is the method that saved both AMC and GameStop from bankruptcy when the meme stock craze was born. And, it has gone well since, as GameStop saw a 1,200% return in the three years after becoming a meme stock.

Social media is now a catalyst for wealth creation. Savvy investors who leverage insights from social platforms have amassed significant gains, illustrating the platform’s potential to act as a driving force in modern trading strategies.

The traditional approach to investing doesn’t account for the impact that social media can have, but it should be taken seriously. It’s not just a negative influence to be scoffed at. People have made enormous sums by understanding and learning from social media.

Algorithmic Trading Is The Way Forward For Financial Institutions

While retail investors are making a bigger impact, financial institutions seem to be doubling down on algorithmic trading, which are automated trades based on predefined strategies set by mathematical models. Larger pools of capital are participating in these types of trades and using data mining to create a more efficient marketplace. Trades are happening much faster than humans could even comprehend and at lower transaction costs.

Of course, algo trading creates new risks by increasing volatility due to instant reactions to market conditions. This can spiral during tumultuous times and create negative ripple effects. They’re also dependent on the quality of algorithms, which can be questionable for some, so due diligence is always required.

The New Value Of Public Markets

Algorithmic trading and retail trading are no longer the underdogs of the financial world. If anything—they’re becoming the proverbial sleeping giants.

Before meme stocks and algorithmic trading, the value of the public markets came from being able to buy and sell things freely between all kinds of investors. This provided companies with a reliable method of growing capital as they grow, with efficient prices. But because of technology, that’s changed.

Now, retail investors are flooding the market through fintech apps, such as Robinhood, and algorithmic trading is happening faster than you can blink. This means that the true cost of capital in public markets can be reduced to harnessing the value of retail investors and rapid electronic trading. These areas are where growth companies can tap into the public markets to access capital and fuel their expansion.

While these aren’t growth companies, Bed Bath & Beyond, AMC and GameStop all leveraged retail investors and meme stocks for recapitalization. As AI develops for trading, there will be an even more significant impact on the public markets and the opportunity from algo trading is likely to grow.

There is a high degree of risk, of course, as it’s impossible to know who will be the next Amazon or Facebook, but algo and retail trading are positioned to make an increasingly large impact.

Early Entry Can Create The Best Opportunity

The prospects for companies in these emerging areas are immense. By exploring novel routes into the public markets, companies can not only grow but also overcome challenges and recover over time.

This new paradigm shows us that the public markets aren’t exclusive to successful companies, but also offer an avenue for struggling companies (AMC and GameStop were struggling before they became meme stocks). In this constantly evolving marketplace, understanding these markets is crucial for financial officers. They can consider using their creativity to leverage the power of retail investors, algo trading and, soon, AI to create primary proceeds and reduce the cost of financing.

As corporate finance becomes entwined with social media sentiment, meme stock movements and algo trading trends, one thing is clear: The traditional marketplace is being challenged, stretched and reinvented. It could be time to lean into the perceived chaos of retail investing, the speed of algorithms and the capabilities of AI to embrace the emerging opportunity and potential for growth.

Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms.

5 Questions with FinTech Founders - Duetti

Welcome to 5 Questions with FinTech Founders, where we sit down with the next generation of FinTech innovators to hear about how they got started, and where they are going. 

In this installment, we spoke with Lior Tibon, Co-Founder and CEO of Duetti, a music financing platform that enables a wide range of artists to sell master catalogs and individual tracks - an opportunity previously only accessible to a small group of A-list artists.

Prior to Duetti, Lior was the COO of TIDAL, the artist-centric global music streaming service. In January 2015, Lior joined the core team that launched TIDAL under the ownership of Shawn “JAY-Z” Carter and its original artist owners, and has led the company's major strategic business, revenue and operational efforts for over 7 years, up until his departure in May 2022. In April 2021, Block (formerly known as Square) acquired a majority ownership stake in TIDAL. Lior previously worked in the investment banking division of Deutsche Bank in London.

1. What inspired you to start Duetti?

Duetti was founded to bring more opportunities for catalog monetization to a broad group of artists - not just to A-listers. By using transparent and sophisticated data analysis, we are able to offer clear and fair pricing for catalog tracks, providing many artists with additional financial options that previously were not available to them. We are not only expanding financial options for artists, but also investing heavily in maximizing reach for any song that we partner on - all driven by our extensive expertise in music streaming and new music formats.   

Duetti has quickly become an essential business tool for many dozens of independent artists including CVBZ, Sylvan LaCue, and Croosh partnering on deals across 100 tracks. 

2. What problem were you trying to solve in the market?

Duetti set out to address a significant market challenge by empowering independent artists to achieve financial independence and success in an industry where opportunities are often too concentrated at the top. Simultaneously, the company aimed to create new investment avenues in the music industry. Through the use of innovative technology and data-driven scalability, Duetti also aimed to provide artists with the insights and tools necessary to confidently navigate the complexities of the music industry, thereby amplifying diverse voices within the ecosystem.

3. What key music industry trend is impacting Duetti?

Streaming is still a relatively new phenomenon (mass market adoption only took off globally ~5 years ago) and there will be various long term fundamental shifts in the underlying dynamics of the music market as a result. On the creator side, it is easier than ever to release songs into the main streaming platform - but it is also challenging to get noticed. On the consumer side, there are ongoing significant shifts in consumption patterns, with more diversity and willingness to discover new artists. These shifts would ultimately require significant changes in the core fundamentals of the industry - and Duetti aspires to be a key change agent in this context. 

4. What's the best piece of advice you ever got?

Having a strong foundational understanding of core unit economics is key to ensuring long term strategic success. Before we started Duetti, we spent a lot of time modeling different financial scenarios and execution paths, taking into account various market assumptions and other considerations. If there is no path for strong ROI on core unit economics, it is going to be much more difficult to build a lasting business. 

5. What advice would you give to new entrepreneurs on raising capital?

Proving your team's execution capability - especially in today’s environment - is one of the most critical ingredients for fundraising success. Even if a startup requires capital to start scaling, any steps that can be taken to demonstrate an ability to efficiently execute from the start can go a long way in raising capital. This can include building out a pipeline with concrete feedback from prospective customers, alongside detailed thinking around execution plans and tactics. 

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The Importance Of 'Fin' Vs. 'Tech' For Fintech Valuations

In the ever-evolving landscape of finance and technology, the term fintech has emerged as a commonly used amalgamation of two distinct yet intertwined realms: finance and technology. As startups continue to disrupt traditional financial services with innovative solutions, understanding the interplay between the “fin” and tech elements becomes crucial, particularly when considering valuations.

The ‘Fin’ Model

Firstly, there’s “fin,” which are fintech companies on the financial services side of the industry. These are system integrators whose goal is to use other companies’ new technologies to reduce customer acquisition costs (CAC) and increase lifetime value (LTV).

“Fin” companies offer services like credit card solutions, access to more and better types of loans and subprime mortgages. However, the “fin” landscape can become overcrowded due to the lower barrier to entry, leading to stiff competition and potentially lower long-term valuations.

Prominent examples of companies leveraging the “fin” model within the fintech industry are:

The “fin” model looks for substantial long-term growth by reducing CAC, increasing LTV or both.

Despite many successes, “fin” firms (like RocketMortgage) usually don’t compete with the giant gross margins held by “tech” companies in the fintech space. Their ability to deliver better and cheaper products is limited when compared to their “tech” counterparts (such as Bloomberg Terminals). They have a more linear growth trajectory, compared to an exponential growth trajectory for successful tech firms.

The Tech Model

On the other end of the fintech spectrum are tech companies that create new technology to address entrenched problems. They aim to enhance customer experiences, solve legacy problems and generate tremendous LTV. By creating innovative technology, these firms outmaneuver competitors and justify substantial investments to fuel their growth. The result, when successful, is a business model geared toward exponential growth.

Examples of “tech” companies in fintech include:

These companies are in the business of selling operating systems to insurance, banking and other financial industries. They become entrenched with their customers by becoming an essential part of how they do business. They create long-term value and astronomical margins by creating new technology, leading to virtuous cycles and network effects.

While the tech model has more opportunity for exponential growth than the fin model, it comes with its own set of challenges. For one, the tech side is mostly B2B, which means their customers are going to be insurance companies, banks, lenders and other fintechs. This limits the customer pool and can lead to longer sales cycles and a harder time acquiring new customers early on. The potential is huge, but it can take longer to get there, hence the need for more capital and time needed to become profitable.

What The ‘Fin’ And ‘Tech’ Models Mean For Valuation

Despite the differences in the “fin” and “tech” business models, the primary valuation objective remains: secure strong franchise value that lasts. What differentiates these models are the means to achieve this value.

While “tech” companies typically burn more cash initially, they eventually become cash-rich due to their high LTV, thanks to the unique technology they provide. However, “fin” firms face a more limited LTV and usually have higher customer churn rates. These companies need to continue to acquire more customers and achieve growth through low CAC instead of LTV, which limits their network effect compared to “tech” side companies.

“Fin” firms are often lumped into the same category as “tech” and are incorrectly valued like SaaS companies. Instead, they should be valued more like financial services companies. This is not meant to denigrate “fin” firms but to value them more realistically. Many financial companies achieved tremendous growth by leaning into tech, but it is a different growth model than creating the tech itself.

Linear Vs. Exponential Growth

When considering the valuations of “fin” vs. “tech” within fintech, follow this simple rule: Successful “fin” side companies should expect linear growth while successful “tech” side companies should expect exponential growth.

Fin companies can steadily grow in a more competitive field by using tech as their advantage. Tech companies are creating entirely new infrastructures and technologies that other companies will base their businesses on, which means years of burning cash and unprofitability for an explosive payoff down the road. Consider API-based payment authentication networks that create API connections with thousands of financial institutions and fintech apps requires significant investment and time before profitability.

Two Paths To The Same Goal

Both business models work, but there is usually less risk on the “fin” side as the tech side makes bigger bets.

Ultimately, you are looking for the same outcome within both models: strong franchise value and long-term customers. Both models are essential to the fintech ecosystem. They’re likely to grow, and could be worthwhile to build and back for decades to come.

Whether you’re a retail or institutional investor, or even if you’re evaluating a compensation plan that includes equity in a fintech company, it’s important to know whether that company is a “fin” or a “tech” company. Consider this question carefully and ask yourself, “Is this company valued in alignment with its true business model?”

Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms.