See the notes from Jonathan Greechan’s (Co-Founder & CEO of the Founder Institute) talk below on how startups can prepare for 2023:

* 2021 was the largest outlier in the tech/ venture space we have seen since 2000. Any headline or argument that uses 2021 as a reference for “normal” is sensationalist and/or not grounded in reality.
* It appears we are just returning to pre-pandemic levels, which were great. For example, 2019 was the second highest year on record for VC of the 2010s (which was the highest decade of all time).
* Public and later-stage companies (Series B+) are the ones really suffering, as a direct result of having valuations/ stock prices set during the 2021 outlier. These values were heavily driven by speculation and non-traditional investors flooding the venture space (PE firms like Softbank/ Tiger Global, pension funds, and other big money players that bypassed VCs and started directly investing in companies).
* Angel valuations have been largely unaffected. Pre-seed and seed valuations are rising. This should not be surprising given the fact that (1) 2021 saw a record amount of new VC firms and the largest amount of capital raised by pre-seed and seed funds in history, and (2) the record amount of “Dry Powder” available.
* On “Dry Powder”, there are 2 main counterarguments: (1) the reporting is delayed and a lot of the money has already been deployed, and (2) a lot of that money is being reserved by VCs to fund their existing portfolio and help them survive.
* These arguments definitely have merit, but that merit is limited because of the market forces that drove this bubble. To address #1 – even if you cut the estimated figures of dry powder in half, we would still be at 2X the 2012 level and the 2nd highest of the 2010s. The numbers right now are just ridiculously high. To address #2 – a record number of new funds were formed in the last 2 years, especially by new managers and in the pre-seed space. These types of funds are specialized and/or smaller, and as such focused on one stage (so holding onto capital to “double down” on existing investments is not even an option for them).
* In 2023 you can expect a new “Series A Crunch” (companies that recently raised seed will hit a wall in getting funding for the next stage). We saw this in the early 2010s, and it means things like debt funding, extension rounds, “pre-series A”, etc will become prevalent again. Seed-stage companies absolutely should be saving cash right now to prepare for this.
* There will be a lot of of M &A. Not just big newsworthy deals, but also a lot of “acqui-hiring” and competing startups that merge through necessity.
* Cooperation across all business ecosystems (including startups) will decrease. In boom times, people have a “rising tide floats all boats” mentality. In down times, this shifts and people retreat to protect their turf.
* Many of the accelerators and other startup support organizations you have seen launched the last few years will disappear. This usually happens quietly. Unsustainable businesses get started in unsustainable times.
* Layoffs will continue through at least half of 2023, and especially across Wall Street and the later-stage startups that raised megarounds in late 2021/ early 2022 (right before the tide shifted).
* For fundraising, 2023 will be a “return to the fundamentals”. To mitigate risk, startup investors will (1) focus on quantitative growth metrics, and (2) team. Diligence and the time to close a round will return to normal levels. These are all healthy behaviors.
* Like any downturn, you can expect this time to produce the tech companies that will define the industry in 5-10 years.
* 2023 will mark the largest migration of talent from large companies to startups that we have ever seen, as talented employees flock to startups (or start their own)
* Smart investors will invest in the angel/pre-seed stages right now, and smart entrepreneurs will start up right now – because they know that by the time these companies need later-stage funding (18+ months, minimum) the market for those deals will be improved.

Speaking at Innovate Finance Global Summit 2023, Sam Everington, CEO, Engine by Starling, discusses how digital banks keep challenging and pivoting as they become more established in the financial sector.

For all your fintech-related news, please visit https://www.finextra.com

Though General Data Protection Regulation has dominated headlines, open banking and the Second Payment Services Directive have set the tone for regulating financial data in the E.U. They are hailed by proponents as a way to make financial markets more competitive by allowing customers to transfer their banking data between institutions. FinTech companies have cheered these changes as an opportunity to rival traditional banks. But even the competition has competition: Asian and American tech firms seem poised to challenge both incumbents and FinTechs alike. How will contention for financial services play out, and what should policymakers consider as they implement the new regulations?

Moderator
James Mackintosh
Senior Columnist, Markets, The Wall Street Journal

Speakers
Louise Beaumont
Co-chair, Open Banking Working Group, techUK; Strategic Advisor, Open Banking, Publicis Groupe

Elena Lieskovska
Senior Managing Director, Head of European Specialty Finance, Värde Partners

Gavin Littlejohn
Chairman, Financial Data and Technology Association

Ajay Vij
Senior Vice President and Industry Head, Financial Services, Infosys

#GDPR #FinTech #FinReg

Leadership – Responsible innovation. You have or are developing innovation which is socially desirable, citizen-centric and undertaken for the public interest.

Bank Account-ing from Gig to Big: BankiFi enables banks/FIs the ability to offer their (micro) business customers a fast track in one location (banking channel or app) taking care of accounting, banking, payments, lending, and tax submission requirements. This way banks earn fee-based income and loyalty with their customers as they grow whilst saving time and money for their sole traders and small business customers. The solutions is offered as cloud-agnostic technology (micro business services) or as a service. Banks and FIs can bundle the offer any way they like, a pre-bundled Request to Pay (RTP4) solution is available as a fast track to market allowing payer and payee to Communicate (rich dialogue between buyer, seller and bank), Choose (options on terms, service and nudges), Collect (payments of any type) and Consolidate (data to any accounting, source or destination system). As such banks can move cap ex to op ex and be relevant.