Shark week is over which means it’s time for fintech week on my blog.
I have never done a full fintech week, but I have a lot of thoughts to organize as I (through our fund Social Leverage) continue to invest in the earliest stages of this sector.
A huge amount of money continues to flow into early stage fintech. The public markets love fintech right now as well.
Square, Visa, Mastercard, Paypal, JP Morgan, Silicon Valley Bank are a sampling of companies at all-time highs.
The Nasdaq, Envenstnet and Greendot are also considered fintech and at or near all-time highs.
Alibaba and Tencent have pulled back, but likely not because of WePay or Alipay which are dominating Asia.
I follow all of these companies in public markets so that I have a feel of the mood of fintech in general, but when it comes to angel investing, my focus is much more narrow.
What’s so exciting about fintech?
For one thing…the Registered Investment Advisor Industry manages/controls over $70 trillion. Josh Brown discusses it here.
That is a lot of money.
A giant shift has long been underway as people leave wirehouses/banks to set up RIA’s and it will continue.
But, as Josh also points out indirectly in this piece about State Street, Schwab, Black Rock and State Street, much of asset management and gathering has become commoditized.
It is for this reason I have long avoided the ETF and Robo Advisor space at the early stage.
Other than Acorns, I have not seen any 10x better products come along that get me excited to invest. I am not knocking anyone for trying but there is only so much software can do when it’s humans on top that will make the difference.
A lot of what’s written above is why I have been insanley focused on do it yourself investing and trading.
I look at the world in my own wierd way. I love what I do and assume that a next generation will want to do what I did but with better tools. It’s also much easier for me to invest where my passion lies and where I continue to build domain experience.
I need to find these next great founders and I am on the phones making calls, flying around the world to see pitches and events to press the flesh to make sure people know what we do and what we want to invest in.
Part of my job today job is to put my thoughts out there as loud as possible so that people working on these problems have a better chance of finding me as well.
The good news is as we head into year three or year ten of this boom (depending on who you ask)…tens of millions of new investors have been onboarded into the world that matters to me.
Hundreds of millions more are playing video games together on YouTube and Twitch, participating in e-sports and playing doing fantasy drafts which are all just onboarding opportunities to the world investing and trading.
I have not even touched on Bitcoin or the Blockchain yet, but it’s not just trading coins anymore on the exchanges that you need to think about. Consider Augur…
A couple of weeks ago, Augur’s decentralized network for preidiction markets was launched.
Augur was created by the Forecast Foundation and funded through an ICO in 2015. It is an uncensorable platform where users can create prediction markets based on the outcome of any verifiable event, from World Cup games to elections to cryptocurrency prices to the weather.
Augur became one of the most popular applications on ethereum shortly after launch. At the time of writing, it has nearly $1.5 million staked on over 600 markets, according to Predictions.Global, a site that displays data on Augur markets (and has censored the assassination markets).
Since Augur consists of smart contracts on ethereum, a blockchain network that is not controlled by any single party, users from around the world can place bets on its prediction markets – without governments being able to stop them.
Global financial markets are not going to be ruled by the same Nasdaq’s NYSE’s, Goldman Sachs, Visa’s and Fidelities of the world.
The stage is set for a wild era in global financial markets.