Fintech Isn't Dead

Hosted By Matt DeCoursey

Full Scale

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Ryan Hemingway

Today's Guest: Ryan Hemingway

Managing Director - Epic Ventures

Salt Lake City, UT

Ep. #988 - Fintech Isn’t Dead

In today’s episode of Startup Hustle, we’re questioning whether fintech is still alive. Matt DeCoursey is joined by Ryan Hemingway, managing director of Epic Ventures. The duo had a sophisticated discussion that covered a wide array of fintech topics. But on top of it all, they answer whether fintech is already dead or not yet.

Covered In This Episode

What’s the real score on fintech right now? Has it passed its prime? Or is it just a slowly developing industry?

Matt and Ryan have things to say about it. Their conversation explores how banks adapt to new technology and fintech’s slow tech integration. And in the end, they also share insightful advice for entrepreneurs who want to get started in fintech.

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  • Ryan’s story and his job at Epic Ventures (02:35)
  • The slow adoption of software and integration (09:49)
  • What has fintech done for the credit side of the business? (14:16)
  • How can fintech adapt to everyone’s needs? (18:34)
  • Banks and the pressure to adopt new technology (26:36)
  • Fraud in the industry (30:32)
  • What’s the best thing for VCs right now? (35:54)
  • Advice to follow when starting a fintech business (41:01)

Key Quotes

I think fintech does a lot of things that the banks can’t do. Or the banks already do, but fintech can do them better. There are a lot of banks around the nation that need to kind of outsource that expertise. That’s why I don’t think fintech is dead in any way.

– Ryan Hemingway

I don’t think banks know what to do with crypto. I think they looked at it five years ago, they’re like, this is the devil. And now, they’re like, yeah, we’re gonna do it.

– Matt DeCoursey

I think, sometimes, too much capital leads to maybe not the most optimal decisions. I think we’ve seen that, but I think that’s correct. I think that’s what fintech is going through right now as well. Adoption is still taking place, but they are cleaning up their businesses and getting back to fundamentals.

– Ryan Hemingway

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Rough Transcript

Following is an auto-generated text transcript of this episode. Apologies for any errors!

Matt DeCoursey 00:01
And we’re back! Back for another episode of Startup Hustle. Matt DeCoursey here to have another conversation that I’m hoping helps your business grow. Is fintech dead? I can’t imagine how it could be. It’s everywhere. Financial technology has so much to do with our everyday lives. I checked my checking account balance in an app today. I might use it to link a bank account to QuickBooks here after I record this podcast. There’s a whole lot of stuff going on. And it is a really big space. And I’ve got an expert on that to have a discussion with today. Before I introduce today’s guest, Today’s episode of Startup Hustle is sponsored by Double – a flexible assistant service for busy executives that matches you with an experienced assistant. Today, it’s easier than ever to hire a virtual assistant online, and no solution is better than Double. Double is a flexible assistant service built for busy founders, executives, or anyone looking to save time and focus on what matters most. Want to take control of your business and unlock a more productive version of yourself? Go to today and get $300 off your first month when you sign-up with the code HUSTLE22. That is, use code HUSTLE22, and that’s 300 bucks straight into your pocket. There’s a link in the show notes. So to help you get there, with me today, I’ve got Ryan Hemingway, and Ryan is a managing director at Epic Ventures. That’s a venture capital firm out of the beautiful city of Salt Lake City, Utah. You can go to Much like the link for, there is also a link for down in the show notes. I guess, without further ado, and straight out of Salt Lake City, Ryan, welcome to Startup Hustle.

Ryan Hemingway 01:54
Hey, thank you for having me, Matt. Excited to be here.

Matt DeCoursey 01:58
Yeah, this will be a fun topic. And I know you’ve got a lot to offer on the subject. Before we get into that, before we decide if fintech is down or not, let’s start with a little bit of your backstory and a little bit about what you guys do at Epic.

Ryan Hemingway 02:13
Sure. So I’ll start by giving you a little bit about me. I actually stopped studying to be a commercial pilot. I was a flight instructor who was just about to start interviewing for jobs to be a pilot and switched up at the last minute. As I thought, you know, I don’t know if I really want to be a glorified bus driver for the next 30-40 years.

Matt DeCoursey 02:39
Don’t say that to other pilots. That’s gonna, say, air mouths, pilot’s earmuffs.

Ryan Hemingway 02:43
But then I saw I had graduated and jumped in. I was trading bonds and corporate bonds back in New York. So on the capital market side, I was working with a group that was doing electronic trading. So the gentleman that I worked directly for built an electronic trading platform. So I got to see firsthand a little bit of the disruption of bringing transparency to the bond market. It was where I started, so in hindsight, I learned a lot from that experience. And then went back to school, did an MBA over in England at Oxford, and then I joined, uh, I graduated in the recession. So when the world was falling apart financially, I joined a regional bank, a commercial bank in Nevada, and Nevada State Bank to build a private banking department. And in hindsight, I learned a lot. It was tough. It was a tough goat since the world was on fire. And I had a front-row seat to the destruction of wealth.

Matt DeCoursey 03:43
I started my first real entrepreneur thing where I was like an adult that wasn’t a side house or anything else in 2008 and 2009. So I get it. It was like, I look back at that. And I’m like, wow, how did this make it? You know, like there was such a bank you worked out? Is it still around?

Ryan Hemingway 04:02
Is it still around? So we did really well, it was we helped the FDIC. So we took over three other banks at the FDIC. It is, you know, a request we help. We kind of took them over during that. And we did survive. We thrive. We’re still around. They were about $4 billion. I don’t know what they’re at now. But yeah, I was the first hire to come to start a private bank. And I’ll tell you this, I remember discussing with my wife when I got the offer, and I said I’ve got a blank canvas. It’s like being an entrepreneur, but in an organization, I’ve got resources, and this will be good. And it was not like that at all.

Matt DeCoursey 04:48
It was an entrepreneurial journey, Ryan, because if I start talking about banks, I start making some pointed comments because, for entrepreneurs and startup founders, the world of banking is more of a point of frustration. And then anything else, because the world of finance isn’t well, okay, so that’s what I would say, isn’t completely true. The world of finance has been slow to adopt the needs of the startup founder. Now we go back to 2008, 15 years ago, we can talk about fintech and a lot of other stuff. I think a lot of people think of 2008. So that was the iPhone three. I like to sometimes compare iPhone models because it lets you kind of give me some references. So iPhone three was the new iPhone, right at that time, I remember because I had also started my own, as I mentioned, my first business there, but that was like the wild west of the internet and so many, you know, there has been I mean, it’s crazy over 15 years, the evolution and the things that have changed, you know, fintech is it was as a premier, a cowboy, or cowgirl along on that. Or to say cow person, I don’t even know what to say anymore. Yeah, so cowboys, cowgirls. Anyway, they’re all along for that ride. But you know, there’s been so much it’s changed. And I think let’s start like, let’s kind of rattle off a little bit of, like, obviously fintech, financial technology. I feel like that’s so broad. Like I mentioned at the beginning of the show, that can be everything from like the app, I check my balance on to, like, a company like lending that’s been on the show has supported the show, and they do they have a specific platform that helps people get loans quickly and easily and affordably for multifamily dwellings, you know, like, that’s like, a slice in a niche that’s pretty and then you have things like the plan isn’t a plan that helps all the bank accounts like attached to stuff. And thank you for doing that because these are the little pain points. But what I’ve learned is that all these financial institutions are kind of like doing their own thing. And there are a lot of integration opportunities. And the moment you think all the good ideas are gone, you start looking at banking, and you’re like, wow, there’s a lot of disruption. That’s still so ready here. Oh, 100%.

Ryan Hemingway 07:09
And I think the evolution has been so if you look back and see where fintech started, right. It was basically unbundling all the banking services, right? You mentioned, right, lending, you had, you know, money transfer payments, you know, Wealth Management, and you had all these companies kind of popped up with point solutions and sectors, right.

Matt DeCoursey 07:34
It could have been, let’s throw, let’s throw PayPal in there, too. Oh, yeah. If you, like PayPal, like, I mean, you know, so like, that was revolutionary at the time. That was our boy Ilan over there. You know, like, Hey, here’s an online payment service, and people are like, what do I do with this? What’s this for us? So you don’t get ripped off on eBay?

Ryan Hemingway 07:53
Exactly. There’s, and that’s, that’s moved forward now. And I think a lot of these points solutions have become, you know, larger solutions. They’ve added more things. They’ve implemented more platforms. As you said, everything’s connected now to your account. You can transfer money here, from their friends, etc. And it’s made, I mean, the beneficiary of all this, I think, is the consumer at the end of the day. Yeah, I agree.

Matt DeCoursey 08:21
Easier on the financial side? Well, they’re all things that need to exist. And you know, like, I don’t want it like I don’t really have any vested interest in chirping about PayPal, but you know, you look like PayPal came out that was, you know, a post-2000 invention, and it was like, pretty revolutionary at the time because your option before that was to send a check. Yep, like a check, like, and if, and I believe you may be a similar age to me. So at some point, when you were a kid, you sent a check away, and you got your product six to eight weeks later. I had to wait. They had to get the check. They had to wait for the check to clear and a whole lot of other stuff and then ship it. Can you imagine trying to sell something in this day and age if you had to deliver it six weeks later?

Ryan Hemingway 09:09
No way. It’s crazy. The thought of that, like even my kids, so I have kids, you know, younger, you know, eight to 15. And, you know, today’s shipping, you know, instantaneous payments. I mean, they don’t know anything other than that, right?

Matt DeCoursey 09:24
It’s absurd. Yeah. And so, you know, you’re kind of rolling forward. Now. I mean, while fintech has, in some cases, been on kind of a cutting edge of disruption and evolution when it came to software and integration, and in a lot of cases, it’s also been slow to adopt.

Ryan Hemingway 09:45
Yes, yes. That’s so. So it’s interesting. So if you go back, if you go back a little bit, you know, a couple of years, you know, before the real big fintech. Boom, boom, there was a lot of software, you know, hotshot Joe, and I say that respectively, very good, that would come in and say, Hey, I’ve got this problem, I’m going to solve it with software. And one of the things that they learned early on was that not everything is a software problem. Sometimes it’s a regulatory burden. Now that that’s not the case, today, most of them have figured out loud there’s a lot of regulatory stuff that we’ve got to play with when dealing with banks when operating with people’s money. And that’s a challenge. And I have seen a number pop up in this red reg tech industry to make that more efficient as well. But once we kind of got through that, I think the adoption started to take place at a quicker rate.

Matt DeCoursey 10:41
Now, well, I mentioned that banks and startups, early-stage startups are oil and water. And that’s a regulatory problem for a number of different reasons. Like, if you’re listening and you are a software founder, then you already know this. So a lot of software companies don’t have the same kind of hard physical assets that other companies have. So you know, it makes it hard to go get a loan, and you’re just not you’re outside of the traditional model. Now, in 2008, we’re where our stories largely began, you know, that there’s, you know, it was, you had no options now you see a lot of stuff coming up. And you know, as some of those working at Epic VC, and once again, go to To learn more, maybe send your information along because they fund early-stage startups. I’m gonna talk about that in a second. But this access to capital was really challenging. And now you have things there, you know, there’s crowdfunding platforms and different things that are like, almost like online Angel platforms that for some, and I don’t have exact stats here, apologies. But you know, five years ago, most of that stuff still wasn’t even legal yet. And, you know, so and that’s that regulatory adoption, that’s been really slow. It’s not necessarily the bank’s fault. I actually had a bank CEO tell me, so Full Scale, the company that is on Startup Hustle, and my business, we have loan equity in like seven different companies that we’ve done some warrants or different kinds of trade for services. And, none of the banks we’ve talked to in the past would recognize any of those assets is worth anything. And that got me fired up. Because I had a bank CEO, I won’t mention he said, I would much rather take that as collateral, but I can’t, as opposed to a truckload of bolts that someone has that are good for one purpose and one person purpose only. And if I have to repossess those, I won’t be able to do anything with them. But for some reason, I give that guy alone, but not you. So you look at fintech and why it isn’t dead is because there are all these solutions that are springing up, like solutions inside solutions. You look, I mentioned that company lending standard earlier, you would think that the process of getting a loan either for a commercial building or a home would be streamlined and efficient or like filled with all kinds of stuff, guess what they are, but there are these little slices and niches, whether it’s funding platforms, connecting platforms making things better. I personally think that you mentioned earlier you said some things are people issues. But I think overall, I feel like financial services and all that is really made for software because it’s on many levels. So analytical, where two plus two has to always be equal for where the people’s problem gets into it is getting, I think getting people to adopt the use of it.

Ryan Hemingway 13:36
Oh, I think that’s 100%. Correct. I think that’s absolutely right. You know what, you know, one of the things I guess, I guess one of the beneficial things I think fintech has done more than anything is on the credit side and the lending side. Because think about it, as we all know, banks, as you said, they don’t want to lend on IP, they don’t want to lend on no assets, they want to only lend to a plus plus borrowers. And that’s that’s fine. Their business model, a bank’s business model, operates, you know, because they can’t have a default rate of less than two or 3% or something like that. So really low numbers for them to operate. And what all these credit startups have brought into the fintech world is on the lending side is they are enabling that portion of the market that doesn’t isn’t an A plus plus borrower to a bank. They’re they’re giving them access to credit at an amazing rate. So you can again, all these lending startups that are looking for better ways to underwrite that’s not on your general FICO score your credit file, they’re getting loans to them and they’re getting you know, with the Buy Now pay later stuff that’s happened and then the access to credit, I think that fintech has enabled is just, it’s just awesome. Right. It’s enabled startups, it’s enabled people to get access to credit, And I think that’s really big.

Matt DeCoursey 15:02
One of my favorite examples, and I think, a huge supporting argument and why fintech certainly isn’t dead is occurring here in my hometown in Kansas City with a company called C to F O. And Sandy Kemper, who has been on the show several times CEO and founder there. So he’s recently told me when he recorded earlier this year that they onboard 25,000 new businesses a day, which is insane. But with that, so if you’re a, if you’re a manufacturer, if you make something that, for example, gets sold at Sam’s Club, Sam’s Club typically wants to take receipt and pay you 60 to 90 days later. The problem is, if you’re strapped for cash, you need to have these little, these little bridges, because you want that money now, so you can keep making more stuff. So you can at the end of the year, so you can keep delivering, keep delivering, keep delivering. And in the past, those kinds of AR, or accounts receivable type loans were super expensive. C to F O created a marketplace that made it really competitive for people to do these loans. And here’s the thing, they were secured by an account receivable from Costco or something, it wasn’t questionable as to whether they get paid. And so with that brought that lending rate down, and obviously rates are, you know, we’re recording this in November, I don’t like to mention dates, because this doesn’t come out for a little bit. But here in November of 2022, they’re getting ready to raise rates again. But the thing is, is that affordable access to capital is and the end like you mentioned, the quickness of it, and the speed and accuracy. Because the last thing I think a business owner wants to do is spend all day applying for loans.

Ryan Hemingway 16:49
No. So here’s a funny one for you. So when I started at Nevada State Bank, we had a small business application. That was a couple pages long, I mean it, you had to fill that out. And again, a lot of if you go and again, then it would take time to go through our system at the bank and the process and loan committee, depending on the size. There was a process to that. So it could take a week, two weeks, depending.

Matt DeCoursey 17:25
And if you remember one of the early, you know, cabbage, if you remember that their big cabbage, get you a credit to your bank account and like a minute later know everything about you.

Ryan Hemingway 17:29
Yeah, and you and I know in the startup world, like even a quick no is better than a long delay. No, you know, just

Matt DeCoursey 17:37
it was just I was just thinking that while you’re talking about that two week run up and those applications and like First off, that’s too long, there’s immediate needs, then then I’ve had that happen. So at Full Scale was like over three years ago, and we’re looking at different funding options. And we burned for like six weeks talking to two different banks. And I told both of them at the front end, if what you’re going to do at the end is tell us is going to, if you’re just gonna end up telling us to go apply for an SBA loan, just tell me no right now. And like, no, that’s not where it’ll end up. That’s not where I’ll end up. One Bank wanted us to, for a potential million dollar loan wanted us to provide $10 million worth of assets to back it up. I do mark these episodes explicit. But I’m not going to tell you the explicit things that came out of my mouth to that banker. All right, I will set if I had fucking $10 million. Right now, I wouldn’t be asking you for one, dude. You’re wasting my time. And then the other place and response. The other place I ended up was the right that well, yeah, that’s yeah. And then the other place, I ended up saying we think you’d be best to apply for an SBA loan. facepalm moment, but yeah, so these are the things that frustrate business owners and I you know, so the question is, is like, if fintech really isn’t dead, then how are they going to begin to adapt to the needs of everyone around and we wanted to address that question, but it feels like a good time to mention like, all these things are really, really heavy. And they require a lot of work, a lot of follow up and a lot of time. And that’s why when people ask me what my best advice for building a business is, most of the time that involves the people on your team and knowing when to delegate. And today I’d like to add that knowing when to hire an assistant is key. And it’s usually the hardest thing for a startup founder to do because we feel so close to everything. That’s why finding an assistant is hard to do. And it doesn’t have to be when you connect with your friends over our friends over at Double. They’re the experts at pairing founders with remote executive assistants you can trust and Double will match you with experienced US based assistants and armed them with the tools and training to ensure that they’re getting the best of the best Startup Hustle listeners can go to and use the code HUSTLE22. You save 300 bucks right off the bat. That’s once again, HUSTLE22 and save $300. Have you ever used a virtual assistant?

Ryan Hemingway 20:03
I’m not a true virtual assistant, but I’ve used a couple of virtual tools. I think they’re a great idea. In fact, I just wrote down Double, so I’ll check it out

Matt DeCoursey 20:13
at once. Yeah, I’m sitting here thinking, you know, like, how these are the things that I like, I made a big point and of emphasis in my life. So I’m up to 300 employees, and it’s just changed the face of life, how quickly and, and the Internet everything we do is a hell of a lot different than it was three years ago, four years ago, and yeah, not having someone to help is great.

Ryan Hemingway 20:39
So yeah, one thing I would always say is to entrepreneurs, and you know, this better than anyone, is entrepreneurs have to do more with less, that’s just the nature of what they do. And, and not only is capital a scarce resource most of the time, like your time is a limited resource. And to use that more efficiently. Amin is just better all around.

Matt DeCoursey 21:00
Well, your time is truly finite, you know, and we and as in the world of VC, and startups and software, we love to use the term scalable. Your time is not the biggest limitation for entrepreneurs. So finding, you know, people that can help and then also you like technology that can help now. You mentioned cabbage, cabbage has a love hate story, because cabbage was great. Like I actually used it before. I was like, wow, this is really fast. And you know what, you paid a little bit of a premium with it, but I was okay with doing that because I turned right back around. It’s like, you know, a high interest rate on a 90 day turnaround and payback isn’t really that deadly. It is if you’re going to stretch it out over eight years. But then the pandemic hit and cabbage, literally, I predicted this, I was telling our CEO when it was right when the COVID hit. We still call it the curtain Coronavirus. We didn’t know what to call it. March of 2022. Big cabbage literally cut everyone’s credit line, like 100% of their users. They went from like you have a $100,000 line to nothing. And that was one of the things we did as we recorded our 1,000th episode of Startup Hustle yesterday I did. I was in the Philippines when that broke out. And I did a little four part series called the corona diaries. And I encourage everyone at some point during that if you think you’ll need the money later, max your credit lines out now. And two days later, everyone cut all their credit lines. It was kind of weird in that, yeah, but cabbage, man, so they ended up like they needed to do that to protect their business. Most likely they ended up getting acquired by Amex. Yeah, so yeah, but Okay, so with. So are we going with fintech isn’t dead? We’re kind of halfway through this? Are we still? I think fintech is ripe for I think there’s a ton of disruption still waiting to occur. And I think there’s a lot of really good things and ideas that can still come out and a massive industry worldwide.

Ryan Hemingway 23:06
Oh, I don’t think it’s dead in any way. Now, I think I think you and I can both agree that the numbers are showing, right, we’ve all seen the layoffs that have taken place at some of the larger fintech even smaller fintechs I think that the funding that’s going gone into fintechs, quarter over quarter is in the decline. So I think there’s a lot happening to the fintech industry. But I can tell you that, again, I worked with a lot of financial institutions, smaller banks, etc. And how to use fintechs for their software, they’re partnering with fintechs is still a top of mind discussion for most of them. So, no, I don’t think fintechs do that at all. I think the adoption is still taking place at a rapid pace, and will continue to do so. Because I think fintechs, as you said, I mean, they do a lot of things that the banks can’t do, or the banks already do, but the fintechs can do them better, right customer acquisition, distribution, the technology side of things, you know, a lot of these you know, unless you’re JPMorgan that’s got billions of dollars into your you know, IT staff. There’s a lot of banks around the nation that need you know, that need to kind of outsource that expertise. So I think adoption is taking place. So that’s why I don’t think of fintechs in any way.

Matt DeCoursey 24:28
So Ice Cube once said, big banks, take little banks, and it is so true on many days, and let’s talk about that for a second because I’m assuming that you mentioned the Nevada was at Nevada State Bank. Yeah. Okay, so that’s a local or regional bank and they’re right now that there really is this big bank take little bank kind of thing going on because there’s you know, four or five kind of big mega national banks that are out there and the regional banks are struggling, I’m noticing a lot of consolidation like I was Do you know my local bank then became, like merged with like 10 other banks, how much pressure is on the regional? So I have used a local bank for our business at Full Scale. But quite honestly, I recently had to make the decision to switch to a bigger bank, because the fintech side of it, we do a ton of Ach, and wire transfers, you know, we’re an international business, we have to send money overseas, we also, you know, collect a lot of money from our clients every month and cannot, you know, can’t charge credit cards for that, or I’d have a massive, well, first off, I’d have a huge chargeback liability always floating around. And I’d also pay an insane amount of credit card fees. So how much pressure is on local and regional banks to get their shit together and step up technologically? I mean, they’re like you said, there’s a lot of stuff that’s helping banks do that, but I’m not seeing the adoption everywhere.

Ryan Hemingway 25:56
Oh, the pressure is huge. I can tell you that, again, the banks that the circles that I kind of run in Yes, the pressure is huge. Because again, consumers are demanding, again, better user experience. They’re demanding all that stuff that you said, I want to send Ach, I want to send wire transfers, I want to do international stuff. I need that to run my business to just and those banks that don’t have it. They’re seeing those deposits, they’re seeing those relationships, you know, move to some other bank that does happen. And so I think the smart, smaller banks are moving quickly, and they’re adopting technology. Again, I can think of two right now that I know are pushing hard to adopt new technology to offer that to their customers.

Matt DeCoursey 26:44
The pressure’s enormous in crypto fintech.

Ryan Hemingway 26:47
I do think crypto is fintech. I think again, it’s kind of its own subcategory, probably

Matt DeCoursey 26:52
in the total bubble if we just say fintech, that’s like saying software. It’s like okay, that’s all right. That’s like, right, what do you do like sports? Yeah. Okay, what kind? So, okay, so crypto is now it is do, you know, I don’t think banks know what to do with crypto. I think they looked at it five years ago. They’re like, this is the devil, and now they’re like, Yeah, but you know, we’re gonna we’re gonna do it.

Ryan Hemingway 27:21
So I do think they’ll get there. And again, just for your listeners, yes, I invested in this. But I invested in a company called Sound digital. And they are, they are a platform that enables Main Street type businesses to work with digital assets. And they were having a lot of great discussions with banks around trying to help them make loans against against crypto so they were kind of a grid now that’s taking you and I know, loans against your crypto digital assets is taking place in the defy world all over the place, but they were trying to bridge.

Matt DeCoursey 27:57
Going to some places that’s also imploded this year, like big time. Big time talking billions of dollars wiped off the table. What was it with Luna? Is it, yeah, Luna?

Ryan Hemingway 28:08
Luna was the big one. And then the other one was Celsius? Celsius?

Matt DeCoursey 28:13
No. Celsius? Yeah. Yeah. And those were crypto lending platforms. And I kept looking at those I’m like you’re offering 20% returns How is that sustainable? Yes, I mean, and it wasn’t it wasn’t well, but that’s that’s part of why traditional banking and and the regulation that kind of weighs it down and makes it slow to adopt is there though, because, you know, like, you talked like a bank can’t get too Cavalier with loaning against certain types of assets or things like that, that’s there for an tended to be for purposes of consumer protection now, we watched those kind of failsafe things blow up in our face all the time. Why were we talking about a financial crisis in 2008? Financial everything now, I think part of what like I think that blockchain in general, just that the whole blockchain process is the future of fintech because I think that what a lot of people don’t think about or consider is, you know, one of the biggest reasons that that Dustin says fail is internal fraud. And blockchain fixes that because ever since the ledger and the pencil were invented, the eraser became as mightier than a sword. And a lot of cases and you know, it’s a lot harder to steal, just to be blunt about it with the blockchain stuff but I mean that the adoption of that I sometimes sit back and think about that, oh my god, this could take like a century.

Ryan Hemingway 29:52
I think it’s coming, but it is moving slowly, and it’s funny you bring up fraud. So again, a little off-topic, but when I was in Nevada working with a lot of clients If we had a product that kind of tracked your, you know, your checks and your inflows and outflows, and it was a little extra charge, most people wouldn’t want to do it. And it’s surprising how much fraud takes place at a small business. How much I mean, I guess embezzling happens, even. Even when the founders, they all know each other. And the CEO says, Oh, my gosh, that doesn’t happen here. It’s amazing how much takes place. And I do think that only needs to happen one time.

Matt DeCoursey 30:27
That’s the thing is like, you know, someone only needs to clean that account out once and it’s you know, and it’s Oh, yeah, but that person will get in trouble. Yeah, but it doesn’t mean you’re gonna get your money back.

Ryan Hemingway 30:40
Exactly. But I think blockchain will solve for that. I do think blockchains are being adopted. Certainly on the defy side, I again, I think the traditional finance side will be slow to adopt. I don’t know if they I don’t think they’ll be early adopters. It is just my opinion of blockchain so much as some of the other fintechs but I do believe that will get adopted in the long run.

Matt DeCoursey 31:04
So there’s been a lot of headlines that have been boldly stating things similar to the death of fintech, which I think is a little aggressive, but we’ve seen that fintech stocks cratering, and, you know, like it’s fintech categorically still interesting. With rates rising and venture capital, trying, trying, I say, trying, because I don’t think it’ll ever fully have discipline. Sorry. That was your karma for the pilot combat earlier. But, you know, like, you know, what, I mean, further, you know, while it’s not dead, or at least in my opinion, it’s not like it is going to be a rough road for fintech companies over these next couple of years. While some of this stuff straightens itself out and bounces back.

Ryan Hemingway 31:56
Yeah, I hope, I hope it’s not yours. But I do think they’re going to have to straighten out a little bit, right. I mean, you know, the market itself has kind of been in, you know, in this weird state right now. You know, everyone’s got a little bit concerned. But you know, what I am seeing at least again, I’m speaking generally now for the companies I work with, right, they’re still closing deals, everything’s, you know, still moving forward. I mean, some deals are being pushed a quarter here and there. But overall, like things are still happening, things are still taking place, you know, fundings are still taking place. But I do think that everyone is gearing up for, you know, some hiccup in the economy here, right. There’s a lot of focus on conserving cash spending, you know, capital efficiency, particularly, you know.

Matt DeCoursey 32:44
Which, by the way, seems to me like it should be an obvious tenant and in any business, right?

Ryan Hemingway 32:50
I mean, those rules haven’t changed.

Matt DeCoursey 32:56
It’s just, you know, a capital efficient house because five years ago, you had startup wars, where the number of ping pong tables, bowling alleys and swimming pools you could fit in a Silicon Valley office was your main recruiting point.

Ryan Hemingway 33:07
Exactly. Yeah. I mean, I think I think that, you know, there’s been a lot of capital flooding into this market. And as you know, I think sometimes too much capital leads to maybe not the most optimal decisions. And so I think we’ve seen that, but I think that’s correct. I think that’s what fintechs are going through right now as well. I think, again, as I said, I think the adoption is still taking place, but you know, they are cleaning up their businesses, they’re getting back to you. And I would argue fundamentals, I think, to say, look, capital efficiency, let’s you know, Let’s optimize our processes. Let’s be smart about spending, and customer acquisition. And, yeah, they’ll get through it. And I think they’re going to be around. Because at the end of the day, you know, you gotta think fintechs are offering real value add. So in a business, like banking, that is a commodity. Yeah, right, those margins are being compressed all the time. And if you can come in and offer that service, you know, cheaper, faster, better experience, right? That’s just going to help those financial institutions grow. And at the end of the day, they’re the customers.

Matt DeCoursey 34:19
I’m hoping you’ll reveal here, but when you’re sitting around with your peers and partners at Epic, and once again, go to venture capital, early stage, that’s what y’all wanted to hear. So I mean, when you’re sitting around talking about deployment of capital and what seems interesting, like how high on the list is fintech right now?

Ryan Hemingway 34:41
I’m still looking at a lot of fintech. So I do think there’s a lot of opportunities. I mean, again, I would like to say that that was a select as it as I’ve always been, but no, it’s on the list very much. I think there’s still a lot of opportunity across the board for Um insurance to, you know, to lending to you know the depository side.

Matt DeCoursey 35:07
I think there’s a separate episode titled as insurtech dead because man it got battered over this last year. Companies like lemonade. Oh, that lemonade is sour right now people that’s trading for five to 10 cents on what it came out as you know. So out of what’s then what industry is the true belle of the ball right now for VCs? I have a comment on that after yours as well.

Ryan Hemingway 35:33
Oh, well, I can go first if you want to.

Matt DeCoursey 35:36
Yeah, sure. So you know, I you know, you heard all this chatter and talk about deals not happening. I don’t think it’s the deals aren’t happening I’m there’s a lot of feet dragging going on right now like and you know, one of the things that those of you seeking capital needs to understand as a lot of early stage deals, whether it’s funding funds, like they have at Epic, or typical angel investment often occur through liquidation of a different asset to give you cash, which people are hesitant to do when a market is down 25% Because it just feels like you’re losing. So there’s some feet dragging. People want to kind of make sure that things are where they need to be. And then I’m just seeing a true resurgence right now and love for the cash positive. The cashflow, positive business I’m hearing, the conversation I’m having outside of the show are more deemed around free cash flow than extreme revenue growth. And obviously, both would be great. But the free cash flow thing is a less riskier proposition for investors right now. Because they’re not staring into a burn rate that might not when does it end?

Ryan Hemingway 36:51
Free free cash flow. What’s that?

Matt DeCoursey 36:54
Something every business should try to have man, like I said that that’s What’s so weird about startups and funding is people. Well, somebody asked me to describe what Startup Funding was like. And I said two plus two equals fish. Like it does, it doesn’t always make sense, you know, companies that haven’t turned a profit have, you know, massive valuations and stuff like that. And I’m like, what, how does this work? So like, I mean, what are you seeing? I mean, what’s the what’s the word? What’s the word on the street?

Ryan Hemingway 37:22
I think so. I think you’re right, I think, just by nature of everything that’s happened, right? I think investors that I’m hearing in circles are again, I don’t know if I call it fi dragging. But I would say they are looking to take maybe a little less risk than they have, right? They’re looking for time to revenue. If you’re in a seed stage. You know, I think some of the discussions around how quick Are you going to get to revenue? How, you know, again, some of the later stages when I say that, I mean, you may be doing three, 4 million in revenue five, something like that, or having discussions around? Could you get to break even if you had to, you know, I’m hearing those discussions, we kind of come to the surface of, you know, if everything really turned bad, could you get to a break-even what would that plan look like? I’ve heard more of those stories as well. And so, again, I don’t think capital efficiency, strong unit economics. Again, as you and I just said a minute ago, those were always part of building a business and should have been part of building business. I think there’s a lot more emphasis now on defining what that means. But that being sent deals are still being done, right. I mean, we’re still looking to do deals. You know, we did six in the beginning of the year, you know, we’ve got a few in the pipe right now that are close. So we’re still looking to deploy capital on the valuation side. I think at the growth stage, kind of later stage we’re seeing valuations affected a lot more again, but in the early side that I’m seeing, I’m still seeing deals getting done at good valuations. I mean, I’m not. I haven’t seen anything that’s 20 times you know, projected revenue. But you know, I’ve seen over the last couple of months anywhere from, you know, 10 to 12 times multiple, so I’m not seeing the multiples come down as hard in the early side as they are on the later growth stage.

Matt DeCoursey 39:25
As we progress towards the end of today’s episode, and once again with me today having a fun and inspiring conversation and interesting as well. I’ve got Ryan Hemingway, the managing director at Epic Ventures, a venture capital firm in Salt Lake City, Utah. Go to for more. There’s a link for that in the show notes as a quick reminder, and once again, in today’s episode, Startup Hustle, sponsored by Double. Double is a remote executive assistant who can help you with everything from email and calendar organization to expense reporting and database management. Find your perfect assistant today when you head over to Use that code HUSTLE22, and you get $300 off. It’s even easier to get to And you just go down to that link in the show notes, click the link for epic VC click the link for There are also some other fun and interesting links down there that can help you find other resources. So while you’re down there, hit that subscribe button, hit that fifth star, you know, 1000 episodes, and we went back, and we’re like, what are we really bad at, and it was asking people to do the subscribe and the fifth star. So whatever. I led that out. That was one of the first things I said in Episode 1000. I was like, we’ve saved up all of the shillings for that. So please go do that. So, you know, when we look back, and you know, we kind of bounced around a lot of stuff today. I think the topic of fintech dead’s pretty broad, but I mean, like if we have to get out our crystal balls. And, and, and kind of talk a little bit about, let’s talk about what it looks like for someone that wants to get started. Someone that’s already got started. I’ve been someone that’s been starting for a while.

Ryan Hemingway 41:11
So some advice.

Matt DeCoursey 41:12
I can also include advice and GPA, like if you have if you’re talking to those three founders or companies, what do you tell them about their outlook as to what to focus on maybe or what to avoid?

Ryan Hemingway 41:29
I think. So I think advice for all startups, and I’m going to, I’m going to say, you know, I’m going to quote and not paraphrase sorry, Ed Williams, right, one of the co-founders of Twitter. And again, I’ll paraphrase here. You look it up. But one of the things he said that I think everyone should remember right, he said, Look, the internet technology is not it’s not magical. It’s not a utopia, right? It’s an engine of convenience, I think. And that people want to do what they’ve always done. They just want to do it better, faster, with a better experience, cheaper, whatever. So I would say specifically to the early stage crew and fintech, right, remember that, right? The products that aren’t necessarily new, but you’ve got to deliver it, you’ve got to add value. So I guess that’s the real point is remember to add value, add value to the consumer, add value to your bank, partner, your financial institution, wherever you’re working with, and focus there, because the more value you add, whether it’s good times or bad times, you know, someone wants to adopt your solution. So again, value value value. And I think that’s probably fair across the two or three. I think that’s probably the advice I would add is, like, add value, capital efficiency, again, especially specific to the later stage groups, I would say, you know, capital efficiency right now, right? Be Wise With Your capital, you know, you should be running those AV tests on all your distribution channels, right? Lower your customer acquisition costs, where you can, you know, etc.

Matt DeCoursey 43:09
I think if I have to think about that, I think for the earliest like the precede like, Hey, I got a new fintech business, I think you got to, you know, first off, Ryan, hit the bull’s eye, like the square in the middle focus on value, what’s the value that you provide to a user on any level, I think that applies to any business anywhere, if you’re not focused on providing value, you’re going to find that someone else well, and they’ll probably end up with your users. One of the biggest mistakes I see the earliest stage founders make as they’re coming into these presentations in these pitches, talking about the eight things they’re going to do to change the world, focus on one, maybe two at most and be a triple plus at those. Because if you’re not, if you don’t have some value prop or something in there, that’s going to really like to reign supreme and be at a world-class level. You’re just in the middle of the pack. I think for those that have already started. I think capital efficiency is a big thing. I think it’s just I don’t. I don’t think there’s a lack of access to capital. I just think that I use the term foot-dragging. And, you know, I don’t know if that’s really like the true thing. I think there’s just, you know, the checks don’t flow as freely during this time because there’s just a little more scrutiny on these decisions on when, how, and it’s maybe even who makes them. But, you know, good businesses that have good offerings at fair valuations are getting funded every day right now. And I poked a little fun at the discipline of VCs because it’s easy to do. It’s not an industry or group of people that have always been the most disciplined. Let’s just use that. So I think that that discipline begins to build up, it builds up it’s kinda like the buy the dip people, right? So things appear on sale right now. Google stocks at a 52-week low, but is it on sale? So here’s the thing, man makes, puts something on sale, goes out, and gets some capital. And you know, like the thing is, is, I always compare valuations to my baseball card collection when I was seven, or eight and like, I’m like, Dad, it’s a Mark McGwire rookie card, it’s where the $100 and he’d be like, kid, do you have anyone to give you 100 bucks for it’s on? No. Okay, that didn’t work shit. Yeah, and like, that’s my dad’s, like the true reality of, like, but it’s a realistic point of view, like it’s worth whatever people give you for it and your market price. So like, the funny part is, there are so many founders out there that have this fictional fantasy net worth. You don’t pay your bills with your net worth, not like that, to pay bills with liquidity and value and stuff like that. So it is what it is, like, if you’re sitting around, like, all hung up on a valuation for a company that’s not even acquirable yet, like, that’s all you’re gonna end up doing. And then I think for the companies with traction, I mean, it’s time to focus on profits or getting to breakeven or free cash flow. That’s a good time to cut costs. And in some cases, if you are in this, what my business is doing right now is building up cash reserves. You know, and that’s and, and reducing debt. You know, to me, it feels pretty simple, like as a PERT as a personal investor, I see the market going down, that tells me it’s time to take cash off the table and pay off anything else that might have interest on it. You know, and there are a lot of approaches but don’t get down. Because, and, you know, another thing too, is that our economy right now sure seems to be checking out a lot of positive signs that are perplexing the street, you know, the labor markets are still strong. Interest rates for fintech are definitely going to have an impact because the people I saw talking to my buddy that runs a homeland department at a big bank, and I saw him the other day, I was like, so has the Fed ruined your business yet? And he’s like, No, but it’s close. So but it doesn’t mean that if you’re a startup founder, you’re building tomorrow’s innovations. So like, by the time that it really even matters. I mean, you’d like to think that a lot of the stuff had straightened out. Once again, Ryan Hemingway of Epic Ventures, Make sure to go to Ryan, let’s do a follow-up down the road and see if anything we said was right or wrong.

Ryan Hemingway 47:36
I love it. Let’s do it. Thanks.