Everyone loves free money! Until it's time to pay up.
In a new multipart series available now from Financial Planning, I take a look at the rapid shift that has occurred in the fintech startup space as interest rates rise and investors are a little slower on the trigger than they were in 2021.
In its most recent "State of Fintech" report, CB Insights said global fintech funding and dealmaking in the second quarter of 2023 shrunk to levels not seen since 2017. Deal count fell for the fifth straight quarter, and funding from $100 million-plus mega rounds hit a six-year low.
But as Technology Tools for Today (T3) Conference Producer Joel Bruckenstein reminds us, wealthtech is special. Sure, startup cash may be harder to come by and the insane valuations of just a couple years ago are no more.
But plenty of deals are getting done as long as the firms chasing capital have the right vision and a solid plan to execute.
"I think there was a lot of money raised that probably shouldn't have been raised for some crazy stuff. And I think that's pretty much over," Bruckenstein said. "If you go back four or five years, 20-somethings with an idea could raise $5 million and talk about how they would get into wealthtech. A few of those folks did well. Many of them did not. Many of them had questionable business plans, if they had a business plan."
With that in mind, FP talked to wealthtech insiders about how they're adjusting to the new landscape, what it takes to win in the current market and why getting a "no" from that VC firm isn't the end of a startup's story.
Check out the full story; a Q&A with Appepar and Opto founder Joe Lonsdale; a special edition of The Financial Planning Podcast with advisor turned angel investor Samuel Deane; and much more, only at Financial Planning.
Anything else on your mind? Drop me a line at justin.mack@arizent.com. And if you have any of that free money just sitting around, feel free to send that too. Have a great weekend everyone!
Regards,
Justin

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