9 advices on how to approach a VC (with a Fintech flavour)…

Why 9 ? Don’t know.
On a plane back from Lisbon and in a very intense period of startup coaching, mentoring, scouting and showcases (NEXTBANK EU, Latam, Sibos, OpenAxel and DACH forum, plus Bootcamp ongoing).

So here s my contribution to how to approach a VC, from my humble experience so far :

1- talk with someone who knows the VC and can vouch for you. Not for the idea, for YOU as an entrepreneur. Sending a “hey Matteo, I have this great idea and here’s my PowerPoint” is a 3 times a day story, especially in this context with Fintech money not being very huge (yet…). If you don’t know the VC, get there. Follow them, see where they are talking, get info on the portfolio and the fund. In other words, give context.

2- send a one pager to start with. Do not overflow. Imagine that very often the first thing any of the partner you approach will do is to talk to the other partners. So the easiest you make that, the better chance you will have to catch their attention.

3- facilitate the work of the VC. Send already history of similar companies, valuation, acquisitions, IPOs. The easiest the diligence, the more straightforward the answer.
Fintech is a world with little or no history or data for VC, so the difference or the game you want to play is about the team and the fact you control well the domain you are getting on.

4- read a Term Sheet generic template you can download from Internet. There are protective provisions and you need to be prepared to accept them. This is crucial especially if you never raised money before. Nothing pisses off more a VC than having to explain what the very basic of a deal is, in series A.

5- in series A we focus on opportunity, not actuals. Highlight what problem the raised money is going to solve. Again, because of lack of history and data, valuation of a startup varies a lot. Your revenue might not be enormous and it makes a difference if you actually have more than a pilot.

6- there are thousands of banks in the planet… Say upfront whom can you sell to now and whom you cannot. Show you thought about it. We all understand that is complicated and lengthy and costly. But if you segment well your banking customers by needs, geography, connections amongst themselves and emulation factor, you show awareness and inspire confidence.

7- share your burning rate. Show it. Always good to understand how much did it take you to get where you are. VCs love entrepreneurs and love more cost conscious entrepreneurs.

8- highlight the Magic. But it’s ok if you don’t have it. As long as it s not too easy to copy it. If you have patents, say it. I you don’t, pls say you thought about it, because maybe the simple answer for you to give is “if we go fast enough we won’t need a patent”.

9- Never close up on a VC. VC loves startup who are progressing, with or without money, so if you do progress, give heads up.
Think of it : Fintech VC business has just started. Partners will change, new funds will rise. Keep the network alive without being invasive. It’s all about timing, remember.

I don’t want to give any lesson here and you can always claim that its so easier when you are on the right side of the money, but i really wanted to give a personal view on what works…

Stay tuned


Wonder what happened in Perth ?

Perth is a two million village in west Australia, with mild winters and great summer (when is cold over here in Europe, which makes it even more attractive).
I was invited by the IFC to moderate a technology showcase in the context of the preparation meeting for the G20 of the financial ministers.

Some Perthness here ..


A more complete description of these event follows here:

The Responsible Finance Forum is a two-day, invite-only event will focus on Responsible Digital Finance. It will convene industry, government, and private sector leaders to discuss how digital financial services are delivered transparently, fairly, and safely. The RFF V organizers include BMZ/GIZ, CGAP, the Bill and Melinda Gates Foundation, IFC, The Netherlands Ministry of Foreign Affairs, The Better Than Cash Alliance, The MasterCard Foundation, UNCDF and the World Bank. I am on the first panel of the second day, themed “Responsibility in Action” and moderated by Matthew Gamser of the IFC.


The Technology and Innovation for Financial Inclusion Expo (30 Aug) is organized by the SME Finance Forum, in conjunction with the Annual GPFI Plenary and Forum 1-2 September 2014, to showcase some of the promising emerging technology solutions that have the potential to accelerate financial inclusion for households and businesses. This event will offer opportunities to fintechs and other participants to interact directly with G20 representatives and for the G20 representatives to gain exposure to the work of a select group of emerging technology companies. AMP will be the first company to present in this expo.

The Global Partnership for Financial Inclusion (GPFI) Plenary and Forum (http://www.gpfi.org/) on 1st Sept is an annual high-level event which aims to engage a select group of leading private sector innovators, global policymakers, and thinkers to discuss and influence critical aspects of the G20 financial inclusion agenda. This year’s forum will focus on the impact of digital financial services. The widespread adoption of digital payments in all their forms, including international and domestic remittances, can be instrumental in increasing financial inclusion. Moving away from cash to digital financial services can also contribute to the G20’s goals of women’s economic empowerment and inclusive economic growth. I will be on the panel on Innovation, led by the Markets and Payments Systems Subgroup.

Panel with Mark Pesce & C (yes, informal dress code and I took it literally, not that it was a huge effort)


Meet the Startups participating at the event:

Advanced Merchant Payment (AMP), Presenter: Thomas Deluca, CEO
Copsonic, Presenter: Christian Ruiz, COO
KlickEx, Presenter: Robert Bell, CEO
Mantis, Presenter: Harald Hirschhofer, CEO
Oxygen, Presenter: Rajpal Duggal, CEO
Quisk, Presenter: Dan Glessner, Chief Marketing Officer
Ripple: Presenter: Karen Gifford, Chief Compliance Officer
Verde International, Presenter: Patrick Reilly, CEO

Chat rooms for the Startups:


Now, the why …

It s what I would call a very valuable, non conventional financial services network, focused on financial inclusion.
These technology showcase have the purpose to make the public and private sector to meet and exchange, and I humbly added some “speed dating” shale to it, in order to maximise the exposure of the Startups to the crowd.

I loved everything of it, including the very informal beer and drinks in front if the ocean, with. 4000 km beach left and right … At the menu, as written in the welcome note of the bar, “beer, food, friends and sunset”. Just love Australia.



Personal Finance Management for semi-dummies …

Just back from a 36 hours trip back from Perth, few hours in Brussels and today in London (kind of a tradition now spelling from where I write)

PFM is a very interesting space.
Roughly, in Europe, at least one startup per country (in some cases more than one) is a PFM tool.
What is it exactly?

Personal Finance Management

It s the modern version of Microsoft Money, obviously way more connected, social, big data aggregator, and profiled (in fact, almost no point in common with Money, but I need a point of reference for the few dummies who never heard about PFM).

Often mobile-only, most times web and mobile, almost never web only.
These tool take a snapshot of your finances, account, invoices to pay, loans to reimburse, forecasted expenses, and they are able to tell you things like:

- hey John, you spent more for coffee this month than the previous one
– if you want to buy that 1000 USD bicycle, you better start saving for the next three months otherwise you won’t have enough money
– you might need a small loan otherwise you won’t see the end of the month due to some unplanned expenses cumulated with your actuals
– you could save have saved 300 USD in the last 6 month, why don’t you try …

and so forth..

Some of the, are connected with an e-invoicing platform, so you can pay your bills directly, some with a investment (trading) platform, some other directly with your bank so they can cross-sell you other financial products.
Some others they are embedded in a payment system (typically a branchless bank, mobile only, like Moven or Simple).

All this to say, it s big data mashed up with financial information most of the time free for the users and paid by your bank or by a commission on the services they can sell through that screen that you are suppose to consult A LOT.
This generates more data, etc etc. wrapped up in a usually beautifully designed user interface


This is my point.

Not sure about pure, standalone PFM platforms.

Let s face it (and this is the part where common sense apply and would love to read your opinion): if I am rich enough (not a millionaire, these guys don’t even know what to pay an invoice is like, not anymore, and not really worried on planning) do I really care about few hundred dollars well forecasted? Or if I spent 75 or 95 dollars at Starbucks last month?
And if I am really on a tight budget, do I really care about a fancy way to remind me I am broken, or close to be?
Another pair of shoes is an aggregator for payments or statements for me personally or for my business, @as I talked about in my previous post.

Also, these platforms are scalable on a country basis. In other words, probably my Starbucks in UK or France would not be counted in my precious coffee budget forecast 2014/2015…

I see PFM as a component of something bigger. With payments, loyalty, semantics, e-invoicing, and – why not – a nice expresso.


Stay tuned



Bank devices, inefficiency and bigger bags.

Looks like destiny is telling me I have to write now my next post.
First BA trip to SMEfinanceforum in Perth, late flight from Brussels, lost connection in London, few hours in the lounge (and in the plane).

This post is about bank devices, identity and security.

Back from my SWIFT time, when I still had a “in the box” job, I was dealing with the mythical “SWIFT for Corporates” solution. In a nutshell, the treasury department of a corporation has often dozens (if not hundreds) of bank accounts in several banks, and the poor treasurer (talking of 10 years ago) had a number of bank devices/proprietary connection (HSBCnet, CITIDirect, etc.) to validate their payments (and more often than not to retrieve the bank statements).

SWIFT came up with the idea of mutualising the connection to the system using a bank-like interface, connecting the corporations to the SWIFT network, allowing to reach out to every bank connected to SWIFT, subscribing and implementing the service. In this way, the channel became a commodity, and each bank had to differentiate itself with the service (needless to say this made much easier to switch between one bank to another, reason why banks were a bit resistant at the beginning).
Now, thousands of corporations later, this looks like a no brainer.

In the retail space, we saw the rise of the Mint and Yodlee of this planet.
You can consolidate in one app your different bank accounts and also do some fancy analytics about how much you spend at Starbucks across all your accounts last month, if you remotely care (one day I will do some cynicism around these “spending apps”).
It does not work well in Europe though.
Many banks have these fancies little devices not only to validate your payments, but also to simply access your online banking services. It’s the case for bnpparibasfortis in Belgium for instance.

Now : can someone explain me why we are still at Stone Age in this matter ?
It s about digital identity. I get it.

But WHY is has to be considered a differentiation factor ?
None of this would be ideal, but already if…
1- I could use my phone to generate the unique code to access my account instead of these stupid devices (that by the way have batteries, so need to be replaced etc.). This for each bank, both for login and payments approval. Embedded in their banking app. Few Startups are in this space. Sequent is one of them
Still not ideal …

2- I could use my phone to generate the unique code for ALL my bank accounts.
It’s a generated unique code with a timestamp. It’s not rocket science. Could not at least banks in the same country agree about that?
Better, but what about multiple accounts in different countries?

3- If I could prove that I am who I am. Cause that’s the only thing that bank would need to approve a transaction in an account they know it’s mine, right ?

In the credit card AND E-commerce space, this need has been well understood, recently.
I saw few Startups (Wallabi, TrustPay, Cards Prepaid and others) that have been created with the purpose of consolidate, simplify and enrich the payment experience of the retail customer (a topic for another post, by the way).

Back in the past, few large banks partnered and created Identrust, but technology wasn’t there yet.
The intention was good though.
SWIFT tried (Innotribe, actually) with the Digital Asset Grid, to tackle some of these issues. Technically, DAG had a way broader scope than identity, but it took the problem from the right, open, portable, institutions-agnostic point.

Respect Network deals with the concept of “your private cloud”, where your data can be stored and access being given to applications, according to the principle that “data don’t move, only access to them does”. In other words, I am not giving my data to anyone, I am simply allowing others to access to them.

So my question remains. For how long do I need to carry stupid code-generating devices, in some case not even the same for a personal and a business account within the same bank ?
Probably few startups will react claiming they have solved the problem and I am sure that – technically – they have.
Point is, until few big fellows will agree on cross-operational adoption or some smart regulator with noble intentions won’t interfere, I’ll just need to buy bigger bags.

Putting an image concerning the same problem, but in the telco space…
A whole other issue here … And smaller items ;-)


Stay tuned


Fintech funds : two questions, two answers.

At Sibos this year, we will talk about Fintech funds, in a session on Thursday morning.
Why is it relevant ?

Exactly one year ago, at Sibos in Dubai, I started my new professional adventure in SBT Venture Capital. You can read about it here.
Back then, aside from the mythical Citi Ventures (must admit never got close enough to understand how it works) and BBVA (credit to them for being there already), no bank had its own startup fund (although maybe Atlante Ventures, from my friends at Intesa San Paolo could exists already).
Certainly, no one (including the one I mentioned so far) had a Fintech fund in place, which is the reason why I believe I joined SBT. There is no real proudness of being the first, as barrier to entry is not that big (if you have the money) but what was interesting was the intention.

I am on a bumpy flight to Moscow now, so I believe this post will be written in a couple of phases (and maybe I two separate posts even) but what I want to wrote about, in case I fall asleep now, is an answer to the following questions :
1- What is the difference between a fund and a “bucket of money set aside to make investments” ?
2- What is the #1 challenge any bank faces once the fund is up and running ?

Answer #1
A fund is typically structured as a separate entity, with a management company (another entity) hired by the fund with the mission to set up the strategy of the fund, find the right companies to invest, and manage the portfolio of invested companies to give a return to the fund (a profit) on the top of returning the invested money of course, plus a compounded interest (called the hurdle).
The management company receives a fraction of the fund to pay resources and expenses, and obviously the partners of this entity are not employees of the bank, and strongly motivated to maximise the profit of the fund as most of the time their reward is strongly measured on this.
I am not making a crash course on how to build a fund, because this is not the point, but I wanted to give some details as this is not the way other banks decided to do this.
Another way of investing in Startups, on paper way simpler, is to set aside in the bank’s balance sheet a money pot, and use it to make investments. Is that simple.
Often, banks call it a fund, as this is what the money is for. To take equity In startups or to buy them, using bank’s capital.
As opposed to the previous case, money is managed by (very senior) employees, the amount of the fund is “declared” but flexible, and one of the challenges (but not the main one as that is #2 answer) is to establish a legal framework for which entity is actually the one taking the equity stake in the companies.

Now : I will be happy to talk extensively about the above to whomever believe this could be of value to them (meaning bring me on board for a while and allow me to issue an invoice) but it s time now to move to the second answer …

Answer #2
In theory, it could be resumed in three words :
Strategic vs profit
Few considerations, before to expand :
No one likes to loose money and banks hated it particularly. If they do by definition, they are in trouble,
Everyone wants to appear (or need, in most of the cases to survive)to innovate or improve its services (true for everyone, banks included),
– More often than not a Fintech startup manages to do cheaper and faster what a bank would implement in the sextuple of the time and at ten times the cost (at least),
– Not invented here syndrome added to fear of change added to “if they do it we can do it as well” makes startup adoption not very easy.

In summary and especially in Fintech, what is strategic for the bank does not coincide with what can – potentially – give the higher return for the money being invested.
So the biggest challenge is to manage the tension between the (product, market, geography, business) strategy of the bank and the fact that if the “fund” does not make a profit, then you might as well use it to sponsor Wimbledon tournament for four years, at least your customers will say thanks to be able to see Roger playing while drinking some champagne at the lounge…

A concrete example : crypto currencies are one of the hottest spots for Startups this year. My friend Chris Skinner rightly pointed out – here – that more funding went to Bitcoin in 2014 than to the whole internet in 1995 (whatever means to compare investments with 20 years ago, but I still think it s impressive).
No bank has made a major investment in crypto currency Startups (I am pretty sure about it as I made a 3 seconds search on Google..) simply because it s hard to tell which role banks will play in this (although at Sibos there is a full Innotribe day dedicated to this topic).
Yet, with a venture capital hat, that seems to me like a wise position to take, providing you find the right startup to invest in.

I took this example which is – granted – as compelling as a bit easy to spot, as the dichotomy between banks strategy and market potential value is obvious… there are more examples, but will talk about it in the Freemium version ;-)

Very happy to continue this dialogue on stage @Sibos2014 with some old and new friends.

Stay tuned


One of (my) greatest projects EVER, and an example of failed startup: Profeshion.com ……If someone picks it up, would love to collaborate

Back to my Innotribe times, in one of a kind sleepless night, I came up with something that every large corporation, including banks, needs,badly: a smart, efficient, flexible tool to manage employees skills.

I went to SWIFT CEO with a 4 slides deck and got his endorsement, took a couple of very skilled developers and the idea was on rails: it was called MINDTAGGER.

The idea came out of a very simple consideration: in 13 years at SWIFT I did change 4 positions, and unless you know me personally you actually can’t possibly guess what else I can contribute to, within the company, on the top of the skills required for my current job.
The trend is to make every corporation more collaborative, flexible, silosless (neologism) and make easier to build cross-divisional team (particularly facing some innovation challenge for instance).

What is (was) MINDTAGGER?
Imagine if every employee of a company could add a TAG CLOUD of his own skills and competences each with a rating at the beginning self-assessed then endorsed (or not) by the other employees, including the option to propose skills to others and get them accepted or not.

Something including hard and soft skills, say with a 1-5 stars rating:

In my case, something like

Innovation management *****
French *****
Market Infrastructures ***
Presentation skills *****
Venture Capital ****
. ….. And so on.

We decided that the best way to publish this skill set was in the intranet page, built on Sharepoint, so the first version of Mindtagger was a Sharepoint plug-in.

Yes, you would say, this is cool, but so what?
Well, this is the REAL idea then: an intuitive browser able to search the employees marching the requested skill set in the weighted fashion you (the searcher) wanted.

Applications of Mindtagger were obvious:
– internal recruiting for a new position
– cross divisional project team for a new challenge
– expertise required on a topic that the company has no skin in the game yet
– mapping existing or required competences inside a given team (for example, make sure there are at least two people with a certain skill to back up each other)

Needless to say, every search could be drilled down by division, geography, number of years in the company, department, and so on.

Let me show you how the browser looks like:


This is actually the “LinkedIn” version of the tool, using a parsing of the profile (as LinkedIn DID NoT have the “skills” yet back then) and the reason why you see “Profeshion” on the top is because in the meantime we rebranded the whole tool with a new name.
The difference between the LinkedIn version and the SWIFT version is the fact that in the case of SWIFT the bubbles have different colours, to reflect the wight associated to each skill. The darker the bubble, the bigger the degree of expertise.

Obviously, search is dynamic.
Meaning if you have too many result (or too little) you simply move the cursor of the expertise up or down and the graph changes dynamically.

If anyone wanted to search on more than four tags, there is the option to “pin” a tag. Think of it as a pre-requisite, on the top of which you can run the visual search.
Say for instance I wanted Chinese AND English as a pre-requisite, I could then run a

Payments ***
Mobile Payments *****
Presentation skills ****
GUI design **

The result of that query would be a 6 skills combination output.

SWIFT has Mindtagger (now Profeshion) live and running now.

LinkedIn in the meantime came up with skills and endorsements, but to my knowledge not a visual tool to search amongst them.
I also would like to thank everyone who made this project possible, if they read this they would know who they are.

Maybe I should/should have put it on kick starter?

Stay tuned


Alternative lending landscape (for dummies…)

I think this is a good opportunity to talk about something concrete we are actively looking at, explained in a way that (I hope) will catch the attention of everyone (including my mum, who I can see right now with her dictionary on… And no, she does not use Google translate)

The two big families of the new lending landscape are P2P lending (person to person) or SME lending (to small businesses).
There are also some hybrid versions of it like corporate lending money to their employees or persons lending a fraction of the capital to a business, in a crowd funded way, but I would say these are less populars.

Let s start with SME lending.
There is no way a bank can profitably make a 20K loan to a business.
The cost of the paper and the time of the employee(s) required to assess, release, monitor and eventually recover the money back will easily eat all the mark-up that the institution would possibly charge (unless they apply illegal outrageous interest rates, which would put them out of business anyway).
This is what became the core business of many Startups of this space.
Use non-conventional (like aggregated data from the POS or geo-localised transactions data) and conventional (good old bank statements) data to make an assessment on how likely is the chance to recover the money if and when the loan happens.
Now : there are two big families of these Startups (I know, life is a binary tree) : the one competing with  the banks (by collecting their own capital and lending their own money) and the one trying to re-intermediate the banks in this process (in other words, selling their platform and services to the banks so they can use their capital  to perform the loans).

An example of the latter is Advanced Merchant Payments, out of Hong  Kong,
focused on the provision of working capital loans to SME’s based on an algorithm that credit scores Merchant payment and bank account data.
IWOCA, focused on the UK and European eTailer market uses an algorithm to provide working capital loans to eTailers based on their digital footprints across Ebay, Amazon PayPal etc. The latter is an example of a startup in competition with banks.
They are both doing quite well, and of course I will not put my Venture Capital hat on as the purpose of this is purely informative.
The default rate (the loans not repaid back) is reasonably low, and the return is good. Remember, for some businesses there is no other way to have access to capital.

Let s talk about P2P lending.
This space is very crowded, and actually even easier to understand : if I have a decent social presence, if my network is solid, if I am a regular customer of e-commerce platforms (like eBay) that allows some data about my transactions to be pulled off, if on the top of it I give access to my bank statements, you can have a quite educated guess whether or not I will be able to repay a small loan that I am asking.

Interesting enough, this “universal, empirical credit score” can be built using a number of different techniques, including NPL and psychological questionnaires (I am thinking specifically to EFL that releases microcredit based on a very specific profile questionnaire, started in developing countries.
Recently, many Startups have arisen just using Facebook and LinkedIn to assess credit worthiness. Still early stage, but promising.

P2P lending is booming in countries (like Latin America) where the Consumer loans have very high interest rates, but it started in US and more maitre countries as data were of course richer and available in an easier way.

Here is a US panorama of the most famous P2P lending platforms.
I am – on purpose – leaving out the crowd funding, for which a separate post will be due.


If any of you bothered to read so far, would be great to hear your thoughts on this. Obviously, if you are in the Fintech business you should have stopped a while ago.
The reason for this post is that I saw this morning on my Facebook wall a dear friend asking me : “Matteo, can you explain to my step-father why Bitcoin is or can become so important, in words he can understand?”.

I leave that challenge for a future post, and starts with something else…

Stay tuned