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August, 2018 Volume 18

Fund I:  Closed

We are excited that we have closed Fund I.  It is comprised of corporate partners (51 percent), family offices (28 percent) that recognize the power of fintech and want a stake in companies that are transforming financial services, as well as individual investors (21 percent) who represent a “who’s who” of the industry.  It has been a great lesson in helping investors understand the opportunity in FinTech while being clear how unique we are with our operators experience and the data assets of Cogo Labs.

The fund is at $58.9 million in assets vs its target of $50 million to focus on early stage startups.  We are excited to back entrepreneurs who are out to massively improve financial services.  It has been very rewarding to hear their stories and share their excitement for change. Thank you to Ian and Mike for such hard work to get to this point.  Our partnership is founded on bringing together different points of view from our varied backgrounds to make the best decision to drive value for limited partners.

—Dave & Mark

 

Envision Interview with Farrah Nekui

What a summer our PhD candidate intern is having at Vestigo.  Farrah discusses her work at the firm as well as her thesis.

Nerd Approved Reading List:  Volume Deux

Last year we celebrated summer by providing our nerd approved book list which many told us they enjoyed.  Here is this year’s list of suggested reading.

Checklist Manifesto by Atu Gawande- for all our focus on erudite strategy, it’s easy to overlook blocking and tackling…Checklist Manifesto is a simple and effective as it gets.  It is easy to see why Frazer enjoys this one given his organization skills. Mira Wilczek’s dad Frank wrote a book for the masses:  A Beautiful Question – very fun read that makes you feel good about fundamental science again. Sean Hanlon of Hanlon Investment Management highly recommended the somewhat hard to find classic the E-myth by Michael E. Gerber which gets off to a slow start but has a great second half.  It makes a point that is suddenly timely again which is that great companies often have only one innovation followed by decades of “franchising” and scaling the idea.  If you read it or skim it and think about Booking.com (now worth $100B) while you do it, you will be rewarded for your diligence. From Here to Security by Robert L. Reynolds who runs Putnam Investments put out this book to provide a blueprint on achieving retirement security in America.  This one caught Ian’s eye given his focus on workplace savings.  Maybe not a beach book but still thought provoking. For another take on the financial system Mike suggests Red Notice by Bill Browder.  It tells the story of Russia’s markets and its brutal realities.  Mike visited Russia for the World Cup so found this page turner a good way to better understand the culture. “If you want a new idea, read an old book” is precisely what Frazer Anderson has done this summer. He is thoroughly enjoying Livy’s Ab Urbe Condita Libri (History of Rome). The great Roman historian’s commentary on the social and military strife faced by the early Roman Republic is perhaps more relevant in today’s political climate. Mark enjoyed Niall Ferguson’s The Square and the Tower which discusses the struggle of networks vs hierarchies.  He found the comparison’s of today’s technology revolution to the period just after the printing press was invented quite enlightening but a bit frightening. Dave’s friend Peter Diamandis of xprize fame wrote Abundance along with Steven Kotler.  It provides a roadmap that is still relevant several years later on finding solutions to the world’s most pressing issues. Enjoy!

Back to School for Summer @MIT Media Lab

Some firms may head for a whale watch for their summer outing but the Vestigo team spent time with amazing thought leaders.  John Werner set up meetings with Alex “Sandy” Pentland and Alex Wissner Gross to open our thinking about blockchain, digital assets and technology changes. Mike was unable to join us due to a family commitment but we will make it up to him in the Fall. We did find time for a fun lunch at Lil Donkey.  Perfect spot to discuss what we learned since they are a fusion restaurant bringing the best together.

Mirador Added As Our Eighth Investment

Mike Nugent lead our investment in Mirador.  They are passionate about helping small businesses grow through access to reasonably-priced business loans. Mirador’s leading small business, digital lending platform powers a new relationship between small businesses and lenders.  It provides a smart, fast and secure cloud-based experience that turns burdensome paperwork into a ‘wow’ experience, enabling banks to make a decision on loans in 24 hours or less. The Mirador Network is a digital lending marketplace connecting small business organizations with lending options. Mirador works with leading financial institutions and has processed more than $1.35 billion in small business loan applications.  These come via their customer base includes Zions Bank, Hanmi Bank, Tompkins Financial and First Foundation. Mirador has a senior team of executives with significant small business technology experience in product, sales and software development. Mirador’s key team members are as follows: Trevor Dryer, CEO & Co-Founder Both his professional and education background have set him up for success as a first-time founder. He began his career at Bain & Company before going to law school at Stanford. After two years as an attorney at Munger, Tolles & Olson, he went on to become the Head of Product Management Mobile Payments & Point-of-Sale at Intuit, a fintech software company. William Beaver, PhD, CTO & Co-Founder Beaver developed a deep expertise in AI & ML prior to co-founding Mirador. In 2011, he completed a PhD in Computer Science at UC San Diego. After completing his PhD, he held senior data scientist positions at Trapit and FlightStats. Carol Glover, Chief Revenue Officer She became the CRO of Mirador in January of 2018.  Carol brings an impressive leadership experience in business development for fintech companies. Previous roles include SVP Strategic Partners and Business Development for Bill.com, Director of Business Development at Intuit and VP Business Development at PayCycle. Mike Camacho, Head of Product Mike joined Mirador as Head of Product in January of 2015.  Prior to joining the firm, his longest stint was six years as Senior Product Designer at Jive Software.  Mike holds a BS in Product Design and Computer Science from Stanford University. We are proud to partner with Mirador to help small businesses grow with their banks/credit unions.

Portfolio Updates

Vestmark:  Best Place to Work

Boston Business Journal names Vestmark for the third year in a row to their list.

Interesting News

US Treasury Issues It’s FinTech Overview

While not a typical summer read, it is a great guide to what is on the minds of our Washington DC regulators for startups in FinTech.  The report encourages experimentation and innovation for the financial services industry.

Blockchain Analytics-A Practical Guide

Found this helpful guide on the blockchain that answers many of the questions we get about this tool.

FinTech Frenzy:  Hype or Reality?

Fortune has a wonderful overview of FinTech from our friend Matt Harris of Bain Capital Ventures.

Disruption Everywhere:  Bernstein Reports

Great insight on how disruption affects industries.

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