Meet the Visionaries: Fintech Founders Democratizing Access to Capital and Credit

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  Speaker 1:
  And hello everyone. Thank you for joining us today for the Alumni Ventures Seed Fund special webinar that we have: Meet the Visionaries. So we’re going to introduce you to three incredible founders from our Seed Fund portfolio to discuss FinTech founders who are democratizing access to capital and credit. So looking at some very interesting companies in a market that is moving incredibly rapidly to disrupt a rather old industry and hopefully make access to capital and credit easier for individuals, small businesses, and everybody else. So that’s what we’re going to be talking about today.

  Most of this presentation—oh, sorry, I have to read a little disclaimer here. This presentation is for information purposes only and is not intended as an offer to sell securities or the solicitation of an offer to buy securities. If you’re interested in reading our full disclosures, you may see that at avfunds.com/disclosures.

  With that out of the way, yeah, so the majority of this call will be focused on our round table discussion. I’ll introduce you first to our team here from the Alumni Ventures Seed Fund in a moment, and we’ll talk a little bit about the topic at hand and then we’ll jump into our discussion. It will mostly be a Q&A that my colleague Jason here will lead. But if you have any questions that you wish to ask, feel free to use the chat function here in GoToWebinar and we’ll try to get to as many as we can.

  So just for a quick introduction, this is our whole team—well, not everyone is here today, it’s myself and Jason. But for a quick introduction, I’m Ron Levin, Managing Partner of the Alumni Ventures Seed Fund. Been with Alumni for about six years now. Previously with Yard Ventures, our Harvard alumni-focused fund, and then switched over to Seed a couple of years ago.

  And I actually was an investor with Alumni Ventures here before I came to work here. So I’ve been part of the Alumni Ventures journey since quite early on. Previously I was a founder and operator myself—co-founder and first CEO of a company out of Barcelona called TravelPerk, which is a software platform in the enterprise travel management space, which is now a multi-billion-dollar unicorn company that is still being led by one of my co-founders.

  I spent most of my career at the intersection of the travel and technology industries. I work with many startups and have been an advisor and angel investor to lots of different startups over the years in addition and prior to my role here at Alumni. And I am also a now published author of a book that is actually related to our topic today. So I published a book about a year and a half ago called Higher Purpose Venture Capital, which is in some ways a misnomer. It’s really not so much about venture capital per se, it’s really about the founders of venture-backed companies that are solving problems related to the symptoms and effects of social and wealth inequality. And access to financial tools, capital, credit, etc., is a very big part of that story.

  So I’m excited to dive in a little bit more with you today. I’ll have Jason introduce himself in a moment. But also on our team—I’m based in Boston, by the way—Meera Oak is a partner in our West Coast office in Menlo Park, and Bo is a newer member of our team in our New York office. But I will let Jason introduce himself.

  Speaker 2:
  Awesome, thank you Ron. And thank you all for joining us today. As Ron mentioned, I’m Jason, an Associate here at Alumni Ventures and a member of the Seed Fund here at Alumni Ventures. I’ve been with AV for a little bit over three years now, and before joining the Seed Fund to work alongside Ron, I was also part of the Harvard Fund, which is the Yard Ventures, where I got some good experience sourcing and investing across different stages, sectors, as well as different geographies. And then prior to VC, I was at Babson College, where I was studying entrepreneurship and finance. But thank you all for joining today and excited to dive in.

  Speaker 1:
  So just for those of you who might be new to Alumni Ventures or don’t mind a little refresher, I’ll go through this quickly. We were established over 10 years ago now really to democratize venture capital on this topic of democratizing finance.

  Traditionally, venture capital has been an asset class that was limited largely to endowments, pension funds, extremely high-net-worth family offices, and the very difficult-to-get-access-to leading venture capital firms, because it’s been a very interesting asset class for investors over the years that’s basically been able to generate outsized returns relative to more traditional assets. And the leading investors in this space generally have not made room for individuals. So that’s why we got started.

  The word “Alumni” is because at our foundation we started working with different university alumni communities, but we are in no way limited to that. We have many funds for different appetites of venture investors and we do try to make it very accessible.

  So if you are an accredited investor, you can join us for as little as $10,000 into one of our funds where you also get access to syndications that we offer and many other benefits of being an investor. To date, we’ve raised nearly one and a half billion dollars from about 11,000 individuals, and we’ve by now invested into over 1,600 companies since we got started, making us one of the most active venture firms in the world—number one or two in North America and top five in the world certainly.

  So we have a great team here spread across five offices around the U.S., and more importantly even than the deal volume is the quality. And we were very pleased last year to be recognized for that as one of the top 20 venture firms in North America, according to CB Insights, which looks at performance across the VC funds. And we are the only venture firm on that list that does work with individual investors.

  So that’s a little bit on AV.

  So the Seed Fund specifically focuses on the earliest stages of institutional venture investing. So we look for opportunities that we consider to be moonshots in the sense that if things go well, they could turn into very large enterprises that potentially go public or become unicorns and so forth.

  So we look for very large addressable markets with compelling founding teams that have an interesting technology that they’ve built, and we believe there’s a great opportunity for defensible positioning. And we always co-invest alongside the leading venture firms in the country and in the world.

  We diversify by design. Our Seed Fund will make over 40 investments per portfolio, and it’s diversified by design. So you’ll get a little bit of health tech, a little bit of FinTech, some enterprise software, and vertical AI and deep tech, and maybe some consumer. So we are trying to represent what’s happening in the venture ecosystem quite broadly, and our deals are almost always backed up by one of the leading venture firms beside us. So it’s not just us making a decision in a vacuum.

  This is sort of a recap of what I went through, but also to mention that we do hold capital in reserve because we like to double down into our winners. So we do hold some of our capital that we deploy over the first year in reserves as we like to put more money to work for companies that we see performing well and hitting their milestones. So I think that covers most of that.

  So yeah, just to touch briefly on our topic today—democratizing access to capital and credit through FinTech. So there is a revolution that’s essentially happening in financial technology at the moment. It’s been going on for a number of years now where traditional banking and financial transactions essentially, which have been very regulated historically and somewhat bureaucratic, has led to of course high costs and lack of accessibility. That applies to individual borrowers, can apply to small businesses.

  And that has really been a barrier—and that barrier particularly comes out for underserved populations. It’s easy to forget just how much of the world has no credit history. It’s not easy to apply for a bank loan or receive any capital or kind of credit or even pay a bill that comes up in an emergency if you’re living paycheck to paycheck. A lot of inequality based on geography as well as socioeconomic status and just a lot of very bureaucratic paperwork that’s often involved in taking out loans and processing financial transactions of all kinds—and a lot of costs.

  But technology is changing that very quickly. So a lot of disruptive things happening that entrepreneurs such as the ones you’ll meet in a moment are spearheading, where it’s no longer necessary to use, for example, a traditional credit rating agency in order to do a background check on whether someone is creditworthy or not.

  There are a lot of other ways to sort of figure that out now and to get to know your customer—do sort of KYC checks. Lending platforms are making it a lot easier and a lot less costly. I remember years ago having to transfer money between dollars and euros or backwards and just how much money you lose on the transaction and essentially feeling like you’re getting nothing for it.

  And as we’ll talk about here more shortly, that is all changing very quickly, where that sort of middle layer really doesn’t even need to be there—or it doesn’t need to be effective in the decision-making on whether or not it’s worth transferring money from one currency to another.

  A lot happening through blockchain that’s decentralizing finance and just taking a lot of the bureaucracy out of the system. So this is helping finance reach much broader audiences, customer bases—it’s sort of making capitalism work, I think, in a much more fair and equitable way and just reducing a lot of the costs and empowering borrowers on both the personal side as well as on the small business side, which is something else we’ll talk about here.

  Speaker 1:
  So that’s just a little bit of an introduction. There’s obviously a lot that’s been written and a lot you can find on this topic. Things are happening very quickly, and we’re so excited to introduce you to three of the companies that we’ve invested in over the last few years. We’ve actually invested in many companies as Alumni Ventures in the FinTech realm over the years—dozens of them in fact—but three that we’ve specifically gotten to know in the past year or so from our Seed Fund that we’re really excited about. And to introduce you to them and to lead our Q&A discussion today, I’ll bring back Jason, and I will go off camera to let him lead the conversation from here. Thank you.

  Speaker 2:
  Thank you for the introduction, Ron, and excited to dive into this conversation with our amazing panelists. I’ll go around and do a quick introduction on each of our panelists and then we can dive right into it.

  So first we have Teymour Farman-Farmaian, CEO of High Globe, who has over 20 years of leadership experience in tech, FinTech, and marketing. He led U.S. operations at Zappo, launching a digital bank with Bitcoin rewards. And earlier in his career, he helped launch Spotify in the U.S. as CMO and CRO and co-founded Lo, which is a platform that grew to over 55,000 users.

  We also have Aleena Nadeem, who is the founder and CEO of Edufi. She studied economics and finance at MIT and previously worked at Goldman Sachs and venture capital, where she led FinTech investments around the world. She brings a strong mix of financial expertise and on-the-ground experience building in Pakistan.

  And then last but not least, we have Alexandra McLeod, who is the CEO of Parlay and brings over a decade of experience in the tech startup and economic development realms. She holds degrees from the University of Cambridge and the University at Buffalo. And before founding Parlay, she was an advisory manager at Deloitte, where she helped launch the firm’s first blockchain-based financial compliance product.

  So thank you all for joining us today, and if you wouldn’t mind coming off mute and just giving a quick 30-second to a minute overview of what your companies do, that’d be a great way to kick us off. We can start with you, Teymour.

  Speaker 3:
  Hi, my name is Teymour Farman-Farmaian. I’m the founder or the co-founder of High Globe. High Globe is a global business payments service. We serve non-American exporters or overseas exporters and freelancers. We serve thousands and thousands—I think thousands of them—by delivering their funds instantly at the lowest cost guaranteed using stablecoin rails.

  So our ideal client is an engineer in Brazil, in Mexico, that needs to be paid by their client in the USA. That engineer or exporter used to work with PayPal or Payoneer, and now they come to High Globe. We give them a U.S. bank account, they get paid in the U.S., they earn yield in the U.S., they have a card in the U.S., and they can take their money home instantly at the lowest cost guaranteed whenever they need it—24×7, 365—to their bank, whenever they need it. So that is what we do.

  Speaker 2:
  Awesome. Thank you for that. Alex, would you like to go next?

  Speaker 4:
  Absolutely. Hello everyone. I am the founder and CEO of Parlay Finance. We have an AI-powered software that lenders—so community banks and credit unions—use across the country to help qualify more small businesses more quickly and more easily.

  And so the pro there is that for bankers that are trying to help their customers, they can do that more easily using our software. And for those customers who usually find that process to be onerous and time-consuming, we make it much easier and much more data-driven for them.

  I like to liken our software to the Hogwarts sorting hat. We’re trying to make it easier to match the right loan product to the right small business and figure out how to get them to a yes. Or if they’re not ready for a yes right now, how do we get them to an alternative or a “not yet?” And so that is us in a nutshell. Great to meet everyone.

  Speaker 2:
  Amazing. Thank you. And Aleena?

  Speaker 5:
  Well, thank you everyone for having me. I’m excited to be here. My name’s Aleena Nadeem and I’m the founder and CEO of Edufi. So Edufi is short for “education finance,” and we are disrupting the student loan sector by a new product called “Study Now, Pay Later.”

  It’s essentially what Klarna is doing for the consumer section—which is “Buy Now, Pay Later”—but we’re applying that same product to the education sector. Think Klarna, if you’ve used that, but for students.

  Speaker 2:
  Thank you for those backgrounds, and thanks again for joining us. Excited to dive in.

  So I’ve got a couple of broad questions for the group, but Teymour, it would be great if you could kick us off and then we can kind of go in that same order as before. Curious—what specific pain point or experience inspired you to build your solution and your business?

  Speaker 3:
  I’m going to be very transparent with you. I’m an immigrant two times over. I’ve had two revolutions—two times over. I was born in Iran, had to leave Iran. I immigrated to Venezuela. I immigrated out of Venezuela because we had a socialist-communist revolution in Hugo Chavez. So I’ve lost everything twice in my career.

  What that leaves me with is a blind spot towards wealth preservation in highly unstable emerging market countries. So what we enable and provide—the sacred, the product that we provide our users—is: earn your money in the U.S., keep your money in the U.S., don’t get devalued in the U.S., and don’t get inflated out.

  Well, who knows about our deficit, but you don’t have to get paid in funny money anymore. You can keep your money in the U.S., you’re safe, and you can take your money home whenever you need it, and we’ll give you the best rate. It’s instant. And your family can live a really nice life in Brazil, Venezuela, Colombia—wherever you want to be—and your savings are safe.

  I didn’t start this as a highly idealistic mission, but it comes from my experience of having been expropriated multiple times and having been inflated out of my wealth multiple times. So this is an emerging market phenomenon. People in America don’t really get it because we are the currency that the world pegs to, and so we inflate, but we don’t understand the impact it has on other countries. All the other countries devalue every time we do. They peg to us. So all I want to say is—we started this with the idea of earning in dollars, spending in dollars, and keeping in dollars.

  Speaker 2:
  Thank you for that. Alex, over to you.

  Speaker 4:
  Sure. So with Parlay, the problems that we solve are a few, but the core one is that applying for a small business loan in the U.S.—and really around the world—is a very painful and laborious process. There’s a lot of documentation involved, there’s a lot of manual processes involved. It’s not at all efficient. And if you’re a small business, time is money, and you don’t really want to spend your time doing all this work upfront only to find at the end of the day you are going to get a no.

  And so the studies show that one in five small businesses gets to a yes, which means that the lender is having to do a lot of work on the front—5x the amount of work—to only get one through the finish line. And then on the small business side, they’re setting themselves up for a lot of work without any knowledge of whether they’re going to get a yes at the end of the day.

  So we make that very manual, disconnected, time-consuming process much more efficient, much more transparent, much more data-driven. For the small business, they can submit an inquiry in 15 minutes or less, and they can get insights at the point of submission on how to improve their financial readiness and resilience.

  And for the lender, our AI basically summarizes and qualifies every prospect and gives that lender more insight as to which product is best for that small business. And now they can scale what they do without having to scale the manual work that normally comes with increasing their reach.

  And all of that is in pursuit of our mission, which is unlocking the next $5 trillion in economic opportunity in the U.S. alone. And I mean, around the world this problem exists too, but we’re starting here and then we’re scaling from there.

  Speaker 2:
  Amazing, thank you. Over to Aleena.

  Speaker 5:
  Sure. So I think there’s a lot of synergies between what we’re building, I think, for the education sector at its core and what Alex is doing actually. But our company was founded around four years ago, and we started work in Pakistan. So Pakistan is a developing country, and now we’ve expanded to the Middle East.

  But at the core of it, what we found—or the problem we’re trying to solve—is that for the average Pakistani, university is kind of out of reach because the fee for university is extremely expensive. So what we are doing is something very simple: we’re breaking that fee into installments so that the upfront cost of education is reduced.

  And I personally feel extremely strongly about the role and power that credit can have. And if you apply that to a sector as influential as the education sector, you have the power to change lives.

  Speaker 5:
  And if that is done in a developing country like Pakistan, I just want to add that I personally have never lived in Pakistan. So I moved back to Pakistan in October 2021. I was born in New York. I’m an American national—never lived here. And the reason I did that is because I think that the impact that I would have creating this company in a developing economy is tenfold. And we see that in the demand every day that we get. So I don’t want to go into that yet. But to answer your question, what we’re solving is making education more accessible through making the upfront cost cheaper. And that same Study Now, Pay Later product is applicable now in Saudi Arabia, where a lot of the education is expensive. We’ve expanded to Oman and Dubai. So you’re seeing the same trend regionally there as well.

  Speaker 2:
  Thank you for that. And back to you, Teymour, with our next question. How do you evaluate the real-world impact of your business on financial inclusion? Are there any specific metrics you track? How do you really measure that?

  Speaker 3:
  So I measure different things. As a business owner or a business manager, I’ve got to make money and I’ve got to survive. So the numbers I track are monthly transacting users, how much money I’m making. So I’m going to answer your question obliquely, but I’m going to say I think what I’m doing is the most significant thing that I’ve worked on in my career. I’ve worked at Google pre-IPO, at Zynga pre-IPO, at Spotify pre-IPO. I was like—I’ve had a nice run.

  Why is this the most significant thing I’m working on? Because until a few years ago, until Zoom, until this medium that we’re communicating through—some countries like Brazil, Mexico, Pakistan, India—educated their best and finest using tax dollars from their local countries. That degree, the personal degree, would immediately go to the United States and then would stay in the United States. And then they would earn a nice salary in the United States and they’d repatriate or remit back a fraction—a small fraction—of what they made because their cost in the United States, or American costs.

  So you had to pay your rent in the U.S. or whatever, and a little bit of money went back home to grandma. So this medium—this thing that we are talking through right now—has changed the world. What it means is that my cousin Ali, or my cousin Luis sitting in Mexico, gets the taxpayer money, gets his education, and now it’s a better deal for him to stay at home, buy an apartment at home, buy a car at home, get insurance at home, and work for an American company in the USA and get paid—instead of $200, get paid a top American salary—and that money stays at home and creates a whole new middle class in these countries.

  So before, the top elites made the money and the middle class left. That’s the story of the emerging markets for the last 50 years. Now what happens is—this medium, it isn’t about High Globe, we capitalize on it—but this medium means that the middle class, the super bright scholarship kid now has a greater incentive to stay at home, make money at home, because now he’s making dollars and a great salary. And what it does is it creates a stable middle class for these countries.

  So that’s a big statement that I’m making—because they’re not exporting their brains. Their brains still work for American companies and the best companies in the world, but the wealth stays at home. And that is truly a wonderful thing. Because as an Iranian, as a Venezuelan, as a European citizen, I’ve had many passports in my life—the first thing you did was you went to America.

  Speaker 2:
  Thank you for that. Same question for you, Alex.

  Speaker 4:
  Yeah, financial inclusion is at the core of everything that we do. So we founded Parlay because we helped a group of incredible women—immigrant women who were evacuated from Afghanistan—get connected to inclusive capital providers so that they could become entrepreneurs in the U.S. And that’s pretty much starting with one of the hardest use cases in America.

  And we ran headfirst alongside them into all the challenges that come with funding entrepreneurs who have come with little to no—in this case, they were totally credit invisible. They were having to learn a financial system they were not familiar with, and then they were having to identify the right CDFI (Community Development Financial Institution) who would be willing to fund them given that they were starting from scratch—no business, no previous experience that they could show to those lenders.

  And so basically, financial inclusion is at the very heart of everything we do. That’s a very complicated scenario. But by doing this work—and now by collaborating with nearly 300 lenders—we know that this problem is universal for small businesses everywhere.

  The majority of small businesses are looking for a very small loan from the financial institution they’re seeking capital from. When it’s a small loan, the amount of work that it takes to actually get that request across the finish line from the banker’s perspective is very high. The unit economics usually don’t work out. And so our mission was to say, okay, well we’ve got two problems here.

  One: it’s very expensive and time-consuming for the banker to pay attention to the small-dollar loan requests. We need to make that more efficient and easier for them so that the unit economics make sense and they will invest the time and effort.

  And then the corresponding one was: okay, well only one in five small businesses get to a yes, which means four out of five get nothing. How do we provide them with insights to help them improve? Or if there aren’t any loan products that that lender can offer them, can we see if there’s a second-look opportunity?

  And so we ended up creating a network of inclusive lenders who can step in if that primary financial institution cannot do the loan but wants to keep their relationship with that small business.

  So we measure success in conversion rates, in reduction of drop-offs, in improvements in ratios and pull-throughs, efficiency ratios, underwriting efficiency, net interest margin—there’s a lot of math, basically, that goes into showing lenders that this is going to be good for them and that it’s worth them investing in the software because we’re going to generate these business outcomes on the other side. But for us, it’s also—how do we get more small businesses to a yes, as quickly and efficiently as possible?

  Speaker 2:
  Awesome. Thank you for that. Same question for you, Aleena.

  Speaker 5:
  Well, Alex has just answered my question—and so has Teymour—but I mean, I can just… Honestly, very similar to what Alex has said, right? I think the whole point of FinTech at its core is to make access to capital faster and easier. So—speed.

  So I think I can give you an example with our business. When we first launched three years ago, our app—when a certain customer applied for a loan—we took around three days till it actually disbursed the loan into the university account. We disburse it to the university. Now we’ve reduced that to five minutes. So if they get approved, within five minutes that capital is gone. So that’s a number one indication of success.

  The second one for us is obviously the number of loans that we distribute. So the larger your loan portfolio, at the end of the day, that’s the number one measure for me. That’s the direct measure of how many lives we’re impacting—how many student loans are we giving successfully?

  And maybe that’s an obvious one, of course. But the third one is a little less obvious—it’s my acceptance rates. So in lending, it’s not a demand-deficient business. It’s a supply-deficient business. Which basically means that you’ll never have a shortage of demand—every single day we get so many people applying for money, right?

  At the end of the day, what are we selling? I’m a consumer-facing business. I’m not B2B—we’re B2B2C. So we’re selling funds. But the point is to be able to lend to the right people.

  So when we started off, we were lending to 5% of the demand that came in—actually disbursing to the demand. We were extremely conservative. But the point of our credit scoring models—and we’ve also built our own AI-based one in-house—is to lend obviously securely, but also to a larger number of people.

  So now our acceptance rate—which means that if 10 people apply—our acceptance rate has gone higher. We’re now at around 20%. And our NPL, which basically means non-performing loans on our portfolio, is still less than 1%.

  So NPLs: just non-performing loans. Number of loans: how big is your loan portfolio. What is your acceptance rate? What is your speed to getting the capital—whether for us it’s to the university—these are all measures of success for us.

  And obviously, you have the obvious ones, which are app retention rate and all the standard ones that show that your technology is up to par. But from a lending perspective, that’s how we quantify it.

  Also for me, my personal measure of success for the business is how much capital we’re able to secure to direct to the sector. Because the education sector has primarily—actually in a lot of countries—been ignored. Developing countries have been ignored. Banks try to lend deeper into corporate credit, but they ignore the education sector. So if I can get big banks to come in and partner with me on the backend and direct capital to this sector, that’s also a measure of success.

  Speaker 2:
  Thank you for that. Next question—and we’ll go back to you, Teymour. How important are partnerships in scaling your product, and what have you learned about aligning incentives across different stakeholders?

  Speaker 3:
  I’d love to start with one of the ladies first the next round of questions. So let’s turn it around.

  Speaker 5:
  I’m happy. I’m happy to answer this. I’m happy to answer that—this way I can. Sure.

  So how important are partnerships and aligning incentives for the—was that the question?

  So we are B2C, so our business wouldn’t run without partnerships. The way we work is that we partner with universities and schools, and we can only lend to the schools that have implemented our technology into their systems. So if I didn’t have partnerships or clients, I wouldn’t have a business. So—very, very important.

  I think aligning incentives is obviously very important, otherwise the deal doesn’t go through. I think for us, for example—I can give my own example. When I started Edufi three years ago in Pakistan, there was no concept of student loans. We’re actually the first student loan company in the country. India has a lot of ed-fintech—so education financial technology companies—but Pakistan does not.

  Speaker 5:
  And so aligning incentives is actually the second step. But I think the first step is actually getting people to understand what you’re even building. And a lot of that has to do with communication. I think when I first started, I would try and explain what we were trying to build in a very complicated way, and people wouldn’t understand what we were doing.

  Then I just went to the school and I was like, “We’re trying to pay your students’ fees so that your cash flows get better”—in a lot more simple terms. So I think aligning incentives, yes, but getting them to understand and even communicate what you’re doing is the first goal. And if you’re able to actually do that, then you can have a genuine conversation.

  And I think a lot of things get lost when the person on the other side doesn’t understand what you’re building, and they’re just too afraid to ask you again. Simple things like that. Actually, this is my experience in Pakistan. Obviously, it’s a lot more of a nascent market, but I don’t know whether Alex and Teymour have had a different experience.

  Speaker 2:
  Thank you. Alex, would you like to go next?

  Speaker 4:
  Sure, totally. Love all of Aleena’s points and agree. Very partnership-driven on our side as well. The space that we operate in—the financial ecosystem—really disadvantages our customers a lot. So not us, as in we’re trying to help them with a situation that is challenging for them.

  Our primary market and customer is community banks and credit unions, and they are the first port of call for small businesses—so really, really important in the community. But they often have legacy software that they’re operating with. And so sometimes they don’t have the luxury of being able to rip and replace entire systems and use something like Parlay.

  And so from the outset, actually, we had to develop a very partnership-forward model to be able to complement and kind of pipe data into existing systems of record. So straight off the bat, infrastructurally, we had to think that way. But we also have a number of data partners where we are able to pull additional data from different third-party sources that help improve the reliability of a submission from a small business—and sometimes even help access that data, because small businesses struggle to get it.

  For example, tax returns seem very simple, but your average small business—if you ask them to provide a tax return and it’s not handy—they’re going to abandon it. And if they abandon, they might not come back. And so we have to make it easy and intuitive for them.

  And so for us, it’s been very, very relationship-driven, very, very partnership-driven. Our goal, our mission, our objective with Parlay is to be the universal front door—the front end that connects to all systems of record in the ecosystem.

  We like to think of Parlay as the system of intelligence to the system of record. And there’s a subset—maybe 10 or 12 core systems of record in the space—and we have built a product that integrates with all of them. Sometimes, especially as you are releasing new products that people are still learning and understanding, we’ll get a little resistance from different systems of record. But over time, we’ve been able to win many over, and it’s a win-win for everyone. It improves quality of insights, it improves data—we actually build net-new data together. And so yeah, that’s how we think about solving a hard problem: through partnerships.

  Speaker 2:
  Thank you.

  Speaker 3:
  Okay.

  Speaker 2:
  Teymour?

  Speaker 3:
  So High Globe is basically, at its very core, in the business of moving money around the world. And right now, there are two ways you move money around the world. One is SWIFT, which is a network of banks—bank to bank to bank. Or you can go to Worldpay, which is a bank network—they have banks all over the world. You can go to Worldpay and say, “Hey, I want to be in 50 countries.” You pay Worldpay, and Worldpay will get it to one of those 50 banks. But there’s a cost of capital for that, and it doesn’t work on the weekends. It’s not 24×7. It only works during banking hours.

  So we are in the process of building a global stablecoin-native—that is the critical piece—stablecoin-native money movement network. And all this white hair is because of banging my head trying to create this network. It is really hard to do. Because especially now that stablecoin is hot, you have everybody slapping on a stablecoin wallet and putting it on that traditional bank network and then coming to us and saying, “Hey, we want to partner with you.”

  And we’ve wasted hours—so much time—with crap, bullshit sort of glue-on old systems plus stablecoin pasted on top. So we do all of our deals, each partnership, one by one by one—because it has to be stablecoin-native.

  So what we do—we’re partnership-driven like Aleena and Alex. It’s been really painful, as we find out that hey, the banks don’t work. Our customers—the magic of our product—is 24×7, 365. Anytime you want your money, there it is. And building that network is a high bar. It takes a lot of attention to detail. And this is what we do.

  But if you ask what we do—we’re a partnerships-driven company, and we’re building a 21st-century stablecoin network: global payments infrastructure.

  Speaker 2:
  Awesome. Thank you for that. And it looks like we have just about enough time for one final question. We can keep with that same order of Aleena, then Alex, and then back to Teymour. What advice would you give to a new founder who’s building in the FinTech space?

  Speaker 5:
  It’s a long list, I feel like. I think the first thing any founder should do is speak to other founders who are maybe four or five years down the line and just sit with them day in and day out and learn from their mistakes, honestly.

  But yes, with that being said, I would say that the most difficult thing to do in my experience—at least like I said, in developing countries—is getting access to capital. Actually securing that liquidity line.

  So often what you see is FinTechs are disrupting a certain sector—whether that’s the education sector, or whether that’s the SME sector, or whether that’s last-mile delivery, whether that’s salary advance—it’s like a product. But all of these products that FinTech startups build require money to lend, at least if you’re in the lending space.

  And generally, banks don’t give money to startups because you don’t have any cash flows or you don’t have any profits or you don’t have any revenue to show. And so you have to partner with the banks. And now, when you partner with banks, you are facing the same problem that you are trying to disrupt—which is that they’re very slow. Integrations take much longer than you thought they would.

  The CRO, which is the risk committee head in banks when you partner with them, will always have the final say—which is the end customer you’re trying to disrupt or trying to lend to. And so you are kind of stuck in this system where you’re trying to disrupt the banking sector, but you’re also reliant on the banking sector to give you the money.

  So what we did is—our way around that was that we partnered with a non-banking financial company, which are called NBFCs in Pakistan, which are smaller institutions than banks. And so their credit team is a lot more lenient in terms of giving you the financing. But it took us a long time to kind of get there.

  So I would say—if you are able to secure your financing line and you’re doing a lending startup, then you should go into this business. And if you have access to large pools of capital—and I don’t mean VC capital, because VC capital is used for your equity financing to run your business—I’m talking about the actual capital to lend or give the money from. So that would be my number one thing.

  I would say—if you’re building a lending FinTech specifically. Obviously, I can give generic advice, which is that there’s ups and downs and you have to keep going, and tenacity is really important. But I think they can probably read that from self-help books. But I would say—specific to this business—that’s what I would say.

  Speaker 2:
  Thank you for that. Over to you, Alex.

  Speaker 4:
  I love this question so much, and I would agree with everything Aleena said, by the way. That founder “therapy” for FinTech founders, I think, is a must. And being around people who’ve done it before you is super helpful.

  I think the thing that I would tell people who are getting into FinTech is—if you feel like something feels unreasonably hard and impossible and overwhelmingly difficult to do, then you are onto something big.

  The reason why FinTech is so incredible is because what amounts to 50 or 100 problems, elegantly solved by a team that dared to think big, can truly revolutionize systems. And that is amazing.

  But nothing is going to be straightforward. Everything will be painful. Everything will be hard. Because you are changing entire systems to make something work.

  On the other side—I will say—just because something is hard doesn’t mean that it’s a high-quality idea either.

   

  Speaker 4:
  So make sure that you surround yourself with other founders who can tell you where they’ve run into barriers in the past—where something didn’t work. In the beginning, we were pitching Parlay and people were saying, “Oh yeah, well we tried to do that, but it didn’t work because… dot dot dot,” right? And every time you learn something like that, you can use that knowledge—that insight—to improve maybe how you attack the problem, whether there’s a facet of that problem you specifically can attack, whether there’s a niche customer that cares about the way that you solve it more than everyone else.

  And so—be a sponge. Take all of that in. But also, if it feels intolerably difficult, it probably means you’re onto something really big. And just make sure you’ve got good red-team friends around you as you go ahead and solve it.

  Speaker 2:
  Awesome, thank you. Last but not least—over to you, Teymour.

  Speaker 3:
  So again, Aleena and Alex—can I get a job with you guys?

  (Laughter)

  No, totally great advice. And talk about shrink therapy—right on it. You need a group of people you can talk to, because you’ve got to be able to hear “no” a hundred times a day, and you’re on your own, and you’re the village idiot.

  What the hell? Again? You’re at a different life stage than I am—I have four kids—and I’m the village idiot at home with my kids and I’m the village idiot at work. So it’s interesting. Thank goodness for having a great wife in my life. So it’s an interesting path.

  What I’m going to say is the following: entrepreneurs and business people often don’t consider the second-order effects of what they do. Let me give you a very simple example. Every Tom, Dick, and Harry right now is all lit up about stablecoin—in my space—or AI in Alex’s space. But let’s stick to stablecoin because it’s what I do.

  So stablecoin is hot. “I’m going to do the next money movement business using stablecoin.” The second-order effect is: how the hell are you going to make money using stablecoin?

  Because let me remind everyone of the basics of economics. Economics 101 teaches: when the marginal cost of delivering a good goes to zero, the price will tend to zero. Which is why software costs $10 million to write, and then a subscription fee—you’ve got to give it to as many units as possible at no cost at all. It costs no money to distribute.

  So this is the issue about stablecoin. Everyone’s piling into stablecoin, and they don’t think it through—how they’re going to make money. Because this industry is going to look very much like what happened with Spotify in the music industry. Before, you had a cost per unit of making money. So people— a lot of startups—went up in 2005, ’06, ’07, ’08, ’09, ’10 saying, “Oh, we’ll just charge a little bit less money than a CD price.”

  But no—what happens is the technology moves forward and the business model follows maybe five years later. So Apple was streaming music but selling music at 99 cents a download—until its business collapsed.

  So all I’m trying to say is: if you’re going to go into AI, or you’re going to go into money transfer, or loans, or whatever business you’re going to go into—be aware that the traditional way of moving money, the traditional way of making money, is probably going to come in question.

  So that’s, for whatever it’s worth, something that I think is missed—and I do a lot of thinking about.

  Speaker 2:
  Thank you so much for that—definitely some great advice around the table. I know we went a couple minutes over, but I really enjoyed that session and thought those were some great answers. 

  So this concludes our session for today. Huge thanks to our amazing panelists and to the audience for joining us for this session. If we didn’t get to your questions, we’ll make sure to follow up with those answers. And if you would like to learn more about Alumni Ventures, please feel free to reach out or scan the QR code in the slide below.

  Thanks again for joining.

  Speaker 3:
  Thank you. Thank you, Alex. Thank you. Thank you so much. Thank you. Thank you for joining.

  Alex, I would love to offer your product to my overseas clients, but you said you’re U.S.-only. I just…

  Speaker 4:
  U.S.-only for now, but the second…

  Speaker 3:
  I’m there. I’ve got thousands and thousands—and I know all their cash, all that pay, all that money coming in. I love that. It’s perfect..if they want to do it. They ask for loans. You can’t get loans at a decent rate even if you’re a nice middle-class employed person in the countries that I operate in. So I’m your person when you’re ready.