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Fintech Boot Camp Promises Tough Love for Fledgling Startups

Editor at Large

In an unfinished space called Grind — a somewhat counterintuitive name choice for a workplace meant to be fun and to foster creativity — Startupbootcamp Fintech New York is set to welcome its first class of 10 startups.

The downtown New York facility, leased from Verizon, has the requisite whiteboards, open work environments and meeting spaces found at the many other fintech accelerators out there (there are 172 in the U.S., according to one estimate). But there's also something else going on here.

There are 225 mentors enrolled in Startupbootcamp Fintech New York (say that five times fast) — more than 20 for each startup, an extraordinarily high mentor-to-mentee ratio. This gives the name "boot camp" some legitimacy. No one has to do pushups, but there's an intense schedule planned of lectures, classes, and programming workshops.

The mentors started in right after the applicants' initial pitches, like on television's Shark Tank. (Those accepted to the 13-week program, which will begin on April 18, received far less money: a $20,000 grant to help with living expenses.)

"There are mentors who offer advice and feedback on the pitch, the product, the market size," said Jesse Podell, a managing director at Startupbootcamp "The idea is to not to tell them what to do or what you would do, but just have an interactive conversation where perhaps they can walk away with a relationship. So even the teams that weren't selected walked out glad that they had made a useful connection. Because for early-stage startups, they may never have talked to somebody like that before."

The feedback is candid, said Podell, a former securities trader. "We train our mentors to be nice but not too nice," he said. "You're not serving [startups] if you're not taking them to the mat on certain assumptions they have."

This will help prepare them for the real world. "At startups, until you externalize and start talking to people, it can be a challenge to talk to a banker who might say, 'I would never use that,'" Podell said.

In some accelerator programs, the advisors are virtual — on call via email and phone, but not physically present. At the boot camp, they meet with teams in person, and some stick with their team for the duration of the program.

Deep-Pocketed Partners

A major selling point for participants in the boot camp is the partnering institutions. "The fact that we have banks and payment networks helps us validate what we're doing," said Zohar Steinberg, founder of token (spelled with a small "t"), one of the 10 startups in the New York program.

The partners also include Santander, Rabobank, MasterCard, Deutsche Bank, Thomson Reuters and the venture capital firm Route 66. They're looking for investment opportunities, pilot projects and employees.

Madrid-based Santander began talking with Startupbootcamp a year ago about doing something in New York.

"We wanted to start looking at the ecosystem on the East Coast," said Pablo Ruiz, head of open innovation at the bank. "New York is a great ecosystem for fintech. We started to look at how we could participate in the ecosystem and work with talented startups to understand how we could bring innovation from an outside-in perspective to Santander."

The bank is not looking to buy startups at this early stage, he said, but wants to work with them and help them grow. It plans to assign a banker mentor to each startup.

"In this process, we gain insights, see how they evolve, and we can then look at partnering with them," Ruiz said. "But they're still at an early stage. It's more about, how can we see new technologies, new business models and work with them?"

The corporate sponsors and advisors will help run pilots and proofs of concept and find ways to work together.

"If the startup is growing a little bit and it turns out that it's more of a feature, not a company, there's an acqui-hire potentially for these banks," Podell said.

Some startups will ultimately receive investment, others will be acquired outright.

"Many of these banks have their own VCs internally," Podell noted. Many have capital to deploy.

Choosing the Teams

Startupbootcamp started its fintech program in 2014 in London, then moved to Singapore. New York was considered a logical next step, given its status as a financial hub. "We have a good fintech ecosystem here that could nurture something like this," Podell said.

The group solicited applications from fintech startups for three months and received more than 400. Staff and partners took a month to pore over the submissions. The team held 13 one-day speed-dating sessions, in Buenos Ares, Sao Paolo, Mexico City, Boston, New York, Atlanta, Chicago, Los Angeles, San Francisco, Toronto, and two in New York. Five teams came in the morning and pitched for five minutes each, and five came in the afternoon and did the same. In between, the Startupbootcamp team sat at a table and the startups visited with them.

They chose the 20 teams they liked the most, and at a "monster event" selection weekend at another Grind space, 10 final teams were chosen.


(1) Comment



Comments (1)
This is a great opportunity to build a FinTech innovation engine with Investors, Entrepreneurs, Analysts and Coders contributing intelligence to a market of microservices:
Posted by v_ianta | Wednesday, March 23 2016 at 4:05PM ET
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