MacDonald Ventures seeks out and funds promising Fintech startups, who are possibly the greatest disruptors of our time, by providing them with support and resources to build phenomenal, world-changing businesses.
When I invest, it’s more than just a capital investment. As a serial entrepreneur with over 100 angel investments and over $400 million in exits, founders benefit from my experience building and funding cutting-edge tech companies and access to my extensive network. That gives my investment partners a competitive advantage within the fintech industry.
What Is Fintech?
Fintech is a combination of the words “finance” and “technology.” It describes new technological solutions designed to enhance or improve financial services and processes. The core purpose of fintech is to help business owners, companies, and consumers alike manage their financial processes—and lives—with the help of specialized tech.
Fintech is a relatively new industry that first emerged in the early 21st century. When it first came about, the term fintech referred to the backend technology used at financial institutions. The term now includes sectors such as retail banking, fundraising, education, investment management, payments, and cryptocurrency.
Fintech has an endless array of applications. The fintech industry is evolving and expanding rapidly, serving both consumer and business interests in innovative new ways. From depositing a check or applying for credit to transferring money from one account to another, the term applies to any innovation that changes how people exchange, spend, save, receive, manage, or invest money.
It’s the difference between walking into your bank to see how much you have in your account versus pulling up your balance information instantly on your phone – and that’s just the start of fintech’s impact.
Banks are a big driver of growth in fintech, becoming early adopters and passing the innovation to their digitally-minded customers to keep their industry timely and relevant. However, startups are disrupting industry incumbents by expanding the reach of financial inclusion and leaning on cutting-edge tech to cut costs – and they’re doing it every day.
Fintech Industry Benefits
Some of the major benefits of fintech solutions include:
- Enhanced Customer Experience and Retention – Financial technology can optimize efficiency and boost productivity to enhance the customer experience of traditional financial institutions. Through offering better, more relevant services, customer retention rates also improve.
- Expand Service Scope – The use of fintech can expand a company’s scope of service, taking advantage of mobile technology to improve transaction convenience and quality. This gives customers the option to streamline their financial processes with the help of smartphones and tablets.
- Improved Financial Security – New fintech solutions such as tokenization, biometric data, and data encryption improve the security of financial services and processes, keeping sensitive information safe.
- Upgraded Payments – Businesses of all kinds can become more efficient at distributing invoices and collecting payments with a higher level of accuracy. This has a secondary benefit of enhancing customer relations, which instills stronger brand loyalty and customer satisfaction.
- High Loan Approval Rates – Alternative lenders can integrate fintech to increase the speed and accessibility of loan approval.
- Convenience – Fintech companies make banking, investing, lending, or paying easy and convenient for consumers.
- Advice – Many of the latest fintech systems utilize AI-driven advice that provides valuable information and recommendations for investing, reducing risk, etc. This expands access to this kind of information previously limited by the use of a professional advisor.
Macdonald Ventures Investment Focus
At MacDonald Ventures, we focus on tech entrepreneurs with ambitious, game-changing ideas to nurture the next generation of revolutionary startups. While our investment focus includes many tech sectors including SaaS and RPA, one of our primary areas of interest is fintech.
As an angel investor with a long and successful history in tech, my portfolio includes a premier roster of dedicated, passionate techpreneurs with grit, determination, and drive to see their world-changing ideas brought to life.
I tend to prefer fintech startups in the B2B space, as these companies typically build predictable revenue streams so I can measure my long-term value. It’s also an area where I have experience: that sweet spot where tech solutions streamline processes, reduce paper or labor, and cut down on busy work.
Fintech Angel Investment Partners
Learn more about the game-changing fintech startups I’ve funded and/or mentored.
Bolt Financial specializes in online checkout technology for retail companies, building optimized and safe one-click checkouts to boost conversion rates and create a seamless branded checkout experience.
Finexio is a SaaS fintech platform that simplifies and monetizes Accounts Payable processes. This MacDonald Ventures investment partner makes sending and receiving payments more affordable and faster by solving the real needs of CFOs, Controllers, and AP Managers.
Blend is a cloud-based banking platform designed to improve the customer experience from end to end. Another MacDonald Ventures investment, Blend simplifies the most common bank processes like applying for a loan or opening an account and streamlines operations for banks, empowering them to process an average of $5 billion in transactions each day.
ClassWallet, another MacDonald Ventures investment, is setting out to eliminate the paperwork of day-to-day expenses for teachers, maintenance crews, and student families by providing a platform that establishes budget limitations, automates receipt collection and transaction settlement, and helps organizations evolve into paperless, productive work cultures.
Ripple is a global payment solution providing a better payments experience and enabling greater economic opportunity for people everywhere. Funded by MacDonald Ventures and supported by blockchain technology, Ripple allows financial institutions to expand into new global markets to create a more inclusive financial system.
Other Fintech investments include:
- Stratos Technologies
Where To Find The Best Fintech Angel Investors In 2021
Angel investments are the lifeblood of fintech startups. If you have an early-stage fintech company and are looking for angel investment funding, there are several places you can find the best investors.
- Crowdfunding – An online form of investment fundraising that pools money from individual contributors.
- Angel Syndicates – Single-deal group funds managed by a syndicate lead that sources deals, conducts due diligence, and secures funding on behalf of the contributors. For example, I’m part of Florida Funders, a crowdfunded syndicate.
- Angel Investment Networks – Online channels to find potential investors and share your pitch.
- LinkedIn – Professional social media platform where you can search for investors in your field.
- AngelList – An online marketplace for both startups and angels, where you can find potential investors based on field, region, etc.
- Personal Network – Tap into your own network, reaching out to people in the entrepreneurial tech space that are familiar with you and your business. If they like your idea, they may be able to introduce you to an investor.
- Fintech Conferences – Tech conferences with a focus on fintech can be excellent places to find interested investors while learning more about the industry.
- Accelerators – Startup programs that offer guidance and access to local investment opportunities.
What Do Fintech Investors Look For?
Finding the best potential investors is an important first step to funding, but you must understand what fintech investors like myself are looking for when we evaluate possible investment opportunities.
Unique Value Proposition and Differentiation
Fintech is quickly becoming a crowded market. Any startup I invest in needs to have a strong, differentiated proposition to truly challenge the incumbents and tackle an unmet market need.
Path to Profitability
The end goal of any angel investment is a successful exit, so we are going to be especially interested in your path to profitability, whether that be through IPO or trade sale. You’ll need to prove your long-term plan for your startups’ financial viability.
Strong Founding Team
A strong founding team sets a startup up for success. As angel investors tend to invest in early-stage companies, there’s greater risk involved, so part of our investment is in the founding team and their capabilities. We’ll want to learn about any past experience working together, successful startups, and relevant industry experience so we can learn what you bring to the table.
There is ample market opportunity in the fintech industry, so we’ll be interested in seeing what potential your company has to address a relevant market need. This means big ideas and hard numbers around the percentage of the market you anticipate capturing as you grow.
Seeing proof of early traction is one of the most important things investors are looking for because a startup with early traction is more likely to obtain additional funding and success later on. Some examples we’ll be looking for include a prototype, pilot customers, strategic company partnerships, or customer testimonials.
Strong Pitch Deck
A professional, engaging pitch deck that shares all pertinent information regarding your startup, its financial projections, fundraising plan, and product/market fit is critical to finding the right fintech angel investor.
Fintech Entrepreneur Benefits
I created MacDonald Ventures to give fintech founders and other tech entrepreneurs the benefit of not just my capital investment, but my experience, guidance, and network.
The most obvious benefit of my investment partnership is the injection of capital into your growing startup. Typically an early-stage investment, this funding can help form the foundation of your business, perfect your prototype, perform market research, and hire an impressive founding team.
The unique advantage MacDonald Ventures investments gain over the competition is the individualized guidance and nurturing of your business during its nascent stages. With decades of experience founding, mentoring, and exiting tech-focused startups, my goal is to share the knowledge and expertise I’ve gained to help the next generation of world-changing technologies take off.
Fintech Company Stages: When To Apply For Funding
In the idea and pre-seed stages, your best funding options might be bootstrapping it or asking friends and family as you build the foundation of your solution and your business. Once you have gained traction and are starting to develop your prototype, a general rule of thumb is that whenever you’re able to raise money, you should.
However, the best times for fintech companies to begin applying for angel investor funding is during the seed and Series A stages so you can get an early injection of capital to develop your technology, hire a team, and start getting your product on the market.
Typically, the first seed capital is the hardest to get, so you need to approach the process with great preparation and thoughtfulness. Ensure you have an authentic brand story, a WOW! factor that separates you from the competition, and an innovative solution with the potential to change the game. Further, you’ll need to have data to back up a strong market fit, proof of traction, a good management team, and reasonable financial projections before you approach a fintech angel investor.
Finding the Right Fintech Investor
Once you’ve developed the beginnings of a world-changing fintech solution and have the traction and projections to prove it, start applying for angel investor funding with qualified fintech investors.
As an angel investor with a focus on the fintech sector, I’m looking for revolutionary startups that can demonstrate a high-demand market opportunity, proven traction, and a direct path to profitability. MacDonald Ventures fintech investment partners gain both my financial and personal investments to throttle their startups to new heights. If you’re a fintech founder looking for funding and expert guidance, reach out.
What is a fintech company?
A fintech company is one that integrates technological solutions into financial processes or services to make them faster, safer, and more convenient.
How will fintech change banking and financial services?
Fintech in modern banking will improve onboarding, help banks get to know their customers, prevent money laundering, and more, optimizing the entire banking process. This makes the customer experience more convenient and mobile, allowing banks to cut costs by reducing physical branches, optimizing staff, and focusing more on customer services.
Fintech is also changing the way lending, insurance, trading, and other financial services work. Even the top financial services companies, like Mastercard and Visa, are acquiring fintech companies and investing heavily in the sector to boost their current stack of financial services. Ultimately, fintech will provide automation, personalization, error reduction, and efficiency enhancement for all types of financial services.
We’re also seeing significant changes in the banking and financial services industry due to blockchain and defi (decentralized finance), both of which have become increasingly important with the recent popularization of cryptocurrency. Bolt and Ripple, for example, are two MacDonald Ventures investments that utilize defi and blockchain technology.
Is fintech growing?
Yes. According to market data, the fintech industry is projected to see a compound annual growth rate (CAGR) of 24% through 2026 with a market value of $324 billion.
The key driver of growth is the heavy investments of large financial institutions into fintech solutions. Additionally, fintech companies are providing low-cost, individualized products and experiences to consumers, increasing customer expectations and boosting global demand and growth.
Will big data help fintech?
Big data will help fintech in three distinct ways:
- Accuracy – Big data analytics can detect inaccurate data within the system, creating more trust and precision within the data businesses rely on.
- Enhanced Decision-Making – Big data systems not only process huge amounts of data but also distill insights and can create meaning from a summary of the information. This provides a big-picture view of the operations, helping businesses make better decisions.
- Efficiency – Big data means employees will always have access to important information when they need it to streamline various tasks, whether for marketing, customer service, or other items.
How do fintech investors make money?
Most fintech investors make their profits by holding a stake in the company they are invested in and collecting the value of that equity at exit, whether through acquisition or IPO.
How can I start a fintech company?
There are six foundational steps to creating a fintech company:
- Know the regulations – Gain a basic understanding of the laws and regulations of the industry. You should also be familiar with the top regulatory bodies. Know how all of these laws and regulatory bodies will impact your business.
- Identify your niche – Find a niche, based on your target demographic, market launch area, and expertise. Some popular niches in fintech include mobile banking, loans/advances, investment management, and insuretech.
- Get familiar with the competition – Know exactly who you’re up against and what specific solutions already exist so you can address a specific, unmet gap in the market.
- Build a team – Find a team of people you trust with experience in either the finance or tech sectors that can help you build your business from the ground up.
- Find funding – There’s a bit more work that needs to happen before you get funding, like market research and prototype development, but once that has begun, you’ll need to identify the right investors, present a compelling pitch deck, and convince them that your startup is worthy of their capital, time, and effort.
- Build, improve, and launch – With funding to power your growing business, you can get to work building and perfecting your fintech solution. When working with tech, you should prepare for an ongoing process of improvement as new technologies and trends evolve.
What are examples of jobs in fintech?
Some of the most popular and in-demand jobs in the fintech industry include:
- Blockchain developers
- App developers
- Financial/business analysts
- Product manager
- Compliance expert
- Cybersecurity analyst
- Data scientist
- Quantitative analyst