FinTech: What's Real and What's a Scam with Drew Glover, General Partner of Fiat Ventures

0:00One of the biggest challenges, especially early on, is we'd be trying to make positive change, change that we knew that would work because we'd seen it happen before in previous companies. and in similar industries. And it was just tough to kind of move it. So for us, first and foremost, we need to make sure that we, before we lean into any project, we have a seat at the table and we get to collaborate with the decision makers in that business. Because some of the decisions we're making are going to be huge dial movers, but also ones that everyone needs to be aligned with. But more importantly, we need to be able to gather data from all different departments.

0:43One of the bigger challenges is, especially you're talking like B2B companies, you want marketing to do a ton of work, but you don't have all the sales data. And you don't know how many calls you need to, or how many cold calls you need to make to actually get a meeting set, or how many emails need to be sent for a deal to be closed. But the first step is always like, we need to make sure the data's clean. We need to make sure it's organized and we need to make sure that we can count on it. And then from there, we can really start building up the growth effort beyond that. But it's always a very important piece of any conversation we have is saying, hey, we need to be right there with you at the table making the decisions together.

1:25Hello, I'm your host, Mike Gelb, and this is the Consumer VC podcast where we discuss the intersection of venture capital and consumer innovation. If you're enjoying the show, also subscribe to my newsletter at theconsumervc.com, where you'll receive new episodes straight to your inbox and a weekly recap of all the consumer deals that are happening. This is all the fundraisers, acquisitions, bankruptcies, all in consumer. All content and episodes are for informational and entertainment purposes only and is not investment advice. Today's episode, we focus on the wonderful world of consumer fintech.

2:01And our guest today is Drew Glover, who's a general partner of Fiat Ventures and founding partner of Fiat Growth. Fiat Growth is a growth consultancy helping to scale some of the largest fintech companies out there. Chime, Lemonade, Copper. They decided to launch a VC fund that focuses on emerging fintech companies, as well with, of course, Fiat Ventures. We discussed his journey into fintech, how Gen Zers are thinking about money a little differently than millennials, figuring out what's real and a real problem to solve versus a scam. Without further ado, here's Drew.

2:43Drew, thank you for joining me today. How are you? I'm doing fantastic. Thanks for having me, Mike. Really appreciate you taking the time. Want to start from the very beginning of your career and your interests. What was your initial attraction to fintech and as well as marketing and kind of strategy side to actually building organizations? I have a super unconventional path into both fintech and marketing. Grew up in the Bay Area, grew up in a family that was deeply rooted in civic action and social advocacy. Dad ran a nonprofit, mom was a principal in the Oakland Unified School District, came from a family that was deeply rooted in just like the nonprofit world.

3:23and philanthropy. And so I grew up in this coming from this place of really having like, you know, I believe a good height, a good, a great IQ, but also really great EQ in terms of just like how the world works, my exposure to all different socioeconomic classes. And, you know, that was something that I just naturally had in me. And it was great to already have that wired at such an early age as I was kind of moving through the rest of the world. Parents put me in a private school. So I had this like really interesting juxtaposition in between called like, not extreme wealth, but like middle to fairly, you know, wealthy folks.

4:00And then coming back to like, you know, inner city East Oakland and experiencing, you know, the lives and the community that was there. And then from there, I went to a private high school, Catholic high school. And then from there, I went to UC Berkeley. I actually played football at UC Berkeley, but that was the first public school I had gone to. And between, you know, experiencing UC Berkeley, you know, just a very progressive campus, but also even being on the football team where it was the first time I'd been on a sports team where it was like legitimately like 80 different people, all from different socioeconomic backgrounds.

4:34and we were so close and had so many experiences together, both on the field and also in the locker room culture, that I really started to fall in love with this idea of different people from different backgrounds. That could be location-based. That could be based on family dynamics. That could be based on their socioeconomic class and really digging into the personas and the archetypes of these different individuals. That just got me naturally invested and excited about the world ahead. Once I graduated college, I did a ton of things. I was in sales, I was in insurance, I was in HR tech, I did a ton of things.

5:11And I kind of battled with this whole challenge of I want to make a ton of money. How do I make a ton of money? Like all those kids I grew up with when I went to private school. And, and then once I started finding some really great experience and became a really great salesman in some previous tech companies, I realized I was cool. I understand that I can make money, but how can I make money, but also do good and make an impact? So I ultimately left a sales role and when started working at a company called Steady, Steady is still around the series C company platform that helps folks in the 1099 world improve their financial health.

5:47So big believer that the future of work is just going to massively shift in the next generations to come. People are no longer going to have one full-time job for the rest of their lives, but they're going to have multiple part-time jobs to create a full-time experience, kicking off with like the gig economy, Uber, Lyft, DoorDash, and so forth. So from there, I was at Steady, and I ultimately started advising a ton of companies because I saw the shift happening in fintech specifically. Folks were no longer just building products for the 20 % of America that already had money and just needed help managing it, but they were starting to build products for the 80 % of America, the most financial help and guidance.

6:27And that's where really I fell into my sweet spot, where I wanted to work with companies, but also build my own companies that help drive impact to the communities across America and frankly, the entire world that needed the most financial help. So kind of your North Star or what became it was how can we when you think about these things like okay I obviously want to make a lot of money but at the same time how can I also get back to and work on projects that are actually meaningful and maybe and are actually democratizing kind of financial products it seems for people that are from maybe different socioeconomic backgrounds different places and so that kind of it seems like became more so your North Star and helping these companies grow?

7:21Is that roughly right? Yeah, it took me a little bit more than a decade to find an answer that I wish I had known when I was a lot earlier, is that making money and doing good don't need to be mutually exclusive. I think everyone believes that you have to choose either or. I'm either going to become an iBanker or I'm going to go work for a nonprofit. But in the world that we live in today, there are so many ways to curate and craft. your kind of holistic way of work in a way where you can do both. You can do good, you can make money, you can change lives, you can make a massive impact. And so again, it took me a long time to realize that, but it's 100%, right?

8:02Like drive impact, have the life you want to lead. Was there one company in particular that you thought on the fintech side, like, oh my gosh, like this company, what they're doing and, um, and in terms of how they're, um, helping people that maybe don't have, you know, a lot of savings or, you know, um, uh, uh, to be able to, uh, to be able to save or, or, or what have you, uh, maybe produce like a financial instrument that, that, that they did not have accessible, um, access before that, that this is, this is pretty interesting in that, you know, it's become like maybe a large company, but they're still being able to have an impact.

8:37Yeah. You know, there's a couple, um, you know, one that's kind of near and dear to fiat it's uh we actually led their series a invested in their seed round as well they've been a long-time client of fiat um it's a company called copper it's a it's a teen bank um i'm just such a big believer that like today's schooling is still not educating today's youth on money in the way they should we're still talking about algebra and calculus and um a lot a math that you only need if you want to like go major in college in math, but not really talking about the X's and O's of business, right? Like if I'm starting a business, how do I run it?

9:19Like what, what taxes mean? You know, what does it mean if I'm a 1099 worker versus a W2 worker? How do I engage with money differently in those specific instances? So, you know, what copper is, it's a team bank, but it's really focused on literacy, financial literacy, but also making it so you can digitize money at the earlier ages. I think we all remember when we were, what, 15 or 16 years old and our parents walked us into a Bank of America or a Wells Fargo and said, hey, let's open up this debit card. But what you can do with copper is you can not only manage your money and basically turn that allowance money into something digital and an actual card, but they are teaching you along the way.

9:59They're also teaching about some of the stuff that in today's social media you can't run from. That'd be like crypto. And like, what does that actually mean? You know, how do I engage with that? And also just keeping in mind, again, the future of work is changing. Teens are working, like they are reselling shoes on StockX, they're opening up Etsy stores, like there's no more lemonade stands in front of people's houses, right? They're mowing people's lawns, they are accepting money via Venmo, they're looking for digital ways to store, save and even potentially invest. So I'm a big believer that stepping below this like, Like, oh, you only see money and manage money for the first time in college going six to seven years younger where people are already engaging with money in super unique ways today.

10:41Yeah, no, totally. And even on the job front, you know, it's really rare that somebody, you know, had the same job for, you know, 20, 30 years like previously. And now it's, you know, if you're at a job for five years, it's like, oh, my God, five years? You made it? You didn't change? You know what I mean? Like, it's pretty bizarre. And it seems like, you know, certainly when it comes to, you know, obviously what you said previously about, you know, 1099 and W2 and the relationship between those and obviously like the gig economy and the different opportunities people have to work and also to have kind of side hustles if they want them.

11:22And so, and it seems like everyone's looking for a side hustle, which I love. I love to see it. Love to see it. Um, everyone is, everyone is exactly. It's amazing. Um, so how, how did you end up founding, um, fiat growth and what was kind of the, the, the synthesis behind it? Yeah. So, um, what you'll, the, the, I think the commonality you'll see throughout the growth, the, the growth of fiat growth, no pun intended there is, is, uh, everything was very much organic. Um, so when I was at steady, I was overseeing growth in partnerships. I also build out their recommendation marketplace. So I joined pre-launch and a couple years in, we had around 3 million users.

12:05And these are all folks that were part-time workers. And through that process, I actually helped stand up their recommendation marketplace. So to break that down, Steady was a money management tool. So 1099 or part-time workers would come in, they would sign up for Steady, they would use the money management tool because it would help them better manage their work life because they had multiple part-time jobs. Maybe they were driving Uber, doing Lyft, and also doing DoorDash all at the same time, but needed to manage that money all the way down to like expenses to taxes. And so because we had all these people using the platform, I built out their marketplace, meaning it was a marketplace that all of Steady users could use that was a list of call it like 25 to 50 products that they should also be using to improve their overall financial lifestyle.

13:03And so what I would do is I would actually build, I built the platform to recommend them products adjacent to what SETI was offering. Through that process, I had all these other companies trying to get inside of our marketplace to market their product to our users. So I probably have around 10 to 20 calls a week with different companies like begging to get their product in front of steady users. And in this process, I started talking to a ton of really cool companies, some that were great for the marketplace, some that weren't. But whenever I met one that I thought was doing something really interesting, really through that thesis, right?

13:38The 80 % of America that needed the most financial health. I said, hey, I can actually help you. Bring me on as an advisor and I can help you scale up your business in super meaningful ways. And it just so happened, I had reconnected with a really close friend of mine in college, Alex Harris. He was at Chime, the super large neobank from series A to series D. And he was doing a very similar role. He was building out their marketplace at the time and was overseeing paid growth. And so me and him were both taking 10 to 20 calls a week almost. And we started co-advising a number of companies together.

14:11One turned into two, two turned into three, three turned into like 13. And we looked at each other and said, listen, like, there's something special happening here. There's not a growth consultancy specifically focused on fintech that we've ever seen in the market, especially one with our skill set. So after it got to a certain number, we looked at each other and said, hey, let's quit our day jobs, and let's found fiat growth. What fiat growth has become today is the leading fintech focused growth consultancy in the country. We're a team of a little over 30 individuals full-time, and we have over the last four and a half years, so it's been four and a half years since we quit that and started Fiat, we have basically hired everyone we wish we could have hired in-house as we were kind of going throughout our career.

14:56It's the who's who, it's like the A-team. And basically what we've done is we've kind of created this culture within Fiat where we say no a lot more than we say yes. We have companies reaching out to us all the time. And the reason why we're so picky is because from day one, we had a very unique model. We get paid in a flat retainer. We would get advisory shares in the companies we work with, but we'd ask for the right to invest in every single company. We didn't have the money at the time, but we knew at some point we wanted to be able to invest in the companies that we were helping scale to the moon.

15:28So in 2021, we actually founded Fiat Ventures, which is our venture fund. And in 2021, we founded that. In 2022, we closed our venture fund with a$25 million fund. And so what we do now is we have Fiat Growth and we have Fiat Ventures. They're two separate entities. However, we get the right to invest in everyone at Fiat Growth. And when we work with them on the growth front and we see all the tea leaves aligning, at that point, we decide if we want to lean in with a check from the venture fund because we've worked with them in the trenches and we know the business that's being built and we know why it's exciting.

16:03We know why it's a smart investment. And most importantly, we know that the founders have the right DNA to build a billion dollar business. Now on the fiat venture front, does a company have to work with fiat growth in order for you all to invest? No, no, not at all. Around 60 % of the investments we made to date have been from fiat growth. The other 40 % are companies that we see in the space that are just doing really interesting things based on the trends we're seeing. So the marriage between fiat growth and fiat ventures is super unique because keep in mind, we work with over 120 companies at fiat growth.

16:39We've driven over a billion and a half dollars in revenue, but we only invested in 17 of those companies. So because we're asking for the right to invest doesn't mean we're going to invest. It just means we have the ability to. And so what fiat growth also gets to be is this really incredible education arm for us. So when we get really excited about a trend in ventures, we're like, you know, let's go get a couple of clients. Let's scale these clients up. Let's do incredible work for them. But let's also learn by doing, you know, like we want to learn about crypto and blockchain. Like let's go get a couple of companies in the consumer space.

17:10It's kind of like bridging the web two, web three line. And, and then really just go like do deep learning in that space. So we can like build out our thesis and thought on where the, the market's headed in that specific area. And so when you want to like learn about a space, I'd imagine, that's that, that you're, it doesn't mean you're just going to get involved, for example, in like whatever that trend is on the, on the fiat growth side. Right. It, it, um, that the companies obviously have to be interesting to you and meaningful in terms of the value that you can add? Yeah. So I think it's really important just to state the type of work we do.

17:48I think when people hear the word consultancy, a lot of them think Bain and McKinsey and like, oh, you're just giving me a hundred page deck and telling me to do the work. When we say growth consultancy, we are true operators and executors. So when we work with the company, we're typically acting as their outsource growth team. When I say that, I mean like, don't hire a CMO, don't hire any growth marketers, let us come in and we'll do everything from standing up your marketing technology infrastructure to make sure your data is clean and crisp to standing up your partnerships or can actually going out and closing partnerships for you in the space, both strategic or embedded.

18:23That means us managing every imaginable paid channel, that'd be Facebook, Instagram, TikTok, Google search, I could keep going down the list. So for us, we become their outsource team. So to your point, like when we are working with a company, we're always leading with can we add value first? And if we can add value, you know, do we believe this is an investable business? Yes, we 100 % do. We love what they're building. Great, let's bring them on as a client. And then when I talk about like us sometimes going out from an educational standpoint, is the difference of us just like kind of sifting through our inbound leads versus us saying, let's go find some companies we're really excited about that we believe we can add value to, that we also just want to learn more about that specific space.

19:07So we can just keep sharpening our tool set around how we can be better investors and how we can be better growth marketers. On the venture side of, for fiat ventures, how do you think about what, well, I guess also this is pertaining to for growth as well, because it's kind of what companies are interested to you. But how do you kind of identify what problems that you want to see solved and that the companies that are actually solved in terms of what's maybe like a real problem in the finance fintech world versus one that you don't think that maybe as much as a problem at all? Yeah, no, that's a great question.

19:47Because the way you ask, it's really interesting. A lot of times we see really interesting trends in the space, and then we look for trends. And then when we are talking to someone that's in that trend, we start hearing what problems they're solving. And then we say, hey, that's an interesting problem, or that's not an interesting problem. So to answer your question specifically around the problems, right, like I think one is access. historically access to low to middle income communities across the world, but specifically within FinTech have been very high. I think a very simple example is like the call like investment app revolution, where historically, you know, to go invest in a stock, like if you weren't, if you didn't have someone that you knew in finance, it was very, very hard to do.

20:38Now, of course, you have the proliferation of Robinhood and public.com. And I could go down the list of, you can literally download an app, upload your debit card and just go invest in just about any stock you want, both a full stock and a fractional stock. But access is still kind of rampant across the entire country in terms of being able to have access to products, to financial products that improve your financial health. And I think about it in three buckets, help you save money, help you earn money, and then help you build generational wealth. So we're constantly thinking about access as it pertains to those three pieces.

21:14And how can we basically work with, how can we be working with companies that are help lowering that access barrier to provide financial access to all the communities that are in need of it most? No, that's really helpful. So it's focusing obviously on access and the three kind of buckets in terms of like maybe be like an overall theme, um, um, access. And, and, and as you say, like help, it has to help you save, earn or build generational wealth. Um, and in terms of your, your focus in terms of, are they solving like a problem that's in that sphere? Um, um, what, when you look at companies? Yes.

21:51Oh, and I'll just quickly add, you know, it's, um, it's important for us to have a thesis, but to not put hard parameters around it. Um, there's so many incredible minds out there, so many incredible founders, so many incredible ideas is we want to be in, you know, we want to be, we want to know the direction that we're walking, but we don't necessarily want the street to be narrow. Like we want it to be as wide as possible so we can truly take in all the opportunities we can, assess them in the way we need to, to make it so we're not missing opportunities in the, in the spaces that we find the most impactful.

22:31Got it. And on the fiat growth side of things, when do you typically become involved in a company? Could it be very early on? Like how, how early is, is too early? Short answer is never too early. Um, uh, also short answer is never too late. Um, we're very much stage agnostic. Um, but I will say we try to keep a pretty healthy kind of 50-50 split. So basically series A and below is around 50 % and then series B and above is around 50%. The difference in terms of how we do work with these companies, typically series A and below, we are truly like their outsourced growth team for a lot of the time.

23:13They don't have a team in place or they have one person. And so we're able to really come in and scale them up and get moving and building out their growth infrastructure, and then actually building out the different growth channels that are most pertinent to them. Kind of keeping in mind that most of their goals are like, how do I get to the next round of funding? So we're understanding, okay, great. What goals do we need to hit to get to that next round of funding? Let's reverse engineer that and let's build it up. And I think what a lot of people don't really understand is the most mistakes that are made on marketing is making emotional decisions when you have data that provides you the ability to make logical decisions.

23:51And a lot of people say, hey, this worked in a previous company, so it should work at this company. But really what marketing, the essence of marketing and the art of marketing is how can I do fast, small tests, iterate on those learnings, do the test again, iterate and test again to basically come out with a ratio of 70, 20, 10. spend 70 % of my money on the things that are working spend 20 % of my money trying to beat what's working and then spend 10 % of my money on experiments that are good good ideas bad ideas and everything in between to see if we can just like get one of those moonshot growth strategies off the ground to like dwarf everything else and I'll just say on the on the upper end of that for some of these larger companies, we're kind of just like taking a very specific arm of their growth effort.

24:50So sometimes it's, hey, take over affiliate marketing. Sometimes it's, hey, we don't have a TikTok strategy. Can you stand that up from us from the ground up? So it's a little bit more piecemeal than some of the earlier stuff, but there's special projects that pop up in between everything. On the earlier side, dealing with earlier companies, when you really are effectively the CMO, essentially, and the marketing side to the business. What tends to be some of the challenges on the marketing side in terms of how you approach your funnels that maybe what you've taken over, it was, oh my gosh, this is so different than that.

25:30Maybe how I would do it or what you perceive would be successful. Or, yeah, yeah, if you want to go for it. No, well, it's interesting. And if you go back to like when we first started, like we've learned a ton. I think the biggest learning we've had is we don't really take on a project unless the team is willing to give us a seat at the executive table. One of the biggest challenges is, especially early on, is we'd be trying to make change, positive change, change that we knew that would work because we'd seen it happen before in previous companies and in similar industries. And it was just tough to kind of move it.

26:09So for us, you know, first and foremost, we need to make sure that we, before we lean into any project, we have a seat at the table and we get to collaborate with the decision makers in that business because some of the decisions we're making are going to be huge dial movers, but also ones that everyone needs to be aligned with. But more importantly, we need to be able to gather data from all different departments. One of the bigger challenges is, especially you're talking like B2B companies, you want marketing to do a ton of work, but you don't have all the sales data. And you don't know how many calls you need to, or how many cold calls you need to make to actually get a meeting set, or how many emails need to be sent for a deal to be closed.