Issue 7: June | July 2024
In this Issue:
In this episode of the American Banker Podcast, host Penny Crosman sits down with Betsy Cohen, founder of The Bancorp and Cohen Circle and a trailblazer in banking as a service (BaaS). They discuss the early challenges and evolution of BaaS, regulatory hurdles, and the growing pains of fintech partnerships. Betsy shares her insights on the current state of BaaS, the impact of consent orders on banks, and her latest ventures with Cohen Circle, where she leverages her extensive experience to invest in the next generation of fintech leaders.
Highlights from Betsy Cohen's Interview
On the Early Challenges of BaaS
"We were just trying to find a function and we came to it two or three years too early. But it gave us a learning period in which we could evolve what became a very lucrative business model, which minimized risk and maximized the low-cost deposits that came with the business relationships that we had with fintechs that needed our services."
On Regulatory Challenges and Consent Orders
"I think that the regulators are struggling. There are risks inherent and embedded in this process, but whether they require the kind of response that the regulators seem to be providing, I would hesitate to say. The impact on the bank and the impact on the marketplace, generally, banking accessibility, because many of the banks that are involved are servicing populations which previously did not have as much access."
On What Cohen Circle Looks for in Fintech Investments
"We're looking for corporate infrastructure to be in place, and by that I really mean seasoned management. This can't be their first idea. And I say that because in technology and customer response, the market moves very quickly... Most importantly, having a differentiated product that serves a purpose and a need and has been market tested."
Check out the full recording and transcript at the link here.
Cohen Circle Sneaker Social
In June, Cohen Circle hosted our spring event - a bespoke sneaker decorating workshop, where guests unleashed their creativity by designing Nike Air Force 1s. We had a blast connecting with our community of tech leaders and investors across the fintech and impact spaces. Enjoy this video from the event featuring never before seen custom sneaker creations.
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Kate Johnson Joins the Cohen Circle Team as Managing Partner of Fintech Ventures
This summer, Cohen Circle welcomed Managing Partner Katelyn Johnson to the team, where she will be leading the firm’s fintech investment arm.
In her role at Cohen Circle, Kate will leverage her fintech experience to lead new investments for the Cohen Circle's venture division, which has invested in companies like Maxwell, Curve, Duetti, Ocrolus, and Nova Credit.?
Read on to learn more about what Kate looks for in a founder, her advice for choosing the right venture partner, and words to live by that she has taken with her throughout her professional journey.?
Why did you decide to join the Cohen Circle team??
When I started talking to Betsy and Daniel Cohen and the rest of the Cohen Circle team, I immediately saw the potential synergies that could benefit the founders we invest in. Unlike many generalist platforms, the Cohen Circle team has deep fintech expertise and a strong track record in banking and insurance, thanks to the Cohens' decades-long leadership in fintech innovation with the Bancorp. Combining their operational and investment experience with my ten years of fintech investing creates a unique advantage for entrepreneurs looking to tap into our extensive experience and networks. Together, we truly stand out as a specialist fintech firm and offer immense value to the companies we support.?
What key qualities do you look for in a fintech founder or founding team??
I consistently look for founders who take a conservative approach, with a strong focus on unit economics and building a business with staying power. I value founding teams that are disciplined in both raising and spending money and have invested time in developing the right mechanisms and distribution channels for their business.?
While this perspective is now more common due to the market slowdown, it has always been my guiding principle. If you look at companies like Slack, Square, Venmo, NerdWallet, and even Microsoft, they were all built during recessions. These challenging times often lead to the creation of the best businesses and the highest returns for venture capitalists, as they force founders to be more disciplined in their operations, valuations, and value propositions.?
Can you share a piece of advice or a mantra that guides you in your professional journey??
In your career, the most important thing you can do for yourself is to identify what you’re good at and what gives you energy, and then find a career that aligns with those interests and strengths. So many young people are looking for that ‘easy’ button they can switch on to achieve a happy and rich life - it doesn’t exist.?
It takes a lot of work and self-reflection to recognize your skill set and understand how to apply it in the professional world. If you find yourself in a high-earning role that doesn't play to your strengths, you may not be as successful or feel fulfilled. It's crucial to do the hard work of finding where your interests and skills align with your goals?early on. ?
Read the full interview here.
In the latest episode of the Female VC Lab Podcast, host Barbara Bickham sat down with Corinne Bortniker , principal at Radiate Capital, an affiliate fund of Cohen Circle, to discuss the inspiring journey that led her to the venture capital world, and the innovative investment thesis that drives her current role. Corinne’s extensive background in equity capital markets (ECM) provided her with invaluable insights into the higher echelons of public companies. However, it was her passion for engaging with visionary founders at earlier growth stages that lured her into the dynamic sphere of venture capital.
Corinne explains how shifting demographic trends, regulatory tailwinds, and technological innovations are transforming these sectors, making them ripe for disruption and impactful investment. Later, she delves into the exciting prospects of platforms that bridge economic stability and health well-being.
Dive into the episode to understand how Corinne and her team are uniquely positioned to create strategic value and support the evolution of their portfolio companies.
Listen here.