The venture market is in the midst of a slowdown — which makes it an odd time to launch a new VC arm. But that’s exactly what the financial wellness coaching company Financial Finesse is doing. The company this week launched Financial Finesse Ventures, which focuses on “socially responsible” fintech. Think of it as the polar opposite of the shady trading apps and questionable crypto firms that reigned supreme in 2021.
In an interview with dot.LA, founder and CEO Liz Davidson says the company’s new fund will look for fintech startups that make a social impact and are transparent with fees and data practices.
“There are some technologies out there that are transformative and have the potential to put a lot of money back in consumer’s wallets and get them to use that money responsibly, so they’re achieving financial freedom much faster,” Davidson told dot.LA.
She contrasted these startups with predatory practices that have emerged in fintech, like high-interest personal loans, trading apps and even employee benefits like payday loans that don’t operate in the best interest of workers.
“All these things may be good for the companies that the VCs are funding because they’re revenue generators, but they’re not good for the consumer or employee. And so, I think it’s just an inherent conflict that happens when you’re under pressure to generate returns for investors really quickly,” said Davidson.
Financial Finesse Ventures has already picked its first early-stage company, which it plans to announce in November. It’s currently in talks with a number of different startups, and plans to pick more in the future. For now, Financial Finesse will be the sole investor in the fund and plans to take a slow approach to tapping new companies.
“We’re looking at a relatively slow rollout for two reasons," Davidson told dot.LA. "Number one, we want to know that we’re doing this right and that we’re getting this model down right. We’re incubating these companies and we know there’s a lot to learn, and we don’t want to go too fast."
The second reason?
"To make sure that we’re pacing ourselves from an investment perspective,” said Davidson. In other words, it’s trying not to jump the gun. “We’re not at a place where we’ve pulled the trigger on any one [...startup] besides the one that we’re launching. But we’ll see how those discussions evolve.”
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