in an economy created by the very companies the startups want to usurp. VC firms have remained optimistic about the market opportunity fintech startups seek to cash in on, but their returns on investment have been a mixed bag.
I grew up in the New York area surrounded by financial services. I understood how massive yet antiquated the industry was. It's highly regulated and slow to innovate compared to others. Given the current economic climate, I'm also interested in the peer-to-peer lending space and the removal of predatory payday lending practices. What excited you about venture, and why did you decide to join your firm?
As for Index and fintech, the two have gone hand-in-hand since the early 2000s, but it was the people, culture, and meritocratic environment that won me over. Additionally, when transitioning into venture, you want to go to a firm where you have the autonomy to lead your own deals once you've built the trust of the team around you. That's atypical in today's world, but was a key characteristic of the Index team construct as I was assessing my options.
I've witnessed the power of the financial services industry to transform lives through access to capital and the introduction of innovative financial instruments. In a post-Dodd Frank world, I believe that this opportunity for innovation sits beyond the traditional publicly traded players, which has drawn me to the evolving fintech landscape.
Student debt is the second-largest consumer debt category in the United States, and today's solutions don't move the needle for borrowers. These solutions include personalized payment recommendations based on monthly cash-flows, Acorns-like round-up contributions, loan consolidation, refinance marketplaces, employer and family contributions, and educational content.
In all of that change and opportunity, I'm hopeful that someone will further solve the need for financial education and destigmatization since these issues are actually the norm, not the exception.Follow your nose and start doing parts of it! That is, I think venture actually favors non-conventional paths, and often I'll see people from operating roles, or in financial services, with deeply relevant domain insights.
While COVID-19 has created a lot of uncertainty worldwide, the pandemic has accelerated the need for financial services to be delivered digitally. This creates an opportunity for a new generation of fintech startups to emerge with mobile-first products and automated services, and for startups to more efficiently scale user acquisition.
I am also excited about financial services for seniors. With 50% of our population being 50 years old or older in the next 10 years, I do think this tech-savvy population will be looking for tools that help bridge the gap between income-generating activities, retirement savings, and leisure spending. Early in my career, I had worked in financial services.
Every year, we see new innovative ideas and better executions, and that makes our work incredibly exciting. The quality of entrepreneurs building within fintech is very high, which makes this a great category to be investing in.We've historically relied on banks to distribute capital into the economy. However, the recent COVID-19 stimulus efforts have demonstrated that banks are often slow and unprepared to distribute capital efficiently.
When I transitioned to venture, Flourish stood out because of the fund's clear mission to help build a fairer and more inclusive financial system. Flourish is also fortunate to operate as an evergreen fund, which affords us the flexibility to support ecosystem programs that advance pro-consumer innovation. Even prior to COVID-19, nearly 70% of Americans were struggling with some facets of financial health.
For companies selling into these incumbents, sales cycles are long, and regulations coupled with lengthy internal approval processes can prove cumbersome. That said, it's these same structural complications that make the broader fintech industry ripe for new companies to enter and compete.What opportunities do you see for fintech investors in the next 6-12 months?
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