Highlights
- Restive Ventures specializes as an early institutional investor in technically strong fintech founders lacking financial services networks.
- Speed of execution and fast iteration are paramount to outperform slow-moving incumbents in fintech.
- AI, especially post-ChatGPT, has drastically increased startup productivity, enabling smaller teams to grow revenue faster with less dilution.
- Successful fintech founders combine technical DNA, decisiveness, inquisitiveness, strong sales skills, and clear leadership roles.
- Restive Ventures anticipates an uptake in fintech IPOs, with public markets providing valuable discipline and growth transparency.
- The firm’s operating ethos centers on respecting founders, providing early-stage value, and maintaining transparency with LPs.
- Advice to founders and investors alike: focus on long-term vision over money-driven decisions and value conviction in investments.
Summary
In this detailed episode of The Innvoators & Investors Podcast, Ryan Falvey, founder and investor at Restive Ventures, shares his insights into early-stage fintech investing, the unique challenges of the financial services industry, and the transformative impact of emerging technologies such as artificial intelligence (AI). Falvey describes Restive Ventures’ mission as an early institutional investor focusing primarily on technically savvy founders who often lack networks within financial services. The firm aims to act as an extension of these startups’ management teams, providing critical connections and strategic support to accelerate growth in the crucial first 12 to 24 months.
Falvey emphasizes the complexity and fragmentation of the fintech and financial services sectors, explaining how this creates significant barriers for new entrants but also abundant opportunities for disruption through technology. He shares his career journey, from starting as a bank teller and working in emerging markets focused on mobile financial services, to running JPMorgan Chase’s Financial Solutions Lab accelerator, and eventually co-founding Restive Ventures. His real-world experience shapes his investment thesis focused on fast-moving, technically proficient founding teams that prioritize speed of execution, long-term transformative goals, and resilience beyond purely financial motivations.
On execution, Falvey highlights the critical importance of speed and product iteration to outpace slow-moving incumbents. Customer acquisition usually starts with consumers, small businesses, or other startups before scaling to larger enterprises. He also discusses the critical founder traits he looks for, such as decisiveness combined with inquisitiveness, technical DNA, a strong sales orientation, and a clear leadership hierarchy within the founding team.
Regarding current trends and technology, Falvey is bullish on AI’s impact on fintech startups. Since the emergence of models like ChatGPT, startups have drastically improved productivity, enabling smaller teams to ship products faster and generate more revenue with less capital. AI-powered “agents” are increasingly embedded in workflows, particularly in customer service and underwriting, exemplified by companies like Dave.com and finney.ai. This technological evolution is also influencing venture capital itself, leading to more capital flowing into innovative startups, albeit amid ongoing challenges in fundraising for early and growth-stage companies due to sector maturation.
Falvey is confident the fintech sector will continue to produce significant IPOs and public company success stories. He praises the public markets for bringing discipline and transparency to growing companies. On operating Restive Ventures, he stresses the core principle of respecting founders and offering them actionable value even when passing on investments. Transparency with limited partners (LPs) creates trust and a shared understanding of strategy, which has proven beneficial through volatile periods like the COVID-19 pandemic.
Lastly, when asked what advice he’d give his younger self, Falvey urges patience, persistence, and focusing on long-term goals rather than chasing money, which he considers a poor decision-making motivator. He also acknowledges the importance of conviction in investing, giving a shout-out to Parker Burrell, a successful and loyal late-stage investor. Falvey ends by inviting founders and interested parties to reach out directly to Restive Ventures, reinforcing the firm’s open and founder-first ethos.
Key Insights
- Early-stage fintech investing requires deep domain expertise and network access: Falvey highlights the complexity and fragmentation in financial services, creating natural entry barriers that technologists without industry connections struggle to overcome. This explains why Restive Ventures’ position as early investors bringing both capital and strategic network value is critical to founder success. It underscores that venture capital in fintech is as much about relationship-building and ecosystem navigation as it is about funding.
- Speed and execution as core competitive advantages: Falvey repeatedly stresses that the fastest-moving startups in fintech dramatically outperform incumbents who are encumbered by legacy systems and slow decision-making. This rapid iteration mindset creates compounding advantages over time, reinforcing the classic startup ethos of “move fast and break things,” but with a modern twist acknowledging fintech’s regulatory and operational complexity.
- The AI revolution is reshaping startup economics and workflows: The post-2023 AI boom, especially with tools like ChatGPT and custom AI agents, has delivered unprecedented productivity gains, effectively turning good engineers into “100x engineers.” This productivity surge means startups can generate much more revenue with fewer people and less dilution—a fundamental shift that could alter venture capital dynamics by postponing capital raises and accelerating growth trajectories.
- Founders’ personal qualities matter profoundly: Beyond financial metrics, Restive Ventures looks for founders motivated by mission-driven, long-term impact rather than short-term financial gain. Such intrinsic motivation enables founders to withstand the inevitable challenges and grinding effort needed to build transformative businesses. Decisiveness paired with inquisitiveness emerges as a rare but highly effective leadership trait—founders must solicit input but also commit and drive forward efficiently.
- Shifts in the venture and public markets are interconnected: Falvey notes that despite venture capital’s evolving identity and fundraising challenges, especially in the face of maturation and market turbulence (e.g., Terra Luna crypto collapse), fintech continues to produce notable IPOs. Public markets impose rigor and discipline on growing companies, an essential factor in sustainable scaling often overlooked in venture narratives.
- Founder respect and transparency with stakeholders are core cultural pillars: By consistently delivering value to founders, even pre-investment, Restive Ventures builds goodwill and an extensive deal flow funnel. Simultaneously, being candid and transparent with LPs about wins, losses, and strategic focus fosters trust and durable partnerships. This dual approach aligns incentives and creates a virtuous cycle beneficial to all parties and necessary during volatile periods like the COVID-19 pandemic.
- Pragmatic philosophy for long-term success: Falvey’s advice to his younger self and founders—to focus not on money as a goal but on purposeful work and resilience—is a reminder that fintech innovation is a marathon requiring passion, persistence, and alignment with a larger mission. This mindset underpins durable startup success and responsible venture capital engagement beyond quick financial wins.
Additional Context
- Restive Ventures focuses almost exclusively on U.S. fintech.
- Their typical approach is to be the very first institutional money in, preceding seed rounds.
- Founders often initially sell to consumers, small businesses, or startups before scaling to larger enterprise customers.
- The emergence of AI-powered agents automating or augmenting workflows is a core area of interest for current investments, exemplified by portfolio companies like Dave.com and finney.ai.
- The fintech industry represents a significant share of global profits (~15%), highlighting the market size and durability of fintech startups.
- There is no clear preference for single vs. multiple founders, but a clear decision-maker (often a CEO) is essential.
- Venture capital as an asset class is evolving, with fewer outsized “10x” returns expected; consistency and marginal outperformance with illiquidity premium are current norms.
This episode offers a rich exploration of how fintech venture capital operates at the intersection of technology, industry domain expertise, and founder psychology amid profound technology-driven shifts. It serves as both an instructive primer for fintech entrepreneurs and an insightful overview of modern venture trends for investors.
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