WORKWEEK

What’s up everyone, Ian here. I’ll be honest most of the news was fucking depressing this week–you can read about that shit elsewhere (and there are some great summary threads in our Tweets Of The Week.) If you missed my essay on why now’s the time to build in crypto, check it out here (particularly proud of this essay based on the responses—thanks to all the founders/operators that replied and gave feedback!) 

Was having such a great day yesterday—was pretty productive, went shopping with the wifey…and then the group chat started blowing up about a surprise Drake album. Check it out here.

Honestly, I like it and it’ll probably grow on me way more. Drake’s talked a lot in interviews after Views came out that he’d like to make an album full of “Hotling Bling,” “Controlla,” and “One Dance,” which I guess he did. The entire album is a dancehall album with Drake singing about 95% percent of the time. 

It’s…not bad? Drake usually isn’t as artistic as artists like Kanye; he’s really good at putting his own spin on current music trends. And the house/dance vibe is definitely currently trending. It seems like Drake aimed to make an album at the intersection of rap and house/dance. Musically, the album has a very 808’s And Heartbreak vibe for me. Pushing musical and rap boundaries is usually a job left to Kanye but Drake does a decent job pulling it off in Honestly, Nevermind. 

My favorite tracks? Thought you’d never ask. “Jimmy Cooks” featuring UK/Atlanta rapper 21 Savage is the best (and only) rap track on the album and luckily it’s an absolute banger. “Falling Back” features some Drake falsetto which idk about but overall very good. The piano in “Massive” makes the track and definitely expect some house remixes to this track (and a lot others, someone tweeted that this was a very remixable album and I totally agree.) I like “Sticky,” “Overdrive,” “A Keeper,” “Liability” too.

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Unless you’re new here, you’ve probably heard me talk about Lithic and their powerful card issuing API. To date, Lithic has helped countless companies quickly build and launch card programs that have generated tens of millions of dollars in interchange revenue. It’s super impressive. 

As part of their commitment to strengthening the entire fintech community, Lithic recently announced the launch of the Lithic Legal Library – a free repository of legal and compliance templates around AML, chargebacks and disputes, fair lending, privacy, and a hell of a lot more. If you’re a fintech founder looking to launch a program, I strongly urge you to spend some serious quality time with this.

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NEWS OF THE WEEK

1) Party Time

On Wednesday, Party Round, the buzzy fundraising tool for founders, launched in the App Store, after a year of stealthy building in beta and taking over our Twitter feeds. It’s now officially the easiest way for founders to raise in fiat and crypto. 

Disclaimer: Cofounders Jordi Hayes and Sarah Chase are two of my best friends and I’ve been lucky enough to see Party Round’s journey from Day 0 (literally). I’m also an advisor and investor in Party Round.

Founders can now download the app, create a round, set the terms of that round and privately invite investors. Party Round handles the rest – from doc generation, to signature and funds collection. Think Cash App for SAFE financing, so you can say goodbye to manual and archaic fundraising. And the timing couldn’t be better. With many VCs pulling back or slowing new investments, I’d expect early stage founders to more frequently raise from larger groups of individuals.

If you’re a founder and wanna check it out, download Party Round here. 

You may be familiar with Party Round through their extremely fire Tech Twitter marketing strategy, starting off with MSCHF-esque Drops to connect with a community of founders and drive awareness of the fundraising tool. Each Drop, from Helpful VCs, CryptoPunk-style NFTs of top VCs, to BIGTECH Fellowship, where they paid someone $50k to quit their FAANG job & build a startup, to Party Grounds, a coffee collab with Cometeer, took tech Twitter by storm. 

This contrarian go-to-market strategy—creating a brand that felt more like a streetwear company than a fintech product—wasn’t just funny, but effective. Tens of thousands of founders signed up for the Party Round waitlist, all while their product and engineering teams were taking an equally laser focused approach to building and perfecting the product. Building demand while building, validating, and finding product market fit helped Party Round launch with a very polished and well-done product that works seamlessly.

Party Round is one of the first fintech companies that has supported digital assets since day one. This approach, which they call Hybrid Finance, is a huge selling point and value proposition for young founders who are building with and using digital assets (primarily stablecoins), in their day to day operations. We’re particularly excited to see this thesis develop at Vol. 1 Ventures; we fully expect Party Round to inspire a lot of companies to focus on the intersection of fiat and digital assets.

With beta customers like Yuga Labs (the hottest party round of this past year, featuring rappers like Gunna, Snoop Dogg, Drake and Nas) and Jordan Singer’s Diagram, Party Round was quietly supporting hundreds of companies that were raising millions in fiat and crypto on the platform. Now that it’s out of beta, Party Round is available to all founders raising on a SAFE, and it’s free to use. 

So what’s next? Fundraising is a great way to acquire customers at a crucial point in their history, the very beginning. And as millions will be raised on Party Round this year, the big idea seems to be reinventing the founder stack for the next generation of digitally-native, Hybrid Finance founders. 

I highly recommend using Party Round if you’re a founder—it’s super simple, fun, and has a lot of cool features (like letting investors mint an NFT for their investment to share online).

2) Apple Plans To Use Face/Touch ID For Loan Underwriting

We’ve been writing a lot about Apple’s foray into Buy Now Pay Later. That’s because it has a lottt of implications for fintech companies (and banks). I do think Apple can really change the face of consumer finance over the next decade. 

How? Well let’s take data and underwriting—I previously wrote that Apple has a very unique dataset around consumer purchase behavior and spending with products like the iTunes and App Store, and the Apple Credit Card. 

It’s been well reported that Apple’s handling underwriting for their BNPL product internally, through a subsidiary called “Apple Financing LLC,” which has acquired lending licenses in most states

But Apple’s planning on using more than just FICO scores and credit reports-two of the main tools used to underwrite customers now, but historically have been poor indicators of credit worthiness for minorities and women. Apple “plans to use its giant store of Apple ID data for identity verification and fraud prevention,” sources told the Wall Street Journal. 

Apple customers with ID’s that have “been in good standing for a long period of time” who have no previous issues around fraud are more likely to get approved for Apple Pay Later. 

The big question is: will Apple prove that tech companies can better underwrite customers using their own behavioral and commerce data than financial institutions?  If Apple pulls this off this should have massive implications for other tech platforms, all of whom will be very interested in developing their own underwriting models based on their own data. 

I do worry if this comes dangerously close to social credit scoring, however, something that’s very popular in China. What if I default on my Apple installment—will I not have the ability to purchase or download apps? Or worse, will my phone not work at all until I pay? In China, lenders leverage social platform data to underwrite customers, but if customers fall behind on payments they start restricting access to the platform. I doubt US companies would be so dystopian but there’s nothing really stopping them from doing so.

TWEETS OF THE WEEK

• In crypto, hedge fund 3AC blew up because they got margin called on some overleveraged crypto deals. If that looks like gibberish to you, check out this great thread from Assistant Professor of Finance at UChicago Booth Anthony Lee Zhang that explains it in layman’s terms. 
• Christa Williams shared a great report on first time fund managers—who outperformed existing fund managers by 3% for the past 12 years. As a first time fund manager, this is great news for me but there are a lot of different reasons for this too.
• How do you standardize product quality? Here’s a thread from the VP of Design at OnFido about how they think about developing metrics to ensure their product, and future iterations, remains high quality. 
• A fantastic interview with Multicoin Capital’s Kyle Samani and Erik Torenberg. 
• Why is inflation bad? Here’s a thread from one of my favorite fintwit accounts.
• I love reading investor updates but when you send them as a founder, usually the investor doesn’t do much besides a pat on the back. I think a) founders need help to learn how to write investor updates, something I’ll be writing about soon. b) we need better tools for founders and investors to interact. Anyway here’s a good debate on the value for investors and founders.