Fintech Leaders – "Dynasties in the Making: 15 Companies Cultivating Tomorrow’s Fintech Leaders"

Host: Miguel Armaza
Guest: Andrew Endicott (Co-founder, Gilgamesh Ventures; ex-Petal)
Date: August 20, 2024

Overview

In this episode, Miguel Armaza is joined by his Gilgamesh Ventures co-founder, Andrew Endicott, to break down their research (in collaboration with the Wharton School) about how 15 foundational fintech companies have become dynasties, training and launching a new generation of founders across fintech and tech industries in the Americas. The discussion dives into data insights, iconic examples like the "PayPal Mafia," recent momentum driving founder surges, the roles most likely to spin out future leaders, and the broad impact these companies have beyond fintech.

Key Discussion Points & Insights

The "Fintech Dynasties" Phenomenon

• Definition: Analogous to the "PayPal Mafia," major fintech companies act as finishing schools, cultivating future founders who launch innovative companies across a range of tech verticals.
• Notable Insight: "These alums of these fintech families, these dynasties, I think that they've been on the inside, they see how sausage is made... you've got to chew a little glass to build something and you're going to encounter hard times." – Andrew Endicott [00:00]
• Comparisons made to: Alabama football coaching tree, music bands that spin off new groups.

Data-Backed Research: 15 Companies, Thousands of Founders

• Methodology: Started with companies having >$250M revenue, narrowed down to 15 major names (e.g., PayPal, Affirm, Mercado Libre, Square, Stripe, Nubank, Zillow, etc.) [04:53]
• Reach:
  • Nearly 2,600 founders have spun out of these 15 companies in the Americas.
  • Only about 12% are building fintech companies; the rest are building in AI, SaaS, health tech, and other industries.
  • Collectively, fintech-focused founders have raised $4.3 billion in equity, with Square, Zillow, and SoFi alumni contributing 60% of this total. [00:54], [20:34]
  • 48% of studied founders launched their fintechs in 2022 or 2023. [00:54]

The Momentum: Why Are So Many Founders Emerging Now?

• Compound Interest in Human Capital:
  • Andrew likens the effect to "compound interest": experience and know-how build over time, leading to exponential founder creation.
  • Quote: "You're seeing a human capital snowball effect where you can draw the line on where fintech kind of began… And it takes time. I think leaders are made, not born... you just had amazing cultivation of talent... that's really matured now." – Andrew Endicott [06:37], [16:06]
• Recent Surge:
  • Half of fintech founders from these dynasties set out on their own in 2022-23, the largest 'graduating class' yet. [15:33]
• Driving Factors:
  • "Insider knowledge": Employees leaving to fix problems they identified firsthand.
  • Layoffs as a forcing function: Talent pushed out considers entrepreneurship over returning to large companies [08:28], [17:57].
  • Financial security from past boom cycles and IPOs lowers risk barriers.
  • Resilience honed by navigating hard times (“chew a little glass to build something” – Andrew Endicott [09:29], [19:03])

The Power of Insider Networks

• Venture Trends:
  • Nearly all of Gilgamesh's recent investments were in companies founded by such "insiders."
• Knowledge & Rolodex:
  • Founders benefit not just from credibility but deep domain knowledge and crucial industry networks, making it easier to raise capital and go to market.
  • Example: Persona (from Square alumni) and anti-fraud companies (from Affirm/PayPal heritage) [21:45], [22:47]
• Notable Quote: "To build that business, it's a lot easier if you've been working in it... you’ve got a Rolodex of people...I think we see that in a couple other places.” – Andrew Endicott [21:45]

Case Studies: Succession and Cross-Pollination

• Max Levchin Thread:
  • “One of the co founders of PayPal was Max Levchin, right? While at PayPal, he pioneered some of the anti fraud methods that we still use today. And then he goes on to build Affirm. And guess what? Affirm has spun out. Some of the Affirm employees have built some of the leading anti fraud companies today.” – Miguel Armaza [00:20], [22:47]
• LatAm Example:
  • Mercado Libre alumni not only build big consumer brands (Mercado Pago) but launch B2B fintech infrastructure for the region as well (Palmillo, etc.) [23:27]

The Role of Product & Engineering Leaders

• Stat: 50% of newfound founders came from product or engineering roles. [24:43]
• Root Cause:
  • Daily exposure to pain points and frustrations with legacy systems ("hand to hand combat") fuels desire to build solutions.
  • Product leaders as "mini CEOs"—their experience making tradeoffs, navigating regulations, and handling risk becomes ideal founder training.
  • Quote: “It's just seared into their minds and their souls that somebody's got to fix this.” – Andrew Endicott [25:21]

Beyond Fintech: Transferable Skills and Broad Impact

• Surprise Finding: 88% of founders from these companies do not go into fintech, but launch ventures in software, dev tools, consumer, and more. [28:38]
  • "It's not an industry where you get pigeonholed. Right. You actually build some amazing skill sets that you can take to multiple different industries." – Miguel Armaza [30:16]
• Economic Reflection: Given finance’s fundamental place in the global economy, it makes sense this training ground powers entrepreneurship across sectors. [30:42]

Notable Quotes & Memorable Moments

• "Alums of these fintech families... see how sausage is made and it's not always pretty and you've got to chew a little glass to build something." – Andrew Endicott [00:00]
• "What Albert Einstein said—the most powerful force in the universe is compound interest. I think that's what we're seeing... a human capital snowball effect." – Andrew Endicott [06:37]/[16:06]
• "It’s seared into their minds and their souls that somebody's got to fix this." – Andrew Endicott (on engineers driven to start companies by legacy fintech pain points) [25:21]
• "Indisputable power of insiders: you just have so much more nuance and depth to your understanding and your networks..." – Andrew Endicott [23:27]
• "Not only have they learned how to build a company in fintech, but they have the credibility to go out and raise from the markets and de-risk their venture from the beginning." – Miguel Armaza [20:34]

Segment Timestamps for Key Topics

| Segment Topic | Timestamp | |---------------------------------------------------|-------------| | Intro to Fintech Dynasties, Data Scope | 00:00-04:53 | | List of the 15 Companies Studied | 04:53-06:37 | | Recent Momentum & the Human Capital Snowball | 06:37-08:28 | | Layoffs & Financial Security as Founder Triggers | 08:28-09:29 | | Insider Advantage & Role of “Insider” Founders | 09:29-10:17 | | Research: Methodology, Key Stats, Funding | 20:34-21:45 | | B2B vs B2C and Knowledge/Network Edge | 21:45-23:27 | | Cross-Pollination: Anti-Fraud Lineage | 22:47-23:27 | | The Rise of Product & Engineering Founders | 24:43-26:56 | | Transferable Skills Beyond Fintech | 28:38-30:39 |

Conclusion

This episode illuminates how a handful of foundational fintech companies have become dynasties, shaping a new generation of founders across a variety of tech startups—not just fintech. Their alumni benefit from insider expertise, strong networks, and credible track records, making them especially formidable. The research shows that trends such as recent layoffs, market maturity, and increased available capital are accelerating this founder boom. Product and engineering talent are particularly likely to spin out, and most alumni take their skills far beyond fintech, impacting the broader tech ecosystem. For anyone interested in the mechanics of modern entrepreneurship, fintech’s “family trees” are now a central case study.

For more details, data breakdowns, and company-by-company insights, visit Gilgamesh Ventures or the Fintech Leaders newsletter.