Podcast Summary: "What Fintech Will Look Like in 5 Years"

How I Invest with David Weisburd (Ep. 256 – Steve McLaughlin, FT Partners)
Release Date: December 5, 2025

Episode Overview

This episode centers on the evolution of fintech over the next five years, featuring Steve McLaughlin, founder and CEO of FT Partners. David Weisburd leads a wide-ranging discussion about the firm’s origin story, how they differentiate themselves from bulge bracket banks, their approach to talent, the transformative role of AI in fintech, and his bold predictions for the industry's future. McLaughlin shares hard-earned lessons on value creation, defensibility, and why staying power and innovation matter most in an ever-volatile sector.

Key Discussion Points & Insights

1. FT Partners’ Origin & Growth Trajectory

• Founding Story & Bootstrapping
  • Steve started FT Partners in the wake of the dot-com bust with “no money, no brand and no employees,” working out of his San Francisco apartment (00:08).

    “I was 32 when I incorporated the business, actually incorporated it on companycorporation.com for $99. Bought a used laptop and got $10 business cards at Kinko's back in the day. So it was pretty humble beginnings.” – Steve McLaughlin (00:28)

• Scale Today
  • The firm has grown to around 250 people with offices in San Francisco, New York, London, and global deal flow (01:29).

2. Resilience in Down Markets and Business Philosophy

• Surviving and Thriving Through Crises
  • FT Partners’ success during market downturns (dot-com bust, GFC, fintech downturn):

    “One of my clients has a motto. Never die. … I like the idea of just, you know, just be there, be consistent.” – Steve McLaughlin (02:52)

• Longevity & Consistency Over Timing
  • Emphasis on being present through the cycles rather than timing the markets:

    “There’s really only two models … pick those [market upswings] correctly, which is incredibly difficult … or be there for a decade. That’s the hard part.” – David Weisburd (03:49)

3. Talent, Team, and Differentiation from Bulge Bracket Banks

• Attracting Nontraditional Talent
  • FT targets those who want to operate outside the structures of big banks and fosters an elite, innovative team:

    “If you’re the best, you want to go off and do it on a smaller platform … and prove to yourself, prove to the world that you can do things better than the big platform.” – Steve McLaughlin (05:09)

• Obsessive Client Focus & Resource Investment
  • Heavy investment in deep analytics, data science, and even AI-powered tools for client work, including a $25M investment into Model ML:

    “We’re going to be AI, you know, all over the firm … and then giving that AI to our clients.” – Steve McLaughlin (06:49)

  • FT Partners acts like an F1 team: every role and process is optimized for performance (08:10).

4. Value Creation Versus Administration in Banking

• Choosing High-Impact Work
  • Operating in private markets with high-growth, often opaque, and hard-to-value companies rather than commoditized transactions:

    “If you’re a smaller elite firm … pick one or two things … capital raising and sell side M&A in the private markets … you can add an enormous amount of value in that equation and … get paid for that.” – Steve McLaughlin (12:10)

• Track Record & Fee Structure
  • FT Partners just earned a $167M fee on a single deal—larger than comparable fees on much larger transactions at traditional banks (15:00).
  • Their fee model is heavily incentive-based, akin to the private equity world:

    “You really got to do the same thing in the same space with the same people for a long, long, long period of time in order to have the credibility … to charge greater than average rates.” – Steve McLaughlin (22:33)

5. Best Practices in Deal Structuring

• Flexible, Long-Term Relationships
  • Willingness to work with both early- and late-stage companies, often structuring lifetime or very long-term arrangements (17:02):

    “We just sold [AvidXchange] this year for $2.3 billion ... we raised a billion dollars for them ... helped them go public and helped them on the sale.” – Steve McLaughlin (18:17)

  • Clients frequently set incentive structures themselves.

6. The ‘World’s Richest Banker’ Label & Motivations

• Steve is unfazed by wealth labels:

  “The money part is keeping score… all the money’s going to go to charity someday… it’s just trying to do good by the world at some point in time.” – Steve McLaughlin (24:51)

• Still prioritizes hands-on client work and scaling the firm’s impact (25:40).

7. Fintech Trends: Digitization, Tokenization, and AI

• Real-World Asset Tokenization
  • The major trend Steve’s bullish on:

    “Tokenization ... to me that's really the future of financial services. … Some portion of that market is going to go tokenized... settling instantaneously with anyone in the world.” – Steve McLaughlin (26:30)

• Legacy vs. Next-Gen Companies
  • Predicts today’s fintech names may become the new “legacy” companies, as a wave of AI-first, global, and highly disruptive firms emerge (28:11):

    “I think you’re going to see lots and lots of trillion dollar companies in 10 years. And ... AI will just be commonplace at that time.” – Steve McLaughlin (28:40)

8. Defensibility, AI Arms Race & Industry Impact

• AI as Competitive Table Stakes
  • Expending everything on AI is now essential to avoid extinction:

    “If you’re not absolutely using AI in every single function of your company, you’re going to be extinct or on the way to it pretty quickly over ... the next 10 years.” – Steve McLaughlin (30:41)

• Is AI Priced In?
  • Market is still figuring out how to price AI—most scaled “AI-first” fintechs are early stage (31:35).
• AI as a Dragon
  • Memorable metaphor:

    “I look at AI as a dragon and the only safe place is on the back of the dragon. Although once in a while the dragon could look around and burn you. But it's still the safest place versus being anywhere in the village.” – David Weisburd (32:57)

9. Job Disruption and the Nature of Defensibility

• Discussion of AI/robotics eliminating traditional roles, rapid copying of innovations, and the consumer windfall:

  “Are you going to wind up having like 50 competitors doing the same thing? … I think it's ultimately going to be very good for consumers, the products are going to be very good, the prices are going to be very low.” – Steve McLaughlin (33:27)

10. What Has Changed in the Past Six Months

• Leaning even more aggressively into AI in FT Partners’ own business, viewing custom, verticalized models as critical for differentiating and expediting client outcomes (34:58):

  “You can now use ... AI ... to look at the whole world… and find buyers for certain companies in the US or Australia. … I think it's the human side of what we do mixed in with the AI side is going to make … a big difference in locating and finding buyers.” – Steve McLaughlin (35:47)

11. Final Reflections

• AI is far more about revenue growth and market expansion than just cost savings—a critical but underappreciated paradigm shift.

Notable Quotes

• On resilience:

  “Just be there, be consistent. … You just got to show up to work every day and keep doing grinding and have good things happen.” – Steve McLaughlin (02:52)

• On value creation:

  “How do you get paid for adding value versus being an administrator of a transaction?” – Steve McLaughlin (14:35)

• On the future of fintech:

  “Some portion of that market is going to go tokenized … settling instantaneously with anyone in the world.” – Steve McLaughlin (27:01)

• On AI as a necessity:

  “If you’re not absolutely using AI in every single function of your company, you’re going to be extinct or on the way to it pretty quickly.” – Steve McLaughlin (30:41)

• On AI competition:

  “Can anyone build any of these businesses? … What's really going to be the competitive differentiation in the future?” – Steve McLaughlin (33:27)

• On AI as a dragon:

  “I look at AI as a dragon and the only safe place is on the back of the dragon. … It's still the safest place versus being anywhere in the village.” – David Weisburd (32:57)

Important Timestamps

| Segment | Guest/Host | Time | |-----------------------------------------------|-------------------|--------| | FT Partners origin story | Steve McLaughlin | 00:08 | | Building in downturns & bull runs | Steve McLaughlin | 02:06 | | Talent strategy & AI investment | Steve McLaughlin | 05:09 | | Value creation vs. administrative banking | Steve McLaughlin | 10:25 | | Record fee and business model | Steve McLaughlin | 15:00 | | Case study: AvidXchange lifelong client | Steve McLaughlin | 18:17 | | Motivation, wealth, and impact | Steve McLaughlin | 24:51 | | Tokenization & global fintech trends | Steve McLaughlin | 26:30 | | Future fintech landscape (post-AI) | Steve McLaughlin | 28:11 | | Defensibility and AI's arms race | Steve McLaughlin | 30:41 | | AI market pricing and adoption | Steve McLaughlin | 31:35 | | AI as a dragon: memorable metaphor | David Weisburd | 32:57 | | On shifting mindset (past 6 months) | Steve McLaughlin | 34:58 | | Closing thoughts on AI's true value | David Weisburd | 38:26 |

Conclusion

This episode offers a compelling, first-hand account of how FT Partners has defied industry norms and volatility, leaning relentlessly into technology, client service, and high-stakes value creation. Steve McLaughlin sees the next five years as a period where AI, tokenization, and truly global perspectives will separate winners from losers in fintech—and where those unwilling to transform may not survive. For newcomers and veterans alike, the message is clear: don’t bet against technology, and don’t underestimate compound consistency.