THINGS YOU SHOULD KNOW WHEN STARTING A FINTECH BUSINESS

Stephane DuboisCEO & Founder, xignite@sdubois - sdubois@xignite.com

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FINTECH IS HOT

FINTECH INVESTMENT

2009 Q2

2009 Q3

2009 Q4

2010 Q1

2010 Q2

2010 Q3

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

2012 Q1

2012 Q2

2012 Q3

2012 Q4

2013 Q1

2013 Q2

2013 Q3

2013 Q4

2014 Q1 E

$M

$250M

$500M

$750M

$1,000M

$1,250M

$1,500M

$1,750M

$2,000M

0

50

100

150

200

250Funding Deals

Source: CB Insights

EVOLUTION OF FINTECH DEALS BY QUARTER

There was more money invested in the first quarter of 2014 than in all of 2006 (when we raised our first round).Good timing!

ARE YOU READY TOJUMP? Or have you

already jumped?

Then remember this…

DATA IS THE LIFEBLOOD OF FINTECH

u

CHANCES ARE YOU WILL NEED MARKET DATA

TRY TO LEARN ABOUT MARKET DATA

Market Data• Quotes• News • Benchmarks

Reference Data• Fundamentals• Financials• Analytics

Master Data• Identifiers• Classification• Corporate Actions

Historical Data• Valuation• Time Series• Tick Data

Equities Funds/ETFs Futures

Options Bonds Forex

Metals Benchmarks Derivatives

ASSET CLASSES

TIMELINESS

Low

late

ncy

Real

-Tim

e

Del

ayed

End

of D

ay

His

tori

cal

DATA TYPES

DELIVERY OPTIONSFiles

FeedsAPIs

If you come from the industry, you probably know quite a bit already. But what made sense when you worked at that big bank may not work for your startup. Ask your vendor to help you out.

MARKET DATA IS NOT FREE v

SCRAPE AT YOUR OWN PERILSDo you really want to start on your path to entrepreneurship success by stealing intellectual property? And do you really think your investors won’t mind?

DON’T GET CAUGHT WITH YOUR PANTS DOWN

KNOW ABOUT EXCHANGE AGREEMENTS AND FEES

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IF YOU RECEIVE OR DISPLAY MARKET DATA

Delay (Delayed Quotes/Real-Time Quotes)

Depth (Last Sale/BBO/Level 2/Depth of Book)

Breadth (Single Exchange/Consolidated Tape)

Source (NYSE/NASDAQ/BATS/etc.)

Type of User (Pro/Non-Pro)

Usage (Display/Non-Display/Wallboard/Web/etc.)

Control (Control of Access/Control of Display)

You become a distributor for the exchange.As a distributor, you may need to sign an agreement and pay licensing fees. Those fees depend on:

Exchange agreements and fees make up a complex domain with many changing rules, options, and significant cost implications. Choose a data vendor that will take the time to help you chose what is right for your business.

MATCH YOUR COSTS TO YOUR GROWTH x

DON’T GET OVERLY DATA HAPPY

• Whether you are building a new platform, web site, or mobile app, the temptation is high to integrate tons of market data in your V1.0 in order to fuel growth and beat the competition.

• This may work but also can be overkill.• Just make sure you meet 80% of your

market requirements in V1.0.• But don’t get far under 80%, or your

product may not stick.• That’s just good product management.

V1.0 V1.1 V2.0 V2.170%

75%

80%

85%

90%

95%

100% DATA COVERAGE VS MARKET NEED BY VERSION

O V E R K I L L

DON’T BLOW YOUR CASHQUICKLY

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WHAT YOU SPEND ON DATA IS JUST THE TIP

• Not all data sets are created equal.• Neither are all APIs.• APIs that seemed cheap on the surface

could waste tons of your time and money during implementation once you dig in. Time and money you just don’t have.

• Beware of legacy solutions that will have you build infrastructure instead of focusing on your own product and value-dd.

• Look under the surface. Don’t assume data will be easy to integrate until you try. Try those APIs before you buy. Be demanding with your vendor.

WELCOME TO FINTECH.AND GOOD LUCK WITH YOUR BUSINESS.WE’LL BE WAITING FOR YOUR IPO.

STEPHANE DUBOISCEO & FOUNDER, XIGNITE

@SDUBOIS - SDUBOIS@XIGNITE.COM

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