Rex Salisbury: Fintech VC, Seed Investing, and Fund Management Insights

Journey to Fintech Venture Capital

• 💡 Rex Salisbury's career path began on a Maryland farm, leading him through investment banking before he taught himself to code and co-founded a direct-to-consumer mortgage company in San Francisco.
• 🚀 He built the Cambrian community in the early 2010s, hosting monthly fintech events that connected early founders from companies like Plaid and Deal.
• 🔑 His expertise in capital markets, fintech networks, and technology led him to become the first external partner hired at Andreessen Horowitz (A16Z) in 2019 to build their fintech practice.
• 🌱 After two and a half years at A16Z, he launched his own fund, Cambrian VC, focusing on pre-seed and seed-stage fintech investments, a commitment he plans for the long term.

Untapped Opportunity in Fintech

• 📊 Financial services, representing about 7% of GDP, has seen minimal change despite being a huge part of the economy, with many institutions founded in the 1800s and early 1900s.
• 📈 Fintech currently has only about 2% penetration of global financial services revenue, indicating a vast 98% remaining opportunity for innovation and growth.
• 💡 The current landscape features better-equipped founders with strong finance and technology understanding, improved infrastructure, and a demographic shift away from tolerating poor financial products.
• 🚀 Rex observes significant product and business model innovation, including new bundles that commoditize traditional banking services, like high-yield accounts integrated into broader product suites.

Pre-Seed & Seed Investing Strategy

• 🎯 Rex primarily focuses on US B2B fintech at the pre-seed and seed stages, finding these to be the most interesting opportunities for his fund.
• ⚠️ He challenges the notion that pre-seed is risky, arguing that today's founders are better equipped to build, hire, and raise follow-on capital, making early-stage investments less uncertain than before.
• 💰 While later rounds (Series A and B) have become highly competitive and expensive, the likelihood of good founders hitting milestones has increased, justifying earlier investment.
• 📈 Carta data shows Series A valuations are near all-time highs, while pre-seed and seed valuations have decreased by about 60% from their peak, creating a "yield to capture" for early-stage investors.

Community Building & Content Creation

• 🤝 Rex emphasizes that building a strong community requires starting small, focusing on quality, and doing it consistently over a long period to achieve "overnight success."
• 🎙️ His Cambrian community initiatives include a podcast interviewing top fintech founders and investors, quarterly in-person events, and a Slack community with 2,000 fintech founders.
• 🔗 He also runs a co-founder matching program twice a year, helping individuals find partners for their fintech ventures.
• ✍️ For content creation, his advice is to "ship it" consistently, accept that early content may not be perfect, and continuously work to improve the process and quality over time.

Career Path for Aspiring Fund Managers

• 🏙️ A crucial first step is to move to a major tech hub like San Francisco or New York to build essential networks and relationships with founders and LPs.
• 📈 Aspiring VCs should aim to join a mid-size company with high growth (e.g., a Series B company in the last 12-18 months) to gain valuable experience and career progression.
• 💸 After gaining operational experience, one should angel invest and advise companies for a few years to build a track record and network with junior venture firm professionals.
• ✅ The ultimate goal is to land a position at a "good venture firm" to gain institutional experience and a strong track record before potentially launching one's own fund, a process that can take five to ten years.