Why I Left Wall Street to Launch a Fintech Company

The following is a guest post by Sliced Investing co-founder, Mike Furlong. He eagerly left Wall Street to launch this start-up. Sliced Investing is backed by Y Combinator, Khosla Ventures, TriplePoint Venture Growth, Data Collective, and Carnegie Mellon.

Interestingly, I also departed from Wall Street to focus on Financial Samurai. This past Spring, I had the opportunity to consult for them, captivated by their mission to democratize access to hedge funds and alternative investments through crowdsourcing.

My initial job was a humbling experience; I spent my early days as a caddy at a country club, serving affluent bankers and traders. They enjoyed a lifestyle that many only dream of—fancy cars, exclusive clubs, luxury watches, and designer clothing. Meanwhile, I was earning minimum wage, carrying their heavy bags, all while trying to maintain a cheerful demeanor under the sweltering sun.

Despite my best efforts to offer helpful suggestions on their games, most ignored me, choosing instead to follow their own whims. This experience was eye-opening, revealing the stark contrast between the wealthy elite and my own financial struggles.

Lessons Learned from a Unique Perspective

Working as a caddy imparted several important lessons. Firstly, it highlighted the challenges of earning a living through manual labor. I quickly realized that the effort required did not equate to the compensation received. Secondly, observing these affluent individuals sparked a desire within me to achieve financial freedom. If they could live such fulfilling lives, why couldn’t I aspire to the same? Finally, it ignited a determination to take charge of my career and build a future I could be proud of.

During my years as a caddy, I often overheard the club members discussing stock tips while waiting between holes. This exposure piqued my interest in financial markets and motivated me to eventually climb the ranks to a trading position at Citigroup. My journey was fueled by a combination of athletics, academics, and strategic networking, ultimately leading me to a competitive financial career.

The Disillusionment of Trading

Initially, Wall Street seemed like the ideal career choice—fast-paced, highly competitive, with significant financial rewards. However, as I spent more time at Citi, I began to notice how technology was gradually making certain banking roles obsolete.

The most apparent change directly affected my own position in trading. As automation surged, I witnessed numerous colleagues lose their jobs to quantitative analysts skilled in computer science, who could efficiently perform the work of multiple traders.

Unbeknownst to me at the time, this realization led me to make a significant life decision: I chose to leave my steady job at Citi and embark on a new venture in San Francisco, aiming to establish a financial technology company.

For more insights, you can read about The Ugly Side Of Silicon Valley And Wall Street.

Embracing a New Chapter Beyond Wall Street

My decision to leave Wall Street was driven by three main motivations:

• Desire for Meritocracy: I sought a career where my abilities would be judged solely on merit rather than age. While trading is relatively meritocratic, there are still hierarchical barriers in finance that can only be surmounted over time. In Silicon Valley, technology has leveled the playing field, allowing anyone to contribute value through innovation.
• Understanding Risk: On Wall Street, success followed a predictable path. As long as I performed adequately, I could ascend the corporate ladder. Conversely, launching a tech company posed a stark contrast: I began with nothing, facing skepticism from all sides. In finance, I was insulated from risk; in tech, I had everything to lose.
• Creating Something Impactful: There’s no greater satisfaction than building something meaningful. Every day, I collaborate with a talented team to develop products that genuinely enhance the lives of our users. For us, success means empowering our customers, rather than just accumulating wealth.

The Great Migration to Fintech

I’m not alone in this transition. Many traders and bankers express a desire to break into tech, leading to a steady influx of talent into the fintech sector. This "Great Migration" has significantly contributed to the rise of fintech startups, ultimately benefiting consumers.

Technological advancements have enabled financial services that were once the domain of large institutions or the ultra-wealthy to become accessible to the general public. For instance:

• Lending Club: A pioneer in peer-to-peer lending, offering competitive interest rates to borrowers, including those with less-than-perfect credit.
• Acorns and Even: These platforms automate the saving process, helping users cultivate a savings habit effortlessly.
• Roboadvisors: They provide sophisticated investment management services at a fraction of the cost, making financial planning more accessible.
• Fundrise: This platform revolutionizes capital raising for real estate, opening opportunities for everyday investors.

Many of these innovative fintech companies were founded by former Wall Street professionals who identified the pain points of consumers and sought to address them directly.

Fintech: A Positive Disruption in Finance

Finance is fundamentally a service-oriented industry, centered around safeguarding individuals' money. However, public trust in traditional banks plummeted during the financial crisis and subsequent economic downturn.

Fintech serves as a remedy, revitalizing the financial landscape by restoring trust through enhanced transparency, lower fees, and democratized investment opportunities. Each of these advancements helps dispel the lingering doubts consumers have about traditional financial institutions.

Investing for Beginners: How to Get Started Without Losing Sleep

The emergence of fintech rejuvenates the core values of finance—protecting and empowering individuals. Reflecting on the future of finance, I am reminded of a poignant quote by T.S. Eliot:

“We shall not cease from exploration, and the end of all our exploring will be to arrive where we started and know the place for the first time.”

When asked about my departure from finance, I often respond that I feel more connected to it now than ever before.

Investing in Private Growth Opportunities

As a final thought, consider diversifying your portfolio by investing in private growth companies through open venture capital funds. Companies are remaining private for extended periods, allowing more substantial returns to accrue for private investors. Discovering the next Google or Apple before they go public can be a transformative opportunity.

For instance, the Innovation Fund invests in the following sectors:

• Artificial Intelligence & Machine Learning
• Modern Data Infrastructure
• Development Operations (DevOps)
• Financial Technology (FinTech)
• Real Estate & Property Technology (PropTech)

Notably, approximately 35% of the Innovation Fund is allocated to artificial intelligence, an area in which I hold strong optimism. In two decades, I want my children to ask why I didn’t seize the opportunity to invest in AI.

The minimum investment for the fund is only $10, a stark contrast to the typical $250,000+ requirement of conventional venture capital funds. Investors can review the fund's holdings before committing capital, a significant advantage over traditional funds that require upfront capital commitment without transparency.

Strategies for Building Wealth

Track Your Net Worth Effectively: To optimize your financial health, it’s crucial to keep a close eye on your finances. I recommend signing up for Empower's free financial tools. These tools allow you to monitor your net worth, evaluate your investment portfolios for unnecessary fees, and utilize their comprehensive Retirement Planning Calculator. Establishing a financial plan can significantly enhance your wealth-building journey.

Investing for Beginners: How to Get Started Without Losing Sleep

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Although Sliced Investing has ceased operations, Mike remains proactive with a new startup that ultimately achieved a lucrative exit.

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