The Company He Co-Founded Raised Hundreds Of Millions To Make Credit Accessible To Everyone— Now He Invests In Startups

Andrew Endicott’s journey is a testament to the multifaceted nature of the fintech landscape. From the intricacies of deal-making to the art of balancing innovation and experience, his insights offer a roadmap for aspiring entrepreneurs navigating the complex terrain of finance and technology.

In an exclusive interview, we delve into the pivotal moments that shaped his career, from the financial crisis to the intricacies of mergers and acquisitions leading up to his role as the co-founder of Petal, a fintech company revolutionizing credit accessibility.

Listen to the full podcast episode and read the transcript here.

From Finance to Fintech: A Strategic Transition

Andrew was born in Mississippi and grew up in Arkansas. He went to college in the midst of the financial crisis, a challenging period that saw many recalibrating their career paths. Armed with a background in finance and accounting, he initially set his sights on Wall Street.

However, the tumultuous economic landscape of 2008 and 2009 prompted a change in plans. Instead of succumbing to the difficulties of the job market, Andrew embraced the opportunity to further his education at Harvard Law School.

The move to law school wasn’t about a love for argumentation, as lawyer stereotypes might suggest. Andrew emphasizes his interest in understanding how things work at a systemic level and thinking about them holistically. His legal education provided a unique lens through which to view public policy and, ultimately, laid the foundation for his journey into business and startups.

Mergers, Acquisitions, and the Art of Deal-Making

Post-law school, Andrew ventured into the corporate world, gaining valuable experience in mergers and acquisitions (M&A). His insights reveal the complexities inherent in deal-making, emphasizing the unpredictability of outcomes. The importance of personalities around the negotiating table and the necessity of a firm backbone were crucial lessons learned during this phase.

Drawing on the wisdom of T. Boone Pickens, Andrew underscores the significance of being willing to walk away from a deal when necessary. The M&A environment taught him the delicate balance of pushing transactions forward while being mindful of the potential for conflicts among decision-makers.

Banking on Experience: The Investment Banking Chapter

Transitioning to investment banking at a reputable institution, Andrew found himself closer to the core of financial activities. He highlights the need for speed in this arena, emphasizing its role in securing favorable terms. The interview unveils the art and intuition required to manage transactions, with a focus on valuations—where science meets art.

Andrew stresses the relative nature of valuations, pointing out the subjectivity influenced by perspective, so it’s not just a purely mathematical exercise. This insight became foundational as he later immersed himself in the world of fintech.

Andrew recalls working not exclusively but primarily with lending companies and non-banking financial institutions like Lazard. He also developed an understanding of how businesses really come into being.

Seeding the Idea: Birth of Petal

The concept of Petal emerged from personal connections and observations of credit access challenges faced by friends. This, coupled with Andrew’s accumulated knowledge from diverse experiences, laid the groundwork for the fintech venture.

The mission: to provide credit access to those traditionally underserved by rigid credit scoring systems. They realized that people who were young, divorced, or immigrants from other countries found it challenging to build a credit score.

Taking the Entrepreneurial Leap: From Comfort to Challenge

The transition from a cushy corporate job to entrepreneurship brought a stark shift. Andrew emphasizes the intrinsic drive entrepreneurs possess—a compulsion to build something meaningful. The interview sheds light on the realities of entrepreneurship,

He remembers making the transition from a corporate job with a good paycheck, working as a lawyer and investment banker. From doing one’s photocopies to embracing the absence of assistants, highlighting the grit required to navigate unknown waters.

Petal: Revolutionizing Fintech with Cash Flow Underwriting

Petal, a FinTech credit card company, has introduced cash flow underwriting as a game-changer. This innovative approach leverages bank account data alongside traditional metrics for more inclusive credit assessments.

Andrew shares the company’s goal of empowering a significant population with limited credit history and fostering financial inclusion. Petal provides credit cards to people who have limited credit history using cash flow underwriting, thus increasing their access to credit.

The company accesses bank account data, bureau data, and all the other traditional information and then uses that information to underwrite credit and approve people for a credit card who would otherwise have difficulty getting one.

The card works similarly to any other credit card and carries Visa branding. Users have a credit limit and a repayment schedule and benefit from the company’s partnerships with lenders, issuer banks, payment processors, and other intermediaries that make the product function efficiently.

The Complex Dance of Fundraising in Fintech

Navigating the capital-intensive landscape of fintech, Andrew delves into the intricacies of fundraising. He emphasizes the need to understand the desired scale and the proof points necessary for different types of capital.

The conversation touches on equity, debt, and the critical role of a well-thought-out capital structure in sustaining fintech growth. Petal has successfully raised funding worth $0.5B in debt and $400M in equity.

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Building Teams in Fintech: Balancing Innovation and Experience

Andrew sheds light on the perpetual challenge faced by fintech companies—balancing innovation with industry experience. The interview stresses the importance of a harmonious relationship between innovators and seasoned professionals. The discussion delves into the complexities of fostering collaboration and mutual respect within teams, which are crucial for sustained success.

Board Dynamics: The Human Element in Corporate Governance

Drawing from his experience as a board member, Andrew emphasizes the importance of interpersonal alignment. He underscores the significance of spending ample time with potential board members to gauge compatibility.

The human element in board dynamics plays a pivotal role in shaping the trajectory of a company, influencing decision-making, and ensuring collective success. Andrew talks about the crucial aspect of board composition for startups.

He emphasized the need to tailor your board size to the current stage of your company. He argued that, during the early stages, the focus should primarily be on product development and market fit, possibly without a board.

As the company matures and secures additional capital, the board’s composition becomes pivotal. It’s not just about having more voices but the right voices – individuals with knowledge and foresight to navigate challenges.

According to Andrew, board members play a vital role in addressing significant issues like fundraising and achieving business liquidity. Operational experience is a key criterion, as it provides an intuitive understanding of the entrepreneur’s priorities.

Andrew shared how individuals with operational backgrounds comprehend the nuanced importance of certain issues and can advise entrepreneurs accordingly.

The Pitfalls of Inexperienced Board Members

Andrew warns against populating the board with individuals lacking a broad range of experiences. Flexibility and balance, rather than advanced career stages, were emphasized as crucial attributes for effective board members.

The interview highlighted the potential pitfalls of having individuals who may not fully grasp the diverse challenges a startup faces. The entrepreneur’s time, Andrew stressed, is a precious resource, and the wrong questions or misplaced focus can be highly detrimental.

He urged entrepreneurs to take their boards seriously and engage with questions thoughtfully. A well-structured board, with experienced and balanced members, ensures that the entrepreneur’s time is utilized effectively.

Transitioning to the Investor’s Table

Andrew went on to share insights into his personal journey from entrepreneur to investor. Having been an active investor in public equities since college, he discussed the natural progression toward becoming an investor after experiencing success as an entrepreneur.

The shift to running Gilgamesh Ventures was marked by a growing interest in investing and actively participating in funding rounds for companies in his network. The decision to turn the page and focus on investment was driven by a desire to leverage accumulated knowledge and contribute to the future of finance.

Andrew recounted the organic evolution of his partnership with Miguel Armaza, his current co-founder at Gilgamesh. Together, they ventured into investing, eventually leading to the establishment of Gilgamesh Ventures as an investment fund. The fund invested in 30-plus companies and has raised tens of millions.

The Continuous Journey of Learning

Andrew stressed the importance of a perpetual learning mindset. Drawing from his experience, he emphasized that success is not solely based on past achievements but on continuous development.

He encouraged professionals to approach their roles with the mindset of a perpetual student, acknowledging that true expertise is a rare and ongoing achievement. In a world where confidence is crucial, Andrew advocated for the simultaneous importance of intellectual humility.

He shared his belief that true experts are scarce and that the path to wisdom requires questioning one’s knowledge. This, he emphasized, is vital for making decisions free from external influence and popular opinions.

In Conclusion

In essence, Andrew’s journey from entrepreneur to investor underscores the importance of adaptability, a strategic board, and an unwavering commitment to continuous learning. His insights serve as a guide for aspiring entrepreneurs and investors navigating the dynamic landscape of startups and venture capital.

Listen in to the full podcast episode to know more, including:

• A journey showcasing the multifaceted nature of fintech, offering insights for aspiring entrepreneurs navigating finance and technology’s complex terrain.
• From weathering the financial crisis to mastering the art of deal-making, career evolution provides a roadmap for strategic transitions in the finance and fintech sectors.
• Petal revolutionizes credit accessibility through cash flow underwriting, addressing challenges faced by those traditionally underserved by credit scoring systems.
• The shift from a corporate job to entrepreneurship highlights the grit required for meaningful ventures, emphasizing the intrinsic drive entrepreneurs possess.
• Fundraising complexities in fintech emphasize understanding the desired scale and proof points for equity and debt, resulting in Petal raising approximately $0.5B in debt capacity and $350M in equity.
• Balancing innovation with industry experience is a perpetual challenge in fintech, emphasizing the importance of harmonious team dynamics for sustained success.
• Board dynamics play a pivotal role in a company’s trajectory, with a focus on tailoring board composition to the company’s stage and avoiding pitfalls associated with inexperienced members.

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