20VC: Do Rich Founders Make Better Founders | The Best Performing Fund Would Only Back YC Founders on Their Second Time | Why SPACs Will Come Back | Why Short Sellers Should Be Banned | Is Trump Better for Business than Biden with Jason Wilk @ Dave
🎯 Summary
20VC Podcast Summary: Dave Founder on SPACs, AI Turnaround, and Founder Quality
This episode of the 20VC podcast features Jason Wilk, founder of the neo-bank Dave, discussing his company’s dramatic journey from a $4 billion SPAC valuation collapse to a significant turnaround, driven heavily by AI integration. The conversation also delves into broader themes regarding founder quality, the mechanics of going public, and the future of financial technology.
1. Focus Area
The primary focus areas are FinTech/Neo-banking, the SPAC market dynamics (its rise and fall), the strategic implementation of Artificial Intelligence (AI) for operational leverage and risk management (underwriting), and a philosophical discussion on founder pedigree and capital structure.
2. Key Technical Insights
- AI in Cash Flow Underwriting: Dave pioneered cash flow-based underwriting using Plaid integration to access six months of transaction history. AI analyzes this massive dataset (nearly a billion transactions across 12 million accounts) to identify credit risk patterns invisible to traditional rules-based engines.
- Rapid AI Model Iteration: Because Dave’s average loan duration is very short (5-10 days), their AI underwriting model learns from successes and failures every few weeks, leading to rapid efficacy improvements—a significant advantage over longer-term installment lenders.
- AI-Driven Customer Support Efficiency: AI now handles 80% of customer support inquiries, providing faster, better NPS scores at a fraction of the cost (estimated at $2-3 per human contact vs. near-zero for AI).
3. Market/Investment Angle
- The Value of Second-Time Founders: The guest strongly believes that successful, exited founders (especially YC alumni) make superior second-time founders due to financial safety, increased ambition (“swinging for the fences”), and learned mistakes. A hypothetical fund backing only second-time YC founders would be top-tier.
- SPAC Mechanics vs. Stigma: SPACs are structurally efficient, guaranteeing capital raise and valuation upfront, unlike the uncertainty of a traditional IPO. However, the vehicle was severely tarnished by low-quality companies leveraging the zero-interest rate environment. The structure could return if high-quality companies use it to reset the stigma.
- Pref Stack Toxicity: Excessive preferred equity stacks in late-stage private companies are killing founder optionality and making inevitable down-rounds or acquisitions impossible, as founders prioritize clawing back to the pref stack rather than accepting realistic offers.
4. Notable Companies/People
- Dave: The neo-bank that went public via SPAC at $4B, dropped to $50M, and has since recovered significantly (market cap over $1.13B at the time of recording) through operational focus.
- YC Founders: Mentioned as prime examples of successful second-time founders (e.g., OpenDoor founder, Ramp founder Eric Gliman).
- Mark Cuban: Provided the initial seed funding for the guest’s first company, notably capping his salary at $30,000—an action now considered “Vulture VC” behavior but which forced early profitability.
- Plaid: Essential partner enabling Dave’s core cash flow underwriting technology.
5. Regulatory/Policy Discussion
The discussion touched on the difficulty of raising capital in the 2009-2010 era compared to today, highlighting how restrictive early funding terms (like salary caps) acted as a forcing function for building profitable business models without relying on excessive capital burns. There was no direct discussion of banning short sellers or Trump vs. Biden business impact, despite the title suggesting these topics.
6. Future Implications
The industry is heading toward a bifurcation:
- Enterprise/B2B: Companies with clear public comps (like Stripe) may increasingly stay private indefinitely due to access to secondary markets.
- D2C/Consumer Brands: Public markets remain valuable for consumer-facing companies like Dave due to the potential for a “retail swing” driven by brand loyalty, pushing valuations beyond pure EBITDA multiples. AI integration will continue to drive massive leverage, especially in risk assessment and cost reduction.
7. Target Audience
This episode is highly valuable for Venture Capitalists, FinTech Founders, Public Market Investors, and Executives interested in operational turnarounds, the strategic use of AI in financial services, and the dynamics of the IPO/SPAC market.
🏢 Companies Mentioned
đź’¬ Key Insights
"Do you realize what that would do to credit card approval rates? Like, the reason why people charge they do for risk because there's risk, and the second you take away someone's ability to monetize, just means they shrink the funnel."
"The big thing people miss was the inherent operating leverage built into these fintech platforms, like they're so scalable, especially with AI. And so as these neo banks compound user growth beyond what it costs to pay back the cost to build their platform, these are just great businesses."
"But also think from a long-term competitive advantage between also the neo banks, the data set we're building around this AI underwriting is going to be such a mega up when we start to get into additional forms of credit."
"I'm going to give you approval for a couple hundred bucks when you join. We give you the Dave debit card to try us out... But my CAC is $16 because I take this speed-of-value approach, where I want to make you a happy customer immediately."
"It's really for the 50% of Americans that are earning less than $100,000 a year, paid to paycheck, overdrawing their account a lot. They're the ones that should not be banking with the incumbents because it's just too expensive."
"When I think about a company like Dave, we have no bank branches. My annual cost to serve is nearly $40."