SOCIAL LEVERAGE: THE EVOLVING LANDSCAPE OF FINTECH AND AI WITH MATT OBER

TL;DR

AI is slashing the time to proof-of-concept, shifting the founder's priority from technical perfection to distribution and social capital. Learn how Matt Ober identifies moats in a "degenerate economy."

INTRODUCTION

The rapid evolution of artificial intelligence is fundamentally altering the startup lifecycle, particularly in the FinTech sector. As AI tools lower the technical barrier to entry, the competitive moat is shifting from the ability to write code to the ability to secure distribution and build community. This shift requires founders to rethink their early-stage strategies, focusing on speed-to-market and proof-of-concept (POC) efficiency over long-term technical perfection. Matt Ober, a General Partner at Social Leverage, joins the Venture Step podcast to share insights from a career built at the intersection of math and markets. With a background leading data strategies at massive firms like Third Point and WorldQuant, Ober brings deep data science knowledge and over a decade of angel investing experience to the table. His perspective is grounded in the reality of high-stakes investing and the practical application of data in the venture world. In this conversation, Ober explores the concept of "social leverage" as a competitive advantage that outweighs financial capital in the early days of a startup. He details why the "boring" parts of wealth management—such as securities class action claims and document automation—are currently the most exciting areas for disruption. Additionally, he provides a behind-the-scenes look at the early philosophy of Robinhood and the importance of maintaining a maniacal focus on a single product.

KEY TAKEAWAYS

• Distribution and sales are now arguably more important than having a top-tier technical founder for most non-deep tech startups.
• Building a network is a long-term trust-building exercise where doing the right thing for founders often results in "karma" returns years later.
• Wealth management remains ripe for disruption in "boring" areas like manual paperwork, audit, and securities claims processing.
• AI enables data-heavy companies to operate with significantly fewer employees, allowing a team of 50 to do the work that once required 10,000.
• Successful early-stage execution requires focusing on one core product before attempting to expand into a broader financial suite.

FULL CONVERSATION

Defining Social Leverage

Dalton: Welcome to the VentureStep podcast where we discuss entrepreneurship, industry trends, and the occasional book review. Today we're joined by Matt Ober, a general partner at Social Leverage who has built a career between the intersections of math and the markets. He previously led data strategies at Third Point and WorldQuant and brings over ten years of angel investing experience to the venture world. Welcome to the show, Matt. Matt: Thank you for having me.

Dalton: Today’s agenda is discussing the difference between Social Leverage and other firms. We will also talk about the speed to Proof of Concept (POC) in the world of AI, changing customer expectations in FinTech, and whether we are heading toward great consolidation. So, what do you mean by "social leverage"? Matt: When my partners Howard and Tom started the firm, financial leverage was a big deal following various financial crises. Social leverage was always about leveraging your social networks to compete. We have a very strong network of ultra-high-net-worth individuals, family offices, and investors. Having backed over a hundred companies, we use this broad network to help founders. It is powerful because you can help a founder by making a few phone calls to open a lot of doors for them.

Dalton: Networking is definitely one of the most important things. You can be super smart, but if you don't know anybody, it’s hard to get that intro. It’s much more optimal to know someone rather than cold calling. How do you add and extract value from a network? Matt: It takes years to build a good network. You also have to recognize that you don’t have to be a social climber. People you met early in your career who were account managers might be presidents of big firms 15 years later. At Social Leverage, we believe in doing the right thing so that the karma comes back. We might make five or six intros for a company we don't even end up investing in. We would rather do that and build the network because those founders might refer us to someone else or a new LP later. It’s a trust thing. Something you do today might not be helpful for 15 years, but the world has many degrees of separation.

The AI Revolution: Speed to POC and the Shifting Founder Profile

Dalton: Speaking of a firm perspective, this new age of AI is interesting. The barrier to entry has reduced, especially for getting a working concept off the ground. Are you seeing that speed increasing? Matt: I agree. Companies are getting to revenue much quicker, and products are being built faster. For a pre-seed investment now, there’s no reason a founder can't get a POC off the ground quickly. A few years ago, you wanted a technical founder paired with a business person. It was hard to invest in someone who was outsourcing everything. Now, I'd argue that go-to-market, distribution, and sales are more important than the technical team member.

"I think arguably now like go to market and distribution and sales is more important than the technical team member." Matt: If you're building a deep tech firm like Anthropic, you obviously need the best talent in the world. But for everyone else, you can use tools like Cursor or no-code platforms to get off the ground and get real feedback from companies.

Dalton: What do you think about the notion of the solo founder? Will that become the new norm because of these technical capabilities?

Matt: It depends. If you’re not looking for venture backing, you can definitely be a solo founder. To build a venture-scalable business, it is possible, but it’s a lonely journey. As a seed investor on many boards, I see that solo founders almost need a therapist to vent to. With a co-founder, you can lean on each other. Solo founders have to handle all the "unfun" parts—legal, compliance, HR, taxes, and audits—while also fundraising and building the product. It’s a massive hurdle of stress. On the other hand, too many co-founders can also lead to a mess. Dalton: It’s like too many chiefs and not enough Indians. Co-founders provide emotional support because the baseline of a startup has massive volatility. Matt: It's funny you say that because I moved into a new office that was previously owned by a therapist. It has a sign outside that says "click this button to let the therapist know you've arrived," which turns on a blue light in my office. I decided to keep it because it feels like part of my day job anyway.

Quality vs. Velocity in AI Development

Dalton: Are you seeing an increase in AI-enabled development across your desk? Is the quality staying the same or moving faster?

Matt: Things are definitely moving faster. I see many companies that think they are the only ones building something, but we’ve already seen 50 similar pitches. AI is becoming like cloud technology—everyone is embedding it into their tech stack. Matt: Some companies use AI for data collection, cleaning, and quality control. This may allow them to build a company that typically required 10,000 people with only 50 employees. It might not be "sexy" AI for the end user, but what’s under the hood is exciting.

Dalton: That’s exactly what drives change—the stuff way under the hood. How have customer dynamics and expectations changed? Matt: With AI, we are seeing quick revenue but also a ton of churn. It’s hard as an early investor to know what is real. People are trying many different AI sales tools for cold calling and email, but they won't keep all of them. You have to figure out who is building a unique moat versus who is just jumping on the hype wagon. Dalton: Do you have a parameter for what constitutes a moat? Matt: For us, it’s about the people and domain experience. Founders might pivot, so you invest in their ability to think through adversity. I love seeing a data moat where they have access to things others don't. We also like industries that haven't been disrupted in a long time, even if they aren't the sexiest parts of FinTech.

The "Boring" Opportunities in Wealth Management

Dalton: I’ve noticed that in something like insurance, having a special angle or data partnership is the only way to stand out. How do you navigate the mess? Do you just focus on the founders? Matt: It comes down to founders. We like to invest in non-consensus things. We’ve been investing in wealth tech and wealth management technology for five years, which wasn't always exciting to other firms. Even now, there are many "boring" parts that are under-thought. We love founders who solve a problem they encountered that is also a multi-billion dollar opportunity.

Dalton: Can you double-click on what excites you in wealth management?

Matt: There are thousands of independent registered investment advisors (RIAs) managing anywhere from $50 million to $40 billion. Every piece of their technology—financial planning, direct indexing, tax, estate, and audit—is being rebuilt.

"There's so much of wealth management that is still broken and has such a better opportunity just from not only the end consumer, but also to make the advisor's life easier." Matt: There are "boring" parts like securities class action claims. Every year, there are over $10 billion in claims. If you own shares in a company that settles a suit, you get paid, but processing that paperwork across multiple accounts is so manual that 70% of wealth managers just don't do it. That is a $10 billion opportunity for someone to come in with AI and automation. Dalton: That reflects my experience interning at Merrill Lynch. The technology was basically just voice authentication, and everything else was manual templates and notes. I created some simple macros and templates that did so well that other offices wanted me to do it for them, too. I was surprised by the level of interest in something so simple. Matt: AI can reduce those inefficiencies. It’s not necessarily getting rid of jobs, but giving people more free time to spend with clients rather than doing tasks that take hours. We invested in a company called Lea out of New York that does document intelligence. Onboarding a new client might require 500 pieces of paper, which usually takes weeks to process manually. With the right accuracy, that should only take a couple of hours. Many good wealth managers aren't even looking for new clients because they are at capacity and don't want the headache of hiring more people to manage the manual process.

Rethinking Valuable Skill Sets

Dalton: When I automate workflows, I tell people it’s about elevating them to higher-value tasks, not replacing them.

Matt: That’s right. It gives value to people who are good at building relationships and creative thinking. At a hedge fund, an analyst spends 90% of their time on grunt work—research, pitch decks, and listening to calls. If you can take that from two weeks down to four hours, that analyst should be out meeting managers or thinking about where the world is going. We don't need people in the office until 2:00 AM building an Excel model anymore.

Dalton: I agree. One of the points of this podcast is that public speaking and explaining complex ideas will be more important skills in the future. There is less leeway now for being technical but having poor social skills.

Matt: We have a younger guy on our team who graduated recently, and seeing how he uses AI tools to crunch data and write memos is eye-opening.

Case Study: The Robinhood Philosophy

Dalton: Social Leverage was an early investor in Robinhood. I actually use their managed investment offering, and it’s done about 20% in six months. It’s very cheap compared to other options.

Matt: They got into wealth management by acquiring a smaller custodian. Now they have equities, crypto, options, wealth management, banking, and credit cards. We were seed investors; my partners Howard and Tom were fans from the start.

Dalton: Their UI is just on another level. Comparing Fidelity's mobile app to Robinhood is night and day. It’s so much easier. Matt: I don’t know how anyone can compete with them in the US from a consumer experience perspective. Dalton: They specialized in making mobile investing easy, and now they are a full financial suite. Matt: They were also the first to make it free. It goes back to the lesson for early-stage companies: execute on one thing before going broader. If they had tried to do everything at the beginning, they never would have made it. I see founders thinking about the next product when they still have millions in demand for their current one. Dalton: How do you know when you’re ready to expand?

Matt: Listen to your customers and look at your pipeline. If people are banging on your door every day for what you’re selling, don’t move your attention elsewhere. Growth will eventually slow, and then you can bring other things to the table, but early on, you need a maniacal focus.

"I think in the very early days... have a maniac focus on one thing is important."

The Pivot vs. The Fight

Dalton: What if a competitor gets a massive capital injection? How do you know whether to get acquired or pivot?

Matt: Or you can fight. More money isn’t always a good thing; sometimes big companies piss off their users by changing pricing. Getting acquired depends on whether the founder still has the drive and the fight in them. Often, a pivot happens because they haven't found product-market fit or customers are driving them toward a different part of the product. If it’s just because things got "hard," it might be time to find a home in a bigger organization.

Dalton: How many times can you pivot?

Matt: You pivot as many times as you have to. But if you've had enough feedback from potential customers before you start, the pivot shouldn't be that drastic.

Dalton: It’s a waste of time to build something no one needs. You can’t bet on being a time traveler who knows what the future demands without testing it.

Matt: Everything has to line up for those big companies to come to fruition.

Dalton: This "monster opportunity" is created by the gap between the speed of development and the ability of large companies to adjust. Matt: We are living in a "degenerate economy" where people want things now and want them perfect. If they don't get it, they go elsewhere. Dalton: How can people find you? Matt: I’m active on LinkedIn. You can visit socialleverage.com or read my newsletter at matober.co. We recently closed an $85 million fund. We are always happy to engage. Dalton: I’ve read the newsletter; it’s quite interesting. Thank you for joining us. Matt: Appreciate it.

RESOURCES MENTIONED

• Social Leverage
• Matt Ober's Newsletter
• Third Point
• WorldQuant
• Bloomberg
• Techstars
• Anthropic
• Cursor
• Lea (Document Intelligence)
• Robinhood
• Merrill Lynch
• Morgan Stanley
• Goldman Sachs
• Fidelity

INDEX OF CONCEPTS

Matt Ober, Dalton Anderson, Social Leverage, Third Point, WorldQuant, Bloomberg, Techstars, POC (Proof of Concept), Anthropic, Cursor, Solo Founder, RIA (Registered Investment Advisor), Securities Class Action Claims, Lea, Document Intelligence, Robinhood, Fidelity, Wealth Tech, MGA (Managing General Agent).