EDITOR ’ S QUESTION
MATTHEW GOLDMAN , FOUNDER AND MANAGING MEMBER AT TOTAVI
The most recent failure that is probably at the top of everyone ’ s mind is Synapse , one of the original banking-as-a-service companies . Synapse found a strong market fit early on in the fintech boom cycle of the 2012 – 2022 era by offering a platform for other entrepreneurs to build their fintech products . Key early customers like Mercury had explosive growth driving Synapse ’ s own growth .
However , the company always had signs of management issues , from early lawsuits by employees to complex terms and banking operations . It all came crashing to a halt this year when they were unable to raise more capital or find a buyer and they failed , creating tremendous havoc amongst their customers . A lack of care about compliance and a stubborn belief in valuations that were no longer relevant led to their downfall .
Speaking of being fast and loose , oneclick checkout company Fast is a notable failure . Led by a charismatic-seeming entrepreneur , Fast was very good at making noise and raising money but seemed to lack a real product and meaningful revenue . Fast was a victim of its own hype and failed due to being a company that was solving a real problem , vs . being a company that seemed to serve the self-interest of its founder .
BlockFi was an innovative crypto exchange and lender that created interesting products such as the first major crypto-rewards credit card . Unfortunately for BlockFi , their relationship with FTX led to collateral and funding challenges and the entire company collapsed during the 2022 crypto crisis . Hypergrowth without profitability leads to situations where companies must keep rising . When the music stops , sometimes they are left without a chair .
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