Prism & Restive Ventures

Tyler Griffin

Belleview, Washington
Cofounder & CEO, Prism (Acquired by PayNearMe)
Cofounder & Managing Partner, Restive Ventures

Restive Ventures provides early-stage capital, deep operational expertise, and systematic connections to help fintech startups launch and grow more quickly.

In 2012, a friend of mine from college and I started Prism. We initially wanted it to be a free solution for busy people who didn’t have time to deal with bill payments. It turns out most affluent people just put everything on auto pay, so we ended up pivoting to be more of a cash management solution. The product focused on helping lower and middle income individuals who were concerned about running out of money at the end of the month avoid late fees by paying their bills on time. For example, if your power bill is due on the 20th, and you put a check in the mail on the 20th, they’re going to say it’s late, but if you pay it through their website, they’ll credit it for the 20th even if the money takes a few days to actually get there.

The product worked really well and enabled real-time payments from the perspective of the customer. To pay a bill with your bank account we would transfer the money out of your account and use a virtual card to pay the bill. That had a few benefits, first for customer security, since they didn’t have to enter account information on several different biller sites, and second, for cost, since we could collect interchange fees without charging the customer anything. The challenge with that model was that several states would consider you a money transmitter. Ultimately, we’d have to get 48 money transmitter licenses, which at the time was not a well-trod path. I was bemoaning the issue at a FinTech conference to the CEO of another payments company, and he flagged that they had just received their last money transmitter license and suggested it might make sense to put the two companies together. That was the impetus for the acquisition.

Even though the decision to sell was a bit spur of the moment, we were able to run a competitive process with multiple interested buyers, which was really important for getting beneficial terms for our stakeholders. For me, it was important to have a really short lock-up because the company already had a CEO and it didn’t make sense for me to stay on past an initial transition. All the employees moved over to the new firm, many received cash payouts in addition to their compensation packages, and some are even still there today. It’s easy to look back wistfully and think about the possibilities if we had continued to grow the company ourselves, but it was a good outcome that everyone is happy with.

Following the acquisition, very importantly, I first took my wife on a month-long honeymoon because we got married while I was running a startup which is really asking a lot of your spouse. Then, I was an Entrepreneur-in-Residence for what was essentially a captive VC fund, doing founder mentoring based on my experience running and selling a startup and through that I got familiar with their portfolio. One of my colleagues there wanted to start his own fund and wanted someone with operational experience, so we started what became Restive Ventures and raised our first fund in 2019. We invest in pre-seed and seed-stage companies and have an opportunity fund as well for later stage investments. At Restive Ventures we’ve had several portfolio companies exit, almost entirely through acquisitions. We approach every investment believing that the company could one day IPO, but understand that a successful exit probably is going to be an acquisition. IPOs are very hard, don’t happen that often, and take many years. If the options for companies or for investors were IPO or total loss you wouldn’t be able to sustain startups or an innovation-focused investment model.

Acquisitions are a good thing and they’re good for employees, too. Rarely do startup acquisitions involve people losing their jobs. Instead, they result in employees getting higher salaries. If you’re an early stage company, you’re almost always paying below-market salaries and you’re making the difference up with equity. In an acquisition, employees will usually get equity in the acquiring firm and a raise to a market-based salary.