Most YC applications answer the competition question with a moat. This one lists Square, Stripe, Braintree, Wells Fargo, JP Morgan, Bloomberg, Intuit and PayPal — then throws the whole list away:
"So, who do I fear most? I fear regulators the most. Banks can't beat us on technology but we might be so successful they beat us with the law."
The application speaks in an unnamed "I". Internal evidence points hard at Zac Townsend — he is the one "still at Stripe", the one who worked in Newark, the one who went to Brown — but nothing labels it, so read the quotes as the application's voice rather than a signed statement.
At filing there was no demo, because "mocking up a fake API for you doesn't seem worth it." No product either, and both founders who wrote it were still employed elsewhere: Townsend at Stripe, Dan Kimerling at Giftly. They had a verbal agreement from Wells Fargo and were "pretty far along" with JPMorgan and Capital One — a verbal agreement and two live conversations, not contracts. They sized the market in big-O notation.
They got in. YC Summer 2013.
The sentence came true sideways
Regulators never beat Standard Treasury with the law. The company never got large enough to be worth beating.
What happened instead is that Standard Treasury decided to build its own bank — and then, in a post the two founders wrote together, "primarily because of concerns around regulatory and geographic risks, we were unable to raise a Series A funding round against that goal."
So the risk that ended it was regulatory, at least in part. The application had named regulatory risk. But the mismatch is the lesson: the application feared a successful company being attacked by the state, and what arrived was investors declining to fund a charter attempt the founders had chosen to make. A risk they walked into, not one aimed at them. Right category, wrong mechanism — and the mechanism decides whether you get to keep going.
Where they are now
In August 2015, Silicon Valley Bank acquired Standard Treasury's assets and team; terms were never disclosed. Kimerling joined SVB in July 2015, weeks before the deal was announced, and ran API Banking, Open Platform, and Global Research and Development. The company had already picked up American Banker's "Ten Technology Companies to Watch" and SWIFT's Global Innovator of the Year, and both founders made the 2015 Forbes 30 Under 30 list. Kimerling's own account credits backing from Y Combinator, Andreessen Horowitz and Index Ventures, on a seed reported at around $2.7M.
Townsend left within about a year; Kimerling within roughly two.
Dan Kimerling runs Deciens Capital as Founder and Managing Partner. Note what that is: the 2013 application lists deciens.com as the interesting thing the founders had built together — "We raised the money, we have made investments." The side project outlasted the startup. His portfolio includes Chipper, SimplyWise, and — read this slowly — Treasury Prime, a banking-as-a-service company selling API access to multiple bank partners, on whose board he sits. He was right about the idea. He gets paid for it now as an investor rather than a founder.
Zac Townsend became the inaugural Chief Data Officer of California, then went to McKinsey's financial services practice, and is now building a startup whose stated ambition is "the world's largest long-term insurer, using digital money."
And Silicon Valley Bank — the acquirer, the safe harbor, the sensible outcome for a startup that could not raise on regulatory risk — failed in March 2023, on a risk nobody was pricing in 2015.
What the application saw early
Read the product description with 2026 eyes:
"We will build commercial banking middleware that will sit on top of banks just like Twilio sits on top of multiple phone carriers."
That describes a category that did not exist yet. Treasury Prime (2017), Unit, Increase, Stripe Treasury — all of them are the sentence above, shipped by someone else, later. And the read on why banks would not do it themselves has not aged a day: "People who run banks don't care about providing high quality technology services, and the people who care about technology don't want to work with (or buy) a bank. Schlep blindness, as it were."
So this is not a thesis failure either. The regulatory risk arrived as a financing failure, and that distinction is why the application is worth reading. Standard Treasury's stated edge required scale in bank relationships before the product got good — its own answer says so: eight relationships is what buys "next-day payouts to 80% of checking accounts in the US," against competitors who "can only do next-day payouts on their one bank." That is a capital and compliance problem wearing a product roadmap, and the application says as much: "Raising money because of non-trivial commercial and regulatory costs."
Being early is indistinguishable from being wrong right up until it isn't — and by then the Series A window has closed and someone else is building your company with better timing and cheaper compliance infrastructure.
Read it knowing how it ends.
The application
YC Summer 2013 · Accepted · Source
Offers standard APIs that facilitate businesses in transfers and other transactions with banks.
Company
If you have a demo, what's the url? Demo can be anything that shows us how the product works. Usually that's a video or screen recording.
No online demo yet. It might be awhile before we have a dashboard and mocking up a fake API for you doesn't seem worth it.
What is your company going to make? Please describe your product and what it does or will do.
We are building APIs for commercial banking services by building on top of multiple large banks.
If someone needs advice they can call Goldman. If they just need to transact then they can use one of our APIs. We will build commercial banking middleware that will sit on top of banks just like Twilio sits on top of multiple phone carriers. It is much easier because we'll have (mostly) RESTful APIs with good documentation, etc, and (if we choose) cheaper because of bulks rates.
- Delivered programmatically, using good APIs - Anything transactional shouldn't involved a human being. Most banks suck at technology and admit that. They're excited to have us resell their services.
- Narrow to start, but ultimately broad services - We want to abstract away the pain of dealing with banks for transactional services like ACH, F/X, wires, factoring, short-term loans, etc, just as Stripe, Braintree, and others have done for getting a Merchant ID. We are starting with ACH and F/X as foundational products.
- Multiple banking partners - We're willing to endure the pain of setting up commercial contracts with many banks and then offering the transactional services (via API) in an intelligently routed way. We've gotten verbal agreement from Wells Fargo, and are pretty far along with JPMorgan and Capital One. Will start with other banks shortly.
Where do you live now, and where would the company be based after YC?
SF. SF.
Founders
Please tell us about an interesting project, preferably outside of class or work, that two or more of you created together. Include urls if possible.
http://deciens.com/ We raised the money, we have made investments. We have been to YC demo days and invested in Keychain Logistics.
Please tell us in one or two sentences about something impressive that each founder has built or achieved.
ZT reorganized child welfare investigations in New York City. He got tons and tons of data, wrote R code to analyze it, set up ethnographic research conducted by his team, etc. He sniffed out details, wrote a report, and then helped implement the changes to a staff of 2000, and a budget in the tens of millions.
Dan built Giftly, particular the proprietary stored value product, from a regulatory, legal, risk, etc, perspective.
Please tell us about the time you most successfully hacked some (non-computer) system to your advantage.
When I started in Newark, I didn't have a computer or an email, and City Hall didn't have wireless. So I tracked down one of the wireless networks I could find - owned by a bails bondsman close to the court, and negotiated with them for their wireless password.
I once spent hours looking at floorplans and historic housing lottery data so that my roommate and I could pick a HUGE double with our own bathroom despite having a terrible pick at Brown.
How long have the founders known one another and how did you meet? Have any of the founders not met in person?
We've known each other since we were 16, when met at Harvard summer school.
Do any founders have other commitments between X and Y inclusive?
No.
Do any founders have commitments in the future (e.g. finishing college, going to grad school), and if so what?
No.
Progress
How far along are you?
We're far along on regulatory/commercial contract/legal stuff. Once we have that settled, there is a lot of backend, unsexy stuff to do to make it as pretty/smooth as we'd like: settlement files over SFTP, testing required by the banking partner, automatic underwriting built on Microbilt/LexusNexus/Iovation, etc, and then launch.
How long have each of you been working on this? How much of that has been full-time? Please explain.
Pre-development. We've incorporated. I'm still at Stripe. Dan's still at Giftly. It didn't make sense to start until one of the banks signalled a willingness to sign a commercial agreement as their was nothing to integrate with. Ready to start now. Raising money because of non-trivial commercial and regulatory costs. Far along with recruiting the rest of the early team and considering raising a seed round.
Idea
Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you're making?
We started by thinking about ACH, which is a problem that Dan actually had in his work. Zac sees how hard it is for even Stripe to deal with Wells Fargo on F/X, wires, etc.
Dan knows a ton about payments. Zac won finance prizes @ Brown. We both want to disrupt banking and have been talking about it for years.
What's new about what you're making? What substitutes do people resort to because it doesn't exist yet (or they don't know about it)?
When most businesses wants to do something financial they have to call their bank and talk to a person - except for getting a MID. That doesn't make sense. Getting a wire, as an example, often involves twenty minutes, a painful conversation, and $30. Even non-quant hedge funds needing to convert EURO to GBP have to pick up the phone and talk to a bank's trading desk.
No one has built developer friendly bank back-end processing, so you have to deal with banks, which overcharge, are slow, and are not developer friendly. Wells Fargo, for example, does offers an API which costs more than their other options and, well, is not very good.
Who are your competitors, and who might become competitors? Who do you fear most?
Possible competitors: Square, Stripe, Braintree, Wells Fargo, JP Morgan, Bloomberg, Intuit, PayPal
Banks cannot innovate on technology. A senior exec at JPMC told us that even if building good APIs was a Jamie Dimon priority it couldn't get done before 2017.
Commercial banking broadly - including every service we're imagining other than ACH (F/X, Wires, Factoring, Lending, Account Creation/Deletion, etc) - is not something that the innovative payments companies plan to provide to others, although they're all services they, themselves, need. Stripe, for example, is trying to make payments work on the web. We're trying to make commercial banking work in the world. They're both trillion dollar problems, but they're different.
So, who do I fear most? I fear regulators the most. Banks can't beat us on technology but we might be so successful they beat us with the law.
What do you understand about your business that other companies in it just don't get?
People who run banks don't care about providing high quality technology services, and the people who care about technology don't want to work with (or buy) a bank. Schlep blindness, as it were.
Also, there is great power in abstracting away thinking about your particular bank. Take ACH: since we are willing to suffer through forming eight banking relationships, we can provide next-day payouts to 80% of checking accounts in the US. Everyone else can only do next-day payouts on their one bank.
How do or will you make money? How much could you make?
We make money on transactions.
For a (very, very) rough guide, profits at ten biggest banks last year were $120b. Let's call 50% of that transactional/FICC/pure commercial banking as we define it.
As for TAM, SAM, SOM, using big-O:
Total addressable market: O(100s of billions)
Serviceable available market through APIs: O(10s of billions)
Share of market: O(10s of billions)
How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it won't be attractive to users till it has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that?
Working the network, undercutting others on price and (especially) ease, directly reaching out to every startup that needs banking services beyond payments that exists or is founded for traction.
We've focused our user research on three customer segments: (a) Corporate treasury departments (a heretofore undisrupted part of most enterprises) (b) hedge, private equity, and venture funds (minus quants/HF) and their back offices (c) technically inclined SMEs and startups who aren't served well by big banks.
Legal
Are any of the founders covered by noncompetes or intellectual property agreements that overlap with your project? If so, please explain.
We both have CIIAA's that could cover this work.
Dan's company is pretty far away.
Zac declared this idea when he signed his at Stripe. He's asked Stripe for an IP waiver letter, or whatever it's called.
(I also described this entire idea in a youtube video I sent to you in December before we didn't accept a late interview, so...there is a lot of documentary evidence that I had this IP before Stripe).
Who writes code, or does other technical work on your product? Was any of it done by a non-founder? Please explain.
No. (Our code was not written by a non-founder)
Others
Please tell us something surprising or amusing that one of you has discovered.
"The failure, if it was one, lay in the fact that, having too much to hold on to, they slowly lost what they had. On the whole, it was those who had least who were able to move most freely to the new world which was coming into existence." --That reading The Making of the Middle Ages can make you think of everything from startups to the state of America in the world (this happened in December)
