‘We aim to meet entrepreneurs where they are in their journeys’: J.P. Morgan’s Ashraf Hebela on how JPM is sharpening its focus on startup banking

Today, we’re diving into the ever-green landscape of startups and startup banking. While the startup scene is always buzzing, recent years have been particularly challenging due to a tough market, limited investment opportunities, and waning investor confidence. However, with a rebound in VC funding this year and recent rate cuts by the Fed, there’s a glimmer of hope for improvement and new opportunities.

Joining me to discuss startup banking and share related insights from recent J.P. Morgan research is Ashraf Hebela, Head of Startup Banking at J.P. Morgan. In our conversation, Ashraf dives into how J.P. Morgan is sharpening its focus on startup banking, what approaches can better serve underrepresented founders, and the critical support that banking startups require from their financial institutions to thrive.

The 5 key takeaways

1. How does startup banking complement J.P. Morgan’s strategy? Ashraf underscores the role of technology in advancing the innovation economy and driving growth. He explains that J.P. Morgan has been deeply engaged in the startup and innovation space for nearly a decade, ensuring that innovators, both nationally and internationally, have the banking services necessary to achieve their goals.

“Our job is to make sure that the best innovators, both nationally and globally, can achieve their outcomes by providing them with world-class banking services across the board,” says Ashraf.

J.P. Morgan’s platform featuring a comprehensive range of financial services — including commercial, private, and investment banking — aims to support entrepreneurs at all stages of their ventures. Ashraf notes that the bank’s goal is to support entrepreneurs from their initial concepts to their final achievements, providing them with advice, insights, and networking opportunities to foster their success.

2. Cultivating startup banking and community bank-like ties with new entrepreneurs: Ashraf believes that to maximize the chances of achieving successful outcomes, it is essential to support entrepreneurs from the outset. This means being there when entrepreneurs are considering effective networking strategies, learning about banking products and services, and in need of guidance. The journey largely revolves around empowering entrepreneurs and enhancing their likelihood of success.

“We aim to meet them where they are — whether that means engaging with them early on or in different regions beyond just California and New York,” notes Ashraf. “As a national business, we believe in meeting with entrepreneurs both in their physical spaces and at the specific timeline of their journey.”

The bank is creating value through networking, insights, connections, events, and sponsorships that foster a sense of community within the innovation economy, according to Ashraf. This, combined with JPM’s comprehensive suite of banking products, helps the bank align with new entrepreneurs’ needs.

“We do the gamut inside of the commercial bank, and then help them [entrepreneurs] realize their dreams and hopes in the public markets,” notes Ashraf.

3. Improving support for women entrepreneurs and founders of color: The startup landscape frequently sees the underrepresentation of women and founders of color. According to JPM’s research, only 7% of unicorn founders are women, and the number of firms led by people of color or minorities is likely even lower.

What can be done differently to improve investment opportunities for this segment and address their banking needs?

“It starts with the investment in a broad national startup banking business,” says Ashraf. “Most of the underrepresented minorities as entrepreneurs are sitting at the early stage, and that means having to invest in an early-stage business.”

Ashraf also highlights:

• The significance of having a presence in diverse locations. 
• Investing in a diverse workforce to facilitate this effort. 
• Catering to the various needs of entrepreneurs, which includes not only access to capital but also access to information, insights, and networking opportunities.

“As you invest in all of that nationally, you increase the probability of allowing more representations into the innovation economy,” he says.

4. Drivers of increased VC fintech funding and how startups can tap into the trend: Ashraf explains that the rise in fintech funding is a long-term trend, with significant investments starting a decade ago.

These investments cover various sub-sectors, resulting in improvements to the online banking experience. The rise of new card options and advancements in wealth technology have played a key role in this evolution. Ashraf specifically focuses on wealth tech.

“The transfer of wealth is now beginning and shifting from the older generation to the newer generations — from Baby Boomers over to the subsequent generations,” he notes. “That’s creating a lot of interesting startups in the wealth tech space.”

The demand for fast and accessible digital wealth management solutions by younger generations is increasing investments in wealth tech.

5. What do banking startups need from their banks to succeed? Ashraf outlines 3 core components that startups should seek from their banking partners to succeed:

• Safety, reliability, and stability, given the critical nature of financial services.

“To me, stability, safety, and reliability come almost before anything else,” says Ashraf.

• Access to capital, information, and networks to help entrepreneurs succeed.

“Somebody [FI] who understands you, who wants to grow with you, and who can grow with you,” plays a vital role in both present and future growth, according to Ashraf.

• A cohesive financial services experience, where a single institution can provide multiple services tailored to the entrepreneur’s needs.

“It just becomes difficult to build cohesion around your financial needs. So, I’d say that’s a really important part as well,” asserts Ashraf.

Catch the full episode

Subscribe: Apple Podcasts | SoundCloud | Spotify | Google Podcasts

Peruse the transcript (for TS PRO subscribers)