Planning a Trip to Yellowstone
The first question you need to answer when planning a trip to Yellowstone National Park is which entrances you are going to use to enter and exit the park.
Fun fact: Despite the fact that 96% of the park is located in Wyoming, and only 3% is located in Montana, Montana has three of the five entrances to the park:
- West (through West Yellowstone, MT): The busiest entrance, offering easy access to Norris Geyser Basin, Canyon Village, and Old Faithful.
- Northeast (through Cook City, MT): This is the one no one knows about, but it is absolutely incredible. The Beartooth Highway (not for the faint of heart) and the Lamar Valley (So. Much. Wildlife.)
- North (through Gardiner, MT): The only entrance that is open year-round. Features the historic Roosevelt Arch.
My family and I entered through the West entrance and exited through the Roosevelt Arch:
The other two entrances (East and South) are in Wyoming, and poor Idaho is left with a measly 1% of the park and no entrances of its own, which is fair because, well, it’s Idaho. It’ll have to settle for having the Zone of Death.
(Editor’s Note — I have a few nits to pick with the TV show Yellowstone, which my wife and I have finally been watching, after years of boycotting it. First nit: the “train station” that the ranch hands take people to be murdered at is based on the Zone of Death, but the show makes it seem like A.) it’s located in Wyoming, and B.) it’s the sight of many, many murders and body disposals. Both untrue.)
Fintech News Break
What happened?
Since we’re talking about Wyoming, we may as well start with crypto.
The U.S. Senate passed the GENIUS Act:
The bill, the first of its kind to put federal guardrails on digital currencies, sets up oversight of stablecoins, a popular crypto asset typically pegged to a government currency such as the U.S. dollar. That peg keeps their price steady, making them attractive to traders looking for a store of value while they buy and sell more volatile cryptocurrencies. Stablecoins can also be used for cross-border payments.
Known as the Genius Act, the bill passed the Senate 68-30. It now moves to the House, where passage is viewed in Washington as likely but could take time. President Trump has said he wants to sign stablecoin legislation before Congress’s August recess.
Many Democrats got on board with the GOP-led effort after strengthening consumer protections and national-security provisions. Supporters of the bill argued that doing nothing would push the industry offshore and lead to more nefarious activity.
So what?
Well, if nothing else, this should be interesting.
As Todd Phillips observed, Congress is essentially creating a new type of bank, which will play by different rules:
“We finally have a setup where all depository financial institutions are kind of regulated the same. Thrifts are regulated like banks, are regulated just like credit unions … Congress is now saying, ‘Alright, we are introducing a new type of depository institution that is going to do things differently than the others.’”
One of the reasons it’s going to play by different rules is that stablecoins work very differently, technologically and philosophically, than the electronic bank accounts that most of us rely on today.
A good example of where these differences will cause some issues is the application of anti-money laundering regulations.
In traditional electronic banking, U.S. financial institutions are required to screen prospective customers before opening accounts with them, attach and store specific identifying information for payments exceeding $3,000 (the travel rule), and monitor all account activity for signs of suspicious behavior, reporting anything suspicious that they find.
In physical banking (i.e., cash), the same initial KYC screening is required if you want to open an account. And reports are automatically filed with FinCEN for deposits, withdrawals, cross-border movement, or merchant payments of more than $10,000. But everything in the middle — you paying back a friend for lunch or paying the babysitter after you get back from date night — is entirely anonymous.
Stablecoins occupy an unusual middle ground.
They are subject to the same rules as electronic banking when the issuer (or an exchange) opens an account with a customer or when transactions are made between wallets that are hosted by crypto service providers like Coinbase.
However, as soon as a stablecoin is sent to or received by an unhosted wallet, it stops being subject to the AML rules of electronic banking and starts enjoying the comparable (though not identical) benefits of anonymity that physical cash enjoys. This is both a technological accomplishment (distributed ledgers enable individuals to prove ownership of tokens without the need for centralized intermediaries) and a philosophical accomplishment (in 2020, FinCEN proposed requiring exchanges to verify the owner of every unhosted wallet; however, fierce industry pushback led to the proposal being tabled).
This is really weird! And it prompts some tough questions.
For the purposes of stopping money laundering (a goal I think we all share), should stablecoins be treated like cash? Are the benefits to user privacy worth it, even though stablecoins are obviously a much more efficient (and therefore risky) money transmission mechanism than cash?
IMHO, it would have been nice to hash out these questions before the GENIUS Act passed, rather than after, but whatever.
Prepare to Stop (For Wildlife)
A thing to expect if you visit Yellowstone is frequent traffic jams caused by visitors stopping their cars in the middle of the road (or getting out of them entirely) to gawk at the wildlife.
My wife and I were a bit frustrated on the first day, as the frequent stops significantly extended the time it took us to reach Old Faithful. We were literally saying stuff like, “come on, it’s just a few bison. Get a grip!” which is a useful illustration of just how much you can take extraordinary stuff for granted when that stuff can be found in your backyard.
The truth (which we reminded ourselves of) is that bison are extraordinarily weird and amazing animals. They are huge (the largest land mammals in North America … up to 2,000 pounds!), lazy (we saw multiple ones literally lying on the ground next to the road, dead asleep), and sneakily athletic (a park ranger told me they can jump six feet vertically from a standstill).
In addition to a bunch of bison, we saw some deer, a gigantic elk that wandered right up to our hotel room window in the morning on day two, and a grizzly bear cub.
That last one is worth elaborating on, because it’s incredibly rare to see grizzlies in Yellowstone (there are only about 180 that live in the park) and even more rare to see a cub.
We were driving down a road out of the mountains in the middle of the park. A few cars had stopped in the middle of the road, but only briefly before moving on. When we got to that spot, we saw what looked like a living teddy bear, sitting in a field off the road (not 10 feet from us), munching on wildflowers.
The little guy looked exactly like this, but I should be clear: this isn’t a picture of the bear we saw. We didn’t take a picture for the same reason that none of the cars ahead of us had lingered — we didn’t know where his mom was, and we had no interest in waiting around to find out.
Mama grizzly bears with cubs are the single most terrifying sight in Yellowstone, without exception.
Fintech News Break
What happened?
A VC-backed startup with an unusual go-to-market strategy just raised some money:
In late 2022, Noah Pepper, a former Stripe business lead for the Asia Pacific region, founded Multiplier, a startup that aimed to sell software to tax accountants. But soon after ChatGPT was released, it occurred to him that AI can change how professional service firms use technology.
“I realized I was barking up the wrong tree by trying to build a SaaS business, and instead I should figure out how to make these people more effective,” he told TechCrunch.
The startup acquired Citrine International Tax, a boutique provider of cross-border tax accounting services, and enhanced the firm with AI capabilities built by Multiplier.
It quickly became apparent that the strategy was working. By eliminating manual work, Multiplier’s AI tools helped Citrine more than double its profit margins. So, Pepper decided that instead of building software for accounting firms, Multiplier would acquire existing professional service businesses and outfit them with its AI solution.
Today, Multiplier, which is now called Multiplier Holdings, is announcing that it raised a total of $27.5 million in seed and Series A financing. Lightspeed Venture Partners led the Series A funding round for the startup, following Multiplier’s seed round, which was led by Ribbit Capital with participation from SV Angel.
So what?
Apparently, this is part of a larger trend that is growing very quickly — instead of starting their own SaaS businesses, tech founders with expertise in AI are acquiring small businesses that could benefit from AI and helping them implement it to improve their performance.
It’s basically a VC-backed, AI-powered alternative to the classic private equity roll-up strategy.
The focus of Multiplier is accounting firms, but it seems likely that this approach can (and will) be applied across a range of industries. Basically, anywhere AI can significantly boost performance.
So, here’s a crazy thought: could this approach work in banking?
PE-style roll-ups in banking are tricky. Small banks (under roughly $600 million in assets) benefit enormously from greater operational efficiency due to scale ($3 billion in assets is where the efficiency benefits really start kicking in). However, the problem is that other compliance obligations (the Community Reinvestment Act, most notably) take effect as the combined entity crosses different asset thresholds ($400M, $1.6B, etc.), which limits the potential efficiency gains.
However, the assumption in traditional PE-style roll-ups of community banks is that you create value by spreading fixed people-heavy functions — compliance, finance, and IT — across a larger asset base. A Multiplier-style, AI-led platform that attacks the cost curve with software from day one could allow an investor to start aggregating smaller targets and hit attractive efficiency ratios sooner.
I have no idea how regulators would feel about such an approach, but I’m guessing they will start seeing it in the wild, sooner rather than later.
Old Faithful Earns Its Reputation
Yellowstone is fun because there are lots of cell dead zones and no reliable WiFi. As such, you end up with a lot of time to just chat, especially when you are stuck in traffic behind gawking tourists.
Here’s a discussion topic that came up in our car: What are the most famous or popular individual attractions at U.S. national parks?
Obviously, the Grand Canyon. Probably El Capitan or Half Dome in Yosemite. And Old Faithful, right?
Well, I’m here to tell you that Old Faithful deserves the hype.
You stand outside on a boardwalk (or sit on your dad’s shoulders), arranged in a half-circle around a small hill with a fissure in the middle of it that has steam coming out of it. You know, roughly, when the eruption will take place, but not precisely when. The geyser has a bimodal distribution, with the average interval being either 65 or 91 minutes, depending on the length of the prior eruption, and a margin of error of ±10 minutes.
The result is a crowd that will start shushing each other at the first sign of extra steam or bubbling water, like we’re all at the movie theater and the trailers have started to roll.
And when the show starts?
Well, it’s very impressive:
Fintech News Break
What happened?
Russ Vought is doing Russ Vought things:
In a proposal published Wednesday in the Federal Register, acting CFPB Director Russell Vought said he will not use the civil money penalty fund to pay for consumer education or financial literacy even though Congress specified that the agency can use the funds, at its discretion, for such programs.
The proposal would remove any references to allocating funds for education and literacy programs by amending a 2013 rule implementing a provision of the Consumer Financial Protection Act.
So what?
The Consumer Financial Protection Act, which created the CFPB, explicitly gave the bureau the authority to levy penalties against companies that it found, through its supervision and enforcement work, to have broken the law.
The resulting funds are then placed into the civil money penalty fund, which is primarily used to provide restitution to consumers who were harmed by those companies. Over the last 12 years, the CFPB has paid $3.7 billion to roughly 6.7 million people for redress or restitution for a wrong, injury, or loss they suffered by a financial firm.
However, Congress also authorized the CFPB to use the money in the fund (which is estimated to be roughly $2 billion) to pay for consumer education and financial literacy programs. Acting Director Vought believes that this additional latitude warps the incentives of the CFPB:
In the absence of adequate guardrails, there could be incentives to bring enforcement actions for the purpose of aggrandizing the operational scope of the agency. The bureau now believes that the procedures outlined in the rule provide neither adequate guardrails for the agency’s exercise of its discretion nor adequate transparency to the public regarding a potentially significant expenditure.
Here’s the thing, though — the CFPB has spent almost no money out of the fund for consumer education or financial literacy. Over 12 years, only one such program has been funded: a program to help military veterans and vulnerable consumers.
This isn’t a case of the CFPB stepping outside of its lane and using its enforcement powers to fund some woke ideological campaign. The bureau has been a very judicious steward of the civil money penalty fund, even under Rohit Chopra (who was under lots of pressure from consumer advocacy groups to spend this money).
To me, this appears to be another example of Acting Director Vought going above and beyond in his efforts to hamstring the CFPB, both today and in the future.
Early Bird Gets a Crowd-Free Experience
My proudest dad moment of the trip came at the end of day one, when I scouted out the next day’s stops after everyone had gone to bed and then hustled everyone out the door bright and early the next morning.
You know what’s more fun than seeing geysers, hot springs, and mud volcanoes?
Seeing geysers, hot springs, and mud volcanoes without the crowds.
#DadTravelEnergy
(Editor’s Note — My wife and I are just finished watching Season three of Yellowstone. I won’t reveal any spoilers here, in case others have been tardy in catching up with it, but I do want to say this: season three is so much better than seasons one and two that it almost doesn’t make sense. The characters are more likable and relatable. There’s less random murder and other monstrous actions, though there is still plenty of drama and violence. It feels like this was the season that Taylor Sheridan figured out what the show is, which then carried over into the prequels — 1883 and 1923 — which my wife and I really liked.)
Fintech News Break
What happened?
OatFi raised a Series A:
OatFi, a startup providing an embedded working capital financing infrastructure, has raised $24 million in Series A funding
OatFi partners with AP, AR, and B2B payment platforms to embed financing into invoice and payment workflows. Its APIs handle underwriting, origination, and capital deployment, which allows platforms to offer net terms and early payouts within their core systems.
Embedded credit is becoming table stakes across B2B commerce and fintech infrastructure, with platforms like Square, Stripe, and Shopify already offering working capital to merchants based on payment flows. Meanwhile, standalone fintech lenders like Pipe, Parafin, and Settle target embedded lending through platform partnerships or direct integrations.
Instead of bolting on a merchant cash advance product using payment data, OatFi embeds a full credit infrastructure inside AP and AR workflows, underwriting each transaction and funding it from its own warehouse lines.
So what?
The embedded lending space is really starting to mature.
As I outlined in this essay back in February, the concept of embedded lending for small businesses really took off with merchant cash advance (MCA) products, like those launched by Square and PayPal 10 years ago.
Those products worked extremely well (high uptake, low risk, extremely sticky), but they were difficult for other platforms that serve small businesses (what I refer to as “Small Business Operating Systems”) to replicate.
Thus, the emergence of embedded lending infrastructure providers like Stripe, Pipe, Paraffin, Fundbox, and OatFi. A lot of these companies started by offering platform partners Embedded-Merchant-Cash-Advance-as-a-Service. This was the obvious place to start (embedded MCA is a great product!), but it’s not the ideal fit for every small business every time, as I previously wrote:
Embedded MCA is convenient and flexible (as we’ve discussed), but it doesn’t provide control (you can’t adjust the terms, and you don’t get any benefit from paying off the advance early) or certainty (you can’t be sure exactly how much your payments will be because it’s based on a percentage of daily sales).
Second, not all businesses require their customers to buy goods and services from them instantly at the point of sale, which means that not all businesses have the real-time payment streams necessary to power embedded MCA.
This is why some of the infrastructure providers in this space are starting to talk less about specific lending products like MCA and more about payment workflows (accounts receivable, accounts payable, expense management, etc.) and the various lending use cases that make sense in the specific context of those workflows.
This is how OatFi is starting to talk about its platform, and it’s clearly resonating with investors.
Exit: North Gate
We left Yellowstone by going out the North Entrance, which is right next to the Mammoth Hot Springs Historic District.
Another fun fact: Mammoth contains Fort Yellowstone, the military administrative center of the park between 1886 and 1918, when the park had to be managed by the U.S. Army because Montana and Wyoming weren’t states when the park was created, and the National Park Service wasn’t founded until 1916.
Here’s what Fort Yellowstone looked like, circa 1910:
Our trip wrapped up with a drive through Paradise Valley and Livingston, before getting back home.
(Editor’s Note — One last Yellowstone nitpick: Paradise Valley is overrated. It’s got great branding and a lot of rich people, including movie stars, call it home, which is probably what put it on Sheridan’s radar in the first place. However, it’s a dumb place for the Dutton Ranch to be fictionally located. It looks nothing like where Yellowstone is actually filmed, and it’s not even close to the prettiest spot in Montana. Putting this out there now: I will gladly serve as a creative consultant for Sheridan’s next Yellowstone spinoff, The Madison. If you’re going to continue driving up our property values, let’s at least get the Montana stuff right.)
