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Is this a partnership or a one-night stand?

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I was fascinated to see a lawsuit in America where a FinTech start-up (Onsa) claims a financial incumbent (Franklin Templeton) has stolen their ideas:

Franklin Resources Inc. destroyed a blockchain startup to get its technology and a “short cut” into the booming fintech market, a group of investors claimed in a lawsuit. The startup, Onsa, claims to have developed a “tokenized” money market that converts assets into digital tokens -- the first of its kind to be approved by the Securities and Exchange Commission. But after taking control of Onsa through an investment, Franklin abruptly axed top executives and coders at the startup in 2020 and recruited some of them to start its own version of the blockchain technology, according to the lawsuit.

“Franklin Templeton is now on the cusp of launching the technology it took from Onsa under the Franklin Templeton banner, hoping to change its image as a technological dinosaur and to generate enormous financial benefits that flow from Onsa’s innovative technology,” the group of Onsa shareholders called Blockchain Innovation LLC said in the complaint. 

It reminded me of the comments from Philippe Gelis a couple of years ago about FinTech start-ups partnering with banks. It is a troubling relationship and not easy. The start-up has to be wary of the incumbent; the incumbent must be humble enough to partner properly.

Too often the incumbent is an arrogant and condescending beast; too often, the start-up is eager to please. It reminds me of the discussions anywhere and everywhere about young and eager hopefuls who get abused by old and rich power mongers. You have to find balance.

The advice from my side is that the hopefuls must keep hope, but make sure it is underwritten by law; the advice for the incumbent is to treat the young as equal and not lesser than thou. It’s all about how you define a partnership.

When I think about partnerships, I bring it to a personal level. If I have a partner, do I think of them as lesser than me? I am more powerful than them? They are weak and I am strong?

Of course not. If you think that way, your relationship will never work. It will fail. When you have a relationship and then a partnership, you have to be open and honest, equal and egalitarian, truthful and inclusive. There are no secrets, no arrogance, no hidden agendas and no aim to harm each other. You are equal partners in an equal relationship to achieve equal goals.

Thing is that this is rarely the case with large, old financial firms. As Philippe outlines, the agenda is often to find out what the start-up thinks and then copy it. It’s not pump and dump. It’s copy and dump.

The bottom-line for any start-up is therefore to be very wary of who you partner with and how. Get it legal and written down. Don’t share any detail until it’s covered by a contract. We can all talk about NDAs, but they mean nothing when it comes to court. What you need is a truly legal cover. One that stands up in court. What’s that? It’s the one that you sign that says: if you do anything like what we have developed, you are liable for $1 billion.  

Make it clear. Make it explicit. And don’t give away your crown jewels without legal cover.

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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