A couple of weeks ago I wrote about systems thinking and why it has become central to our investment practice. This note takes the discussion a step further. I reflect on one company in our portfolio that has helped sharpen our own thinking.
The Philosophy (a recap)
As entrepreneurial innovation increasingly addresses large, critical markets where responsibility and incentives are fragmented across multiple stakeholders, systems thinking becomes essential. Systems thinking is the discipline of understanding how different people, institutions, incentives, technology, and markets work together to organize economic activity. By understanding and incorporating these dynamics at the inception of company design, technology founders can significantly improve the odds of adoption for their innovations and of building enduring companies that deliver real value at scale.
Observations from Giving Credit
On the surface, Giving Credit appears to be another fintech addressing access to credit. Working alongside Ashley, David and the broader team, however, has suggested something more nuanced. The company has prompted us to think differently about how trust, incentives and institutions interact within the credit system and in the process we have improved how we assess opportunities in these space. I wanted to share a few key observations from this journey.
1. Framing as a Missing Market vs. a Better Product
The obvious diagnosis is that millions of people cannot access affordable credit because they lack a FICO score. Giving Credit began with a different question: why does the existing system consistently fail to recognize people who are, in practice, creditworthy?
That shift in diagnosis changes the design of the company. The challenge is not simply underwriting another loan. It is understanding how trust is established, evidenced and transmitted throughout the financial system. Once viewed through that lens, product decisions become less about building a better lending interface and more about creating credible new signals that users trust, and financial institutions are willing to rely upon.
For us, this reinforced a broader lesson from systems thinking: There’s higher value in learning the system that produces the problem before building product.
2. The Company as the Center of an Ecosystem
Borrowers alone cannot make Giving Credit successful. The right lenders, nonprofit organizations, data providers, regulators, and investors all influence the true character of the market.
One decision we found particularly instructive was the company's emphasis on partnering with community lenders that have already developed deep trust with borrowers but whose lending activity was largely invisible to traditional credit infrastructure. Establishing trust through building partnerships with those who already have it accelerates adoption.
The question shifts from 'Who is my customer?' to 'Which alliances must we invest in first to strengthen our market positioning?' That is a different way of designing a company.
3. The Real Competition Is Institutional Habit
Giving Credit appears, at first glance, to compete with other lenders; in practice, much of its focus lies elsewhere.
The company is working within a system shaped by decades of underwriting practices, regulatory expectations, established risk models and consumer behavior. Those institutional habits often matter more than competing applications.
This suggests another characteristic of systems companies: they invest enough time to understand existing behavior before coding. The objective is rarely disruption for its own sake. It is reorganizing incentives so that adoption becomes rational for each participant.
4. Capital Formation Is Part of the System Design
Working in foundational markets also changes how founders think about financing. Different forms of capital solve different system constraints.
In Giving Credit's case, catalytic and philanthropic capital helped with academic studies and the initial work that went into reducing adoption risk and building trust with community finance organizations. Once that groundwork was laid, the company converted from a nonprofit to a C-corporation; venture capital then financed technology, talent and expansion as those early relationships demonstrated their value.
Capital formation can become a strategic tool when companies think in systems. It creates system options where the sequencing, the form, and the amount of capital become opportunities to unlock value that many conventionally financed companies cannot reach.
5. Trust Through Stewardship
One of the more striking observations has been the team’s willingness to resist the instinct to centralize ownership of data, and to instead invite ecosystem participants into the governance of the network.
Giving Credit has positioned itself as a steward of the ecosystem rather than its owner. It stewards clear rules for data access and engages constantly with customers and partners to shape how key elements of the product work. Participation increases buy-in, trust and a sense of ownership among participants.
Equally important, the company creates mechanisms for voice. Rather than forcing dissatisfied users to exit the system, it enables them to challenge and make suggestions to improve it. Each correction strengthens trust, improves the product and compounds the quality of the network.
6. System Health is A Predictor for Success
Traditional startups naturally measure company performance: customers acquired, revenue generated or loans originated.
Systems companies invite an additional, deeper question: is the ecosystem becoming healthier?
For Giving Credit, that might include whether more lenders are participating, whether repayment data becomes more representative, whether borrowers build lasting financial resilience, and whether actual default rates and NPLs are falling. Ecosystem-level measures that can be traced to the company’s own initiatives are, in our experience, among the earliest signals of market size and strength that the company may ultimately serve.
In Summary
Working with the Giving Credit team is a constant reminder that systems thinking is often the source of the unconventional choices that make a company genuinely differentiated. Most of the startups we meet in the credit space are optimizing existing products — e.g., boosting credit scores through subscription repayment records or prepaid credit card partnerships. By taking a systems approach, Giving Credit has instead built high-quality relationships with Princeton University, Unorthodox Philanthropy and Union Capital, among others. These relationships position Giving Credit to become a trusted platform for the roughly 60 million non-W-2 workers who are creditworthy and yet invisible to existing infrastructure.
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If you would like to explore collaborating on this topic and partnering with Fairbridge in our work for accelerating social progress, I'd love to hear from you. And if you are a founder, you can apply for funding.
And, finally, a big thanks to [ ], our sponsoring partner this week!