Advertisements


Column: Here"s why the arguments against canceling student debt make no sense

Canceling student debt isn't unfair to those who have already paid off their loans. And it isn't a giveaway to the rich, either.Canceling student debt isn't unfair to those who have already paid off their loans. And it isn't a giveaway to the rich, either......»»

Category: topSource: latimesMay 18th, 2022

Hedges: No Way Out But War

Hedges: No Way Out But War Authored by Chris Hedges via ScheerPost.com, (emphasis ours) Permanent war has cannibalized the country. It has created a social, political, and economic morass. Each new military debacle is another nail in the coffin of Pax Americana... Original Illustration by Mr. Fish — “No Guts No Glory” The United States, as the near unanimous vote to provide nearly $40 billion in aid to Ukraine illustrates, is trapped in the death spiral of unchecked militarism. No high speed trains. No universal health care. No viable Covid relief program. No respite from 8.3 percent inflation. No infrastructure programs to repair decaying roads and bridges, which require $41.8 billion to fix the 43,586 structurally deficient bridges, on average 68 years old. No forgiveness of $1.7 trillion in student debt. No addressing income inequality. No program to feed the 17 million children who go to bed each night hungry. No rational gun control or curbing of the epidemic of nihilistic violence and mass shootings. No help for the 100,000 Americans who die each year of drug overdoses. No minimum wage of $15 an hour to counter 44 years of wage stagnation. No respite from gas prices that are projected to hit $6 a gallon. The permanent war economy, implanted since the end of World War II, has destroyed the private economy, bankrupted the nation, and squandered trillions of dollars of taxpayer money. The monopolization of capital by the military has driven the US debt to $30 trillion, $ 6 trillion more than the US GDP of $ 24 trillion. Servicing this debt costs $300 billion a year. We spent more on the military, $ 813 billion for fiscal year 2023, than the next nine countries, including China and Russia, combined. We are paying a heavy social, political, and economic cost for our militarism. Washington watches passively as the U.S. rots, morally, politically, economically, and physically, while China, Russia, Saudi Arabia, India, and other countries extract themselves from the tyranny of the U.S. dollar and the international Society for Worldwide Interbank Financial Telecommunication (SWIFT), a messaging network banks and other financial institutions use to send and receive information, such as money transfer instructions. Once the U.S. dollar is no longer the world’s reserve currency, once there is an alternative to SWIFT, it will precipitate an internal economic collapse. It will force the immediate contraction of the U.S. empire shuttering most of its nearly 800 overseas military installations. It will signal the death of Pax Americana. Democrat or Republican. It does not matter. War is the raison d’état of the state. Extravagant military expenditures are justified in the name of “national security.” The nearly $40 billion allocated for Ukraine, most of it going into the hands of weapons manufacturers such as Raytheon Technologies, General Dynamics, Northrop Grumman, BAE Systems, Lockheed Martin, and Boeing, is only the beginning. Military strategists, who say the war will be long and protracted, are talking about infusions of $4 or $5 billion in military aid a month to Ukraine. We face existential threats. But these do not count. The proposed budget for the Centers for Disease Control and Prevention (CDC) in fiscal year 2023 is $10.675 billion. The proposed budget for the Environmental Protection Agency (EPA) is $11.881 billion. Ukraine alone gets more than double that amount. Pandemics and the climate emergency are afterthoughts. War is all that matters. This is a recipe for collective suicide. There were three restraints to the avarice and bloodlust of the permanent war economy that no longer exist. The first was the old liberal wing of the Democratic Party, led by politicians such as Senator George McGovern, Senator Eugene McCarthy, and Senator J. William Fulbright, who wrote The Pentagon Propaganda Machine. The self-identified progressives, a pitiful minority, in Congress today, from Barbara Lee, who was the single vote in the House and the Senate opposing a broad, open-ended authorization allowing the president to wage war in Afghanistan or anywhere else, to Ilhan Omar now dutifully line up to fund the latest proxy war. The second restraint was an independent media and academia, including journalists such as I.F Stone and Neil Sheehan along with scholars such as Seymour Melman, author of The Permanent War Economy and Pentagon Capitalism: The Political Economy of War.  Third, and perhaps most important, was an organized anti-war movement, led by religious leaders such as Dorothy Day, Martin Luther King Jr. and Phil and Dan Berrigan as well as groups such as Students for a Democratic Society (SDS). They understood that unchecked militarism was a fatal disease. None of these opposition forces, which did not reverse the permanent war economy but curbed its excesses, now exist. The two ruling parties have been bought by corporations, especially military contractors. The press is anemic and obsequious to the war industry. Propagandists for permanent war, largely from right-wing think tanks lavishly funded by the war industry, along with former military and intelligence officials, are exclusively quoted or interviewed as military experts. NBC’s “Meet the Press” aired a segment May 13 where officials from Center for a New American Security (CNAS) simulated what a war with China over Taiwan might look like. The co-founder of CNAS, Michèle Flournoy, who appeared in the “Meet the Press” war games segment and was considered by Biden to run the Pentagon, wrote in 2020 in Foreign Affairs that the U.S. needs to develop “the capability to credibly threaten to sink all of China’s military vessels, submarines and merchant ships in the South China Sea within 72 hours.”  The handful of anti-militarists and critics of empire from the left, such as Noam Chomsky, and the right, such as Ron Paul, have been declared persona non grata by a compliant media. The liberal class has retreated into boutique activism where issues of class, capitalism and militarism are jettisoned for “cancel culture,” multiculturalism and identity politics. Liberals are cheerleading the war in Ukraine. At least the inception of the war with Iraq saw them join significant street protests. Ukraine is embraced as the latest crusade for freedom and democracy against the new Hitler. There is little hope, I fear, of rolling back or restraining the disasters being orchestrated on a national and global level.  The neoconservatives and liberal interventionists chant in unison for war. Biden has appointed these war mongers, whose attitude to nuclear war is terrifyingly cavalier, to run the Pentagon, the National Security Council, and the State Department. Since all we do is war, all proposed solutions are military. This military adventurism accelerates the decline, as the defeat in Vietnam and the squandering of $8 trillion in the futile wars in the Middle East illustrate. War and sanctions, it is believed, will cripple Russia, rich in gas and natural resources. War, or the threat of war, will curb the growing economic and military clout of China. These are demented and dangerous fantasies, perpetrated by a ruling class that has severed itself from reality. No longer able to salvage their own society and economy, they seek to destroy those of their global competitors, especially Russia and China. Once the militarists cripple Russia, the plan goes, they will focus military aggression on the Indo-Pacific, dominating what Hillary Clinton as secretary of state, referring to the Pacific, called “the American Sea.”  You cannot talk about war without talking about markets. The U.S., whose growth rate has fallen to below 2 percent, while China’s growth rate is 8.1 percent, has turned to military aggression to bolster its sagging economy. If the U.S. can sever Russian gas supplies to Europe, it will force Europeans to buy from the United States. U.S. firms, at the same time, would be happy to replace the Chinese Communist Party, even if they must do it through the threat of war, to open unfettered access to Chinese markets. War, if it did break out with China, would devastate the Chinese, American, and global economies, destroying free trade between countries as in World War I. But that doesn’t mean it won’t happen. Washington is desperately trying to build military and economic alliances to ward off a rising China, whose economy is expected by 2028 to overtake that of the United States, according to the UK’s Centre for Economics and Business Research (CEBR). The White House has said Biden’s current visit to Asia is about sending a “powerful message” to Beijing and others about what the world could look like if democracies “stand together to shape the rules of the road.” The Biden administration has invited South Korea and Japan to attend the NATO summit in Madrid. But fewer and fewer nations, even among European allies, are willing to be dominated by the United States. Washington’s veneer of democracy and supposed respect for human rights and civil liberties is so badly tarnished as to be irrecoverable. Its economic decline, with China’s manufacturing 70 percent higher than that of the U.S., is irreversible. War is a desperate Hail Mary, one employed by dying empires throughout history with catastrophic consequences. “It was the rise of Athens and the fear that this instilled in Sparta that made war inevitable,” Thucydides noted in the History of the Peloponnesian War.  A key component to the sustenance of the permanent war state was the creation of the All-Volunteer Force. Without conscripts, the burden of fighting wars falls to the poor, the working class, and military families. This All-Volunteer Force allows the children of the middle class, who led the Vietnam anti-war movement, to avoid service. It protects the military from internal revolts, carried out by troops during the Vietnam War, which jeopardized the cohesion of the armed forces. The All-Volunteer Force, by limiting the pool of available troops, also makes the global ambitions of the militarists impossible. Desperate to maintain or increase troop levels in Iraq and Afghanistan, the military instituted the stop-loss policy that arbitrarily extended active-duty contracts. Its slang term was the backdoor draft. The effort to bolster the number of troops by hiring private military contractors, as well, had a negligible effect. Increased troop levels would not have won the wars in Iraq and Afghanistan but the tiny percentage of those willing to serve in the military (only 7 percent of the U.S. population are veterans) is an unacknowledged Achilles heel for the militarists. “As a consequence, the problem of too much war and too few soldiers eludes serious scrutiny,” writes historian and retired Army Colonel Andrew Bacevich in After the Apocalypse: America’s Role in a World Transformed. “Expectations of technology bridging that gap provide an excuse to avoid asking the most fundamental questions: Does the United States possess the military wherewithal to oblige adversaries to endorse its claim of being history’s indispensable nation? And if the answer is no, as the post-9/11 wars in Afghanistan and Iraq suggest, wouldn’t it make sense for Washington to temper its ambitions accordingly?” This question, as Bacevich points out, is “anathema.” The military strategists work from the supposition that the coming wars won’t look anything like past wars. They invest in imaginary theories of future wars that ignore the lessons of the past, ensuring more fiascos.  The political class is as self-deluded as the generals. It refuses to accept the emergence of a multi-polar world and the palpable decline of American power. It speaks in the outdated language of American exceptionalism and triumphalism, believing it has the right to impose its will as the leader of the “free world.” In his 1992 Defense Planning Guidance memorandum, U.S. Under Secretary of Defense Paul Wolfowitz argued that the U.S. must ensure no rival superpower again arises. The U.S. should project its military strength to dominate a unipolar world in perpetuity. On February 19, 1998, on NBC’s “Today Show”, Secretary of State Madeleine Albright gave the Democratic version of this doctrine of unipolarity. “If we have to use force it is because we are Americans; we are the indispensable nation,” she said. “We stand tall, and we see further than other countries into the future.” This demented vision of unrivaled U.S. global supremacy, not to mention unrivaled goodness and virtue, blinds the establishment Republicans and Democrats. The military strikes they casually used to assert the doctrine of unipolarity, especially in the Middle East, swiftly spawned jihadist terror and prolonged warfare. None of them saw it coming until the hijacked jets slammed into the World Trade Center twin towers. That they cling to this absurd hallucination is the triumph of hope over experience. There is a deep loathing among the public for these elitist Ivy League architects of American imperialism. Imperialism was tolerated when it was able to project power abroad and produce rising living standards at home. It was tolerated when it restrained itself to covert interventions in countries such as Iran, Guatemala, and Indonesia. It went off the rails in Vietnam. The military defeats that followed accompanied a steady decline in living standards, wage stagnation, a crumbling infrastructure and eventually a series of economic policies and trade deals, orchestrated by the same ruling class, which deindustrialized and impoverished the country. The establishment oligarchs, now united in the Democratic Party, distrust Donald Trump. He commits the heresy of questioning the sanctity of the American empire. Trump derided the invasion of Iraq as a “big, fat mistake.” He promised “to keep us out of endless war.” Trump was repeatedly questioned about his relationship with Vladimir Putin. Putin was “a killer,” one interviewer told him. “There are a lot of killers,” Trump retorted. “You think our country’s so innocent?” Trump dared to speak a truth that was to be forever unspoken, the militarists had sold out the American people. Noam Chomsky took some heat for pointing out, correctly, that Trump is the “one statesman” who has laid out a “sensible” proposition to resolve the Russia-Ukraine crisis. The proposed solution included “facilitating negotiations instead of undermining them and moving toward establishing some kind of accommodation in Europe…in which there are no military alliances but just mutual accommodation.” Trump is too unfocused and mercurial to offer serious policy solutions. He did set a timetable to withdraw from Afghanistan, but he also ratcheted up the economic war against Venezuela and reinstituted crushing sanctions against Cuba and Iran, which the Obama administration had ended. He increased the military budget. He apparently flirted with carrying out a missile strike on Mexico to “destroy the drug labs.” But he acknowledges a distaste for imperial mismanagement that resonates with the public, one that has every right to loath the smug mandarins that plunge us into one war after another. Trump lies like he breathes. But so do they. The 57 Republicans who refused to support the $40 billion aid package to Ukraine, along with many of the 19 bills that included an earlier $13.6 billion in aid for Ukraine, come out of the kooky conspiratorial world of Trump. They, like Trump, repeat this heresy. They too are attacked and censored. But the longer Biden and the ruling class continue to pour resources into war at our expense, the more these proto fascists, already set to wipe out Democratic gains in the House and the Senate this fall, will be ascendant. Marjorie Taylor Greene, during the debate on the aid package to Ukraine, which most members were not given time to closely examine, said: “$40 billion dollars but there’s no baby formula for American mothers and babies.” “An unknown amount of money to the CIA and Ukraine supplemental bill but there’s no formula for American babies,” she added. “Stop funding regime change and money laundering scams. A US politician covers up their crimes in countries like Ukraine.” Democrat Jamie Raskin immediately attacked Greene for parroting the propaganda of Russian president Vladimir Putin. Greene, like Trump, spoke a truth that resonates with a beleaguered public. The opposition to permanent war should have come from the tiny progressive wing of the Democratic Party, which unfortunately sold out to the craven Democratic Party leadership to save their political careers. Greene is demented, but Raskin and the Democrats peddle their own brand of lunacy. We are going to pay a very steep price for this burlesque. *  *  * The walls are closing in, with startling rapidity, on independent journalism, with the elites, including the Democratic Party elites, clamoring for more and more censorship. Please, if you can, sign up at chrishedges.substack.com so I can continue to post my now weekly Monday column on ScheerPost and produce my weekly television show, The Chris Hedges Report. Tyler Durden Wed, 05/25/2022 - 19:00.....»»

Category: personnelSource: nytMay 25th, 2022

Biden is teasing a coming decision on student-loan forgiveness. Here"s everything we know about how it could look.

The President's campaign pledge to forgive $10,000 per borrower is still on the table. Meanwhile Republicans are working to stop any forgiveness. President Joe BidenAP Photo/Carolyn Kaster Pressure has been mounting for Biden to cancel student debt, as he pledged during his campaign.  Last month, he said his decision on relief would come in a matter of weeks.  While Republican opposition mounts, a few developments hint at the kind of relief borrowers might see. Despite President Joe Biden's campaign pledge to cancel $10,000 in debt per borrower, he's been largely silent on the issue through his presidency.But there may be a light at the end of tunnel for more than 40 million Americans with federal student loans.In late April, Biden said he'd "have an answer" on relief in the coming weeks. That was a year after Biden asked the Department of Education to prepare a memo outlining his legal power to cancel student debt. Insider found that the Education Department created and circulated the memo, but Biden has not revealed its contents. Instead of relief for all borrowers,  so far, Biden has focused on targeted groups like borrowers with disabilities and those defrauded by for-profit schools, who have seen more than $9 billion in collective debt relief. He also extended the pandemic pause on student loan payments four times since taking office, following two from former President Donald Trump. Democrats are pressuring him to relieve borrowers in fear of low midterm turnout, with some progressives urging him to cancel at least $50,000 for those in debt. Meanwhile, Republicans senators have introduced bills intended to prohibit cancellation.Biden's approval rating among the young people who helped get him elected is tanking. With the payment pause set to expire after August 31, Americans are on pins and needles to find out what Biden will do. Here's everything we know so far.In April, Biden said he would announce a decision or extend the payment pause by September, when the current payment pause is up.President Joe Biden speaks to reporters in the Oval Office of the White House on May 9, 2022.Drew Angerer/Getty ImagesIn April, Biden gave himself until the end of August to announce a decision regarding student debt cancellation, or to extend the payment pause he'd already continued four times. "Between now and August 31, it's either going to be extended again or we're going to make a decision, as Ron referenced, about canceling student debt," White House Press Secretary Jen Psaki told Pod Save America referring to Ron Klain, Biden's chief of staff, who also told the podcast in March that leading up to the prior May 1 payment restart date, the president would either extend the pause again — which he did — or decide how he could act on student debt using executive action. Later that month, Biden shortened his own timeline, saying he'll 'have an answer' on student-loan forgiveness in the coming weeks.President Joe Biden laughs during the White House Correspondents' Association dinner in Washington, DC, on April 30, 2022.NICHOLAS KAMM/AFP via Getty ImagesSince Psaki revealed the end-of-August deadline, Biden truncated the timeline for the announcement to be a few weeks from April. "I'm in the process of taking a hard look at whether there will be additional debt forgiveness," Biden said at the end of the month. "And I'll have an answer for that in the next couple of weeks." Republicans introduce their first bill to bar Biden from cancelling debt broadly.Sen. John Thune alongside Senate Minority Leader Mitch McConnell at a news conference.Alex Wong/Getty ImagesFollowing Biden's hints that an announcement on forgiveness could be coming soon, GOP Sens. John Thune, Richard Burr, Mike Braun, Bill Cassidy, and Roger Marshall introduced the Stop Reckless Student Loans Action Act, which would end the payment pause and bar Biden from canceling student debt broadly."As Americans continue to return to the workforce more than two years since the pandemic began, it is time for borrowers to resume repayment of student debt obligations," Thune said in a statement. "Taxpayers and working families should not be responsible for continuing to bear the costs associated with this suspension of repayment. This common-sense legislation would protect taxpayers and prevent President Biden from suspending federal student loan repayments in perpetuity." Shattering progressives' hopes, Biden confirmed in April that he won't be forgiving $50,000 in debt per borrower.President Biden at State of the Union.Saul Loeb - Pool/Getty ImagesDemocratic senators such as Chuck Schumer and Elizabeth Warren have made it clear that for many progressives, $50,000 in forgiveness per borrower is the number to strive for. "Canceling $50,000 of student-loan debt would give 36 million Americans permanent total relief," Warren said during a town hall in January. "That would be the end of their debt burden. And it would aid millions more by significantly reducing the principal on their debt."But at the end of April, Biden shattered progressives' hopes, saying that although he is considering debt forgiveness as promised, it will not be for as high as $50,000 per borrower. "I am considering dealing with some debt reduction, I am not considering $50,000 debt reduction," he told a reporter last month. It marked one of his most decisive comments to date on what he is considering when it comes to canceling student debt broadly.  Biden considers excluding high earners from debt relief, possibly excluding people who make more than $125,000 or couples making $250,000.Biden considered income caps on student debt relief while on the campaign trail, but that may not be what the final policy looks like.Susan Walsh/AP PhotoTop Biden aides are looking at limiting student debt relief to people earning less than $125,000 to $150,000, or $250,000 to $300,000 for couples that file joint taxes, people familiar with the matter told The Washington Post. But they said that Biden hadn't made a final decision. "There's different proposals floating around the administration about how to structure this," one person told the Washington Post.But as Psaki later noted, while income caps are in line with what Biden considered on the campaign trail, that may not be what the final policy looks like. Income caps could also pose problems for many Americans, as doing so means setting up a layer of income verification before the government grants debt relief. And it would mean that borrowers would miss out on relief if they don't know to sign up or apply for it, Politico reported. Three Democratic senators make a last ditch effort to urge Biden to go big on relief.Senate Majority Leader Charles Schumer, D-N.Y., and Sen. Elizabeth Warren, D-Mass., are seen after the Senate Democrats luncheon in the U.S. Capitol on Tuesday, October 19, 2021.Tom Williams/CQ-Roll Call, Inc via Getty ImagesThree Democratic senators — Elizabeth Warren, Chuck Schumer, and Raphael Warnock — want Biden's student-loan relief to be expansive, and are requesting him to hold off on implementing any loan forgiveness through executive action until they can arrange a meeting with him, sources told Politico last week. Following Biden's comments that he is not considering $50,000 in debt cancellation for federal borrowers, something that Warren, Warnock, and Schumer have pushed for repeatedly, the progressive senators reportedly moved to intervene. "President Biden told the senator months ago he wanted to meet about this issue, and the senator wants to make sure the president hears why Georgians want strong debt relief before the White House takes any action," a Warnock spokesperson told Politico.A former Obama lawyer says Biden 'likely does not' have the legal standing to cancel student debt broadly.Then-Democratic presidential candidate Barack Obama listens as his vice presidential running mate, then-Sen. Joe Biden, speaks at a rally in front of the Old State Capitol in Springfield, Ill., on August 23, 2008.AP Photo/Alex BrandonThe contents of the Education Department's memo outlining whether or not the president has the authority to unilaterally cancel student debt remain private to Biden's team, leaving others to speculate over the last year. This month, a Wall Street Journal exclusive found that Charlie Rose, a top lawyer in former President Barack Obama's Education Department, is not confident that it's legal. According to a legal analysis the Journal obtained, Rose said that canceling student debt for every borrower without tailoring the relief toward each borrower's individual needs could be overruled in court and leave the administration at risk of being sued by student-loan companies."If the issue is litigated, the more persuasive analyses tend to support the conclusion that the Executive Branch likely does not have the unilateral authority to engage in mass student debt cancellation," Rose wrote. Republicans are starting to worry Biden might actually forgive some student debt.Rep. Virginia FoxxBill Clark/CQ-Roll Call, Inc via Getty ImageRepublicans aren't happy about Biden's potential student loan action. Virginia Foxx, a North Carolina representative, was among congressional Republicans who have voiced their disapproval of student debt cancellation recently."The Biden administration is trying once again to save its tanking poll numbers by writing a blank check to student loan borrowers using Americans' pocketbooks," she said in an op-ed for Fox News. A group of Republicans led by Mitt Romney introduced a bill that would stop Biden from cancelling debt broadly.Republican Sen. Mitt Romney of Utah outside the Senate chamber on December 7, 2021.Bill Clark/CQ-Roll Call, Inc via Getty ImagesSenator Mitt Romney and several of his Republican colleagues introduced a bill that would bar the Biden administration from broadly canceling student-loan debt this week, prohibiting him from even partially forgiving borrowers' outstanding balances. The bill would include exemptions for student-loan forgiveness, cancelation, and repayment programs that are already in effect, such as the Public Service Loan Forgiveness and Teacher Loan Forgiveness programs.The bill is unlikely to become law anytime soon with a 50-50 Senate, a Democratic-controlled House, and Biden in the Oval Office, but the message is clear. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 20th, 2022

I took out $20,000 in student loans and now owe $50,000. I don"t mind paying back, but the system is broken.

"We do everything society tells us," nonprofit head Kristin McGuire said. "But we enter the workforce, hit a glass ceiling, and are burdened by debt." Kristin McGuire.Courtesy of Kristin McGuire Kristin McGuire, 40, is the executive director of a nonprofit organization called the Young Invincibles. McGuire took out $20,000 in student loans 22 years ago. She now owes $50,000. This is her story, as told to writer Fortesa Latifi. This as-told-to essay is based on a transcribed conversation with Kristin McGuire, 40, the executive director of a nonprofit organization called the Young Invincibles. It has been edited for length and clarity.When I was 18 years old, I took out a loan for $20,000 to help pay for my college education. It's been 22 years, and I now owe $50,000.I went to California State Dominguez Hills and got a degree in public administration. When student loan payments were paused because of the pandemic in March 2020, I was so relieved. Instead of putting $400 toward my student loans every month, I was able to allot that money elsewhere, like toward my mortgage. Without worrying about student loans for the last two years, I've paid down more of my mortgage and other bills, which resulted in my credit score increasing. I even refinanced my house with a lower interest rate. When I started college, I was a low-income, first-generation studentMy family made a plan: My mom, my brothers, and I agreed that we would each only take $20,000 worth of loans for our college educations, because we figured we would be able to pay that amount back. We stayed within our familial guidelines and borrowed $20,000, but more than 20 years later, I'm still repaying my loans after graduating. My mom went back to school as well, entering college at the same time as my brothers and I. We made it a priority to repay her student loans as a family, so hers are paid in full. One of my brothers and I are still in repayment. As a Black woman saddled by student loans decades after graduation, I'm not an outlier: the student debt crisis impacts Black women more than any other group nationally. That's why I want people to know my story — because it isn't unique. I don't mind paying back, but the system is broken when I owe more than double what I originally borrowedEveryone I went to college with has student loan debt. Right now, after two years of loan repayments being paused because of the pandemic, it's unclear when the bill will come due again. That uncertainty isn't viable for people like me, who are trying to figure out how to balance their budgets. I feel a great responsibility and duty to amplify the student debt crisis, especially with how it affects Black women. Not only are we impacted the most by the debt crisis, but we're also paid far less than other demographics.We're doing everything society tells us to do. We're trying to attain the American dream by doing well in high school, going to college, and earning a degree. But then we enter the workforce, hit the glass ceiling quickly, and are burdened by insurmountable student debt.In my group of friends, people are worried about whether or not they'll be able to pay their bills when student loan repayments restart. There's this sense of a financial cliff, where repayment can be the thing to push people off. The student loan crisis contributes to the mental health crisisAmerica loves to talk about mental health like it's something we care about, but there's not really an understanding that of how student loans impact us. When we're overburdened by student loans, we can't attend to our mental health.In my work with the Young Invincibles, a nonprofit organization focused on amplifying the voice of young people in the political process, I try to make sure people understand the generational impact that student debt has on a lot of families. A lot of millennial borrowers are still paying back their loans, but they now have children of their own going to college. If we can't address the issue of student loan debt with one generation, it's going to roll onto the nextI'm trying to make sure my daughter doesn't have student debt, because me and my husband already do. What happens when people who still have student debt have kids, and it's their turn to go to college? Although President Biden ran on a campaign promise of canceling $10,000 worth of loans for each borrower, that promise has yet to be fulfilled. I am still hopeful there will be cancellation.If not, people like me will just go back to the old norm — owing far more than we borrowed.Read the original article on Business Insider.....»»

Category: personnelSource: nytMay 16th, 2022

At least $10,000 in student debt relief should be the "floor" for Biden, top House progressive says

The White House says Biden will "make a decision" on debt relief before September. Khanna is urging Biden to stick to a campaign pledge. Rep. Ro Khanna of California.AP Photo/Jose Luis Magana Rep. Ro Khanna says $10,000 in student debt relief should be "the floor" for the Biden administration. "We have to deliver at least $10,000," he said in an interview with Insider. The White House says Biden will "make a decision" on debt relief sometime before September. Rep. Ro Khanna of California is urging President Joe Biden to stick to a campaign pledge ahead of the November midterms: Forgiving student debt.The influential House progressive argued $10,000 should be "the floor" for the president to wipe out using executive action."We have to deliver at least $10,000," Khanna said in an interview with Insider. "I'm for up to $50,000 for working families and students who are working class but at least deliver the $10,000."With much of the Democratic legislative agenda stalled, the Congressional Progressive Caucus released an array of executive orders that Biden could take on his own last month. They included unilateral action on student debt relief without specifying a figure.The California Democrat also pushed back against arguments from economists that debt relief would provide outsized benefits to professionals or higher-income Americans. "A lot of the people who are getting student debt relief are first generation —  first in their families to go to college or from working or middle class backgrounds," he said. "If you're a upper middle-class professional, as someone who's wealthy, you wouldn't have to take out the student loans."Khanna's push comes just after President Joe Biden extended the pause on student-loan payments, and waived interest, for his fourth time in office. With the pause set to expire on August 31, many of Khanna's Democratic colleagues have argued that instead of resuming payments right before the midterms, delivering broad student-loan relief would be a great way to win some votes at the polls.For example, a Data for Progress poll first obtained by Insider found that nearly half of likely voters in key battleground states would be more likely to head to the polls should Biden fulfill his $10,000 student-debt cancellation campaign pledge. And while many Democrats are hoping Biden will go beyond $10,000 in relief, it appears many of them just hope he will make some dent in the $1.7 trillion crisis. Nearly 100 Democratic lawmakers recently called on Biden to cancel a "meaningful amount" of student debt, with Congressional Progressive Caucus Chair Pramila Jayapal telling reporters that while she supports $50,000 in forgiveness, the goal right now is for Biden to "make progress" on the issue.But, as Insider previously reported, Republican lawmakers remain largely opposed to these moves. Many of them have cited the cost to taxpayers that would accompany broad student loan relief, with top Republican on the House education committee Virginia Foxx recently saying she worried the additional payment pause extension would make way for broad forgiveness.Biden himself has been largely silent on broad relief. But White House Press Secretary Jen Psaki said last week that the president will either extend the student-loan payment pause again, or "make a decision" on canceling student debt before September.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderApr 19th, 2022

The Benefits of Making a Failure Résumé

Daniel Pink is the author of several bestselling books that probe human behaviors, including the importance of timing, the mechanism behind motivation, and the sociology of selling things. His new book, The Power of Regret: How Looking Back Is Moving Us Forward, is about the wrongheadedness of the No Regrets credo. This interview has been… Daniel Pink is the author of several bestselling books that probe human behaviors, including the importance of timing, the mechanism behind motivation, and the sociology of selling things. His new book, The Power of Regret: How Looking Back Is Moving Us Forward, is about the wrongheadedness of the No Regrets credo. This interview has been condensed and lightly edited. Why write a book on regret? The external reason is that we’ve gotten it profoundly wrong. If we do not understand this emotion, then we are leaving its capability on the table by having this bizarrely aversive relationship with it. For me personally, largely because I have regrets of my own. I can’t imagine having written this book in my 30s. But in my 50s, it felt kind of inevitable because I had mileage behind me and mileage ahead of me, and when I talked to people about it, I got the exact opposite response to what I expected. [time-brightcove not-tgx=”true”] You conducted the World Regret Survey in which you asked people about their biggest regrets during 2020, in the teeth of the pandemic. Do you think that time made people more reflective about how they could have lived our lives differently? Or do you think it obscured their ability to see their former lives with objectivity? I do think that that people were willing to reflect at that moment, if for no other reason than they had extra time. And a sense of mortality was in the air. It made people more willing to look backward and ask some of those fundamental questions. You about four core categories of regret— foundation regrets, boldness regrets, moral regrets, and connection regrets. Can you explain the difference between them? Foundation regrets are about stability: finances, health, about studying in school and university. Boldness regrets are about “if only I’d taken the chance,” a very large category of regrets. Moral regrets are complicated; we have a lot of regrets, in this database of 16,000, about bullying. We have a lot of regrets about marital infidelity. I think to most people around the world and of different political perspectives, those are bad things. I think it gets super interesting in the very small category of things. For instance, I showed a left-leaning American a regret a lot of people had about not serving in the military and he said ‘That’s not a regret.’ But if you believe in a sense of duty, that’s a different moral code. It’s not wrong, it’s not better or worse. And then connection regrets are about losing touch with somebody in your life or when there’s been a schism ? It’s not so much schisms as much as drifts. It’s a relationship that should have been intact, or that was intact, and it comes apart. And I think one reason we missed the significance of this is that these relationships often come apart in profoundly undramatic ways. It’s not this people throwing plates at each other, it’s a slow kind of drift. And then one person doesn’t want to reach out because they think it’s going to feel awkward and they think the other side’s not going to care. And they’re wrong. Which is the largest category? Connection regrets. Moral is the smallest, but there’s something about those that really stick with people. There’s somebody in my book who stole candy from a grocery store when she was 10. And at age 70, she’s still bugged about that. Is there a difference between using regret as a tool and learning from our mistakes? They’re certainly related. The problem is that is that some people make mistakes and don’t feel bad about them. Mistake is an action; regret is a feeling. The thing about regret is that it hurts. And it hurts for a reason; it’s conveying a particularly strong signal. The fact that I feel a spear of negative feeling called regret makes it much more likely that I’m going to be awake to the possibility of learning from that mistake, if I treat it right. Some of the regrets people had seemed to be predicated on a genetic lottery. If you were lucky enough to be born into a wealthy family, isn’t it likely you’d have fewer foundational regrets? I do think that in some cases, boldness presupposes some degree of stability. It’s harder to be bold if your life is completely precarious. Regret requires some degree of agency— it’s your fault. And for certain kinds of foundation regrets, you don’t always have agency. A good example of this is saving money. If you regret that you didn’t build that stable financial foundation, and you’re an American, and you’re the first one in your family to go to college, and you racked up $200,000 of student debt, that’s not all on you. Can feelings of regret make you a better leader? If you deal with it right. Ignoring regret is a really bad idea for leaders, because they’re not going to learn. But wallowing in it is, in some ways, an even worse idea because it hobbles them. What I would like for leaders is not to sort of proclaim No Regrets as this sign of courage, but actually to show courage by staring their own regrets in the eye and doing something about them, and having honest, authentic conversations with their team about regrets. If we deal with regrets sensibly, they are powerful forces for improving us and for leaders especially, there’s evidence showing that confronting your regrets can make you a better negotiator, it can make you a better strategist and make you a better problem solver. There’s even evidence—and I think a lot of leaders don’t get this because it’s counterintuitive—that disclosing those regrets and mistakes, actually strengthens your standing and builds affinity rather than the reverse. Don’t leaders have to have a slightly ‘no regrets’ philosophy in order to make the bold moves that risk a lot of money and people’s livelihoods, to have, as they say, a bias towards action? I don’t think that having a bias toward action is actually being ‘no regrets’. I think that leaders can look at the four core regrets that I’ve identified and have a pretty good sense that when they look back on their leadership, those are going to be the things that they regret. Did they create a stable environment for people? Did they do the right thing? Did they build connections and affinity? And did they take the smart risks? Management books talk about a bias for action but in the day to day choices of many managers, there’s a bias toward inertia, there’s a bias toward not getting in trouble. Can we regret the wrong thing? Like perhaps, just to pick an example out of the air, an executive is forced to resign because he did not reveal a relationship with an employee. He now regrets not revealing that relationship earlier, but perhaps what he should have regretted was engaging in the relationship at all? How can we tell what the right regret is? I don’t think there is a foolproof way of doing that. What you’re talking about is, in some ways, a moral regret. And I think it depends on that individual’s moral code, whether the breach was the relationship itself or not disclosing it. That depends on a lot of different things —whether the parties were married, what the company policies were, and so forth. I do think that it’s possible for people to feel regret for the wrong thing. It might be a half step to the ‘no regrets’ thing. So they’re not actually really confronting it. In that particular case, if you say, ‘Oh, I regret that I didn’t reveal it,’ maybe you are eliding the fact that what you should be regretting is the is the relationship itself. Is there a difference between ruefulness and regret? A business leader might say, ‘I wish I’d invested in infrastructure.’ But if they’d done that, they couldn’t have hired people. How do you make the distinction? One of my favorite techniques in the book is the idea of a failure resume. This is an idea from Tina Seelig at Stanford, where what you do is you list your mistakes, your setbacks, your screw ups, in the way that you would on a resume, but then in the next column, you list what you learned from it. When I’ve done that, it’s painful, it’s unpleasant. But there are a couple of times when the lesson was, stuff happens. I didn’t have the right information at the time. That sense-making process is a way to defang some of those regrets. What can a boss do if they have a conversation with an employee that he or she regrets? It depends on what the conversation is. This is the difference between a regret of action or inaction. Obviously action regrets are easier to address, because you can just undo them. You can’t erase them fully, but you can apologize, you can make amends, you can make restitution, you can explain. And I think that’s perfectly fine. If it’s an inaction regret, if you didn’t speak up on behalf of somebody, if you didn’t have somebody’s back at a meeting, you can’t undo that. But what you should do is look hard at yourself, disclose the regret, make sense of it, and extract a lesson from it, and that’s the most important thing. Your steps of remedy seem very similar to the way people who have faith deal with what they call sins. You confess, you repent, you make amends, and you live differently. Would not your process be a very familiar one to, say, Catholics? Our brains are programmed for positive emotions and negative emotions, because negative emotions are functional. And our most common negative emotion is regret, because it’s also the most instructive and clarifying. So the fact that religious traditions have figured this out and tried to reckon with it is a great sign. And the fact that their steps are similar to the steps science suggests, is also a great sign. What’s not a great sign is the utter capture of kind of broader cultural philosophy that suggests that you shouldn’t have regrets, you should never look backward. And that if you have a negative feeling, it should be banished. What is your personal biggest regret? I guess the one that really sticks with me is regrets about kindness when I was younger. I was never a bully. But I was somebody who grew up to become a writer. So I was an O.K. observer, and I would see stuff. And I would see people being excluded, and I would see people being mistreated. And I didn’t do a damn thing. That really bugs me, even to this day. I learned from that regret. What I don’t want to do is in the future 25 years come back and say, ‘Man, you know what, you were not very kind when you were in your 20s. And you were also kind of an ass when you were in your 50s, too.’.....»»

Category: topSource: timeFeb 7th, 2022

Meet the typical Gen Zer, who is quitting their job, has over $17,000 in student debt, and is influencing nearly everything you buy

Gen Z has entered the spotlight. From fashion to work, they're setting the tone for the 2020s and poised to take over the economy in a decade. Gen Z is ready for the spotlight.TIMOTHY A. CLARY/Getty Images Gen Z, the oldest of whom turn 24 this year, is the new "it" generation. They're setting trends in fashion and in the workplace, influencing consumer and worker behavior. And they're saving more than they're spending and set to dominate the economy in 20 years. Gen Z has stolen the crown from millennials as the media darling of the moment. The generation, the oldest of whom turn 24 this year, is in the spotlight as they begin to wield influence over lifestyle, work, and consumer trends. Look no further than various headlines promising how-to meet Gen Z demands in the workforce or market beauty brands to them.It's a coming-of-age story, and Gen Z is shaking things up as they enter young adulthood. They're the first digitally native generation and they're best reached online, where they're often catapulting new trends. They're innovative, entrepreneurial social activists, ready to create and shape a better world.They were hit by the pandemic during some of their most formative years, which could shape their futures over the long term. The oldest members of the "TikTok generation," who graduated into a recession, run the risk of repeating millennials' economic plight, but they're already showing signs of behaviors that could define them for years, trying to save and invest early and embrace a lifestyle based on thrift.By size and spending power, they're set to take over the economy in a decade, but their spending restraint and skepticism about markets could make that economy very different.While it's hard to capture an entire generation when some members are still teens and others are adults — demographic differences that produce data filled with caveats — here's what life looks like for the typical Gen Zer in 2021.Gen Z emerged in the limelight during the pandemic, taking over as the latest "it" generation.ViewApart / Getty ImagesGen Z is the most ethnically diverse generation in history and set to unseat millennials as the most educated generation, too. But Jason Dorsey, who runs the research firm Center for Generational Kinetics (CGK), says they're not millennials 2.0."They are really a distinctive generation with a different set of parents raised at a different time, that are coming into the world with some different views," he said, adding that the oldest members are entering the life stage in which they're exerting enough influence to take the mantle as the "it" generation.Society feels like it finally understands millennials, he explained, and is switching focus to the next generation, which remains a mystery. That leaves Gen Z "shifting and driving much of the conversation," and he predicted they'll do so for the next 15 years.They're the first generation to grow up in a wholly digital era, making them tech-savvy and mobile-first.Roy Rochlin/Getty ImagesGen Z was born into a world marked by technology, the internet, and social media. The average Gen Zer got their first smartphone just before their 12th birthday. They communicate primarily through social media and texts, and spend as much time on their phones as older generations do watching television.The pandemic heightened their digital behaviors. With ample time to scroll on their phones, they digitally bonded with one another as many moved back home during the pandemic at a similar life stage, Dorsey said.This helped TikTok, Gen Z's favored platform, blow up during the pandemic. By September 2020, the social media app had grown by 75%, and expanded into intergenerational use. It signals the growing influence of Gen Z in leading consumer behavior, much like millennials did with Instagram.Like millennials before them, the typical Gen Zer has had — and will have — their share of economic troubles.Brothers91/Getty ImagesThe pandemic put Gen Z on track to repeat millennials' money problems. As is typical with recessions, the youngest workers were hit hardest. Gen Z students could lose $10 trillion of life cycle earnings due to Covid lockdowns, the World Bank has estimated.A Bank of America Research report called "OK Zoomer" found that the pandemic will impact Gen Z's financial and professional future in a similar way to how the Great Recession did for millennials."Like the financial crisis in 2008 to 2009 for millennials, Covid will challenge and impede Gen Z's career and earning potential," the report reads, adding that a significant portion of Gen Z entered adulthood in the midst of a recession, just as a cohort of millennials did."I'm a little worried about ending up like those who graduated around 2008," Maya Tribitt, a junior at the University of Southern California, previously told Insider. "A lot of the fear people my age have about getting jobs right out of college have come from the horror stories of people 10 years older than us. It's really scary to think that might be our new reality."But the typical Gen Zer is already trying to build wealth, hoping to avoid millennials' record of falling behind.Klaus Vedfelt/Getty ImagesAs of 2017, 70% of Gen Zers were already earning their own spending money, per a CGK survey. That's the same amount as millennials, who are 10 years older on average. A follow-up CGK survey in 2020 found that the pandemic has taught Gen Z how to be frugal. They've begun saving money and investing earlier than previous generations did, and they're seeking good job benefits, Dorsey said.More than half (54%) of Gen Zers are saving more since the pandemic began than prior to it, according to the State of Gen Z report. Thirty-eight percent have opened an online investment account, while 39% have opened an online bank account.Despite investing earlier, though, Gen Z is going to have to work harder to get a return. They're set to earn less than previous generations on stocks and bonds, as Credit Suisse's global investment returns yearbook found Gen Z can expect average annual real returns of just 2% on their investment portfolios — a third less than the 5%-plus real returns that millennials, Gen X, and baby boomers have seen. Their average credit-card debt is $1,963, less than any other generation.Noam Galai/Getty ImagesGen X has the most debt because they're in their prime spending years, followed by boomers, according to an Experian Consumer Debt study. It makes sense. With the oldest members of the generation in their early 20s, and the majority of the cohort still in its teen years, Gen Z has yet to enter their prime earning years or come into full spending power. The oldest are still getting their feet off the ground in the workplace, and most don't have assets like a house and a car as older generations do.That's not to say Gen Z is debt-free. On average, they carry loan debt of $15,574.They have less student-loan debt than other generations — an average of $17,338 — but that's likely to grow as the generation ages into college life.Gen Z has a smaller student-debt burden than other generations.Pat Greenhouse/The Boston Globe/Getty ImagesSo says the Experian study.What was once largely viewed as a millennial problem is now becoming an issue for Gen Z. The generation holds 7.37% of the national $1.57 trillion student loan debt, but college is only getting more expensive. That share is expected to grow as more Gen Zers enroll in college.The future of student debt is highly uncertain, as President Joe Biden campaigned on canceling thousands of debt for each student, but he's been reluctant to actually do it since his election. The Democratic Party is in something of a civil war over Biden's authority to cancel debt unilaterally, leaving borrowers at a standstill. Despite their good money habits, the typical Gen Zer drove debt growth during the pandemic. They owe $16,043 on average.Tim P. Whitby/Getty ImagesGen Z had the most debt growth of any generation between 2019 and 2020, with the average balance increasing by 67.2% from $9,593, per the Experian report. But that's still less debt than all other generations have, and Experian said the increase "seemed to track with age — the greatest growth occurred among the youngest consumer group."That growth was mainly across mortgage and personal loan debt; Gen Z owe $169,470 and $6,004, respectively. It seems, then, that homebuying Gen Zers are leading the charge in their generation's debt upswing.But the typical Gen Zer is still set to take over the economy in a decade.Charmedlightph/ Getty ImagesBank of America Research's "OK Zoomer" report found that Gen Z will fare well in the long run. The generation currently earns $7 trillion across its 2.5 billion-person cohort, it stated. By 2025, that income will grow to $17 trillion, and by 2030, it will reach $33 trillion, representing 27% of the world's income and surpassing that of millennials the following year.Research and advisory firm Gen Z Planet recently found that the generation is saving and investing more than it's spending, and now holds $360 billion in disposable income. They're already influencing consumer behavior. The typical Gen Zer is rebelling against all things 2010s, while reviving the trends of the early millennium.Alexi Rosenfeld/Getty ImagesResearch has shown that, in moments of economic turmoil, humans are more likely to feel nostalgia. Gen Z's version of a nostalgic escape from the pandemic is reviving the fashions from the time before social media took over. From wired headphones to claw clips and baggy jeans, they're reviving the Y2K trends of yore in what Sara Fischer of Axios has deemed a "throwback economy." Corded headphones instead of AirPods, for example, are a way for Gen Z to make an "anti-finance bro" statement.They've also been lusting after an "old money" aesthetic characterized by Oxford shirts, tennis skirts, and tweed blazers, a sharp contrast from the "California rich" look of the Kardashians and the casual outfits of the new millennial billionaire class that characterized the 2010s. Prior to the pandemic, the VSCO girl had the internet buzzing. Characterized by a natural look that embodied a crossover between '90s fashion and a surfer lifestyle, she was a contrast to the contoured faces and lip fillers of Instagram influencers. Gen Z's continued embrace of nostalgia is showing she was no fluke, but the harbinger of a new (old) look.Their love for nostalgia explains why the typical Gen Zer likes to shop at thrift stores.Westend61/Getty ImagesThrifting is booming thanks to Gen Zers in search of sustainable, stylish clothes."I've kind of stopped buying clothes from traditional stores," Gen Zer Grace Snelling told Axios. "People almost respect you if what you're wearing is thrifted, and it looks good because you've managed to pull off a cool outfit, and it's sustainable."Recycling and reselling clothes helps the digitally native generation wear new-to-them outfits on a budget they haven't yet posted to social, avoiding repeating looks. It's also a tool to start a lucrative side hustle, in which some are raking in as much as $300,000 a year on apps like Depop and Poshmark.The trend goes beyond clothing. Gen Z (and millennials) are even increasingly eschewing mass-market home decor for vintage furniture, Insider's Avery Hartmans reported. It's not just fashion. The typical post-college Gen Zer is taking their contrarian views to the workplace.Su Arslanoglu/Getty ImagesGen Z is asserting new norms in the workplace, and eschewing the ones implemented by millennials before them. The New York Times' Emma Goldberg wrote that young 20-somethings are challenging tradition by delegating work to their boss, asking for mental health days, working less once they've accomplished their tasks for the day, and setting their own hours. It's part of what Erika Rodriguez called a "slow-up" in a recent opinion piece for the Guardian, referring to a permanent shift in slowing down productivity with the aim of having more separation from work. But some Gen Zers are quitting their jobs altogether, in what LinkedIn CEO Ryan Roslansky called a "Great Reshuffle." He said his team tracked the percentage of LinkedIn members who changed the jobs listed in their profile and found that Gen Z's job transitions have increased by 80% during that time frame.In August, a study by Personal Capital and The Harris Poll found that a whopping 91% of Gen Zers were keen to switch jobs, more than any other generation. While some are seeking greener pastures in other jobs, others are opting out of working altogether, bolstering the "antiwork" movement that embraces a work-free lifestyle.While the vast majority of Gen Zers haven't yet entered the workforce, it stands to reason they'll be just as, if not more so, progressive than their older peers.They're also creative, entrepreneurial, and innovative both inside and outside work.Part of the Students for Hospitals team.Jalen Xing"Gen Z is innovative and powerful," Emma Havighorst, a 2020 graduate, told Insider last year. "The way we see the world is very different from prior generations."For three years, Havighorst has hosted the podcast "Generation Slay," which profiles Gen Z creators and entrepreneurs like mental-health advocate Gabby Frost and nonprofit founder Ziad Ahmed. She said she thinks the pandemic will produce even more innovators."Necessity breeds invention," she said. "We'll be trying to figure out solutions to problems that plagued past generations."Consider high schoolers Daniel Lan and Jalen Xing, who created homemade face shields for hospitals during the pandemic, starting the initiative Students for Hospitals.More than half (58%) of Gen Z respondents in a DoSomething Strategic survey said that, since the pandemic, they had picked up a new activity or were doing more of something they already enjoyed.But perhaps most significantly of all, the typical Gen Zer is ready for change — and they'll do what it takes to make that happen.RODGER BOSCH/AFP via Getty ImagesA generation whose childhood was defined by international protest movements including Occupy Wall Street and the Arab Spring, Gen Z has been at the forefront of activism, from the March for Our Lives anti-gun protest and the climate change movement. Arguably its most famous member is the climate-crisis activist Greta Thunberg.2020 also put the generation front and center in the anti-police-brutality demonstrations sparked by the killing of George Floyd, a Black man who was murdered by a white police officer in Minneapolis. Social networking app Yubo and Insider polled 38,919 US-based Gen Zers, and found that 77% of respondents had attended a protest to support equality for Black Americans.The generation also played a pivotal role in the 2020 election, Insider's Juliana Kaplan reported, which may have finally captured the elusive youth turnout. Tufts University's Center for Information and Research on Civic Learning & Engagement (CIRCLE) revealed youth voter turnout for 2020 was up by at least 5% from 2016 — and could have been up by as much as 9%.It seems, then, that change may start with Gen Z.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 28th, 2021

Transcript: Edwin Conway

   The transcript from this week’s, MiB: Edwin Conway, BlackRock Alternative Investors, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS:… Read More The post Transcript: Edwin Conway appeared first on The Big Picture.    The transcript from this week’s, MiB: Edwin Conway, BlackRock Alternative Investors, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, man, I have an extra special guest. Edwin Conway runs all of alternatives for BlackRocks. His title is Global Head of Alternative Investors and he covers everything from structured credit to real estate hedge funds to you name it. The group runs over $300 billion and he has been a driving force into making this a substantial portion of Blackrock’s $9 trillion in total assets. The opportunity set that exists for alternatives even for a firm like Blackrock that specializes in public markets is potentially huge and Blackrock wants a big piece of it. I found this conversation to be absolutely fascinating and I think you will also. So with no further ado, my conversation with Blackrock’s Head of Alternatives, Edwin Conway. MALE VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My extra special guest this week is Edwin Conway. He is the Global Head of Blackrock’s Alternative Investors which runs about $300 billion in assets. He is a team of over 1,100 professionals to help him manage those assets. Blackrock’s Global alternatives include businesses that cover real estate infrastructure, hedge funds private equity, and credit. He is a senior managing director for BlackRock. Edwin Conway, welcome to Bloomberg. EDWIN CONWAY, GLOBAL HEAD OF ALTERNATIVE INVESTORS, BLACKROCK: Barry, thank you for having me. RITHOLTZ: So, you’ve been in the financial services industry for a long time. You were at Credit Suisse and Blackstone and now you’re at BlackRock. Tell us what the process was like breaking into the industry? CONWAY: It’s an interesting on, Barry. I grew up in a very small town in the middle of Ireland. And the breakthrough to the industry was one of more coincident as opposed to purpose. I enjoyed the game of rugby for many years and through an introduction while at the University, in University College Dublin in Ireland, had a chance to play rugby at a quite a – quite a decent level and get to know people that were across the industry. It was really through and internship and the suggestion, I’ve given my focus on business and financing things that the financial services sector may be a great place to traverse and get to know. And literally through rugby connections, been part of a good school, I had an opportunity to really understand what the service sector, in many respects, could provide to clients and became absolutely intrigued with it. And what – was it my primary ambition in life to be in the financial services sector? I can definitively say no, but through the circumstance of a game that I love to play and be part of, I was introduced to, through an internship, and actually fell in love with it. RITHOLTZ: Quite interesting. And alternative investments at Blackrock almost seems like a contradiction in terms. Most of us tend to think of Blackrock as the giant $9 trillion public markets firm best known for ETFs and indices. Alternatives seems to be one of the fastest-growing groups within the firm. This was $50 billion just a few years ago, it’s now over 300 billion. How has this become such a fast-growing part of BlackRock? CONWAY: When you look at the various facets which you introduced at the start, Barry, we’ve actually been an alternatives – will be of 30 years now. Now, the scale, as you know, which you can operate on the beta side of business, far surpasses that on the alpha side. For us, throughout the years, this was very much about how can we deliver investment excellence to our clients and performance? Therefore, going an opportunity somewhere else to explore an alpha opportunity in alternatives. And I think being so connected to our clients understanding, that this pivots was absolutely taking place at only 30 years ago but in a very pronounced way today, you know, we continue to invest in this business to support those ambitions. They’re clearly seeing this as the world of going through a tremendous amount of transformation and with some of the challenges, quite frankly, in the traditional asset classes, being able to leverage at BlackRock, the Blackrock muscle to really explore these alpha opportunities across the various alternative asset classes that in our mind wasn’t imperative. And the imperative, really, is from the firm’s perspective and if you look at our purpose, it’s to serve the client. So the need was coming from them. The necessity to have alternatives and their whole portfolio was very – was very much growing in prominence. And it’s taken us 30 years to build this journey and I think, Barry, quite frankly, we’re far from being done. As you look at the industry, the demand is going to continue to grow. So, I think you could expect to see from us a continued investment in the space because we don’t believe you can live without alternatives in today’s world. RITHOLTZ: That’s really – that’s really interesting. So let’s dive a little deeper into the product strategy for alternatives which you are responsible for at BlackRock. Our audiences is filled with potential investors. Tell them a little bit about what that strategy is. CONWAY: So we’re – I think as you mentioned, we’re in excess of 300 billion today and when we started this business, it was less about building a moat around private equity or real estate. I think Larry Fink’s and Rob Kapito’s vision was how do we build a platform to allow us to be relevant to our clients across the various alternative asset classes but also within the – within the confines of what they are permitted to do on a year-by-year basis. So, to always be relevant irrespective of where they are in their journey from respect of liabilities, demand for liquidity, demand for returns, so we took a different approach. I think, Barry, to most, it was around how do we scale into the business across, like you said, real estate equity and debt, infrastructure equity and debt. I mean, we think of that as the real assets platform of our business. Then you take our private equity capabilities both in primary investing, secondary et cetera, and then you have private credits and a very significant hedge fund platforms. So we think all of these have a real role and depending on clients liquidities and risk appetite, our goal was, to over the years, really build in to this to allow ourselves for this challenging needs that our clients have. I think as an industry, right, and over the many years alternatives have been in existence, this is been about return enhancement initially. I think, fundamentally, the changes around the receptivity to the role of alternatives in a client’s portfolio has really changed. So, we’ve watched it, Barry, from this is we’re in the pursuit of a very total return or absolute return type of an objective to now resilience in our portfolio, yield an income. And so things that probably weren’t perceived as valuable in the past because the traditional asset classes were playing a more profound role, alternatives have stepped up in – in many respects in the need to provide more than just total return. So, we’re taking the approach of how do you have a more holistic approach to this? How do we really build a global multi-alternatives capability and try to partner and I think that’s the important work for us. Try to partner with our clients in a way that we can deliver that outperformance but delivered in a way that probably our clients haven’t been used to in this industry before. Because unfortunately, as we know, it has had its challenges with regard to secrecy, transparency, and so many other aspects. We need to help the industry mature. And really that was our ambition. Put our client’s needs first, build around that and really be relevant in all aspects of what we’re doing or trying to accomplish on behalf of the people that they support and represent. RITHOLTZ: So, we’ll talk a little bit about transparency and secrecy and those sorts of things later. But right now, I have to ask what I guess is kind of an obvious question. This growth that you’ve achieved within Blackrock for nonpublic asset allocation within a portfolio, what is this coming at expense of? Are these dollars that are being moved from public assets into private assets or you just competing with other private investors? CONWAY: It’s really both. What – what you are seeing from our clients – if I take a step back, today, the institutional client community and you think about the – the retirement conundrum we’re all facing around the world. It’s such an awful challenge when you think how ill-prepared people are for that eventual stepping back from the workplace and then you know longevity is your friend, but can also be a very, very difficult thing to obviously live with if you’re not prepared for retirement. The typical pension plan today are allocating about 25 percent to 28 percent in alternatives. Predominantly private market. What they’re telling us is that’s increasing quite substantially going forward. But you know, the funding for that alpha pursue for that diversification and that yield is coming from fixed-income assets. It’s coming from equity assets. So there’s a real rebalancing that’s been taking place over the past number of years. And quite frankly, the evolution, and I think the innovation that’s taken place particularly in the past 10 years, alternatives has been really profound. So the days where you just invest in any global funds still exist. But now you can concentrate your efforts on sector exposure, industry exposures, geographic exposures, and I think the – the menu of things our clients can now have access to has just been so greatly enhanced at and the benefit is that but I think in some – in some respects, Barry, the next question is with all of those choices, how do you build the right portfolio for our client’s needs knowing that each one of our client’s needs are different? So, I would say it absolutely coming from the public side. We’re very thankful. Those that had a multiyear journey with us in the public side are now allocating capital to is now the private side to because I do think the – the industry given that change, given that it evolution and given the complexity of these private assets, our clients are looking to, quite frankly, do more with fewer managers because of the complexion of the industry and complexity that comes with it. RITHOLTZ: Quite – quite interesting. (UNKNOWN): And attention RIA’s. Are your clients asking for crypto? At interactive brokers, advisers can now offer crypto to their clients and you could trade stocks, options, futures currencies, bonds and more from the same platform. Commissions on crypto are just 12-18 basis points with no hidden spreads or markups and there are no ticket charges, custody fees, minimums platform or reporting fees. Learn more at IBKR.com/RIA crypto. RITHOLTZ: And I – it’s pretty easy to see why large institutions might be rotating away from things like treasuries or tips because there’s just no yield there. Are you seeing inflows coming in from the public equity side also? The markets put together a pretty good string of years. CONWAY: Yes. It absolutely has. And many respects, I think, we’ve had a multiyear where there was big questions around the alpha that can be generated, for example, from active equities? The question was active or passive? I think what we’ve all realized is that at times when volatility introduces itself which is frequent even independent of what’s been done from a fiscal and monetary standpoint, that these Alpha speaking strategies on the traditional side still make a lot of sense. And so, as we think about what – what’s happening here, the transition of assets from both passive and active strategies to alternative, it – it’s really to create better balance. It’s not that there’s – there’s a lack of relevance anymore in the public side. It’s just quite frankly the growth of the private asset base has grown so substantially. I moved, Barry, to the U.S. in 1998. And it’s interesting, when you look back at 1998 to today, you start to recognize the equity markets and what was available to invest in. The number of investable opportunities has shrunk by 40 plus percent which that compression is extraordinarily high. But yet you’ve seen, obviously, the equity markets grow in stature and significance and prominence but you’re having more concentration risk with some of the big public entities. The converse is true, though on the – on the private side. There’s this explosion of enterprise and innovation, employment creation, and then I believe opportunities has been real. So, I look at the public side, the investable universe is measured in the thousands and the private side is measured in the millions. RITHOLTZ: Wow. CONWAY: And I think part of the – part of the part of the thing our clients are not struggling with but what we’re really recognizing with – with enterprises staying private for longer, if not forever, and with his growth of the opportunities that open debt and equity in the private market side, you really can’t forgo this opportunity. It has to be part of your going forward concerns and asset allocation. And I think this is why we’re seeing that transformation. And it’s not because equities on fixed income just aren’t relevant anymore. They’re very relevant but they’re relevant now in a total portfolio or a whole portfolio context beside alternatives. RITHOLTZ: So, let’s discuss this opportunity set of alternatives where you guys at Blackrock scene demand what sectors and from what sorts of clients? Is this demand increasing? CONWAY: We’re very fortunate, Barry. Today, there isn’t a single piece of our business within – within Blackrock alternatives that isn’t growing. And quite frankly too, it’s really up to us to deliver on the investment objectives that are set forth for those clients. I think in the back of strong absolute and relative performance, thankfully, our clients look to us to – to help them as – as they think about what they’re doing and as they’re exploring more in the alternatives areas. So, as you know, certainly, the private equity and real estate allocations are quite mature in many of our client’s portfolios but they’ve been around for many decades. I think that the areas where we’re seeing – that’s called an outside demand and opportunity set, just but virtue of the small allocations on a relative basis that exist today is really around infrastructure, Barry, and its around private credits. So, to caveat that, I think all of the areas are certainly growing, and thankfully, for us that’s true. We’re looking at clients who we believe are underinvested, we believe they’re underinvested in those asset classes infrastructure both debt and equity and in private credit. And as you think about why that is, the attributes that they bring to our client is really important and in a world where your correlation and understanding those correlations is important that these are definitely diversifying assets. In a world where you’re seeing trillions of dollars, quite frankly, you’re providing little to no or even there’s negative yield. Those short falls are real and people need yield than need income. These assets tend to provide that. So the diversification, it comes from these assets. The yield can come from these assets and because of the immaturity of the asset classes, independence of the capital is flowing in, we still consider them relatively white space. You’re not crowded out. There’s much room for development in the market and with our client’s portfolios. And to us, that’s exciting because it presents opportunities. So, at the highest level, they’re the areas where I believe are most underdeveloped in our clients. RITHOLTZ: So let’s talk about both of those areas. We’ll talk about structured credit in a few minutes. I think everybody kind of understands what – what that is. What – when you see infrastructure as a sector, how does that show up as an investment are – and obviously, I have infrastructure on the brink because we’re recording this not too long after the giant infrastructure bill has been passed, tell us a little bit about what alternative investments in infrastructure looks like? CONWAY: Yes. It’s really in its infancy and what the underlying investments look like. I think traditionally, you would consider it as – and part of the bill that has just been announced, roads, bridges, airports. Some of these hard assets, some of the core infrastructure investments that have been around for actually some time. The interesting thing is the industry has evolved so much and put the need for infrastructure. It’s so great across both developed and emerging economies. It’s become something that if done the right way, the attributes we just spoke of can really have a very strong effect on our client’s portfolios. So, beyond the core that we just mentioned, well, we’ve seen a tremendous demand as a result of this energy transition. You’re really seeing a spike in activity and the necessity transition industry to cleaner technologies, a movement, not away completely from fossil fuel but integrating new types of clean energy. And as a result, you’ve seen a lot of demand on a global basis for wind and solar. And quite frankly, that’s why even us at BlackRock, albeit, 10-12 years ago, we really established a capability there to help with that transition to think about how do we use these technologies, solar panels, wind farms, to generate clean forms of energy for utilities where in some cases they’re mandated to procure this type of this type of – this type of power. And when you think about pre-contracting with utilities for long duration, that to me spells, Barry, good risk mitigation and management and ability to get access to clean forms of energy that throw off yield that can be very complementary to your traditional asset classes but for very long periods of time. And so, the benefits for us of these – these assets is that they are long in duration, they are yield enhancing, they’re definitely diversifying. And so, for us, where – we’ve got about, let’s call this 280 assets around the world that we’re managing that literally generate this – this clean electricity. I think to give the relevance of how much, I believe today, it’s enough to power the country of Spain. RITHOLTZ: Wow. CONWAY: And that’s really that’s really changing. So you’re seeing governments – so from a policy standpoint, you’re seeing governments really embracing new forms of energy, transitioning out of bunker fuels, for example, you know, burning diesels which really spew omissions into the – into the into the environment. But it’s really around modernizing for the future. So, developed and emerging economies alike, want to retain capital. They want to attract new capital and by having the proper infrastructure to support industry, it’s a really, really important thing. Now, on the back of that too, one things we’ve learned from COVID is that the necessity to really bring e-commerce into how you conduct your business is so important and I think from the theme of digitalization within infrastructure to is a huge part. So, it’s not just the energy transition that you’re seeing, it’s not just roads and bridges, but by allowing businesses to connect to a global consumer, allowing children be educated from home, allowing experiences that expand geographies and boundaries in a digital form is so important not just for commerce but in so many other aspects. And so, you think about cable, fiber optics, if you think about all the other things even outside of power, that enable us to conduct commerce to educate, there are many examples where, Barry, you can build resilience into your portfolio because that need is not measured in years. Actually, the shortfall of capital is measured in the trillions so which means this is – this is a multi-decade opportunity set from our vantage point and one of which our clients should really avail of. RITHOLTZ: Quite interesting. And I mentioned in passing, structured credit, tell us a little bit about what that opportunity looks like. I think of this as a space that is too big for local banks but too small for Wall Street to finance. Is that an oversimplification? What is going on in that space. CONWAY: I probably couldn’t have set it better, Barry. It’s – if we go back to just the even the investable universe, in the tens of thousands of companies, just if we take North America that are private, that have great leadership that really have strategic vision under – at the – in some cases, at the start of their growth lifecycles are even if they maintain, they have a very credible and viable business for the future they still need capital. And you’re absolutely right. With the retreat of the banks from the space to various regulations that have come after the global financial crisis, you’re seeing the asset managers in many respects working behalf of our clients both wealth and institutional becoming the new lenders of choice. And – and when we – when we think about that opportunity set, that is really understanding the client’s desire for risk or something maybe in a lower risk side from middle-market lending or midmarket enterprises where you can support that organization through its growth cycle all the way to some higher-yielding, obviously, with more risk assets on the opportunistic or even the special situations side. But it – it expands many things. And going back of the commentary around the evolution of the space, private credit today and what you can do has changed so profoundly, it expands the liquidity spectrum, it expands the risk spectrum. And the great news is, with the number of companies both here and abroad, the opportunities that is – it’s being enriched every single day. And were certainly seeing, particularly going back to the question are some of these assets coming from the traditional side, the public side. When we think of private credit, you are seeing private credit now been incorporated in fixed-income allocations. This is a – it’s a yelling asset. This is – these are debt instruments, these are structures that we’re creating. We’re trying to flexible and dynamic with these clients. But it really is an area where we think – it really is still at its – at its infancy relevant to where it can potentially be. RITHOLTZ: That’s really quite – quite interesting. (UNKNOWN): It’s Rob Riggle. I’m hosting Season 2 of the iHeart radio podcast, Veterans You Should Know. You may know me as the comedic actor from my work in the Hangover, Stepbrothers or 21 Jump Street. But before Hollywood, I was a United States Marine Corps officer for 23 years. For this Veterans Day, I’ll be sitting down with those who proudly served in the Armed Forces to hear about the lessons they’ve learned, the obstacles they’ve overcome, and the life-changing impact of their service. Through this four-part series, we’ll hear the inspiring journeys of these veterans and how they took those values during their time of service and apply them to transition out of the military and into civilian life. Listen to Veterans You Should Know on the iHeart radio app, Apple Podcast or wherever you get your podcast. RITHOLTZ: Let’s stick with that concept of money rotating away from fixed income. I have to imagine clients are starved for yields. So what are the popular substitutes for this? Is it primarily structured credit? Is it real estate? How do you respond to an institution that says, hey, I’m not getting any sort of realistic coupon on my bonds, I need a substitute? CONWAY: Yes. It’s all of those in many respects. And I think to the role, even around now a time where people have questions around inflation, how do substitute this yield efficiency or certainly make up for that shortfall, how do you think about a world where increasingly seeing inflation, not of the transitory thing it feels certainly quasi-permanent. These are a lot of questions we’re getting. And certainly, real estate is an is important part of how they think about inflation protection, how client think about yield, but quite frankly too, we’ve – we’ve gone through something none of us really had thought about a global pandemic. And as I think about real estate, just how you allocate to the sector, what was very heavily influenced with retail assets, high street, our shopping behaviors and habits have changed. We all occupied offices for obviously many, many years pre the pandemic. The shape of how we operate and how we do that has changed. So, I think some of the underlying investment – investments have changed where you’ve seen heavily weighted towards office space to leisure, travel in the past. Actually, now using a rotation in some respects out of those, just given some of the uncertainties around what the future holds as we come – come through a really difficult time. But the great thing about this sector is between senior living, between student housing, between logistics and so many other parts, there are ways in real estate to capture where there’s – where there’s demand. So still a robust opportunity set and it – and we do think it can absolutely be yield enhancing. We mentioned infrastructure. Even if you think about – and we mention OECD and non-OECD, emerging and developed, when I think about Asia, in particular, just as a subset of the world in which we’re living in, that is a $2.6 trillion alternative market today growing at a 15 percent CAGR. And quite frankly, the old-growth is driven by the large economic growth in the region. So, even from a regional perspective, if we pivot, it houses 57 percent of the world’s population and yet delivers 47 percent of the world’s economic growth. So, think of that and then with regard to infrastructure and goes back to that, this is truly a global phenomenon. So if we just even take that sector, Barry, you’ll realize that the way to maintain that type of growth, to attract capital, to keep capital, it really requires an investment of significant amount of money to be able to sustain that. And when you have 42 million people in a APAC migrating to cities in the year going back to digitalization, that’s an important thing. So, when I say we’re so much at the infancy in infrastructure, I really mean it. It can be water, it can be sewer systems, it can be digital, it can be roads, there’s so much to this. And then even down to the regional perspective, it’s a – it’s a need that doesn’t just exist in the U.S. So, for these assets, this tend to be long in duration. There’s both equity and debt. And on the debt side, quite frankly, very few outside of our insurance clients and their general account are taking advantage of the debt opportunity. And – and as we both know, to finance these projects that are becoming more plentiful every single day, across the world, including like, I said, in APAC in scale, there’s an opportunity in both sides. And I think that’s where the acid mix change happen. It’s recognizing that the attributes of these assets can have a role, the attributes of these assets can potentially replace some of these traditional assets and I think you’re going to see it grow. So, infrastructure to us, it’s really equity and debt. And then on the credit side, like I mentioned, again, too, it’s a very, very big and growing market. And certainly, the biggest area today from our vantage point is middle-market lending from a scale opportunity standpoint. So, we think much more to come in all of those spaces. RITHOLTZ: Really interesting. And let’s just stay with the concept of public versus private. That line is kind of getting blurred and the secondary markets is liquidity coming to, for lack of a better phrase, pre-public equities, tells little bit about that space. Is that an area that is ripe for growth for BlackRock? CONWAY: Yes. We absolutely think it is and you’re absolutely correct. The secondary market is – has grown quite substantial. If you even look at just the private equity secondary market and what will transact this year, I think it will be potentially in excess of 100 billion. And that’s what were clear, not to mention what will be visible and what will be analyzed. And that speaks to me what’s really happening and the innovation that we mentioned earlier. It’s no longer about just primary exposure. It’s secondary exposure. When we see all sort of interest and co-investment opportunities as well, I think the available sources of alpha and the flexibility you can now have, albeit if directed and advised, I believe the right way, Barry, can be very helpful and in the portfolio. So, your pre-IPO, it is a big part of actually what we do and we think about growth equity. There is – it’s a significant amount of capital following that space. Now, from our vantage point, as one of the largest investors in the public equity market and now obviously one of the largest investors and they in the private side, the bridge between – between private to public – there’s a real need. IPOs are not going away. And I think smart, informed capital to help with this journey, this journey is really – is really a necessity and a need. RITHOLTZ: So let’s talk a little bit about this recent restructuring. You are first named Global Head of Blackrock Alternative Investors in April 2019, the entire alternatives business was restructured, tell us a little bit about how that restructuring is going? CONWAY: Continues to go really well, Barry. When you look at the flow of acid from our clients, I think, hopefully, that’s speaks to the performance we’ve been generating. I joined the firm, as you know, albeit, 11 years ago and being very close to the alternative franchise as a critical thing for me and running the institutional platform. To me, when you watched this migration of asset towards alternatives, it was obviously very evident for decades now that this is a critical leg of the stool as our clients are thinking about their portfolios. We’re continuing to innovate. We’re continuing to invest, and thankfully, we’re continuing to deliver strong performance. We’re growing at about high double digits on an annual basis but we’re trying to purposeful too around where that growth is coming from. I think the reality is when you look at the competitive universe, I think the last number I saw, it was about 38,000 alternative asset managers out there today, obviously, coming from hedge funds all the way to private credits and private equity. So, competition is real and I do think the outcomes for our clients are starting to really grow. Unfortunately, some – in some cases, obviously, very good, and in some cases, actually not great. So our focus, Barry, is really much on how can we deliver performance, how can we be a partner? And I think we been rewarded with a trust and the faith our clients have in us because they’re seeing something different, I think, from us. Now, the scale of the business that you mentioned earlier really gives us tentacles into the market that I believe allows us to access what I think is the new alpha which is in many respects, given the heft of competition sourcing and originating new investments is certainly harder but for us, sitting in or having alternative team, sitting in 50 offices around the world, really investing in the markets because that – the market they grew up with and have relationships within, I think this network value that we have is something that’s quite special. And I think in the world that’s becoming increasingly competitive, we’re going to continue to use and harness that network value to pursue opportunities. And thankfully, as a result of the partnership we’ve been pursuing with her clients, like, we’ve – we’re certainly looking for opportunities and investments in our funds. But because of the brand, I think because of the successes, opportunities seeks us as much as we seek opportunity and that has been something that we look at an ongoing basis and feel very privileged to actually have that inbound flow as well. RITHOLTZ: Really quite interesting. There was a quote of yours I found while doing some prep for this conversation that I have to have you expand on. Quote, “The relationship between Blackrock’s alternative capabilities and wealth firms marked a large opportunity for growth in the coming years.” This was back in 2019. So, the first part of the question is, was your expectations correct? Did you – did you see the sort of growth you were hoping for? And more broadly, how large of an opportunity is alternatives, not just for BlackRock but for the entire investment industry? CONWAY: Yes. It’s been very much an institutional opportunity set up until now. And there’s so much to be done, still, to really democratize alternatives and we certainly joke around making alternatives less alternative. Actually, even the nomenclature we use and how we describe it doesn’t kind of make sense anymore. It’s such a core – an important allocation to our clients, Barry, that just calling it alternative seems wrong. Just about the institutional clients. It ranges, I think, as I mentioned on our – some of our more conservative clients which would be pension plans which really have liquidity needs on a monthly basis because of the liabilities they have to think about. At about 25 plus percent in private markets, to endowments, foundations, family offices, going to 50 percent plus. So, it’s a really important part and has been for now many years the institutional client ph communities outcomes. I think the thing that we, as an industry, have to change is alternatives has to be for the many, not for the few. And quite frankly, it’s been for the few. And as we talked about some of the attributes and the important attributes of these asset classes to think that those who have been less fortunate in their careers can’t access, things they can enrich their future retirement outcomes, to me, is a failing. And we have to address that. That comes from regulation changes, it comes from structuring of new products, it comes from education and it comes from this knowledge transmission where clients in the wealth segment can understand the role of alternatives and the context of what can do as they invest in equities and fixed income too. And we think that’s a big shortfall. So, the journey today, just to give you a sense, as we look at her clients in Europe on the wealth side, on average, as you look from what we would call the credited investors all the way through to more ultra-high-net worth individuals, their allocation to alternatives, we believe, stands at around two to three percent of their total portfolio. In the U.S., we believe it stands at three to five. So, most of those intermediaries, we speak to our partners who were more supporting and serving the wealth channel. They have certainly an ambition to help their clients grow that to 20 percent and potentially beyond that. So, when I look at that gap of let’s call it two to three to 20 percent in a market that just given the explosion in wealth around the world, I think the last numbers I saw, this is a $65 trillion market. RITHOLTZ: Wow. CONWAY: That speaks to the shortfall relative to the ambition. And how’s it been going? We have a number of things and capabilities we’ve set up to allow for this market to experience, hopefully, private equity, hedge funds, credit, and an infrastructure in ways they haven’t in the past. We’ve done this in the U.S., we’re doing it now in Europe, but I will say, Barry, this is still very much at the start of the journey. Wealth is a really important part of our future given our business, quite, frankly is 90 plus percent institutional today, but we’re looking to change that by, hopefully, democratizing these asset classes and making it so much more accessible in that of the past. RITHOLTZ: So, we hinted at this before but I’m going to ask the question outright, how significant is interest rates to client’s risk appetites, how much of the current low rate environment are driving people to move chunks of their assets from fixed income to alternatives? CONWAY: It’s really significant, Barry. I think the transition of these portfolios is quite profound, So you – and I think the unfortunate thing in some respects as this transition happens that you’re introducing new variables and new risks. The reason I say it’s unfortunate and that I think as an industry, this goes back to the education around the assets you own, understanding the role, understanding the various outcomes. I think it’s so incredibly important and that this the time where complete transparency is needed. And quite frankly, we’re investing capital that’s not ours. As an industry, we’re investing our client’s assets and they need to know exactly the underlying investments. And in good and bad times, how would those assets behave? So certainly, interest rates are driving a flow of capital away from these traditional assets, fixed-income, and absolutely in towards real estate, infrastructure, private creditors, et cetera, in the pursuit of this – this yield. But I do – I do think one of the things that’s critically important for the institutional channel, not just the wealth which are newer entrants is this transmission of education, of data because that’s how I think you build a better balanced portfolio and that’s a – that’s a real conundrum, I think, that the industry is facing and certainly your clients too. RITHOLTZ: Quite interesting. So let’s talk a little bit about the differences between investing in the private side versus the public markets, the most obvious one has to be the illiquidity. When you buy stocks or bonds, you get a print every microsecond, every tick, but most of these investments are only marked quarterly or annually, what does this illiquidity do when you’re interacting with clients? How do you – how do you discuss this with them in and how do perceive some of the challenges of illiquid investments? CONWAY: Over the – over the past number of decades, I think our clients have largely held too much liquidity in their portfolios. Like, so what we are finding is the ability to take on illiquidity risk. And obviously, in pursuit of that premium above, the traditional markets, I mean, I think the sentiment they are is it an absolute right one. That transition towards private market exposure, we think is an important one just given the return objectives, the majority of our clients’ need but then also again, most importantly now, with geo policy, with uncertainty, with interest rate uncertainty, inflation uncertainty, I mean, the – going back to the resilience point, the characteristics now by introducing these assets into the mix is important. And I think that’s – that point is maybe what I’ll expand on. As were talking to clients, using the Aladdin systems, and as you know, we bought eFront technologies, albeit a couple of years ago, by allowing, I think, great data and technology to help our clients understand these assets and the context of how they should own them relative to other liquidity needs, their risk tolerances, and the return expectations are really trying to use tech and data to provide a better understanding and comprehension of the outcomes. And as we continue to introduce these concepts and these approaches, by the way, that there is, as you know, so used to in the traditional side, it – it gives them more comfort around what they should and can expect. And that, to me, is a really important part of what we’re doing. So, we’ve released recently new technology to the wealth sector because, quite frankly, we mentioned it before, the 60-40 portfolio is a thing of the past. And that introduction of about 20 percent into alternatives, we applaud our partners who are – who are suggesting that to their clients. We think it’s something they have to do. What we’re doing to support that is really bringing thought leadership, education, but also portfolio construction techniques and data to bear in that conversation. And this goes back to – it’s no longer an alternative, right? This is a core allocation so the comprehension of what it is you own, the behavior of the asset in good and bad times is so necessary. And that’s become a very big thing with regard to our activities, Barry, because your clients are looking to understand better when you’re talking about assets that are very complex in their nature. RITHOLTZ: So, 60-40 is now 50-30-20, something along those lines? CONWAY: Yes. RITHOLTZ: Really, really intriguing. So, what are clients really looking for these days? We talked about yield. Are they also looking for downside protection on the equity side or inflation hedges you hinted at? How broad are the demands of clients in the alternative space? CONWAY: Yes. It ranges the gamut. And even – we didn’t speak to even hedge funds, we’ve had differing levels of interest in the hedge fund world for years and I, quite frankly, think some degree of disappointment too, Barry, with regard to the alpha, the returns that were produced relevant to the cost. RITHOLTZ: It’s a tough space to say the very least exactly. CONWAY: Exactly right. But when you start to see volatility introducing itself, you can really see where skill plays a critical factor. So, we are absolutely seeing, in the hedge fund, a resurgence of interest and demand by virtue of those who really have honed in on their scale, who have demonstrated an up-and-down markets and ability to protect and preserve capital, but importantly, in a low uncorrelated way build attractive risk-adjusted returns. We’re starting to see more activity there again too. I think with an alternatives, you’ve really seen a predominant demand coming from privates. These private markets, like a set of growths so extraordinarily fast and the opportunities that is rich, the reality too on the public side which is where our hedge funds operate, they continue to, in large part, do a really good job. The issue with our industry now with these 38,000 managers is how do you distill all the information? How do you think about your needs as a client and pick a manager who can deliver the outcomes? And just to give you a sense, the difference now between a top-performing private equity manager, a top quartile versus the bottom quartile, the difference can be measured in tens of percent. RITHOLTZ: Wow. CONWAY: Whereas if you look at the public equity side, for example, a large cap manager, top quartile versus bottom quartile is measured in hundreds of basis points. So, there is definitely a world that has started where the outcomes our clients will experience can be great as they pursue yield, as they pursue diversification, inflation protection, et cetera. I think the caveat that I would say is outcomes can vary greatly. So manager underwriting and the importance of it now, I think, really is this something to pay attention to because if you do have that bottom performing at the bottom quartile manager, it will affect your outcomes, obviously. And that’s what we collectively have to face. RITHOLTZ: So, let’s talk a little bit about real estate. There are a couple of different areas of investment on the private side. Rent to own was a very large one and we’ve seen some lesser by the flip algo-driven approaches. Tell us what Blackrock is doing in the real estate space and how many different approaches are you bringing to bear on this? CONWAY: Yes, we think it’s both equity and debt. Again, no different to the infrastructure side, these projects need to be financed. But on the – as you think about the sectors in which you can avail of the opportunity, you’ve no doubt heard a lot and I mentioned earlier this demand for logistics facilities. The explosion of shopping online and having, until we obviously have the supply chain disruption, an ability to have nearly immediate satisfaction because the delivery of the good to your home has become so readily available. It’s a very different consumer experience. So the explosion and the need for logistics facilities to support this type of behavior of the consumer is really an area that will continue to be of great interest too. And then you think about the transformation of business and you think about the aging world. Unfortunately, you can look at various economies where our populations are decreasing. And quite frankly, we’re getting older. And so, were you’re thinking of the context of that senior living facilities, it becomes a really important part, not just as part of the healthcare solution that come with it, but also from living as well. So, single-family, multifamily, opportunities continue to be something that the world looks at because there is really the shortfall of available properties for people to live in. And as the communities evolve to support the growing age of the population, tremendous opportunity there too. But we won’t give up on office space. It really isn’t going away. Now, if you even think about our younger generation here in BlackRock, they love being in New York, they love being in London, they love being in Hong Kong. So, the shape and the footprint may change slightly. But the necessity to be in the major financial centers, it still exists. But how we weighed the risks has definitely changed, certainly, for the – for the short-term and medium-term future. But real estate continues to be, Barry, a critical part of how we express our thought around the investment opportunity set. But clients largely do this themselves too. The direct investing from the clients is quite significant because they too see this as still as a rich investment ground, albeit, one that has changed quite a bit as a result of COVID. RITHOLTZ: Well, I’m fascinated by the real estate issue especially having seen some massive construction take place in cities pre-pandemic, look over in Manhattan at Hudson Yards and look at what’s taking place in London, not just the center of London but all – but all around it and I’m forced to admit the future is going to look somewhat different than the past with some hybrid combination of collaborative work in the office and remote work from home when it’s convenient, that sort of suggests that we now have an excess of capacity in office space. Do you see it that way or is this just something that we’re going to grow into and just the nature of working in offices is changing but offices are not going away? CONWAY: Yes. I do think there’s – it’s a very valid point and that in certain cities, you will see access, in others we just don’t, Barry. And quite frankly, as a firm, too, as you know, we have adopted flexibility with our teams that were very fortunate. The technologies in which we created at BlackRock has just become such an amazing enabler, not just to help us as we mention manage the portfolios, help us a better portfolio construction, understand risks, but also to communicate with our clients. I think we’ve all witnessed and experienced a way to have connectivity that allows them to believe that commerce can exist beyond the boundaries of one building. However, I do look at our property portfolios and even the things that we’re doing. Rent collections still being extraordinarily high, occupancy now getting back up to pre-pandemic levels, not in all cities, but in many of the major ones that have reopened. And certainly, the demand for people to just socialize, that the demand for human connectivity is really high. It’s palpable, right? We see it here too. The smiles on people’s faces, they’re back in the office, conversing together, innovating together. When people were feeling unsafe, unquestionably, I think the question marks around the role of office space was really brought to bear. But as were coming through this, as you’ve seen vaccine rates change, as you’ve seen the infection rates fall, as you’ve seen confidence grow, the return to work is really happening and return to work to office work is really happening, albeit, now with degrees of flexibility. So, going back to the – I do believe in certain areas. You’re seeing a surplus. But in many areas you’re absolutely seeing a deficit and the reason I say that, Barry, is we are seeing occupancy in certain building at such a high level. And frankly, the demand for more space being so high, it’s uneven and this goes back to then where do you invest our client’s capital, making sense of those trends, predicting where you will see resilience versus stress and building that into the portfolio of consequences as you – as you better risk manage and mitigate. RITHOLTZ: Very interesting. And so, we are seeing this transition across a lot of different segments of investing, are you seeing any products that were or – or investing styles that was once thought of as primarily institutional that are sort of working their way towards the retail side of things? Meaning going from institutional to accredited to mom-and-pop investors? CONWAY: Well, certainly, in the past, private equity was really an asset class for institutional investors. And I think that’s – that has changed in a very profound way. I mentioned earlier are the regulation has become a more adaptive, but we also have heard, in many respects, in providing this access. And I think the perception of owning and be part of this illiquid investment opportunity set was hard to stomach because many didn’t understand the attributes and what it could bring and I think we’ve been trying to solve for that and what you’re seeing now with – with regulators, understanding that the difference between if we take it quite simply as DD versus DC, the differences between the options you as a participant in a retirement plan are so vastly different that – and I think there’s a broad recognition now that there needs to be more equity with regard to what happens there. And private equity been a really established part of the alternatives marketplace was once, I think, really believed to be an institutional asset class, but albeit now has become much more accessible to wealth. We’ve seen it by structuring activities in Europe working with the regulators. Now, we’re able to provide private equity exposure to clients across the continent and really getting access to what was historically very much an institutional asset class. And I do think the receptivity is extraordinarily high just throughout people’s careers, they have seen wealth been created as a result of engineering a great outcome with great management teams integrate business. And I do believe the receptivity towards private equity is high as an example. In the U.S., too, working with the various intermediaries and being able to wrap now private equity in a ’40 Act fund, for example, is possible. And by being able to deliver that to the many as opposed to the few, we think has been a very good success story. And I think, obviously, appreciated by our clients as well. So, I would look at that were seeing across private equity as well as private credit and quite frankly infrastructure accuracy. You’re seeing now regulation that’s becoming more appreciative of these asset classes, you’re seeing a more – a greater level of openness and willingness to allow for these assets to be part of many people’s experiences across their investment portfolio. And now, with innovation around structures, as an industry, were able to wrap these investments in a way that our clients can really access them. So, think across the board, it probably speaks the innovation that’s happening but I do think that accessibility has changed in a very significant way. But you’ve really seen it happen in private equity first and now that’s expanding across these various other asset classes. RITHOLTZ: Quite intriguing. I know I only have you for a relatively limited period of time, so let’s jump to our favorite questions that we ask all of our guests. Starting with tell us what you’ve been streaming these days. Give us your favorite Netflix or Amazon Prime shows. CONWAY: That is an interesting question, Barry. I don’t a hell of a lot of TV, I got to tell you. I am – I keep busy with three wonderful children and a beautiful wife and between the sports activities. When I do watch TV, I have to tell you I’m addicted to sports and having – I may have mentioned earlier, growing up playing rugby which is not the most common sport in the U.S., I stream nonstop the Six Nations that happens in Europe where Ireland is one of those six nations that compete against each other on an annual basis. Right now, they’re playing a lot of sites that are touring for the southern hemisphere. And to me, the free times I have is either enjoying golf or really enjoying rugby because I think it’s an extraordinary sport. Obviously, very physical, but very enjoyable to watch. And that, that truly is my passion outside of family. RITHOLTZ: Interesting stuff. Tell us a bit about your mentors, who helped to shape your early career? CONWAY: Well, it even goes back to some of the aspects of sports. Playing on a team and being on a field where you’re working together, there’s a strategy involved with that. Now, I used to really appreciate how we approach playing in the All-Ireland League. How we thought about our opponents, how we thought about the structure, how we thought about each individual with on the rugby field and the team having a role. They’re all different but your role. And actually, even starting from an early age, Barry, thinking about, I don’t know, it’s sports but how to build a great team with those various skills, perspective, that can be a really, really powerful combination when done well. And certainly, from an early age, that allowed me to appreciate that – actually, in the work environment, it’s not too different. You surround yourself with just really great people that have high integrity that are empathetic and have a degree of humility that when working together, good things can happen. And I will say, it really started at sports. But I think of today and even in BlackRock, how Larry Fink thinks about the world and I think Larry, truly, is a visionary. And then Rob Kapito who really helps lead the charge across our various businesses. Speaking and conversing with them on a daily basis, getting their perspectives, trying to get inside your head and thinking about the world from their vantage point. To me, it’s a huge thing about my ongoing personal career and development and I really enjoy those moments because I think what you recognize is independent of how much you think you know, there’s so much more to know. And this journey is an ever evolving one where you have to appreciate that you’ll never know everything and you need to be a student every single day. So, I’d probably cite those, Barry, as certainly the two most important mentors in my life today, professionally and personally quite frankly. RITHOLTZ: Really. Very interesting. Let’s talk about what you’re reading these days. Tell us about some of your favorite books and what you’re reading currently? CONWAY: Barry, what I love to read, I love to read history, believe it or not. From a very small country that seems to have exported many, many people, love to understand the history of Ireland. So, there’s so many books. And having three children that have been born in the U.S. and my wife is a New Yorker, trying to help them understand some of their history and what made them what they are. I love delving into Irish history and how the country had moments of greatness and moments of tremendous struggle. Outside of that, I really don’t enjoy science fiction or any of these books. I love reading, you name any paper and any magazine on a daily basis. Unfortunately, I wake at about 4:30, 5 o’clock every day. I spent my first two hours of the day just consuming as much information as possible. I enjoy it. But it’s all – it’s really investment-related magazines, not books. It’s every paper that you could possibly imagine, Barry, and I just – I have a great appreciation for certainly trying to be a student of the world because that’s what we’re operating in an I find it just a very interesting avenue to get an appreciation to for the, not just the opportunities, but the challenges we’re collectively facing as a society but also as a business. RITHOLTZ: I’m with you on that mass consumption of investing-related news. It sounds like you and I have the same a morning routine. Let’s talk about of what sort of advice you would give to a recent college graduate who was interested in a career of alternative investments? CONWAY: Well, the industry has – it’s just gone through such extraordinary growth and the difference, when I’ve started versus today, the career opportunity set has changed so much. And I think I try to remind anyone of our analysts who come into each one of our annual classes, right, as we bring in the new recruits. I think about how talented they are for us, Barry, and how privileged we all are to be in this industry and work for the clients that we do. It’s just such an honor to do that. But I kind of – I try to remind them of that. At the end of the day, whether you’re supporting an institution, that institution is the face of many people in the background and alternatives has really now become such an important part of their experience and we talked about earlier just this challenge of retirement, if we do a good job, these institutions that support the many, they can have, hopefully, a retirement that involves dignity and they can have an ability to do things they so wanted to do as they work so hard over their lives. Getting that that personal connection and allowing for those newbies to understand that that’s the effect that you can have, an alternatives whether it’s private equity, real estate, infrastructure, private credit, hedge funds, all of these now, with the scale at which they’re operating at can allow for a great career. But my advice to them is always don’t forget your career is supporting other people. And that comes directly to how we intersect with wealth channel, it comes indirectly as a result of the institutions. And it’s such a privilege to do that. I didn’t envision when I grew up, as I mentioned, my first job, milking cows and back in a small town in the middle of Ireland that I would be one day leading an alternatives business within BlackRock. I see that as a great privilege. So, for those who are joining afresh, hopefully, try to remind them that it is for all of us and show up with empathy, dignity, compassion, and do the best you can, and hopefully, these people be sure will serve them well. RITHOLTZ: And our final question, what you know about the world of alternative investing today you wish you knew 25 years or so ago when you were first getting started? CONWAY: I think if we had invested much more heavily as an industry in technology, we would not be in the position we are today. And I say that, Barry, from a number of aspects. I mentioned in this shortfall of information our clients are dealing with today. They’re making choices to divest from one asset class to invest in another. To do that and do that effectively, they need great transparency, they needed real-time in many respects, it can’t be just a quarterly line basis. And if we had been better prepared as an industry to provide the technology and the data to help our clients really appreciate what it is they own, how we’re managing the assets on their behalf, I think they would be so much better served. I think we’re very fortunate at this firm to have built a business on the back of technology for albeit 30 plus years and were investing over $1 billion a year in technology as I’m sure you know. But we need to see more of that in the industry. So, the client experience is so important, stop, let’s demystify alternatives. It’s not that alternative. Let’s provide education and data and it’s become so large relative to other asset classes, the need to support, to educate, and transmit information, not data, information, so our client understand it, is at a paramount now. And I think it certainly as an industry, things have to change there. If I knew how big the growth would have been and how prominent these asset classes were becoming, I would oppose so much harder on that front 30 years ago. RITHOLTZ: Thank you, Edwin, for being so generous with your time. We’ve been speaking with Edwin Conway. He is the head of Blackrock Investor Alternatives Group. If you enjoy this conversation, please check out all of our prior discussions. You can find those at iTunes, Spotify, wherever you get your podcast at. We love your comments, feedback and suggestions. Write to us at MIB podcast@Bloomberg.net. You can sign up for my daily reads at ritholtz.com. Check out my weekly column at Bloomberg.com/opinion. Follow me on Twitter, @ritholtz. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Mohammed ph is my audio engineer. Paris Wald is my producer, Michael Batnick is my head of research, Atika Valbrun is our project manager. I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio.   ~~~   The post Transcript: Edwin Conway appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureNov 22nd, 2021

Millennials own nothing because the economy screwed us over for 25 years - but older generations still try and blame it on our work ethic

Older generations don't understand just how much harder it is for millennials and younger generations to build wealth. Millennials have been screwed over by the economy. Allison Nicole Leung/Insider Intelligence My parents don't understand why I don't own a house, a car, or a retirement savings account. My generation has fewer job opportunities, more student debt, and outrageous housing prices. It's far worse for us than it was for previous generations. Ingrid Cruz is a freelance writer based in Mississippi. This is an opinion column. The thoughts expressed are those of the author. A few months ago my parents chastised me for not really owning anything. I have few savings, don't own a house, investments, or even a 401K due to financial pressures prior to the pandemic, some of which only worsened last year. This is a struggle many millennials face, but I, a first-generation immigrant, often feel guilty and unworthy knowing my net worth is in the negative. As a child, my mother wanted me to go into a respectable, high-paying, stable profession, such as a lawyer, accountant, or perhaps a high-ranking corporate position. She always expected me to buy a home, get married by a certain age, and eventually take care of her as she got older. Instead, I am a writer on a freelance income with student loan debt that will wreck my finances once repayment provisions begin again in 2022. It's hard to make my parents understand that the United States they dreamt of and brought me to in 1989 has drastically changed. The economy is stacked against millennials According to a CNBC report, millennials owned only 5.19% of the United States' total wealth in 2020 - four times less than what boomers owned at the same age. We are a generation that saw income inequality increase just as the Great Recession caused hiring freezes, decreased our odds of finding a good job, and student loan debt skyrocketed. The Bureau of Labor Statistics states that high student loan debt caused millennials to delay major life decisions. Fewer earnings meant delaying marriage, home and car purchases, and not being able to move out of our parents' homes - or having to move back in during a crisis. In drastic situations, fewer earnings also leads people to delay medical care and avoid scheduling routine physical checkups, leaving issues undiagnosed. Navigating the maze of health insurance costs and policies in the United States is also difficult, and takes a toll on our finances. Even for a healthy person, the price of having a child at a hospital can be prohibitive and childcare, care for aging parents, and other line items necessary to sustain a healthy family are frequently financially debilitating. The Great Recession also affected housing, creating shortages that were driving up rent even before the pandemic. Stagnating and low wages are only part of the problem: Even with higher wages, many millennials live paycheck to paycheck because of the many debts they've had to take on in order to get by. The rising costs of living we are currently experiencing, and will be sure to continue experiencing without intervention from the federal and state government, are only going to make it more challenging for millennials, Gen Z, and future generations to build wealth unless we work to ensure pay equity and reasonable costs of living. Rent control, controls on house-flipping that artificially increases the cost of land and rent, and even climate justice that would prevent devastating fires would give millennials peace of mind when it comes to securing housing. Most personal finance advice doesn't apply for our generation Though well-intentioned, many articles on saving money or generating wealth aren't helpful to working-class, marginalized, or economically hard-hit people who have little access to wealth and social capital to begin with. Such finance articles often assume that people who want to save money can afford to spend money at coffee shops, subscriptions, gyms, or can afford online shopping to start with. There's no way to save $4 per day on a cup of coffee if you're not in the position to do so in the first place. Many millennials, especially immigrants and refugees, grew up with the idea that we'd not only come to this country to live a better life, but to own nicer things. In family structures where scarcity was often a factor in everyday life, one of the few ways we can prove our parents' investments and sacrifices were worth it is to achieve an extraordinary amount of financial success.Some people have done so, but they're the exception rather than the rule. Learning financial literacy is a challenge for people who grew up with survival as their main goal. Fact is, it's harder for millennials to move up in their social and income status than previous generations. According to a 2019 analysis by Stanford University, there are also racial homeownership gaps among millennials because every gain from the reforms meant to help people of color own homes after the Civil Rights Movement has been lost.Though many millennials are able to secure wages that are higher than the federal minimum wage, $7.25 per hour is 31% less than the minimum wage in 1968, once inflation is accounted for. As millennials, we're constantly at the whim of market forces that throw us into disarray, with little or no safety nets, and we regularly have to fight against misconceptions about our work ethic or ambitions. But that can change.Success does not equal owning something First, we can stop tying our success and sense of accomplishments to owning things. It's okay to grieve the opportunities and wages we've lost while recognizing that we have done our best. We were taught we lived in a world of promise just as the opportunities conferred to past generations began to disappear. Then, we had a pandemic to consider. Millennials can also talk to the elders in our lives and explain our side of this. The systemic obstacles and injustices we've faced in our quest to make a living are real and different from what our parents faced. Our cost of living, healthcare, childcare, and education expenses are exorbitant, and they weren't this high for previous generations. This may not change the minds of our elders, but it can give us something to consider.We can keep voting, educating, and organizing for our rights, and people of all generations can work to understand how decisions made in the past created the systems, inequities, and issues millennials and the next few generations must grapple with. On top of everything I've mentioned, we also have climate change to deal with - all of which will impact our finances and mental health. The constant need to continue changing minds and ensuring the next generations don't go through what we go through can be exhausting, but chasing after it is well worth it.Finally, we can surround ourselves with like-minded individuals who understand us and can provide moral support and remember to rest whenever we can. Our world and its prospects are exhausting. We needn't feel guilty about finding a few moments of peace and quiet. Read the original article on Business Insider.....»»

Category: dealsSource: nytNov 7th, 2021

Transcript: Soraya Darabi

     The transcript from this week’s, MiB: Soraya Darabi, TMV, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This… Read More The post Transcript: Soraya Darabi appeared first on The Big Picture.      The transcript from this week’s, MiB: Soraya Darabi, TMV, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest. Her name is Soraya Darabi. She is a venture capital and impact investor who has an absolutely fascinating background working for, first with the New York Times Social Media Group then with a startup that eventually gets purchased by OpenTable, and then becoming a venture investor that focuses on women and people of color-led startups which is not merely a way to, quote-unquote, “do good” but it’s a broad area that is wildly underserved by the venture community and therefore is very inefficient. Meaning, there’s a lot of upside in this. You can both do well and do good by investing in these areas. I found this to be absolutely fascinating and I think you will also, if you’re at all interested in entrepreneurship, social media startups, deal flow, how funds identify who they want to invest in, what it’s like to actually experience an exit as an entrepreneur, I think you’ll find this to be quite fascinating. So with no further ado, my conversation with TMV’s Soraya Darabi. VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. My special guest this week is Soraya Darabi. She is the Co-Founder and General Partner of TMV, a venture capital firm that has had a number of that exits despite being relatively young, 65 percent of TMV’s startups are led by women or people of color. Previously, she was the cofounder of Foodspotting, an app named App of the Year by Apple and Wire that was eventually purchased by OpenTable. Soraya Darabi, welcome to Bloomberg. SORAYA DARABI; GENERAL PARTNER & FOUNDER; TMV: My goodness, Barry, thank you for having me. RITHOLTZ: I’ve been looking forward to this conversation since our previous discussion. We were on a Zoom call with a number of people discussing blockchain and crypto when it was really quite fascinating and I thought you had such an unusual and interesting background, I thought you would make a perfect guest for the show. Let’s start with your Manager of Digital Partnerships and Social Media at the “New York Times” when social media was really just ramping up. Tell us about what that was like. Tell us what you did in the late aughts at The Times. DARABI: Absolutely. I was fresh faced out of a university. I had recently graduated with mostly a journalism concentration from Georgetown and did a small stint in Condé Nast right around the time they acquired Reddit for what will soon be nothing because Reddit’s expecting to IPO at around 15 billion. And that experience at Reddit really offered me a deep understanding of convergence, what was happening to digital media properties as they partnered for the first time when nascent but scaling social media platforms. And so the “New York Times” generously offered me a role that was originally called manager of buzz marketing. I think that’s what they called social media in 2006 and then that eventually evolved into manager of digital partnerships and social media which, in essence, meant that we were aiming to be the first media property in the world to partner with companies that are household names today but back in the they were fairly unbalanced to Facebook and Twitters, of course, but also platforms that really took off for a while and then plateaued potentially. The Tumblers of the world. And it was responsibility to understand how we could effectively generate an understanding of the burgeoning demographics of this platform and how we could potentially bring income into The Times for working with them, but more importantly have a journalist that could authentically represent themselves on new media. And so, that was a really wonderful role to have directly out of University and then introduce me to folks with whom I still work today. DARABI: That’s quite interesting. So when you’re looking at a lot of these companies, you mentioned Facebook and Twitter and Tumbler, how do you know if something’s going to be a Facebook or a MySpace, so Twitter or a Tumbler, what’s going to survive or not, when you’re cutting deals with these companies on behalf of The Times, are you thinking in terms of hey, who’s going to stick around, wasn’t that much earlier that the dot-com implosion took place prior to you starting with The Times? DARABI: It’s true, although I don’t remember the dot-com implosion. So, maybe that naivete helped because all I had was enthusiasm, unbridled enthusiasm for these new companies and I operated then and now still with a beta approach to business. Testing out new platforms and trying to track the data, what’s scaling, what velocity is this platform scaling and can we hitch a ride on the rochet ship if they will so allow. But a lot of our partnerships then and now, as an investor, are predicated upon relationships. And so, as most, I think terrific investors that I listen to, who I listen to in your show, at least, will talk to you about the importance of believing and the founder and the founder’s vision and that was the case back then and remains the case today. RITHOLTZ: So, when you were at The Times, your tenure there very much overlapped the great financial crisis. You’re looking at social media, how did that manifest the world of social media when it looked like the world of finance was imploding at that time? DARABI: Well, it was a very interesting time. I remember having, quite literally, 30-second meetings with Sorkin as he would run upstairs to my floor, in the eighth floor, to talk about a deal book app that we wanted to launch and then he’d ran back down to his desk to do much more important work, I think, and — between the financial crisis to the world. So, 30-second meetings aside, it was considered to be, in some ways, a great awakening for the Web 2.0 era as the economy was bottoming out, like a recession, it also offered a really interesting opportunity for entrepreneurs, many of whom had just been laid off or we’re looking at this as a sizeable moment to begin to work on a side hustle or a life pursuit. And so, there’s — it’s unsettling, of course, any recession or any great awakening, but lemonade-lemons, when the opening door closing, there was a — there was a true opportunity as well for social media founders, founders focusing on convergence in any industry, really, many of which are predicated in New York. But again, tinkering on an idea that could ultimately become quite powerful because if you’re in the earliest stage of the riskiest asset class, big venture, there’s always going to be seed funding for a great founder with a great idea. And so, I think some of the smartest people I’d ever met in my life, I met at the onset of the aftermath of that particular era in time. RITHOLTZ: So you mentioned side hustle. Let’s talk a little bit about Foodspotting which is described as a visual geolocal guide to dishes instead of restaurants which sounds appealing to me. And it was named App of the Year by both Apple and Wired. How do you go from working at a giant organization like The Times to a startup with you and a cofounder and a handful of other coders working with you? DARABI: Well, five to six nights a week after my day job at the “New York Times,” I would go to networking events with technologists and entrepreneurs after hours. I saw that a priority to be able to partner from the earliest infancy with interesting companies for that media entity. I need to at least know who these founders were in New York and Silicon Valley. And so, without a true agenda other than keen curiosity to learn what this business were all about, I would go to New York tech meetup which Scott Heiferman of meetup.com who’s now in charge LP in my fund would create. And back then, the New York Tech Meetup was fewer than 40 people. I believe it’s been the tens of thousands now. RITHOLTZ: Wow, that’s … DARABI: In New York City alone. And so, it was there that I met some really brilliant people. And in particular, a gentleman my age who’s building a cloud-computing company that was essentially arbitraging AWS to repopulate consumer-facing cloud data services for enterprises, B2B2C play. And we all thought it would be Dropbox. The company ultimately wasn’t, but I will tell you the people with whom I worked with that startup because I left the “New York Times” to join that startup, to this day remain some of the most successful people in Silicon Valley and Alley. And actually, one of those persons is a partner at our firm now, Darshan. He was the cofounder of that particular company which is called drop.io. but I stayed there very quickly. I was there for about six months. But at that startup, I observed how a young person my age could build a business, raise VC, he was the son of a VC and so he was exceptionally attuned to the changing landscape of venture and how to position the company so that it would be attractive to the RREs of the world and then the DFJs. And I … RITHOLTZ: Define those for us. RREs and BFJs. DARABI: Sorry. Still, today, very relevant and very successful venture capital firms. And in particular, they were backing a lot of the most interesting ideas in Web 2.0 era when I joined this particular startup in 2010. Well, that startup was acquired by Facebook and I often say, no, thanks to me. But the mafia that left that particular startup continues to this day to coinvest with one another and help one another’s ideas to exceed. And it was there that I began to build the confidence, I think, that I really needed to explore my own entrepreneurial ideas or to help accelerate ideas. And Foodspotting was a company that I was advising while at that particular startup, that was really taking off. This was in the early days of when Instagram was still in beta and we observed that the most commonly posted photos on Instagram were of food. And so, by following that lead, we basically built an app as well that activity that continues to take place every single day. I still see food photos on Twitter every time I open up my stream. And decided to match that with an algorithm that showed folks wherever they were in the world, say in Greece, that might want spanakopita or if I’m in Japan, Okinawa, we help people to discover not just the Michelin-rated restaurants or the most popular local hunt in New York but rather what’s the dish that they should be ordering. And then the app was extremely good was populating beautiful photos of that particular dish and then mirroring them with accredited reviews from the Zagats of the world but also popular celebrity shots like Marcus Samuelsson in New York. And that’s why we took off because it was a cult-beloved app of its time back when there were only three geolocation apps in the iTunes apparently store. It was we and Twitter and Foursquare. So, there was a first-mover advantage. Looking back in hindsight, I think we sold that company too soon. OpenTable bought the business. A year and a half later, Priceline bought OpenTable. Both were generous liquidity events for the founders that enabled us to become angel investors. But sometimes I wish that that app still existed today because I could see it being still incredibly handy in my day-to-day life. RITHOLTZ: To say the least. So did you have to raise money for Foodspotting or did you just bootstrapped it and how did that experience compare with what that exit was like? DARABI: We did. We raised from tremendous investors like Aydin Senkut of Felicis Ventures whom I think of as being one of the best angel investors of the world. He was on the board. But we didn’t raise that much capital before the business is ultimately sold and what I learned in some of those early conversations, I would say, that may have ultimately led to LOIs and term sheets was that so much of M&As about wining and dining and as a young person, particularly for me, you and I discussed before the show, Barry, we’re both from New York, I’m not from a business-oriented family to say the least. My mom’s an academic, my father was a cab driver in New York City. And so, there are certain elements of this game, raising venture and ultimately trying to exit your company, that you don’t learn from a business book. And I think navigating that as a young person was complicated if I had to speak economically. RITHOLTZ: Quite fascinating. What is purposeful change? DARABI: Well, the world purpose, I suppose, especially in the VC game could come across as somewhat of a cliché. But we try to be as specific as possible when we allude to the impact that our investment could potentially make. And so, specifically, we invest in five verticals at our early stage New York City-based venture fund. We invest in what we call the care economy, just companies making all forms of care, elder care to pet care to health care, more accessible and equitable. We invest in financial inclusion. So this is a spin on fintech. These are companies enabling wealth creation, education, and most importantly literacy for all, that I think is really important to democratization of finance. We invest in the future of work which are companies creating better outcomes for workers and employees alike. We invest in the future of work which are companies creating better outcomes for workers and employers alike. We invest in purpose as it pertains to transportation. So, not immediately intuitive but companies creating transparency and efficiency around global supply chain and mobility. I’m going to talk about why we pick that category in a bit. And sustainability. So, tech-enabled sustainable solutions. These are companies optimizing for sustainability from process to product. With these five verticals combined, we have a subspecies which is that diverse founders and diverse employee bases and diverse cap table. It is not charity, it’s simply good for business. And so, in addition to being hyper specific about the impact in which we invest, we also make it a priority and a mandate at our firm to invest in the way the world truly look. And when we say that on our website, we link to census data. And so, we invest in man and women equally. We invest in diverse founders, almost all of the time. And we track this with data and precious to make sure that our investments reflect not just one zip code in California but rather America at large. RITHOLTZ: And you have described this as non-obvious founders. Tell us a little bit about that phrase. DARABI: Well, not obvious is a term you hear a lot when you go out to Silicon Valley. And I don’t know, I think it was coined by a well-known early PayPal employee turned billionaire turned investor who actually have a conference centered around non-obvious ideas. And I love the phrase. I love thinking about investment PC that are contrary because we have a contrary point of view, contrarian point of view, you often have outlier results because if you’re right, you’re taking the risk and your capturing the reward. When you’re investing in non-obvious founders, it should be that is the exact same outcome. And so, it almost sort of befuddled me as a person with a hard to pronounce name in Silicon Valley, why it was that we’re an industry that prides itself on investing in innovation and groundbreaking ideas and the next frontier of X, Y, and Z and yet all of those founders in which we were investing, collectively, tended to kind of look the same. They were coming from the same schools and the same types of families. And so, to me, there was nothing innovative at all about backing that Wharton, PSB, HBS guy who is second or third-generation finance. And what really excites me about venture is capturing a moment in time that’s young but also the energy is palpable around not only the idea in which the founder is building but the categories of which they’re tackling and that sounded big. I’ll be a little bit more speficic. And so, at TMV, we tried to see things before they’re even coming around the bend. For instance, we were early investors in a company called Cityblock Health which is offering best in class health care specifically for low income Americans. So they focus on the most vulnerable population which are underserved with health care and they’re offering them best in class health care access at affordable pricing because it’s predominantly covered through a payer relationship. And this company is so powerful to us for three reasons because it’s not simply offering health care to the elite. It’s democratizing access to care which I think is absolutely necessary in term out for success of any kind. We thought this was profoundly interesting because the population which they serve is also incredibly diverse. And so when you look at that investment over, say, a comparable company, I won’t name names, that offers for-profit health care, out-of-pocket, you can see why this is an opportunity that excites us as impact investors but we don’t see the diversity of the team it’s impact. We actually see that as their unfair advantage because they are accessing a population authentically that others might ignore. RITHOLTZ: Let me see if I understand this correctly. When you talk about non-obvious find — founders and spaces like this, what I’m hearing from you is you’re looking at areas where the market has been very inefficient with how it allocates capital … DARABI: Yes. RITHOLTZ: … that these areas are just overlooked and ignored, hey, if you want to go on to silicon valley and compete with everybody else and pay up for what looks like the same old startup, maybe it will successful and maybe it won’t, that’s hypercompetitive and hyper efficient, these are areas that are just overlooked and there is — this is more than just do-goodery for lack of a better word. There are genuine economic opportunities here with lots of potential upside. DARABI: Absolutely. So, my business partner and I, she and I found each other 20 years ago as undergrads at Georgetown but we went in to business after she was successful and being one of the only women in the world to take a shipping business public with her family, and we got together and we said we have a really unique access, she and I. And the first SPV that we collaborated on back in 2016 was a young business at the time, started by two women, that was focused on medical apparel predominantly for nurses. Now it’s nurses and doctors. And they were offering a solution to make medical apparel, so scrubs, more comfortable and more fashionable for nurses. I happen to have nurses and doctors in my family so doing due diligence for this business is relatively simple. I called my aunt who’s a nurse practitioner, a nurse her life, and she said, absolutely. When you’re working in a uniform at the hospital, you want something comfortable with extra pockets that makes you look and feel good. The VCs that they spoke to at the time, and they’ve been very public about this, in the beginning, anyway, were less excited because they correlated this particular business for the fashion company. But if you look back at our original memo which I saved, it says, FIGS, now public on the New York Stock Exchange is a utility business. It’s a uniform company that can verticalize beyond just medical apparel. And so, we helped value that company at 15 million back in 2016. And this year, in 2021, they went public at a $7 billion market cap. RITHOLTZ: Wow. DARABI: And so, what is particularly exciting for us going back to that conversation on non-obvious founders is that particular business, FIGS, was the first company in history to have two female co-founders go public. And when we think of success at TMV, we don’t just think about financial success and IRR and cash on cash return for our LPs, of course we think about that. But we also think who are we cheerleading and with whom do we want to go into business. I went to the story on the other side of the fence that we want to help and we measure non-obvious not just based on gender or race because I think that’s a little too precise in some ways. Sometimes, for us non-obvious, is around geography, I would say. I’m calling you from Athens, as you know, and in Greece, yesterday, I got together with a fund manager. I’m lucky enough to be an LP in her fund and she was talking about the average size of a seed round in Silicon Valley these days, hovering around 30 million. And I was scratching my head because at our fund, TMV, we don’t see that. We’re investing in Baltimore, Maryland, and in Austin, Texas and the average price for us to invest in the seed round is closer to 5 million or 6 million. And so, we actually can capture larger ownership of the pie early on and then develop a very close-knit relationship with these founders but might not be as networked in the Valley where there’s 30 VC funds to everyone that exist in Austin, Texas. RITHOLTZ: Right. DARABI: And so, yes, I think you’re right to say that it’s about inefficiencies in market but also just around — about being persistent and looking where others are not. RITHOLTZ: That’s quite intriguing. Your team is female-led. You have a portfolio of companies that’s about 65 percent women and people of color. Tell us how you go about finding these non-obvious startups? DARABI: It’s a good question. TMV celebrates its five-year anniversary this year. So the way we go about funding companies now is a bit different than the way we began five years ago. Now, it’s systematic. We collectively, as a partnership, there are many of us take over 50 calls a month with Tier 1 venture capital firms that have known us for a while like the work that we do, believe in our value-add because the partnership comprised of four more operators. So, we really roll up our sleeves to help. And when you’ve invested at this firms, enough time, they will write to you and say I found a company that’s a little too early for us, for XYZ reason, but it resonates and I think it might be for you. So we found some of our best deals that way. But other times, we found our deal flow through building our own communities. And so, when I first started visit as an EM, an emerging manager of a VC firm. And roughly 30 percent of LP capital goes to EM each year but that’s sort of an outsized percentage because when you think about the w-fix-solve (ph) addition capital, taking 1.3 billion of that pie, then you recognize the definition of emerging manager might need to change a bit. So, when I was starting as an EM, I recognize that the landscape wasn’t necessarily leveled. If you weren’t, what’s called the spinout, somebody that has spent a few years at a traditional established blue-chip firm, then it’s harder to develop and cultivate relationships with institutional LPs who will give you a shot even though the data absolutely points to there being a real opportunity in capturing lightning in a bottle if you find a right EM with the right idea in the right market conditions which is certainly what we’re in right now. And so, I decided to start a network specifically tailored around helping women fund managers, connecting one another and it began as a WhatsApp group and a weekly Google Meet that has now blown into something that requires a lot of dedicated time. And so we’re hiring an executive director for this group. They’re called Transact Global, 250 women ex-fund managers globally, from Hong Kong, to Luxembourg, to Venezuela, Canada, Nigeria, you name it. There are women fund managers in our group and we have one of the most active deal flow channels in the world. And so two of our TMV deals over the last year, a fintech combatting student debt and helping young Americans save for retirement at the same time, as an example, came from this WhatsApp deal flow channel. So, I think creating the community, being the change, so to speak, has been incredibly effective for us a proprietary deal flow mechanism. And then last but not least, I think that having some sort of media presence really has helped. And so, I’ve hosted a podcast and I’ve worked on building up what I think to be a fairly organic Twitter following over the years and we surprise ourselves by getting some really exceptional founders cold pitching us on LinkedIn and on Twitter because we make ourselves available as next gen EMs. So, that’s a sort of long-winded answer to your question. But it’s not the traditional means by any means. RITHOLTZ: To say the least. Are you — the companies you’re investing in, are they — and I’ll try and keep this simple for people who are not all that well-versed in the world of venture, is it seed stage, is it the A round, the B round? How far into their growth process do you put money in? DARABI: So it is a predominantly seed fund. We call our investments core investments. So, these are checks that average, 1 and 1.5 million. So for about 1.25 million, on average, we’re capturing 10-15% of a cap payable. And in this area, that’s called a seed round. It will probably be called a Series A 10 years ago. RITHOLTZ: Right. DARABI: And then we follow on through the Series A and it max around, I think, our pro rata at the B. So, our goal via Series B is to have, on average, 10% by the cap. And then we give ourselves a little bit of wiggle room with our modeling. We take mars and moonshot investments with smaller checks so we call these initial interest checks. And initial interest means I’m interested but your idea is still audacious, they won’t prove itself out for three or four years or to be very honest, we weren’t the first to get into this cap or you’re picking Sequoia over us, so we understand but let’s see if we can just promise you a bit of value add to edge our way into your business. RITHOLTZ: Right. DARABI: And oftentimes, when you speak as a former founder yourself with a high level of compassion and you promise with integrity that you’re going to work very hard for that company, they will increase the size of their round and they will carve out space for you. And so, we do those types of investments rarely, 10 times, in any given portfolio. But what’s interesting in looking back at some of our outliers from found one, it came from those initial interest checks. So that’s our model in a nutshell. We’re pretty transparent about it. What we like about this model is that it doesn’t make us tigers, we’re off the board by the B, so we’re still owning enough of the cap table to be a meaningful presence in the founder’s lives and in their business and it allows us to feel like we’re not spraying and praying. RITHOLTZ: Spraying and praying is an amusing term but I’m kind of intrigued by the fact that we use to call it smart money but you’re really describing it as value-added capital when a founder takes money from TMV, they’re getting more than just a check, they’re getting the involvement from entrepreneurs who have been through the process from startup to capital raise to exit, tell us a li bit about how that works its way into the deals you end up doing, who you look at, and what the sort of deal flow you see is like. DARABI: Well, years ago, I had the pleasure of meeting a world-class advertiser and I was at his incredibly fancy office down in Wall Street, his ad agency. And he described to me with pride how he basically bartered his marketing services for one percent of a unicorn. And he was sort of showing off of it about how, from very little time and effort, a few months, he walked away with a relatively large portion of a business. And I thought, yes, that’s clever. But for the founder, they gave up too much of their business too soon. RITHOLTZ: Right. DARABI: And I came up with an idea that I floated by Marina back in the day where our original for TMV Fund I began with the slide marketing as the future of venture and venture is the future of marketing. Meaning, it’s a VC fund where the position itself more like an ad agency but rather than charging for its services, it’s go-to-market services. You offer them free of charge but then you were paid in equity and you could quantify the value that you were offering to these businesses. And back then, people laughed us even though all around New York City, ad agencies were really doing incredible work and benefiting from the startups in that ecosystem. And so, we sort of changed the positioning a bit. And now, we say to our LPs and to our founders, your both clients of our firm. So, we do think of ourselves as an agency. But one set of our marketplace, you have LPs and what they want is crystal clear. The value that they derive from us is through a community and connectivity and co-investment and that’s it. It’s pretty kind of dry. Call me up once a year where you have an exceptional opportunity. Let me invest alongside you. Invite me to dinners four times a year, give me some information and a point of view that I can’t get elsewhere. Thank you for your time. And I love that. It’s a great relationship to have with incredibly smart people. It’s cut and dry but it’s so different. What founders want is something more like family. They want a VC on their board that they can turn to during critical moments. Two a.m. on a Saturday is not an uncommon time for me to get a text message from a founder saying what do I do. So what they want is more like 24/7 services for a period of time. And they want to know when that relationship should start and finish. So it’s sort of the Montessori approach to venture. We’re going to tell them what we’re going to tell them. Tell them what they’re telling them. Tell them what we told them. We say to founders with a reverse pitch deck. So we pitch them as they’re pitching us. Here’s what we promise to deliver for you for the first — each of the 24 months of your infancy and then we promise you we’ll mostly get lost. You can come back to use when your business is growing if you want to do it tender and we’ll operate an SPV for you for you or if you simply want advice, we’re never going to ignore you but our specialty, our black belt, if you will, Barry, is in those first 24 months of your business, that go-to-market. And so, we staffed up TMV to include, well, it’s punching above our weight but the cofounder of an exceptionally successful consumer marketing business, a gross marketer, a recruiter who helps one of our portfolio companies hire 40 of their earliest employees. We have a PR woman. You’ve met Viyash (ph), she’s exceptional with whom, I don’t know, how we would function sometimes because she’s constantly writing and re-editing press releases for the founders with which we work. And then Anna, our copywriter who came from IAC and Sean, our creative director, used to be the design director for Rolling Stone, and I can go on and on. So, some firms called us a platform team but we call it the go-to-market team. And then we promise a set number of hours for ever company that we invest into. RITHOLTZ: That’s … DARABI: And then the results — go ahead. RITHOLTZ: No, that’s just — I’m completely fascinated by that. But I have to ask maybe this is an obvious question or maybe it’s not, so you — you sound very much like a non-traditional venture capital firm. DARABI: Yes. RITHOLTZ: Who are your limited partners, who are your clients, and what motivates them to be involved with TMV because it sounds so different than what has been a pretty standard model in the world of venture, one that’s been tremendous successful for the top-tier firms? DARABI: Our LP set is crafted with intention. And so, 50% of our investors are institutional. This concludes institutional-sized family offices and family offices in a multibillions. We work with three major banks, Fortune 500 banks. We work with a couple of corporate Fortune 500 as investors or LPs and a couple of fund to funds. So that’s really run of the mill. But 50 percent of our investors and that’s why I’m in Athens today are family offices, global family offices, that I think are reinventing with ventures like, to look like in the future because wealth has never been greater globally. There’s a trillion dollars of assets that are passing to the hands of one generation to the next and what’s super interesting to me, as a woman, is that historically, a lot of that asset transferred was from father to son, but actually, for the first time in history, over 50 percent, so 51% of those asset inheritors are actually women. And so, as my business partner could tell because she herself is a next gen, in prior generations, women were encouraged to go into the philanthropic or nonprofit side of the family business … RITHOLTZ: Right. DARABI: And the sons were expected to take over the business or the family office and all of that is completely turned around in the last 10 years. And so, my anchor investor is actually a young woman. She’s under the age of 35. There’s a little bit of our firm that’s in the rocks because we’re not playing by the same rules that the establishment has played by. But certainly, we’re posturing ourselves to be able to grow in to a blue-chip firm which is why we want to maintain that balance, so 50 percent institutional and 50 percent, I would call it bespoke capital. And so, the LPs that are bespoke, we work at an Australian family office and Venezuelan family office and the Chilean family office and the Mexican family office and so on. For those family offices, we come to them, we invite them to events in New York City, we give them personalized introductions to our founders and we get on the phone with them. Whenever they’d like, we host Zooms. We call them the future of everything series. They can learn from us. And we get to know them as human beings and I think that there’s a reason why two thirds of our Fund I LPs converted over into Fund II because they like that level of access, it’s what the modern LP is really looking for. RITHOLTZ: Let’s talk a little bit about some of the areas that you find intriguing. What sectors are really capturing your attention these days? What are you most excited about? DARABI: Well, Barry, I’m most excited about five categories for which we’ve been investing for quite some time, but they’re really being accelerated due to the 2020 pandemic and a looming recession. And so, we’re particularly fascinated by not just health care investing as has been called in the past but rather the care economy. I’m not a huge fan of the term femtech, it always sounds like fembot to me. But care as it pertains to women alone is a multitrillion dollar opportunity. And so, when we think of the care economy, we think of health care, pet care, elder care, community care, personal care as it pertains to young people, old people, men, women, children, we bifurcate and we look for interesting opportunities that don’t exist because they’ve been undercapitalized, undervalued for so long. Case in point, we were early investors Kindbody, a reproductive health care company focused on women who want to preserve their fertility because if you look at 2010 census data, you can see that the data has been there for some time that women, in particular, were delaying marriage and childbirth and there are a lot of world-famous economists who will tell you this, the global population will decline because we’re aging and we’re not necessarily having as many children as we would have in the past plus it’s expensive. And so, we saw that as investors as a really interesting opportunity and jumped on the chance to ask Gina Bartasi who’s incredible when she came to us with a way to make fertility preservation plus expenses. So she followed the B2C playbook and she started with the mobile clinic that helps women freeze their eggs extensively. That company has gone on to raise hundreds — pardon me — and that company is now valued in the hundreds of million and for us, it was as simple as following our intuition as women fund managers, we know what our peers are thinking about because we talk to them all the time and I think the fact that we’re bringing a new perspective to venture means that we’re also bringing a new perspective to what has previously been called femtech. We invest in financial inclusion. Everyone in the world that’s investing fintech, the self-directed financial mobile apps are always going to be capitalized especially in a post Robin Hood era but we’re specifically interested in the democratization of access to financial information and we’re specifically interested in student debt and alleviating student debt in America because not only is it going to be one of the greatest challenges our generation will have to overcome, but it’s also prohibiting us from living out the American dream, $1.7 trillion of student debt in America that needs to be alleviated. And then we’re interested in the future of work, and long have been, that certainly was very much accelerated during the pandemic but we’ve been investing in the 1099 and remote work for quite some time. And so, really proud to have been the first check into a company called Bravely which is an HR chatbot that helps employees inside of a company chat a anonymously with HR representatives outside of that company, that’s 1099. That issue is like DEI, an inclusion and upward mobility and culture setting and what to do when you’re all of a sudden working for home. So that’s an example of a future of work business. And then in the tech-enabled sustainable solutions category, it’s a mouthful, let’s call that sustainability, we are proud to have been early investors of a company called Ridwell, out of Seattle Washington, focused on not just private — privatized recycling but upcycling and reconnaissance. Where are our things going when we recycle them? For me, it always been a pretty big question. And so, Ridwell allows you to re and upcycle things that are hard to get rid of out of your home like children’s eyeglasses and paints and battery, single-use plastic. And it shows you where those things are going which I think is super cool and there’s good reason why it has one of the highest NPS scores, Net Promoter Scores, of any company I’ve ever worked with. People are craving this kind of modern solution. And last but not least, we invest in transportation and part because of the unfair advantage my partner, Marina, brings to TMV as she comes from a maritime family. And so, we can pile it, transportation technology, within her own ecosystem. That’s pretty great. But also, because we’re just fascinated by the fact that 90 percent of the world commodities move on ship and the biggest contributor to emissions in the world outside of corporate is coming from transportation. SO, if we can sort of figure out this industry, we can solve a lot of the problems that our generation are inheriting. Now, these categories might sound massive and we do consider ourselves a generalist firm but we stick to five-course sectors that we truly believe in and we give ourselves room to kick out a sector or to add a new one with any given new fund. For the most part, we haven’t needed to because this remain the categories that are not only most appealing to us as investors but I think paramount to our generation. RITHOLTZ: That’s really intriguing. Give us an example of moonshot or what you called earlier, a Mars shot technology or a company that can really be a gamechanger but may not pay off for quite a while. DARABI: We’ve just backed a company that is focusing on food science. Gosh, I can’t give away too much because they haven’t truly launched in the U.S. But maybe I’ll kind of allude to it. They use crushed produce, like, crush potato skins to make plastic but biodegrades. And so, it’s a Mars shot because it’s a materials business and it’s a food science business rolled off into both the CPG business and an enterprise business. This particular material can wrap itself around industrial pellets. Even though it’s audacious, it’s not really a Mars shot when you think about the way the world is headed. Everybody wants to figure out how do we consume less plastic and recycle plastic better. And so, if there are new materials out there that will not only disintegrate but also, in some ways, feed the environment, it will be a no-brainer and then if you add to the equation the fact that it could be maybe not less expensive but of comparable pricing to the alternative, I can’t think of a company in the world that wouldn’t switch to this solution. RITHOLTZ: Right. So this is plastic that you don’t throw away. You just toss in the garden and it becomes compost? DARABI: Yes, exactly. Exactly. It should help your garden grow. So, yes, so that’s what I would call a Mars shot in some ways. But in other ways, it’s just common sense, right? RITHOLTZ: So let’s talk a little bit about your investment vehicles. You guys run, I want to make sure I get this right, two funds and three vehicles, is that right? DARABI: We have two funds. They’re both considered micro funds because they’re both under 100 million and then we operate in parallel for SPVs that are relatively evergreen and they serve as opportunistic investments to continue to double down on our winners. RITHOLTZ: SPV is special purpose investment … DARABI: Vehicles. Yes. RITHOLTZ: Right. DARABI: And the PE world, they’re called sidecars. RITHOLTZ: That’s really interesting. So how do these gets structured? Does everything look very similar when you have a fund? How quickly do you deploy the capital and typically how long you locked for or investors locked up for? DARABI: Well investors are usually in private equity are VC funds locked up for 10 years. That’s not usual. We have shown liquidity faster, certainly, for Fund I. It’s well in the black and it’s only five years old less, four and a half years old. So, how do we make money? We charge standard fees, 2 on 20 is the rubric of it, we operate by. And then lesser fees for sidecars or direct investments. So that’s kind of how we stay on business. When you think about an emerging manager starting their first fund, management fees are certainly not so we can live a lavish rock and roll life on a $10 million fund with a two percent management fee, we’re talking about 200K for the entire business to operate. RITHOLTZ: Wow. DARABI: So Marina and I, not only anchored our first fund with their own capital but we didn’t pay ourselves for four years. It’s not glamorous. I mean, there’s some friends of mine that thing the venture capital life is glam and it is if you’re on Sand Hill Road. But if you’re an EM, it’s a lot more like a startup where you’re burning the midnight oil, you are bartering favors with your friends, and you are begging the smartest people you know to take a chance on you to invite you on to their cap table. But it somehow works out because we do put in that extra effort, I think, the metrics, certainly for Fund I have shown us that we’re in this for the long haul now. RITHOLTZ: So your fund 1 and Fund 2, are there any plans of launching Fund III? DARABI: Yes. I think that given the proof points between Fund I and Fund II and a conversation that my partner and I recently had, five years out, are we in this? Do we love this? We do. OK. This is our life’s work. So you can see larger and more demonstrable sized funds but not in an outsized way, not just because we can raise more capital now but because we want to build out a partnership and the kind of culture that we always dreamed of working for back when we were employees, so we have a very diverse set of colleagues with whom we couldn’t operate and we’ll be adding to the partnership in the next two or three years which is really exciting to say. So, yes, the TMV will be around for a while. RITHOLTZ: That’s really interesting. I want to ask you the question I ask any venture capitalist that I interview. Tell us about your best and worst investments and what did you pass on that perhaps you wish you didn’t? DARABI: Gosh. The FOMO list is so long and so embarrassing. Let me start with what I passed on that I regret. Well, I don’t know she really would have invited me to invest, but certainly, I had a wonderful conversation a peer from high school, Katrina Lake, when she was in beta mode for Stitch Fix. I think she was still at HBS at the time or had just recently graduated from Harvard. When Katrina and I had coffee in Minneapolis were we went to high school and she was telling me about the Netflix for clothing that she was building and certainly I regret not really picking up on the clues that she was offering in that conversation. Stitch Fix had an incredible IPO and I’m a proud shareholder today. And similarly, when my friend for starting Cloudflare which luckily they did bring me in to pre-IPO and I’m grateful for that, but when they were starting Cloudflare, I really should have jumped on that moment or when my buddy Ryan Graves whom I still chat with pretty frequently was starting out Uber in beta with Travis and Garrett, that’s another opportunity that I definitely missed. I was in Ireland when the Series A term sheet assigned. So there’s such a long laundry list of namedropped, namedropped, missed, missed, missed. But in terms of what I’m proud of, I’d say far more. I don’t like Sophie’s Choice. I don’t like to cherry pick the certain investments to just brag about them. But we’ve talked about someone to call today, I’d rather kind of shine a light — look at my track record, right? There’s a large realized IRR that I’m very proud of. But more on the opportunity of the companies that we more recently backed that prevent damages (ph) of CRM for oncology patient that help them navigate through the most strenuous time of their life. And by doing so, get better access to health care. And we get to wrote that check a couple of months ago. But already, it’s becoming a company that I couldn’t be more excited about because if they execute the way I think Shirley and Victor will, that has the power to help so many people in a profound way, not just in the Silicon Valley cliché way of this could change the world but this could actually help people receive better care. So, yes, I’m proud of having been an early investor in the Caspers of the world. Certainly, we’re all getting better sleep. There’s no shame there. But I’m really excited now today at investing in financial inclusion in the care economy and so on. RITHOLTZ: And let’s talk a little bit about impactful companies. Is there any different when you’re making a seed stage investment in a potentially impactful company versus traditional startup investing? DARABI: Well, pre-seed and seed investing isn’t a science and it’s certainly not a science that anyone has perfected. There are people who are incredibly good at it because they have a combination of luck and access. But if you’re a disciplined investor in any asset class and I talk to my friends who run hedge funds and work for hedge funds about 10 bets that they take a day and I think that’s a lot trickier than what I do because our do due diligence process, on average, takes an entire quarter of the year. We’re not making that many investments each year. So even though it sounds sort of fruity, when you look at a Y Combinator Demo Day, Y Comb is the biggest accelerator in Silicon Valley and they produce over 300 companies, three or four times a year. When you look at the outsized valuations coming out of Y Comb, it’s easy to think that starting company is as simple as sort of downloading a company in a Box Excel and running with it. But from where we sit, we’re scorching the earth for really compelling ideas in areas that have yet to converge and we’re looking for businesses that may have never pitched the VC before. Maybe they’re not even seeking capital. Maybe it’s a company that isn’t so interested in raising a penny eventually because they don’t need to. They’re profitable from day one. Those are the companies that we find most exciting because as former operators, we know how to appeal to them and then we also know how to work with them. RITHOLTZ: That’s really interesting. Before I get to my favorite question, let me just throw you’re a curveball, tell me a little bit about Business Schooled, the podcast you hosted for quite a while. DARABI: So, Synchrony, Sync, came to me a few years ago with a very compelling and exciting opportunity to host a podcast with them that allowed me a fortunate opportunity to travel the country and I went to just under a dozen cities to meet with founders who have persevered past their startup phase. And what I loved about the concept of business school is that the cities that I hosted were really focused on founders who didn’t have access to VC capital, they put money on credit card. So I took SBA loans or asked friends and family to give them starter capital and then they made their business work through trying times and when you pass the five-year mark for any business, I’m passing it right now for TMV, there’s a moment of reflection where you can say, wow, I did it. it’s incredibly difficult to be a startup founder, more than 60 percent of companies fail and probably for good reason. And so, yes, I hosted business school, Seasons 2 and 3 and potentially there will be more seasons and I’m very proud of the fact that at one point we cracked the top 20 business podcasts and people seem to be really entertained through these conversations with insightful founders who are vulnerable with me about what it was like to build their business and I like to think they were vulnerable because I have a good amount of compassion for the experience of being founder and also because I’m a New Yorker and I just like to talk. RITHOLTZ: You’re also a founder so there’s going to be some empathy that’s genuine. You went through what they’re going through. DARABI: Exactly. Exactly. And so, what you do, Barry, is quite similar. You’re — you host an exceptionally successful business podcast and you’re also an allocator. You know that it’s interesting to do both because I think that being an investor is a lot like being a journalist. In both professions, you won’t succeed unless you are constantly curious and if you are having conversations to listen more than you speak. DARABI: Well, I’ll let you in on a little secret since it’s so late in the podcast and fewer people will be hearing this, the people I invite on the show are essentially just conversations I want to have. If other people come along and listen, that’s fantastic. But honestly, it’s for an audience of one, namely me, the reason I wanted to have you on is because I’m intrigued by the world of venture and alternatives and impact. I think it’s safe to say that a lot of people have been somewhat disappointed in the results of ESG investing and impact investing that for — it’s captured a lot more mindshare than it has captured capital although we’re seeing signs that’s starting to shift. But then the real question becomes, all right, so I’m investing less in oil companies and more in other companies that just happen to consume fossil fuels, what’s the genuine impact of my ESG investing? It feels like it’s sort of de minimis whereas what you do really feels like it has a major impact for people who are interested in having their capital make a positive difference. DARABI: Thank you for saying that. And I will return the compliment by saying that I really enjoyed getting to know you on our one key economist Zoom and I think that you’re right. I think that ESG investing, certainly in the public markets has had diminished returns historically because the definition has been so bizarre and so all over the place. RITHOLTZ: Right. DARABI: And I read incredible books from people like Antony Bugg-Levine who helps coin the term the Rockefeller Foundation, who originally coined the term you read about, mortgage, IRR and IRS plus measurement and it’s so hard to have just standardization of what it means to be an impact investor and so it can be bothered but we bother. Rather, we kind of come up with our own subjective point of view of the world and we say what does impact mean to us? Certainly, it means not investing in sin stocks but then those sin stocks have to begin somewhere, has to begin with an idea that somebody had once upon a time. And so, whether we are investing in the way the world should look from our perspective. And with that in mind, it doesn’t have to be impact by your grandpa’s VC, it can be impact from modern generation but simply things that behave differently. Some folks with their dollars. People often say, well, my ESG portfolio is underperforming. But then if you dig in to the specifics, are you investing in Tesla? It’s not a pretty good year. Did you back Beyond Meat? Had a great year. And so, when you kind of redefine the public market not by a sleeve and a bank’s version of a portfolio, but rather by company that you think are making demonstrable change in the world, then you can walk away, realizing had I only invested in these companies that are purpose driven, I would have had outsized returns and that’s what we’re trying to deliver on at TMV. That’s the promise. RITHOLTZ: Really, really very, very intriguing. I know I only have you for a few minutes so let’s jump to my favorite questions that I ask all of our guests starting with tell us what you’re streaming these days. Give us your favorite, Netflix, Amazon Prime, or any podcast that are keeping you entertained during the pandemic. DARABI: Well, my family has been binging on 100 Foot Wave on HBO Max which is the story of big wave surfer Garrett McNamara who is constantly surfing the world’s largest waves and I’m fascinated by people who have a mission that’s sort of bigger than success or fame but they’re driven by something and part of that something is curiosity and part of it is insanity. And so not only is it visually stunning to kind of watch these big wave surfers in Portugal, but it’s also a mind trip. What motivates them to get out of bed every day and potentially risk their lives doing something so dangerous and so bananas but also at the same time so brave and heroic. So, highly recommend. I am listening to too many podcasts. I listen to, I don’t know, a stream of things. I’m a Kara Swisher fan, Ezra Klein fan, so they’re both part of the “New York Times” these days. And of course, your podcast, Barry. RITHOLTZ: Well, thank you so much. Well, thank you so much. Let’s talk a little bit about who your early mentors were and who helped shape you career? DARABI: It’s going to sound ungrateful but I don’t think, in like a post lean in definition of the word, I ever truly had a mentor or a sponsor. Now, having said that, I’ve had people who really looked at for me and been incredibly gracious with their time and capital. And so, I would absolutely like to acknowledge that first and foremost. I think about how generous Adam Grant has been with his time and his investments for TMV in Fund I and Fund II and he’s a best-selling author and worked on highest-rated business school professor. So shout out to Adam, if he’s listening or Beth Comstock, the former Vice Chair of GE who has been instrumental in my career for about a decade and a half now. And she is also really leaning in to the TMV portfolio and has become a patient of Parsley Health, an early investment of ours and also an official adviser to the business. So, people like Adam and Beth certainly come to mind. But I don’t know, I just — I’m not sure mentors really exist outside of corporate America anymore and part of the reason why we started Transact Global is to kind of foster the concept of the peer mentor, people who are going through the same thing as you at the same time and allowing that hive mentality with an abundance mentality to catalyze people to kind of go further and faster. RITHOLTZ: Let’s talk about some of your favorite books and what you might reading right now. DARABI: OK, so in the biz book world, because I know your listeners as craving, I’m a big fan of “Negotiation Genius.” I took a crash course with one of the authors, Max Bazerman at the Kennedy School and it was illuminating. I mean, he’s one of the most captivating professors I’ve ever had the pleasure of hearing lecture and this book has really helped me understand the concept of the ZOPA, the Zone of Possible Agreement, and how to really negotiate well. And then for Adam whom I just referenced, of all of his incredible books, my favorite is Give and Take because I try to operate with that approach of business. Give more than you take and maybe in the short term, you’ll feel depleted but in the long term, karma pays off. But mostly, Barry, I read fiction. I think the most interesting people in the world or at least the most entertaining at dinner parties are all avoid readers of fiction and history. So I recently reread, for instance, all of my favorite short stories from college, from Dostoyevsky’s “A Gentle Creature” to “Drown” Junot Diaz. “Passing” by Nella Larsen, “The Diamond as Big as the Ritz” by Fitzgerald. Those are some of my very favorite stories of all time. And my retirement dream is to write a book of short stories. RITHOLTZ: Really, really quite intriguing. Are they all available in a single collection or these just, going back to your favorites and just plowing through them for fun? DARABI: Those are just going back to my favorites. I try to re-read “Passing” every few years which is somehow seems to be more and more relevant as I get older and Junot Diaz has become so incredibly famous when I first read “Drown” about 20 years ago which is an original collection of short stories that broadened my perspective of why it’s important to think about a broader definition of America, I guess. And, yes, no, that’s just — that was just sort of off the top of my head as the offering of a few stories that I really love, no collection. RITHOLTZ: That’s a good collection. And we’re down to our final two questions. What sort of advice would you give to a recent college grad who was interested in a career in either venture capital or entrepreneurship? DARABI: Venture capital or entrepreneurship. Well, I would say, learn as early as possible how to trust your gut. So, this could mean a myriad of things. As an entrepreneur, it could mean under the halo effect of an institution, university or high school or maybe having a comfortable day job, tinker with ideas, get feedback on that idea, don’t be afraid of looking or sounding dumb and build that peer network that I described. People who are rooting you on and are also insatiably curious about wonky things. And I would say that for venture capital, similar play on the same theme, but whether it’s putting small amounts of money into new concept, blockchain investing, or whether it’s meeting with entrepreneurs and saying maybe I only have $3,000 save up but I believe in you enough to bet amongst friends in Brooklyn on your concept if you’ll have me as an investor. So, play with your own money because what it’s really teaching you in return is how to follow instincts and to base pattern recognition off your own judgement. And if you do that early on, overtime, these all become datapoints that you can point to and these are lessons that you can glean while not taking the risk of portfolio management. So, I guess the real advice to your listeners is more action, please. RITHOLTZ: Really very, very intriguing. And our final question, what do you know about the world of venture investing today that you wish you knew 15 or 20 years ago when you first getting started? DARABI: Twenty years ago, I was a bit of a Pollyanna and I thought every wonderful idea that simply is built by smart people and has timed the market correctly will work out. And I will say that I’m slightly more jaded today because of the capital structure that is systematically allowing the biggest firms in the world to kind of eat up a generous portion of, let’s call it the LP pie, which leaves less capital available to the young upstart VC firms, and of course I’m biased because I run one, that are taking outsized risks on those non-obvious ideas that we referenced. And so, what I wish for the future is that institutional capital kind of reprioritizes what it’s looking for. And in addition to having a bottom line of reliable and demonstrable return on any given investment, there are new standards put into play saying we want to make sure that a portion of our portfolio goes to diverse managers. Because in turn, we recognize that they are three times more likely to invest in diverse founders or we believe in impact investing can be broader than the ESG definitely of a decade ago, so we’re coming up with our own way to measure on sustainability or what impact means to us. And if they go through those exercises which I know is hard because, certainly, I’m not trying to add work to anyone’s plate, I do think that the results will more than make up for it. RITHOLTZ: Quite intriguing. Thank you, Soraya, for being so generous with your time. We have been speaking with Soraya Darabi who is the Co-Founder and General Partner at TMV Investments. If you enjoy this conversation, well, be sure and check out any of the prior 376 conversations we’ve had before. You can find those at iTunes or Spotify, wherever you buy your favorite podcast. We love your comments, feedback, and suggestions. Write to us at MIB podcast@bloomberg.net. You can sign up for my daily reads at ritholtz.com. Check out my weekly column at bloomberg.com/opinion. Follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack team that helps me put these conversations together each week. Tim Harrow is my audio engineer. Paris Walt (ph) is my producer. Atika Valbrun is our project manager, Michael Batnick is my head of research. I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio.   ~~~     The post Transcript: Soraya Darabi appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureOct 20th, 2021

Polexit!? Polish Court Overrules EU"s European Court Of Justice

Polexit!? Polish Court Overrules EU's European Court Of Justice Authored by Mike Shedlock via MishTalk.com, Poland and the EU are increasingly at odds. Let's take a look at events to see where this is headed... After the top Polish court overruled the ECJ, Fears Rose the Court Ruling Points to EU Exit. Tens of thousands of protesters marched through Warsaw and other Polish cities late Sunday to oppose a court ruling that European Union legal judgments have become incompatible with the Polish constitution, a decision protesters fear could prompt Poland to follow the U.K. out of the bloc. Waving EU and Polish flags, demonstrators held banners reading “I’m Staying in Europe” and “No Polexit!” Unlike in the U.K., an overwhelming majority of Poles wish to stay members of the EU—as do Hungarians, another Central European country whose government is in regular conflict with the bloc over where the EU’s powers end and national sovereignty begins. On Thursday, Poland’s Constitutional Tribunal ruled that the process of European integration encoded in EU treaty law has reached what it called a “new stage” that is incompatible with the Polish constitution, and that the latter should take precedence when the two conflict. When joining the EU in 2004, Poland agreed to implement EU treaties, also signing up a few years later to the bloc’s updated Lisbon Treaty. Poland’s ruling party says the EU has overstepped its authority. In Brussels, a spokesman for the European Commission, the EU’s executive arm, on Monday gave no timeline for responding to Poland. EU officials fear a domino effect and gradual disintegration of the EU’s legal and political authority if one country can overrule EU rules and EU court decisions. “If you allow all these fundamental principles of European integration to be hollowed out and ignored, then this is eventually the end of the EU,” said Piotr Buras, head of the European Council on Foreign Relations’ Warsaw office. Fertile Ground for Secession In Ultra Vires, a column on the situation in Poland, Eurointelligence founder Wolfgang Münchau places some of the blame for what's happening in Poland on the German Constitutional Court located in Karlsruhe. In its ruling last week, Poland’s constitutional court went beyond anything the German constitutional court ever did. It declared Art. 1 of the Treaty on European Union, the clause that establishes the EU, not compatible with certain chapters of the Polish constitution. It found the same for Art. 19 TEU, which establishes the CJEU. If sustained, this would constitute a legal Polexit. If a member states believes that the EU treaties violate their national constitution, they either have to change the constitution, get the other members to agree to a change in the treaties, or leave the EU. The EU could, if it wanted to, even make an argument under international law that this ruling automatically voids Poland’s accession treaty, and thus its EU membership.  The role of the German constitutional court in all of this is indirect but nonetheless important. What it did was engage in a legal discourse that made the Polish outrage possible. Readers may recall that the CJEU was a big factor in the Brexit discussions. If only the remainers had known that they could have renationalised some of those powers? Despite the europhobia that led to Brexit, there was much less of a sense of secessionism in the legal profession, compared to with Germany or Poland. Some of the arguments used during the Polish hearings were straight copies of arguments made by the German constitutional court. Karlsruhe, for example, popularised legal concepts such as ultra vires and the democracy principle. They sound more innocent than they are. Karlsruhe argues that sovereignty can be conferred but not shared. This implies that the CJEU cannot be the arbiter of its own remit. It also means that EU law does not override national law in areas outside the agreed perimeter, and that it is the national courts that decide the precise location of that perimeter. Fiscal policy and defence are not part of that remit. So, if you want a fiscal union or a European army, you cannot do this inside the existing treaty.  The Polish ruling will almost surely end up in Poland backing down. I see Polexit as a possible but improbable outcome. But remember that Brexit, too, started out that way. The Karlsruhe version of legal euroscepticism has been far more clever, and more effective. It managed to create legal facts out of thin air that informed the EU negotiating position of successive German governments. The Polish ruling, by contrast, is drafted as a deliberate provocation that might play into the hands of Law and Justice ahead of the 2023 elections. Karlsruhe is not responsible for what is happening in Poland. But it is responsible for starting a discourse that others take up and push to the limits. No Polexit!? Münchau opines there will not be a Polexit.  OK, but what about changes to the existing treaties for Eurobonds, financial debt commingling, or a European army?  It takes unanimous consent to change anything in the EU. Heck, it took nearly a decade just to work out something seemingly simple like a trade deal with Canada. Half-Baked Union Hungary and Poland are at odds with the EU over court rulings. Other countries are tangled up with EU disputes regarding immigration and borders. The European Monetary Union (EMU) or Eurozone is in a similar situation. It takes unanimous agreement to change anything or even do many things unless there were specifically established by treaty. Germany demanded these unanimous consent rules out of fear of debt commingling. Now these rules hamper efforts by the EU to bring Poland, Hungary, the Czech Republic and other countries into line over anything not clearly spelled out. The EU has a half-baked union and it will stay that way unless every country agrees to changes.  Good luck with that. *  *  * Like these reports? If so, please Subscribe to MishTalk Email Alerts. Tyler Durden Wed, 10/13/2021 - 02:00.....»»

Category: blogSource: zerohedgeOct 13th, 2021

2 Consumer Loan Stocks Overcoming Tough Industry Backdrop

Falling consumer sentiments, recessionary woes and worsening asset quality hurt the Zacks Consumer Loans industry players' financials. Efforts to digitize operations along with easing lending standards will aid companies like Credit Acceptance (CACC) & Encore Capital (ECPG). The Zacks Consumer Loans industry continues to bear the brunt of falling consumer sentiments, mainly attributable to inflation, geopolitical matters and recessionary fears. This will, therefore, gradually dampen the demand for consumer loans and hurt top-line growth. Weakening asset quality as the economic growth continues to slowdown remains a key near-term concern.Nonetheless, easing lending standards, which have increased the number of clients eligible for consumer loans and digitization of operations, will keep benefiting industry players. Hence, companies like Credit Acceptance Corporation CACC and Encore Capital Group, Inc. ECPG are worth considering for the near term.About the IndustryThe Zacks Consumer Loans industry comprises companies that provide mortgages, refinancing, home equity lines of credit, credit card loans, automobile loans, education/student loans and personal loans, among others. These help the industry players generate net interest income (NII), which forms the most important part of total revenues. Prospects of the companies in this industry are highly sensitive to the nation’s overall economic condition and consumer sentiments. In addition to offering the above-mentioned products and services, many consumer loan providers are involved in other businesses like commercial lending, insurance, loan servicing and asset recovery. These support the companies in generating fee revenues. Furthermore, this helps the firms diversify revenue sources and be less dependent on the vagaries of the economy.3 Themes Shaping Consumer Loan Industry's FutureSagging Consumer Sentiments: The ongoing Russia-Ukraine conflict, supply-chain woes and raging inflation (persistently being above 8%) continue to weigh heavily on the consumer sentiments. Due to these factors, the Conference Board Consumer Confidence Index fell to a 16-month low of 98.7 in June. Also, the Expectations Index — which shows a six-month outlook – fell to 66.4 this month (the lowest level since March 2013) as consumers become more downbeat regarding the outlook for the economy, labor market and incomes.Lynn Franco, senior director of economic indicators at The Conference Board, said “Consumers’ grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices. Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as growing risk of recession by yearend.” So, consumer spending is likely to face headwinds from inflation and rising interest rates during the second half of the year. This will thereby result in lower demand for consumer loans. Thus, growth in net interest margin (NIM) and NII for consumer loan companies is likely to be hampered.Credit Quality May Worsen: Since March 2020, the U.S. administration has provided substantial financial assistance to individuals through various packages to overcome pandemic-related challenges. However, with the stimulus packages gradually stopping and the Federal Reserve signaling continued monetary policy tightening ahead to tame inflation, there is a strong likelihood that the U.S. economy might be slipping into a recession in the next six-nine months.Also, going by the central bank’s latest Summary of Economic Projections, the U.S. economy will grow 1.7% in both 2022 and 2023, down from the prior projection of 2.8% for 2022 and 2.2% for 2023. These factors may severely curtail the consumers’ ability to pay back loans. Thus, consumer loan providers will likely have to build additional reserves to tide over unexpected defaults and payment delays owing to the economic slowdown. This will, thereby, lead to deterioration in industry player’ asset quality going forward.Easing Lending Standards: With the nation’s big credit reporting agencies removing all tax liens from consumer credit reports since 2018, several consumers' credit scores have improved. This has raised the number of consumers for the industry participants. Further, easing credit lending standards are helping consumer loan providers to meet loan demand.Zacks Industry Rank Reflects Muted ProspectsThe Zacks Consumer Loans industry is a 17-stock group within the broader Zacks Finance sector. The industry currently carries a Zacks Industry Rank #211, which places it at the bottom 16% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates underperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a disappointing earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Since April 2022-end, the industry’s earnings estimates for the current year have moved 1.3% lower.Before we present a few stocks that you may want to add to your portfolio despite industry challenges, let’s take a look at the industry’s recent stock market performance and valuation picture.Industry vs. Broader MarketThe Zacks Consumer Loans industry has underperformed both the Zacks S&P 500 composite and its own sector over the past year.The stocks in this industry have collectively lost 28% over this period while the Zacks S&P 500 composite and Zacks Finance sector have declined 12% and 13.5%, respectively.One-Year Price Performance Industry's Current ValuationOn the basis of price-to-tangible book (P/TBV), which is commonly used for valuing consumer loan providers because of large variations in their results from one quarter to the next, the industry currently trades at 1.03X. The highest level of 1.54X and a median of 1.21X are recorded over the past five years.This compares with the S&P 500’s trailing 12-month P/TBV of 13.32X, as the chart below shows.Price-to-Tangible Book Ratio (TTM) As finance stocks typically have a lower P/TBV, comparing consumer loan providers with the S&P 500 may not make sense to many investors. But a comparison of the group’s P/TBV ratio with that of its broader sector ensures that the group is trading at a decent discount. The Zacks Finance sector’s trailing 12-month P/TBV of 3.92X for the same period is way above the Zacks Consumer Loan industry’s ratio, as the chart below shows.Price-to-Tangible Book Ratio (TTM) 2 Consumer Loan Stocks Braving the Industry ChallengesCredit Acceptance Corporation: Headquartered in Southfield, MI, CACC offers financing programs and related products and services to automobile dealers across the United States, enabling them to sell vehicles to consumers irrespective of their credit history. Further, it is engaged in the business of reinsuring coverage under vehicle service contracts sold to consumers by dealers on vehicles financed by the company.Revenue growth remains a major positive for Credit Acceptance, with the same witnessing a five-year (2017-2021) CAGR of 13.7%. Growth is primarily attributable to a steady rise in finance charges, which is also the main revenue component. Finance charges are likely to continue improving as the demand for auto loans steadily rises, driven by solid economic growth. A decent rise in dealer enrolments and active dealers is also expected to aid the company’s revenues.Credit Acceptance believes in returning capital to shareholders through stock repurchases instead of paying dividends. In September 2021, it authorized additional 2 million shares to be repurchased. As of Mar 31, 2022, the company had 0.36 million shares left to be repurchased. Despite having a substantial debt burden, its high cash flow generating business model and low capital expenditures are likely to help sustain share buybacks.The company’s earnings are expected to decline 11.1% for 2022. Shares of this Zacks Rank #2 (Buy) firm have lost 14.4% over the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Price and Consensus: CACC Encore Capital: Based in San Diego, CA, ECPG offers debt recovery solutions and other related services for consumers across financial assets globally. The company also provides debt servicing and other portfolio management services to credit originators for non-performing loans in Europe.Encore Capital primarily focuses on portfolio purchasing and recovery business in the United States and Europe. It plans to leverage its leadership position in portfolio purchasing and recovery as well as credit management services to bolster market share worldwide.Organic growth remains solid for ECPG. Over the last three years (ended 2021), revenues recorded a CAGR of 7.2%. A gradual rise in portfolio purchases will help the company’s revenue growth.Similar to Credit Acceptance, ECPG believes in returning capital to shareholders through stock repurchases. In May 2021, it authorized an additional $250 million for share buyback. As of Mar 31, 2022, the company had $153.2 million authorization remaining. Despite having a huge debt burden, its high cash flow generating business model is likely to help sustain share buybacks.This Zacks Rank #2 stock has lost 8.2% over the past three months. ECPG’s earnings are expected to increase 14.4% for this year.Price and Consensus: ECPG  Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Credit Acceptance Corporation (CACC): Free Stock Analysis Report Encore Capital Group Inc (ECPG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 30th, 2022

These 46 pitch decks helped fintechs disrupting trading, investing, and banking raise millions in funding

Looking for examples of real fintech pitch decks? Check out pitch decks that Qolo, Lance, and other startups used to raise money from VCs. Check out these pitch decks for examples of fintech founders sold their vision.Yulia Reznikov/Getty Images Insider has been tracking the next wave of hot new startups that are blending finance and tech.  Check out these pitch decks to see how fintech founders sold their vision. See more stories on Insider's business page. Fintech funding has been on a tear.In 2021, fintech funding hit a record $132 billion globally, according to CB Insights, more than double 2020's mark.Insider has been tracking the next wave of hot new startups that are blending finance and tech. Check out these pitch decks to see how fintech founders are selling their vision and nabbing big bucks in the process. You'll see new financial tech geared at freelancers, fresh twists on digital banking, and innovation aimed at streamlining customer onboarding. New twists on digital bankingZach Bruhnke, cofounder and CEO of HMBradleyHMBradleyConsumers are getting used to the idea of branch-less banking, a trend that startup digital-only banks like Chime, N26, and Varo have benefited from. The majority of these fintechs target those who are underbanked, and rely on usage of their debit cards to make money off interchange. But fellow startup HMBradley has a different business model. "Our thesis going in was that we don't swipe our debit cards all that often, and we don't think the customer base that we're focusing on does either," Zach Bruhnke, cofounder and CEO of HMBradley, told Insider. "A lot of our customer base uses credit cards on a daily basis."Instead, the startup is aiming to build clientele with stable deposits. As a result, the bank is offering interest-rate tiers depending on how much a customer saves of their direct deposit.Notably, the rate tiers are dependent on the percentage of savings, not the net amount. "We'll pay you more when you save more of what comes in," Bruhnke said. "We didn't want to segment customers by how much money they had. So it was always going to be about a percentage of income. That was really important to us."Check out the 14-page pitch deck fintech HMBradley, a neobank offering interest rates as high as 3%, used to raise an $18.25 million Series APersonal finance is only a text awayYinon Ravid, the chief executive and cofounder of Albert.AlbertThe COVID-19 pandemic has underscored the growing preference of mobile banking as customers get comfortable managing their finances online.The financial app Albert has seen a similar jump in activity. Currently counting more than six million members, deposits in Albert's savings offering doubled from the start of the pandemic in March 2020 to May of this year, from $350 million to $700 million, according to new numbers released by the company. Founded in 2015, Albert offers automated budgeting and savings tools alongside guided investment portfolios. It's looked to differentiate itself through personalized features, like the ability for customers to text human financial experts.Budgeting and saving features are free on Albert. But for more tailored financial advice, customers pay a subscription fee that's a pay-what-you-can model, between $4 and $14 a month. And Albert's now banking on a new tool to bring together its investing, savings, and budgeting tools.Fintech Albert used this 10-page pitch deck to raise a $100 million Series C from General Atlantic and CapitalG 'A bank for immigrants'Priyank Singh and Rohit Mittal are the cofounders of Stilt.StiltRohit Mittal remembers the difficulties he faced when he first arrived in the United States a decade ago as a master's student at Columbia University.As an immigrant from India, Mittal had no credit score in the US and had difficulty integrating into the financial system. Mittal even struggled to get approved to rent an apartment and couch-surfed until he found a roommate willing to offer him space in his apartment in the New York neighborhood Morningside Heights.That roommate was Priyank Singh, who would go on to become Mittal's cofounder when the two started Stilt, a financial-technology company designed to address the problems Mittal faced when he arrived in the US.Stilt, which calls itself "a bank for immigrants," does not require a social security number or credit history to access its offerings, including unsecured personal loans.Instead of relying on traditional metrics like a credit score, Stilt uses data such as education and employment to predict an individual's future income stability and cash flow before issuing a loan. Stilt has seen its loan volume grow by 500% in the past 12 months, and the startup has loaned to immigrants from 160 countries since its launch. Here are the 15 slides Stilt, which calls itself 'a bank for immigrants,' used to raise a $14 million Series AAn IRA for alternativesHenry Yoshida is the co-founder and CEO of retirement fintech startup Rocket Dollar.Rocket DollarFintech startup Rocket Dollar, which helps users invest their individual retirement account (IRA) dollars into alternative assets, just raised $8 million for its Series A round, the company announced on Thursday.Park West Asset Management led the round, with participation from investors including Hyphen Capital, which focuses on backing Asian American entrepreneurs, and crypto exchange Kraken's venture arm. Co-founded in 2018 by CEO Henry Yoshida, CTO Rick Dude, and VP of marketing Thomas Young, Rocket Dollar now has over $350 million in assets under management on its platform. Yoshida sold his first startup, a roboadvisor called Honest Dollar, to Goldman Sachs' investment management division for an estimated $20 million.Yoshida told Insider that while ultra-high net worth investors have been investing self-directed retirement account dollars into alternative assets like real estate, private equity, and cryptocurrency, average investors have not historically been able to access the same opportunities to invest IRA dollars in alternative assets through traditional platforms.Here's the 34-page pitch deck a fintech that helps users invest their retirement savings in crypto and real estate assets used to nab $8 millionA trading app for activismAntoine Argouges, CEO and founder of TulipshareTulipshareAn up-and-coming fintech is taking aim at some of the world's largest corporations by empowering retail investors to push for social and environmental change by pooling their shareholder rights.London-based Tulipshare lets individuals in the UK invest as little as one pound in publicly-traded company stocks. The upstart combines individuals' shareholder rights with other like-minded investors to advocate for environmental, social, and corporate governance change at firms like JPMorgan, Apple, and Amazon.The goal is to achieve a higher number of shares to maximize the number of votes that can be submitted at shareholder meetings. Already a regulated broker-dealer in the UK, Tulipshare recently applied for registration as a broker-dealer in the US. "If you ask your friends and family if they've ever voted on shareholder resolutions, the answer will probably be close to zero," CEO and founder Antoine Argouges told Insider. "I started Tulipshare to utilize shareholder rights to bring about positive corporate change that has an impact on people's lives and our planet — what's more powerful than money to change the system we live in?"Check out the 14-page pitch deck from Tulipshare, a trading app that lets users pool their shareholder votes for activism campaignsDigital tools for independent financial advisorsJason Wenk, founder and CEO of AltruistAltruistJason Wenk started his career at Morgan Stanley in investment research over 20 years ago. Now, he's running a company that is hoping to broaden access to financial advice for less-wealthy individuals. The startup raised $50 million in Series B funding led by Insight Partners with participation from investors Vanguard and Venrock. The round brings the Los Angeles-based startup's total funding to just under $67 million.Founded in 2018, Altruist is a digital brokerage built for independent financial advisors, intended to be an "all-in-one" platform that unites custodial functions, portfolio accounting, and a client-facing portal. It allows advisors to open accounts, invest, build models, report, trade (including fractional shares), and bill clients through an interface that can advisors time by eliminating mundane operational tasks.Altruist aims to make personalized financial advice less expensive, more efficient, and more inclusive through the platform, which is designed for registered investment advisors (RIAs), a growing segment of the wealth management industry. Here's the pitch deck for Altruist, a wealth tech challenging custodians Fidelity and Charles Schwab, that raised $50 million from Vanguard and InsightRethinking debt collection Jason Saltzman, founder and CEO of ReliefReliefFor lenders, debt collection is largely automated. But for people who owe money on their credit cards, it can be a confusing and stressful process.  Relief is looking to change that. Its app automates the credit-card debt collection process for users, negotiating with lenders and collectors to settle outstanding balances on their behalf. The fintech just launched and closed a $2 million seed round led by Collaborative Ventures. Relief's fundraising experience was a bit different to most. Its pitch deck, which it shared with one investor via Google Slides, went viral. It set out to raise a $1 million seed round, but ended up doubling that and giving some investors money back to make room for others.Check out a 15-page pitch deck that went viral and helped a credit-card debt collection startup land a $2 million seed roundHelping small banks lendTKCollateralEdgeFor large corporations with a track record of tapping the credit markets, taking out debt is a well-structured and clear process handled by the nation's biggest investment banks and teams of accountants. But smaller, middle-market companies — typically those with annual revenues ranging up to $1 billion — are typically served by regional and community banks that don't always have the capacity to adequately measure the risk of loans or price them competitively. Per the National Center for the Middle Market, 200,000 companies fall into this range, accounting for roughly 33% of US private sector GDP and employment.Dallas-based fintech CollateralEdge works with these banks — typically those with between $1 billion and $50 billion in assets — to help analyze and price slices of commercial and industrial loans that previously might have gone unserved by smaller lenders.On October 20th, CollateralEdge announced a $3.5 million seed round led by Dallas venture fund Perot Jain with participation from Kneeland Youngblood (a founder of the healthcare-focused private-equity firm Pharos Capital) and other individual investors.Here's the 10-page deck CollateralEdge, a fintech streamlining how small banks lend to businesses, used to raise a $3.5 million seed roundA new way to assess creditworthinessPinwheel founders Curtis Lee, Kurt Lin, and Anish Basu.PinwheelGrowing up, Kurt Lin never saw his father get frustrated. A "traditional, stoic figure," Lin said his father immigrated to the United States in the 1970s. Becoming part of the financial system proved even more difficult than assimilating into a new culture.Lin recalled visiting bank after bank with his father as a child, watching as his father's applications for a mortgage were denied due to his lack of credit history. "That was the first time in my life I really saw him crack," Lin told Insider. "The system doesn't work for a lot of people — including my dad," he added. Lin would find a solution to his father's problem years later while working with Anish Basu, and Curtis Lee on an automated health savings account. The trio realized the payroll data integrations they were working on could be the basis of a product that would help lenders work with consumers without strong credit histories."That's when the lightbulb hit," said Lin, Pinwheel's CEO.In 2018, Lin, Basu, and Lee founded Pinwheel, an application-programming interface that shares payroll data to help both fintechs and traditional lenders serve consumers with limited or poor credit, who have historically struggled to access financial products. Here's the 9-page deck that Pinwheel, a fintech helping lenders tap into payroll data to serve consumers with little to no credit, used to raise a $50 million Series BAn alternative auto lenderTricolorAn alternative auto lender that caters to thin- and no-credit Hispanic borrowers is planning a national expansion after scoring a $90 million investment from BlackRock-managed funds. Tricolor is a Dallas-based auto lender that is a community development financial institution. It uses a proprietary artificial-intelligence engine that decisions each customer based on more than 100 data points, such as proof of income. Half of Tricolor's customers have a FICO score, and less than 12% have scores above 650, yet the average customer has lived in the US for 15 years, according to the deck.A 2017 survey by the Federal Deposit Insurance Corporation found 31.5% of Hispanic households had no mainstream credit compared to 14.4% of white households. "For decades, the deck has been stacked against low income or credit invisible Hispanics in the United States when it comes to the purchase and financing of a used vehicle," Daniel Chu, founder and CEO of Tricolor, said in a statement announcing the raise.An auto lender that caters to underbanked Hispanics used this 25-page deck to raise $90 million from BlackRock investors A new way to access credit The TomoCredit teamTomoCreditKristy Kim knows first-hand the challenge of obtaining credit in the US without an established credit history. Kim, who came to the US from South Korea, couldn't initially get access to credit despite having a job in investment banking after graduating college. "I was in my early twenties, I had a good income, my job was in investment banking but I could not get approved for anything," Kim told Insider. "Many young professionals like me, we deserve an opportunity to be considered but just because we didn't have a Fico, we weren't given a chance to even apply," she added.Kim started TomoCredit in 2018 to help others like herself gain access to consumer credit. TomoCredit spent three years building an internal algorithm to underwrite customers based on cash flow, rather than a credit score.TomoCredit, a fintech that lends to thin- and no-credit borrowers, used this 17-page pitch deck to raise its $10 million Series AHelping streamline how debts are repaidMethod Financial cofounders Jose Bethancourt and Marco del Carmen.Method FinancialWhen Jose Bethancourt graduated from the University of Texas at Austin in May 2019, he faced the same question that confronts over 43 million Americans: How would he repay his student loans?The problem led Bethancourt on a nearly two-year journey that culminated in the creation of a startup aimed at making it easier for consumers to more seamlessly pay off all kinds of debt.  Initially, Bethancourt and fellow UT grad Marco del Carmen built GradJoy, an app that helped users better understand how to manage student loan repayment and other financial habits. GradJoy was accepted into Y Combinator in the summer of 2019. But the duo quickly realized the real benefit to users would be helping them move money to make payments instead of simply offering recommendations."When we started GradJoy, we thought, 'Oh, we'll just give advice — we don't think people are comfortable with us touching their student loans,' and then we realized that people were saying, 'Hey, just move the money — if you think I should pay extra, then I'll pay extra.' So that's kind of the movement that we've seen, just, everybody's more comfortable with fintechs doing what's best for them," Bethancourt told Insider. Here is the 11-slide pitch deck Method Financial, a Y Combinator-backed fintech making debt repayment easier, used to raise $2.5 million in pre-seed fundingQuantum computing made easyQC Ware CEO Matt Johnson.QC WareEven though banks and hedge funds are still several years out from adding quantum computing to their tech arsenals, that hasn't stopped Wall Street giants from investing time and money into the emerging technology class. And momentum for QC Ware, a startup looking to cut the time and resources it takes to use quantum computing, is accelerating. The fintech secured a $25 million Series B on September 29 co-led by Koch Disruptive Technologies and Covestro with participation from D.E. Shaw, Citi, and Samsung Ventures.QC Ware, founded in 2014, builds quantum algorithms for the likes of Goldman Sachs (which led the fintech's Series A), Airbus, and BMW Group. The algorithms, which are effectively code bases that include quantum processing elements, can run on any of the four main public-cloud providers.Quantum computing allows companies to do complex calculations faster than traditional computers by using a form of physics that runs on quantum bits as opposed to the traditional 1s and 0s that computers use. This is especially helpful in banking for risk analytics or algorithmic trading, where executing calculations milliseconds faster than the competition can give firms a leg up. Here's the 20-page deck QC Ware, a fintech making quantum computing more accessible, used to raised its $25 million Series BSimplifying quant modelsKirat Singh and Mark Higgins, Beacon's cofounders.BeaconA fintech that helps financial institutions use quantitative models to streamline their businesses and improve risk management is catching the attention, and capital, of some of the country's biggest investment managers.Beacon Platform, founded in 2014, is a fintech that builds applications and tools to help banks, asset managers, and trading firms quickly integrate quantitative models that can help with analyzing risk, ensuring compliance, and improving operational efficiency. The company raised its Series C on Wednesday, scoring a $56 million investment led by Warburg Pincus with support from Blackstone Innovations Investments, PIMCO, and Global Atlantic. Blackstone, PIMCO, and Global Atlantic are also users of Beacon's tech, as are the Commonwealth Bank of Australia and Shell New Energies, a division of Royal Dutch Shell, among others.The fintech provides a shortcut for firms looking to use quantitative modelling and data science across various aspects of their businesses, a process that can often take considerable resources if done solo.Here's the 20-page pitch deck Beacon, a fintech helping Wall Street better analyze risk and data, used to raise $56 million from Warburg Pincus, Blackstone, and PIMCOSussing out bad actorsFrom left to right: Cofounders CTO David Movshovitz, CEO Doron Hendler, and chief architect Adi DeGaniRevealSecurityAn encounter with an impersonation hacker led Doron Hendler to found RevealSecurity, a Tel Aviv-based cybersecurity startup that monitors for insider threats.Two years ago, a woman impersonating an insurance-agency representative called Hendler and convinced him that he made a mistake with his recent health insurance policy upgrade. She got him to share his login information for his insurer's website, even getting him to give the one-time passcode sent to his phone. Once the hacker got what she needed, she disconnected the call, prompting Hendler to call back. When no one picked up the phone, he realized he had been conned.He immediately called his insurance company to check on his account. Nothing seemed out of place to the representative. But Hendler, who was previously a vice president of a software company, suspected something intangible could have been collected, so he reset his credentials."The chief of information security, who was on the call, he asked me, 'So, how do you want me to identify you? You gave your credentials; you gave your ID; you gave the one time password. How the hell can I identify that it's not you?' And I told him, 'But I never behave like this,'" Hendler recalled of the conversation.RevealSecurity, a Tel Aviv-based cyber startup that tracks user behavior for abnormalities, used this 27-page deck to raise its Series AA new data feed for bond tradingMark Lennihan/APFor years, the only way investors could figure out the going price of a corporate bond was calling up a dealer on the phone. The rise of electronic trading has streamlined that process, but data can still be hard to come by sometimes. A startup founded by a former Goldman Sachs exec has big plans to change that. BondCliQ is a fintech that provides a data feed of pre-trade pricing quotes for the corporate bond market. Founded by Chris White, the creator of Goldman Sachs' defunct corporate-bond-trading system, BondCliQ strives to bring transparency to a market that has traditionally kept such data close to the vest. Banks, which typically serve as the dealers of corporate bonds, have historically kept pre-trade quotes hidden from other dealers to maintain a competitive advantage.But tech advancements and the rise of electronic marketplaces have shifted power dynamics into the hands of buy-side firms, like hedge funds and asset managers. The investors are now able to get a fuller picture of the market by aggregating price quotes directly from dealers or via vendors.Here's the 9-page pitch deck that BondCliQ, a fintech looking to bring more data and transparency to bond trading, used to raise its Series AFraud prevention for lenders and insurersFiordaliso/Getty ImagesOnboarding new customers with ease is key for any financial institution or retailer. The more friction you add, the more likely consumers are to abandon the entire process.But preventing fraud is also a priority, and that's where Neuro-ID comes in. The startup analyzes what it calls "digital body language," or, the way users scroll, type, and tap. Using that data, Neuro-ID can identify fraudulent users before they create an account. It's built for banks, lenders, insurers, and e-commerce players."The train has left the station for digital transformation, but there's a massive opportunity to try to replicate all those communications that we used to have when we did business in-person, all those tells that we would get verbally and non-verbally on whether or not someone was trustworthy," Neuro-ID CEO Jack Alton told Insider.Founded in 2014, the startup's pitch is twofold: Neuro-ID can save companies money by identifying fraud early, and help increase user conversion by making the onboarding process more seamless. In December Neuro-ID closed a $7 million Series A, co-led by Fin VC and TTV Capital, with participation from Canapi Ventures. With 30 employees, Neuro-ID is using the fresh funding to grow its team and create additional tools to be more self-serving for customers.Here's the 11-slide pitch deck a startup that analyzes consumers' digital behavior to fight fraud used to raise a $7 million Series AAI-powered tools to spot phony online reviews FakespotMarketplaces like Amazon and eBay host millions of third-party sellers, and their algorithms will often boost items in search based on consumer sentiment, which is largely based on reviews. But many third-party sellers use fake reviews often bought from click farms to boost their items, some of which are counterfeit or misrepresented to consumers.That's where Fakespot comes in. With its Chrome extension, it warns users of sellers using potentially fake reviews to boost sales and can identify fraudulent sellers. Fakespot is currently compatible with Amazon, BestBuy, eBay, Sephora, Steam, and Walmart."There are promotional reviews written by humans and bot-generated reviews written by robots or review farms," Fakespot founder and CEO Saoud Khalifah told Insider. "Our AI system has been built to detect both categories with very high accuracy."Fakespot's AI learns via reviews data available on marketplace websites, and uses natural-language processing to identify if reviews are genuine. Fakespot also looks at things like whether the number of positive reviews are plausible given how long a seller has been active.Fakespot, a startup that helps shoppers detect robot-generated reviews and phony sellers on Amazon and Shopify, used this pitch deck to nab a $4 million Series AHelping fintechs manage dataProper Finance co-founders Travis Gibson (left) and Kyle MaloneyProper FinanceAs the flow of data becomes evermore crucial for fintechs, from the strappy startup to the established powerhouse, a thorny issue in the back office is becoming increasingly complex.Even though fintechs are known for their sleek front ends, the back end is often quite the opposite. Behind that streamlined interface can be a mosaic of different partner integrations — be it with banks, payments players and networks, or software vendors — with a channel of data running between them. Two people who know that better than the average are Kyle Maloney and Travis Gibson, two former employees of Marqeta, a fintech that provides other fintechs with payments processing and card issuance. "Take an established neobank for example. They'll likely have one or two card issuers, two to three bank partners, ACH processing for direct deposits and payouts, mobile check deposits, peer-to-peer payments, and lending," Gibson told Insider. Here's the 12-page pitch deck a startup helping fintechs manage their data used to score a $4.3 million seed from investors like Redpoint Ventures and Y CombinatorE-commerce focused business bankingMichael Rangel, cofounder and CEO, and Tyler McIntyre, cofounder and CTO of Novo.Kristelle Boulos PhotographyBusiness banking is a hot market in fintech. And it seems investors can't get enough.Novo, the digital banking fintech aimed at small e-commerce businesses, raised a $40.7 million Series A led by Valar Ventures in June. Since its launch in 2018, Novo has signed up 100,000 small businesses. Beyond bank accounts, it offers expense management, a corporate card, and integrates with e-commerce infrastructure players like Shopify, Stripe, and Wise.Founded in 2018, Novo was based in New York City, but has since moved its headquarters to Miami. Here's the 12-page pitch deck e-commerce banking startup Novo used to raise its $40 million Series AShopify for embedded financeProductfy CEO and founder, Duy VoProductfyProductfy is looking to break into embedded finance by becoming the Shopify of back-end banking services.Embedded finance — integrating banking services in non-financial settings — has taken hold in the e-commerce world. But Productfy is going after a different kind of customer in churches, universities, and nonprofits.The San Jose, Calif.-based upstart aims to help non-finance companies offer their own banking products. Productfy can help customers launch finance features in as little as a week and without additional engineering resources or background knowledge of banking compliance or legal requirements, Productfy founder and CEO Duy Vo told Insider. "You don't need an engineer to stand up Shopify, right? You can be someone who's just creating art and you can use Shopify to build your own online store," Vo said, adding that Productfy is looking to take that user experience and replicate it for banking services.Here's the 15-page pitch deck Productfy, a fintech looking to be the Shopify of embedded finance, used to nab a $16 million Series ADeploying algorithms and automation to small-business financingJustin Straight and Bernard Worthy, LoanWell co-foundersLoanWellBernard Worthy and Justin Straight, the founders of LoanWell, want to break down barriers to financing for small and medium-size businesses — and they've got algorithms and automation in their tech arsenals that they hope will do it.Worthy, the company's CEO, and Straight, its chief operating and financial officer, are powering community-focused lenders to fill a gap in the SMB financing world by boosting access to loans under $100,000. And the upstart is known for catching the attention, and dollars, of mission-driven investors. LoanWell closed a $3 million seed financing round in December led by Impact America Fund with participation from SoftBank's SB Opportunity Fund and Collab Capital.LoanWell automates the financing process — from underwriting and origination, to money movement and servicing — which shaves down an up-to-90-day process to 30 days or even same-day with some LoanWell lenders, Worthy said. SMBs rely on these loans to process quickly after two years of financial uncertainty. But the pandemic illustrated how time-consuming and expensive SMB financing can be, highlighted by efforts like the federal government's Paycheck Protection Program.Community banks, once the lifeline to capital for many local businesses, continue to shutter. And demands for smaller loan amounts remain largely unmet. More than half of business-loan applicants sought $100,000 or less, according to 2018 data from the Federal Reserve. But the average small-business bank loan was closer to six times that amount, according to the latest data from a now discontinued Federal Reserve survey.Here's the 14-page pitch deck LoanWell used to raise $3 million from investors like SoftBank.Branded cards for SMBsJennifer Glaspie-Lundstrom is the cofounder and CEO of Tandym.TandymJennifer Glaspie-Lundstrom is no stranger to the private-label credit-card business. As a former Capital One exec, she worked in both the card giant's co-brand partnerships division and its tech organization during her seven years at the company.Now, Glaspie-Lundstrom is hoping to use that experience to innovate a sector that was initially created in malls decades ago.Glaspie-Lundstrom is the cofounder and CEO of Tandym, which offers private-label digital credit cards to merchants. Store and private-label credit cards aren't a new concept, but Tandym is targeting small- and medium-sized merchants with less than $1 billion in annual revenue. Glaspie-Lundstrom said that group often struggles to offer private-label credit due to the expense of working with legacy players."What you have is this example of a very valuable product type that merchants love and their customers love, but a huge, untapped market that has heretofore been unserved, and so that's what we're doing with Tandym," Glaspi-Lundstrom told Insider.A former Capital One exec used this deck to raise $60 million for a startup helping SMBs launch their own branded credit cardsCatering to 'micro businesses'Stefanie Sample is the founder and CEO of FundidFundidStartups aiming to simplify the often-complex world of corporate cards have boomed in recent years.Business-finance management startup Brex was last valued at $12.3 billion after raising $300 million last year. Startup card provider Ramp announced an $8.1 billion valuation in March after growing its revenue nearly 10x in 2021. Divvy, a small business card provider, was acquired by Bill.com in May 2021 for approximately $2.5 billion.But despite how hot the market has gotten, Stefanie Sample said she ended up working in the space by accident. Sample is the founder and CEO of Fundid, a new fintech that provides credit and lending products to small businesses.This May, Fundid announced a $3.25 million seed round led by Nevcaut Ventures. Additional investors include the Artemis Fund and Builders and Backers. The funding announcement capped off the company's first year: Sample introduced the Fundid concept in April 2021, launched its website in May, and began raising capital in August."I never meant to do Fundid," Sample told Insider. "I never meant to do something that was venture-backed."Read the 12-page deck used by Fundid, a fintech offering credit and lending tools for 'micro businesses'Embedded payments for SMBsThe Highnote teamHighnoteBranded cards have long been a way for merchants with the appropriate bank relationships to create additional revenue and build customer loyalty. The rise of embedded payments, or the ability to shop and pay in a seamless experience within a single app, has broadened the number of companies looking to launch branded cards.Highnote is a startup that helps small to mid-sized merchants roll out their own debit and pre-paid digital cards. The fintech emerged from stealth on Tuesday to announce it raised $54 million in seed and Series A funding.Here's the 12-page deck Highnote, a startup helping SMBs embed payments, used to raise $54 million in seed and Series A fundingSpeeding up loans for government contractors OppZo cofounders Warren Reed and Randy GarrettOppZoThe massive market for federal government contracts approached $700 billion in 2020, and it's likely to grow as spending accelerates amid an ongoing push for investment in the nation's infrastructure. Many of those dollars flow to small-and-medium sized businesses, even though larger corporations are awarded the bulk of contracts by volume. Of the roughly $680 billion in federal contracts awarded in 2020, roughly a quarter, according to federal guidelines, or some $146 billion that year, went to smaller businesses.But peeking under the hood of the procurement process, the cofounders of OppZo — Randy Garrett and Warren Reed — saw an opportunity to streamline how smaller-sized businesses can leverage those contracts to tap in to capital.  Securing a deal is "a government contractor's best day and their worst day," as Garrett, OppZo's president, likes to put it."At that point they need to pay vendors and hire folks to start the contract. And they may not get their first contract payment from the government for as long as 120 days," Reed, the startup's CEO,  told Insider. Check out the 12-page pitch deck OppZo, a fintech that has figured out how to speed up loans to small government contractors, used to raise $260 million in equity and debtHelping small businesses manage their taxesComplYant's founder Shiloh Jackson wants to help people be present in their bookkeeping.ComplYantAfter 14 years in tax accounting, Shiloh Johnson had formed a core philosophy around corporate accounting: everyone deserves to understand their business's money and business owners need to be present in their bookkeeping process.She wanted to help small businesses understand "this is why you need to do what you're doing and why you have to change the way you think about tax and be present in your bookkeeping process," she told Insider. The Los Angeles native wanted small businesses to not only understand business tax no matter their size but also to find the tools they needed to prepare their taxes in one spot. So Johnson developed a software platform that provides just that.The 13-page pitch deck ComplYant used to nab $4 million that details the tax startup's plan to be Turbotax, Quickbooks, and Xero rolled into one for small business ownersAutomating accounting ops for SMBsDecimal CEO Matt Tait.DecimalSmall- and medium-sized businesses can rely on any number of payroll, expense management, bill pay, and corporate-card startups promising to automate parts of their financial workflow. Smaller firms have adopted this corporate-financial software en masse, boosting growth throughout the pandemic for relatively new entrants like Ramp and massive, industry stalwarts like Intuit. But it's no easy task to connect all of those tools into one, seamless process. And while accounting operations might be far from where many startup founders want to focus their time, having efficient back-end finances does mean time — and capital — freed up to spend elsewhere. For Decimal CEO Matt Tait, there's ample opportunity in "the boring stuff you have to do to survive as a company," he told Insider. Launched in 2020, Decimal provides a back-end tech layer that small- and medium-sized businesses can use to integrate their accounting and business-management software tools in one place.On Wednesday, Decimal announced a $9 million seed fundraising round led by Minneapolis-based Arthur Ventures, alongside Service Providers Capital and other angel investors. See the 13-page pitch deck for Decimal, a startup automating accounting ops for small businessesInvoice financing for SMBsStacey Abrams and Lara Hodgson, Now co-foundersNowAbout a decade ago, politician Stacey Abrams and entrepreneur Lara Hodgson were forced to fold their startup because of a kink in the supply chain — but not in the traditional sense.Nourish, which made spill-proof bottled water for children, had grown quickly from selling to small retailers to national ones. And while that may sound like a feather in the small business' cap, there was a hang-up."It was taking longer and longer to get paid, and as you can imagine, you deliver the product and then you wait and you wait, but meanwhile you have to pay your employees and you have to pay your vendors," Hodgson told Insider. "Waiting to get paid was constraining our ability to grow."While it's not unusual for small businesses to grapple with working capital issues, the dust was still settling from the Great Recession. Abrams and Hodgson couldn't secure a line of credit or use financing tools like factoring to solve their problem. The two entrepreneurs were forced to close Nourish in 2012, but along the way they recognized a disconnect in the system.  "Why are we the ones borrowing money, when in fact we're the lender here because every time you send an invoice to a customer, you've essentially extended a free loan to that customer by letting them pay later," Hodgson said. "And the only reason why we were going to need to possibly borrow money was because we had just given ours away for free to Whole Foods," she added.Check out the 7-page deck that Now, Stacey Abrams' fintech that wants to help small businesses 'grow fearlessly', used to raise $29 millionCheckout made easyRyan Breslow.Ryan BreslowAmazon has long dominated e-commerce with its one-click checkout flows, offering easier ways for consumers to shop online than its small-business competitors.Bolt gives small merchants tools to offer the same easy checkouts so they can compete with the likes of Amazon.The startup raised its $393 million Series D to continue adding its one-click checkout feature to merchants' own websites in October.Bolt markets to merchants themselves. But a big part of Bolt's pitch is its growing network of consumers — currently over 5.6 million — that use its features across multiple Bolt merchant customers. Roughly 5% of Bolt's transactions were network-driven in May, meaning users that signed up for a Bolt account on another retailer's website used it elsewhere. The network effects were even more pronounced in verticals like furniture, where 49% of transactions were driven by the Bolt network."The network effect is now unleashed with Bolt in full fury, and that triggered the raise," Bolt's founder and CEO Ryan Breslow told Insider.Here's the 12-page deck that one-click checkout Bolt used to outline its network of 5.6 million consumers and raise its Series DPayments infrastructure for fintechsQolo CEO and co-founder Patricia MontesiQoloThree years ago, Patricia Montesi realized there was a disconnect in the payments world. "A lot of new economy companies or fintech companies were looking to mesh up a lot of payment modalities that they weren't able to," Montesi, CEO and co-founder of Qolo, told Insider.Integrating various payment capabilities often meant tapping several different providers that had specializations in one product or service, she added, like debit card issuance or cross-border payments. "The way people were getting around that was that they were creating this spider web of fintech," she said, adding that "at the end of it all, they had this mess of suppliers and integrations and bank accounts."The 20-year payments veteran rounded up a group of three other co-founders — who together had more than a century of combined industry experience — to start Qolo, a business-to-business fintech that sought out to bundle back-end payment rails for other fintechs.Here's the 11-slide pitch deck a startup that provides payments infrastructure for other fintechs used to raise a $15 million Series ABetter use of payroll dataAtomic's Head of Markets, Lindsay DavisAtomicEmployees at companies large and small know the importance — and limitations — of how firms manage their payrolls. A new crop of startups are building the API pipes that connect companies and their employees to offer a greater level of visibility and flexibility when it comes to payroll data and employee verification. On Thursday, one of those names, Atomic, announced a $40 million Series B fundraising round co-led by Mercato Partners and Greylock, alongside Core Innovation Capital, Portage, and ATX Capital. The round follows Atomic's Series A round announced in October, when the startup raised a $22 million Series A from investors including Core Innovation Capital, Portage, and Greylock.Payroll startup Atomic just raised a $40 million Series B. Here's an internal deck detailing the fintech's approach to the red-hot payments space.Saving on vendor invoicesHoward Katzenberg, Glean's CEO and cofounderGleanWhen it comes to high-flying tech startups, headlines and investors typically tend to focus on industry "disruption" and the total addressable market a company is hoping to reach. Expense cutting as a way to boost growth typically isn't part of the conversation early on, and finance teams are viewed as cost centers relative to sales teams. But one fast-growing area of business payments has turned its focus to managing those costs. Startups like Ramp and established names like Bill.com have made their name offering automated expense-management systems. Now, one new fintech competitor, Glean, is looking to take that further by offering both automated payment services and tailored line-item accounts-payable insights driven by machine-learning models. Glean's CFO and founder, Howard Katzenberg, told Insider that the genesis of Glean was driven by his own personal experience managing the finance teams of startups, including mortgage lender Better.com, which Katzenberg left in 2019, and online small-business lender OnDeck. "As a CFO of high-growth companies, I spent a lot of time focused on revenue and I had amazing dashboards in real time where I could see what is going on top of the funnel, what's going on with conversion rates, what's going on in terms of pricing and attrition," Katzenberg told Insider. See the 15-slide pitch deck Glean, a startup using machine learning to find savings in vendor invoices, used to raise $10.8 million in seed fundingReal-estate management made easyAgora founders Noam Kahan, CTO, Bar Mor, CEO, and Lior Dolinski, CPOAgoraFor alternative asset managers of any type, the operations underpinning sales and investor communications are a crucial but often overlooked part of the business. Fund managers love to make bets on markets, not coordinate hundreds of wire transfers to clients each quarter or organize customer-relationship-management databases.Within the $10.6 trillion global market for professionally managed real-estate investing, that's where Tel Aviv and New York-based startup Agora hopes to make its mark.Founded in 2019, Agora offers a set of back-office, investor relations, and sales software tools that real-estate investment managers can plug into their workflows. On Wednesday, Agora announced a $9 million seed round, led by Israel-based venture firm Aleph, with participation from River Park Ventures and Maccabee Ventures. The funding comes on the heels of an October 2020 pre-seed fund raise worth $890,000, in which Maccabee also participated.Here's the 15-slide pitch deck that Agora, a startup helping real-estate investors manage communications and sales with their clients, used to raise a $9 million seed roundAccess to commercial real-estate investing LEX Markets cofounders and co-CEOs Drew Sterrett and Jesse Daugherty.LEX MarketsDrew Sterrett was structuring real-estate deals while working in private equity when he realized the inefficiencies that existed in the market. Only high-net worth individuals or accredited investors could participate in commercial real-estate deals. If they ever wanted to leave a partnership or sell their stake in a property, it was difficult to find another investor to replace them. Owners also struggled to sell minority stakes in their properties and didn't have many good options to recapitalize an asset if necessary.In short, the market had a high barrier to entry despite the fact it didn't always have enough participants to get deals done quickly. "Most investors don't have access to high-quality commercial real-estate investments. How do we have the oldest and largest asset class in the world and one of the largest wealth creators with no public and liquid market?" Sterrett told Insider. "It sort of seems like a no-brainer, and that this should have existed 50 or 60 years ago."This 15-page pitch deck helped LEX Markets, a startup making investing in commercial real estate more accessible, raise $15 millionInsurance goes digitalJamie Hale, CEO and cofounder of LadderLadderFintechs looking to transform how insurance policies are underwritten, issued, and experienced by customers have grown as new technology driven by digital trends and artificial intelligence shape the market. And while verticals like auto, homeowner's, and renter's insurance have seen their fair share of innovation from forward-thinking fintechs, one company has taken on the massive life-insurance market. Founded in 2017, Ladder uses a tech-driven approach to offer life insurance with a digital, end-to-end service that it says is more flexible, faster, and cost-effective than incumbent players.Life, annuity, and accident and health insurance within the US comprise a big chunk of the broader market. In 2020, premiums written on those policies totaled some $767 billion, compared to $144 billion for auto policies and $97 billion for homeowner's insurance.Here's the 12-page deck that Ladder, a startup disrupting the 'crown jewel' of the insurance market, used to nab $100 millionData science for commercial insuranceTanner Hackett, founder and CEO of CounterpartCounterpartThere's been no shortage of funds flowing into insurance-technology companies over the past few years. Private-market funding to insurtechs soared to $15.4 billion in 2021, a 90% increase compared to 2020. Some of the most well-known consumer insurtech names — from Oscar (which focuses on health insurance) to Metromile (which focuses on auto) — launched on the public markets last year, only to fall over time or be acquired as investors questioned the sustainability of their business models. In the commercial arena, however, the head of one insurtech company thinks there is still room to grow — especially for those catering to small businesses operating in an entirely new, pandemic-defined environment. "The bigger opportunity is in commercial lines," Tanner Hackett, the CEO of management liability insurer Counterpart, told Insider."Everywhere I poke, I'm like, 'Oh my goodness, we're still in 1.0, and all the other businesses I've built were on version three.' Insurance is still in 1.0, still managing from spreadsheets and PDFs," added Hackett, who also previously co-founded Button, which focuses on mobile marketing. See the 8-page pitch deck Counterpart, a startup disrupting commercial insurance with data science, used to raise a $30 million Series BSmarter insurance for multifamily propertiesItai Ben-Zaken, cofounder and CEO of Honeycomb.HoneycombA veteran of the online-insurance world is looking to revolutionize the way the industry prices risk for commercial properties with the help of artificial intelligence.Insurance companies typically send inspectors to properties before issuing policies to better understand how the building is maintained and identify potential risks or issues with it. It's a process that can be time-consuming, expensive, and inefficient, making it hard to justify for smaller commercial properties, like apartment and condo buildings.Insurtech Honeycomb is looking to fix that by using AI to analyze a combination of third-party data and photos submitted by customers through the startup's app to quickly identify any potential risks at a property and more accurately price policies."That whole physical inspection thing had really good things in it, but it wasn't really something that is scalable and, it's also expensive," Itai Ben-Zaken, Honeycomb's cofounder and CEO, told Insider. "The best way to see a property right now is Google street view. Google street view is usually two years old."Here's the 10-page Series A pitch deck used by Honeycomb, a startup that wants to revolutionize the $26 billion market for multifamily property insuranceHelping freelancers with their taxesJaideep Singh is the CEO and co-founder of FlyFin, an AI-driven tax preparation software program for freelancers.FlyFinSome people, particularly those with families or freelancing businesses, spend days searching for receipts for tax season, making tax preparation a time consuming and, at times, taxing experience. That's why in 2020 Jaideep Singh founded FlyFin, an artificial-intelligence tax preparation program for freelancers that helps people, as he puts it, "fly through their finances." FlyFin is set up to connect to a person's bank accounts, allowing the AI program to help users monitor for certain expenses that can be claimed on their taxes like business expenditures, the interest on mortgages, property taxes, or whatever else that might apply. "For most individuals, people have expenses distributed over multiple financial institutions. So we built an AI platform that is able to look at expenses, understand the individual, understand your profession, understand the freelance population at large, and start the categorization," Singh told Insider.Check out the 7-page pitch deck a startup helping freelancers manage their taxes used to nab $8 million in fundingDigital banking for freelancersJGalione/Getty ImagesLance is a new digital bank hoping to simplify the life of those workers by offering what it calls an "active" approach to business banking. "We found that every time we sat down with the existing tools and resources of our accountants and QuickBooks and spreadsheets, we just ended up getting tangled up in the whole experience of it," Lance cofounder and CEO Oona Rokyta told Insider. Lance offers subaccounts for personal salaries, withholdings, and savings to which freelancers can automatically allocate funds according to custom preset levels. It also offers an expense balance that's connected to automated tax withholdings.In May, Lance announced the closing of a $2.8 million seed round that saw participation from Barclays, BDMI, Great Oaks Capital, Imagination Capital, Techstars, DFJ Frontier, and others.Here's the 21-page pitch deck Lance, a digital bank for freelancers, used to raise a $2.8 million seed round from investors including BarclaysSoftware for managing freelancersWorksome cofounder and CEO Morten Petersen.WorksomeThe way people work has fundamentally changed over the past year, with more flexibility and many workers opting to freelance to maintain their work-from-home lifestyles.But managing a freelance or contractor workforce is often an administrative headache for employers. Worksome is a startup looking to eliminate all the extra work required for employers to adapt to more flexible working norms.Worksome started as a freelancer marketplace automating the process of matching qualified workers with the right jobs. But the team ultimately pivoted to a full suite of workforce management software, automating administrative burdens required to hire, pay, and account for contract workers.In May, Worksome closed a $13 million Series A backed by European angel investor Tommy Ahlers and Danish firm Lind & Risør.Here's the 21-slide pitch deck used by a startup that helps firms like Carlsberg and Deloitte manage freelancersPayments and operations support HoneyBook cofounders Dror Shimoni, Oz Alon, and Naama Alon.HoneyBookWhile countless small businesses have been harmed by the pandemic, self-employment and entrepreneurship have found ways to blossom as Americans started new ventures.Half of the US population may be freelance by 2027, according to a study commissioned by remote-work hiring platform Upwork. HoneyBook, a fintech startup that provides payment and operations support for freelancers, in May raised $155 million in funding and achieved unicorn status with its $1 billion-plus valuation.Durable Capital Partners led the Series D funding with other new investors including renowned hedge fund Tiger Global, Battery Ventures, Zeev Ventures, and 01 Advisors. Citi Ventures, Citigroup's startup investment arm that also backs fintech robo-advisor Betterment, participated as an existing investor in the round alongside Norwest Venture partners. The latest round brings the company's fundraising total to $227 million to date.Here's the 21-page pitch deck a Citi-backed fintech for freelancers used to raise $155 million from investors like hedge fund Tiger GlobalPay-as-you-go compliance for banks, fintechs, and crypto startupsNeepa Patel, Themis' founder and CEOThemisWhen Themis founder and CEO Neepa Patel set out to build a new compliance tool for banks, fintech startups, and crypto companies, she tapped into her own experience managing risk at some of the nation's biggest financial firms. Having worked as a bank regulator at the Office of the Comptroller of the Currency and in compliance at Morgan Stanley, Deutsche Bank, and the enterprise blockchain company R3, Patel was well-placed to assess the shortcomings in financial compliance software. But Patel, who left the corporate world to begin work on Themis in 2020, drew on more than just her own experience and frustrations to build the startup."It's not just me building a tool based on my personal pain points. I reached out to regulators. I reached out to bank compliance officers and members in the fintech community just to make sure that we're building it exactly how they do their work," Patel told Insider. "That was the biggest problem: No one built a tool that was reflective of how people do their work."Check out the 9-page pitch deck Themis, which offers pay-as-you-go compliance for banks, fintechs, and crypto startups, used to raise $9 million in seed fundingConnecting startups and investorsHum Capital cofounder and CEO Blair SilverbergHum CapitalBlair Silverberg is no stranger to fundraising.For six years, Silverberg was a venture capitalist at Draper Fisher Jurvetson and Private Credit Investments making bets on startups."I was meeting with thousands of founders in person each year, watching them one at a time go through this friction where they're meeting a ton of investors, and the investors are all asking the same questions," Silverberg told Insider. He switched gears about three years ago, moving to the opposite side of the metaphorical table, to start Hum Capital, which uses artificial intelligence to match investors with startups looking to fundraise.On August 31, the New York-based fintech announced its $9 million Series A. The round was led by Future Ventures with participation from Webb Investment Network, Wavemaker Partners, and Partech. This 11-page pitch deck helped Hum Capital, a fintech using AI to match investors with startups, raise a $9 million Series A.Helping LatAm startups get up to speedKamino cofounders Gut Fragoso, Rodrigo Perenha, Benjamin Gleason, and Gonzalo ParejoKaminoThere's more venture capital flowing into Latin America than ever before, but getting the funds in founders' hands is not exactly a simple process.In 2021, investors funneled $15.3 billion into Latin American companies, more than tripling the previous record of $4.9 billion in 2019. Fintech and e-commerce sectors drove funding, accounting for 39% and 25% of total funding, respectively.  However, for many startup founders in the region who have successfully sold their ideas and gotten investors on board, there's a patchwork of corporate structuring that's needed to access the funds, according to Benjamin Gleason, who was the chief financial officer at Groupon LatAm prior to cofounding Brazil-based fintech Kamino.It's a process Gleason and his three fellow Kamino cofounders have been through before as entrepreneurs and startup execs themselves. Most often, startups have to set up offshore financial accounts outside of Brazil, which "entails creating a Cayman [Islands] holding company, a Delaware LLC, and then connecting it to a local entity here and also opening US bank accounts for the Cayman entity, which is not trivial from a KYC perspective," said Gleason, who founded open-banking fintech Guiabolso in Sao Paulo. His partner, Gonzalo Parejo, experienced the same toils when he founded insurtech Bidu."Pretty much any international investor will usually ask for that," Gleason said, adding that investors typically cite liability issues."It's just a massive amount of bureaucracy, complexity, a lot of time from the founders. All of this just to get the money from the investor that wants to give them the money," he added.Here's the 8-page pitch deck Kamino, a fintech helping LatAm startups with everything from financing to corporate credit cards, used to raise a $6.1M pre-seed roundThe back-end tech for beautyDanielle Cohen-Shohet, CEO and founder of GlossGeniusGlossGeniusDanielle Cohen-Shohet might have started as a Goldman Sachs investment analyst, but at her core she was always a coder.After about three years at Goldman Sachs, Cohen-Shohet left the world of traditional finance to code her way into starting her own company in 2016. "There was a period of time where I did nothing, but eat, sleep, and code for a few weeks," Cohen-Shohet told Insider. Her technical edge and knowledge of the point-of-sale payment space led her to launch a software company focused on providing behind-the-scenes tech for beauty and wellness small businesses.Cohen-Shohet launched GlossGenius in 2017 to provide payments tech for hair stylists, nail technicians, blow-out bars, and other small businesses in the space.Here's the 11-page deck GlossGenius, a startup that provides back-end tech for the beauty industry, used to raise $16 millionRead the original article on Business Insider.....»»

Category: topSource: businessinsiderJun 30th, 2022

Chuck Schumer vows to continue pushing for $50,000 in student-loan forgiveness per borrower, even after Biden rejected that amount: "Let"s fight and persist until we succeed"

Student-loan borrowers "can't do all the things people look forward to because every month that damn payment is on their backs," Sen. Schumer said. Sen. Chuck Schumer puts on "cancel student debt" mask.Alex Wong/Getty Images Sen. Chuck Schumer said he will continue to fight for $50,000 in student-loan forgiveness per borrower. Biden previously said $50,000 is not an amount he is considering. Latest reports suggest the relief will be $10,000 for borrowers making under $150,000 a year. The Senate Majority Leader doesn't see President Joe Biden's $10,000 student-loan forgiveness plan as the end of the road."We need the working people of America, we need this powerful, progressive, thoughtful and caring labor movement to make this issue the kind of issue that resonates from one end of America to the other," Chuck Schumer said during an AFL-CIO roundtable on student debt on Wednesday, adding that student-loan borrowers "can't do all the things people look forward to because every month that damn payment is on their backs.""Let's fight and persist until we succeed in canceling $50,000 in student debt," Schumer said.Schumer has long been an advocate for $50,000 in student debt cancellation for federal borrowers — but Biden stunted that effort in April when he told reporters $50,000 in relief is not something he was considering. Instead, recent reports have suggested he is looking at $10,000 in forgiveness for borrowers making under $150,000 a year. He will likely announce his final plan in July or August, closer to when the pause on student-loan payments is set to expire. For Schumer and many of his Democratic colleagues, though, $10,000 in relief is not sufficient. Massachusetts Sen. Elizabeth Warren, who joined Schumer at the Wednesday roundtable, also called for $50,000 in relief, saying that we "have a President of the United States who cares about labor... and we are here today to say, 'Mr. President, labor cares about student loan debt." "Please cancel $50,000 in student loan debt," Warren added. According to data provided by Warren's office last month, $50,000 in relief would wipe out balances for 30 million Americans, while Biden's $10,000 forgiveness plan would do the same for 13 million borrowers.Biden has not yet publicly confirmed an amount he will cancel, but he told reporters over the weekend he is close to making a decision, and a further extension of the pause on student-loan payments is "on the table." Still, both Democratic and Republican lawmakers alike have expressed concerns with the Education Department's preparedness to implement loan forgiveness given a decision has yet to be finalized, but Education Secretary Miguel Cardona has confirmed the department is "ready to roll" with the president's plan.Union leaders, like President of the American Federation of Teachers Randi Weingarten, hope the plan is to go big on relief."Canceling up to $50,000 of student debt is the only just and moral response to our nation's student debt crisis, and it would be a game-changer economically for educators, nurses, public employees and other working people who face enormous economic challenges as a result of their debt burden," Weingarten said during the roundtable.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJun 22nd, 2022

These 44 pitch decks helped fintechs disrupting trading, investing, and banking raise millions in funding

Looking for examples of real fintech pitch decks? Check out pitch decks that Qolo, Lance, and other startups used to raise money from VCs. Check out these pitch decks for examples of fintech founders sold their vision.Yulia Reznikov/Getty Images Insider has been tracking the next wave of hot new startups that are blending finance and tech.  Check out these pitch decks to see how fintech founders sold their vision. See more stories on Insider's business page. Fintech funding has been on a tear.In 2021, fintech funding hit a record $132 billion globally, according to CB Insights, more than double 2020's mark.Insider has been tracking the next wave of hot new startups that are blending finance and tech. Check out these pitch decks to see how fintech founders are selling their vision and nabbing big bucks in the process. You'll see new financial tech geared at freelancers, fresh twists on digital banking, and innovation aimed at streamlining customer onboarding. New twists on digital bankingZach Bruhnke, cofounder and CEO of HMBradleyHMBradleyConsumers are getting used to the idea of branch-less banking, a trend that startup digital-only banks like Chime, N26, and Varo have benefited from. The majority of these fintechs target those who are underbanked, and rely on usage of their debit cards to make money off interchange. But fellow startup HMBradley has a different business model. "Our thesis going in was that we don't swipe our debit cards all that often, and we don't think the customer base that we're focusing on does either," Zach Bruhnke, cofounder and CEO of HMBradley, told Insider. "A lot of our customer base uses credit cards on a daily basis."Instead, the startup is aiming to build clientele with stable deposits. As a result, the bank is offering interest-rate tiers depending on how much a customer saves of their direct deposit.Notably, the rate tiers are dependent on the percentage of savings, not the net amount. "We'll pay you more when you save more of what comes in," Bruhnke said. "We didn't want to segment customers by how much money they had. So it was always going to be about a percentage of income. That was really important to us."Check out the 14-page pitch deck fintech HMBradley, a neobank offering interest rates as high as 3%, used to raise an $18.25 million Series APersonal finance is only a text awayYinon Ravid, the chief executive and cofounder of Albert.AlbertThe COVID-19 pandemic has underscored the growing preference of mobile banking as customers get comfortable managing their finances online.The financial app Albert has seen a similar jump in activity. Currently counting more than six million members, deposits in Albert's savings offering doubled from the start of the pandemic in March 2020 to May of this year, from $350 million to $700 million, according to new numbers released by the company. Founded in 2015, Albert offers automated budgeting and savings tools alongside guided investment portfolios. It's looked to differentiate itself through personalized features, like the ability for customers to text human financial experts.Budgeting and saving features are free on Albert. But for more tailored financial advice, customers pay a subscription fee that's a pay-what-you-can model, between $4 and $14 a month. And Albert's now banking on a new tool to bring together its investing, savings, and budgeting tools.Fintech Albert used this 10-page pitch deck to raise a $100 million Series C from General Atlantic and CapitalG 'A bank for immigrants'Priyank Singh and Rohit Mittal are the cofounders of Stilt.StiltRohit Mittal remembers the difficulties he faced when he first arrived in the United States a decade ago as a master's student at Columbia University.As an immigrant from India, Mittal had no credit score in the US and had difficulty integrating into the financial system. Mittal even struggled to get approved to rent an apartment and couch-surfed until he found a roommate willing to offer him space in his apartment in the New York neighborhood Morningside Heights.That roommate was Priyank Singh, who would go on to become Mittal's cofounder when the two started Stilt, a financial-technology company designed to address the problems Mittal faced when he arrived in the US.Stilt, which calls itself "a bank for immigrants," does not require a social security number or credit history to access its offerings, including unsecured personal loans.Instead of relying on traditional metrics like a credit score, Stilt uses data such as education and employment to predict an individual's future income stability and cash flow before issuing a loan. Stilt has seen its loan volume grow by 500% in the past 12 months, and the startup has loaned to immigrants from 160 countries since its launch. Here are the 15 slides Stilt, which calls itself 'a bank for immigrants,' used to raise a $14 million Series AAn IRA for alternativesHenry Yoshida is the co-founder and CEO of retirement fintech startup Rocket Dollar.Rocket DollarFintech startup Rocket Dollar, which helps users invest their individual retirement account (IRA) dollars into alternative assets, just raised $8 million for its Series A round, the company announced on Thursday.Park West Asset Management led the round, with participation from investors including Hyphen Capital, which focuses on backing Asian American entrepreneurs, and crypto exchange Kraken's venture arm. Co-founded in 2018 by CEO Henry Yoshida, CTO Rick Dude, and VP of marketing Thomas Young, Rocket Dollar now has over $350 million in assets under management on its platform. Yoshida sold his first startup, a roboadvisor called Honest Dollar, to Goldman Sachs' investment management division for an estimated $20 million.Yoshida told Insider that while ultra-high net worth investors have been investing self-directed retirement account dollars into alternative assets like real estate, private equity, and cryptocurrency, average investors have not historically been able to access the same opportunities to invest IRA dollars in alternative assets through traditional platforms.Here's the 34-page pitch deck a fintech that helps users invest their retirement savings in crypto and real estate assets used to nab $8 millionA trading app for activismAntoine Argouges, CEO and founder of TulipshareTulipshareAn up-and-coming fintech is taking aim at some of the world's largest corporations by empowering retail investors to push for social and environmental change by pooling their shareholder rights.London-based Tulipshare lets individuals in the UK invest as little as one pound in publicly-traded company stocks. The upstart combines individuals' shareholder rights with other like-minded investors to advocate for environmental, social, and corporate governance change at firms like JPMorgan, Apple, and Amazon.The goal is to achieve a higher number of shares to maximize the number of votes that can be submitted at shareholder meetings. Already a regulated broker-dealer in the UK, Tulipshare recently applied for registration as a broker-dealer in the US. "If you ask your friends and family if they've ever voted on shareholder resolutions, the answer will probably be close to zero," CEO and founder Antoine Argouges told Insider. "I started Tulipshare to utilize shareholder rights to bring about positive corporate change that has an impact on people's lives and our planet — what's more powerful than money to change the system we live in?"Check out the 14-page pitch deck from Tulipshare, a trading app that lets users pool their shareholder votes for activism campaignsDigital tools for independent financial advisorsJason Wenk, founder and CEO of AltruistAltruistJason Wenk started his career at Morgan Stanley in investment research over 20 years ago. Now, he's running a company that is hoping to broaden access to financial advice for less-wealthy individuals. The startup raised $50 million in Series B funding led by Insight Partners with participation from investors Vanguard and Venrock. The round brings the Los Angeles-based startup's total funding to just under $67 million.Founded in 2018, Altruist is a digital brokerage built for independent financial advisors, intended to be an "all-in-one" platform that unites custodial functions, portfolio accounting, and a client-facing portal. It allows advisors to open accounts, invest, build models, report, trade (including fractional shares), and bill clients through an interface that can advisors time by eliminating mundane operational tasks.Altruist aims to make personalized financial advice less expensive, more efficient, and more inclusive through the platform, which is designed for registered investment advisors (RIAs), a growing segment of the wealth management industry. Here's the pitch deck for Altruist, a wealth tech challenging custodians Fidelity and Charles Schwab, that raised $50 million from Vanguard and InsightRethinking debt collection Jason Saltzman, founder and CEO of ReliefReliefFor lenders, debt collection is largely automated. But for people who owe money on their credit cards, it can be a confusing and stressful process.  Relief is looking to change that. Its app automates the credit-card debt collection process for users, negotiating with lenders and collectors to settle outstanding balances on their behalf. The fintech just launched and closed a $2 million seed round led by Collaborative Ventures. Relief's fundraising experience was a bit different to most. Its pitch deck, which it shared with one investor via Google Slides, went viral. It set out to raise a $1 million seed round, but ended up doubling that and giving some investors money back to make room for others.Check out a 15-page pitch deck that went viral and helped a credit-card debt collection startup land a $2 million seed roundHelping small banks lendTKCollateralEdgeFor large corporations with a track record of tapping the credit markets, taking out debt is a well-structured and clear process handled by the nation's biggest investment banks and teams of accountants. But smaller, middle-market companies — typically those with annual revenues ranging up to $1 billion — are typically served by regional and community banks that don't always have the capacity to adequately measure the risk of loans or price them competitively. Per the National Center for the Middle Market, 200,000 companies fall into this range, accounting for roughly 33% of US private sector GDP and employment.Dallas-based fintech CollateralEdge works with these banks — typically those with between $1 billion and $50 billion in assets — to help analyze and price slices of commercial and industrial loans that previously might have gone unserved by smaller lenders.On October 20th, CollateralEdge announced a $3.5 million seed round led by Dallas venture fund Perot Jain with participation from Kneeland Youngblood (a founder of the healthcare-focused private-equity firm Pharos Capital) and other individual investors.Here's the 10-page deck CollateralEdge, a fintech streamlining how small banks lend to businesses, used to raise a $3.5 million seed roundA new way to assess creditworthinessPinwheel founders Curtis Lee, Kurt Lin, and Anish Basu.PinwheelGrowing up, Kurt Lin never saw his father get frustrated. A "traditional, stoic figure," Lin said his father immigrated to the United States in the 1970s. Becoming part of the financial system proved even more difficult than assimilating into a new culture.Lin recalled visiting bank after bank with his father as a child, watching as his father's applications for a mortgage were denied due to his lack of credit history. "That was the first time in my life I really saw him crack," Lin told Insider. "The system doesn't work for a lot of people — including my dad," he added. Lin would find a solution to his father's problem years later while working with Anish Basu, and Curtis Lee on an automated health savings account. The trio realized the payroll data integrations they were working on could be the basis of a product that would help lenders work with consumers without strong credit histories."That's when the lightbulb hit," said Lin, Pinwheel's CEO.In 2018, Lin, Basu, and Lee founded Pinwheel, an application-programming interface that shares payroll data to help both fintechs and traditional lenders serve consumers with limited or poor credit, who have historically struggled to access financial products. Here's the 9-page deck that Pinwheel, a fintech helping lenders tap into payroll data to serve consumers with little to no credit, used to raise a $50 million Series BAn alternative auto lenderTricolorAn alternative auto lender that caters to thin- and no-credit Hispanic borrowers is planning a national expansion after scoring a $90 million investment from BlackRock-managed funds. Tricolor is a Dallas-based auto lender that is a community development financial institution. It uses a proprietary artificial-intelligence engine that decisions each customer based on more than 100 data points, such as proof of income. Half of Tricolor's customers have a FICO score, and less than 12% have scores above 650, yet the average customer has lived in the US for 15 years, according to the deck.A 2017 survey by the Federal Deposit Insurance Corporation found 31.5% of Hispanic households had no mainstream credit compared to 14.4% of white households. "For decades, the deck has been stacked against low income or credit invisible Hispanics in the United States when it comes to the purchase and financing of a used vehicle," Daniel Chu, founder and CEO of Tricolor, said in a statement announcing the raise.An auto lender that caters to underbanked Hispanics used this 25-page deck to raise $90 million from BlackRock investors A new way to access credit The TomoCredit teamTomoCreditKristy Kim knows first-hand the challenge of obtaining credit in the US without an established credit history. Kim, who came to the US from South Korea, couldn't initially get access to credit despite having a job in investment banking after graduating college. "I was in my early twenties, I had a good income, my job was in investment banking but I could not get approved for anything," Kim told Insider. "Many young professionals like me, we deserve an opportunity to be considered but just because we didn't have a Fico, we weren't given a chance to even apply," she added.Kim started TomoCredit in 2018 to help others like herself gain access to consumer credit. TomoCredit spent three years building an internal algorithm to underwrite customers based on cash flow, rather than a credit score.TomoCredit, a fintech that lends to thin- and no-credit borrowers, used this 17-page pitch deck to raise its $10 million Series AHelping streamline how debts are repaidMethod Financial cofounders Jose Bethancourt and Marco del Carmen.Method FinancialWhen Jose Bethancourt graduated from the University of Texas at Austin in May 2019, he faced the same question that confronts over 43 million Americans: How would he repay his student loans?The problem led Bethancourt on a nearly two-year journey that culminated in the creation of a startup aimed at making it easier for consumers to more seamlessly pay off all kinds of debt.  Initially, Bethancourt and fellow UT grad Marco del Carmen built GradJoy, an app that helped users better understand how to manage student loan repayment and other financial habits. GradJoy was accepted into Y Combinator in the summer of 2019. But the duo quickly realized the real benefit to users would be helping them move money to make payments instead of simply offering recommendations."When we started GradJoy, we thought, 'Oh, we'll just give advice — we don't think people are comfortable with us touching their student loans,' and then we realized that people were saying, 'Hey, just move the money — if you think I should pay extra, then I'll pay extra.' So that's kind of the movement that we've seen, just, everybody's more comfortable with fintechs doing what's best for them," Bethancourt told Insider. Here is the 11-slide pitch deck Method Financial, a Y Combinator-backed fintech making debt repayment easier, used to raise $2.5 million in pre-seed fundingQuantum computing made easyQC Ware CEO Matt Johnson.QC WareEven though banks and hedge funds are still several years out from adding quantum computing to their tech arsenals, that hasn't stopped Wall Street giants from investing time and money into the emerging technology class. And momentum for QC Ware, a startup looking to cut the time and resources it takes to use quantum computing, is accelerating. The fintech secured a $25 million Series B on September 29 co-led by Koch Disruptive Technologies and Covestro with participation from D.E. Shaw, Citi, and Samsung Ventures.QC Ware, founded in 2014, builds quantum algorithms for the likes of Goldman Sachs (which led the fintech's Series A), Airbus, and BMW Group. The algorithms, which are effectively code bases that include quantum processing elements, can run on any of the four main public-cloud providers.Quantum computing allows companies to do complex calculations faster than traditional computers by using a form of physics that runs on quantum bits as opposed to the traditional 1s and 0s that computers use. This is especially helpful in banking for risk analytics or algorithmic trading, where executing calculations milliseconds faster than the competition can give firms a leg up. Here's the 20-page deck QC Ware, a fintech making quantum computing more accessible, used to raised its $25 million Series BSimplifying quant modelsKirat Singh and Mark Higgins, Beacon's cofounders.BeaconA fintech that helps financial institutions use quantitative models to streamline their businesses and improve risk management is catching the attention, and capital, of some of the country's biggest investment managers.Beacon Platform, founded in 2014, is a fintech that builds applications and tools to help banks, asset managers, and trading firms quickly integrate quantitative models that can help with analyzing risk, ensuring compliance, and improving operational efficiency. The company raised its Series C on Wednesday, scoring a $56 million investment led by Warburg Pincus with support from Blackstone Innovations Investments, PIMCO, and Global Atlantic. Blackstone, PIMCO, and Global Atlantic are also users of Beacon's tech, as are the Commonwealth Bank of Australia and Shell New Energies, a division of Royal Dutch Shell, among others.The fintech provides a shortcut for firms looking to use quantitative modelling and data science across various aspects of their businesses, a process that can often take considerable resources if done solo.Here's the 20-page pitch deck Beacon, a fintech helping Wall Street better analyze risk and data, used to raise $56 million from Warburg Pincus, Blackstone, and PIMCOA new data feed for bond tradingMark Lennihan/APFor years, the only way investors could figure out the going price of a corporate bond was calling up a dealer on the phone. The rise of electronic trading has streamlined that process, but data can still be hard to come by sometimes. A startup founded by a former Goldman Sachs exec has big plans to change that. BondCliQ is a fintech that provides a data feed of pre-trade pricing quotes for the corporate bond market. Founded by Chris White, the creator of Goldman Sachs' defunct corporate-bond-trading system, BondCliQ strives to bring transparency to a market that has traditionally kept such data close to the vest. Banks, which typically serve as the dealers of corporate bonds, have historically kept pre-trade quotes hidden from other dealers to maintain a competitive advantage.But tech advancements and the rise of electronic marketplaces have shifted power dynamics into the hands of buy-side firms, like hedge funds and asset managers. The investors are now able to get a fuller picture of the market by aggregating price quotes directly from dealers or via vendors.Here's the 9-page pitch deck that BondCliQ, a fintech looking to bring more data and transparency to bond trading, used to raise its Series AFraud prevention for lenders and insurersFiordaliso/Getty ImagesOnboarding new customers with ease is key for any financial institution or retailer. The more friction you add, the more likely consumers are to abandon the entire process.But preventing fraud is also a priority, and that's where Neuro-ID comes in. The startup analyzes what it calls "digital body language," or, the way users scroll, type, and tap. Using that data, Neuro-ID can identify fraudulent users before they create an account. It's built for banks, lenders, insurers, and e-commerce players."The train has left the station for digital transformation, but there's a massive opportunity to try to replicate all those communications that we used to have when we did business in-person, all those tells that we would get verbally and non-verbally on whether or not someone was trustworthy," Neuro-ID CEO Jack Alton told Insider.Founded in 2014, the startup's pitch is twofold: Neuro-ID can save companies money by identifying fraud early, and help increase user conversion by making the onboarding process more seamless. In December Neuro-ID closed a $7 million Series A, co-led by Fin VC and TTV Capital, with participation from Canapi Ventures. With 30 employees, Neuro-ID is using the fresh funding to grow its team and create additional tools to be more self-serving for customers.Here's the 11-slide pitch deck a startup that analyzes consumers' digital behavior to fight fraud used to raise a $7 million Series AAI-powered tools to spot phony online reviews FakespotMarketplaces like Amazon and eBay host millions of third-party sellers, and their algorithms will often boost items in search based on consumer sentiment, which is largely based on reviews. But many third-party sellers use fake reviews often bought from click farms to boost their items, some of which are counterfeit or misrepresented to consumers.That's where Fakespot comes in. With its Chrome extension, it warns users of sellers using potentially fake reviews to boost sales and can identify fraudulent sellers. Fakespot is currently compatible with Amazon, BestBuy, eBay, Sephora, Steam, and Walmart."There are promotional reviews written by humans and bot-generated reviews written by robots or review farms," Fakespot founder and CEO Saoud Khalifah told Insider. "Our AI system has been built to detect both categories with very high accuracy."Fakespot's AI learns via reviews data available on marketplace websites, and uses natural-language processing to identify if reviews are genuine. Fakespot also looks at things like whether the number of positive reviews are plausible given how long a seller has been active.Fakespot, a startup that helps shoppers detect robot-generated reviews and phony sellers on Amazon and Shopify, used this pitch deck to nab a $4 million Series AHelping fintechs manage dataProper Finance co-founders Travis Gibson (left) and Kyle MaloneyProper FinanceAs the flow of data becomes evermore crucial for fintechs, from the strappy startup to the established powerhouse, a thorny issue in the back office is becoming increasingly complex.Even though fintechs are known for their sleek front ends, the back end is often quite the opposite. Behind that streamlined interface can be a mosaic of different partner integrations — be it with banks, payments players and networks, or software vendors — with a channel of data running between them. Two people who know that better than the average are Kyle Maloney and Travis Gibson, two former employees of Marqeta, a fintech that provides other fintechs with payments processing and card issuance. "Take an established neobank for example. They'll likely have one or two card issuers, two to three bank partners, ACH processing for direct deposits and payouts, mobile check deposits, peer-to-peer payments, and lending," Gibson told Insider. Here's the 12-page pitch deck a startup helping fintechs manage their data used to score a $4.3 million seed from investors like Redpoint Ventures and Y CombinatorE-commerce focused business bankingMichael Rangel, cofounder and CEO, and Tyler McIntyre, cofounder and CTO of Novo.Kristelle Boulos PhotographyBusiness banking is a hot market in fintech. And it seems investors can't get enough.Novo, the digital banking fintech aimed at small e-commerce businesses, raised a $40.7 million Series A led by Valar Ventures in June. Since its launch in 2018, Novo has signed up 100,000 small businesses. Beyond bank accounts, it offers expense management, a corporate card, and integrates with e-commerce infrastructure players like Shopify, Stripe, and Wise.Founded in 2018, Novo was based in New York City, but has since moved its headquarters to Miami. Here's the 12-page pitch deck e-commerce banking startup Novo used to raise its $40 million Series AShopify for embedded financeProductfy CEO and founder, Duy VoProductfyProductfy is looking to break into embedded finance by becoming the Shopify of back-end banking services.Embedded finance — integrating banking services in non-financial settings — has taken hold in the e-commerce world. But Productfy is going after a different kind of customer in churches, universities, and nonprofits.The San Jose, Calif.-based upstart aims to help non-finance companies offer their own banking products. Productfy can help customers launch finance features in as little as a week and without additional engineering resources or background knowledge of banking compliance or legal requirements, Productfy founder and CEO Duy Vo told Insider. "You don't need an engineer to stand up Shopify, right? You can be someone who's just creating art and you can use Shopify to build your own online store," Vo said, adding that Productfy is looking to take that user experience and replicate it for banking services.Here's the 15-page pitch deck Productfy, a fintech looking to be the Shopify of embedded finance, used to nab a $16 million Series ADeploying algorithms and automation to small-business financingJustin Straight and Bernard Worthy, LoanWell co-foundersLoanWellBernard Worthy and Justin Straight, the founders of LoanWell, want to break down barriers to financing for small and medium-size businesses — and they've got algorithms and automation in their tech arsenals that they hope will do it.Worthy, the company's CEO, and Straight, its chief operating and financial officer, are powering community-focused lenders to fill a gap in the SMB financing world by boosting access to loans under $100,000. And the upstart is known for catching the attention, and dollars, of mission-driven investors. LoanWell closed a $3 million seed financing round in December led by Impact America Fund with participation from SoftBank's SB Opportunity Fund and Collab Capital.LoanWell automates the financing process — from underwriting and origination, to money movement and servicing — which shaves down an up-to-90-day process to 30 days or even same-day with some LoanWell lenders, Worthy said. SMBs rely on these loans to process quickly after two years of financial uncertainty. But the pandemic illustrated how time-consuming and expensive SMB financing can be, highlighted by efforts like the federal government's Paycheck Protection Program.Community banks, once the lifeline to capital for many local businesses, continue to shutter. And demands for smaller loan amounts remain largely unmet. More than half of business-loan applicants sought $100,000 or less, according to 2018 data from the Federal Reserve. But the average small-business bank loan was closer to six times that amount, according to the latest data from a now discontinued Federal Reserve survey.Here's the 14-page pitch deck LoanWell used to raise $3 million from investors like SoftBank.Branded cards for SMBsJennifer Glaspie-Lundstrom is the cofounder and CEO of Tandym.TandymJennifer Glaspie-Lundstrom is no stranger to the private-label credit-card business. As a former Capital One exec, she worked in both the card giant's co-brand partnerships division and its tech organization during her seven years at the company.Now, Glaspie-Lundstrom is hoping to use that experience to innovate a sector that was initially created in malls decades ago.Glaspie-Lundstrom is the cofounder and CEO of Tandym, which offers private-label digital credit cards to merchants. Store and private-label credit cards aren't a new concept, but Tandym is targeting small- and medium-sized merchants with less than $1 billion in annual revenue. Glaspie-Lundstrom said that group often struggles to offer private-label credit due to the expense of working with legacy players."What you have is this example of a very valuable product type that merchants love and their customers love, but a huge, untapped market that has heretofore been unserved, and so that's what we're doing with Tandym," Glaspi-Lundstrom told Insider.A former Capital One exec used this deck to raise $60 million for a startup helping SMBs launch their own branded credit cardsCatering to 'micro businesses'Stefanie Sample is the founder and CEO of FundidFundidStartups aiming to simplify the often-complex world of corporate cards have boomed in recent years.Business-finance management startup Brex was last valued at $12.3 billion after raising $300 million last year. Startup card provider Ramp announced an $8.1 billion valuation in March after growing its revenue nearly 10x in 2021. Divvy, a small business card provider, was acquired by Bill.com in May 2021 for approximately $2.5 billion.But despite how hot the market has gotten, Stefanie Sample said she ended up working in the space by accident. Sample is the founder and CEO of Fundid, a new fintech that provides credit and lending products to small businesses.This May, Fundid announced a $3.25 million seed round led by Nevcaut Ventures. Additional investors include the Artemis Fund and Builders and Backers. The funding announcement capped off the company's first year: Sample introduced the Fundid concept in April 2021, launched its website in May, and began raising capital in August."I never meant to do Fundid," Sample told Insider. "I never meant to do something that was venture-backed."Read the 12-page deck used by Fundid, a fintech offering credit and lending tools for 'micro businesses'Embedded payments for SMBsThe Highnote teamHighnoteBranded cards have long been a way for merchants with the appropriate bank relationships to create additional revenue and build customer loyalty. The rise of embedded payments, or the ability to shop and pay in a seamless experience within a single app, has broadened the number of companies looking to launch branded cards.Highnote is a startup that helps small to mid-sized merchants roll out their own debit and pre-paid digital cards. The fintech emerged from stealth on Tuesday to announce it raised $54 million in seed and Series A funding.Here's the 12-page deck Highnote, a startup helping SMBs embed payments, used to raise $54 million in seed and Series A fundingHelping small businesses manage their taxesComplYant's founder Shiloh Jackson wants to help people be present in their bookkeeping.ComplYantAfter 14 years in tax accounting, Shiloh Johnson had formed a core philosophy around corporate accounting: everyone deserves to understand their business's money and business owners need to be present in their bookkeeping process.She wanted to help small businesses understand "this is why you need to do what you're doing and why you have to change the way you think about tax and be present in your bookkeeping process," she told Insider. The Los Angeles native wanted small businesses to not only understand business tax no matter their size but also to find the tools they needed to prepare their taxes in one spot. So Johnson developed a software platform that provides just that.The 13-page pitch deck ComplYant used to nab $4 million that details the tax startup's plan to be Turbotax, Quickbooks, and Xero rolled into one for small business ownersAutomating accounting ops for SMBsDecimal CEO Matt Tait.DecimalSmall- and medium-sized businesses can rely on any number of payroll, expense management, bill pay, and corporate-card startups promising to automate parts of their financial workflow. Smaller firms have adopted this corporate-financial software en masse, boosting growth throughout the pandemic for relatively new entrants like Ramp and massive, industry stalwarts like Intuit. But it's no easy task to connect all of those tools into one, seamless process. And while accounting operations might be far from where many startup founders want to focus their time, having efficient back-end finances does mean time — and capital — freed up to spend elsewhere. For Decimal CEO Matt Tait, there's ample opportunity in "the boring stuff you have to do to survive as a company," he told Insider. Launched in 2020, Decimal provides a back-end tech layer that small- and medium-sized businesses can use to integrate their accounting and business-management software tools in one place.On Wednesday, Decimal announced a $9 million seed fundraising round led by Minneapolis-based Arthur Ventures, alongside Service Providers Capital and other angel investors. See the 13-page pitch deck for Decimal, a startup automating accounting ops for small businessesInvoice financing for SMBsStacey Abrams and Lara Hodgson, Now co-foundersNowAbout a decade ago, politician Stacey Abrams and entrepreneur Lara Hodgson were forced to fold their startup because of a kink in the supply chain — but not in the traditional sense.Nourish, which made spill-proof bottled water for children, had grown quickly from selling to small retailers to national ones. And while that may sound like a feather in the small business' cap, there was a hang-up."It was taking longer and longer to get paid, and as you can imagine, you deliver the product and then you wait and you wait, but meanwhile you have to pay your employees and you have to pay your vendors," Hodgson told Insider. "Waiting to get paid was constraining our ability to grow."While it's not unusual for small businesses to grapple with working capital issues, the dust was still settling from the Great Recession. Abrams and Hodgson couldn't secure a line of credit or use financing tools like factoring to solve their problem. The two entrepreneurs were forced to close Nourish in 2012, but along the way they recognized a disconnect in the system.  "Why are we the ones borrowing money, when in fact we're the lender here because every time you send an invoice to a customer, you've essentially extended a free loan to that customer by letting them pay later," Hodgson said. "And the only reason why we were going to need to possibly borrow money was because we had just given ours away for free to Whole Foods," she added.Check out the 7-page deck that Now, Stacey Abrams' fintech that wants to help small businesses 'grow fearlessly', used to raise $29 millionCheckout made easyRyan Breslow.Ryan BreslowAmazon has long dominated e-commerce with its one-click checkout flows, offering easier ways for consumers to shop online than its small-business competitors.Bolt gives small merchants tools to offer the same easy checkouts so they can compete with the likes of Amazon.The startup raised its $393 million Series D to continue adding its one-click checkout feature to merchants' own websites in October.Bolt markets to merchants themselves. But a big part of Bolt's pitch is its growing network of consumers — currently over 5.6 million — that use its features across multiple Bolt merchant customers. Roughly 5% of Bolt's transactions were network-driven in May, meaning users that signed up for a Bolt account on another retailer's website used it elsewhere. The network effects were even more pronounced in verticals like furniture, where 49% of transactions were driven by the Bolt network."The network effect is now unleashed with Bolt in full fury, and that triggered the raise," Bolt's founder and CEO Ryan Breslow told Insider.Here's the 12-page deck that one-click checkout Bolt used to outline its network of 5.6 million consumers and raise its Series DPayments infrastructure for fintechsQolo CEO and co-founder Patricia MontesiQoloThree years ago, Patricia Montesi realized there was a disconnect in the payments world. "A lot of new economy companies or fintech companies were looking to mesh up a lot of payment modalities that they weren't able to," Montesi, CEO and co-founder of Qolo, told Insider.Integrating various payment capabilities often meant tapping several different providers that had specializations in one product or service, she added, like debit card issuance or cross-border payments. "The way people were getting around that was that they were creating this spider web of fintech," she said, adding that "at the end of it all, they had this mess of suppliers and integrations and bank accounts."The 20-year payments veteran rounded up a group of three other co-founders — who together had more than a century of combined industry experience — to start Qolo, a business-to-business fintech that sought out to bundle back-end payment rails for other fintechs.Here's the 11-slide pitch deck a startup that provides payments infrastructure for other fintechs used to raise a $15 million Series ABetter use of payroll dataAtomic's Head of Markets, Lindsay DavisAtomicEmployees at companies large and small know the importance — and limitations — of how firms manage their payrolls. A new crop of startups are building the API pipes that connect companies and their employees to offer a greater level of visibility and flexibility when it comes to payroll data and employee verification. On Thursday, one of those names, Atomic, announced a $40 million Series B fundraising round co-led by Mercato Partners and Greylock, alongside Core Innovation Capital, Portage, and ATX Capital. The round follows Atomic's Series A round announced in October, when the startup raised a $22 million Series A from investors including Core Innovation Capital, Portage, and Greylock.Payroll startup Atomic just raised a $40 million Series B. Here's an internal deck detailing the fintech's approach to the red-hot payments space.Saving on vendor invoicesHoward Katzenberg, Glean's CEO and cofounderGleanWhen it comes to high-flying tech startups, headlines and investors typically tend to focus on industry "disruption" and the total addressable market a company is hoping to reach. Expense cutting as a way to boost growth typically isn't part of the conversation early on, and finance teams are viewed as cost centers relative to sales teams. But one fast-growing area of business payments has turned its focus to managing those costs. Startups like Ramp and established names like Bill.com have made their name offering automated expense-management systems. Now, one new fintech competitor, Glean, is looking to take that further by offering both automated payment services and tailored line-item accounts-payable insights driven by machine-learning models. Glean's CFO and founder, Howard Katzenberg, told Insider that the genesis of Glean was driven by his own personal experience managing the finance teams of startups, including mortgage lender Better.com, which Katzenberg left in 2019, and online small-business lender OnDeck. "As a CFO of high-growth companies, I spent a lot of time focused on revenue and I had amazing dashboards in real time where I could see what is going on top of the funnel, what's going on with conversion rates, what's going on in terms of pricing and attrition," Katzenberg told Insider. See the 15-slide pitch deck Glean, a startup using machine learning to find savings in vendor invoices, used to raise $10.8 million in seed fundingReal-estate management made easyAgora founders Noam Kahan, CTO, Bar Mor, CEO, and Lior Dolinski, CPOAgoraFor alternative asset managers of any type, the operations underpinning sales and investor communications are a crucial but often overlooked part of the business. Fund managers love to make bets on markets, not coordinate hundreds of wire transfers to clients each quarter or organize customer-relationship-management databases.Within the $10.6 trillion global market for professionally managed real-estate investing, that's where Tel Aviv and New York-based startup Agora hopes to make its mark.Founded in 2019, Agora offers a set of back-office, investor relations, and sales software tools that real-estate investment managers can plug into their workflows. On Wednesday, Agora announced a $9 million seed round, led by Israel-based venture firm Aleph, with participation from River Park Ventures and Maccabee Ventures. The funding comes on the heels of an October 2020 pre-seed fund raise worth $890,000, in which Maccabee also participated.Here's the 15-slide pitch deck that Agora, a startup helping real-estate investors manage communications and sales with their clients, used to raise a $9 million seed roundAccess to commercial real-estate investing LEX Markets cofounders and co-CEOs Drew Sterrett and Jesse Daugherty.LEX MarketsDrew Sterrett was structuring real-estate deals while working in private equity when he realized the inefficiencies that existed in the market. Only high-net worth individuals or accredited investors could participate in commercial real-estate deals. If they ever wanted to leave a partnership or sell their stake in a property, it was difficult to find another investor to replace them. Owners also struggled to sell minority stakes in their properties and didn't have many good options to recapitalize an asset if necessary.In short, the market had a high barrier to entry despite the fact it didn't always have enough participants to get deals done quickly. "Most investors don't have access to high-quality commercial real-estate investments. How do we have the oldest and largest asset class in the world and one of the largest wealth creators with no public and liquid market?" Sterrett told Insider. "It sort of seems like a no-brainer, and that this should have existed 50 or 60 years ago."This 15-page pitch deck helped LEX Markets, a startup making investing in commercial real estate more accessible, raise $15 millionInsurance goes digitalJamie Hale, CEO and cofounder of LadderLadderFintechs looking to transform how insurance policies are underwritten, issued, and experienced by customers have grown as new technology driven by digital trends and artificial intelligence shape the market. And while verticals like auto, homeowner's, and renter's insurance have seen their fair share of innovation from forward-thinking fintechs, one company has taken on the massive life-insurance market. Founded in 2017, Ladder uses a tech-driven approach to offer life insurance with a digital, end-to-end service that it says is more flexible, faster, and cost-effective than incumbent players.Life, annuity, and accident and health insurance within the US comprise a big chunk of the broader market. In 2020, premiums written on those policies totaled some $767 billion, compared to $144 billion for auto policies and $97 billion for homeowner's insurance.Here's the 12-page deck that Ladder, a startup disrupting the 'crown jewel' of the insurance market, used to nab $100 millionData science for commercial insuranceTanner Hackett, founder and CEO of CounterpartCounterpartThere's been no shortage of funds flowing into insurance-technology companies over the past few years. Private-market funding to insurtechs soared to $15.4 billion in 2021, a 90% increase compared to 2020. Some of the most well-known consumer insurtech names — from Oscar (which focuses on health insurance) to Metromile (which focuses on auto) — launched on the public markets last year, only to fall over time or be acquired as investors questioned the sustainability of their business models. In the commercial arena, however, the head of one insurtech company thinks there is still room to grow — especially for those catering to small businesses operating in an entirely new, pandemic-defined environment. "The bigger opportunity is in commercial lines," Tanner Hackett, the CEO of management liability insurer Counterpart, told Insider."Everywhere I poke, I'm like, 'Oh my goodness, we're still in 1.0, and all the other businesses I've built were on version three.' Insurance is still in 1.0, still managing from spreadsheets and PDFs," added Hackett, who also previously co-founded Button, which focuses on mobile marketing. See the 8-page pitch deck Counterpart, a startup disrupting commercial insurance with data science, used to raise a $30 million Series BSmarter insurance for multifamily propertiesItai Ben-Zaken, cofounder and CEO of Honeycomb.HoneycombA veteran of the online-insurance world is looking to revolutionize the way the industry prices risk for commercial properties with the help of artificial intelligence.Insurance companies typically send inspectors to properties before issuing policies to better understand how the building is maintained and identify potential risks or issues with it. It's a process that can be time-consuming, expensive, and inefficient, making it hard to justify for smaller commercial properties, like apartment and condo buildings.Insurtech Honeycomb is looking to fix that by using AI to analyze a combination of third-party data and photos submitted by customers through the startup's app to quickly identify any potential risks at a property and more accurately price policies."That whole physical inspection thing had really good things in it, but it wasn't really something that is scalable and, it's also expensive," Itai Ben-Zaken, Honeycomb's cofounder and CEO, told Insider. "The best way to see a property right now is Google street view. Google street view is usually two years old."Here's the 10-page Series A pitch deck used by Honeycomb, a startup that wants to revolutionize the $26 billion market for multifamily property insuranceHelping freelancers with their taxesJaideep Singh is the CEO and co-founder of FlyFin, an AI-driven tax preparation software program for freelancers.FlyFinSome people, particularly those with families or freelancing businesses, spend days searching for receipts for tax season, making tax preparation a time consuming and, at times, taxing experience. That's why in 2020 Jaideep Singh founded FlyFin, an artificial-intelligence tax preparation program for freelancers that helps people, as he puts it, "fly through their finances." FlyFin is set up to connect to a person's bank accounts, allowing the AI program to help users monitor for certain expenses that can be claimed on their taxes like business expenditures, the interest on mortgages, property taxes, or whatever else that might apply. "For most individuals, people have expenses distributed over multiple financial institutions. So we built an AI platform that is able to look at expenses, understand the individual, understand your profession, understand the freelance population at large, and start the categorization," Singh told Insider.Check out the 7-page pitch deck a startup helping freelancers manage their taxes used to nab $8 million in fundingDigital banking for freelancersJGalione/Getty ImagesLance is a new digital bank hoping to simplify the life of those workers by offering what it calls an "active" approach to business banking. "We found that every time we sat down with the existing tools and resources of our accountants and QuickBooks and spreadsheets, we just ended up getting tangled up in the whole experience of it," Lance cofounder and CEO Oona Rokyta told Insider. Lance offers subaccounts for personal salaries, withholdings, and savings to which freelancers can automatically allocate funds according to custom preset levels. It also offers an expense balance that's connected to automated tax withholdings.In May, Lance announced the closing of a $2.8 million seed round that saw participation from Barclays, BDMI, Great Oaks Capital, Imagination Capital, Techstars, DFJ Frontier, and others.Here's the 21-page pitch deck Lance, a digital bank for freelancers, used to raise a $2.8 million seed round from investors including BarclaysSoftware for managing freelancersWorksome cofounder and CEO Morten Petersen.WorksomeThe way people work has fundamentally changed over the past year, with more flexibility and many workers opting to freelance to maintain their work-from-home lifestyles.But managing a freelance or contractor workforce is often an administrative headache for employers. Worksome is a startup looking to eliminate all the extra work required for employers to adapt to more flexible working norms.Worksome started as a freelancer marketplace automating the process of matching qualified workers with the right jobs. But the team ultimately pivoted to a full suite of workforce management software, automating administrative burdens required to hire, pay, and account for contract workers.In May, Worksome closed a $13 million Series A backed by European angel investor Tommy Ahlers and Danish firm Lind & Risør.Here's the 21-slide pitch deck used by a startup that helps firms like Carlsberg and Deloitte manage freelancersPayments and operations support HoneyBook cofounders Dror Shimoni, Oz Alon, and Naama Alon.HoneyBookWhile countless small businesses have been harmed by the pandemic, self-employment and entrepreneurship have found ways to blossom as Americans started new ventures.Half of the US population may be freelance by 2027, according to a study commissioned by remote-work hiring platform Upwork. HoneyBook, a fintech startup that provides payment and operations support for freelancers, in May raised $155 million in funding and achieved unicorn status with its $1 billion-plus valuation.Durable Capital Partners led the Series D funding with other new investors including renowned hedge fund Tiger Global, Battery Ventures, Zeev Ventures, and 01 Advisors. Citi Ventures, Citigroup's startup investment arm that also backs fintech robo-advisor Betterment, participated as an existing investor in the round alongside Norwest Venture partners. The latest round brings the company's fundraising total to $227 million to date.Here's the 21-page pitch deck a Citi-backed fintech for freelancers used to raise $155 million from investors like hedge fund Tiger GlobalPay-as-you-go compliance for banks, fintechs, and crypto startupsNeepa Patel, Themis' founder and CEOThemisWhen Themis founder and CEO Neepa Patel set out to build a new compliance tool for banks, fintech startups, and crypto companies, she tapped into her own experience managing risk at some of the nation's biggest financial firms. Having worked as a bank regulator at the Office of the Comptroller of the Currency and in compliance at Morgan Stanley, Deutsche Bank, and the enterprise blockchain company R3, Patel was well-placed to assess the shortcomings in financial compliance software. But Patel, who left the corporate world to begin work on Themis in 2020, drew on more than just her own experience and frustrations to build the startup."It's not just me building a tool based on my personal pain points. I reached out to regulators. I reached out to bank compliance officers and members in the fintech community just to make sure that we're building it exactly how they do their work," Patel told Insider. "That was the biggest problem: No one built a tool that was reflective of how people do their work."Check out the 9-page pitch deck Themis, which offers pay-as-you-go compliance for banks, fintechs, and crypto startups, used to raise $9 million in seed fundingConnecting startups and investorsHum Capital cofounder and CEO Blair SilverbergHum CapitalBlair Silverberg is no stranger to fundraising.For six years, Silverberg was a venture capitalist at Draper Fisher Jurvetson and Private Credit Investments making bets on startups."I was meeting with thousands of founders in person each year, watching them one at a time go through this friction where they're meeting a ton of investors, and the investors are all asking the same questions," Silverberg told Insider. He switched gears about three years ago, moving to the opposite side of the metaphorical table, to start Hum Capital, which uses artificial intelligence to match investors with startups looking to fundraise.On August 31, the New York-based fintech announced its $9 million Series A. The round was led by Future Ventures with participation from Webb Investment Network, Wavemaker Partners, and Partech. This 11-page pitch deck helped Hum Capital, a fintech using AI to match investors with startups, raise a $9 million Series A.Helping LatAm startups get up to speedKamino cofounders Gut Fragoso, Rodrigo Perenha, Benjamin Gleason, and Gonzalo ParejoKaminoThere's more venture capital flowing into Latin America than ever before, but getting the funds in founders' hands is not exactly a simple process.In 2021, investors funneled $15.3 billion into Latin American companies, more than tripling the previous record of $4.9 billion in 2019. Fintech and e-commerce sectors drove funding, accounting for 39% and 25% of total funding, respectively.  However, for many startup founders in the region who have successfully sold their ideas and gotten investors on board, there's a patchwork of corporate structuring that's needed to access the funds, according to Benjamin Gleason, who was the chief financial officer at Groupon LatAm prior to cofounding Brazil-based fintech Kamino.It's a process Gleason and his three fellow Kamino cofounders have been through before as entrepreneurs and startup execs themselves. Most often, startups have to set up offshore financial accounts outside of Brazil, which "entails creating a Cayman [Islands] holding company, a Delaware LLC, and then connecting it to a local entity here and also opening US bank accounts for the Cayman entity, which is not trivial from a KYC perspective," said Gleason, who founded open-banking fintech Guiabolso in Sao Paulo. His partner, Gonzalo Parejo, experienced the same toils when he founded insurtech Bidu."Pretty much any international investor will usually ask for that," Gleason said, adding that investors typically cite liability issues."It's just a massive amount of bureaucracy, complexity, a lot of time from the founders. All of this just to get the money from the investor that wants to give them the money," he added.Here's the 8-page pitch deck Kamino, a fintech helping LatAm startups with everything from financing to corporate credit cards, used to raise a $6.1M pre-seed roundThe back-end tech for beautyDanielle Cohen-Shohet, CEO and founder of GlossGeniusGlossGeniusDanielle Cohen-Shohet might have started as a Goldman Sachs investment analyst, but at her core she was always a coder.After about three years at Goldman Sachs, Cohen-Shohet left the world of traditional finance to code her way into starting her own company in 2016. "There was a period of time where I did nothing, but eat, sleep, and code for a few weeks," Cohen-Shohet told Insider. Her technical edge and knowledge of the point-of-sale payment space led her to launch a software company focused on providing behind-the-scenes tech for beauty and wellness small businesses.Cohen-Shohet launched GlossGenius in 2017 to provide payments tech for hair stylists, nail technicians, blow-out bars, and other small businesses in the space.Here's the 11-page deck GlossGenius, a startup that provides back-end tech for the beauty industry, used to raise $16 millionRead the original article on Business Insider.....»»

Category: personnelSource: nytJun 22nd, 2022

Megan Rapinoe Discusses Historic Equal Pay Agreement, Title IX Anniversary and Transgender Sports Bans

Leadership lessons from the U.S. soccer star. (To receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.) Title IX, the federal legislation mandating equal opportunities for men’s and women’s participation in sports, turns 50 on June 23. The golden anniversary offers opportunities to recognize the advancements of women’s athletics, such as the pioneering collective bargaining agreement, agreed to on May 18 by the United States Soccer Federation, the U.S Women’s National Team Players Association and the United States National Soccer Team Players Association, that creates true pay equity in the sport. Players like Megan Rapinoe, who along with teammate Alex Morgan was the leading goal-scorer for the United States during its 2019 World Cup championship run, had long advocated for equal pay, going so far to sue their employer, US Soccer, that year in a gender discrimination case. [time-brightcove not-tgx=”true”] While female athletes have enjoyed great gains, inequalities do persist in sports. TIME caught up with Rapinoe to discuss how Title IX can be improved, the leadership lessons that came out of the equal pay fight, and the importance of transgender inclusion in sports. (For coverage of the future of work, visit TIME.com/charter and sign up for the free Charter newsletter.) This interview has been condensed and edited for clarity. What does Title IX mean to you? Oh, goodness. I mean, Title IX gave me the opportunity to play soccer in college and get a scholarship. I don’t think I even knew about it until probably I got to college, or a little bit after. It wasn’t in my consciousness. That’s kind of the amazing thing about my generation is, we didn’t have to think about it. It was just there for us. Take the elite aspect out of it, how many women that have just been able to go to college and play a sport? To go to college and to get a scholarship and to not be saddled with student debt? What’s the impact of that in the workplace and thought leadership in business and, every aspect of life? Multiple generations of women, for the first time, we’re able to have these opportunities and break out of the extremely restrictive roles that we had been assigned to for so long. So the impact is immeasurable. I think not only in this country, but around the world. It was a transformational piece of legislation. What do you think the shortcomings of Title IX have been, and how do we fix them? I think the holes probably mirror the holes in society. I’m sure there’s a racial blind spot. I’m sure there’s an LGBTQ blind spot. I’m sure there’s an immigrant blind spot, all of that. Title IX is also charged with handling sexual assault and rape on college campuses. We know that that is continuing to be rampant and underreported. And even when it is reported, it’s so difficult to get anything done. You and more than 500 female athletes signed an amicus brief in support of Roe v. Wade: the brief argued that Roe was essential for the effectiveness of Title IX, as choice offered many women the opportunity to pursue sports. Is it a sort of cruel irony that on the 50th anniversary of Title IX, a leaked Supreme Court opinion indicated that Roe may be overturned? Completely. I think it’s terrifying to be honest. I don’t think anything is safe. Why would it ever? I mean, [the Court] struck down the voting rights act. Are we insane? So we’re potentially on the verge of striking down Roe v. Wade. I mean, I don’t think that this Republican Party will stop at anything. We absolutely need to be vigilant. It is really sad that 50 years on from Title IX, and that so far on from Roe v. Wade, we’re bringing up not just settled law, but a settled desire and progression that the majority of the country really wants. This is not the will of the majority of the people, by any means at all. Where do you think women’s sports is going in the next 50 years? I’m, by nature, hugely optimistic. I think that there’s enough going on right now, we can look at our lawsuit, the success of our team, look at the WNBA, we can look at a million different places and see that progress is really taking hold. And it’s not just because, oh, it’s the right thing to do. It’s the smart thing to do. It’s the right thing to do for your ROI. I think that the we are at the bottom of a hockey stick of growth in women’s sports. One of the trappings that’s really easy to fall into for women’s sports is trying to mirror and mimic every single thing that men’s sports has done. I don’t think that’s the goal. It’s different, right? And that’s okay. It doesn’t have to be exactly the same. We don’t have to use every single thing that men’s sports has done, because frankly, not all of it has worked. We should use the benefit of hindsight, and we should understand what’s good to take, and where can we innovate, where can we move forward. It’s going be difficult in a lot of ways for men’s sports to be as nimble as women’s sports, even though we don’t have a fraction of the money or the budget or the influence or the power. We can be nimble and we can be really innovative and we can go into new frontiers probably a lot quicker than men’s sports can. I don’t think my imagination can even capture what’s possible with women’s sports in the next 50 years. Where can women’s sports innovate? Something that is just woven into the fabric of women’s sports is that sort of cross section between sports and doing good to change the world. When we think about, not just in America, but other places in the world, developing nations, how can we use sports to spur education, equality? Women’s sports has a leg up on everyone. While having it be a very successful business model, we can use sports to change the world in so many ways. (For coverage of the future of work, visit TIME.com/charter and sign up for the free Charter newsletter.) Right before this 50th anniversary of Title IX, US Soccer, the women’s national team and the men’s national team agreed to a historic Collective Bargaining Agreement (CBA) that insures true equal pay: the women and men will split FIFA’s pot of World Cup prize money evenly. What leadership lessons did you learn during the protracted fight for equal pay? Girl. Don’t even get me started. I learned that just because you’re the “leader”—and I think this can be in business or whether you’re the CEO or the captain or whatever—don’t think you know everything. You bring a lot. And you bring probably a very special talent, and maybe a talent that is more glorified in society—not necessarily more important— and that’s maybe why you’re at the top. But the best leaders know how to say, I don’t know. Know how to delegate and know how to not only get the most out of themselves, but try to get the most out of everyone else. Allowing people the space to be themselves and bring their special talent to the table is the most important thing. Even within the team, if just the loudest people in the room are talking, Becky Sauerbrunn is not going to talk over them. She will never talk louder than me. But that doesn’t mean that I should be speaking. She’s smarter than me in a lot of different ways. And I need to understand, as a leader and as someone who does have a loud voice, I need to recognize I don’t know everything and create that space for Becky. Are you worried about US Soccer delivering on the promise of the CBA? You’ve been fighting the federation for so long, it would be human nature to be skeptical. I can’t hold every single grudge that I have. That’s not right. And that’s also not how progress is made. And that’s not what’s going to be best for the next generation. Contrary to what people think, I’m not that combative. I don’t like conflict. And it took up a lot of energy and a lot of time, a lot of emotional energy. And that’s not the goal, just to keep fighting. I’d rather keep growing. This is day one of not only a new contract that means a lot to all of us, but it’s a new relationship. And that requires both parties to show up with an open mind and an open heart and vulnerability to build that together. So that we can move forward because there was a lot of contention and pain. The healing has to begin. What I’ve always said about this relationship, is that we’re wasting our f-cking time and we’re wasting our f-cking money. Them and us. Why don’t we do this together in a way that is fair and equal? Yes, you will have to pay them a lot more money than you used to. But ultimately we’re all going to be better for it. We will all make more money for it. We will all grow the sport in a much more healthy and vibrant way moving forward than we ever would if we just continue to fight. What do you think is the biggest shortcoming you’ve had as a leader and how have you tried to work on that? I am not always as thoughtful and analytical and slow as I need to be. Sometimes I want to wriggle out of being uncomfortable, and so you can just make quick decisions, when it’s better to sit in it. Picking and choosing those right moments to use the cudgel of pink hair, I think is a growth area, for sure. Has there been an example where you weren’t as slow as you needed to be? It’s no secret that [former US coach] Jill [Ellis] and I had a little bit of tension. I don’t really like swallowing pills, right? It’s definitely necessary. And I think there were times I didn’t and it was not appropriate, whether that’s talking back or having a certain attitude or having a chip on my shoulder. What leadership lessons did you learn during the 2019 World Cup, when, while you were attempting to lead the US team to the title as one of the co-captains, the President of the United States was attacking you on Twitter? In that instance, obviously it was not that comfortable. I don’t think [Donald] Trump is a serious person. I was one of many women that he went after. But I think it was really important to keep my anxiety or fear or uncertainty that I had around that to myself. And so outwardly, it was kind of a funny joke within the team. Like, bro, the f-cking president is tweeting at you, what on earth? And I’m like, I know, this is insane. So that ability to almost like dissociate from the reality that the President United States is trying to dunk on his own citizen and a player that’s trying to win the World Cup, and just being able to shoulder a lot of that myself. We decided to sue the Federation. We have all the pressure on us in the world. I’ve like dyed my hair pink. The President is trying to dunk on us. This could wreck teams. This could completely fold your chances at a World Cup. So I think that ability to kind of make a joke out of it, but also allow the team to be relaxed. It felt like a must win World Cup. I know we feel all that, but we have to laugh. We have to celebrate our goals. We have to enjoy ourselves. I think we all did a really good job of preparing the team and shielding the team from what they didn’t need to deal with. What’s been the biggest challenge in your role advocating for LGBTQ rights? Once I figured it out, I was like: Oh, this is awesome. I’m gay and my whole life makes sense now. For a long time, I was the only player that was out. And so just being the only spokesperson and making sure I’m setting the right example, saying the right things, whether it comes to gay marriage or difficult and nuanced topics like trans inclusion in sports. Those are the challenges of just continuing to stay educated. I am not just speaking for me, I’m speaking for a lot of people. I don’t want to make anything weird. Nothing goes unsaid. Speak it plainly. And I’m gonna speak it loudly, and I think that that helps other people who maybe don’t have the ability to do that, or who aren’t in a place to do that quite yet. Read more: TIME’s Athlete Of The Year: US Women’s Soccer Team You mentioned the issue of transgender inclusion in sports, which is such a hot subject right now, as many states have passed bills that ban or limit transgender sports participation. Where do you stand on this issue? I’m 100% supportive of trans inclusion. People do not know very much about it. We’re missing almost everything. Frankly, I think what a lot of people know is versions of the right’s talking points because they’re very loud. They’re very consistent, and they’re relentless. At the highest level, there is regulation. In collegiate sports, there is regulation. And at the Olympic and professional level. It’s not like it’s a free-for-all where everyone’s just doing whatever. And I think people also need to understand that sports is not the most important thing in life, right? Life is the most important thing in life. And so much of this trans inclusion argument has been put through the extremely tiny lens of elite sports. Like that is not the way that we need to be framing this question. We’re talking about kids. We’re talking about people’s lives. We’re talking about the entire state government coming down on one child in some states, three children in some states. They are committing suicide, because they are being told that they’re gross and different and evil and sinful and they can’t play sports with their friends that they grew up with. Not to mention trying to take away health care. I think it’s monstrous. I would also encourage everyone out there who is afraid someone’s going to have an unfair advantage over their kid to really take a step back and think what are we actually talking about here. We’re talking about people’s lives. I’m sorry, your kid’s high school volleyball team just isn’t that important. It’s not more important than any one kid’s life. Show me the evidence that trans women are taking everyone’s scholarships, are dominating in every sport, are winning every title. I’m sorry, it’s just not happening. So we need to start from inclusion, period. And as things arise, I have confidence that we can figure it out. But we can’t start at the opposite. That is cruel. And frankly, it’s just disgusting. So, we need to really kind of take a step back and get a grip on what we’re really talking about here because people’s lives are at risk. Kids’ lives are at risk with the rates of suicide, the rates of depression and negative mental health and drug abuse. We’re putting everything through God forbid a trans person be successful in sports. Get a grip on reality and take a step back. You’re on the roster for the upcoming CONCACAF Women’s championship, a key qualifier for the 2023 World Cup and 2024 Olympics. How do you view your role now? So do you see yourself as more of the veteran mentor? Or do you still want to be the focal point of the offense, scoring lots of goals? Well, I certainly hope my role has changed because I don’t think I’m going to be able to play 90 minutes, six or seven games in a row in a World Cup. It’s most certainly changed, and that’s something I’m honestly really excited about. I think that, just from a soccer perspective, I think I still have a lot to give. Can I give everything that I gave in the last World Cup? No, I don’t think that’s possible. Unless there’s some sort of miracle that happens. But I can still give a lot on the field and particularly in the mentorship role. It’s not like I can’t play soccer anymore. I think people have a little bit of a short memory when it comes to me and when it comes to aging athletes. Everyone just needs to pump the brakes. And I think I’ve earned a little bit of grace. At the Tokyo Olympics last summer, those last few games had the feel of a swan-song for you and some of the other veterans. Do you still have desire to play in next year’s World Cup and the 2024 Olympics? Are you all in on this cycle? I think I’m all in on this next World Cup. I’ve probably played my last Olympics. With the smaller roster, that feels like a lot. That’s a difficult cycle. You go two years back-to-back and I think other players are going to be in a much better position to be successful than I would. I’ve had injuries this year. That kept me out for a while. But it feels like a new dawn and a new day......»»

Category: topSource: timeJun 19th, 2022

DEBT DIARIES: 24 stories of the student-debt "hamster wheel" that borrowers of all ages and incomes can"t escape

Insider spoke with two dozen student-loan borrowers stuck with huge debt loads. They're a small part of a $1.7 trillion crisis in the US. Marianne Ayala/InsiderThe $1.7 trillion student-debt crisis in the US continues to grow, making the burden heavier for millions of Americans.Since March 2020, as part of pandemic relief measures, federal borrowers have not had to make student-loan payments, and interest on the loans has been waived. President Joe Biden extended the pause for a fourth time, through August 31, citing uncertainty with the pandemic. Advocates and lawmakers lauded the decision and the additional relief for 43 million federal borrowers.But even during the payment pause, many borrowers did not feel relieved. The looming date for restarting payments sparked anxiety and fear among some borrowers who knew that even though they had not been required to pay off their debt over the past two years, they would not be able to afford an additional bill in just a few months. That's why some Democratic lawmakers are calling for Biden to cancel student debt for every federal borrower."More than 40 million Americans have benefited from the federal pause on student-debt payments, but without cancellation they will be buried under a mountain of debt once again," Sen. Elizabeth Warren of Massachusetts told Insider. "The president campaigned on canceling at least $10,000 in student debt, he has the executive authority, and now is the time to deliver."Now, Biden is reportedly considering $10,000 in relief for borrowers making under $150,000 a year, and that announcement is likely to happen in July or August, closer to when payments are set to resume. But that relief could leave some borrowers out, like parents and graduate students, and the amount will not make a huge difference to those with much larger debt loads.Over the past year, Insider has spoken with nearly two dozen borrowers who shared their experiences with the "hamster wheel" of student debt, its impact on their lives and their families, and their fears that their debt will follow them to their graves. Here are their stories.Older people are giving up hope of paying off their student loans before they die: 'There's a real fear in dying in this'Marianne Ayala/InsiderOver 8 million borrowers over 50 hold 22% of the federal student-debt load. The burden can be so heavy that some of those Americans will never see a life without student debt.Three borrowers who fall into that category — David Wise, Linda Navarro, and Theresa Teders — shared how their debt had permanently altered their lives. They said they don't see it going away until they die.Read the full story here.Inside the 'vicious cycle' of spiraling student-loan debt caused by servicers just not picking up the phoneMarianne Ayala/InsiderPaying off student debt is one challenge. Getting help from a student-loan company to actually pay off that debt is a whole other hurdle.Two borrowers, Charles Moore and Lynda Costa, tried to contact the company that collects their debt for assistance with repayment, but hours-long waits and inaccurate information only caused their debt loads to surge even more.Read the full story here.'It's mind-boggling to me that this total amount is not going down. It's not going away': 2 borrowers describe the crushing interest that keeps them from paying off their debtMarianne Ayala/InsiderHigh interest rates are largely to thank for the $1.7 trillion student-debt load in the US, keeping borrowers from paying off balances far higher than what they initially borrowed.Alexandria Mavin and Daniel Tapia are trying to pay off their student debt, but interest keeps adding on to their monthly bills, trapping them in a cycle of repayment.Read the full story here.Meet a married couple with $130,000 in student debt after paying off $140,000 — but they started with just $54,000. 'The loans have always stayed one step ahead of us.'Marianne Ayala/InsiderRon and Marcia Rizzardi are a clear example of the toll that high interest rates can have on student debt loads. The couple started out with a combined $54,000 in debt from their educations, and over the past 25 years they've made $140,000 in payments. Today, they owe $130,000, and they don't see it going away anytime soon.Read the full story here.Meet a single grandmother raising 3 grandchildren with $75,000 in student debt: 'I don't want my grandkids to be in poverty'Marianne Ayala/InsiderGwen Carney, 61, is raising her grandchildren on her own — with $75,000 in student debt. She desperately wants to give her grandkids the lives they deserve, but in order to do so she has to work a full-time job while sewing face masks on the side for some extra cash. The pandemic pause gave her relief, but she worries she won't be able to afford to pay her student debt and support her grandkids when payments resume.Read the full story here.Meet a recent college grad with $143,000 in student debt: 'There have been times when I didn't eat' to afford the paymentsMarianne Ayala/InsiderWhile the student-loan payment pause extended to federal borrowers, those with private student loans continued to see their debt grow.Karla, a recent college graduate, has a student-debt load of $143,000, with $91,000 coming from private loans. Even though she's kept up with her monthly payments, the high interest is keeping her from even touching the amount she originally borrowed.Read the full story here.Meet a single dad with $550,000 in student loans for his 5 children: 'I'm just not going to take the chance on not sending my kids to school'Marianne Ayala/InsiderMillions of parents across the country want their kids to access higher education but can't afford to do so on their own. So they take out Parent PLUS loans on behalf of their children to cover up to the cost of attendance.While it's an easy loan to get, it's very difficult to pay off. Just ask Reid Clark, a 57-year-old single father with $550,000 in student debt for his five children. He said he didn't regret sending his kids to school, but he wished it had been harder for him to take on so much debt.Read the full story here.Meet a 64-year-old dad delaying retirement because of $265,000 in student debt for his 2 kids: 'I was going to do whatever was necessary to get my kids through'Marianne Ayala/InsiderRobert Pemberton wanted his two kids to succeed — and it came at the cost of $265,000 in student debt. He said that although he now makes a livable salary, his debt load became unmanageable after periods of unemployment and his wife's cancer treatment. He isn't sure when he will retire, thanks to the high interest rates on PLUS loans.Read the full story here.Meet a 57-year-old dad with $104,000 in student debt for his son: 'It was my obligation to do the best I could for him'Marianne Ayala/InsiderJeff O'Kelley, 57, has $104,000 in student debt from loans he took out to send his son to college. Like many parents who made the same decision, he said he didn't regret accumulating debt to give his son the best future possible. But he believes the "extraordinarily simple" process he followed to take on debt needs to change.Read the full story here.Meet a 62-year-old veteran with $104,000 in student debt after working in public service for 4 decades: 'I joined the Army to escape poverty. This is a different kind of poverty.'Marianne Ayala/InsiderJeffrey Spencer thought joining the Army in 1976 would give him access to a free education. It didn't, and now, at 62, he has $104,000 in student debt. And while he works for the state of California, which would make him eligible for the Public Service Loan Forgiveness program, failures in the program led to his being denied repeatedly. He said he was tired of broken promises.Read the full story here.Meet a therapist with $81,000 in student debt who worked in public service for 20 years and can't get loan forgiveness: 'People in the helping professions are getting totally screwed over'Marianne Ayala/InsiderSince 2017, when the first group of borrowers became eligible for the Public Service Loan Forgiveness program, which forgives student debt for public servants after 10 years, it's run up a 98% denial rate.Lindsay Averbook, who has $81,000 in student debt, is one of the rejected borrowers. She's worked in public service — in mental-health care — for her whole career, and she said she didn't understand why it's taking so long to get the student debt relief she deserves.Read the full story here.Meet a single mom and adjunct professor with $430,000 in student debt: 'I'm in a hole that I'm never going to get out of'Marianne Ayala/InsiderMaria firmly believes her $430,000 student-debt load was not worth it. She'd thought that pursuing a master's degree and a Ph.D. would land her a job teaching at a university, and she extensively researched the programs and their outcomes to ensure they were worth the cost. But a layoff and medical bills for her daughter's cancer treatment set her on a different course, and she said she sees herself dying with her student debt.Read the full story here.Meet an independent voter with $163,000 in student debt who left the Democratic Party after 4 decades because she felt 'betrayed' by Joe Biden: 'I really felt he was going to help us with the student-loan problem'Marianne Ayala/InsiderAs a presidential candidate, Joe Biden pledged to approve forgiving $10,000 in student loans for every federal borrower. He won Melissa Andretta's vote with that pledge.Andretta, who has $163,000 in student debt, said she'd thought Biden would help with the student-loan crisis in the US, but now she feels "betrayed."Read the full story here.Meet a first-generation college grad with $250,000 in student debt: 'It's the price I had to pay to achieve the American dream'Marianne Ayala/InsiderObtaining a higher education is a pillar of the American dream, and it's one that Juan Antonio Sorto, a first-generation college student, wanted more than anything. The cost of achieving that dream was $250,000 in student debt.Sorto said that while he was proud of his accomplishments and the life his education had given him and his family, he wished President Joe Biden would do more to ensure others don't have to take on so much debt for an education.Read the full story here.Meet a single mom who took on $49,000 in student debt to put one of her 2 daughters through college: 'It's the only way for my kids to get an education and be successful'Marianne Ayala/InsiderDanet Henry, 53, is a single mom of two with a $49,000 student debt load for her oldest daughter. And once her youngest daughter graduates in three years, that balance will likely double. That's because Henry took on PLUS loans — the most expensive type of federal loan — and while she knows she has to pay back her debt, she wishes parents could be included in relief programs.Read the full story here. Meet 2 married couples who are blocked from a student-loan-forgiveness program because they were advised to combine their debts years agoMarianne Ayala/InsiderThe spousal joint loan consolidation program was created in 1993, which allowed married couples to combine their student-debt loads into one loan so they could make just a single monthly payment with one interest rate. The idea is that it's a more affordable option.But over a decade after Congress shuttered the program in 2006, some married couples are stuck in the program and cannot qualify for loan forgiveness because law prohibits them from separating their debt balances. Insider spoke to two couples — all public servants — who were told combining their balances was their best option, but they didn't know their loans would not be eligible for relief.Read the full story here.Meet a teacher with $303,000 in student debt who says Biden's $10,000 loan-forgiveness plan 'is not even a drop in the bucket'Marianne Ayala/InsiderWith Biden considering $10,000 in student-loan forgiveness, borrowers like Cheryl say that won't make a dent in the student debt balances they hold. Cheryl, 53, has $303,000 in student debt — and while she doesn't mind paying back what she borrows, she wishes interest didn't accumulate so quickly.Even if Biden cancels $10,000 in student debt, Cheryl said, she'll probably have to pick up a second job to afford payments when the pause expires after August 31.Read the full story here.A 61-year-old student-loan borrower chooses between paying her debt and paying for health insurance — and Biden's forgiveness plans won't helpMarianne Ayala/InsiderRobin O'Brien, 61,  could not foresee the pandemic when she took out student loans to go to graduate school. There's no way she could have anticipated contracting COVID-19, and the medical bills that came along with it.Now, as Biden gets closer to making a decision on broad student-loan forgiveness, O'Brien is also forced to make a decision: paying her medical bills or her $64,000 student loan bills — and she knows she cannot afford both. She's disappointed graduate students are not being considered in Biden's relief plans.Read the full story here. Read the original article on Business Insider.....»»

Category: dealsSource: nytJun 15th, 2022

Employers helped pay off student loans for 4% of workers — and the ones who make the most money were most likely to see relief

If you want your employer to pay off or help relieve your student loan debt, you probably want to be in the top 10% of earners. Just 4% of workers have access to a student loan repayment benefit.yacobchuk/Getty Images A report from the Bureau of Labor Statistics found 4% of employers offer student loan repayment. Workers who earn more were more likely to have access to the student loan relief benefit. Meanwhile, the Biden administration is reportedly considering canceling $10,000 in debt for borrowers. Americans are sitting on $1.7 trillion in student debt, and just a small fraction are getting help from their employers.As of March 2021, just 4% of all civilian workers were able to access student loan repayment benefits from their employers, according to a new analysis from the Bureau of Labor Statistics. People working in management, professional, and related fields were the most likely to have their employers help chip in on their loans — 7% of workers in that category had access to the student-loan repayment benefit.Perhaps most stark, though, is which income brackets had the most access to student loan repayment benefits. Among the lowest 10% of workers, only 2% had access to student loan repayment benefits. Meanwhile, 9% of the top 10% of earners had access to a student loan repayment benefit — over four times as much as the lowest earners.Indeed, the percentage of workers with access to a student loan repayment benefit ticks up as you move across the income spectrum. In simpler terms, the more money you make, the more likely you are to have access to a student loan repayment benefit.For instance, among the lowest 25% of earners, just 2% had access. Meanwhile, 8% of the highest 25% of earners had access to a repayment benefit. Employers offering student loan repayment isn't a new phenomenon, albeit not very common. A survey from SHRM found that 8% of firms offered student loan repayments in 2020, and 1% of respondents said that their employers had actually reduced that benefit.As Insider's Leo Aquino reports, the CARES Act expanded how much relief employers can give their workers. Under the early-pandemic legislation, employers can put $5,250 in tax-free payments towards their workers' student loans every year. While lower-earning workers tend to hold less in average student debt — and hold a lower percentage of debt — those making below $40,000 represent three-quarters of student loan borrowers. Black borrowers also have a disproportionately higher average balance of student loan debt. The left-leaning Roosevelt Institute found that cancelling $50,000 in debt per borrower would help lower-income borrowers more, contradictory to messaging that that amount of relief would mostly benefit high-earners with a large loan burden.Meanwhile, the Biden administration is reportedly gearing up to cancel $10,000 in student for borrowers who make under $150,000. Some Democrats and advocates have said that's not enough."$10k relieves most the people who owe the least," Rep. Alexandria Ocasio-Cortez wrote on Twitter. "What relief is there for the most desperate? For them, interest will undo that 10k fast. We can do better."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJun 13th, 2022

Corporations Aren"t Greedy Enough

Corporations Aren't Greedy Enough Authored by Julius Krein via UnHerd.com, American political debates over inflation have settled into predictable - and mostly unhelpful - patterns. On one side, “neoliberal” Democrats such as Lawrence Summers and Jason Furman argue that President Biden’s Covid stimulus bill was too aggressive, causing the economy to overheat and precipitating an inflationary wage-price spiral. On the other, progressives such as Elizabeth Warren and members of the Biden administration point to factors like idiosyncratic supply chain disruptions from the pandemic and later the Ukraine war, while increasingly leaning on explanations involving “corporate greed”. Republicans, meanwhile, are eager to blame Biden for inflation, but have added nothing of substance to discussions around either its causes or cures. The conventional inflation narratives are both flawed, however, and are increasingly deployed to cover a retreat to the comfort of traditional ideological divides. Summers and Furman, for example, are aggressively pushing to eliminate tariffs to counter inflation, even though Trump’s 2018 tariffs cannot account for accelerating inflation in 2021, and their repeal would offer at best small and temporary relief. Likewise, Democratic rhetoric against “corporate greed” and “price gouging” mostly takes the form of moralistic posturing and only obscures more serious concerns about industry concentration and lack of competition. Moreover, each side’s preferred explanations for inflation seem at odds with their perceptions of its severity and staying power. If, on the one hand, a one-time spending bill is the main culprit, then the Fed should easily be able to manage inflation through interest rate hikes (already underway), and there is little reason to fear an out-of-control inflationary spiral. In an April 2021 interview, Summers argued that a one-off stimulus would alter long-term expectations and lead to persistent inflation because it signaled the advent of  “a new era in progressive policy”. But a year later, any such progressive paradigm seems dead and buried, and unless Democrats pull off a miracle in the midterms, it is likely off the table through at least 2024. On the other hand, if “corporate greed” — read charitably as underlying structural problems in the economy — is the main driver of inflation, then it seems unlikely that the Fed will be able to contain it, except perhaps at the cost of a severe recession. If that is the case, then any future progressive fiscal expansion would have to be ruled out, given its devastating inflationary consequences, unless those problems are addressed. Indeed, the question going forward is whether there are structural issues — aside from idiosyncratic supply chain problems — that will cause inflation to remain elevated and lead to stagflation (high inflation and low growth). Here, there are reasons for concern, although they do not fit neatly into either conventional narrative and so have received relatively little attention. The most intriguing and potentially alarming trends are visible in the oil market. In December 2019, before Covid, global oil consumption was about 100 million barrels per day, and the price of West Texas Intermediate (WTI) crude hovered around $50-$60 per barrel. At that time, the US operating rig count was around 800 (around 2,000 globally), according to Baker Hughes. After the pandemic hit, in 2020, global oil demand fell to about 90 million barrels per day, prices collapsed and briefly went negative, and the US rig count hit a low of around 250. Oil demand recovered about half the lost ground in 2021 and is expected to return to 2019 levels of 100 million barrels per day this year. In December of 2021, WTI spot prices were around $75, rose significantly after the Russian invasion of Ukraine, and currently sit around $110. Yet the US rig count is still around 700 (of 1,600 globally). The last time oil prices were above $100, before the crash of 2014, the rig count was over 1,800 (3,600 globally). This trajectory is difficult to square with inflation accounts based on excessive demand. Oil demand has still not exceeded pre-pandemic levels; it is supply that has lagged. Meanwhile, far from being “too greedy”, companies seem to not be greedy enough — at least in the conventional sense of maximising profits. Instead of reinvesting their earnings in drilling new wells, even at profitable oil prices, companies have returned cash to shareholders. Some have argued that oil companies are not drilling because of the Biden administration’s environmental regulations. As a critic of those policies, I am sympathetic, but they cannot account for the larger phenomenon, including international drilling. Others have suggested that ESG investing requirements have prevented the oil and gas industry from accessing capital. While there is no question that ESG as presently constructed is a disaster, this does not explain why companies are not reinvesting their own earnings. There are some time-lag issues — wells cannot be drilled overnight — but prices have now been elevated for months. Oil futures are also over $80 through most of 2024, meaning companies can hedge future production. The best explanation is, therefore, the simplest one: shareholders prefer that companies return cash rather than invest, a preference widely discussed among industry participants and observers. Oil companies, to quote Bloomberg’s reporting on this issue, have “responded to investors’ persistent insistence that they return cash to shareholders and not spend their cash flow on capex. . . . That means that we have under-invested in oil, which helps to lead to a higher oil price, but it also means that those companies do have much more free cash flow.” Any serious analysis of today’s inflation must recognise the different dynamics at play across various sectors. The oil industry is not the same as the housing market, semiconductors, shipping, and so forth. Nevertheless, across industries, the trend of shareholders preferring cash returns over investment has been prevalent in recent decades. Corporate share buybacks, which dropped from previous highs during the pandemic, returned to record pace in 2021 and 2022, according to Goldman Sachs. The oil industry is actually a late adopter of this cash-return model. Previously, exploration and production companies were typically managed to maximise their “net asset value”. This meant that, in the American shale boom of the early 2010s, companies were investing in drilling at levels far above their operating cash flow, using debt financing to fill the gap. After the crash of 2014, however, Wall Street gained additional influence over the sector. Ever since, the industry has maintained “capital discipline” and avoided negative cash flows. Economic theory assumes that companies are managed to maximise individual firm profits and, therefore, that they will invest to expand operations as long as expected returns exceed the cost of capital, and that they will compete with each other until profit margins approach zero. But economic theory has refused to grapple with the fact that maximising shareholder returns is not identical to maximising firm profits. Financial market incentives may discourage competitive investment in favour of shareholder returns, as seen in the oil industry; indeed, the gap between firm hurdle rates and cost of capital is a distinguishing feature of recent economic history. In short, what economic theory presumes to be “rational” for a single firm may not be “rational” from the perspective of a diversified institutional portfolio manager. If anyone is too “greedy”, in other words, it is not corporations but shareholders. Or, more precisely, the incentives of financial managers may not be consistent with maximising overall output. This trend has led to an erosion of productive capacity and supply buffers, which has become painfully evident in recent years. The same forces also encourage industry concentration through mergers and private equity “roll-ups” to preserve pricing power, as well as the separation of high-value intellectual property rents from capital and labour costs. The result is a bifurcated economy with high-margin “superstar” firms on one side and low-profit “commoditised” firms on the other. In an inflationary environment, this means that firms with large profit cushions, like superstar firms built on intellectual property rents, probably have the pricing power to maintain high margins. Firms without pricing power, like small-business restaurant franchisees, often have no profit cushions and must raise prices out of necessity. Fears of stagflation have focused on a Seventies-style wage-price spiral, but the above considerations suggest that a greater concern today may be the threat of a “profit-price” spiral. In the Seventies, investment was discouraged by high taxes, strong unions (which directed profits to labour), and relatively robust antitrust enforcement. With low investment, increasing demand only led to more inflation rather than growth. Today, we have low taxes, weak unions (although tight labour markets), and high industry concentration. These conditions, combined with shifts in corporate governance and financial management, have also discouraged investment — by facilitating extractive financial engineering, as in the case of the oil industry example. A scenario in which companies maintain returns in a stagnant economy by preserving margins while avoiding competitive investment is also more consistent with recent empirical findings. Corporate profit margins achieved a record in 2021 (though they seem poised to retreat somewhat in the coming quarters), and studies have found that rising corporate profits have contributed significantly more to inflation than labour costs. Employees may be able to manage some concessions in a tight labour market, but the data hardly suggest that is the dominant factor. This sort of firm behaviour has a telling precedent: the modern tobacco industry. Since cigarette consumption began dropping in the Eighties, the basic model of tobacco companies has been to offset sales volume declines with price increases. This strategy works because tobacco companies face little competition due to industry concentration and regulations prohibiting advertising. Thus cigarette price inflation has averaged about 7% per year since 1997, while overall inflation during that time has been slightly above 2%. The example is revealing because tobacco companies’ high cash returns and low capex requirements have historically made them attractive to financial investors, despite modest growth or innovation. Because of its dividend, Philip Morris was the highest performing stock of the 20th century, beating out far more technologically significant rivals. Guided by the incentives of financial markets, it would not be especially surprising to see more industries adopt the “stagflationary” behaviours of Big Tobacco. To the extent that is the case, monetary policy alone will not be sufficient to heal the economy. Low rates since the financial crisis have supported asset bubbles but not high investment. Nor will demand-side policies work. As the last several months have shown, further stimulus payments are likely to allow companies to take profits without supporting sufficient investment or wage growth. Given the immediate-term salience of monetary policy debates, it is often forgotten that escaping the stagflation of the Seventies required not only a sharp rise in interest rates but also the “supply-side” reforms of Ronald Reagan. In this respect, an overlooked element of Summers’s critique of the Biden stimulus bill — that it was not simply too large but too weighted toward transfer payments — is especially apt, as is his call for “a kind of progressive supply side economics that emphasizes . . . public investment.” Conventional supply-side policies like tax cuts, typically associated with Republicans, fall prey to the same financial dynamics described above, and have led primarily to increased shareholder returns and asset bubbles rather than increased investment in recent years. New supply-side approaches are required, such as the proposed funding for manufacturing investment contemplated in the COMPETES/USICA conference bill. The administration has also proposed other supply-side measures in areas such as housing, but previous efforts along these lines were weighed down by unpopular progressive wish-list items. Rumours that the administration is considering a cancellation of some student debt — with no accompanying reforms to higher education policy — suggest progressives still remain trapped in old welfarist paradigms. Contrary to neoliberal disdain for tariffs and “hipster antitrust”, however, prudent competition and trade policy reforms will be necessary to boost domestic investment in a highly concentrated economy whose industrial base has eroded. And although progressive proposals for a windfall tax on profits would do nothing to solve supply-side problems, a tax on “windfall buybacks” may make corporate earnings reinvestment more attractive. Even if inflation subsides more rapidly than expected, a new policy focus on the supply side is necessary. Avoiding stagflation simply by returning to “secular stagnation”, as Summers would put it, would only lead to further decline and likely a repetition of the same cycle in the future. Also required is the recognition that fundamental assumptions of economic theory — and the ideological approaches they inspire — no longer match the realities of America’s financialised economy. Tyler Durden Fri, 06/10/2022 - 14:25.....»»

Category: blogSource: zerohedgeJun 10th, 2022

DEBT DIARIES: 23 stories of the student-debt "hamster wheel" that borrowers of all ages and incomes can"t escape

Insider spoke with nearly two dozen student-loan borrowers stuck with huge debt loads. They're a small part of a $1.7 trillion crisis in the US. Marianne Ayala/InsiderThe $1.7 trillion student-debt crisis in the US continues to grow, making the burden heavier for millions of Americans.Since March 2020, as part of pandemic relief measures, federal borrowers have not had to make student-loan payments, and interest on the loans has been waived. President Joe Biden recently extended the pause for a third time, through May 1, citing uncertainty with the Omicron variant. Advocates and lawmakers lauded the decision and the additional relief for 43 million federal borrowers.But even during the payment pause, many borrowers did not feel relieved. The looming date for restarting payments sparked anxiety and fear among some borrowers who knew that even though they had not been required to pay off their debt over the past two years, they would not be able to afford an additional bill in just a few months. That's why some Democratic lawmakers are calling for Biden to cancel student debt for every federal borrower."More than 40 million Americans have benefited from the federal pause on student-debt payments, but without cancellation they will be buried under a mountain of debt once again," Sen. Elizabeth Warren of Massachusetts told Insider. "The president campaigned on canceling at least $10,000 in student debt, he has the executive authority, and now is the time to deliver."Over the past year, Insider has spoken with nearly two dozen borrowers who shared their experiences with the "hamster wheel" of student debt, its impact on their lives and their families, and their fears that their debt will follow them to their graves. Here are their stories.Older people are giving up hope of paying off their student loans before they die: 'There's a real fear in dying in this'Marianne Ayala/InsiderOver 8 million borrowers over 50 hold 22% of the federal student-debt load. The burden can be so heavy that some of those Americans will never see a life without student debt.Three borrowers who fall into that category — David Wise, Linda Navarro, and Theresa Teders — shared how their debt had permanently altered their lives. They said they don't see it going away until they die.Read the full story here.Inside the 'vicious cycle' of spiraling student-loan debt caused by servicers just not picking up the phoneMarianne Ayala/InsiderPaying off student debt is one challenge. Getting help from a student-loan company to actually pay off that debt is a whole other hurdle.Two borrowers, Charles Moore and Lynda Costa, tried to contact the company that collects their debt for assistance with repayment, but hours-long waits and inaccurate information only caused their debt loads to surge even more.Read the full story here.'It's mind-boggling to me that this total amount is not going down. It's not going away': 2 borrowers describe the crushing interest that keeps them from paying off their debtMarianne Ayala/InsiderHigh interest rates are largely to thank for the $1.7 trillion student-debt load in the US, keeping borrowers from paying off balances far higher than what they initially borrowed.Alexandria Mavin and Daniel Tapia are trying to pay off their student debt, but interest keeps adding on to their monthly bills, trapping them in a cycle of repayment.Read the full story here.Meet a married couple with $130,000 in student debt after paying off $140,000 — but they started with just $54,000. 'The loans have always stayed one step ahead of us.'Marianne Ayala/InsiderRon and Marcia Rizzardi are a clear example of the toll that high interest rates can have on student debt loads. The couple started out with a combined $54,000 in debt from their educations, and over the past 25 years they've made $140,000 in payments. Today, they owe $130,000, and they don't see it going away anytime soon.Read the full story here.Meet a single grandmother raising 3 grandchildren with $75,000 in student debt: 'I don't want my grandkids to be in poverty'Marianne Ayala/InsiderGwen Carney, 61, is raising her grandchildren on her own — with $75,000 in student debt. She desperately wants to give her grandkids the lives they deserve, but in order to do so she has to work a full-time job while sewing face masks on the side for some extra cash. The pandemic pause gave her relief, but she worries she won't be able to afford to pay her student debt and support her grandkids when payments resume.Read the full story here.Meet a recent college grad with $143,000 in student debt: 'There have been times when I didn't eat' to afford the paymentsMarianne Ayala/InsiderWhile the student-loan payment pause extended to federal borrowers, those with private student loans continued to see their debt grow.Karla, a recent college graduate, has a student-debt load of $143,000, with $91,000 coming from private loans. Even though she's kept up with her monthly payments, the high interest is keeping her from even touching the amount she originally borrowed.Read the full story here.Meet a single dad with $550,000 in student loans for his 5 children: 'I'm just not going to take the chance on not sending my kids to school'Marianne Ayala/InsiderMillions of parents across the country want their kids to access higher education but can't afford to do so on their own. So they take out Parent PLUS loans on behalf of their children to cover up to the cost of attendance.While it's an easy loan to get, it's very difficult to pay off. Just ask Reid Clark, a 57-year-old single father with $550,000 in student debt for his five children. He said he didn't regret sending his kids to school, but he wished it had been harder for him to take on so much debt.Read the full story here.Meet a 64-year-old dad delaying retirement because of $265,000 in student debt for his 2 kids: 'I was going to do whatever was necessary to get my kids through'Marianne Ayala/InsiderRobert Pemberton wanted his two kids to succeed — and it came at the cost of $265,000 in student debt. He said that although he now makes a livable salary, his debt load became unmanageable after periods of unemployment and his wife's cancer treatment. He isn't sure when he will retire, thanks to the high interest rates on PLUS loans.Read the full story here.Meet a 57-year-old dad with $104,000 in student debt for his son: 'It was my obligation to do the best I could for him'Marianne Ayala/InsiderJeff O'Kelley, 57, has $104,000 in student debt from loans he took out to send his son to college. Like many parents who made the same decision, he said he didn't regret accumulating debt to give his son the best future possible. But he believes the "extraordinarily simple" process he followed to take on debt needs to change.Read the full story here.Meet a 62-year-old veteran with $104,000 in student debt after working in public service for 4 decades: 'I joined the Army to escape poverty. This is a different kind of poverty.'Marianne Ayala/InsiderJeffrey Spencer thought joining the Army in 1976 would give him access to a free education. It didn't, and now, at 62, he has $104,000 in student debt. And while he works for the state of California, which would make him eligible for the Public Service Loan Forgiveness program, failures in the program led to his being denied repeatedly. He said he was tired of broken promises.Read the full story here.Meet a therapist with $81,000 in student debt who worked in public service for 20 years and can't get loan forgiveness: 'People in the helping professions are getting totally screwed over'Marianne Ayala/InsiderSince 2017, when the first group of borrowers became eligible for the Public Service Loan Forgiveness program, which forgives student debt for public servants after 10 years, it's run up a 98% denial rate.Lindsay Averbook, who has $81,000 in student debt, is one of the rejected borrowers. She's worked in public service — in mental-health care — for her whole career, and she said she didn't understand why it's taking so long to get the student debt relief she deserves.Read the full story here.Meet a single mom and adjunct professor with $430,000 in student debt: 'I'm in a hole that I'm never going to get out of'Marianne Ayala/InsiderMaria firmly believes her $430,000 student-debt load was not worth it. She'd thought that pursuing a master's degree and a Ph.D. would land her a job teaching at a university, and she extensively researched the programs and their outcomes to ensure they were worth the cost. But a layoff and medical bills for her daughter's cancer treatment set her on a different course, and she said she sees herself dying with her student debt.Read the full story here.Meet an independent voter with $163,000 in student debt who left the Democratic Party after 4 decades because she felt 'betrayed' by Joe Biden: 'I really felt he was going to help us with the student-loan problem'Marianne Ayala/InsiderAs a presidential candidate, Joe Biden pledged to approve forgiving $10,000 in student loans for every federal borrower. He won Melissa Andretta's vote with that pledge.Andretta, who has $163,000 in student debt, said she'd thought Biden would help with the student-loan crisis in the US, but now she feels "betrayed."Read the full story here.Meet a first-generation college grad with $250,000 in student debt: 'It's the price I had to pay to achieve the American dream'Marianne Ayala/InsiderObtaining a higher education is a pillar of the American dream, and it's one that Juan Antonio Sorto, a first-generation college student, wanted more than anything. The cost of achieving that dream was $250,000 in student debt.Sorto said that while he was proud of his accomplishments and the life his education had given him and his family, he wished President Joe Biden would do more to ensure others don't have to take on so much debt for an education.Read the full story here.Meet a single mom who took on $49,000 in student debt to put one of her 2 daughters through college: 'It's the only way for my kids to get an education and be successful'Marianne Ayala/InsiderDanet Henry, 53, is a single mom of two with a $49,000 student debt load for her oldest daughter. And once her youngest daughter graduates in three years, that balance will likely double. That's because Henry took on PLUS loans — the most expensive type of federal loan — and while she knows she has to pay back her debt, she wishes parents could be included in relief programs.Read the full story here. Meet 2 married couples who are blocked from a student-loan-forgiveness program because they were advised to combine their debts years agoMarianne Ayala/InsiderThe spousal joint loan consolidation program was created in 1993, which allowed married couples to combine their student-debt loads into one loan so they could make just a single monthly payment with one interest rate. The idea is that it's a more affordable option.But over a decade after Congress shuttered the program in 2006, some married couples are stuck in the program and cannot qualify for loan forgiveness because law prohibits them from separating their debt balances. Insider spoke to two couples — all public servants — who were told combining their balances was their best option, but they didn't know their loans would not be eligible for relief.Read the full story here.Meet a teacher with $303,000 in student debt who says Biden's $10,000 loan-forgiveness plan 'is not even a drop in the bucket'Marianne Ayala/InsiderWith Biden considering $10,000 in student-loan forgiveness, borrowers like Cheryl say that won't make a dent in the student debt balances they hold. Cheryl, 53, has $303,000 in student debt — and while she doesn't mind paying back what she borrows, she wishes interest didn't accumulate so quickly.Even if Biden cancels $10,000 in student debt, Cheryl said, she'll probably have to pick up a second job to afford payments when the pause expires after August 31.Read the full story here.Read the original article on Business Insider.....»»

Category: personnelSource: nytJun 7th, 2022

Check out these 41 pitch decks fintechs disrupting trading, investing, and banking used to raise millions in funding

Looking for examples of real fintech pitch decks? Check out pitch decks that Qolo, Lance, and other startups used to raise money from VCs. Check out these pitch decks for examples of fintech founders sold their vision.Yulia Reznikov/Getty Images Insider has been tracking the next wave of hot new startups that are blending finance and tech.  Check out these pitch decks to see how fintech founders sold their vision. See more stories on Insider's business page. Fintech funding has been on a tear.In 2021, fintech funding hit a record $132 billion globally, according to CB Insights, more than double 2020's mark.Insider has been tracking the next wave of hot new startups that are blending finance and tech. Check out these pitch decks to see how fintech founders are selling their vision and nabbing big bucks in the process. You'll see new financial tech geared at freelancers, fresh twists on digital banking, and innovation aimed at streamlining customer onboarding. New twists on digital bankingZach Bruhnke, cofounder and CEO of HMBradleyHMBradleyConsumers are getting used to the idea of branch-less banking, a trend that startup digital-only banks like Chime, N26, and Varo have benefited from. The majority of these fintechs target those who are underbanked, and rely on usage of their debit cards to make money off interchange. But fellow startup HMBradley has a different business model. "Our thesis going in was that we don't swipe our debit cards all that often, and we don't think the customer base that we're focusing on does either," Zach Bruhnke, cofounder and CEO of HMBradley, told Insider. "A lot of our customer base uses credit cards on a daily basis."Instead, the startup is aiming to build clientele with stable deposits. As a result, the bank is offering interest-rate tiers depending on how much a customer saves of their direct deposit.Notably, the rate tiers are dependent on the percentage of savings, not the net amount. "We'll pay you more when you save more of what comes in," Bruhnke said. "We didn't want to segment customers by how much money they had. So it was always going to be about a percentage of income. That was really important to us."Check out the 14-page pitch deck fintech HMBradley, a neobank offering interest rates as high as 3%, used to raise an $18.25 million Series APersonal finance is only a text awayYinon Ravid, the chief executive and cofounder of Albert.AlbertThe COVID-19 pandemic has underscored the growing preference of mobile banking as customers get comfortable managing their finances online.The financial app Albert has seen a similar jump in activity. Currently counting more than six million members, deposits in Albert's savings offering doubled from the start of the pandemic in March 2020 to May of this year, from $350 million to $700 million, according to new numbers released by the company. Founded in 2015, Albert offers automated budgeting and savings tools alongside guided investment portfolios. It's looked to differentiate itself through personalized features, like the ability for customers to text human financial experts.Budgeting and saving features are free on Albert. But for more tailored financial advice, customers pay a subscription fee that's a pay-what-you-can model, between $4 and $14 a month. And Albert's now banking on a new tool to bring together its investing, savings, and budgeting tools.Fintech Albert used this 10-page pitch deck to raise a $100 million Series C from General Atlantic and CapitalG 'A bank for immigrants'Priyank Singh and Rohit Mittal are the cofounders of Stilt.StiltRohit Mittal remembers the difficulties he faced when he first arrived in the United States a decade ago as a master's student at Columbia University.As an immigrant from India, Mittal had no credit score in the US and had difficulty integrating into the financial system. Mittal even struggled to get approved to rent an apartment and couch-surfed until he found a roommate willing to offer him space in his apartment in the New York neighborhood Morningside Heights.That roommate was Priyank Singh, who would go on to become Mittal's cofounder when the two started Stilt, a financial-technology company designed to address the problems Mittal faced when he arrived in the US.Stilt, which calls itself "a bank for immigrants," does not require a social security number or credit history to access its offerings, including unsecured personal loans.Instead of relying on traditional metrics like a credit score, Stilt uses data such as education and employment to predict an individual's future income stability and cash flow before issuing a loan. Stilt has seen its loan volume grow by 500% in the past 12 months, and the startup has loaned to immigrants from 160 countries since its launch. Here are the 15 slides Stilt, which calls itself 'a bank for immigrants,' used to raise a $14 million Series AAn IRA for alternativesHenry Yoshida is the co-founder and CEO of retirement fintech startup Rocket Dollar.Rocket DollarFintech startup Rocket Dollar, which helps users invest their individual retirement account (IRA) dollars into alternative assets, just raised $8 million for its Series A round, the company announced on Thursday.Park West Asset Management led the round, with participation from investors including Hyphen Capital, which focuses on backing Asian American entrepreneurs, and crypto exchange Kraken's venture arm. Co-founded in 2018 by CEO Henry Yoshida, CTO Rick Dude, and VP of marketing Thomas Young, Rocket Dollar now has over $350 million in assets under management on its platform. Yoshida sold his first startup, a roboadvisor called Honest Dollar, to Goldman Sachs' investment management division for an estimated $20 million.Yoshida told Insider that while ultra-high net worth investors have been investing self-directed retirement account dollars into alternative assets like real estate, private equity, and cryptocurrency, average investors have not historically been able to access the same opportunities to invest IRA dollars in alternative assets through traditional platforms.Here's the 34-page pitch deck a fintech that helps users invest their retirement savings in crypto and real estate assets used to nab $8 millionA trading app for activismAntoine Argouges, CEO and founder of TulipshareTulipshareAn up-and-coming fintech is taking aim at some of the world's largest corporations by empowering retail investors to push for social and environmental change by pooling their shareholder rights.London-based Tulipshare lets individuals in the UK invest as little as one pound in publicly-traded company stocks. The upstart combines individuals' shareholder rights with other like-minded investors to advocate for environmental, social, and corporate governance change at firms like JPMorgan, Apple, and Amazon.The goal is to achieve a higher number of shares to maximize the number of votes that can be submitted at shareholder meetings. Already a regulated broker-dealer in the UK, Tulipshare recently applied for registration as a broker-dealer in the US. "If you ask your friends and family if they've ever voted on shareholder resolutions, the answer will probably be close to zero," CEO and founder Antoine Argouges told Insider. "I started Tulipshare to utilize shareholder rights to bring about positive corporate change that has an impact on people's lives and our planet — what's more powerful than money to change the system we live in?"Check out the 14-page pitch deck from Tulipshare, a trading app that lets users pool their shareholder votes for activism campaignsDigital tools for independent financial advisorsJason Wenk, founder and CEO of AltruistAltruistJason Wenk started his career at Morgan Stanley in investment research over 20 years ago. Now, he's running a company that is hoping to broaden access to financial advice for less-wealthy individuals. The startup raised $50 million in Series B funding led by Insight Partners with participation from investors Vanguard and Venrock. The round brings the Los Angeles-based startup's total funding to just under $67 million.Founded in 2018, Altruist is a digital brokerage built for independent financial advisors, intended to be an "all-in-one" platform that unites custodial functions, portfolio accounting, and a client-facing portal. It allows advisors to open accounts, invest, build models, report, trade (including fractional shares), and bill clients through an interface that can advisors time by eliminating mundane operational tasks.Altruist aims to make personalized financial advice less expensive, more efficient, and more inclusive through the platform, which is designed for registered investment advisors (RIAs), a growing segment of the wealth management industry. Here's the pitch deck for Altruist, a wealth tech challenging custodians Fidelity and Charles Schwab, that raised $50 million from Vanguard and InsightRethinking debt collection Jason Saltzman, founder and CEO of ReliefReliefFor lenders, debt collection is largely automated. But for people who owe money on their credit cards, it can be a confusing and stressful process.  Relief is looking to change that. Its app automates the credit-card debt collection process for users, negotiating with lenders and collectors to settle outstanding balances on their behalf. The fintech just launched and closed a $2 million seed round led by Collaborative Ventures. Relief's fundraising experience was a bit different to most. Its pitch deck, which it shared with one investor via Google Slides, went viral. It set out to raise a $1 million seed round, but ended up doubling that and giving some investors money back to make room for others.Check out a 15-page pitch deck that went viral and helped a credit-card debt collection startup land a $2 million seed roundHelping small banks lendTKCollateralEdgeFor large corporations with a track record of tapping the credit markets, taking out debt is a well-structured and clear process handled by the nation's biggest investment banks and teams of accountants. But smaller, middle-market companies — typically those with annual revenues ranging up to $1 billion — are typically served by regional and community banks that don't always have the capacity to adequately measure the risk of loans or price them competitively. Per the National Center for the Middle Market, 200,000 companies fall into this range, accounting for roughly 33% of US private sector GDP and employment.Dallas-based fintech CollateralEdge works with these banks — typically those with between $1 billion and $50 billion in assets — to help analyze and price slices of commercial and industrial loans that previously might have gone unserved by smaller lenders.On October 20th, CollateralEdge announced a $3.5 million seed round led by Dallas venture fund Perot Jain with participation from Kneeland Youngblood (a founder of the healthcare-focused private-equity firm Pharos Capital) and other individual investors.Here's the 10-page deck CollateralEdge, a fintech streamlining how small banks lend to businesses, used to raise a $3.5 million seed roundA new way to assess creditworthinessPinwheel founders Curtis Lee, Kurt Lin, and Anish Basu.PinwheelGrowing up, Kurt Lin never saw his father get frustrated. A "traditional, stoic figure," Lin said his father immigrated to the United States in the 1970s. Becoming part of the financial system proved even more difficult than assimilating into a new culture.Lin recalled visiting bank after bank with his father as a child, watching as his father's applications for a mortgage were denied due to his lack of credit history. "That was the first time in my life I really saw him crack," Lin told Insider. "The system doesn't work for a lot of people — including my dad," he added. Lin would find a solution to his father's problem years later while working with Anish Basu, and Curtis Lee on an automated health savings account. The trio realized the payroll data integrations they were working on could be the basis of a product that would help lenders work with consumers without strong credit histories."That's when the lightbulb hit," said Lin, Pinwheel's CEO.In 2018, Lin, Basu, and Lee founded Pinwheel, an application-programming interface that shares payroll data to help both fintechs and traditional lenders serve consumers with limited or poor credit, who have historically struggled to access financial products. Here's the 9-page deck that Pinwheel, a fintech helping lenders tap into payroll data to serve consumers with little to no credit, used to raise a $50 million Series BAn alternative auto lenderTricolorAn alternative auto lender that caters to thin- and no-credit Hispanic borrowers is planning a national expansion after scoring a $90 million investment from BlackRock-managed funds. Tricolor is a Dallas-based auto lender that is a community development financial institution. It uses a proprietary artificial-intelligence engine that decisions each customer based on more than 100 data points, such as proof of income. Half of Tricolor's customers have a FICO score, and less than 12% have scores above 650, yet the average customer has lived in the US for 15 years, according to the deck.A 2017 survey by the Federal Deposit Insurance Corporation found 31.5% of Hispanic households had no mainstream credit compared to 14.4% of white households. "For decades, the deck has been stacked against low income or credit invisible Hispanics in the United States when it comes to the purchase and financing of a used vehicle," Daniel Chu, founder and CEO of Tricolor, said in a statement announcing the raise.An auto lender that caters to underbanked Hispanics used this 25-page deck to raise $90 million from BlackRock investors A new way to access credit The TomoCredit teamTomoCreditKristy Kim knows first-hand the challenge of obtaining credit in the US without an established credit history. Kim, who came to the US from South Korea, couldn't initially get access to credit despite having a job in investment banking after graduating college. "I was in my early twenties, I had a good income, my job was in investment banking but I could not get approved for anything," Kim told Insider. "Many young professionals like me, we deserve an opportunity to be considered but just because we didn't have a Fico, we weren't given a chance to even apply," she added.Kim started TomoCredit in 2018 to help others like herself gain access to consumer credit. TomoCredit spent three years building an internal algorithm to underwrite customers based on cash flow, rather than a credit score.TomoCredit, a fintech that lends to thin- and no-credit borrowers, used this 17-page pitch deck to raise its $10 million Series AHelping streamline how debts are repaidMethod Financial cofounders Jose Bethancourt and Marco del Carmen.Method FinancialWhen Jose Bethancourt graduated from the University of Texas at Austin in May 2019, he faced the same question that confronts over 43 million Americans: How would he repay his student loans?The problem led Bethancourt on a nearly two-year journey that culminated in the creation of a startup aimed at making it easier for consumers to more seamlessly pay off all kinds of debt.  Initially, Bethancourt and fellow UT grad Marco del Carmen built GradJoy, an app that helped users better understand how to manage student loan repayment and other financial habits. GradJoy was accepted into Y Combinator in the summer of 2019. But the duo quickly realized the real benefit to users would be helping them move money to make payments instead of simply offering recommendations."When we started GradJoy, we thought, 'Oh, we'll just give advice — we don't think people are comfortable with us touching their student loans,' and then we realized that people were saying, 'Hey, just move the money — if you think I should pay extra, then I'll pay extra.' So that's kind of the movement that we've seen, just, everybody's more comfortable with fintechs doing what's best for them," Bethancourt told Insider. Here is the 11-slide pitch deck Method Financial, a Y Combinator-backed fintech making debt repayment easier, used to raise $2.5 million in pre-seed fundingQuantum computing made easyQC Ware CEO Matt Johnson.QC WareEven though banks and hedge funds are still several years out from adding quantum computing to their tech arsenals, that hasn't stopped Wall Street giants from investing time and money into the emerging technology class. And momentum for QC Ware, a startup looking to cut the time and resources it takes to use quantum computing, is accelerating. The fintech secured a $25 million Series B on September 29 co-led by Koch Disruptive Technologies and Covestro with participation from D.E. Shaw, Citi, and Samsung Ventures.QC Ware, founded in 2014, builds quantum algorithms for the likes of Goldman Sachs (which led the fintech's Series A), Airbus, and BMW Group. The algorithms, which are effectively code bases that include quantum processing elements, can run on any of the four main public-cloud providers.Quantum computing allows companies to do complex calculations faster than traditional computers by using a form of physics that runs on quantum bits as opposed to the traditional 1s and 0s that computers use. This is especially helpful in banking for risk analytics or algorithmic trading, where executing calculations milliseconds faster than the competition can give firms a leg up. Here's the 20-page deck QC Ware, a fintech making quantum computing more accessible, used to raised its $25 million Series BSimplifying quant modelsKirat Singh and Mark Higgins, Beacon's cofounders.BeaconA fintech that helps financial institutions use quantitative models to streamline their businesses and improve risk management is catching the attention, and capital, of some of the country's biggest investment managers.Beacon Platform, founded in 2014, is a fintech that builds applications and tools to help banks, asset managers, and trading firms quickly integrate quantitative models that can help with analyzing risk, ensuring compliance, and improving operational efficiency. The company raised its Series C on Wednesday, scoring a $56 million investment led by Warburg Pincus with support from Blackstone Innovations Investments, PIMCO, and Global Atlantic. Blackstone, PIMCO, and Global Atlantic are also users of Beacon's tech, as are the Commonwealth Bank of Australia and Shell New Energies, a division of Royal Dutch Shell, among others.The fintech provides a shortcut for firms looking to use quantitative modelling and data science across various aspects of their businesses, a process that can often take considerable resources if done solo.Here's the 20-page pitch deck Beacon, a fintech helping Wall Street better analyze risk and data, used to raise $56 million from Warburg Pincus, Blackstone, and PIMCOA new data feed for bond tradingMark Lennihan/APFor years, the only way investors could figure out the going price of a corporate bond was calling up a dealer on the phone. The rise of electronic trading has streamlined that process, but data can still be hard to come by sometimes. A startup founded by a former Goldman Sachs exec has big plans to change that. BondCliQ is a fintech that provides a data feed of pre-trade pricing quotes for the corporate bond market. Founded by Chris White, the creator of Goldman Sachs' defunct corporate-bond-trading system, BondCliQ strives to bring transparency to a market that has traditionally kept such data close to the vest. Banks, which typically serve as the dealers of corporate bonds, have historically kept pre-trade quotes hidden from other dealers to maintain a competitive advantage.But tech advancements and the rise of electronic marketplaces have shifted power dynamics into the hands of buy-side firms, like hedge funds and asset managers. The investors are now able to get a fuller picture of the market by aggregating price quotes directly from dealers or via vendors.Here's the 9-page pitch deck that BondCliQ, a fintech looking to bring more data and transparency to bond trading, used to raise its Series AFraud prevention for lenders and insurersFiordaliso/Getty ImagesOnboarding new customers with ease is key for any financial institution or retailer. The more friction you add, the more likely consumers are to abandon the entire process.But preventing fraud is also a priority, and that's where Neuro-ID comes in. The startup analyzes what it calls "digital body language," or, the way users scroll, type, and tap. Using that data, Neuro-ID can identify fraudulent users before they create an account. It's built for banks, lenders, insurers, and e-commerce players."The train has left the station for digital transformation, but there's a massive opportunity to try to replicate all those communications that we used to have when we did business in-person, all those tells that we would get verbally and non-verbally on whether or not someone was trustworthy," Neuro-ID CEO Jack Alton told Insider.Founded in 2014, the startup's pitch is twofold: Neuro-ID can save companies money by identifying fraud early, and help increase user conversion by making the onboarding process more seamless. In December Neuro-ID closed a $7 million Series A, co-led by Fin VC and TTV Capital, with participation from Canapi Ventures. With 30 employees, Neuro-ID is using the fresh funding to grow its team and create additional tools to be more self-serving for customers.Here's the 11-slide pitch deck a startup that analyzes consumers' digital behavior to fight fraud used to raise a $7 million Series AAI-powered tools to spot phony online reviews FakespotMarketplaces like Amazon and eBay host millions of third-party sellers, and their algorithms will often boost items in search based on consumer sentiment, which is largely based on reviews. But many third-party sellers use fake reviews often bought from click farms to boost their items, some of which are counterfeit or misrepresented to consumers.That's where Fakespot comes in. With its Chrome extension, it warns users of sellers using potentially fake reviews to boost sales and can identify fraudulent sellers. Fakespot is currently compatible with Amazon, BestBuy, eBay, Sephora, Steam, and Walmart."There are promotional reviews written by humans and bot-generated reviews written by robots or review farms," Fakespot founder and CEO Saoud Khalifah told Insider. "Our AI system has been built to detect both categories with very high accuracy."Fakespot's AI learns via reviews data available on marketplace websites, and uses natural-language processing to identify if reviews are genuine. Fakespot also looks at things like whether the number of positive reviews are plausible given how long a seller has been active.Fakespot, a startup that helps shoppers detect robot-generated reviews and phony sellers on Amazon and Shopify, used this pitch deck to nab a $4 million Series AE-commerce focused business bankingMichael Rangel, cofounder and CEO, and Tyler McIntyre, cofounder and CTO of Novo.Kristelle Boulos PhotographyBusiness banking is a hot market in fintech. And it seems investors can't get enough.Novo, the digital banking fintech aimed at small e-commerce businesses, raised a $40.7 million Series A led by Valar Ventures in June. Since its launch in 2018, Novo has signed up 100,000 small businesses. Beyond bank accounts, it offers expense management, a corporate card, and integrates with e-commerce infrastructure players like Shopify, Stripe, and Wise.Founded in 2018, Novo was based in New York City, but has since moved its headquarters to Miami. Here's the 12-page pitch deck e-commerce banking startup Novo used to raise its $40 million Series AShopify for embedded financeProductfy CEO and founder, Duy VoProductfyProductfy is looking to break into embedded finance by becoming the Shopify of back-end banking services.Embedded finance — integrating banking services in non-financial settings — has taken hold in the e-commerce world. But Productfy is going after a different kind of customer in churches, universities, and nonprofits.The San Jose, Calif.-based upstart aims to help non-finance companies offer their own banking products. Productfy can help customers launch finance features in as little as a week and without additional engineering resources or background knowledge of banking compliance or legal requirements, Productfy founder and CEO Duy Vo told Insider. "You don't need an engineer to stand up Shopify, right? You can be someone who's just creating art and you can use Shopify to build your own online store," Vo said, adding that Productfy is looking to take that user experience and replicate it for banking services.Here's the 15-page pitch deck Productfy, a fintech looking to be the Shopify of embedded finance, used to nab a $16 million Series ADeploying algorithms and automation to small-business financingJustin Straight and Bernard Worthy, LoanWell co-foundersLoanWellBernard Worthy and Justin Straight, the founders of LoanWell, want to break down barriers to financing for small and medium-size businesses — and they've got algorithms and automation in their tech arsenals that they hope will do it.Worthy, the company's CEO, and Straight, its chief operating and financial officer, are powering community-focused lenders to fill a gap in the SMB financing world by boosting access to loans under $100,000. And the upstart is known for catching the attention, and dollars, of mission-driven investors. LoanWell closed a $3 million seed financing round in December led by Impact America Fund with participation from SoftBank's SB Opportunity Fund and Collab Capital.LoanWell automates the financing process — from underwriting and origination, to money movement and servicing — which shaves down an up-to-90-day process to 30 days or even same-day with some LoanWell lenders, Worthy said. SMBs rely on these loans to process quickly after two years of financial uncertainty. But the pandemic illustrated how time-consuming and expensive SMB financing can be, highlighted by efforts like the federal government's Paycheck Protection Program.Community banks, once the lifeline to capital for many local businesses, continue to shutter. And demands for smaller loan amounts remain largely unmet. More than half of business-loan applicants sought $100,000 or less, according to 2018 data from the Federal Reserve. But the average small-business bank loan was closer to six times that amount, according to the latest data from a now discontinued Federal Reserve survey.Here's the 14-page pitch deck LoanWell used to raise $3 million from investors like SoftBank.Catering to 'micro businesses'Stefanie Sample is the founder and CEO of FundidFundidStartups aiming to simplify the often-complex world of corporate cards have boomed in recent years.Business-finance management startup Brex was last valued at $12.3 billion after raising $300 million last year. Startup card provider Ramp announced an $8.1 billion valuation in March after growing its revenue nearly 10x in 2021. Divvy, a small business card provider, was acquired by Bill.com in May 2021 for approximately $2.5 billion.But despite how hot the market has gotten, Stefanie Sample said she ended up working in the space by accident. Sample is the founder and CEO of Fundid, a new fintech that provides credit and lending products to small businesses.This May, Fundid announced a $3.25 million seed round led by Nevcaut Ventures. Additional investors include the Artemis Fund and Builders and Backers. The funding announcement capped off the company's first year: Sample introduced the Fundid concept in April 2021, launched its website in May, and began raising capital in August."I never meant to do Fundid," Sample told Insider. "I never meant to do something that was venture-backed."Read the 12-page deck used by Fundid, a fintech offering credit and lending tools for 'micro businesses'Embedded payments for SMBsThe Highnote teamHighnoteBranded cards have long been a way for merchants with the appropriate bank relationships to create additional revenue and build customer loyalty. The rise of embedded payments, or the ability to shop and pay in a seamless experience within a single app, has broadened the number of companies looking to launch branded cards.Highnote is a startup that helps small to mid-sized merchants roll out their own debit and pre-paid digital cards. The fintech emerged from stealth on Tuesday to announce it raised $54 million in seed and Series A funding.Here's the 12-page deck Highnote, a startup helping SMBs embed payments, used to raise $54 million in seed and Series A fundingHelping small businesses manage their taxesComplYant's founder Shiloh Jackson wants to help people be present in their bookkeeping.ComplYantAfter 14 years in tax accounting, Shiloh Johnson had formed a core philosophy around corporate accounting: everyone deserves to understand their business's money and business owners need to be present in their bookkeeping process.She wanted to help small businesses understand "this is why you need to do what you're doing and why you have to change the way you think about tax and be present in your bookkeeping process," she told Insider. The Los Angeles native wanted small businesses to not only understand business tax no matter their size but also to find the tools they needed to prepare their taxes in one spot. So Johnson developed a software platform that provides just that.The 13-page pitch deck ComplYant used to nab $4 million that details the tax startup's plan to be Turbotax, Quickbooks, and Xero rolled into one for small business ownersInvoice financing for SMBsStacey Abrams and Lara Hodgson, Now co-foundersNowAbout a decade ago, politician Stacey Abrams and entrepreneur Lara Hodgson were forced to fold their startup because of a kink in the supply chain — but not in the traditional sense.Nourish, which made spill-proof bottled water for children, had grown quickly from selling to small retailers to national ones. And while that may sound like a feather in the small business' cap, there was a hang-up."It was taking longer and longer to get paid, and as you can imagine, you deliver the product and then you wait and you wait, but meanwhile you have to pay your employees and you have to pay your vendors," Hodgson told Insider. "Waiting to get paid was constraining our ability to grow."While it's not unusual for small businesses to grapple with working capital issues, the dust was still settling from the Great Recession. Abrams and Hodgson couldn't secure a line of credit or use financing tools like factoring to solve their problem. The two entrepreneurs were forced to close Nourish in 2012, but along the way they recognized a disconnect in the system.  "Why are we the ones borrowing money, when in fact we're the lender here because every time you send an invoice to a customer, you've essentially extended a free loan to that customer by letting them pay later," Hodgson said. "And the only reason why we were going to need to possibly borrow money was because we had just given ours away for free to Whole Foods," she added.Check out the 7-page deck that Now, Stacey Abrams' fintech that wants to help small businesses 'grow fearlessly', used to raise $29 millionCheckout made easyRyan Breslow.Ryan BreslowAmazon has long dominated e-commerce with its one-click checkout flows, offering easier ways for consumers to shop online than its small-business competitors.Bolt gives small merchants tools to offer the same easy checkouts so they can compete with the likes of Amazon.The startup raised its $393 million Series D to continue adding its one-click checkout feature to merchants' own websites in October.Bolt markets to merchants themselves. But a big part of Bolt's pitch is its growing network of consumers — currently over 5.6 million — that use its features across multiple Bolt merchant customers. Roughly 5% of Bolt's transactions were network-driven in May, meaning users that signed up for a Bolt account on another retailer's website used it elsewhere. The network effects were even more pronounced in verticals like furniture, where 49% of transactions were driven by the Bolt network."The network effect is now unleashed with Bolt in full fury, and that triggered the raise," Bolt's founder and CEO Ryan Breslow told Insider.Here's the 12-page deck that one-click checkout Bolt used to outline its network of 5.6 million consumers and raise its Series DPayments infrastructure for fintechsQolo CEO and co-founder Patricia MontesiQoloThree years ago, Patricia Montesi realized there was a disconnect in the payments world. "A lot of new economy companies or fintech companies were looking to mesh up a lot of payment modalities that they weren't able to," Montesi, CEO and co-founder of Qolo, told Insider.Integrating various payment capabilities often meant tapping several different providers that had specializations in one product or service, she added, like debit card issuance or cross-border payments. "The way people were getting around that was that they were creating this spider web of fintech," she said, adding that "at the end of it all, they had this mess of suppliers and integrations and bank accounts."The 20-year payments veteran rounded up a group of three other co-founders — who together had more than a century of combined industry experience — to start Qolo, a business-to-business fintech that sought out to bundle back-end payment rails for other fintechs.Here's the 11-slide pitch deck a startup that provides payments infrastructure for other fintechs used to raise a $15 million Series ABetter use of payroll dataAtomic's Head of Markets, Lindsay DavisAtomicEmployees at companies large and small know the importance — and limitations — of how firms manage their payrolls. A new crop of startups are building the API pipes that connect companies and their employees to offer a greater level of visibility and flexibility when it comes to payroll data and employee verification. On Thursday, one of those names, Atomic, announced a $40 million Series B fundraising round co-led by Mercato Partners and Greylock, alongside Core Innovation Capital, Portage, and ATX Capital. The round follows Atomic's Series A round announced in October, when the startup raised a $22 million Series A from investors including Core Innovation Capital, Portage, and Greylock.Payroll startup Atomic just raised a $40 million Series B. Here's an internal deck detailing the fintech's approach to the red-hot payments space.Saving on vendor invoicesHoward Katzenberg, Glean's CEO and cofounderGleanWhen it comes to high-flying tech startups, headlines and investors typically tend to focus on industry "disruption" and the total addressable market a company is hoping to reach. Expense cutting as a way to boost growth typically isn't part of the conversation early on, and finance teams are viewed as cost centers relative to sales teams. But one fast-growing area of business payments has turned its focus to managing those costs. Startups like Ramp and established names like Bill.com have made their name offering automated expense-management systems. Now, one new fintech competitor, Glean, is looking to take that further by offering both automated payment services and tailored line-item accounts-payable insights driven by machine-learning models. Glean's CFO and founder, Howard Katzenberg, told Insider that the genesis of Glean was driven by his own personal experience managing the finance teams of startups, including mortgage lender Better.com, which Katzenberg left in 2019, and online small-business lender OnDeck. "As a CFO of high-growth companies, I spent a lot of time focused on revenue and I had amazing dashboards in real time where I could see what is going on top of the funnel, what's going on with conversion rates, what's going on in terms of pricing and attrition," Katzenberg told Insider. See the 15-slide pitch deck Glean, a startup using machine learning to find savings in vendor invoices, used to raise $10.8 million in seed fundingReal-estate management made easyAgora founders Noam Kahan, CTO, Bar Mor, CEO, and Lior Dolinski, CPOAgoraFor alternative asset managers of any type, the operations underpinning sales and investor communications are a crucial but often overlooked part of the business. Fund managers love to make bets on markets, not coordinate hundreds of wire transfers to clients each quarter or organize customer-relationship-management databases.Within the $10.6 trillion global market for professionally managed real-estate investing, that's where Tel Aviv and New York-based startup Agora hopes to make its mark.Founded in 2019, Agora offers a set of back-office, investor relations, and sales software tools that real-estate investment managers can plug into their workflows. On Wednesday, Agora announced a $9 million seed round, led by Israel-based venture firm Aleph, with participation from River Park Ventures and Maccabee Ventures. The funding comes on the heels of an October 2020 pre-seed fund raise worth $890,000, in which Maccabee also participated.Here's the 15-slide pitch deck that Agora, a startup helping real-estate investors manage communications and sales with their clients, used to raise a $9 million seed roundAccess to commercial real-estate investing LEX Markets cofounders and co-CEOs Drew Sterrett and Jesse Daugherty.LEX MarketsDrew Sterrett was structuring real-estate deals while working in private equity when he realized the inefficiencies that existed in the market. Only high-net worth individuals or accredited investors could participate in commercial real-estate deals. If they ever wanted to leave a partnership or sell their stake in a property, it was difficult to find another investor to replace them. Owners also struggled to sell minority stakes in their properties and didn't have many good options to recapitalize an asset if necessary.In short, the market had a high barrier to entry despite the fact it didn't always have enough participants to get deals done quickly. "Most investors don't have access to high-quality commercial real-estate investments. How do we have the oldest and largest asset class in the world and one of the largest wealth creators with no public and liquid market?" Sterrett told Insider. "It sort of seems like a no-brainer, and that this should have existed 50 or 60 years ago."This 15-page pitch deck helped LEX Markets, a startup making investing in commercial real estate more accessible, raise $15 millionInsurance goes digitalJamie Hale, CEO and cofounder of LadderLadderFintechs looking to transform how insurance policies are underwritten, issued, and experienced by customers have grown as new technology driven by digital trends and artificial intelligence shape the market. And while verticals like auto, homeowner's, and renter's insurance have seen their fair share of innovation from forward-thinking fintechs, one company has taken on the massive life-insurance market. Founded in 2017, Ladder uses a tech-driven approach to offer life insurance with a digital, end-to-end service that it says is more flexible, faster, and cost-effective than incumbent players.Life, annuity, and accident and health insurance within the US comprise a big chunk of the broader market. In 2020, premiums written on those policies totaled some $767 billion, compared to $144 billion for auto policies and $97 billion for homeowner's insurance.Here's the 12-page deck that Ladder, a startup disrupting the 'crown jewel' of the insurance market, used to nab $100 millionData science for commercial insuranceTanner Hackett, founder and CEO of CounterpartCounterpartThere's been no shortage of funds flowing into insurance-technology companies over the past few years. Private-market funding to insurtechs soared to $15.4 billion in 2021, a 90% increase compared to 2020. Some of the most well-known consumer insurtech names — from Oscar (which focuses on health insurance) to Metromile (which focuses on auto) — launched on the public markets last year, only to fall over time or be acquired as investors questioned the sustainability of their business models. In the commercial arena, however, the head of one insurtech company thinks there is still room to grow — especially for those catering to small businesses operating in an entirely new, pandemic-defined environment. "The bigger opportunity is in commercial lines," Tanner Hackett, the CEO of management liability insurer Counterpart, told Insider."Everywhere I poke, I'm like, 'Oh my goodness, we're still in 1.0, and all the other businesses I've built were on version three.' Insurance is still in 1.0, still managing from spreadsheets and PDFs," added Hackett, who also previously co-founded Button, which focuses on mobile marketing. See the 8-page pitch deck Counterpart, a startup disrupting commercial insurance with data science, used to raise a $30 million Series BSmarter insurance for multifamily propertiesItai Ben-Zaken, cofounder and CEO of Honeycomb.HoneycombA veteran of the online-insurance world is looking to revolutionize the way the industry prices risk for commercial properties with the help of artificial intelligence.Insurance companies typically send inspectors to properties before issuing policies to better understand how the building is maintained and identify potential risks or issues with it. It's a process that can be time-consuming, expensive, and inefficient, making it hard to justify for smaller commercial properties, like apartment and condo buildings.Insurtech Honeycomb is looking to fix that by using AI to analyze a combination of third-party data and photos submitted by customers through the startup's app to quickly identify any potential risks at a property and more accurately price policies."That whole physical inspection thing had really good things in it, but it wasn't really something that is scalable and, it's also expensive," Itai Ben-Zaken, Honeycomb's cofounder and CEO, told Insider. "The best way to see a property right now is Google street view. Google street view is usually two years old."Here's the 10-page Series A pitch deck used by Honeycomb, a startup that wants to revolutionize the $26 billion market for multifamily property insuranceHelping freelancers with their taxesJaideep Singh is the CEO and co-founder of FlyFin, an AI-driven tax preparation software program for freelancers.FlyFinSome people, particularly those with families or freelancing businesses, spend days searching for receipts for tax season, making tax preparation a time consuming and, at times, taxing experience. That's why in 2020 Jaideep Singh founded FlyFin, an artificial-intelligence tax preparation program for freelancers that helps people, as he puts it, "fly through their finances." FlyFin is set up to connect to a person's bank accounts, allowing the AI program to help users monitor for certain expenses that can be claimed on their taxes like business expenditures, the interest on mortgages, property taxes, or whatever else that might apply. "For most individuals, people have expenses distributed over multiple financial institutions. So we built an AI platform that is able to look at expenses, understand the individual, understand your profession, understand the freelance population at large, and start the categorization," Singh told Insider.Check out the 7-page pitch deck a startup helping freelancers manage their taxes used to nab $8 million in fundingDigital banking for freelancersJGalione/Getty ImagesLance is a new digital bank hoping to simplify the life of those workers by offering what it calls an "active" approach to business banking. "We found that every time we sat down with the existing tools and resources of our accountants and QuickBooks and spreadsheets, we just ended up getting tangled up in the whole experience of it," Lance cofounder and CEO Oona Rokyta told Insider. Lance offers subaccounts for personal salaries, withholdings, and savings to which freelancers can automatically allocate funds according to custom preset levels. It also offers an expense balance that's connected to automated tax withholdings.In May, Lance announced the closing of a $2.8 million seed round that saw participation from Barclays, BDMI, Great Oaks Capital, Imagination Capital, Techstars, DFJ Frontier, and others.Here's the 21-page pitch deck Lance, a digital bank for freelancers, used to raise a $2.8 million seed round from investors including BarclaysSoftware for managing freelancersWorksome cofounder and CEO Morten Petersen.WorksomeThe way people work has fundamentally changed over the past year, with more flexibility and many workers opting to freelance to maintain their work-from-home lifestyles.But managing a freelance or contractor workforce is often an administrative headache for employers. Worksome is a startup looking to eliminate all the extra work required for employers to adapt to more flexible working norms.Worksome started as a freelancer marketplace automating the process of matching qualified workers with the right jobs. But the team ultimately pivoted to a full suite of workforce management software, automating administrative burdens required to hire, pay, and account for contract workers.In May, Worksome closed a $13 million Series A backed by European angel investor Tommy Ahlers and Danish firm Lind & Risør.Here's the 21-slide pitch deck used by a startup that helps firms like Carlsberg and Deloitte manage freelancersPayments and operations support HoneyBook cofounders Dror Shimoni, Oz Alon, and Naama Alon.HoneyBookWhile countless small businesses have been harmed by the pandemic, self-employment and entrepreneurship have found ways to blossom as Americans started new ventures.Half of the US population may be freelance by 2027, according to a study commissioned by remote-work hiring platform Upwork. HoneyBook, a fintech startup that provides payment and operations support for freelancers, in May raised $155 million in funding and achieved unicorn status with its $1 billion-plus valuation.Durable Capital Partners led the Series D funding with other new investors including renowned hedge fund Tiger Global, Battery Ventures, Zeev Ventures, and 01 Advisors. Citi Ventures, Citigroup's startup investment arm that also backs fintech robo-advisor Betterment, participated as an existing investor in the round alongside Norwest Venture partners. The latest round brings the company's fundraising total to $227 million to date.Here's the 21-page pitch deck a Citi-backed fintech for freelancers used to raise $155 million from investors like hedge fund Tiger GlobalPay-as-you-go compliance for banks, fintechs, and crypto startupsNeepa Patel, Themis' founder and CEOThemisWhen Themis founder and CEO Neepa Patel set out to build a new compliance tool for banks, fintech startups, and crypto companies, she tapped into her own experience managing risk at some of the nation's biggest financial firms. Having worked as a bank regulator at the Office of the Comptroller of the Currency and in compliance at Morgan Stanley, Deutsche Bank, and the enterprise blockchain company R3, Patel was well-placed to assess the shortcomings in financial compliance software. But Patel, who left the corporate world to begin work on Themis in 2020, drew on more than just her own experience and frustrations to build the startup."It's not just me building a tool based on my personal pain points. I reached out to regulators. I reached out to bank compliance officers and members in the fintech community just to make sure that we're building it exactly how they do their work," Patel told Insider. "That was the biggest problem: No one built a tool that was reflective of how people do their work."Check out the 9-page pitch deck Themis, which offers pay-as-you-go compliance for banks, fintechs, and crypto startups, used to raise $9 million in seed fundingConnecting startups and investorsHum Capital cofounder and CEO Blair SilverbergHum CapitalBlair Silverberg is no stranger to fundraising.For six years, Silverberg was a venture capitalist at Draper Fisher Jurvetson and Private Credit Investments making bets on startups."I was meeting with thousands of founders in person each year, watching them one at a time go through this friction where they're meeting a ton of investors, and the investors are all asking the same questions," Silverberg told Insider. He switched gears about three years ago, moving to the opposite side of the metaphorical table, to start Hum Capital, which uses artificial intelligence to match investors with startups looking to fundraise.On August 31, the New York-based fintech announced its $9 million Series A. The round was led by Future Ventures with participation from Webb Investment Network, Wavemaker Partners, and Partech. This 11-page pitch deck helped Hum Capital, a fintech using AI to match investors with startups, raise a $9 million Series A.Helping LatAm startups get up to speedKamino cofounders Gut Fragoso, Rodrigo Perenha, Benjamin Gleason, and Gonzalo ParejoKaminoThere's more venture capital flowing into Latin America than ever before, but getting the funds in founders' hands is not exactly a simple process.In 2021, investors funneled $15.3 billion into Latin American companies, more than tripling the previous record of $4.9 billion in 2019. Fintech and e-commerce sectors drove funding, accounting for 39% and 25% of total funding, respectively.  However, for many startup founders in the region who have successfully sold their ideas and gotten investors on board, there's a patchwork of corporate structuring that's needed to access the funds, according to Benjamin Gleason, who was the chief financial officer at Groupon LatAm prior to cofounding Brazil-based fintech Kamino.It's a process Gleason and his three fellow Kamino cofounders have been through before as entrepreneurs and startup execs themselves. Most often, startups have to set up offshore financial accounts outside of Brazil, which "entails creating a Cayman [Islands] holding company, a Delaware LLC, and then connecting it to a local entity here and also opening US bank accounts for the Cayman entity, which is not trivial from a KYC perspective," said Gleason, who founded open-banking fintech Guiabolso in Sao Paulo. His partner, Gonzalo Parejo, experienced the same toils when he founded insurtech Bidu."Pretty much any international investor will usually ask for that," Gleason said, adding that investors typically cite liability issues."It's just a massive amount of bureaucracy, complexity, a lot of time from the founders. All of this just to get the money from the investor that wants to give them the money," he added.Here's the 8-page pitch deck Kamino, a fintech helping LatAm startups with everything from financing to corporate credit cards, used to raise a $6.1M pre-seed roundThe back-end tech for beautyDanielle Cohen-Shohet, CEO and founder of GlossGeniusGlossGeniusDanielle Cohen-Shohet might have started as a Goldman Sachs investment analyst, but at her core she was always a coder.After about three years at Goldman Sachs, Cohen-Shohet left the world of traditional finance to code her way into starting her own company in 2016. "There was a period of time where I did nothing, but eat, sleep, and code for a few weeks," Cohen-Shohet told Insider. Her technical edge and knowledge of the point-of-sale payment space led her to launch a software company focused on providing behind-the-scenes tech for beauty and wellness small businesses.Cohen-Shohet launched GlossGenius in 2017 to provide payments tech for hair stylists, nail technicians, blow-out bars, and other small businesses in the space.Here's the 11-page deck GlossGenius, a startup that provides back-end tech for the beauty industry, used to raise $16 millionRead the original article on Business Insider.....»»

Category: dealsSource: nytJun 6th, 2022