Archive for 2021
They’re Actually Going to Buy the Constitution
November 17, 2021
It was Tuesday night in the ConstitutionDAO discord. Users posted the same questions that the mods had answered hundreds of times already.
“Wen constitution fren?” wrote apelord37.
Another begged the number to hit $6 million already just so they could go to sleep. It was a weak milestone. The earlier thresholds had been more exciting.
“A million, no two million, no THREE MILLION!” the crowd cheered on social media.
But the deadline to reach $20 million, the figure that the auction house had estimated on the high end of what a rare copy of the Constitution of the United States could sell for, was rapidly approaching.
$20 million would be a respectable bid, but it wouldn’t even guarantee a win, and besides that wouldn’t even account for the separate $5 million needed just for auction fees and sales tax. What the DAO really needed was $25 million just to be in the game.
Ouch.
With less than 48 hours to go, hope began to dissipate. A betting site pegged the odds of the DAO actually succeeding at 19%, a discouraging sign.
Just as the people began to pray that Elon Musk might ride in like a white knight, contributors to the DAO awoke Wednesday morning to find that someone had anonymously contributed 1,000 eth to the cause, the equivalent of more than $4 million.
“Holy sh**, this could actually happen,” $people said.
With renewed energy, the DAO reached $20 million by noon and was at $35 million at the time this story is being posted. All of the data is public. A review of it shows that there are more than 11,700 contributors. The top 20 contributors, however, account for more than half of all the funds raised.
On the ConstitutionDAO discord, confidence has surged.
“WAGMI,” one user wrote.
The questions have shifted to what happens if too much is raised and who is going to be hosting parties irl to watch the auction live.
Still others have begun to make other suggestions, like using excess funds for starving children. The crowd isn’t pleased by this, however.
“people, people, focus here, we have only set out to do one thing and that is We’re All Gonna Buy the Constitution,” a user writes.
What Works in Marketing Financial Products
November 17, 2021
Social media was at the top of the list for many marketers that deBanked spoke with, but there are certain formulas necessary to make it work, they say.
“It’s coming up with new ways to say ‘we want to fund your deals,’” said Cassandra Lund, Social Media Manager at Lendini, when asked what the hardest part of her job is. Being heavily involved in the marketing campaigns of a large small business funding company, Lund believes social media is a prime place for setting up brand legitimacy.
“[Social media] provides something that even other forms of marketing cannot,” said Lund. “It instantly connects you to your audience and allows them to ask questions right away, either through direct message or as a comment.”
Fintech companies are also strategically using social media to start getting their name out there. Jennifer Marshall, Marketing Manager at fraud and dispute software provider Quavo, praised the power of social media; especially platforms that provide a professional environment for both consumers and businesses.
“We see the most results on LinkedIn,” said Marshall, “from both paid and organic efforts. “LinkedIn can take [businesses] a long way if their marketing team leverages tagging and mentioning [on the platform]. In the early stages of a company, when brand awareness is the top priority, [businesses] should leverage their employees’ LinkedIn networks.”
While Marshall and Lund are marketing different financial products, they both agree on the inherent value of LinkedIn to their respective companies when it comes to a buttoned-up platform for connections and content.
“Just create a Linkedin and Instagram and start posting,” Lund said, when asked how a business could get their foot in the social media door. “You will find people in your industry, potential clients and information about what other businesses in your field are doing. Build out from there, and your business will thank you for it.”
With the opportunity social media provides comes responsibility, and some companies have let simple mistakes hurt the perception of their brand. Lund and Marshall both believe that a misguided or typo-littered social media presence can do a company more harm than good.
“Spelling errors and bad graphics, I see these [errors] a lot on social media as it becomes more and more important to small businesses,” said Lund. “There is nothing more important on social media than a first impression, and a spelling error or hugely pixelated photos is a major deterrent.”
Marshall stressed that companies not let “B2B vs B2C” marketing practices dictate their social media efforts. “In the end, you should want to reach people where they work and where they play. Once you understand that, the value of social media to all financial companies is crystal clear.”
With new members of the work force living most of their lives ingrained in social media, it appears its value in the business world is exponential. “The younger generations have used it for years, or since being born, and it’s not going anywhere in the near future,” said Lund. “Finding new clients, new customers and like-minded business professionals on [social media] helps build your brand and stake a claim in the industry. Anyone that doesn’t think social media is important in business in general is missing out.”
Marketing financial products, especially new or alternative fintech solutions can be difficult, however. When asked about how to market a financial product, Francesca Ligouri, Lead National Designer at Create with Chess, a national marketing company that works in a variety of industries, spoke about the values of traditional marketing materials on top of social media. She stressed the importance of putting a tangible item that explains your business model in the hands of a potential customer that may not fully understand the product being sold to them.
Ligouri spoke about networking materials, and how sometimes the explanation of a product is best done through tangible imagery.
“It’s about using infographics and icons [to help] create a storyline of what you’re trying to say, while keeping your demographic engaged,” said Ligouri. “Illustrative materials like brochures, folders, and mailers make people want to pick up your collateral and be like ‘oh cool, what is this all about?’ instead of printing a word document of all your info and expecting people to want to read through it.”
Whether it is printed or digital materials, innovation in finance isn’t just about the technology behind the products themselves, but also about how those brands and their products are introduced to potential customers.
Buying the Constitution at $20 Mil? More Like $25 Mil
November 16, 2021
While crypto fans rally to hit a $20 million fundraising target in order to make a competitive bid for a copy of the United States Constitution on Thursday, lurking in the background is another cost, the auction house fees.
Known as the “Buyer’s Premium,” Sotheby’s charges 25% on the first $400k, 20% on the next $3.6M and $13.9% on the amount over $4 million, according to the auction terms.
That would mean that a $20 million winning bid would generate $3,044,000 in Buyer’s Premium Fees. And that’s before an additional 1% overhead premium equivalent to $200,000, bringing the house fees to $3,244,000.
Oh, and that’s not inclusive of the upfront sales tax of $1,775,000 (8.875% of the sales price).
All combined, the fees and taxes to take the $20 million haul off the premises, before transport, preservation, and security is: $4,819,000.
That means that the ConstitutionDAO would really need at least $25 million in its coffers in order to place a legitimate $20 million bid.
On Tuesday at 5pm EST, approximately 48 hours before auction time, the DAO had only raised 1,382 ETH, equal to about $5.87M. Sotheby’s starts the bidding at 6:30pm on Thursday at its location in NYC.
Time will tell if it is able to muster up the rest in time.
SBFA Launches Industry Certification for Small Business Finance Providers
November 16, 2021
Washington, D.C.— The Small Business Finance Association (SFBA) today launched a new certification for the small business finance industry. The Certified Small Business Finance Professional (CSBFP) program will bring education and accountability to all providers of alternative finance products. The certification will require applicants complete a four-section training course, abide by industry best practices, provide industry references, pass an exam and be subject to a background check. The certification will also require applicants to complete continuing education classes every two years.
“This certification is a message to our customers that we want them to feel confident they are being offered fair capital options from responsible lenders,” said Steve Denis, the executive director of SBFA. “There are countless companies offering a proliferation of products and services and we believe it’s business owners deserve the comfort of knowing they are working with a certified professional.”
The certification will require applicants to complete a course centered on understanding products, laws governing the industry and compliance. The certification exam will focus on testing applicants’ ability to understand key concepts and best practices. Those who become certified will be allowed to use CSBFP branding in their marketing materials, have access to key regulatory updates and gain entry to a networking platform that will allow them to connect to industry and legal professionals.
“Our goal is to offer a fully immersive experience for certified professionals. We don’t simply want to give them a stamp but provide them a way to connect, learn and grow beyond the initial education process. It’s in the interest of our industry to offer best-in-class professionals, but more importantly, it’s in the interest of better serving our small business customers,” said Denis.
The certification is open to anyone working in the alternative small business finance industry. Interested professionals can learn more at www.csbfp.org or www.sbfassociation.org.
Contact:
Steve Denis 202.213.9506
sdenis@sbfassociation.org
New York’s Fourth Judicial Department Affirms Its Settled Law That MCA Agreements Are Not Usurious
November 16, 2021
New York’s Appellate Division for the Fourth Judicial Department in the Supreme Court of New York issued a landmark decision for the merchant cash advance industry on November 12th.
By affirming the original decision issued in Kennard Law P.C. DBA Kennard Law and Alfonso Kennard v High Speed Capital LLC (Index No: 805626/2020), the Appellate Division agreed that among other things that it is settled law in New York that the underlying purchase and sale of future receivables agreement at issue in the case is not a usurious loan.
On June 10, 2020, plaintiffs filed their lawsuit against the defendant, asking the Court to vacate a confession of judgment on the basis that the defendant’s underlying contract dated back on August 24, 2017 was really an unenforceable criminally usurious loan.
The defendant moved to dismiss and the judge granted the motion, holding that:
1. Plaintiffs’ claim of usury is barred by the one-year statute of limitations applicable to usury based claims.
2. Plaintiffs have failed to plead a cognizable cause of action upon which to seek relief.
3. Plaintiffs have no recoverable damages.
4. Plaintiffs’ claims are barred by documentary evidence and settled law in New York holding that the parties’ underlying agreement was not a usurious loan.
Plaintiffs appealed, hoping that the Fourth Department would be persuaded by their arguments that the agreement was usurious. It wasn’t. Instead the Appellate Division unmistakably and unanimously affirmed the original judgment.
The decision demonstrates that there is consensus across judicial departments. Kennard in the Fourth Department (Western New York) is similar to Champion Auto Sales, LLC et al. v Pearl Beta Funding, LLC in the First Department (Manhattan and the Bronx) circa 2018.
Coincidentally, the attorney representing the losing parties, Amos Weinberg, is the same in both landmark cases.
The attorney representing High Speed Capital was Christopher Murray of Stein Adler Dabah & Zelkowitz, LLP.
Yes Lender Becomes Fintegra, Brings on Former Federal Reserve Vice Chair
November 15, 2021
Yes Lender is now Fintegra. Along with the name change, the company is bringing on Roger Ferguson, former Vice Chair of the Federal Reserve (1997-2006) in an advisory role. Ferguson is also an investor in Fintegra.
“Our new name combines ‘fintech’ with ‘integrity’” said Glenn Forman, CEO at Fintegra. [The name] serves as a daily reminder to our customers and colleagues of our mission and values, which we take very seriously.”
The company’s goal is seemingly to write a lot of deals, and get them funded as fast as possible through a fintech application process. According to a press release, the online application can get merchants their funds within 24 hours of their application being submitted.
When touching upon Fintegra’s goals with the rebranding, Forman spoke on a good work environment along with customer-centric business decisions. “We’re committed to putting capital in the hands of entrepreneurs so they can grow their businesses and improve the lives of their customers, suppliers and employees, and we’ll continue to do so in a highly ethical and empathetic way.”
When speaking about the partnership with Ferguson, Forman believes this unprecedented addition will bring equally unprecedented opportunities to this company.
“We’re incredibly fortunate to be able to tap Roger’s wisdom and experience to accelerate Fintegra’s growth. His track record of success and impeccable ethics are perfectly aligned with our brand.”
Forman and Ferguson are looking to rekindle an old working relationship to help Fintegra take off. “While it’s been a few years since we worked together at McKinsey & Company, it feels great to be joining forces again to take Fintegra to new heights.”
Crypto Fans Want to Buy The Constitution of the United States and They Might Actually Succeed
November 15, 2021
It’s the ultimate NFT, the Constitution of the United States. On November 18th, Sotheby’s will auction off one of the only thirteen surviving copies of the United States Constitution, an opportunity the public hasn’t had since 1988.
But a private collector hoping to pocket the national treasure will have some competition, the crypto mob on twitter. On November 11th, at least two individuals launched @ConstitutionDAO, a twitter account dedicated to crowdfunding crypto with the intent of raising enough money to be the winning bid.
The buyer would technically be a DAO, a Decentralized Autonomous Organization, a community-led entity with no central authority that is governed by a smart contract.
It’s predicted that if the DAO can raise significant cash before the auction that Sotheby’s will allow it to place legitimate bids. Sotheby’s put the estimated winning bid price at $15 million – $20 million.
It might not be out of reach, the DAO raised nearly $2 million in just the few hours since it began crowdfunding the money through a platform called juicebox.
If the DAO wins, theoretically “ownership” of the constitution would be fractionalized into shares based upon each member’s contribution. With a DAO, no one need even disclose who they are. Only a crypto address is required.
We have coordinated a DAO to acquire The Constitution of the United States.
I give you: @ConstitutionDAO
Ping me if interested in being a part of a monumental moment. https://t.co/VHkCTrq4fa
— Austin Cain (📜,📜) (@j_austincain) November 12, 2021
Members contributing to the pool of funds have the option of including a public message.
“To secure the blessings of liberty”
“Another first generation immigrant hoping to be the proud owner of the US constitution.”
“American Dream!!!”
“cant wait to explain this at Thanksgiving”
“in satoshi we trust”
The official website of the ConstitutionDAO is here.
For the sake of following the success or failure of this project accurately, deBanked contributed a very small amount to the DAO so that it could participate in the possible ownership and community of the Constitution. Weird, I know.
Mortgage Fintech CEO says Brokers are Still Relevant to Lending Process
November 12, 2021
At Money 20/20 last month, deBanked spoke with Jason Harris, CEO of Button Finance, about his company’s initiative to give access to home equity loans to borrowers that would have never been able to do so. Through this conversation, Harris also shared his thoughts on how brokers across the finance world are still relevant, and the ones who are embracing tech are the ones who are closing deals.
Button Finance is a fintech company that brings together venture and hedge fund capital with borrowers seeking lines of home equity credit. After moving into second-lien mortgages, Button Finance is looking to open up a practice which according to Harris, is mostly an exclusive borrowing process for high net worth clients who borrow from large institutions.
“The reason we like this product is because if you’re an individual, you have to go somewhere like LendingClub or to your credit card to borrow money. And those are interest rates at 20%, as high as 30%, even if you have great credit, it can be over 10%. So we want to give people a much lower cost for access to credit.”
Harris also has a desire to make the process as quick and efficient as technology allows. He is embracing not only expanding the access to capital, but making the process to obtain it simple.
“We want to make it so you can borrow money sitting on the toilet on your phone,” Harris said.
When speaking about brokers in his industry, Harris touched on how the ones who are innovating are taking advantage of such a unique time, where the amount individuals innovating are relatively low, and the opportunities given by the innovation have never been higher.
While some companies offer a completely broker-less buying process, Harris thinks the role of a broker is necessary for a borrower of any loan to be comfortable and informed during the borrowing process.
“Now with regards to the need for brokers, this is something that now happens very often,” said Harris. “When people make large purchases, they like the comfort of speaking to someone and having someone advise them. Sometimes a broker can offer you some educational knowledge. We’re in the finance world; if you’re not a finance person at all, before you borrow $500,000, you might want someone advising you along the way.”
“Different brokers have different ways of brokering,” said Harris. “Some brokers spend money and build out great technology platforms themselves, and they’re able to scale and do ten times as many mortgages as a broker who is doing high touch [business]. Other brokers will use relationship based lending and have high touch [business]. I think it’s definitely going more towards the technology route.”
While embracing the value tech has, Harris realizes that with all this technology comes a responsibility to educate borrowers on all the different processes that are changing when it comes to data transfer, verification, and approval processes. “Like every other tech company, we want to try to bring technology to this as much as possible. We want to be able to advise a borrower on the best possible product just using technology.”
While speaking specifically about the innovation the financial world is experiencing, Harris thinks that a drastic change to the finance world will be take place over a long period of time.
“Like everything, things move slowly,” said Harris. “Don’t think this will happen overnight.”
