Before I dive in, we wanted to remind our readers of some of the places you can donate in support of Black Lives Matter.
Also - please remember to double check that you’re registered to vote in your neighborhood (I just did the change for my boyfriend and myself, it’s fairly simple. Happy to help you figure it out no matter where you live!)
Now fintech.
In the last six months, we have gotten a taste of what extreme personal finance evangelists (like those on r/personalfinance) have been telling us to do the whole time: don’t go out, pay down debt, save, invest, put your finances first.
Imagine for a moment we weren’t forced into quarantine by events outside our control. Imagine, instead, that we chose to do this for our financial health.
Was it worth it?
Frederik Waller from TradeRepublic told me, “definitely not worth it.” He went on to say, “Money doesn't buy happiness and I miss so many things from my ‘regular’ life, the green numbers in my TradeRepublic account can't make up for that. Not even close.” Julian Rowlands from Spruce responded with “no, no, dear god, no.” He continued optimistically with, “BUT: I look at some of the changes to white-collar work and I could see the long term benefits being quite substantial.” As things return to normal, employers will be less worried about if WFH *actually* works, providing for the flexibility that employees have always wanted. The flexibility means: maybe I can work from home a month a year, or on my WFH days, I can jump into the ocean for a swim before my calls start, or I can take a language class every Tuesday at 11am… all without fanfare or incident. Julian acknowledged the privilege of tech employees, expressing concern that blue-collar workers won’t enjoy the same flexibility or security.
For me, the pandemic has been a blessing and a curse. I financially did the things I told myself were essential. I’m debt free. I’ve talked about it before and I’ll talk about it again. I’m on the road to a solid investment portfolio. I’ve laid a reasonable framework for growth. Mentally though? This is the first summer I haven’t taken a vacation (I don’t take time off in the winter because I generally disapprove of the cold). Last week I took my first day off since last October. I worked through it.
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This week’s issue is presented by Privacy.com, a consumer and B2B fintech startup. Privacy.com recently unveiled its card issuing API for all developers recently—making it easier and simpler for non-fintech developers to start issuing their own virtual or physical debit cards. While other card issuing platforms have a ton of red tape before you can start playing around with their API, Privacy.com’s API docs are publicly available and the company has prioritized transparent pricing to find a structure that works for you. Check out Privacy.com’s new API at the link below, and if you’re interested in an intro to learn more, email ian@fintechtoday.co for an intro!
The News
The SEC adopted amendments to the “accredited investor” definition on Wednesday. Traditionally, one could only become an accredited investor if they met certain criteria - super high income or net worth tests - but regardless of financial sophistication. Previously, one was required to either: have a networth over $1M and/or make $200,000 annually. The SEC wrote, “The amendments allow investors to qualify as accredited investors based on defined measures of professional knowledge, experience or certifications in addition to the existing tests for income or net worth.”
This is an awesome start - now all one has to do is take a Series 7 or equivalent. Wait… you’re right, it’s really not that much better. These rules are prohibitive and favor the privileged. However, the SEC making this move is really promising and gives me hope that they’ll continue to expand the definition of an “accredited investor” until the whole concept is eradicated (because we should be allowed to do what we’d like with our money).
Fundraising News by Cokie Hasiotis & Anshul Gupta
“To truly democratize the stock market, you have to change the culture,” and that's exactly what Public hopes to do, according to co-CEO Leif Abraham. Public, a stock trading app, raised a seven-figure check from Scott Galloway, bringing total funding to $32M. Public wants you to “invest in good company,” meaning users can build financial literacy and share experiences to tap into the collective wisdom of a community of investors.
After catching up with Leif this week, I learned that Public views itself as a social network first — the community and education pieces are just as important as the actual trading. At first, I was skeptical. I asked him how he intended to regulate that community, especially given his aforementioned desire to change the culture of trading (from extremely bro-y to… decidedly not). To prove his point, Leif told me that 40% of their users are female. I wasn’t as skeptical anymore. So far, Public has had very few incidents where they’ve needed to step in because every community member must also be a customer, meaning that they are fully KYC’d, which has been acting as a deterrent to inappropriate behavior.
While teenagers were buying up Hertz stock on Robinhood, Public halted trading on the bankrupted company and kicked off a project to introduce “safety labels” within the app. Based on the SEC guidelines, a “micro-cap stock,” or a company with under $300M in market cap) would be labeled with a caution sign in Public’s app. Public has seen 160% growth quarter after quarter since September 2019 and notes that they “saw a lot more engagement during the pandemic.”
Public launched Public Trends this week, which indicates the popularity of a particular stock in the community. It has a “Most Popular” list and a “Least Popular” list developed from community data. It’s pretty cool, I had some fun playing around with it. And even put some $$$ into one of the Least Popular stocks, once again cosplaying as a stonksboi.
Finix’s DIY offering is gaining momentum. The payments infrastructure provider just announced a $30M extension on top of their original $45M Series B back in February (good ol’ days), with Lightspeed and AmEx Ventures leading the investment.
