FintekNews is pleased to offer our weekly feature column 3 Questions. Each week, we feature a thought leader within a unique sector of fintech and ask them to answer just 3 questions for our audience in their vernacular. This week, we’d like to introduce you to Sally Outlaw, Founder & CEO of Worthy Financial. Worthy redefines how Americans access alternative investment products.
NAME: Sally Outlaw
TITLE: Founder & CEO
COMPANY: Worthy Peer Capital, Inc.
WEB ADDRESS: https://worthybonds.com
What does your firm do/offer within the fintech sector?
Worthy is a combination of FinTech and RegTech, I say this as we had to employ both in order to deploy the alternative investment and digital savings solutions that we offer investors. At the heart of what we do is a proprietary liquid debt product called Worthy Bonds that we engineered via the new Regulation A+ securities framework. With a $10 minimum investment, Worthy Bonds are designed to allow even the smallest investor to access the types of alternative debt products that were typically only afforded to institutional and wealthier investors. In addition to offering an attractive fixed return to all classes of investors, the proceeds are being used to provide asset-backed loans to America’s small businesses – the backbone of the American economy – so we are excited to offer both a financial as well as social return.
What area/s of fintech do you believe will grow the most in the coming 5 years?
I’m sure no one would be surprised to hear me say cryptocurrencies and Blockchain! We’ve all seen the recent Bitcoin frency, which as a registered investment advisor I found a tad scary (!), but there is enormous innovation going on with cryptocurrencies that will bring some interesting opportunities. There is an increasing amount of new currencies coming to market – and we see a number of entrepreneurs using ICO’s to raise the capital they need. Underlying the cryptocurrencies is the Blockchain and this obviously has a number of robust applications in and out of the FinTech area. As a former real estate broker, I’m interested to see how it might disrupt how houses are bought and sold.
What has been the biggest success in your firm to date & how do you feel consumers are adapting to the facet of fintech you operate within?
I’d have to say it was just getting our new bond through the SEC regulatory process given that we are one of the few companies to use Regulation A+ in this way – to engineer a debt product – as most companies use RegA+ for equity offerings. It was a bit of a struggle as the SEC still tries to catatgorize these types of debt offerings as falling under the Investment Company Act – which would then not allow us to use RegA+ to bring this investment to the masses. The position they take is primarly due to the fact that, since we are investing the bond proceeds into loans and they define most loans as a security, then they determine any company investing in securities falls under the 40’ ACT. But we persevered, provided legal arguements for why we fit an exemption, and now anyone can benefit from the 5% interest we offer so the many months of frustration with the SEC examiners paid off!
(With regard to our facet of fintech), we operate in both the digital finance space as well as in the micro-investing one and both are growing rapidly. More and more customers are not only becoming accustomed to but demand that they have easy, online access to conduct their banking and investing. Our target market, which is primarily millennials, also have tons of student loan debt and are working less in traditional jobs – so no 401k plans – therefore they are also welcoming solutions like ours and others which allow them to tuck money away in small increments with little to no impact on their day to day lives. As a company, you really have to fit into the world of your customer instead of forcing them to conform to yours – so no 9-5 office hours, no high thresholds for minimum investments, and as little friction as possible to get them registered and using your product.
Sally Outlaw is Co-Founder & CEO of Worthy Financial, a financial technology company launched to help bring private equity and private credit investment opportunities (through peer to peer lending and crowdfinance) to the masses. She is also author of “Cash from the Crowd”