Online Event Archive Recorded November 14, 2023
Can smart applications of financial technology give small businesses a competitive edge? Check out innovative products that allow small businesses to more efficiently manage capital flow and to provide valuable benefits to their employees with minimal cost.
Hear from the entrepreneurs behind these products directly, and consider how they might help the businesses you serve.
- Alice provides deskless and hourly wage workers the ability to access real-time contribution-free benefits, putting an additional week of income in their pockets.
- EarlyBird is empowering parents, family and friends to collectively invest in a child’s financial future, starting at the earliest age.
- iink helps restore insured properties back to pre-loss condition by connecting and facilitating the flow of money and information between all stakeholders involved in the payments lifecycle.
- PartnerSlate provides small businesses in the food and beverage CPG space connections with contract manufacturers as well as working capital loans to help those businesses get their products to market and generate revenue.
Speakers:
- Avi Karnani, Founder, Alice
- Thomas McGrath, Founder, iink
- Vince Tseng, Founder, PartnerSlate
- Jordan Wexler, Founder, EarlyBird
- Caitie Rountree, Director of Membership and Events, NCRC
Transcript:
NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.
Rountree 0:15
Hey, all welcome. Thanks for joining us this afternoon. I’m Caitie Rountree, NCRC Director of membership and events. Really excited to be with you all this afternoon. But before we get started, I just wanted to cover a handful of housekeeping items. We do have a code of conduct for all of our attendees, we expect you all to treat one another and our speakers with respect. So if you’re not sure, when in doubt, you can check the link on this slide. Go ahead as we go along, you can submit your questions for speakers via the q&a module at the bottom of your screen. We’ll be having a handful of opportunities for questions throughout and then more time for questions at the end as well as an opportunity to to follow up after the event. You can always learn more about NCRC at the links below. And please do tag us on social media. If you’re enjoying the content today. We will by the way, be sharing the recording for this event afterwards. all registrants wrote will get an email with that link within the next couple of days. Wonderful. We can go to the next slide. NCRC is an organization of over 700 members dedicated to making just economy and national priority and a local reality. We work with our members to close the racial and socio-economic wealth and opportunity divides. And we do that by organizing agreements between financial institutions and our members to increase lending investments in philanthropy and neighborhoods that need it. We advocate on behalf of members for policies that encourage the use of capital in various forms to be used to build an equitable and fair economy. We provide grants loans, technical support and training to entrepreneurs, community development and community finance organizations and professionals. We investigate and litigate to root out discrimination in financial services and housing, produce agenda-setting research media and events and renovate and build affordable homes for low and moderate-income families. So that’s a little bit about NCRC, you may already be a member or you may be part of our larger coalition. Feel free to follow up afterwards to learn learn more about us. But today, I have the distinct privilege of being able to introduce you all to a group of folks who are supporting businesses in some really unique ways. And so if you’re on this call, you either are a small business or you serve small businesses. And I think you’ll really enjoy learning a little bit more about these products and how they can position small businesses to be employers of choice, or solve really critical capital flow problems that particular types of small businesses encounter. So it’s my pleasure to introduce you to Avi, the founder of Alice, Thomas, the founder of iink. Vince, the founder of, I’m blanking Vince, remind me the name, PartnerSlate, sorry. And Jordan, the founder of EarlyBird. And I’m gonna let them tell you a little bit more about the work that they do, starting with Avi.
Karnani 3:38
Hey, everybody, great to be here. Thank you so much, NCRC. And Caitie, I’m going to share my screen briefly want to put up a quick overview of what we do here at Alice. What we do at Alice is we make what we call positive paycheck, pre-tax spending. This is super important for main street businesses. Pre-tax benefits are really the only tax breaks for hourly workers that can put hundreds if not 1000s of dollars back in their pockets. Every year. They’ve been in the law since 1978. But really only office workers have used them. And the problem that we solve is that those benefits are paid to play. And what we mean by pay-to-play is you have to make contributions to your employee benefits in order to use them. So you make a contribution out of your paycheck to get health insurance, you make a contribution on your paycheck to use your 401k and you make a contribution out of your paycheck to use your commuter benefits HSAs. FSA is your pre-tax benefits. If you are one of the 120 million Americans living paycheck to paycheck, how do you make contributions out of your paycheck you can’t. So you are just sort of locked out of these. So whether you’re a big brand, with many hundreds of 1000s of workers or a single location franchisee on Main Street, you don’t really have benefits to offer your workers when you go out to try to find Benefits. All of these companies are out there. They serve office workers, people who are sitting like me at my desk looking at two big screens really fast the internet, I’ve got my own company email, it’s on my phone, it’s at my desk, and you know, I don’t lock up my phone, when I get to work, I don’t have a 12-minute break for every four hours that I work. So I can use these benefits from these companies. But even then I don’t like it, you can see the Yelp reviews that we pasted out here. What we are seeing in across the country that we really like is more and more cities and states are making mandatory commuter benefit laws to say, hey, it’s expensive to get to work. This is a cost that goes up with inflation, the cost to ride the train, the bus, and parking have all gone up in New York City, which is where I am just like all over the country. And now you have to offer these benefits if you are an employer. So 55 to 60 million people are now covered by them. So what Alice does is we redesigned these benefits so that they work for frontline workers who are not sitting at a desk who don’t have a conference room in the back of the chipotle where some guy is going to show up and talk about how open enrollment for FSA is work. And so that they can use that the employees can use them without having to make contributions. And it saves them a ton of money. Here’s four guys in New York, two. baristas, a bartender and a facilities manager, they’re each getting back like 1000 bucks a year of their own money that they never have to pay back. This is Uncle Sam paying these employees more money without the employer having to pay for any of it. The way that works is employees connect to their spending that they do to get to work. So the credit or debit cards or prepaid cards that they use to ride the subway, the bus berries pay to park at the meter in a parking garage, it takes two minutes, you can do it in one hand while you’re on break. And all of a sudden, we will our system will have the ability to scan spending, find those expenses, employers connect us to their payroll, it takes them one phone call to do it. And then the amounts of money that employees spend getting to work becomes pre-tax, because we’re able to see their spending history and then set up their benefits set up their election set up their reimbursements and, and so on, and they don’t have to do any work. And neither does the employer. Again, it’s mass transit and parking. People are spending huge amounts of their salary in New York City to ride the bus, it costs almost $1,800 a year in New York City is a cheap market to do transit. And let’s not even talk about how expensive parking is, when you have those expenses, we’ll send you a text message again, it’s got to be something employees can do while they’re on their break, eating a sandwich in one hand. And it works in English, it works in Spanish and a whole bunch of languages. So all employees can communicate with us and the language they are most comfortable with. And for employers, it is a set it and forget it. If we turn it on, and a couple of clicks, they become compliant with those commuter benefit laws. And those nine cities and states, more of the money they are paying their employees actually reaches take home pay. And they don’t have to pay anything out of pocket. The government gives employers a small incentive to offer these benefits to their workers. And we take that incentive. So no one’s out of pocket, no one has to get budget, there’s no per employee per month fees, or anything like that. So employers choose us because it gets them compliant in a couple of clicks, cost neutral, and it’s easy, sets up and connects directly to payrolls and no one’s filling out any forms, the employer doesn’t have to become an expert in commuter benefits, because that’s not what employers in this market have the time to do. So everybody wins, employees keep more of their money, we tell them, hey, you’re gonna get 20% cashback on what you spend on parking and transit, it’s going to add up to an extra week of pay for free a year. And that’s without you having to stand on your feet. For employers, you don’t have to pay any extra money. It you only pay us the incentive you get from the government when you offer these benefits. And you only pay it to us after we get your employees enrolled. And after they’re keeping more of their pay. So that’s what we do hear it out. And we think it’s super important that these benefits that have been in the law for decades can finally be usable by main street workers and their employers. And it just puts tons of money back into communities. And it gives employers an edge in this market where they are dealing with compensation pressure, from wage inflation, in order to keep their workers. So we’re able to give them something that they don’t have to pay for to do that. And, of course, what we like is that this money is going right back into transit systems, which, you know, we think is is good for working people. And that’s just sort of one of the benefits for local communities as well. So we’re the win win win. And with that, let me turn it over to questions.
Caitie, you’re on mute.
Rountree 9:54
We’ll take a couple of questions. Now if you want to put those in the q&a box and then we’ll take a few more questions at the end as well. I have one to start. You know, this is big, there are cities and localities where this is becoming mandatory. We’d love to hear you know where those are and where your geographic footprint is at this time?
Karnani 10:20
Yeah, well, we’re all over the country, the places that have made this mandatory are New York, San Francisco, DC, Philadelphia, Seattle, Los Angeles, Chicago, just passed their commuter benefit law and it will come become active here, January 1 2024. We think this is just going to kind of keep steamrolling through the country, because people need help with the cost of commuting, and transit agencies need more dollars to flow into them, because lots of the folks on this call are probably taking this call from home, right, so that ridership went down. It’s blue-collar workers who are who are actually riding and paying a greater share of the cost of transit. And I think cities and states are realizing that with so many large cities and states that have successfully passed these and have not been a dampening for business activity, and have helped employees keep more money in their pockets, that it’s sort of a safe, kind of double barrel tax cut for employers and for employees to pass.
Rountree 11:13
Yeah, yeah. Awesome. And just tell me a little bit about the size of the businesses that you see or the types of businesses that yeah, are a good fit?
Karnani 11:25
So one the great things about software in AI is our system, it doesn’t care if you are a 12 person, florist or you know, kind of three people at a coffee shop, all the way to a business with 10,000 employees and 100 locations across 10 states. So we serve all of those types of groups, some examples of customers for us, depending on where you are in the country, just salad, you know, multi-state, salad, multilocation, Chang, salt and straw, great ice cream all over the West Coast, all the way down to kind of single coffee shops in my neighborhood here in Brooklyn. So we’re building technology that doesn’t put sort of minimums onto businesses, if you have employees, and you want them to get cashback when they spend to get to work, and you want them to have more money, their their take home pay that you don’t have to pay them. This will do it regardless of the size.
Rountree 12:14
Yeah. That’s awesome. Thanks, Avi. Jordan, we’d love for you to tell us a little bit about EarlyBird. Next.
Wexler 12:23
Awesome, thank you so much for having us. Excited to share about EarlyBird. So welcome to EarlyBird. So I am actually a direct product of EarlyBird. My father invested in me when I was nine years old, and it totally changed my life. It enabled me to do things that would have never been able to like start my first business in 2012. And then be able to continue to explore entrepreneurship and really exciting ways that my beautiful baby niece was born six years ago. And when I looked around, there was no simple or meaningful way to gift a financial asset. And as I dug in further to the problem, turns out raising a child, of course, is extremely expensive. And unfortunately, today, over 70% of us families are not currently investing in their kids, which means this idea of building generational wealth is really a myth, and one that we have now set out our lives to solving. I think one of the most important stats here to take a look at is that if you invest just $500 or more in a child, they are around before the age of five years old, there are 3x more likely to enroll in college and 4x more likely to graduate. So this is a critical function of our society to build a better future for the next generation. And so that is why we built EarlyBird. And so today, we are the all-in-one wealth creation platform that empowers families to save and invest for their child’s future starting from day one. So one of the really unique positioning of EarlyBird is that we’re very focused on new and expect and expecting parents. So think zero to five, zero to seven years old is really that core demographic for us as we believe it is so critically important to get started from day one and be synonymous with that new parent checklist where you are buying the baby books, setting up a nursery and setting up your earlybird account to invest in their future. The way that we envision building generational wealth, though, is very unique. There are three critical pillars that you have to enable for a family to actually achieve this. So the first is obvious it’s complete and universal access to a holistic managed earlybird portfolio. So we have tailored our entire experience to be focused on the parent and how they are able to onboard teaching them at different points throughout the process. And then we have five fixed manager labored portfolios, we then recommend one of those portfolios, a parent sets a monthly reoccurring investment. And they’ve taken a massive step and building generational wealth for their child within three to five minutes. But step two for us is that it cannot just be the responsibility of the parent to invest in the child, you have to be able to galvanize all the friends and family around these kids that want to invest in the child’s future and make it super easy and seamless. And then the third very unique pillar to building generational wealth for us is that financial capital is actually half of the battle. The other half is called emotional capital. So on EarlyBird, oh, Jimmy on EarlyBird, every investment in, you are able to include this beautiful video memory or photo memory so that you can contextualize when, where and why you are investing in this child. And so that it truly has a major impact on their future. Think of just giving a child $100 is meaningless. But being able to invest in a specific moment in time, think first day of school graduation, first piano recital, of course, birthdays and holidays. But it goes way beyond that, right. And what this enables is for the ability for a parent now to build their nest with an EarlyBird, so you can invite your family and friends in, and I Is Uncle Jordan don’t just invest on birthdays and holidays. But I am now able to be engaged and connected to this child’s life. And I am able to like comment, but then micro invest $1 $3 $5 into these special moments, month over month, quarter over quarter for the child so that we can all have that impact on these families. For us, our true mission is that through the power of love, community and capital, we can collectively democratize access to generational wealth for all families. And of course, the biggest piece of this is how do we scale this to families in need. And what we have found is that there are two key pillars to that strategy. The first is through employers. So employer benefits, being able to offer EarlyBird as an amazing perk or benefit to all of the employees and organization. And the second is through partnering with nonprofits and foundations. And so we’ve already launched a couple programs, one being with a building management company that worked with affordable housing for amazing families in Chicago, and Philadelphia. And they offer now EarlyBird as an account for all those families within the buildings. And the actual building management company is the custodian. So they actually control and own the accounts, they help set up the accounts for the families, we can then invite the families into the account, they don’t get access to withdraw funds or anything, but they can actually invest themselves. And so they’ve structured this really beautiful matching program. And we have now over about 250 families into that program. And we’re just beginning to scale this out. So anyone on this call that is interested in partnering with us. But from both a nonprofit foundational standpoint or an employer standpoint, we’d be really excited to have a conversation. Thank you, everyone.
Rountree 18:20
That’s great. And again, we’ll pause here for a couple of questions. And then we’ll have more opportunities for questions. At the end, I’m seeing some questions to go back to Avi. So we’ll again, ask now hold on or hold on your questions. And we’ll come to them at the end. I would love to hear you know how, how much money is being invested per child through this tool? Yeah, I would just love to hear a little bit of what that looks like.
Wexler 18:51
So our demographic right now is we’re about 40%, you know, the target demographic is the everyday American family. We’re not catering to the upper class in any way. It’s really the our average annual household income was about 60k to about $150,000. And we’re seeing an average monthly reoccurring investment of $100 per month. But the unique aspect of EarlyBird, of course, is that $100 per month equals $1,200 a year. And these are invested. Of course, these are custodial investment accounts invested directly into managed portfolios by EarlyBird as we’re the RIA registered investment advisor, and but unique aspect of EarlyBird is that $1,200 invested is great, but the average amount invested per year is actually $1,700 Because there’s an extra $500 from all the community contributions that are happening on a frequent basis from birthdays and holidays of course as the larger contribution events but then all these really beautiful celebratory moments like Halloween just happened we saw over 1,000 moments uploaded a beautiful cute Halloween costumes that you will get are saving for your child going this time capsule so that you will be able to give this to them not Just the 50,000 or $100,000 invest in their future, but also a beautiful, you know, time capsule, all these memories that you’ve saved. And so all those micro contributions add up throughout the year, and really differentiate us from any other of course investment platform.
Rountree 20:14
Well, let me just say that I really wish that my four-year-old had been able to go trick-or-treating for college investments instead of piles and piles of candy.
Wexler 20:25
We actually did a campaign this year where we gave a lot of our brand ambassadors little tokens that they handed out instead of candy, or with candy, or instead of candy to kids. And it said, Give to your parents. And it was a QR code, they could scan and they got $25 invested in their future.
Rountree 20:42
So that’s amazing! That’s a real treat. Yeah, yeah, I am seeing some questions about, you know, finding out more about these companies or next steps, we will distribute a survey here for folks that if you want to be able to do some follow-up after the event, fill that out. And we’ll pass that along to these folks. And we will also share that in the email follow up as well as links to all of these different companies. So don’t worry, we’re not just going to leave you the teaser trailer and then leave you wishing that you had a way to move forward. We’ve got you covered. Yeah. All right. Thanks so much, Jordan. Vince, talk to us about PartnerSlate next.
Tseng 21:31
Well, it’s a pleasure to meet everybody here. PartnerSlate is a company that is transforming how we use and get new products to market with in the food CPG space. So if you think about the food that we consume, it has really undergone a massive transformation in the last 20 years. What used to be brands that were produced, just by a few large companies like Kellogg’s, and Nestle and Pepsi, has really transformed to the point where over all of the over half of all of the new products that reached the market today are done by entrepreneurs, so startups and challenger brands. And so that’s why when you walk down the aisle of a grocery store, you now get to see hundreds of different brands or above snacks, everything from seaweed chips, to to keto granola to better for you ice cream. And this has really only been enabled, the only reason why we have been able to have aspiring entrepreneurs become the sort of like national, nationally distributed brands is that it’s become much easier for brands to now create projects and bring them to market by using a network of manufacturers that essentially rent out their lifetime. And these manufacturers are called contract manufacturers. And what PartnerSlate does, is that we make it much easier for brands to find these contract manufacturers to produce their products. So Caitlin Mills, who is the CEO of a gluten-free brand called simple Mills, once went on an NPR interview and talked about the problem, which is that in order to find a manufacturer that is suitable for your product, you have to go through 12 pages of Google and call every single manufacturer that you find until you finally find one that is willing and able to make your products on and so what we’ve done is we have solved two of the biggest problems that face these entrepreneurs that are looking to break bring their dreams to market. The first is that we’ve created a marketplace where we have aggregated about 6000 contract manufacturers and built an AI platform that helps to match all of the projects requirements from each project. And as it turns out, it’s not an easy task, because there are so many so many complexities that go into finding the right combination of equipment, capacity, geography, certification requirements, has to be crucial or free. And so what we are able to do is take a process that takes that normally takes four to six months down to a matter of days. So the second thing that we do at first aid to really help these entrepreneurs get off the ground is we also provide access to capital to finance these projects. In many cases, what we find are these brands are looking to expand and they’ve just gotten the go ahead from say Whole Foods or Costco to be distributed national. The problem is that any bank that takes a look at the financials of these companies is not going to be willing to give them a loan to front them attached to produce their product, in which case in some cases, they may need to increase the production scale by four or five turns in most banks traditionally just look at the last 12 months of revenue. So what PartnerSlate does is we take into account all of these other factors that indicate future success to these brands. We’re able to provide them the financing through our network with financing partners, to help them get the capital, they need to produce their product and get it to market successfully. So to date, we have helped over 1000 on startups, and in particular, we are very proud of supported founders from underrepresented backgrounds, fully two-thirds of our founders come from background, nontraditional backgrounds, either female founders or minority founders. And we believe that this is the way that we can help level the playing field and bring new products and markets in more equitable way with mutual.
Rountree 26:02
Thanks, Vince, and we will take again, a couple questions now. And then come back for more questions at the end, I’d love to hear a little bit more about the financing model. They you have. And you know how that’s different than, you know, like you said, a lot of these small businesses may not be able to access that kind of money from a traditional financial institution. So just Yeah, to talk to us a little bit about how you approach that.
Tseng 26:31
Yeah, so our data model is based on information that we’ve selected. So our data platform has aggregated a tremendous amount of data about what is likely to produce on success in distribution and scale. So we know what it means when we have a signed distribution agreement with a retailer to go national. And we can take that purchase order and provide financing at a much more effective rate through our network of financing partners that specialize in helping CPG brands, there are these financing institutions out there. But again, just like the search for contract manufacturers, it’s very difficult for a brand that is in the heat of the moment where Whole Foods has just told you that they need you they have a purchase order for half a million units that you need to deliver in three months for you to figure out is the right financing for you. So we have done the heavy lifting to aggregate those lenders to prequalify them and have them set up with the right to take in the right data that we can provide to our collector.
Rountree 27:48
Yeah, that’s great. Yeah, thanks so much. All right, Tom, talk to us. Our final presenter here. Oh, and you’re here twice on my screen and talk to us about iink in the work that y’all are doing.
McGrath 28:03
Can you guys see my screen? Cool. So yeah, my name is Tom McGrath, CEO and founder of iink. iink is a digital payments network, our mission has really been to help restoration professionals and property owners get paid up to 60 times faster after uninsured property loss. While this is really important is a lot of restoration professionals or small business owners, and the insurance claim kind of process and getting lien holders to sign off on claims is something that causes a pretty significant cash flow problem. For them. It also delays getting those families back into their homes more quickly, many of which the home has become the office for them as well. And then also for the small business owner, the guy who maybe owns a pizza restaurant, if he didn’t have business income protection, as an insurance policy. Speed is very, very important to getting those funds released, and getting his business back up and running. And unfortunately, for better, I would say more. So for worse. Natural disasters tend to really impact LMI communities more prolifically than they do wealthier. It’s just because property values tend to be cheaper, you know, where flooding might be more common, are hurricanes. And so the process that we’re really speeding up is actually after the insurance company approves and issues that claim. So effectively, what happened in the mid-2000s, is there was a lot of insurance companies who were cutting checks directly to property owners. And you know, due to some of the kind of, you know, recessionary periods and the predatory lending that happened with a lot of the mortgage companies, a lot of them were about to default on their properties. And so they use that insurance money for other things paying off credit card bills, you know, maybe they needed to pay for their children’s college tuition and said, you know, why do I want to fix a property that I’m gonna get kicked out of in three months because I can’t keep up with the payments. And so what ultimately happened is, there’s close to $421 billion paid out in insurance claims each year in the United States for properties both commercial and residential. And there are now legal stipulations that require the lien holder to be included on those payments. So you basically now have billions of dollars worth of these multi-party insurance checks that we’ll say, Pay to the order of Caitie and Bank of America. And in order for Caitie to get access to that capital, and likewise, her restoration professional who’s helping you repair that property, they have to go through a formal process of checks and balances, referred to as last draft, Fannie and Freddie were really the drivers of these guidelines. And then if you’re a credit union, or boring portfolio lending, you may have come up with your own, but the process of getting that signature is actually quite lengthy. It requires a lot of mailing of checks back and forth. So typically, what you see happen is the insurance company is going to mail that cheque to Caitie, it’s gonna say pay to the order of Katy and Bank of America. A lot of times these restoration professionals because they want to get it done fast will step in and say, Hey, Caitie, why don’t you let me do this for you? I’ve seen it a few times as a restoration professional, we can get you back into your home as quickly as possible. And I can get myself paid and my guys paid as quickly as possible. And the banks may go through any number of checks and balances, they will check if there’s been delinquencies on a loan, they may want to see a copy of a contract between you know, the homeowner, and that contractor, they want to know they’re licensed and insured, repair affidavits conditionals waivers of lien, it’s a very, very antiquated manual process. On top of that, you physically have to mail the check, usually to one of their processing centers. And then once they endorse that check, they’ll mail it back usually takes about seven to 10 business days, just for it to get back because they’re using US Postal Service. And hopefully the check doesn’t get lost on or expire along the way. But in mail time alone, you’re just looking up close to like two to three weeks, which you know, is very impactful, you know, when it comes to maybe somebody who’s out of their home or out of their business, and the cashflow issues that arise from the contractor, but generally speaking, what we see is anywhere from 30 to 60 days delayed and getting access to the capital to restore the home, or commercial property, I’ve seen it take as long as six to 12 months. And what we do here at iink is we reduce that to as little as one business day. And the way that we accomplish that is we’ve effectively, you know, without going too much into it created the TurboTax experience for submitting these last draft claims and making everything digital. And one of the things that, you know, I’m trying to get banks on board with and I guess one of my assets to the group today is what our system outputs at the end of the day is an email that goes to the bank that has all the information they want the scope of loss from the insurance company or a cover letter, with all the details, and documentation and data points, they need to make a decision on whether or not they’re going to release this. But today, we still mail these checks to the bank, and we still wait for them to come back versus every single bank in the United States of America gets this email and has access to this link here. And if they click this link, it brings up a digital signature page, which allows you to digitally endorse this check so that we save, you know, hopefully 14 days and getting you know, these funds released again to kind of help that small business owner as the contractor, the guy running the pizza restaurant in New Jersey, or you know, the five, the five family, the five children’s five kids in a family, you know, we’re staying at a motel six because the home still can’t be repaired. And they’re working out of Starbucks for their office. And so that’s really, you know, what we’re trying to accomplish is just speeding up all this process so that we can rebuild those local economies quicker, help those small contractors with those cashflow problems, who don’t normally like to do insurance work. But unfortunately, it’s something that we really need. There’s not enough people, which slows the economic recovery of all these locations. So that’s a little just a quick blast on iink. So I’m happy to take any questions from you guys.
Rountree 33:48
Awesome. Thanks so much, Tom. Yeah, this is, yeah, I feel like the small businesses in NCRC universe, we do actually have a lot that are in the construction business because of the importance at home. So this one feels particularly close to our hearts in some ways. Yeah. I’m going to open it up for full questions now. As well, so if folks have questions, go ahead. Tom, I’d love to ask you a little bit about Yeah, just, you know, the the types of construction agencies that you see benefiting from this, obviously, you know, pretty widespread but yeah, just talk to us about what what what you’re seeing in terms of who’s who’s using this. Yeah,
McGrath 34:42
I mean, you have everyone from kind of the mom and pop, you know, I have like teachers, for example, who in the summertime will do roofing restoration, and then you have the really large companies but I think that one of the benefits to the smaller business owner is many times you know, let’s say that there’s a hailstorm in Denver where I live and they knock on the door of you know Five, five people said, hey, I can fix your roof, I’m fixing your neighbor’s roof. And they can probably get that job’s done in about three days. And let’s say it was 20 grand a pop, well, now he’s out 100 grand, still waiting 60 days for the mortgage company to release those funds, which maybe he can’t make payroll, or maybe he loses the job altogether to the big guy. Because the homeowner goes like, well, I don’t have the money, do you have the money to start the work? And then somebody else comes in, says, Don’t worry, we’ll float it. And then you know, they’re fine waiting. So it definitely really benefits those individuals. And we’ve had some small business owners who, in the course of using us as a financing tool, as well have been able to double the size of their business, you know, guy went from one to 2 million in revenue in just 12 months, because he wasn’t cash constrained in that capacity.
Rountree 35:41
Yeah. Awesome. Thanks, Tom. Jordan, a question for you. There’s a question about what type of investment account is set up. And the options are restrictions on withdrawals by the children?
Wexler 35:55
Yeah, so these are custodial investment accounts, which is really the ownership of the child starting from day one, and then at 18, or 21, when they become an adult, gets transferred as their primary brokerage account. So we, EarlyBird become their primary brokerage account. We are also looking to expand these financial service offerings. And so one thing that we’re looking into in 2024 is offering the 529 plan that many of you might be familiar with, which is directed towards, of course, college savings specifically, because toward investment can be used for anything, which is a broader use case. And as far as withdrawals go, the structure that we’ve set up with employers, starting with foundations, nonprofits, is that the actual organization is the custodian. So they are the oversight of the actual account for the family. And so there’s no access for these families to withdraw funds until the child becomes an adult. And there’s a process that do of course, pass that over. And for an employer, of course, the family has access to that. And parents can withdraw funds from a custodian investment account, but it has to be used for the benefit of the child for the IRS and declared to the IRS. So it’s a decent lift. And we’ve seen, you know, maybe 2% withdrawal rate of funds, and generally it’s only for specific things of real need.
Rountree 37:22
Yeah, thanks, Jordan. So there’s a question. This made me chuckle just because there’s so indicative of who NCRC is people are but a question about data. We like to say here, the data drives the movement for economic justice. And the question was specifically about whether any of y’all provide data or analytics that contributes to CRA or CDFI reporting. But and, Tom, I think your answer back to the particular person who’s worth lifting up, but if any of y’all want to, you know, talk broadly about, you know, data and economic justice, so heavy I see.
Karnani 38:01
Yeah, we track census tract information for every employee, every hourly worker who’s using our platform. So that’s one way in which we understand economic impact and other metrics that we track is how many additional after tax dollars did they receive in their paycheck that they wouldn’t normally, if you are a daily bus rider in New York City, you’re gonna get about $500 a year. Which, you know, we like to kind of benchmark against two-thirds of Americans don’t have $500 in an emergency. In the many other regions of the US, it’s kind of more than that amount of money. So we try to kind of dollars coming in, and it’s specifically to whom are those dollars going in terms of income level? And then where do they live in terms of census tract?
Rountree 38:53
Awesome, thanks. Anybody else want to take a stab at that one? Yeah.
Rountree 39:07
All right. I’ve got a I’ve got another question here. Just about you know, your own business models, how y’all managed to get the funding that you needed to be able to get to the scale that you’re at now and how you’re approaching the next leg of of scaling your work, in terms of getting getting your own funding.
Wexler 39:32
I’m happy to jump in. So EarlyBird of the river for years and we have gone through more of the traditional VC route, venture capital route, and I’ve been lucky enough to raise a couple larger, earlier rounds with some amazing backers like 776, which is Alexis Ohanian is VC and just recently, resilience VC, which is very focused on LMI lower moderate-income families and finding really great partners that are able to collaborate with us and support us on this mission, of course democratizing access to generational wealth for all families. And so, for us, it’s really important to find those partners and we can collaborate with beyond just capital, but really find, you know, opportunities and solutions like this to partner with the right people. Thanks, Jordan,
Karnani 40:29
we to our resilience portfolio company, and unlike Jordan, have been able to go out to the venture community to say, Hey, this is a big opportunity. Those folks like impact, but they’re not driven by impact. They are driven by kind of size of market and outcome. And we’re saying, hey, there’s an absolutely enormous number of people who are commuting, the number of office workers are actually relatively small, numerous, 40 million people or so the number of people who are in the blue collar economy is about three times the size, so we hope to build both an impactful business and big money.
Tseng 41:07
Like, like Avi and Jordan, partner, slate is backed by resilience. And we have gone the traditional venture capital route, we’ve pulled together an all star roster of investors, including supply chain capital and revenue of Chicago, they are both specialist investors in Cleveland was behind brands such as Yahoo, and farmer’s fridge. And supply chain has a mission of democratizing access for entrepreneurs, and helping founders from underrepresented backgrounds, as she paired up with in the martial arts. And we’re hoping to go back to the venture community in about a year’s time to raise our next round chair to grow our access even further. Yeah, I’ll
McGrath 41:55
add one thing. So I think that while it was a tough fundraising environment, one of the things that I’m seeing as a venture capital back company as well, is that a lot of the funding is being shifted to early stage companies seed in series A so whereas it may be difficult to raise a Series C or D. Because you know, those companies have to have some sort of liquidity event soon. For us, people are a little bit more optimistic of what the future may hold, and still deploying capital on to those to those companies. So what do you heard, hey, it’s very difficult time to fundraise that is true, but I would say a little bit less so for early stage companies.
Karnani 42:30
A quick note, just to kind of think about forms of funding, and maybe why you’re seeing a bunch of venture capital here, even though we’re all focused on making impact in different ways is, one of the things we really appreciate about about venture is while we have to go back and raise it from time to time, and we do so probably meaningfully less often than if it was grant funding. And that allows us to build software, we can do investments upfront that are really deep software investments like to build our technology where you can connect to many different kinds of workers credit and debit cards, and like turn that into information that we can use to spin up benefits, integrate into payroll systems on the employer side and just do all of it. It was very big build. And being venture backed allowed us to sort of do that, and then go out and also prove our market in the same kind of unit of funding rather than kind of having to go multiple, multiple times back to grant or other sources of funding.
Wexler 43:26
Yeah, I think it’s a fascinating comment, because, you know, we’ve been around for four years, and we didn’t start, of course, 100%, focused on LMI. But as we evolved and grew our brand, and of course, got the backing to do so it granted us the privilege to be able to now expand and you know, orient our services to really help families in need, which is always been a core mission to us. But to start there is can be a very challenging experience. And so for us the broader brand, and proving that product market fit of what we’re building towards, enabled us to now of course, be in the place where we are to help families in need and partner with organizations that we can really lead the charge with and not rely on them to give us too much.
Rountree 44:16
Yeah, yeah, I feel like there’s some very rich conversations we could have about the importance of venture capital to scale and yeah, that’s yeah, it’s, it’s great to hear you guys talk about that.
Tseng 44:29
I would just add one thing for Parker State, which is that we also serve beyond just the entrepreneur community. We work with large public food companies like Kraft and known and HelloFresh. And they have the budgets that allow us to fund our development of our software platforms that serve the broader set of food companies. So we’re supporting them Tire ecosystem, even though our mission is really focused on rounds of entrepreneurs,
Rountree 45:04
that you get the diversification within your own clients and customers to be able to support that. Yeah. Yeah, that’s great. Makes a lot of sense. Yeah. Well, wonderful. Well, thank you each so much. You know, again, we have with us here, Vince from PartnerSlate Jordan from EarlyBird, Avi from Alice, Tom from iink. You will all get recordings, and Chloe shared a link to a survey. That’s both how you can tell us what you thought of this, but also how you can share additional questions or ask for some follow-up from these folks here. We’ll share that in the follow-up email as well. And of course, direct you to the website so you can learn more about each of these companies and the the great work that they’re doing. And yeah, we look forward to seeing more and more businesses supported by your companies. So thank you guys so much for joining us.
