Killing the Financial Middle Man

Thoughts on education coming soon, but on a Sunday afternoon, I am letting my mind wander in other areas.

I continue to be impressed by platforms that are popping up focusing on cutting out the middle man in the finance space to bring the end recipients and financiers closer.  These platforms are not only allowing end users more access to capital, but in some cases can dramatically improve the quality of a users life.  In Robert Shiller’s most recent book (which I am just a few pages into) the review on amazon summed it up nicely:  “He makes a powerful case for recognizing that finance, far from being a parasite on society, is one of the most powerful tools we have for solving our common problems and increasing the general well-being. We need more financial innovation–not less–and finance should play a larger role in helping society achieve its goals.”

Here are a few platforms that I am fascinated to watch as they evolve, which I think each represent a specific vertical waiting to take off:

SunFunder – started by a good friend of mine, Sunfunder allows for individuals to invest in solar energy projects around the world in developing countries.  Through Sunfunder, individual investors can literally invest in projects that are allowing folks to have access to power in locations that they were never be for able to.

Pollenware – allows companies to pay off their accounts payable prior to when their terms dictate them to. Companies with payables set aside a certain amount of cash to pay their vendors with immediately.  In exchange for receiving immediate payment, vendors work in an auction format and bid for the type of discount that they are willing to take to get paid today.  Companies that owe money get a discount and vendors get paid sooner, theoretically giving a discount that is less than they are paying to any sort of credit line that they may be using.

KickStarter – allows individual investors / contributors to find projects that are of interest to them and fund those projects (slogan is “a funding platform for creative projects”).  This has encouraged folks that I know to chase their dreams and broadens the community of financing opportunities to the world.  There is not a financial return component involved for the funder (yet?).

Lending club – peer to peer lending that primarily disinter-mediates credit card companies and other short term high rate lenders.  This allows borrowers to reduce their interest rate and investors to have an alternative platform to invest in that beat checking account interest rates.   From an investor perspective, Lending club allows you to make investments in $25.00 increments, encouraging diversification.

Crowdfunder – provides a platform to allow investors to take equity in early stage companies in exchange for capital.




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