With Brexit and other turmoil driving recent market uncertainty, alternative investments are getting an even closer look. The most recent startup to join the alt-investment movement is brandCrowder, a company that facilitates investment in franchises.
In his FinovateSpring 2016 demo Ijeoma Onuosa, the company’s president and co-founder, said, “brandCrowder, in essence, seeks to lower the barrier of entry into the market and offer to the market our curated deals.” Onuosa went on to detail how franchise-related equities have outperformed the U.S. stock market by 33%.
Accredited investors can invest in single company funds, syndicated funds, and portfolio funds while nonaccredited investors can participate in national deals that fall under Regulation D of the JOBS Act. brandCrowder’s goal is to let everyone compete on a level playing field that Onuosa describes as a “yield-rich environment.”
- Founded in 2015
- Headquartered in Birmingham, Michigan
- Offers franchise deals for 3,800 brands in 170 industry sectors
CFO Francois Nabwangu and President Ijeoma Onuosa, co-founder, demoed brandCrowder at FinovateSpring 2016
Before brandCrowder stepped onto the FinovateSpring 2016 stage, I chatted with Robert Armiak, the company’s CEO. Prior to joining brandCrowder, Armiak spent 18 years at Alliance Data where he served as SVP of finance and treasurer.
Finovate: What problem does brandCrowder solve?
Armiak: Two Pain Points—One Solution
- Issue #1
Traditional bank underwriting for portfolio holders of operating franchise units is broken (i.e., this $10 trillion market is illiquid, how does “McDonald’s guy” gain liquidity).
- Issue #2
Consumer access to higher-yielding alternative asset choices (i.e., if you’re a non-operator investor, how do you passively participate in profits much like the stock market).
Equity participation in franchise-generated free cash flow via commonly accepted and widely adopted structured financial products and recently adopted Title II and III regulations and guidelines.
Finovate: Who are your primary customers?
- Institutional Investors
- Accredited Investors
- Non-accredited Investors
Finovate: How does brandCrowder solve the problem better?
Armiak: Our executive team is leveraging decades of industry-specific knowledge into an efficiency-focused, alternative-investing platform that will ultimately increase the velocity of capital in the United States.
Finovate: What in your background gave you the confidence to tackle this challenge?
Armiak: Former board member, SVP finance and treasurer Alliance Data Systems (NYSE; ADS). Helped form ADS and took the “Big Data” company public in 2001 at a $500mm market cap which has since grown to more than $13 billion. Issued nearly $11 billion of asset-backed securities and another $7 billion of debt and equity to fund ADS growth.
Finovate: What are some upcoming initiatives from brandCrowder that we can look forward to over the next few months?
Armiak: Beta launch (August 2016)
Finovate: Where do you see brandCrowder a year or two from now?
Armiak: Actively assisting hundreds of brands, thousands of franchisees and millions of investors reach their near- and medium-term franchising goals more efficiently.
Finovate What kind of metrics or facts about brandCrowder can we share with readers?
Armiak: We have over $300 million in offerings from some of America’s favorite brands in our current pipeline ready to come to market.