While many fin-tech entrepreneurs cite a personal experience with the problem they are trying to solve as playing a pivotal role in the founding of their company, Brian Smith’s is more personal than most.
Mr. Smith is a cofounder of equity crowdfunding platform RedCrow, one that focuses on stringent curation of investment opportunities.
RedCrow’s first vertical in health care is not by accident. In 2003 his child was born at 24 weeks and passed away.
RedCrow is initially targeting medical professionals who will be able to invest in businesses they will understand. By the time they get to see those companies, they can be assured those companies have been thoroughly vetted. RedCrow has developed a network of strategic sourcing partners, each with a proven deal selection background. Once approved by RedCrow’s investment committee, the companies can receive investments.
Companies can also be identified by RedCrow’s Discovery process, one which provides important exposure to early stage companies, Mr. Smith said. Companies present on RedCrow and refine their plans based on feedback and questions from the crowd.
Because many early stage companies do not have lengthy paperwork histories to be reviewed by potential investors, vetting has to consider other factors, Mr. Harrison explained.
“At that stage it’s people investing in people. We look at the quality of the leadership teams.
“We also look at what can happen if they get to the next level in the marketplace. Is it a game changer? What is the social impact?”
Institutional investment philosophies are undergoing change, Mr. Harrison and Mr. Smith both explained. In the past some family offices had their “getting to heaven money” which was devoted to worthy causes with less concern about financial return. Now more family offices are concerned about returns so their future generations are cared for.
Yet this is happening at a time when $30 trillion in assets are beginning to be transferred to millennials, a generation more concerned with doing good than their predecessors.
“Eighty-seven percent of millennials are giving to charity, more than any other to date,” Mr. Harrison said. “We feel we’ll resonate with millennials.”
