Founders’ Letter: Launching Short Term Notes

Here at Yieldstreet, we’re continually looking for new ways to help you generate wealth—that’s why we’re excited to announce a brand new product for our community of investors.

What Are Short Term Notes?

This offering provides investors access to a different stage of the investment process—prefunding upcoming offerings before they launch on the YieldStreet platform. 

Currently, we primarily work with institutional funds and other financing vehicles to prefund all Yieldstreet offerings. We do this to ensure “certainty of execution” for both our originators, who receive 100% of the loan amount when a transaction closes, and our investors, who can immediately start earning interest once their allocation goes active. Our existing institutional partners are expected to continue and grow their financing facilities alongside our launch of Short Term Notes. 

Given our investor-first mentality we thought, why not provide YieldStreet investors an additional avenue to earn interest by allowing them to participate in this defined process we currently execute with institutional partners? After all, we’re all about unlocking investing opportunities that were previously unavailable.

What are some of the risks?

The primary risk in participating in this type of product is Yieldstreet’s ability to fully allocate prefunded investments. As a member of our investor community, you’ve likely seen the rapid rate that most investments are allocated. YieldStreet has fully sold out every prefunded investment (over 125 investments) since inception and the majority of our investments in the last six months were fully subscribed in a short period of time. 

A second risk is if a prefunded offering defaults during the brief period it is held. Most offerings launch to the platform less than 60 days from the date they are prefunded. Given our rigorous diligence process, we are confident in the investments that we close and prefund—in fact, Yieldstreet will be participating in 5% of the total amount raised in Short Term Notes in a junior position. This means that for a $10M note, Yieldstreet will provide $500,000 in first loss capital before your principal will be impaired.

Why are we excited?

This is a product that lives up to its name—it lasts just 6 months, or 180 days, and offers monthly payments. Investors will indicate 65 days prior to maturity if they wish to continue their investment or liquidate principal at day 180. 

Have questions? Reach out to the Yieldstreet team at [email protected]

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