How My Father-In-Law’s Question Inspired YieldStreet

by Milind Mehere | Founder & CEO

My father-in-law lives in India. Every time we spoke on the phone in the US, he had the same question: “Where are you investing your money?” And every time, like a broken record, I had the same answer: “In the stock market, Dad.” He wasn’t crazy about that answer, and frankly, neither was I. In India, interest rates are much higher than they have been for the last decade in the US. The government implemented many initiatives that enable Indian investor to earn 4-10% yield with relatively minimal risk. My father-in-law was shocked that accredited investors in the US had so few alternatives to our volatile stock market. After all, in almost every field, the US has served as the ideal for best practices in almost every field. Why were our investment options so limited? Maybe his daughter should have married a nice Indian boy who was going to stay in India. As I was searching for better investment options, I saw that a lot of my friends were in the same boat. We were successful young professionals, over-invested in the stock market. We had diligently put our hard-earned dollars into 401(K)s and had built decent retail stock portfolios full of index funds and ETFs. Our kids’ college funds were in 529s, also invested in stocks. And we were all terrified of the next bear market. I began searching for alternatives. Other investment options, such as commodities, options, futures, and even bonds, which were too sophisticated to truly understand and to use with confidence. I was working for Yodle, an online marketing platform for small businesses that I had co-founded. Some of our clients owned strong cash-flow businesses, such as hotels, or fast food chains, like Subway and Dunkin Donuts. I was fascinated by these and eager to invest, but I kept getting locked out of great deals either by professional investment funds or by high-net-worth investors who could drop six or seven figures at a shot. It was frustrating, to say the least. One day, I read a Foundation Capital paper about how Lending Club and other crowdfunders were transforming the online lending ecosystem. It inspired me to learn if I could somehow tap the power of the crowd to solve my investor’s dilemma–and finally have a different answer for my father-in-law. Soon after, I crossed paths with specialty finance experts Dennis Shields and Michael Weisz. It was from them that I learned about specialty finance loans in lawsuit funding, real estate and receivables finance. Dennis and Michael, meanwhile, were trying to figure out how to make borrowing less expensive for their clients. The more we talked, the more we realized that together we could meet huge needs for both accredited investors like myself, who were searching for yield, and worthy borrowers with strong businesses, searching for affordable capital. We believed that if we could build the right online marketplace to bring these parties together, we would forever change how people think about financial planning and wealth creation. YieldStreet was born out of our passion for investing, and our need for a more transparent and accessible investment landscape. Now when my father-in-law invariably asks me, “So, where are you investing your money?” I have a new answer for him. I tell him about the latest deals we’re offering on YieldStreet and he gets almost as excited about them as I am. I think he’s starting to warm up to me.

Published:

03/18/2016

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