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  • Writer's picturetom

Snakes & Ladders

Imagine the game Snakes and Ladders, but every time the player lands on a snake and must slide down, the odds of landing on another snake on the next turn increase. It’s only a matter of time before you are relegated to the bottom, with little chance of you ever making it back up again. And when many people experience financial struggle, there are snakes at every turn, preying on both the desperation and lack of understanding of the financially distressed to profit.

I recently met someone currently incarcerated for gang-related charges who was a successful salesman for a real estate finance company preying on elderly people in his community. As soon as he realized how the product actually worked versus how he was taught to sell it, he quit and told his mom that he thought gang life was a relatively more dignified way to make money.

So with so many snakes preying on people experiencing stress and struggle, I’m looking for the builders of better ladders.

I am trying to spend as much of my life supporting people and organizations that I deeply believe in and doing everything I can to help advance their great work and have decided to share more openly about the incredible companies and entrepreneurs I’m lucky to support, and just as importantly share the underlying passions, problems and potential solutions I’m exploring for so that I can continue to find more like-minded people and gain different perspectives and better inform myself that can only clarify my thinking on how best to make the most impact in the World with what I have to offer.

If we don’t know each other, I’ve put together this little presentation that I hope explains my mission in life.

Here’s a staggering fact: 20% of Americans have debt currently in the collection process estimated at over $400B in debt. In keeping with the “snakes at every turn” analogy, once someone becomes indebted beyond what they can afford to pay down or service, debt settlement agencies offer to help consumers negotiate with the creditors, often charging usury fees throughout the process. A recent lawsuit filed by the U.S. Consumer Financial Protection Bureau against Freedom Debt Relief, one of the leading companies marketing debt settlement solutions to borrowers in the US, helps us understand how this industry largely operates today.

I was introduced to an entrepreneur by a mutual friend this past summer and in our first phone conversation, it was clear that he was driven for the right reasons to provide an ethical debt settlement solution and outlined a way in which he thought a venture-scale business could be built whilst still empowering and supporting the customer (the entrepreneur doesn’t want the Company publicly named just yet). The time is right for a debt settlement service that combines a customer-driven approach with ethical practices and a smart tech stack.

Anyone seeking debt settlement solutions is already under a high-degree of financial stress. By being able to provide a pathway out of collections through an easy-to-use, transparent and responsible service, I believe that the Company will have the opportunity to build other trusted relationships with borrowers looking to lift themselves and their credit scores up over time.

The Pew Charitable Trusts continue to publish incredibly insightful research on financial shocks (and a wide range of other important factors impacting the US economy) and Bankrate published a widely cited survey which reported 63% of respondents would be unable to pay for a $500 car repair or $1000 medical bill. The last new investment commitment I made of 2017 was to HoneyBee, which is partnering with employers to unlock employees’ unspent PTO (Paid Time Off) to provide small, short-term loans at less than 36% APR with no monthly interest regardless of credit history.

Both HoneyBee and the debt settlement company are committed to providing innovative, responsible and far less expensive solutions to problems causing significant financial stress for many Americans. Both companies are very early-stage and are both representative of the kinds of ventures I am looking to find and invest in that can significantly reduce the cost of being poor in America. While both of these companies are consumer-focused services, I also believe strongly in “B2B2C” models like Patch, providing out of network health reimbursement as a service (try saying that 3 times fast). I was one of the first investors in Patch and a couple of years later, it’s now just starting to truly take-off.

I ultimately want to build a portfolio of entrepreneurs who share a similar set of values and passions all of whom are working on improving key products and services that can meaningfully make people’s lives better.

Here are just a few areas I’m passionate about finding better solutions for:

A more ethical bail bond service and financial services for people just released from jail. The “criminal justice” system in America is itself criminally dysfunctional. Here is but one of many articles I could use to cite examples of the dysfunction. I would very much like to talk to any entrepreneur trying to build ethical services for people who have been caught-up in the American Prison System.

Financial services for Seniors and late-stage life planning. This section from a recent Washington Post article is a huge cause of concern for me:

“By 2030, 1 out of 5 U.S. residents — a total of 70 million people — will be 65 or older, according to population estimates. At the same time, federal funding for senior citizen programs has decreased by about 19 percent since 2010, to just less than $8 billion, according to the National Association of Area Agencies on Aging. It is expected to shrink further under President Trump.”

Student debt services and educational lending models. I’m interested in attacking this massive problem from both reducing existing debt loads but also from eliminating the long-term debt in the first place. I also believe there are exciting opportunities to totally transform the concept of spending time and money on education in exchange for a set of employable skills and so am generally keen to meet anyone working on big ideas here.

Solving for the Impending Pension Crisis. The unfunded pension liability is likely the single greatest threat facing America today. I will write more on this separately but I am keen to explore this from both the workers’ perspective as well as from the Municipal Government perspective itself. While locally elected officials need to reckon with the true state of their financial insolvency and find more responsible and sustainable solutions, it’s more likely that politicians won’t do what’s required in-time to reverse the long-term damage already inflicted on municipalities throughout the United States and that entire municipalities (at least) will be privately owned and operated in the next decade. I was an early investor in Voatz which is leveraging blockchain technology and mobile biometrics to increase voter participation. I believe that there are significant opportunities for governing and delivering civic services through blockchain technology.

Financial Services made for the Future of Work. As what it means to earn an income is being reimagined, we need to reimagine core financial services and benefits for the on-demand and flexible workforce. These can only work with strong network effects, efficient API-driven services and persistent reputation and I think that there’s a massive opportunity here.

Made for Rural America Solutions. This article from the WSJ is a must-read if you’re interested in the fraying of America that threatens to ultimately break the United States of America apart. Amidst increasingly high unoccupancy rates, there are stories like this one that show how local ingenuinity is breathing new life into otherwise failed or failing commercial real-estate.

I believe a Whole Foods equivalent to Dollar General is desperately needed to provide better nutritional options to rural America. Companies like CrowdCow and CroudCarnivore are just starting to scratch the surface of DTC farming.

I’d love to work with an entrepreneur that has both the ambition and ability to build a National Community Supported Agricutlure “CSA” logistical infrastructure capable of intelligently routing fresh grown food across the Country. I think we’re nearing the right time to totally reinvent the supply chain for food and would love to be able to help accomplish this in my lifetime.

If any of this resonates for you or aligns to what you’re working on or also looking to invest in, I’d love to get to know you. If you want to know why you want me as an investor, just ask any of the CEO’s of any of the Companies I’ve invested in. Please comment below on what you’re working on that fits the above and I’ll get in-touch.

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