[ADiamond]

My first year at LendIt, and to be honest I really wasn't impressed. Definitely not $2200 impressed. As a company I don't think we were $8800 impressed.

I really felt like it's just a place for the "Who's Who" in FinTech (not even our industry, but FinTech in general) to go and swing their dicks around, and maybe a good place for service providers to pay over $30k? for a booth to do some marketing although when it came to that I even felt like THAT was an opportunity for the "Who's Who" to pay the highest for the best real estate for their poorly-devised tables and that money could've been spent wiser in the marketing budget to attract potential customers.

I forgot the name of the company but on the 3rd level to the expo you could enter the showroom by walking straight or walking in to the left. The very first table if you walked in straight, he had the real estate of 4 smaller booths - by the time I stopped at that booth at 4:30 on Tuesday he had run out of marketing merch and said to me "we ran out of material this morning sorry. People who weren't even interested in our company would just grab merch because we're the first booth when you enter" Well if you are looking to give out pens with your name on it then I think this guy got his $30-50k worth. I then began to talk to him and he stopped me and said "Wait, are you B2B, or B2C?" "Oh ok well then I'll save you the time, compliance will not let us work with any B2B so you may as well just keep on walking." As much as I am B2B, this guy just wouldn't even waste his time telling me about his company no matter how genuinely interested I may have been.

Ahhhh B2C.. that was definitely the theme at LendIt. Thank god Credibly actually had a booth set up there or I would almost think that MCA providers didn't belong. Lending Club, Prosper, what's the other one? It was like a trickle-down economy with these three companies at the top while everyone else was really just in their shadow - they may as well have had their own conference. ODC was there doing god knows what. Probably paying people so they stop shorting their stock.

For the most part I tried to attend as many Keynotes as possible, because not only did I feel like I was getting my money worth by hearing these industry leaders speak for 20 minutes at a time, but it was interesting in seeing where their heads are at and I thought maybe I would learn something about underwriting I didn't already know in one of the 5-ish credit/risk keynotes. (that didn't happen)

Even then, a recurring theme was B2C, and during "Risk Management & Credit Analysis for Mispriced Opportunities" litigation financing came up among real estate "fix n flip" financing as both viable opportunities for investors to explore

Below, a photo of the above referenced Keynote that ended the day on Monday - Don Davis of Prime Meridian Capital Management (left - sitting) was very adamant that if institutional investors were looking to deploy some serious capital, in his words "$100MM at a clip" they would look toward B2C companies such as Lending Club & Prosper & SoFi - why? They've been vetted, their model is tested, they have controls in place. "They Work." As opposed to "specialty finance companies" which institutional investors may invest $10-20M. (You know he meant MCA when he said spec-finance right?) Brendan Ross of Direct Lending Investments (middle - sitting) then went on to say that a lot of institutional investors stopped buying loans on the secondary market and they would much rather be the one financing the specialty finance company for a fixed rate as opposed to funding the loans, so they don't have to bear the risk of default. If financing a "specialty finance" company - they are looking for said company to have an internal rate of return between 20-30% whereas other asset classes they are only looking for 10% IRR.




During the "Relative Value Strategies Across Credit" there were a lot of interesting points thrown around especially by Steven Lee of MW Eaglewood Americas - one thing he said that caught my attention was "Capital One will lend to the I.B., the I.B. will lend that money to Lending Club, then lending club will lend to the consumer looking to pay off their capital one credit card" I missed his point but it had to do with how all of this institutional money is getting thrown at these platforms. Aaron Peck of Monroe Capital had quite a few good points during this keynote - especially that the origination channel doesn't determine performance. Origination channel will determine low cost of acquisition if you are targeting the right people. Performance of loans comes purely down to UW.

I don't want to say LendIt is strictly a B2C expo but really, if you were there you could sense that MCA as an investable asset was but a mere laugh during a convo over a cocktail to a lot of these people. I was actually quite surprised how under-represented our space was. Sure there were speakers from quickbridge, on deck, and a few other lenders there. But I went to this thing under the assumption that it would promote what we are trying to do every day. There was definitely A LOT of "Tech" there I guess trying to meld with the "Fin" as A.I. and automated-processes was also a common theme - but I feel safe saying that real estate finance, equipment finance, freaking student loan debt-finance had more coverage than merchant cash advance!!!!!!! Either way, glad I went - made some really good contacts, saw some old friends, and it was an experience none the less.

[jotucker1983]

I never bothered to attend many related industry conferences either lol. Mainly for the same reasons you listed:

- The money to show up could be better spent doing direct marketing to prospective clients

- Whatever "new products/services" that will be presented at the trade show, I would eventually hear about shortly anyway just from reviewing industry publications/forums.

- I could usually download or see transcripts of all of the speeches after they occur anyway, to get even more details (for free) on what was said.

I've always seen them more as a waste of my time (as a one man show broker) and more of a "showing off contest" between the big dogs.

[staten]

1. Institutions are looking for yield. However-Prosper had to give AWAY 35% of the company to attract Fortress et al.
2. Brendan Ross is touting his book (which has performed well) since it is a mix of whole loans and direct credit line to lenders. He is taking operating risk, even if structured in an SPV (Think of the hit Princeton is going to take on Argon). But he has reached critical mass to be relatively well diversified. I imagine his challenge is too get the capital deployed.
3. Monroe is heavily invested in Channel Partners and they know what they are doing.