A Matter of Time

Ever since the Internet became more popular than a library it was only a matter of time before Wall Street felt the pain of age. By Wall Street I mean Capital Market transactions like issuing, brokering, structuring and trading. What a great tool the Wall Street markets were for generations, a way to raise capital and perform countless financial transactions to make the capital make more capital.

As my first post to my blog I want to address one basic Wall Street transaction - Secondary Market Financing. One example of Secondary Market Financing is where companies take receivables like loans and sell them to investors. In a large transaction the investors are usually institutional investors like funds or large companies. Well, don't all funds and large companies have investors too? Sure, and many of those investors are institutional investors as well. Sooner to later down the ladder you're going to end up with an individual investor, a real human being, maybe rich, maybe poor ... but in any event he or she most likely has Internet access.

So here's my point. The company needing financing for some receivables is made up of stockholders (they probably have Internet access too), anyhow that company goes on a Wall Street transaction journey and after a whole bunch of brokers, market makers and institutional investors they end up with some individual Internet users money. Job well done, they got the transaction done. But how efficient was it to go a banker, broker, institution, etc. when all the company had to do was go directly to the individual investor. Yes, of course, Secondary Market Financing is a complicated thing ... was before the Internet anyhow.

I have a lot more to say about the Internet and financing especially in the areas of Peer-to-Peer lending and a particular hybrid P2P company called Loan Market Direct, and yes, I work there. Please come back and I'll try to tell you why the title of my blog makes all the sense in the world.