Convergence of Finance & Media: Transformation of Complex Markets (Mar/201…
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Convergence of Finance & Media: Transformation of Complex Markets (Mar/201…

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Much has been said about disintermediation in markets, made possible by new technologies & more efficient systems. In the past, this has in actuality been an introduction of new intermediation forms, ...

Much has been said about disintermediation in markets, made possible by new technologies & more efficient systems. In the past, this has in actuality been an introduction of new intermediation forms, leading to more numerous & complex intermediation functions. The truer disintermediation has yet to take place, but, like its antecedents, this too will be a transference to intermediation of a new order: Networks & their ecosystem of services will be new intermediaries, augmenting roles previously dominated by institutions & serving to open a previously enclosed environment.

This presentation illustrates some of the historical, current & anticipated trends described. It is not a comprehensive review of industry activities or a survey of competitors. Nor is it an analysis or set of recommendations for purposes of assessing any investment, public or private.

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Convergence of Finance & Media: Transformation of Complex Markets (Mar/201… Convergence of Finance & Media: Transformation of Complex Markets (Mar/201… Presentation Transcript

  • CONVERGENCE OF FINANCE & MEDIA:TRANSFORMATION OF COMPLEX MARKETSMuch has been said about disintermediation in markets, made possible by newtechnologies & more efficient systems. In the past, this has in actuality been anintroduction of new intermediation forms, leading to more numerous & complexintermediation functions. The truer disintermediation has yet to take place, but, like itsantecedents, this too will be a transference to intermediation of a new order: Networks &their ecosystem of services will be new intermediaries, augmenting roles previouslydominated by institutions & serving to open a previously enclosed environment.This presentation illustrates some of the historical, current & anticipated trendsdescribed. It is not a comprehensive review of industry activities or a survey ofcompetitors. Nor is it an analysis or set of recommendations for purposes of assessingany investment, public or private.MARCH / 2013 UPDATE
  • BACKGROUND & BASICS:MARKET INTERMEDIATION & ITS GROWTHMARCH / 2013 UPDATE
  • MARKETS ARE THE INTERSECTION OF SOURCES & USERS OF CAPITAL, MANY OF WHICH PLAY COMPLEX ROLES IN OVERLAPPING WAYS BUSINESS CORPORATIONS VENTURES CAPITAL SOURCES CAPITAL USERS PRIVATE INVESTORS INSTITUTIONS /FUNDS SOVEREIGNS BANKS MUNICIPALITIES CONSUMERS4 MARCH / 2013 UPDATE View slide
  • INTERMEDIARIES SERVE A CHANNELING FUNCTION, ENABLING THE FLOW OF CAPITAL IN ITS MOST OPTIMAL DIRECTION Investors Banks Issuers Money Credit Lenders Managers Card Cos Borrowers Buyers Brokers Merchants Sellers Traders Analysts Consumers Builders Advisors PRINCIPAL AGENT PRINCIPAL5 MARCH / 2013 UPDATE View slide
  • THE INTERMEDIATION FUNCTION IS DRIVEN BY SCALE ECONOMIES & INFORMATION EFFICIENCY BASED ON VOLUME & SPECIALIZATION Banks Investors Issuers Money Credit Lenders Managers Card Cos Borrowers Buyers Brokers Merchants Sellers Consumers Builders Traders Analysts Advisors6 MARCH / 2013 UPDATE
  • IN INSTITUTIONAL MARKETS, THESE AGENCY EFFICIENCIES HAVE LED TO NEW INTERMEDIATION VEHICLES IN THE FORM OF SPECIALIZED FUNDS Private Hedge Funds Equity Venture Mutual Funds Capital Corporate REITs & Credit Other Vehicles PRIVATE PUBLIC7 MARCH / 2013 UPDATE
  • IN CONSUMER MARKETS THE SAME HAS LED TO EXPANSION OF INTERMEDIATED PRODUCTS & THE INTRODUCTION OF NEW INTERMEDIATED INSTRUMENTS Credit cards Securitization Debit Mortgages cards Pools SPV Student loans Car loans CDS Annuities & policies PRODUCTS INSTRUMENTS8 MARCH / 2013 UPDATE
  • THIS CORE GROUP OF INTERMEDIATION ENTITIES ARE LARGELY FUNDED FROM WITHIN A UNIVERSE OF OTHER INSTITUTIONAL SOURCES... BANKS INSURANCE ENDOWMENTS COMPANIES Private Equity REITs SPVs Finance Co’s Hedge Funds PENSIONS Venture Capital SOVEREIGNS Mutual Funds CORPORATIONS FAMILY OFFICES9 MARCH / 2013 UPDATE
  • ... WHICH ARE OFTEN THEMSELVES PROFESSIONALLY MANAGED INTERMEDIARIES & OTHER AGENTS ASSOCIATIONS Banks SOVEREIGNS Insurance Endowments Companies Private Equity Hedge Funds Corporate Credit Venture Capital Mutual Funds Family Offices Pensions CORPORATIONS BANKS10 MARCH / 2013 UPDATE
  • AS RISKLESS COMPENSATION FOR AGENCY SERVICES IS A CAPITAL DRAIN FROM THE MARKET (OFFSET BY THE UNIQUE VALUE-ADDED OF THE AGENCY FUNCTION)... $- compensation Principal Agent Principal $11 MARCH / 2013 UPDATE
  • ... THERE IS INCENTIVE TO DISINTERMEDIATE CAPITAL FLOWS & SIMPLIFY COMPLEX MARKETS BUSINESS CORPORATIONS VENTURES CAPITAL SOURCES CAPITAL USERS PRIVATE INVESTORS INSTITUTIONS /FUNDS SOVEREIGNS BANKS MUNICIPALITIES CONSUMERS12 MARCH / 2013 UPDATE
  • BUT INFORMATION EFFICIENCY WILL ALWAYS BE CENTRAL TO A PROPERLY FUNCTIONING CAPITAL ENVIRONMENT BANKS information $ CREDIT CARD CO’S $ $ INSURANCE information COMPANIES information HEDGE FUNDS $ $ $ ENDOWMENTS $ PRIVATE information $ EQUITY $ CORPORATE $ $ VENTURE CREDIT $ CAPITAL information $ MUTUAL FUNDS $ SOVEREIGNS $ information PENSIONS information $ $ CORPORATIONS $ $ $ $ FAMILY OFFICES TRANSFORMATION $ $ information13 MARCH / 2013 UPDATE
  • THE FUTURE BANK WILL BEA MEDIA CONGLOMERATE:INGREDIENTS CURRENTLY IN PLACEMARCH / 2013 UPDATE
  • VARIATIONS OF MEDIA (SYNONYMOUS WITH INFORMATION FLOW) ARE AT THE CORE OF EFFECTIVE INTERMEDIATION information information Principal Agent Principal information information15 MARCH / 2013 UPDATE
  • WHEREAS BANKS HAVE TRADITIONALLY BEEN BUILT ON THE FOUNDATION OF CAPITAL, THEIR VALUE IS BASED ON ACCESS, ANALYSIS & PACKAGING OF INFORMATION information information Data Analysis [BANK] Networks Ideas [MEDIA CO.] Advice information information CONTENT DISTRIBUTION16 MARCH / 2013 UPDATE
  • THE OPEN WEB HAS ENHANCED & BROADENED THE FLOW OF INFORMATION & ITS ACCESS Facebook Google Amazon Apple17 MARCH / 2013 UPDATE
  • THE PERVASIVENESS OF SOCIAL MEDIA HAS EXPANDED THE REACH & SCOPE OF INFORMATION Facebook Google Amazon Apple18 MARCH / 2013 UPDATE
  • MOBILITY & APPS HAVE FACILITATED THE IMMEDIACY OF INFORMATION DELIVERY Facebook Google Amazon Apple19 MARCH / 2013 UPDATE
  • TRANSACTIONAL PLATFORMS ARE BEING PERFECTED & CONSUMERS HAVE BECOME ACCUSTOMED TO ELECTRONIC COMMERCE Facebook Google Amazon Apple20 MARCH / 2013 UPDATE
  • AS TECHNICAL CAPABILITIES & CONSUMER PREFERENCES COMBINE FOR A DEMOCRATIZED & FRAGMENTED MARKET TO THRIVE... INF L OR IA M C AT SO IO N Facebook Google Wikipedia Yahoo! Gilt Amazon Apple NT TRA ME NS C IN A RT A TI ON E AL ENT21 MARCH / 2013 UPDATE
  • ... KEY FUNCTIONAL ELEMENTS ARE ALSO EVOLVING... SECURITY ANALYTICS DATA EDUCATION VISUALIZATION22 MARCH / 2013 UPDATE
  • ... & REGULATORY ACTIVITY APPEARS TO BE IN TUNE WITH THE SOCIAL ENVIRONMENT FINRA Opens Door for Social Media with New Rules Socialware, January 9, 2012 http://blog.socialware.com/2012/01/09/finra-opens-door-for-social- media-with-new-rules/ JOBS Act would make crowd funding of small businesses legal for people who aren’t accredited investors PandoDaily, March 17, 2012 http://pandodaily.com/2012/03/17/after-some-initial-doubts-im-sold- on-the-jobs-act/23 MARCH / 2013 UPDATE
  • INGREDIENTS ARE THUS FALLING INTO PLACE FOR ENHANCED & COST-EFFECTIVE INFORMATION FLOW & CAPITAL ACCESS... INF L OR IA M M C A AT SO I IO N Wikipedia SECURITY ANALYTICS Yahoo! DATA EDUCATION VISUALIZATION REGULATION REFORM RELAXATION Gilt NT TRA ME NS IN C A TI A R T ON TE AL EN24 MARCH / 2013 UPDATE
  • ... FACILITATING DISINTERMEDIATION AT A QUICKENING PACE & THE DIRECT INTEGRATION OF FINANCE & MEDIA INF L OR IA M M C A AT SO I IO N Wikipedia Yahoo! FINANCE Gilt NT TRA ME NS IN C A TI A R T ON TE AL EN25 MARCH / 2013 UPDATE
  • DEVELOPMENT OF SOCIAL MARKETS:UNDERWAYMARCH / 2013 UPDATE
  • ESTABLISHED MEDIA PLATFORMS HAVE LAID IMPORTANT GROUNDWORK IN THE COMBINATION OF MEDIA & FINANCE... MEDIA BLOOMBERG CNBC PR NEWSWIRE CAPITAL IQ DOW JONES ETRADE FINANCE27 MARCH / 2013 UPDATE
  • ... & THIS IS BEING BROADENED WITH INNOVATIVE SOLUTIONS... DATA SECURITY RESEARCH TRADING NETWORK P2P IDEAS/ADVICE CORP FIN PAYMENTS / DEPOSITS28 MARCH / 2013 UPDATE
  • ... CATERING TO AN EXPANDING USER BASE INCREASINGLY ACCUSTOMED TO NEW TECHNOLOGIES & STYLES... INDIVIDUALS INSTITUTIONS CORPORATIONS IDEAS INVESTORS TOOLS ANALYTICS ISSUERS ACCESS NEWS/PR INFLUENCERS ADVISORS29 MARCH / 2013 UPDATE
  • ... RANGING FROM THE PROVISION OF DATA & INFORMATION... BANKRATE OPERA SOLUTIONS YAHOO FINANCE CB INSIGHTS CRUNCHBASE30 MARCH / 2013 UPDATE
  • ... TO THE EXCHANGE OF IDEAS... STOCKTWITS SEEKING ALPHA FUTUREADVISOR ETORO BENZINGA COVESTOR31 MARCH / 2013 UPDATE
  • ... TO PRIVATE CAPITAL SOURCING & CROWD-FUNDING... SECONDMARKET KICKSTARTER AXIAL MARKET FUNDERS CLUB ANGELLIST32 MARCH / 2013 UPDATE
  • ... TO PEER-TO-PEER (P2P) & OTHER LOAN PRODUCTS... PROSPER LENDING CLUB FUNDING CIRCLE POLLENWARE33 MARCH / 2013 UPDATE
  • ... TO THE MECHANICS OF CLEARANCE & PAYMENTS... SQUARE AFFIRM GOOGLE WALLET DWOLLA STRIPE PAYPAL34 MARCH / 2013 UPDATE
  • ... TO CONSUMER MARKET OFFERS & BIDS... GROUPON GILT STUBHUB EBAY ETSY FOURSQUARE35 MARCH / 2013 UPDATE
  • ... TO THE EVOLUTION OF ALTERNATIVE CURRENCIES & TRADABLE VALUE SYSTEMS, VIRTUAL & REAL... FACEBOOK CREDITS BITCOIN PEERINDEX KLOUT36 MARCH / 2013 UPDATE
  • ... SETTING THE STAGE FOR NEW CAPITAL FLOWS & NEW MARKETS TO FORM & EVOLVE... BANKS SQUARE CREDIT CARD CO’S BANKRATE FB CREDITS INSURANCE HEDGE FUNDS COMPANIES STOCKTWITS SECONDMARKET KICKSTARTER LENDING CLUB ENDOWMENTS PRIVATE EQUITY CORPORATE PROSPER FOURSQUARE VENTURE CREDIT STRIPE CAPITAL MUTUAL FUNDS ETORO PAYPAL SOVEREIGNS EBAY DWOLLA CORPORATIONS PENSIONS GROUPON ANGELLIST FAMILY OFFICES STUBHUB BITCOIN COVESTOR ESTABLISHED EVOLVING MARKETS PLATFORMS37 MARCH / 2013 UPDATE
  • ... ALL BASED ON EFFICIENT INFORMATION FLOW & A SUPERIOR ECONOMIC MODEL INFORMATION INFORMATION INFORMATION $ $ Principal Agent Principal $ $ INFORMATION INFORMATION INFORMATION38 MARCH / 2013 UPDATE
  • NEXT PHASES:INTEGRATION & EXPANSIONMARCH / 2013 UPDATE
  • MARKETS ARE COMPLEX MECHANISMS THAT REQUIRE INTEGRATION (EVEN WHEN DISINTERMEDIATED) INVESTORS ISSUERS SUPPORT CONSUMERS MERCHANTS INTEREST ANALYTICS GROUPS BUYSIDE MARKETS SELLSIDE UNDERWRITING VENDING ADVERTISERS RESEARCH TOOLS NEWSWIRE PR INFLUENCERS40 MARCH / 2013 UPDATE
  • DISPARATE PLATFORMS ARE A FIRST STEP TO A HOLISTIC SYSTEM IN WHICH CAPITAL & INFORMATION ARE CO-JOINED SQUARE information $ BANKRATE FB CREDITS $ $ information STOCKTWITS SECONDMARKET information $ $ KICKSTARTER LENDING CLUB $ $ information PROSPER FOURSQUARE $ $ STRIPE information $ ETORO PAYPAL information EBAY $ $ $ DWOLLA $ GROUPON ANGELLIST information $ information STUBHUB BITCOIN $ $ $ COVESTOR information FRAGMENTED EFFICIENT, FUNCTIONAL, DEMOCRATIZED41 MARCH / 2013 UPDATE
  • THIS EVOLUTION WILL TAKE TIME, EXPERIMENTATION & SUPPORT OF THE MARKETS’ CONSTITUENCIES BUSINESS CORPORATIONS VENTURES CAPITAL SOURCES CAPITAL USERS PRIVATE INVESTORS INSTITUTIONS /FUNDS SOVEREIGNS BANKS MUNICIPALITIES CONSUMERS42 MARCH / 2013 UPDATE
  • IN THE COURSE OF THIS EVOLUTION, THE CURRENT AGENCY SYSTEM WILL INCREASINGLY ADAPT TO A MORE DECENTRALIZED SOCIAL ENVIRONMENT... Investors Banks Issuers Consumers Analysts Credit Money Card Managers Co’s Lenders Builders Traders Advisors Sellers Brokers Borrowers Buyers43 MARCH / 2013 UPDATE
  • ... IN WHICH THE NEW (DIS)INTERMEDIARY WILL LIKELY BE THE NETWORK ITSELF INFORMATION INFORMATION INFORMATION Investor $ PayPal Issuer $ Square StockTwits Lender Borrower SecondMarket LendingClub Principal Network Principal FutureAdvisor Dwolla Buyer Seller AngelList CB Insights Consumer $ $ Builder Bankrate INFORMATION INFORMATION INFORMATION44 MARCH / 2013 UPDATE
  • WHERE ARE YOU INTHIS LANDSCAPE?WHERE ARE YOUHEADING?MARCH / 2013 UPDATE
  • CONTACT INFORMATION TO DISCUSS FURTHER: CoRise Co., LLC 535 Fifth Avenue, 4th floor New York, NY 10036 Telephone: (646) 532-6690 email: info@coriseco.com www.coriseco.com46 MARCH / 2013 UPDATE