We talked to Steve Cohen's right hand man about Point72 Venture's latest investment, tech on Wall Street, and cryptocurrency
- SAY, a technology company that aims to help stock owners unlock their voting rights, has secured $8 million from a number of investors.
- Business Insider spoke with Matthew Granade, a managing director at Point72 Ventures and a lead investor on the deal, about SAY, his outlook on financial technology and cryptocurrency.
Quiet Capital, Struck Capital, and Core Innovation Capital are other investors in the round.
SAY, founded by Jeff Cruttenden, the same entrepreneur behind investment app Acorns, is working on a platform that aims to easily allow investors to engage with the companies they own.
Some investors only consider the price of a stock when buying a share of a company, but they are also owners of that company. And ownership typically guarantees a say in the way a company is managed. Still, taking advantage of those shareholder rights can be tricky. So-called proxy voting involves snail mail, long financial reports, and confusing proposals. SAY wants to simplify the process.
"At a time when millions of Americans feel powerless and underserved by the political and economic systems there sits a massive opportunity to use technology to empower shareholders as owners and citizens," Cruttenden said.
Business Insider caught up with Matthew Granade, chief market intelligence officer at Point72 and head of Point72 Ventures, about the investment in SAY, technology on Wall Street and cryptocurrency.
The following has been edited for clarity and length:
Frank Chaparro: What type of companies do you look to invest in?
Matthew Granade: Point72 Ventures has been in business for two years now. We focus on various businesses in enterprise technology where we have a strong thesis on where things are going in the industry they are in. We are looking for new ways of investing, new ways of serving banks. We do a lot in artificial intelligence and machine learning, where we have done a lot of research. We also are looking at activity in databases and cybersecurity. Financial technology is a big piece of it.
Granade: Technology is changing the way that financial services takes place. In SAY, we see a unique opportunity to connect companies with shareholders. We are in a very strange world. The only people who vote their shares are people with a tremendous amount of patience and, of course, activist investors. It's strange. We did research on this and we found there are a lot of people who want a lot more say, and want to have say in the companies they own. The current discussions around Facebook sheds light on this. Shareholders have been quiet, but they should be the loudest voice.
Chaparro: How did the deal come together?
Granade: We knew Jeff through Acorns. It was our second or third investment as a fund. We got an email, 'Hey Jeff has a new idea and he wants to tell you about it.' Steve and I had breakfast with Jeff and we were very impressed. It takes you a few minutes to get all the moving pieces behind the company, but we immediately got the idea. We are owners of stock, and we get owning stock, and it makes sense to help people activate that ownership. It's largely an idea, right now, because it's a young company. But we are excited to be on board.
Chaparro: How is finance being democratized?
Granade: I would point to a couple other examples. Quantopian is democratizing the quantitative hedge fund business. Before this stuff only existed in enclaves in London and New York City. What Quantopian did is it put the ability to code and use data to drive alpha into the hands of countless more people. This allows anyone to try their hands at algorithms. And basically be their own hedge fund.
Acorns is a great example of creating a product, using technology, and they did so in a way that tackles issues relating to regulations and brokerage tech. It solves a key problem. It makes investing much easier and that is very important.
Chaparro: What are some of the biggest misconceptions in fintech?
Granade: We are different than a lot of other fintech investors. They are interested in stand-alone start to finish financial services firm. That's a very hard model to pull off. We have tended to invest in people who somehow play one part in the overall ecosystem and have relationships with brokers, but they are providing services in the middle of the thing, not doing their own thing.
Chaparro: How do you distinguish between what's real and what's hype?
Granade: We pay attention to a few different things. If you take the case of SAY as an example, I haven't seen anything else like it. It is going after a market with very few large old competitors. There is a pool of money related to how proxy voting is done. Third thing, I really do like the team. Jeff and the people he put around this are incredible entrepreneurs. It is a strong group attacking a problem not many people are attacking. There is money to be had if you can do this right.
Chaparro: Of course, I have to ask about crypto. Are you guys investing?
Granade: No we are not. Not in any sort of active way. We have done a lot of research. Steve is intellectually curious about it. We have not come up with a thesis yet, but that doesn't mean we won't develop a thesis.