BNPL for Alternative Assets
I want Buy-Now-Pay-Later functionality for purchasing limited partnership interests on alternative investment platforms. Some of these investment platforms offer their own deals (Cadre, etc.). Others act as 3rd party administrators (AngelList, etc.)
For simplicity, I'll start with the RUV use case. A RUV interest is a no management fee, no-carry LP interest in a fund that invests in a single private company. I invest in startups and growth stage companies using RUVs. I want an Affirm-like checkout experience for RUV investing.
Platforms would get a massive new recurring revenue stream with zero CAC.
I currently have to pay cash in full for each RUV interest.
This is strange since I can get financing at
0% APR, 24 month financing for a $1k iPhone
2.49% APR, 72 month financing for a $50k Tesla
0%-30% APR 36 month financing through Affirm.
These are rates for pure consumption goods. They will definitely depreciate to near zero resale value within 10 years.
In contrast, I only invest in RUVs because I expect their resale value to multiply over a decade.
Example:
I get the opportunity to invest in a $500k RUV allocation in SpaceX.
I want
a lender to fund the commitment immediately.
to then pay the lender back in installments the same as how I would pay off a Tesla car loan.
the option of a lower interest rate by providing a personal guarantee, down payment, etc.
a native check-out experience as another payment method next to ACH and wire.
Every platform that creates LP interests (SPVs/RUVs/etc.) has 80% of the infrastructure to do this
Borrower sourcing: non-issue since the platforms already source investors who are potential borrowers
Origination: service providers offer semi-turnkey functionality in this area
Servicing: platforms already capture key data points for credit through KYC/AML
Collections: platforms can block distributions or access to new deals. Platforms also have posesssion of the collateral at all times. This is a major advantage over those lending for consumer goods
Capital markets: this can resemble a capital call line of credit. Banks, credit funds, high net worth individuals, etc. can underwrite this