Accion, the largest microfinance network in the United States and a leader in global financial inclusion, joins with community banking leaders and military veterans to back new web-based lender, StreetShares.com
StreetShares will focus on funding veteran-owned small businesses
Washington, D.C., May 2, 2014 – StreetShares, Inc., a new web-based lending platform, announced this morning the close of a $1.2 million seed round led by Accion Venture Lab, a seed-stage investment initiative sponsored by microfinance pioneer Accion. The round also included Washington D.C.-area community bankers, military veteran investors, Harvard Business School angels and Capital One alumni.
“We’re thrilled to have these investors join StreetShares, and we look forward to working with people who believe in our mission: to fund the veteran-owned and main street businesses that are the true backbone of the American economy,” said Mark L. Rockefeller, Co-Founder and CEO of StreetShares.
StreetShares was founded last year by Rockefeller, a former Wall Street lawyer and Iraq War veteran, and Mickey Konson, the former head of credit for Capital One’s national Small Business unit. Konson, who also worked at McKinsey & Co., serves StreetShares as Chief Operating Officer. Rockefeller and Konson teamed with long-time DC-area software engineer and entrepreneur, Ben Shiflet, who serves as the company’s Chief Technology Officer.
The StreetShares team has built a socially-oriented online lending platform, with the goal of serving a critical but underserved segment: veteran-owned small businesses. One in nine small businesses in America is veteran-owned. Military veterans face unique challenges in building credit, due to military deployment schedules and the rigors of military service.
When it launches later this month, StreetShares will be unique in the growing peer-to-peer online lending space. In the context of a growing online peer-to-peer lending industry focused primarily on consumer finance, StreetShares is dedicated to small businesses with funding needs below $100K. StreetShares provides a social experience that emphasizes affinity-based lending and uses a distinctive online marketplace. StreetShares allows investors to back a portion of an overall small business loan by bidding both the amount of the overall loan that the investor wants to back and the rate of return required by that investor. Bids are then reverse-auctioned and the lowest interest rate bids are combined to form a single loan, a technique that provides small business borrowers with the best market rate.
Paul Breloff, Managing Director of Accion Venture Lab, had this to say about their investment: “We’re very excited about the potential of this innovative new lending model to reach underserved communities. By focusing on veterans and, over time, other affinity groups, we think StreetShares can differentiate themselves in the market and create a unique experience for investors and enterprises seeking to grow.”
StreetShares is an online community where local investors fund main street businesses directly, without inefficient intermediaries. On StreetShares.com, individual investors bid to lend shares of small business loans to mainstreet businesses. Traditional overhead costs are eliminated, allowing mainstreet businesses to borrow at lower rates and mainstreet investors to enjoy higher returns. To request an invitation or for more information, visit StreetShares.com. StreetShares is open to all small businesses, but has a particular focus on the veteran-owned business community.
Accion is a global nonprofit dedicated to creating a financially inclusive world where people have the financial tools they need to improve their lives. We are building the next generation of top-tier microfinance institutions, accelerating start-up companies that serve the poor through our impact-investing initiatives, and helping to create a strong industry with high standards. Over more than 50 years, Accion has helped create 63 microfinance institutions in 32 countries on four continents that today reach millions of clients. The Accion U.S. Network is the largest microfinance network in the United States and has served hundreds of thousands of clients with loans and support. For further information, visit www.accion.org.