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November 2016

Love0
By CNote

#WHATWENEEDTOSUCCEED

30 billion, 90%, 5 times, 27 dollars, 7%…what’s behind these numbers? On one hand, a grim picture of missed opportunity, on another – a light of hope for our future. Consider the facts:

  • If women scaled as entrepreneurs, $30 billion can be added to our country GDP.
  • Women put 90% of their income into their communities and families.
  • Women have been starting businesses at 5x the rate of the national average.
  • 1 out of 27 dollars of commercial lending goes to women led businesses.
  • 7% of all the venture capital is received by women.

I remembered these facts last week as I attended the Scale Collective event in NYC hosted by Virago, a strategic advisory supporting women entrepreneurs. The event brought close to 100 women entrepreneurs together and was held at the venue located in midtown west, the part of the city going through unprecedented transformation and rebirth, from the area of dark and deserted warehouses into glass skyrises attracting sun light and new life.

I found it to be very symbolic. The movement of women entrepreneurship is gaining momentum, coming out of the shadow and into the light. There are now events, networks, funds, accelerators focused solely on women in business. This progress is remarkable, but we need more. The majority of these efforts are happening locally, organized by one or two women specialized on one problem area. What we’re missing is collective scale, national effort, and change on a federal level.

This is #whatweneedtosucceed is all about. In a letter to a future president endorsed by 80 companies, there is an agenda of items that must be implemented at a national level to promote and create equal opportunities for women entrepreneurs. This is the first call-for-action of its kind. Among many “needs” on the list, there are a few deeply engraved in the mission of CNote and our CDFI partners: to “foster small business lending” and to “create new sources of capital.”

The buzz about women’s potential in business is out there moving in waves. My greatest hope is that these waves reach the ocean. In 10 to 20 year, I hope that our daughters won’t be sitting in the same room, talking about #whatweneedtosucceed but rather sharing their stories of success and celebrating the progress, not knowing the times when it had been different for their mothers.

– Yuliya Tarasava, Co-founder

Love0
By CDFIs

Reflections post-CDFI conference

Last week, I had the pleasure of attending the national conference of Community Development Financial Institutions (CDFIs) in Atlanta. CDFIs, as you’ve read in previous posts are the “good guys and gals of finance.” They provide fair capital and coaching to underserved segments like women and minorities in a high integrity, transparent and personal way. While I was in Atlanta, I met many impressive professionals. Their financial acumen, industry prowess and commitment to their community was nothing short of impressive. But what really made me stop and pause was their stories. CDFI professionals never lose site that beyond the spreadsheets, technology and complex modeling that makes their industry sing, there is an underlying heartbeat that keeps them going — the borrowers.

CDFI borrowers have some of the most beautiful and inspiring stories I’ve ever heard.

It made me reflect on my own neighborhood and the propensity that many of us have to take our local small businesses for granted. The place we grab a bagel. The local dry cleaners. The pet shop down the street. These are neighborhood establishments that serve our needs, but behind those storefronts are people – passionate, committed, driven small business owners that started once with a “what if I’ and turned it into a “and so it shall be.”

Most CDFI borrowers had one if not several denials or rejections before walking through the doors of CDFI. And when they are greeted with someone who believes in them, the magic begins. They meet a loan officer or a business coach that wants to hear their story, that wants to hear the why behind their business and most importantly, that wants to see them succeed.

I will admit, I was incredibly impressed last week to see the level of expertise and professionalism that the CDFI industry hosts. By what I walked away with at the annual OFN conference was not just a natural admiration, it was an emotional connection. Every day, CDFIs change the course of someone’s life. This effects not just that individual, but their family and their community – our community – for years to come.

– Cat Berman, Co-founder

Love0
By Financial Planning

Are you an over-saver?

Nearly 1/3 of Americans are over-saving, amounting to over $300B in “extra” savings sitting in banks earning nothing. So why do we do it? CNote interviewed 100+ over-savers to find out. Here’s what we learned.

I know, it sounds like a funny term. Over-saver? But if you are one of the millions of Americans that have a rainy day fund, there is a high chance that you too, are an over-saver. We define an over-saver as someone who houses more than their emergency fund in their savings account. Perhaps you keep $1,000 more – or tens of thousands more. Whatever the case – you’re not alone. Nearly 1/3 of all American’s are over-savers, amounting to over $300B in “extra” savings.

So why call out our propensity to over-save? Well two reasons really. First and foremost, if your savings is housed in a traditional bank, you are actually losing money. Those bank interest rates are no longer keeping up with the rate of inflation, and online savings banks are barely matching it themselves.

Secondly, I would argue that keeping $300B on the sidelines is bad news for our economy. When over $300B sits in savings accounts earning nothing, that means less money is circulating, spent, loaned and put to work to make our economy stronger.

So you may ask yourself – why do we do it? Why do we house extra dollars when we know they will bare little fruit in this incredibly low interest rate environment? Well I decided to find out. I went out and interviewed over 100 over-savers and here were the main themes that emerged:

1) Liquid is Safety – after enduring several recessions, many Americans still feel that the only thing they can rely on is cash. Will the market crash under the next administration? Will my dollars be there for me when I need to cash out? Many of us think our cash on hand is simply smart given the volatility we’ve seen. It’s not that we won’t play the market – we just won’t put all eggs in any one basket.

2) Flexibility is Key – we used to be a more predictable society. I know my parents had a plan – whether it was for big vacations or retirement – and they stuck to that plan. But many of us just simply don’t live our life that way. What if there is a big purchase we want to make next year? Or an investment opportunity we don’t want to miss? Having cash on hand makes those opportunistic leaps easier.

3) We Simply Forget – I know it sounds silly, but I heard this over and over again. When new cash comes in, many of us take the easiest road: dump it in our savings. That’s much easier that exploring our options and it’s why those dollars are often left there without thought, intention or investment.

Take all of these together and you have a snapshot of how we’ve developed a hefty $300B+ cash cushion.

I think it’s finally time to admit it – Americans are increasingly tied (psychologically and emotionally) to liquidity. While not as sexy as trading, cash management is important – but often ignored. We are here to turn that around.

Our goal at CNote is to create a new reality for good savers that allows you to do good and do well. We believe you deserve an experience that is simple, honest and helpful. As we create this new world, we invite you to comment, challenge and help us redesign a financial reality we can all be proud of.

– Cat Berman, Co-founder