Launch Case Studies

Alternative Lender

Objective: Prepare a new alternative lender with a strong compliance foundation and no regulatory issues from Day One.

Background/Opportunity

  • A US-based alternative lender came to InnReg prior to launching a mobile-only lending app targeting millennials and college students with thin credit. As they fine-tuned the product design, they asked us to advise on the configuration of their operational stack and compliance platform. This forward-thinking group needed a product design and operational system that would conform to all compliance regulations. This system also needed to scale over time to support long-term growth.

Challenge/s

  • The alternative lender wanted to deploy effective and efficient account origination processes for a prospect audience with thin credit files while complying with all relevant origination regulations. In addition, their planned funding and payment processing system was 100% mobile. They were concerned about how to meet compliance regulations, without allowing constraints to erode the integrity of the user experience of their unique new product. 

InnReg's Solution

  • Advised on the design and deployment of a secure and compliant automated underwriting and processing system that delivers origination decisions within 3 minutes.
  • Identified and implemented an optimal compliance stack using the most appropriate technologies for the client.
  • Designed efficient and effective processes that meet all lending requirements and all digital information security requirements.

Client Results

  • Successfully booked 1,000+ consumer accounts within 3 weeks of launch.
  • Seamlessly originated accounts, transmitted funds, processed payments, and securely transmitted sensitive customer data to credit reporting agencies without hiccups during launch and growth phases.
  • Named a Start-Up Of The Year by a prominent industry publication.

Testimonial

“Francesco Matteini and his team at InnReg are doing an outstanding job as our compliance gurus. It is like having an in-house regulatory department. They came in, listened, understood our needs, and built our compliance systems from the ground up. They make it easy for me to focus on launching my company and building my customer base because I know the regulatory issues are in safe hands. They are creative in their problem-solving approach. Their work is on-time and on-budget. I trust their input completely, and I highly recommend InnReg to any fintech company that wants outsourced compliance for all or part of their compliance function.”  

-- Client CEO

Online Tax Planning & Advisory

Objective: Ready an innovative new service for launch.

Background/Opportunity

  • The client was a Techstars-backed program designed to automate tax planning for consumers. The service would aggregate financial data from third-party sources to forecast taxes due and to identify tax savings opportunities in real-time as they emerged. Their goal was to minimize tax payments for their clients and provide a “no surprises” filing experience every April.

Challenge/s

  • As a tax planner and advisor, the client needed to ensure the product fulfills all applicable regulatory requirements while providing analysis of users’ tax situation in an innovative real-time manner. In addition, they needed an approach for tax analysis and strategies that would always adhere to constantly changing IRS rules.

InnReg's Solution

  • Leveraged 20+ years of compliance expertise to formulate the regulatory strategy.
  • Advised on the negotiation of vendor contracts with key strategic alliances.

Results

  • The client was acquired by a large-scale tax preparation software company during launch. They are the only Techstars-backed company ever acquired prior to Demo Day.

Testimonial

“In his role as our advisor, Francesco provided a decisive contribution in formulating our regulatory strategy. As we set out to disrupt the way consumers plan for their taxes, we had to figure out how the existing regulations (IRS, etc.) apply to our business model. Francesco guided us through the steps necessary to operate within the rules. His participation in the launch of our company was also instrumental in establishing our credibility with partners and investors.”

-- Client CEO and Co-founder

Retail Trading Platform

Objective: Launch a revolutionary new equity stock trading platform for retail investors.

Background/Opportunity

  • The client wanted to create a trading platform that would be fun, easy, and affordable. The platform needed to deliver their mission to help new investors learn about stock trading in a low risk and low-cost environment. Their goal was to make Wall Street accessible to a wider Main Street audience. The product design included online brokerage accounts, plus gifts of stocks delivered via gift cards and e-cards.

Challenge/s

  • In pursuit of their mission, the client had to build a platform attracting younger and lower net worth investors to equity trading but at the same time avoid raising regulatory red flags or generating negative press. Given their business model and plans for growth, they had to create a cost-efficient operational system, but with a complex product design including custodial accounts for minors, shares of stock in the form of gift cards and e-cards, fractional trading, and other areas that required a clear regulatory strategy.

InnReg's Solution

  • Designed and deployed a compliance platform that supported accurate transactions at high speed and with a high level of information security.
  • Advised on the negotiation of profitable vendor contracts, including a multi-year clearing agreement.

Client Results

  • Raised $15 million in Series A funding after their successful launch and positive press.
  • Stock shares delivered via gift cards contributed an incremental $50 million in revenue from sales at partnering national retail outlets such as Target, Safeway, and Staples.
  • Won numerous awards in fintech trade publications including Product of the Year and Most Disruptive Company.

Testimonial

“Francesco has been the driving force in establishing our compliance, legal, and risk management functions. His experience and profound knowledge of the industry have been instrumental in protecting our brand during high-growth periods, as well as through challenging times. A clear communicator, Francesco has established strong relationships with industry regulators. In addition to his experience and knowledge of business, law, and regulations, Francesco has an extremely organized approach to problem-solving. I have been very happy to work with Francesco and look forward to doing so again in the future.”

-- Client President and COO

Equities Gifting Solution

Objective: Launch a new service that makes it easy to give stocks and index funds as gifts.

Background/Opportunity

  • The client was a start-up supported by the Y Combinator incubator program. Their mission was to design a new service for people who wanted to give the unique gift of equity stocks, using an easy and fun platform. Their product strategy blended retro and fintech because it hearkened back to the days when parents and grandparents gave bonds to children to seed their college fund.

Challenge/s

  • The client needed to manage numerous compliance regulations spanning the brokerage/investment advisory environment to support stored-value gift cards and the trading environment to support online investing, including custodial accounts for minors.

InnReg's Solution

  • Established a manageable set of regulatory requirements.
  • Advised on the adoption of the most efficient regulatory structure to accommodate the desired business and revenue model.

Client Results

  • The company was acquired by a competitor based on their successful product launch with substantial positive press, and their potential to become a viable competitor in their own right.

 

Micro-Investing Platform

Objective: Launch a micro-investing app designed to increase portfolio growth potential compared to conventional savings and investment accounts.

Background/Opportunity

  • The client believes every single person would benefit from an investment approach that includes small, daily contributions. However, decades of experience as investment advisors had taught them this level of discipline is rare even with seasoned investors. Their platform solves this problem by rounding up a client’s credit and debit card purchases to the next dollar, and then automatically depositing this “small change” into a passively managed investment account.

Challenge/s

  • The client needed guidance on how to identify and address potential regulatory compliance issues related to targeting international users. They also asked for support in identifying the best vendors to support the international launch of an innovative investment program and product in a regulated environment.

InnReg's Solution

  • Conducted a comprehensive gap analysis. 
  • Ensured that the compliance program was implemented in accordance with all SEC requirements for a Registered Investment Advisor.
  • Addressed all compliance issues related to targeting and managing international accounts.
  • Sourced and introduced regulated vendors who could support international clients.

Client Results

  • The client was successfully launched in 2016 on a strong compliance foundation.
  • They closed their first round of VC seed funding soon after launch and have moved on to securing Series A funding.

Testimonial

“InnReg understands fintech, online brokers and robo-advisors like no other compliance consultants we approached. They keyed in immediately on all the potential regulatory issues that could affect our business when targeting international users. Their CEO Francesco Matteini has built a substantial network of third-party providers. He helped us evaluate and select the right vendors to meet our needs within our budget and timeline."

-- Client Founder and President

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