StreetShares bonds

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pgs59
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StreetShares bonds

Post by pgs59 » Mon Jul 09, 2018 4:46 am

Anybody have any experience/thoughts/opinions about these bonds returning 5% with liquidity (according to the advertisement).

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pokebowl
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Re: Street Smart bonds

Post by pokebowl » Mon Jul 09, 2018 5:33 am

pgs59 wrote:
Mon Jul 09, 2018 4:46 am
Anybody have any experience/thoughts/opinions about these bonds returning 5% with liquidity (according to the advertisement).


You will have to provide more information OP to what exactly you are referencing. Are these "crypto blockchain" smart bonds you are referring to or some other bond variant?
There is nothing more expensive than something offered for free.

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Re: Street Smart bonds

Post by z3r0c00l » Mon Jul 09, 2018 5:45 am

"Notes are a non-deposit investment product. Not FDIC insured. No guarantee. May lose value. StreetShares authorizes bank accounts by using a third party vendor, Plaid."

They give precious little information about the fees or how the investment works. It looks like a P2P loan platform that takes advantage of patriotism to sell their products. There is a 1% fee for the first year, apparently liquid after that.

I tend to avoid these kinds of things if they seem too good to be true. It seems unlikely that anyone can guarantee a 5% return without significant risk. The P2P platforms have apparently been getting worse and worse for individual investors. No one is on your side when it comes time to collect, and defaults rates are pretty high.

They also seem to be setting up to send you a wealth of advertising and business offers.

Perhaps try the $25 minimum and see how it goes for a year?

https://www.merchantmaverick.com/review ... es-review/
Last edited by z3r0c00l on Mon Jul 09, 2018 6:10 am, edited 7 times in total.

pgs59
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Re: Street Smart bonds

Post by pgs59 » Mon Jul 09, 2018 5:53 am

Sorry, I meant to type Street Shares (streetshares.com). They provide small business financing with preferences to veterans. They are registered with the SEC. Loans are funded via accredited and institutional investors (according to what I've read on the web). They have a 2 page ad in Kiplinger's magazine. It does not appear to have any Bitcoin connections.

pgs59
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Re: Street Smart bonds

Post by pgs59 » Tue Jul 10, 2018 5:09 am

I did email reply for "more information" and immediately received the salesman's (not surprising) offer to add up to $1000 to my deposit (depending on the amount of same). That was the compete clincher for me.

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Re: Street Smart bonds

Post by Call_Me_Op » Tue Jul 10, 2018 7:38 am

I hear warning bells going off (in addition to my usual tinnitus).
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

Theoretical
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Re: Street Smart bonds

Post by Theoretical » Tue Jul 10, 2018 8:49 am

pgs59 wrote:
Tue Jul 10, 2018 5:09 am
I did email reply for "more information" and immediately received the salesman's (not surprising) offer to add up to $1000 to my deposit (depending on the amount of same). That was the compete clincher for me.
Wait, that was the clincher to buy?! I get a brokerage throwing money at you to gain assets, but why would a fund do that? Moreover, doesn’t that mean that some of your money will be used to help induce the next guy/gal to invest?

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willthrill81
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Re: Street Smart bonds

Post by willthrill81 » Tue Jul 10, 2018 2:19 pm

pgs59 wrote:
Mon Jul 09, 2018 5:53 am
Sorry, I meant to type Street Shares (streetshares.com). They provide small business financing with preferences to veterans. They are registered with the SEC. Loans are funded via accredited and institutional investors (according to what I've read on the web). They have a 2 page ad in Kiplinger's magazine. It does not appear to have any Bitcoin connections.
When I was researching which peer-to-peer notes (loans) to invest in years ago, I found that loans used for small businesses had the worst returns of any category by far, even lower than loans to pay for family vacations. In aggregate, such notes almost always yielded negative returns, not 5%.

Perhaps Street Shares is employing better selection criteria than Lending Club did. But it sounds a bit to good to be true. YMMV.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

pgs59
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Re: Street Smart bonds

Post by pgs59 » Tue Jul 10, 2018 2:34 pm

NO NO NO!! Adding a "bonus" deposit means only one thing: Jumbo fees/commissions which can't do the consumer any good at all. Very suspect. They seem to be playing to the "help our Vets" emotions. I'm all for a helping hand to our vets (I'm one) but not under these circumstances.

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Re: Street Smart bonds

Post by Theoretical » Tue Jul 10, 2018 8:22 pm

Oh! I am so glad to hear that, and it’s a good example of where a salesman can trigger some sanity back into the discussion inadvertently.

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BoglePaul
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Re: Street Smart bonds

Post by BoglePaul » Tue Oct 16, 2018 9:20 pm

I am an investor in StreetShares. USAA has currently partnered with StreetShares to provide small business loans. That is a pretty huge stamp of approval.
https://communities.usaa.com/t5/Money-M ... a-p/184075

The street shares notes pay 5%, all while investing in Veteran owned businesses.
https://streetshares.com/landing/veteran-business-bonds

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Re: Street Smart bonds

Post by AerialWombat » Wed Oct 17, 2018 12:27 am

I’m both a veteran and owner of three small businesses. Knowing what I know on both fronts, there is no way I would ever gamble on what they’re offering. I’ll stick to poker.

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Re: Street Smart bonds

Post by z3r0c00l » Wed Oct 17, 2018 6:29 am

How does a company targeting vets or other financially vulnerable groups make you feel better? This is the same as all the gold coin offers going to one side of the political aisle, they are just targeting people who have signaled that they are credulous or vulnerable. The same for payday loans and all manner of other bad offerings. If it was a good product, they wouldn't have to appeal to patriotism to sell it. And if it was patriotism, they wouldn't have to sell it.

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willthrill81
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Re: Street Smart bonds

Post by willthrill81 » Wed Oct 17, 2018 11:26 am

BoglePaul wrote:
Tue Oct 16, 2018 9:20 pm
I am an investor in StreetShares. USAA has currently partnered with StreetShares to provide small business loans. That is a pretty huge stamp of approval.
https://communities.usaa.com/t5/Money-M ... a-p/184075

The street shares notes pay 5%, all while investing in Veteran owned businesses.
https://streetshares.com/landing/veteran-business-bonds
What is the estimated default rate on these notes? Are the notes individual securities, or are they tied to the platform like Lending Club's?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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BoglePaul
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Re: Street Smart bonds

Post by BoglePaul » Wed Oct 17, 2018 12:41 pm

AerialWombat wrote:
Wed Oct 17, 2018 12:27 am
I’m both a veteran and owner of three small businesses. Knowing what I know on both fronts, there is no way I would ever gamble on what they’re offering. I’ll stick to poker.
USAA currently does not offer small business loans. Is it terrible for USAA to partner with StreetShares so that they can offer small business loans to their customers, many of which are Veterans? Notice that USAA chose StreetShares and not any of the other peer-to-peer firms.
Last edited by BoglePaul on Wed Oct 17, 2018 12:51 pm, edited 1 time in total.

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BoglePaul
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Re: Street Smart bonds

Post by BoglePaul » Wed Oct 17, 2018 12:45 pm

z3r0c00l wrote:
Wed Oct 17, 2018 6:29 am
How does a company targeting vets or other financially vulnerable groups make you feel better? This is the same as all the gold coin offers going to one side of the political aisle, they are just targeting people who have signaled that they are credulous or vulnerable. The same for payday loans and all manner of other bad offerings. If it was a good product, they wouldn't have to appeal to patriotism to sell it. And if it was patriotism, they wouldn't have to sell it.
From the testaments of the borrowers that could not get small business funding from their local banks, the number of success stories makes me feel like they are serving the community. As far as patriotism, they CEO is a Veteran as are some of the employees. They focus on the Veteran Business Owners segment of the market because they are more likely to pay back their loans. Seems like there are a lot of skeptics on this forum. Is it possible for a company to do good?

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BoglePaul
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Re: Street Smart bonds

Post by BoglePaul » Wed Oct 17, 2018 12:48 pm

Another news article about the USAA partnership:
https://www.americanbanker.com/news/usa ... ss-lending

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BoglePaul
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Re: Street Smart bonds

Post by BoglePaul » Wed Oct 17, 2018 12:54 pm

willthrill81 wrote:
Wed Oct 17, 2018 11:26 am
BoglePaul wrote:
Tue Oct 16, 2018 9:20 pm
I am an investor in StreetShares. USAA has currently partnered with StreetShares to provide small business loans. That is a pretty huge stamp of approval.
https://communities.usaa.com/t5/Money-M ... a-p/184075

The street shares notes pay 5%, all while investing in Veteran owned businesses.
https://streetshares.com/landing/veteran-business-bonds
What is the estimated default rate on these notes? Are the notes individual securities, or are they tied to the platform like Lending Club's?
I think the 5% notes work like a money market (not insured though). I have never heard of any issues with the 5% notes. There is a chat box on the website to ask for more information.

AerialWombat
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Re: Street Smart bonds

Post by AerialWombat » Wed Oct 17, 2018 2:48 pm

BoglePaul wrote:
Wed Oct 17, 2018 12:41 pm
AerialWombat wrote:
Wed Oct 17, 2018 12:27 am
I’m both a veteran and owner of three small businesses. Knowing what I know on both fronts, there is no way I would ever gamble on what they’re offering. I’ll stick to poker.
USAA currently does not offer small business loans. Is it terrible for USAA to partner with StreetShares so that they can offer small business loans to their customers, many of which are Veterans? Notice that USAA chose StreetShares and not any of the other peer-to-peer firms.
No, it's not terrible for USAA to offer services to their customers. They are a business, so need to make offers to make money. And the veteran angle aligns with their overall marketing positioning, so it does make marketing sense.

What I said is that my own military experience and my own business ownership experience alone is enough to convince me NOT to lend money to veteran business owners. I was enlisted, not officer (as their CEO was), and based on that experience, I know that the military produces really, really good technicians. Technicians tend to make failed business owners far more often than successful business owners. The percentage of technicians/operators that can successfully run a business is very small. SBA data supports this, as does my own experience representing hundreds of failing small businesses with IRS problems.

Furthermore, after skimming through the StreetShares Reg. A Offering Statement on the SEC EDGAR system, I also would not invest. The company is only four years old, and even though the reported financial information is not current, they have/had a lot of corporate debt and massive operating overhead. I realize they're a Silicon Valley-styled startup, but I co-founded one of those, too, and our financials have never looked as bad as theirs did as of the Form 1-A filing.

The sales tactic that somebody else posted about also does not bode well. It reflects the excessive operating expenses indicated in the financial statements, and also tells me they're having a hard time selling the offering.

Your username is "BoglePaul". I'm hoping it's only coincidence, and that you're not the Paul Breloff listed as a director of StreetShares. :shock:

That's my unprofessional, pseudo-fundamental analysis. It's a hard "no" for me.

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BoglePaul
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Re: Street Smart bonds

Post by BoglePaul » Wed Oct 17, 2018 9:44 pm

AerialWombat wrote:
Wed Oct 17, 2018 2:48 pm
BoglePaul wrote:
Wed Oct 17, 2018 12:41 pm
AerialWombat wrote:
Wed Oct 17, 2018 12:27 am
I’m both a veteran and owner of three small businesses. Knowing what I know on both fronts, there is no way I would ever gamble on what they’re offering. I’ll stick to poker.
USAA currently does not offer small business loans. Is it terrible for USAA to partner with StreetShares so that they can offer small business loans to their customers, many of which are Veterans? Notice that USAA chose StreetShares and not any of the other peer-to-peer firms.
No, it's not terrible for USAA to offer services to their customers. They are a business, so need to make offers to make money. And the veteran angle aligns with their overall marketing positioning, so it does make marketing sense.

What I said is that my own military experience and my own business ownership experience alone is enough to convince me NOT to lend money to veteran business owners. I was enlisted, not officer (as their CEO was), and based on that experience, I know that the military produces really, really good technicians. Technicians tend to make failed business owners far more often than successful business owners. The percentage of technicians/operators that can successfully run a business is very small. SBA data supports this, as does my own experience representing hundreds of failing small businesses with IRS problems.

Furthermore, after skimming through the StreetShares Reg. A Offering Statement on the SEC EDGAR system, I also would not invest. The company is only four years old, and even though the reported financial information is not current, they have/had a lot of corporate debt and massive operating overhead. I realize they're a Silicon Valley-styled startup, but I co-founded one of those, too, and our financials have never looked as bad as theirs did as of the Form 1-A filing.

The sales tactic that somebody else posted about also does not bode well. It reflects the excessive operating expenses indicated in the financial statements, and also tells me they're having a hard time selling the offering.

Your username is "BoglePaul". I'm hoping it's only coincidence, and that you're not the Paul Breloff listed as a director of StreetShares. :shock:

That's my unprofessional, pseudo-fundamental analysis. It's a hard "no" for me.
I am a different guy. Statistically, Veterans are better at paying their bills than other groups (heard that from a bank). Hopefully StreetShares can cross the chasm. They were aiming high early on.

AerialWombat
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Re: Street Smart bonds

Post by AerialWombat » Thu Oct 18, 2018 11:34 am

BoglePaul wrote:
Wed Oct 17, 2018 9:44 pm
I am a different guy. Statistically, Veterans are better at paying their bills than other groups (heard that from a bank). Hopefully StreetShares can cross the chasm. They were aiming high early on.
Glad you're not the same guy. We'd all be screaming "shill!" otherwise. :D

Veterans may be better at paying their bills, sure. But there's a HUGE difference between paying one's bills and running/growing a successful small business. Massive difference.

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Re: StreetShares bonds

Post by garlandwhizzer » Thu Oct 18, 2018 1:48 pm

The bond market very efficiently prices risk. In the current environment when a bond issuer offers a 5% yield, you don't need to study it in detail. It is certain that increased risk is involved. Risk free 5% bonds would disappear so quickly you would never hear about them. Stretching for yield in the bond market sometimes produces slight gains over safer alternatives but can also produces very considerable losses. There is a dramatic asymmetry in risk/reward. The main purpose of bonds is not yield but safety IMO. Offering high nominal yields is a hook to market riskier bonds. No one is going to get rich off of a 5% nominal yield which in real terms is now about 2%, but it's certainly possible to lose a lot.

Garland Whizzer

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Re: StreetShares bonds

Post by jminv » Thu Oct 18, 2018 2:08 pm

Given what the moneys being lent for, 5% isn’t very attractive. These are risky offerings, everything will go fine until it doesn’t. Wait until the next recession comes along and small businesses feel the pressure. Especially the micro businesses they seem to be targeting.

USAA offering the product to borrowers isn’t a ringing endorsement for what this thread is about : lenders. From a lenders perspective the attributes that make these loans attractive to borrowers might make them not such a great investment (short business history, low revenue thresholds, fast and easy approval process, etc). It isn’t a good investment at all once you factor in that you’re only getting 5%. You can do peer to peer lending where there is actually a building backing what is effectively a small business remodeling loan through peerstreet and their kind and get 7.5-9%. Or you can go with a company that isn’t paying you for the risk you’re undertaking.

Small business lending is risky so you should compensated for that risk. Here you have a middleman taking a big portion of the return (their spread is large) and needing to use salesmen to push the product and take a big comission. At least with peerstreet etc (property lenders) the spread is smaller so you earn more, there’s collateral, etc.

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Re: Street Smart bonds

Post by z3r0c00l » Thu Oct 18, 2018 6:11 pm

BoglePaul wrote:
Wed Oct 17, 2018 12:45 pm
z3r0c00l wrote:
Wed Oct 17, 2018 6:29 am
How does a company targeting vets or other financially vulnerable groups make you feel better? This is the same as all the gold coin offers going to one side of the political aisle, they are just targeting people who have signaled that they are credulous or vulnerable. The same for payday loans and all manner of other bad offerings. If it was a good product, they wouldn't have to appeal to patriotism to sell it. And if it was patriotism, they wouldn't have to sell it.
From the testaments of the borrowers that could not get small business funding from their local banks, the number of success stories makes me feel like they are serving the community. As far as patriotism, they CEO is a Veteran as are some of the employees. They focus on the Veteran Business Owners segment of the market because they are more likely to pay back their loans. Seems like there are a lot of skeptics on this forum. Is it possible for a company to do good?
I am not worried about the borrowers, I am worried about the lenders, aka those people getting scammed by investing in this product. :D Not that worried, however, because I am in no danger of becoming one of them.

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