Reinventing Wall Street for Silicon Valley
Wall Street
Wall Street has long been a hub of financial innovation – where insiders create structured transactions with confusing acronyms (LBOs, PIPEs, RMTs, SPACs). These deals are pitched by bankers to large companies, which have differentiated access to capital markets.
There’s a different relationship with technology innovation on Wall Street. Investors, management, and advisors usually base their financial decisions on precedent transactions and comparable companies (i.e., the past), which makes underwriting new technologies difficult. It’s called “technology risk.”
Silicon Valley
In Silicon Valley, technology is anything but a risk. It’s a requirement to exist, and bigger technology bets are celebrated. Not surprisingly, this environment attracts many of the brightest teams focused on pursuing technological breakthroughs.
Unfortunately, even the most promising startups fly under the radar of Wall Street’s financial institutions, which aren’t set up for success in Silicon Valley with their slow and offline processes and high fixed costs. The result is a structural gap in the market where premium startups are underserved by innovative financial products. Dilutive VC financing has traditionally been the only game in town. Until now.
As the bridge between Wall Street and Silicon Valley, Arc is solving this problem by reinventing startup financing through technology.
Where traditional financial institutions deploy analysts to manually underwrite transactions, Arc uses technology to better price the risk inherent in startup financing. APIs offer real-time access to financials, machine learning improves data interpretation, and cloud analytics unlock scalable, automated processes. The result is more flexible, efficient, and affordable capital for our customers.
At Arc, we believe best-in-class technology companies deserve best-in-class financial technology to fuel their growth. Where we’re going, founders won’t have to choose between Wall Street and Sand Hill Road. Join Arc today.
