Are Stocks Too Volatile For You? Try Alternative Investments In Business Lending

The stock market is not the only investment opportunity that’s been democratized.

That’s according to Benzinga’s conversation with Jay Morton, the CEO and co-founder at Supervest, the fintech connecting the capital to opportunity.

Read on to learn more about Morton’s foray into investment alternatives like merchant cash advances and why opportunities outside of stock markets may be important for investor exposure.

Context: In a past life, Morton was a mortgage pro.

Though it’s a great business to be in today, things had changed during the Global Financial Crisis over a decade ago.

“I went from being able to close a loan in one day to not being able to close a loan at all,” he said.

“A friend, then, brought me into the small business lending arena. He and I built a company lending millions of dollars a month of these short-term factoring deals,” which allow businesses to secure capital and use outstanding invoices as collateral.

After a few years in the business, Morton said he sought sustainability and less interaction with telemarketers, salespeople, underwriters and debt collectors.

This was the inception of Supervest, a platform that provides accredited investors access to extremely high-yield alternative investments like merchant cash advances (MCAs).

“I flew to Chicago and met with my current partners who owned a CRM in the space,” he added. “They had the tools and things in order for us to build and use Supervest on top of their system.”

After developing a proof of concept, Morton sought the next level. He hired a Securities and Exchange Commission law firm in New York to discuss how to best expand access.

“We moved forward with [a] Regulation D” focused platform that allows more businesses to raise capital through the sale of equity or debt without the need to register with the SEC, he said. 

Since launching and a bit of uncertainty during the early days of the pandemic, Supervest is nearly 10 times its initial size.

“Investors love the system and have realized that if they could get through COVID unscathed and make money, then obviously the system was pretty real.”

Growth Trajectory: “(In) 2021, we really started to see an acceleration.”

There was so much growth, Supervest needed new infrastructure, Morton said. 

“Our technology really has three components. The CRM capabilities, the investor platform, and an escrow component. We’ve been working on a version 2.0 over the last seven or eight months, and it will be ready in the next couple of months.”

Morton said he's excited for this iteration, as it gives Supervest total ownership of a technology built just for the purpose of promoting the growth of investments in nascent asset classes.

“We won’t be a one-trick pony anymore,” Morton adds. “It’s going to allow us to get into other asset classes like real estate, crypto, credit card processing, litigation funding, etc.”

Supervest's Vision For The Future: Apart from the release of Supervest 2.0, Morton said he's excited about the firm’s foray into alternative trading systems that give depth and liquidity to onboarded asset classes.

“It’s kind of like having a secondary market or Robinhood Markets Inc HOOD for non-stock investments.”

In growth initiatives beyond better technology, Morton said partnerships with firms like Vincent, Pitchbook and YieldTalk are key.

“We even partnered with a company called Alto IRA. They allow individuals to self-direct their IRA funds. Alto IRA will allow those funds to be invested on Supervest.”

In a follow-up on equity raises, Morton said that the company is bootstrapped. An influx of capital is needed to grow further, he said. 

“The goal is to hold an equity round and raise some capital so we can increase the staff, do marketing, and build out the platform,” he said, adding to the self-directed and fixed-return opportunities.

“We’ll likely have three to five options, as far as asset classes, so people can be diversified.”