Page 14 - Investment Advisor June 2022

INDUSTRY INSIGHTS

By Timothy D. Welsh

Back in the Tank: ScratchWorks Season 4

Three finalists — benjamin, Andes Wealth Technologies and College Aid
Pro — had 15 minutes each to win deep-pocketed investors over.

fter an 18-month pandem-
ic delay, ScratchWorks, the
A wealth management industry’s
elite fintech accelerator, finally debuted
its Season 4 at the Barron’s Advisor
Independent Summit in late March in
Louisville, Kentucky.
Three emerging fintech companies
took the stage live to make their pitch —
“Shark Tank” style — to the luminary
investors of ScratchWorks, hopeful for
industry fame, valuable connections
and most importantly, cold, hard cash
to fuel their growth. No doubt these
tech entrepreneurs were humming Pink
Floyd’s “Money” as they prepared for
the main stage. Snappy Kraken who was a graduate of company, a valuation that both Bicknell
ScratchWorks, now in its fourth sea- Season 1. and Nathanson thought was in the ball-
son, connects innovative tech startups Sofia turned a $100,000 investment park for an emerging firm that had great
with wealth management leaders to from Bicknell and his co-investors into a potential to make inroads into the highly
advance the digital transformation of multimillion-dollar raise from Bicknell competitive advisor tech space.
the financial services industry. Finalists just a few months later to make Snappy They thought, however, that $500,000
pitch their companies to a panel of RIA Kraken a household name in the advisor was a bit rich for where benjamin was
executives with deep pockets and hun- marketing technology sector. in its evolution. Reiner backed up his
dreds of billions of dollars in collec- valuation with solid growth numbers,
tive AUM, with the goal of securing an BENJAMIN including the fact that benjamin has a
investment for their company. Up first was Matt Reiner, CEO of nearly yearlong streak of double-digit
In the format, finalists have 15 minutes benjamin, an AI-driven workflow auto- quarter-over-quarter growth.
to make their case to the ScratchWorks mation engine and business support sys- After spirited discussion, Bicknell
investors to get a deal — making that tem that automates over 100 common and Nathanson made a final offer:
pressure-packed stage time likely the workflows and tasks to bring efficien- $250,000 for 10% of the company, sub-
most important 15 minutes of their fin- cies, scale and cost savings. Through ject to agreement from ScratchWorks’
tech careers. benjamin’s advanced design, advisory other investors. This offer would be a
Season 4 featured a subset of firms can automate much of the client significant haircut to Reiner’s initial ask;
ScratchWorks’ famous investors, includ- journey from streamlining the prospect- it was clear in Reiner’s mind, however,
ing Marty Bicknell, CEO of Mariner ing process, simplifying onboarding, that having Bicknell and Nathanson and
Wealth Advisors, and The Colony coordinating meeting scheduling and the other investors in ScratchWorks as
Group’s CEO, Michael Nathanson. The preparation, as well as ongoing client partners in benjamin would be transfor-
ability of the ScratchWorks investors engagement and relationship manage- mational for the company.
to transform the trajectories of fintech ment by synchronizing the RIA and cus- After a dramatic pause that had the
startups can be quite dramatic, most todian tech stacks. hundreds of advisors in the audience
notably in the case of Robert Sofia and Reiner opened up with a request of murmuring, Reiner agreed to the deal Adobe Stock
his marketing automation platform $500,000 in exchange for 10% of the with a big smile and handshakes all

12 INVESTMENT ADVISOR JUNE 2022 | ThinkAdvisor.com