Page 16 - Investment Advisor June 2022

INDUSTRY INSIGHTS

around. ScratchWorks — Season 4 was pitch by Matt Carpenter and Joe of that number, Messinger noted that
off to a roaring start. Messinger, the co-founders of College CAP was on track for over $2 million
Aid Pro, or CAP, whose college planning in annual recurring revenue and had
ANDES WEALTH TECHNOLOGIES SaaS platform provides students, fami- already signed up hundreds of advisors,
Up next was MIT graduate, CFA and lies, and the advisors supporting them making CAP a proven fintech platform
veteran technologist Helen Yang with with technology, education and guid- with tremendous growth potential.
her award-winning technology platform, ance needed to ensure a great return on In addition, Carpenter and Messinger
Andes Wealth Technologies. Andes is the college investment. said they were well on their way to roll-
an integrated client onboarding and Carpenter and Messinger also had a ing out a consumer version of CAP that
communications platform designed to very rich valuation of $30 million and would be a powerful lead generation
help advisors deliver differentiated and were asking for an investment of $3 mil- tool for their advisor users.
personalized services at scale, incor- lion for 10% of the company. These strong metrics for an emerg-
porating behavioral finance to ing platform had an impact
help advisors better manage Finalists have a timed “pitch on Bicknell and Nathanson,
client relationships. as they became more attuned
Yang’s opening offer was a clock” to make their case to the potential for CAP.
very rich one of $1.8 million After further spirited debate,
for 6% of the company, cre- to investors to get a deal — Nathanson dropped an intrigu-
ating a valuation of $30 mil- making that short, pressure- ing offer that again had the
lion. While both Bicknell and audience murmuring in antici-
Nathanson are big believers in packed stage time likely the pation. “Would you be willing
behavioral finance and noted to accept a $15 million valu-
the need for better tools for most important 15 minutes of ation for a $1 million invest-
advisors to work with clients, their fintech careers. ment?” he asked Messinger
they pushed back against this and Carpenter.
high valuation. This compelling counterof-
Yang countered with some impressive “We’re here to solve the college fund- fer caught the CAP founders by surprise
industry accolades for Andes, including ing problem in America,” Messinger said and led to a quick sidebar in front of the
being recognized repeatedly by industry in his opening pitch. “Each and every hundreds of attendees, huddling among
awards programs as the best risk-toler- year we have 3 to 4 million kids heading themselves as the clock was ticking on
ance tool. In addition, Andes’ stream- off to college, which means we have 3 the pitch session. After about 30 seconds
lined process to develop an integrated to 4 million parents trying to figure out of whispering, Messinger and Carpenter
investment policy statement that maps how to pay for college. If advisors want made a “raised eyebrow” glance to their
back to advisors’ model portfolios vs. to reach Generation X, this is their No. 1 CEO, Kevin Degnan, who was sitting in
canned portfolios common in “model financial concern, so if you are an advi- the audience, implying, “Boss, should
marketplaces,” along with innovative sor in your local community who can do we take it?!?”
portfolio analytics, would be a pow- this, you have a great chance to build a And in one of the most dramat-
erful differentiator. great business.” ic endings in ScratchWorks history,
She also said that she and her team Through CAP, advisors can glean key Degnan gave them the “thumbs up”
were deep into negotiations with mul- insights into the affordability of col- sign and ScratchWorks closed out
tiple enterprise relationships and that lege; the “sticker” price often overstates Season 4 in style.
the pipeline for prospects was full. the total cost as many colleges provide Stay tuned for ScratchWorks —
Despite Yang’s persuasive pitch, merit scholarships as part of their offers. Season 5, opening up for indications of
Bicknell and Nathanson decided to pass “We think we can disrupt the way fami- interest at www.scratch.works soon.
on the deal. They did agree, however, lies shop and pay for college funding,”
to a formal, 1-1 demonstration of the Carpenter said. Timothy D. Welsh, CFP, is president, CEO and
Andes platform. While both Bicknell and Nathanson founder of Nexus Strategy LLC, a consulting
were on board with the CAP value prop- firm to the wealth management industry. He
COLLEGE AID PRO osition and potential, both pushed back can be reached at [email protected] or
Rounding out Season 4 was the final on the $30 million valuation. In defense on Twitter @NexusStrategy.

14 INVESTMENT ADVISOR JUNE 2022 | ThinkAdvisor.com