Customer Case Study with Philip Picariello (VP of Finance & Ops at Stocktwits)
- Meow Technologies, Inc.
Stocktwits is a platform for over 6 million users to share ideas and insights about stocks and the financial markets.
Founded in 2009, Stocktwits has raised almost $50 million in venture funding including a recent Series B financing. Their investors include Foundry, True Ventures, ffVC and Social Leverage.
Today, we are featuring Philip Picariello who is the Vice President of Finance & Operations at Stocktwits.
Prior to Stocktwits, Philip held various different senior roles leading finance functions for startups as well as a 10+ year stint as a Senior Vice President and Head of Investment Management for a $25 billion short duration fixed income portfolio with eSecLending. He also oversaw the government bond trading team and co-established the portfolio management division.
Philip also holds many licenses and certifications from FINRA, the Financial Industry Regulatory Authority, including the SIE, Series 14, Series 24, Series 28, Series 4, Series 57, Series 63, Series 7 and Series 99.
You have a ton of experience in financial services. Why use Meow versus a legacy bank?
“Asset management fees are incredibly overpriced for just buying U.S. Treasuries at legacy banks.
We have seen fees range from 25 to 100 basis points (or 0.25% - 1%) for an asset manager as well as a markup from the trading desk.
These management fees make no sense for something as simple as a laddered U.S. Treasuries portfolio compared to building a full blown portfolio across multiple asset classes.
It also comes down to service and not just being another client number having to talk to multiple people and red tape to get adjustments made to the product.
I have worked with many vendors or financial services in the past where a question or a small change has to be reviewed by up to 9 different people. I don’t know who to talk to. You don’t know who can answer what. One person needs to talk to 7 other people to get the right answer to your question.
And it just wastes a lot of time. We have other providers and you get some support email that takes hours and days to get efficient responses on.
That is frustrating when you’re dealing with millions of dollars moving around.
What makes me feel valued?
I go right into our slack channel and ping on a question and it’s answered right away without hesitation. And if you don’t have an answer immediately, you give me a timeline and you go way above and beyond to be transparent.
There is no red tape or bureaucracy.”
But what about the legacy bank “free” money market funds?
“Money market funds always have an expense ratio meaning you are paying something. Depending on the share class, those fees can range between 25 and 100 basis points. Always look at the Fund Fact Sheet. When looking at Government Money Market funds, inquire about the approved repo collateral as some funds will take Agency Mortgage Backed Bonds which might not align with your firm’s investment strategy. And based on Rule 2a-7, those funds are required to carry certain daily and weekly liquidity buckets to fund all investor outflows. Based on your company’s cash needs, a dedicated portfolio would better allow you to optimize your cash’s return on a risk adjusted basis.
However, more importantly these money market funds are mostly omnibus accounts which means your funds are stuck with everyone else and you don’t have a direct relationship with your own cash.
Having a direct relationship with your capital in a segregated brokerage account is important to me especially with everything that’s happened in the banking world.”
But why don’t you just go to TreasuryDirect (government website) to buy Treasury Bills?
“I could, but it’s not an efficient use of time. Treasury Direct allows for the purchase of the Treasuries in the primary and secondary market but also requires you to set up a relationship with a brokerage firm if you want to liquidate those securities. So now I need two vendors to do what Meow can do for me."
Anything else that you find important?
“I looked under the hood at Meow. You need to when you’re parking your cash.
And I saw a FINRA registered broker-dealer and custodian with BNY Mellon Pershing*. Having set up investment advisors and broker dealers in the past I know the scrutiny that these firms go through on a regular basis.
And BNY Mellon Pershing is one of the top 3 custodians in the entire world and handles a huge percent of the entire repo market.
My wire instructions say BNY Mellon Pershing. At no time does Meow or the broker handle the firm’s funds. I can see my unique account number. I can login to the portal and see exactly where my funds sit.
And that’s what matters for my investors and board.
You guys are the tech platform on top which makes it nice and easy. And you’re hyper transparent about the fees showing all yields in the dashboard net of fees which I appreciate.
Look, every startup works hard to raise their money.
They want to invest their cash and extend their runway. And it doesn’t make sense to pay it all in fees which is why I love your Costco model for financial services. Cut costs and keep it transparent for the customers.”
*Brokerage services provided by BNY Mellon Pershing, Member SIPC through a clearing and custody partnership with Helium Advisors. Meow is not an investment adviser; however we’ve partnered with Helium Advisors LLC (“Helium”), an SEC-registered investment adviser, to bring you certain investing features. All investment advisory services are provided by Helium. We are not affiliated with Helium however we receive compensation as a percentage of assets managed by Helium for promoting Helium’s investment advisory services. Our partnership with Helium gives us an incentive to refer you to Helium instead of another investment adviser that is not a partner of ours. This conflict of interest affects our ability to provide you with unbiased, objective information about the services of Helium. This could mean that the services of another investment adviser with whom we are not partnered may be more appropriate for you than those of Helium. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time. Helium accounts are not bank guaranteed or FDIC insured.