Financial Technology Partners CEO Interview with Greg Ingram
How did your background shape your vision for CMG? What is the fundamental problem that you are solving?
During my career in ECM the same long-standing problems continued to manifest themselves. ECM by its nature typically operates within very short time cycles, and practitioners struggle with the lack of structured data compounded by multiple disparate data sources. From my Sell-side perch, I witnessed Buy-side firms trying to make informed investment decisions with fragmented data and lack of real time signals.
The fundamental problem that CMG solves for is providing a gateway for all interested parties (both Sell & Buy-side) to share common data inputs across a neutral platform. The platform was developed to be the system of record for ECM transactions delivering trusted cross-constituent collaboration, under a framework that solves for compliance and risk concerns.
Why hasn’t a product / service like CMG existed before? Why is now the right timing for CMG?
It sounds self-serving, but I truly feel that it took a team of practitioners to design the system that solves for the unique complexities of capital formation. I also feel very strongly that a key advantage for CMG is our independence, and we operate a completely neutral platform. I am very proud to say those words were reinforced with our recent Series B raise, with a healthy mix of investment banks and investment managers joining forces to take CMG to the next level.
From a timing perspective, I feel that within the last few years, SaaS and cloud-based technologies became mainstream on the street. Investment Banks, hedge funds, and investment managers have made rapid progress adopting these technologies and gaining economies of scale in the relentless pursuit of efficiencies and taking cost out of financial transactions. With our initial product launch in 2017, CMG was perfectly positioned to leverage these technologies.
How has CMG, as an independent company, been able to bring together both the buyside and sellside (which is always a challenging proposition)?
Quite frankly we built a better mousetrap and the Buy-side, which was underserved, appreciated the fact that our platform leveled the playing field. The team at CMG is very grateful and indebted to our buyside advisory members, Capital Group, Fidelity, Franklin Templeton, T. Rowe Price, and Vanguard as well as our other early adopters, for having faith that a small start-up could deliver innovation to the capital formation process.
Additionally, their input has been invaluable to our product design and development and will continue to be so for the foreseeable future. Obviously when those firms stood behind what we were doing, the Sell-side banks became very interested in CMG.
I am sure your phone has been ringing since announcing your $25 million financing round in June. Are you open to taking on additional strategic investors? How important is an investment from your key partners?
We expected that there would be interest in what we were doing following the announcement, but we have been blown away by the level of excitement. We appreciate the validation from both sides of the industry (Buy-side & Sell-side) and the value proposition has been underpinned by substantial interest we are receiving from private capital as well.
What is your pricing / revenue model?
Our Buy-side pricing model is typical SaaS-based pricing at the seat or group level. We have also recently rolled out an Enterprise-class service and it has been very well received.
Our Sell-side model has both annual seat-based licenses and transactional components. We offer a highly configured approach to allow banks to adopt certain aspects of our platform. It is certainly not one-size fits all and we have an aggressive release schedule that will see us expand the offering dramatically over the next 12 months.
As you become “hard wired” into the capital markets fabric of Wall Street, there are obviously lots of directions CMG can go. Where are you most focused in the near-term?
Every employee at CMG is 100% focused on launching US ECM deal offerings on our platform. The CMG functionality will provide broad digital connectivity between Buy-side and Sell-side firms for US ECM offerings and it will ultimately capture all relevant workflow.
Following the launch of our transactional platform in the US, our Buy & Sell-side partners are looking to us to deliver the same innovation to the International markets. I can assure you there are no shortage of ideas on where we can position our technology to address the next market infrastructure opportunity.
What are the biggest challenges you face on a day-to-day basis running a fast growing FinTech company? How has COVID impacted your plans?
We face the same challenges as other start-ups that have developed compelling technology and that is focus, prioritizing initiatives, delivering on our commitments, and making hard choices to delay ambitious ideas. It is so important to stay true to our mission and our loyal partners.
Despite the challenges that we all are facing because of the pandemic, we are truly humbled by enthusiastic engagement by our customers. I really feel it speaks to the nature of an industry that has been starved for innovation. CMG seamlessly moved to a fully remote work environment in early March and it has been quite successful.
What is the long-term vision for CMG? Is independence critical to your future?
We are looking to be a vehicle to drive innovation and help the industry more efficiently raise capital. While we are squarely focused on the public equity markets, we do feel our technology can be the basis for connecting diverse pools of capital. I don’t want to get on my soapbox, but I am a firm believer that capital is the life blood of an advanced economy, it drives innovation, creates jobs, and improves lives. If you join us in that belief, then it really drives home the true mission of our company and explains how we have developed a truly innovative platform with a modest-sized team.
Do you have any advice for other entrepreneurs targeting the capital markets space?
I’m glad to share what has worked for us. You need deep domain expertise, whether that is yourself or your initial team. It really helps to have first-hand experience dealing with the problems that you hope to solve. You need to focus on nailing one aspect, resolving one pain point, then moving on to the next opportunity. You need discipline not to become a captive workforce and solving the unique problems of a single customer, even though they may be willing to reward you handsomely. Finally, for us, our most important initial hires were on the technology side. The technology direction you take in the first few months of your firm can make or break you, as you progress down the commercial road. We were very fortunate to be able to attract some top-tier technologists to join in our mission from the early days.
Questions?
We want to hear from you.