A new partnership between Republic and BankProv simplifies the escrow process for companies raising money on the platform.
Republic will utilize BankProv’s BaaS offering from Treasury Prime to deliver the service.
“We are delighted to work with Republic and support their mission to expand access to new investment opportunities,” said Dave Mansfield, CEO of BankProv.
“Our focus on developing specialized BaaS technology tailored for our customers allows us to deploy industry-first solutions to underserved markets.”
Why Republic took its time when seeking partner
Finding the right partner took some effort, Republic’s head of retail Chuck Pettid said. With the platform hosting several investment activities, the provider needed to be well-versed in the different regulations governing each. A smooth customer experience is also essential.
“We have more optionality for investors,” Pettid said. “If it were straightforward equity deals, in the grand scheme of things, that’s pretty simplistic. But because we offer equity deals, debt deals, revenue sharing deals, and cryptocurrency deals, those have a different flavor and require a different type of service. We also need to sync up with BankProv with information to collect for certain securities exemptions or even the security instrument.
“Each security instrument can be an equity deal; it could be a custodial equity deal, a nominee equity deal, or an SPV. Different requirements must be collected, or different information must be collected from investors. BankProv has a system in how they operate, and if we’re not collecting the right information, that investor ends up with a pretty bad experience.”
It was a long process, from identifying the need to signing the contract. Republic spoke with several providers, some clients, and Republic investors who knew other service providers. They gave themselves 45 days for a two-company shortlist before conducting a one-week review.
Developing the contract took more than one month. The companies had to account for multiple actions.
Building the product took three months, Pettid said. Time was spent ensuring each company’s software could communicate with each other. Due to the complexity, certain features had to be prioritized.
“It’s basically what would allow us to do most of our business,” Pettid said. “Then we’re adding features into it as we go along.
“We could do credit cards for one of our entities with the most activity. We did not do credit cards for another entity with a different securities exemption and smaller volume until maybe a month ago. That was discussed and planned with the BankProv team and our team internally, so it wasn’t a surprise.”
Tony is a long-time contributor in the fintech and alt-fi spaces. A two-time LendIt Journalist of the Year nominee and winner in 2018, Tony has written more than 2,000 original articles on the blockchain, peer-to-peer lending, crowdfunding, and emerging technologies over the past seven years. He has hosted panels at LendIt, the CfPA Summit, and DECENT's Unchained, a blockchain exposition in Hong Kong. Email Tony here.