Firstly, I'd like to introduce y'all to our new URL and site FinTechIsrael. The name change comes as part of our ongoing discussions with NetBanker in the US, a major financial technology/innovation blog/news site that has grown a cult following around its conferences under the name Finovate and FinovateStartup. They requested a name change, which we complied with. Hopefully, we will be able to formally connect with them and get our members access to their conferences/events in the future...
Onto the topic at hand - First Coverage is the next step in a series of high-quality financial tools that have come out of a rather brilliant financial technology guru, Jeff Parker. For full disclosure - I first met Jeff Parker as a student of Cornell University, during a lecture he was giving as the "Entrepreneur of the Year". At the time, I was a member of the student Entrepreneurship club and had the chance to chat with him about his prior achievements, and build somewhat of a bond. Over the years, I have called on Jeff for guidance/support on a few work-related issues, and have found him abundantly helpful and useful.
Jeff Parker's resume reads like a who's who in financial services techology, including the creation of Technical Data Corporation (founded on 1980, sold to Thomson), Business Research Corporation (founded in 1982, sold to Thomson), First Call Corporation (founded in 1983, sold to Thomson), and CCBN (founded in 1997, sold to Thomson in 2004). The last two were full-on game changers -
- First Call - For those of us who can't live without the Yahoo! Finance page telling us industry sentiment (industry estimates, average buy/hold/sell, etc.) we can thank Jeff Parker. Prior to First Call, research was a different business, a major differentiator for most sell-side and buy-side firms, and held tight as a result. If an institutional investor wanted access to research for more than one firm, they would need an account at each. There was no such thing as market sentiment statistics, and the market was far from efficient. Enter Jeff Parker - a smart banker at Smith Barney who thought about ways to change the world. Jeff used his connections to build a relationship with all the major research houses and banks and made a simple ask: Give me your research and i'll give you access to everyone's research. To ease trust issues, he offered share ownership to the first firms who added their research to the system. It was a crazy idea in 1983, but he was able to get the big firms to go along, creating a momentum effect that locked everyone in. The company was sold to Thomson a few years later, making Parker a very rich man and their CEO of Thomson Financial. Today, the Thomson First Call brand is valued at over $1bn.
- CCBN - Following a stint in Venture Capital, Jeff Parker started CCBN in 1997 to solve the problem of Investor Relations on the web. The web revolutionized data access, and Jeff saw an opening to create more transparency. CCBN was a service company that offered listed companies the opportunity to outsource their investor relations sites, including filings/reports/meetings/notes/audio recordings. The sites would be built to fit the look and feel of the current company website, but be housed at CCBN. Almost overnight, CCBN became a household name in the world of finance, hosting live and historical calls for nearly all the top companies in the US. The company raised some $35m through 2004, when it was acquired by Thomson Financial. The acuqisition price was not disclosed, but this too was a major game changer, and a must-have product for Thomson.
Jeff's newest venture is with First Coverage, where he is currently Chairman of the board. The web-based tool, called "The Community" combines an internal "alpha capture system", media sentiment engine and meeting management tool to create a very essential product for investment professionals.
- The "Alpha Capture System" is essentially a messaging portal for buy-side folk to receive, sort and track ideas sent to them by sell-side professionals; This tool is the first to allow fully customizable, passive information aggregation in a reasonable and actionable manner for buy-side folks - when compared to Bloomberg/Reuters messaging or other traditional communication
- The Media Sentiment Engine tracks the global web of formal and informal content (traditional news media, blogs, etc) to aggregate the most relevant and critical content for the user; Again the dashboard created here is substantially stronger than what can be built using traditional tools, although it would be interesting to see how their sentiment engine compares with all the new semantic search tools coming out of Israel and elsewhere these days
- The Meeting Management tool allows the ecosystem to connect and create meetings in an intuitive manner (e.g. read a blog post and immediately schedule a call with the writer); This tool is not new per se, but does offer some nice added features that are important to financial professionals, such as recording voice conversations and tracking agenda, notes and action items.
The value proposition is quite strong to buy-side, sell-side, independent researchers, investor relations professionals and even CFOs (seeking to justify the high cost "services" offered by sell-side research). They have already signed up 300 institutions, and are venture backed by Commonwealth, Grand Banks Capital and J.L. Albright Ventures.
Looks like a strong investment with a likely Thomson Reuters exit... What do you think?