CNote was launched in 2017 by Catherine Berman and Yuliya Tarasava, who have decades of experience working in finance, venture capital, and private equity. In those past roles, they witnessed the wealth gap grow at an alarming pace, especially after the great financial crisis ravaged American´s middle class. Due to this, they decided to leave traditional finance to start CNote, and prove that financial innovation could be used as a tool to close the wealth gap, not exacerbate it.
“I always saw finance as a tool for positive change and economic development,” says Yuliya Tarasava, co-founder and COO of CNote.
Their vision is: a business model that created value for all of its stakeholders – rather than following the traditional path of trying to grab a bigger piece of the pie for themselves, they would work to increase the size of the pie for everyone. By providing a new and sustainable capital source for their community – lender partners. Generating better returns for their members, and by increasing capital access and economic activity in communities that need it most.
The platform was founded on two core principles. That everyone deserves a shot at financial freedom and that each person can play a part in building a more equal world.
Consequently, they deliver great financial products and economic opportunity to everyone, including women, minorities and those often forgotten by Wall Street.
Users are allowed to invest any amount of money in CNote, as it has no minimum requirements. In turn, CNote will invest their money into Community Development Financial Institutions (CDFIs), that provide credit and financial services to underserved markets and populations. The money that gets deployed through CDFIs goes toward supporting small business led by minorities, immigrants and refuges in more than 37 states in the USA.
In return, CNote offers a 2.75% rate of return on your investments with no associated fees. The startup instead makes money by retaining any funds in excess of the 2.75% return after investing in partner CDFIs.
“What CNote allows you to do right now is align your money with your values and support communities and causes you care about,” Tarasava says.
Data provided by their CDFI partners allow investors to track their CNote investments to tangible results, such as the number of (women and minority-owned) small business loans granted or affordable housing units financed.
This Social Fintech has raised more than $25 million on its platform. By making it easy to open an account, CNote has made it convenient for investors of any experience level to achieve social impact.
Due to the global situation of Covid-19 pandemic, CNote is working to address the economic impact on small businesses. Their last statement says “Most small businesses are desperately low on cash and need capital to stave layoffs and avoid defaults. The recently passed federal aid programs will provide significant support, but that capital may not reach businesses for weeks, if not months. CDFIs are local lenders that know their communities and are well equipped to rapidly meet the individual needs of small firms. It is paramount that we support these local lenders to save the small business while funds from government programs make their way to small businesses.”.
CNote has created the Rapid Response Found to quickly deploy patient loan capital to CDFIs so they can fill this critical lending gap until federal and state aid is implemented. In order to achieve this purpose, they suggest users two options: charitable contribution or a patient loan.