Young Broker Funding America on Youtube Is Controversy One Can't
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March/April 2021 THE DEATH OF A THOUSAND FINANCIAL SERVICE COMPANIES By Sean Murray Young Broker Funding America on Youtube is Controversy One Can’t Look Away From Q&A With Jennie Villano StillFunding Funding the the Unbankable Unbankable Send us your DECLINED & high risk deals yellowstonecap.com/iso 855-972-2748 www.fundrycap.com Table of Contents March/April 2021 Featured 2 THE DEATH OF A THOUSAND FINANCIAL SERVICE COMPANIES by: SEAN MURRAY Inside 02 06 12 THE DEATH OF A YOUNG BROKER FUNDING Q&A WITH JENNIE VILLANO THOUSAND FINANCIAL AMERICA ON YOUTUBE IS SERVICE COMPANIES CONTROVERSY ONE CAN’T 14 LOOK AWAY FROM INDUSTRY NEWS 08 GOVERNOR PHIL MURPHY ON FINTECH IN NEW JERSEY March/April 2021 Letter From the Editor PUBLISHER Sean Murray EDITOR-IN-CHIEF Sean Murray ART DIRECTOR Deborah Barlay BY SEAN MURRAY SALES 212.220.9084 deBanked is a publication by: If you’re reading this, then your career in the industry probably survived the pandemic. Congratulations. Raharney Capital, LLC 325 Gold Street, Ste 502 Your competition is already off to the races, scrambling to capitalize on Brooklyn, NY 11201 the damage wrought on the industry in 2020. Word on the street is that 212.220.9084 they’re buying up the domain names of financial service companies that For advertising information or general inquiries, didn’t make it. Could that create an advantage? I had a theory that it email [email protected] or call 212.220.9084. would, but what I learned in practice was something that everyone needs to know. I share it here and it may shock you. For permission to reprint published material, email [email protected]. The publisher is Goodbye pandemic. I look forward to the Summer and doing things not offering products or advice related to law, again in person. Man, that’s going to be sweet. accounting, tax, investments, or securities. The content herein does not necessarily reflect the views and opinions of the publisher unless specifically stated. VISIT US AT DEBANKED.COM –Sean Murray Featured Story THE DEATH OF A THOUSAND FINANCIAL SERVICE COMPANIES By SEAN MURRAY IN MARCH 2021, DEBANKED REVEALED THAT 7.5% OF DAILYFUNDER’S USER BASE THAT HAD EXISTED IN MARCH 2020, WAS LOST DURING THE PANDEMIC. Featured Story / The Death of a Thousand Financial Service Companies DailyFunder, of course, is the most widely used forum for small business finance brokers and the statistic offered one of the most compelling insights into the damage inflicted on the industry. A loss was defined as a user whose email address ceased to exist. It was either deleted or the domain name was not renewed. It was a startling revelation. And yet, in a sign of optimism, DailyFunder added more new users in that 12 month timeframe than were lost. And yet, is anything ever truly deleted in the digital age? And how did it come to pass that the owners of these companies believed deletion to be a preferable outcome to transference? Surely as a thousand brokerages closed, there would have been an eager buyer to scoop them up, even if the sales price was for pennies? And so I arrived at a theory, that companies that simply wound up and disappeared rather than sold themselves off, probably left behind a digital footprint that still drew in prospective customers, a path that ultimately led nowhere. A competitor might rejoice at that outcome but it’s not exactly a net gain because that customer may have decided to go somewhere else or nowhere else instead. Someone else’s loss wasn’t their win. Even the customer was a net loser. That could be resolved, of course, if the competition simply acquired the expired domain names of their fallen competitors, something that could be reasonably achieved for the price of ten bucks through any domain name registrar. Outside of the small business finance industry, such tactics are commonplace. One can simply go on Godaddy’s domain auctions to see the never-ending revolving door of expiring domains which are often ranked and priced on the basis of how much traffic they stand to generate, mainly because of the past owners’ efforts. According to Digital Information World, 70% of all web domains fail to be renewed 1 year after they’re purchased. “[41% of these expired domains ] go on to be snapped up and registered by other users to potentially benefit and profit from,” they say. And there is nothing controversial about this. This is simply a standard of the world wide web. Your fallen online business is recycled as someone else’s marketing tool. Applying that math to the small business finance industry at hand, that would mean that of 1,000 brokerage failures, 41% of the expired domain names are going to be acquired by someone else or they already have been. And if the expired domain only costs $10 (and they’re not all this cheap), then theoretically one could acquire the web traffic of 410 failed brokers for roughly $4,000. WHOA. The realization led me to conduct a controlled experiment, one in which I would try to prove this theory for a deBanked story. I bought roughly twenty expired domains, intentionally leaning toward older ones, domains that had been expired for 2-10 years rather than recent casualties of the pandemic. Once completed, I jotted down my hypothesis, that these domain names probably produced some level of prospective customer traffic. 4 deBanked /March/April 2021 / deBanked.com When my experiment concluded, I became alarmed, access to portals or databases where previous customer even sick, over what the results taught me. Deletion, data was held. This implies that not only is the old I learned, is an outcome that no business, let alone a domain owner at risk but that business vendors that financial services company, can afford to surrender had not disabled access to their systems for the defunct themselves to. users could also be at risk from nefarious actors now in control of email addresses belonging to former Here’s why: customers. A nefarious actor could surely dream up still more Among the first steps taken was to create a “catch- ways to carry out compromising acts. I disabled all” email account on each domain so that if a former incoming email altogether for the domains pretty soon owner of a domain came along and tried to contact me, into my aforementioned discoveries so that emails to I would get it no matter which address they tried and those domains would simply bounce back and indicate that I would be able to tell them that I had acquired it to the sender that there’s nobody there anymore. accordingly and even tell them my theory! And my original hypothesis had been blown to No marketing or anything was done for any of smithereens. These domains generated no material the domains. I simply acquired them and let them web traffic of note, except for probing “bots” instead of sit stagnant. I did not resurrect the old websites or human users. What I thought might be a hidden source anything of that nature. And yet, I received thousands of web traffic, a clever insight on internet marketing 101 and thousands of emails, none from what I could tell, something not uncommon in the pages of deBanked, were from former owners. instead turned out to be a glimpse into a business’s It’s important to state that I did not use these worst nightmare. accounts to actually do anything, but that these No matter how much one’s business has failed, vulnerabilities came to light by virtue of monitoring the control over the domain name should be preserved at inbound emails these domains accrued. all cost, that is unless, all of the above vulnerabilities are Some domain names still had control of social media addressed first and completely. accounts like business facebook pages and twitter Originally, the costs of this journalistic experiment accounts. Someone could not only acquire your old were to be recouped by simply reselling the domains domain, but use it to resurrect and use dormant social onto the public market for fair market value. Instead, media accounts, including being able to view all past they were simply cancelled, cast back in the sea private correspondence on them. Yikes. anonymously, where anyone else could buy them and Some domain names were still attached to active do whatever they want with them. I, however, made no bank accounts, credit card accounts, or financial effort to alert anyone’s attention to them. services. Correspondence regarding these accounts The publication of this story was delayed as I, the was still being transmitted to them. When you delete journalist, had to weigh the merits of disclosing my a domain, you need to make sure its access is revoked findings. But as the data says, 41% of expired domains from every account you have, especially bank accounts. are going to get snapped up anyway. And true to form, I Some received NSF notices or were being subject to debt was actually outbid by other unknown buyers by some collection efforts. of the original domain names I had hoped to acquire for Every domain name was subscribed to newsletters my experiment. A financial service company’s domain or communities or some service in which one could use and all the vulnerabilities with it, were sold to bidders to learn personal information or business information willing to pay $30, $40, or $50+ versus my $10-$20 or about the previous owner. so budget. That seems a terrifyingly small cost.