Unlocking Yield And Diversifying Portfolios, With Percent

Percent was the presenting partner at Alts Expo May 2023, a one-day virtual event hosted by WealthChannel. In this webinar, Nelson Chu and Prath Reddy present Percent’s private credit platform.

Interested In Learning More About This Opportunity?

Click here to visit the Percent website.

Webinar Presenters

• Nelson Chu, Percent
• Prath Reddy, Percent

Webinar Highlights

• How investors can unlock yield and diversify portfolios with private credit.
• How private credit fits into the economy, allowing companies to grow and scale.
• Historical barriers to accessing the private credit asset class for accredited investors.
• Characteristics of private credit that make it a recession-resistant asset class.
• Overview of the due diligence process for evaluating private credit opportunities.
• Live Q&A with webinar attendees.

Connect With Percent

• Percent – Official Website
• Percent on LinkedIn
• Nelson Chu on LinkedIn
• Prath Reddy on LinkedIn

Webinar Transcript

Jimmy: Well, you two gentlemen are going to be presenting Percent. Tell us about Percent. The floor is yours for the next half hour. Thank you, gentlemen.

Nelson: So, thank you all for joining us today. My name is Nelson Chu. I’m the founder and CEO of Percent. We’re excited to be talking about that with you all today. I’m joined today by Prath Reddy, our president, and we’re here to talk about pretty much an introduction to private credit and how to unlock, yield, and diversify your portfolio in the market environment that we’re in today. So, first, obligatory disclosures. I think this will be available afterwards, so I don’t need to go too much into it. But just as a kind of general statement, this material, this presentation is for informational purposes only. This is not a solicitation to sell securities and everything else you see on this page.

So, just a brief background about myself. I have been an investor and advisor to companies over the years that have created over $1 billion in equity value. I used to be at Bank of America, used to be at Merrill Lynch, used to be at BlackRock. And Prath has spent 12-plus years in investment banking, primarily in debt capital markets, doing all sorts of fixed-income securities, and formerly at UBS, Credit Agricole, John Hancock, and Goldman Sachs. So, just for a little bit about us before we dive into sort of the market and all that good stuff. We are focused on private credit markets and private debt markets. And that’s something that, you know, not many of you may know what it is specifically, but it’s probably something you’ve actually interacted with fairly regularly. And so it is a tremendous opportunity, especially in the environment today for accredited investors, borrowers, and underwriters alike to be able to transact from start to finish in this kind of very unique market that we play in. These are structured transactions. They provide really critical capital to grow, help private institutions to be able to kind of scale and reach their ultimate business objectives. And as an accredited investor, you can gain a new feather in your cap, a new option to be able to make investments into this asset class, get diversification and yield in times of market volatility.

So, the problem with private credit historically has actually been that it’s been almost like systemic to the industry itself. So, obviously, these days, everyone is looking more beyond traditional equity, traditional fixed income. And the challenge with private credit and kind of adding that into your portfolio is that, yes, it is uncorrelated, but it’s actually very difficult to find it. It’s very difficult to actually source them, diligence them. There’s no real central market for it. And because these are private securities, there’s actually no real quality data. It actually makes comparing borrowers and investment opportunities really, really difficult. So, from a discovery standpoint, super difficult, super cumbersome to identify these investments, no centralized market, very little transparency into underlying asset performance. You can make the investment and not know really what happens to it until it either matures or defaults.

And there is not a lot of technology on that side. So, super outdated processes, lots of different paperwork that’s flying around, usually not via DocuSign or HelloSign, all manual, all having to sign on your own. And because these are traditionally investments that are for institutions, there’s super high minimums as well. And we’re talking not like 25, 30 grand, we’re talking more like 250, 300, 500 grand ultimately, which, you know, has a very high barrier to entry. Now, we’re pretty unique in this instance, right? So, our platform itself connects to credit investors with these borrowers and underwriters. You can actually browse opportunities, source them, and analyze them and diligence them, all these opportunities that have been structured by these underwriters, and make that investment directly all through the system itself.

So, just to clarify, because, again, this is always a bit of a gating item. What is accredited investor? There’s multiple ways to be accredited. You can present a W-2 that shows you earned income in excess of $200,000 or $300,000 with a spouse. You can show net worth of over $1 million. You can actually be series licensed. So, if you’re working in that industry and you have series licenses, that works as well. And you also can be an LLC or family office with over $5 million in assets under management. And you can also be a registered investment advisor as well. So, those are all kind of options to become accredited. Our platform makes it very easy to prove accreditation. And once you’re done, it’s kind of like a set and forget it, you’re all good to go from there. So, with that, that was kind of a brief overview of us and sort of how we play in this space. But I’m gonna hand it off to Prath. He can kind of demonstrate and talk through more about private credit as an asset class as a whole.

Prath: Great. Thank you, Nelson. So, just to kind of kick things off in terms of setting the landscape for private credit, you know, we view it as, you know, kind of two distinct sub-asset classes within private credit. There’s kind of asset-based or asset-backed lending, and then there’s corporate lending as well. So, under the asset-backed category, these are really debt instruments that are provided to investors. The source of repayment for, you know, those instruments do come from the underlying cash-generating assets. So, these could be a portfolio of small business loans, it could be equipment leases, real estate, consumer loans, and so forth, as you see here. The other category is really corporate lending. So, that’s lending to operating companies themselves. And so they’re cash flow-based. And so, you know, ultimately, the profitability of the company and their ability to service that debt comes from, you know, the revenues that they generate as you would expect, you know, any kind of traditional loan to a company would be structured.

And this could be provided to either a company that is profitable or it could be an unprofitable company that is backed by high-quality equity sponsors and, therefore, you’re bridging them to, you know, their next equity fundraiser, essentially, which is kind of the venture debt category. So, whether it’s asset-based lending or corporate lending, we see a lot of this activity take place at the private credit market level, whether it’s kind of upper middle, middle, or lower middle. This is generally how we kind of classify the market, just to kind of set the stage.

So, in terms of growth, private credit has been on a tear, frankly, since the financial crisis back in 2008, 2009. That was really a direct result of, you know, a lot of the banks stepping away from lending to a certain profile of small businesses, to a certain profile of consumers, as a result of heightened regulatory constraints. We’re actually kind of seeing that now again in light of kind of the recent, you know, banking at the regional bank level in terms of SVB and, you know, First Republic. There’s likely going to be heightened kind of scrutiny around what regional banks and smaller banks do in terms of their lending activity and how they manage their risk exposure on their balance sheets. So, we think that there’s actually gonna be kind of a second revival of non-bank lending and of taking the place of traditional banks that have faced these types of borrowers in the past.

So, you can see the run up here in terms of dry powder versus deployed just across, you know, kind of private credit funds out there in terms of how much money that they’ve been able to raise, trying to execute on a variety of strategies to deploy that capital into underlying direct lending portfolios. And so we see that activity having really ticked up over every single year since the financial crisis. And in our view, it’s only gonna continue to increase in light of recent activity. And, you know, that’s actually in good timing in general, just given that, you know, we have seen that private credit is very much a recession-resilient asset class. If you compare kind of the last 12 months as it relates to equity on the public side, equity on the private side or even public debt, private credit has generally outperformed all categories, which is the reason why there’s so much capital flowing into the credit funds and the managers that are out there executing on a variety of strategies because it is a nice hedge within any institutional or retail investor’s portfolio.

Generally speaking, private credit is not mark to market. It is certainly kind of a buy-and-hold type of instrument and so, therefore, it’s not as sensitive to fluctuations in the public markets or on interest rates in general. A lot of private credit is also priced with fixed coupons, and so therefore, you know, a rising rate environment doesn’t have the adverse effect as it does have on public debt where prices move inversely to yield. And private credit is highly negotiated, as we’ll get into in a moment. Your ability to kind of structure these deals in a way where you limit your downside and protect, you know, kind of the principal at risk is really a great tool to have in an uncertain economic environment like we’re in today. So, you know, truly through and through from a pricing valuation standpoint, as well as from a control standpoint, private credit is certainly appealing in uncertain times such as now.

And in terms of how it’s been performing just, you know, historically and even just more recently, default rates within private credit have remained sub 2% for the most part. I mean, if you look at this graph here, if you look at, you know, lower middle market, which is kind of the first subset there, sub $25 million EBITDA-type companies, it hovers right around 2%. And historically, that’s kind of where it’s been at as well. If you go up market, it certainly kind of comes down a little bit. But if you compare this with, you know, public markets, it’s certainly right in lockstep, if not outperforming.

So, flip to the next slide in terms of public market defaults. Moody’s, I believe this is from S&P, they project default rates going forward in a variety of scenarios to be either at or slightly above, you know, where private credit has been in the last 12 to 24 months as well. So, the whole notion of, you know, going private means that it’s riskier isn’t necessarily the case because, again, you have a lot more control over the individual loan structures. You have a lot more information at your disposal about the borrower itself, especially if you’re lending to certain standards and certain proven methods that has allowed you to run a healthy book over recent times. All that insight allows you to be able to structure deals on a more bespoke basis and, therefore, mitigate against, you know, defaults and certainly loss given defaults as well. So, you know, private credit has that other unique advantage of not necessarily going up and down with the tide of just general defaults in the high yield and IG market. It’s certainly more catered to the actual manager, the underwriter involved, and what their track record has been in both good times and bad.

And, you know, the core of really private credit is conducting thorough due diligence and structuring deals in the way that it makes the most sense to protect principal. So, the way that we have developed the standards within our marketplace that we now institute third-party underwriters to also follow the same rules is really a tried and true method. So, we look at, you know, borrowers at the corporate level. We take a look at financials, operations, a variety of, you know, ways that they’re able to mitigate risk through technology, looking at external and internal risk factors. And of course, you know, where is this management team coming from? What’s their historical track record? What have they done elsewhere? Why are they the right team?

So, being able to assess borrowers directly, understanding kind of on the quantitative and qualitative side under all these categories is obviously paramount to being able to figure out whether they’re a good credit or not. If it’s an asset-backed deal or if it’s a secured corporate loan deal, assessing the quality of the assets that are being pledged to the loan also is obviously extremely important. So, we’re looking for quality assets that are durable in terms of the cash flows that they generate or the value that they uphold in terms of, you know, kind of having a secure basis for the loan. If it’s a loan portfolio and kind of a true asset-backed deal, then the diversification of those assets plays a huge role in understanding, you know, how loss absorbent the entire portfolio can be based on the amount that’s being lent to it. Historical performance of those underlying assets, of course, and looking at kind of what the pro forma would look like when we apply the leverage that we’re looking at. You know, all of these aspects are, obviously, extremely important when we look at ABS deals, but also for secured corporate lending deals as well. So, that liquidation value of the underlying assets, let’s just say, it’s a secured corporate term loan to a manufacturing company and it’s secured by, you know, their machinery and equipment. We’ll wanna know exactly what that fire sale looks like for the machinery and equipment and ensuring that the LTV makes sense.

Looking at the, you know, deal structure itself, understanding terms, you know, what type of security interests that we have, obviously, senior is what we look for generally on our side and what we look for for other third-party underwriters as well that are on our platform, you know, where it ranks within the payment, kind of waterfall within the company in a bankruptcy scenario, all the different protections that we can afford to the deal structure, credit enhancements, covenants, so on and so forth. Running different analyses around, you know, if-then scenarios around cash flows, around macro and kind of, you know, firm-specific considerations and really understanding what happens in an event of default. And so really trying to mitigiate what that loss given default is, if a default does occur, is obviously critical upfront to understand what that process is so that you’re not making irrational decisions if and when that time arrives.

And then, of course, in the cash flow modeling side, you know, using that historical basis as an assumption for how to kind of project going forward, stress testing that, and really better aligning the structure of the debt to, you know, where we think that the company is headed, what the challenges that they might be facing over the next six, 12, 18 months are, where their source of repayment might be. Is it the actual cash flow of the company? Is it the assets? Is it a takeout event? Is it bridge financing? All of that, you know, effectively is considered on the modeling side. So, across all four of these categories, this is basically what we have instituted on our side to standardize the market, standardize the deal structures, and ultimately make sure that investors are able to compare one deal versus another very easily.

And, you know, ultimately, the underlying, you know, loan documents and the actual structure of the deal is really providing the credit enhancement and the protection. So, in terms of structural enhancements, you know, we have a variety of features to kind of choose from, obviously, perfecting the security interest in the portfolio and the IP. We can also, you know, create cash reserves so that you can ensure that there is a current pay associated with the actual debt structure, you know, understanding what the right term is, short-term versus long-term, and what the risks are in terms of their ability to refinance and repay that debt. And there’s a variety of guarantees that we can also source, which is becoming more and more commonplace, especially in this market. I’d say when credit was plentiful and banks were kind of in full functioning mode, you know, in order for non-bank lenders to be competitive, they may not have required personal guarantees or even limited guarantees in some instances, but now that’s becoming standard and commonplace.

In terms of reporting, you know, we have noticed that over the years when we first started the platform, everybody was reporting differently, everyone had their own formats, their own standards, their own metrics that they wanna take a look at. So, our ability to, you know, look at over 430 transactions that we’ve done over the last, you know, call it three and a half, four years, has allowed us to figure out what that lowest common denominator is. So, understanding the financial health of any given company is extremely important, both from, you know, kind of a corporate level financing standpoint, as well as what the assets look like, monitoring the KPIs and kind of the key indicators that we would be able to glean from and understand whether or not the company is on the right trajectory for growth. And then, of course, early detection of issues. If there’s any deterioration in the collateral quality or the actual cash flows of the company on a month-to-month basis, being able to get ahead of a problem is, you know, half the control benefit that you would have in private credit. You have access to this information, it’s what you do with it that matters.

And then finally, on the covenant side, you have a variety of covenants. These aren’t club-like loans that you would typically see in, you know, the syndicated loan market or an investment grade or, even in some cases, high yield. These are highly coveted deals that are extremely restrictive in most cases. So, anything that the company wants to do is typically, you know, kind of run by the lender first, outside of the normal course of business, of course. So, you’ll see all of the kind of typical covenants that we put that we typically see in other underwriters, debt transactions as well that again are made standardized for investors to easily compare one versus another.

And lastly, you know, just in terms of what we, you know, do in terms of visibility for investors, you know, because these reports are so different, we’ve effectively standardized all of them. So, from a corporate performance standpoint, from a collateral performance standpoint, you know, we deliver consistent reporting typically on a weekly basis. If not weekly, then at least monthly. So, you as an investor can compare one borrower versus another borrower extremely easily. We publish these reports outside of the context of you even being in an offering. So, if you wanna do research about a company that’s currently raising debt capital in the Percent marketplace, you would be able to actually review the reports ahead of time and be prepared for the next time they come back to market to refinance whatever they have out or add on to the, you know, offering that they have outstanding. So, we painstakingly have taken a look at, you know, what works in public markets, what works for rating agencies, and have developed a standard set of reporting, whether it’s corporate or collateral, for investors’ benefit and their ability to analyze and perform relative value analysis on a frequent basis. So, this is one of the hallmarks of the Percent platform as well. With that, I’ll turn it back to Nelson.

Nelson: Perfect. Thank you, Prath. And appreciate that robust breakdown of all the things that we do here at Percent to structure and protect investors throughout this process in what is, you know, traditionally a very esoteric, unique investment and asset class. So, just to kind of give you more clarity around how we operate as a marketplace. We make it really easy. That’s kind of true to form in our MO, really. You get access to our marketplace. You can discover and compare deals and terms very easily because everything is structured very similarly with one another. You get liquidity and yield inherent liquidity at the end of the day. These durations are significantly shorter than you traditionally see. And so we’re talking, you know, six-, nine-, 12-month maturities at the end of the day while still getting the return that you’re looking for, about 10% to 13% historically on average, although in this environment, it’s actually higher than that.

Like Prath had mentioned, you know, we provide that reporting to you, and so that transparency around data and underlying asset performance is critically important. You also have the ability to view any borrower’s underlying financials, including all the assets that collateralize the deal. And as always, we provide some of the best support in the industry. We handle all the payments, reporting, and documentation. And you can also always reach out to any of us and ask questions around any specific deal and we’ll work to provide you those answers.

Now, there’s multiple ways to invest in Percent as well. First and foremost, where we got started was really what we call asset-backed notes. These are essentially investing into a pool of assets that are generating interest and yield. These are gonna be things like consumer loans and advances. And I think this was one of the questions as well that came through in terms of industries we focus on. So, consumer loans and advances, discounted receivables, litigation finance, SMB financing, SMB leases. This is really where we cut our teeth very early on in the process and what we offered historically for the first kind of couple of years of the company’s life.

Last year we added another asset class, which was corporate loans, specifically more on the venture debt side of the equation. And you have the opportunity to get exposure and investing directly into high-growth companies by providing short-term financing, usually in between equity rounds or in a period of time with looking to grow and scale as a company. And lastly, because not everybody likes to invest and diversify and, you know, kind of spread things around on their own and manually manage it, we also offer something called the blended note. And this is essentially diversified exposure to multiple private credit deals in a single investment. Most of these are pretty thematic. So, you can say, “Oh, this one is U.S.-only deals, or this one is short duration-only deals, or this one is high yield-only deals.” You’ll see these come up periodically every once in a while on the platform. And for those of you who wanna get even more exposure and kind of create something more customized, if you put in more than half a million dollars and interested in getting a blended note, we can also create a customized one for you as well based on your own investment mandates and criteria. That’s something unique we started offering this year as well.

It makes it really easy, right? At the end of the day, discoverability is the name of the game here. And so it takes a very short amount of time to get an account set up on the platform. Just go to percent.com, sign up, go through the process to verify identification, verify accreditation, link a bank account. And then from there, you can always just browse, discover, compare opportunities. Because all these deals are structured very similarly, you can actually compare them structurally with one another, which is something pretty unique in private credit. And then we obviously have all the sorting, filtering functionality you’re looking for to be able to kind of find out more details about each opportunity.

And transparency is the name of the game here as well, alongside ease of use. So, as Prath had mentioned, you know, we do provide reporting on a regular basis, but there’s also deal summary comparables you can actually always look at. And then after you make the investment, there’s always monthly surveillance and weekly surveillance opportunities. So, you can monitor the performance of your investment post-close at the underlying asset level. We also provide comprehensive portfolio management tools. As you’d expect in other asset classes, it’s a little bit harder to do in private credit, so we’ve kind of made it as easy as possible and make it feel as much as you’d be investing in any other kind of equity platform or brokerage platform. So, you can actually see performance at the deal level or at a portfolio level. You can reinvest and easily maintain your allocation and roll things over as they refinance. You can find new opportunities and all the obligatory tax statements and reporting we provide as well.

So, it’s been a good run for us for these last few years. It’s been a four-year run at this point. The company’s about to turn five in a couple of days. We’ve had about 400-plus structured notes we’ve issued on the platform to date, close to $800 million worth of notes. Today’s current weighted average APY, which used to be, call it, in the 10%, 12% range, is now 16.28% just because the current market conditions has dictated that rates go up, ultimately. We still maintain a fairly short duration range. So, it’s about nine months in terms of weighted average, in terms of maturity. We’ve had and maintained about a 1.95% default rate since inception. Several dozen borrowers. There’s several thousand investors like you investing, and it is still very much a heavy retail-to-institutional investor mix of about three to seven.

So, with that, we kind of ran through the industry, the market, how we operate and all the things that we offer to you as an investor to get access to what we would think is one of the most exciting asset classes in the world today. And certainly, what the likes of Blackstone, Apollo, Ares, KKR are saying in terms of them doubling down on private credit. So, we’re excited to be able to offer that opportunity to you as our credit investors to make that investment as well. And so with that, I think I’ll open it up for questions and we’ll kind of take them one by one. So, Prath, I think this one we can put it to you. In terms of industries that we focus on, we obviously shared some of those that we had talked through, but maybe talk through sort of how we’ve diversified between asset-backed versus corporate debt recently, and within those, you know, what’s been the general focus at the moment?

Prath: Yeah, absolutely. So, we started with asset-backed, you know, four or five years ago when it first got started as a means to really develop, you know, high-quality reporting for investors. So, understanding the nature of the underlying assets, the collateral, getting that data from the underlying borrowers and originators of those assets and streamlining that reporting for investors was where we started, and so, therefore, we have a very high slant towards the asset-backed category. We’ve worked with a variety of fintech lenders and non-bank lenders here in the U.S. as well as abroad. Generally speaking, it’s kind of been defined between two buckets. There’s the small business side and there’s the consumer side that just relates to who the underlying obligors are at the end of the day that they’re facing, that these non-bank lenders are facing.

So, under the small business category, it could be, in fact, receivables, it could be merchant cash advances, it could be trade financing. On the consumer side, it’s everything between buy now, pay later loans to earn wage advances and unsecured kind of lending products in South America. So, it’s really spanned the spectrum in terms of, you know, lending taking place at the consumer and small business level on the ABS side. On the corporate side, about a year and a half ago or so, we started introducing venture debt and corporate debt under the platform as well. The sectors have been quite diverse in nature. It’s everything between energy to, you know, technology companies, to health care companies that are primarily venture-backed and lower middle market looking for growth financing and bridge financing or acquisition-related financing as well. These categories continue to expand as we invite more third-party managers and third-party underwriters to the platform. They are bringing their own expertise in terms of the geographies that they operate in and the sectors that they focus on. And so the composition of the deals on the Percent marketplace is going to continue to evolve in lockstep with the diversity of the underwriters that are signing up and syndicating their deals into our marketplace as well.

Nelson: Perfect. Thank you. And we have two minutes. We’re gonna speed-run through these questions. So, first and foremost, one of the recent questions we got, just to kind of fully clarify here, the minimum is actually 250K historically in private credit when you invest in other funds like KKR, Blackstone or anything like that. We actually have minimums that are oftentimes as low as $500. So, we’re firmly in the camp that you should be able to try before you buy. And so you can invest a short-duration product, $500, see how the investment goes through, learn from it and then be able to come back and put more money to work. And we see that happen all the time with investors, which is a good segue into the next question, which is how to invest in a diversified portfolio?

And so you see here on the third section over here, it’s Percent-blended notes, right? That is actually the ability to invest in a diversified portfolio in this instance. And so that is essentially where you can actually pick a theme that you’re interested in, U.S. only, senior only, high yield only, or if you have putting more than $500,000 to work, we can make one for you. So, it never really is deal by deal unless you choose to make a deal by deal, you can always have that set-it-and-forget-it mentality with the blended note to get that diversified disclosure you’re looking for.

In terms of how things are treated from a tax perspective, this is for now ordinary income, but we are the ones that will be able to kind of provide that tax document for you. And it’s actually very simple. It’s 1099-INT. But in that instance, you get one 1099 for the year for all investors to make on Percent. It’s actually very simple and very easy to do. And the platform is growing very quickly, and so we’re in a position, in a fortunate position now where we’ve actually opened up the platform to allow for third-party underwriters to come on board and actually use our structure and take advantage of our technology to be able to kind of issue deals in the same way and the same level of structure that you’d expect. Right?

And so that is happening very, very quickly, and you’re seeing the growth of the platform pick up significantly this year as a result of that. And that gets you the same level of exposure and diversification that everyone has come to expect on the platform. The fees themselves are minimal, actually. So, as of right now, as an investor, if you’re investing directly, there are no fees to make that investment. We actually do charge a 1% management fee if you’re investing in product number three over here, the blended note. That gets charged on a monthly basis, but annualized to be 1%. There will be additional fees that we bring on board in the near-term future, but it’s still gonna be relatively minimal relative to the rest of the industry. At the very least, that’s important to us. And Prath, last question. Is there any offerings which are tax-advantaged? I think you can maybe talk to that, especially for some of the potential institutional investors on here. There’s ways to maybe do that in that blended note.

Prath: Yeah. So, with the blended note product, because it is a kind of wrapped instrument, you know, investing in underlying Reg D deals there, there are a couple of ways that, you know, we can provide tax advantage status to it. So, we do work with a third-party annuity wrapper provider that effectively we can wrap that into an annuity and you can defer the interest for as long as that annuity policy is in place. So, that’s one kind of tax advantage where we can kind of avoid ordinary income on an annualized basis. And then also for foreign investors, if you’re non-U.S., the blended note product does qualify for the portfolio interest exemption, which means that you’re not subject to any withholding tax whatsoever, irrespective of whether you’re in a country with a tax treaty or not to the U.S. So, that’s obviously been very beneficial for any non-U.S. investors as well.

Nelson: Perfect. I think that wraps it up and we’re a little bit over on time. Sorry about that.

Jimmy: No. But we got you started a couple of minutes late, so no worries at all.

Nelson: Oh, perfect. How long is it?

Jimmy: We actually got time for one or two more minutes if you wanna take it. But, yeah, why don’t you direct people to your website or how they can get in touch with you, or what are the steps involved that investors who are interested in your platform wanna learn more about private credit or get invested in some of these private credit offerings? What are the steps they take to get started with you guys?

Nelson: Yeah, absolutely. So, the easiest thing to do is check out percent.com. We have a wealth of knowledge and information on there that we’ve created to help you get up to speed on this obviously new and unique asset class. We’d like to think that we’re really the only player on the street that offers these type of opportunities, and so, definitely, we want you to get educated. The beauty of the platform actually is that you can sign up yourself and then you actually can work to get accredited over time. And you could choose to not verify identity, not verify accreditation. You can still browse all the deals. You can still view all our surveillance reports. You can do everything pretty much outside of making the investment. Right? And so we encourage every investor. Just sign up, take a look, and see if it’s a fit for them. We’ve left our support details on here as well, so, [email protected] and our phone number. We’re always happy to chat with you, always happy to share more details about what we’re building and what we’re doing here today. And, yeah, that’s kind of the best way to get in touch with us. In terms of… I know you’ve got… One more question came in if we have time for it.

Jimmy: Go for it. Yeah.

Nelson: Yeah, how we find the deals. Prath, do you kind of wanna talk through sort of how we have sourced our underwriters, how we’ve sourced our borrowers and how that relationship has worked over the years?

Prath: Yeah, sure thing. Historically, we relied on a referral network as well as our network of VC firms as well that we’re in close touch with, going to conferences and incentivizing different parties within the private credit market to bring deal flow to us. So, that was when we were underwriting all the deals. As of January 1st this year, we launched our underwriter product. So, now private credit funds and placement agents that are already operating within this market are now incentivized to bring their own deals to this platform and syndicate them. And so, therefore, the deal flow is now really coming from the managers that are already within the deal flow itself. And they’re all differentiating themselves by showcasing their track record, their performance, their areas of focus, so on and so forth, as well as providing all the data on the underlying borrowers as well. So, we view this as a one-to-many approach versus just relying on our, you know, direct sourcing capabilities. But any borrower can also go to percent.com. Companies can sign up and get pre-qualified for either asset-based financing or corporate debt. And then they would get routed to either us or third-party underwriters to potentially work with them to bring a deal to market as well. So, we have kind of a direct sourcing strategy on that end as well.

Nelson: The beauty of it is any… Sorry.

Jimmy: No, go ahead, Nelson.

Nelson: Any underwriter that brings a deal to market, you know, as you start to get familiar with our platform, you’re gonna see that deals are structured very similarly. You can have the same attributes to compare, the same performance reports to compare. So, these deals being brought to market still have to adhere to our standards, which makes life for you as an investor significantly easier. And I do know that we did talk a little bit quick. We were trying to get through everything on time at the very least, so this is being recorded. So, please feel free to watch this afterwards. And we’re always around if you wanna answer any questions. If you have any questions, we’d be happy to answer them.