Pictured: Janie Barrera from LiftFund with Yuliya Tarasava, CNote, at the OFN Conference in Chicago
Today, we’re highlighting CNote, an OFN partner that leverages financial technology to remove some of the barriers to investing in community development. Co-founded by two women, the Oakland-based firm serves as an innovative capital source for CDFIs by unlocking retail and other non-traditional investment dollars.
CDFI Connect sat down with CNote co-founder Yuliya Tarasava to learn more about CNote, how her team is supporting the CDFI industry, and her vision on the continuing evolution of community finance and impact investing.
For those that don’t know, can you give us a basic explanation of what CNote is?
Yuliya Tarasava: CNote is an impact investing platform that allows investors of any net worth—anyone can get started with just $5—to invest in economic equality and development via CDFIs. We spread investments across our growing portfolio of CDFIs. Those CDFIs get additional capital to make more loans, and our investors get a solid return while making a positive social impact across America.
So how exactly does someone invest?
YT: We’re a financial technology company, so we’ve made it as easy as possible to invest. New users visit mycnote.com, provide some basic information, connect an existing bank account, and can fund their CNote account in minutes—with no minimums or fees. We then deploy that capital in batches across our CDFI network. Investors earn monthly interest and can either withdraw that interest or reinvest it and compound their returns. A large number of our users also set up recurring transfers into their CNote account, growing their investment and creating more impact with their dollars.
Why was making this platform for CDFIs part of your core objective?
YT: My co-founder and I come from the finance industry. We already knew about all the great work CDFIs were doing. We also knew that the industry as a whole was thirsty for more affordable capital. We saw that we could match that capital need with a consumer demand for a product that offered positive social impact and a return on cash that was better than the 0.10% paid by most traditional savings products. We decided to build a financial company around that concept—that you can earn a competitive return while doing good.
How else do you work with CDFIs?
YT: Great question, so we not only provide capital to CDFIs but we are also trying to bring visibility to the amazing work CDFIs are doing. Everyone in the industry knows CDFIs have done amazing things for communities and have positively impacted countless lives, but unfortunately, not a lot of America knows just how impactful CDFIs are. We want to help bring capital and awareness to the industry. One of our ongoing initiatives is a curated borrower story series where we highlight specific CDFI borrowers and send out a professional photographer to capture the small business owner in action. This helps us highlight the impact of CDFIs have with our investors and helps CDFIs scale their content and marketing initiatives because they can repurpose the content we create. Obviously, this is a proven model for CDFIs we’re trying to scale it and make consumers realize their money can have a national, yet still very tangible local impact.
Any other big plans in the works?
YT: We are piloting a new program with CDFIs where, rather than sourcing and administering capital from CNote investors, we’ll administer direct investments into a given CDFI if they have a devoted community of investors and donors that want to support them. Leveraging CNote’s administrative and reporting tools to manage investors can free up many hours of work for CDFIs and help them unlock capital that is ready for investment.
How much capital has been invested in CNote so far?
YT: As of today, we have more than $18 million in committed capital from our investors, and that number keeps growing.
Can you tell us a little bit about who is investing in CNote?
YT: That’s the most exciting part to me personally. Anyone can invest in CNote. People, foundations and even businesses. We have young investors and old investors, men and women. Generally our customers want to align their dollars with their values—they want to see their money doing good in the world. We’ve seen strong interest by millennial investors but that’s not our sole cohort of investors by any means. With CNote we’ve tried to make impact investing super easy and accessible. For many other forms of impact investing you either have to be wealthy (a donor or foundation) or you have to open an investment account and choose a portfolio of companies that hopefully reflect your values. We also try to make impact investing more concrete by sharing real-world stories of individuals, businesses, and communities that have benefited from the money you’ve invested.
Any big wins for your team since you’ve launched?
YT: Yeah, there are a few that stand out. Partnering with OFN was a big highlight for us—it sort of ratified all the work we’ve been doing to grow and made us feel even more aligned with the industry. We’ve had some great national coverage in places like Forbes, Fast Company, Nasdaq.com and ImpactAlpha. We also won the award for fintech innovation at the very popular annual conference called South by Southwest. But we’re probably most proud of the millions of dollars we’ve deployed to CDFIs, the hundreds of businesses we’ve helped fund, and that we’ve helped create or maintain over 1,400 jobs.
What do you think of the impact investing as a sustained movement?
YT: We’re big believers in the movement. We think we’re at an inflection point where in just a decade or two every investment will have “impact” considerations baked in. We’re already seeing shifting norms in the public equity markets and a strong generational shift towards aligning money and meaning. Our hope is that we’re positioning CNote to ride this wave and bring a rush of new energetic capital into CDFIs over the coming years. Our mission is to help close the wealth gap and decrease inequality in America, and we think we have the perfect partner in the CDFI industry.
Do you have a message for other CDFIs or OFN members reading this?
YT: First, thank you. The work you are all doing is amazing, we’re excited to join you on this mission. Second, we’re always looking for new CDFIs to bring into our network and for innovative ways to support the industry. Third, we can’t help ourselves but ask fellows CDFI practitioners to sign up for a CNote account. We don’t have to sell you twice on the impact and history of CDFIs, and now you can also invest in them. And finally, If you’ve got an idea or just want to connect please reach out to our team!
Learn more today!