FinTech disruption is in its early innings, particularly on the institutional side. But the number of exciting startups is growing. This growth is occurring due to the vast coverage of industries and asset classes that companies such as ChartIQ and OMEX Systems have been benefitting from clients that are looking to profit from the data they collect.

You’ve likely heard of companies such as Lending Club in the lending sector, Wealthfront for wealth management, and Square for payments. Companies such as these are reinventing very old processes in their respective sectors, and there are many more examples of technology firms like these that are gaining mainstream recognition. But there are thousands of startups reimagining much more niche functions in financial services, and many of them could be complementary or competitive to your own business.

Working with fledgling companies is a foreign concept to many FinServ professionals, particularly outside of the CTO’s office. But here are 3 reasons you should personally and professionally get involved with FinTech startups right away.

The benefits of being first are numerous. The early users of disruptive technologies will have the first opportunities to reap the benefits—especially profits. For those of you on the buy side, this is particularly true when a product can uncover new sources of alpha before your peers catch on to them.

Even if you are more risk adverse with technology adoption, discovering new products early can still have a meaningful benefit by making you a faster “fast follower.” Don’t start your due diligence on a product at the time it becomes mainstream, when the excess benefits are already being arbitraged away. If you start by putting small amounts of time into reviewing early stage products a year or two in advance, for example, you’ll be ready to immediately jump in once the early adopters have sufficiently validated it for you. And even more important, you’ll have the opportunity to help shape the product features as they are built, ensuring it will have maximum utility to you once you do start using it.

Many entrepreneurs are at the forefront of thought leadership, and since they are shaping the future of this industry, it follows that they are also a great source for understanding that future as early as possible. Don’t solely rely on industry publications or consulting firms to highlight key trends. You’ll gain a much deeper understanding by also interacting directly with the trendsetters themselves.

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Courtesy of the NY Times

, broker-dealers, investment brokers, global investment bankers and others in the business of guiding investors and entrepreneurs across various asset classes are right to become concerned about a potential investing bubble. Particularly those who have seen similar peaks (and troughs) over at least the past 15 years.

Per the NY Times article:

In Spain, where there was a debt crisis just two years ago, investors are so eager to buy the government’s bonds that they recently accepted the lowest interest rates since 1789.

In New York, the Art Deco office tower at One Wall Street sold in May for $585 million, only three months after the going wisdom in the real estate industry was that it would sell for more like $466 million, the estimate in one industry tip sheet.

In France, a cable-television company called Numericable was recently able to borrow $11 billion, the largest junk bond deal on record — and despite the risk usually associated with junk bonds, the interest rate was a low 4.875 percent.

Welcome to the Everything Boom — and, quite possibly, the Everything Bubble. Around the world, nearly every asset class is expensive by historical standards. Stocks and bonds; emerging markets and advanced economies; urban office towers and Iowa farmland; you name it, and it is trading at prices that are high by historical standards relative to fundamentals. The inverse of that is relatively low returns for investors.

But frustrating as the situation can be for investors hoping for better returns, the bigger question for the global economy is what happens next. How long will this low-return environment last? And what risks are being created that might be realized only if and when the Everything Boom ends?

Safe assets, like United States Treasury bonds, have been offering investors paltry returns for years, ever since the global financial crisis. What has changed in the last two years is that risky assets, like stocks, junk bonds, real estate and emerging market bonds, have also joined the party.

Want to buy shares of American companies? At the current level of the Standard & Poor’s 500 index, every dollar invested in stocks buys you about 5.5 cents of corporate earnings, down from 7.4 cents two years ago — and lower than just before the global financial crisis in 2007-8.

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How to differentiate your disruptive and innovative company from the rest? Have your chief cheerleader (presumably your CEO) make an epic statement in which your entire company and your constituents can continuously hang their hats on..  The following is a classic example:

“We think we are going to fundamentally change humanity’s understanding of the economic landscape on a daily basis.” Skybox co-founder Dan Berkenstock

The above words from an entrepreneur whose offering is seemingly perceived to be something simple: satellite technology.

If you are an aspiring tech czar in the capital raising mode, a brand enhancement specialist, a brokerdealer or venture capitalist doing due diligence, or a mere investment banker who is working with an advanced-stage company whose execs are also looking to you to help ‘craft the value proposition” to investors, your target audience will always be more inspired when you perspire passion to the point where its dripping from your pores.

The context of the above quote is in connection with a very compelling piece written by WSJ reporter Christopher Mims in his aptly-titled column “KEYWORDS”

Hyperlink above will bring you to the June 16 WSJ article: The story itself is not merely about enterprise valuation techniques and not only about the next great technology innovation, the story transcends borders for those who can read in between the lines..

The post Amid the Crazy Enterprise Valuations, Google Finds a Steal of a Deal: Entrepreneurs and Bankers Take Heed; A BrokerDealer.com Blog appeared first on BrokerDealer Blog.