The following Q&A is a new feature presented by Chris Abbott of Rhodes College, one of The Venture Center's 2017 summer interns.
Q: For those who aren’t as familiar with the concept of FinTech and what it entails, how would you describe the goals of PFITR?
A: The term FinTech represents all financial technology companies or businesses that are developing solutions to improve any financial practice and its financial results. At PFITR, we develop and provide tools for institutional investors in government, banks, family offices (wealth management), corporations and even non-profits that invest in the bond market.
We use today’s technology to help investors with tools that provides transparent, real market data at an affordable cost, through a user-friendly software solution. We also bring transparency to the reporting side of their investment practices, so they can easily comply with regulators and auditors with constantly updated reports of their investment portfolios.
Q: What motivated the idea and creation of PFITR?
A: Our founder and CEO, Jim Koetting, has spent over a decade working with institutional investors to help them become better stewards of the fixed income portfolios they oversee. After writing "Public Fund Investing for Dummies," developing accreditation programs, and training thousands of Treasurers, CFO’s, CFA’s, and professional managers, he found the technology to be dated and lacking in many ways. He continued to be consulted on the best practices and soon realized that the lack of tools was a problem, so he developed the solution that is PFITR’s flagship product, the Bond Price Validation tool.
So now, PFITR offers coaching and training while also equipping investors with a software solution that allows people to easily understand how they should be investing their bond funds. This includes looking after real-market data such as risks, transparent pricing, historical prices, and other necessary analytics to look after when taking care of the entity’s liquidity, safety, and yield.
Q: Who was involved when PFITR first started?
A: The company originally started in 2013 in St. Louis, Mo. After Jim was chosen among 150 of other candidates to be part of the Venture’s Center FinTech Accelerator, he came to Little Rock to complete that program. Afterward, he hired a couple of people that allowed him to keep PFITR’s offices in Little Rock.
“One of the biggest opportunities the VC FinTech Accelerator has to offer is that you get to learn and befriend other entrepreneurs that are going through similar processes to grow their businesses in this arena, and get to exchange some knowledge that helps everyone.” —Jim Koetting
After meeting the Hexanika team [another startup that was part of the 2016 VC FinTech Accelerator], Jim soon got the advice to hire the entire software development team in Hyderabad, India, thus making it a very diverse and international company consisting of talented and hardworking people. We now have a worldwide team of 10.
The bond market is the largest global market, making PFITR’s cliental expand all over the world.
Q: What has been the key to marketing your business?
A: Being involved with different startup accelerator programs, as well as networking with others in the FinTech area has been the basis of marketing our business. But with a growing team and growing customer portfolio, we are currently in the process of developing a more structured marketing plan.
As a startup, you don't necessarily have a marketing budget like any other business, so you have to rely on the most basic and available resources like social media. As the Sales Operations Manager who joined the team back in November 2016, I've been identifying the necessary sales process by going through the highs and lows of the company. This has helped us find out how to expand the startup on a small budget.
We mostly rely on our website and social media to emphasize PFITR’s mission and spread the message to potential customers. The website is updated regularly, as we are approaching new clients at a constant rate.
Being involved with the 2016 VC FinTech Accelerator and becoming tenants of the Little Rock Technology Park has been a vital asset to attract attention through media and investors presented by networking here in Little Rock.
Q: On that note, what has presented itself as the biggest obstacle(s)?
A: The first obstacle is that we are in an “unsexy market.” Since the bond market is not something most people have a base knowledge of, it is a huge market and companies make billions on bond data communication. Because of that, it was difficult at the start.
The second biggest struggle with any FinTech product is that you are presenting a disruption to the traditional ways of doing things. People are creatures of habit and our software challenges the status quo, but people will come to realize that our solution will help improve their jobs. Despite the difficulty, we must identify the early adopters and help them incorporate change.
Talk about PFITR’s time at the Global FinTech Awards this year. What was that experience like—especially since you guys took home an award?
A: We were a finalist at the awards last year, but didn’t win. This year, we were able to return as finalist. PFITR had matured as both a company and in our development, so there was hope that we would win.
Jim met several people at the awards that are very well known in the financial industry. He had a quality conversation with “Mr. Wonderful” himself, Kevin O’Leary of Shark Tank. Jim also spoke to former New York Governor Elliot Spitzer. The two discussed bond market regulation and the transparency of data. Jim described the scene at the awards by saying it seemed like anyone who is well known in investing, banking, and regulation was there.
When it came time for the awards, the anticipation was quickly building. With each category, the presenter would announce the runner-up, followed by the announcement of the winner. Jim had been correctly predicting the winners of each category, but was hesitant to predict his own company when it came time for PFITR’s category.
“When it got to the best institutional innovation category, I was a bit nervous and was telling myself 'it’s okay if we don't win, we were finalists and that alone is great since we are in such great company.'” — Jim Koetting
The presenters soon announced the category’s winner as PFITR and our Bond Price Validation tool. Jim was immensely proud, but kept his acceptance speech brief, as he thanked both his team and Benzinga for choosing PFITR as the winner.
Q: Moving forward, where do you see PFITR in 2-5 years?
A: In five years, I see us with 60 MM in revenue, in line with the industry standard for pricing, analytics, reporting, and portfolio management. We will employ about 100 people in the Little Rock area, making us another Little Rock FinTech success story.
About PFITR: PFITR is a Financial Technology company that enables institutional fixed income investors and bond market professionals to see valuations and analytics in the fixed income market space to make the best investment decisions possible. Their Bond Price Validation (BPV) Tool, provides money managers insight to better manage their portfolios by delivering key and transparent data which results in, risk reduction disciplined investing, and improves yield.
They train and coach government, banking institutions, corporations, non-profit organizations, family offices, treasurers, directors of finance and public CFOs on identifying, measuring and mitigating risks in fixed income security, while also offering effective reporting.
The BPV® tool is their entry level product that helps transform decision making in the bond within a fixed income portfolio creating a better steward and fiduciary. The next generations of PFITR technology is using the analytics and bond market data to automatically assist portfolio managers make buys and sales based upon market conditions and parameters established by the portfolio manager.
PFITR’s Vision and Mission: PFITR's mission is to empower bond investors and agents to be better stewards of their portfolios, through innovative tools, coaching, training and even artificial intelligence that equip them to make better informed decisions. Providing relevant data, PFITR enables them to make wiser decisions when having access to market transparent pricing and risk analysis in the most user-friendly way.
Our vision is that every institutional investor should have the power of transparent information to make better informed investment decisions. Our online solutions will enable this vision, by becoming the data source that comply, expose risks, and becomes a regulatory tool that offers them fiduciary responsibility and good stewardship with unbiased data.