Lecture Report “Fintech and Intellectual property

financing vehicles”
Presenter: Professor Xuan Thao Nguyen

During the lecture

1. Fintech Companies: IP and Non-IP Assets:

Ms Thao said that the in 21 century, banks are dinosaur. The process of
borrowing money from banks is very complicated, time-consuming. Therefore,
the borrowers have an tendency to borrow money from the peers, individuals to
individuals. So the fintech company were born, played a rule as a intermediate
part between borrowers and lenders that using techology to operate.
- PeerStreet => valuation of 4 billion dollars, no commercial bank in VN
can surpass this number. The company uses non-credit data.
- Blend => the company does not invest in real estate.
- Avant => for middle-income companies with large capital needs
=> The above 3 companies do not apply to “Traditional” IP Financing.

2. Financing Vehicles for Fintech Companies:

- Why can't fintech companies raise capital from commercial banks?
+ Technology companies need capital to grow and maintain the company's
operations.
+ Fintech in Vietnam is still quite new and does not have a solid
foundation, even without collateral.
+ Cash flow needs to be stable in the market, so it is too risky if
commercial banks are willing to spend a large amount of capital for this
field.
- For that reason, fintech companies have raised venture capital funds for
investors who want to spend large amounts of money and reap high
returns. But the fintech companies themselves don't want investors to
hold a lot of shares in the company because they fear losing control of a
new business in the market with many ways to thrive. Venture capital is
not always cash but can also be provided in the form of technical
expertise or management expertise. But venture capital is not easy for
businesses to obtain. Only 1% of fintech companies apply for venture
 capital, the remaining 99% are not approved because of the fact that these
companies are still start-ups.

3. Trademark:

- Consistent with the economic reality during the financial crisis in 2008–
2009, the ratio of trademark collateral recorded sank to 8.3% in 2008 and
9.2% in 2009. After the financial meltdown, the ratio of trademark
collateral recorded has very slowly climbed back but failed to reach the
high of 21.1% in 2002. In fact, the ratio of trademark collateral recorded
in recent years is about half of the peak year of 2002. In the last five
years, the ratio is at 11%. That means 89% of trademarks are not recorded
by lenders as collateral with the USPTO. This finding is consistent with
patents as collateral. Lenders shun both trademarks and patents as
collateral in financing.
- IP is not a really good way to raise money. However in reality, some
famous company in Silicon Valey: Apple, Google still use this way to
raise money. So we need to open our mind

Introduction
1. Opening:
On August 8th, we had a very interesting seminar by Professor Xuan Thao
Nguyen with the topic “Fintech and Intellectual property financing vehicles”.
She really brought new knowledge with an impressive way of communicating.
1. Definition:
- Financial technology (better known as Fintech) is a combination between
Financial and Technology, used to describe new tech that seeks to
improve and automate the delivery and use of financial services. At its
core, fintech is utilized to help companies, business owners, and
consumers better manage their financial operations, processes, and lives
by utilizing specialized software and algorithms that are used on
computers and, increasingly, smartphones. Fintech, the word, is a
combination of "financial technology."

2. Examples of fintech applications:

- Including robo advisors, payments apps, peer-to-peer (P2P) lending apps,
investment apps, and crypto apps, among others.

(Source: fintechnews.sg)