He founded Greensill Capital to disrupt "supply-chain finance", a $7T industry that supports global trade.
A few months ago, Greensill was headed for a $40B IPO. Now, it's likely worth $0 (oh, and Softbank is involved).
WTF happened? 🧵
2/ First, what is supply chain finance (SCF)?
Let's say you supply widgets to a car company. Typically, you give CarCo 90-120 days to pay its invoice for the widgets.
Waiting for the money sucks, though. You have working capital needs that CarCo's money could help with.
3/ Let's say your invoice to CarCo is $1000.
A bank or lending organization will offer you this SCF deal:
1⃣They advance you $990 upfront
2⃣Take on the credit risk of CarCo's bill owing
3⃣At 90-120 days, CarCo pays the full $1000 and the financier profits $10