not every hero wears a cape, they just need an internet connection
WIFE: What did you do today?
ME: Um, so finished that Q&A I was telling you about. Some crazy things happened in the market and...oh, yeah, saved about 12% about Global GDP.
Jokes aside, they heroes:
"Eslam Negm, 32, watched from the deck of the Baraka 1 tugboat and thought of the all the Internet memes about the marooned ship. The world had been laughing at Egypt. 'No one was able to see how much pressure we were under,'"
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