By John Klyce – Reporter
October 12, 2021, 01:01pm CDT
For years, Greg Sossaman was employed by financial institutions. And though he enjoyed the work, there was something that frustrated him. Because most banks don’t like to take on risks, businesses that seriously needed money weren’t always considered credit worthy — while more affluent businesses that didn’t actually need loans were often the ones banks wanted to fund.
So, when Sossaman was offered the CEO role with digital financial services startup Planet Wealth — which hopes to widen the doors of capital access — he was intrigued.
“After my experiences of banking with small businesses and entrepreneurs, this project spoke to me,” he said. “I had to be a part of this.”
The company officially launched in July, and the goal is for its platform to help people build wealth, by providing them tools to raise funds and purchase valuable assets. Those can be rental properties, collectible cars, or really, anything that fluctuates in value or generates cash flow — even collectible stamps, oil and gas rights, or whiskey barrels.
Typically, Sossaman explained, just the act of raising funds can be expensive, with the combined costs of compiling documents and creating a website and video to attract investors sometimes reaching $30,000 to $50,000.
“That process prices people out,” he said.
Planet Wealth’s platform, however, will provide those tools and services at no cost, giving people the chance to pool together their social capital to raise financial capital.
“In a sense, we offer a free swing at the plate of capitalism,” Sossaman said. “That’s what people with capital do. They buy assets and make income off of them.”
The platform can be used by individuals or businesses. Technically, you must form an LLC to participate in a capital raise. But this is something people can do with the company’s software.
Planet Wealth is designed to benefit investors, too. The organizer of a deal can’t take a salary off a raise, and they don’t get paid unless their investors get paid. The first cut of earnings from an asset go to the investors, and everything after that is split.
“Our philosophy is built around investor advantages,” Sossaman said. “It’s easy to say yes to.”
But how is Planet Wealth making money in all of this?
The company charges 4% commissions on raises that take place on its platform; think of it as a listing fee. If someone completes a raise of $500,000, for example, Planet Wealth will take a 4% cut.
The startup has also raised a healthy amount of its own capital. When MBJ first spoke to Sossaman in July, it had raised around $8 million in funds. Now that number is about $10 million.
Currently, it has five employees, but this number could grow to 20 by the end of the year, and it recently brought on a director of human resources, who will help identify upcoming hires. There are marketing, web development, graphic design, and social media positions to fill, and Sossaman said there will be a heavy emphasis on marketing.
Though people can’t kick off raises on the website yet, Planet Wealth hopes to have the first offerings ready by early November. And the goal is to have 1 million platform users by the second quarter of 2022.
“It’s all about people working together with a common goal,” Sossaman said. “To create wealth for themselves and others.”