Planet Wealth to offer access to capital, resources

By Christin Yates, Special to the Daily Memphian
Updated: August 01, 2021 7:36 AM CT | Published: August 01, 2021 4:00 AM CT

Dr. Jeffrey Cole (left) and Greg Sossaman recently started Planet Wealth, a new financial tech company based in Memphis that has raised $6 million from 70 local investors. (Mark Weber/The Daily Memphian)

As an orthopedic surgeon at OrthoSouth, Dr. Jeff Cole has always done a bit of dabbling in side gigs. In 2003, he partnered with someone in St. Louis and started an electronic medical records company.

“At the time, medical office practice and documentation were full of redundant work and inefficiencies, and everything was paper-based,” Cole said. “If we had had proper funding at the time, we could be a leader in that space today.” That endeavor lit a fire in Cole because he knew they had a great software company, but they couldn’t get funding for it to grow. After about 15 years, the company was on the cusp of profitability, and then finally, they closed it down.

“A friend who runs a venture capital firm in San Francisco, California, talked about one of his portfolio companies, and one was blockchain,” Cole said. “Blockchain fascinated me, and I began a deep dive to study it.”

Cole’s interest in blockchain and digital security continued to develop over the past several years, and he later found himself in a demo for a product.

“Calls with the CEO became weekly, daily and then multiple times per day,” he said. “We started talking about the vision of what we’ve now built, which is amazing.”

That demo morphed into Planet Wealth, which launched last week to “empower like-minded individuals to share resources toward a common goal.”

Cole is now on the board for the company.

“The company has been building toward this launch for about three years, so it’s a coincidence that as we aim to democratize capital, there just happens to be this strong anti-Wall Street retail movement occurring,” Greg Sossaman, CEO of Planet Wealth, said.

The digital financial services platform or “fintech,” is aiming to level the playing field between Wall Street and Main Street. Planet Wealth opens doors to capital access by eliminating costs that have prohibited large-scale participation and by providing process- and data-driven experience. This can create financial independence, or having enough income to pay one’s living expenses for his or her lifetime without having to be employed, achievable for those who pursue it.

“By broadening access to capital formation tools, we can stimulate growth and provide economic enrichment in our community,” Sossaman said. “We’re creating an on-ramp for people to participate — it’s a full private market ecosystem.”

The Jumpstart Our Business Startups (JOBS) Act intended to encourage funding of small businesses in the U.S. by easing many of the country’s securities regulations. Since then, crowdfunding, or the process through which businesses can go out and raise capital from unaccredited individuals, has exploded.

“The problem is, there are no guardrails (on crowdfunding) that need to be on it,” Sossaman said. “Traditional crowdfunding is more focused on helping issuers raise capital, and less focused on the investor’s interests. Large upfront costs, a lack of deal vetting, and poor structure means a less likely chance of success — we call that ‘dream funding.’”

Planet Wealth considers itself “crowdfunding 2.0” or wealth funding. People are encouraged to use the platform with asset-supported structures. The issuers don’t win until their investors win — 100% of the capital raised goes to the asset or the improvement of the asset, which makes Planet Wealth different from typical crowdfunding.

Suppose a Memphian wants to purchase a $1 million property Downtown to lease for income. After seeking out any government incentives he or she could take advantage of, such as a PILOT and opportunity zone grants, the individual could combine those incentives with capital sourced from all over the world through Planet Wealth’s software.

As opposed to Wall Street, all the capital raised goes to the building (or other asset) or improvements. There is no fee or salary paid to the issuer or leader of the deal, and cash flow is prioritized to the investor. For example, perhaps the first 5% of cash flow goes to the investor. Then the issuer and investor split the rest 50/50.

Planet Wealth is not an investment advisor, but it does plan to offer broker-dealer services and a variety of private investment opportunities in the future.

Through Planet Wealth, people can build their own networks and pool resources on a platform that has the power of Wall Street to serve the self-interest of others. Planet Wealth has all the services of Wall Street from banking, custody, deal issuance, deal funding to broker/dealer services and exchange.

“As a Memphis company, we plan to make Memphis the model that others will follow,” Sossaman said. “We want to spur economic development, and we have a huge opportunity to do that with a lot of local support.”

Before being tapped to lead Planet Wealth, Sossaman worked on the banking side with a lot of small businesses, and he saw companies that could not grow capital.

For instance, if an individual or startup wanted to raise $1 million, they would likely spend $40,000-$50,000 simply trying to market it to investors. Planet Wealth provides these tools through the platform — an expense that individuals will not have to incur on their own.

“We want to empower the masses to go out and achieve financial independence,” Sossaman said. “We think more people should be able to be in the game, and we put together a safe and compliant platform to do that.”

As of now the platform is free; however, those who join may incur a small, monthly fee in the future.