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SoftBank could reportedly take control of WeWork at a valuation below $10 billion as the embattled office rental company seeks bailout options

Sun, 10/13/2019 - 8:08pm

  • WeWork's options to avoid running out of cash could include a SoftBank financing deal that would give the Japanese company — WeWork's largest investor — control of the office rental startup, The Wall Street Journal reported on Sunday.
  • SoftBank's deal could value the startup below $10 billion. The Japanese investment group valued WeWork at $47 billion in its January funding round.
  • WeWork is also working with JPMorgan on another option, lining up billions for a debt deal.
  • WeWork could run out of money as soon as the end of November, The Financial Times reported last week. The company's new co-CEOs are slashing thousands of jobs, selling off businesses, and closing non-core activities like WeGrow
  • For more WeWork stories, click here. 

WeWork's cash problems could lead to a takeover by its largest investor that would see its valuation dip below $10 billion, The Wall Street Journal reported on Sunday. 

The office rental company had planned to raise billions by going public, but its initial public offering was shelved after investors raised concerns about its leadership, business model, and conflicts of interest. After co-founder Adam Neumann stepped down last month, new co-CEOs shelved the IPO, made plans to lay off thousands, and embarked on other cost-cutting measures like selling the company's private jet and closing WeGrow, its educational arm

Now, WeWork, which has seen its credit rating sink to junk status, could run out of cash as soon as the end of November, The Financial Times reported last week. The company is exploring options to help with the cash crunch.

One solution could be taking more money from its largest investor. SoftBank could invest several billion in new equity and debt, the Journal said. 

Read moreSex, tequila, and a tiger: Employees inside Adam Neumann's WeWork talk about the nonstop party to attain a $100 billion dream and the messy reality that tanked it

The Japanese investor calculated that WeWork needs at least $3 billion to operate through next year, according to the Journal. The SoftBank deal would reportedly see much of Neumann's voting power shift to the investor, which already has two board seats, and the company would play a bigger part of leading WeWork's turnaround. 

SoftBank could buy in at a valuation below $10 billion, the Journal added. The company last valued WeWork at $47 billion in a January investment round.

SoftBank's money could also be used in part to help Neumann repay his hundreds of millions in personal bank loans

WeWork is also looking at a potential bailout package with JPMorgan

SoftBank isn't WeWork's only option for a bailout. The company has been working with major lender JPMorgan to work out a debt package that could be in the billions.

A source told Business Insider top WeWork executives spent last week in JPMorgan's New York headquarters.

"WeWork has retained a major Wall Street financial institution to arrange financing," a WeWork representative told Business Insider in a statement. "Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company's management and its bankers over the course of this past week and this coming week."

See more: How WeWork spiraled from a $47 billion valuation to talk of bankruptcy in just 6 weeks

The Wall Street Journal also reported that SoftBank CEO Masayoshi Son picked Marcelo Claure, the company's chief operating officer, to help WeWork's co-CEOs. Claure, the former CEO of Sprint, has been working with about 20 SoftBank employees to evaluate WeWork's global leases and real estate. 

A representative for SoftBank declined to comment to Business Insider.

WeWork has 528 locations in 111 cities.

Got a tip? Contact Meghan Morris on Signal at (646) 768-1627 using a nonwork phone, Twitter DM @MeghanEMorris, or email at (PR pitches by email only, please.) 

SEE ALSO: WeWork said to be talking to JPMorgan for $5 billion in debt financing

Join the conversation about this story »

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BLOCKCHAIN IN BANKING: An inside look at four banks' early blockchain successes and failures

Sun, 10/13/2019 - 6:01pm

Since its emergence at the start of the decade, blockchain has been heralded as one of the most transformative technologies for financial services. Blockchain hype has led financial institutions (FIs) to pour money into the space and into distributed ledger technology more broadly: about $1.7 billion annually as of 2018, per research from Greenwich Associates cited by Bloomberg.

Despite the hype, sentiment around the technology has grown increasingly skeptical as FIs struggle to realize the value of their investments. Incumbents have shuttered some early experiments, and FI execs are beginning to discuss blockchain's prospects in bearish terms.

Key difficulties include scaling the technology for commercial application, ongoing regulatory uncertainty, and the difficulty of bringing together competing participants.

Yet amid the noise, it's becoming more clear where exactly blockchain has value, and some players are beginning to make genuine inroads in their adoption and deployment of the technology. Those who are finding success are both pushing back against souring industry sentiment and setting themselves up as industry leaders.

In The Blockchain in Banking Report, Business Insider Intelligence explores early blockchain successes and failures at four major banks, identifies the lessons these early wins — and losses — have for the rest of the financial services industry, and outlines actionable steps that industry players can take to ensure the success of their own blockchain projects.

The companies mentioned in this report are: Australia and New Zealand Banking Group (ANZ), Bank of America (BofA), Citi Bank, CME Group, Fidelity Investments, HSBC, IBM, JPMorgan, Marco Polo, Mastercard, Nasdaq, PayPal, Ripple, Royal Bank of Canada (RBC), Santander, SWIFT, and Visa.

Here are some of the key takeaways from the report:

  • Blockchain has been one of the most hyped technologies within financial services, heralded for its potential to eliminate pain points across the industry. 
  • Despite this enthusiasm, questions have come up about the technology's efficacy as FIs struggle to actualize blockchain solutions. Among the key challenges holding back blockchain adoption are scalability and performance, trust, and regulatory uncertainty.
  • Yet, for all its difficulties, blockchain's promise to transform financial services processes has meant leading banks are attempting to figure out where the technology does and does not work firsthand, to varying degrees of success.
  • To implement an effective blockchain solution, decision-makers should first determine how much they're willing to commit to the technology and identify a genuine business problem that blockchain can resolve. Only then should they develop a strategy for delivering a blockchain project.

In full, the report:

  • Details the key roadblocks holding backing blockchain adoption within financial services.
  • Identifies the most promising use cases are which industry players are coalescing.
  • Explores four banks' early blockchain project successes — JPMorgan and HSBC — and failures — Citi Bank and BofA — and the lessons they provide.
  • Provides actionable recommendations on how banks can successfully pursue a blockchain project.

Interested in getting the full report? Here are two ways to access it:

  1. Purchase & download the full report from our research store.  >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of blockchain in banking.

Join the conversation about this story »

We asked financial planners for their favorite high-yield savings account, and almost everyone said the same thing

Sun, 10/13/2019 - 4:14pm

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, but our reporting and recommendations are always independent and objective.

Two years ago, I opened a high-yield savings account at Ally and directed a fixed amount of every paycheck into it. I've found that the account is a great place to send my automatic contributions, which financial planners say is one of the best and easiest ways to build long-term wealth.

I liked that Ally's online savings accounts have no ATM access and a limit on monthly transactions. Coupled with having my checking account at a different bank, those "limitations" not only kept me from dipping into my savings too often, but helped me double my balance last year.

And when I recently asked a handful of certified financial planners for their favorite high-yield savings account, I wasn't too surprised that most of them had the same answer: Ally's.

Ally is an online-only bank that's offering a 1.8% annual percentage yield on savings accounts, while the average APY is 0.1%. That means that at Ally a balance of $10,000 will earn $149 in a year, but you can start earning interest on as little as $1 since there's no minimum-balance requirement.

Any high-yield savings account earns significantly more interest than a checking or traditional savings account, helping you make the most of money you may need to access next month or next year. Dozens of banks offer high-yield savings accounts with varying interest rates for different balance amounts, which you can think of as a reward for saving.

"I recommend this type of account to keep your emergency funds in, or money that you have for a short-term goal," said Luis Rosa, a CFP who founded the financial-planning firm Build a Better Financial Future. "It's easily accessible and yielding a lot higher than your typical brick-and-mortar bank."

Read more: I moved my emergency fund to a high-yield online savings account, and after earning 20 times more interest I'd tell anyone to do the same

Along with Rosa, Nick Vail, a CFP at Integrity Wealth Advisors, and Anjali Jariwala, a CFP and certified public accountant at Fit Advisors, also recommend Ally.

Ally charges no monthly maintenance fees, so your savings and earnings are (mostly) yours to keep. As with any high-yield savings account, if you earn interest throughout the year, you'll get a Form 1099-INT from your bank to include with your tax return, and your interest will be subject to taxes at your normal income tax rate. 

Ally was named the best online bank and the best bank for millennials in 2018 by Kiplinger. It recently ranked second in J.D. Power's "Direct Banking Satisfaction Study," one point behind Charles Schwab. J.D. Power said Ally ranked "higher than average on competitiveness of interest rates."

But high-yield savings accounts do come with a few limitations. Ally allows only six transactions per statement cycle, including withdrawals and transfers to different banks or other Ally accounts, on all online savings accounts and money-market accounts combined. Any transactions beyond the limit will incur a $10 fee.

Ally also offers investment accounts. Learn more »

SEE ALSO: Capital One is offering a cash bonus of up to $500 for new money-market accounts, but only for a limited time

DON'T MISS: I doubled my savings in 2018 and it took only 5 minutes of effort

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Bitcoin 101: Your essential guide to cryptocurrency

Sun, 10/13/2019 - 1:00pm

Bitcoin is everywhere.

The cryptocurrency is seemingly in the news every day as investors and businesses try to understand the future of this digital finance.

But what is Bitcoin all about?

Why is it suddenly on every financial news program?

And what does it mean to you?

Find out the answers to these questions and more in Bitcoin 101, a brand new FREE report from Business Insider Intelligence.

To get your copy of the FREE slide deck, simply click here.

Join the conversation about this story »

The 15 richest people in India, ranked

Sun, 10/13/2019 - 12:13pm

Forbes released its 2019 ranking of India's 100 Richest People.

For the 12th year in a row, Mukesh Ambani, the head of oil-gas-telecom conglomerate Reliance Industries, topped the list with an estimated net worth of $51.4 billion.

Despite a slowdown of economic growth that caused more than half of India's 100 richest people to lose money, Ambani has only gotten richer, adding $4.1 billion to his fortune in the past year.

Read more: Mukesh Ambani is India's richest man for the 12th year in a row. Meet the Ambanis, Asia's wealthiest family, who live in a $1 billion skyscraper and mingle with royals and Bollywood stars.

India's richest 15 people, which include Ambani, pharmaceuticals billionaires, and infrastructure tycoons, are worth a combined $215 billion.

Here are the 15 richest people in India right now, ranked.

SEE ALSO: Meet the Ambanis, Asia's wealthiest family, who live in a $1 billion skyscraper and mingle with royals and Bollywood stars

DON'T MISS: More than half of India's 100 richest people lost money in the past year, but the country's richest man got $4 billion richer.

15. Dilip Shanghvi

Net worth: $7.55 billion

Age: 64

Source of wealth: pharmaceuticals

14. Sunil Mittal

Net worth: $7.6 billion

Age: 61

Source of wealth: telecom

13. Burman family

Net worth: $8.3 billion

Source of wealth: consumer goods

12. Cyrus Poonawalla

Net worth: $9.1 billion

Age: 78

Source of wealth: vaccines

11. Bajaj family

Net worth: $9.2 billion

Source of wealth: motorcycles

10. Kumar Birla

Net worth: $9.6 billion

Age: 52

Source of wealth: commodities

9. Lakshmi Mittal

Net worth: $10.5 billion

Age: 69

Source of wealth: steel

8. Godrej family

Net worth: $12 billion

Source of wealth: Godrej Group, consumer goods

7. Radhakishan Damani

Net worth: $14.3 billion

Age: 64

Source of wealth: investments, retail

6. Shiv Nadar

Net worth: $14.4 billion

Age: 74

Source of wealth: software services

5. Uday Kotak

Net worth: $14.8 billion

Age: 60

Source of wealth: banking

4. Pallonji Mistry

Net worth: $15 billion

Age: 90

Source of wealth: construction

3. Hinduja brothers

Net worth: $15.6 billion

Source of wealth: diversified

2. Gautam Adani

Net worth: $15.7 billion

Age: 57

Source of wealth:  commodities, infrastructure

1. Mukesh Ambani

Net worth: $51.4 billion

Age: 62

Source of wealth: petrochemicals, oil and gas, telecom

SMB LENDING REPORT: How alt lenders are providing SMBs with new funding options, and the ways incumbents can respond to stay ahead

Sun, 10/13/2019 - 12:00pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here. Current subscribers can read the report here.

Small- and medium-sized businesses (SMBs) are vital creators of wealth, income, and jobs in the global economy. For example, they make up 99.9% of all private sector businesses in both the US and the UK, and they employ 60% and 48% of all workers in those countries, respectively.

The income and assets of these businesses make them an irreplaceable customer base for financial institutions. However, incumbent financial institutions are falling short of SMBs' lending wants and needs.

Fintechs — including alt lenders, payment providers, and lending platforms — are changing the SMB lending space by filling that gap and capturing an increasingly large sliver of the SMB lending market. For example, alternative financial providers only accounted for 2%, or £11.5 billion ($14.7 billion), of the UK SMB lending market in 2018. However, their share is projected to surge to 9.1%, worth £52.6 billion ($67.4 billion), by 2021.

In the SMB Lending Report, Business Insider Intelligence will examine the key players in the SMB lending space, determine the advantages of each player, and discuss how incumbents can improve their offerings to better serve SMBs and stave off the growing competition from alt lenders in the space. Additionally, we will look at what the future of SMB lending will hold.

The companies mentioned in this report are: NatWest, BNP Paribas, Esme Loans, OnDeck, ING, Kabbage, Funding Circle, Lending Club, PayPal, Square, Lendio, ING, Funding Options, INTRUST Bank, Behalf, Lending Express, and Fundbox, among others.

Here are some of the key takeaways from the report:

  • SMBs are underserved by conventional lenders, so fintechs are increasingly offering digital services tailored to meet SMBs' wants and needs.
  • Some incumbents have already woken up to the opportunity of better serving SMBs and leveraging this revenue stream, but the majority are still unaware.
  • This has given fintechs the opportunity to grow their market share among SMBs. If incumbents don't fight back with their own digital services, they will like lose further share to fintechs. 
  • There are three main ways incumbents can revamp their SMB lending products, each of which requires a different level of effort: partnering with fintechs, developing tech-enabled solutions in-house, or launching their own challenger products. 

 In full, the report:

  • Outlines the current state of the SMB lending space.
  • Details the different players that are involved in SMB lending.
  • Explains three ways in which incumbents can up their SMB lending game and fight off competition.
  • Highlights the benefits and hurdles that come with each of those strategies.
  • Discusses what the future of the SMB lending space will hold.

Interested in getting the full report? Here are two ways to access it:

  1. Purchase & download the full report from our research store. >>Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of SMB lending.

Join the conversation about this story »

More than half of India's 100 richest people lost money in the past year, but the country's richest man got $4 billion richer.

Sun, 10/13/2019 - 11:45am

India's economic growth has slowed, and the country's richest people haven't been spared the effects. 

Forbes released its 2019 ranking of India's 100 Richest People, and it showed that more than half of India's richest people lost money in 2019.

"Under the Narendra Modi-led government, which returned to power for a second term with a thumping majority in May, economic growth slowed to 5%, a six-year low," Naazneen Karmali wrote for Forbes.

According to Karmali, the automobile and consumer goods industries were hit particularly hard, with layoffs and production cuts. Fourteen of India's richest lost at least $1 billion, and nine of last year's richest didn't make this year's list. 

The country's richest man, however, got even richer despite the economic turmoil. Mukesh Ambani, who runs the oil-gas-telecom conglomerate Reliance Industries, added $4.1 billion to his net worth.

The 62-year-old is now worth an estimated $52.7 billion, making him the 15th-richest person in the world. Ambani has now been India's richest man for 12 years in a row. 

The Ambani family is known for living in a lavish, 27-story skyscraper in Mumbai that cost an estimated $1 billion to build. The weddings of two of Ambani's children, in December 2018 and March 2019, were attended by the likes of Google CEO Sundar Pichai, Hillary Clinton, actress Priyanka Chopra, and Bollywood star Shah Rukh Khan.

Read more: Mukesh Ambani is India's richest man for the 12th year in a row. Meet the Ambanis, Asia's wealthiest family, who live in a $1 billion skyscraper and mingle with royals and Bollywood stars.

The next-richest Indian, Gautam Adani, is worth an estimated $15.7 billion. That may be a whopping $37 billion less than Ambani, but Adani rose eight spots in the past year to become the second-richest man in India. The infrastructure and coal mining billionaire got approval in 2019 to start work on a coal mine in Australia after waiting nine years, according to Forbes. Adani also controls India's largest port, Mundra Port.

While most Indian billionaires — with exceptions such as Ambani and Adani — lost money in the past year, billionaires in France made more money than their counterparts anywhere else in the world, as Taylor Nicole Rogers reported for Business Insider.

The personal fortunes of French billionaires grew more than twice as fast as those of American and Chinese billionaires in the first half of 2019, Bloomberg's Alexander Sazonov reported in July, mainly thanks to China's growing desire for luxury goods. 

Take Bernard Arnault, France's richest person and the third-richest in the world, who runs LVMH, the world's largest maker of luxury goods. Last week, Arnault made $5.1 billion in less than 48 hours — and he's now made more money in 2019 than any other person listed in the Bloomberg Billionaires Index. 

SEE ALSO: Meet the Ambanis, the wealthiest family in Asia, who live in a $1 billion skyscraper and mingle with royals, politicians, and Bollywood stars

DON'T MISS: French billionaire Bernard Arnault just made $5 billion in less than 48 hours. Here's how the world's third-richest person makes and spends his $99 billion fortune.

Join the conversation about this story »

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Only half of Gen Xers have a retirement account, and that's a catastrophe in the making

Sun, 10/13/2019 - 11:30am

Millennials may bear the brunt of bad press, but Gen X is arguably in worse financial shape.

Insider recently teamed up with Morning Consult to survey 2,096 Americans about their financial health, debt, and earnings for its new series, "The State of Our Money." Of the total respondents, 566 were Gen X, defined as ages 39 to 54 this year.

According to the survey, exactly half of Gen Xers don't have a retirement savings account. That's only slightly less than the share of millennial respondents who don't have one (54%). That's particularly concerning considering the nearly two-decade span between the youngest millennials and oldest Gen Xers.

While the Silent Generation and early Baby Boomers have relied on a combination of pension benefits and Social Security to make up their retirement income, Gen X has largely had to assume the responsibility of building up their own nest egg, and they're clearly struggling.

All told, only 36% of Gen Xers are actively saving in a retirement account, while 13% have a dormant retirement account. Americans tend to earn the most money from their late 30s to early 60s, making it a crucial period for socking away extra income. 

And yet, "I don't earn enough money to save for retirement" was cited as a major reason for not saving by about 62% of those who don't have a retirement plan. Regardless of salary, the financial squeeze for many Americans tends to ramp up during mid-life. They're typically the most expensive years, when buying a house, supporting children, and accumulating debt become the norm.

About 43% of Gen Xers also said unemployment is a major reason they don't have a retirement account. This could be explained, at least in part, by mothers leaving work to care for young children during their 20s and 30s.

Still, according to Pew Research Center, women exiting the workforce to care for children is becoming less common. In fact, 70% of moms with kids under 18 worked in 2015. Many families are no longer relying on a single income to cover expenses and save for financial goals like retirement.  

A separate survey from Schwab Retirement Plan Services found that even those who are contributing to a 401(k) aren't saving enough. The typical Gen Xer thinks they'll need $1.8 million for a comfortable retirement, but they saved an average of just $9,500 last year — half of the maximum allowable contribution.

Check back on "The State of Our Money" throughout the month for more findings and analysis.

Join the conversation about this story »

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Benchmark's role ousting the CEOs of WeWork and Uber could be the end of the 'founder friendly' reputation that made it one of Silicon Valley's hottest VC firms

Sun, 10/13/2019 - 11:28am

Martin Roscheisen has been fired twice by the boards of startups he led.

Even so, Roscheisen says he would gladly work again with the venture capital firm that pushed him aside in one of the two episodes. 

Roscheisen, who is now chief executive of venture-backed diamond-maker Diamond Foundry, described that incident as a mutual decision he reached with a venture capital firm partner on the board who asked him to resign when it became clear that the startup was struggling to grow users.

But to take money again from the "the backstabber of all founders"?

Unthinkable, Roscheisen said.

The "backstabber" he's talking about is Benchmark Capital, a renown Silicon Valley venture capital firm which was in the news in September for its role helping to remove WeWork's charismatic and controversial cofounder Adam Neumann from the helm.

Benchmark is one of the most respected investment firms in the tech world, with a history of backing big hits like Twitter and Snap and a carefully crafted reputation of supporting, and understanding, entrepreneurs. This reputation is now under scrutiny as the events at WeWork and other startup interventions by Benchmark raise questions about the firm's true character.

The spotlight comes as the notion of the "founder-friendly" venture firm — a trend that Benchmark is largely responsible for creating — is being reconsidered across Silicon Valley and the broader investment community. The idea that startup founders are infallible looks more tenuous amid tales of excess and bad judgement at some high-profile firms. 

"There's just so much competition for the best deals and the best founders, that venture capitalists were tripping over themselves to say who could be the most founder friendly," said Mark Suster, a two-time entrepreneur and general partner at Upfront Ventures in Los Angeles.

"Then there are people who are old enough and wise enough, to have a long enough lens, to say, 'You know what, governance matters.' ... It's not the popular thing to say right now," Suster said, in defense of Benchmark's behavior.

A spokesperson for Benchmark declined to comment.

A pattern or a co-incidence?

For critics of Benchmark, the last few years provide plenty of ammunition.

In 2017, the San Francisco firm along with other investors pressured Uber's cofounder and chief executive Travis Kalanick to quit. It also sued Kalanick, alleging that he misled them in order to add board seats under his control. Benchmark was expected to see its stake hit approximately $8.25 billion in value after Uber went public.

Benchmark partner Bill Gurley also helped the board at Nextdoor relieve founder Nirav Tolia of his duties as chief executive last year, sources familiar with the talks told The Wall Street Journal. Tolia did not respond to a request for comment.

"I don't know how you explain to founders, 'Hey, the way I do early-stage investing is — I bet on founders,' and then you have this track record of explicitly not betting on founders," said Delian Asparouhov, a principal at Peter Thiel's venture capital firm Founders Fund.

"That to me is what feels morally corrupt (about firing founders). You have this dichotomy between what you're pitching to the next founder and what your actions actually reflect," Asparouhov said.

Benchmark, based in San Francisco, attracts founders with its impressive track record. The firm has modest fund sizes and still managed to take 25 companies public in the last decade, including Uber, Dropbox, GrubHub, and Yelp, PitchBook said. It now has 33 startups in its portfolio, compared to Kleiner Perkin's 90 and Sequoia Capital's 74.

Read more: How WeWork spiraled from a $47 billion valuation to talk of bankruptcy in just 6 weeks

Some investors say the chief executive ousters at WeWork and Uber, which was also backed by Benchmark, are more coincidence than correlation. The firings happened in the span of two years and took place at consumer-facing companies, which gave them more prominence in the media, said Semil Shah, a seed-stage investor at Haystack and a venture partner at Lightspeed in Menlo Park.

"There is a risk that if the collective board does not feel like the CEO is the best steward of the enterprise, that option is on the table," he said, referring to the option of ousting a CEO. "It's not a Benchmark thing. This happens at other funds."

Benchmark owes part of its success to the way it actively manages its portfolio. But as the firm tries to woo founders, its reputation among them and its response to the unfolding founder-friendly debate could determine its future ability to land the hottest deals.

Founder Fund's Asparouhov said any venture capital firm that has a history of firing founders could lose out on the most sought-after deals. A small number of founders who have prior experience working at a white-hot startup are more likely to create "extraordinary returns," he said, and are also more likely to know about the firm's track record.

Though these insider-founders are in the minority, "when it does come up, it tends to be painful for the investment firm," he said.

'Bill wants to win'

Heather Fernandez's account of working with Benchmark shows the firm's appeal. Her company Solv, which is working to bring convenience and transparent pricing to healthcare, raised money from the firm in 2017 and had partner Bill Gurley join the board.

Fernandez described the Benchmark partner as a "thought partner." Before the startup raised a cent of capital, they met and spoke on the phone often to fine-tune the idea and plan for challenges ahead.

"The role of an early-stage investor is to dig in with you," she said.

Others say Benchmark can turn on a dime if it feels its payday is at risk.

An entrepreneur who spoke on the condition of anonymity said the firm helped unseat him at his own startup when it was underperforming so the firm could replace him with a chief executive "in their network who they already know and trust."

Roscheisen, the entrepreneur who was ousted twice, felt scorned.

His firm Nanosolar, founded in 2001, had raised half a billion dollars to develop a cheaper and highly efficient solar cell. The problem was getting the technology to market. It was still untested at scale by the time Nansolar signed more than $4 billion in orders in 2009.

As a board member, Gurley had a latent presence, Roscheisen said.

"Gurley was stunningly clueless about the industry that Nanosolar was operating in even after eight years on the board," he said, adding that the investor was "weak in the knees at the first blow of a bit of wind."

After years of delays and unsolved product issues, Roscheisen said the board forced him to resign. Geoff Tate, a former chipmaker executive who replaced Roscheisen as chief executive, confirmed.

"Bill wants to win," Tate said. "Bill has a smart mind, and he's going to question things if he thinks it's going the wrong direction."

Gurley did not return repeated requests for comment.

Fernandez, the healthcare founder, said she expects her investors to have her back. But she knows being founder friendly has limits.

"If a board is hearing from the executive team, from employees, from customers, that there is a problem with the CEO, or if you see a destruction of value happening, I have a hard time believing that they'd say 'We're going to stand by this person no matter what,'" she said. 

In defense of Benchmark

The setup at WeWork meant that removing the CEO was not simple, and ultimately required founder Adam Neumann to agree to step down.

Neumann had locked up control of parent corporation The We Company ahead of the planned initial public offering. Its filings to go public, called an S-1, revealed that Neumann had 20 votes per share with his superpowered stock, about double the industry standard. He also owned an interest in four buildings that WeWork leased, received personal loans from the company, and bought the trademark to the "We" name so he could license it at cost.

Read moreWeWork details CEO Adam Neumann's web of loans, real-estate deals, and family involvement with the company

Outside observers have criticized investors, including SoftBank, for giving the founder so much power.

"People will say why would the VCs ever do that? How could they be that stupid? Sometimes, it is what it is," Mike Maples, Jr., a partner at venture firm Floodgate, said. "Your job is to make money for your investors."

Maples said if he passed on an investment opportunity because the founder had more voting shares than other directors, and the company went on to give massive returns, his firm lost. So did the university endowment or hospital that's invested in the firm as a limited partner and could have built another building on campus.

There are other stakeholders to consider, said Shah, an investor.

"I think when any top firm — it doesn't matter if it's Benchmark or your next top firm — I think they're making a decision on behalf of a number of key constituents," he said, "which include everyone from employees to the key executives at the company who may mutiny to their limited partners and protecting their principle investment."

Being founder-friendly is overrated

Venky Ganesan, managing director of Menlo Ventures, said being seen as founder unfriendly can hurt a venture firm's reputation.

The problem is, he said, what it means to support entrepreneurs has changed since he joined the venture business almost 20 years ago. Ganesan related founders to teenagers and investors to parents.

"These are people who have great potential, but we need to make sure they turn into responsible adults," he said. "You set boundaries, curfews, and consequences. ... Now the role has changed. They have become friends. We want to go and have a beer with them."

The events of the last few months could shift expectations again.

"People think founder friendly is you saying yes to everything," Ganesan said. "It's about helping you make the best decisions you can. Sometimes, it might mean saying no. We help you by saying no."

For Benchmark, which needs to win favor with a new generation of startups, the ability of founders to take such a nuanced perspective could make all the difference.

SEE ALSO: The Takedown of Travis Kalanick — the untold story of Uber's infighting, backstabbing, and multimillion-dollar exit packages

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'Joker' scores an October 2nd weekend record at the box office, while 'Gemini Man' bombs

Sun, 10/13/2019 - 11:19am

  • "Joker" won the domestic box office for a second-straight weekend.
  • It brought in an estimated $55 million, the best week two performance ever by a movie released in October.
  • "Gemini Man" came in third place, earning only $20.5 million.
  • The movie's budget was $138 million.
  • Neon's "Parasite" brought in $376,264 on three screens and had a per-screen average of $125,421, the best average of any movie this year.
  • Visit Business Insider's homepage for more stories.

Warner Bros. has got something special with "Joker." The super serious (and ultra violent) origin story of DC Comics' greatest villain continues to put up record-breaking numbers for October.

After having the biggest opening weekend for the month last weekend, in its second go around "Joker" brought in an estimated $55 million. That's just a measly 43% drop from last weekend and an October record for best week two performance, topping the studio's release of "Gravity" ($43.1 million) in 2013.

Budgeted around $55 million (north of $60 million when you count marketing), "Joker" now has a global cume to date of over $540 million. WB is raking in the money!

Read more: Kevin Smith rekindled his friendship with Ben Affleck thanks to a private jet and getting "ghosted" by Snoop Dogg

But while Warner Bros. soaks in the fruits of its labor, across town Paramount is in full crisis mode with "Gemini Man."

Will Smith's latest movie, which showcased technological feats rarely seen in theaters, was supposed to be a worthy adversary to "Joker," but the Ang Lee movie didn't put up much of a fight.

"Gemini Man" came in third place (United Artists' "The Addams Family" came in second with $30.2 million) only bringing in $20.5 million this weekend. That's below its industry projections and setting the stage for Paramount and the other companies that shared the financial burden (Skydance Media, Fosun Pictures, and Alibaba) to potentially lose millions as the movie cost $138 million to make.

Whether it was its tired story, which had been floating around in development for almost 20 years, or the decision by Lee to shoot it in the high frame rate of 120 frame per second, which gives the picture a sharpness audiences aren't huge fans of yet (it's so advanced no theater in the US could show it the way Lee intended), nothing worked for "Gemini Man."

Now Paramount, whose biggest earner in 2019 is the Elton John biopic "Rocketman" with over $195 million earned worldwide, will put its hopes in "Terminator: Dark Fate" (opening November 1) providing a lift for the studio to close out the year.

Meanwhile on the arthouse side, Neon's "Parasite" showed that the hype is real for the latest movie by Bong Joon-Ho ("Snowpiercer," "Okja"). Playing in only three theaters this weekend, it brought in $376,264 and had a per-screen average of $125,421. That's the best screen average of any movie this year. It's also the highest per-screen average since 2016's "La La Land."


SEE ALSO: Horror movie juggernaut Blumhouse is jumping into podcasting with a series for iHeartRadio

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As founders and VC investors lock horns, startups are on the hunt for 'outside' board directors, Silicon Valley's in-demand job

Sun, 10/13/2019 - 11:05am

The adage goes: It's a board's job to hire and fire the chief executive.

That's a gross exaggeration. But in the hyper-competitive world of tech startups, the cold truth behind the saying helps explain the rising profile — and the demand for — a special "outside" member of the board who can bring clout and credibility during difficult periods of infighting and fractious management shake-ups. 

Often referred to as an independent board member, the outside director is a person who sits on a startup's board and has voting rights but is typically not an investor in the company. They don't have a financial stake, which makes them more objective than the venture capital partners looking for a return on their investment.

And in the wake of brutal board battles at Uber and WeWork, in which company founders were ousted from the CEO job, there's a growing appreciation on all sides for the role that impartial independent directors can play.

Outside directors "don't have millions of dollars riding on the outcome," said Mark Suster, a two-time entrepreneur and general partner at Upfront Ventures in Los Angeles. "They are truly more independent of (any) decision."

Andy Ruben, whose company Yerdle helps retailers like Patagonia sell used goods, is currently conducting interviews in his search for an outside director, his board's third.

The ideal candidate brings operating experience as a chief executive or operating officer at a retailer that Yerdle sees as a potential partner, who can provide the "voice of the customer."

"You're baking a cake, and you're putting in the right ingredients," is how Ruben puts it.

There are no rules for startups

Rules laid down by the stock exchanges require public companies to supply their boards with a majority of independent directors, but there are no such prescriptions for privately-held firms. That's made the process more haphazard for privately held startups, which typically bring on outside directors at various milestones, like raising new funding or preparing to go public.

On average, companies add three outside directors before going public, and as many as 40% of startups add their first outside director more than three years before an IPO, according to research by Brian Tayan, a researcher at the Stanford Graduate School of Business. 

Read more: WeWork's had a terrible month, and now CEO Adam Neumann is stepping down — here's everything that has happened since the embattled company filed to go public

Most often, founding chief executives recruit an outside director to the board who provides industry experience, said Tayan, who has surveyed dozens of entrepreneurs on their corporate governance. They're also looking for a management background, prior governance experience, or knowledge of banking and accounting.

Those individuals aren't too hard to find. Silicon Valley has a surplus of people with domain expertise and a supercharged network, said Niko Bonatsos, managing director of venture firm General Catalyst.

"Why wouldn't you utilize this eclectic bench of individuals to help the founders level up like an avatar in a video game?" he said.

Asana and Gusto, both late-stage startups that make tools for businesses, tapped seasoned operator Anne Raimondi to join their boards as an outside director earlier this year. She is a expert on executive compensation — something that public companies must disclose — having led operations at Zendesk before it went public in 2014. Her work at Asana and Gusto focuses on this strategy.

"As an operator, you're in the weeds. You're so close to the business," Raimondi said. Her job is to help them see around corners.

"Sometimes that help can be very threatening"

The outside director may also bring experience as a founder or chief executive. That's not always true of an investor on the board.

Mimi Chan, whose startup Littlefund lets people send money that's earmarked for savings instead of material gifts to the children in their lives, recalls an investor telling her she needed to take a closer look at what a competitor was doing. It shook her confidence.

She turned to an adviser who she considers an outside director, though her company is so young it doesn't have a board yet.

"Other venture capitalists, many of them, have not been in the founder's shoes," Chan said. "It's nice to have someone that maybe doesn't have all the answers but can at least relate to you."

Investors said they often see founders run to the outside director with problems. They may fear that a venture capitalist on the board will influence their ability to raise the next round of funding. The worst case scenario includes their removal from the company.

"When a company is not performing well, the instinct of all board members is to try to help," said Rob Chandra, an early-stage investor at Avid Park Ventures who teaches a class on entrepreneurship at UC Berkeley's Haas School of Business. "Sometimes that help is taken and is constructive, and sometimes that help can be very threatening and can make the entrepreneur feel like they are at risk of losing their job." The founder may become reluctant to share information with the board that they think reflects badly on them.

The outside director's feedback "may have more credibility," said Bonatsos, the investor, because they're seen as a neutral party.

'Founder control' is not what it used to be

How independent an outside director is varies from board to board.

An angel investor may graduate from the role of adviser to board member. "There's a natural evolution," Chandra said, as they develop a relationship with the founder and show they add value.

Suster, who sold his last company to Salesforce where he became a vice president before joining the venture capital business, gives this unconventional advice to founders: Ask the candidate for a check.

"The funny thing is, when you write a $100,000 check, even if you're a multimillionaire, you feel a sense of ownership," Suster said. "'... Feeling that sense of ownership — that I have skin in the game — really matters I think for you to truly make good business decisions."

The demand for a competent outside director comes as the notion of "founder control" is being reconsidered across Silicon Valley and the broader investment community. Venture capital investors are showing less willingness to support founders like WeWork boss Adam Neuman, who amassed major company ownership before his forced departure. And the next crop of entrepreneurs are taking a more moderate approach.

Aditi Shekar is a first-time founder and chief executive. Her company, Zeta, makes a budgeting tool designed for couples and has raised an undisclosed amount of funding from angel investors.

She doesn't report into a board of directors yet, but Shekar said she is building good governance habits now. Every month, she sends an email with the company's financials to all of her investors and has a follow-up phone call with her lead angel, who she considers a board adviser-type, to go over what at Zeta went well and what didn't.

"If you know someone is going to check your work, you're just going to be a little more thoughtful about it," Shekar said.

Join the conversation about this story »

NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here's how the company makes money.

I opened a high-yield savings account with online bank Ally to earn 20 times more on my money, and it's safe to say I'm obsessed

Sun, 10/13/2019 - 10:10am

  • Author Sarah Li Cain needed a place to keep her savings for her first home that would earn interest but not put her money at risk.
  • She settled on a high-yield savings account with Ally, which had no monthly fees or minimum-balance requirement, and it had a 2.20% interest rate (although as of October 2019 that interest rate is 1.80%), which means it earns about 20 times more interest than money in a savings account that might pay 0.1% at a traditional bank.
  • Since opening the account, she's been so happy with its customer service and ease of use that she moved money she'd been keeping in a traditional bank into Ally, too.
  • Visit Business Insider's homepage for more stories.

A few years ago, my husband and I wanted to plan for a major purchase — our very first house. As someone who likes to maximize her savings, I was concerned I had to let my money just sit there for a few years while we went through the house-hunting process.

I'm someone who likes to leave as little money as possible in a regular bank account (except for our emergency savings fund) because I love to invest my money and watch it grow. In this case, however, it didn't make sense to stick money in a brokerage or retirement account because I wanted a conservative option — I didn't want to lose the money I was setting aside for a down payment on my future home.

After doing some research, my husband and I decided on a high-yield savings account. With it, we could earn a bit of money from interest and access our funds relatively quickly, two of the most important things we were looking for.

We chose Ally for its lack of fees and minimum-balance requirement

I feel lucky to be living during a time when I can do research online. With so many comparison websites and banks competing for my business, I was able to compare bank accounts pretty quickly.

We settled on Ally Bank's online high-yield savings account. Ally has:

  • A 2.2% interest rate (when I opened the account; as of October 2019 the interest rate is 1.80%), compounded daily
  • No fees or minimum required balance
  • Federal Deposit Insurance Corp. insurance up to $250,000
  • 24/7 customer service.

My husband and I liked the fact that it doesn't charge any monthly maintenance fees and there is no minimum-balance requirement. Because we were just starting our savings journey when we opened the account, we didn't want to transfer more than $50.

Something else I liked was that its interest rate (1.90% as of September 2019) is one of the highest we'd seen. It's even comparable with rates you'd find for certificates of deposits, with more immediate access to our cash. A 1.80% interest rate means that money earns nearly 20 — or even 200 — times more than it would in a traditional bank account, which typically pays only .01% to 0.1% interest, if anything. 

Before this, we had a checking account for our daily transactions and a savings account for our emergency fund at my husband's local bank. We loved the customer service, so we didn't think twice at looking at the rates we were earning with either of these accounts.

We set up automatic monthly transfers to help us save more

We had no intentions of tapping into our savings account often, so we were fine with the fact that we were allowed only six withdrawals per month.

We linked our Ally account to our checking account so we could easily transfer money toward our house fund. We set up automatic transfers and made some manual transfers whenever we wanted to put more money in the account.

Otherwise, we just let the account sit there and grow, slowly but surely, logging in every few weeks to see its progress. It's exciting to see money grow! We weren't too concerned about letting the money do its thing because we knew that we didn't have to pay maintenance fees, and our money was insured through Ally by the FDIC.

It's safe to say we're obsessed with our Ally account

I'm glad we opened our high-interest savings account. It was a painless signup process, easy to set up transfers, and when we eventually wired money for our house closing, I felt good knowing Ally called to make sure it was me who initiated the transfer.

That wasn't the first time I'd spoken with Ally. We liked how responsive the customer service was — I never had to wait more than five minutes to talk to someone on the phone or via its chat app — and that we could call outside of business hours.

After opening an initial account with Ally, we transferred our money from our regular bank account into Ally, too. When we checked with our local bank, we found out we weren't earning any interest, and the rate for its savings account was much lower than what Ally offered.

I'm happy we went with a high-interest savings account because it meant I could earn a bit of interest while keeping our money close. I also felt great knowing we could pounce on a deal once our dream home came on the market — and when it did, we pounced as planned. As we get ready to move into our new place, it feels good knowing that I was able to find a good bank account to house our funds.

Join the conversation about this story »

NOW WATCH: Amazon is reportedly seeking a new space in New York City. Here's why the giant canceled its HQ2 plans 5 months ago.

THE RISE OF BANKING-AS-A-SERVICE: The most innovative banks are taking advantage of disruption by inventing a new revenue stream — here's how incumbents can follow suit

Sun, 10/13/2019 - 10:02am

Fintechs are encroaching on incumbents' share in the banking game, forcing them to explore new business models — but tech-savvy legacy banks can treat this as an opportunity rather than a threat by moving into the Banking-as-a-Service (BaaS) space.

BaaS platforms enable fintechs and other third parties to connect with banks' systems via APIs to build banking offerings on top of the providers' regulated infrastructure. This means banks that launch BaaS platforms can actually benefit from fintechs entering the finance space, as it turns fintechs into customers rather than just competitors. Other benefits from launching a BaaS platform include being able to monetize such platforms, establishing strong relationships with fintechs, getting ahead of the curve in terms of open banking, and accumulating additional data from third parties.

In The Rise of Banking-as-a-Service, Business Insider Intelligence looks at the benefits banks stand to gain by offering BaaS platforms, discusses key players in the industry that have already successfully launched BaaS platforms, and recommends strategies for FIs looking to move into BaaS.

The companies mentioned in this report are: BBVA, Clearbank, 11:FS Foundry, Starling.

Here are some key takeaways from the report:

  • Offering BaaS also allows banks to unlock the opportunity presented by open banking, which is becoming a vital part of the financial services industry.
  • There are two key types of players — BaaS-focused fintechs and BaaS providers with a retail banking arm — that banks will need to learn from and compete against in the BaaS space.
  • Banks that have embraced digital will have an easier time ensuring that their infrastructure and systems are suitable for third parties.
  • It's vital for incumbents to accurately assess third-party needs to create an in-demand portfolio of white-label BaaS products.

 In full, the report:

  • Outlines what BaaS is and how it relates to open banking. 
  • Highlights the benefits of launching a BaaS platform, including two different monetization strategies.
  • Explains what BaaS players are currently doing in the space, and outlines the services they offer.
  • Discusses what incumbent players can do in order to launch their own successful BaaS platform.

Interested in getting the full report? Here are four ways to access it:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
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  4. Current subscribers can read the report here.

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A hedge-fund wunderkind, top YouTube talent managers, and what Robert Shiller's worried about

Sun, 10/13/2019 - 9:30am


You might not have heard of Jesse Cohn, but you've almost certainly heard of the companies he's been shaking up.

As Bradley Saacks and Casey Sullivan report, Cohn, the 39-year old right-hand man to billionaire investor and Elliott Management cofounder Paul Singer, is the driving force behind an activist campaign targeting AT&T

Bradley and Casey write: 

A review of his career should be required reading for AT&T's board: From falling into finance as someone who didn't know what he wanted to do in his early 20s to becoming Paul Singer's attack dog on some of his most influential campaigns, Cohn has developed a reputation as a feared investor with the means to change America's blue-chip corporations.

Conversations with more than two dozen of his colleagues, competitors, detractors, and friends also reveal an evolution. Cohn has developed a more diplomatic touch, as his targets have become larger and overhauls need approval by long-term shareholders, such as BlackRock, State Street, and Vanguard. 

This gives Cohn even more influence when he goes after a company like AT&T. 

Read their story: We talked to 24 people about the hedge-fund wunderkind at Elliott who wants to shake up AT&T. Here's why management should be terrified.

Who to know: UK tech, Wall Street, YouTube talent management

As well as profiling the likes of Jesse Cohn, we published three lists this week highlighting the people to watch in UK tech, on Wall Street, and in YouTube talent management. Check them out:

We Isn't Working

The WeWork story just keeps on going. This week our reporters focused in on WeWork's troubled $850 million Lord & Taylor building. As Dakin Campbell and Meghan Morris write, "one need look no further than this trophy asset at the heart of New York's real estate scene to understand the company's current fate."

Meanwhile, Shona Ghosh revealed that WeWork cofounder Adam Neumann personally invested $30 million in a startup and loaned money to its CEO. The CEO then got fired over alleged gross misconduct. And Meghan reported that Neumann lent money to phone distributor PCS Wireless this spring, showing how his family office is investing beyond startups. 

As Shana Lebowitz reports, the WeWork fiasco has employees wondering if their shares have been set on fire. She talked to experts who said most tech startup workers are in the dark about how much their equity is worth.

Rebecca Ungarino and Shannen Balogh meanwhile reported on the damage WeWork has wrought on Wall Street. The coworking company's rapid decline could cost Goldman Sachs $260 million, according to one estimate, and analysts are likely to be queuing up to ask about WeWork on JPMorgan's earnings call this week

Lastly, the commercial real estate tech industry is gathering at a huge WeWork-anchored building in New York this week. Alex Nicoll asked speakers and attendees what they will be focusing on.

Every company is a tech company

Every company is now a tech company. With that in mind, Joe Williams has been zoning in on what the tech, information, and data chiefs at America's biggest companies are focused on. Here's a selection of his recent stories:

What else should we be writing about? Let me know.

-- Matt

Finance and Investing

Nobel laureate Robert Shiller forewarned investors about the dot-com and housing bubbles. Now he tells us which irrational market behaviors have him most worried.

The Nobel Prize-winning economist Robert Shiller knows market excess when he sees it.

Charles Schwab looks back on his 48-year-old firm's major turning points, and tells us what's in store for the future of personal finance

Charles "Chuck" Schwab has made his name synonymous with personal investing.

Dyslexic, failing at school, and partially blind: How Larry Hite overcame the odds to become one of the most successful self-made stock traders using a strategy that's 'accessible to anybody'

Larry Hite isn't your typical Wall Street trader. 

Tech, Media, Telecoms

How The Trade Desk's Jeff Green became ad-tech's most loved CEO and one of Google's biggest critics, and how he plans to save targeted advertising

Few people have watched the digital advertising industry change more than Jeff Green.

Here's the pitch deck payments-automation startup Tipalti used to raise $76 million from investors, including former top Twitter execs Adam Bain and Dick Costolo

Adam Bain stepped down as Twitter's chief operating officer three years ago, and since then, he's been on the lookout for fast-growing startups to invest in — and with whom he could share what he learned from leading a fast-growing startup.

Popular direct-to-consumer brands like Away, Dirty Lemon, Glossier, and Mailchimp are pouring money into building content studios as they go beyond performance marketing

After spending millions of dollars on marketing on Instagram, Google, and Facebook over the years, in 2019, Zak Normandin pulled the plug on paid marketing on social media entirely. The founder and CEO of Iris Nova, parent company of buzzy beverage startup Dirty Lemon, decided to build its own content studio instead.

Healthcare, Retail, Transportation

A doctor's office that charges $150 a month and doesn't take insurance just raised $26 million to take its model national

Parsley Health, a new kind of doctor's office that charges a monthly fee and doesn't take insurance, is planning to take its business virtual. 

Andreessen Horowitz just promoted a VC rising star to figure out how software will transform healthcare. Here are the top 3 areas she plans to invest in.

The venture capital firm with the tagline "software is eating the world" thinks it's now time to apply that to your doctor's office, too. 

Join the conversation about this story »

NOW WATCH: Sharks aren't the deadliest creatures on Earth. Here are the top 10.

How to pick the right credit card to maximize rewards where you spend the most

Sun, 10/13/2019 - 9:25am

  • Beyond earning points, miles, or cash back through a credit card sign-up bonus, one of the easiest ways to rack up rewards is to use a credit card that offers bonus rewards for your most frequent purchases.
  • For example, if you spend a lot on dining, you'll want a card that earns bonus points when you eat out, like the Chase Sapphire Reserve or the American Express® Gold Card.
  • We'll walk you through the best credit cards for earning rewards dining, groceries, gas, and travel, as well as the best cards for maximizing purchases that don't fall under a popular bonus category.
  • Read more personal finance coverage.

You banked the big credit card sign-up bonus, took your dream vacation and now you're excited to do it all over again. Except this time, you want to maximize the rewards credit cards you already have and focus on earning more points and miles on your daily spending.

Luckily, there are lots of rewards credit cards that pay out more than the standard 1 point per dollar spent. If you're looking to maximize rewards on your everyday spending, look no further than the following credit cards. We'll break it down by spending category — from dining to gas to groceries.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which can far outweigh the value of any rewards.

When you're working to earn credit card rewards, it's important to practice financial discipline, like paying your balances off in full each month, making payments on time, and not spending more than you can afford to pay back. Basically, treat your credit card like a debit card.

Read more: The best credit card sign-up bonuses available now


With the average American spending $3,424 on dining between 2017 and 2018, this is a category most people will want to maximize. Luckily, lots of cards offer generous rewards on dining.

The Citi Prestige® Card offers the highest return on dining spending, with 5x points on these purchases. You may notice that some cards, like the Hilton cards below, offer more than 5x points — but keep in mind that the points multiplier is only half of the equation.

You also need to know how much each point is worth. We recommend using The Points Guy's valuations to get a sense of how many cents you'll get in value with different loyalty currencies. These valuations are based on all the different ways you can use a given type of points or miles, from redeeming them as statement credits to transferring them to a travel partner to book a flight.

Below, we'll rank the best credit cards for dining in order of highest to lowest return based on how many rewards you earn per dollar spent, and the value of those rewards based on TPG's estimations.

Credit cards with the best bonuses for dining

Read more: My 5 favorite credit cards for earning rewards on dining out, no matter how much you spend

Based on the numbers, the Citi Prestige is the most rewarding card for dining purchases. But the Amex Gold card or the Chase Sapphire Reserve could be a better option for you if you prefer to earn Amex or Chase points. Citi ThankYou points can be transferred to 14 airline transfer partners including Cathay Pacific, JetBlue, and Virgin Atlantic, but Amex and Chase's loyalty programs partner with airlines and hotels that are arguably more useful for many US-based travelers, such as British Airways, Delta, and Marriott with Amex and Hyatt, United, and Southwest with Chase. In fact, The Points Guy values Citi points (1.7 cents per point) a bit lower than Amex and Chase points (2 cents each)


If you have a car, gas is a big spending category — and it's one that many cash-back cards pay out big rewards on.

  • American Express® Business Gold Card: 4 points per dollar spent at the two categories where you spend the most each month, including US gas stations, on up to $150,000 per calendar year, then 1 point per dollar (8% return on spending)
  • Citi Premier℠ Card: 3 points per dollar spent on travel, including gas stations (5.2% return on spending)
  • Costco Anywhere Visa: 4% gas stations on the first $7,000 spent per year, then 1% (4% return on spending)
  • Hilton Honors American Express Surpass Card: 6 points per dollar spent at US gas stations (3.6% return on spending)

Read more: The 7 best credit cards for getting maximum points or cash back on your gas purchases

Again, not all points are created equal, and whether 6 Hilton points is equivalent (or higher than) 4% cash back or 4 Membership Rewards points depends on how you redeem your rewards. Most people will be best off going with the Amex Business Gold card for gas rewards.

Thanks to a vast list of hotel and airline transfer partners, you can redeem Membership Rewards points for some incredible travel experiences. If you have a business-class trip to Europe in mind, Membership Rewards transfer partner All Nippon Airways (ANA) offers one of the best deals out there at 88,000 miles round-trip.

However, if you're saving up your Hilton points for a high-end resort in the Maldives, it could be worth channeling gas spending toward the Hilton Honors Surpass card.

Read more: Amex Business Gold card review


With 4x points on the first $25,000 spent each year at US supermarkets, the Amex Gold card offers the most generous payout on grocery spending. Considering the average US household spends $4,445 on groceries per year, these limits shouldn't be problematic for most consumers.

Earning 6% cash back on the first $6,000 spent, the Blue Cash Preferred card is a good option if you prefer cash back to rewards points. When maxed out, the 6% back equates to $360 cash back, which is enough for most people to book at least a couple of hotel nights or a round-trip transcontinental flight.

Read more: What a year of grocery spending could earn you with 3 popular credit cards  

Flights and other travel
  • The Platinum Card® from American Express: 5 points per dollar on flights booked directly with airlines or with, 5 Membership Rewards points on prepaid hotels booked on (10% return on spending)
  • Chase Sapphire Reserve: 3 points per dollar spent on travel (6% return on spending)
  • American Express Gold card: 3 points per dollar on flights booked directly with airlines or on (6% return on spending)
  • Citi Prestige: 5 points on air travel, 3 points on hotels and cruise lines (5.1%-8.5% return on spending)
  • Citi Premier card: 3 points on travel including gas stations (5.1% return on spending)
  • Uber Visa card: 3% cash back back on airfare, hotels and vacation home rentals
  • Costco Anywhere Visa: 3% cash back on travel worldwide

If you're looking for lots of rewards for flights, the Amex Platinum card is a great choice. The card earns 5x points on flights booked directly with airlines and one Prepaid hotel bookings made with American Express also earn 5 points. One reason I'd recommend this card over the Citi Prestige is that the Amex Platinum will soon gain valuable travel protections like trip delay insurance, while Citi has mostly done away with these on its cards. The Platinum card also has no foreign transaction fees, meaning you can use it to earn cash back abroad without paying a 3% fee.

While the American Express Platinum is a great option, not everyone will get enough value out of the 5x bonus categories to justify the $550 annual fee. The Chase Sapphire Reserve is a great alternative. While it earns a lower 3 points per dollar spent, this bonus applies to all travel purchases, not just flights. Plus, the card's $450 annual fee is largely offset by the $300 travel credit. Unlike American Express, Chase doesn't restrict its travel credit to a specific airline. The credit automatically applies to any purchases coded as travel. That's why the Chase Sapphire Reserve is such a popular card for earning and redeeming travel rewards.

Click here to learn more about the Chase Sapphire Reserve. All other spending
  • Chase Freedom Unlimited: 1.5% cash back on everything, can be combined with Chase Ultimate Rewards cards to boost your value (1.5%-3%)
  • Chase Freedom: 1% cash back, 5% rotating quarterly category bonuses for up to $1,500 in combined spending (requires activation), can be combined with Chase Ultimate Rewards cards to boost your value (1.5%-3%) (1%-10% return on spending)
  • Discover it® Miles: 1.5 miles per dollar spent, and Discover will match all your cash back at the end of the first year (3% return on spending)
  • Discover it® Cash Back: 1% cash back, 5% category bonuses when you activate (1-5% return on spending)
  • Citi® Double Cash Card: 1% when you make purchases, 1% as you pay (2%-3.4% return on spending)
  • Uber Visa card: 2% back on online purchases (1-2% return on spending)

Lots of cash-back credit cards offer at least 1.5% cash back on everything, which is a great benchmark to keep in mind on purchases that aren't eligible for bonus points. The Discover it Miles a great option for those looking for a no-annual-fee card with accelerated earning power. Cardholders earn 1.5 miles per dollar spent, which is equivalent to 1.5% cash back. Points are doubled the first year and can be redeemed for statement credits toward travel purchases or transferred to your bank account.

For those looking to maximize long-term earnings, the Chase Freedom Unlimited is another great option. It earns 1.5% cash back on everything. If you have an Ultimate Rewards-earning credit card like the Chase Sapphire Preferred Card or the Sapphire Reserve, you can convert your Freedom Unlimited cash back to Ultimate Rewards points. Essentially, you could earn 1.5 Ultimate Rewards points per dollar spent on everything, which equals a very solid 3% return on every dollar you spend.

If you want the flexibility of earning occasional category bonuses, the Chase Freedom and Discover it Cash Back are worth considering. Both cards earn 1% cash back along with 5% on select category bonuses. Bonus categories rotate every quarter and cardholders can earn 5% cash back on up to $1,500 worth of spending when they activate the bonus each quarter. Be sure to check the cash back bonus calendar for both Discover and Chase for a better idea of where you can expect to earn more points.

Read more: Current Chase Freedom quarterly 5% bonuses

For a more straightforward option, the Citi Double Cash card is solid. Cardholders earn 1% cash back on purchases and another 1% when they pay off the card. Recently, Citi introduced cash back-to-ThankYou points conversions, making the Citi Double Cash card a great way to earn 2 ThankYou points on every dollar spent.

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I flew Delta's extra legroom seats to Iceland and the flight was fine, but the extra space comes with a catch (DAL)

Sun, 10/13/2019 - 9:23am

  • Wow Air and its low-cost Iceland flights no longer exist after its March 2019 bankruptcy, but it's still possible to score a flight deal to the Land of Fire and Ice. 
  • I recently flew on Delta from New York's JFK to Keflavik, Reykjavik's main international airport, and got a free upgrade to Comfort-Plus, Delta's extra-legroom seats, thanks to my frequent-flyer status.
  • However, I found that Comfort-Plus on Delta's 757-200 came with some compromises. It was nice having extra legroom, but I might have been happier back in coach.
  • Visit Business Insider's homepage for more stories.

When Icelandic low-cost carrier Wow Air declared bankruptcy and abruptly stopped flying in March 2019, Iceland's economy took an immediate and sustained hit.

With its shockingly low fares — $199 roundtrip from US cities was not unheard of — and its attention-grabbing marketing tactics, the airline dropped off more than one-fourth of Iceland's international visitors before its collapse, according to The New York Times.

Tourism made up more than one-third of Iceland's economy in 2015, so Wow's collapse has prompted recession worries in Iceland. The number of international visitors are expected to drop by 16% this year, with 20% fewer Americans visiting.

A few weeks before Wow's collapse, I got an email from Scott's Cheap Flights, a service that highlights flight deals from your favorite airport, with flights to Reykjavik, Iceland for around $220 on Delta.

Unfortunately, such compelling flight deals to Iceland are becoming rarer since Wow's collapse, although they still pop up from time to time.

"The flight prices to Keflavik have been affected by Wow," Darci Valiente, a flight searcher with Scott's Cheap Flights, told Business Insider. "According to our [historical database], we regularly send JFK-KEF nonstop on Delta once a month in the $200s and $300s. However, the last time we saw this deal was in July, and since then, prices have trended to the upper $300s and lower $400s."

Now, I wasn't purposely avoiding booking a flight on Wow, despite rumors at the time that the Icelandic carrier's days were numbered, I was hoping to qualify for another year of elite frequent-flyer status on Delta, so the Wow-level fare on the US airline was quite appealing. My wife and I decided to book a long weekend in September.

Because of that frequent-flyer status (I am a "Platinum Medallion," in Delta's parlance, for 2019), I got a free upgrade to Delta's extra-legroom seats — branded as "Comfort-Plus," or comfort plus, for both flights.

Comfort-Plus is usually a nice perk on Delta's domestic and international routes, but this particular flight from New York to Keflavik, Iceland, the main international airport serving Reykjavik — is operated by an older narrow-body Boeing 757-200. While it's a fun plane, and usually a comfortable one, Comfort-Plus on this plane usually involves a few compromises — ones which aren't worth the extra two inches of legroom.

Most of the Comfort-Plus rows are against a bulkhead, an exit, or behind the "Premium Select" seats — Delta does not offer business class on the relatively short Iceland flight, only its take on premium economy. Those Comfort-Plus seats end up with a few shortcomings. Other seats, like mine for the outbound flight, are right next to the bathroom, meaning you have aisle traffic and an odor throughout the flight.

That said, it was a fine flight, but if I'd have paid the extra couple hundred dollars that the Comfort-Plus seats usually cost, I would have been quite unhappy.

Take a look at how my flight experience went:

SEE ALSO: I took a $120 Blade helicopter flight from midtown Manhattan to JFK Airport — here's what it was like

Delta operates from two terminals at JFK: Terminal 2 and 4. Terminal 4 is significantly bigger, and serves most of Delta's international routes.

However, since Delta's flight to Iceland is on a 757 — smaller than the planes that fly most routes to Europe — it can leave from the smaller Terminal 2. Because the terminal does not have passport control facilities, though, the flight returns to Terminal 4.

Unfortunately, Terminal 2 is a bit lacking. It tends to serve mostly point-to-point domestic flights, and often gets crowded.

There are a handful of sit-down restaurants, a Wendy's, a couple of small shops and news stands, and a Delta Sky Club lounge.

We went up to the Sky Club to have a light preflight dinner and a drink, but it was really, really crowded. To the point that it was almost impossible to find a place for two people to sit together.

We found a seat eventually ... though we were facing this guy who thought it was okay to put his feet up on the table where people put their food.

The buffet area was overrun and the food looked pretty unappealing, so we decided to head down to one of the restaurants instead.

Eventually, we went toward our gate.

Here's my seat, 17C. That's an aisle seat on the left side of the plane.

Delta has a few 757 configurations, and this one — the one without "Delta One" business class — is a bit odd.

The boarding door and one of the lavatories is right in the middle of the Comfort-Plus section, meaning the cabin has a sort of scattered feel, and a lot of seats are up against bulkheads. For example, I had a bulkhead just behind me. Luckily, I was still able to recline. 

One major downside to this seat was that I was right next to the lavatory, meaning I would have people bumping into me trying to get into and out of the restroom all night. Plus, the smell was quite unpleasant.

Here's the view to my immediate right. How lovely.

If you're booked on one of these 757 flights, it's worth noting that row 18 on the right side is directly behind the lavatory, and seats are slightly more narrow since the tray table and entertainment monitors are stored in the armrests. The same is true for row 19 on the left side, which is behind the boarding door.

Row 15, behind the "premium select" seats, also has tray tables and monitors in the armrests.

But back to my seat, 17C. Despite the odd placement of the seat, the seat itself was perfectly comfortable for the roughly five-hour flight.

Each Comfort-Plus seat on the 757 is roughly 17.3 inches wide with 34 inches of pitch. That's the amount of space between the back of one seat and the back of the seat in front of it.

That's two to three extra inches of pitch compared to the main cabin seats, and the same width.

That's certainly not industry leading, but it's on par with most of Delta's narrow-body jets. For comparison, Comfort-Plus seats on the widebody 767, which operates many of Delta's flights to Europe, are 17.7 inches wide with 25 inches of pitch.

One other source of annoyance, though: the rail, or "leg" of the seat in front of me pretty much bisected that stowage space. That didn't affect my legroom, but if I had tried to store a carry-on, I couldn't have fit a full-sized backpack.

Each passenger got a small pillow and blanket, which was waiting on the seat.

Flight attendants also distributed small amenity kits with a sleep mask, earplugs, and a cleaning wipe.

Each seat — aside from seats in the rows mentioned before — had an entertainment screen embedded in the seat in front. The screen had a USB port embedded so you could charge your phone.

Each row also had two power outlets for larger devices like laptops.

There was an individual reading light and air vent for each seat. I opened my air vent all the way, which helped minimize the smell from the lavatory.

There seemed to be some rowdy passengers on this flight. The flight attendants actually had to stop the safety video and restart it because people were messing around in the aisles. Soon enough, though, we pushed back and were in the air.

Shortly after pushing back, flight attendants came around with the menus. This is a nice touch that Delta does on international flights in economy; it adds a pleasant feeling to the meal service, and also helps you plan ahead (for example, you can skip dinner if you know that a light meal will be served before landing).

It also lets you decide what to eat before the flight attendants get to you. Here were the entrée options on my flight ...

... And here was the run-of-show.

See also: Apply here to attend IGNITION: Transportation, an event focused on the future of transportation, in San Francisco on October 22.

There was also a full drink list.

A few minutes after takeoff, flight attendants came around with hot towels. This is usually something you'd see in business or first class, but Delta also does it in economy (admittedly, they're disposable wipes, rather than cloth towels like in the premium cabins). It's yet another nice touch, though, and it feels nice to wipe your hands after getting through the airport and onto the plane.

Right around now, I started my first movie of the flight (it was fine, though a disappointing capstone on what had been an interesting X-Men series).

Dinner came about 45 minutes into the flight. I went for the chicken salad option.

I'm not used to saying this about airplane food, especially in coach, but it was delicious. The lettuce was crisp, the chicken was tender, and everything was flavorful ...

... Even without the dressing.

There was also cheese (and crackers) ...

... A Blondie for dessert ...

... And a small fruit salad.

Sitting in Comfort-Plus, I was lucky to get dinner early on in the service because after about 15 minutes, the pilots announced that we were entering an area with reported turbulence, and the flight attendants would have to buckle in.

Eventually, the turbulence ended and people could move around again.

Once dinner was served to everyone, the cabin lights were lowered — they stayed dark through the rest of the flight.

Soon enough, we began to descend, and after about 20 minutes, we made a light, easy, and on-time touchdown at Keflavik International Airport.

We parked at a remote stand, and took a bus to the terminal.

Soon enough, we made it to the terminal and through customs, and were ready to start our first day in Iceland!

After a few days hiking and exploring around Reykjavik, it was time to head home.

We also flew Delta on the return. The flight leaves at 8:30 a.m., and unfortunately I wasn't able to take photos in the airport because we were running a bit late.

The Delta 757 Comfort-Plus cabin in Iceland

This time, I was in seat 16C, one row up from my previous flight. We also just happened to end up on the same exact plane.

The experience was similar, but sitting one row up — and not being directly next to the restroom — made a huge difference.

Aside from the seat, the main difference on this flight was the menu and service, since it was a morning flight.

Here was the breakfast menu ...

... And here was the run of show.

Drink service came first, with this bizarrely worded napkin ...

... And then a cookie.

And then the Wi-Fi.

Breakfast service came next. It's a good thing that both options were sandwiches, because there was no silverware on the plane. One of the flight attendants said that apparently the catering ground staff forgot to load it. That was fine for the sandwich ...

... But made it a little awkward to eat the cheese spread with crackers and the fruit salad. Eh, first-world problems.

The rest of the flight was uneventful, and there was one more drink and snack service before landing.

Soon enough, we were on the ground at JFK. So what did I think of Delta's speedy service to Iceland?

The five-hour flight between New York and Keflavik, Iceland, is an easy one. By the time you reach cruising altitude and have dinner or breakfast, watch a movie, and have another snack, you're already on approach.

Wow Air's incredible flight deals and marketing led to a tourism boom for Iceland and heavy competition on routes. Prices have generally gone up since the airline's collapse, but there are still decent prices available, and the Reykjavik area makes for a fantastic long weekend.

If you fly Delta, just be careful when picking your seats. While extra legroom might seem appealing at first glance, the odd seat layout on the older 757-200 jets leads to a number of compromises for Comfort-Plus, like the narrow seats or a malodorous adjacent lavatory. 

The 17 best resorts in the world, according to travelers

Sun, 10/13/2019 - 9:17am

  • Condé Nast Traveler just released its annual Readers' Choice Awards winners, where travelers rate the best destinations and experiences.
  • 600,000 voters weighed in on nearly 10,000 hotels, resorts, and spas around the world.
  • Here are the top-rated, traveler-approved resorts worldwide.
  • Of the resorts included on this list, seven are centered around African safaris. Two private islands in the Maldives are included — and only one resort in the US made the list.
  • Visit Business Insider's homepage for more stories.

If you're looking for the best resorts in the world, go to Africa.

Condé Nast Traveler recently released the results of its 32nd annual Readers' Choice Awards survey, which chronicled travelers' experiences, including unforgettable resorts all over the world. 

Read more: The 17 best hotels in the world, according to travelers

In the survey, 600,000 voters provided their thoughts on nearly 10,000 hotels, resorts, and global experiences. The resorts that ultimately made the final cut all share an air of luxury, but they span different price points and destinations.

Here are the top 17 resorts in the world. Safari-inspired travel seemed to be popular this year, with seven out of 17 resorts being African bush resorts. A couple of private islands in the Maldives made the cut, as did a handful of Irish castles. Only one US resort topped the list.

SEE ALSO: The 17 best hotels in the world, according to travelers

DON'T MISS: The best cheap hotels under $100 a night around the world — that are surprisingly upscale, too

17. Ol Jogi Home

Location: Nanyuki Town, Kenya

Starting rate per night: Only available upon request

A 45-minute flight from Nairobi and nestled within 58,000 acres of private Kenyan bush, Ol Jogi Home provides a luxurious, exclusive safari experience with all the usual resort trappings: a gym, tennis courts, yoga studio, and spa. The resort accommodates 14 guests at a time.

16. Esperanza, an Auberge Resort

Location: Los Cabos, Mexico

Starting rate per night: $581

Located on the Baja Peninsula, Esperanza has 57 beachfront suites and villas. It prides itself on offering a variety of experiences, including a ceviche-making class, tequila tastings, whale watching or clam diving excursions, and ATV rides in the desert.

15. Oliver's Camp

Location: Tarangire National Park, Tanzania

Starting rate per night: $409 per person

This safari-oriented resort is in a remote part of a protected park in Tanzania. It is small and intimate; the resort only has 10 tents, including one honeymoon suite. It runs on solar power and has previously been celebrated for its sustainability initiatives. Its most popular activities include night drives into the bush and a walking safari.

14. Dorado Beach, a Ritz-Carlton Reserve

Location: Dorado, Puerto Rico

Starting rate per night: $862

Opened by a Rockefeller in the 1950s, Dorado Beach is a luxury community complete with two 18-hole golf courses and two miles of private beach access. 

13. Velaa Private Island

Location: Noonu Atoll, Maldives

Starting rate per night: $2,250

A private island with the largest wine and Champagne collection in the Maldives, Velaa aims to be a resort "beyond luxury." Each of the 45 private villas and residences were built with local materials and the entire resort was constructed in the shape of a turtle. 


12. Angsana Lang Co

Location: Thừa Thiên Huế, Vietnam

Starting rate per night: $140

Angsana Lang Co is a 223-room resort in central Vietnam with proximity to several UNESCO World Heritage Sites. It also has an award-winning spa and a swimming pool that spans the property.

11. Elewana Elsa's Kopje

Location: Meru National Park, Kenya

Starting rate per night: Only available upon request

Situated in a protected park in Kenya, Elewana Elsa's Kopje is close to a rhino sanctuary and boasts regular sightings of elephant herds, hippos, and lions. The tiny resort opened in 1999 and has 11 private cottages, each of which has a deck.

10. andBeyond Nxabega Okavango Tented Camp

Location: Okavango Delta, Botswana

Starting rate per night: $835 per person

Nxabega Okavango Tented Camp is a Botswana safari resort on 61,000 acres of exclusive land. There are nine tents, each with a veranda and an al fresco shower. 

9. Naladhu Private Island

Location: South Male Atoll, Maldives

Starting rate per night: $948

Twenty houses, each with a private pool, make up the private island of Naladhu. With "blissful seclusion" at the center of its mission statement, the island has a 24-hour butler service, private dining, and in-residence spa experiences.

8. Deplar Farm

Location: Ólafsfjörður, Iceland

Starting rate per night: $2,612

Deplar Farm is a lodge on a converted sheep farm that features just 13 guest suites and a state-of-the-art spa. Typical activities in the area include heli-skiing and salmon fishing.

7. Dromoland Castle Hotel & Country Estate

Location: Co. Clare, Ireland

Starting rate per night: $275

Dromoland Castle, the ancestral home of the prominent O'Brien family dating back to the 16th century, became a resort in the 1960s. Popular activities include falconry, horseback riding, and archery. There is also a full-service spa and an award-winning golf course.

6. Richard's River Camp

Location: Masai Mara National Reserve, Kenya

Starting rate per night: Only available upon request

Established in 2006 as a getaway for a young conservationist couple, Richard's River Camp is a seven-tent resort that accommodates 16 people at a time. The intimate resort was entirely furnished and decorated by the couple with fabrics and pieces collected through their own travels. The camp offers driven safaris, bush walks, and even hot air balloon flights.

5. Adare Manor

Location: Limerick, Ireland

Starting rate per night: $384

A two-hour drive from Dublin, the Adare Manor is located on 840 acres of private green. There is an award-winning golf course and a Michelin star restaurant on site, as well.

4. InterContinental Danang Sun Peninsula Resort

Location: Da Nang, Vietnam

Starting rate per night: $389

The InterContinental's Danang Sun Peninsula Resort is a beachfront property nestled in a nature reserve and close to UNESCO World Heritage sites. The resort has amenities like half a mile of private beach and a wide array of spa treatments, from holistic therapies to pedicures.

3. Chindeni Bushcamp

 Location: South Luangwa National Park, Zambia

Starting rate per night: Only available upon request

Overlooking a hippo lagoon, Chindeni is a bushcamp retreat. It consists of four canvas lodges that can accommodate eight guests. The resort runs on solar power and is only open from May to December. 

2. L'Horizon Resort & Spa

Location: Palm Springs, California

Starting rate per night: $410

L'Horizon is made up of 25 bungalows that were all designed to feel like private residences, with different finishes and furnishings. The property was built in 1952 as a getaway for Hollywood producer Jack Wrather. There, he hosted guests like Marilyn Monroe and Ronald Reagan. It was redesigned as a luxury resort, complete with al fresco dining and an expansive spa, in 2015. It is the only US resort to make the top of Conde's list.

1. Sirikoi Lodge

Location: Lewa Wildlife Conservancy, Kenya

Starting rate: Only available upon request

Situated on 68,000 acres of wilderness in Northern Kenya, Sirikoi Lodge was built by a conservationist couple. It can accommodate 18 guests and its intimate setup includes one main lodge, a cottage, and four elevated tents, all with private outdoor decks. A staff of 68 people facilitates all lodge activities, including bush walks, game drives, helicopter excursions, and private dining. 

What it's like going to the world's biggest horse sale, where royals and millionaires dropped $360 million this year on horses they hope might be the next Kentucky Derby winner

Sun, 10/13/2019 - 9:07am

Every September, wealthy horse-racing fans, buyers, and sellers converge on Kentucky's second-largest city, Lexington, known as "the horse capital of the world."

Lexington is surrounded by hundreds of horse farms and is home to the world's largest thoroughbred horse auction house, Keeneland, which also hosts races. At Keeneland's September yearling sale, buyers drop millions on 1-year-old horses that have never even been ridden. In 2019 in particular, buyers spent more than $360 million on 2,855 of these horses (also called "yearlings") at the September sale.

Read more: I toured one of Kentucky's most legendary horse farms, where horses live in immaculate barns, security teams sweep the grounds at night, and Secretariat is buried. Here's what it looks like.

"We talk about this being the horse capital of the world, and it really is the place that's acknowledged around the world," Bill Thomason, president and CEO of Keeneland, told me in an interview during the September sale.

More than half of all horses born in the US are born within 30 miles of Keeneland, and the top stallions in the country are all within this 30-mile radius, according to Thomason.

"It's a concentration of an industry that's in this town with people whose livelihoods depend on this crop that they're producing, which are the yearlings," he said.

I flew down to Kentucky to attend the beginning of Keeneland's September yearling sale. Here's what it was like.

SEE ALSO: I spent 4 days in the 'horse capital of the world,' where the barns look more like estates and billionaires convene for the world's largest horse sale. Here's what life looks like in Kentucky's second-biggest city.

DON'T MISS: Inside the glitzy kickoff party for the world's biggest horse sale, where 300 of the industry's elite sipped on rare bourbons ahead of dropping millions on horses

Keeneland is the world's largest thoroughbred auction house. Throughout 2018, it sold more than $600 million worth of horses — $377 million during its September sale alone.

The Lexington, Kentucky-based auction house holds four thoroughbred sales annually in January, April, September, and November.

Its September sale, which has been called the "Super Bowl" of horse sales, is for yearlings only, meaning year-old horses who have never even been ridden.

Keeneland is also a horse racing company.

Keeneland hosts races on approximately 32 days per year, with eight to 10 races per day.

The auction house throws lavish parties for its VIP buyers and sponsors.

I got into the glitzy kickoff party for this year's September sale, which took place at an opulent venue in Lexington and included electric violin and cello performers and a rare bourbon tasting.

At the party, Keeneland president and CEO Bill Thomason led a Champagne toast in honor of the horse, because, as he said, "the horse is the reason for our existence and why we do what we do."

On the first day of the September sale, I got to Keeneland at about 9:00 a.m. The sale was set to kick off at noon.

The race course and auction house are about seven miles from downtown Lexington.

The massive parking lot was already filling up with cars, many of them luxury vehicles like Range Rovers and Mercedes.

Keeneland doesn't keep track of exactly how many people attend the September sale, but Amy Owens, a communications associate at Keeneland, told me that "thousands of people" are involved in the sale.

That includes Keeneland employees, those who sell horses (and all their employees), buyers and their associates, people from van companies, insurance companies, veterinary clinics, and also tourists who simply want a peek into the whole affair.

After I parked my rental car, I started walking, following signs that pointed me to the sales pavilion.

But I'd only taken a few steps when a man driving a forest-green (or rather, Keeneland green, as I would soon realize) golf cart pulled up next to me and offered me a ride.

My first stop was breakfast at Keeneland's Equestrian Dining Room, a casual eatery on the ground floor of the grandstand, with Keeneland's chief marketing officer, Christa Marrillia.

The restaurant has a buffet and offers an à la carte menu with items like pancakes and quiche. I got a mushroom quiche with a side of breakfast potatoes, which was tastier than I expected it to be for the restaurant's casual, diner-like setting.

All the menus at Keeneland's various hospitality facilities are created by their executive chef, Marc Therrien.

After breakfast, I headed over to the barn area behind the sales pavilion, where employees of the farms that brought horses to the sale were walking the yearlings around, warming them up and showing them off.

This wasn't the first chance potential buyers had to see the yearlings.

While the first day of the sale was a Monday, previews — where prospective buyers could set up private viewings of individual horses — had been taking place since the previous Thursday, when the yearlings arrived at Keeneland. 

But some people were still viewing horses just a couple of hours before the sale was set to start, perhaps taking one last look before deciding to bid.

In addition to a yearling's pedigree, potential buyers are looking at the horse's conformation, which basically means how balanced the horse's body is. They'll look closely at the horse's proportions, muscles, legs, and how the horse walks.

It's all to try and determine how the yearling might perform as a racehorse, and how likely it is to sustain any injuries — because a horse that isn't well-balanced is more prone to getting hurt.

Christa Marrillia, Keeneland's chief marketing officer, compared the sale to the NBA draft because it's "all based on potential."

Prospective buyers and their veterinarians can also visit the on-site repository, where they can find every horse's medical records, x-rays, and details on any surgeries or issues.

The majority of horses at the September sale are Kentucky-bred because everyone wants a Kentucky bred-horse, Keeneland's director of communications, Amy Gregory, told me.

But there are also horses from Russia, India, France, England, Ireland — all around the world.

"They all want American pedigrees to infuse into their bloodstock back home," Gregory said.

Before the horses are taken up onstage, they are carefully brushed and beautified.

During a tour of the Taylor Made Farm facilities at Keeneland, an employee said they will dye a horse's hair if there are any gray streaks and paint their feet with fish oil to make them look nice and shiny.

Potential buyers can learn more about each yearling in the sales guide.

They can look up each yearling's sire (father) and dam (mother), as well as the sire's and dam's achievements.

The first yearling to be auctioned off, for example — hip number one — is the filly of Tapit, who had a moderate racing career but went on to become a top breeding stallion. In the sales guide, you can see that Tapit's offspring have brought in almost $145 million in career earnings.

Ahead of taking their turns on stage, the horses are walked around the show barn, a large covered outdoor holding area.

Here, Keeneland staffers are watching each and every move to make sure the right horse advances to the sales pavilion.

Then, when the horse is up next, it's brought into the sales pavilion's indoor holding area, where it's walked around in circles until it's led on stage to be bid on.

Onlookers gathered in this area, watching the horses coming in right before they were auctioned off — sometimes for millions of dollars.

When a horse's hip number approaches, it's led up this walkway and onto the stage.

Keeneland's iconic sales arena can seat up to 700 people, although it wasn't even half full on the first day of the sale.

Thousands of people descend on Lexington for the September sale, but as the sale lasts for two weeks, not all the attendees come for the first day, or even the first week.

The most coveted yearlings up for auction at the September sale are the offspring of high-profile race horses such as 2015 Triple Crown winner American Pharoah and 2018 champion Justify.

"Book One" of the September sale — the first three days of the sale — is made up of the yearlings that are expected to fetch the highest prices.

"What you're seeing right now is the cream of the crop," Bill Thomason, president and CEO of Keeneland, told me after the first day of the sale. "You're seeing the best sires and the best pedigrees ... the best looking horses. ... They're not all at this level."

But of course, these horses have never raced before — or even been ridden.

Whereas the November breeding stock sale sells proven race horses, breeding stallions, and broodmares, at the September sale, "you're selling the possibility," Marrillia told me at breakfast. "You're selling the future... The dream of winning the Derby." 

According to Gregory, the communications director, a whole new wave of buyers will come after Books One and Two of the sale, made up of more of "regional buyers and mom-and-pop type farms and racing outfits."

From my various vantage points, no matter how hard I tried, I could never spot anyone actually bidding. But that's what the bid spotters are for.

Several bid spotters in suits were stationed in the aisles throughout the sales arena, scanning the crowd intently. Each spotter is assigned specific buyers, so they know where they're sitting and their own individual, subtle bidding signals.

Whenever they spotted a bid, the spotters would yell something that sounded like "hup!" — I asked around and nobody seemed to know what they were saying, if it was even an actual word — and then they gave beckoning gestures like they were encouraging the person to keep on bidding.

While the bid spotters wore suits, most of the guests at the sale were casually dressed.

I saw lots of polo shirts, khakis, baseball caps, and jeans.

I found it interesting that while the horse crowd can certainly be fancy, as I saw at Keeneland's kickoff party, the sale itself is clearly about work, not dressing up or showing off. 

The seats in the sales arena are reserved for prospective buyers, but behind a glass wall encircling the back of the arena, many observers sat on benches and watched the sale from a distance.

While the atmosphere during the auction was relatively subdued most of the time, the energy changed noticeably when bids for a horse surpassed $1 million.

The level of chatter in the hallway behind the glass wall would rise, and there was a palpable tension in the air as people waited to see how high the bidding would go. 

After particularly exciting sales, reporters would rush to interview the buyer, if he or she was anywhere to be found.

In many cases, the buyer isn't even at the sale.

When Japanese buyer Yuji Hasegawa bought a $1.5 million colt on the first day of the sale, it was his agent, Hiroyasu Takeuchi, who was actually on-site to do the bidding and speak to reporters.

Hasegawa, the buyer, is a new player on the thoroughbred scene in Japan, according to Bloodhorse Magazine.

The agent told reporters the plan was to take the colt back to Japan for now and hopefully later bring him back stateside to compete in the Kentucky Derby.

Once the bidding has been closed, each horse is brought back to its temporary stall at Keeneland's barn area, where it must be picked up within 24 hours.

Keeneland encourages buyers to pick up their horses as quickly as possible to make room for the next round of yearlings to be brought in. 

At a van counter in the sales pavilion, buyers can arrange transport of a horse via various companies. To leave the property with a horse, the buyer or transportation company needs to have the bill of sale in hand, and they'll need to pass through three gates that are guarded 24/7.

Keeneland offers several dining options for guests at its horse sales. For casual bites, attendees can stop at the Pavilion Bar within the sales pavilion.

Of course, there are televisions everywhere so nobody has to miss a moment of the sale.

For a more upscale sit-down dining experience, there's the Buffet at the Saddling Paddock Chalet, barely a minute's walk from the sales pavilion.

For lunch, I enjoyed two plates from the buffet's spread, which included various meats — from corned beef to brined turkey — and sides such as salads, charcuterie, mac 'n' cheese, and multiple types of desserts. 

For the VIP guests at the sale, there's the Sycamore Room, which is reserved for those who spend $10 million or more at Keeneland's horse sales each year.

In the opulently decorated lounge, guests can relax on plush couches and chairs and enjoy complimentary drinks and snacks. They can also reserve private conference rooms and use computers provided for them to do any necessary work.

But the ultra-VIP buyers might not even be found in this lounge. The Sheikh of Dubai, for example, has a private lounge in the grandstand area where he watches the sale on TV while one of his representatives bids for him in the sales arena. 

While I briefly spotted Sheikh Mohammed chatting with legendary horse trainer Bob Baffert outside behind the sales pavilion on the first day of the sale, he seemed to mainly stay out of the public eye during this year's sale.

"We always try to provide him with the most privacy he needs," a Keeneland employee told me.

At this year's sale, the Sheikh bought four of the seven yearlings that sold for $2 million or more at the auction. In total, he spent $16 million on 10 horses.

Read more: Legendary horse trainer Bob Baffert, who's trained 5 Kentucky Derby winners and 2 Triple Crown champions, says he's so successful because he never takes vacations

In total, 2,855 horses sold for a combined $360 million at Keeneland's September sale this year.

The most expensive yearlings sold were an American Pharoah filly for $8.2 million, which was bought by Mandy Pope's Whisper Hill Farm, and a $4.1 million colt sold to Sheikh Mohammed of Dubai.

After spending the day at the Keeneland sale, I was blown away by the amount of money spent on horses that have never even been ridden — essentially, as Marrillia put it, millions spent on "the possibility," on "the dream of winning the Derby." 

As I walked through the hallway of the sales pavilion that afternoon, I heard a man say something to his companion that pretty much summed it up for me: "This is a rich man's sport."


Here's everything we know about WeWork exec exits, huge layoffs, and more as the co-working giant looks to right itself after a failed IPO

Sun, 10/13/2019 - 9:07am

  • WeWork's CEO Adam Neumann is out, blaming public scrutiny that he says was distracting him from doing his job.  And WeWork pulled its IPO after mulling a massive valuation cut to drum up investor interest. 
  • Now, WeWork's new co-CEOs are looking to shutter or sell off businesses and the jet Neumann had used to travel the world. It's also planning massive job cuts. 
  • We're tracking Neumann's finances, and what's next for WeWork as it tries to nab a lending lifeline. 
  • Business Insider has long been tracking WeWork. You can read our stories by subscribing to BI Prime.

Here's everything we know about what's going on inside WeWork right now:

Latest news Neumann's finances What's next for WeWork and the broader IPO market Neumann's exit Tanking valuation  Financials and real estate Coworking rivals Road to the failed IPO Neumann's leadership SoftBank's role Deals


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NOW WATCH: Super-Earths are real and they could be an even better place to live than Earth

Bill Gates, who said he had no relationship with Jeffrey Epstein, reportedly met with the disgraced financier multiple times, including a 2011 meeting with billionaire Eva Dubin and her teenage daughter

Sat, 10/12/2019 - 6:49pm

  • Since Jeffrey Epstein was arrested on charges of sex trafficking of minors and conspiracy in July, billionaire Bill Gates has downplayed his relationship with the late financier. 
  • Now, contrary to Gates' assertion last month that he and Epstein "didn't have any business relationship or friendship," The New York Times reports that the two met multiple times beginning in 2011, and at least three times at Epstein's Manhattan residence.
  • One meeting included billionaire Eva Andersson-Dubin and her then-teenage daughter. The family has been closely linked to Epstein since Dubin dated Epstein in the 1980s, though they've attempted to distance themselves in recent months.
  • In an email obtained by The Times that Gates sent to colleagues after he met Epstein face-to-face for the first time, he noted that "a very attractive Swedish woman and her daughter dropped by and I ended up staying there quite late." 
  • Epstein also reportedly met with teams from Gates' charity, pitching an idea that would involve seed money from the Bill and Melinda Gates Foundation and the bank JPMorgan Chase.
  • For more stories about Jeffrey Epstein, click here.

New details and documents obtained by The New York Times reveal a much closer connection between Bill Gates and the late Jeffrey Epstein than what the Microsoft founder had previously admitted. 

The Times reported that the billionaire met with the disgraced financier at least three times. Epstein also hatched a plan with JPMorgan, which never came to fruition, to use Gates' foundation money for a charitable fund. 

Gates spokeswoman Bridgitt Arnold told Business Insider in a statement that the men met "multiple times" to discuss philanthropy, but they did not socialize or attend parties together. She also said it appears that "Epstein misrepresented the nature of his meetings with Gates while also working to insert himself behind-the-scenes without Gates's knowledge."

She did not say say how many times Gates and Epstein met. 

"Bill Gates regrets ever meeting with Epstein and recognizes it was an error in judgment to do so," Arnold said. "Gates recognizes that entertaining Epstein's ideas related to philanthropy gave Epstein an undeserved platform that was at odds with Gates' personal values and the values of his foundation."

She told Business Insider in August that, while Epstein aggressively pursued a relationship with Gates, "any account of a business partnership or personal relationship between the two is categorically false."

The disgraced financier went to jail for 13 months starting in 2008 after he pled guilty to two counts of soliciting prostitution from underage girls in Palm Beach, Florida. The Times reports that the two first met face-to-face in January 2011 at Epstein's Manhattan residence, and that Gates visited the townhouse at least two more times, meeting him as late as 2013.

During that first meeting on the Upper East Side in 2011, the two wealthy men were joined by Dr. Eva Andersson-Dubin and her 15-year-old daughter. Dubin, who once dated Epstein, and her billionaire hedge fund manager husband Glenn Dubin maintained close social, financial and philanthropic ties with Epstein, including after he went to jail. Six sources told Business Insider that Epstein was a godfather to their oldest daughter, which the family denies.

Spokespeople for the Dubins have previously said the family spent less time with Epstein after he left jail in 2009, and if they had known about this year's allegations, they would have cut ties with him. Representatives for the Dubins declined to comment on Saturday about The Times' story.

After the meeting, Epstein emailed friends and associates to boast, writing "Bill's great" in one email reviewed by The Times. In an email Gates sent to his own colleagues the next day, he wrote, "A very attractive Swedish woman and her daughter dropped by and I ended up staying there quite late." 

Epstein hatched a plan to work with the Gates Foundation and JPMorgan, but it fizzled out years before his 2019 arrest

A source close to Epstein told Business Insider that Epstein and Gates liked to talk about science and philanthropy together, and said their relationship preceded 2013. The source said Epstein liked to work with senior businessmen at the end of their careers, and that Epstein's dynamic personality often reminded those men of the son they wished they had, or even of themselves at a younger age. 

Gates flew on Epstein's private plane in 2013 from New Jersey to Palm Beach, according to flight logs released in connection with an Epstein-related case. Epstein has a large home in Palm Beach, and often flew friends, including the Dubins, on his plane. A spokeswoman for Gates told The Times that Gates was not aware it was Epstein's plane.  

Read more: Bill Gates made donations to MIT through Jeffrey Epstein —here are all of the tech mogul's connections to the financier

Epstein also sought to work with the Bill and Melinda Gates Foundation, according to The Times. He wanted to join the foundation's efforts with JPMorgan as the groups created the Global Health Investment Fund.

He also wanted to start a separate charitable fund, seeded with Gates Foundation money, to focus on global health projects. Epstein would bring in more donations, which would earn him fees potentially in the tens of millions. 

Gates' spokeswoman told The Times that the foundation was not aware of the fee, but that he "did propose to Bill Gates and then foundation officials ideas that he promised would unleash hundreds of billions for global health-related work."

Foundation employees visited his New York mansion multiple times, per The Times. Some, after learning that he was a sex offender, were wary of damaging the foundation's reputation. One team was incredulous of Epstein's claims of having access to trillions of dollars that could go in the charitable fund. 

The JPMorgan fund work never came to fruition. At least two senior Gates Foundation employees stayed in contact with Epstein until late 2017, The Times reported. 

"Over time, Gates and his team realized Epstein's capabilities and ideas were not legitimate and all contact with Epstein was discontinued," Arnold told Business Insider.

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