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Private-equity giant KKR warns WeWork's fiasco is just the start of many more funding struggles for unicorns — and spells out 4 areas where it's investing instead

Wed, 01/15/2020 - 1:00pm

  • Private-equity giant KKR said WeWork's situation was not a "one-off occurrence," and it expects more venture-capital-backed startups to run into funding troubles. 
  • Henry McVey, the firm's head of global macro and asset allocation, recommends shying away from many similar companies in their early stages of growth because investors will apply more scrutiny to their financials moving forward.  
  • He also provided alternative recommendations for where to invest now.
  • Click here for more BI Prime stories.

We have not heard the last of hot venture-capital-backed startups that suddenly struggle to attract additional investor dollars.

That's according to the private-equity firm KKR, which is joining other Wall Street firms, like Morgan Stanley, in warning that WeWork's stumble previewed the future for more unicorns.

The shared-workspace provider was on the verge of going public in August. But widespread scrutiny of its financials raised red flags that not only thwarted the initial-public-offering process but also tanked its private valuation by more than 80%.

"Our belief is that the WeWork situation was not a 'one-off' occurrence," said Henry McVey, KKR's head of global macro and asset allocation, who is also tasked with managing the firm's risk-taking limits. 

He added in a note: "Rather, we see a growing number of venture capital/early stage growth investments that we think may have difficulty funding in 2020." KKR manages $208 billion in assets.

McVey's outlook comes after an exceedingly profitable year for investors in almost every asset class and in the 11th year of an expansionary cycle — a perfect time for any investor to question how much upside is left to take risks with.

According to McVey, one course of action is to underweight "many parts" of the universe of companies at their early stages of growth and later stages of venture-capital funding rounds.

That's because the winners' podium for this cycle largely consists of companies that are already richly valued. For example, he considers that companies in the top decile of the S&P 500 are now at their most expensive prices since the 2000 tech bubble.  

The implication is that these companies — many of which are in the technology sector — will have a harder time growing at the same rates from their already high starting points. He calls this predicament the winner's curse.

For the cohort of highly valued companies that have yet to cross the IPO finish line, McVey anticipates that investors will be more discerning when evaluating their future prospects.

He and other investors certainly noticed that just 23% of the companies that floated IPOs in 2019 were net-income positive in year one — the lowest share in two decades.

Moving forward, the so-called momentum strategy of profiting from the best-performing and most richly valued companies will lag, in his view.

"Consistent with this view, heady metrics in the private markets like adjusted TAM, or total addressable market, and adjusted EBITDA could all face much more intense investor scrutiny, we believe," McVey said.  

Buy the 'unloved middle' instead

The late-stage-venture-capital space may be too risky to handle — but it is far from the only option investors have. 

McVey recommends leaning in to what he calls the "unloved middle" of the market: assets that are neither richly valued because everyone wants in on the action nor dirt cheap because they are evidently ill-fated.

To this effect, here are four of his recommendations for where to put your money to work right now. All quotes are attributable to McVey: 

1. International private-equity strategies: "While we are not convinced that European public equity markets can consistently outperform the US and Asia, we believe that European Private Equity can outperform its public benchmark."

2. Environmental, social, and governance investments: "Overall, the global backdrop that we are describing leads us to look across all KKR's investment platforms to partner with companies that mitigate climate change, enhance resilient development, protect water quality, manage waste responsibly, and enhance learning and workforce development."

3. "'Spicy' (but not too spicy)" government bonds in certain countries with high real rates: "Indeed, in a world of over $11 trillion of negative rates, the value of the real coupon in markets like Vietnam, the Philippines, and Mexico could be substantially revalued upward if our case for the global economy is correct."

4. Opportunistic credit, collateralized-loan-obligation liabilities, and certain bank loans: "Consistent with our macro theme to lean into dislocation and buy 'spicy' debt (but not too 'spicy'), our suggestion is to pursue a strategy of accumulating positions in credit yielding instruments where prices reflect some of the current market uncertainty while avoiding the tails."

SEE ALSO: Goldman Sachs reveals 20 single-stock trades that are historically cheap and will help you make a killing during earnings season

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Accounts Payable Process Automation Report: Technologies, market trends, benefits, and solutions of digitizing in 2020

Wed, 01/15/2020 - 12:54pm

The $22 trillion business-to-business (B2B) US payments market is facing a paradox. High invoice volume (a business can see anywhere from hundreds to tens of thousands of invoices per month) and small departments that still use largely analog process are driving a desire to digitize: Enterprises using digital payables platforms can see 81% lower processing costs and 73% faster processing cycle times, per Kofax.

But accounts payable is a complex process, and entrenched habits and limited resources have stymied digitization and kept companies set in their ways.

Accounts Payable Process

In a fully analog accounts payable process, an invoice is generated and sent by a supplier. It's then printed and walked to an approver, and the invoice data is entered. That data is then approved, a check is written, and that check is mailed back to the supplier. On the B2B side, a lack of interoperability between these steps, inefficient execution, and largely analog processes create a cycle that can take 30 to 90 days.

Automated Accounts Payable

In an automated accounts payable process, an invoice is submitted to an invoicing platform, where a buyer can capture platform data. Then it is processed and approved, all within the platform, and payment goes out to the supplier. All sides benefit from this process, as automation can cut costs by 81% and improve efficiency by 73%, per Kofax. 

Accounts Payable Automation Benefits

Today, more firms are starting to seek accounts payable solutions that automate the invoicing and payments process, as they look to cut costs, decrease fraud, improve efficiency, and gain more visibility into payment data. These changes are bringing a deluge of providers — including software companies, card networks and providers, banks, and payment networks — into the ecosystem.

By moving into B2B payments, players in the space can diversify their businesses by capturing a new source of volume and attracting a new set of clients, attractive prospects as growth in digital consumer payments begins to slow.

For these providers, striking while the iron is hot and chasing the classes of businesses with the most opportunity — including small sellers, the middle market, cross-border companies, and the gig economy — will prove the top strategies in a successful pursuit of the B2B market.

In this report, Business Insider Intelligence will size the accounts payable market in the US; evaluate the breakdown between analog and digital processes at all three stages of an accounts payable transaction; and evaluate barriers toward digitization.

We will then identify four key segments where there's particular opportunity in accounts payable and assess the value in each. Finally, we will examine four best-in-class providers serving these areas and explain why their solutions could be a blueprint for other providers entering B2B.

The companies mentioned in this report are: Bottomline Technologies, Intuit, JPMorgan Chase, MineralTree, Oracle, SAP, SWIFT, Tipalti, Visa, Xerox.

Here are some key takeaways from the report:  

  • The $22 trillion US B2B payments market has been slow to digitize, with 36% of firms using paper invoicing, 47% relying on manual processes for approval, and 49% of payments made by check.
  • Forty-four percent of businesses are looking to add automation to their payables processes as a way to capitalize on the efficiency and cost-cutting benefits it brings in, while also cutting fraud and increasing access to payment data.
  • Large enterprises have the highest budgets for digital solutions, but they're also the most likely to already be using them, which makes small businesses, middle-market companies, cross-border businesses, and the gig economy the ripest targets for innovation.

In full, the report:

  • Explains the typical accounts payable process and identifies pain points within each stage.
  • Lists the benefits of automating accounts payables and highlights friction points preventing businesses from digitizing.
  • Analyzes how payments providers can best move into the space and capture a large volume share as the market is on the cusp of rapid digitization.
  • Evaluates four best-in-class strategies that payments providers looking to move into payables can take to scale quickly.

Interested in getting the full report? Here's how to get access:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Join thousands of top companies worldwide who trust Business Insider Intelligence for their competitive research needs. >> Inquire About Our Corporate Memberships
  3. Current subscribers can read the report here.

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Australian billionaires have donated at least $54 million to wildfire relief efforts. Here's how that stacks up to billionaires' donations after the Notre Dame fire.

Wed, 01/15/2020 - 12:53pm

  • Australian billionaires have collectively pledged at least $54 million to wildfire relief efforts, Business Insider estimates. The largest single private donation has been from Andrew Forrest, who donated $48 million to the cause.
  • To put that number into perspective, one social-media influencer said she was able to raise $700,000 for the relief efforts by selling nude photos of herself online.
  • And within hours of the Notre Dame fire in April, three French billionaires had collectively pledged to donate $565 million to the cathedral's rebuilding.
  • An estimated 25 million acres of Australia's brush have burned since September, killing at least 28 people, forcing hundreds of thousands of others to evacuate, and blanketing cities in dangerous smoke.
  • All figures in the article below are in USD unless otherwise specified.
  • Visit Business Insider's homepage for more stories.

Jeff Bezos was slammed on Twitter after announcing that Amazon would be donating $690,000 to the wildfire relief efforts in Australia, but he's not the only billionaire whose donations — or lack thereof — are drawing criticism.

An estimated 25 million acres of Australia's brush have burned since September. The fires have killed at least 28, forced hundreds of thousands of others to evacuate, and blanketed cities in dangerous smoke — and there are still at least two months left in fire season.

In response, Australian billionaires have pledged at least $53,680,380 to relief efforts, according to a calculation by Business Insider. That estimate does not include the gifts that were made privately, including that of Australia's richest person, Gina Rinehart. Several famous Aussie multimillionaires, including Liam Hemsworth and Nicole Kidman, have pledged hundreds of thousands of dollars to relief efforts, but their donations were not included in this estimation.

Billionaires' donations pale in comparison to those made after the Notre Dame fire

Australian comedian Celeste Barber has been one of the leading voices behind the criticism of billionaires' lack of reaction to the massive fires. Barber led the largest Facebook fundraiser in the platform's history to benefit relief efforts. In just 12 days, 1,307,939 Facebook users gave more than a total of $34 million USD to the Trustee for NSW Rural Fire Service & Brigades Donations Fund on Facebook.

Only one Australian billionaire, Andrew Forrest, has donated more than that. Forrest donated $48 million, Business Insider Australia reported. 

For comparison, within hours of the fire that swept through the Notre Dame in Paris in April, three French billionaires had already pledged $565 million for restoration efforts, Business Insider's Katie Warren reported at the time. While those French billionaires — LVMH CEO Bernard Arnault, Kering founder François-Henri Pinault, and L'Oréal heiress Françoise Bettencourt Meyers — are all significantly wealthier than anyone in Australia, the difference in reactions is one Barber was quick to highlight.

"Hey billionaires, Notre Dame burning down sucked," Barber tweeted January 7. "I get it. Times that by a trillion and that's what's happening in Australia. Feel free to flick us a quick couple of million. You make it seem pretty easy."

Hey billionaires, Notre Dame burning down sucked. I get it. Times that by a trillion and that’s what’s happening in Australia. Feel free to flick us a quick couple of million. You make it seem pretty easy.

— Celeste barber (@celestebarber_) January 7, 2020


Billionaires' gifts have also been compared to the $700,000 USD one social-media influencer said she was able to raise for the relief efforts by selling nude photos of herself online. That would mean her contribution outnumbers that of real estate billionaires John and Pauline Gandel.

The single biggest private donation to the Australian wildfire relief totaled $48 million

Here's a look at the Australian billionaires who have pledged donations so far. All figures are in USD.

  • Casino mogul James Packer was among the first Australian billionaires to donate, making two gifts totaling $3.45 million through his company and family foundation in November, The Australian reported.
  • The cofounders of software company Atlassian, Mike Cannon-Brookes and Scott Farquhar, each donated $770,000, Forbes reported.
  • Real estate billionaires John and Pauline Gandel donated $690,380 to a group of organizations involved in the relief efforts, The Sydney Morning Herald reported.
  • Gina Rinehart — the richest person in Australia — said she "privately" donated after Barber called her out on Twitter, her spokesman said in a statement to The Daily Mail.
  • Andrew Forrest donated $48 million, which is believed to be the largest private donation to relief efforts, Business Insider Australia reported. 

A handful of American billionaires have also announced plans to contribute to the relief efforts:

  • Facebook COO Sheryl Sandberg announced that the social network would donate $173,000 ($250,000 AUD) to the Australian Red Cross and match up to $671,000 ($1 million AUD) in donations made to GlobalGiving.
  • Jeff Bezos was slammed on Twitter for donating $690,000 — roughly the amount of money he makes in five minutes — to the recovery efforts, Business Insider reported.

SEE ALSO: Australia's fires are 46% bigger than last year's Brazilian Amazon blazes. There are at least 2 months of fire season to go.

DON'T MISS: Here's how much Australia's billionaires have donated to relief efforts for the wildfires that have destroyed 25 million acres of land and have killed at least 28 people

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'They don't even plan to go public' — NYU professor Scott Galloway says Casper filed for an IPO but really wants a sale

Wed, 01/15/2020 - 12:48pm

  • Casper, the online mattress seller that filed for an IPO last week, would prefer to find a buyer than go public, Scott Galloway told Kara Swisher on the pair's Pivot podcast this week.
  • "They don't even plan to go public ... they're basically saying a Target or someone, 'Come take us out ... we're for sale,'" the New York University professor told the Recode cofounder.
  • Casper's IPO filing revealed modest revenue growth of 20% and an operating loss of $65 million in the nine months to September 30, and the startup faces intense competition from rivals such as Purple and Nectar.
  • "This company should absolutely not be a public company," Galloway told Swisher.
  • View Business Insider's homepage for more stories.

Casper, the online mattress seller that filed for an initial public offering last week, would prefer to find a buyer than go public, Scott Galloway told Kara Swisher on the pair's Pivot podcast this week.

"These guys have said, 'We're in a corner, we're up against it,'" the New York University professor suggested to the Recode cofounder. "They don't even plan to go public ... they're basically saying a Target or someone, 'Come take us out ... we're for sale.'"

Casper's IPO filing revealed a modest 20% rise in revenues and an operating loss of about $65 million in the nine months to September 30.

"This company should absolutely not be a public company," Galloway told Swisher. "The fact that they can even think they can get public, is sorta strange."

Casper boasts a strong management team and has built a strong brand, targeted an industry ripe for disruption, and tapped into growing consumer interest in getting better sleep, Galloway said.

However, its losses are hard to justify given it's not growing explosively and isn't a technology company benefiting from major scale or network effects, he added.

Finding a buyer for the business is a better option than pursuing an IPO, Galloway said. When Casper's bosses asked him for guidance two years ago, he said that he told them, "I have three pieces of advice: sell, sell, and sell."

His advice remains the same today: "Get out, sell to an old company trying to find Botox to look younger."

Casper's biggest challenges are fierce competition from other online mattress retailers such as Purple and Nectar, and the lack of barriers to others entering the market, Galloway said. Those factors will either derail its listing plans, or slash its stock price by 30% to 50% during its first year on the market, he argued.

If Casper fails to go public, months after WeWork's IPO went up in flames, it could dampen public investors' interest in similar businesses, Galloway said. There's a risk that "Casper does what We does and kinda s---s in the pond for direct-to-consumer IPOs," he continued.

Galloway proposed a better option for venture capitalists than an IPO: Combine Casper with other private e-commerce startups.

"The gangster move here ... would be to create a new-age Williams-Sonoma and to roll up Away, Warby Parker, and Casper," he told Swisher. "Consolidate some of the back end, do a better job of targeting, have more clout."

Casper didn't immediately respond to a request for comment from Business Insider.

The idea of a Casper buyout isn't new. Target considered buying it for around $1 billion in 2017 but ended up taking a minority stake, Recode reported.

Moreover, the New York Post reported this week that Casper discussed a sale with traditional mattress retailers Tempur Sealy and Serta Simmons last year, although Casper and Tempur Sealy both issued denials.

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NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption

The United Explorer card is currently offering up to 65,000 miles — but only for one more week

Wed, 01/15/2020 - 12:42pm

The United Explorer card is a great option for United flyers even with its standard sign-up bonus of 40,000 miles, but it's currently even more appealing thanks to a limited-time offer. 

If you apply for the card now, you can earn up to 65,000 United miles — 40,000 after you spend $2,000 in the first three months, and another 25,000 miles after you spend $10,000 total in the first six months. 

However, this offer is only available until January 22, so your time to apply is running out.

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 will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back. 

The miles you can earn with this sign-up offer could help you book an award flight on United or one of its partners in the Star Alliance, such as Air Canada or Lufthansa. United recently switched to a new, "dynamic" system for pricing its flights booked on miles — so there's no longer an award chart to reference to see exactly how many miles you'll need to get to a given destination. For reference, a round-trip economy award flight within the US requires at least 25,000 miles.

Travel website The Points Guy values United miles at 1.3 cents apiece, so 65,000 miles would be worth about $845. This valuation takes into account your various options for using these miles, from economy-class flights on United to business- and first-class flights booked on international partners like ANA and Lufthansa.

Read more: United Explorer card review

To earn the full 65,000 miles, you'll need to spend at least $10,000 in the first six months from your account-opening date. That averages out to $1,666 spent per month. If that's more money than you'd typically spend in that time period, keep in mind that tax season is approaching — it could be worth paying your federal return with the Explorer card if you're working toward its bonus. For other ideas, see our guide to meeting a minimum spending requirement for credit card welcome bonuses.

Other reasons to consider the United Explorer card

Beyond the welcome bonus, the United Explorer card is worth a look thanks to the following benefits:

Read more: If you have the United Explorer card, here are 6 perks you should be taking advantage of right now

The card has a $95 annual fee that's waived the first year. If you're a frequent United flyer, the benefits like a free checked bag and United Club passes can make it worth it.

If you're interested, don't forget that the card's offer end date is fast approaching. Apply by January 22 to earn up to 65,000 United miles.

Earn up to 65,000 miles: Click here to learn more about the United Explorer card »

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Fidelity is looking for an in with financial advisers by adding more model portfolios — and they're built with its own funds as well as ETFs from rival BlackRock

Wed, 01/15/2020 - 12:01am

  • Investment management giant Fidelity is adding more fixed-income model portfolios to its menu of products available to financial advisers.
  • It's making that move against the backdrop of a fast-changing competitive landscape for brokerage, wealth management, and asset management.
  • While Fidelity doesn't charge advisory fees for the model portfolios, it charges investment management fees for the underlying funds. The portfolios' average expense ratios range from 0.30% to 0.38%.
  • The portfolios will be built using Fidelity's own mutual funds and ETFs, the firm said, as well as third-party ETFs including BlackRock's iShares. BlackRock is set to report fourth-quarter earnings on Tuesday. 
  • Visit BI Prime for more wealth management stories.

Investment-management giant Fidelity is adding more fixed-income model portfolios to its menu of products available to financial advisers.

It's making that move against the backdrop of a fast-changing competitive landscape for brokerage, wealth management, and asset management. Fees for asset managers have been under increasingly intense pressure, and discount brokers raced to slash stock and ETF trading commissions to zero in the fall of 2019. 

Model portfolios are built out of mutual funds and ETFs and can help replace portfolio construction via individual securities by financial advisers. Plus, they offer a prepackaged way to distribute asset managers' products.

Fidelity, one of the biggest asset managers, on Tuesday detailed a new bond model portfolio collection. They'll be built using Fidelity's own mutual funds and ETFs, the firm said, as well as third-party funds  — Fidelity mentioned BlackRock's iShares in particular. (BlackRock, the world's largest asset manager, is set to report fourth-quarter earnings on Tuesday.)

Meanwhile, discount brokers Charles Schwab and TD Ameritrade are set to combine later this year in a deal valued at about $26 billion. Both Schwab and TD Ameritrade have model portfolio platforms, and like Fidelity offer custody services for registered investment advisers. Schwab also has its own branded mutual funds and ETFs. 

Model portfolios' total market size has swelled to some $2.7 trillion in assets, representing 19% annual growth since 2016, according to an October report from Broadridge, the financial-technology firm that services global financial institutions. Broadridge expects model portfolio assets will more than double by 2023.

Though it's growing and firms have estimated how many assets have flowed into the space, the model portfolios' total market size is difficult to track.

That's in part because the portfolios can't quite be compared against each other, or benchmarks, said Scott Smith, the director of the advice relationships practice at industry research firm Cerulli Associates.

Financial advisers are "trying to do seven jobs well," Smith said in an interview, and using model portfolios can take away some of the investment selection work. 

Fidelity's model portfolios are available on so-called turnkey platforms for advisers, including its own offering. 

A growing market 

Fidelity already offers bond model portfolios to the advisers it serves through its institutional asset management business. Where the new vehicles differ are through their strategies Fidelity says maximize clients' total return when adjusted for risk.

For instance, one of the four new offerings is designed to expose investors to a diverse bond portfolio centered around investment-grade mutual funds and ETFs alongside a "limited" non-investment-grade allocation. While Fidelity doesn't charge an advisory fees for the models, it charges investment management fees for the underlying funds.

The portfolios' average expense ratios range from 0.30% to 0.38%.

BlackRock is also among the firms growing its footprint in the model portfolio space. It said in December that it was effectively trying to make clients' model portfolio process smarter through a fintech partnership. 

As competition ratchets up and feels fall fast in the ever-crowded wealth and asset management space, questions have cropped up around the relationships between asset managers and the brokerages and other platforms distributing their products — especially when there's crossover between offerings.

One analyst asked BlackRock CEO Larry Fink on the firm's third-quarter earnings call in October about distribution platform relationships in the wake of zero-commission trades becoming the norm.

"So let me just say one thing. Our relationship with Fidelity, as you kind of alluded to, is as strong as ever. Our relationship is way beyond ETFs. It's about education. It's about working with their platform," Fink said on the call. "And so our relationship with Fidelity is unchanged, if that's what you were trying to allude to, related to what we pay them and other things."

Also in October, the CEO of asset manager Russell Investments, Michelle Seitz, said an interview with Business Insider that zero-commission trades could mean that firms like Russell may end up getting squeezed when commissions drop on the platforms that carry their investment products.

"Nothing is necessarily free," Seitz said then. "The biggest element of all of these changes to the pricing structure to the end client, I believe, should be transparency — making sure that they understand how the entire ecosystem works."

Bank of America said in October that it added 40 new third-party model portfolios for its own financial advisers to choose from, managed by firms including Natixis and JPMorgan, and available to Merrill Lynch Wealth Management clients. Bank of America first introduced model portfolios in 2017.

SEE ALSO: Russell Investments' CEO wades into the broker-war debate, saying that zero commissions could encourage overtrading

SEE ALSO: Fidelity's RIA head explains where he thinks the business fits into a fast-growing industry being reshaped by mergers and breakaway advisers

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

Delta has tough questions to answer from the FAA about why it dumped jet fuel over a school during an emergency landing at LAX (DAL)

Tue, 01/14/2020 - 8:39pm

The Federal Aviation Administration said on Tuesday that it is "thoroughly investigating" why a Delta flight dumped jet fuel over a residential neighborhood in Los Angeles.

At least 44 children and adults at several elementary schools near Cudahy, Los Angeles, were affected after the fuel was jettisoned.

The patients mainly suffered skin irritation, and none needed to go to the hospital, the Los Angeles County Fire Department said.

Delta Air Lines flight 89, from LAX to Shanghai, China, declared the emergency after experiencing an unspecified engine issue not long after takeoff.

The flight turned north over the Pacific Ocean immediately after taking off and began to climb, but leveled off north of Calabasas before turning east over Los Angeles to circle around and return to the airport.

The plane then descended steadily before turning for a final approach into the airport, passing over Cudahy at around 2,375 feet, according to data from FlightRadar24.

It was not clear when the plane began dumping fuel, nor how much of the 24 minute flight was spent ejecting fuel, a process that can last a relatively long time.

A statement from the FAA said:

"The FAA is thoroughly investigating the circumstances behind this event. There are special emergency fuel-dumping procedures for aircraft operating into and out of any major US airport.

"These procedures call for fuel to be dumped over designated unpopulated areas, typically at higher altitudes so the fuel atomizes and disperses before it reaches the ground."

Typically, a plane will dump fuel when it needs to return to the airport because of a technical problem or an on-board medical issue.

Larger planes, like the Boeing 777-200 in this case, have fuel dumping capability to reduce landing weight, avoiding damage and possible risks to the plane or runway. Smaller planes will either land "heavy," or fly in a holding pattern to use up fuel before landing.

However, according to the FAA, there are "special emergency fuel-dumping procedures" for planes flying into or out of major US airports.

In most cases, fuel evaporates before reaching the ground.

Procedures call for fuel to be dumped "over designated unpopulated areas," according to the FAA, "typically at higher altitudes so the fuel atomizes and disperses before it reaches the ground."

An aircraft might deviate from those procedures if it isn't possible to get high enough or far enough from populated areas. However, it was unclear whether that was the case with Delta 89.

It was also not immediately clear whether air traffic controllers approved the fuel release over a populated area from low altitudes.

In a statement, Delta called the fuel dumping "normal procedure," but said it had "concerns" over the reported injuries. It said:

"Shortly after takeoff, Flight 89 from LAX to Shanghai experienced an engine issue requiring the aircraft to return quickly to LAX. The aircraft landed safely after a release of fuel, which was required as part of normal procedure to reach a safe landing weight.

"We are in touch with Los Angeles World Airports and the LA County Fire Department and share concerns regarding reported minor injuries to adults and children at a school in the area."

SEE ALSO: A plane returning to LAX dumped jet fuel over nearby elementary schools, injuring 44 people including at least 20 children

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Casper, the buzzy mattress seller adored by millennials, has a costly returns problem that could be a nightmare for its IPO

Tue, 01/14/2020 - 8:18pm

  • Casper's generous return policy on its mattresses is costing the company tens of millions of dollars, the company revealed recently in its initial public offering paperwork.
  • In the first nine months of last year, returns, refunds, and discounts cost Casper $80 million — or about 20 cents of every dollar in sales it took in during that period. 
  • The company has also had to set aside increasing amounts of money as a reserve against future returns. 
  • In part thanks to such costs, the company is operating in the red at a time when Wall Street is increasingly skeptical of money-losing companies.
  • Click here for more BI Prime stories.

It turns out that offering an extraordinarily generous return policy on mattresses can be super-costly.

At least that's what Casper's financial statements indicate. In the first nine months of last year, refunds, returns, and discounts cost the company $80 million, according to the document the company filed last week in advance of a planned public offering. That's about 20 cents out of every dollar in sales the company took in, including those that it ultimately refunded.

"That's a high number," said Rob Siegel, a lecturer in management at Stanford Graduate School of Business.

Worse for Casper, that rate is going up. In all of 2018, returns, refunds, and discounts cost the company $80.7 billion, or about 18.4 cents of every dollar it saw in sales, including the amount it refunded. In 2017, such costs added up to $45.7 million, or 15.4 cents for every dollar in sales.

For its part, Casper has recognized that returns represent a significant issue. Reducing returns was one of the top initiatives it listed in its public offering document for improving its financial results.

"As a young company, we are still learning about the factors affecting customer returns and believe we have the opportunity to reduce customer return rates," the company said in the document. "We have identified several opportunities that span policy change, process improvement and consumer education to reduce return rates and increase overall customer satisfaction."

The double-edged sword of selling mattresses online

Traditionally, consumers have purchased mattresses through department or furniture stores where they've had the chance to test them out before purchasing them by sitting or lying on them. By contrast, most of Casper's customers don't get that chance. While the company has several dozen physical stores, it largely sells its mattresses online through its website.

The benefit of such an approach is that on the mattresses that it sells itself, Casper doesn't have to share its profits with retailers or distributors. It also can showcase its products in the way it thinks is best; it doesn't have to worry about having its mattresses side by side with a competitor's in a retail showroom.

But purchasing a mattresses without feeling it first would seem to be a tough sell for many consumers. Mattresses are among the most expensive products consumers buy, and people tend to hold on to them for years and years. What's more, people's tastes in mattresses tend to be idiosyncratic; some like firmer mattresses, others harder ones. Few would want to get stuck with a mattress that doesn't meet their needs.

To address those concerns, Casper and other such online mattress vendors have offered generous return policies. Typically customers can send back a mattress within 100 days of receiving it and get a full refund.

That's led to at least some consumers to attempt to game the system, as The Wall Street Journal reported last month. Such customers have been able to repeatedly get mattresses without ever really paying for them by successively purchasing new ones from different online vendors and then sending them back immediately before the return periods expire.

Casper's return costs are adding up

Even if most consumers aren't taking advantage of the situation, many are indeed returning their mattresses. And the costs are piling up.

At the end of September, Casper had set aside a cushion of $11.6 million to account for returns. To put that number in context, the company had $54.6 million in cash on hand at that point.

As return costs have risen, Casper has repeatedly upped the amount it sets aside for them. Its return reserve stood at $8.6 million at the end of 2018 and $5.3 million at the end of 2017.

Casper has "a very expensive [business] model, particularly because of their guarantees," said David Hsu, a professor of management at the University of Pennsylvania's Wharton School.

Indeed, Casper's high return costs are one of the big reasons why the company, despite having a healthy growth rate, is racking up big losses. In the first nine months of last year, the company lost $67 million, up from about $66 million in the same period a year earlier.

It remains to be seen how public investors will treat the company. Other money-losing startups saw a poor reception from Wall Street last year. Uber debuted at a price far below the level at which many of its bankers predicted. It, Lyft, and Slack all saw their share prices fall after they went public. And WeWork was unable to complete its offering, despite repeatedly lowering its valuation, as investors pushed back against its losses and questionable transactions involving its CEO.

Got a tip about Casper or another startup? Contact this reporter via email at, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: WeWork and other top startups were cut down to size in 2019. This VC thinks 30% of the more than 400 other unicorns will soon see their valuations slashed too.

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Robo-advisor Wealthfront offers a high-yield cash account with a minimum deposit of $1 — here's how it stacks up

Tue, 01/14/2020 - 7:43pm

It took me longer in adulthood than I'd like to admit to finally build a habit of saving money, but once I did, it stuck. While I'd love to tell you that I tracked every last penny I spent, the truth of how I boosted my savings is much simpler: automatic deposits, and high interest rates.

I opened a savings account with an online bank that offers high interest rates and no fees, and I set up automatic deposits into that account from my paycheck. This means the money I intend to save never even makes it to my checking account, making it impossible for me to spend it impulsively.

My savings account also had a 2.20% interest rate when I signed up, far higher than the 0.01% rate my old bank offered. At my old bank, my monthly deposits from interest were pennies. With my new high-yield savings account, I get upward of $30 every month. Sure, I'm not going to retire early on those returns, but getting a bonus each month for growing my savings encourages me to keep going.

Thanks to the popularity of online banks like Marcus and Ally and high-yield savings accounts, new options are cropping up everywhere, and competition is driving rates up and pushing fees down. Wealthfront, one of the most popular robo-advisers — online applications that automate investing to make it easy and more accessible — is the latest company to jump on the high-yield-savings bandwagon.

While it's not called it a high-yield savings account, Wealthfront's new Cash Account is pretty much identical to its competitors in that arena — and it might be leading the pack in helping you make the most of your money.

How does Wealthfront's Cash Account work?

The name Cash Account might be confusing to some, but this is essentially a high-yield savings account. That means you can transfer money into and out of the account for free whenever you want, and you'll get some of the highest rates available for savings accounts, which can make a difference when you're trying to build up your savings.

You won't have to pay any fees with this account either, regardless of your balance, and you need to deposit only $1 to get started.

I'm a big advocate of high-yield savings accounts. Three months ago, I switched from a traditional bank to a high-yield savings account with a popular online bank, and I've already made $70 in interest. Seeing that money deposited in my account feels like receiving a reward. And building in rewards for saving money can rewire your brain to build new savings habits.

Wealthfront describes its vision for the account as being "self-driving money," which is just a fun way of saying it will help you automate your finances.

Read more: Most traditional investment advice fails to take women's pay gaps and longer lifespans into account — Ellevest is changing that

Lots of companies doing this are relatively new but wildly successful in the financial technology, or fintech, industry. New online banks offer fee-free checking and savings accounts that can be set up in minutes and even be configured to split direct deposits from your employer among various accounts. Mobile banking makes it easy to automate bill payments and paying off debt. And robo-advisers like Wealthfront even automate your investments for you.

This self-driving-money revolution is essentially taking what wealthy folks have always had in the form of spendy financial planners — the ability to "set it and forget it" with their money and still experience good returns — and making that available to the masses.

Wealthfront says the Cash Account is now open to current Wealthfront investing members as well as new Wealthfront clients. 

The best features of Wealthfront's Cash Account

  • 1.78% annual percentage yield (as of January 14)
  • No fees
  • $1 minimum opening deposit
  • FDIC-insured up to $1 million

This account is fee-free, which is a must, as monthly service fees — even when you can waive them by maintaining a minimum daily balance — can end up eating into your savings and canceling out any interest you earn. It's suitable for both seasoned savers and folks who are just getting started, since you have to maintain a minimum balance of only $1 to open an account and earn interest.

Finally, holders of the Cash Account are insured by the FDIC for up to $1 million, which is significantly higher than the $250,000 limit available at traditional banks. Wealthfront's achieves this by spreading cash deposits across four different banks. If you already have a savings account at one of those banks, you won't qualify for more than $250,000 in total FDIC insurance from that particular bank. 

Biggest flaws
  • Online only
  • No ATM card

Wealthfront isn't your traditional brick-and-mortar bank, but an online-only investment service that is expanding into new services with the Cash Account. You don't have to worry about your money — online banks have been around for a while now, and as long as they're FDIC-insured, they're safe. But people who prefer to do their banking in person or aren't as comfortable with online banking might prefer to bank elsewhere.

Some savings accounts come with an ATM card so you can easily access your funds, like in case of an emergency. Wealthfront's Cash Account does not, and since it doesn't offer checking-account options, the only way to withdraw your money is by transferring it to an outside bank account, meaning it would be about one to three days before you receive your money, or even longer if you're transferring the funds to a bank account that hasn't been verified and linked to your Cash Account.

I like having a savings account that doesn't offer immediate access to my funds, as it discourages me from dipping into my savings for unnecessary purchases. If I ever need money for an emergency, I can always use my credit card. If you're worried about not having quick access to cash in an emergency, you could always keep a small portion of your savings in an account linked to your checking account.

The best way to use Wealthfront's Cash Account

Use Wealthfront's Cash Account for:

  • Your emergency savings fund
  • Short-term savings goals
  • Money you don't need to access regularly

Don't use Wealthfront's Cash Account for:

  • Your retirement fund
  • Long-term savings goals
  • Money you need to access regularly

Like other high-yield savings accounts, Wealthfront's Cash Account offers the best returns you can get on money you can access easily. It's also a low-risk place to park your cash.

This makes it a great option for your short-term savings goals and emergency fund. I like to use savings accounts for money I might need to access in the next five years.

For longer-term savings goals, I prefer options with higher returns. Certificates of deposit lock up your money for a specified period (usually one to six years) but have higher interest rates. As for your retirement savings, even the best high-yield savings accounts won't come close to competing with the average returns from a long-term investment strategy or a tax-advantaged retirement account like an IRA or a 401(k).

Finally, you don't want to keep money you plan to use regularly in a savings account — keep that in your checking account. Not only do checking accounts offer easier access to your money, but most savings accounts allow only six easy withdrawals a month before you start racking up fees.


Wealthfront is shaping up to be one of the best options for your savings with its new Cash Account. It offers one of the highest interest rates, with no fees and with a minimum-balance requirement that anyone can maintain.

Given that switching my bank accounts helped me drastically improve my savings habits, I'd definitely recommend high-yield savings accounts, whether with Wealthfront or another low-fee online bank. By the end of this year, I'll have earned enough interest to cover a flight to Europe, which makes cutting back on shopping to boost my savings a lot more rewarding.

Learn more and open a Wealthfront Cash Account here »

This post was updated on January 14 to reflect a change in the APY for Wealthfront's Cash Account. As of this time, the APY was 1.78%.

SEE ALSO: How much money you should save depends on 3 things

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Wealthfront and Betterment are battling it out, and it's great news for savers

Tue, 01/14/2020 - 7:19pm

Note that this post was originally published in the summer of 2019. Since then, the Fed cut the benchmark rate multiple times, and both accounts changed their interest rates accordingly. As of 1/14/20, the interest rate on Betterment's Everyday Cash Reserve account is 1.83%. The interest rate on Wealthfront's Cash account is 1.78%. They are still two of the highest interest rates available on comparable accounts.

Betterment and Wealthfront are online investing advisers at their core, but they're making a clear play for ordinary savers.

Betterment joined fellow robo-adviser Wealthfront this summer in the high-yield savings space — a niche more commonly occupied by online banks and large financial institutions — with the debut of its Everyday Cash Reserve account. The account initially offered an eye-popping annual percentage yield (APY) of up to 2.69%, besting Wealthfront's 2.57% APY.

But since the Federal Reserve announced its continuing cuts to the interest rate benchmark starting over the summer, Betterment's Everyday Cash Reserve account and Wealthfront's Cash Account have both lowered their rates, which are still well above the industry norm — the average general savings account earns 0.09%.

You can open a Betterment Everyday Cash Reserve account with as little as $10.

While technically a cash account, Wealthfront's account has the same features as a high-yield savings account. Wealthfront debuted its Cash Account earlier this year with a 2.24% APY and had been steadily increasing it until the Fed announced its first rate cut.

It's difficult, if not impossible, to declare an outright winner between the two robo-advisers' high-yield accounts. Both Betterment and Wealthfront still offer some of the highest rates on the market right now, plus their accounts are fee-free, allow unlimited transfers, and are FDIC-insured up to $1 million.

High-yield savings accounts are a great place to store money for emergencies and short-term goals — including money you're shoring up to invest — because there's zero risk of losing it, it's easily accessible, and it grows while it's sitting there. Still, the current interest rate probably shouldn't be the sole factor in deciding which account to open, as interest rates are subject to change at any time at the behest of the Federal Reserve.

But regardless of how the rate shifts over time, you've already made progress toward automatically building wealth by keeping your money a high-yield savings account over a traditional savings or checking account, particularly if it's fee free.

Wealthfront's and Betterment's high-yield savings accounts may also be particularly attractive to those looking to segue into robo-investing.

For longer-term growth on your money, Betterment offers customized investment portfolios in its taxable brokerage accounts, IRAs for retirement savings and investing, and trust accounts. Meanwhile, Wealthfront allows you to invest in low-cost index funds with as little as $500, set up and contribute to an IRA, or save in a 529 college plan.

Learn more about the Betterment Everyday Savings account » Learn more about the Wealthfront Cash Account »

This post was updated on November 4, 2019, to reflect both accounts' changing interest rates.

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A plane returning to LAX dumped jet fuel over nearby elementary schools, injuring 44 people including at least 20 children

Tue, 01/14/2020 - 6:55pm

Los Angeles County firefighters and paramedics treated at least 20 children and dozens of adults after they came in contact with jet fuel dumped by a plane flying overhead.

The Los Angeles County Fire Department said in a tweet that 44 people were treated at the scene with minor injuries related to the accident and were released.

The fire department said that 20 children and 11 adults were treated at Park Avenue Elementary School in Cudahy, California, while 13 other patients from elementary schools in nearby South Gate and Florence Graham were also evaluated.

The department's Health HazMat units responded and confirmed the substance was jet fuel.

ABC 7 Los Angeles reported that the victims were complaining of skin irritation.

Two classes were outside in the school's playground when the liquid "rained down" just before noon, the Los Angeles Times reported.

It was not immediately clear which flight dumped the fuel or why the liquid was discharged. Jettisoning fuel to reduce weight is a common practice when a jet is forced to return to the airport after takeoff, often because of a technical issue or passenger medical emergency.

Typically, jet fuel dissipates when it's jettisoned from a plane. It was not immediately clear why the fuel ended up reaching the ground in this instance. The Federal Aviation Administration has procedures for dumping fuel for planes heading into or out of major airports, including climbing to higher altitudes when possible and avoiding populated areas.

Delta Flight 89 from LAX to Shanghai returned to the airport shortly after taking off at around the same time, according to data from FlightRadar24. The plane, a Boeing 777-200, passed 2,375 feet over the Cudahy area at 11:53 a.m.

A Twitter user posted video of a plane and said it was the Shanghai flight dumping fuel on approach, but the footage could not be independently verified by Business Insider.

Delta confirmed in a statement to Business Insider that the flight experienced a problem with one of its engines after taking off and had to return to the airport after reducing its landing weight:

"Shortly after takeoff, Flight 89 from LAX to Shanghai experienced an engine issue requiring the aircraft to return quickly to LAX. The aircraft landed safely after a release of fuel, which was required as part of normal procedure to reach a safe landing weight. We are in touch with Los Angeles World Airports and the LA County Fire Department and share concerns regarding reported minor injuries to adults and children at a school in the area."

The FAA told Business Insider that it was investigating the incident.

SEE ALSO: These are the airports with the most delays during last year's Christmas travel period — this year is expected to be even busier

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Morgan Stanley has promoted 130 new managing directors for its 2020 class

Tue, 01/14/2020 - 6:17pm


  • Morgan Stanley has 130 new managing directors across the firm for its 2020 class. 
  • That's fewer managing-director promotions than in recent years at the investment bank, which has been cutting costs in recent months. 
  • Visit BI Prime for more stories

Morgan Stanley has 130 new managing directors across the firm, according to a person familiar with the matter. 

The 2020 managing-director class is smaller than recent years — the bank promoted 145 managing directors in 2019 and 153 in 2018.

A smaller managing-director class wasn't unexpected, given the bank's recent cost-cutting measures. The firm announced a 2% cut to its workforce in December, or about 1,500 jobs, amid what it views as a difficult economic backdrop.

The managing-director title at the investment bank is among the most coveted on Wall Street.

Other stats about the 2020 class:

  • Twenty-five percent of the new managing directors are women, which boosts the firm's overall female managing-director population to 21%, its highest mark to date.
  • In the US, 4% of the new managing directors are black, 4% are Hispanic, and 17% are Asian.
  • Fifty-eight percent of the 2020 class is based in the Americas, 20% in Europe, the Middle East, and Africa, and 22% in Asia.

Morgan Stanley is scheduled to report fourth-quarter-earnings results on Thursday, the last of the big US investment banks to report. 

Read more: Citigroup CEO Michael Corbat sent out an internal memo congratulating the bank's new class of managing directors — we got the entire list of 220 names

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These 11 milestones in venture capital funding will tell you whether startups hit their peak in 2020 or continue to defy expectations

Tue, 01/14/2020 - 6:06pm

  • "More is more" was the mantra for startups seeking funding in 2019.
  • A new report from PitchBook and the National Venture Capital Association summed up the trends that led to record deal sizes, higher valuations, and the rise of mega-rounds last year.
  • These are the 11 most revealing statistics on venture capital that you need to know for the year ahead.
  • Click here for more BI Prime stories.

It's no secret that there's a lot of money pouring into the tech startup scene these days. The arrival of SoftBank and its $100 billion Vision Fund has super-charged the funding climate.

But even aside from SoftBank, last year contained several important milestones and developments for venture capital funds and startups.

Here are some of the key metrics from 2019. Whether they are surpassed once again in the next 12 months or stand as the high-water mark will be one of the big stories to watch in the VC industry.

$136.5 billion

There was no stopping the avalanche of capital plowing into startups in 2019.

Investors plugged $136.5 billion into venture-backed companies in the US last year, down slightly from 2018. The number of deals, however, crept higher to 10,777 in 2019 from 10,542 in 2018.

PitchBook and the National Venture Capital Association credit this uptick to the "larger deals that have closed at every stage and in almost every sector."

273 mega-rounds

Last year there were 273 "mega-rounds," that is, a fundraising event where a company pulled in more than $100 million. These super-sized deals are becoming more common — and were up almost 12% from 2018 — as tech investors raise bigger and bigger funds to compete for access to the fastest-growing startups.

2.9 years

Startups are waiting longer to take outside capital. In 2019, the median age of companies raising angel or seed funding was 2.9 years, continuing a steady rise from the 1.5 years median age in 2012.

PitchBook's report identified two reasons for this: The cost of starting a business has shrunk because of the availability of software services and cloud computing. Also, founders can raise money from other sources, such as crowdfunding or debt financing.

The startups that delay are more mature when they go to fundraise, and are able to command bigger deals and valuations, according to the report.

25% of early-stage deals

Those outsized transactions known as mega-rounds accounted for almost 25% of the capital put into early-stage deals in 2019. Young startups gobbled up cash in the pursuit of growth without revenues, though this approach has come under fire from investors in recent months as more startups suffer layoffs.

Lowest since 2013

The nation's tech capital lost some of its share of venture deals to other emerging metropolises. In 2019, the San Francisco Bay Area posted its lowest proportion of overall venture investments since 2013.

The amount of money invested in startups on the West Coast slipped to 50% of the nationwide total in 2019 from 62% in 2018, while venture spending went up at least one percentage point in the Mountain, Southern, and Mid-Atlantic regions.

$10.7 billion

There's more money available to startups in the healthcare sector. The venture funds focused on this sector raised $10.7 billion last year, setting a new high for the third year in a row.

2,597 late-stage deals

The number of late-stage deals reached a new record in 2019, topping 2,500 for the first time with a total of 2,597 deals.

It's a marker of investor interest in these types of deals. They are able to make more informed decisions because late-stage companies can raise money based on their battle-tested business models.

90% of unicorns

The startups making their public markets debut in 2019 are much better funded than their predecessors.

In the past, a venture-backed company would raise $100 million in financing on average ahead of going public at a valuation of $100 million, said Greg Becker, chief executive of Silicon Valley Bank, which also sponsored the report. "Today, more than 90% of unicorns have already raised at least $100 million in a single private financing," he wrote.

6 times

Last year logged almost 3,900 deals involving software startups. They pulled in a total of $43.5 billion, up six times from $7.3 billion a decade ago. 

Although there's more money plunging into software startups, the number of those type deals fell from 4,141 in 2018.

$18.3 billion

It was a record year for female-founded startups seeking funding, with the number and value of deals involving companies started by women trickling higher. Investors put $18.3 billion into female-founded startups across 2,184 deals, up from $16.9 billion and 2,057 deals in 2018, according to the report.

1,700 transactions

The corporate venture capital fund officially arrived in 2019. These funds, defined as separate entities that invest a company's money into private companies the same way any other investor would, participated in about 25% of deals over the past four years. 

Corporate funds added to the pot in almost 1,700 transactions last year, "highlighting how important corporations now consider startup investment to their overall growth strategy," according to the report.

SEE ALSO: VCs predict that remote work, celebrity startup investors, and an exodus from Silicon Valley are the big tech trends to watch in 2020

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AOL's cofounder is touring the country to fund startups outside Silicon Valley. Here are the next states he's visiting, and how entrepreneurs can vie for a chunk of $300 million.

Tue, 01/14/2020 - 6:05pm

  • AOL cofounder Steve Case's venture capital firm, Revolution, has been running "Rise of the Rest" bus tours since 2014. In 2017, it raised a complementary $150 million Rise of the Rest seed fund, and last fall raised another of the same value. 
  • The next Rise of the Rest bus tour is setting off on April 20 and will visit Wichita, Tulsa, Oklahoma City, Northwest Arkansas, and St. Louis.
  • This article is part of Business Insider's Better Capitalism series, which tracks the ways companies and individuals are rethinking the economy and role of business in society.
  • Visit Business Insider's homepage for more stories.

If you're an investor looking for some high growth startups, you're not going to immediately think of searching Kansas and Missouri. Steve Case wants to change that.

Case, an AOL cofounder and its former CEO, has been leading his Washington, D.C.-based venture capital firm, Revolution, on "Rise of the Rest" bus tours since 2014. He and his team have been operating on the premise that there is huge potential outside of where, traditionally, 75% of all venture capital has gone: Silicon Valley, New York City, and Boston.

On Tuesday, Revolution announced that ninth bus tour will take place from April 20-24 and go through Wichita, Kansas; Tulsa, Oklahoma; Oklahoma City, Oklahoma; northwest Arkansas; and St. Louis, Missouri.

Revolution raised its first $150 million Rise of the Rest Seed Fund to accompany the trips and their underlying thesis, in 2017. It raised a second $150 seed fund last fall and has limited partners like Amazon CEO Jeff Bezos, Bridgewater founder Ray Dalio, and Quibi CEO Meg Whitman.

So far, the Rise of the Rest team has built a network of 200 coinvestors and invested across 43 cities in the US. At each bus stop, the team meets with local entrepreneurs and community leaders and ends the day with a pitch competition, where the winning entrepreneur will receive $100,000 from the seed fund. The tours are meant to raise awareness of each region's startup scene, and the Rise of the Rest team maintains its relationships with each of the locales throughout the year, and will continue to make investments.

We asked the Rise of the Rest crew why it chose the heartland as its the next destination, and a spokesperson sent us the following, a collection of insights from the investment team.

Wichita, Kansas

"In addition Wichita's rich history of entrepreneurship through the founding of companies like Koch Industries, Pizza Hut, and Rent-A-Center, there's a lot of momentum in the local startup community in regard to talent. This is further augmented by the anchoring presence of Cargill's protein business (a multi-billion dollar unit of the MN-based company) paired with the efforts of local universities like Wichita State, startup support organizations like e2eAccelerator, and the Accelerate Venture Partners angel network, which are working in tandem to mobilize the community and empower entrepreneurs."

Tulsa, Oklahoma

"There are robust efforts by community leaders in Tulsa focused on continuing to improve the quality of life while addressing local talent-development issues. Because of initiatives like the George Kaiser Family Foundation's Tulsa Remote program, which actively incentivizes relocation for remote workers, Tulsa is quickly becoming an incredibly attractive place for professionals to live, work, and raise a family."

Oklahoma City, Oklahoma

"Oklahoma City is leveraging deep expertise in energy and natural resources to fuel the creation of high-growth, tech-enabled startups in the state's capital. Many of these startups are supported by a highly effective network of organizations that are set on helping Oklahoma City rise — like StitchCrew, the Oklahoma City Thunder Launch Pad, and i2e."

Northwest Arkansas

"Northwest Arkansas benefits from the anchors of Walmart, Tyson Foods, and JB Hunt—established companies that help the region attract businesses focused on supply chain, food, and consumer retail. Regional universities and business councils are not oblivious to this regional advantage and are working hand in hand to support the growth of startups looking to innovate in supply chain and agriculture. Now, national players like Endeavor and Plug & Play are taking notice and planting roots in the region to compliment home-grown startup support efforts from longtime players like Grit Studios and Startup Junkie."

St. Louis, Missouri

"We first visited St. Louis on our second Rise of the Rest Road Trip in 2014, and are looking forward to being back to explore how the region is poised to become a hub for agtech. In addition to the native farming and agriculture talent that exists in Missouri — anchored by efforts from Cortex, BioSTL, Yield Lab, the Danforth Center, and others — local universities with renown programs in agriculture and the sciences are creating a strong talent pipeline. During our stop in the Gateway City, we'll be championing this narrative of St. Louis as an agtech hub while hosting a national food and agriculture-focused pitch competition."

As with any other Rise of the Rest visit, the tour is connected to Case's worldview, which he describes in detail in his book "The Third Wave." As he sees it, AOL led the pack of the first wave of the internet, establishing the networks that led to the second wave of internet companies — like Facebook, Google, and Amazon — where the rise of smartphones helped make near-instant online access an inescapable facet of life.

The third wave that Revolution is tapping into, is where the "internet of things" will essentially become the "internet of everything," where we will move past novelties to industry-transforming developments like new methods of collecting and analyzing real-time livestock and crop data.

He's not pretending that major startups aren't going to continue emerging from America's existing startup hubs. But he and his team are looking to take advantage of the industry connections and specialized talent pools across the country. David Hall is the managing partner for this second Rise of the Rest fund, and he wants these investments to inspire more people to stay in their home states rather than head to the coasts.

"We see it as such a huge growth engine for the future of the US economy," Hall told Business Insider in October.

SEE ALSO: AOL founder Steve Case is doubling down on his bet that the future of startups is outside Silicon Valley. Here's what entrepreneurs from the heartland need to know about his VC's second $150 million fund.

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NOW WATCH: Steve Case on why he's investing more in startups outside of Silicon Valley and New York

Here's when you can expect your tax refund to hit your bank account, according to the IRS

Tue, 01/14/2020 - 5:53pm

  • The IRS will be accepting 2019 tax returns beginning Monday, January 27.  
  • Whether you file taxes electronically or by paper, the fastest and safest way to receive your refund is to request direct deposit.
  • The IRS issues 90% of tax refunds within 21 days of filing, but it could take up to six weeks if you file by paper.
  • The IRS has resources to help you file your taxes and track your refund.
  • This post has been reviewed for accuracy by Thomas C. Corley, CPA.
  • Read more personal finance coverage.

Most people dread filing their taxes — but nearly everyone is hoping for a refund.

If you're expecting to get money back this year, you may be wondering exactly when you will receive your tax refund. The short answer is that you'll almost certainly receive it within three weeks of filing your tax return, which you can do as early as January 27.

Where's my tax refund?

Filing online and requesting direct deposit is the quickest way to get your federal tax refund, according to the IRS, which issues 90% of refunds within 21 days. Your state refund, however, may take longer.

According to IRS data, over 111 million Americans received federal tax refunds last year, averaging $2,860 per refund. Just over 138 million taxpayers filed electronically and nearly 92 million received their refunds via direct deposit.

Taxpayers can check the status of their tax refund using the IRS's refund-tracking service within 24 hours of filing a tax return online or within four weeks of mailing a paper return. The IRS updates its system daily, usually overnight.

To check your refund status, you'll need three things:

  • Your Social Security number or individual taxpayer identification number
  • Your filing status
  • The exact refund amount
When will I get my tax refund?

After the IRS processes your tax return — which typically takes up to three weeks from your filing date — it will deposit your refund in up to three separate bank accounts, as long as they're held in your name as an individual account or you and your spouse's name as a joint account.

If you file by the traditional paper-and-pencil method and request your refund as a check, it will generally arrive via snail mail within six weeks of filing. If it doesn't, an error or incompletion may be holding up the process.

For taxpayers claiming credits, refunds may take longer. The IRS says certain credits, including the Earned Income Tax Credit and the additional Child Tax Credit, can not be issued until mid-February as a means to protect against identity theft and tax fraud. Those refunds usually become available in early March.

Still have tax questions? Connect one-on-one with a tax professional through JustAnswer, a Business Insider partner »

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Here are the top venture-capital firms in the cannabis industry, and where they're looking to place their next bets

Tue, 01/14/2020 - 5:30pm

Despite a challenging year in the cannabis industry, venture investors poured over $2.3 billion into cannabis startups in 2019, up from $1.5 billion in 2018.

The industry was hit with a number of headwinds, including slower-than-expected retail sales in Canada and legal jurisdictions in the US, as well as a spate of vaping-related illnesses in the US that prompted some states to introduce bans on the sale of vaping products.

As part of a broader effort to track who's investing in cannabis — and where that money is going — Business Insider identified the top 14 venture funds based on how many deals they landed in 2019.

Check out the exclusive list here.

We also queried the investors on their outlook for 2020, and where they're looking to place their next bets. 

The firms told us they were looking to invest in areas such as advertising technology, international opportunities for CBD and hemp, drug-delivery platforms, lab testing, and synthetic cannabinoids.

One of the most common predictions Business Insider heard from venture capitalists was that 2020 would be the year when a few brands "pull away from the pack" and emerge as the top brands in cannabis.

Click here to see the full list of the top VCs in cannabis, available exclusively to BI Prime subscribers.

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Here's the lowdown on those payment plans you see when you shop online, like Afterpay and Affirm

Tue, 01/14/2020 - 5:15pm

  • Point-of-sale (POS) loans have become increasingly popular, with offers from companies like Afterpay, Affirm, and QuadPay popping up on many retailers' sites.
  • POS loans offer the opportunity to buy a product now and pay for it in installments, like layaway but in reverse.
  • These short-term loans may be beneficial for consumers buying large items, like furniture or appliances, who have the money in their monthly budget to make payments. But they can also encourage poor spending habits.
  • Read more personal finance coverage.

The concept of "buy now, pay later" has long had appeal. Credit cards make it easy. But, increasingly, according to research from, people are choosing alternative point-of-sale (POS) lenders to fill that financial gap. 

A POS loan is essentially the opposite of layaway. With layaway, you pay for your item over time and then take it home when you've cleared your bill. 

With a POS lender, you get your item first then pay for it over a specified period of time. Companies like Affirm, Afterpay, Klarna, and QuadPay, are among those offering POS lending.

These services are widely available, too. Says Ted Rossman, industry analyst for, "Some of them are linked to participating retailers (such as Affirm, which partners with Walmart among others, and Afterpay, which partners with companies such as Forever 21, MAC Cosmetics, and Billabong to offer loans). Others (like Klarna) can be used at any website (they give you a 'ghost card' number to input at checkout)."

But like any financial product, it's important to do a deep dive first to find out if it's right for you.

How are POS lenders different from credit cards?

First of all, POS lending is only possible through certain retailers, while credit cards can be used to buy virtually anything.  

"Additionally," says Leslie Tayne, a debt resolution attorney with the Tayne Law Group, "the amount you're borrowing is based on your purchase with point-of-sale lending, rather than on your credit limit. Interest rates can be similar on the two and funding is immediate." 

Your loan duration will vary based on the lender; it can be 30 days, a few months, or one or more years. Borrowers make monthly payments until their final payment comes due or they pay off the loan early.

Also, opening a credit card is a hard inquiry that shows up on your credit report, while point-of-sale lending is just a soft inquiry.

Finally, POS lenders are underwriting the borrower on each new purchase, which protects them from extending too much credit. Credit card companies, on the other hand, extend a  line of credit to consumers that renews as the balance is paid off.

Know what you're getting into

Make no assumptions and do your research to be clear on what each lender offers before signing on for a loan. Each lender is different.

For example, with Klarna, you have no interest and no fees, and you spread the full purchase price over four bi-weekly payments. There is no credit check, and you can pay off the full amount at any time. Klarna has 190,000 global merchant partners. It is used for shopping online and is expected to be available in stores in the U.S. early this year.

With QuadPay, borrowers pay in four installments over six weeks with no interest charges. You can shop online using the QuadPay app anywhere Visa is accepted and anywhere in store via the QuadPay app using Apple Pay or Google Pay. 

It's also important to price shop with POS loans. Calculate the total cost (including any interest and fees) of purchasing the goods on a credit card with a fixed annual percentage interest rate for the same number of months as your planned installment loan and see which is a better offer.

The pros

POS lending may offer a better option for those looking to make large purchases without a credit card since you know how long you'll be making payments and when you'll be debt-free. As with a personal loan, your payments are predictable every month.

Plus, says Tayne, "The combination of the lack of the need for credit history with the ability to make set monthly payments can make this an attractive option for big, one-time purchases, such as mattresses, furniture, or electronics, as long as you have it in your budget to pay it off."

The cons

While POS lending has appeal, one of the biggest drawbacks of these loans is the interest rate, which can be as high as 30%, according to Tayne.

Then there's temptation. Just like a credit card, the idea of paying later can give you the go-ahead to buy now and worry about it next week. Discipline is needed to avoid overspending. The last thing you want is to take on more than you can afford, especially if you have a stack of bills already. 

Because the POS lending algorithms don't place as much weight on factors such as credit history, borrowers taking out these loans may be extra susceptible to poor credit habits. 

And, if you wish to return what you've purchased, you'll have to work with the retailer rather than the lender and still may end up having to pay some amount of the loan. 

With Affirm, for example, you'll only get a refund if the merchant receives your returned items and processes the refund within 120 days from the date of purchase. Affirm will credit any loan payments you've made, up to the refund amount, but you will not get back the interest you've paid on the loan.

Installment programs can affect your credit. For example, Affirm reports to credit bureaus, while Klarna does not. Pay off your installments on time and in full to keep your credit healthy. 

Be clear about any fees associated with the loan. Search for the best deal. You don't want any surprises like late payment fees and deferred interest. 

Is POS lending right for you? 

Just like with credit cards, POS lending can be great if you use it correctly. Where credit cards can help you build up credit and earn perks and rewards, they're only good if you're spending within your means and able to pay off your balance in full every month.

The same is true with POS loans. If you're able to make your monthly payments without going into debt, they can be great for making large purchases. But beware: They can make shopping too easy. Before you know it, you could have a stack of POS loan bills due every month, and that's definitely not good for your bottom line.

"If you're in debt, then cash and debit are better options," says Rossman. "Point-of-sale lenders focus on discretionary purchases – generally, not food and shelter — so it's important to avoid this sort of consumer debt." 

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NOW WATCH: People are still debating the pink or grey sneaker, 2 years after it went viral. Here's the real color explained.

7 tricks to cut your grocery spending in the new year, according to a chef

Tue, 01/14/2020 - 5:11pm

  • Chef Joel Gamoran, who focuses on sustainability and food waste, says there are many ways to make your groceries go further. 
  • If you want to reduce your grocery bill, he says, consider changing grocery stores, learn how to use the groceries you buy more efficiently, and follow the "five-minute rule."
  • Read more personal finance coverage. 

Grocery stores probably aren't where you want to be spending your money.

Joel Gamoran, a chef who focuses on sustainability and food waste, says there are many ways to make your groceries go further. 

From spending more time shopping at the meat and deli counters and bulk bins, to making your own otherwise-expensive condiments, sauces, and salad dressings at home, here are seven tips to help you cut your grocery spending this year. 

1. Follow the 5-minute rule

A lot of the things that eat up your grocery budget are simple to make at home with little effort.

"I have a five-minute rule: If you can do it in under five minutes, you should do it at home," says Gamoran, the author of "Cooking Scrappy: 100 Recipes to Help You Stop Wasting Food, Save Money, and Love What You Eat" and the star of A&E's series "Scraps."

"For example, chicken stock or vegetable stock. Maybe you made an omelet with onion, so you have onion peel, and maybe you had a roast chicken, for example," Gamoran says. The only prep it requires is a rough chop of ingredients and adding water, and other than that, it will make itself on the stove. "In a cost test, you're talking about water versus $5," he says.

2. Forget the fancy condiments — you can make them

"You see a lot of fancy salts, condiments, and oils these days," Gamoran says. "A lot of people buy that. It's a total waste of money." 

Things like infused oils are simple to make. "I heat up my vegetable oil, which is soybean oil. Then, I put in whatever I have left in the kitchen. It's infusing it like tea, and you can have your own flavored oils at home for a one-twelfth of the cost," he says.

The same goes for salad dressing, he says. "Salad dressing should have three ingredients: a really good neutral oil, some sort of acid, and a sweetener. That's it," he says. "It will stay good in your fridge for a long time, and salad dressings at the store average six to seven bucks. Again, you're talking about a five-minute deal."

3. Skip the packaged meat section and go to the butcher counter

Pre-packaged meat is often overpriced, says Gamoran, and you can save by simply going to the meat counter and finding whole pieces. 

"Try and find a cut of any meat that is kind of whole as opposed to its own cut. It doesn't matter if you don't know how to break it down," says Gamoran, adding that it can be done for you behind the counter. 

"When you go to the grocery store, you see that whole fish no one ever buys because they're scared to cut it. The best thing you can do is hand that over to the butcher, have them cut it and then give you the bones, give you everything, and you just doubled your money," he says. "I think it's a waste to go for single packaged animal protein."

4. Bypass prepackaged meats and cheeses and head to the deli

Buying things in packages often restricts you to buying more than you need, and that can be a big money waste. With deli and meat counters at grocery stores, this is often an option you have. 

"You don't need to go get a big, giant thing of bacon. You can get a slice or two just for the recipe at the meat counter, and then you don't have 10 slices left over," Gamoran says. "If you can find those little pockets in the grocery store that allow you to portion out smaller sizes for a single recipe, I think that's a really good way to go."

The same thing goes for cheeses and anything you can get on the olive bar. "A recipe might call for capers, and you have to go buy a big jar of capers only to have 80% left over. At the pickle bar, you can just go grab a tablespoon of capers," he says. Using these various counters and fresh bars can help you save several dollars compared to their pre-packaged counterparts.

5. Be friends with your freezer

Gamoran says that one of the best tools for saving money on groceries is already in your kitchen: your freezer. 

"Make best friends with your freezer. A lot of people think frozen food is inferior food, but the  freezer is so crucial to meal planning," says Gamoran. Using your freezer to have easy-to-make meals on hand for when you just don't feel like cooking can cut your restaurant spending, too. 

The freezer can also help you save things for later. "I think it's okay to follow a recipe and have extra ingredients left over, but what's not okay is to let those extra ingredients go bad," he says.

Many things can be used later, and the freezer can help. "Extra little pieces of meat that you didn't use are great for the freezer; so are extra mushrooms. Utilizing the freezer will extend the life of food up to four times," he adds.  


6. Start meal planning the easy way

Meal planning can be a great way to save time and money. If done right, a few ingredients can transform into a week's worth of meals. 

"For meal planning, you start with the base. Start beefing up your whole grains and carbs, and think outside the box. Incorporate new things that are cheap and cost-efficient, like couscous or quinoa. There are so many options now," Gamoran says.

"On a Sunday or Monday night, you can make a big pot and then it can transform into a lot of different things. You can have a quinoa salad on Monday for lunch, and you can have a quinoa fry on Tuesday," he says. Once your base is picked out, you can swap in different things all week long to keep it interesting and fresh. 

7. Use your store's bulk section

Everything is cheaper in the bulk section, where items are sold without packaging. 

"Shop in bulk, no question about it," Gamoran says. "You should never buy things like almonds pre-packaged." 

It's not uncommon to find things selling for less than half of what the packaged version costs in the bulk section. Most stores have bulk sections, and by simply buying here, you can save. "Bulk is huge," Gamoran says. 

How to use Southwest's Companion Pass, which gets you two-for-one travel on both paid flights and award tickets

Tue, 01/14/2020 - 5:09pm

Southwest offers one of the most generous airline benefits around: the Companion Pass. With this perk, you can bring along a friend for free on all Southwest flights — both those that are paid and those booked on points. They'll only have to pay for taxes and fees.

In early 2019, Southwest ran an amazing promotion that granted new credit card holders the Companion Pass for a year after they met a minimum spending requirement. Unfortunately, that offer is no longer available, but you can still earn the pass by flying, earning qualifying points, or a combination of both.

In fact, the three personal Southwest credit cards are currently running sign-up bonuses of up to 75,000 points — earning the full bonus would get you more than halfway toward qualifying for the Companion Pass, and unlike with last year's enticing sign-up offer, you'd get the Companion Pass for the rest of the year in which you earn it, as well as the entire following calendar year. 

Once you've earned the Companion Pass, you'll want to be sure you're making the most of it, stretching the value of your dollars and your points used to book travel on Southwest. Here's everything you need to know.

Refresher: How to earn the Companion Pass

You need to earn 125,000 qualifying Southwest points or fly 100 one-way flights in a calendar year to obtain a Companion Pass. 

If you don't travel frequently, the good news is that Southwest credit card sign-up bonuses count as qualifying points toward the pass. You can open one of the three personal Southwest credit cards, and you'd be a good chunk of the way there.

If you can qualify for a business credit card, you could also open one of the two Southwest business credit cards to earn another sign-up bonus. With two sign-up bonuses, you could qualify for the Companion Pass without needing to earn any additional points.

With the following three cards, you can earn up to 75,000 Rapid Rewards points, which get you more than halfway toward qualifying for the Companion Pass. You'll earn 40,000 points after you spend $1,000 in the first three months, and another 35,000 points after you spend $5,000 in the first six months:

There are also two Southwest business credit cards:

Getting started with the Southwest Companion Pass

As Companion Pass holder, you can book your flight to your desired destination using cash or points. Once your flight is confirmed, you can add a second passenger (your companion) for the same flight online or by phone.

Designate your companion

However, before you start scouring the site for flights, you must first designate who your companion will be. To do so, log onto your Rapid Rewards account at Southwest. On your Snapshot tab, click Choose Your Companion. Then, enter the information about your companion and follow the instructions until the process is complete.

If you prefer to speak to a representative, you can call 1-800-435-9792. After you complete the companion-designation process, a Companion Pass member kit and membership card will arrive in 7-10 business days.

Don't worry — you don't need to wait for your Companion Pass member kit to come in the mail before you start booking tickets!

Add your companion to a reservation

Once your flight is booked, visit the My Trips section of your account. Find your flight in the section titled "Upcoming" and click on the "Add Companion" link. Here, click "Continue" to proceed to the next step where you can purchase your companion fare and review the information. Once you hit the "Purchase" button to complete your booking reservation, you're all set.

You can also book through a Customer Representative (1-800-248-4377) and notify them that you will be using a Companion Pass. This is a lesser-known alternative that could be more useful because it can sometimes take up to 24 hours before you can add your companion online (though in my experience it has never taken this long).

Who can I designate as my companion?

While the Companion Pass is good for only one companion, you can change who your companion is up to three times per year. One thing to keep in mind is that you can't change your companion every month, so try to think of someone you travel with frequently, such as a spouse, friend, or family member.

Additionally, you can't book future flights with one companion, change your companion, and then book more flights with the new companion. Any future flights scheduled with the first companion will have the companion ticket canceled when you change your companion.

How to change your designated companion

If you're looking to change who your companion is, you can do this up to three times per year. However, you cannot make the switch online yourself — you need to speak with Southwest directly (1-800-435-9792). The process is straightforward. A customer representative will take the information about your new designated companion and make the switch for you.

Note that until your trips with your current companion are complete, you will not be able to book a new flight with your newly designated companion. For example, if you're traveling to New York City with your sister in May, but want to fly to Los Angeles with your husband in June, you will not be able to add your husband as your companion until your trip in May is completed.

One workaround to this is that you can still book a flight for yourself, and then add your companion after flying the last leg of your previous trip (in this case the May trip) as long as there is still a seat available on the flight. If you use points and need to cancel for any reason, all of your points will be restored to your account.

Are there any restrictions?

One huge benefit to having the Companion Pass is that you can use it whether you book your flight with points or with cash. For example, even if you book a flight for yourself using points, your Companion Pass still qualifies so you can bring your companion with you for only the cost of taxes ($5.60 each way on domestic US flights). There's also no limit to the number of flights you can use the Companion Pass on.

Bottom line

From the beach to the mountains, Southwest Airlines offers almost to breathtaking locations throughout the country, and beyond. Whether it be Mexico, the Caribbean, or Central America, there are endless vacations to dream up and fly to with your favorite person (even if your favorite person changes during the year).

$69 annual fee: Click here to learn more about the Southwest Rapid Rewards Plus card » $99 annual fee: Click here to learn more about the Southwest Rapid Rewards Premier card » $149 annual fee: Click here to learn more about the Southwest Rapid Rewards Priority card »

SEE ALSO: All our credit card reviews — from cash-back to travel rewards to business cards — in one place

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Wells Fargo takes a $166 million wealth-tech hit as new management rethinks big projects (WFC)

Tue, 01/14/2020 - 4:20pm

  • Wells Fargo's massive wealth and investment management division reported $166 million in technology-related expenses in its fourth-quarter earnings results on Tuesday.
  • The item, "expenses related to the strategic reassessment of technology projects," marked the second-straight quarter of such a technology project-related hit that came out to north of $100 million.
  • The San Francisco-based bank, which counts controlling costs as a main goal under new leadership and has been advertising more tech roles than in the past, declined to elaborate on these expenses.
  • Still, the two large technology costs underscore the very fluid nature of the firm still trying to put its massive fake-account scandal that came to light more than three years ago.
  • These costs and management's shifting plans around tech in that unit come as fast-evolving wealth-tech is re-shaping virtually every channel within the broader wealth management industry.
  • Visit BI Prime for more wealth management stories.

Wells Fargo's massive wealth and investment management division reported $166 million in technology-related expenses when the bank reported fourth-quarter earnings on Tuesday.

The item, "expenses related to the strategic reassessment of technology projects," primarily "equipment expense," marked the second-straight quarter of such a technology project-related expense north of $100 million.

In the third quarter, the wealth and investment management arm — among the country's largest by number of advisers and client assets — reported a rise in non-interest expenses largely due to "higher equipment expense including a $103 million impairment of capitalized software."

The San Francisco-based bank, which counts controlling costs as one main goal under new leadership, declined to comment to Business Insider on what specifically these expenses were.

Still, the two large technology costs underscore the very fluid nature of the firm still trying to put its massive fake-account scandal that came to light more than three years ago and led to the ousting of two chief executives and an unprecedented limitation on growth imposed by the Federal Reserve.

These costs and management's shifting plans around tech in that unit come as fast-evolving wealth-tech is re-shaping virtually every channel within the broader wealth management industry — particularly as cheap, automated, human-less solutions aimed at younger generations have gained momentum, challenging legacy brands and business models.

And it's not just the competitive client-facing tech that's under a microscope. Wealth and asset management firms are constantly challenged to up their own wealth-tech offerings for financial advisers; we first reported the New York asset manager Neuberger Berman has been overhauling its client- and adviser-facing digital portals and platforms.

Wells Fargo's cost problem

Analysts and regulators have needled Wells Fargo executives about specific steps they are taking to earn back the public's trust, cut back on costs, and improve relations with Washington

An analyst asked the bank on Tuesday what drove the $166 million wealth tech expenses and "whether there could be other IT projects that you're looking at reassessing or cutting." 

Wells CFO John Shrewsberry said a shift in priorities under Jon Weiss, head of wealth and investment management, in handling technology that supports different parts of the wealth business resulted in an impairment charge related to software development. 

"I wouldn't anticipate seeing a lot more of that. And to be honest, we don't have an extraordinary amount of capitalized software development costs. So the risk isn't that great from an accounting perspective," he said. 

Weiss was named to his post in 2017 after serving in various roles since joining the firm in 2005.

Wells Fargo in July 2019 shuffled senior leadership across several units, including one of Weiss's direct reports. Jim Hays was named head of Wells Fargo Advisors, reporting to Weiss, and replaced the former head David Kowach, who moved over to lead community banking.  

Wells Fargo overall has been advertising more tech roles than in the past, according to a recent job-listing analysis from Jefferies and the data provider Thinknum.

Executives answered many questions related to reducing costs — which have risen in part to paying for litigation and brand marketing in the scandal's wake. 

"Our expenses were too high and becoming more efficient remains a top priority," Shrewsberry said of expenses broadly on a call with analysts on Tuesday. 

And chief executive Charlie Scharf, addressing his first earnings call in that post, said more pointedly: "We don't sit here and believe that we have carte blanche to spend whatever we possibly want on any issue. We are going to spend what's necessary on these historical issues." 

Broadly, the firm reported quarterly results that fell short of Wall Street's estimates. Investors dumped the stock as shares fell as much as 5% in afternoon trading. 

"Overall, results were below our expectations on lower revenues and higher expenses," analysts from the firm Keefe, Bruyette & Woods led by Brian Kleinhanzl said in a note to clients on Tuesday.

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