Cadence is a crowdfunding platform focused on providing short-term debt investments under Reg. D. The firm uses a blockchain-based platform (don't worry, no Bitcoin or crypto here) to greatly increase operational efficiency and administrative processes, allowing it to offer investment minimums as low as $500 per investment; previously, the unit economics of having a large pool of investors with low minimums were unfeasible due to high administrative costs.
The Firm uses a self-formulated risk framework to vet all inbound deal flow, and only lists an investment if it satisfies all of the criteria contained in its diligence process. When analyzing prospective investments presented by its origination partners, Cadence also utilizes institutional underwriting practices and security structures specifically designed to protect investor principle. It’s clear that Cadence makes an effort to offer listings from a diverse group of originators; the company offers detailed information on each of its origination partners, including statistics on how many deals they’ve had listed on Cadence and weighted average returns data. When considering an investment on Cadence’s platform, in addition to weighing the prospective investment itself, it’s also important to perform due diligence on the origination partner. The experience and general profile of the originators on Cadence’s site varies significantly. While some have demonstrated a 10+ year track record of generating returns, others operate in riskier geographic markets (i.e. South America) or relatively nascent sectors. Cadence's returns indicate that it is bearing risk somewhere, and it’s important for investors to understand this risk is on a deal-by-deal basis.
Cadence’s strongest point of differentiation lies in the ultra-short-term nature of many of its deals--some as low as 1 month. The short duration of Cadence's deals presents a highly compelling and, thus far, largely unique opportunity for investors to achieve competitive yields in a highly liquid alternative investment product. The relative liquidity of Cadence's deals stands out in an alternative space typically characterized by investments with lengthier capital lock-up periods. Past investment opportunities on the platform, all of which have been fully funded, show deals in a range of industries and durations that boast annual yields ranging from approximately 8-15%.
With strong risk-adjusted yields, high liquidity, and low investor minimums, Cadence is a compelling option for accredited investors and worth a serious look. Depending on your investment strategy and your preferred level of involvement, the only potential issue with Cadence is the requirement to frequently engage with the platform to keep capital at work due to the shorter investment periods.