Meet Finalis, MSIV’s First Investment
Q&A with Founder & CEO Federico Baradello
Wednesday, March 2, 2022 from Corte Madera, CA
In 2021, Marin Sonoma Impact Ventures launched the North Bay’s first regional venture capital fund and began deploying capital into Marin + Sonoma’s most promising startup companies.
Today, we are excited to publicly announce the first of our investments, which we completed last year. Meet Corte Madera’s Finalis, a fintech company that is on a mission to power dealmakers by building the world’s largest private securities brokerage platform.
Finalis is the leading platform enabling private securities brokerages to operate legally and compliantly. The company delivers a white-labeled regulatory affiliation and compliance back-office solution that supports a wide range of private market dealmaking including M&A, capital raising, private placements, direct participation programs, fintech marketplaces, and alternative investment sponsors.
Why We Invested
Over the past few years, legacy brokerage business models have been under significant pressure as tech-enabled upstarts, most notably across the proptech and insurtech verticals, have made significant inroads with a customer base desperately seeking better tools, service, and economics.
Finalis is well on its way to ushering in the same kind of change for the investment banking industry and building the largest dealmaking platform in the world. In this highly regulated yet lucrative industry, Finalis is the first company to truly bring to market a scalable, tech-enabled compliance solution that can also be utilized by dealmakers to run their day-to-day business. Modernizing the technology stack of the long-tail of the investment banking industry is painstaking, unsexy work, yet one that carries with it an unmistakable opportunity that Finalis is poised to capture.
Their traction is clear and accelerating as, in February 2022, Finalis announced the onboarding of its 100th dealmaking partner to the platform.
MSIV is privileged to be supporting the team on this journey to remake the dealmaking industry and we are thrilled that key components of this effort are being driven out of Marin County.
Finalis team at a recent offsite gathering
Today we are shining the spotlight on Finalis Founder & CEO Federico Baradello. MSIV Founder & Managing Partner Zachary Kushel sat down with Fed to discuss his entrepreneurial journey and all that is ahead on the Finalis journey.
ZK: Fed, where did the inspiration behind launching Finalis come from?
FB: Well, I’m a former Kirkland & Ellis deal lawyer. Prior to Finalis, I spent the better part of my career doing middle market technology company buyouts for private equity fund sponsors such as Vista and Silver Lake. And what became apparent was that there was a central irony in all of my work: I was working on some of the hottest tech buyouts in the country, yet I was using a 30-year old technology stack to actually execute those transactions.
To me, this made no sense. As an “older millennial,” I’m part of a digital native generation that is very comfortable operating in the cloud, and so it was a mystery to me that, during a time when all of the people driving these transactions forward were running their personal lives out of the cloud, we were managing the most critical aspects of our careers – trillions of dollars’ worth of private market deal flow – using antiquated technology.
Finalis Founder & CEO Federico Baradello
ZK: What specifically was broken about these legacy processes? What were the real pain points?
FB: There are no shortage of anecdotes that I can share, but I have distinct memories of physically printing out signature pages for a deal closing and driving them to the house of a partner of a private equity firm so that he could physically sign them. After each deal would close, I would oftentimes complete an audit of how many emails I had sent and received just quarterbacking the deal execution process, and I found that oftentimes that number would be as high as 10,000 e-mails!
At Finalis, we decided early on to focus our efforts on the digital transformation of investment banks and other private securities brokerages. We soon realized that a great place to start within that enterprise was solving regulatory and compliance-related pain points. So we built a solution through which private securities brokerages can affiliate their regulatory licenses and attached them to a tech-enabled compliance solution that allows brokers to process their transactions, communicate with a compliance officer, and manage their entire deal lifecycle all out of a single platform.
ZK: What does your typical customer look like?
FB: The private securities brokerage industry has multiplied in size over the past twenty years, and the bulk of that growth has been driven by the long-tail of the industry – that’s everything from a solo dealmaker (somebody monetizing their relational capital to generate deal flow) to that 30 or 40 person boutique investment bank and everything in between. The Finalis platform focuses on building solutions for these players that have long been underserved by the existing businesses serving the space.
ZK: You grew up here in Marin and have strong family ties to Latin America. What was it like growing up here with such strong ties to both communities?
FB: We moved around a lot when I was growing up because my father kept relocating for work reasons. I was born in Connecticut, lived in Europe, different places along the east coast – we must have lived in 7 or 8 places – by the time we finally found our way to Marin County. And what’s so interesting is that when we arrived in Tiburon, we really dropped the anchor, and my mom refused to move ever again, for such obvious reasons, and my parents continue to live here to this day.
Growing up, we were always the only Argentinians we knew in our community. It was always exciting for me to think about my family as a bridge between these two very distinct worlds. I have such an appreciation for my heritage and my roots in Argentina, and now today both my wife Claire and I are so excited and committed to building our life and making Marin County our own, and to shaping this community’s future for the better.
Fed, his wife Claire, and dog Finley in Tiburon
ZK: Tell us your vision for the future. Five years from now, when Finalis is successful beyond your wildest dreams, what might that look like for you as a company, and what might that mean for the North Bay?
FB: There’s a transformative shift underway that is challenging the conventional wisdom of how private securities are brokered, and it’s no longer about necessarily going to Wall Street. We are seeing a bourgeoning group of independent dealmakers and practitioners monetizing their relational capital to connect capital seekers with capital providers. It used to be that only the privileged few had access to private capital, but the new reality is that the barriers are decreasing rapidly. Finalis is at the forefront of that democratization in terms of who we’re empowering, and I believe that five years from now so much more of that vision will be reality.
As for the community, it’s always been a mystery to me that Marin has not seen more startup companies locate here, and this is a big part of the reason why we were so excited to receive this investment from MSIV. We are very much aligned with MSIV’s vision and are huge believers in building a more robust startup community north of the Golden Gate Bridge.
With COVID, the model around where you live and where you work is changing in real-time, and I do believe that all these shifts will be playing out in Marin’s favor. Knowledge workers are now empowered to optimize for living and working in places like Marin, where one can enjoy a great quality of life for themselves and their families. For Finalis, as we continue to scale, there will be opportunities to develop a physical presence here, and we are excited to figure out exactly what that looks like. We know we have a role to play in developing Marin’s local startup ecosystem in the days to come and are excited about what that future will bring.
Zachary Kushel is Founder & Managing Partner of Marin Sonoma Impact Ventures.
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