Innovative exchange blooms in New Orleans
Local business leaders often promote New Orleans as a growing hub of entrepreneurism, pointing to the surge of small start-ups now setting up shop here. One of them, the Receivables Exchange, has recently earned a major honor that’s further validating this civic enthusiasm.
The Wall Street Journal gave the company its 2010 E-Commerce Technology Innovation of the Year Award as part of a competition that recognized 49 firms selected from among 600 contenders around the world.
Formed in 2007 by Justin Brownhill and Nic Perkin, the Receivables Exchange is an online marketplace where small and midsize businesses can auction their receivables, or their invoices for money owed to them by customers. It allows these companies to access the cash tied up in their invoices faster than by using conventional business loans.
“The fundamental principle is that business in the 21st century happens very, very fast because everyone is connected,” says Perkin. “We’re synchronizing the speed of business today for small and medium-sized businesses with access to working capital.”
Brownhill and Perkin, both 39, have experience with earlier start-up companies, though none had been in New Orleans. But Perkin, a graduate of Tulane University, says a methodical search process led them to base the business in the Crescent City. State tax incentives were an important consideration, he says, but eventually the choice came down to the cultural appeal of New Orleans combined with its relatively low cost of living. He says this eases start up costs and helps employees afford to take the risks associated with joining a new firm at its earliest stages.
“Being in New Orleans allows you to have one of the top quality-of-life experiences in the country and at a fraction of the cost of other cities,” he says. “That’s a great combination for start-ups. The money we raised (through venture capital) has taken us so much farther than it would have in other cities, and that’s incredible.”
Based in the Central Business District, the company has grown from a single employee and its founders to 70 employees today, with 50 working in New Orleans and the rest at offices in New York and San Francisco.
“I hope in the not too distant future that New Orleans is known as the city where receivables are exchanged.” Perkin says, “and where small and medium companies access working capital.”