Why getting financing from LeafLink is a bad idea. (Part 2/4)
This data is yours.
Prior part summary: Data is not always bad.
So we established data vendors can be good and bad. Where does LeafLink fall on this spectrum?
LeafLink, a New York-based technology company, has built a powerful marketplace for retailers and wholesalers to transact canna-products. With each sale, LeafLink appends a meaningful data point to their growing trove of transactions for each business on the platform.
Now, to LeafLink’s credit (pun on its way), the higher-ups quickly figured that this database of purchases and sales is valuable stuff. In fact, through a series of number crunching and spreadsheet jiggering (read: machine learning), the team recognized this data can be a good proxy for the credit quality of the business. One fancy powerpoint and handshake later, LeafLink raised some money and started lending against the very products they are marketplace-ing.
If you are a business that transacts on LeafLink — this seems good. As a business operating in the cannabis arena, you likely don’t have access to capital. So if LeafLink is offering some form of debt (factoring, loan, line of credit), you may think to yourself, “why not take it?”
Here’s why: it is your data. You made those transactions on LeafLink. You worked hard to sell the goods or get the funds to buy them. Also, if you read their privacy policy, you are an owner of this data. You can request it any time you would like!
So why not try to get a lower rate by making that data work for you?
