How Small Investors Can Bet Big on Brands They Love
Brian Kenny: During the height of the Roman Republic, the state contracted with private companies to perform many public services. Like modern day corporations, these government contractors, called publicani, issued investment shares called particula, the equivalent of today’s over-the-counter shares. Every Roman citizen was invited to participate, and many saw it as their civic duty to invest in the empire they so loved.
Today, we’ll hear from Professor Luis Viceira about his case entitled LOYAL3: Own What You Love. I’m your host, Brian Kenny, and you’re listening to Cold Call.
Professor Viceira teaches MBA, doctoral students, and executives at Harvard Business School. He’s a financial economist, whose research focuses on investment management and capital markets. Luis, welcome.
Luis Viceira: Thank you so much.
Kenny: As I read this case, I thought this is my opportunity to get rich. I’m going to go to LOYAL3 and I’m going to begin investing. I learned a lot from reading this case. Maybe you can start just by setting the case up for us. Who’s the protagonist? What’s the scenario that the case begins with?
Viceira: The case starts by looking at the currency of the company. One of the founders of the company, Barry Schneider, is thinking what to do after taking the company to some initial and very significant successes. LOYAL3 is based on the initial vision of one of the founders, Stephen Klein, who’s an HBS graduate. He actually developed that vision when he was a student here at HBS. He had this idea of thinking about what he calls the connective owner, or the affinity investor, which is this idea that shareholders make better customers. He wanted to take that into a business model. The initial idea of LOYAL3 was actually to provide the consumers to be shareholders in a way that was cost effective for the small investors, the small consumers.