CNote Co-Founder and CEO Catherine Berman
Catherine Berman is CEO and cofounder of CNote, an innovative fintech platform that unlocks new investment opportunities for retail and institutional investors. Working with mission-aligned community lenders, CNote aims to close the wealth gap by allowing anyone to invest in small businesses, affordable housing and economic development in financially underserved communities, with a focus on lending to women and minorities.
Berman, a three-time entrepreneur who has built and scaled multimillion-dollar businesses, left traditional financial services on a mission to build a more inclusive economy. She realized that federally certified Community Development Financial Institutions (CDFIs) were already providing accessible loans to small businesses—but investing in them was too complex for the vast majority of investors.
She co-founded CNote with Yuliya Tarasava, (COO) in 2016 to solve that problem. The two women—who have decades of financial industry experience—wanted to create financial products that decrease inequality rather than perpetuate it.
I caught up with Catherine to find out more about her remarkable journey and how this innovative approach can help create a new model for social innovation.
Afdhel Aziz: Catherine, welcome. When I heard about CNote, I was obsessed and wanted to find out everything about it. Please tell us about your journey to start CNote and where your passion for equality and social justice came from?
Catherine Berman: I come from a family of immigrants. That experience showed how challenging it can be to break through social barriers and to get truly equal access to opportunities. This desire to drive equality of opportunity has colored a lot of my work from my time volunteering as a student for Americorps to founding CNote. I want to build a more equal world—one where new immigrants like my mother would have the same opportunity my daughter has today.
Aziz: Thank you for sharing that. Please give us a quick explanation of the types of products that C-Note offers? What are the impact categories you focus on?
Berman: CNote offers fixed income and cash alternative investments. We map our investments to our 26 proprietary impact themes along with the UN Sustainable Goals. Our strongest impact investment categories include racial justice, climate crisis, immigration and refugee issues, and gender equality.
Aziz: Please explain what CDFIs are and why are working with CDFIs such a good financial investment, especially in these troubled times?
Berman: The acronym CDFI stands for Community Development Financial Institution and they are federally certified community lenders. To bring it home, a CDFI most likely funded one or more of your favorite local businesses —be it a bakery, a restaurant, a hair salon or something else. These community lenders are responsible for many of the empowering projects that keep our communities thriving, including investing in affordable housing, addressing food deserts, providing first loans to women and minority businesses, funding schools in low-income communities and other community-centric projects.
For years, CDFIs were only recognized for their inspiring impact, creating greater opportunity, and keeping communities thriving. Today, we realize that CDFIs are also an exciting investment opportunity with a proven track record for capital preservation and consistent repayment.
CDFIs are not only proven vehicles in strong financial times, they also have 40+ years of data showcasing how they successfully weather economic downturns and natural disasters. CDFIs have weathered storms in the past and they will weather this one as well. Their work is more important today because we know from the last recession that communities of color and low-income communities are hit hardest in an economic crisis. CDFIs are on the front lines of the economic response keeping these communities resilient and primed for recovery.
Aziz: How do you work with institutional investors like The Sierra Club to create customized portfolios that align with their strategic goals?
Berman: We can create personalized bonds that reflect the return, maturity and impact a client seeks. It starts with data. Our robust database of CDFI impact and geographies allows us to hyper-customize fixed-income vehicles for clients. We host over 26 impact themes, from racial justice to climate change, and have a nationwide network of cities and states where we can invest. This means you can create a fixed income bond that invests in your own backyard (“Invest in Brooklyn”) or one that invests in the movements you care about (“Invest in Wealth Creation for Women of Color.”)
Aziz: Amazing. In the future, do you see instruments like the ones you create being part of every socially conscious investors portfolio?
Berman: Absolutely. If you have access to fixed income products that not only meet your return and maturity needs but also create more of the world you want to live in, why wouldn’t you? We seek to create options where you don’t have to choose between your return and your values. By meeting investors where they are, we can deliver competitive returns by investing in the areas that matter most to clients.
