Speaker Profile: Pitichoke Chulapamornsri
Have you ever wondered how the city of Boston paid for the construction of the Brookline Public High School and the T? Or how San Francisco funded the building of the Golden Gate Bridge?
The answer is through municipal bonds, a debt security issued by a municipality to finance its capital expenditures. Just like how household borrow money through mortgages to make a big purchase such as a hosue, governments borrow money through the issuance of municipal bonds to fully fund all the infrastructure projects.
Our Speaker Pitichoke Chulapamornsri is the Business Development Director for Neighborly, a FinTech startup with a mission to modernize public finance. He and his company are trying to democratize access to the municipal market and simplify the process of investment so that all of a community’s members have an opportunity to decide how the government spends its money.
American cities borrow hundreds of billions of dollars annually through municipal bonds to finance critical civic projects like schools, parks, bridges and water systems. Although municipal bonds market is worth is a staggering $3.7 trillion, it is opaque and relatively untouched by the use of finTech and other online tools compared with the stock market, leading to higher prices for retail investors.
Another issue with the current municipal bonds market is that they are issued in $5,000 denominations. In a country where an average household makes $50,000, a municipal bond isn’t affordable, and a single bond would likely be a large chunk of a household’s total income.
While working as a senior analyst at Goldman Sachs, Pitichoke realized his passion lies beyond just helping his high net worth clients generate more income. He wants to leverage his financial expertise in a way that makes a positive impact in society. Therefore, he decided to go to the Harvard Kennedy School to discover the intersection between finance and public policy, and stumbled upon the municipal bonds market.
To Pitichoke, municipal bonds represent an opportunity for the public to invest in the projects and causes that they care about. His company Neighborly is bringing this vision into reality by introducing an online marketplace and smaller denomination for bonds.
“Fourteen years ago when I first came to America, I remember having to buy my plane tickets through a travel agent, who of course, charged an expensive commission. Now, with the advent of direct-to-consumer platforms like Expedia, I can just go online and purchase a plane ticket from any airline directly,” wrote Pitichoke. Similarly, Neighborly’s bond issuance platform leverages simple technology so that city administrators can go online to issue their bonds, bypassing most of the middlemen and cutting out unnecessary fees.
The city of Denver presents a glimpse of one possible municipal finance future. In August 2015, the city sold $12 million worth of mini-bonds for sustainability projects and it was sold out within the first 20 minutes. The key to this success was the accessible denominations of $500, versus the typical $5,000 minimum for municipal bonds, and the incorporation of an online platform.
Reflecting on his time at the Harvard Kennedy School (HKS), Pitichoke said what he missed the most is the fact that everyone he met at HKS was motivated by a burning desire to do the right thing, to make an impact, and to leave the world better for the next generation. Pitichoke is glad to have some of the smartest and most passionate people who care by moving to Silicon Valley.
At TEDxBeaconStreet, Pitichoke will be joining us from San Francisco and sharing his journey from Goldman Sachs and Harvard Kennedy School to the startup world. Come to our Nov 19–20 event to hear how Pitichoke and his team are making municipal bonds attractive again!
