April 17, 2001, 10:55 AM — IN MAY 1999, LAURENT PAULHAC presented his little-known startup to some of the nation's biggest companies and won the chance to build them a website to support important financial transactions -- and in the process make his new company profitable.
Like others with Internet ambitions, CEO Paulhac brought an entrepreneurial zeal to the table. But his company, Prescient Markets, was also smart enough to grab an expert partner well-known to his prospective customers when the opportunity came along. Now Paulhac and his team are busy building add-on services and planning future expansion of the Cpmarket.com site.
More on Cpmarket.com's business model in a moment. First, here's a brief primer about what's traded on Cpmarket.com -- the "CP" in the website address. CP stands for commercial paper, which is a short-term note that allows large companies like Ford and Citigroup to float millions of dollars in debt from one to 270 days. Often, it's a way for these companies to manage their cash flow. The buyers of commercial paper -- mostly institutional investors and large financial institutions -- loan large chunks of money to the CP issuers, who agree to pay the money back after the set period with about 6 percent interest. The Security and Exchange Commission estimates that at any one time there's about $1.5 trillion in outstanding CP.