Sramana Mitra: Perhaps we should work together to some extent, this is very aligned to what I do. I can understand why you guys approached us to be featured. Is there anything else that you want to add to what you have shared so far?
Joe Silver: A couple of additional interesting things about our company, I would say we are international now. We launched recently in Canada and closed our first loan there. This is a big step in the right direction for us.
We have lent in over 35 states across the US wherever an entrepreneur is. Going to Canada is the next step. We are soon to launch in Australia as well. We have a key strategic partner in the National Australia Bank. They are helping us get in over there. Geographic expansion is really the key to what we are doing.
Sramana Mitra: Let me ask you a few things to help me gauge the international strategy. Do you meet every single entrepreneur? Does somebody in the firm need to meet with the entrepreneur in person?
Joe Silver: Absolutely not. We have built this company as a technology company, so everything that we do – sourcing buyers to making loans to managing the loan portfolio is all tech-enabled. That’s helped us scale magnificently without needed folks. We’ll have a couple of phone calls through the process but everything is tech-enabled in a quick and easy way.
We don’t want entrepreneurs to spend their time hunting for finance sources. We want them to develop and sell great technology. Folks can hook up their accounting platforms directly to us via API. We can analyze all the financial information and come back with a proposed loan quickly.
It just depends on how quickly the entrepreneur can get us the information. There may or may not be a couple of phone calls along the way to learn a little about the business model. We don’t meet folks in person. We are interested in cash flows and understanding the financials.
We don’t make judgments based on who the management team is or what the technology is or if they are giving us the right answer or not. As lenders, we are agnostic to all those factors. We are just interested in the financials which helps us reach companies that may not be able to attract your typical VC type of investment.
Sramana Mitra: Basically it’s six months of a minimum $15,000 MRR that is the qualification criteria and then it goes up from there.
Joe Silver: Sure, we’ll take a look at customer churn and customer concentration. Some folks are selling to small businesses, so they might have limited concentration but higher churn.
Others are selling to large enterprises so they’ll have higher concentration but a higher churn. Again we’ll look at that cash flow profile and try to understand that but you are right at those starting points of the revenue profile.
Sramana Mitra: We are global, so our portfolio is 100% global and spread out. The US is still number one for us, but I would say our number two geography is India.
Joe Silver: We see a lot of companies in our portfolio with a significant presence in India. We need to see some sort of entity set up in the United States to be able to lend just by our guidelines. If there are subsidiaries, sister entities, or employees in India, we do that all the time.
Sramana Mitra: Thank you for your time.