Building a Public FinTech Company From Scratch: OppFi CEO Todd Schwartz (Part 5)

Sramana Mitra: What about going beyond Illinois? How long did you do just Illinois?

Todd Schwartz: We scale nationally now. What was interesting to me was there were 17 other states that had small-dollar lending laws that we could use. What’s difficult is that each state has its own rules. We started to scale that way. There are 35 states that have payday lending laws, but only 17 have small-dollar lending laws.

Our goal was to provide credit access in a better way and, essentially, eradicate the payday loan. That was our original mission. That’s when I stepped down as CEO. I became Executive Chairman and hired a CEO.

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Catching Up On Readings: Top 10 Strategic Tech Trends 2023

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Building a Public FinTech Company From Scratch: OppFi CEO Todd Schwartz (Part 4)

Sramana Mitra: What about the technology? Did you build all that?

Todd Schwartz: I do not believe in going out and blowing a bunch of equity to build this beautiful shiny technology system. In four years, it’s probably not going to be the best system with the rate of change. I used off-the-shelf solutions and did API integrations into them. I spent little on technology. I didn’t have a CTO for the first five years. They were all variable costs. I didn’t have to outlay a lot of equity. I was able to grow with a variable cost model.

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596th 1Mby1M Entrepreneurship Podcast with Julien Pham, Third Culture Capital

Julien Pham is Founder and Managing Director at Third Culture Capital (3CC), a firm focused on investing in the healthcare space.

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Building a Public FinTech Company From Scratch: OppFi CEO Todd Schwartz (Part 3)

Todd Schwartz: The technology wasn’t there. I didn’t know anything about lending. I didn’t know any other way to do it except take $100,000 of my own savings and open a one-room office in the north side of Chicago, get a printer, and use Excel to originate loans. I applied for the CILO license. Six months later, I was granted the license. I was getting referrals from the pawnshop.

I made the first 3,000 loans in person by myself. I handed the check to every borrower. I got to know every borrower. I understood why we were better. There were no prepayment penalties. I had to hire people. We were getting so much referral volume. We have such high customer satisfaction. We weren’t really measuring it, but I could just tell by the way people were overjoyed and the referrals we were getting. Our interest rates were much lower. Our payment terms were much more beneficial.

596th Roundtable Recording with Julien Pham, Third Culture Capital

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Roundtable Recap: November 17 – Spotlight on Healthcare Investing

During this week’s roundtable, we had as our guest Julien Pham, Founder and Managing Director at 3CC Third Culture Capital, a firm focused on investing in the healthcare space.

Afterlife

As for entrepreneur pitches, we first had Brett Maxfield from Los Angeles, California, pitch Afterlife, a concept-stage venture that is waiting for financing to get off the ground.

Efeedo

Next, we had Javed Christi from Saint Charles, Missouri, pitch Efeedo, a revenue stage venture in the crowded restaurant POS space, that is looking to raise financing.

You can listen to the recording of this roundtable here:

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Building a Public FinTech Company From Scratch: OppFi CEO Todd Schwartz (Part 2)

Sramana Mitra: How did you steer your career from that point on?

Todd Schwartz: I went through the crisis of 2008. That’s when I learned a lion’s share of what I know today. I learned about investing. I learned about allocating capital. I learned what not to do. I learned it not from having success. We got ourselves in a little bit of a pickle. It was a very tough situation. Unwinding a lot of that was painful.