Thought Leaders in Financial Technology: Snehal Fulzele, CEO of Cloud Lending (Part 4)

Sramana Mitra: How do you charge?

Snehal Fulzele: We have a stack of business models. It’s a flat fee per user per month. It depends on how many modules they purchase because we offer an entire end-to-end lending suite which covers not only origination, but along with that, we also cover underwriting. This is true for traditional finance companies. They are legacy servicing platforms, but they want to revamp their borrower experience. In that case, they will just got for the origination and the underwriting application.

Sramana Mitra: Interesting. Give me a ballpark. If I’m an online lending institution, what are we talking about? What’s the range? Are we talking $1,000 a month or $10,000 a month. >>>

Thought Leaders in Financial Technology: Snehal Fulzele, CEO of Cloud Lending (Part 3)

Sramana Mitra: One thing that I find curious is that you have 85 customers and they are all online lenders. How many online lenders are there right now?

Snehal Fulzele: We are a global company. Half of our customers are in the US. It started in the UK and US, and we are seeing a lot of online lending in countries like China. There are about 3,000 companies in China. It’s happening in Australia. If you add the crowdfunding platforms in the US alone, there are about 400 of them, which spans across not only loans, but also equity platforms as well.

Sramana Mitra: You don’t just deal with lending. You also deal with equity crowdfunding due diligence? >>>

Student Entrepreneur to $10M+ in Revenue Without Dropping Out: Course Hero CEO Andrew Grauer (Part 7)

Sramana Mitra: You focused on getting to a business model. Part of the problem at the Valley right now is that people just go and build things without figuring out a business model. As a result, they have huge burn rates and no monetization model. That doesn’t create a sustainable company. That whole model is predicated upon some fluke acquisition. Otherwise, you cannot sustain that model. Your model is much more sustainable.

You said you were very conscious about the burn rate. Can you talk a little bit about how you built your team? What areas did you put in people?

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Student Entrepreneur to $10M+ in Revenue Without Dropping Out: Course Hero CEO Andrew Grauer (Part 6)

Andrew Grauer: Then, moving on to the other question on the engagement level, engagement is quite high. I think the difference between other online education sites like Coursera and edX is that their users are looking just to learn for learning sake. Our supplemental resources are really focused on helping students who are already enrolled in the course and there is a requirement where there’s a large incentive for them to complete and do well in the course. If they can really get an edge and make sure that they master the course, this will be a major motivation to use Course Hero.

Sramana Mitra: Are you saying that your 150,000 subscribers are all active users?

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Student Entrepreneur to $10M+ in Revenue Without Dropping Out: Course Hero CEO Andrew Grauer (Part 5)

Sramana Mitra: From the end user’s perspective, is the end user using your platform largely in a web self-service mode? What percentage of that user uses self-service versus a tutor assisted usage?

Andrew Grauer: It’s probably going to be something like 70% to 80% self-service.

Sramana Mitra: I’m trying to gauge how big the tutoring phenomenon is in this community versus people just using the materials and teaching themselves.

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Student Entrepreneur to $10M+ in Revenue Without Dropping Out: Course Hero CEO Andrew Grauer (Part 4)

Sramana Mitra: You were doing college level courses?

Andrew Grauer: Yes, we focused on US colleges. Then, we expanded internationally as well and now we’re just starting to go into high school.

Sramana Mitra: Within those colleges, was there any bias in terms of courses?

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Student Entrepreneur to $10M+ in Revenue Without Dropping Out: Course Hero CEO Andrew Grauer (Part 3)

Sramana Mitra: That’s actually great. We love these stories of student entrepreneurs who didn’t drop out. Going back to the subscription model, how did the revenue ramp?

Andrew Grauer: It ramped really well in terms of growth rate but we were starting on a really small figure. I don’t remember the specifics. I do know that in 2010 we eventually got to a million dollars in sales. Then, we doubled every year after that. That was about $2.5 million in 2011, $5 million in 2012 and over $10 million last year. We hope to do between $15 to $20 million this year.

Sramana Mitra: Let’s get to a bit more granular detail about how you built that revenue up. Talk to me about the highlights of customer acquisition and conversion rates during the early times. It sounds like the advertising revenue was a non-event. >>>

Crowdfunding Startups: What Excites Me, What Worries Me

There has been a bit of action for a while now in the crowdfunding world, and certain startups have been able to get themselves off the ground using the Kickstarter / Indiegogo style sites. By and large, these types of financings have gone to companies that are building physical products, digital games, etc. Fundings have also happened for some causes, films, art projects that are typically not businesses. Equity crowdfunding isn’t legal yet in the US. But presumably, it will become so. In Europe, it is legal. Hopefully, other parts of the world will also start seeing the infrastructure develop.

For our audience, the primary concern is financing digital startups: technology and technology-enabled services. Typically, these are difficult to assess, high-risk companies, and amateur investors from the ‘crowd’ are unlikely to be able to perform adequate due diligence to have a sophisticated investment thesis.

However, there is one category of investors who will have an excellent vantage point from which to assess new ventures.

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