Aiming to Disrupt Consumer Credit: Al Goldstein, CEO of AvantCredit (Part 4)

Sramana Mitra: When you went to market, what about the institutional partner side? Did you go to market with a set of institutional partners pre-negotiated?

Al Goldstein: No, we didn’t. In these marketplaces, you have to match both sides. To get started, we lent only our own capital. We raised equity capital. We have raised over $100 million of equity capital today. We took the risk ourselves and lent our capital plus a combination of debt capital on top of that until we built up on our portfolio to show the performance of the loans over time – to show that our models were, in fact, very predictive. As we got more and more performance, the institutions became more and more interested.

Sramana Mitra: To launch the company, did you raise equity capital?

Al Goldstein: We did. We’ve raised a $109 million of venture capital to date.

Sramana Mitra: Right away?

Al Goldstein: No, we did it in three rounds. To start, we raised $9 million.

Sramana Mitra: You raised $9 million on a concept?

Al Goldstein: We’ve known our lead investor August Capital for a very long time. They are great partners and believed in what we wanted to build.

Sramana Mitra: So it was basically a concept financing. It was not something that you validated and then raised money, but you had relationships with these investors.

Al Goldstein: We were live. We launched on January 1st of 2013 and we closed our first round in February. We, internally, funded for a few months just to launch.

Sramana Mitra: How did things ramp up? What are some of the key milestones and key strategic drives? It’s only been a little over a year and a half. It looks like you’ve scaled reasonably fast in that time frame. Talk to me about how you built the company touching upon the key levers, strategies, and milestones.

Al Goldstein: Our business is a little bit different than most in that there’s a lot of demand, but it’s very challenging to produce the supply. Our business has a lot of significant barriers to entry. The first thing we focused on was really building the right team and making sure that we had people on board who are fully dedicated to the various components of the business, which includes capital market, operations, regulatory and legal – which is very intensive in our business – marketing, and finance & accounting. We built out the team mostly from people who had worked for me in the past.

Our core team consists generally of all people in an executive team who have either worked for me in a prior company or I’ve known for 8 to 10 years. We were very successful early on in building the right team that had very high caliber and who had complementary skills.

This segment is part 4 in the series : Aiming to Disrupt Consumer Credit: Al Goldstein, CEO of AvantCredit
1 2 3 4 5