Firmology’s Meet & Greet series takes an inside look at the technology and resources available to small business owners and entrepreneurs, straight from the founders who built them.
Name: David Haber
Company Name: Bond Street
Company One Liner: Small business lending marketplace
Location: New York, NY
Website Address: www.onbondstreet.com
Best Way(s) to Contact Me: David@onbondstreet.com
Tell us a little bit about yourself and your background.
I grew up in San Diego with a pretty modest upbringing. I first got into starting businesses when I realized that working for $7/hr. at Target wasn’t the fastest way to make gas money. So, I started everything from a taco catering company to a wholesale business where I sold lighters and gel candles to Walgreens. These businesses were never anything big, but they definitely changed my perspective on life and showed me that it was possible to create.
After graduating from high school, I went to Harvard with the intention of becoming a doctor. I was studying biochemistry, but after spending my sophomore summer in Silicon Valley working at a startup, I got hooked.
I ended up working for Rory Riggs, an incredibly successful entrepreneur, in NYC the following summer and for two years after graduating. He became a very close mentor of mine and is now an investor in my current company.
After deciding it was time to try something different, I ended up joining Spark Capital, initially in Boston, as their sole associate. It was an amazing experience as it afforded me the opportunity to meet with a tremendous number of entrepreneurs and explore my passion for financial services and technology. The Spark team was great and they gave me a lot of rope to figure things out and break stuff. While I really enjoyed the job, I always knew that I wouldn’t be totally happy unless I took the leap to start Bond Street.
What does your company do and what problem does it solve for businesses?
Bond Street is an online marketplace that connects creditworthy small business owners with a community of qualified lenders to get them the money they need so they can get back to building their business.
Traditionally, the lending process has been extremely manual and inefficient. Borrowers had to spend up to 25 hours preparing paperwork to be brought to their local branch and then they would have to wait weeks before they heard back from their bank about the loan decision, with approval rates under 20%. These acceptance rates have only gotten worse in the last decade as bank consolidation, increased regulation, and risk aversion has driven many banks away from smaller loans and smaller businesses.
Bond Street is solving this credit gap and process inefficiency through technology, data, and design. We’ve built a platform that allows entrepreneurs to apply for a loan in as little as 10 minutes by syncing their financial accounts directly. These include accounting software packages (like Quickbooks), bank accounts, and government filings. By being able to collect this data directly, we’ve streamlined our underwriting process and can make decisions in less than 48 hours and have been funding loans from start to finish in under a week.
Bond Street is also bringing fair rates back to near-prime businesses. In recent years, as banks have pulled back from lending to small businesses, alternatives have emerged but have shown to be expensive (with APRs well above 50%). With our unique model, we’re able to offer small business owners rates as low as 6% interest, making us very competitive with traditional bank rates, while still providing a meaningful returns.
We’re excited to be building a better future where access to financing for small business owners is simple, transparent and fair.
How did you come up with the idea for your company?
While working Spark Capital, I spent quite a bit of time going deep within financial services for the firm. It was an area of the market that had not previously been a core focus, but one that I was very passionate about.
Along the way I saw that many of these financial software platforms were beginning to launch APIs and to make their data more accessible, which I believed could help speed up the underwriting process and offer a much more compelling customer experience.
While I was mostly focused on technology investments, I would often come across fast-growing services businesses or physical products companies that would be doing significant revenue but who were still struggling to raise bank financing.
Not understanding what was happening, I started cold-calling senior executives within small business lending at banks across the country. Over time, I consistently heard a message that banks were structurally not able to help these companies anymore. The combination of consolidation, a lack of investment in technology, inefficient processes, sunk costs in the branch infrastructure, and risk aversion made it very difficult for them to adequately serve the market.
Throughout the process, I was brainstorming with my good friend Peyton Sherwood who was helping lead product and engineering at Venmo. When they sold the business to Braintree (and ultimately PayPal) at the end of 2013, we both decided it was time to leave our respective jobs and build Bond Street.
What makes your company different from your competitors?
We are religious about building great customer experience and understand that it happens at every touchpoint with our customer. Whether this is through the design of our website, our rates and fees, in our approvals, and even in our declines, we aspire to build a brand that feels transparent and empowering to small business owners and one that they are proud to be associated with–something that has been sorely lacking in financial services for a long time.
What are the most important considerations businesses should have when choosing technology to help them power their business?
We believe that technology should empower them to do what they love doing, better. We don’t believe in using technology for technology’s sake, but understand that when used properly it can help streamline processes and fade into the background so that business owners can get back to building.
What other companies or entrepreneurs within the technology space do you admire and think businesses should know about?
There are so many entrepreneurs that I admire, but I’d especially call attention to Brian, Nathan, and Joe at Airbnb. They have had a relentless focus on design, community and customer experience and it has paid off in spades.The rate at which they have expanded globally and the number of people around the world whose income they have helped supplement with the platform is astounding. I’m hugely bullish on the company.
Anything else Firmology readers and business owners should know? News? Upcoming features? Special deals?
We’re live and lending. If you run a small business and are looking to invest in your growth, you can visit our site at www.onbondstreet.com–we’d love to speak with you.
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Images courtesy of Bond Street’s Facebook page