It’s hard to forget the firsts, especially first deals — they
set precedents, lay down the groundwork for policies and establish a starting
point for legacy.
For funders and lenders, their first deal can be significant in establishing
client relations, setting priorities for credit policies and as we found
out, teaching them valuable lessons.
First Steps..Baby Steps
John D’Amico’s first bet was a small cafe in Carmel, Indiana
that his company GRP Funding advanced $25,000 to, eight years ago. Reviewed
on credit card sales, GRP looked at the business’ cash flow and
deemed it a good risk to take, D’Amico recollected.
“That business model seems so far and long ago,” he said. “OnDeck
was not a company at that point and loan products were not talked about.
It was only advances.”
Would he still feel confident doing the same deal today? “Yes, that
deal is still there to be had today. But you want to make sure that you’re
#LifeLessons: Don’t get comfortable, stay updated with the times
and evolve and keep the credit risk policies fresh.
Small Can Be Significant
The first check Jersey City-based World Business Leaders cut was for $7,000,
back in 2011.
Chief Revenue Officer, Alex Gemici recalled that it was an African arts
store run by a woman in Virginia Beach who paid back the loan in full
and came back three months later for an additional loan of $12,000.
“We believed her story and went by our lending policy and the deal
fit the bill.”
We could make a big difference even with a small loan.
Not All Firsts Are Good
Not everyone has a smooth start. For New York City-based company, Cardinal
Equity, the first deal was a bump on the road.
The auto dealership in New Jersey that it advanced $250,000 to in 2011
defaulted on the second renewal. Although Arty Bujan, managing member
at Cardinal Equity still thinks auto dealerships are a “nightmare,”
his company still funds them but with very strict scrutiny, looking for
ones with a steady revenue stream and a good amount of time in the business.
#LifeLessons: There’s always risk.
Srividya Kalyanaraman, "Remember When? Funders Talk About Their First
Deals" Debanked,com, October 14, 2016. Accessed via: http://debanked.com/2016/10/remember-when-funders-talk-about-their-first-deals/