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How This Revenue-Based Finance Provider Help Entrepreneurs Raise Capital

icon-calendar 2022-05-31 | icon-microphone 43m 38s Listening Time | icon-user Debutify CORP
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In today’s episode, Asher Ismail, co-founder of Uncapped, a company revolutionizing growth capital. We discuss the democratization of capital, how he has been building businesses and his early life, how he supports founders through his mentorship and coaching role, the disadvantages and advantages of being a remote company, and the ins and outs of equity.

As a founder, Asher raised millions in capital from angels, VC, crowdfunding, and banks. In 2017, he was named Emerging Entrepreneur of the Year. Prior to Uncapped, he was CEO at Midrive, General Manager at Moneysupermarket and part of the early team at Skype.

His Backstory And How Uncapped Was Created

Asher Ismail: Well, we provide fast flexible funding to e-commerce businesses for marketing inventory or hiring. But the key thing is that we do it without requiring a personal guarantee or any dilution. And, yeah. You know, it's my dream to work on uncapped because you know, every day I get to help other entrepreneurs get the funding that they need. 

Our first customer is actually where my friend. So, you know, from the start, we've really tried to create a product that is actually friendly, fast, that's fair, that's transparent. You know, it's the funding solution I wish always existed. We're now in 22 countries, including the US, UK, Germany, Poland, Spain. And our business has just been growing exponentially. So we now fund more businesses in a day than a typical VC will fund in a year.

And then more personally, I also spend a big chunk of my time now, doing executive coaching for other founders. So supporting them in their leadership development and growth. And I guess I've learned a lot from the different businesses that I run and just really want to share that with more folks. And so, yeah, I'd love to work with leaders on how they can achieve high performance without compromising their well, their wellbeing. 

Connor: Yeah. That must actually go quite hand in hand. I don't know what the parabola is, but have you felt stressed like that when you bury yourself in a project like this. It's like nothing I've ever seen uncapped. 

Asher Ismail: Absolutely. It's totally a rollercoaster. I think of building a business as they say. And, you know, depending on what your personality style is, I think for so many entrepreneurs, they really feel the highs, but then they also really feel the low. And learning how to manage that and you being able to continue on and push forward and get to the next day is super important to being able to really win in the long-term. 

Connor: I really like to touch on that in a second, like the coaching aspect. Can you just tell us to, you know, bring us into the fold a bit, one of those other companies that you've worked at, give us the trajectory of the story.

Asher Ismail: Yeah, well, I mean, uncapped itself was born out of the frustrations I faced when I was launching my first business. So I did that business in 2003, which was a marketplace and, you know, I was young and just trying to raise a hundred. And I probably had a hundred meetings and I got a hundred nos. 

So back then I was just in my very early twenties. You know, I was in a situation where I didn't own a home. So, you know, taking financing from the banks will want to personal guarantees, which just wasn't possible. And then, you know, venture capital, it wasn't ideal either because I didn't have a track record or connections or warm introduction. And so I just repeatedly missed out on growth opportunities.

And then my second business, was in a very different space. I was selling insurance online. So it was for new drivers and it was, you know, a first product for them and then a launched a second product, which was about getting insurance by the, by the minute. So rather than having to buy, you know, a full-out insurance policy, you can actually match it to actually your usage.

And yeah, and that business, I guess I had thought that I had it all figured out on the funding side. I raised millions in venture capital, but then I got terribly diluted and yeah, I just started to realize that the options for me were really limited. And it was depressing to think that I could work so hard and then own so little of my company.

But you know, what I noticed is that it wasn't just me, you know, growing businesses. They're just often left to choose between raising costly venture capital or burning themselves with traditional debt. And so, yeah, I just thought there must be a better way. I'm going to start to work on cats first to bring, you know, more fair funding, alternative to Europe and then north America and you know, now and the rest of the world.

So we've now given over 150 million of funding to businesses who've gone on to create other, you know, jobs and opportunities. And we've also helped the founders, you know, own more of their businesses. And save millions in dilution. 

Connor: Nice work. How does that feel? That's pretty cool. 

Asher Ismail: It's been really amazing. And I have to say, but I think it's also, I just feels also, there's a lot of luck involved also in like, you know, building a business. And so definitely the experiences really helped to like get there, but also it was great to be in the right place, the right time. And you know, right now e-commerce has had such a boom and, you know, that's the main focus of who we fund.

You know, we primarily are supporting e-commerce businesses. Obviously, it's been a fantastic time to be building, you know, a DTC company. And, yeah, we've been able to ride on the coattails with some, some really other incredible founders. 

Connor: That's a really nice, modest response. So you must've had a line neck, as you're saying about how you're giving out insurance by the minute and insurance to first drive. That's kind of a similar sort of thing at uncapped, like, you know, disrupting of course, but also in a sort of charitable way to people who aren't getting that sort of product or program in the first place.

So you're kind of doing that thing. Did you carry that thought with you? Like, oh, this is something I could do in the future? Or was it kind of a surprise when you stumbled across the idea of uncapped? 

Asher Ismail: Each of this were kind of connected together. Like, you know, every business that I've been part of and, you know, also the ones that I've also worked for some other people and, you know, in each of them I've really. And drawn to them because they had a purpose.

So, you know, my belief is that, you know, businesses that, you know, do good perform well. And you know, that's definitely the carry through from those different types of businesses. They're trying to solve some bigger problems. And I think in particular, at my last company, you know, I faced that challenge where I was really looking for a product like, like ours, but it just didn't exist. And so that kind of was the inspiration to go on and actually create it. 

Connor: I have a couple of questions about uncapped. I also love this story. What was it like in the first days? And how did it all come together? Was there somebody that you met? Was there somebody you working with already? And what was that initial kind of like, oh we're just going to do it look like? 

Asher Ismail: Well actually I have a co-founder who came from like the other side of the point. So his background was in venture capital. And so I think one would unique things we did was by me being an entrepreneur and having that experience, and I've experienced this challenge and knowing what the product we needed was the other challenge was obviously getting the amount of capital you need to actually deploy.

And, you know he was great in terms of like, you know, having that resource, not thinking and that access to help solve that problem. So we could combine together and, you know, find the right solution. So, I mean that's kind of how it first started out. And in the sense that, you know, at the beginning, when you're giving away capital to folks in a new model that no one has ever done before, obviously you're taking a lot of risk.

And so when you're gonna take a lot of risk and potentially lose a lot of money, who do you go to? VCs. Yeah, so we raised our first money from some amazing venture capital funds in Europe. And then after a while, we kind of proved that actually, hey, we could actually do this. And you know, we didn't lose everyone's money.

And in fact, we were really good at figuring out who are the companies that are going to grow and pay us back. And so then we were able to then work with banks who then gave us some more money and some more money. And, you know, we've been able to then support a whole bunch of entrepreneurs through that route.

And yeah, I don't know. It all happens so quickly to be honest, you know, this company is not that old, it's only that been going for almost three years. And, you know, just over a year ago we had 10 people in the business and you know, now we have, you know, a hundred people in the business. So, you know, that's I guess the game and startups is that things can move really quickly when you have the right solution and the right product. And you have the right backing. 

How Uncapped Works

You know, obviously you're going to have like some pretty hard metrics when you're giving out that money, but I also wanted to ask you, like, do you have an operator on hunches? Because I know that your website is like incredibly streamlined and easy and like people can get the money they need quickly, but was there an early period where you were kind of, you know, dealing with people one-on-one and you're like, wow, this guy's got a great idea. Let's do it. Or was it always kind of analytical? 

Asher Ismail: Well, I guess, you know, what's different and in the way that we work versus a bank or a venture capital fund is, you know, we don't ask for, is this plans or pitches, or we don't know, meet up with you for coffee.

Instead we connect to the data sources that you use to run your company. And make data-driven decisions off the back of that. So for example, you know, as part of our, our online process, you would connect your Shopify accounts or your Google ads or your banking software. And, you know, we have a hundred different ways that we can connect and understand the business.

And we use that approach because it removes the bias from decision-making. And I think that's actually so much of what has frustrated people about venture capital is that, you know, those decisions are often based on pattern matching and the people who end up getting the capital are often the same people who would get the capital previously.

And you end up with a really undiversified pool of founders who are actually going on to be able to build big businesses. And yeah, one of our beliefs was that actually, if you streamline the. And you democratized it by actually making it available to anyone, not just people who happen to be living in London, New York or San Francisco, and said, you know, anybody can apply online and just connect their data and let the data speak for itself.

We believe that's actually the way forward. And so in terms of the criteria that we're looking for, you know, we say that uncapped is great for you. If you've generated sales online for at least six months, You're doing at least 10K of revenue per month and your growing. So, you know, pretty, pretty simple criteria to find a good business in that sense. 

We obviously then, you know, deep dive and look at a whole bunch of other things in terms of, you know, return on ad spend and growth and economics and all sorts of other metrics, but at the heart of it, now, those are the base things to kind of make it through. And yeah, and it's overall, it's a really simple, fast process you apply in minutes. You get a decision in 24 hours. And, you know, there's a no risk to you because there's no cost to apply. There's no other hidden fees. And it's just incredibly simple. 

Connor: Yeah, no, it sounds too simple. 

Asher Ismail: Definitely at the beginning, I think folks would always ask us, like, what's the catch? And you know, there isn't a catch. That's kind of funny because people just expect getting funding to be hard and complicated. And I think that's just what we've taught people historically, right. That you need like a lawyer. And a friend who's done it before and someone to give you this introduction and all those things are just the way this way of generating money for growth has always been.

But our world was actually like, what if we really designed it around the founder made it super simple. You know, our legal agreement is like six pages it's written in plain English. So you know that what you're signing. And I think all those things make such a difference because as a founder, Instead of now, you know, doing what I did, where I just spent like six months knocking on doors, begging people for money, you can in 24 hours, get money in your bank account and take all that time that you would've spent on pitching and reinvest it into spending time with your customers and with your team and building your product and the things that probably as an entrepreneur are the things that you actually want. It's exciting to help entrepreneurs in that way. 

Connor: Are you actually going to be staying in e-commerce or what do you see in the future? Like, will you be looking at services as well, or just products and, you know, because products are very like, you know, linear and easy to see.

Asher Ismail: Yeah. So e-commerce was the first category that we funded, but we've actually expanded into other categories. We also support software as a service SaaS businesses, and really actually anyone who's generating revenue online or ultimately really looking for it is businesses that have repeatable predictable revenue.

And so if you have any business that has that structure, where we can connect to a data source and understand how you're doing and then see consistent behavior, that's a business that we'd like to. So, yeah, we, you know, are really open to talking to other types of businesses. When you go on our website, you can fill in some basic details and it'll kind of tell you, right, from there, like within two minutes, whether or not your business type actually qualifies and we're finding more and more in other cases.

His coaching experience

Connor: I guess I want to hear more about the coaching cause you seem like a really philanthropic person. You're now doing this amazing startup, but you're even taking time to sitting on a tech board for diversity in London, you're coaching new entrepreneurs. Like how has that experience been for you and what, what are you trying to achieve? What's your goal there? 

Asher Ismail: You know, I think the part of my job, I think I always enjoyed the most about like running a company is actually like the coaching, the mentoring, the leadership development kind of side of things. And I think it's great to be able to build one. And you know, see it to success, but it's also incredible to be part of a bunch of other entrepreneurs journeys, you know, and see how you can support them to achieve some of the things that perhaps I just took a long time to get to, because I didn't have somebody necessarily to give me that input or, you know, help me have a different perspective on things.

And so I think it's just been really fun to be able to watch other people and see them. And, you know, often that's about helping people gain more clarity or confidence or resilience, you know, I think just those little things can make a huge difference to the ultimate outcomes. 

Connor: Yeah, no, definitely. You do seem like the calmest leader, one of the most calm leaders I've met, even though we're very far away from each other, but it's, it's an incredible skill, you know, like, but I'm interested, like you're saying. You didn't have people to turn to for feedback and perspective. Can you tell us a bit more about your early life? Because you just seem like the most grounded and well-spoken clairvoyant person, where did you get that perspective from? 

Asher Ismail: I definitely did have people in my life that I turned to for support and all those things, but I think maybe, you know, in the early days of like, when I was building my first company, you know, being an entrepreneur was almost like a dirty word, like to my parents that was like, maybe you should get a real job.

Yeah. It was this idea of like, what are you doing? It just seemed like it didn't seem like a thing. Whereas I think now. For this new generation, they've seen the success of, you know, all these tech entrepreneurs who've gone on to become super successful and how, you know, billion dollar companies. And there's this whole romanticism that's attached to entrepreneurship. It just maybe wasn't there before. 

So in my time, you know, there was that, but also the information just wasn't available. Like, you know, when you were trying to find out how to actually run a company or how it's supposed to be. It was a lot tricky right there. Wasn't podcasts about entrepreneurship. There wasn't a YouTube channel you could go to, there just wasn't as much writing or, you know, that understanding of things.

I just had a lot of basic things that I needed to sort out, and it took me a few iterations. You know, it wasn't actually until building this third company because I really feel like I had it figured out. And to be honest, I still don't have to figure it out. You know, I'm still every day when I think more things about how I wish I knew I should've done it, this.

And so I just reflect on that and I think that there's an opportunity to help other entrepreneurs kind of get to that state. And as sooner for me as well, like, you know, in terms of building a company, I didn't set out to go and build a unicorn. I was about, you know, solving a problem for my friends.

And, you know, that's kind of been the heart of what I went on do, but the other part of it is always been about, you know, building a company that I really want to work for.

So, you know, I want to go to work every day and it doesn't feel like work. It feels like I'm solving interesting problems with people. I really love and, you know, by able to create that dynamic, you are actually, you know, basically finding that you have happiness every day, right? Because happiness, isn't a function of what you achieve, it's a function of know how you spend your time and being able to then do something that you're enjoying continuously. It's super powerful.

And as an entrepreneur, we sometimes attach so much to the success. You know, of actually getting to the final outcome, but success like that, it's very temporary, right? It's actually, you know, the daily activities you do that are going to bring you joy and, you know, there's always going to be another challenge and another problem to go and solve.

So you don't have to, you know, anchor all your emotions to, you know, And learning that and just gives you more perspective until to solve problems with a little bit more confidence. But also to feel what you're doing every day is really important. 

Connor: Yeah. I just had all my friends have a on Thursday last week to, I did a screening for my latest short film, and it was probably like the most beautiful night of the whole year, so far, you know, everybody's watching it, the clap and the cheer and shaking hands and, you know, congrats, bro.

And then the next morning, I just like just a tinge of kind of melancholy and you know, what's next and fair. And it's insatiable, there's no peak really like it's just putting your attention on the. And anything can be beautiful. Anything can bring you happen as you can brush your teeth through the dishes and just feel pure elation if you give enough attention. 

Asher Ismail: That's so true. And you know in entrepreneurship, I think what's interesting. I've known friends who are founders who have gone on to build a great business and then finally get to the exit. And then the day that the exit is done and they've sold their business, they're just incredibly depressed.

So it's kind of relates to similarly to your story, right? Because you can get so caught up in the expectations of that moment, but actually you realize life really hasn't changed that much. You know, when you go to the other side of it, you still got to build a life around you that you really enjoy.

And even though I have another friend where, you know, they had sold their business, I immediately started working on another startup in the meantime, decided that they were going to buy, start building a big house in the country.

So they were working on the construction of this house, renovating it, they put in a big pool. Absolutely beautiful. And then on the day that it was done, his partner told him that she was leading him.  And so suddenly here, he was like this guy with millions of dollars. And a big home house all by himself in the country.

And you know, it just made you think, you know, where are you focusing your time and you know, where what's actually really important to you. And it just make sure to keep things in perspective. You know, company building is really important, but there's also a broader life that we have to live. And there's, you know, other goals and other ambitions that are important to support too. So, you know, having that rounded life is going to ultimately serve you better in life.

His insights on remote working life

Connor: Yeah, it's interesting that you're running a remote company. Like, I mean, me and you, I feel like we're kind of similar with valuing people. How much interaction do you have with people? Like, and do you think that it could be beneficial or detrimental to do either or? 

Asher Ismail: Yeah, well, I think our thinking behind building a remote company was actually about having a more well-rounded life. So, you know, the idea that you have ultimate flexibility by being remote. On one hand, we have flexibility to be able to hire people around the world. 

So we have team members in 18 countries, but also that the people themselves have more flexibility to control their day and to live their life in the way that they want to live, whether that meant then physically moving around or just making time in their day for other things that a normal, you know, nine to five wouldn't allow, like spending time with their family or dropping the kids off at school or being able to go to the gym in the middle of the day and take care of your wellbeing. 

You know, we have one of our team members who surfs every afternoon, right. And then they finish their surfing lesson or, and then they are back onto a zoom call talking to the team and they're just getting to live their life the way they really want to live it. And once they're doing that, it's impossible for them to go anywhere. Because, you know, they're hooked on that idea of actually building a life, not just having a job.

And so yeah, for us, it's been fantastic and, you know, has worked or in so many ways. 

It is also a challenge. You know, you've got to put work into it as well, because certainly, you know, interacting primarily with people over a video call and have a different interaction. It can have a different level of closeness that you build with people. So you've got to think about it proactively about making time to socialize, not making your calls, just all about work and figuring out ways to actually build the connections across your team.

And so, you know, we invest in that and we do a lot of things that try to, you know, build the culture of the company but overall, yeah, I think it's been a huge advantage for us, took the pandemic to stimulate it. I think because. You know, prior to that, it was like on the fringe, right? To say you're running a remote company.

It was like this, or like a few examples of people doing it successfully. It was hard to find the supply of people who thought that was possible. And I think modern work where, you know, we focus more on outcomes rather than hours also has only been a recent trend. Like, you know, certainly for my parents and the way that.

Oh, yeah their boss's expectation would be, you have to be at your desk at 9:00 AM and if you're not there, like you're going to be fired. Right. So it was an evolving world and you know, I think a lot of things have come together, but certainly the pandemic just made it just forced us all to try it. And then I think a lot of people just realized that actually that's what they like. So yeah, I think it's worked out, it's probably the best benefit that's come out of that unfortunate time. 

His hiring strategy

Connor: Tell me about the people that you've brought on. Has there been people that you've brought on that like really, you know, change things? Has it been people that destroyed things? Probably not. 

Asher Ismail: There's only been both. I think one of the challenges of course is whenever you're scaling a business that fast, when you hire 90 people in the space of 12 months, You're going to make some mistakes. That's that's the beginning.

Right? And so you can't buy yourself down for that too much, but I think the more key thing is about whether you realize that quickly, that someone isn't a match for your culture or, you know, isn't, you know, who you thought in terms of what they would be able to execute and then you make a change quickly. 

So that has happened to us. But for the most part, I'd say we've had a lot of wins and had really great people who came to us and just added a bunch of skills that were missing and, you know, put out some fires. But also became leaders themselves, and then we're able to hire more great people. And like, that's like the key thing, right? If you can find people initially around you, who you can really build with, and then you trust them to be able to go out and hire more great people like them, you're, you know, off to a really good. 

And for us, one of my things was always until we got product market fit, we stayed, you know, under 10 people. And the reason why was because when you're, you know, sub 10 people, you can change things really quickly. Right. And a big thing about startups is that they're not a technology problem. They are a people problem.

And it's so much because of the relationships that exist between people and the relationships grow exponentially with each person that you have. So you know, you at the beginning, keeping it small, lets you be more agile and move quickly. But then once you've got something that works, you know, you want to in this game, I think, you know, move on it as quickly as possible so that you can, you know, get out there probably before other folks do.

But also because you probably want to spread what you're doing, you know, to more places and to more people. And we'll make it move and take advantage of the opportunity. And so, so yeah, that's what we did. And so far it's been, been working out for us. 

The Future Of Uncapped

Asher Ismail: What's next? Well, you know, what's interesting is that we're going to be going through an interesting time in the world where I think we're having a venture capital nuclear, winter. I would say where VC rounds pretty much died out for the next little while. And the reason being of course, like the, you know, challenging macro environment that we have, and also, you know, the, the war in Russia and Ukraine, and it's just kind of spooks a lot of people in the market, right.

We've seen tech stocks fall massively, and that has a trickle-down effect, the price of every evaluation of even the. It's, you know, building something online, you know, this period is going to be really interesting because I think we're going to have actually more great businesses that are looking for capital ones who probably would have gone to try to get funding from venture capital previously, and now are thinking actually I need to expand, you know, my set of options.

And so I'm hoping we're going to get a lot of really great companies coming to us, looking for. And it's going to be a great thing because it's going to, you know, stimulate those folks who perhaps would have looked otherwise and, you know, traditional equity sources and now are probably going to instead take that challenge and turn it into an opportunity by actually getting to keep more of their business and actually do better overall.

Because you know, kind of, they got forced to consider something. So I think that's what's going to be next and this little period, it's going to be really interesting to see how companies are going to get funded and how open fund companies are going to be to explore and, you know, new ways of doing. Do you think you'll change anything to accommodate that? Or are you going to try and ride the wave or do you have any secret things up your sleeve?

Well, I mean, I think if we're going to keep doing what we're doing it'll be very similar in the sense that the actual solution that we have, isn't different. I think it's that the overall environment of like what people are seeing as a need is gonna. And one of the problems so often when you're running a company, right? Is that you see these businesses that try to tell you, oh, we just need some money to like educate the market. Whenever you hear that. Like, that's you're probably pretty doomed. You know, if you're going to go and spend a bunch of your, your seed capital, trying to educate the market, it's tough.

And in our case, we had the, a little bit of a problem with that because, you know, we had a new thing, no one ever heard of it. It was a, you know, a challenging thing to be able to explain. And you don't people to believe, but some of these events, you know, like this, just push people towards you a bit more, right? Because actually every venture capital fund is saying to their portfolio, hey, maybe you should go and talk to on Kat because you know, they don't want to be diluted either. So it's an interesting dynamic when you're able to actually partner with, you know, some of the alternatives that you've.

And yeah, I think things like that are going to keep helping us grow and hopefully we're going to able to fund, you know, thousands of more entrepreneurs in the coming year. 

Connor: Yeah. Good luck. You must be disrupting the VCs, but also like it's a nice symbiosis to it. 

Asher Ismail: It's a symbiosis because I think you know, equity, it's not to say that equity is a bad thing. Equity is just one tool in an entrepreneurs. And you just gotta know when to use it. And equity makes sense when you're doing R and D you know, like, like we were, when we first launched in capital or doing something, no one had done before in Europe. And people didn't understand how it worked and we're taking a bunch of risk.

And so it makes sense to use equity for that. But then when you get to something that's predictable and repeatable, like if you are, you know, marketing and doing, you know, Facebook ads and you know that your Facebook ads have a three X return to go and raise vc money where you give away 20% of your company in order to fund that.

It's just crazy, but there's so many businesses that are doing that. And it's because they just don't realize, oh, wait a minute. There's an alternative product, which is much cheaper for solving that situation. Right? And so once you become aware and like, you know, knowledge is power and usually once you start using it that way, then you're hooked and you know, you keep doing it and you grow your business.

And so yeah, I just think more entrepreneurs finding out about what we're doing is going to be a great thing. And understanding, not just, hey, this is the right solution, but in general, just understanding more broadly, what are the options available for you to fund your company? And what we're lucky is that there is actually now more options than ever before. We're kind of in this unprecedented time. So yeah, if you need more fuel, strike while the iron's hot. 

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