Avi Levine, vice president at Star Funding, Inc. (pictured left) sat down with Matthew Gillman, CEO of SMB Compass, a bespoke business financing company focused on providing financing and education to small businesses across the United States. Matt discusses starting up SMB Compass and the challenges he faces as a young entrepreneur.

Avi: Tell me about SMB Compass.

Matt: SMB Compass is a specialty finance company that provides financing solutions to lower middle-market companies. We work closely with business owners and management teams to help them align with the right financing partner. Our focus and success stories have come from companies sourcing debt ranging from $250,000 to $10,000,000. 

Avi: What made you start SMB?

Matt: That’s a great question. Becoming an entrepreneur was always a goal of mine but finding the right business to start is what took time to figure out. To backtrack a bit, I started my career working in SBA lending for Newtek Business Services, based out of New York. I was able to learn all the intricacies of SBA lending, specifically the SBA 7a program. I enjoyed my time working at Newtek Business Services but started to get the entrepreneurial bug. I was then introduced to a startup called On Deck Capital in 2013. It was a completely different type of lending which made it an appealing new challenge. The programs changed dramatically during my tenure there and after we went public in December of 2014, I decided to look for my next opportunity. My entrepreneurial bug grew even bigger which led me to a great team looking to build and launch an asset-based lender called InterNex Capital.  InterNex was every bit of an entrepreneurial experience. From building infrastructure, hiring a team, implementing an origination strategy, and going to market.

Avi: That’s a great story. You are pretty fortunate to have experienced so much at such a young age. Start-up Life, fintech, traditional lending. I think I see where this is going.

Matt: Now to go to why I started SMB Compass. As a lender I always saw companies that carried various types of debt, but frequently the structure and solution provided by the lender was not the best option for the company. Looking back at my experience in both cashflow and collateralized lending, I started to get excited about being able to leverage my network of lenders to help companies find the right capital for their business.

Avi: What are some of the biggest challenges you face as a young professional starting a new company as a young guy in the industry?

Matt: People normally focus on the excitement of owning your own business, being your own boss, and having employees. While exciting, it’s incredibly difficult, especially when you’re young and trying to break into an industry with countless established companies. The biggest challenge is only having 24 hours in a day. Most young entrepreneurs, including myself, try to do it all in the beginning and feel they have way more bandwidth then what’s actually possible. Administrative and non-revenue generating tasks add up quickly and before you know it, a significant amount of time is drained.

The second biggest challenge I faced early on was prioritizing and staying focused. While working as an employee you have a specific function, you receive a weekly paycheck, and are focused on executing your daily objectives. When you’re out on your own it’s easy to get distracted with new business ideas, partnerships, etc. It took me a while to figure out that I was spending lots of brainpower and time exploring new opportunities versus the core reason why I started my company. I’m not saying keep blinders on at all times but without a core focused strategy it’s easy to get distracted.

Avi: I can see how lack of time and staying focused can really derail an entrepreneur from reaching their goals. Glad you got on track quickly.  Tell me more about the biggest challenge as a YOUNG entrepreneur.

Matt: I wasn’t aware that being 30 was young, but I guess you’re closing in on 40 so I understand where you’re coming from… In all seriousness, I attribute most of what I’ve learned over the years to my experiences and the younger you are, the less of it you have. As I continue to grow my business, work on new transactions, and work with smart people like yourself, my business will continue to improve, and our value proposition will grow. So, to really answer your question, being young means you have less experience, and I’ve made sure to surround myself with smart and successful people while building SMB Compass.

Avi: What do you think the biggest changes are going to be to the industry in the next five years?

Matt: I think this is a hard question to answer and it seems to change every day. We’re in an industry that’s been around for a long time. The biggest change that’s taking place is people are growing increasingly more impatient. We live in a world where technology is resulting in everyone wanting instant satisfaction. You can do virtually anything on your phone and from your couch, so people are expecting the same thing from lenders. We have seen some startups in the fintech space take a technology first approach to traditional lending, and while some have been successful, others have had challenges doing so.

Avi: So how many hours a week do you work from your couch?

Matt: Ha ha, I think I set myself up for this one. Excluding the weekends, I typically don’t work from my couch.

Avi: Are you in your pajamas?

Matt: Why would I be in my pajamas?

Avi: Because you are on your couch.

Matt: Right now, I am in the office and I don’t wear pajamas.

Avi: OK, back to the interview. Tell us where you plan on taking your company?

Matt: As of now my biggest focus is on our customer acquisition strategy and our branding. Having consistent deal flow is one of the hardest challenges to solve for. The more deal flow we have the more data that’s available on market trends which in turns gives us a stronger grasp on where to go next.

Avi: Will you ever go work for somebody else again? I will say this.  You seem to be one of the more sought after BDOs out there. More than one recruiter has asked me about you and what it would take to get you back on someone else’s payroll.

Matt: Thanks for the compliment. It’s funny, I’ve been asked this a bunch of times. I was never opposed to working for someone, I just wanted to build my own company. If I end up working for someone in the future, I hope it’s for a good reason! 

Avi: Like a lot of money and a really comfortable couch.

Matt: I don’t work from my couch in my pajamas. Get over it.

Avi: OK. What advice can you give someone who is looking to transition out of the corporate world to start their own business?

Matt: I think starting your own business sounds sexy, but it’s not for everyone. I’ve had different types of startup experience and that’s where I think people have to decide what they want. Working for a well-funded startup is an entirely different experience than starting at ground level with lots of smart people in the room, which is entirely different than self-funding a company and doing it on your own. My biggest piece of advice to anyone considering starting their own company is to plan ahead, save money, and expect that everything takes longer than anticipated. Be prepared financially for the long game and to not make money from day one.

Avi: How do you differentiate SMB Compass from similar businesses?

Matt: We offer a service that other great companies provide, but our biggest differentiation is who we are as people and how we handle the process for clients. Our focus isn’t being a transactional and volume-based firm, but rather a group that delivers the most appropriate solutions to our clients and partners.

Avi: That sounds good to me. Well, we look forward to your ongoing success with SMB. Thank you again for your time.

Are YOU a young professional in an SFNet Chapter leadership role or have an interesting work-related story? Want Avi to interview you? Let us know! Contact Will Kemp at wkemp@republicbc.com and explain why you’d be a great YoPro to be featured in our next e-newsletter.

Avi can be reached at alevine@starfunding.net. Matt can be contacted at matthew@smbcompass.com. For more info: https://www.linkedin.com/in/gillmanmatthew/