Brock Blake. Founder & CEO.
- Date of Incorporation: September 2005
- Location: South Jordan, Utah
- Industry (Yahoo Finance): Venture Capital & Private Equity
- Employees: 45
- Website: www.fundinguniverse.com
Tell us, how did you begin as an entrepreneur?
For me, I’ve always been an entrepreneur. I’ve done a lot of different side projects and things. In college, I played soccer at Brigham Young University and I started a soccer camp to help pay for school. I started a few companies, three or four, that just helped to pay for school. I didn’t realize that I was being an entrepreneur. I was just looking for ways to make money. As things went on, I became really passionate about it. I enjoyed learning about business and the opportunities there. What really kicked it off was when I got involved with a program called “Junto Partners.” This was started by Greg Warnock and Alan Hall, two Venture Capitalists here in Utah. This was a sort of an eight week boot camp, kind of like the TV Show “The Apprentice,” but without all the glitz and glamor. Initially, there were over 100 applicants, so they narrowed those applicants down to twenty, and those twenty went through this eight week boot camp selling, raising money, and doing events and other projects. At the end they selected five winners and those five winners were given $50,000 to start a business. I was selected as one of those five. I took the investment that was given from them over to Funding Universe. They had started a few months prior to my joining the team. It was started by Paul Allen from FamilyLink.com and David Bradford, who is now the CEO of FusionIO. Then they got involved with my partner right now, Trent Miskin, and they asked him to help develop the site. That’s kind of the start of my entrepreneurial career.
What was your very first project before you got funding from Junto?
We started a company called Know Marketing. The whole concept was based on the idea that “word of mouth” referrals are the best way to get customers. So we set out to track word of mouth referrals and to find a way to encourage people to give those referrals. For example, if I liked your stuff and I referred a friend over to you, you would give me an incentive, a kickback of sorts, for the referral and you would give the person I referred a discount on the service. A great concept, a huge idea, but at the time we had no idea what we were doing – anyway it was an awesome learning experience! A good failure.
In his book Empowering Yourself, Harvey J. Colman talks about the principles that someone must follow to be able to be invited into the “next circle.” Performance is important, but you also have to have exposure and the right image. You’re 28 and you’ve already been invited into some premium circles of trust, including the BYU Businessmen Competition Panel of Judges, the Utah Innovation Award’s Selection Committee, and other groups. What are the factors that enabled you to be invited into these circles so quickly and at such a young age?
I think “Junto Partners” opened a lot of doors. It was an opportunity to get invited into a group of entrepreneurs that were well known and prestigious. Something like that adds a lot of credibility to your image. I give a lot of credit to Junto. However, once that initial door is opened, I believe that no matter what age you are or how much experience you have, anyone can be an expert at something if they’re passionate enough about it. I’m passionate about entrepreneurship and I’m very passionate about helping business owners with financing. That passion opened up other doors. You have to have confidence so that when that door opens you can walk through that door. No matter what your age or your experience you have to know that you can represent yourself and your company well, whatever it is that is at stake. I’ve been lucky because some of the mentors who have helped me have invited me into their circles.
Let’s talk about a typical fund at Funding Universe. You brought seed capital from Junto to Funding Universe, which partnered with Paul Allen and David Bradford. So let’s talk about your products: Describe the typical fund – the amount, the industry or industries, the time frame etc.
Our goal is to the help the business owner when it comes to obtaining business financing. In some cases, that financing comes through a loan, a bank loan, or an SBA loan for equipment financing on unsecured lines of credit. In other cases, that financing comes through an angel investor or venture capitalist. We see about 7,000 business owners a month, and it’s growing. The first thing that we do with every business owner is to do an initial funding analysis, which costs $99, depending on which type of funding they are looking for. If they are looking for a loan, we do our own underwriting process. We look at their personal credit, their business credit, their debt to income ratio, and their tax returns. What we are trying to do is determine if this is a good fit for a bank. We come back to them within forty-eight hours and we go through the analysis. At that point we can say, “You’re a good fit and here is a bank, or five banks, we can refer you to get a loan.” In some cases, they are not a good fit and we can advise them that they are not ready to get any financing. They need to do A, B, C, which they can do on their own or we can help them. We also go through that process when it comes to those seeking to be an investor. We do the analysis and see if the situation is a good fit for investors. We introduce them to our network, and if they fit we help them and if not we tell them what they need to do to improve. We work with about a thousand investors across the United States. The average loan or amount of financing that a business would get is in the $50,000 to $100,000 range, but we will work with clients up to about $5 million. Anything above $2 million we are really selective about.
So $50,000 to $100,000 loans are typically coming from banks and million dollar loans are from venture capitalists or angel investors?
Angel investors usually go up to $1 million and over that is typically venture capital.
What type of industries are you typically looking for? Are you technology based or do you do a lot of funds?
We do almost everything, but there are three areas that are difficult for us: We don’t do a lot of real estate businesses, nor the entertainment industry, such as films, record labels, things like that; the other category would be miscellaneous businesses like pawn shops, bail bond stores, that type of stuff. It is very difficult to get money for things like that. We do work with a lot of restaurant owners, internet companies, and technology companies.
What are you looking for in the ideal fund?
In today’s age, investors are looking for businesses that have traction, have revenue in the door, have their team in place, and they might have a patent, or they have their technology perfected, or some type of IP established. A lot of it is based on who the CEO is or who makes up the team. They want to know if they can give financing to this team and get a good return on their money.
Most investors would rather go with the A team with the B idea than with the B team with the A idea, because the A team will figure out how to make the B idea work, while the B team could take the A idea and make it a failure. A lot of it is about the team. Investors want to see a company that is really scalable and that has a huge potential. They are not looking for a company that can hit five million dollars in the next five years. They are looking for a company that can hit fifty or a hundred million dollars in revenue over the next five years. Do they have confidence in the team? Do they have an innovative product or service that customers really need?
Sometimes you can get some really cool technology that no one is going to use or pay for, but an innovative product or service where the market is huge is exciting. Investors get excited about that.
What is the typical breakdown of ownership of an angel fund or a VC fund?
The VC is getting about 15 percent to 40 percent of the company. A lot of investors are not looking at coming in and taking control of a company because it doesn’t motivate the entrepreneur. The entrepreneur that a VC is investing in might just up and leave when the going gets tough if the VC has a good chunk of the company. The VCs these days really aren’t looking to come in and run the company, they just want to make a nice return on their money. They want a good ownership percentage, but they usually don’t want to take more than 50 percent.
Let’s keep talking about this ideal fund. What are the key components of this A Management Team. What type of people are they?
The CEO is someone who’s ambitious, who’s scrappy, who’s a bootstrapper and who is able to figure out ways to get things done. He or she should also be a leader and an optimist, someone who knows the industry really well, is trustworthy, and is someone that they have confidence in. The other thing is that a board of directors, or advisory board, can help a lot because is because if that CEO has figured out how to get someone well known to be on his or her board, then that says something about the CEO. A strong board or advisory board lends credibility. If it is filled with talented people who have been there and done that then they can help build your technology and your CTO. It’s all about answering the question, can this team execute?
So your website indicates that you have 693 million dollars in capital, and 63,000 entrepreneurs and investors in your network. Give us a breakdown of the current amount of money you have invested in different projects. Is that 693 million available? Also give us a percentage of the entrepreneurs that you have funded.
What that $693 million represents is about one thousand investors in our network. That number is an aggregate of all the investors and how much they have looked to allocate to invest. It is available for potential future funds.
So you have 1,000 investors as well as a network of entrepreneurs who want to get funded. What percentages actually do get funded?
That’s a great question. The majority of the customers who are getting funded are getting financed through banks. It is just market standards. You are not going to get a restaurant owner or a life style business to raise money from a venture capitalist. We have about 400 banks we work with that we’re sending clients to. We are doing such a good job right now that about 70 percent of the deals that we are screening and then referring are getting funded. Right now we probably have about $100,000 worth of financing on a daily basis. We’re pretty active.
So what percentage are bank loans, angel, or venture capitalist funds?
One percent of the customers would be angel or VC that actually get funded; probably out of the businesses applying for bank loans, about 35 percent of businesses get funded.
Brock, you’re 28, turning 29, and you’ve been recognized by vSpring, Utah Business Magazine, and some other business institutions. You have the vast majority of your life ahead of you. What are you planning to do with it?
Be an Entrepreneur. I love building. Right now we are growing fast and it is a fun, fun stage. I think we will get it to the point where we will continue to build this and, if we choose, we will be able to sell it and have a decent exit, and at that point go start another company. I might become more of an investor and get involved in a lot of companies. I think for awhile I will just be just engaged with the entrepreneurial world. I’m very passionate about it. I wake up every morning just loving what I do. Hopefully, we can do well enough where we can get to the point (now we’re getting into the Mormon side of the interview) where my wife and I can go serve and do something for the LDS Church. I’m not suggesting it is a requirement of being a wealthy entrepreneur to serve, but it would be nice to do well and have enough money to serve in some capacity when you are still at a young age and while you have enough energy to do some good things for the Church.
How old are your kids right now?
We have three kids. Our oldest is four, our next is two, and we just had a new-born who is four months now.
Are there any books, individuals, or resources that have been influential in your life in getting you to this point?
I’ll start with individuals. I’ve been very lucky. I’ve had some wonderful mentors who I highly respect who have been influential. I will be grateful to them for a long time. Alan Hall is a great mentor. I’ve gotten to know Alan pretty well and I feel like we’re pretty good friends. We’re going to San Diego next week to do some golfing. But Alan Hall, he’s incredible. Greg Warnock has been a great mentor. Paul Allen is the same way, a great example. I highly respect him. He’s been great to me. Craig Bott is another person. Those are a few on the business side.
I’m the youngest in my family of five boys and one girl. Being the youngest, they’ve all been amazing examples to me.
There have been a few books that have been important to me. I think the first one that influenced me was, How to Win Friends and Influence People. The Art of the Start is a great entrepreneurial book. Love is the Killer App is a great book on relationships and networking. Good to Great is a fantastic book when it comes to strategy, when you think about building your business and what you want to focus on. The Mormon Way of Doing Business I really enjoyed. It was fun to read about some of those individuals. So those are five books that have shaped the way I do what I do, how I lead, and my thoughts about business.
So far in your career what has been the most rewarding moment?
Right now, the past six months have been the most rewarding time for me. I don’t know if there is necessarily just one moment, but it’s very rewarding to grow your company and grow your brand so that people recognize it outside the state of Utah and across the United States. To see your vision come to life and know that you are only scratching the surface of what you feel that you can do with Funding Universe is very rewarding. We had our company Christmas party with our forty-nine or fifty employees now and we had all the families and kids come to it. It was chaos. The kids were running all over the place. We did “white elephant” gift exchanges and that kind of stuff. It was fun. Yes, you are building a company but you are also impacting a lot of people, their families, and their kids as well as helping people to make a living. Those kinds of things are really the most rewarding.
Do you have any advice for the thousands of aspiring entrepreneurs in our community?
Just get out and do it. People wait for the perfect time, and then you grow older and have more responsibility. Your family gets larger and it just gets harder. You get older and it’s harder to take those risks. Get out and do it. Don’t wait. Think about it – you go to college to get some experience and think how much money you spend for that over four years. Entrepreneurship is one the most amazing experiences you can have. Take five grand or ten thousand and invest it and say to yourself, “If I lose this money over the next two years – I’m going to consider it as an investment in my education!” You’ll learn so much through that experience. Once you decide to do it, don’t play business. Don’t worry about getting business cards and the like, just feel the excitement of being in business – get out there and sell! Sales revenue will cure everything. Don’t be afraid to get out and sell your product even if it’s not quite finished yet.
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