Al Goldstein On Raising $600 Million To Disrupt A $13 Trillion Industry

Al Goldstein is the co-founder and CEO of Avant which is an online lending platform that offers alternatives to its clients with safer, faster, better financial products. The company has raised over $600 million from top tier investors such as RRE, QED, DFJ, KKR, Tiger Global, August Capital, General Atlantic, Hyde Park Venture Partners, and Origin Ventures to name a few. Prior to Avant, Al co-founded Pangea Properties and Enova International which he sold for $250 million.

In this episode you will learn:

How to make products transparent and clean
Operating in highly regulated environments
The art of being strategic with hiring employees
Raising capital from the right investors
How to transform new industries that are becoming digital
The future of digital banking

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About Al Goldstein:

Al Goldstein, also known as Al, CFA, Co-founded Avant, LLC in 2012 and serves as its Chief Executive Officer.

Al Goldstein is the Founding Partner of Pangea Equity Partners.

Goldstein served as Executive Chairman of Avant Credit Corporation.

Goldstein served as the President of Internet Services Division of Cash America International Inc., from August 16, 2007, to October 1, 2008, and was responsible for its Internet-based operations and the services that directly support these operations.

He served as an Executive Vice President of Internet Lending Cash America International Inc., since September 2006. He served as the President of Cash America’s E-Commerce Division from August 2007 to October 2008.

He founded CashNet USA in 2004 and served as its President and Chief Executive Officer.

He served as an Investment Banker of Deutsche Bank’s Leveraged Finance/Industrials Coverage practice in New York until September 2003 and worked on various secured and unsecured leveraged debt transactions.

Goldstein holds a Bachelor of Science in Finance from the University of Illinois in 2002.

Connect with Al Goldstein:

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone and welcome to the DealMakers show. I’m very excited about today’s guest. We actually have a guest from Chicago, so without further ado, Al Goldstein what’s happening?

Al Goldstein: Hello, Alejandro. Great to be on the show today.

Alejandro: So, you got into banking out of college if I understand that right. I believe you started at Deutsche Bank. What were you doing there?

Al Goldstein: I started my career as an investment banker which basically means I was carrying around everyone’s bags and pitch books and spending pretty much my entire day and night at the office. Then very quickly learned that I was never going to be a very good long-term investment banker which propelled me to become an entrepreneur.

Alejandro: Got it. One of the things that I see from many successful founders is that they have that M&A experience or that investment banking experience. So, what kind of learnings did you get from your experience at Deutsche?

Al Goldstein: I was actually working in what’s called Leveraged Finance which is helping companies finance themselves with bond offerings and debt financing which was actually a pretty amazing experience as a 23-year-old schmuck, I will say. I got to spend time with company CEOs and CFOs and help them build financial models which is an amazing experience. The other thing is that I met some incredible people a lot of whom I stay in touch with today that all have gone on to do incredible things, in and out of finance, in and out of entrepreneurship.

Alejandro: Then from that, you get the entrepreneurial bug. Tell us about how you got this.

Al Goldstein: Yeah. Actually, it’s a funny story. I’m a Soviet immigrant; grew up in the former Soviet Union. Came to the U.S. when I was eight years old. My older brother was 13 or 14; graduated from college in 1997, middle of the dot-com boom. He was a software engineer. Brilliant software engineer. Started writing code when he was probably 12 years old. Went out to the Valley, and he got to experience all of the craziness that was going on in the late ’90s and early 2000s. I was learning finance and math at the University of Illinois Urbana-Champaign. I was looking on and saying “Why is this taking so long? I want to do that too.” One of my internships, when I was in college, was at a trading company. The CEO of that trading company became a great friend, and he ultimately became my first business partner because he had stopped trading. He was looking to build a company. I was 23. I was getting very antsy working in banking which is a phenomenal experience, but it was becoming redundant. So, the two of us got together and said, “Let’s build a company.” We weren’t even sure what we were going to do, but we wanted to build a business. He said this great line which I’ve now repeated to a bunch of young people that I meet with. It is, “I want to put you into a position to benefit from your hard work.” It was the start of something phenomenal. What he didn’t mention was he wanted me to go from having a good salary to having no salary to moving back in with my parents, but it was a phenomenal start to the journey.

Alejandro: Then, your first company, was this Enova International?

Al Goldstein: That’s right. We jumped into what’s called digital lending or online lending today before that term really existed. Started that business in late 2003 when I left investment banking. Early 2004. My brother who was out in Silicon Valley came on as our third partner, co-founder. Really was the brilliant software technical mind of the company. The whole idea was to digitize credit for underbanked consumers in the U.S. which is a huge population. It’s become a huge industry, and the business did phenomenally well which was exciting. We went from 0 to 500 employees over a 4 or 4 1/2-year period. I built, I would say, the best company in the space and ended up selling that business to a public company over a relatively short period of time.

Alejandro: What were the terms of that transaction, Al?

Al Goldstein: A lot of this is public, so I can talk about it. In total, we only raised 4 million dollars of equity capital, which is obviously tiny by today’s client. Ultimately, the business sold for about 250 million dollars.

Alejandro: Really cool. I don’t know if you’ve ever read the book called The Founder’s Dilemmas. It’s from Professor Noam T. Wasserman, from Harvard, and he talks about co-founder dynamics. Especially when you’re building a company with let’s say a family member because sometimes, it’s not as easy to really tell the things the way they are. So, what was the experience of building such a big company with a family member?

Al Goldstein: I’ve read that book. I’ve read a bunch of books on the subject. I think I’ve broken every one of the rules in all those books. They talk about not working with family members and friends. I joke, there’s this wonderful book called Founders at Work where it just interviewed with 50 different founders. One of the quotes in there really resonated with me which is, “When you’re 23 years old and trying to start a company,” and this is before startups were as cool as they are today; it’s about getting people that you trust that want to work with you. It’s really, really hard. So, we hired everyone we knew that was smart. My brother was my co-founder. My best friend from high school was our Chief Operating Officer, but I will say my most favorite experience from all those times. You get to work really hard with people you know and trust, and you win or lose based on how much work you put in and a lot of luck. Sometimes, it works really, really well. Sometimes, it’s challenging. As long as you’re willing to live up to those challenges, I think it’s been great. My mentor and co-founder is one of my closest friends today. We see each other all the time. He’s a godfather to my kids and vice versa. My brother and I are super, super close. He’s gone on to start a different company, and we continue to work tangentially together.

Alejandro: Got it. By the way, that book, Founders at Work, is Jessica Livingston from Y Combinator. Is that right?

Al Goldstein: Correct.

Alejandro: That’s a really good book. Then after this experience, you basically go on to start Pangea Properties. How did the idea come together?

Al Goldstein: It was pretty interesting. I had two years to run that business, and I left at the end of 2008. The world had blown up. We were in the middle of the financial crisis. Growing up as an immigrant kid, I probably read too many of those Rich Dad Poor Dad books talking about how to buy real estate and invest in real estate. I’ve always been really interesting in doing something tangible where you could actually see the before-and-after photos. You see the product. Real estate is one of those businesses that is very conducive to that. So, we had this idea to start buying some distressed properties and really making them very nice, and making them a great product for what we call the Workforce Housing Tenant for middle-income consumers. They just want a great place to live. We were fortunate enough to have sold our business, so we had some liquidity. Our shareholders and investors had some liquidity. We were crazy enough to overlook the fact that we had no real estate experience. So, we jumped right in, in 2009 and started buying distressed apartment properties around the Chicago area initially.

Alejandro: Got it. How was this experience for you of shifting from one industry to a completely new industry that you had no idea about?

Al Goldstein: It was different, but it was also really exciting and interesting. There were a lot of similarities quite honestly because the tenants that we were building apartments to rent to were very, very similar to our borrowers in our first business. We understood their fundamental needs, and we thought that if we provided them a great product, they would be really loyal. I think we got a huge advantage since we came from a technology business that was focused on data and analytics, and we were focused on modeling machine learning pretty early when nobody in real estate was even thinking about those things. So, we had the benefit to approach the problem with a clear perspective. We were very lucky and fortunate to do this. We found some really good real estate experience that helped us learn the building blocks and basics. How do you manage property? How do you deal with [10:10] physical real estate? But we definitely made a whole bunch of mistakes along the way.

Alejandro: How many apartment units do you have now?

Al Goldstein: That business has done phenomenally well. I’m no longer the CEO. One of my partners is the CEO who is phenomenal, who is actually someone I met when I was at Deutsche Bank which has a trend of meeting great people in relational terms. We own and operate about 15,000 apartments now across about four different markets. We actually started what we call Pangea Mortgage Capital which is in the lending business.

Alejandro: For this company, you are the Executive Chairman. What is the role that you play as an Executive Chairman? What are the duties like?

Al Goldstein: From the beginning as Executive Chairman, it’s really on strategy and how do we build new business lines and invest in new ideas? That’s really how we think about our business. We’re always trying to reinvent ourselves and think about ways in which we can continue to expand our purview. We’ve done that now a few times where we started just buying distressed apartments in Chicago. We now operate across multiple markets. We have a lending business that scaled really nicely. We have 600 employees. We’re providing third-party management construction services to other real estate owners, and our real estate continues to expand and do that. I really work with our CEO who is phenomenal and help him think about the future; help him think about how to invest in new business lines, how to invest in people, how to grow the opportunity set that we have access to.

Alejandro: Got it. In 2013, you launched Avant. Didn’t you have enough already with operating your previous companies? How did you come up with this concept?

Al Goldstein: Yeah, it’s kind of funny. I guess we’re all masochists to a certain extent. Personally, I just love the idea of building new things. The way Avant came about is really quite interesting. My two co-founders at Avant were actually former interns at Enova, my first company, and they’re both phenomenal. One is a brilliant software engineer, computer scientist. The other is a really phenomenal data scientist product-focused person that really thinks about how to build products in a unique way. Both of them were at Y Combinator. Actually, as you mentioned, [12:39] from Y Combinator with a different company after they left Enova. We had always talked about building something really, really big together in financial services. There’s this funny founder story. When they were building their other business, they needed a loan for their other company, and they went into one of these physical brick and mortar stores, tried to one. The process was incredibly painful. The computers didn’t work. They had to leave and come back. So, it was a phenomenal story how Avant got started. My two co-founders, after they left Enova, went and joined Y Combinator with a different startup idea also around financial service. But we had always talked about doing something really big together. There’s this galvanizing moment where they actually needed a loan to get their other business off the ground. They went into a physical retail location and tried to get a personal loan. The computers were down. The systems didn’t work. They had to leave and come back multiple times. It was very clear; this was our thing to build something really big. We think originally the idea was how do we build a digital CapitalOne? Basically, a digital bank that provides great products and services to at least 40% of the U.S. consumer population that’s in the middle-income category that largely the banks haven’t focused on? That’s what we started doing in 2013, 2014.

Alejandro: Talking about CapitalOne, we’ll talk about that just in a bit, but you guys even got an investor QED, Nigel, who is one of the founders of CapitalOne. Great investors. We’ll talk about that in just a little bit. How was the process? So, you come together with these guys. You knew them from before, but how was the brainstorming of, “Hey. This is kind of like the incubation of this concept, and this is what it looks like, and let’s just throw it out to the world, so we see what happens?”

Al Goldstein: I think our original idea was really pretty simple. In my experience, most ideas at their core have to be simple to be successful because everything is so complicated. As it stands, it’s hard to do anything, so the more complicated the ideas, the more likely it is to fail. So, when we first started thinking about it, the idea was basically there’s a huge market in the personal-lending world that is brick-and-mortar based. Either you go into a physical bank branch or go into a non-bank lending branch to take a loan. This is going back, at this point, six or seven years. Our idea was really pretty simple. There’s a reason that Netflix won, and Blockbuster lost. It’s because Netflix just made it really convenient for customers to access content. When you’re talking about money, you don’t even have a physical asset. It’s by definition digitized. The idea was: make it really, really simple and transparent and clean for consumers to access credit when and how they want to do it. That was our core idea from the start. It was really hard to implement because financial service is complicated, requires lots of capital, it’s very highly regulated, but that was really the simple idea from day one.

Alejandro: Got it. What ended up being the business model?

Al Goldstein: Over the last five or six years, we’ve really built two separate businesses which is interesting. For the first three or four years, we really focused exclusively on building the best lending company that we possibly could. If you fast-forward now, we’ve originated nearly 1 million loans to consumers, over 6 billion dollars of loans in the form of personal loans through the Avant lending brand. We launched our own credit card product about a year and a half ago, scaling that up nicely so that if you need a credit card, you can now come to Avant, take a card which we call the Avant Card that’s issued by our partner WebBank. Then we provide a great product that’s very transparent to consumers. The long-term plan is really to build the digital bank with the entire suite of lending and banking services that are the most transparent consumers could possibly find.

Alejandro: Lending is also painful, Al. I mean, there’s just so much regulation. So, how was this process for you and the team?

Al Goldstein: Yeah. There’s a tremendous amount of regulation. We built our company from day one to really be focused on compliance and transparency. So, we have today about 650 employees in the company. Probably 30 to 40 of those employees are focused exclusively on compliance making sure that we are fully, fully, compliant with every aspect of the regulatory environment in which we operate which is incredibly complicated because we operate in a federally-regulated environment where you have a number of federal regulatory agencies that oversee us and our partner banks. We have 50 states where we’re operating. We have state regulators, and legislators, and legislation that we have to comply with. So, that’s really the #1 focus is make sure we’re providing great products to consumers that are fully compliant with all the different regulations that we have to live within.

Alejandro: With some of the people that I’ve been speaking that are also in fintech and also lending, they always say that some of the critical hires that they’ve made were perhaps people that either had like the general counsel title or stuff like that. Did you experience something similar?

Al Goldstein: Oh, for sure. If you look at our founding team, we started with the three of us, my two co-founders and I. Our first two employees were folks that we knew really, really well. One was our Chief Operating Officer who had worked at my prior company who’s phenomenal, who’s now the President of Avant. The other was our General Counsel and Chief Compliance Officer, and she happened to be my wife.

Alejandro: Wow.

Al Goldstein: She had great experience. As I said, I’ve broken a lot of those rules. She’s phenomenal at infrastructure systems. We grew from there. We brought on great people with backgrounds in banking. Our Chief spent 30 years at Household Finance and HSBC. We have folks like Nigel Morris, as you mentioned from QED that are involved with the company. Sheila Bair is a former board member. She spent three years on our board. She’s the former chairwoman of FDIC. So, we have a bunch of folks around the table that have been really, really helpful and instrumental in helping us in what is a very complicated business.

Alejandro: During the early days, Al, what were some of those big challenges that you were facing while building the business?

Al Goldstein: Well, as you said it’s a very complicated business. You have to focus on really the compliance and regulatory aspect of what you’re trying to do. But also, we were lending out capital. We had to go and raise that capital from equity investors, but we also had to go get debt capital and funding. It’s a little chicken-and-egg problem where it’s hard to get that kind of capital until you have performance. So, until you actually have shown that you know what you’re doing, that you know how to understand fraud, that your modeling capability which we were really focused on building the best machine learning AI capability in the entire lending universe actually work. Until you could prove that, it’s very, very difficult. You fast-forward to today; we now are one of the most prolific issuers of securitizations in the whole category. We’re in the process of completing our tenth securitization transaction. We performed. Not only are we providing great products, the credit is working which is really the other side of it, and that takes time to prove. And there are no short-cuts. That’s the challenge is that no matter what you think and what you believe, the credit investors really are focused on time. That’s what we’ve really been focused on. It’s taken, at this point, six years, but we think we’ve really proven ourselves as one of the best around in this world.

Alejandro: It’s interesting that you touch on this because I was present to the fact that for an operation like this, it’s capital-intensive because you need the capital to support a growth of the business, but as you were alluding to, you also need the debt capital that you’re really using to provide for the lending side, the piece of it. So, can you tell us about how you went about tackling these fronts and what was the journey like?

Al Goldstein: Yeah. The journey was extremely challenging. We started, as always, with folks that we had relationships with. It was a really hard time, and we had to show that our performance was going to work, and that was okay. Over time, we built great relationships with large financial institutions, large banks, large money managers and asset managers that really, I think, believe that Avant’s Lending Business is really stable and really best of breed. That’s taken a long time. I’ll tell you, what we’ve been focused on the last three or four years is really building a completely new business. So, we started as a lending company, Avant. We realized about three or four years ago that we were building some pretty amazing capability around our technology and user experience, around fraud analytics and fraud capability, around decisioning, etc. That was not only relevant for us but was relevant for very large financial institutions that were trying to digitize their own credit offerings. So, about three years ago, we packaged all of that into a separate company which we now call Amount. That business is really just a pure technology company that’s focused on helping large financial institutions digitize their credit offerings. Some of our partners now are some of the largest banks in the world. HSBC is an example which is a 2-trillion-dollar global institution is one of our partners. We’re helping them to digitize their credit offerings so that you get the same experience as a customer of HSBC as you would with a pure online company like Avant.

Alejandro: Got it. We’ll talk about Amount just in a little bit. In this regard, what is the main difference that you found that perhaps you can share with the folks that are listening between raising money for your company and also raising money for the lending site?

Al Goldstein: Well, on the equity side of the equation, it’s really about a story and a vision. I think we had a big vision. The consumer credit market is gigantic. It’s 13 trillion dollars just in the U.S. alone in outstanding loans. A lot of that is mortgage, but it’s a really big antiquated industry. I think from an equity perspective you can get excited about the fact that there’s a lot of room for disruption. On the debt side, debt investors aren’t really betting on the story. It’s a component of what they look at, but really what they’re betting on is facts. That’s where you run into challenges because when you start early, you just don’t have that many facts. You have a lot of ideas and a lot of experience which is what we had in the category, but until you actually show that you can perform over time, lending investors aren’t really going to believe it. So, it’s been a challenge. It took us years to show that the performance of our models and our portfolios really are as good as we thought they were going to be. I think we’ve now proven that to a lot of the folks that we work with, but it just takes time. There’s no shortcut to it.

Alejandro: Yeah. I hear you. On the equity side, you were mentioning the lineup of investors that you have is remarkable. You have RRE, Founders Fund, QED, we were talking about them, DFJ, and then I also saw more on the private equity type of thing: KKR, Tiger Global. How did you manage to get these folks aboard?

Al Goldstein: It started early with August Capital who’s one of our lead investors. It’s a storied firm, and like most of the folks that we’ve talked about, I’ve gotten to know them over a very long period of time. One of the senior partners at August Capitals has been a great friend for nearly ten years. We had always talked about doing something together, so when we were talking about this idea, they were one of the first folks that we actually talked to. They decided to invest, and they led our first couple of rounds of funding. Over time, we met some incredible folks. We met the folks at Tiger Global. Really had a phenomenal view of the space and the category and have an unbelievable track record and experience. Chase Coleman, I think, is one of the smartest people I’ve ever come across. They’ve been a phenomenal partner. Then ultimately, we met General Atlantic who led our last round of capital. They have a storied firm. It’s been invested in some of the biggest names and growth. Uber and Airbnb, etc., invested in China. We’ve been very, very fortunate that our vision, I think, is really, really big. How we try to set ourselves apart with execution is whatever we say we’re going to do we really try to make sure we actually do it. And if we ever make a mistake, we’re just always extremely transparent on the fact that “Hey, this is what we said. We missed it on this front, and here’s why, but this is why we’re not going to do it next time. This is why we’re going to get better.” I think over time, that resonates with folks.

Alejandro: Yeah. That’s integrity; delivering on your work, and that creates trust. So, I completely see that, Al. Right now, Avant, how much capital has been raised in total that is publicly disclosed?

Al Goldstein: We’ve raised about 600 million dollars of equity capital in total, and billions of dollars of debt capital on top of that to finance the lending in our portfolio.

Alejandro: Got it. So, on the equity side, as you were maturing as a business because you’ve done multiple rounds, what kind of expectations did you see on investors. Like what did they want to really hone in on in terms of metrics? What was important to them?

Al Goldstein: I think it just depends on what stage the company. In the beginning, the focus was really on the opportunity and how big it can be. We collectively think that we operate in the gigantic category where you can build a very, very large company. Today, as we said, we have two companies. We both have very, very large opportunities. That was really the one. As we got more data and more information, it was really much more about the Unity Economics and customer acquisition and ability to scale and retention. So, as we got further along, we really were very focused on building a financial model, building out the Unity Economics, making sure our customers were really, really happy, and they were really, really sticky in providing them great value. So, I think if you look at later rounds, that was really the focus of investors is does the model work? Does it scale? How do you get the profitability? How do you grow that over time?

Alejandro: I was just at the South by Southwest, and I was speaking with someone that was interested in this fintech and also lending space. One of his biggest concerns was about default rates. Was that also a concern for you guys?

Al Goldstein: For sure. 100%. The lending business is actually pretty simple at its core if you think about it which is, we’re trying to provide consumers with a great product. The main costs that we have to incur, one is customer acquisition cost. What does it cost us to find those customers? Two is default cost. There’s a third which is attrition is, if our customers are happy, are they going to stick with us over the long-term, and then take more products. As we provide more product capability ala credit card and banking accounts, etc., will they want to continue to work with us which, in turn, lowers that customer acquisition cost? So, defaults are one of the two largest costs of a business if your defaults are too high. It doesn’t matter how great of a product you provide to consumers; it just doesn’t work. So, that’s really at the core specifically for debt investing.

Alejandro: Got it. In 2016, I saw that you guys had revenues of over 437 million, over 400 employees. You are alluding to the fact that you guys have over 600 employees now, so how big is the operation today?

Al Goldstein: We have about 650 employees. We’re profitable now, which is something that has been a big focus.

Alejandro: Nice.

Al Goldstein: Obviously, it’s a difficult challenge for startups specifically in startups operating at a pretty big scale. We now operate multiple sites. We have four different sites where we have product and engineering folks. We have servicing meaning folks that pick up the phone and help our customer now in three different locations. We service not only on our own behalf, but we help some of our bank partners with servicing their consumers which is something that is really, really exciting and new for us as well.

Alejandro: Yeah. Also, I see that, and you can probably confirm this, but startups I think, it’s not only about the team, the idea, the execution, but I think the timing. I see that your space, the growth is somewhere to be or expected to be up until 2025 growing at a compounding annual rate of about 52% which is unbelievable. So, how do you see Avant and this space, in general, in a few years from now?

Al Goldstein: Yeah. I think the industry is gigantic, and if you think about other industries that have really transformed and become digital, the financial services industry is much, much larger. So, you think about transportation with Uber and Lyft, or the lodging hotel industry with Airbnb, those companies have become very, very big. The challenge with financial service is it’s very complex, and it’s regulatory-intensive and capital-intensive. But we think the opportunity is gigantic. We think we have an opportunity to build a really big transformational company just focused on providing credit to the 40% of the consumer population that really isn’t served well by banks. So, it’s a giant, giant business. It’s going to grow really, really quickly. I think our challenges really lay in our ability to execute.

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Alejandro: Right. And the other company that you’re leading, Amount. What is the business model behind Amount?

Al Goldstein: When we started, we said we were really focused on building technology and capability for ourselves, but I think what we figured out fairly early on was we weren’t competing with banks because we were really servicing a customer that the banks aren’t really serving. We think of our customers as having household incomes between $40,000 and $80,000. The banks largely want to lend to consumers that have household incomes that are higher than that, and they want to lend larger dollar amounts, and it’s not their focus area. So, what we kind of thought about is, can we package our ability, our technology into a separate company and offer that to banks and large financial institutions as a partner, as a peer-technology offering. That’s what we did. We called that company Amount, and we think about it as what can we help our banks amount to? That’s a pure technology business. There, what we’re doing is we’re helping our banks digitize their credit offerings. We’re helping them deal with digital fraud. We’re helping them use advanced analytics, machine learning, AI capability to improve their own credit ability, and then helping them improve their serving capability starting with personal loans, but really the focus is on helping them build the digital banks that they need to build that their customers want and demand.

Alejandro: Got it. So, Amount is a completely separate entity from Avant, or are they related?

Al Goldstein: They are two businesses that are really side-by-side today underneath one holding company.

Alejandro: Okay. Got it.

Al Goldstein: There’s actually substantial benefit that they derive from each other because they’re not competitive and our bank partners largely are lending to a different consumer population, so there’s a lot of learning that they get the benefit of, but they really have two separate goals. Whereas, Amount’s business is really dedicated to helping our partners improve their own capability and Avant’s lending business is to help our consumers provide them with great products.

Alejandro: One thing that I wanted to ask you. You have so many things going at the same time. Either as you being the CEO or the Executive Chairman as we were discussing earlier. How do you manage your time to stay effective on all fronts?

Al Goldstein: Well, I think the answer is, not very well, unfortunately, but I also have three little kids who are high-energy, and my wife now is back running a very exciting company called Spring Labs as a co-founder. So, we have a bit of a crazy life, but I will say I’ve been very fortunate to work with some really amazing people over time, so I just try to focus. I spent virtually all of my time on the Avant business really focused on the Amount business which is our technology business. We have a great team dedicated to that as well. Then we have a great team dedicated to the Avant lending business. But it’s very hard, so I just really started trying to optimize and focus on what’s important, and that changes day to day. It’s very, very hard, but really, it’s all about the people around you.

Alejandro: I’m sure that in terms of optimizing, perhaps the people around you help with that. One thing that I’ve noticed is that on your past two companies, on Amount and also Avant, you’ve been serving as the CEO and also the chairman. Why is this the case? Why didn’t you have someone as the chairman to be able to hold you accountable or something like that?

Al Goldstein: Yeah. That’s a great question. I think with startups, in my experience I’m not sure what the specific role difference between the chairman and the CEO is. I think as companies get bigger, that may change, but really, if you look at our board, we’ve tried to build these great boards that have combinations of folks from the investment world and operations world and regulatory world. I think the board really works as a unified body. So, I’m not sure there’s a specific difference in chairman or director versus board member. We really try to build the best team that we can. Over time, that changes. As you think about companies that go public, etc. the needs may change. The requirements may change, but really, we try to just build a really cohesive unit and team.

Alejandro: Makes sense. One question that I always ask the guests that we have on the show is, you’ve been around the block quite a few times, Al. So, if you could go back to the past and give yourself one piece of advice before launching a business, what would that be and why?

Al Goldstein: It’s a great question. I think I’ve made so many mistakes over time, but to me what I’ve learned is that you really need to have a great team when you’re starting because everything is so hard. It’s so hard to do anything yourself. Now, we really try to focus on whenever we build anything new, how do we make sure we pull together the right team for all of the tests required at least for the first 6 to 12 months? Because I think about all the mistakes that we’ve made over time, it’s always not having the right people at the table. It’s easier said than done just because teams are hard to build. Great people are always in high demand, and it’s hard to find partners with the same vision and ideas that you have, but I think the team is the key.

Alejandro: That’s a good one. And when you’re thinking about the team, Al, I know there are obviously different people that you need to bring to the equation like investors, board members, team players, management, leadership. Is there a specific type of quality or pattern that you have recognized on the people that you want to have around you?

Al Goldstein: I think it just depends on the business that you’re trying to build because every business is so different. So, if you think about financial services, and specifically fintech, clearly if you’re trying to build a fintech company, you need someone that’s going to own the technology side of the equation. You need someone that’s going to own risks and understand risk and analytics. You need someone that’s going to own regulatory, and someone that’s going to be the externally-facing person focused on investors and capital, etc. versus real estate is very, very different. I just think it really depends on the team you’re trying to bring together. To me, the biggest issue is how do you make that team gel? One of the books I read recently that I really love is The Culture Code. I think it’s written by Daniel Coyle. It’s just a phenomenal read. I’ve asked most of my partners and execs to read it as well. It just talks about what makes different high-performance teams successful. The definition of success is more than the sum of the parts. So, what makes folks like the Navy Seals and Seal teams successful? What makes folks like certain basketball teams and sports teams successful, and certain companies more successful? There’s just such a huge value to culture in my opinion as well as if you can build that right team, which is incredibly difficult to do, you can accomplish almost anything. But it’s hard to define what that takes. So, that’s the big challenge.

Alejandro: Got it. I love it. What is the best way for folks that are listening to reach out and say hi, Al?

Al Goldstein: Always just send me an email. My email is really simple. It’s al*@av***.com . I’d love to chat with you.