Kevin Bennett On Raising $75 Million To Save You Money On Auto Loans

Kevin Bennett has been on a mission to transform consumers’ financial relationships with their cars. His startup has already raised tens of millions of dollars from notable investors and is growing rapidly. The venture, Caribou has acquired financing from Moderne Ventures, Goldman Sachs, CMFG Ventures, and Link Ventures.

In this episode you will learn:

• Company culture as your sustainable competitive advantage
• The invaluable asset of coaches and advisors
• Kevin Bennett’s top advice before launching a business
• Why you should only focus on 1-3 metrics
• Getting through the tough times of entrepreneurship

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About Kevin Bennett:

As Co-founder & CEO of HomeZen, Kevin developed the concept for, launched, and leads a venture-backed consumer transaction platform for residential real estate.

Connect with Kevin Bennett:

• Crunchbase
• LinkedIn
• Twitter

Read the Full Transcription of the Interview:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. I’m super excited with our guest today. He’s a guest that has been there, has done it, has done the full cycle in this journey of building, scaling, financing, exiting, and you name it. So without further ado, let’s welcome our guest today. Kevin Bennett, welcome to the show.

Kevin Bennett: Alejandro, thanks so much. It’s great to be here.

Alejandro: So originally from Washington, D.C. How was life growing up there?

Kevin Bennett: Life was great. I’m super fortunate. I grew up with a great family, and I was the oldest of three boys. I have two younger brothers. It was pretty idyllic, honestly. It’s funny; I think I came by the entrepreneurship bug, honestly. My parents were entrepreneurs, not in the technology field, but my dad graduated from law school and hung up his own shingle and got into a number of different careers, including real estate and representing professional athletes and trading currencies and commodities and all kinds of stuff. That was my model growing up, which was if you were fortunate, you could go into business, and if you had ideas and had different models of ways that you wanted to do things, you could start your own business. That was really informative. My brothers and I are all entrepreneurs in our own ways. Two of us are in technology and one on the investment side.

Alejandro: Do you think that the whole entrepreneurial thing was the inspiration that you got from your parents?

Kevin Bennett: I think, in some ways, it was subliminal. I just grew up knowing that was a thing you could do. Some folks were doctors; some folks were lawyers; some folks worked in different industries, but some folks were entrepreneurs and just started their own businesses. You could work for yourself and get started that way. That piece, in hindsight, was incredibly powerful. The other piece that was incredibly powerful was my parents focused on giving back, everything from sponsoring classes of kids to going to college. We went to soup kitchens and volunteered on weekends, and they dedicated profits from their businesses to the local community they were operating in. So I also grew up with that model of giving back in mission, and that has really informed my view of how I spend my time, which is on mission-driven startups. That’s the entrepreneurship and the mission side coming together. The other piece that was really influential is that my dad died of cancer when I was 14. That was a really tough time. My family was very close, and we stayed close, and it helped us all get through it, but it was a really tough time. I think it taught me early on that even in the toughest times and the darkest days, you can get through it. You just keep going. I think those are lessons in entrepreneurship; the lessons about loss and resilience were incredibly powerful going through the entrepreneurial journey. I don’t mean to be melodramatic about it, but it’s a rollercoaster. There are ups and downs, and there are moments when you think you have a rocket ship going to the moon, and there are moments when you think, “This thing might not be around in six months. I think having those lessons of resilience and being able to put one foot in front of another have been incredibly helpful, and I’ve been fortunate to have developed them.

Alejandro: In terms of mindset, as you were saying, we may not be able to make it in the next six months. What is that mindset? Obviously, it’s an emotional rollercoaster to us in entrepreneurship, so what did you learn from those tough times when you were in your teens, and you guys had to go and endure that challenging situation for the family with the passing of your dad? How did you implement that so that you also have that same mindset when you’re tackling very uncertain situations when building and scaling a company?

Kevin Bennett: It’s a great question. If you think about it conceptually, you’re often dealing in the context of complexity. Opportunity is often in complexity. You’re trying to understand complex systems complex problems, but the key is to break them down and to understand what are the key drivers? What are the key things you have to get right? What are the key metrics you have to move and be incredibly focused on? One of the lessons I’ve tried to internalize and tell myself and other folks in the team is: you never need to count higher than three because there are never more than three things that matter. Focus on the most important things in your business, the most important metrics you’re trying to move, and if you can get those right, then the other things follow. But if you solve for metrics 7-10, but not 1-3, 7-10 aren’t going to matter very much. I think that’s important in life when you have challenges as well. You figure out, “What do I need to do to keep going,” and whether that’s committing to school, committing to your family, committing to the different pursuits that are going to help you move forward, that’s true. You just have to keep moving forward in life and entrepreneurship. It’s all about moving forward. You need realism and not to deny the challenges, but also optimism that you can move forward and you can solve problems because life and entrepreneurship are about problem-solving and prioritizing them accordingly.

Alejandro: In your case, it took a little bit of time to get into entrepreneurship because after college, you thought the way to go was going into public service. But I’m sure that one of the key pieces that you learned was how to manage your agenda and time.

Kevin Bennett: Yes. It’s a great point. I did have that public service and giving back focus coming out of college, and that’s where I started in public service and working for the Governor of Virginia. I grew up in Virginia, just out of Washington, D.C., and worked there. That’s where I learned to see another executive. The Governor of Virginia was an entrepreneur, actually. He co-founded Nextel, Columbia Capital, venture capitalists. Mark Warner was very successful in the private sector before he went to the public sector. I learned from him, as well, when I was working for him in the public sector, but a lot of lessons he had learned in the private sector, and one of them was around managing his time. He had a whole team that was scheduling him and was focused on how to be strategic with his time and how to prioritize. My role was mostly in policy and speech writing, but I took those lessons around prioritization, focus, scheduling, and time management, and those have helped me throughout my career as well. I went to law school and ended up in the Obama administration working on technology policy, which is where I first engaged in technology. I’m an avid computer and dial-up modem. I’m dating myself a little bit. We used Prodigy growing up and all that, but I was never a tinkerer. I didn’t learn to take a computer apart and put it back together when I was ten, and I didn’t eliminate Stan Tycoon when I was 11 or anything like that, but where my entrepreneurial journey in a real way gets started is I discovered the magic of technology as a driver and forcing function for change. We all saw that working on technology policy and working with great companies in public and private partnerships that you could see that technology was going to change every aspect of the world and was changing every aspect of the world. So if you wanted to have a positive change on the world, it was all about leveraging technology to do that, and that was a huge opportunity. I ended up going to business school, and then I’ve been working on mission-driven startups ever since, primarily in the D.C. area where I am today.

Alejandro: What led you to finally go at it? Obviously, you did different companies, different startups. You were at Personal, then Opower, then LiveSafe, and that led you to Homezen, so what was that sequence of events that needed to happen for you to say, “You know what? I’m ready to do it on my own now.”?

Kevin Bennett: I wanted to develop my own pattern-matching. I wanted to get some reps; I wanted to get some experience working at different startups, and all mission-driven, but mostly post-Series A funded startups, and learn about the journey. All mission-driven, personal help consumers protect their data and ownership of that data. You had Opower, which was a later stage when I joined, and I was there through the IPO, and it was a great experience. I was helping residential energy users, and homeowners use less energy and help the environment that way. LiveSafe, back to an earlier-stage startup where it was about helping students stay safe on college campuses, was an incredibly powerful mission there. Then homes and helping make the housing market more affordable for buyers and sellers was really exciting. We helped people save money and got into the broader economy, and that was my entry point into the fintech ecosystem in a way. When we were selling that startup, I had gotten a note from the team of QED of Frank, Nigel, and Matt. They had this idea around vin MotorRefi that there are these consumer asset classes of debt starting with SoFi and that SoFi moment of digitizing and making it more consumer-friendly and fair. You would see that happen in mortgage; you would see that happen in credit builders and [10:41], but auto, there has been innovation about who sits in the car and what’s under the hood, but you hadn’t had that innovation around financing and the consumer’s financial relationship with their car. So starting with refinancing, what we’ve been able to do is help consumers save money. We save them, on average, $100 a month, MPS in the high 70s low 80s, and that was the ability to transform the American middle class and the relationship with our cars and save them money. That was something that I could get really excited about that Nigel, Frank, and Matt saw it as a mission-driven venture that had great economics behind it, as well, and we were excited. So I joined the team as the first CEO as they were getting it up and running. It’s been just under four years since then and an incredible journey.

Alejandro: And now, with Caribou, the advantage that you have, as well, is the experience that you go with Homezen, your previous company. There, you did the full lifecycle as an entrepreneur. What was that exit process for you, and what level of visibility does being a full-cycle entrepreneur give you when it comes to the entrepreneurial journey?

Kevin Bennett: It’s a great question. In my case, there are a couple of aspects. One, I had worked in multiple functions. I had worked in product, marketing, business development, and different areas. You wouldn’t want me writing any code, but other than that, I had experience in different functions. I had a sense of how the different pieces of a startup or an organization work. And, to your point, I had been in different stages. I had seen the Series A stage. I had seen the IPO process play out, and with Homezen, my then co-founder, Mike Spainhower, and we worked at all of these startups together. He was the co-founder. We started from his couch, and he’s our CTO at Caribou today, so a long working relationship. The other piece of it is you build relationships. So many of the people that I work with today are people I worked with at Opower, or I had met at different startups along the way. So it helps you build the network of people who you trust because when you are early stage, it’s unproven, so when people come and work with you, they’re investing in you, your story, and your vision. So that kind of relationship aspect of it is really important, as is the culture you build in early days. As far as the exit, I think you just learn a little bit about that process and what that looks like. I had raised capital at Homezen through angel family offices venture funds, so I had a bit of experience with that, and I found that to be very helpful in the life and journey of Caribou. We’ve raised about $75 million at this point. Each stage is different, but it’s all been an education, and a creative and the experience has been helpful for sure.

Alejandro: With Caribou, what is the business model for the people listening. How do you guys make money?

Kevin Bennett: It’s a great question. To the original vision, we thought it was an opportunity to build an online marketplace. Historically, first of all, most people didn’t even know they could refinance their homes. Less than half of the population even knows that’s something you can do. We’ll finance your car. Most people know they can refinance their homes, but very few people know they can refinance their car. In that case, what ends up happening is most folks don’t get a great deal at the dealership. They end up paying above an efficient market rate by two to three points APR often, and they can save money. So driving around and every month, they’re paying more than they need to on their financing or their insurance products, and there was a real opportunity to match them, build this matching marketplace that matched them with the best offers from credit unions, community banks, other lenders that they may not know or be aware of and other providers of insurance products. We built that, and consumers can check the rates in seconds without digging into their credit or giving up their social. Within 60 seconds or so, they can actually get firm offers of credit, and they can go through that process online and make it easy. As a result, as I mentioned before, you’re saving an average of $100 a month on your payments, often being thousands back and refunds from over-priced insurance products you had and have an MPS in the high 70s, low 80s, depending on the month. We’re really efficient because we’re a technology platform; we’re efficient for our lending partners, as well, because they love working with us. That’s how we got started, and the go to market was on a refinance. That’s been successful so far; we’ve been fortunate. Then we added traditional auto insurance last fall. As we’ve expanded the products we offer, we expanded the brand from MotorRefi to Caribou, which we launched late last year. With the new brand, auto insurance, plus refinancing, we’re really excited here in early ’22 about the continued progress traction and more product launches coming.

Alejandro: Before, you were alluding that you guys have raised $75 million from great investors like QED, the last round from Goldman Sachs, which was the Series B. I believe it was $50 million—not bad for a Series B. The question here that comes to mind is when you are engaging those investors, and you’re building trust, and you’re giving them the picture, and showing them how you’re able to execute over the course of time to give them that level of assurance that you might be able to find that direction toward success with your management team. How did you guys think about traction and metrics, and were you able to convey those in order to create that trust so that other people that are listening and are thinking about their own fundraising journeys, too, get inspiration from your own journey?

Kevin Bennett: It’s a great question. I’d say one of the biggest learning curves for me in my entrepreneurial journey was around fundraising. It’s the thing you’ve never done until you’ve done it, and it’s hard to approximate. You could have worked in product or marketing and understand what that’s like. I think it’s easy to psych yourself out, but, ultimately, all of this, whether it’s working with your board—and I’m fortunate to have a great board—or working with investors, hiring and building a team, it’s all about human relationships. It really boils down to that and building relationships with other people. That comes down to trust. I think sometimes folks worry, “If I talk about my idea, maybe someone might steal it.” But I think it’s much more likely that people want to help you. The beautiful thing about the entrepreneurial ecosystem is that people generally want to help each other. Whether it’s an investor or another startup founder, reaching out, sharing your ideas and getting feedback, having a conversation, and understanding how they see the idea, where they see the strengths and weaknesses. When you get feedback from someone, that’s just their perspective on what they would do. That doesn’t mean you have to do it. You have conviction and your ideas. But, also, you can always get smarter. Investors are incredibly intelligent people, for the most part, and they can give you great feedback. Then you build that relationship and that trust. There’s also something powerful about being open to the relationship, allowing yourself to be a little vulnerable, which it is. One of my favorite lines that I heard from someone else was: vulnerability is the currency of human relationships. It’s how you build relationships. Then, building trust is often about sharing your vision, helping someone understand it, and then doing what you say you’ll do. So having a conversation with an investor and then checking in a month later, two months later, or a quarter later and say, “Here’s what we did. We said we were going to do it, and we did it.” That among, especially folks who don’t have a previous working relationship, can be incredibly powerful.

Alejandro: And being open and authentic about what the journey has been and what you have in front of you. Some founders are perhaps worried about being too open or too transparent, so what do you have to say about that, and also to them?

Kevin Bennett: It’s a great question. I think two things: 1) investors get thousands of pitches. They know; they can smell it. So you’re better off being authentic because they see the body language; they hear it in your tone, your language. Generally, people are going to read and have a sense for where things are. The best thing you can be is to be yourself. One of my earliest pieces of advice I got from a friend who is also an entrepreneur was there’s no one way to do it. You have to be authentic to yourself, your style, and your personality. No one is perfect. You’re going to be better at some things and worse at some things, but be open and honest with yourself; be open and honest with other people about it. You’ll get better advice; you’ll get more help. That’s really important, that level of authenticity. People want to work with people who are authentic, and whether you’re adding someone on your team or adding an investor to your cap table, they’re committed to working with you for a long time. So you want to be able to build that relationship in a way that can be healthy. It’s not just a transaction. It’s not just a raising event. It’s a long-term relationship, and if you approach it that way, I think investors appreciate that. And they know everything isn’t going great all the time. Sometimes you can feel the pressure as an entrepreneur to say everything is great all the time. There’s never a point where everything is great all of the time. There’s always something. I think you can be open about that. I think you also have more credibility than when you say something is going great. It really is because you actually tell them when it’s not going great as well.

Alejandro: In terms of the operation, Caribou, for the people that are listening to get a better sense, is there anything that you can share in terms of the number of employees or anything else that you feel comfortable sharing?

Kevin Bennett: Yeah. One of the things that was fortunate that we did was to invest early in culture and the team because we’ve hired so quickly, and we’ve gone through a pandemic, obviously. I don’t think anyone had that on their bingo card. What that has allowed us to do is to be intentional about our culture and to have a strong culture. So every company has a culture, and they communicate in signal. Then people who are a good fit for your culture can opt-in to that culture because they understand who you are and what you’re about. We’re a mission-driven company. We’re a values-led company. Our values are a cultural operating system, and ultimately, your culture is your product. It’s how you get your team members to join. Obviously, great people create great experiences, great value, and build great companies. That’s what it’s all about. For us, the way that’s operationalized. When the pandemic started, we were roughly 40 people, and we’re over 400 today.

Alejandro: Wow!

Kevin Bennett: We grew over 300 people the last calendar year. We’re going to go through a similar journey this year in terms of growth. Revenue growth has followed a steeper trajectory in a positive way. So we’re excited about that. We crossed a billion dollars in loans last year. We’re really getting to scale and building the teams, structures, and support. There’s that phase of product/market fit. Then once you have product/market fit, it’s all about scale, building the management structures, empowering the team, hiring great leaders, and having the right coaches. The thing I’d say about coaching is that coaching is invaluable. Sometimes there is a stigma that coaching is what you get when you’re not doing a good job. I think it’s important for us, as entrepreneurs, to destigmatize that and talk about coaching as a critical asset. In fact, I’ve coached the entire time through Caribou, and it’s been an incredible process. Getting coaching from the members of the team, getting the right advisors, and surrounding your team with the right folks who can help them self-actualize, be their best selves, and improve. It’s an incredibly freeing perspective when you get there. Your goal is to hire great people, and it’s a huge investment. Then invest in their success, and invest in your own success as well. So coaching can be a huge asset. You can get that through formal coaching, through informal advisors, or a formal advisory board. I’m a huge fan of finding the right mentors and coaches.

Alejandro: I’ve heard you say that your culture is your product as we’re talking about people. Can you expand on that?

Kevin Bennett: Yeah. When you think about the leading indicator as opposed to the lagging indicator, a lagging indicator is revenue or a brand. The leading indicator is what creates that. Obviously, you’ve got to build the product; you’ve got to acquire a customer center. But before any of that, you have to bring the right group of people together to build the organization, to build the product, to build out marketing, to build the engineering team, to build it all. Culture is incredibly important. There was a very old-school capitalism that what was known as HR was effectively a call center, and you should spend as little as possible on it, minimizing everything else. I’m a believer in stakeholder capitalism and the view that you should be flipping that on its head, that actually, people and culture, as we call it, is the heart that pumps the blood through the body. If that organization isn’t high-quality and isn’t healthy, the rest of the organization won’t be healthy. You won’t be able to hire great people, obtain great people, build the culture that you want. So being proactive, seeing further down the field, and focusing on building a great culture can not only help you attract talent but keep talent and differentiate yourself in the market. I think culture is one of the only sustainable competitor advantages out there. Someone else can rip off your UI, your pricing model, or something else, but you can invite your competitor into your office. They can see your culture, and they can’t just go copy it. If you get that recipe right with culture, it sets you off to have a great and exciting path and to be financially successful, yes, but also to create a community and an organization that people really want to be a part of. That can be extremely powerful.

Alejandro: Imagine you go to sleep tonight, Kevin, and you wake up in a world where the vision of Caribou is fully realized. What does that world look like?

Kevin Bennett: It’s a great question. We’ve been going through these exercises as we get traction and continue to grow. One of the fun things about the space we’re in, as we get deeper in the space, the opportunities continue to present themselves. There’s just more and more innovation and transformation that we can do in the space. I think we’re pretty far from a world where it’s solved, but what we’re aiming to do is transform consumers’ financial relationships with their cars. How do we do that? We look at startups and trends about how do you make illiquid assets liquid? How do you help consumers leverage what is the largest or second-largest asset in their lives and actually make it a financial asset and feel like a financial asset and not feel like a liability? There are so many opportunities and ways to do that. We’re excited about how can we build a much more sophisticated ecosystem in auto fintech? There’s a lot of opportunities out there to do that. It’s hard for me to imagine getting all the way there. There’s a ton to do. We’re really excited about it, and I think the other thing and some folks will ask you this question. I think it’s also okay to not know the answers to questions. This is another thing to be comfortable with, like, be comfortable with discomfort sometimes. You know, what would happen after that? I honestly don’t know. I’m so focused on this; it’s really exciting. The deeper we get into it, the more opportunity we see, so it’s really exciting.

Alejandro: Nice. One of the questions that I typically ask the folks that come on the show is, imagine that I put you into a time machine, and I bring you back in time with all this wealth of knowledge that you’ve been able to acquire. I bring you back in time, and you have the opportunity of speaking with your younger self, with that younger Kevin, maybe that younger Kevin back in 2015 that was launching his first company. Imagine you were able to have a chat with that younger self, and you were able to tell that younger Kevin one piece of business advice before launching a business. What would that be and why, given what you know now?

Kevin Bennett: It’s a great question. I think it’s actually more life advice. My instinct is to say, believe in yourself and stay focused. There’s a lot of noise, and a lot of people have different opinions and advice. Some of it is great, and some of it is not great, or it’s great advice for someone else but not for you. Also, as we talked about, going back to the beginning of the conversation, it’s a rollercoaster. There are good times; there are bad times, but believing in yourself, staying focused, and being authentic to your vision and to yourself as a human being, is so critical. Especially when we’re early in our lives, sometimes you don’t know yourself as well, or sometimes you don’t have the confidence in the person you are becoming or will become. But have confidence in that person in your vision of that person, believe in yourself, stay focused, and when you hit hard times, shake it off and keep going. I think that’s advice that I’ve only gained more conviction on over time, and I think it’s incredibly powerful for people.

Alejandro: I love it. Kevin, for the people that are listening, what is the best way for them to reach out and say hi?

Kevin Bennett: Check us out at gocaribou.com at the website. Look us up on social media. I’m active at Twitter and social accounts for the company. Check us out. I would say we can save most people money, so hopefully, we can also save you some money along the journey.

Alejandro: Amazing. Well, Kevin, thank you so much for being on the DealMakers show today.

Kevin Bennett: Great. Thanks so much. Take care.

* * *
If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at al*******@pa**************.com.

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