Managing cash flow is extremely critical for any business but especially so for service-oriented small businesses. Ensuring that invoices are paid in a timely manner is essential to preserving healthy cash flow. Often, invoices go unpaid because of a poorly-designed process on the part of the vendor for reasons like waiting to send an invoice, lack of automation, poor tracking once an invoice is sent, and poor follow-up on unpaid invoices. Finly is a payment management platform that allows small businesses to invoice and collect digital payments by leveraging automation. Vendors using the platform can invoice clients with a few clicks using their mobile devices and customers can pay immediately by text or email, making the solution ideal for solopreneurs like wellness providers, fitness coaches, musical lesson providers, and others. There are recurring options for subscriptions and memberships, and payors can use flexible payment options including split payments across multiple payment types, and all payment and transaction details are centrally stored. Finly offers a freemium model with multiple tiers that are based on the dollar amount of payments collected each month. There’s no fee taken on ACH collections and credit card payments are subject to the customary 3% fee which can be passed onto the payor.
LA TechWatch caught up with Finli Founder and CEO Lori Shao to learn more about the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $8.6M, and much, much more…
Who were your investors and how much did you raise?
We closed a $6M Seed fundraising round, led by the Urban Innovation Fund. Motley Fool Ventures, M13, Alumni Ventures, and all existing investors also participated in the round.
Tell us about your product or service.
We are on a mission to financially lift local communities. An all-in-one payment management platform built for service-based small businesses in the US, Finli allows businesses to manage invoices, payments, and customer communication in a single platform.
What inspired the start of Finli?
I was raised in LA in an immigrant family surrounded by small businesses and soloprenuers and saw first-hand how these business owners helped sustain the community and make it thrive. After 17 years in the corporate finance space, I realized that those same small businesses owners were consistently neglected by the Fintech space, leaving them to resort to antiquated methods of doing business such as handwriting invoices, dealing with cash or checks exclusively, and/or using payment platforms that scrape off percentages from their already slim profit margins. I envisioned creating a platform that anyone from a millennial new business owner could use, all the way up to my immigrant parents or people who do not have a strong technological proficiency. That was the inspiration behind Finli and what brought us to where we are today.
How is it different?
Other products on the market are cumbersome and need to be drastically diluted in terms of features to be applicable and usable by the solopreneurs and small business owners in our community. Simply put, they were not created specifically for them. Aside from being complicated, their pricing was also a hindrance. Finli does not have any transaction fees for the business owners. If you invoice for $200, you receive $200.
What market you are targeting and how big is it?
According to the U.S. Small Business Administration Office of Advocacy, 99.9% of US businesses are small businesses, representing over 60M individuals. Existing banking and administrative platforms have not built their solutions with the small business of today in mind, many of whom are utilizing five or more services to manage client billing and payments.
What’s your business model?
Freemium SaaS.
What are your post-COVID office plans??
Our employees will be fully remote for the foreseeable future. Our team is expanding and remote work allows us to obtain the best talent in any location, while also growing in the various markets that we serve.
What was the funding process like?
The process was grueling at first and we met with a lot of potential investors, looking for the perfect fit. That wasn’t unexpected for us as we are targeting a very niche market. Since we are a mission-based, social impact startup, we wanted to ensure that our investors were aligned with our mission. The process quickly became easier and refined, allowing us to accelerate through the finish line.
What are the biggest challenges that you faced while raising capital?
Although our segment in the market is large and sustains communities across the country, there is a stigma that it is not worth exploring. We knew that going into the process and identified it early as a hurdle that we must overcome. The genesis of Finli is to serve an underserved market.
The process did require a lot of stamina since we are a mission-based, social impact organization. We had to work harder for longer to achieve the results we accomplished, so running out of steam was not an option during the process.
I myself as the Founder and CEO of Finli am also a woman, an immigrant, and a mom. I’m not the typical face you would see in these meetings. Unfortunately, there is still a stigma in this day and age with working moms and our ability to fully run a company and that did possibly create opinions. Luckily, the results of our seed rounds proved otherwise.
What factors about your business led your investors to write the check?
First and foremost the payment technology and infrastructure that powers Finli is unique. They allow Finli to innovate on the money level, which is of utmost importance for our customer base and their customers.
Finli is focused on financial inclusion for a market yearning for a solution to call its own. When we created Finli, we extensively researched what our customers and their consumers needed, and built Finli to meet their needs. Everything we innovate from that point maintains that commitment to serve them based on their needs.
What are the milestones you plan to achieve in the next six months?
We are currently refactoring our database and undergoing a complete redesign in an effort to support our customers and improve their experience on Finli
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Every stage has its own strategy and set of hurdles. At the earliest stage, it is absolutely necessary to understand your consumers’ needs, while also being able to prove and communicate those needs to potential investors. That is a good way to exemplify that you have created a must-have “painkiller” to their pain points that your market segment cannot live without. You can start this process by talking to as many customers and prospects as possible to ensure that you’re headed in the right direction. This step does not require a capital injection to accomplish, just your time and access to the right audience. It also helps to reduce the touchpoints of the feedback loop; thereby cutting down expenses while improving the accuracy of user requirements and reducing technical and product debt.
Where do you see the company going now over the near term?
I see Finli becoming the de facto financial platform for community-centric service businesses where they feel safe, supported, represented, and respected.
What’s your favorite outdoor activity in LA?
I love hiking with my dogs! Our favorite trails are Mt Wilson, Eaton Canyon, and Griffith Park!
