Tuesday, February 15, 2011
Interview with Jed Simon, FastPay
Story by Benjamin F. Kuo
Last week, Los Angeles-based FastPay (www.fastpaypartners.com) announced a round of funding and its services for providing advanced payment to online publishers, application developers, and game developers. We spoke with Jed Simon the firm's CEO and founder, about the company.
Tell us a little bit about what FastPay is about?
Jed Simon: The idea came from recognizing a pain point in the ad tech ecosystem. On one hand, you've got publishers, on the other, advertisers. Even with quality publishers and advertisers, there's still a lag in payment timing between the advertisers and publishers of anywhere from 90 to 120 days. We thought, there is a problem, everyone complains about it, let's address it.
So how do you do that for those publishers?
Jed Simon: We have a tech enabled product which accelerates payment, not unlike a traditional factor or AR lender. But, we have a non-equity dilutive product, and we accelerate cash flow. If you are a publisher, and have receivables from agencies, ad networks, sell side platforms, we'll aggregate them and give you a single payment every month, and put cash in your business on an ongoing business.
What's your background and how did you start the business?
Jed Simon: My original job out of college was as an investment banker at Morgan Stanley. Then, I worked at DreamWorks for ten years, all over the studio, everything from working with the President when I first arrived there to spending a long time at the music company. I then moved to London to run the international distribution arm. I really wanted to get back to a growth industry, after being in a stagnant industry. One of my responsibilities at DreamWorks was new media. I took at look at all these performance marketing business here in LA, saw the growth in online advertising, and noticed that one of the common complaints I heard from everyone---whether from application creators, mobile marketers, and publishers--was just how long it took to get paid. I thought hey--we can solve that problem.
Where are you in terms of company launch?
Jed Simon: We did something unique, is instead of raise a ton of money and then try to build our product and launch it, we soft launched last year, raised money from two high net worth individuals. One is Victor Coleman, founder of Arden Realty, and the other is John Glaser, a successful hedge fund manager. We tested, tried a few different things, applied different technology to the mix, and now we're at the point where we just closed our second financing and a bank line, and are ready to scale. We've just hired three new employees and are out there marketing our services and ready to grow.
Can anyone sign up for this, or does this take a more complex application?
Jed Simon: There are certain qualifications for the quality of your receivables, the product you offer. There are underwriting criteria that we employ. However, we're lots less strict than a bank, and if you come to our site you can learn more about our services. It's very easy to sign up, there's no term, and we've got lots of happy clients. It's a great way to build valuation, and leverage your balance sheet to drive your business, rather than going for a venture round in highly dilutive circumstances.
Is it a lot of work to apply?
Jed Simon: Right now, it's a little bit of work, but we're trying to make it less work every day. it's very simple, an application and a security agreement which you can e-sign. We can fund in a couple of days. Relative to these other agreements you typically see for financing, it's a walk in the park.