Working at Optimizely definitely showed me the power of small copy changes. And LLMs are perfectly suited for generating text variations. Makes a ton of sense.
When lending to an end borrower, a lender is often focused on their ability to underwrite the borrower to understand the risk of the loan.
We think it's very unlikely that Level could become the best underwriters of all the different types of borrowers in the world by lending directly.
Instead, the most innovative founder types in the lending space are often finding creative ways of using non-traditional sources of data or underwriting techniques to be able to lend to borrowers that otherwise may be left underbanked or unbanked.
So hopefully, by lending to lending companies, Level opens the door to new ways of thinking that we ourselves may have missed.
But you make an excellent point that there could be different flavors of the Level platform that could enable the same end result of allowing innovative founders to explore new ideas.
Good question. Right now we are building customer empathy feeling the challenge of starting a new lending business.
The choices for us are similar to the customers we serve. Either we:
1) lend off of our balance sheet
2) sell equity of the company to power more lending
3) prove a longer track record for traditional debt providers to do a larger debt deal
4) open up a marketplace so that debt providers can use Level to invest in alternative assets that they might not otherwise have access to
We're going to be exploring a collection of these techniques to see what can be a scalable source of capital for both Level and the customers we serve.
Good question. We’ve so far noticed that going direct can still be a painful process, where deals can take a long time to close (3-6 months) or take a lot of legal fees ($100k+). We've also seen that companies lending at a larger scale are still trying to diversify their source of capital.
This is definitely a challenge we will face as we continue to try and serve larger customers and are hopeful that by focusing on having integrations into financials and streamlining the process, we can make Level the first choice of capital even as customers hit larger lending volumes.