Laurel Taylor left college with an undergraduate degree with the distinction of summa cum laude in one hand and $150,000 student loan debt in the other. From that moment, the next fifteen years of her life would be guided by decisions made to meet monthly student loan payments. She got her first job doing cold calls and sales for a base salary of $24,000 a year instead of starting a company like she wanted to, put off her 401k contributions, and delayed her decision to buy her first house and get married.
Everything was pushed back several years just so she could focus on paying for her four years of college education. Laurel Taylor had finally come upon the grim reality of a life with hundreds of thousands of dollars in debt, something that had become an integral part of American higher education that’s not even questioned anymore.
Laurel grew up in a small town. Her mom was a highly educated woman, so she always knew that she wanted to go to school, and she knew that student loans were just a part of the process. After graduating though, all the owed money and interest payments began to weigh down on her, and she figured that there must be a better way to deal with the problem. Just because something was accepted as normal didn’t make it good.
Laurel explained the obstacle she faced in her early days; “in the first five years of your career, you have the lowest earning potential, and your student loan payment is the same day one to year 17. You’re paying the same amount every month, but that’s disproportionately expensive to you when you’re starting your career.” That problem became apparent when she moved to San Francisco and got her first job. Because the expenses of living in the city were high and she had to make payments towards her student loans every month, she ended up with a boatload of credit card debt.
A few years later, when she turned 25, she went to a Consumer Credit Counseling service and consolidated everything, paying off her debt in one year. During that time, she moved to a house with many roommates, didn’t go out, and lived off of almost nothing; it was a wake-up call. It was becoming apparent that the struggles that she faced as a young professional would only be compounded by the race to pay off her student loans.
A few years later, she was at Google, leading a global sales team, and pursuing an MBA at MIT. During those years, inspiration struck in two different areas, making Laurel reconsider her career path and take a leap of faith.
The first event that happened was the passing of her sister. Laurel talked about the situation at the time,
My sister was diagnosed with brain cancer and during that process of losing her, one of the biggest regrets that she had was she always wanted to go back to school, but she didn’t pursue a graduate degree because she didn’t want to have student loan debt.
That experience was incredibly profound for Laurel. She realized that her sister was still lucky that she could go to an undergraduate school, but there were probably tens of thousands of people out there who were reluctant about getting an education because they didn’t want to graduate holding a package of an unfathomable amount of student loans with predatory interest rates on top.
The next event that happened was the second wave of student loans that came with her MBA program at MIT. Despite having a credit score over 800, a substantial income, and a high potential job at Google, she was still being charged a ridiculous amount of interest on her student loans even though she was low risk. Seeing that there was a huge overcharge, she started to think about ways to solve it.
At that point, even with everything in her life going in the right direction, the problem surrounding student loans was too big to ignore. In 2015, she quit her job, pouring all of her savings into her company.
It turned out to be a lot tougher than she expected. Many of the hurdles she encountered involved being a sole female founder. With a co-founder, there’s someone to go into board meetings with, to meet clients with, and most importantly, to have by your side through thick and thin. Being a sole founder was a lonely journey.
Six months into starting her business, she pivoted. Her original business model was a business to consumer (B2C) marketplace connecting graduates to employers offering student loan benefits, but she learned out that she could achieve her goal better if she switched to a B2B2C model. By focusing on helping employers pay off part of the student loans as a work benefit, they would facilitate the front and back end to make that transaction process incredibly easy.
With that shift, she had to create almost 100% turnover on the team as the people who were building the B2C platform weren’t suited for the new business model. Because of that, another change she had to make was dramatically reducing the company cash burn and redirecting the cash flow to the new product.
“There’s the reality of an existential threat along the timeline based on just how much money you have in the bank; here are my monthly cash burns so I can live for “X” number of months, so I got to hit my milestones along those months. You’re constantly in what they call the valley of death from startup to series A to series B and beyond. You have different moments where you have a threat of a valiant death where you’ve got to hit your milestones or you die because don’t get funding” she explained.
So Laurel had to get on the road to funding, a path that would take her through the struggles of getting money as a sole female founder and as a financial tech startup. When looking for investors for her pre-seed and seed rounds, one of the first problems she encountered was the lack of money going around. As she searched, she noticed an ongoing trend of money being invested into startups in later rounds like series A and series B, meaning that she would have to work harder to get cash for the company.
The second problem she encountered was getting this funding as a female sole founder. In the world of startups, only 2% of VC funding went to female-led companies, and investors also often looked for the magic “three co-founders” as a sign of a stable business, so she had to work strategically to get where she wanted.
After a particularly strong presentation, she was approached by her friend, an esteemed serial entrepreneur, who advised her, “Laurel you have to be better, smarter, more buttoned-up, more prepared, more articulate, more credentialed, and have more Awards. That’s what you have to do. You have to do more all the time.”
That was one of the most important tactics. By showing that as a person she was much more reliable, credible, and stronger than her competitors, she was much more likely to get funding. It was all about the self-discipline.
Even with all the preparation and good habits built, things can still go awry. One time, while she was pitching to an investor, he got angry and started screaming and throwing things at her. Another time, she pitched to a tier one investor even though she wasn’t ready for it. The experience was marred by a lack of preparation, and their story had holes in it. In the end, the investor just didn’t support their mission and they left the pitch feeling horrible.
For each of those bad experiences though, there have been numerous good ones, and Laurel acknowledges that’s just part of the experience of being an entrepreneur. There are enormous highs and enormous lows. Many times, she feels like she’s just one step away from giving up. Running a startup has meant forgoing a steady income and taking on a ton of stress. Fortunately, she loves what she’s doing. The problem that she’s trying to solve is close to heart and the fast pace means she’s always on her toes.
It’s crazy to think that from a small start they’ve grown to partnerships with companies such as Credit Union Student Choice and Ultimate Software among others to make student loan payments a benefit for as many people as they can.
Beyond these tactical victories, the vision that FutureFuel could put a dent in the $1.67 trillion of student debt is extremely motivating. Laurel sees “FutureFuel as a platform strategy that enables a radical change in the distribution of financial services and products.” In the future, they want to be able to take in all sorts of data about a student, where they went to school, their GPA, their company role, their salaries, and more to calculate a more accurate interest rate, potentially saving thousands. Right now, they save users on average $19,000 just by lowering the interest rate by 1.7%, and that’s just the beginning.
Creating a better system for student loans, FutureFuel is aiming to shape the future.
“Do it. Do it as early as you can. Become an entrepreneur on the side. You can become an entrepreneur part-time. I think that the tragedy is that student loan debt makes it very difficult for most people to become an entrepreneur because they have that monthly liability. But you can become an entrepreneur in your spare time. And it is a much smarter way of becoming an entrepreneur than the path that I took which was going all-in. You really want to have some data that the market is willing to pay. Just move into it and have a heavy bias to action. You got to get out in the market and start talking to people and start experimenting.”
If you want to learn more about FutureFuel, see their website here. To see our interview with TidyChoice click here. If you’re interested in the most recent business secrets, check out our Business Knowledge page.