How SoLo Funds Is Bringing Equity to Financial Services
In 2015, Rodney Williams, a serial entrepreneur and founder of LISNR, wanted to find ways to bring equity to financial services. Williams comes from an economically disadvantaged background and remembers a time when his electricity was shut off as a child because his mother didn’t have enough money to pay for it. With the experiences from his upbringing in mind, Williams and his cofounder Travis Holoway devised a platform that would lessen the impact that emergency situations have on economically disadvantaged families. The platform, SoLo, uses a new model for peer-to-peer lending. It provides access to loans between $50 and $500, with terms set by the borrower. With over 325,000 users, SoLo Funds is a rare, equitable option for those who don’t typically have access to emergency funds.
Rodney sat down with Worth to talk about his inspiration for SoLo Funds, how it works, and what’s next for the platform.
What inspired you to create SoLo Funds?
I’m a three-time venture founder and grew up in Baltimore. As a kid, I remember when our electricity was shut off because my mom had to pay to fix a flat tire and didn’t have money to pay the electric bill.
I went out into the world and achieved a measure of success. When I would return home, it was overwhelming to see so many people in need. It’s not just in Baltimore, however, because the scary truth is that most Americans can’t afford $1,000 for an emergency. My cofounder Travis Holoway grew up outside Cleveland. We witnessed first-hand the lack of equitable solutions to help people. It was our experiences and those of our neighbors that inspired Travis and me to start SoLo. We wanted to figure out how to provide access to money in a way that was equitable.
How does SoLo Funds work?
Solo is a platform where our members can request and fund loans for emergency needs. Something that makes us unique is that members choose the duration of their loan, relay why they want capital, and decide how much (if any) repayment tip they’ll add to show their appreciation to the lender, within guardrails.
It is important to us that the borrower is empowered with choice, so SoLo puts the borrower in control of the loan. All revenue and costs associated with a loan are optional. We’re trusted by our users because we provide a more equitable solution. SoLo can be a better choice than uncomfortable alternatives such as paying late, borrowing against a future paycheck or car, having an awkward conversation with family, or selling or pawning an item from their home. We’re helping our members learn about capital management by giving them control of the cost.
Our goal with SoLo’s marketplace is to provide a real solution for our community members. We’re going to keep it as pure as possible while continuing to keep it equitable for all parties.
How did you get started as an entrepreneur?
At 24 years old, I was the first marketer to publish a patent for consumer-packaged goods conglomerate Proctor & Gamble. I worked on the Pampers brand and was pivotal at making Pampers the most digital brand at the time. That opened me up to technology. I started writing a patent that ultimately became my 1st company, LISNR. It uses ultrasonic technology as a way to help devices communicate. Today, it’s being used to protect payments and transactions. Think of it like an audio token, it allows for enhanced security when you buy online and fulfill in store. When I started LISNR I entered into a startup competition and that was the birth of me as a tech entrepreneur. Within a few months I was off to the races.
What audience is SoLo Funds focused on?
Our borrowing members are a wide array of Americans — students, teachers, government employees, police officers, gig economy workers. When COVID happened, we experienced the importance of SoLo for essential workers and hourly employees as 82 percent of our members are from underserved zip codes.
Our lending members are in the same community, and 30 percent of our borrowing members become lenders. They’re living in the same neighborhood as each other. They’re really into FinTechs, they love Acorns, GofundMe, Stash, Robinhood. They’re also looking for ways to give back, they want to make an impact. 16 percent of our loans don’t have tips or donations and we found our borrowers tip and donate less over time as they learn the cost of capital and establish repayment track records.
Can you tell me a bit about SoLo Causes?
At SoLo Funds, we’re always looking for ways to give back to our communities. Our platform allows capital to stay within communities, but we wanted to do more. Now, through SoLo Causes, a percentage of SoLo Funds revenues will support one of our nonprofit partners. We’re very excited to have Habitat for Humanity as our first confirmed partner.
This effort is part of SoLo Funds’ commitment to redistribute 100 percent of its members’ voluntary donation revenue to nonprofits by 2023. In communities that are often forgotten and struggle to make ends meet, SoLo Causes is committed to bridging the need for years to come.