Speight enters QC FinTech accelerator with LendingTree as its model
(EDITOR’S NOTE: Local entrepreneur Doug Speight begins a new journey at the beginning of next month, joining the QC FinTech accelerator in Charlotte. It’s a three-month program. Ahead of that experience, we caught-up with Speight for an update on Cathedral Innovation Group, LLC and Cathedral Leasing.)
By Tom Ballard, Director of Innovation and Entrepreneurial Initiatives, Pershing Yoakley & Associates, P.C.
This is not Doug Speight’s first rodeo, so he clearly is not afraid of the proverbial pivot that frequently occurs with start-ups.
The Knoxville entrepreneur is now focused on an online model for Cathedral Leasing, a subsidiary of Cathedral Innovation Group, LLC, the company he founded last year that was previously profiled on teknovation.biz. Its initial focus was on the growing market for additive manufacturing and 3D printers and now Speight has even loftier goals.
Thanks to the selection of Cathedral as one of 10 companies in the next class of the 12-week accelerator run by QC FinTech and RevTech Labs in Charlotte, Speight is going to have a unique opportunity to further fine tune his business strategy from two perspectives – being a financial technology start-up that has a revolutionary and disruptive impact.
Speight has adjusted Cathedral’s business model twice in order to accommodate needs in the marketplace. The original business concept called for Cathedral to purchase 3D printers and lease them to clients.
“We lost deals, because we couldn’t pull together financing fast enough, and our financiers required high capital reserves,” Speight explained.
The second model or first pivot was what he called the “private label leasing model.” Cathedral acted much like an independent sales company, marketing printing technology and finding buyers. Once the “sale” was made, Cathedral turned it over to a back office party to finalize and manage the deal.
“We executed three deals before the end of 2014,” Speight said of the second model. “We’re still executing this business, while we develop the online marketplace.”
Cathedral’s Founder and Chief Executive Officer uses a well-known firm to describe his current business model.
“We’re building the LendingTree for equipment leasing,” Speight says, clearly indicating that the focus is enabling companies to receive multiple equipment lease offers from multiple sources, to ensure that the companies get the best rates and terms.
More important, perhaps, is the risk reduction that he is building into the online model.
“I’ve always believed in strategic partnerships,” Speight says. “Therefore, we’re licensing components of the online marketplace from a strategic partner.”
He adds that this strategy is intended to minimize as much technology risk as possible. “We know the platform works, it’s been a market leader for a decade,” Speight explains.
“We’re mating the online marketplace with new analytics that enable us to score and qualify companies, and then match them to our lease finance partners’ underwriting criteria,” he adds. “We can pre-qualify companies and offer our finance partners high quality candidates, so that they can approve deals and move quickly.”
Once developed and available, Speight says those wanting to lease equipment will complete an application for free, while Cathedral’s finance partners will pay a subscription and a success fee once a transaction is completed.
“Our goal is to get small and middle market companies the tools that they need in order to grow,” the always smiling entrepreneur told us. “We’ve been able to develop a successful model for additive manufacturing, now we’re zooming out to take advantage of a much larger market opportunity.”
The global 3D printing market stands at $3 billion, but is growing by 40 percent annually. According to the Equipment Leasing and Finance Association, the equipment leasing industry is $827 billion annually and encompasses manufacturing, agricultural, construction, medical and transportation equipment.
Speight came to the region when he joined Oak Ridge National Laboratory (ORNL) in 2009. He received entrepreneurial leave to start Cathedral and recently decided to resign from the lab to continue his entrepreneurial journey.