Nate Matherson and Matt Lenhard came up for the idea for LendEDU while college students in Delaware. After going through the Iowa Startup Accelerator in Cedar Rapids, they moved back to Delaware. In December they joined Y Combinator in Mountain View, California. SPN caught up with Matherson over the phone.
SPN: What made you decide to apply for Y Combinator the first time?
NM: First of all, the money aspect. They do give you $120,000 for 7% of your company. For us, we’ve only raised a quarter of a million dollars, so that was a ton of money to us. Second, they do have a pretty awesome reputation for helping startups grow quickly. So we thought, “Why not give it a shot?”
SPN: What kind of feedback did they give you the first time about why you didn’t make the cut?
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NM: It was in April of 2015, and to be honest with you, we were not doing too well. We flew out to California for the ten minute interview. We went into the room, told them what we were doing, and the feedback was pretty much, you guys aren’t growing. And that was true. They said, reapply when you think you’ve figured it out and you’re growing.
Our customer acquisition strategy is what they pinpointed as something we needed to work on. By the time the next application came around, we had figured that piece out a little better.
SPN: The second time were there any other things you changed in your application?
NM: [The first time] we were doing about $1,000 a month in revenue. We were too small, and we weren’t really showing growth. They knew student loans were a huge problem. You see it everywhere in the news. I think that part resonated with them. I think that’s why they accepted us the second time around. We had figured out how to acquire customers, and student loans are still a huge problem.
SPN: Do you think having gone through Iowa was a hindering factor to getting in?
NM: Not a factor. They get applications from around the world. There are teams from Nigeria. There are teams from India. It’s very much a global application process. I don’t think it hurt us at all.
SPN: What has it been like interacting with the other teams?
NM: There are a lot of them. I think there’s over 100 other teams. It’s hard to meet all of them, but they segment the businesses into different groups. So we mostly interact with businesses in our group. Everybody has been really nice and really smart. You kind of feel like you’re the stupidest guy in the room all the time. But that’s a good thing because everybody has expertise in their one domain. There’s a guy who’s an expert at payments online, or a guy who’s an expert at email marketing.
SPN: What are you most looking forward to with Y Combinator?
NM: The Iowa Startup Accelerator was very hands-on. YC is very hands-off. But what they are very good at is pushing you to grow as fast as you can. Since we’ve been here we’ve just been working our butts off. We think we’re getting about three times as much work done now as before we moved out to California. What we’re looking forward to is having that fire under us to grow, grow, grow, as quick as we can.
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Read Nate Matherson’s guest post, “How to make the most of your accelerator experience”
Ryan Pendell is the Managing Editor of Silicon Prairie News.
