David Klein is a classic entrepreneur in that he saw a problem and created a solution.
Before launching CommonBond in 2011 with co-founders Michael Taormina and Jessup Shean, Klein worked in consumer finance at American Express as Director of Strategic Planning and Business Development, where he led a team that managed a $250MM annual portfolio. He also worked at McKinsey & Company, advising clients in financial services. Ivy Exec talked to him about his journey.
IE: What inspired you to create CommonBond?
DK: Two things happened. I went to business school with the goal of launching a company before graduating, and I tried to pay for business school with student loans. CommonBond was born from the personal pain I experienced going through the student loan process.
IE: What does CommonBond do?
DK: At the most basic level we’ve created a simple, low cost, more personal student loan experience. By raising capital from a community of individual (e.g., alumni) and institutional investors, we provide students with loans at lower rates and a better student loan experience throughout the process. We launched our first program at Wharton Business School in 2012, and now serve 25 business schools. In 2014 we’ll be expanding to law, medical and engineering schools.
IE: Did you launch CommonBond while you were at business school?
DK: Yes. We started CommonBond while at Wharton, and by the end of the first year, the company gained enough momentum to justify deferring the second year of b-school to continue building the company. After we landed our first financing in fall 2012, we never looked back. Within 24 hours of launching the business, we had $2.5 MM of loan applications at our pilot school – Wharton — where we all met as co-founders. Within 12 months we grew our capital base to over $100 MM.
IE: You climbed the ladder at some premier companies. Was it hard to cut the corporate ties and take the entrepreneurial path?
DK: I come from a family of entrepreneurs, so I think taking business risk is part of my DNA. That said, I also believe, based on my experience, there is a lot to learn from corporate America in terms of strategic thinking, best practices, process and structure. After eight or nine years in corporate roles, I really started to feel the itch to start something.
IE: What do you think blocks people from making the entrepreneurial leap?
DK: I think the longer you’re in corporate America, the harder it is to leave. The golden handcuffs are hard to break free of. When I left American Express people were kind of shocked. People generally didn’t leave the job I had for business school. If I was following a similar corporate path, I understand how it would have been a crazy thing to do. But I was on a different path. There was a huge risk in what I did, but I’d rather dare to do great things and fail, than avoid taking risks and have regrets – so taking the leap is what I needed to do.
IE: Is it important to have a career plan? Did you have one?
DK: Things crystallized for me early on when I taught overseas for a year right out of college. I think you need to have a well thought out plan, but you can’t let it govern your every move. Having a plan, even if it is filed away in your subconscious, guides your decision-making so you don’t stray too far afield. I think of it as having guardrails up to keep you on course.
IE: CommonBond has a social mission. What is it?
DK: When we launched, we wanted to do something that would have an impact on the greater good. I was deeply inspired by Warby Parker and Toms’ 1:1 models, and tried to figure out how CommonBond could do the same for people in need. For every degree fully funded on the CommonBond platform, we fund the education of a student in need abroad for a full year. We’ve partnered with Pencils of Promise to make that a reality. Lesser known is the fact we also fund financial literacy programs in the U.S., the first of which have been in West Philadelphia and Oakland.
Follow David on Twitter @DavidXKlein and CommonBond @CommonBond.