Shaper: Christian Faes

Show aired on 7th January 2017

Transcript

Elliot Moss
That was Dizzy Gillespie with For The Gypsies. Good morning this is Jazz Shapers. I am Elliot Moss, thank you very much for joining me. Jazz Shapers is where you can hear the very best of the people shaping the world of jazz, blues and soul and alongside them we put people who are doing exactly the same in the world of business, they are shaping it and we call them Business Shapers. My Business Shaper today, I am very pleased to say is Christian Faes. He is the co-founder and CEO of LendInvest and they are an alternative finance platform, they’re techie, they’ve got lots of money for potential investors in the world of property and you will be hearing a lot from him about how it all works and how he has grown and been investing in himself in fact. Lots coming up from Christian very shortly. In addition to hearing from him, you will be hearing from programme partners at Mishcon de Reya some words of advice for your business and then we have got some brilliant music on top of all of that including Gregory Porter, Mr Eric Bibb and this tribute to Fats Waller from Jason Moran.

Jason Moran with Ain’t Misbehavin’. Christian Faes is my Business Shaper here on Jazz Shapers as I said, co-founder and CEO of LendInvest, the alternative finance platform as we have named it… and Christian hello.

Christian Faes
Thanks. Thanks Elliot.

Elliot Moss
Where are my manners. Where are my manners.

Christian Faes
Good morning.

Elliot Moss
Good morning. Thank you so much for joining me. Tell me what LendInvest is because some people in the know will know it and many people won’t.

Christian Faes
Yeah.

Elliot Moss
It’s pretty natty so I would love you to explain it in simple language.

Christian Faes
Yeah. No, in simple language it’s very much like the name says, so lend invest. We lend money and we also have an investment platform so we describe it as an online mortgage marketplace, so we are principally a mortgage lender so on the borrower side we lend money to borrowers that are borrowing to purchase property or to do works to a property and then on the investor side we have an online investment platform which allows investors to invest in the loans that we lend out. And across it all we are using technology so we are very much a technology led business and using technology just to make the experience of getting a mortgage a much better one and letting investors invest in a mortgage which is a relatively new asset class.

Elliot Moss
It sounds…

Christian Faes
For investors.

Elliot Moss
…for investors. It sounds simple when you describe it. Let’s go back a little bit. You’re a lawyer by training.

Christian Faes
Yes. Don’t hold that against me.

Elliot Moss
I’ll really try not to. Personally for me it’s very difficult. I’ve interviewed a few lawyers turned entrepreneurs, not many. I’ve interviewed many accountants turned entrepreneurs and other professionals, but not many lawyers.

Christian Faes
Yep.

Elliot Moss
When did you realise you didn’t want to be a lawyer and when did you realise that you could set up your own business.

Christian Faes
It’s an interesting question. I mean I think I always wanted to set up my own business and I studied law. I really enjoyed actually the study of law. I think I enjoyed the practice of law less actually so the sort of in a bizarre sort of way because I am not necessarily an academic person, but I enjoyed the academic way of studying law but then the practice of it is very, very different. I always wanted to start my own business and actually the first business I started back in Australia was a small legal practice and that wasn’t because I necessarily wanted to started a law firm, but it was the only sort of business I knew and wanted to start a business so that sort of, that was where it all began really.

Elliot Moss
And you came to the UK about 12 years ago.

Christian Faes
I have been here for about 12 years. So I did 3 years, went back to Australia and then I came back.

Elliot Moss
Yeah because I’ve seen some big name law firms in there.

Christian Faes
Yeah.

Elliot Moss
And other in-house jobs as well.

Christian Faes
Yes.

Elliot Moss
Where did the idea come from for this lend invest company that you’ve now created?

Christian Faes
Yeah. So in Australia when I had started my own legal practice, I started doing work for a lot of short term alternative mortgage lenders and sort of really got to know the business quite intimately and I guess from the lawyers perspective and perhaps you will appreciate this, it felt like the lawyer was doing a lot of the work you know putting the deal together, doing the documentation all the rest of it. I mean I felt like actually I want to be the guy doing the deal and be the entrepreneur behind it. So, but yeah that’s really where I got my first introduction to the mortgage industry was acting for mortgage lenders.

Elliot Moss
And then I read about the frustration that you had around the mortgage process itself and that being one of the other reasons why you said this and anyone that has applied for a mortgage or that’s got a slightly off-piste request or doesn’t have the right documentation and is self-employed, always struggles especially if you are looking at investments and buy-to-lets and so on. Where were you in that? Where you actually kind of a victim of that or did you observe that?

Christian Faes
Well I have been both, definitely observed it. But yeah, been a victim of it as well myself and it is something we actually feel quite passionate about in terms of just how backwards the mortgage industry is. You know the average mortgage in the UK takes three months to get. It is extremely frustrating. It’s hard to imagine a poorer consumer experience and your know whether you have banked with the bank for you know a number of years you know you go along to the branch, the first thing they are going to do is print out a paper form which unpopulated and then ask you what your name is, what your address is and what your date of birth is you know, they’ve got the information in the computer, they’ve just printed the form off from but it’s not all meshed together. So it is a really poor offline experience. Personally yeah as a foreign national coming to the UK, it is very difficult to borrow and also you know as an entrepreneur you know with three years tax returns and all this sort of stuff it’s very difficult. So I think, you know I have certainly been subjected to that and just generally throughout business we observe everyday people who have been let down by High Street you know mainstream mortgage lenders just by backward outdated processes.

Elliot Moss
Stay with me for more about how the backward outdated processes are going to be confined to the dustbin forever by Christian Faes, my Business Shaper today and co-founder and CEO in fact, I love these titles, of LendInvest. Time for some more music though now, this is Eric Bibb with Tell Riley.

Eric Bibb with Tell Riley. Christian Faes is my Business Shaper today, co-founder and CEO of LendInvest and we have been talking about confining awful and old antiquated processes to the dustbin. In order to attempt to do that, you need some funds yourself. You’ve been very successful as a business in raising money. I mean lots of it. My sources say it runs into the millions.

Christian Faes
Yeah.

Elliot Moss
Tell me how you did that. Why have people backed you Christian and your team?

Christian Faes
Well I think it’s important to point out that we haven’t been an overnight success. So you know we set up our business back in 2008 and you know we went a number of years actually not being backed and actually sort of you know really having to struggle as a small business to sort of to make means and in many respects that’s a really good foundation. So we weren’t sort of the hottest start up that just had money thrown at us from day one, but by the time we got perhaps to that stage you know we sort of built a really good foundation for the business. But I think why we have been successful now I think it’s a bit of that, it’s the fact that we’ve gone through a struggle, we’ve build a really sound business, it’s a profitable business, we are not necessarily just chasing the hype around some of the areas of the technology space but also I think our investors, certainly our equity investors really believe in the fact that mortgages will be disrupted. You know I don’t think anyone believes that well hopefully you know people can understand that in five years’ time you will get a mortgage online. That’s just the way it will be, so the process I described of going into the bank branch and filling out a paper form is kind of those days are limited and they are coming to an end and I think you know equity investors really believe in that and they think that we are the team that will be able to make a real impact on that.

Elliot Moss
I like the steady as she goes kind of story which hasn’t been an overnight success to use your words.

Christian Faes
Yeah.

Elliot Moss
What advice would you give us. If there is one thing you would say to someone looking to raise significant money as you have, what would it be?

Christian Faes
I would say its focus on not current trend or fad, but to focus on creating a real business. Focus on creating a business where there is a genuine consumer need and you can make a business that actually makes money out of it without the need for external capital.

Elliot Moss
I would write that down, I think that’s pretty good advice there. You can stay, you can stay there to the end. It’s brilliant. Stay with me for more from my Business Shaper Christian Faes who is my guest today who I am pleased to say. We’ve got the latest travel in a couple of minutes, but before that some words of advice from our programme partners at Mishcon de Reya for your business.

You are listening to Jazz Shapers with me, Elliot Moss. Every Saturday morning I get to meet someone who is shaping the world of business, we call them Business Shapers and if you have missed any of the previous five years or so then iTunes is your destination; put in the words ‘Jazz’ and Shapers’, BA if you are flying soon or cityam.com if you fancy a look around a really good place for news. Christian Faes is my Business Shaper today, co-founder and CEO of LendInvest and they are an alternative finance platform and they are hoping to disrupt the world of mortgages. As you move Christian to create the new reality and you are kind of making it up as you go along if you like and you are saying well here is the experience I would really like to create. Huge amounts of stuff happen behind the scenes, huge amounts of engineering I imagine, huge amounts of kind of user experience stuff…

Christian Faes
Yeah.

Elliot Moss
…which people always talk about. How have you managed to assemble those teams and as a non-technical expert as a CEO…

Christian Faes
Yeah.

Elliot Moss
…how do you make sure you get the best out of them?

Christian Faes
Yeah it’s a really good question. I think it’s probably been one of our biggest challenges so as I described we sort of started as an offline you know very uninteresting business in many respects and then sort of trying to become a technology disrupter in our space has been difficult to attract good tech talent so we do need the best we can find and often you know, you don’t want to take the techie guy out of a bank because you know they are sort of used to programming a language of twenty years old and sort of you know the legacy systems that they have been dealing with so you don’t want to sort of go full circle and recreate that. Conversely if you take guys out of Facebook and Google and so forth, which we have, they come from a very different reality in terms of just you know the expectations of the type of environment they expect to work in and also often don’t have a good understanding of financial services so really whilst we say we are very much a technology led business, our core of what we do is a financial services business and you know I say the company updates all the time I reinforce with the guys we are dealing with other peoples’ money and actually it’s a really serious business. So whilst we are trying to create a really fun culture and an attractive place for tech orientated people to come and work at the end of the day we are not building a games app or something that is about selling as much as possible as quickly as physically possible, you know it’s about building a sound, sensible business and treating it with the seriousness it deserves which is you know dealing with other peoples’ money.

Elliot Moss
How do you define your own role as the CEO besides what you’ve just described which is essentially ensuring everyone understands that the stakes are high, that they’ve got to be focused, that it is other peoples’ money which is a very good way of putting it.

Christian Faes
Yeah.

Elliot Moss
What is the role that you end up doing, the role that you play in the business on a daily basis?

Christian Faes
Yeah another brilliant question because I think it’s kind of when you start, you start up my co-founder and you do everything and I think as the business grows you know we are sort of approaching a hundred and twenty people now, you can’t do everything and I think it’s actually through that journey you do come to a realisation that there is people that can do certain things much, much better than you and part of the challenge is really attracting the best people we can find and actually people that are much better than us at doing things from you know in-house legal, to the technology, to compliance, to the funds management and so forth, so it’s a, but that is a journey to realise that that you can’t do everything and certainly you know there are people that are much better placed than you to do things.

Elliot Moss
Have you accepted it? Yes or No?

Christian Faes
Starting to.

Elliot Moss
He doesn’t. Now look at his eyes. This is a guy who likes to go ‘but I can write that better than you’.

Christian Faes
Well you know.

Elliot Moss
It’s hard isn’t though. I am sure it is hard.

Christian Faes
Yeah, I mean often you think you can, but in reality you can’t because you just need to scale the business and a business that is fast growing you know you simply can’t do everything. So really it’s taking on a leadership role and trying to make sure that you are taking away the blockers in front of any people that are in the business from doing what they need to do to sort of take the business to the next level.

Elliot Moss
Stay with me for more from Christian, my Business Shaper. Time for some more music. It’s the brilliant Gregory Porter with French African Queen.

That was Gregory Porter with French African Queen. I have been talking to Christian Faes who is my Business Shaper today, co-founder and CEO of LendInvest and we were talking about leadership. Your legal training, I bet that was a brilliant background for leadership Christian?

Christian Faes
Ah I think it is a brilliant background.

Elliot Moss
I’m only joking obviously.

Christian Faes
Yeah, yeah I know I can tell, I can tell. But I mean not for leadership no.

Elliot Moss
What’s prepared you then, have you learnt on the job?

Christian Faes
Yeah definitely learning on the job and you know certainly know we’ve got, we’ve got good investors, so Automico is our main VC investor and you know there is a lot of mentors that they provide so we get guides as the business grows we sort of have people that are coming into the business to provide people like myself with appropriate guidance.

Elliot Moss
You seem incredibly affable I mean I don’t that, you know you are very relaxed.

Christian Faes
I don’t know about that.

Elliot Moss
No it’s a good thing, it’s a good thing. How would the team describe you? Are you much steelier?

Christian Faes
Probably less affable than I may be coming across now. I think yeah, try and create an environment where people are empowered to take ownership of what they are doing, but if they are not performing then certainly they would realise that quite quickly.

Elliot Moss
Ah he’s giving me the look now. Okay. Okay. He’s just looked in through the glasses okay I’m thinking I understand. So there is a balance obviously.

Christian Faes
Yeah there has to be.

Elliot Moss
And it feels like you’re pretty fair I would say.

Christian Faes
I try to be, yeah. I mean obviously they may say I am bit moody from time to time, but you know that’s just with dealing a hundred different things at once sometimes but…

Elliot Moss
And do you enjoy all this bit of it though, this?

Christian Faes
Yeah definitely. Yeah I mean I think it’s like I say it’s definitely a journey, but it is a really exciting one and I think now we are at the point where it it’s kind of we are very well capitalised, very well supported, it’s kind of we have an opportunity to make the business as big and successful as we can imagine it to be. So it is hugely exciting.

Elliot Moss
My final chat is going to be coming up with Christian plus we will be playing a track from another Christian, that’s Christian Scott and that’s after the latest traffic and travel.

That was Christian Scott with Twin and you may recall that he won a Jazz FM award and he is a brilliant and innovative musician. Christian Faes is my Business Shaper today and his co-founder and CEO of LendInvest. I’ve only got him for a little bit longer. You’ve talked about team, we’ve talked about leadership. There are plans I believe to, you’ve said scale and there are plans potentially to IPO the business. Where are you going to be Christian in all of this because you know the founders are founders and then they become leaders and then they sometimes disappear into the sunset.

Christian Faes
Yeah.

Elliot Moss
How connected are you to the future of this business?

Christian Faes
I am very connected. I think in many respects like I said it is a really exciting time for the business and I think for me it’s, we are just getting started really. I think you know we talk about the opportunity just to disrupt mortgages, it’s a 1.2 trillion pound market in the UK. The reality is we are only point one five percent of that market, so we really just scratching the surface of what can be achieved. You know I am a young guy‘ish so yeah no I don’t plan to go anywhere anytime soon.

Elliot Moss
And how important is the money to you personally?

Christian Faes
It’s not that important I mean I think it’s a, it’s a good validation of what you are doing, but it’s not what drives me.

Elliot Moss
It may not drive you, but it obviously drives your investors, it drives the market.

Christian Faes
Yeah.

Elliot Moss
I’ve spoken to other people who are looking to create their unicorn, you know the next billion pound business. Does the profit matter today and obviously it’s, it’s where it is, but have you got pressures on you behind the scenes to deliver a profit, or do people understand this is a long play.

Christian Faes
I think certainly we have been fortunate with our investors, they do understand it’s a long play but then like you say, how long is long? I don’t think you know it’s not infinite, and in many respects we do think that you know this opportunity is of closing window. You know the opportunity to disrupt mortgages is a really big one now, but if we take five or ten years to do it, it’s kind of like we won’t be the dominant player in it. So we do need to move quickly for that reason. In terms of creating the next unicorn, that would be nice and certainly we do work very hard towards that, all of our staff have options in the company you know we give everyone share options and so everyone has a vested interest in building the company to be as big and as financially successful as it can be. But I think it is a balance between creating a great product, really valuable company and giving shareholder value as well.

Elliot Moss
You look like you are enjoying it and I am assuming you are because there is still smiles and you have a bit of a twinkle in your eye and stuff. The kind of couple of priorities that you’ve got for the next three to five years for you that you, if we then spoke again in five years, you would go Elliot that’s what I will have delivered and you say to me yes I delivered them and that would have made the difference. What do you think they are?

Christian Faes
I mean some of it is quite technical so I think in many, from an outsider’s perspective it would be very much more of the same, so build our brand, build investors’ trust, keep building away on the platform you know keep working on the technology to make it a better experience. Underneath the hordits evolving our product range, allowing a wider audience of investors to invest in our products and so forth so, but some of that is quite technical stuff, but I think it’s more of the same, bigger and better.

Elliot Moss
I hope it gets bigger and better. Good luck with it all. It’s been really lovely to meet you. Just before I let you go and make it bigger and better.

Christian Faes
Yes.

Elliot Moss
What’s your song choice and why have you chosen it?

Christian Faes
Yeah so my song choice is, well it’s more of the artist himself actually, so James Morrison who is an Aussie jazz musician and the song is All Of Me.

Elliot Moss
Any reason why you have chosen this one apart from he is an Aussie and you just like him?

Christian Faes
I like him and it’s his most popular song on Spotify so…

Elliot Moss
You’re an honest man Christian. Here it is. Thank you very much.

That was James Morrison with All of Me, the song choice of my Business Shaper today Christian Faes. Someone with a very clear purpose for his business, namely to be a disrupter. Real clarity of where he wants to go with this business and I sense I think of honesty in the way that he manages his team and that he is pushing this business forward. All really good stuff. Do join me again, same time, same place, that’s next Saturday 9.00am sharp for another addition of Jazz Shapers. Meanwhile stay with us because coming up next is Nigel Williams.

Christian Faes

Christian Faes is co-founder of LendInvest, a peer-to-peer marketplace for property lending and investing.

In late 2008, as global financial markets crashed, Christian and co-founder Ian Thomas saw an opportunity. They set up a mortgage lending business called Montello Bridging Finance to fill a critical gap in short-term property finance. Whilst business was slow at first, Christian and Ian took time to get their underwriting right and build an investor network. Then, as the world began to regain its confidence, Montello emerged as one of the leading short-term mortgage lenders in the UK. LendInvest spun out of Montello in May 2013 to be the world’s first online lender for property finance. Its mission was simple: to bring the speed and efficiency of online lending to the mortgage market for the first time.

LendInvest is a member of the Peer-to-Peer Finance Association and in 2015 received the European online marketplace industry’s first rating from a credit rating agency.

Follow Christian on Twitter @ChristianFaes.

Listen live at 9am Saturday.

“The average mortgage in the UK takes three months to get. It is extremely frustrating. It’s hard to imagine a poorer consumer experience.”

“I think it’s important to point out that we haven’t been an overnight success…”

“Focus not on current trend or fad, but on creating a real business. Focus on creating a business where there is a genuine consumer need.”

“Whilst we are trying to create a really fun culture and an attractive place for tech orientated people to come and work, at the end of the day we are not building a games app.”

“You can’t do everything, and I think…you do come to a realisation that there are people that can do certain things much, much better than you.”

“…they may say I am bit moody from time-to-time, but you know, that’s just with dealing a hundred different things at once.”

“The reality is we are only point one five percent of that market, so we really just scratching the surface of what can be achieved…”

“I think it is a balance between creating a great product, really valuable company and giving shareholder value as well.”