As high school students, one of the first principles of business we are taught is that the riskier the business, the less likely a bank will provide a loan for any purpose. So what does someone with aspirations to start a business but no credit history or lack of access to financial institutions do when he or she needs capital? To answer this question, E@D sat down with Kavin Lam’ 18, who founded Engaged Community Directed Investments (Edi) along with Eddy Medina’ 17, to learn more about how this problem is being solved through their solutions. Both Eddy and Kavin are first-gen college students who aim to make the lives of low income households better by allowing them to take small steps to make big impacts. The particular problems that Edi challenges were also talked about in The Atlantic.
What does Edi do?
Edi’s main goal is to mobilize two pools of untapped resources, especially for funding of new small businesses. We aim to help small minority business owners who need capital to get access to it. Often times, they are either afraid of banks and large financial institutions or cannot receive loans due to structural inequities and zero credit history. We also localize crowdsourcing, an upcoming choice for how many businesses try to raise capital. By localizing it, we add a personal element to the actual crowdsourcing which in return helps mitigating the risks associated with crowdsourcing.
When and how was it started?
Edi was conceptualized last spring when my co-founder, Eduardo Medina (Eddy) and I were working as First in Class Mobilizers. We were brainstorming ideas and had the opportunity to apply for the Dyson Societal Solutions Scholarship; Eddy had written a paper about financial structures of the JOBS Act and the Business Development Company regulations. It was a great paper and we converted it into an application, entered the scholarship, and received $20,000 to put this into action.
Who is involved with the company?
Eddy and I worked on it over the summer at the Stanford Graduate School of Business. During the process we were assigned a mentor, who is actually a PhD student and has taken the topic of our organization as the topic for her thesis. It’s extremely exciting to see that Edi has become something beyond just an idea and actually has been able to help people out!
Are there any resources at Cornell that have helped you?
Apart from being able to find Eddy as an awesome co-founder, the Dyson Societal Scholarship allowed us to kick it off with a $20,000 reward. By being able to have the opportunity that pushed us to put our idea out there, we were able to take advantage of the great resources at Cornell. We have constantly been helped by Cornell Professors and Faculty to keep us on track and keep the product as efficient as possible.
Where do you see Edi heading into the future?
At this point, we are spending most of our time in trying to figure out ways to minimize transaction costs of micro-loans and crowdfunding. We are also trying to find our way to finalize an algorithm that will allow loan recommendations for low income individuals looking to invest. It is a lot of exciting work and we look forward to getting as much done as possible.
Do you have any advice for entrepreneurs starting out?
I love working with my friends, so I’d just say find your best friend to do it because you will spend endless time working on it with them, and that is something you won’t be able to forge anywhere else.