The jazz ensemble approach: How Fundbox’s dual leadership model powers lending growth

As fintech companies transition from scrappy startups to scaled operations, traditional leadership models often hit their limits. The demands of managing complex partnerships, navigating regulatory requirements, and driving sustainable growth require a different kind of executive structure than the founder-led approach that got many companies off the ground. 

Today, I’m joined by Prashant Fuloria, CEO of Fundbox, and Anchit Singh, the company’s Chief Business Officer, to explore how they’ve developed a collaborative leadership model that’s helped drive Fundbox’s evolution in the embedded finance space.

We’ll dig into the CEO-CBO dynamic, how they divide responsibilities, and what other growing fintechs can learn about building leadership structures that scale.

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Company overview and embedded finance strategy

Prashant: Fundbox is a capital platform for small businesses, and what that means is that our mission is to help power the small business economy through capital and financing solutions, and we do this by embedding those financing solutions inside the systems and tools that small business owners already use. And so we partner with leading accounting software platforms, payment providers, invoicing apps, neobanks, banks and marketplaces, and we meet the customer where they are by providing financing inside of the ecosystem that they’re already playing in.

Evolution from direct to embedded business model

Prashant: So Fundbox actually started out as an embedded capital company. In fact, our very first product was embedding invoice financing inside of invoicing systems like QuickBooks and FreshBooks. Over time, we also grew a direct business, but over the last several years, three years or more, we’ve doubled down on the core of the company, which was and is the embedded aspect. And we’ve done this because this is where we see the world is going. As businesses become increasingly digitalized, using different digital tools to run and grow, where 50% of SMBs in the US today use some sort of vertical software or another, there is a huge opportunity to reach customers where they are inside of those systems if you have the right technology to serve them in the right way, the right product at the right time.

Platform partnerships and market evolution

Anchit: I think three, four years back when you were talking to platforms, you would need to explain them why embedded capital. I think right now that word has become so common where you don’t even need to start with why embedded capital. It’s more about why Fundbox, because people have seen the adoption of embedded finance across different use cases, payments, payroll and capital has also been ramping up a lot. And capital is also very complex use case for somebody to do in house, not only on the tech side, but also on the legal compliance, figuring out credit, managing credit facilities. So that’s another reason where folks are seeing, folks want, like, somebody externally coming them and helping here. And the last thing I’ll add is and folks also know like, think of a bank the way they make sure that their deposits are sticky by doing lending. And same for a vertical SaaS, who is trying to act like a small business operating system. They think of capital in that capacity as well that how do I make my platform sticky by doing capital lending?

Development of CEO-CBO collaborative structure

Prashant: I think this is a natural evolution of the company. We think about what needs to be done and how we can accomplish it first, and how that rolls up into roles is is the outcome of that thought process. Now, the traditional wisdom around these roles is the CEO is responsible for the overall strategic direction and vision of the company, making sure that you’ve got the right team in place, that the team has access to the right resources to be able to run and grow, and then just sort of monitoring or overseeing the execution against the strategy, while the chief business officer is perhaps more execution oriented and is focused on driving efforts, both internally and externally, to accomplish that vision and strategy. And to some extent, that’s kind of true for us, but I would say that reality is a lot more nuanced. And as a musician, the analogy I’ll give is that the traditional view of this relationship is maybe like a classical music orchestra. There’s a conductor and a composer who determines what you need to play and how to play it, and the musicians go and kind of go about playing their parts. In reality, I think a company like Fundbox, again, in a world that’s highly complex, changing very rapidly and with a lot of uncertainty, is more like a jazz ensemble than a classical music orchestra. Sure, there’s a piece of music, there’s a lead sheet, which generally lays out where you want to go, and there may be a band leader, but at different points in time, different folks do different things. And even in the course of like one song, different folks lead the band at different points in time. So there are times when I’m just coming up with, hey, Prashant, I really think we should be doing this, and I’m like, Yeah, let’s do it. And there may be times when I’m playing the role of an individual contributor, like, I don’t like the slide deck, I want to update it myself. And so that’s just the reality of what I think teams need to do in today’s world. You’ve got to be dynamic. You’ve got to keep keep shifting what you do, keep changing what you do based on what the company needs. And then coming out of what you’re actually doing are these roles, like a chief business officer or a chief operating officer, or a CEO or a CFO.

Skills required for flexible leadership dynamics

Anchit: So I think, from my perspective, if you’re aligned on the mission, you’re aligned on the end goal, you know, like you cannot achieve yourself, and everybody has to be very flexible, adaptable, to do things that are needed to move the business. Like if I see my journey at fundbox, I started in data science, then I moved into credit, then I did product. Then three years before, I was like, Okay, let’s do selling. So I was more into partnerships. So whatever has the company asked me, I’ve been open to doing that, and are lucky that the company believed in giving me that opportunity, and then once you get an opportunity, you just take your hand, you show ownership, and you go and execute. And I feel now in the world, at least in the past two years, with all the things with AI, it’s actually much easier to pick up new skills if you have a good mindset around learning. And that’s the thing I think we keep at fundbox. It’s not even at an executive level. We still have a very flat organization. And even like anyone in the company, a product manager a credit, they all are like have coming up with ideas pushing back on us, and we are having discussions to align on what makes sense to move the business forward.

Trust and communication in leadership

Prashant: If I were to add one thing to what Anchit said, obviously, flexibility, curiosity, willingness and eagerness to learn, those are really very important. The other thing is trust and knowing that the other person’s coming in with the right intentions. So we try to keep the company very apolitical. We try to keep all of these organizational dynamics that can sometimes plague execution and thinking to a minimum. And again, having worked together for a long time, Anchit and I, as well as some of the other folks in our leadership team, I think we have a certain level of trust. We get together every morning, spend a half hour on a daily sync and just talk about things that are going on in the company, ranging from partners to technology to credit to people questions, and so there is this dialog that’s happening all the time that really keeps us in sync. I got a call from a partner yesterday, and there was something there I thought was important. So what did I do next? I pick up the phone call Anchit and say, Hey, this is the conversation I had. What should we do about this? And we had a quick 15 minute conversation. He’s in New York, I’m in San Francisco. We have colleagues in Tel Aviv, in Tbilisi, in Dallas, all over the place, but we communicate all the time, and we’ve built over time, that sense of trust. And trust cannot come from words. It has to come from actions. When you see how people are acting and they’re acting in the best interest of the company, putting the company before themselves, that’s how I feel trust is built. And I think that’s similar in many ways, to going back to my jazz ensemble analogy, how the band sounds overall is much more important than how any one musician sounds. And you and I are very familiar with those situations where there’s a star musician who just does their own thing and to the detriment of the entire band, that’s not a good place for any band to be in.

Anchit: Yeah, and just to add on the trust, and we have, fundbox has gone through a lot of ups and downs, and in terms of our colleagues, like we, we have a very good retention, like people have been with the company for four or five years, and fundbox started back in 2014 and a lot of people still, and it’s, it’s a lot of you need to work at an intensity at a startup, and people are happy doing it because they feel valued. They wield the trust and they get to show their creativity in the store.

Lessons learned in team development

Prashant: I think there have been times when we’ve grown the leadership team too quickly, and I think that was a mistake. It takes time to build that relationship and that level of trust and understanding that really drives a high performance team. And so we’ve been very careful about how we’ve evolved the leadership team over time. We’ve also tried to keep the team, and not just the leadership team, fairly small today for a company that’s doing some triple digit million dollars a year in revenue, we’re about 200 people, and so we’re doing over half a million dollars of revenue per person, and that’s good. I’d like to keep growing the business and get to a million dollars per person in terms of effectiveness. And I say this because I want everybody at Fundbox to be really important, and they are. And if you have a small team, everybody knows that they’re critical, and that’s part of what keeps them there. They make a difference. Somebody wakes up in the morning has an idea that can have a meaningful impact on the company. And so we’ve kept the team lean. I think what we’ve also learned over time is that when you grow a team, putting aside the financial cost of having a larger team, there’s actually a people cost of having a larger team, because larger teams also mean more overhead in communication, alignment and so on. So we really try to keep our teams lean. Have people who are highly motivated and very much bought into the company’s mission and vision, and also people who are eager to cross train and can do different things. And I love it when someone who has joined the company as a credit analyst is now sitting in front of a partner and an executive team at a partner and delivering a presentation in such a confident way, it seems like they’ve been doing this all their life. This all their lives, but they’re actually a credit analyst who has now built another muscle, and as a company that’s we’re not a Capital One or a chase or, you know, or an AmEx, so our value proposition to our people is not that you’re going to be at this ginormous bank that everybody’s heard about, but it’s more of it. You’re in a small company, and the benefit is that you’re going to see everything end to end. The same decks that we present to our board and investors are what we share with the company and everybody. Everybody sees all the numbers. You’re going to have an end to end view of how a company is run, and you’re going to have experience in different areas over time. I think that’s magical, because for those folks who really want to learn it all, it’s a great opportunity. And by the way, not everybody’s interested in that, right? And then maybe fundbox is not the right company for you, which is totally fine, too. But if you’re really curious, like, I really want to understand, like, how does Prashant work with his board? Well, come to me, let’s talk. We’ll chat about it, right? It’s a very purposeful, intentional way of trying to work and get people on board who are aligned with that.

Anchit: And one very specific example that comes to my mind is we did a rebrand recently, and we did it with a team of two to three people in the marketing team. And we have done rebrand in the past where we have hired an agency, paid a lot of dollars and much bigger team. So it’s again, shows like, if you empower people who have high ownership, they can move mountains totally.

Impact of internal culture on partnerships

Prashant: I’ll start with one way in which the way we work internally has a big impact on how we serve small businesses and the platforms that they use and trust. The cross training of people and the ability of our people to work across different functions is a real asset when it comes to working with partners. We have many people at fundbox who’ve got a credit background. Maybe they’ve grown up in a bank like a Capital One, where they have very strong skills around credit, and they’ve also become product managers, and so they’ve written PRDs and worked with engineering teams to be able to actually build products. And they’re now talking to partners and understanding their needs and sharing our ideas and roadmap and things like that. So rather than having three different people play three different roles with a partner, you can have one person who has an understanding of the end to end business, and that just creates credibility when we talk to a partner, because the same person has command of all of these domains. So that’s just one way, I think, an important way in which how we work internally shows up when we talk to partners, because our partners sometimes compliment us on Hey, you’ve got good credit expertise, or you’ve got a good technology stack. But more often than not, they say, wow, like Person X, they’re incredible. And we’re like, Yeah, I’m proud of them. And that’s just what happens inside the company, spilling out into an external conversation or interaction.

Lean, empowered teams serving partners

Prashant: I think they’re lean, because what you’re not getting is four or five siloed functions at our table, all doing their doing things. Yes, and we do have a partnerships team. We do have a credit team and a product team, although those are that’s a very fluid relationship. And obviously we have an engineering team, but for any one partner, you’ve got people who are playing multiple roles at the same time. And I think that’s a good model for us. And Zach, you mentioned something at the start of this whole podcast, which is, as organizations grow and scale, how much of their how much of their work dynamics should they change? And again, conventional wisdom is that, oh, as you get bigger, you should completely abandon how you worked as a startup. And in a startup, famously, one person or two people do everything right, and then get to a more structured, traditionally structured model. But I’m not sure that’s the only way to scale, I think. And that’s going back to point that Anchit made earlier, with tools, with the ability to learn very, very quickly. I think there is a the scale is almost, could almost be framed as a, how do you keep the energy, the momentum and the speed of execution of a startup as you scale? And some. The team dynamics that we’ve tried to build at fundbox, capture the startup approach. Now we wouldn’t be technically called a startup. We are a company at some scale, and so are we a scale up a growth company. I guess we’re what you might call a growth company. And yet, there are things we do in the way we operate that are very startup like.

Personal journey and leadership development

Anchit: I think there are few things that I’ve gotten from the experience. One is like, I think once you start from like being an exec, being into the weeds of execution yourself, you internalize, like you can talk strategy all day, but if you are not executing well, it doesn’t mean anything. And by executing well, I mean like thinking deeply about problems and how even you are sharing information, cross functionally within the team and coordinating things internally, making sure everybody has the context. It’s not easy, like it takes time and analyzing that to know how important that is, is something that I always keep thinking and now in my current role, we have amazing teammates all around and for me, the biggest thing is, are they working on the most important problem or not, and I keep obsessing about that like daily, because I have known, like when I was growing up myself, sometimes maybe I was not utilized as effectively as I could have been, like in putting in the right things. And now for me, sitting at the table I am, that’s the number one thing I spend, I think, two hours thinking about it every day, like I’m like, is everyone doing the right things, what they and you need to balance with what people want to do and what the company wants to do, and ideally, the incentives are aligned. And that’s another thing I keep thinking a lot.

Advice for other fintech companies

Prashant: I’d offer a couple of thoughts to other teams, and whether it’s fintechs or other companies. One is, be careful about how you grow and add people to the company, especially if you’re a well funded company and and money is not a constraint, there can be a tendency to want to hire like we’re hiring. And very often, people conflate hiring and growing the team with success. So you know, you see all these LinkedIn postings growing, yeah, I feel like a lot’s going on. I would say that consider not just the financial cost, but the organizational cost of bringing people on board. Now, don’t get me wrong, we hire too, and we are proud of our ability to bring on new talent, but I think not recognizing the organizational cost of bringing on a new person, what it means in terms of communication and overhead, what it means in terms of not giving somebody internally who’s already there the chance to do something different or something more. Keep all those costs in mind. 

So I think that’s a really important thing. I’d also say that in today’s world, this is my second thought, deep domain expertise is definitely important. And at the same time, there are a lot of things that can be picked up very quickly if I want to understand something about a particular kind of regulation. In the state of Texas, for example, I can run a Gemini deep research query or question, get a detailed dossier that can read up and understand to a decent level, like what’s happening with small business lending regulation in the state of Texas. I think what becomes more important in today’s world is trying to connect the dots between different things. So if I understand what’s happening in Texas, and I know that we’re working with a Texas based partner, okay, what does that mean? And what’s the conversation that we’re going to have? How do we approach that conversation, what can we do and not do? How do we talk to our bank partners? So there’s a whole set of things that cut across different domains which become really important. So I think again, don’t get me wrong. Domain expertise is important, and people who are really deep into what they do, there’s a lot of value there. I guess. What I would try to avoid is folks you know, who are, who cannot also, in addition to being deep, go into other areas and try to start piecing things together again, folks that are very siloed in their thinking? Well, that’s a problem. I think siloed thinking can be the can be a huge detriment to moving forward, because if someone just says, This is my job, this is what I do. Here’s the information. There you go, like that’s not going to help you succeed.

Future of SMB economy and Fundbox’s direction

Prashant: So first of all, if you look at the last 10 years and you step away from whatever’s happening this month or this quarter, I think the small business economy is growing, and it represents a larger and larger opportunity. The number of small businesses in the US alone has grown three times as fast as the number of people. The number of new business starts doubled when the pandemic hit, or in 2020, and while a number of other pandemic era changes have started getting reversed, now people are getting back into the office and and all of that. I think the number of new business starts hasn’t gone down meaningfully, and so this indicates that there is some sort of change in the world, in the ethos, whether that’s because people want to be their own boss, or because there’s some cultural, social thing, but more people are wanting to start new businesses or buy an existing small business and do their own thing.

These businesses are getting increasingly digitalized, so over 50% of small businesses now use some sort of what I’m going to loosely call the small business operating system. So all the secular trends to increase the penetration, the growth of financial services, including capital in the small business economy, are there. So we expect that to continue to grow over the next five years, because this is just a secular trend that’s just based on broader waves, broader things in the world. When it comes to embedded capital, which is what we’re focused on, we are seeing these waves as well. And I think there was a time when wave one of embedded capital was, hey, we’re going to take our product and we’re going to stick it inside of your experience, or give you a referral link to get an insurance or get a payment or get capital. The next wave was slightly more sophisticated. Was it’s not just a question of distribution, brute force distribution, it’s a question of also using data that a platform may have to better serve the customer. Why have them enter information all over again. Why not use their transactional information and insights that are already there in the platform to underwrite them better and give more people more access to capital and all those kinds of things. And the third wave that we are seeing, and we believe we’re helping shape the market and leading the way, is it’s not just any product, the product has to be the right product in context. So if I’m an invoicing app, invoice financing makes a lot of sense. If I’m a payroll platform, where payroll financing makes sense. So ultimately, these are capital products, but how they’re surfaced and how they’re manifest inside of a small business operating system can vary greatly based on what the context is in which that system touches the small business customer. So I think that’s like the next wave. And you know, we’ve seen a lot of success with our partners as we’ve sort of gone through that for us, more specifically as a company, the ways that we are seeing are beyond all of this is just growth internationally. We’ll be making some announcements over the next one to two months that highlight fundbox entering a new geographical market with a partner. So very excited about that. We’ve focused on the US mostly so far, but partner demand is taking us kind of where to new geographies that’s super, super interesting, new products that is, that’s always there. It’s always part of what we do. And the third thing I’ll say is more interactions, more engagement with traditional financial institutions. So we recently announced a partnership with a company called Autobooks. This announcement went out about three or four weeks ago. Autobooks provides small business capabilities like invoicing and merchant acceptance inside of the banks, and they have over 2000 banks that they work with. Well, through our partnership with Autobooks, we can bring capital and our technology to those bank partners. So the whole FinTech versus banks debate, in my mind, is played out. And so much you know, so much of a of the past, I think now the real emphasis is on, how can FinTech effectively partner with banks to provide the best products for the end customer.