Jay Avigdor of Velocity Capital Group: The Principle of Radical Honesty That Builds Resilient Financial Ventures

As part of my series about the “How to Navigate and Succeed in the Modern World of Finance”, I had the pleasure of interviewing Jay Avigdor, CEO and Founder of Velocity Capital Group.

As a pillar in the alternative finance industry, Jay Avigdor seamlessly balances his roles as a devoted family man and the President & CEO of Velocity Capital Group, demonstrating a unique equilibrium between his personal and professional life. Over his distinguished 13-year career, he has developed an extensive network of over 40,000 relationships with clients and brokers, contributing to an impressive $850 million in sales. Jay’s innovative technological approach is setting new trends in the industry. His infectious enthusiasm for working closely with his team and his active involvement in the day-to-day business processes exemplify his hands-on leadership style, driving Velocity Capital Group’s continual growth and success.

Thank you so much for your time! I know that you are a very busy person. Our readers would love to get to know you a bit better. Can you tell us your backstory and how you got started?

Starting over 13 years ago as an intern for Pearl Capital, I was very intrigued by the space from the start. As an intern, they didn’t just hand me some money and tell me to go fund, although I wish they did! Eager to start and still working on the basics of my internship, I took to the Yellow Pages to find business owners looking for capital. And that’s where I got my first deal, closing it two weeks later. It felt like a miracle. I had a desk, a computer, and my first commission check, and the rest was history.

Velocity Capital Group began in 2018, starting in the spare bedroom of my home with around $50,000 in personal savings. Slowly but surely, we expanded. My wife was instrumental at first, helping me set up broker agreements on folding tables in our office. Bootstrapping it from there, I went to Craigslist, LinkedIn, and Facebook to find and connect with brokers. From there, we brought on more people that could let me focus on the business as a whole, and we’ve been funding more and more since.

Can you share a story about the funniest mistake you made when first starting? Can you tell us what lessons or takeaways you learned from that?

During those early years, a lot of mistakes were made; we had a small team and worked quickly. So one day, to my surprise, we found that the broker’s commission went to the small business owner, and the capital for the small business owner went to the brokers. Looking back on that now, it was definitely a worthwhile learning experience, but at the moment, nothing can prepare for that brief moment of panic.

After that, there are really two directions that I see managers taking, blaming others or finding a solution to the problem. In my approach, coming from a place of trust and learning has benefitted me more than I can say. There are many people that choose to point fingers or make an example out of someone. That kind of style hurts the relationship between myself and my employees. In my experience, when someone messes up, they want to make the situation right. And with the right guidance, that situation can be avoided going forward.

Are you working on any exciting new projects now? How do you think that will help people?

Recently we launched a funding calculator that we’ll soon be launching live. The calculator allows our brokers and merchants to select a custom financing package within our underwriting parameters. Giving small business owners more choices when it comes to their financing.

We’re also developing an in-house AI that will analyze and interpret our previous transaction data to provide relevant insights for underwritten deals. Further downstream, we’re looking to have this AI provide suggested prices on deals and maybe one day run will most of the underwriting process.

Do you have a “number one principle” that guides you through the ups and downs of running a business?

“Don’t tell me; just be honest.”

Being straightforward, forthcoming, and good reputation will get you everywhere in life. Not leading honestly can hurt one’s reputation and, later on, adversely affect one’s ability to do business effectively. Especially for your team, be honest with your team and treat them like family.

If a fellow business leader would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?

I learned the hard way during the first few years of Velocity Capital Group it was very tough to find VC capital without a proof of concept.

Entrepreneurs in a similar position need to build out a proof of concept. I would recommend assessing if you’re ready to take on this endeavor. Then, see if family or friends are willing to fund your business to get it off the ground.

I find it crucial to take 1 to 3 years to focus and develop that concept, it’s both humbling and illuminating. After putting that time in, you’ll have more information than you’ll need to approach VCs for capital backing. From where you started, your concept will be refined and optimized for business use. That is exactly what VCs are looking for.

What measure do you use to determine the value of a company?

Every business has its ebbs and flows, its peaks and valleys. For me, it’s not about how you started. It’s about what you went through. Did your business go through and have to adjust for COVID? That tells me that you can practically survive anything. Did a key executive leave during a trying time, and you got through it? That means me something too. It’s not strictly about what numbers you’re hitting or expecting to hit, but what challenges you face and how you pivot your approach from there. That’s what I care about most. Facing challenges with your team and with clients and coming out better than the way we came in.

What advice would you give to other leaders about how to get an optimal evaluation of their business?

Strap in and realize that if you haven’t gone through the wringer, you have a way to go. If you haven’t gone through difficult situations and challenges in the business, then you need to brace yourself. Because eventually, that significant roadblock will hit, your experience and intuition will get tested in the business environment.

Those problematic situations turn into badges of honor for VCs.

What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill? From your experience, do you have any general advice about how to boost growth and “restart their engines”?

Funny enough, I have an excellent example for this one. I was playing a game with my wife, and I was stuck on my turn. With no idea where to make the next move, I devised a plan to get a drink. After that minute or so, I came back to the board game and made the perfect move for that situation. When I stepped away from the game for that brief moment, I found the answer I needed.

It can be counterintuitive, but sometimes the best way to get a better look is to step away from what you’re looking at for a while. Some of my best business decisions have come after some kind of break. That’s mainly because I’m not in the middle of the process of trying to examine it. I’m giving myself that space then, coming back to the process, I can see much more evident of where the hiccups are.

Another way is to hire new talent with fresh ideas.

What are the most common financial mistakes you have seen other businesses make? What should one keep in mind to avoid that?

Over-hiring or paying too much for hires. Secondary, needing to understand cost per acquisition or other marketing metrics regarding advertising dollars spent.

Lastly, taking on too much debt. Don’t gamble away your business; ensure you have a plan and are ready to execute on that. If you’re taking on debt to sustain your business from plummeting, then that’s just a band-aid solution that’ll fall off eventually.

Based on your experience and success, what are the most important things one should know to succeed in the modern finance industry?

Train your team correctly and put the right systems in place. Always have that personal touch on your clients. Communicate with your employees and treat them as extensions of you and the business that you’ve built with them.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

In this fast industry, it’s very easy to lose sight of what you’re going for and burn out. What I’ve learned is if you’re working on the same thing constantly without a goal, then burnout is almost guaranteed. However, if you’re constantly pivoting what you’re working on and you have a clear goal in mind, then that can help you stand tall during the most brutal winds.

If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

If all financing, MCA companies, hedge funds, businesses in the subprime space, and businesses put up a piece of their profits to charity. If every financing company sets that as its priority, then we could change the world and show how financing can be the greater good.

How can our readers further follow your work online?

You can follow me on LinkedIn: https://www.linkedin.com/in/jay-avigdor-4b035247/

This was very inspiring. Thank you so much for joining us!

About The Interviewer: Jason Hartman is the Founder and CEO of Empowered Investor. Jason has been involved in several thousand real estate transactions and has owned income properties in 11 states and 17 cities. Empowered Investor helps people achieve The American Dream of financial freedom by purchasing income property in prudent markets nationwide. Jason’s Complete Solution for Real Estate Investors™ is a comprehensive system providing real estate investors with education, research, resources and technology to deal with all areas of their income property investment needs. Through Jason’s podcasts, educational events, referrals, mentoring and software to track your investments, investors can easily locate, finance and purchase properties in these exceptional markets with confidence and peace of mind.

Starting with very little, Jason, while still in college at the age of 19, embarked on a career in real estate. While brokering properties for clients, he was investing in his own portfolio along the way. Through creativity, persistence and hard work, he earned a number of prestigious industry awards and became a young multi-millionaire. Jason purchased a California real estate brokerage firm that was later acquired by Coldwell Banker. He combined his dedication and business talents to become a successful entrepreneur, public speaker, author, and media personality. Over the years he developed his Complete Solution for Real Estate Investors™ where his innovative firm educates and assists investors in acquiring prudent investments nationwide for their portfolio. Jason’s sought after educational events, speaking engagements, and his popular “Creating Wealth Podcast” inspire and empower hundreds of thousands of people in 189 countries worldwide.

While running his successful real estate and media businesses, Jason also believes that giving back to the community plays an important role in building strong personal relationships. He established The Jason Hartman Foundation in 2005 to provide financial literacy education to young adults providing the all-important real world skills not taught in school which are the key to the financial stability and success of future generations. We’re in a global monetary crisis caused by decades of misguided policies and the cycle of financial dependence has to be broken, literacy and self-reliance are a good start. Visit JasonHartman.com for free materials and resources.