Business Breakdowns
Episode 143 Live Oak: The Small Business Bank
Business Breakdowns

Episode 143: Live Oak: The Small Business Bank

Business Breakdowns

Episode 143

Live Oak: The Small Business Bank

Stephen Vafier is the Founder of Storri Labs Capital Partners. We cover the unique events that led to Live Oak's founding, how it has benefited from PPP loans and the collapse of regional banks, and why it's a good example of the intersection between innovation and regulation.

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(00:02:16) - (First question) - The unique market opportunity that the founders saw when starting this business

(00:04:39) - How Live Oak differentiated its approach to make a more successful business model

(00:06:03) - How they approached the SBA loan program differently

(00:09:04) - The Live Oak sales strategy 

(00:10:06) - Their strategy for trading partially guaranteed government-backed loans 

(00:12:12) - Overcoming challenges to attract clients to specialized loans

(00:15:44) - A brief history of Chip Mahan’s career

(00:20:23) - Chip’s technology-centric approach without relying on physical locations

(00:22:49) - Traditional banking security with high-upside ventures, contrasting with neo banks 

(00:27:51) - The balance between the traditional lending business and technology-focused ventures

(00:31:48) - How Live Oak intends to scale the business 

(00:36:52) - How the surge in SBA programs during COVID impacted Live Oak

(00:40:02) - Handling the effects of the Silicon Valley Bank collapse

(00:42:32) - The strategy for deposit growth and how pivotal is it for the bank's competitiveness

(00:46:13) - How Live Oak navigates threats from entities employing similar strategies 

(00:53:36) - The significance of Chip Mahan's role and his influence on the organization's future 

(00:56:43) - Potential risks that Live Oak faces

(00:59:44) - Lessons learned from researching Live Oak

 

Live Oak: The Small Business Bank

Introduction

Matt
This is Matt Reustle. And today, we are breaking down Live Oak Bank. Our guest today is Stephen Vafier, the Founder of Storri Labs Capital Partners. And I had asked Stephen several times over the years if he'd be interested in joining me for a Breakdown. When he finally said, he had an interesting name, I'll admit, I was slightly disappointed that he came back with a bank. Then he started to share the details about Live Oak Bank.

Live Oak is a bank that received its charter right before the financial crisis. It does not have the 100-year plus histories of many of the banks that we know so well today, the JPMorgans, the Goldman Sachs and the other too big to fail banks. This is a new story. And it's a new story with very interesting DNA in terms of how they built up this bank. They targeted specific industries. They targeted the SBA loan program, and they had technology in their DNA.

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