Founded in 2021, Solana Beach, California-based FundCanna offers a growing repertoire of financial products to cannabis businesses in need of funds. Specializing in loans that target small to medium-sized businesses, but also able to meet the needs of larger companies, FundCanna was founded to service the cannabis industry by CEO Adam Stettner, a loan industry veteran. In a recent interview with CBE, Stettner talked about the origins of FundCanna and why the types of products he creates for cannabis businesses have not been, and may not be, offered by traditional banks. He also weighed in on the recent non-passage of safe banking, and why he believes the industry also needs to address other pressing issues.

The idea to engage the cannabis industry came to Stettner during the pandemic, a time of change for many people. “I’ve been in both consumer and commercial lending in one way or another for roughly 20 years,” he said. “I’ve been in finance for longer, but lending for the past 20 years. Fast forwarding to how I got into [cannabis], I did student loans, and then non-cannabis small to medium-sized business lending – what’s called SMB, or traditional SMB lending – and I did that for almost 15 years until the summer of 2021, a period encompassed both the great recession of ‘08 through ’12, but also COVID.

“Here I am,” he added of his previous company, Reliant Funding, “lending to businesses – I had 220 employees, we had underwritten over a million files, funded nearly 100,000 clients, and put billions of dollars on our own balance sheet to American small business – and then COVID occurs. It shut all of them down, I mean, literally every single one of them, and I wasn’t allowed to go to work. We were prohibited from going to work. So, here I am, running a business, I have a portfolio of over 4000 active clients, and I’m sitting at home, as are all of my clients, and while I’m at home, early in the pandemic, I’m watching the news like everybody else, and on the news they say cannabis has been deemed an essential business, an essential industry. And I’m thinking to myself, wait a second, I’m a user of cannabis but I’m not in the industry. My understanding is that cannabis is federally illegal, it has disparate rules and regulations in all these different states, yet it’s deemed essential in the middle of this pandemic when all these other businesses are closed.”

The idea quickly morphed into interest, and then into research, which was the catalyst Stettner needed to see cannabis as an industry. “I already knew businesses were underserved by banks,” he said. “Non-cannabis businesses are underserved by banks, which was the impetus for me to form my prior company, to fill the gap.”

Indeed, given the numbers Stettner saw while running Reliant, the gap seems to be more of a chasm. “Banks service about 20 to 25 percent of traditional business,” he explained. “By that, I don’t mean with deposit accounts, but in the way of lending. So, the average approval rate for non-cannabis business is only 20 to 25 percent, and the company that I started was to fill the gap. Well, here I am sitting at home, I learn there are 15,000 banks in the United States, and only 600 to 700 of those service cannabis as deposit accounts. None serve cannabis as lenders unless they’re lending on real estate, but none of them are giving working capital or bridging the gap between cash outlay and revenue. That doesn’t exist. I think not only is it that less than 5 percent of the banks available to business are available to cannabis as deposit institutions, but almost none of them are available to fill the lending, and cannabis is an emerging industry with all the issues that the industry deals with, most notably growth.”

Serving the Underserved

Being underserved by banks in a growth industry forced the hand of many companies. “They were raising equity,” said Stettner, “but equity is not only incredibly expensive and dilutive to the operators; it is also not designed to service a business for its ongoing capital needs. It’s designed as seed or strategic equity raises to achieve a given task. You should not be using equity to service the business on an ongoing basis, but there really wasn’t any other choice, so there was a lot of equity.

“I knew what would happen at some point,” he continued. “Equity would restrict the business for one of two reasons: either the equity would dry up or operators could not afford to continue to dilute themselves, even if they were up rounds. But oftentimes those additional equity raises become down rounds, which is where the valuation of the business in the latest equity round is a lower valuation than any prior round. I started going deeper and deeper, and ultimately decided that once I knew enough that I felt I could make an impact, that it was time for me to leave my other business. And that other business was doing very well. We were originating somewhere between $250 million and $300 million annually, we had revenue of $70 to $80 million a year, and it was a profitable business that I founded and ran.”

Because the rudiments of his prior business and FundCanna seem so similar, why not fold cannabis clients into the previous company? “Traditional banks don’t want to lend to cannabis right now,” replied Stettner. “There were a few prohibitions and vice businesses from my prior business, and cannabis – given it is federally illegal, and concerns around money laundering and knowing your customer, and given I had bank facilities and revolving lines – there was concern about me churning that money into cannabis, and so there was a prohibition for them.

“It’s a lot easier to just say no than to analyze what I’m trying to do and how I’m looking to protect them,” he added. “And all of the AML (anti-money laundering), and KYC (know your customer), and BSA (Banking Secrecy Act) policies that I would adhere to – all of the bank acronyms they want to make sure you’re going to be compliant with – it’s just easier for them to say no because they’re so large that this is not worth the risk for them.

“Banks are amazing at what they do,” he stressed. “I’m not knocking banks, I think banks are incredible, but they don’t fill the need that every business has. Not only does it leave a void, but it creates an opportunity for an operator like myself to examine that need and then design product, and in many cases, partner with the banks, but really make sure that I’m servicing the underlying client. So, I decided to start over doing the same process I ran last time, which is study the industry, study all the segments of the supply chain, understand the geography and the timeline – the cycle between cash outlay and revenue – and then design products that would service the industry, and then go out and raise private capital so that I could service the industry, and that’s what I did.

“When I have proof of concept, I will be able to approach the banks that are more comfortable with cannabis,” he noted. “My prior relationships were not cannabis-friendly banks, there are plenty of cannabis friendly banks that do exist, but they don’t want to go through the trouble of individually vetting each and every client. So, if I can prove the concept and then leverage my track-record of lending nearly $20 billion and doing it all on balance sheet and in partnership with banks, then I become a good conduit for them to give me a facility and then for me to vet the clients accordingly, and then operate as a funder.”

Proof of Concept

I was curious about the mechanism for creating a financial product tailored to meet a specific need, how that happens, and if FundCanna hit the ground running with its four listed solutions: Vendor Financing, Working Capital, Equipment Financing, and Cannabis Dispensary Financing.

“I started the company technically and formally in September of ’21, but from September through December it was all groundwork, no lending, and no funding of any kind,” answered Stettner. “All I did really was establish the organization, get licensed as a lender – not in cannabis – establish the bank accounts, and pitch this concept to my circle of private capital, and we began funding for the first time in January of 2022. What we began with was a vendor finance product where we would pay third parties on behalf of our clients rather than the client having to [pay] because everything is c-o-d or if they’re given terms and the terms don’t match their revenue cycle, which isn’t very helpful.”

He added by way of example, “Let’s say a manufacturer is going to buy biomass plant from a cultivator, and then they’re going to manufacture that into, let’s use crude oil as an example. So, whether it’s hemp and CBD or THC and cannabis, they’ll take that plant or biomass, manufacture it into crude oil, and then sell that crude oil to a processor that will distill it down into usable product to be consumed. But they have to pay c-o-d for the plant, and their process might take three to four months from the time they lay cash out to the time they receive revenue from their client base.

The solution was sitting in front of them. “We launched FundCanna with a product where I would pay the cultivator and then put [the manufacturer] on a term that’s well in excess of their revenue cycle so that they had room,” said Stettner. “They would begin to repay in the week following the week I paid their bill, but it would be a small micro-installment, because I’m going out over a long period of time with a weekly payment. Instead of having to lay out, let’s say, $100,000 in cash for all of the plant, I lay out the $100,000, and they make a weekly payment to me of, let’s say, $1,400. When they get paid in three months, they can pay me off and pay only for the time used. In other words, I’m not charging them a flat fee, and I’m not penalizing them for paying me back early. It’s the opposite. I’m incenting them to pay me as quickly as they desire with the intent that the faster the repayment, the less expensive the money is.

“That was the product we launched with,” he added. “From there we’ve evolved, and now we have a cost-of-capital only product, where we’ll do a period of time where they’re not repaying the original principal, they’re only paying for the cost of capital, and then there’s a trigger at which point they begin to repay original principal and cost of capital, and that gives them even more breathing room. So, we have a standard vendor product, we have the cost-of-capital only product, we have a general working capital product, we’re working on launching an equipment product within Q1-Q2 of next year, and then we’re also doing very specific vendor programs where we finance specific equipment on behalf of a vendor, and that might be lighting, safes, manufacturing equipment, you name it.”

The loans are not generally collateralized. “In essence, we have the ability to file what’s called the UCC, which is like a uniform of filing that gives us in essence a blanket collateralization or lien, but we do not take their inventory as collateral. We are filing that at times, not always; it depends on the size of the deal, the performance of the deal, and the structure of what we put together. And when we file that, it’s really more of a notification to make sure they’re not over-levering, and we’re filing that because it’s a public filing that would let any other person coming in know that there’s already an outstanding obligation.”

How then does FundCanna manage risk, especially in cannabis markets where people are not getting paid, and if someone defaults, there could be a serious domino effect. Are some markets inherently riskier than others in that regard?

“The short answer is yes, there is risk, and that’s true of any industry and all geography,” said Stettner. “But you’re pointing out a nuance of the industry, and it’s a very real concern. What you can do is you can look at accounts receivable, you’re looking at P&L at balance sheet, and you look at bank statements. You see historic inflow and outflow of capital, and you can determine, based on sales numbers – whether it’s from systems like METRC or otherwise – the inflow and outflow of money, what the historical trend is, and use that inflow and outflow of money to decide as to what a comfortable service load would be for your client.

“Because, forgetting me,” he continued, “I never want to put myself in a position where I’m burdening our clients, and their problems become our problems. If we use historical analysis, they will often say in the financial world that past performance is not indicative of future results. That’s tattooed on every financial prospective, and while that’s true, and you want to have the disclaimer, at the same time if you have a set series of clients and transaction history, you can use that to determine what the inflow and outflow of money looks like. Now, will that adequately predict what happens four months from now if [a market] has that domino-effect? Absolutely not. But if we have our finger on the pulse of each of these markets and the supply chain, and we work closely with our clients if they’re having an issue, we want to work through it with them and their issue is our issue. But at the same time, I never want to become part of a problem.

“So, we use our underwriting to try to forecast our estimation, what a comfortable or serviceable load looks like, and whether that payment is easily manageable,” he clarified. “And if it is, then that’s the level we go to. Somebody may request, I’ll make up an arbitrary number, half-a-million dollars. We may approve them for, let’s say, $280,000, and we’ll explain to them why with the idea, ‘Look, why don’t we take the $280,000, and as the $280,000 comes back in, we can put it back out again, because unlike traditional lending, I don’t mind if the money is always revolving. So, we can find a way to ultimately provide you with much more than $500,000, but we don’t believe $500,000 at once is going to be serviceable or manageable with the current inflow and outflow of capital given where you fall in the supply chain, segment-wise, and where your geography is.’”

FundCanna also provides access to capital in as little as 24-hours, according to its website. How is it possible to evaluate and fund so quickly? “On the site, we have the ability for people to fill out what we call a quick one page,” explained Stettner. “Even though it may be three segments, when it’s printed out, it’s only a page. With that, we’ll always look for bank statements, a P&L, a balance sheet, and then of course on our side we validate licensing, and we look at Secretary of State [website] and the various other things to make sure things are compliant and legal. But given our history of 20 years of underwriting files across both consumer and commercial, we can glean a fair bit from just from the P&L, the balance sheet, and the bank statements. We also have models built that help us determine levels of comfort, and then we work with the client to make sure that works.

“Oftentimes, more questions will come out of that,” he added, “but the analysis is literally a matter of about an hour. So, if we receive the P&L, balance sheet, bank statements, and the answer to the demographic questions from the website, or we can also send out a DocuSign, it only takes a very short period of time for us to do our analytics because a lot of it is automated, and then we can go back to the client to request additional clarifying information.”

Safe Banking

Scheduling had forced us to conduct the interview in two parts with several intervening weeks, during which it was learned that the U.S. Senate would not include a version of the SAFE Banking Act in the final omnibus spending bill. I asked Stettner for his reaction.

“I think safe banking is almost ceremonial, and it’s not something that I believe will make a difference for the industry,” he replied. “From my perspective, it’s upsetting and frustrating that something so innocuous isn’t passing, because it’s a proxy for the political view and environment for the cannabis industry, but the SAFE Banking legislation itself is essentially useless. Of all the things we need to address, it’s the lowest priority for our industry, because while you still see the quotes on SAFE banking as to why we need it – it’s so dangerous to operate in cash and people are paying their taxes with duffel bags full of cash – all of that is BS in my opinion. There are 700 banks that will gladly bank cannabis and take your deposits, and you can write checks from your accounts and do all the things you need to do to operate your business. You’ve got everything from regional banks to large multi-state banks to credit unions, all of which bank cannabis.”

What does he believe would move the needle? “Either Schedule 3 or making cannabis federally legal,” he said. “Having cannabis remain federally illegal is our underlying issue, because as long as it is, you have a taxation issue with 280E, you’ve got a problem with the credit card rails for Visa, MasterCard, and Amex, and my belief is that if we were Schedule 3 or if [cannabis] was legal, that you might see Visa, MasterCard, and AmEx come in, and also normalization in terms of movement of money and means to make payments.

“There isn’t another industry that operates with an effective tax rate that is at or about 70 percent, and that is because of the federal prohibition,” he added. “You can’t write off your cost of goods, you have to pay taxes on your revenue, but you can’t offset that revenue with any of your costs. That by itself is prohibitive, but on top of that, every other industry enables you to pay on Visa, MasterCard, Amex, Discover, and the lake, or debit, which uses Visa/MasterCard rails, and in this industry you can’t do that.

“Then you’ve got all of this disparity on state licensing, and prohibition on intrastate commerce,” he continued. “All the while you’re banking, but what those things really do is they put insane amounts of pressure on legal operators so it’s very hard for them to operate. Forget about a profit; it’s hard for them to break even, and all of that causes them to have to charge more at the retail level. And then there’s disparity in the way states license, and you might have an imbalance in licensing with not much regard to how many cultivators are licensed relative to distributors and retailers. You may have a glut of product due to over-licensing, and that puts a lot of power in the hands of retailers in terms of who they buy from and what they buy.”

The result of all this imbalance is markets that are out of step with the law. “When you tie all these things together, it really drives consumers to the illicit market,” said Stettner. “Not only is taxation a problem for operators given their effective tax rate at 70 percent, but now you’ve got consumers paying taxes near 40 percent in some cases. So, inclusive of taxes, what costs you $150 through a legal retail outlet, you might be able to get for $70 through the illicit market. This is why you see California with $12 billion [in annual sales], and only $3 billion of it is running through the legal rails.”

It is a frustrating situation given the strengths of the cannabis business generally. “With all the headlines about unpaid or back taxes, the vast majority of taxes have been paid,” noted Stettner. “As an example, there’s about $250 million in unpaid taxes outstanding – that is a headline – but $4.2 billion of taxes have been paid, and that’s often buried. Legal operators are doing their best to keep up and stay compliant, but the legislators have been focused on SAFE banking.

“In reality,” he concluded, “politicians should be viewing the fact that we have a large commercial enterprise that the citizens of this country have spoken on in overwhelming majority. They want this, and our legislators are doing very little to put the industry in a position where, forget thriving, where they can even survive.”

What does he think will happen? “The good news is there is an increasing amount of volume to the voices that recognize a lot of what I just said,” he replied. “I think the more this is talked about, the higher the likelihood that the politicians who represent us are going to have to do something to recognize that the system is broken. While they’ve collected over $4 billion dollars in taxes, it’s hard to collect taxes when you’re driving an industry underground. I think the tax revenue is a great thing – all legal businesses pay tax, they all should – but we need to bring it in line with a typical industry. And even if those are vice industries – like tobacco, alcohol – unlike tobacco and alcohol, there is medicinal value to the cannabis industry. I don’t want that to get lost, but nonetheless, it’s still an industry.”

In Good Times and Bad

Whether the passage of SAFE banking would have been impactful or not for the industry, I was curious if the current financial environment for businesses in addition to that legislative failure had impacted the amount of inquires FundCanna was receiving.

“I’ve been watching the industry from the outside, but I’m only on the inside for the past 18 months,” Stettner reminded me. “So, I only know this market, but even before SAFE banking and this last failed attempt, we saw a steady progression of increased interest by the industry. I can’t just attribute that to the lack of equity or a bear market, but what I would say is all businesses need capital, it doesn’t matter what industry you’re in, and the majority of this world does not run on equity raises; it runs on debt.

“When I say that, I’m not talking about individual consumers that borrow on their credit cards, and I’m not talking about over-leveraged entities,” he added. “Cash-rich companies like Google and Apple still borrow because debt is the lifeblood of any business. And so, as the industry matures, and despite the bear market, the industry, any industry, leverages the debt markets. All new companies typically begin with equity because they have no track record from which to borrow, and then as they evolve and grow, they don’t continue to raise equity nonstop, but turn to the debt markets, because equity is dilutive to principals, and in a bear market in particular, if you continue to try to raise equity, you will often have what’s called a down round, where your current equity raise is at a lower valuation than your prior equity raise, which is not good for anybody, most notably your prior equity participants.”

In this scenario, the way forward is seemingly unambiguous. “Whether bear market or otherwise, I expect that as cannabis matures as an industry that it will increasingly leverage debt as a way to fuel growth and operate business,” said Stettner. “But again, not unique to cannabis, and we are seeing increased interest in our operation over the last 18 months in all states, including newer states, not just the legacy states that have been online for five-plus years. So, while I would say there’s no doubt that the cannabis industry is in a difficult period, there’s also no doubt that the industry will come out of that difficult period.”

Non-bank lenders will be needed either way. “In good times and bad, business needs money, and when you would normally turn to equity and equity is not available, if debt is available, it’s a great tool,” stated Stettner, adding, “I would say debt is an amazing tool even when equity is available, because unlike equity, when you pay it back, you retain your ownership, and with equity, in my opinion anyway – and there’s no doubt a level of bias here, but I speak even as an operator – my preference is to always use debt over equity. Because once I give that equity away or sell equity in a business that I’m running, I can’t get it back. My intent is to grow beyond the capital I use, and if I were to do that now I’m bringing my former equity investors along with me. Strategic equity is amazing, but any other kind of equity I find to be the most expensive capital you can get.

“And so, to answer your question directly, we are seeing increased interest,” he said. “I think some portion of that is undoubtedly attributable to the fact that either the bear market has dried up equity, or the bear market has slowed business to the point where people that didn’t think they would need some capital, but I would also attribute the majority of the growth in our demand to the fact that despite the bear market, the industry continues to mature and evolve.”

The interest in FundCanna also seems to extend to the customized nature of its approach to the industry, and its desire to change how business was done in the past. “Until very recently,” explained Stettner, “agriculture as an industry, and cannabis in particular, didn’t have a debt product for cultivators that was unique to their growth cycle, and if they could get debt at all, it was typically on their real estate, it wasn’t on their business. With FundCanna, the whole goal was to change that, and to make available to them a product construct that met their need, because my view on this is if it didn’t meet their need, they weren’t going to leverage the product.”

It seems obvious on its face, but circumstance had prevented a tailored product from taking root in the industry. “I didn’t want to bring a product to market that didn’t work for the client, but all too often what you find is that’s what happens,” said Stettner. “In this case, because cannabis was originally an illicit product and then became a legal product at the state level but was still illicit at the federal level, you had a lot of people saying, ‘This is what we offer, take it or leave it,’ and that’s a terrible way to service an industry. Our goal was to take the opposite approach of understanding what’s needed, and then design a product based on that need, with the idea that it would be reliable, it would be renewable, and it would be easily accessible. And I didn’t want it to be onerous in terms of how to apply. I wanted the speed and the alacrity of the product to be there, because in this industry when someone realizes they have an opportunity and they want to capitalize on it, they can’t wait three or six weeks to determine whether or not the money will be available – by then the opportunity has passed them by – so all those things were part of the construct that helped us design the product.”

FundCanna Forward

The company’s attention to detail is apparently paying off. “Demand is continuing to increase as word spreads about the fact that we’ve designed products that try to mirror the need rather than just taking a standard off-the-shelf funding product, slapping a cannabis label on it, and bringing it to this industry,” said Stettner. “I’ll give you an example. The typical timeline for our clients – and at this point, we’ve underwritten north of 600 – is in the range of two to eight months for the typical cash outlay to revenue cycle. What we have done is make sure that our average term exceeds eight months, so then, unlike a typical funding product, we give flexibility to the client. In other words, if your revenue cycle is an eight-month cycle, I might add 20 percent of that to give you a buffer, but then I will give you the autonomy to pay it back whenever you want, and only pay for time used, with no prepayment penalty.”

As the industry continues to evolve, does FundCanna intend to meet all levels of funding? “Yes, that’s the point of the vast delta between the $5,000 client and the $2 million client, but it’s also the concept of we will pay third-party vendors,” said Stettner. “If a cultivator is buying nutrients and lights and maybe wants to purchase grow tables, we’ll pay their vendors for them, and they can all be in separate installments, with the idea that there can be different schedules of repayment for each of those things.

“But a large, commoditized grower may have a much different need,” he noted. “They may want to run different types of lighting throughout their growth facility, or they may have some hybrid indoor/outdoor grows, some fully indoor only grows, and they’re going to have different needs for all of that. We want to make sure that the product, the term, the cost, that it all meets what they’re looking to do. And then we may have a small craft grower or a high-end edibles manufacturer, and their needs are completely different, their timeline is different, and their margins are different. So, it’s very important that we have, as I mentioned before, not only speed but flexibility in the product construct, so that we can service the industry accordingly.”

There is one significant caveat to FundCanna lending, however. “We will not fund pre-revenue businesses,” said Stettner, explaining “It is not in our charter to fund what I consider a startup from scratch. We’ll find early revenue, like an early stage or early revenue business, but really the reason for that, and I think this is critical to point out, is we want to make sure that the money we’re providing is not a burden to the clients we’re working with. We’re looking to build a long-term relationship that is scalable and repeatable, and if we extend money beyond what we believe is within a comfortable repayment schedule, we’re stepping on not just the client’s toes but our own with the desire for a long-term relationship. So, when a business doesn’t yet have revenue, no matter how great their business plan is, we don’t have any kind of benchmark or data from which to gauge how the repayment structure will impact their cash flow.”

What about an MSO is several states that wants to open a dispensary in a new market. How would that work? “We’re happy to fund based on the existing businesses, in essence, cross collateralizing,” said Stettner. “You want to leverage your existing base of revenue in order to open or expand? That’s an absolute yes from my perspective, and very different than somebody that wants to open a new location and currently doesn’t have revenue on an existing location. Now, whether or not 10-15-20 million is available, I would say at that level it is likely something I would syndicate on. In other words, we have the ability to fund what I have comfort funding, and that’s, I would say, a multi-million-dollar deal on our own balance sheet. Where it goes in excess of my comfort, I would be the lead and fund up to my level of comfort, and then I have individuals and entities that can syndicate with me on that file.”

And when lenders serve the underserved, do the underserved by definition pay more for those loans because they are the underserved? “Oftentimes, that’s the case,” said Stettner, “but I would say there are a few components here. I believe in risk-based pricing, and pricing that, the more flexible a product is and the less onerous the guarantees or security interest is, typically the more expensive a product is.

“But that’s not to say that there’s always a one-for-one,” he added. “There are a lot of things that go into how you price debt, and competition is among them. There was a lot of competition in traditional SMB, and for me, you stay the course on providing excellent service with terms that work for the client, and that includes price, and you worry a little bit less about what competition is doing. Because competition can come and go, and competition can provide a poor level of service and product to the client, so if you don’t keep your eye on your client, and instead you look at your competitor, you end up going where they go instead of where the client needs you to be, and I want to stay focused on the clients’ needs.”

In terms of industry sectors in the greatest need of funding, “We see demand from the entire supply chain and the ancillary segment,” said Stettner. “I can tell you that our top five in terms of both interest and funding are ancillary, manufacturing, cultivation, hemp, and retail, and that’s not in any particular order. Those segments of the industry comprise, let’s say, 65 to 70 percent of the inquiries we get and the portfolio that we have.”

Though relatively new, does FundCanna have an end-game? Does Big Debt come in and buy up these clients 5-10 years down the line or whenever? “The path can go any number of ways,” replied Stettner, “but I don’t know that there is an ideal. The path is we continue to build the company and evolve product and deliver amazing product and service, and along the way, if that makes us profitable and turns the company into a great organization, there’s the opportunity to merge with other financial services companies that are not currently in cannabis. It’s a way for them to buy in without diluting their non-cannabis brand, or candidly, without diluting FundCanna as a cannabis brand. There is also the opportunity to sell and or go public, and then down the road there will undoubtedly come a time when banks not only are banking the space, but lending into the space.”

But that will likely continue to leave plenty of opportunity for companies like FundCanna to continue serving the industry with nuanced products. As our long interview came to an end, I asked Stettner about the importance of trust in his business and this industry.  “The great thing about this industry is that reputation is very important, and I think when you burn people, or when you lose someone’s trust, it’s inevitable that that will get around,” he responded. “Of course, if you’re in the funding business, people are going to defy your trust at some point, or they’re going to breach their commitment. It’s part of the game. But we work very hard to overcome any skepticism with people that have been burned. When they come to us, we want to make sure that there is a level of comfort, and we encourage them to go as deep as they can with the company or with me as a principal. I take great pride that the most valuable thing I have in my career is my reputation. I’ve worked 30 years to build it, and I’m not going to sacrifice it for a dollar or anything else.”