VenConnect Offers a Supply Chain Finance Solution for Small and Mid-sized Companies
By Jenny Rollins
VenConnect, a bootstrapped Ogden-based fintech startup with Hooper origins, has created a way for small to mid-sized businesses to solve the cash flow tug of war that can come with paying vendors, subcontractors, and suppliers.
The company has set out to create an innovative way to more effectively manage the process of paying these critical partners through a little-known cash flow optimization tool known as Supply Chain Finance. The result is vendors, subs, and suppliers receive immediate payment on their open invoices with zero impact to their customers’ liquidity and without modifying their A/P terms.
TechBuzz sat down with Clint Weston, VenConnect’s Founder and CEO, to learn more about his company and how it addresses supply chain challenges, with a particular emphasis on solving the cash flow tug of war in the market. We learned the heart of VenConnect is its passion for small to medium-sized businesses, and its free, proprietary platform adds tremendous value to the process of paying vendors. With manufacturing and construction booming in Utah, along with a myriad of supply chain challenges and materials delays plaguing projects, we thought VenConnect’s solution was both relevant and timely.
Typically when a company hires a vendor or supplier, that vendor submits an invoice which will then typically be paid 30-90 days later. VenConnect gives vendors or suppliers on-demand liquidity with the ability to easily choose the timing of payments based on their individual cash flow circumstances for a slight discount—typically between 2.00% - 2.50% for 30 days (which is notably less than the fee a vendor would pay by accepting payment by credit card).
VenConnect is free for users. Weston’s team has designed it to be elegantly simple for anyone to manage. “Users can sign up and be ready to use the platform within a day,” says Weston. “And vendors and suppliers have the flexibility to choose which invoices they want to be paid immediately and which payments they want to wait for.”
Weston hails from Hooper, Utah and started his career as a bank teller at Zions Bank. He moved up the ranks and worked for nearly 25 years in commercial banking. However, he always had a desire to start his own venture.
He observed several fintech companies emerge with supply chain finance solutions for enterprises, usually $200 million or more in annual revenue. However, he didn’t see many supply chain finance solutions for smaller businesses. He and VenConnect co-founder (and now Chief Credit Officer) Jan Ackley came together and worked out a solution to fill that gap.
“I’m very passionate about small business, and that’s what I’ve done my whole career,” says Ackley. “We quickly realized the small to medium-size market is not being served at all,” added Weston. VenConnect focuses on profitable companies that have been in business for at least five years with between $1 million and $100 million in gross annual revenue.
Weston explained that VenConnect is not a solution for companies experiencing cash flow issues themselves, rather it is a solution companies can implement to deepen their relationships with their vendors and suppliers who might be struggling with liquidity.
“Right now with the serious challenges we are seeing with supply chains, one of the best ways that a company can mitigate and reduce the financial risk in their supply chain is by pushing liquidity down to their vendors and suppliers,” says Weston. “If a vendor or supplier can have immediate access to cash flow, they can purchase inventory sooner or hire the staff that they need … which only ends up benefiting that customer because now the vendor is in a better position to provide the goods and services their customers need.”
In addition to deepening vendor relationships, VenConnect’s Supply Chain Finance platform allows the accounts payable department, traditionally strictly a cost center, to turn into a revenue center through VenConnect’s revenue sharing program. Also, instead of accounts payable staff being overwhelmed by all the calls asking about invoices and when they will be paid, vendors and suppliers can log into the VenConnect free platform and have complete transparency, control, and flexibility regarding their payment. VenConnect is proving to reduce the workload and burden on A/P staff by creating streamlined efficiencies in the payables process.
Weston and his co-founders have been working on VenConnect for two years. They partnered with a software development team in Utah about 18 months ago to build the platform. The response has been overwhelmingly positive since its launch in January of this year.
The biggest challenge the VenConnect team has come across so far is making sure smaller companies understand the concept of supply chain finance and the significant benefits and value propositions of offering early payment discounts to vendors and suppliers.
The VenConnect team is focused on typical early stage company activities: refining the concept, acquiring customers, listening to them, pouring in their feedback into the product and making sure the platform is working smoothly and that the data is flowing.
Smaller companies, including vendors, subs, and suppliers have been particularly hard hit during the pandemic with constraints on inventory, labor shortages, and major supply chain issues. Weston coined VenConnect’s tagline: “Be the solution,” and he strongly believes supply chain finance is the premier tool that will allow a company to solve the cash flow constraints of their vendors and suppliers now and in the future.
Jenny Rollins is an award-winning writer, editor, and content producer. Jenny is a senior editor for Business.org and manages her own freelance writing and editing business. She has previously worked for KSL.com, Harvard Business Review, and Deseret News.