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Updated: Nov 4, 2016
Expect the unexpected. That’s what Virtual Driver Interactive teaches its student drivers. But founder and CEO Bob Davis never expected how difficult it would be to find the affordable capital his company needed to develop a new product and launch a digital marketing campaign. Virtual Driver Interactive was about to pump the brakes on their expansion — then he found Funding Circle.
Virtual Driver Interactive (VDI) was founded in 2004, just as Bob’s eldest child was getting ready to learn to drive. Bob was cruising down I-680 towards San Jose, California when a lawn chair flew off the back of a truck and nearly crashed through his windshield. Fortunately, his well-trained reflexes helped him swerve safely out of the way, but he was struck with an idea that led to the creation of one of the country’s most effective driving simulators.
Virtual Driver Interactive teen driver simulator in action.
Car crashes are the number one killer of teens. More than drugs, homicides, and suicides combined.* This is largely due to the limited experience that teen drivers have behind the wheel. They never have a chance to experiment, to practice, or to test their limits without endangering themselves or others.
“My kids were starting to get into video games, and I wondered if you could use gaming technology to practice dangerous situations in a safe environment — to take the danger out of driving,” Bob said. He hired his brother-in-law, an engineer with a degree from Georgia Tech, and started a truly family-owned business.
“As an entrepreneur, I have a lot more freedom to make the right decision for the right reasons. I can go from idea to implementation in the same afternoon.”
The UPS Foundation became one of their first customers, purchasing 100 simulators for Boys & Girls Clubs around the country. When UPS saw how effective the simulators were at encouraging the development of safe driving habits, they asked Bob if they could use the simulators to train their own professional drivers. The UPS fleets with drivers that were trained on Bob’s machines reduced their number crashes by 38%.
VDI continued to innovate and almost a decade after their founding, VDI was growing steadily thanks to a few strategic hires and the launch of an award-winning boating simulator funded by a grant from the US Coast Guard.
“Without a doubt, my biggest challenge as a business owner is our ability to scale.”
But at the same time, VDI’s flagship simulator for teen drivers was quickly becoming outdated. It was originally built to run on Windows XP, and while it still effectively taught safe driving habits, Bob’s team saw lots of opportunities for improvements and expansions. Unfortunately, Bob couldn’t push the pedal to the metal until he paid off some of VDI’s early investors. Bob considered reapplying for an SBA loan, but his previous experience had been agonizingly frustrating and he felt that even with their low interest rates, the capital wasn’t worth the added hassle.
Filling out an application and waiting for the bank’s slow response was like sitting in a traffic jam on a hot summer afternoon with the windows rolled up and a broken air conditioner. “We come up with great ideas all the time, but you can only afford to implement so many…Our challenge isn’t lack of ideas — it’s lack of access to capital to execute them,” he said.Read more:How to fund a new product launch
Bob found a lender online that offered to loan him a couple hundred thousand dollars in just a few minutes, but it came with an interest rate well above 35%. They didn’t understand his business and weren’t about to take the time to get to know him. And they didn’t seem to care that operating VDI with daily interest payments on a loan of that size would have been like trying to drive a Jeep with four flat tires.
Just then, a letter came in the mail from the National Small Business Association (NSBA) — one of Funding Circle’s trusted partners. Bob visited FundingCircle.com and liked what he saw when he started to check under the hood.
“What I didn’t expect is that I got a call within an hour that was very friendly — thanking me for applying. I don’t remember anyone ever thanking me for applying for financing before.”
Bob began the online application, finding it particularly straightforward and easy to complete in a matter of minutes. The process just got better from there. “Funding Circle’s online application was fantastic: simple and accurate. They said upfront what they needed, and they made it easy for me to give it to them. When my Account Manager called me, it wasn’t to demand more information — it was service-oriented. The whole process worked flawlessly.”
His personal Account Manager made sure all of his paperwork was in order before passing his application directly on to his underwriter who called him to learn a little more about how he planned to use the loan. “I could see it was a real company really assessing my creditworthiness — but nonetheless, it was done in a really friendly and supportive way.”
VDI was offered a $250,000 loan at 7.99% — far better than any other offer Bob had received. And much faster, too. Though VDI would never condone driving over the speed limit, Bob enjoyed life in the fast lane. “I literally went from opening a mailer on Wednesday to being funded on Monday.”
“In my opinion, if every small to midsized business knew they had an opportunity to get capital at rates lower than their credit cards, Funding Circle would have an enormous spike in applications.”
Bob put the money to work immediately — paying off some pre-existing debt and using the rest to fund product development and a digital ad campaign that received over 600,000 impressions. A month later, VDI launched a beta version of their new product, Virtual Driving Essentials, that allows parents to see and comment on what their kids are learning each day on the simulator.
A little farther down the road, Bob hopes to expand the teen driving simulator internationally and design a new simulator to help emergency first responders drive more safely in stressful situations — saving even more lives and making our streets safer for everyone.
Today, VDI is financially well-positioned to keep their foot on the gas. And while we may not always be able to expect the unexpected, Bob knows that when he works with Funding Circle he can safely expect the highest level of customer service and access to fast, fair, and affordable working capital.
Paige Smith is a Content Marketing Writer and Senior Contributing Writer at Funding Circle. She has a bachelor's degree in English Literature from Cal Poly San Luis Obispo, and specializes in writing about the intersection of business, finance, and tech. Paige has written for a number of B2B industry leaders, including fintech companies, small business lenders, and business credit resource sites.