KindlED | The Prenda Podcast
The KindlED Podcast explores the science of nurturing children's potential and creating empowering learning environments through microschooling. Powered by Prenda, each episode offers actionable insights to help you ignite your child's love of learning. We'll dive into evidence-based tools and techniques that kindle curiosity, motivation, and well-being in young learners. Do you have a question, topic, or story you'd like to share with us? Get in touch at podcast@prenda.com.
KindlED | The Prenda Podcast
Episode 88: Money For Microschools. A Conversation with Allison Serafin.
We trace Allison Serafin’s path from restless learner to teacher, elected education leader, and capital guide who helps schools access facilities and finance. The heart of the talk is practical: how founders can become “underwritable” without losing their mission.
• early sparks in entrepreneurship and a misfit K–12 experience
• classroom wins and structural limits seen in Houston and Philadelphia
• leading in Las Vegas across TFA, district change, and state board service
• learning finance to build IDEA campuses and earn credibility
• what Building Hope does and why facilities cost so much
• pilot microloans for microschools with humane, unsecured terms
• clean bookkeeping, days cash on hand, and debt coverage explained
• how to use AI to learn finance fast and prepare for lenders
• start scrappy, then professionalize when you choose to grow
About our guest
Allison Serafin brings experience, accomplishment and energy to her responsibilities at Building Hope. Allison has more than 20 years in the education field, including time as an elected member of the Nevada State Board of Education. She helped raise more than $40 million for IDEA Public Charter School in her hometown of Houston and was Domestic Portfolio Director at Dovetail Impact Foundation. Allison is a dedicated Peloton bicyclist. She earned a BS in Political Science at Texas Christian University and an MS in Social Work at the University of Texas-Arlington.
Connect with Allison
Building Hope
Got a story to share or question you want us to answer? Send us a message!
About the podcast
The KindlED Podcast explores the science of nurturing children's potential and creating empowering learning environments.
Powered by Prenda Microschools, each episode offers actionable insights to help you ignite your child's love of learning. We'll dive into evidence-based tools and techniques that kindle young learners' curiosity, motivation, and well-being.
Got a burning question?
We're all ears! If you have a question or topic you'd love our hosts to tackle, please send it to podcast@prenda.com. Let's dive into the conversation together!
Important links:
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Interested in starting a microschool?
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Yeah, like all of the lessons that my parents taught me, right? Like you better know what you don't know and be quiet and find the people who know it. And then like you're a sponge. Like there's no question too dumb. You ask all of it.
SPEAKER_03:Hello, and welcome back for another episode of the Kindled Podcast, brought to you by Prenda. I'm Kelly Smith, your host for today's episode, and I'll be interviewing Allison Serafin. Allison is the chief of strategy and development at Building Hope, where she supports charter schools and more recently microschools in expanding their operations and reaching more kids. She's has she has more than 20 years experience in education, including some time as an elected member of the Board of Education in Nevada. She's raised more than$40 million to start the Idea Public Charter Schools in her hometown of Houston. She's dedicated to the cause of helping kids through education. She's really focused on structures and systems and how can people overcome barriers to get access to capital and achieve their dreams as they bring new options for kids and families in school. I think you're going to love Allison. We're going to talk about not only her experience in the charter school world, what she's done recently giving loans to microschools, but we'll also get into what it means to be a learner and how she has exemplified the concepts and principles of an empowered learner. So with that, here's Allison. Allison Sarvan, thank you so much for joining the Kindle Podcast. It's so good to have you here.
SPEAKER_01:I'm excited to be here. Thanks for thanks for having me.
SPEAKER_03:Yeah, well, I've loved getting to know you a little bit better over these next last months. Allison, those of you in the microschool world will recognize her and her name from some work she's done around financing microschools and lending money to education entrepreneurs. I think it's incredible work. We're going to talk about that later, but can we just start with you? I always, you know, I'm curious about your path into this and how did you get to this point where you're just a ferocious advocate for education innovation?
SPEAKER_01:I'd like to think that it started when I was a Girl Scout and my parents had me go door to door, right, selling cookies. And so that's where like the entrepreneurship bug was built, where my dad was like, you have a goal and you're gonna hustle and you're gonna go after it. And I'm gonna teach you.
SPEAKER_03:Were you good at it? Were you a good cookie salesperson?
SPEAKER_01:I don't think initially, but for anyone out there that is in Generation X raised by a boomer, we certainly know that our parents just told us to do it, right? So like if you're scared to go knock on a door, your dad's like, go knock.
SPEAKER_03:Wow.
SPEAKER_01:And then they give you feedback. So what you don't know is real-time feedback. Your parents were giving you that to the next house to say, this time you should do it this way. Eye contact. Like, what's your what's your angle? Like, what do you, what do you want to achieve? They need to know the purpose. And you're like, it's cookies. So that's where this understanding of if you identify a problem, be a solution, like figure out a way to make it happen. While I may not have enjoyed the process, this kind of entrepreneurial ship bug was built there. And then on the education side, I never really liked school. I wasn't a great student. School just never really clicked. I was identified with ADHD when I was really young. It was really hard to focus, kind of the archetype of sitting still in a desk. Um it just was a bit of a bore. And so it wasn't really until college that I even liked school. I mean, I really hated school so much that I dropped out of high school when I was 16 and got my GED, my junior year. And I ended up finding my way and getting to college. And that's a whole nother podcast. But the process of like getting into college, going through an experience where you could kind of pick your classes, identify professors through friends that had them that taught in a particular way that would be energizing, and kind of being the author of your own educational path, that really unlocked for me. Like, why aren't we approaching K-12 this way? And so that has kind of led me on what I would call like a 25-year journey and figuring out how we can provide kiddos more access to educational opportunities that allow them to flourish.
SPEAKER_03:Can we just pause on this? Because the fact that you made it to college, I wasn't there, right? But I've seen kids like this, that it's a it's a very clear mismatch between the structural constraints and the culture and the norms and you and what's important and valuable to you as a person. So on the one hand, you've got you that's just like, I don't see the point. I want to do other things, I'm upset, angry, whatever. And then you have this consistent labeling process that I'm sure started when you were very young. That's like, you're a problem, you're a problem. Can you just sort of how in the world, I get how you got to 16 years old dropping out and getting a GED? Like that part makes sense because I think that happens. What like what's yeah, what is it that that led you to kind of stick with learning and and not give up completely on formal education?
SPEAKER_01:So, I mean, even going back to that experience I had as a child with going door to door to sell Girl Scout cookies, there was a sense of accomplishment. There was a sense of me being able to decide when I went to the next house, if I used the feedback or not. It was immediate, it was real, and like ultimately I did get really good at it. The part of me then, when I was struggling in school, I always found a lot of like space to thrive through work. I mean, I started working when I was 15. When I was in high school, my parents hit a real like tough financial window. And so I ended up needing to work a lot more to like help out at home. And I just saw a lot more value and going to work. So I would skip school. I would skip school and pick up another shift. Pick up a shift. Yeah.
SPEAKER_02:Wow.
SPEAKER_01:I picked up work because then I was earning a paycheck, and then I felt like I was adding more value at home. And candidly, I just really didn't think world history was as valuable as being able to be more of a financial contributor. To be fair, my parents did not know any of this. They never asked this of me. And I'm also um, I also recognize my privilege. Like I'm a white girl that grew up in a middle class home. And I know that if I grew up in an under-resourced area or if I had a different color of skin, there is a very strong likelihood I would not be here. I would not have made the same choice to go to college. And so that would I consider a privilege that was not like didn't ask for this. Now it's my responsibility to pay it forward for more kids.
SPEAKER_03:It's interesting to reflect because I do hear in this, uh, you know, part of this, it's just these intangibles, like, what is it exactly about the life I was blessed with relative to other people? But, you know, somewhere in that that life is you got this taste of entrepreneurship, you got the feeling of a job well done, of the what are the, you know, the early kind of capitalist will talk about this um this the satisfaction of of almost like self-validation through contribution, right? I've contributed to the economy, I've I've gotten paid, like someone's willing to pay me. And in a way, you become, I don't want to say like impervious, but I can imagine there were messages you were getting at school that were sort of contradictory, but you had this sense of like I'm valuable, I'm capable, I can do I I don't like those messages, don't stick maybe the way that they would if you did hadn't had those other pieces.
SPEAKER_01:I mean, this is not meant to be psychotherapy, but I No, interesting, I hadn't thought of that, but yes, the counter, right? At school, yeah, never working up to my potential, right? Yeah, you know, I'm the kid with the backpack. And if people who know me now are like, you were disorganized, I'm like, yes, you learn the archetype to like get it together, especially after joining Teach for America. Like, you cannot be a mess and be on the recruitment team. Yeah, there were signals, right? So, like, show up, work hard, like go above and beyond identifying what's valued, what gives you better shifts, what gives you uh better pay, like how you engage in the workplace. I just saw that I had more control over that than I did at school. That I mean, school just felt like a racket. And there's a bit of a backstory. I went to private school K9. And then because of some financial challenges that my parents had, I went to public school. And when I went to public school, I had taken so many advanced courses that they like bumped me. They didn't even know what to do with my schedule. So they bumped me into all of these advanced junior level classes. Yeah. And there were junior level classes, and I was reading novels I read in middle school. And so I was like, I'm reading Lord of the Flies, and like I've read that in Learn Height 451, I've already read that. So there was just the, and that was another piece that I was like, wait a minute.
SPEAKER_02:Right.
SPEAKER_01:This is the education that kids are getting. And this is advanced. And then when I went to St. Francis, I was reading that book in my summer reading class before eighth grade. Like this is like this paradox just did it make sense. So I was like, yeah, I'm gonna work.
SPEAKER_03:Okay, so all this is swirling around in your head. No, that's it. You're getting this. No, no, it's great. I think it's giving people a sense of who you are. And and interestingly, like, you know, we all kind of hear ourselves in the stories. I think most of us can point to somebody that we care about, whether it's our own kid, somebody we know, where it is kind of a mismatch for some combination. I mean, I'm I'm hearing in you really just you probably would disagree with this, but giftedness, brilliance, sort of some of these things that made it just hard for you. Plus, you had this confidence in swagger that came from other things outside of school. So, you know, now here you are and you just don't see the point. You're like, you could have applied your same list of ways to cope and sort of navigated that system and done fine. You would have been valedictorian, probably. You just didn't want to. You're like, no, I'll go make some money and forget about it.
SPEAKER_01:That's never been my jam. I mean, I'm I'm a rebel, right? Like this is that's like in my I mean, I am my parents' daughter. Like they love it, they just raised me that way. And so this is what I loved about the work and the work that I get to do. Yeah, right.
SPEAKER_03:It's so how did you get there? So was it was it education right away when you went to college? Okay, so you went to college as a GED possessing.
SPEAKER_01:I know that's a whole nother thing. There were there was no internet, there was like a Peterson's guide to four-year colleges, there was an MCI phone card, there was calling admission. Anyways, people that are like watching this, if anyone's like an MCI phone card, yeah. Like, can you imagine? We used to pay push all the numbers, yeah. Using our cell phones, we had like power minutes where they would give you certain times of day to talk for free. Yeah, I mean, I I went to TCU. I ended up studying poli sci. Yeah, GoFrogs. Very proud on frog. Yeah, got my degree in poli sci. Okay. And teaching changed my life.
SPEAKER_03:So, how did you meet Teach for America and yeah, what was it?
SPEAKER_01:Grad school. I was getting my master's in social work.
SPEAKER_03:Okay.
SPEAKER_01:So after TCU, I pursued my master's in social work. I was really fired up around injustice and reflecting a lot on privilege and recognizing my own limitations. So I was like, I really, before I get into policy, I really need to learn more about like across lines of difference. I really need to learn more about like what's real, like the social kind of challenges that so many people have in order to be able to flourish. And so uh spent two years getting my MSW and during that learned about Teach for America.
SPEAKER_03:Okay. And you're thinking, okay, I've I see these societal problems, structural challenges. This starts when kids are very, very young. I would imagine the you were you were a a prime candidate or susceptible to the TFA methodology or training. I mean, I can imagine that you just lit up. You're like, okay, we can get into classrooms and make a difference. Um can you talk about your first teaching job, TFA? If you don't know, Teach for America posts people in, I'm saying this to our listeners, like takes really promising young people, early career, you know, school, and they put them into teaching jobs, often in, you know, very underprivileged situations. And it's a chance to really get real about uh making a difference in the lives of young people. So it's a really inspiring program and it's made a difference for lots and lots of people.
SPEAKER_01:Very grateful to Eric Gukian, who was my selector at the University of Texas. Yeah, again, Teach for America also changed my life. Being a teacher was never on my bingo card. If you can imagine, it was the lat job I ever wanted. Story. I took my teacher licensure test in the Algebra 2 classroom I skipped all over the time when I was supposed to be in high school. I was like, full circle moment to be in Ms. Holt's classroom while I'm taking my teacher licensure exam.
SPEAKER_03:That's hilarious.
SPEAKER_01:Yeah, I mean, I taught at Attics Middle School in Sunnyside in South Houston on the second floor, sixth grade, language arts and world cultures. And my students were remarkable and brilliant and incredible. And yeah, I would I could do that over and over again. It was the hardest experience, like career-wise, of my life. I also think just where I was in general in life, that's probably also what made it so hard. But gosh, right? You just see the incredible potential that's in every single kid, despite all of the cards that are stacked against them.
SPEAKER_03:Can you, I don't know if it's appropriate to share, just give us a glimpse of one of those situations or just some somebody you remember from that early class.
SPEAKER_01:I mean, Antoinette was one of my students. So teachers know this, right? You have some kiddos that come early and stay late, and you start to learn pretty quickly when kids choose to spend time with you, like you're the best option. It's not only incredibly flattering, but it's just a real gift to be able to create safe, welcoming spaces for young people. We all remember what it's like. Like if you walk into someone's classroom and there's like a beanbag chair or a nook and you can just kind of make yourself at home, that was really important. So Antoinette would always come early or stay after school. And she was a voracious reader, just so curious. And so she and she was she managed some, I would say mean kids, if you will, with tremendous grace. And I knew that if she stayed at Attics, there would be a really strong likelihood that high school was going to be incredibly hard for her. And so I was really lucky that Chris Farbeck had just launched Yes College Prep, um, which is a charter school in Houston. And I got to know him, and I was really lucky to be able to get Antoinette connected to Yes Prep, and she ended up going there. Um that's when I first really started to learn about charters, and she graduated from Creighton University with a nursing degree, and she's she's a nurse in the medical center in Houston. Um but then I have students who their stories aren't that. I had students who were 15 and 16 in sixth grade and had been retained so often that now they, you know, 16 years old in sixth grade, yeah, it's it's no wonder you hate school. And so, you know, there's the the paradox of that. Like, how do you create safe, welcoming spaces for young people when adults have just let them down year after year? And how can how can we create something different, even if it's just for a year?
SPEAKER_03:It's beautiful. So I hear in you, you know, in your experience as a brand new teacher, is really both sides of it. One is is just the sheer joy and exhilaration of a child, you know, really having an impact in the life of a young human being. I said this about my story, you know, I I did all this tech stuff and I worked in software companies and I got to work on interesting things. It wasn't until I saw that and it was face to face in my first micro school in my house where I saw a kid that hated learning and thought he was dumb change his mind about that and to see what that means for him and his life and what's possible. Cool, right? Um, it's more than cool. It's like it's addictive in a way, and it uh it really it reset it reset your whole trajectory, it reset mine too. And um totally and I I know we have a lot of people listening that they're thinking of that first moment for them and and those type, those times where we just recognize how important this work is. So shout out to all of you doing this work. You also saw in that first situation, like you were kind of doing some calcs, right? Like, okay, this is a problem. I can't imagine a world where no matter how great I am as a teacher, this 15-year-old in my sixth grade class, there's just so much stacked against him. And I know the school that they're gonna go to, and I just I'm aware of what's going on. So you're starting to think about structural issues. And can you kind of bridge us from there into the rest of your work? Because I think that, yeah, that puts you in a different category. All of a sudden you're like, what can I do about the structure? And how can I make uh changes that will help lots and lots of people?
SPEAKER_01:Yeah, systems change. So after being a core member, I moved to Philadelphia. This is when Paul Vallis was named superintendent. So Philly was the first school district in the country to have a state takeover. And Teach for America had just launched there. So I was a teacher coach. And if I thought South Houston was tough, well, Philly was gonna show me that I was dead wrong. And I really just was humbled by the tremendous courage of teachers and just got a masterclass and how to navigate multi-generational poverty around high expectations, but at the same time learning about systems change and change management. What does it look like when a state out of desperation, because of persistently low achieving outcomes, kind of pulls a lever to start to take over schools and what that does in historically disenfranchised communities. And before that, I would have said, that's a great idea. And then after seeing it play out, I just got a, you know, a bird's eye glance of like, this is what I studied in school. And we would do like a case study, and now I'm experiencing it through the eyes of my teachers that I'm supporting. And so I think that was the first time when he mentioned like systems and structures changed. I was like, oh, I'll be a teacher coach and then I'll help more teachers get better. And then I was like, oh, well, now let's go up another level. What does it mean when the system is dysfunctional and then teachers are having to work against that? And so after that, I ended up, I've had a few other gigs, but in 2008 moved to Las Vegas and led Teach for America, which resulted in kind of a domino of different roles. I worked in the Clark County School District, reporting to the superintendent. So got to lead, if people want to remember, Common Core. Got to lead here we go. Uh got to lead a lot of common core work and then ran for office. So I was elected to serve on the State Board of Ed in Nevada and then launched a nonprofit to really start to engage in systems change, to recruit and kind of develop leaders so that we can have more high-quality choice through charter schools and the urban core in Las Vegas.
SPEAKER_03:Holy smokes. Yeah. I think all of us are getting dizzy thinking about all of this.
SPEAKER_01:I know it's a lot. I feel like I'm like 90 years old folks. I've been at this forever.
SPEAKER_03:You're not. And uh, I think what's fascinating is you just have that energy. So it's not actually surprising to me, just I'm extrapolating back. Like I know the energy you approach everything you do with, and then you're like just you keep doing that and you're looking for where are the levers? Like, what can I actually do to help really going all the way back to those first kids you were meeting in tech in Houston and then the ones in Philadelphia? Yeah, there's so much that that is, you know, it's no one's fault that they don't even see the people that are accidentally making things hard for them. And and it's not people as much as as systems and and uh structures. So I love that you're you're doing that work. Um can you talk about the nonprofit? So yeah, what what did you do and what was the thesis by that time?
SPEAKER_01:Launched Opportunity 180, started writing the business plan. Kind of late 2013.
SPEAKER_03:Yeah.
SPEAKER_01:Got, you know, applied for a 501c3 to kind of serve as this incubator. At the time, the term was a harbor master, to kind of field like a chamber of commerce or an economic development authority, I think is a better term, to kind of identify who are the highest performing charter operators nationally, who are the high performers locally, who are the who are the people that want to lead that work, and how do we use philanthropy and deploy that in order to accelerate a field of more choices for kids. And so I was really blessed to be able to have a significant amount of local philanthropy and some state funds to be able to stand up the organization. My mom ended up getting sick in 2017. And so I had to step away from this organization that I founded. And any founder knows it's like your baby.
SPEAKER_02:It's hard to do.
SPEAKER_01:Incredibly hard to do, but it's also, it wasn't actually a hard choice for me. Like needing to go home was like that's more important. So moved home to Houston to then launch something else where I was the founding ED for Idea to launch Idea Public Schools first uh campuses in the in the Houston area. So as you can tell, there's a there's a trend of launching.
SPEAKER_03:Well, and I see you kind of changing elevation too. You're you're like, let's go all the way to policy. And then back in the field. Let's go down. And then I'm like, okay, now I can do a new charter school. And idea public school is, of course, well known as a a winner as as far as charters go. And um, and sorry to hear about your mom and on all of that, of course. She's great.
SPEAKER_01:She's downstairs. We're she's all right, everything's fine.
SPEAKER_03:That's hard.
SPEAKER_01:Everything's great. We're rooming.
SPEAKER_03:It's awesome. We we start a new school. Tell me about that. Like, what was the what was the thesis? What were you trying to accomplish, and how did it go?
SPEAKER_01:I mean, in Las Vegas, here we were trying to start like schools for building excellent schools, fellows, right? So these are very scrappy. I call them skinny branch schools, which remind me very much of micro school starting. You're HR, your marketing, you're the CEO, you're everything. And so getting capital pulled together for those leaders is very different than an experienced operator that has an incredibly healthy balance sheet in order to be able to borrow or secure debt to build multi-million dollar buildings that are going to serve 1200 kiddos in grades K through 12. So I was able to kind of see both ends of the spectrum. What is the pathway to access capital? And I didn't know anything about building a school in 2015. That's how I first learned about building hope. They they put in an RFP for my like first project. I knew not ERI. Someone had even said debt stack. I would have been like, what? A debt stack? And I would have pretended like I knew what that meant.
SPEAKER_03:Well, just to just to be honest with you, everyone listening right now is also pretending to know what that means. So it's funny because you just like that, you just switched from like our people, which is like heart-based educators who care a lot and they're thinking hard about not only how to serve kids in my community, but maybe about the systems and the change. And you just switched into like that, into full finance mode talking about debt stacks. Did you just learn all this on the job? I mean, you must have, right? Like money is a key enabler to starting new schools. And so in order to start idea, you guys needed capital and you just trained yourself. I mean, it sounds like you just sort of took this on.
SPEAKER_01:I will give credit to my first meeting with the brilliant John Arnold, who, if you're not familiar with John Arnold, he and his wife are geniuses and um have built an incredible amount of wealth through a tremendous amount of hard work and genius. And they're incredibly generous. And so I had a meeting with them when I had first moved back to Houston. And you cannot show up to a meeting with John Arnold, who worked at Enron, managed the floor, and started a hedge fund business in his 20s. I think he retired in his 30s as a billionaire. You cannot sit down with him to raise$10 million and not know what debt service coverage ratio is, and how you're gonna cover that, and what's your mads and what's your EBITDA, and how are you gonna achieve? Yeah, you better, so yeah, I had to learn real quick.
SPEAKER_03:Wow. So did you sit down not knowing those things? And then you just said, sorry, I'll I'll go learn it all.
SPEAKER_01:100%. Like iron sharpens iron. I think this is when, um yeah, like all of the lessons that my parents taught me, right? Like you better know what you don't know and be quiet and find the people who know it. And then like you're a sponge. Like there's no question too dumb. You ask all of it. So, you know, our CFO at the time, I was like, I need you to give me a crash course and bond financing 101. I did not know what a bond was. I'm st I was like, is it like monopoly money? Is there a certificate? Do you like get a bond? Like, is it like statue?
SPEAKER_03:What exactly is the bond?
SPEAKER_01:I'm like, what is this? Like, I did not know any of it. I'm like, what do you mean? Debt service coverage is just money I need to show to pay the debt, and it's I didn't know any of it at all. And so, yes, uh, Wyatt was really um grateful. Like, I was really grateful to him for teaching me. But I what it showed me is like one, in order to honor and respect those, like if you're gonna sit across from someone who is an expert in something and you're gonna ask of them to participate, then you have to do the intellectual prep to like honor and respect their perch.
SPEAKER_02:Yeah.
SPEAKER_01:And so that was just it's like going to the gym. Like I had to do the workout in order to be able to, you know, crush race day.
SPEAKER_03:This is a great moment in the conversation to just pause and talk about learning because what you're exemplifying in this story is just the quintessential. We we have this concept at Prenda called the empowered learner, but it just basically means what you're saying. It's somebody who sees what they don't know, and instead of running away from that, which is natural human instinct or trying to stay comfortable, it's leaning toward it, it's racing toward the hard parts and it's challenging yourself, you know, in order, and it's often connected to a big vision, right? It's like, I want the school to exist because I care so much about each of these kids. In order to do that, I need money from this guy who's a genius hedge fund guy, and he's expecting me to learn this stuff. And so therefore, you know what I mean? Like you're basically like working backwards. One of our values is fig figure it out. And it's one thing after another. I don't care about looking stupid. I will ask the questions, I will do, I will read all the things. I will, you know, until I know it, I'm gonna like obsess over it. And you did all of that in a way that I think just really exemplifies. I I think people that know you now would be like, you're the iron that's sharpening everyone else's iron. And I think that's a good thing, by the way. We'll talk about what you've done in the microschool world. But uh, you know, to to say, you know, you weren't that way like as from birth, you weren't that way in college, you weren't that way in grad school. Like this was something that you you decided you needed to know later and you did it. And it's just a textbook example of learning in a in an empowered learner sort of way. I just want to sort of shout that out for you, but also for our our listening audience. I think they they will be nodding their heads like, yeah, that is incredible. And probably they're thinking, I I hope or wish that I had the courage to do what Allison did in this story, guys, which is just to go all in on it. Do it. Why? Like, why would you say? Wouldn't it be easier not to know what debt stack and service coverage and all this stuff is?
SPEAKER_01:First of all, yes, a hundred percent. Because now when someone drops basis points, I'm like, oh my God, but really interest rates? Like that's what you're saying? Like you there's like the code book for like it's like the number after the decimal.
SPEAKER_03:It's like here's the decimal percentage.
SPEAKER_01:I'm like, oh, you're just gonna move the decimal over? Got it.
SPEAKER_02:And now we we sound cool. Yeah.
SPEAKER_01:Yeah, I think I mean in most of the finance conversations, it was men. And no disrespect to men. Men are terrific. But I was like, this can't be that hard. Like, I don't think the people sitting across from me are that different. What they have is more exposure. What they have is more at bats. Like they clearly have spent as much time learning about this as perhaps I did learning about how to teach roll of thunder, hear my cry. And so we just come from different spaces. But if they're gonna take me seriously and not you like drop buzzwords to make me feel intimidated, which would happen. And I know anyone in finance is listening to this who's like basis points or not, that's not a buzzword. I would say for someone who doesn't know finance, it just feels like so elitist to start using language about money that you can use other language for that says that means the same thing. And so yeah, I was just like, okay, fine. Like, I'm not gonna be the person in the room that needs someone to explain everything to me. If I wanna be taken seriously and respected as an equal at the table, then yeah, I've got to do it. So the when I it I think it's hard to then want to have a seat at the table or access to things and then not wanting to learn what they know from a place of curiosity. You don't need to be an expert at all. I don't think, and I'm not, but my goodness, like I don't want to give that power to someone else.
SPEAKER_02:That's the way to do it.
SPEAKER_01:I don't want my students to ever give their power to someone else when it's totally within them to learn.
SPEAKER_03:That's who I'm thinking about right now, is just the countless kids. And I I spend a lot of my time like tutoring math, and I just hear these self-destructive, limiting beliefs that it prevent people from even taking the step to try. What I love about what you're saying, and I hope every kid you know that we all work with will get this, is you are capable. Look, if that guy over there can figure this out, you can also figure this out. It's just he's had more time on it. You can do, you can do this thing. You're capable of growing and stretching. It's not, I'm not saying that's gonna be the easiest thing. Like it would have been easier for Allison in the story to have like stayed in things she's comfortable with and to walked away like sheepishly, like, I guess I can't do financial.
SPEAKER_01:One of the consultants out there would be like, we'll come to the meeting with you and guide you along the whole thing.
SPEAKER_03:Yeah, exactly. And they want you to stay in your kind of corner feeling stupid.
SPEAKER_01:They don't want you to learn. So no, I don't know.
SPEAKER_02:There is no way.
SPEAKER_03:No, it's so great. I think it just there's so much just courage in it, but it's also the way I mean imagine a world full of people that operate the way you operate it here, where it's just like, I don't know that yet, and I'm gonna go learn it and let's ask questions and look dumb with each other and like do the thing that humans do best, which is learn things.
SPEAKER_01:So about AI. AI is amazing, right? Because now I wouldn't need Wyatt to sit down with me. If I could literally just use chat or Claude or Grok or pick your LLM and say, I'm about to have a meeting with John Arnold. Here's his bio. Yeah, I'm gonna have a conversation, here's our financial model. I need you to teach me how to explain this, this, this, and this, and let's role play.
SPEAKER_03:Oh my gosh. So here's the thing. You could look at AI and be scared out of your wits. You could be like, it's gonna replace my job, it's gonna make it impossible for me. You could look at AI and feel, I don't know, like maybe this is an enabler, it prevents it can like help me to get out of work. But you're saying I'm gonna use AI to be the very best version of myself as possible.
SPEAKER_02:Yes.
SPEAKER_03:You're not cutting corners, you're saying this is another resource and really incredible resource that will help me learn. And as a result, so yeah, just being a learner, I I hope you guys can hear this in Allison's voice. Just the power that comes with this. It's incredible. And I want this literally for every human being on the planet. Yeah. Okay, so you you met the Building Hope people through the idea. And an idea, by the way, you guys should look this up. I it's a great, it's just a great example and really heart-driven, but like full on accountability and and results in public schools. They've done really good work. You you somehow found your way into building hope. And can you just kind of give our audience like a picture of what that is? What were you doing, and what kinds of things were you learning?
SPEAKER_01:Yeah, fantastic question. Okay, so Drew D'Amico, who leads the real estate team, reached out to me. Uh, this is probably at the end of COVID, and just shared that there was an opportunity to join the Building Hope team. And Drew, for context, was the person who had submitted the RFP when I was in Las Vegas and kind of held my hand and taught me all of the ins and outs of how to build a school and finance your way there. So he said, we need someone who can translate and crosswalk for leaders that are interested in pursuing finance or a facility. So could you come alongside and lead our business development work and coach leaders along the way? So you can speak school, and then you also know what underwriters and the process of building a school to kind of help them. So that's what I initially joined the team to do, and then quickly kind of stepped in to other roles, started in Texas, and the the region was the nation. Uh, was really lucky to build a team and hire Lauren Allen, who is a dynamo who comes from a charter background, also teach for America. And so she now leads the business development side on real estate, but spent the first two years at Building Hope working side by side with school leaders that were like, we need a new facility, or we need, you know, we want to borrow money and helping them first get oftentimes their house in order before they pursue that project. And and so, yeah, through that I just learned a lot of gaps that exist that I that I knew of from my own experience, right? But then, you know, rates rise and capital, it did the market had changed so much that there was a lot of learning to do.
SPEAKER_03:A lot of our listeners won't have, you know, built a charter school facility before. Can you just give us like a sense, like how much money it was, like a median, you know, build for a new facility for charter school? I just want people to kind of have a sense of what kind of deals we're talking about here.
SPEAKER_01:Great question. I'm on the board of a charter school right now. We met yesterday morning and we got an estimate for a million and a half for a module, one modular unit.
SPEAKER_03:What's a modular unit? Like a port, like a portable?
SPEAKER_01:Like a portable. A portable.
SPEAKER_03:$1.5 million to add a portable in the parking lot.
SPEAKER_01:That's correct. That is site work, utilities, because you still have to do permitted drawings, you still have to do all the site work, you still have to hire the engineer, you still have to meet e-occupancy for building code. I'm sure many of many of your listeners are very familiar with building code and fire marshals and and all of that. Or not, right? Like, or you're in a learning pot or you're leading a school at your home, and so you're not having to worry about building code. That's absolutely right. And I love this way. I mean, anyways, we'll we'll get there, but we'll get there. Uh you know, a big charter school. So if you see a charter school for like 1200 kiddos, um, that's like opening, like they're just now doing a ribbon cutting, there's a good chance that school costs n worth of 20 million.
SPEAKER_03:20 million. I feel like I need a respectful whistle.
SPEAKER_01:Like a Yeah, that's fields. A lot of money.
SPEAKER_03:And the founder of the school are people like you and me that care a lot about kids and learning, but they maybe haven't necessarily done big deals. I mean, by that point, you you kind of get into this played a really important role, just getting buildings in place for these charter schools to be able to open and function. And and that's all over the country. I mean, Arizona, where I am, I mean, I think 20% of kids go to charter schools in Arizona. I mean, it's a big number. There's a lot of kids that are doing these things, and I've seen those$20 million. In fact, I heard a number in my part of the Phoenix metropolitan area of$93 million. I'm not sure that could possibly be. I mean, it's a big, big campus with sports facilities and all the things. Um, yeah, it's it's intense. Okay, so you guys are are out there helping these school leaders get facilities so that they can do their mission of Yes. Yeah, what did you learn through all of this? And and what would be, I mean, you're talking about getting your house in order. I would imagine there's one, like people can pick this stuff up. You know, you can train, they're trainable. And two, there is a a a required level of like preparation to be debt eligible or to be able to do the financing to underwritable, as we say. Yeah, underwritable. There we go.
SPEAKER_01:Like made up a word.
SPEAKER_03:Yeah, look at you're dropping the jargon.
SPEAKER_01:Everybody, if you don't know what underwritable means, you should go just no it's like when you go get a car loan and they go back to talk to the finance guy and they run your credit score. It's like that, but like behind Zoom, and they're trying to figure out how to underwrite your business because a business doesn't have a credit score. So they're looking at lots of other metrics. Yeah, I mean, what you learn is financial accounting's not intuitive. You learn that what oftentimes sets our hearts on fire for the work that we do, it's not receivables and payables and managing restricted grants or, you know, like managing my cash flow and building, you know, like do I have a high yield savings account? And what's my day's cash on hand? Like those things aren't as intuitive as what's our long-term plan? Have we done our unit plans? Have we backwards mapped our assessments? How are we gonna know what kiddos are learning? Like how many kiddos are coming? We need to call so-and-so's mom. Like you're in the work.
SPEAKER_03:Yeah.
SPEAKER_01:And banks love that you do the work. That's those of us that lend to the schools. Yeah, we love that. But we need to make sure that the numbers pencil because you have to pay money back. And that's just a huge gap between the program and the love of kids and families and learning and the business case. And so helping schools get this when I say get your house in order, yeah. Like how do you tell the program story and then how do the numbers tell the program story?
SPEAKER_03:No, it's it seems so logical, it makes a ton of sense. Oh, but it's so hard. I know, I know. Well, let's it gets even harder at the micro level. So I know you guys just recently did this pilot project with Stand Together around lending money to microschools. I was so impressed with the way you handled this whole thing. I watched your updates along the way. Lots of interest. I think you saw tons of microschool founders step up and say, sure, I'll I will take your money, thinking maybe that it was a gift or something and understanding how loans work. And can you just walk through, walk us through that project? What was it? How did this even get its start? And um, and then, you know, how did it all work?
SPEAKER_01:Can you believe it was a year ago, like this week, that we first had a meeting with Raphael. Now, Rafael at Stand Together Trust, Stand Together Trust to their credit, they had been thinking about pathways to accelerate access to capital or like how do we address the barriers to micro schools launching and growing sustainably. And so Rafael had kind of, he's a program officer at Stand Together Trust. He had been relentless in trying to identify a partner. And he had a meeting with at the time our founder, Joe Bruno, and our current CEO, Bill Hanson. And I was like, Well, I know Raphael, like when he was at 4.0. Like, tell me about the meeting. Like, what happened? Just me being nosy. As anyone who knows me knows, like, I'm gonna, yeah, I'm very, I'm always very curious. And they were like, they're stand together's really interested in a micro loan program. And then someone on our there was some kind of conversation or chatter around like, that's crazy, the margins are terrible. And I love when someone says something's crazy. I mean, it really is like. Patnip for me when someone's like, that could never happen. Like, you can't do that. There's some like antenna where I'm like, did you say that's impossible? Like, I'd love to take that on, which someone might say that's a critical thinking flag. I would like to say it's full of hustle and passion and optimism.
SPEAKER_03:Absolutely.
SPEAKER_01:I asked if that's something that I could take on. And so I'm really grateful that I work for a CEO that was like, okay, great. Like if this is something that interests you and you want to lead it. And I was insatiably curious. It tapped into this desire I have around entrepreneurialism and moms and teachers and dads that want to be a part of the solution and like just doing it themselves. It tapped into this like capital pathway, like, how can we demystify what it means to get access to capital and make it more relatable? Yeah, it just like there was a lot that I and I wanted to learn. I was like, okay, like I'm now gonna get in the weeds and I'm gonna learn about underwriting and how, like, what are the mechanics of lending beyond just working alongside schools? Yeah, I was humbled. I was humbled.
SPEAKER_03:Amazing. Give us some parameters. So, how many applications, how many loans did you guys make?
SPEAKER_01:What kinds of 258 interest forms across over 30 states. So, and four weeks with zero customer acquisition cost. So, not a single dollar spent on marketing. Um, I think there was a substack that um Raphael Gang had written. We were really grateful that Stand Together Trust came in with capital and the Beth and Ravenel Curry Foundation. They came in alongside them, which was great because we learned that I underbudgeted what it would cost to implement the pilot. Those of you out there know that when you budget, always leave contingency. Always, everything always takes longer and costs more, like hashtag America. Um just it. Yeah, so 258 interest forms. Gosh, like the best, the best people in our country. I mean, just yeah, amazing leaders, all types of programs, all corners of the country. Um, 54 applications. I came in starting July 1. So that's when the application launched. My learning evolved very quickly. It was a bit of a sprint. My goal was to have all loans underwritten in a month. That did not happen, but it did, it was two months, which was pretty great for an unsecured loan at 3% with interest only year one. We wanted to like put in some founder-friendly launch elements, knowing that schools were growing. Yeah. And so ended up making 11 loans across eight states and looking now to thinking around like, so what does that mean moving forward?
SPEAKER_03:How much money are these loans and what are people using them for?
SPEAKER_01:Loans were loans, they were available five to fifty thousand dollars and five thousand dollar increments. Though the loan, the the borrowed amounts actually range from twenty to fifty.
SPEAKER_03:Okay. It tends to be the higher end of that. That makes sense. Those are the people more ready, more underwritable.
SPEAKER_01:Yes. Um these were unsecured.
SPEAKER_03:Yeah.
SPEAKER_01:I don't think I've what I learned in this process was there wasn't necessarily recognition of the innovation around it being unsecured.
SPEAKER_03:Right.
SPEAKER_01:All small business administration loans and nearly all business loans are secured with personal guarantees.
SPEAKER_03:It's like, sure, I'll give you money, but I'm coming after your house if you don't pay me back, or something like that.
SPEAKER_01:Usually the personal guarantee, I'm for I'm not coming after anybody's house.
SPEAKER_03:No, I know.
SPEAKER_01:That's what's so innovative. The personal guarantee usually is a retirement account.
SPEAKER_03:Wow.
SPEAKER_01:Um, if someone they have a savings or they have some money set aside, sometimes it's a house and they're cars. We had a number of schools that applied that had already. So I learned through the process by reviewing loan documents that some applicants had already had, what the terms were. And so that's when I was like, these are incredibly favorable terms. Now I see what the market's offering and why we need to cut, like we need more runways of below market capital for schools.
SPEAKER_03:Yeah, incredible. I mean, I I think you see it in the numbers. So 258 apply or interested and only 54 apply. There's probably those other 200 that dropped off right there in your application form, probably learned some parts of the process that they didn't know before, or they might have thought, oh, this will be different than it is. I think it's it is important for especially, you know, microschools, and we've talked about this. You and I've had these conversations, just it's it's a kind of an open-ended world right now. So, you know, my first micro school was seven kids around my kitchen table. So it was very organic, grassroots. I didn't know about, I didn't need money really to do that. I just needed parents to send their kids. So, but then as you go, I have friends that have started that that way and then grown to know, you know, they're serving 50 kids. They need, they've they've gone through multiple churches or something, and they're at a place where they need to get a commercial space. That is a place where capital can can play a role. I mean, that's how capitalism works, like getting capital to the entrepreneurial needs. That's that's part of the whole thing. But there's all this education going along with it. Can you talk a little bit about some of the learnings that you think the the applicants might have picked up, things that they might have because I I think we have people listening right now that are thinking about starting a microschool. They're like, I would love to get a loan, but they probably don't know how it works. And can you just give kind of in very simple terms, these are things it would be helpful for you to know, kind of going into thinking about finance.
SPEAKER_01:Well, I first have to apologize to the applicants from the first week of the loan program because initially there was this thinking of like, we're gonna implement AI and we're gonna create an underwriting process that is efficient and it is fast, and that way we can figure out what we can scale. And so that first week was like efficiency. And I am not proud of the emails that I sent that were efficient, it was like clear and kind, but didn't provide the warmth or like the clear like action items. And that weekend I was just so sad. Like after some of the emails I had sent that were no's. I mean, so sad. I was like, I cannot do this project and keep sending emails. So we totally regrouped and extended the underwriting window so that I could provide more feedback around here's what needs to happen, which then uncovered it's really impossible to scale if you want to balance like clarity and warmth. That was like my takeaway is like AI is great to look at the numbers and to like figure out debt service coverage ratio or scenario plan. But humans are required to create connection and community and for that learning to stick. And that's the I needed to I'm just I needed to honor the work that was put into the applications with the same like level of warmth and heart and the feedback. And so some of the things like for someone to know of like I'm interested in a loan, well, you need to have a business bank account and you need to ensure that nearly all of your business activity, like 99%, is in that one account. Your rent's being paid out of that account on time, your utilities are being paid out of that account. You're not paying bills out of a personal account and then reimbursing yourself. That business account is the single source of business activity truth. And I would say, in addition to that, you need to know key metrics about your financial health. And I would say it's similar to like if you have an aura ring or one of those like fitness brands. Sure.
SPEAKER_02:We all have that.
SPEAKER_01:Well, have the little dashboards, like your sleep score.
SPEAKER_02:Right.
SPEAKER_01:Day's cash on hand is kind of like your sleep score for business flexibility.
unknown:Right.
SPEAKER_01:Yeah, because your day's cash on hand, right, give you an idea of like how many days of cash do you have to burn through before lights out?
SPEAKER_03:Yeah.
SPEAKER_01:And so days cash on hand is really important to know. It's important to manage your receivables, like tuition being paid timely. How are you capturing that? It's important to pay bills on time. It's important to know how much debt you can afford. If you want to know how to figure that out, you can use AI. You can just enter. You can literally ask AI, I'm interested in this lease. Here's you could even if you had an LOI, you could upload the lease and say, here's my projected revenue, here's my projected expenses. Can I afford it? If the debt service coverage is less than one, the answer is no. And that's it stinks. But like there's that's really important to know so that then when you're asking to borrow money, you know how much you can afford to borrow. Um, you're doing that lift. And that signals to a bank, you know, your stuff. And banks love lending to small businesses, even if the numbers don't look Pollyanna, amazing J curve, like meaning like you're not going to serve like a thousand kids.
SPEAKER_02:Yeah.
SPEAKER_01:Even if it's lean, if you can tell that story of I've got 30 days cash on hand, here's my plan to get to 45. I did the math and I realized I can afford a$10,000 loan at this. Here's my enrollment plan that shows that I can afford it with all of my expenses that include inflation. By the way, everyone, do not have a model that does not include inflation because everything increases every year. Yeah, a bank will work with you. A bank will totally work with you. But if it's like 30% philanthropy needed into perpetuity, that has no commitments, and you want me to give you a five-year loan, and you have nearly a third of your budget projected by like a wish, I'm sorry.
SPEAKER_03:I know. And and there's so much heart, right? And I I've heard you talk about this.
SPEAKER_01:There's people that Yes, I know I don't sound like I have a lot of heart when I go into that.
SPEAKER_03:Well, it's clear as kind, and it is these are the things that are actually going to kill kill these projects. And we we need these projects to succeed, right? We need you to succeed. And so if you think of Allison as being harsh, it's like she's doing that to help you because we we want I one of the things I remember you saying is a lot of the people you worked with are paying themselves zero, right? They're just living off of they're living off of nothing. And sometimes that's been the case for years for a long time. So, you know, fine, right, to do that as a passion project or an initiative as a person. You guys, you know, there's so many just dedicated, passionate, caring people. If you're thinking about expanding though and building upon, you really do need to get these, these, you know, Allison just rattled off a great list, but just basic business ideas kind of embedded, and that's next level. So I will just say, as the micro school guy here, I I want to say, don't start with all of this, right? The main thing is do you have something that your community wants? Can you get 10 families together that are willing to kind of sign up for your school? Do that out of anywhere you can find. Don't pay leases, don't pay realtors, don't get loans. Just start with, just start with something. But then after a couple of years of that, you're at this point now where if you want to grow, I want you to grow too. And and the advice that Allison's giving, just around running a business in a clean, predictable way. I know, Allison, you have big intentions of actually continuing to support people in thinking about all of this, which I fully applaud and encourage. So thank you for the work you've done and for sharing it with us here. I'm I'm super excited. And I hope more people are learning, you know, the basics of business finance from all of this. Before we wrap up, this has been a fun conversation. I always ask people to tell me somebody in their life that's kindled a love of learning for you. You clearly are a learner. You've demonstrated it throughout so many phases of your story. Who was it that you could kind of point to and say, hey, this person really helped kindle that fire for me?
SPEAKER_01:Yeah, I would say my grandmother, my dad's mom, she lived with us growing up. And every Saturday she would take me to the library and to Luby's cafeteria in Houston. And she was just insatiable. So if I was ever curious about something at school during the week, she would say, We're gonna go check a book out about it at the library. Or if you're at dinner and there's a question, there was no, again, internet.
SPEAKER_02:Yeah.
SPEAKER_01:It would always be extra credit to research whatever the topic was and then come back at dinner the next day after learning the answer. This is when encyclopedias were big. So you would just like sit there trying to find it. So yeah, I mean, my my grandmother, my hero, she's the best.
SPEAKER_03:I love it. Thanks, Grandma. Appreciate that. The support you've uh helped empower a learner that's doing a lot of good in the world. So, Allison Servan, thank you so much for joining the Kindled Podcast today. Had a lot of fun chatting with you. I know our our listeners have enjoyed it as well. So thank you so much and keep up the great work. Thank you.
SPEAKER_00:The Kindled Podcast is brought to you by Prenda. Prenda makes it easy to start and run an amazing micro school based on all the ideas we talk about here on the Kindled Podcast. Don't forget to follow us on social media at Prenda Learn. And if you'd like more information about starting a microschool, just go to Prenda.com. Thanks for listening, and remember to keep Kindling.
