ON FRIDAY, Dec. 18, Ami Kassar and a handful of other employees at the bankrupt Advanta Corp. were laid off. The next day, Kassar and his partner, Paul Tiefling, another Advanta casualty, started to brainstorm their own company.
The plan was to set themselves up as middlemen between small companies looking for bank loans to grow and bank loan departments looking to lend.
Kassar had been at Advanta for nine years and was its chief innovation officer, responsible for its Internet strategy and social-networking site, Ideablob, among other things. (But not responsible, he says, for the steep interest-rate hikes that the troubled company hit its credit-card customers with after the economy went bust, or for the decision to cut off small-business credit lines last June.)
Having heard from the owners of small businesses at Ideablob events about the hassles they were facing getting loans, Kassar saw an opportunity for a service that would shop around a client company's loan application to several institutions at once, saving owners the time and paperwork that it would take to apply to multiple banks individually.
On Feb. 1, MultiFunding opened for business. Today, after just 12 weeks, MultiFunding has $23 million in financing at various stages in the pipeline for 25 clients.
On his decision to join the E-Class: "For me, personally, it was a no-brainer," he says. "My choice was, I could go in the job market. It could take me some months to find a job. I might have to move.
"I've seen a lot of people in similar positions who get stuck, almost, in the depression of it.
"They're sitting there hoping for months that the phone's going to ring or the computer's going to ping. The last thing I wanted to do was to sit around the house.
"I lost my job on a Friday and started my next company Saturday. It was 'live' six weeks after I lost my job.
"That's me and my personality," he acknowledges. "But I saw an opportunity to take advantage of the complete disruption from the financial crisis."
Entrepreneurship 101, a market need waiting to be filled: "An economic tsunami can create incredible opportunities," Kassar says. In MultiFunding's case, the opportunity lay in the constriction in credit.
"If you're trying to borrow money today for your business, it's a much more cumbersome process than it was a year or two ago," he says.
"If you're running an existing business, the process can absolutely eat you alive. You might have to go to two dozen banks before you find the right one for you, and each one has its own application process.
"For me, I said, 'Here's a chance.' We leapt and we started a new company."
Hurricane Katrina and the Great Recession, an analogy: "It sounds terrible, but if you look at Hurricane Katrina - and that was horrific - after all of that terrible destruction happened, a lot of people made money," Kassar says. "The construction industry made money. There were new opportunities."
He sees a parallel in the Great Recession. "There have been so many disruptions. Literally, industries have been knocked down. By nature that creates opportunity."
"Credit lines are getting knocked away, or industries are changing," he says. "These shifts create opportunities for entrepreneurship. People with the right attitudes and the right spirit can take advantage."
Social networking, 2010's silver lining: Classic business theory would tell you that start-up costs are going to be lower during a downturn. "First of all, there's more talent out there that's cheaper," Kassar says. "You can get your hands on other resources cheaper."
What's new in this downturn, he says, is the chance to self-market on the cheap. "There are opportunities to get the word out about yourself and your company that might not have been there before."
At MultiFunding, Kassar says, "Our marketing tools are predominantly LinkedIn, Facebook and Twitter."
From pink slip to start-up: "If you've worked in a big company for 20 or 30 years, and now you're starting your own company, that transition can be difficult," Kassar acknowledges.
His advice is to start small, and bootstrap. "I think a big mistake entrepreneurs often make early on is to think too big about their idea," he says. "They think they have to raise a million dollars or five million dollars.
To start up quickly and cheaply, MultiFunding used WordPress as its blogging platform ("so we can evolve it," Kassar explains). He and his partner printed a scant 100 business cards apiece, he says - then scrapped them and reprinted a micro-batch when they realized that their corporate tagline was off-message.
"We found our office as a sublease on Craigslist," he says. "We moved in and the phones were here and the Internet was here, and we got going."
Baby steps for newborn companies: "I think you have to start with your idea, then break your idea into steps," Kassar says.
Step one, he says, is to "sort out what the fundamental economic proposition of your idea is and what it would take to prove it." He recommends the Small Business Administration's local Small Business Development Centers (see box at right) as a good place for laid-off would-be entrepreneurs to fine-tune their focus.
"Then find a way to execute it as inexpensively as you can. Then, in two-month or three-month increments, you can say, 'OK, I've learned this or proved this. What is the next step?'
"It's like a child," Kassar says. "Before worrying about how to get your kid into college, you've got to get them home from the hospital. Then you've got to go through that horrible six weeks of getting them to sleep. A company is like that.
"Truly, we started out along those lines. It doesn't mean our company will look like this in three months or six months or 12 months, but it was a logical way to start."