MILWAUKEE, WI / ACCESSWIRE / February 22, 2024 / Northwestern Mutual:
Originally published by Northwestern Mutual on February 1, 2024
Company: ModernTax
Founder and CEO: Matthew Parker
Year founded: 2021
We're proud to be investing in ModernTax through the Northwestern Mutual Black Founder Accelerator® in collaboration with NM Future Ventures.
Matthew Parker first took the leap into entrepreneurship in 2015 when a close friend of his-who shared his dream of becoming an entrepreneur-proposed that they open a business together.
"Our first business was a storefront tax preparation office in a lower-middle-income community in in West Baltimore, Maryland," Parker says. "We found that a lot of the companies that produce and provide financial and tax services avoid certain neighborhoods, which created an opportunity to build a financial business in a lower socioeconomic type environment."
Though his first company didn't succeed, he started up a new company with a similar model in Washington, D.C. While running the business, Matt became frustrated with the burden of all the necessary paperwork. He started searching for online solutions, which took him in a slightly different direction, to Silicon Valley's history of technical innovation.
After seeking advice from Michael Seibel at Y Combinator (a well-known startup accelerator based in Silicon Valley), he decided to move to the area. In 2021, he founded ModernTax to help simplify the filing process for small financial companies by providing on-demand tax and financial information on their customers.
Below, Parker shares the lessons he's learned, what inspires him on a daily basis, and why he believes the key to entrepreneurial success comes down to focusing on your business' core concepts.
What is ModernTax?
Everyone knows that filing your taxes at the end of the year requires you to collect a bunch of documents to provide to your accountant. If you're trying to get a loan or some other type of financial product, then you'll probably need to collect just as much paperwork (if not more). Whether you're trying to get insurance or a banking product from a financial institution, you're going to need to provide a certain amount of information.
ModernTax serves as a replacement agent for collecting those documents. This typically starts with tax records, which provide a robust view of an individual's or a business's financial life. Our goal is to help those organizations to make those decisions, more quickly, more accurately and more transparently with their customers. So we serve companies across the insurance and financial industries as well as fintech by building a better way to facilitate this process and cut down on the time that the end-users have to spend filling out forms and providing documentation for services that they might need.
What inspired you to go from your first tax business to this iteration?
We started that first business as a single retail storefront and did everything from buying tax software and advertising to get customers to come in our store to managing our books, our compliance obligations, our data collection and our audits with the IRS. We had to get credentials with the IRS to become a tax business. So we really learned a lot about the ins-and-outs and all the different chambers of infrastructure that you need to run that business face-to-face.
So that made us realize just how much information and data is flowing across all these different systems at one time. But we really got the idea to build ModernTax during the pandemic in 2020 because 95 percent of our business became helping people figure out if they qualified for economic impact payments from the federal government in the form of PPP, EID or EIDL loans from the Small Business Administration (SBA). To apply for those funds, you needed good, sound tax information. For the customers we were working with, both directly and indirectly, that information was critical for them to be able to continue their operations or pay their bills.
What's your proudest moment with this company so far?
The business has evolved but there's always been a central pain point of collecting information online and digitizing the process. One of the main problems we addressed early on was the way that companies integrate and access information from different sources. So ModernTax really serves as a place for these organizations to have a much more streamlined, user-friendly way to request this information on behalf of their consumer. Opening up tax data access allows instantaneous permission to businesses for financial services, real-time transactions and taxable event estimate notifications to consumers and businesses.
But being selected to be a part of Northwestern Mutual's Black Founder Accelerator® really helped us understand our business at a higher level. It opened my eyes to much bigger opportunities and a brighter future. I was still thinking kind of small, but now I can see how ModernTax can be a solution for large organizations.
What inspires you at work every day?
I am attracted to unsexy businesses; I really enjoy being involved in something that's not super cool, but can have a big impact. Our work is very much a back-office experience. It's not front-facing to the end-user, but the solutions we offer provide a lot of value to the buyer. We strive to create a more transparent ecosystem for small business owners and individuals, which I believe is a source of truth that can be used to compare apples to apples-instead of other sources like credit scores or alternative financial data assets that can bar people from the system. It's become my mission.
What advice do you have for other Black founders?
Spend more time focused on the core things that are going to make you successful. Build a product that works and that people can use-and then validate their willingness to pay for that product. It sounds so simple, but if you spend more time on those two things, a lot of the noise you hear-"Black people can't raise money or whatever"-will become less loud and you'll really be able to see what you can do. You can't ignore the barriers and the ceilings that might be set for you, but if you focus on those two things, you'll make a lot more progress.
What are your goals for the company this year?
Our primary focus in 2024 is growing our business with our current customers and also being very detailed and focused on the types of customers we want to work with. Do they have a budget? Are they experienced in this problem at a high level? And will they be ambassadors of what we're building? Because to build a great, long-lasting company, it's not enough to get a customer who's going to use your product very transactionally. You need to build a product that customers will be willing to use and also promote and share to adjacent customers or across their organization.
Within the next 18 months, we aim to cross $10 million in annual recurring revenue. We have built a strong foundation, identified the business problems, and defined the types of companies we can serve. Now, our focus is on execution and achieving our targets.
Our big goal is to become so tied into an organization that they not only think of us in terms of the problems we are solving but also as the partner that can help them build their businesses as they look to innovate. We are really just getting started.
View additional multimedia and more ESG storytelling from Northwestern Mutual on 3blmedia.com.
Contact Info:
Spokesperson: Northwestern Mutual
Website: https://www.3blmedia.com/profiles/northwestern-mutual
Email: info@3blmedia.com
SOURCE: Northwestern Mutual
View the original press release on accesswire.com
