Investors poured in, eager for a slice of his Series A raise. Yousef Kassim’s company, Easy Expunctions, boasted nearly a $2 million run rate and the round’s price tag was cheap: $18 million pre-money. Yet amidst investor enthusiasm, Kassim wrestled with how his company would balance social impact and commercial viability.
Founded in 2014, Easy Expunctions provided qualified customers an inexpensive way to clear their criminal record. Millions of Americans face restricted access to employment, housing, and public benefits because they were charged with a crime. While many states permit record expungement for certain cases, the process is convoluted, involving costly filings and attorney's fees. Easy Expunctions’ automated solution bypassed the need for a lawyer, dramatically reducing the cost to consumers.
Kassim secured early financing to build out the software for expungements in Texas and set up shop in San Antonio. In his first years in operations, he managed to quickly gain traction and fight off legal challenges from attorneys displeased that he was stealing their customers. He attracted more financing and hired more staff. By 2021, Kassim was poised to scale the operation further, but had several crucial questions to answer before the company could proceed.
For Easy Expunctions to reach profitability, Kassim had to address issues with cash flow. The company’s generous customer financing options – no interest and no late fees – had led to alarming increase in receivables and bad debt. Nevertheless, Kassim was reluctant to discontinue customer financing for it allowed the company to serve low-income Americans deserving of a clean slate.
One potential solution involved the growth of their B2B model. Current revenue streams relied on a B2C model, selling directly to individuals seeking expungement. But Kassim suspected that selling directly to employers, universities, nonprofits, and law firms could provide a more sustainable source of revenue. How could Easy Expunctions break into this market?
Finally, to expand the business into new states, Easy Expunctions would need outside investment. The wrong investor could pressure the company to prioritize margins or market share over social impact. But if a politically misaligned funder could help them reach thousands of more customers should Kassim take the money?
Citation: Evan Okun and Song Ma, "Easy Expunctions", Yale Case Study 22-011, May 19, 2022.