Business Spotlight with Tony Kosobucki from Federation Financial

In this episode, Jackie Zach interviews Tony Kosobucki, the founder and former CEO of Federation Financial, and current head of strategic partnerships at Receive. Tony shares his personal and professional journey, starting with his transition from corporate America to entrepreneurship. He discusses the challenges he faced in building his business, including the initial lack of confidence and the pivotal moment when he decided to take the leap. He also highlights his work with Receive, a company that provides small and medium-sized businesses with access to their revenue upfront, offering a unique solution to cash flow problems without fees or interest.

Tony emphasizes the importance of focusing on the product and customer experience rather than getting bogged down by chasing profits. He credits his success to his early customers and the belief others had in him, especially a mentor who helped build his confidence. As Receive looks to scale, Tony talks about the challenges of maintaining quality service while growing rapidly. He advises other business owners to delegate tasks and not try to do everything themselves, highlighting the benefits of outsourcing and focusing on what truly adds value to the business.

 

Podcast Transcript:

Jackie Zach: Hello, everyone! This is Coach Jackie Zach, and I’m excited to have Tony Kosobucki with me today. Tony is the founder and former CEO of Federation Financial and is currently the head of strategic partnerships at Receive. I’m thrilled to have you here, Tony.

Tony is also embarking on a new adventure: moving to a hobby farm in central Wisconsin with his wife, where they’ll pursue their passion for gardening. What an exciting journey ahead! In his downtime, Tony is a recovering home brewer who’s won awards in Wisconsin, Illinois, and Washington, D.C.—though, as he puts it, brewing can be an expensive hobby.

He’s also an avid reader and is especially proud of earning his MBA from Marquette University in 2021. During those two years, he managed a 50-hour workweek, school, the pandemic, and the arrival of his daughter. What an incredible accomplishment! Tony attributes much of his success to his wife and is proud to have made it through those two challenging years.

It’s my pleasure to welcome Tony Kosobucki to the show. Hello, Tony!

Tony Kosobucki: Hi Jackie! Great to see you, and thanks for having me on.

Jackie: It’s my pleasure! Let’s dive right in. Tell us a little about your personal story.

Tony: Sure! I grew up in a small town in central Wisconsin called Amherst. These days, I’m based in the Milwaukee area, where I’ve been for about 10 years. But as you mentioned, we’re in the process of relocating. I have a three-year-old daughter, who’s my pride and joy, and two cats—one of whom is saying hi right now!

We’re excited to move back to the countryside and give my daughter a childhood similar to the one I had. It’s been a hectic month, but that seems to be a recurring theme for me!

Jackie: That sounds fabulous. Now, what’s a funny story your family loves to tell about you?

Tony: Well, I’m not sure I’m willing to share this, but it involves a country music festival, probably too many drinks, a malfunctioning camp stove, and some undercooked brats. I’ll let you fill in the blanks!

Jackie: That sounds hilarious! I can picture it all in my head. I assume this story comes up a lot during family gatherings?

Tony: Oh, absolutely. I’ll never live it down.

Jackie: I can’t blame them! If you were my sibling, I’d tease you too. Now, tell us about how your business came to be and when you felt confident enough to run it yourself.

Tony: I spent the first 10 years of my career in corporate America. It offered great learning opportunities, but I found it hard to derive meaning from the work. Big companies are great at maintaining systems, but they’re not always equipped to create something new. I realized that innovation often comes from nimble teams, like startups, driven by passion.

Confidence, though, is an ongoing battle. Even with successes, you always question yourself. The key is to recognize that the world is full of capital chasing good ideas. That realization came to me gradually. Growing up in a small town, I wasn’t exposed to that world until I started meeting people and seeing opportunities.

After 10 years of watching others live their dream, I decided it was now or never. I knew I might fail, but not trying at all would have hurt more. That decision brought me to where I am today, and I work every day to move one step closer to my goals.

Jackie: What an inspiring lesson for business owners! Now, tell us more about your company.

Tony: Receive is a venture capital-backed company and the world’s first earned revenue access company. We work with small and medium-sized businesses (SMBs), which often face challenges like tight margins and cash flow issues.

On average, 50–60% of a small business’s assets are tied up in receivables, which can put them in a tough spot. Receive was founded to fix that. Receive provides SMBs with access to their revenue upfront, with no fees or interest—it’s completely free for them to use.

The application process is very simple and takes 24 hours or less. We connect two key pieces of data: First, we need to know where your sales are coming from. You can link your point of sale, or if you’re an Etsy, Shopify, or Amazon seller, we’re already integrated with those platforms. The second step is to link your bank account. We base all of our underwriting strictly on cash flows—there’s no credit check, and we don’t charge anything to business owners.

For example, if you have $10,000 in sales on a Friday night but you run out of Miller Lite, you can immediately access spending power through Receive. You can then restock right away. I believe this is a game changer. We’re seeing tremendous growth and a lot of positive reactions.

This comes back to the idea thing. I have a lot of bad ideas—only about one in 20 turn out to be good. The only way to know is to test them. With Receive, I think it was a positive hypothesis test, and I’m really excited about where we go from here.

Jackie: Excellent. So tell us a story about someone who pushed or inspired you to believe you could do it. What was the impact of that experience?

Tony: I’m in my mid-30s now, and over the years, I’ve had the opportunity to work with many startup founders. One in particular comes to mind—a founder of what is now a very successful FinTech company. He was fresh out of college, and I remember sitting with him and realizing the success he’d achieved in funding his idea and launching it. It struck me that the only barrier holding me back all this time was myself.

If you wait for the perfect time, more education, or additional research, you’ll never act. This young founder, 12 years my junior, with limited work experience, took his idea to market and found followers. That was a pivotal moment for me. I realized that I had it in me too, but I needed to push myself. His journey was a big professional inspiration, and I owe a lot to him.

Jackie: That’s wonderful. It’s so interesting because success is never achieved alone. People need inspiration, accountability, or capital, but we never truly do it on our own. What’s been your biggest learning as a business owner?

Tony: One of my biggest lessons is not to chase dollars and cents. Profit is a byproduct of a great product and loyal customers. As business owners, we know there’s never enough time in the day, so it’s crucial to focus on your product and customer experience. That’s where your value lies.

Your time is best spent improving your product and delivering a remarkable experience to your customers. Everything else will fall into place over time. So my biggest takeaway is: don’t get caught up in the nickels and dimes. Stay focused on your product and your customers—that’s the North Star.

Jackie: That’s a great insight. Business ownership is tough, exciting, and full of emotions. That’s why we do these interviews—so business owners know they’re not alone. What has been your biggest challenge, and who has helped you through it?

Tony: My biggest challenge, even now, is believing in myself. Like I mentioned earlier, even highly successful people often admit they don’t have it all figured out. You just have to trust the process and see the journey through.

I had a president at a previous job, an experienced guy with 30 years in the field, who believed in me for reasons I didn’t fully understand. Knowing that someone so seasoned saw something in me helped me reflect on my value and build the confidence to believe in myself.

Jackie: You’re the first person I’ve interviewed who’s credited someone for recognizing your potential early on. That recognition helps build confidence because whatever they saw in you, you’ve got it. If you had to name three people you’re most grateful for in your business journey, who would they be?

Tony: It might sound like a cop-out, but I’d say my first three customers. Starting Federation Financial, I was asking people to trust me with their money when I had no track record. Those first three clients who took a chance on me were invaluable.

Their trust laid the foundation for the business. As their accounts grew, referrals came in, and they were the pillars of the company’s growth. I’m eternally grateful to them and hope they’re still having a great experience with the service.

Jackie: That’s admirable. It’s so important to recognize the people who believed in you at the start. What’s next for you and your business in the next one to three years?

Tony: At Receive, we currently operate through a direct channel and an emerging partnership channel. The direct channel provides valuable insights—we call it our lab, where we test and refine the product.

The big opportunity lies in scaling through partnerships. We’re onboarding partners who already have relationships with SMBs. For them, it’s an incremental revenue opportunity, while we provide their clients with something of value.

The challenge is scaling while maintaining our focus on customer experience. When we grow 10, 12, or 15 times our current size, can we still offer that white-glove, first-name-basis service to our customers? That’s what keeps me up at night, and it’s the goal we’re striving to meet.

Jackie: It sounds like this is not only a growth opportunity but also a challenge, right? You’re where you are because of great opportunities, but imagine scaling 10x, 15x, or even 50x. Beyond that, what do you see as the biggest challenge in scaling?

Tony: I’d say the biggest challenge is support. Right now, we pride ourselves on the personal touch we provide, but that model doesn’t scale easily. We’ll need to consider automation and outsourcing in some areas, and every time we make those decisions, we risk impacting our value proposition. It’s a delicate balance—scaling in a way that makes financial sense while maintaining an awesome product.

At the end of the day, you have to ask yourself, “How big is big enough?” Growth for its own sake isn’t always the goal. If you’re retired and looking back, what size of company would you feel proud to have built? Bigger isn’t always better. So, yes, growth and the challenges that come with it are what we’ll be navigating in the next year or two.

Jackie: Definitely. What advice would you give to business owners trying to do everything on their own?

Tony: Haha, don’t.

Jackie: Right, don’t do it on your own.

Tony: Exactly. I’ve been there. Here’s the thing: understand where your time is going. Look at your daily tasks and ask yourself, “Does it make sense for me to handle this personally?” Sure, I could do my own bookkeeping, but is that the best use of my time? No. My value lies in the product and the customer experience.

If you assign a dollar value to your time—say $1,500 an hour—you’ll see it doesn’t make sense to spend an hour on bookkeeping when you could outsource it. That applies to many other tasks as well.

I’ve learned this through networking with other business owners. For those who haven’t explored fractional help, you’re missing out. These days, you can outsource almost any business function. Whether it’s marketing or operations, you don’t have to do it all yourself. My advice is simple: don’t try to wear every hat. Focus on what adds the most value to your business because otherwise, your product and customers will suffer.

Jackie: You’re absolutely right. I hear this all the time from business owners. You articulated perfectly why doing everything yourself isn’t the best idea. I also love how you highlighted fractional help—it’s such an important resource. Business owners should focus on their strengths and use them to grow their business instead of spending time on tasks they’re more comfortable with but less impactful.

Tony, it sounds like you’ve had some incredible people supporting you along the way. What would you like to say to them?

Tony: Thanks for believing in me. The best is yet to come.

Jackie: Love it.

Tony: As a business owner and entrepreneur, your job is never done. If you’ve got it in you, stick around—we’re going to have some fun.

Jackie: Love it. Well, Tony, it was a pleasure speaking with you. Thank you so much for being on the show.

Tony: It was an absolute pleasure. Thank you, Jackie.