Every year, millions of Americans take the leap to start a business. They form an LLC, open a bank account, and begin building. Then they run into the same problem: the financial system does not trust businesses without history. No business credit profile means no business credit card, no meaningful financing options, and no clear path toward the growth capital required to scale.
Today, we’re excited to invest in Dao as they build the financial operating layer for newly-formed small businesses. Art Flores helped build ZenBusiness into one of the largest business formation platforms in the country, giving the team rare insight into the earliest moments of the entrepreneurial journey. Alongside Seth Snyder, an experienced fintech operator, and Rafael Lopez, a repeat SMB founder and ZenBusiness co-founder, Dao combines deep distribution advantages with operational and technical expertise. Together, they are building a guided path from business formation to long-term financial access.
The Opportunity
Over 5.5 million business applications were filed in the U.S. in 2023, with high-propensity employer applications up roughly 37% versus 2019.
Only 43% of startup employer firms under two years old that applied for financing were fully approved.
Fiscal Year (FY) 2025 saw the most capital ever delivered to small businesses. In total, the SBA has guaranteed 84,400 7(a) and 504 small business loans for $44.8 billion. This includes 6,750 504 loans for $7.8 billion and 77,600 7(a) loans for $37 billion.
What Dao Actually Builds
An unsecured business credit card designed for newly-formed businesses, helping business owners establish business credit from day one.
Automated reporting to business credit bureaus, allowing entrepreneurs to build a real financial profile through everyday business spending.
AI-assisted workflows that simplify SBA loan research, preparation, document collection, and lender application processes.
A lender-matching system that connects qualified businesses with approved SBA lenders once they become credit-ready.
Integrations with accounting ledgers and all the spend management needs a business owner expects, making Dao part of the company’s existing operational workflow.
Conclusion
Dao’s insight is simple: the card is not the product, the path is. Existing fintech and SMB lenders largely serve businesses that already have traction, revenue, and established financial histories. Dao starts at the beginning providing access and guidance through foundational financial decisions and tools that are currently not accessible or don’t exist for the day one business owner.
What makes this especially compelling is distribution. The hardest part of building a financial product is often not the software or infrastructure, but access to customers at the exact moment of need. Dao is positioned directly inside the formation funnel, where intent is highest and acquisition costs are lowest. Combined with an already-established issuing bank, debt facility, and experienced founding team, we believe Dao has the opportunity to become the financial on-ramp for the next generation of small businesses. We’re excited to welcome them to the Redbud team as they help entrepreneurs build financial credibility and a path towards growth from day one.
