Tax codes and deductions can be extremely complicated for individuals to parse through. Additionally, hiring someone to do your taxes can be expensive. According to the National Association of Tax Preparers, “the average cost to have a tax professional prepare an individual federal tax return in 2023 was $248, an increase of more than 16% from 2021.

Due to this, “lots of people are missing out on deductions and credits because tax codes are hard to read through and it’s really expensive to get a financial advisor,” says Colin Horsford, co-founder of Muse Tax (or “Muse”), an AI-powered tax recommendation and financial intelligence software. 

Muse Tax is part of the Center for Accelerating Financial Equity’s (CAFE) flagship Fintech Accelerator program cohort. CAFE is committed to working with innovative fintechs who are building technology to support immigrant, LMI, and other underserved communities.  

We are featuring founders of our participating companies weekly. This week, we are featuring Colin Horsford, Co-Founder of Muse. He co-founded Muse in 2022 with Busayo Ogunsanya. Here’s a snippet from our chat with him.

Tell us a little bit about yourself and your background.

I grew up in New York City and I’m an accountant professionally. I’ve been in the accounting field since I was 17-years old. I went to Baruch College and got my degree in accounting and then got my master’s in quantitative finance and statistics from New York University. After that, I was working at Ernst and Young where I first met my co-founder, Busayo Ogunsanya. 

I went on to work for many different banks, namely, Goldman Sachs and JPMorgan. Eventually, I quit that to start my own CPA practice. During that time, I was talking to Busayo and he had started working on building a chatbot to help people with their taxes. I decided to dive into the chatbot with him and start Muse. 

Tell us a little bit about Muse and how you started it. Was there a specific experience or moment that sparked the idea for your company?

I initially started by helping Busayo bring the chatbot he was working on to life. He was doing something very innovative with this chatbot since this was way before ChatGPT. During this time, I had also taught myself how to code. 

One day, I saw a commercial of a company asking people to come in and bring their tax returns to review. When I saw that, it got me thinking about how expensive that would be and that it would probably just be better and cheaper for computers to review people’s tax returns instead of humans. During a conversation with Busayo, we realized we were both working on the same thing but from different angles. That day we decided to start working on this together. 

As CPAs, both of us realized how lots of people are missing out on deductions and credits because tax codes are hard to read through and it’s really expensive to get a financial advisor. We wanted to create software leveraging AI to provide people with that kind of help. 

How do you see Muse aligning with CAFE’s mission?

When I was working at my own CPA practice, I had a lot of low- to moderate-income (LMI) clients. The area I live in Brooklyn has a lot of LMI individuals and I took it as a personal mission to work with them. I have continued that mission with Muse’s work. I personally and professionally align with CAFE’s focus on LMI and underrepresented communities. Once people get a level playing field, it significantly affects their lives and I want to do my small part in that. 

Were there any challenges you faced in starting an impact-driven business in particular?

“In general, tax is not the most exciting thing to talk about and even though we are more of a data company, it took a while for us to massage our messaging to get through to people. Generally, LMI and other underrepresented communities don’t trust banks and corporate organizations and it’s harder to get through to them, which has been another challenge.”

What has been the most rewarding aspect of your entrepreneurial journey?

“We are helping individuals every day and it’s great seeing the outcome of what I built change lives for the better. It’s great seeing that I have an impact on their lives through this technology.”

What prompted you to apply for the CAFE accelerator program? 

“I found out about this program online and sent it to my co-founder and both of us thought that it seemed like the perfect program for us. CAFE’s mission to advance financial equity in underrepresented communities resonated with us and the individuals that Muse is targeting with its work.

CAFE will also connect us to banks, which is another helpful aspect of the program. Even the other companies in the cohort are doing great work in fintech which gives us a learning opportunity.”

How has it been working with other founders? 

“It’s been great to meet them and plug in to each other’s companies. For example, Nester, one of the other companies in the cohort, helps people with projecting their home maintenance expenses. Your home and your taxes are your largest expenses throughout the year.”

Tell us more about your goals on networking and mentorship through the fintech accelerator program.

“Mentorship is our number one goal in this program. We want to get to know fintech leaders who have been in this field for a while and for them to lend their expertise to us. We also want to get introduced to banks through this program for potential partnerships.”

How does Muse reach out to financial institutions? Are there any challenges you have faced in getting financial institutions on board? 

“We started out as a B2C company and have now transitioned into a B2B2C company. Getting larger financial institutions is a challenge as it takes a while to onboard them.”

How does your business evaluate the impact you create in underserved communities?

“We measure key impact metrics internally. It’s a priority for us to serve underserved communities.”

 Brendan Kennealey from Nester shares his journey in building an impact-driven startup to empower homeowners and joining CAFE’s fintech accelerator. 

According to the Pew Research Center, owning a home is often the largest asset for US homeowners. Owning and maintaining can be extremely costly. “Seventy-seven percent of homeowners say they faced an unexpected issue or repair with their home in the first year of ownership, according to a recent survey from the insurance company Hippo.” in the National Association of Realtors magazine.

Brendan Kennealey founded Nester in 2021 specifically to help new homeowners to better prepare for these expenses. These unexpected expenses can be especially burdensome on low-to-middle income homeowners. “Homeowners may put a large, unexpected home repair on their credit card and get into that debt cycle and this affects low- to moderate- income (“LMI”) homeowners more than others,” says Kennealey. 

Nester is part of the inaugural cohort of CAFE’s flagship Fintech Accelerator program. CAFE is committed to working with innovative fintechs who are building technology to support immigrant, LMI, and other underserved communities. 

Each week, we are featuring founders of our participating companies and their impact on underserved communities. This week, we are featuring Brendan Kennealey from Nester. Here’s a snippet from our chat with him.

Tell us a little bit about yourself and your background. Was there a specific experience or moment that sparked the idea for your company?

“My background is primarily in education, I went to Boston College and Harvard Business School and lived in the Boston area for almost 15 years and worked with different schools. I also worked in education in Rwanda. After that, I moved to Wilmington, DE, where I worked as Head of School at Salesianum School. After 10 years there, I transitioned into Nester.  Starting a fintech startup after education seems a little off path.  

The reality was, that I was having dinner with one of my best friends who recently bought a house. It was a relatively new house, only about 10 years old but there were lots of things wrong with the house, and he was extremely frustrated. However, a lot of the stuff going wrong was up against its useful life and he had no insight into it. 

I realized that he’s not alone. The number one regret that homeowners have is the cost of maintaining their house. Most of these costs are predictable since we can project what will need replacing based on the useful life of different things in the home. We used to project this for the schools I worked at, and it got me thinking, why not do this for the homes as well? I wanted to make owning a home a better experience for homeowners.”

Tell us a little bit about Nester. 

“We got started with the idea of helping home buyers. Sort of like how Carfax sits in the transaction of a used car, Nester would sit in the transaction of a used house if you will. Before the buyer gets their house, we give them their Nester report, where we put home maintenance costs in a digestible timeline. We show them how much they need to save per month in addition to their mortgage to afford the costs of owning their home. We also give every house a Nester score like a FICO score for the house, which changes based on where your house is in its lifeline. For example, if you replace your roof, the score goes up because you won’t have to change it for a long time. 

We give home buyers follow-up questions to ask the seller and realtor, to help them get more educated. For a buyer, we can also help them compare houses side by side. It’s complicated for someone to do all these calculations on their own. We are independent and we don’t take positions about this being a good or bad house, one may be more expensive in sticker price but when you factor in maintenance, it changes the math.”

How does Nester impact LMI populations?

“Nester works and is valuable whether a house is $100,000 or $1 million. Interestingly, the value increases for folks who are lower and middle-income. If their roof or furnace goes, it can be a major burden financially. 

We are partnering with government entities and financial institutions. Every state has a state housing program where they provide down payment assistance and first homeowners programs. They have this dual mission to help people get access to homeownership and do it in a way to make sure these homeowners are not getting in over their heads. We are currently partnered in our hometown with the city of Wilmington, Delaware. We are now looking at these partnerships as priority number one. 

Priority two is financial institutions. For most people, their house is their biggest asset, if you are a bank or credit union and your customer is looking to buy a home, you can provide them value with Nester and cross-sell other products too. We also have a partnership with Habitat for Humanity and we’re looking at that to expand out beyond local networks.”

What has been the most rewarding aspect of your entrepreneurial journey?

“Honestly, it is customers and when they get the report, just the relief that they get is so valuable to us. We do a lot of in-person focus groups and such, for our product development, and seeing the reaction of the customers when they get the report is great.  We recently did Nester reports for a group of 4 single moms who were soon to be homeowners for Habitat for Humanity.”

What prompted you to apply for the CAFE accelerator program? 

“When I heard what CAFE was doing, it felt like a great fit especially as we transition to working with government and financial institutions. CAFE’s mission to advance financial equity aligns with our product, which is getting traction with LMI homeowners and home buyers.”

Tell us more about your goals on networking and mentorship through the fintech accelerator program and how it’s been so far. 

“Our primary goal is getting quicker access to financial institutions and CAFE has a great network of financial institutions, community banks and credit unions. That’s something that we are starting as a channel for Nester. We also want to get smarter about selling to these kinds of institutions. I think that’s gone well particularly on the learning side, not just from the speakers but from the other founders who have gone through this. The other founders in the cohort have shared some of their learnings and mistakes they made. Meeting other founders in similar industries is the benefit of this cohort model. 

Third down the list of goals is that we are likely going to look for institutional funding soon, be it venture capital or a strategic partnership, we are looking at getting access to those.”

Are there any challenges you have faced in getting financial institutions on board? 

“The challenge we’ve seen is from the financial institutions’ side. Getting in the door is the first hurdle but even when you are through the door, there is no linear path to getting a partnership signed. Every bank is different, there are multiple people making decisions, and they all need to sign off on a partnership in no set order. Each bank has their process; certain things are similar, but they are a lot different.  

Navigating that process and figuring out the people who will be involved in that decision and trying to somehow get them to a consensus, is not unique to us but a big challenge for us. CAFE has been helpful in that, part of what has been helpful is the reassurance that we’re not crazy, everyone is facing that. We are also learning things we can do to make this process better.”

How does your business evaluate the impact you create in underserved communities?

“Having an impact on LMI communities is super important to us, my background has largely been in education and working with LMI communities.  We have a product that is useful to everybody but has a large impact on LMI homeowners. I believe every transaction should come with a Nester report – there’s no downside to having more information. Without the foresight Nester provides, homeowners may put a large, unexpected home repair on their credit card and get into that debt cycle and this affects LMI homeowners more than others. The fact that our product can play an important role there, it’s a huge win for us personally and professionally.”