What happens when a founder spends years watching the same financial problem play out during one of the most difficult moments in a family’s life? For Phillip Mason, founder of Lilypay, the idea for the company came directly from years working in deathcare and seeing families struggle to pay unexpected funeral expenses.

Lilypay provides funeral financing through funeral home partners, giving families another way to manage funeral costs while ensuring funeral homes receive payment. The company now works with more than 200 funeral home partners across the country. In this Startup Story, Phillip shares how firsthand industry experience led him to build Lilypay, how conversations with funeral directors helped validate the problem, and what building a bootstrapped fintech company taught him about staying close to customers.

Note: Responses have been lightly edited for length and clarity.

From Sales to Solving a Problem in Deathcare

Can you tell us about your background and what your path looked like before becoming the founder of Lilypay?

Phillip: I did not come up through finance or engineering, which is the usual founder path in fintech. I came up through sales. I went into it after college mostly to pay bills, and I stayed because I liked sitting across from someone and actually listening. That took me to Dignity Memorial, where I worked as a sales manager. Deathcare is a demanding industry. You meet people on the worst day of their lives and help them make difficult decisions about the service, timing, and cost, often within days of losing someone.

I spent years at hundreds of arrangement tables and learned how families actually talk about money when they are grieving. So when people ask what qualified me to start a company in funeral finance, the answer is not a credential. I spent my career in the exact room where the problem happens, watching it happen over and over until I could not unsee it.

What first inspired you to start Lilypay, and was there a particular experience or moment when you realized families needed a better way to manage funeral expenses?

Phillip: There was a specific family. I was helping them through arrangements and we got to the money conversation, which is the part nobody warns you about. They applied for the financing option we offered at the time, and they were declined. I watched what happened next. They pulled out five credit cards and split the bill across all of them. Then they started cutting services. Fewer flowers. Shorter viewing. The things they cut were not line items to them. They were the ways they had planned to say goodbye to someone they loved.

That did not sit right with me, and it kept not sitting right with me. Because the problem was not that the family was irresponsible. Pew has found that nearly sixty percent of Americans do not have a thousand dollars available for an unexpected expense, and the average funeral costs many multiples of that. Death is the least budgeted expense in American life. It arrives with no notice, it has to be paid within days, and the decision maker is in acute grief. Meanwhile every other industry had figured this out. You can pay for a couch in four installments. You can pay for a plane ticket in four installments. You could not do that for a funeral. The gap was absurd, and I could not stop seeing it.

Validating the Need

When you first had the idea for Lilypay, what were some of the earliest steps you took to determine whether there was a real need and viable business opportunity?

Phillip: I did the least glamorous thing possible, which was talk to funeral directors. Dozens of them. I was not pitching, I was asking one question: what happens when a family cannot pay? Every single director had a version of the same story. They had written off balances. They had let families make handshake payment plans that quietly became donations. Some were carrying receivables on their own books because they could not bring themselves to turn a family away. The pain was universal and it was on both sides of the table, family and funeral home. That is when I knew it was not a niche.

The second test was the business side. I looked hard at why existing lenders declined so many funeral applicants, and the answer was that they were underwriting a person’s past instead of their present. A credit score is a rearview mirror. Banking data tells you whether someone can actually make a payment next month. The third thing I did was validate that funeral homes would let a third party into the arrangement room at all. That was the real risk. Directors are protective of that moment, correctly. So the product had to make their job easier, not add a step. That constraint shaped everything we built.

What was one of the biggest challenges you faced while turning Lilypay from an idea into an operating company, and how did you work through it?

Phillip: Underwriting. I knew exactly what was wrong with how the industry evaluated families, and knowing what is broken is not the same as knowing how to fix it responsibly. We were building a lending model from scratch, with no institutional playbook, in a category where being too loose puts us out of business and being too tight recreates the exact problem I started the company to solve.

There was no way to think our way through that. We had to build it, put it in front of real families, watch what actually happened, and adjust. Every early approval and every early decline taught us something. We ended up looking at banking data instead of leaning on credit scores alone, and we added a crowdfunding component for the borderline cases, because a family sitting just outside approval still has to bury someone.

Doing that while bootstrapped made it harder and, honestly, better. This is my first company and we launched it on personal resources, so we could not buy our way out of a single mistake. Every decision carried a real cost. That forced a discipline we would not have had with a war chest, and it meant we only built the things families and funeral directors actually asked us for. Nothing speculative survived.

Learning From Early Partners

How did you get your first funeral home partners and customers, and what did those early experiences teach you about what the market actually needed?

Phillip: The first ones came from the industry itself. I had spent years at arrangement tables, so I knew these people and I could speak their language. I was not a fintech guy explaining deathcare to a director. I was someone who had done their job. We are now working with more than 200 funeral home partners across the country, and we made a deliberate choice early that we go through funeral homes, not around them. We are not direct to consumer. The funeral director is the trusted adviser in that room, and any product that tries to bypass them has misread the entire dynamic.

What the early partners taught us was that funeral homes needed three things we had not fully prioritized on day one. They needed speed, because a family cannot wait a week for a decision when the service is Saturday. They needed certainty, because a promise of payment is worthless if the family defaults and the home absorbs it. And they needed the whole thing to consume almost no staff time. So we built to those three. Same day decision, same day ACH funding directly to the funeral home, and Lilypay assumes the repayment risk, which means the home gets paid whether or not the family completes. That last one changed every conversation we walked into.

Was there a moment when you realized Lilypay was truly making an impact or that the business was beginning to gain traction?

Phillip: Two moments, one small and one large. The small one happens constantly. A family gets approved and the director tells us they put back services they had already cut. The flowers go back on. The viewing goes back to full length. We did not make the funeral cheaper. We made it possible for a family to grieve the way they wanted to. The large one was Foundation Partners Group. They serve more than 125,000 families a year across nearly 230 locations in 21 states, and they chose to integrate Lilypay across their network. That was the signal. A group at that scale does not take a flyer on a bootstrapped startup. Going from a handful of partners to more than 200 confirmed it, but Foundation Partners was the moment the industry decided we were real.

Lessons From Building Lilypay

Looking back at your journey so far, is there anything you would have done differently if you were starting Lilypay today?

Phillip: I would have built the funeral home side of the product before the family side. My instinct was to obsess over the applicant experience, because that is who I was doing this for. But funeral homes are the ones who adopt us, and every hour we spent early on polishing the family flow was an hour we were not spending on the director’s workflow. We eventually rebuilt to that. I would start there now.

I would also have talked to more directors before writing a single requirement, and I say that as someone who talked to a lot of them. Nearly every meaningful improvement to our product came from a director telling us something we did not know. The features we invented in isolation were the ones we later tore out.

What advice would you give to early stage founders and entrepreneurs who see a difficult problem worth solving but are unsure how to turn that problem into a sustainable business?

Phillip: Start with a problem you have witnessed personally, not one you read about. My advantage was that I had sat in that room hundreds of times. If you have real exposure to something broken, that experience is your unfair advantage. Second, go where the discomfort is. Deathcare is emotionally heavy and relationship driven, but that difficulty is also why problems in the industry remain unsolved. Hard industries are underserved for a reason, and that can be your opening.

Third, solve for the person who is not your customer. Families are who we exist for, but funeral directors are who adopt us. We had to make the director’s day easier before we could make the family’s day better. Last, stay close to the pain. I still read the stories that come in. That is not sentiment. That is quality control.

About Lilypay

Lilypay is a funeral financing company founded by Phillip Mason that works through funeral homes to help families manage funeral expenses. Rather than going directly to consumers, Lilypay works with funeral directors and provides same day decisions and ACH funding directly to funeral homes. The company assumes repayment risk so funeral homes receive payment even if a family does not complete repayment. Lilypay now works with more than 200 funeral home partners across the country.

Wrap Up

Phillip Mason’s experience building Lilypay demonstrates how firsthand industry knowledge can become an advantage when solving a difficult problem. His idea did not come from identifying a trend from the outside. It came from spending years in the room where the problem occurred and seeing the same challenge affect families and funeral homes repeatedly.

His experience also highlights the importance of continuing customer discovery after launching. Conversations with funeral directors helped Phillip validate the original problem, but their feedback also influenced how Lilypay built and improved its product. For early stage founders, his journey is a reminder to stay close to the people experiencing the problem, listen carefully to the people responsible for adopting the solution, and be willing to change what you build based on what you learn.

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