Lighter Capital, a recently re-branded funding option, describes themselves as Entrepreneurs Funding Entrepreneurs. They just announced they have up to $500,000 available and are looking to seed a “weird and Explosive” company.
According to Randall Lucas, Finance + Product, ” We’re a “lighter” approach to capital than the marble and granite of the banks, plus we try to keep a “lighter” attitude. We help growing small businesses accelerate with access to small but meaningful amounts of capital, typically $100-500k.”
They have a revenue-based lending structure which allows us to fund companies more quickly than banks and the structure is more flexible for entrepreneurs. “We don’t buy shares, and we don’t look for traditional loan structures — instead, we buy a small % of the company’s revenues, up until some cap, as our repayment stream. So we share the risks with the entrepreneur, and we are 100% aligned with the company on juicing revenue growth.”
I love their approach to investing in startups. The problem they are attacking is the limited access to capital problem most startups face. First, banks aren’t lending and the traditional debt structure is too restrictive during economic uncertainty (ie: can’t commit to debt payments if you aren’t sure about sales outlook).
Also, the VC model really only works for the “home-runs” so this approach makes sense for great businesses that make money but aren’t swinging for the fences. “We think businesses that make $1-5m/ year in revenue are great businesses and our long term vision is to make it super fast and simple for those businesses to get capital.” They believe a company that’s doing $1 or $2 or $3 M in revenue, with potential to go to $10 M or $20M, is still an awesome opportunity and deserves access to capital.
“Our ultimate vision is to hook up this market opportunity with our technology back-end — and to help make “Capital-as-a-Service” a reality for these companies”, says Andy Sack, CEO. In other words — the “lighter” version of going to meet 30 different VCs in Silicon Valley, or or putting on a tie to go to meet a banker, is to be able to apply online, from your couch, in your boxers, and get funded on a Sunday afternoon.
The idea is starting to spread. Press, social media, brokers, partners, and referral networks of friends and business contacts are starting to talk about Lighter Capital (formerly RevenueLoan) as leaders in the Revenue-based Finance market.
Lighter Capital is aggressively putting their capital to work. They’ve already put $1.1 M out in a number of investments, so they are already generating revenue and actively investing the rest of our first $6 M in capital.
“Currently we get most of our deals through word of mouth and organic traffic on our site, but with the rebrand we’re really pushing to fund companies completely online”
The Team – it’s a really entrepreneur-based team, they’ve all worked for startups before so they’ve seen the funding process first-hand. “We are a pretty wacky, fun bunch … and not just saying that” says Randall.
If you are a startup and think you deserve $500,000, go here right now!