Capital as a Service

REVENUE-BASED LOANS FOR ONLINE BUSINESSES

Origins

We founded Lighter Capital to liberate small business owners from the onerous demands of banks and VCs. It’s time to use technology to remake credit analysis. It’s time for investment structures that work better for investors and entrepreneurs. In short, it’s time for some serious innovation in the financial services industry.

People

We are entrepreneurs ourselves, building a company to upend financing for growing tech companies. We are entrepreneurs, former VCs, software and data wizards, and financing wonks who are pioneering a new way to finance great business that just don’t work for traditional VC or bank financing.

Model

Our online application uses proprietary analytics to make lending decisions in rapid fashion. No joke, we shoot for closing an investment in 2 weeks! And we created the RevenueLoan™, a loan repaid from a percentage of revenue, to be a flexible financing option with no dilution, no loss of control, and no fixed repayment schedule.

Does that sound appealing to you? Great! We currently look to fund companies that have:

  • Revenue run rate of $200k annually or more
  • Gross margins of 50% or higher
  • Solid plan for use of for $50k to $500k with near-term return (“money machine”)

Lighter Capital vs. Other Methods

Bank / Debt VC / Equity Lighter Capital
Control Financial covenants / ratios / personal guarantee Board seat / protective provisions / drag-along Minimal, non-financial covenants
Dilution None / warrants Moderate to extreme None / warrants
Flexibility / leverage Inflexible, fixed payments, high financial leverage risk Highly flexible / no payments, no financial leverage risk Flexible, payments linked to revenue, low financial leverage risk
Alignment of Interests Unaligned or negatively aligned Growth and exit at all costs, possible mismatch Aligned strictly with revenue growth at all times
“Exit Strategy” Neutral Dependent upon “exit,” constantly pushing for M&A Entrepreneur-aligned (exit is welcome, but not necessary)
Cost of Capital 5-10% (stated), 10-20% (actual) 30%+ (stated to investors) 25% +/- (entrepreneur-aligned; only “costs more” if company exceeds plan on the upside)