Recent Deal Roundup: August 2017

If July was all about welcoming new companies to the Lighter Capital community, August was about balancing the old and the new. We funded 11 companies this last month—five new clients and six old ones.

We also funded our 300th deal, which is a huge milestone for us. We celebrated with a company-wide happy hour on a rooftop bar near our office. (Oh yeah, and rooftop ping pong!)

Here’s a quick rundown of some of the deals we closed in August.

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Lighter Capital closes its 300th deal

Yesterday we closed our 300th deal: a follow-on round for Mailprotector. We're aiming for 500 deals by July 2018, so hitting 300 is a big milestone for us.

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Sell high: your monthly subscription product, compounding, and revenue growth

Subscription models bring a new level of complexity—deferred revenue, monthly recurring revenue churn, customer churn—but it also brings benefits: sticky revenue streams that one-and-done business models can’t achieve, low cost of goods, and gross margins that increase with scale. One of the easiest levers to pull is the cost of your monthly subscription model.

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4 milestones to reach before raising your Series A

While seed funding is more abundant than ever (the number of seed-funded companies has quadrupled in the last four years), Series A funding is actually harder to get than it used to be. With a super-abundance of competent seed-funded companies, investors can afford to get choosy about their Series A bets.

Many companies want to raise their Series A before they're ready, but coming unprepared to such a competitive space can be detrimental to your company's future funding prospects or even harmful to your reputation. Investors who might have taken your business seriously six months down the road will write you off as someone who doesn’t take being prepared seriously. While there are few hard and fast rules about when to raise a Series A, there are milestones that will help you demonstrate to your future investors that you have traction and a road to profitability. Let’s take a look at four of the biggest indicators that your company is ready to seek its Series A.

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Lighter Capital makes the Inc. 5000 for the second year in a row

We're happy to announce that Inc. has ranked Lighter Capital #634 on the Inc. 5000 list of the fastest-growing private companies in the United States. Lighter Capital is also the tenth fastest-growing private company in Seattle, and #35 in the financial services industry. This is the second time Lighter Capital has appeared in the Inc. 5000.

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6 bootstrapping strategies from CEOs who made it to $100M ARR

In the world of tech startups, bootstrapping has a special cachet. Bootstrapped companies that make it big—say, to $100M ARR—without relying on venture capital or angel investors are looked on with something like awe. (Note that relying is the key word here--some boostrappers may take VC money, but only after they don’t truly need it.)

The founders of such companies are the Yodas of the tech startup world, full of hard-won wisdom and quotable advice. They know what it takes to grow a company to profitability the hard way. Here are some concrete strategies the founders of MailChimp, Atlassian, and Tableau have used to maximize their margins and grow without VC.

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Recent Deal Roundup: July 2017

We had a great July, closing nine deals for a total of $3.1M—an average loan size of approximately $350K! Eight of the nine startups we funded are new to the Lighter Capital family, too. We’re thrilled to welcome them to the community and ready to watch them grow!

Here’s a quick rundown of the deals we closed in July.

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Webinar takeaways: the business metrics that drive investors

On Tuesday, we hosted a webinar about important metrics to track when fundraising. Lighter Capital CEO BJ Lackland offered an investor’s perspective on why these are the main metrics a fundraising startup should track, and Grow CEO Rob Nelson took a deep dive into data sources and best practices around analyzing them. Check out the video here.

Below are five interesting takeaways from the webinar.

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Lighter Capital client Signal Vine raises $2M Series A round

As reported by their press release, Signal Vine, provider of a text messaging platform used by higher education institutions to improve student retention and comprehension, has raised a $2M Series A. New Markets Venture Partners led the round. New Markets invests in early- and growth-stage edtech, IT, and business services startups, and their companies have been acquired by industry leaders like Blackboard and ETS.

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How to tell if an investor is a bad fit

Pitching investors and knocking on doors for growth capital is an all-consuming process. Not only does it require countless coffee meetings, tedious pitch deck revisions, and many hours away from running your business, but you’re in a vulnerable and emotional position. You need capital, and your business can only survive for so long without it.

While it’s tempting to want to partner with the first investors who says “Yes,” it’s critical to partner with the right investor. After all, these are people who you’ll be working with for at least the next five to seven years.

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