How Knowify Found the Perfect Source of Funding

Marc Visent, CEO of Knowify, and Allen Johnson, Chief Investment Officer at Lighter Capital, recently joined Intuit’s Developer Evangelist David Leary to talk about Knowify’s funding journey in an online “fireside chat.”

Here are some takeaways:

On Lighter Capital understanding SaaS models:

  • In seeking funding, Visent appreciated how Lighter Capital understands how SaaS companies work. “A bank doesn’t have the knowledge to lend to a subscription-based company like ours, but Lighter Capital has this knowledge about how these companies work,” he says. “We show them our numbers, we show them our model, we show them how we run our business—for them it was probably straightforward. While with everyone else, it’s a long journey of explaining what SaaS is, Lighter Capital are experts at this. That’s why it was a great option.”

On the funding process at Lighter Capital:

  • Visent found Lighter Capital’s funding process a perfect fit for a small, busy company: “The process was ultra-fast. When you are a very small company, I can’t leave for three weeks. I need things to happen very fast. And it was extremely fast.” (In fact, a company can get funded in as few as 15 days—just ask Visible.vc.)

On aiming for steady, right-sized growth:

  • Choosing Lighter Capital for funding says Visent, “was a very easy decision.” That’s because Knowify’s need for investment to enable market-appropriate growth was a perfect fit for this type of funding. “We are not the classical startup that burns hundreds of thousands of dollars a month. We have a different approach to market. We try to grow as fast the market can take it.”

On their immediate use of funds:

  • Knowify used Lighter funding for new hires, growth initiatives like digital campaigns, and trade shows. “We hired someone the very same week that we got the funding,” says Visent. Trade shows, he says, “can get expensive, and the amount of money that goes out immediately isn’t returned right away; it’s building for the future. For us, it was very important.”

On maintaining equity:

  • Knowify had the chance to raise VC money but found that the terms and the structure were not good for the way that Knowify wanted to grow. “Some companies are a perfect fit for a Series A, and some companies are not and need other funding options,” says Visent. “But if you feel that they’re going to cut you a check for $2 million and you can’t put that money to work, you shouldn’t give up 30% of your company. For us, it was both things: We did not need that much funding and we didn’t want to dilute our team.”

On prioritizing company-market fit:

  • Visent encourages others to consider what rate of growth is appropriate for their situation: “Think about the growth that the market can take. Not everyone can explode. Not everyone can be Uber and try to get the whole market by burning a ton of money. Other apps are more niche; they have different growth strategies.”

On choosing Lighter Capital:

  • “There are options like Lighter Capital; they understand very well how the business works and always that’s very important,” says Visent. “When you partner with someone who understands the business you will have a better time.”   

Visent’s resounding conclusion is that revenue-based financing like that provided by Lighter Capital can be an excellent option to fuel the growth of early-stage SaaS companies. Knowify is a prime example of one for which this kind of funding was the perfect fit.

Katherine Gustafson is a full-time freelance writer specializing in content for mission-driven changemakers such as tech disruptors in fintech, healthcare IT, and B2B SaaS. She also does corporate work on business topics including accounting, management, and innovation for companies such as KPMG, TD Bank, Workday, Avalara, and Adobe. She is the author of a book about innovation in sustainable food, and her writing has appeared in a wide variety of sites and publications including QuickBooks Resource Center, Business Insider, and Forbes. Follower her on Twitter @k_m_g.