Success Story - Valant

Stimulating healthy growth

A mix of revenue-based financing and VC helped Valant Medical Solutions vault to the forefront of the behavioral healthcare market.

Stimulating healthy growth

A mix of revenue-based financing and VC helped Valant Medical Solutions vault to the forefront of the behavioral healthcare market.

Looking for competitive advantage in a growing market

When President Obama’s 2009 economic stimulus bill set aside $19 billion for healthcare technology and electronic health records, David Lischner, CEO of Valant Medical Solutions, saw an opportunity. “The market was going to move faster,” Lischner says, “and we wanted to make sure we could stay ahead and grow with the market—or ahead of it.”

Lischner had founded Valant in 2005 to help streamline healthcare paperwork and provide a platform that would allow caregivers to focus less on red tape and more on patient care. Now they needed capital to build out their engineering capacity, certify their product, and invest in marketing and sales in order to earn a greater market share.

They settled on a mix of debt and VC funding that would help them take their suddenly expanding market.

 

Choosing revenue-based financing

Revenue-based financing turned out to be a natural fit with Valant’s growth strategy. “In late 2010, we had close to $1 million in revenues,” Lischner says. “Back then, our cash flow was more choppy and unpredictable, and I liked that the amount you pay Lighter Capital each month scales with your success. Your payment goes up or down depending on how much cash you are bringing in, which makes it a lower risk than traditional debt.”

Lischner also appreciated the availability of follow-on rounds. “We were used to bootstrapping, and I liked that this type of financing would allow us to bootstrap our way out of any difficulty. If we had done normal debt with a fixed repayment amount, financing would have been more risky. As it turns out, we did pretty well and our revenues kept growing, but it was good to have that security.”

Location
Seattle, WA

Founded
2005

Employees
60

Growth
500%

“At the time, we were emerging. Now we’re the market leader. We’re on our way to becoming a $100 million company in the next four to five years.”

David Lischner
Founder and CEO

Ease and expertise

“From when we agreed on terms to closing was rapid and smooth,” Lischner says of his experience with Lighter Capital. “The whole process of borrowing from Lighter Capital was fast, hassle-free, and efficient—and definitely faster than equity financing.”

Lischner also looked to Lighter Capital to help facilitate venture fundraising. “From the beginning our relationship was great,” Lischner says. “Andy Sack, the founder of Lighter Capital, supported us along the way. CEO BJ Lackland also made great contributions beyond the money.”

Lighter Capital also introduced Lischner to the Seattle-area VC that facilitated their next round of funding.

Growing fast to take the market

One year after financing, Valant had doubled their revenues and customer base. Three years later, they had increased revenues by 500%. “We grew from about 10 employees to 60,” Lischner says. “At the time, we were emerging. Now we’re the market leader. We’re on our way to becoming a $100 million company in the next four to five years.”

That growth helped them close $11M in private equity investment in 2014 to enable their expansion in the behavioral health segment, and broaden its EHR and electronic billing capabilities. They raised an additional $3M in VC in 2015.

“Relationships do matter. You don’t always understand this when you just look at deal terms, but the quality of people you work with matters a lot. The people at Lighter Capital have been a great sounding board when we were formulating our financing strategy.”

David Lischner, CEO Valant


Success Story - SteelBrick

Build it and they will fund

SteelBrick used revenue-based financing to overcome an uneven revenue stream and achieve explosive growth.

Build it and they will fund

SteelBrick used revenue-based financing to overcome an uneven revenue stream and achieve explosive growth.

Seizing the opportunity

In 2009, inspired by a conversation he’d had while consulting a client, SteelBrick founder and CEO Max Rudman made the decision to pivot his seven-year-old company from consulting to developing software for Salesforce. “We recognized an opportunity,” Rudman says of the decision, “a need for it in the marketplace, and decided to capitalize on it.”

Rudman and his team developed an affordable out-of-the-box configure price quote application for high-growth Salesforce companies called QuoteQuickly. It wasn’t an immediate success. In early 2010, SteelBrick had around five customers and $10,000 in revenue.

“I was good at converting leads,” Rudman says. “Our biggest initial difficulty was figuring out the sales and marketing piece to generate qualified leads.”

And scaling up was a challenge. SteelBrick’s consulting revenue funded product development and business growth, but the bulk of their revenue came in Q4, which meant QuoteQuickly grew in fits and starts.

Then, in early 2013, Lighter Capital found them.

Location
Palo Alto, CA

Pivoted to SaaS
2009

Lighter Capital funding to date
$200,000

Exit value
$360 Million

“I wasn’t looking for funding. I knew we weren’t big enough for traditional lending or financing like a line of credit from a bank. And I didn’t think we were at a growth point attractive to a VC.”

Max Rudman
Co-founder and CTO, SteelBrick

“I wasn’t looking for funding. I knew we weren’t big enough for traditional lending or financing like a line of credit from a bank. And I didn’t think we were at a growth point attractive to a VC.”

Max Rudman
Co-founder and CTO, SteelBrick

Technology-driven, easy, and entrepreneur-friendly

“I wasn’t looking for funding,” Rudman explains. “I knew we weren’t big enough for traditional lending or financing like a line of credit from a bank. And I didn’t think we were at a growth point attractive to a VC.”

Lighter Capital eventually offered SteelBrick $200,000 in revenue-based financing. “I liked the fact that it was a revenue-based loan,” Rudman says. “The more cash receipts we had, the faster we could pay. So the incentives were completely aligned. The better we did, the better Lighter Capital did.”

Once the financing was completed, Rudman found working with Lighter Capital to be easy. “They were constantly leveraging technology to make it more efficient and easier to service the loan,” Rudman says, “like the ability to automatically import income statements and balance sheets during the monthly servicing process. They’re relying heavily on technology to take the cost out of the lending process.”

After SteelBrick received its funding in early 2013, things started to move very fast.

An incredible year

By the end of 2013, the company had grown to 110 customers and approximately $2M in annual recurring revenue. 2014 saw continuing growth and a $6.5M Series A led by Emergence Capital Partners, and 2015 was a watershed year.

In the first half of 2015, they saw 300% year-over-year growth in bookings and revenue. They raised $18M in Series B funding in February and another $48M in Series C funding at the beginning of Q4. The whirlwind year ended with Salesforce acquiring the company for $360M.

What’s the key to the company’s success? Rudman says he’s most proud of their focus on the customer experience. “We want to make sure that every customer is successful with our product,” he says. Rudman then adds, “And when it comes to funding, look around for what’s best for your company, but don’t be surprised if it somehow finds you.”

In February 2016, SteelBrick officially rebranded as Salesforce Quote-to-Cash. Rudman now serves as the VP of product management.

“Every time we’ve had questions, Lighter Capital has been very quick to provide us answers.”

– Max Rudman

“Every time we’ve had questions, Lighter Capital has been very quick to provide us answers.”

– Max Rudman


Success Story - MapAnything

It's worth the wait. Don't settle for VC funding too early.

MapAnything’s founders raised $40M+ without sacrificing significant ownership. But first, they scaled with Lighter Capital.

It's worth the wait. Don't settle for VC funding too early.

 

MapAnything’s founders raised $40M+ without sacrificing significant ownership. But first, they scaled with Lighter Capital.

The founder challenge

Co-founders John Stewart and Ben Brantly had big dreams for MapAnything—a company high on promise but low on assets. To fulfill those dreams they needed money. They knew they could get it, but the potential price tag was huge—signing over control of their company.

“We looked into many financing sources,” Stewart says, “but never found one we liked. In order to raise $600,000 in 2012, my co-founder and I needed to give up 35%-40% of our company. Using our own capital seemed to be our only choice.”

 

The long-term financing solution

Before dipping into their pockets any further, Stewart and Brantly met with BJ Lackland, CEO of Lighter Capital, to talk about revenue-based financing. Just like hundreds of other growing tech companies, they decided it was just what they needed. Stewart says, “Our company wouldn’t have existed if no one had gambled on us—and BJ did.”

MapAnything’s first round of funding was in December 2012. Stewart describes that initial funding as “fast and smooth.” The whole deal was completed in just three weeks. One of the things Stewart appreciated was how Lighter Capital took the time to really get to know their business, including how they worked as a Salesforce AppExchange Company.

After the first round, Light Capital provided the company with ongoing capital. “It was nice to know that every time we needed additional capital, we could return for more.” MapAnything went on to do four more rounds of funding for a total of $1.2 million, which Stewart says was even faster and smoother.

Funded in
2012

Growth
4600%

Headquarters
Charlotte, NC

Lighter Capital funding to date
$1.2M

“I always felt like Lighter Capital had MapAnything’s best interests at heart. During the initial funding, they took the time to really get to know us — and our business. It’s great to be able to focus on growing my business instead of looking for funding.”

John Stewart
CEO and co-founder, MapAnything

Preserving owner equity

Revenue-based financing helped take MapAnything to the next level. Their customers now include multiple Fortune 500 companies. Two years after their first financing, the company made #227 on the Inc 500 list—number 15 among software companies.

“We were on a fast-growth trajectory before,” says Stewart, “but funding from Lighter Capital has dramatically accelerated our growth.”

The five rounds of funding also helped MapAnything secure a $7.3 million Series A in December, 2015, without Stewart or Brantly sacrificing significant ownership. In February 2017, they raised a $33.1 million Series B.

Today, MapAnything is the premier mapping, geo-analytics and location intelligence solution for Salesforce users from one-man shops to the likes of Time Warner and First Data, and they’re expanding from Salesforce to ServiceNow.

“At key times during our growth, Lighter Capital got us the funding we needed fast, allowing us to invest in the business and not to be distracted by fundraising”

John Stewart
CEO and co-founder, MapAnything, Inc.

“At key times during our growth, Lighter Capital got us the funding we needed fast, allowing us to invest in the business and not to be distracted by fundraising”

John Stewart
CEO and co-founder, MapAnything, Inc.