The Ledger
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Benson: Lighter Capital required full 4-year interest on early exit
“They had a term that if we wanted to exit the loan early, like after two years, it was a four-year loan, if we want to pay it off after two years and take our money somewhere else, We had to pay them all the interest as if we had been there for four years”
Adrian: Lighter Capital quoted Latakoo a 2x loan repayment cap
“The terms we saw and we actually spoke to them, it would have been more like a hundred percent payback. So it would have been twice what they gave us, we would have to pay back. And others we've seen have been like in the three X category.”
Lackland: Lighter Capital achieves 96% accuracy predicting portfolio revenue
“We have a group of nine software developers, data scientists that have gotten really good overall throughout our portfolio. We're about 96% accuracy on average for predicting revenue.”
Benson: Badger Maps pays around 22% to 23% interest on Lighter Capital debt
“I think it was like 22, 23%.”
Benson: Early SaaS debt from Lighter Capital was capped at 3-4x MRR
“What didn't exist, well, I mean, the products that exist were more expensive, for starters, but they were also, they weren't willing to loan very much, right? So I think Leiter would do, like, three, and I'll get into this in my slides, I don't want to blow my…”
Benson: Lighter Capital RBF cost Badger Maps about 18% interest
“I think for me, it worked out to be about 18%, because we weren't that good at growing, but if we had been good at growing, it would have been a lot more expensive.”
Latka: Lighter Capital typically requires a 1.3x to 1.5x repayment cap
“The typical rates at lighter that they have a repayment cap of 1.3 to 1.5 X typically, which means if they lend you a hundred grand, you got to pay them 130 grand over three years up to 155 grand.”
Garen Hess recommends Riverside Acceleration Capital over competitors like Lighter Capital
“I would highly recommend them to any entrepreneurs looking around for that out there because I looked at a lot of other firms like lighter capital and others and nothing against the other firms, but these guys have been awesome.”
Ronzio: Fast-growing SaaS gets no more from Lighter Capital than credit cards
“They'll only give you a three or four times what your MRR is. And when you're growing at such an early stage like this, they look backwards. So they look at your last three months of our MRR and with how much we've been growing, you know, 30, 40% month over mo…”
Benson: Revenue-based debt fits cash-generative SaaS, not capital-hungry startups
“It's a great product for companies that throw off cash.
Right.
So if you have a,
A nice MRR and a growing MRR.
It's a nice way to raise money.
Obviously it wouldn't be a good fit if you're, you know, for a lot of companies that don't, that are capital hungry, …”
Lackland: Alternative Financing Borrowers Fall Into 'VC Later' or 'VC Never'
“They kind of break down our customer set into two different persona types. They're the types that are like VC later. They just kind of want to put off raising equity. And they're the types that are VC never. They're just like, they just want to run the busines…”
Lackland: Lighter Capital focuses on hitting singles rather than home runs
“Instead of being a home run winner, which we can't be we can't be home run hitter and we should never strike out. And so we're like the masters of a single basically. Like we're really good at getting like on base and not much further.”
Connor Lee: Revenue-based financing generally requires profitability and $1M ARR
“Usually these types of loans are only available to companies that have, you know, profitable, functional businesses doing, you know, over a million in ARR. I think that's their model.”
Carpel: SaaS financing platforms like FounderPath and Pipe do not require personal guarantees
“With Nathan's product, and pipe, and espresso, and lighter, as far as I know, almost every one of them do not have a personal guarantee.”
Benson borrowed $888,000 in four tranches from Lighter Capital
“And so I borrowed 888,000 dollars, two years and four tranches.”
ShipHero pays 10% to 20% interest on its Lighter Capital term loan
“It was I'll say between 10 and 20%.”
Rubin: ShipHero Was Profitable for the Entire Previous Year
“Well, we, so now that we took the money from lighter we'll dip into the negative this month, but for the entire last year, we were profitable.”
Rubin: ShipHero secured a term loan from Lighter Capital instead of revenue-based financing
“So they say they do revenue based financing and I had spoken to them and I said, I don't want to do revenue based financing. I want a term loan. And then they gave me a term loan.”
Lighter Capital's loan required no warrants, only key-person life insurance
“It's three year term. So it's like fantastic. I'm like anything else where you kind of stuck with them because you got warrants or you got a board seat, no board seat, no warrants. Only weird bit was I had to get life insurance for myself,”
Almabase's revenue-based debt takes 9% of its early cash receipts
“I think they basically put a cap in terms of for the first, I think, million dollars per year in cash receipts. It's about nine percent, if I remember correctly. And then between, from anywhere over one million to, I think, 1.5 or two million, it's five percen…”
Bank of America's $50K debt cap pushed Almabase to revenue-based financing
“We did, I think, talk to a bank and bank of America is our banker. We did talk to them, but there was lots of complications. And also they said, we can give you a maximum of 40 K, 50 K, something like that, which wasn't sufficient at the point that we raised. …”
Almabase repays 1.4x cap over three years for revenue-based financing
“So we are doing it at 40% you know, over three years. So for example, if we raise a hundred K, we're repaying 140 K and the way the repayment works is it's a cut or it's a percentage of monthly cash receipt, right?”
Kim: Sendlane's revenue-based debt carries a roughly 1.3x repayment cap
“I think for us, it's like a 1.3 per 1.3 X roughly. So essentially over a three year term, we're going to pay 1.3 times more than we take took in as money.”
Kim: Sendlane pays Lighter Capital 8.5% to 9% of monthly revenue
“For us with lighter than we worked with them, it's a three-year term, right? It's revenue based. So it's based on your revenue and it's tiered buckets based around your revenue. And it, Depending on how much you're making, they're taking a percentage up to abo…”
Sendlane took on multiple venture debt tranches from Lighter Capital
“Yeah, actually, we actually use debt to you know, we've been with lighter capital a couple times now with a couple different tranches, actually just as recent, recently as the company kind of exploded this year, a lot of our growth happened in 2020 this year, …”
Connor Lee: GoPersonas repaid $225,000 on a $150,000 Lighter Capital loan
“So we use letter capital. Yeah, we were, we haven't our loan was 150 K in actual loan and we had a 50% interest paid over, over three years. So we paid 225 K 70, 70,000, you know, in in, in, in fees and whatnot.”
Farrow: Aisle Planner utilized revenue-based financing from Lighter Capital
“We actually did a round of revenue funding with lighter capital a while back, and I couldn't have been more happy.”
Preuss: Lighter Capital funded Visible in 15 days from start to wire
“It was like 15 days from the start to the end. And it was cool. We did it. We did a podcast in series with them because we essentially just turned over our visible profile to the letter capital team and they had everything they needed. And we did it, you know,…”
MarketFactory used a $500k loan from Lighter Capital to bridge cash crunches
“Found a great partner in lighter capital based in Seattle. You know, they gave us like a 500 K AR 500 K loan.”
Klaff: Lighter Capital Caps Single-Client Concentration at 40%
“Threshold no more than 40% of revenue concentrating one client. We have 50% of revenue in the moment. Top three clients will be no more than 60% of revenue, and so we'd fail that test as well.”
Benson: Badger Maps pays around 19%-20% interest on Lighter Capital debt
“Probably like 19% ish.
20%.”
Benson: Badger Maps raised an additional $320k debt round
“We did another debt round
With the same people we did the original one for another, like, what do we do, like, 320 K?”
Lackland: Lighter Capital's $100M Facility Came Entirely From Community Investment Management
“We put the hundred million dollar financing, it actually all came from one financing source, a group in San Francisco called Community Investment Management, and they basically specialize in providing capital to tech-enabled small business lenders in great par…”
Lighter Capital offers pre-negotiated buyout discounts for startups raising equity rounds
“If you want to pay us off early, like if you go raise an equity round, you want to pay us off early. And usually that means in 12 months or 18 months after we funded them, you pay us a lesser total amount. So it might be like a 125 K or something like that. An…”
Lackland: Lighter Capital Targets $500K to $8M Annual Revenue Startups
“A minimum of 15 grand and like to see roughly recurring revenue anywhere up to like a million a month. We don't really have a ceiling on that, but it typically, that's kind of what we fund. Most of the companies we fund are kind of between the 500 K in revenue…”
Lackland: Lighter Capital did 101 deals last year, targeting near 200
“We did a hundred and, a 101 last year, and we're very, the goal this year is to get close to 200.”
Lackland: Lighter Capital is funding 10 to 12 companies monthly
“We're funding, eh, 10 to 12 companies a month right now.”
Lackland: Lighter Capital Funds Startups Growing From 10% to 500% Annually
“We fund companies that are growing at 10% per year. We fund companies that are growing at 500% per year.”
Lackland: Lighter Capital Has Raised $120 Million Across Two Funds
“You know, all total, we've raised a hundred and twenty million bucks. We start off with an initial fund of twenty million, and then we add on a hundred million dollar fund a little over a year ago.”
Lackland: Founders Spend 8 to 10 Hours Securing Lighter Capital Check
“We think entrepreneurs spend about eight to 10 hours with us before we write them a check, as opposed to, say, chasing down a bunch of angels or VCs.”
Lackland: Lighter Capital borrowers pay zero in months with zero revenue
“Literally, we have companies that get no company, no customer payments in a particular month. They'd literally pay as a zero. And that's part of the deal is we're kind of there to ride along with them on their growth trajectory.”
Lighter Capital Funds $250K on Average and Up to $2M Total
“Basically, on average, we provide companies about 250 K per funding. We'll go up to two million per company total.”
HipLead used revenue-based financing from Lighter Capital instead of raising equity
“No, it was actually it was actually a loan from lighter capital. Oh, it's sort of like a bank loan. But that it's invoice or revenue financing basically.”
HipLead raised over $200K in debt financing to make key hires
“It was a little over 200,000 dollars. Okay. It wasn't much. It was just to make a few key hires.”
Almabase raised $250,000 in revenue-based debt from Lighter Capital
“We raised, I think two 50 K in debt so far from lighter capital.”