RevenueLoan Blog

February 8, 2011

Build it, Ship it, Fund it.

Filed under: news — Christian @ 3:09 pm

Twelve months ago it was crazy talk. Like the dude with the scraggly beard on the corner raving about the coming apocalypse, if you told someone you could conceive, build, and launch a company in a few months, they would have backed slowly away from you and avoided making any sudden movements.

Six months ago the tech media picked up on the rapid-launch and scraped around for a few examples to showcase, “Hey! Look at these lunatics! They designed, built, and launched a company in a month!”

In the last month this method of starting a company has ceased to be newsworthy in the “edge media” most of us read. The mainstream media still doesn’t know what to do with the story, but then if it isn’t about Lady Gaga shagging some Republican Senator, the mainstream echo chamber can’t process it.

Now the roadmaps for how to do a rapid-launch yourself are appearing, and one of the best ones I have seen is this post on 500 Startups by Dan Martell, the Silver Surfer. He shows how structuring your software properly can speed your development process, and get you that up-and-to-the-right growth curve:

Build a killer product faster : The secret of user activity streams and cohort metrics

Going with this accelerated methodology also means that funding becomes a really interesting matrix of variables. Getting a round of Angel or VC funding is just not going to fit in this timeframe. The amount of lawyer-hours and flight time alone are going to total more than your entire dev cycle!

And a bank? Forget about it. You don’t have enough collateral for them to even let you in the door.

Can you guess how you can fund your rapid startup? (You knew I was going to get RevenueLoan in here somewhere, didn’t you!)

If you have launched your product, are acquiring customers, they’re paying fees, and you need cash to fund growth to serve that hockey-stick-shaped growth curve, revenue based financing (RBF) is a very strong option for you for two reasons:

  1. It answers the immediate need (CASH! NOW!)
  2. It serves the long term desire to retain ownership and control of your fledgling company

So what happens if your spiffy new company can’t maintain that hockey-stick curve and acquire 1000 new paying customers a day for 18 months straight? If you got your growth funding using the RBF model you are still the full owner of the company. So you can’t get fired by your shareholders. You didn’t get a bank loan either, so you don’t have onerous monthly loan payments to make to the bank. Which – by the way – illustrates a cool feature of RBF funding:  Your monthly loan payment is pegged to a percentage (1.5%, for example) of your monthly revenues. So if revenues go down, so does your payment. Try asking your bank for flexible monthly payments!

By the end of 2011, the “1 month from concept to revenues” story will be so old and played out that even the mainstream media will be back to talking about Lady Gaga again. And businesspeople will understand the value of leveraging their revenues to get growth funding, rather than selling out to the first deep-pocket that comes along.

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2 Comments »

  1. We are at a point in our development where we could use additional funding and I am encouraged by this summary of Revenue Loan. We had some private investment monies to get us going but they have hit a point where they don’t want to put more monies into the company. We are very close to getting to the break even point but, we need additional funding to continue to build our sales. We just started getting into retail with our cleaning and disinfecting products and have a laundry detergent which is better than anything on the market which we have not promoted. All the products are Green Clean Institute certified and the cleaner also has the NSF certification. I will contact Revenue Loan to see if they are interested. Thanks for the tip.

    Comment by Patrick Hurst — March 24, 2011 @ 11:53 am | Reply

    • Glad to hear it, Patrick!

      The fastest way to get working with RevenueLoan is to fill out the Application Form on the web site. Just go to RevenueLoan.com and click the “Apply” button in the top right corner. When you put in your financials, our system will do some dark magic calculations in the background, and let us know the results. Then we will call you.

      Easy peasy. Looking forward to seeing your proposal!

      Comment by Christian — March 24, 2011 @ 12:43 pm | Reply


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