Interview: Lighter Capital Founders Liberate Small Businesses from Banks and VC’s

Financing a small business is challenging. Whether an entrepreneur chooses debt financing, angel investors, seed capital, venture capital, private equity, friends and family investment, bootstrapping, or other methods of financing the hassle and cost is rarely ideal.

In 2010, Lighter Capital was created to address the unique needs of business owners with a new form of growth funding. Instead of lending money at fixed rates, Lighter Capital decided to offer loans in exchange for a percentage of future revenues. Therefore, payments start small, and only increase as the company is able to grow revenues.

Two years later, BJ Lackland, former CFO of Power Efficiency Corporation, was appointed by Lighter Capital co-founder and executive chairman, Andy Sack to steward their mission of financial liberation for small businesses.

The unique loan service aims to remove the hassle, costliness, and fine print of bank and venture capital loans for tech and software startups. Comprised of entrepreneurs and former venture capital, data, and software experts, Lighter Capital seeks to pioneer a new way for aspiring entrepreneurs to finance their businesses and launch their ideas.

“We provide financing to small, growing entrepreneurial companies,” said BJ Lackland, Lighter Capital CEO. “We do that with a very unconventional loan. We provide between $50,000 to $500,000 in loans to small, growing (particularly software) businesses. We do that very, very rapidly. We want to provide entrepreneurs with rapid access to capital so that they can grow their businesses.”

Lighter Capital credits their technology platform for thorough but quick credit analysis of startups that wish to be funded, enabling the company to provide investment funding much more rapidly than traditional financing options.

Learn how Lighter Capital capitalized on three growing trends to successfully market their unconventional loan product and why Lackland believes a “one size fits all” approach to small business financing is not feasible in today’s economy.

How I Got Started:

Lighter Capital was founded with the idea that there were only three major trends. One was that banks had retreated from financing small businesses, so there really wasn’t capital available for small businesses.

The second trend was that you could use technology to evaluate businesses and evaluate their credit in new and interesting ways that banks weren’t doing. Essentially you could use that technology, a form of next generation credit analysis, to evaluate these businesses and fund them really quickly.

The last trend was that it takes relatively little capital now, especially for a software business, to get up and going. In the old days, it would take millions of dollars to launch a software product, but today it takes very little money.

We founded Lighter Capital to liberate small business owners from the onerous demands of banks and VCs. It’s time to use technology to remake credit analysis. It’s time for investment structures that work better for investors and entrepreneurs. In short, it’s time for some serious innovation in the financial services industry.

We primarily target software companies that have at least $200,000 in [annual] revenue. It can be online businesses or anything web-based.

Our loan products are sort of unconventional.