Startups, $120 Million Up For Grabs! As Close to “Free Money” as You Can Get

BJ Lackland

In Episode #658, Nathan interviews BJ Lackland. He has spent over 15 years as an investor in startups. As an investor, he’s been in VC and Angel and is now the CEO of Lighter Capital, where he oversees over 200 alternative investments in early stage tech companies. As an executive, he’s been on the executive team of 3 companies including CFO of a public tech company called Power Efficiency Corp. He’s raised and uploaded over $150M worth of capital.

Famous Five:

  • Favorite Book? – Crossing the Chasm
  • What CEO do you follow? – N/A
  • Favorite online tool? — Cirrus
  • How many hours of sleep do you get? — 4-5
  • If you could let your 20-year old self, know one thing, what would it be? – “Just keep seeking”

Time Stamped Show Notes:

  • 01:20 – Nathan introduces BJ to the show
  • 02:05 – BJ was at VC in the early 2000s for 5 years and focused on energy technology
  • 02:58 – Lighter Capital is a fintech company that revolutionized as a startup finance
    • 03:06 – They are using technology to improve entrepreneurs’ access to capital
  • 03:14 – Lighter Capital’s model
    • 03:23 – An entrepreneur spends 8-10 hours with them before they write a check
    • 03:30 – The revenue-based financing tends to be the best aspect of equity
  • 03:58 – On average, Lighter Capital provides companies $250K and can go up to $2M
    • 04:28 – Pay multiple is 1.5 to 2 times and paid typically over a 3 to 5-year period
    • 04:53 – If the company grows quickly, they can pay in a shorter time period
    • 05:00 – “We have every incentive of trying to help them grow”
    • 05:07 – Lighter Capital is really betting on the entrepreneurs
  • 05:20 – Lighter Capital has raised a total of $120M
    • 05:23 – The initial fund was $20M
  • 05:45 – Lighter Capital is raising from traditional LPs
  • 06:44 – Lighter Capital makes money like a bank does
  • 07:35 – Most lenders are worried about payment defaults
  • 07:44 – Lighter Capital focuses on helping companies grow long-term
  • 08:40 – Lighter Capital has a minimum threshold of $15K a month
  • 08:55 – Lighter Capital looks into 2 different audiences
    • 08:58 – One is their customers
    • 09:01 – The other one is their capital partner
  • 09:14 – Lighter Capital is funding 10-12 companies a month
  • 09:40 – Lighter Capital has a group of 9 developers and data scientists
  • 09:49 – Lighter Capital has 90% accuracy for predicting revenue
  • 10:45 – Lighter Capital still goes through several different factors for approving a company
  • 11:56 – In Episode 421, Nathan had Ceterus who worked with Lighter Capital
    • 12:17 – The payment can or cannot accelerate depending on the company
  • 12:44 – Companies can pay lighter capital earlier with a lesser amount
  • 13:56 – Lighter Capital funded companies that are just by themselves
  • 15:00 – Lighter Capital is also funding similar companies
  • 15:36 – In Episode 542, Nathan had HipLead and on Episode 560, Badger Maps, and they both worked with Lighter Capital
  • 17:34 – Lighter Capital worked with 101 companies last year
  • 17:54 – Lighter Capital closed a lot of deals last Christmas
  • 19:20 – The Famous Five

3 Key Points:

  1. Thousands of new businesses are coming out every month; having easy access to capital is a huge advantage for them.
  2. Predicting one company’s future revenue is beneficial, both for the investor and the company.
  3. Keep seeking, stay curious, and always find new things to learn about.

Resources Mentioned:

  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • Organifi – The juice was Nathan’s life saver during his trip in Southeast Asia
  • Klipfolio – Track your business performance across all departments for FREE
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Freshbooks – Nathan doesn’t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW
  • Show Notes provided by Mallard Creatives