Andy Sack (Randy Stewart photo)

Ready, set, invest. By August 31, Lighter Capital will pump $500,000 into a new business no matter how awful the investment opportunity.

The Seattle firm, formerly known as RevenueLoan and operated by Seattle angel investor Andy Sack, just kicked off an unusual competition in which it promises to provide $500,000 to the best company that applies for one of its so-called RevenueLoans.

And, as Sack notes, if just one odd-ball company makes a pitch, it will get the cash.

“What can I say?  We love to fund weird companies that make money,” explains Sack, who in addition to serving as CEO of Lighter Capital also oversees TechStars Seattle and Founder’s Co-op.

Lighter Capital is not a venture capital firm. In fact, it targets companies that are generating revenue of more than $1 million and just need an extra boost. It doesn’t take an equity stake as part of its investment, instead agreeing to a fixed percentage of revenues up to a certain cap. (More on how it works here).

In fact, Lighter Capital is more of a rival to traditional banks, which the firm isn’t afraid to poke fun of in its release. They write:

“The unstoppable funding countdown to August 31 might seem crazy to old-school bankers, who have been hiding in their marble offices since the financial crisis started in 2008.”

Sack and crew have shown a willingness to back the unusual. Past investments include a maker of goat milk ice cream and Tomato Battle, a Seattle startup that’s organizing events around the country in which people toss tomatoes at one another. Since 2010, it has pumped $1.1 million into companies.

Now, they are getting ready to bolster that total.

“We’re putting half a million bucks out there this month — come hell or high water,” notes Randall Lucas, a former venture capitalist who serves as vice president of Lighter Capital. “If the banks aren’t going to fund awesome, growing companies, we will.”

Lucas said that the terms of the investment will be negotiable, but it will likely be a pretty standard deal. For Lighter Capital, that typically means single-digit percentage of revenue, usually two to six percent, and a multi-year payback period, usually three to five years.

Comments

  • http://twitter.com/AndySack Andy Sack

    thanks for the love in the article, John

  • http://twitter.com/arrestly Arrestly

    I think this article is misleading – you say “no matter how awful the investment opportunity.”.  However, in order to apply you must have “explosive” revenues, and their definition is “a company that grows revenues at a frightingly rapid rate”. 

    So, in order to apply you must be an existing company making verifiable revenue, and demonstrate growth. 

    • http://twitter.com/lightercapital Lighter Capital

      Hi there — it’s true we want “explosive” revenue growth.  But the line in the sand is that we’re looking for it among folks who actually apply.  So while we want lots of TNT … we may be looking at M-80s.  ;)

  • Tatango

    I feel like this post will be referenced in the future as to the height of the tech bubble, just before everything went to hell… hahaha

  • http://twitter.com/AndySack Andy Sack

    Just want to add some clarity here.  We are committed to invest up to 500K in a company that shows explosive potential. John’s title is a bit misleading — I’m fun and light….well, at least I’m fun…One thing I try not to be is stupid.  I’m not actively looking to invest in bad companies! :-) And 500K doesn’t burn holes in my pockets.  Lighter Capital has a innovative financial product that allows us to invest in areas where VCs and banks don’t.  You can think about what we do as we rent money to business as growth capital.  

    • http://twitter.com/arrestly Arrestly

      Shows, or demonstrates?  The application is mostly financial, you MUST demonstrate explosive revenue, right? 

  • http://twitter.com/heydtrain Darren Kochansky

    I’m positive there are a few companies in town that will take full advantage of this challenge – and I think part of the allure will be knowing ‘yes or no’ by 8/31!  Brilliant, go get em Andy and team!

  • Simon Han

    This is a good opportunity for a company that falls in Lighter Capital’s revenue and gross margin sweet spot. I’m curious to see who secures the investment!

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