WTF? RevenueLoan changed its name to...

A couple weeks ago, I wrote about how naming a company is a real pain ....but never mentioned the results of our naming efforts. Well, in this post, I'm happy to share with all of you that RevenueLoan is now LIGHTER CAPITAL.

Why Lighter Capital, you ask?

- We’re about more than RevenueLoans

- We're a lighter financial institution, as in fun and lighthearted

- And we plan on making raising capital lighter, as in easier and faster funding for small businesses

We’re about more than RevenueLoans

As we worked with small businesses over the past year, we realized there’s a lot more opportunity to disrupt the small business growth capital and lending incumbents.  We intend to be the team that causes that disruption. What’s screwed up about small business capital now? That really merits its own post, but…let's just say there's lots that's screwed up and if you're an entrepreneur with a business that is growing getting access to capital to grow your business is way too hard and the process success.  Getting money takes too much time, hassle, and work and the investors ask for too much (equity, control, interest rates, etc.) Lighter Capital changes all that -- and we do so with a deep understanding of what it takes to be an entrepreneur.

Lighter, as in fun and lighthearted

We aren’t your father’s local 3-6-3 bankers.  We don’t wear suits. Our offices don’t smell of rich mahogany. We know building a business takes hard work - getting funding shouldn’t make your life harder. So we wanted our name to represent our focus on keeping business upbeat and lighter. And even it we don't fund your business, we want to do so with respect and a smile and leave you feeling like you haven't wasted your time or had to dress up to be someone your not. We like quirkiness and appreciate weirdness and generally want to have fun building this company as you should have fun building yours.

Lighter, as in lightweight funding

I’ve been in both the entreprenuer’s shoes and the financier’s shoes for long enough to have seen where taking outside funding can get painful. Under the right circumstances, taking bank debt or VC funding can make sense, but we’ve seen a lot of companies where those sources of capital start to weigh-down a company instead of lifting it up. RevenueLoans give companies more flexibility without demanding your first-born-child. And we’re working to make it faster and simpler to get our money, so entrepreneurs can focus on what they do best – building exciting new businesses.

Expect to see some of these changes in our company and loan process in the coming months. I’m psyched out of my mind about some of the work our team is doing, and this name change is an exciting step in the direction we’re taking.

In the interest of being open and light – check out this video of our team debating the name change:

Small business lending is in trouble

Emily Maltby wrote a great piece in the Wall Street Journal this morning ( showing how crappy Small Business lending is today. There are some really powerful stats that show just how hard it is for small businesses to get money and how the big banks aren’t doing anything to help the problem:


- Total small business loans outstanding are now $609B, down 8.6% (Mar. 2011 v. Mar. 2010) Read: “Small businesses aren’t getting new loans after old loans are paid down”

- Big banks' outstanding loans to small businesses fell by 14% between March 2010 and March 2011. Read: “Big banks not lending to small businesses is the main cause of the problem”

- Business owners rank access to capital as the most important issue facing privately held companies. Read: “Small businesses NEED money”

- In the past six months, only 17% of loan-seeking businesses with less than $5 million in annual revenue landed bank financing. Read: “The fall in small business lending is due to banks not lending, there are plenty of companies out there looking for money that aren’t getting it”


Whenever I read stats like this it gets me fired up about the work RevenueLoan is doing to solve this problem. Stay tuned.


(Thanks for sending me the article, Rob)

How not to name your company

A couple days ago I talked about why it’s so hard to name your company, it's harder to name an existing company than I had thought. Coming up with a new name for RevenueLoan lead me down some funny paths. Throughout the process the team and I got frustrated enough that we tried some random strategies to keep the process fun and lighthearted. Some weird things we tried:

1) Roll the dice

2) Riff on James Bond movies

3) Name after your intern

Roll the dice

At one point, we had reduced the list of possible company names down to 3 names, all of which we decided were "good enough". After spending too many hours sitting around and debating the pros and cons of each name, I wrote the names on 3 slips of paper, crumpled them up, and threw them on the ground. The plan was to name the company with the name on the first piece of paper I picked up. I picked the first one up, read it aloud, and as I did....I changed the rules of the roll the dice game. I knew instantly that the first name was not the name I wanted and said "no, that's not it". And then there were two crumbled up pieces of paper and I declared that we were now in a roll the dice process of elimination game for the name.  I picked the second piece of crumbled paper and the second company name didn't feel that good either.  And low and behold, the third name felt pretty good. So I went with it. We announced to the team that we were [name on crumpled paper #3] (to be announced).

An hour later, I was driving home, and I decided I didn't like the name. So I sent an email to everyone saying I was having brand remorse and we needed to go back to the drawing board. Ugg. I was totally indecisive and was dragging everyone through a terrible process. I felt crappy.

Takeaway: Using the roll the dice strategy actually can work.  I just wouldn't commit to which ever one you pick first or last (too much chance)....rather, I'd suggest picking them with an idea that the last one you pick is the right name and then watch your emotional reaction to the names that you pick first or second. If you feel instant regret that the 3rd name is the name that chance picked for you then you probably have the wrong name. In other words, let your immediate reaction to the names shed light on which company name you choose. And whatever name you decide on using this process, sit on the name for at least a day before you just go without it. And it's OK to try again.

Riff on James Bond movies

Yes, this was something we tried. Basically, we plugged "Fund" into a bunch of James Bond movie titles. We came up with the following names

The Fund who Loved Me.

The Spy who Funded me.

Dr. Fund.

You Only Fund Twice.

Live and Let Fund.

You see where this went. Right into the toilet.

Takeaway: In a funny way, we had fun doing this and the names provided some comic relief. We actually liked a couple of the names - Funderball and The Man with the Golden Fund, but ultimately it was too bizarre for us to use as our actual company name.

Name after your intern

Kenton is an awesome developer working for us this summer before he goes to graduate school. In lieu of having an actual name, we began to refer to ourselves as Kenton, or The Kenton Group, or Kenton Financial. There were 2 problems with naming it Kenton - the first problem is that the story wouldn't exactly work. With Judy's Book , the name made sense - it was my mother in law's name and the site was inspired by her book of trusted local services. The second problem is that it sure can get confusing having an employee and a company with the same name - we imagined not knowing who or what we were talking about!

These tactics didn't exactly work for what we’re calling "the company formerly known as RevenueLoan" but they did help us keep our minds open and keep the process fun, or at least less sucky!

Why naming your company sucks

I've known for about 6 months that RevenueLoan was not a good company name. I determined that it is a product and not a company and so I started a process of creating a new company name about 2 months ago.  I thought that naming was important but didn't want to waste a lot of time, money and resources on getting a good name. In the past, I've seen companies get totally derailed by company naming and be totally unproductive while in the process of naming. I was determined not to let that happen here.  At the time, I thought it would take 2 weeks. I was wrong. It turns out naming your company is harder and sucks worse than I thought. I thought I knew how to name a company!

Well, I stand before you today a humbled man.  I’m going to share a bit about the process we went through and some tips for naming your company more efficiently than I just did. This blog has 4 parts and should help shed light on why naming your company sucks:

  1. It's your baby
  2. Domain squatters hate you
  3. All the good names are taken
  4. The team needs to be on board

It's your baby

Your company becomes a huge part of who you are. "Hi, I'm Johnny from Crummy Co." becomes the new way people know you. So the naming decision is hugely important - way more important than making sure you don't have mustard stains on your shirt or your fly isn’t down. Those things last at most a day. Your company name stays with you for a long time.

We had a lot of things that we wanted to convey with our name, so coming up with a name that fit all of those at once was more than a pain.  In fact, we had too many objectives and too many people to satisfy with our new name.  Naming a company with 6 people is like naming a child with input from both sets of grandparents -- it's a nightmare.

Domain squatters hate you

I was shocked how hard it was to find a domain. We couldn't find anything. It's amazing how domain squatters seem to think of every possible word ever. It also becomes an addicting game - is this one available? Nope. How about that one? Nope. I got totally sucked into the domain name availability game. You can try adjusting the spelling or add a word to the domain, but the further away you get from an actual word, the harder it becomes for people to find you.

All the good names are taken

About 3 weeks into the process, we had a name. It was good. We hi-fived each other and drank whiskey. As a final step, I emailed our attorney to file a trademark for the name. Bad news - the name was taken. To quote one guy on our team "Pretty sure none of us are excited about going back to the drawing board…" There's no trademark on children's names i.e. there can be lots of Andy Sacks in the world ....but in any given industry, you only get one company name, and trademarks are specifically designed to reduce confusion in any one market.

NOTE: While this was painful, I STRONGLY recommend doing trademark searches before you go too far down the road as a company with the risk that you don't own the trademark.  i.e. it's much costlier in the future to change a company name than now!

The team needs to be on board

If you've already hired a few employees, you need to be sure the team buys into the new company name. This isn't the worst thing in the world, but it adds another level of complexity to the naming process. Too many cooks in the kitchen, kind of thing. If you hired an employee with the name "Earth Friendlies" and suddenly change your name to "Cow Eaters" you risk putting your employees in a position where they aren't with you on your mission. Nobody on our team got too upset about any of the names we came up with, it just makes it drag on longer.

Ultimately, I'm happy to be done with the process. Look for another post about some of the ways we went about choosing a name and what we've finally decided on.

Should more angel investors consider a royalty based investment model?

I just answered this question on quora -- please vote it up here.

I absolutely think that royalty and revenue based finance should be considered by angels and funds. Ok -- I'm biased. I'm so convinced that revenue based finance is important that I started a company called RevenueLoan in addition to my equity orient Seattle based angel fund Founder's Co-op to pursue this model. Why? Because I think that there are lots of instances and lots of companies where this model is preferable for the entrepreneur than straight equity. Let me explain, revenue based investments have the following benefits when compared to straight equity:

  1. Generally, revenue based investments are cheaper for the entrepreneur than straight equity. Often, significantly cheaper. If you think about selling equity -- often that's for 20% of the company. One can think of that equity sale as a 20% perpetual royalty.
  2. Revenue based investments don't involve significant control provisions. Entrepreneurs who don't want the hassle of dealing with investors on the board of directors are attracted to royalty based finance.
  3. Revenue based investment align entrepreneur and investor incentives in growing revenues and growing the revenue line and thus, growing the business. This is GOOD! And the right focus. When the entrepreneur and business increase sales, the entrepreneur wins and the investor wins. When growing sales takes longer, the entrepreneur isn't punished. This is GOOD!
  4. The main objection to revenue based investments in my opinion revolve around the precious commodity of cash and not profit. It's true, revenue based investment require the company to have sufficient margin to pay them off and they take precious cash out of the company. That said, no investment is free and the benefits of revenue based investments far out weigh the costs.

In short, in my opinion, royalty and revenue based investments are a great tool for angels to have in their tool chest.  

Just my -- albeit biased -- $0.02.