Meet Daniel Lipinski, founder of Just Capital
Daniel Lipinski is a serial entrepreneur going from a logistics startup to founding his own venture funding firm, Just Capital. Right now, with many businesses desperate for capital, there’s no-one better to talk to about the fundraising landscape.
Hi Daniel, thanks for taking the time to chat to us today! Tell us a little bit about you and your founder journey so far.
I’ve had a winding journey into the venture space! My first company was a delivery firm, which I scaled to an acquisition. After that, I launched a business loan brokerage, bringing businesses and investors together. That was a strong company, but we weren’t really changing the game for the businesses themselves.
From my own experiences as a founder in logistics and then in the credit space, I realised there was a much bigger opportunity improving the type of financing available to businesses. That’s where the idea for Just Capital came from. It’s the type of funding I wish had existed when I was raising.
So, how is Just Capital different from other ways to finance your business?
Our model is based on revenue finance, which is the most founder-friendly approach we could build. We fund businesses with capital to grow up front and they repay the funding (plus a flat fee) with a small share of their sales over the next few months. We don’t charge any interest or take any equity. Your repayment is a percentage of your sales, so if you have a slow month, you pay less that month. Then as the company does well, we do well.
It’s much simpler and faster, with much less sacrifice in terms of time and the cost of capital. Most fundraising methods become a founder’s full-time job - with our model, funding takes a few days.
Things are crazy right now - what kind of businesses are you looking to fund?
In the midst of the crisis, we’re supporting a lot of ecommerce and online services - spaces like food and drink delivery, online education and retail, SaaS companies for remote office logistics. While the economy is dicey, there’s huge opportunity for companies in these areas
More generally, our market is great businesses who need more cash flow to unlock their potential. They don’t need someone telling them how to run their business or come in as partners - they just need extra rocket fuel. So, any online company that could scale up its performance on ad spend or inventory is perfect for us.
Having now launched Just Capital, what are you most proud of?
God that’s a hard one! We’re proud of our product, our service, the speed of sign-up, UX and so on. But another less obvious edge we have is the quality of our analysis and underwriting. We have amazing expertise from across the business finance industry. That means we can understand a business incredibly quickly and build the best possible funding offers bespoke to that business.
What kind of feedback do you get from founders?
Fund me again please! Seriously though, the feedback’s been really positive so far, which is very rewarding. In a lot of fundraising, the expectation is completely on the business: you have to prove you’re good enough for the bank or the VC. Our priority is to prove ourselves to our clients, to show them what we can do for them. So we’ve invested heavily in making the process super-fast and intuitive, as well as responsive customer service.
What do most companies not understand about fundraising?
Probably that equity funding is not your main goal as a company. It seems like some founders would rather raise a big round than make a profit. Equity does have a big role to play for many companies - we’ve taken equity funding ourselves - but it’s not the sole measure of your success. After all, if you’re growing fast and making money, why would you give away a share of that if you don’t absolutely have to.
Our dream clients are the ones who grow with us, taking bigger and bigger funding, reaching huge scale while keeping 100% of their equity.
What advice would you give to a founder about to raise?
Know your numbers. Know your space. Know your competitors. Also know that when you’re in front of investors, as great and knowledgeable as they may be, you’re the one with the courage and energy to create this opportunity. So give yourself a break.
What do you do to unwind?
Right now, not much - apart from the odd binge watch (Tiger King, anyone?). When the lockdown’s over though, I can’t wait to get back into my fly fishing.
