Allied Payment Shares Secrets of Success
By: Karl R. LaPan, President & CEO, Northeast Indiana Innovation Center
Today, I attended the Northeast Indiana Innovation Center’s E3 (Entrepreneurial Ecosystem Enrichment) meeting, where I learned Ralph Marcuccilli’s secrets to venture fundraising success. Over the last five years, Ralph has raised nearly $5 Million dollars to build his company – Allied Payment. Allied Payment offers online bill payment service to financial institutions including banks and credit unions as well as directly to consumers. (https://www.alliedpayment.com)
When asked what angel investors in Northeast Indiana look for in investing, Ralph and several of his investors in the room shared the following:
- A committed founder who is personally, financially, and passionately committed to the business and its success. Founders need to be aligned with their investors and have skin in the game (a significant part of their net worth “at risk” regardless of what their net worth is.)
- Ensure NO part-timers at the top. You must have a full-time Founder or CEO or the business will never grow and scale.
- Create a robust and proven business model with major recurring revenue and big margins exceeding 30-50%+. High margins often can absolve many of the sins in growing a business (Things just don’t always work the way you planned, modeled, or assumed.)
- Surround yourself with credible people who believe in you and who support you by providing access their established networks and expertise (investors, talent, distribution, customer, and channel).
- Focus on realistic projections of where you are and where you want to go. Sophisticated investors will ask you about your last set of projections and where you are on achieving those business results.
Keep in mind a few investor concepts when thinking about raising investment funds for your business or venture:
- 7% of the investments generate 75% of the investor’s return. What makes you so special or what increases the likelihood that you can produce a 10-30x on the money?
- Less than 20% of the ventures seeking early stage capital actually get it. You are competing with a lot of great people and ventures out there. Why is your business model brilliant?
- Remember, people with ideas don’t mean they are entrepreneurs. It just means they might have a great idea, but less than 2% of ideas are likely to become something on the order of a scalable, growth-oriented business. You have to really show you can execute and deliver on your promises.
Thanks Ralph and team for taking the leap and doing what a small % of our population do – create jobs for their community and cool innovations for the world to consume. I also want to thank the angel investors in the room who see around the corner and bet on the potential of people to make something ‘big’ happen.
When you need advice or support in moving your venture forward, don’t forget about the Northeast Indiana Innovation Center (as your growth partner and your success address.