SoMoLend Holdings LLC recently acquired $400,000 from QED Investors thus closing their seed-stage funding to a laudable $2 million worth. They are looking at improving their software platform as well as expanding their marketing and social networking efforts.
The company’s CEO and Founder Candace Klein shares more about this recent funding through this e-interview with Lead411:
Who are your competitors and how are you different from them?
Our competitors include crowdfunding platforms such as: Indiegogo, Kickstarter or Kiva, and lending sites such as: Prosper and Lending Club.
SoMoLend.com is a debt-based (business loan) funding platform that matches small business borrowers with lenders (comprised of financial institutions, banks, accredited investors and friends and family of a business). SoMoLend is a transparent platform that allows lenders to know who they are investing in, and borrowers to know who their lenders are and they can communicate with each other. Lenders, who are typically local to the business, get a return on their investment in the form of an interest payment and in some cases additional rewards. Our loans typically range from $500 to $500,000.
Nobody else has this mix of a small business borrower, the product of a commercial loan and interest payment ROI, and the lender pool via a transparent platform that we do at this time.
Other crowdfunding sites offer donation, rewards or non-interest loans, and don’t specifically target small businesses. Other lending sites don’t have the transparency, small business focus or lending pool that we do.
What percentage of your marketing budget are spent on the following?
A. Advertising – 20%
B. Social Media Marketing – 10%
C. SEO – 10%
D. PR – 55%
E. Direct Marketing – 5%
F. Other – Affiliates, webinars, and speaking engagements are a big focus, and $0 cost
What marketing tactic has given you the highest ROI? What percentage ROI do you get back on this?
The speaking engagements have had the best results for lead generation and also resulted in many earned media opportunities, but they didn’t cost anything other than travel in some cases.
PR would be next and the ROI is approximately 30%
Last year we tested several marketing vehicles for the first time, and will continue to test this year as well. Digital advertising is more of a focus than print.
What do you plan to spend your new funding on? Product development? Marketing?
Our funding is going towards product development and marketing. We do ongoing development to refine our platform based on the needs of our customers and to support regulatory requirements, as well as further develop our friends and family fundraising campaign offering, and analytics tools.
From a marketing perspective our funding will go primarily towards customer acquisition and conversion efforts, fundraising campaign tools, as well as brand building. We are also going to invest in marketing automation software.
If this is your first round of financing and you’re the CEO, how many hours did you put into working on getting your financing? Was that taking up the most of your day?
Raising capital for the first time for my first startup was a full time job. I committed nearly 40 hours (of an 80 hour week) to raising capital for nearly 18 months in order to close on 2.2 million. This effort including calling potential investors, meeting with potential investors, and networking with others who could refer me to potential investors.
If you are the CEO, what are your biggest challenges?
I struggle with balancing my role as the visionary, fundraiser and operational leader. I spend so much time out of the office and away from my team that I fear I don’t offer them the guidance that they want and need from me.
How many employees do you have?
We have six full-time employees, and three part time.
When were you founded?
We were founded in 2011, the SoMoLend.com platform was launched in 2012.
How much did you revenue increase(if any) this year over last year?
This doesn’t apply, because the site wasn’t launched (and our ability to gain revenue) until mid 2012.
Want to know more about this recent funding? You can read more about it on this news release here.