Goldilocks Featuring: Dana Love of Radpay.
Radpay is a simpler, friendlier, more cost-effective solution for merchants to accept card payments. Using Radpay’s patent-pending blockchain-based payment platform, merchants can increase their net margin by 40% to 200%, depending on the type of merchant, overnight, with no investment. Founded in July 2018, Radpay’s recently announced oversubscribed equity investment round is the first outside funding the company has received.
1. What was the inspiration for Radpay? Were there any personal situations you encountered that gave you the idea, or was the reasoning something you saw in the market?
We saw a chance to level the playing field for entrepreneurs and small merchants. My co-founder Jared founded, ran, and exited a web hosting company called Brinkster. He felt the pain Radpay is addressing. It’s much more than high rates, it’s a combination of sketchy customer service, high rates, a lack of innovation, hidden fees, and a convoluted ecosystem. As for me, I saw another chance to use technology and novel thinking to disrupt a huge industry.
2. You raised a $1.2M round led by Resiliency Ventures, what were you looking for with your new funding? How has your business plan changed with the fresh capital?
We didn’t have a lead investor, which is to say all investors did their own diligence. That’s not the best way to raise money, but it’s the hand we were dealt. One big upside to it: our pitch got really good because every investor looked at Radpay from a different viewpoint. This is the best group of investors I’ve seen.
3. Did you find the investors you were looking for, or did you find funding in an unexpected place?
Phoenix is a tough market for fundraising. We scoured the region and then went outside the area. One learning: invest in Pitchbook early, and use their research to help identify locations where investors live and work.
4. How did you pitch your company? - What were the metrics you were most inclined to put forward, which did you think didn’t show you in such a good light?
I pitched my first company in 1995. Since then, the seismic shift in investment appetite outside of the Bay Area has made it daunting to start and grow a company. When an investor wants to see a product, customers, revenue, and a sales pipeline in exchange for a small seed investment, look elsewhere. Be honest about your warts, and about your wins. It’s too easy to push aside the negative and over-emphasize the positive. Try hard to be objective about your metrics.
If you don’t have revenue, and Radpay didn’t when we closed the round, have pre-sales. And keep your customer close, since a good customer reference can make a big impact. But don’t let investors harass your customers: save them for the big checks.
5. Were there any ‘I can’t believe that just happened’ moments during your pitches? Was there a moment when you knew that an investor was going to make an offer?
We had an inbound investor. He literally cold-called us to put money in. Between Jared and me, we have seven startups and hundreds of millions of dollars in raised capital. That was our first inbound investor, though.
6. What are Radpay’s expansion plans? What sort of projections do you have for the short and long terms, both in terms of team building and services?
We’re a SaaS company, which often means a lean overhead. But Radpay is a payment processor, and fintech companies spend a lot on compliance, finance, treasury, security, and legal. We’re working to grow headcount with revenue, and also to make sure we hire talent early.
Our services will grow to encompass the 62 novel claims Radpay currently has in front of the patent office. And since we’re constantly thinking about new patent applications, our development team has a wealth of fun, valuable things to build.
7. What do you feel like your competition is? What sort of plans do you have to further distinguish yourself from other startups?
Our competition is fascinating. They’re giants. They’re also new entrants in a 70-year-old industry. Some, like Stripe, are less than 10 years old. Most are less than 25 years old. In the startup community, we’re distinguished by our intellectual property portfolio, by the way in which we’re solving the problem, and by our intense focus on merchants. It’s easy to get distracted from that focus. Don’t let it happen.