Likeable Local gets $500,000 debt financing; to expand Portland office
Photo / Courtesy of Likeable Local
Dave Kerpen, CEO of Likeable Local, says he's "super excited" about his company's Portland office and "the burgeoning Portland tech scene."
Social media software tool company Likeable Local has received $500,000 in debt funding to expand its Portland and New York offices.
The debt funding is from Lighter Capital, a Seattle company that specializes in revenue-based financing, meaning Likeable Local pays back a fixed percentage of its gross revenue each month until the loan is paid off.
“The debt funding doesn’t dilute my company in terms of giving up equity,” company co-founder and CEO Dave Kerpen told Mainebiz. He declined to specify the percentage he will pay back monthly, except to say it is in the single digits. Kerpen added that since revenues in a small company can vary month-to-month, the pay-back scheme works especially well in slower revenue months, when it would pay less. It also will pay more as the company grows.
With the new funding, Likeable Local has $2 million in funding to date. Early financing came in the form of convertible notes from Red Sox part-owner Tom DiBenedetto; 500 Startups in Mountain View, Calif.; and several angel investors.
Likeable Local also is seeking $1 million more to continue expanding both the Portland and New York offices. Kerpen said he already has talked to the Maine Venture Fund and Maine Angels, and will talk to the Bangor Angels next week.
“They’re trying to build a solution to a big problem: social media marketing for small- to medium-sized businesses,” said Maine Venture Fund Managing Director John Burns. “It’s a huge market and it’s a huge issue.”
Burns said smaller companies may not have the resources to hire a social media manager, and Likeable Local’s software could help. He said Maine Venture Fund is starting the process of due diligence for the potential investment.
Kerpen said the $1 million he is seeking would keep on the existing investors and give them and the new investors a total of 40% equity in his company. The current convertible notes would be converted into equity upon getting the new funding. He adds that the funding may come from both angels and venture capitalists.
Social media for smaller companies
Kerpen, who is based in New York, started Likeable Local two years ago after seeing a demand for the software from smaller companies. His other company, Likeable Media, now run by his wife, is an agency that performs social media work for large businesses such as 1-800-Flowers.
The Portland office, which opened in April 2013, currently has seven employees, and he plans to add three more this quarter using the new debt financing from Lighter Capital. He also will use the funds to add sales and operations staff in New York.
Kerpen said Portland is now the development and product headquarters, while New York handles sales and operations, but he said he may add sales staff in Portland next year.
The company is at 401 Cumberland Ave., a space that could house 25 employees. It would have to get more space to accommodate the plan for more than 100 employees in Portland in five years.
Likeable Local has more than 1,000 customers, mostly smaller businesses. It recently signed its first agreement with a national franchise, Papa John’s International Inc. Kerpen hopes to sign on more large companies with franchisees, and now is working in what he calls a beta model with 1-800-Flowers.
Smaller Maine clients include Androscoggin Dental Group in Lewiston and Oral and Maxillofacial Surgery of Maine in Bangor.
Big growth projected
The company currently is generating about $200,000 a month in sales, which translates into an annualized revenue run rate of $2.4 million this year. Kerpen said he is aiming for revenue of $21 million by the end of 2017 and $50 million by 2020.
Kerpen, who started his entrepreneurial career selling Crunch ‘n Munch gourmet popcorn at Fenway Park and Boston Garden, says the company’s social media product, Likeable Hub, is web-, cloud- and mobile app-based. Customers buy subscriptions ranging from $20 per month to $500 per month, depending on the features they use.
The $20 subscription includes access to the Likeable Hub content library, ideas for posting and a scheduling tool. Customers pay more for other features like ads, website setup and auto-posts across Twitter, Facebook and LinkedIn.
“The software helps manage social media, generate content and ideas, as well as generate ads and leads,” Kerpen said.
He said it offers more features than free programs like Hootsuite. He cited Main Street Hub, an Austin, Texas, Internet marketing service, as one competitor.
Kerpen initially set up the Portland office because his chief technology officer and co-founder Hugh Morgenbesser, wanted to stay in Portland. “I’m super excited about our Portland office and the burgeoning Portland tech scene,” Kerpen said.
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