I've received a number of questions about this so this will be my first FAQ blog post.
Q: Why are you raising so much money?
A: Over the last two years we've entered in another phase of our growth where we think there are some excellent opportunities to grow through mergers and acquisitions as well as traditional organic growth. Last year we acquired two companies and we expect to target 1-2 new deals per year. This capital raise gives us the opportunity to do this more aggressively.
Q: What does this mean for existing Billtrust customers?
A: We think all good things. We will continue to invest heavily in our products, infrastructure, and support team. We launched several brand new products in 2012 to help our customers deal with billing and payment challenges and we expect this pace of innovation to continue or accelerate.
Q: How long did it take from the moment you started to when you closed on the financing?
A: Raising money is hard work. You need to produce a lot of materials, have a lot of meetings, so you can expect to have it suck 4-8 months of life away. We decided to get some assistance and hired an investment banking firm - Raymond James - to help us. So it still a took about six months, but Raymond James did about 75% of the work.
Q: What was the fund raising process like?
A: Raymond James ran a process where they identified over 50 possible investors that would potentially be interested in Billtrust. Each potential investor was asked to sign a Non-Disclosure Agreement (NDA) and then they were sent a Private Placement Memorandum (PPM). A PPM is basically a 50 page PowerPoint that covers all areas of the business including what you're planning on doing with the money. 15 firms submitted offers to invest of which 5 were deemed serious. The Billtrust management team met individually with each of the 5 and then after a bunch of back and forth, we selected Bain Capital Ventures.
Q: Why Bain Capital Ventures? Are they the same Bain Capital that is being vilified in the press for sending jobs overseas?
A: Bain Capital Ventures (BCV) invests in high growth opportunities and is a separate entity from Bain Capital. They stood out for a number of reasons. Any of the 5 finalists would have been a great partner. They all could have helped finance our M&A strategy. BCV stood out for two major reasons. The first is their incredible network of business contacts. I spoke with one BCV CEO who said that intro's from the Bain network resulted in about 80% of his new business. The second big reason was the person who would be joining our board - Matt Harris. When you raise money, the firm you raise the money is important, but far more important is the person from that firm you'll be dealing with. Matt has an incredible amount of payment experience, understands what Billtrust is trying to accomplish, and can challenge us on ways to make us even better.
Q: Is Billtrust profitable and if so, why do you need this money?
A: Billtrust is very profitable, which coincidentally also a good time to raise money.
Q: Is it time for a victory dance?
A: Not at all. Raising money is not a time to celebrate (maybe for a moment). Raising money is simply a milestone on the journey. For us, we hope it's a journey that leads to us being a nationwide powerhouse in the billing an payments space.
Q: What's next for Billtrust?
A: I don't know and I'm OK with not knowing. I've always been a firm believer that if you build a great company, you'll always have a lot of options.
If I missed anything, please ask in the comments.