It took longer than expected, but PostProcess Technologies closed this year an $18 million Series C funding round.
About $12 million came from previous debt the Buffalo company converted to equity, and $6 million is new equity.
“It’s a brutal fundraising environment overall,” CEO Jeff Mize said, “but we got across the minimum threshold, and there continues to be a lot of enthusiasm for what we’re doing.”
PostProcess develops solutions for the additive manufacturing industry.
Another Buffalo business, less than 2 years old, recently raised a pre-seed round that was higher than anticipated. SelectFI closed a $4.5 million pre-seed round, after originally targeting $2.5 million.
So in a tough economic climate, how did they do it? Business First asked them to share their strategies.
Create a knowledgable internal team
SelectFI, which launched in May 2023, set up an advisory board that included industry experts early on. The startup’s software platform is an auto dealership regulatory compliance and financing pre-qualification tool that aims to let dealerships help customers with financing quickly, more accurately and in greater compliance with Federal Trade Commission fair lending practices.
That, along with having an experienced management team, helped the company raise funds, according to CFO Matthew Dorn, who was a CPA for several years. He's had previous stints as CFO and has raised funds while developing power plants with different partners.
Also on SelectFI's leadership team are Chief Marketing Officer Chris Laczi, previously vice president of marketing at Life Storage; founder Tom Vullo, who has been in the auto industry for over a decade; and Chief Operating Officer Drew Dorn, Matthew's brother and an engineer who built a tech-enabled smart grid energy business that he sold to a private equity fund.
“That was attractive to a lot of folks,” Matt Dorn said. “We were able to really communicate what our goals and strategies are and how to execute on a lot of things.”
Since January, the company has been adding to its revenue month-over-month by about 20%.
Look for advocates in your external networks
But it’s not just about the internal team. Both SelectFI and PostProcess raised with the help of their networks.
PostProcess’ existing investors, especially Chuck Lannon, co-founder of Life Storage who now resides in Florida, gave advice and brought in more investors.
“I couldn’t have done it without him,” Mize said.
It also helped to show the company’s progress. The business this year projects year-over-year top-line growth of more than 30% and gross margin expansion of 20%.
SelectFI also took advantage of existing connections, which helped them get introductions to other investors and allowed prospective newer investors to lean on the underwriting process that the company had already gone through.
“We met a lot of smart businesspeople during that process,” Laczi said. “They urged us to raise more capital and create more runway for ourselves. We said, ‘We should listen to that.’ ”
