The following is a guest post by Alex Levin, who writes for JW Surety Bonds.
The early founders and employees of PayPal are famous for dreaming big. Known informally as the “PayPal Mafia,” these entrepreneurs have gone on to fund or help create numerous game-changing startups, including YouTube, Yelp, Flickr, LinkedIn and Facebook. And now Eric M. Jackson, the former VP of marketing for PayPal, has added his own contribution to the long list of PayPal Mafia internet startups – a private investment networking site called CapLinked.
According to Jackson, while the internet was busy revolutionizing all sorts of industries, the world of private investment went largely neglected. Facebook had made connecting with friends easier than ever, and YouTube put video entertainment at the fingertips of anyone with a computer, but professionals with a very real need for engaging in investment opportunities were stuck with old technology that was difficult to use. In order to remedy this, Jackson and co-founder Chris Gray created CapLinked as a way for investors and private companies to connect, manage deals and stay in touch even after a deal has been completed. And the results have been astounding – since its founding in 2009, over $27 billion dollars in deals have been made through CapLinked involving nearly 80,000 companies, making CapLinked an undeniable success.
And as Jackson puts it, the success indicates to him that CapLinked finally provides the service that the private investment community has needed for over a decade.
What was the inspiration for creating CapLinked?
I think the simplest way to answer is that in 2009, I was having coffee with [co-founder] Chris Gray and we were talking about business lessons we learnt in our careers – I had been at PayPal before and had a media company, so I had raised some capital before, and I was talking about how challenging it is to get a business up and running.
When it came to raising capital, there weren’t a lot of tools but then the other problem was to keep updated with investors. And Chris, who had been in investing for 15 years as well as private equity, he said from his side of the table there weren’t a lot of tools to help him invest and find opportunities either, and we realized that there should be a way to make this a lot easier than sharing information on LinkedIn or Facebook. So that realization was difficult for all parties involved and led us to create a new platform that’s social and easy to use and makes it a much simpler process.
How does CapLinked work?
At a very basic level, CapLinked gives companies, investors and their advisors tools for networking, managing and raising capital as well as exchanging updates. So think of it as a centralized platform for all the parties involved in private investing to come to and share info.
You can set up a profile and network on the site and be introduced to advisors and lawyers, and you can set up a deal room. And unlike other online deal rooms that can be very expensive and require longterm commitments, the site is free. So you set up a free deal room and populate it with info from your transaction, you can share it and it feels very social – so the software is not clunky and user unfriendly.
It’s meant to be much more enjoyable and really intuitive while also giving you the tools to go through due diligence. Then, after the deal is done the investor can continue receiving updates from this guy through a full suite of investor relation tools.
Generally speaking, it is a social network and you might say it’s a professional network where people that are looking for private investing come and find good prospects to work with and then are given the tools to be able to deal with them.
How does CapLinked differ from past private investment tools?
It really brings it out of 1995 and by that I mean that private investment has been stuck with old 1995-era technology for a long time – this includes spreadsheets, faxes, emails loaded with attachments, etc and it was a really old school process that desperately needed an update. When you look what’s going on with public markets, those investment tools are far more sophisticated and it’s time for private investment to catch up. It’s moving the entire industry away from email clients and lengthy cumbersome spreadsheets and moving it to a much more centralized and online environment – and even an environment that’s more secure than just emails flying around the internet. So it also protects privacy.
What has the success of CapLinked taught you?
The success of CapLinked has proven that it’s a product that people want. It’s really taken off and grown quickly and in the 13 months we’ve been available to the public, we have worked with technologies and industries that you wouldn’t expect to see – not just high tech but commercial, real estate, food and beverage and it just shows that a good set of tools is important for any business and that there is a real need for it in the business world.
Alex Levin is a writer for JW Surety Bonds, a surety bond agency licensed nationwide.