Pipe: Business-Funding Fit
Building a new asset class and helping subscription businesses raise money smarter.
From Not Boring by Packy McCormick.
Today’s Not Boring is brought to you by…
Read on and I’ll tell you how Pipe is the smartest way to finance subscription businesses.
Hi friends 👋 ,
I love my job.
- In February, when Pipe announced its seed round, I knew that the company was going to be special. It solves a problem I’d been thinking a lot about and elegantly marries tech and finance. I was jealous I hadn’t thought of the solution!
- In July, when Alex Danco interviewed founder and co-CEO Harry Hurst and Pipe raised another $60 million, I knew my initial hunch was right.
- Last week, VC Guide included Pipe on its Wishlist of “companies we’d ‘quit our jobs for’ and ‘leave our 4-year vesting schedules early for’” alongside Not Boring favorites Stripe, DoNotPay, Figma, Mercury, Discord, and Webflow.
- On Monday, I included Pipe in my essay on software that’s eating the financial markets.
- Then on Tuesday, Harry and I decided to do a Not Boring deep dive on Pipe.
This is a company that I’ve admired from afar, and it’s surreal that I got to go behind the scenes. I’ve come away even more impressed. I can’t believe I get paid for this.
Speaking of which… I told you that when I write company deep dives, I would tell you whether I’m making money via CPA (I get paid when someone signs up for the product) or CPM (I get paid upfront no matter what happens). I had a choice on this one and I chose a CPA deal, because I think that any reader involved with a subscription business should work with Pipe.
Now let’s get to it.
Pipe: Business-Funding Fit
I know, I know… I’m getting paid to write this essay. But my reputation is more important to me than any one deal, and I’m willing to stake it on this: for any recurring revenue business, checking to see how much your recurring revenues are worth today on Pipe is a no-brainer. Not comparing Pipe to other forms of financing or discounting is a disservice to your shareholders, including yourself and your employees.
Pipe is building an entirely new asset class based on recurring revenue contracts. It’s not equity and it’s not a loan. Pipe lets businesses raise money today by selling their monthly or quarterly subscription cash flows directly through its platform. It’s as if you could convince all of your customers to pay you upfront, immediately in exchange for a small discount.
We’re going to go deep on the business, but I love making Not Boring readers money, so I’m going to tell you how to do that first. Here’s how it works:
- Sign up for Pipe and connect your banking, payment processing, and accounting software.
- Pipe instantly assigns your subscription revenue a rating.
- Once approved, you access the Pipe Trading Platform and can see how much investors are willing to pay for your subscription revenue right now. On average, investors pay $0.90 – $0.95 for every dollar of revenue they buy on Pipe.
- Choose how much or which of your contracts you want to trade from an auto-populated list.
- Click “Payout” and receive the money within a day.
- Pipe makes money like an exchange, charging a one-time maximum 1% fee to companies and another fee to investors.
From sign up to cash in bank in 24 hours:
That’s it. In less time than it takes to set up a Slack group, your company can raise as much money as it might in a months-long, dilutive venture capital fundraising process or in an equally painful venture debt raise that leaves you with liens on your business and warrants outstanding.
If you run or work for a recurring revenue business, you should see how much your monthly or quarterly cash flows are worth today. At the very least, it’s free and fun to check; at best, you might be able to fund your company’s growth without raising another round.
Who is Pipe for? Pipe works with companies that make recurring revenue – from SaaS to subscription content businesses, and everything in between. Pipe’s clients are small businesses with as little as $100k in ARR all the way up to publicly traded companies that make hundreds of millions in ARR. If your business makes recurring revenue, whether it’s venture-backed, bootstrapped, or public – chances are, Pipe can help you raise cheaper capital faster.
If that sounds like your business and you want to give it a try: Sign Up For Pipe
I only write deep dives about companies that I think can help your business. MainStreet, for example, has gotten Not Boring readers nearly $1 million back from the government already. But I also only write about companies that I think are fascinating to learn about. I’ve been excited about Pipe since long before Harry approached me about working together because of its potential to solve one of the biggest problems facing startups.