As part of our Female Founder series, The Startup Magazine caught up with Rebecca Kacaba, CEO and Co-Founder of the capital raising platform DealMaker (DealMaker.tech). DealMaker makes significant contributions to startup businesses around the world as a company that has facilitated over a billion dollars in capital raises for their clients in just a couple of years.
Before founding her startup, Rebecca practiced law on Bay Street for over 10 years, founded the startup practice group at one law firm and was co-chair of the Toronto Venture Technology and Emerging Growth Companies Group at another. Rebecca’s vision and drive have landed her in Lexpert’s top 40 under 40 and recognized as one of North America’s most innovative lawyers by the Financial Times.
In her interview with The Startup Magazine below, she discusses how capital raises open doors for entrepreneurs, how her background as a lawyer brought her where she is today, how she balances motherhood and entrepreneurship, and much more.
TSM: Describe what DealMaker does in 10 words or less:
Rebecca: A shopping cart for securities – online stores for raising capital.
TSM: With a bit more detail, what does DealMaker do?
Rebecca: DealMaker makes the process of raising capital online as simple as opening an online store. Our technology allows issuers to add an “invest now” button to their websites that powers a “checkout” for securities transactions. In 3 years we’ve powered 400+ issuers to raise over $1B via Regulation A+, Regulation D, and more.
TSM: What inspired you to start DealMaker? Share with us what problem you’re solving.
Rebecca: As a founder, raising capital is extremely difficult. It was difficult to watch the frustration build in these founders, see their lack of understanding and a lot of legacy processes slowing them down – we searched high and low but there weren’t any tools in the market that we felt were sufficiently equipped to help them. At its core, raising a round is a process that can very easily become dictated to you, and it can be tough to watch superstar founders slowly lose control over their raises as they search for investors, rely on third parties, etc., – we wanted to put control back in their hands.
TSM: How is DealMaker impacting the world/your clients?
Rebecca: In short, we make capital raising simple. The world of finance is evolving, and issuers of all shapes and sizes face increased pressure to grow faster and capitalize on the increasing opportunity of the retail capital markets. DealMaker is really the only solution that lets an organization execute sophisticated online raises. From document digitization to online payments, groundbreaking raises require the very best technology. We’re raising the bar and making it easy for more established companies to consider raising online.
At the end of the day, the vision is a single, global capital market – making it easy for ideas everywhere and anywhere to get funded. The internet and technology as a whole have connected the world in so many ways, and the capital markets have really lagged behind in that evolution by many years. From allowing issuers to more easily take advantage of a retail investor audience, to unlocking their capacity through advanced analytics and international audiences, we’re driving the market forward.
TSM: What are the disruptive factors in the capital raising process that make it so promising as a business?
Rebecca: The capital markets as a whole are perfectly ripe for significant innovation. An established and incredibly high volume industry largely based on antiquated practices and navigating complex and ever-changing regulation.
Technology brings with it a fresh perspective – automating a single piece of the market challenges the assumptions up and downstream that things have to stay “the way they’ve always been done”.
The innovation that the internet as a whole has brought to every industry has been slow to permeate the markets. President Obama signed the JOBS Act into law in 2015, and specifically called out the ability of companies to “raise money online” – changes and evolution like that come really once a generation, and the time to capitalize on the momentum of early adopters and build the tools that will keep that innovation growing is now or never.
TSM: Is Blockchain a tool in DealMaker’s future as it further innovates capital transactions?
Rebecca: It’s always something we’re looking at and actively exploring – especially within our technical teams. Being in the business of the purchase of “non-physical” goods (securities), it’s hard not to be fascinated with the world of digital and tokenized assets. Similar thinking with blockchain, where the idea of a decentralized ledger seems like it could be a sweeping innovation in an industry so ridden with verification requirements, eligibility checks, etc. Definitely something we’re keeping an eye on.
TSM: We have a global audience. As companies, and investors, are open to cross border capitalization, are there major hurdles to raising capital cross border?
Rebecca: There certainly can be – a lot of companies see the opportunity in leveraging a global base (or their global audience) to draw in capital, but legal and regulatory requirements can be especially challenging to navigate. We’ve seen a lot of issuers struggle with this, and be pleasantly surprised in using our technology how simple it can be if you automate a lot of the administrative work away.
Ultimately, technology will improve and simplify compliance obligations – borders “breaking down” will lead to more available capital and provide more markets for companies to enter and grow quickly.
TSM: Describe any DealMaker pivot point, and its impact on the company?
Rebecca: Early in 2020, we saw our target audience pivot as Reg A+ offerings increased dramatically in popularity, especially in the initial waves of COVID as an “online-first” approach became increasingly attractive to a lot of companies. Originally, our product was built “by lawyers, for lawyers”, and while that part of our business continues to thrive, it’s the growth of JOBS Act financings that have really propelled us forward.
Ultimately, the goal of the technology itself has remained clear since our inception – to simplify the process to raise capital and unlock capacity for growing companies. But seeing where the market was headed early in our lifecycle allowed us to anticipate “where the puck was going” and start aiming our go to market activity away from more “traditional” raises towards those done primarily online. We pivoted our target audience, but the core technology has been a set mission from the start.
The impact has been huge as Reg A+ and other “marketed” transactions have driven our growth, and ultimately been a huge part of helping drive our mission forward.
TSM: DealMaker is no longer a startup, it is a “scaleup”. What have been the primary challenges in your scaleup journey? Hiring? Quality control? Capital?
Rebecca: Growing a team at our pace while maintaining a high bar for quality is difficult for any organization. As our team grows larger and more international, it can be challenging to continue to identify the same level of “all-star” talent that built the foundation of our organization.
TSM: Going back to your early career decisions, tell us what factors influenced your decision to be an entrepreneur?
Rebecca: Practicing as a lawyer, I spent a lot of time working with insightful and visionary founders, advising them on some of the most significant and meaningful challenges they faced scaling their companies. Working with founders, especially those in the position of raising capital, is a mix of inspiring and frustrating – you’re moved by the hustle and capability of incredible people, but it can be hard to see them struggle with problems that they’re unable to solve.
Building DealMaker allowed us to really transform the way we helped founders navigate the financing process. Coming from a family of entrepreneurs, it felt natural to try and make something new that would help in a way that our traditional practice couldn’t.
TSM: And what characteristics do you have that particularly contributed to your ability to jump from a startup success to a scaleup success?
Rebecca: To move at this speed and size, success really boils down to the whole team’s ability and sync. As we have grown, maintaining a team that is able and willing to support one another has been a priority, and a huge factor in our growth. Working every day with very capable individuals who also have the capacity to admit when they are wrong and share what they’re learning is the ultimate motivator – it takes a lot of talent and confidence.
TSM: How do you handle the challenge of balancing the demands of entrepreneurship with personal life responsibilities and parenthood?
Rebecca: It’s never easy. I’m not going to say that I’m perfect at it either, at the end of the day we’re all human and it’s really all about trying our best to balance. Being laser focused about what you’re willing to spend your time on, and being willing to say no, helps. What drives me to balance these kinds of demands is really that I want my daughters to look up to me as a leader and role model in their lives. That gets me up and running in the morning.
TSM: With all of your experience helping startups and as an entrepreneur yourself, what is the most important thing you can tell startup founders?
Rebecca: It’s hard to nail down a single thing – a lot of what drives success as a founder is the commitment and the mindset. That underpins everything else. Some of the best advice I received (or usually give to founders) includes:
- Identify the pain point or market gap you are trying to address/fix. While you may fix many intertwined problems along the way, stay focused on what the big picture problem is that you are solving and what the added benefit is for your customers. What are they gaining from you?
- Use your network. You need to stay connected to different players in your space to keep your pulse on the industry. Gathering the data and always keeping your perspective current makes it easier to navigate changes
- Take the time to evaluate competitive products in the market and compare your solution to the current and future needs. This helps assess the situation from a customer’s perspective rather than being reactive to competitor products.
- Seek feedback. We’re hyper-focused on having meaningful conversations with our current and potential customers and system users to acquire critical feedback, which helps us improve our product and tech in real time.
- Build a strong team. Our motto is “Play for the name on the front, not the name on the back.” Wins are shared together, and losses are felt by everybody – it’s really impossible to do everything alone, and the most impactful investment you can make is in people.
TSM: That is fantastic advice Rebecca. Thank you for your insights and good luck on your journey.
Rebecca Kacaba, CEO and Co-Founder of DealMaker
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