Clearco’s CEO, Andrew Curtis, joined HatLaunch Founder and CEO Robert Hamm as well as HatLaunch's CFO Tyler Smith on the 2X eCommerce podcast this June. In a conversation guided by host Kunle Campbell, this edition of the 2X eCommerce podcast gave our team the chance to talk about growth, non-dilutive capital, and what it really takes for an ecommerce brand to grow and scale. Check out the episode and learn from our key takeaways.

Learning from 2X eCommerce Podcast: Ecommerce brands use Shopify and BigCommerce – but not all of them

One key takeaway from the 2X eCommerce podcast was that while many ecommerce brands choose sites like Shopify or BigCommerce, not all of them do. Robert Hamm worked as a software engineer prior to launching HatLaunch and built a custom platform to handle all of HatLaunch's workflows. From managing inventory to getting orders through production and even building the front-end, customer-facing website itself, Robert says automating tasks and delegating them to the right people was what allowed the business to scale. 

However, this same reason for HatLaunch’s success made it difficult to access working capital later on. When HatLaunch was seeking support for its efforts to scale – including hiring 45 employees and purchasing a warehouse – the company couldn’t just sync automatically with the software tools used by potential funding partners.

HatLaunch now uses a local bank for capital-intensive purchases, such as machinery, in addition to accessing support from Clearco to fund invoices for marketing spend. Thanks to the flexibility that Clearco offered in the application process – in this case, being able to manually review HatLaunch’s documents instead of automatically connecting to an ecommerce website – HatLaunch was able to access working capital support quickly, without needing to use other types of business loans.

Learning from 2X eCommerce Podcast: Ecommerce brands want to own what they create

Robert recommends avoiding early capital, at least during the initial stage of the venture. Early on, he says it was good to feel the pinch of early ad spend. Having to foot the bill for large invoices from Google or Meta made it essential for HatLaunch to become profitable (and find the most profitable forms of ad spend) as efficiently as possible. Funding the business (or giving away equity) too quickly could mean having a “funding safety net” that gets the business in a hole from funding unprofitable ad spend. 

Once the venture is scaling fast or maturing, however, both Robert and Tyler value the extra working capital – so long as they can retain their ownership stake. Tyler says that being flexible about how HatLaunch receives payments has been critical to the company’s success. This means giving their customers some additional leeway from time to time, especially when partnering with bigger businesses and working on larger scale projects that might require overseas sourcing from suppliers. 

Using Clearco’s Invoice Funding helps HatLaunch build partnerships with bigger businesses and reach the company’s next phase of growth. For Robert and Tyler, a major factor in this choice was not giving up ownership - even temporarily. According to Robert, HatLaunch uses a local bank to finance purchases like equipment. 

The bank wants first liens on the business in return, which is something the business owners need to consider when looking for capital – but this isn’t the case for alternative options like Invoice Funding. Clearco CEO Andrew Curtis says this arrangement is intentional: good funding partners should be savvy when deciding how to make the most of their funding capacity, and partners like HatLaunch are talented at turning ad spend for Meta or Google into 3 or 5 times that amount in revenue. 

Learning from 2X eCommerce Podcast: Ecommerce brands rate access to working capital high on their list of priorities

Whether invoice financing, bank loans, or some other form of borrowed capital is attained, it is clear that working capital is key to a successful ecommerce brands. For growth-focused founders looking to build the “engine” that generates their ecommerce sales, expenditures like marketing spend and inventory are areas where extra capital is welcome. Fast growing companies like HatLaunch are looking to free up working capital for advertising spend, which can make or break the business.

Fortunately, the company has the alternative option of funding their invoices with Clearco – freeing up to a million USD in receipts, that can then be used to support growing, funding, or expanding the business.