IRALOGIX provides technology-enabled, fully paperless, white-label IRA record keeping and technology solutions. Its proprietary technology solutions empower any financial institution to customize its IRA offering and compete in all segments of the IRA market. Through modular technology, its clients can offer their clientele the ability to streamline their IRA service options, and helps them expand their business across all areas of the industry, profitably.
The success of that ability has allowed IRALOGIX to raise an $11 million expansion of its Series B in 2021 and $22 million Series C in 2022.
“In total we’ve raised $50 million in equity and venture debt to date,” says Founding Partner Joe Hipsky.
The company’s two recent raises were quite different. One was strategic and another semi-traditional venture capital.
“Somewhat of a tale of two raises, really, both with what we got for it, as well as the intent and, to a certain extent, that the more recent one was dependent upon that first one,” Hipsky says. “At that time, we had gone from a really early-stage company with some growing pains from some structural issues that we're going to prevent us from really getting the company to the promised land, if you will.”
The first investment of capital allowed IRALOGIX to position itself for growth. The most recent raise was led by a group of individual financial technology investors.
“That was really a collaborative approach between us and them,” Hipsky says. “We went to market with two asks, but it was the same ask, effectively. The timeline was the only difference — it was the same plan. Through round and round discussions with them, we arrived at taking a smaller, more measured approach, which required hiring a whole lot less people and in a very short period of time. We took that path and the uniqueness of it, with them leading it personally, was one (unique) aspect. But they were also able to bring a lot of industry players to the table, not only as investors, but additional help, if you will."
In the early days of investing, Hipsky says they didn’t take the correct approach.
“We did things wrong, and I knew it,” he says.
The early investors weren’t venture people.
“They were more corner-store, lifestyle business builders, which is a different sport and you do things differently,” Hipsky says.
What that led to was “just-in-time” investing, meaning they were raising capital constantly instead of getting ahead of the game.“We were never not raising,” he says. “We always just had enough capital to not drown, but couldn't make any plans, either.”
His advice to others is to get a minimum of 18 months of runway.
“That’s 18 months assuming things aren’t going to go correctly,” Hipsky says. “That gives you enough time to reach those milestones and those benchmarks in between to get that next-round investor interested in cutting a check as well.”
Hipsky spoke on the Smart Business Dealmakers Podcast about the two raises, what each was like, how he prepared and what the future holds for the business.