Lighter Capital Intuit Developer Fund
Intuit has a core set of features that QuickBooks Online will provide, and if you need features specific to your industry, Intuit expects you to find an add-on product. It has taken Intuit a few years to get the applications interface (API) right, but now they have a robust and reliable platform that outside developers can use to plug their products in to QuickBooks Online.
To support the add-on community, Intuit has announced the creation of the Lighter Capital Intuit Developer Fund. This allocates $15 million of credit to provide capital to companies specifically developing add-on products for QuickBooks Online.
Initially, I thought that this was intended to help small startup companies that wanted to bring products to the QuickBooks Online community. However, the intent here is to work with companies that already have products that are generating a significant amount of revenue, to help those companies to expand and grow their existing products and company.
Lighter Capital is helping these companies “get to the next level” by, essentially, providing a loan that is a royalty arrangement. The add-on developer can receive from $50,000 up to $2 million in capital without having to give up equity in their company or have someone added to their board of directors. Typically these are 3 to 5 year term loans paid back from revenue that the company generates.
Qualifying companies need to have at least $15,000 a month in revenue to qualify. They don’t necessarily have to be profitable at this time.
Lighter Capital uses a highly automated system to do the initial qualifications. Approval typically takes 45 days from the start of the engagement. They are looking for three things:
- A “sticky revenue stream.” That is, once you get a customer you keep them for a long time.
- High gross margin businesses, where it is easy to maintain that revenue stream.
- Low revenue losses. The company should be growing, but not necessarily making a profit.
The advantage to the developer is that the approval process is relatively quick and easy, due to the large amount of automation in the initial process. Also, as I mentioned, the developer is not giving up shares of the business or bringing in new business partners.
It will be interesting to see how this works out. Lighter Capital funded just over 100 businesses last year in multiple markets. This funding is for established businesses that are looking to grow, not new startups. An example that they point to is Agiliron, a SaaS provider of multi-channel commerce systems that include retail point of sale, webstores, and more, and which integrates with QuickBooks Online. Agiliron is a company that was founded in 2007 and has been active in the QuickBooks Online market for several years, and that wanted additional capital to be able to scale up their company quickly now that they have an established product.
This is interesting due to the importance of add-on products in the QuickBooks Online ecosystem. I just wish that there was a way to get some funding to smaller companies, rather than just focus on those that already have a significant revenue stream.
Find-A-ProAdvisor Website Updates
Earlier this year I talked about the major overhaul of the Find-A-ProAdvisor website, and Intuit promoted these changes heavily at QuickBooks Connect 2017. The new information this time, for me, was a preview of some changes that will be released starting in December, specifically for tax consultants.
If your practice involves tax preparation or consulting, you will want to edit your ProAdvisor profile to update the new “tax expert” settings. If a client says that they are searching for tax planning, a new website will be shown that is similar to what I’m showing above.
Note that these qualifications are self-designated. That is, there isn’t any process that qualifies you as a “tax expert” other than your being a Certified ProAdvisor who checks off those boxes in your ProAdvisor profile.https://quickbooks.intuit.com/accountants/online/
In addition, Intuit announced that they are going to be adding “lead management” features to the ProAdvisor section of QuickBooks Online Accountant. I won’t go into details on this because it is all very tentative.
These kinds of developments show that Intuit continues to focus on supporting accounting professionals, and that they want QuickBooks Online Accountant to be place where you can manage all of your clients.
Wait a minute, isn’t QuickBooks Connect all about QuickBooks Online? It is true that for the first three years you couldn’t find any reference to QuickBooks Desktop at this show, but this year QuickBooks Enterprise got its foot in the door!
Building on what I said earlier this year in my article Is QuickBooks Desktop Dead? I continue to see indications that Intuit has realized that the desktop isn’t going away and that it needs to be supported. For example:
- There was a QuickBooks Enterprise booth at QuickBooks Connect 2017, sort of. An Intuit employee asked if I could meet him at the “desktop booth,” and my reaction was “What desktop booth?” It was there, off to the side of the exhibit hall, and with signs that almost nobody could see. I asked several of my friends at the show if they had seen the “desktop booth” and nobody knew that there was one. But it was there! This was a surprising and welcome change.
- As I understand it, Intuit has been reorganizing the QuickBooks Desktop management team, and there are more resources available there now than there were before. Of course, QuickBooks Enterprise is getting the most attention, but it helps all of the desktop products (except QuickBooks for Mac).
- In some cases, we are starting to see QuickBooks Desktop become more visible on the Intuit websites, as illustrated below. It has been a long time since I’ve seen the desktop product show up alongside QuickBooks Online the way I’m seeing here. I do suspect, though, that Intuit is doing some A/B testing on their website in this regard. If I go to this website from a different computer I see a different view, and the desktop product isn’t so prominent. Intuit uses A/B testing very often, which sometimes drives me crazy.
All in all, it is very encouraging to see increased visibility and support for the desktop product.
And the Winner Is: Shopvox!
In conjunction with QuickBooks Connect 2017, Intuit held the $100K App Showdown, a competition that offers a $100,000 grand prize to a developer of QuickBooks Online add-on products. Some of the finalists were firms that I’ve been very interested in following, such as Veem (which I mentioned in my article on top products from Accountex 2017), Recur 360, and Locate inventory.
The winner of this year’s competition was Shopvox, a product that is a comprehensive web-based solution for custom fabricators. This is aimed mainly at screen printing/embroidery firms, sign companies, and award/trophy companies, but it could fit any kind of custom manufacturer.
This is a very interesting product that I’m hoping to look at very closely. Custom manufacturing is an area that isn’t served well by QuickBooks (online or desktop), and I’ve been looking for a good solution for this kind of business. At the conference I was given a very detailed tour, and this seems to be a very comprehensive product that covers all of the important bases. My main concern is with what the learning curve will be for a small business of this type, and that is one aspect I’ll be spending more time investigating.
One major advantage to this product is that it integrates with QuickBooks Online, Xero, and QuickBooks Desktop. I really like products that can work with all three of these accounting systems!