Please provide a brief overview of your company, the service you provide/product you make, and the main audience you serve.
Founded in 2016, Redline Steel specializes in custom home decor manufacturing and distribution. Our focus is on products created primarily from steel, but we’ve recently transitioned into using other materials such as canvas and candle products. We have plans for expansion into even more items including wreaths, cutting boards, lamps and rugs — really any product within the home decor industry.
Based in Huntsville, Alabama, Redline Steel is a veteran-owned and operated company and 100 percent of the products are manufactured in the United States.
- Did you ever explore VC or other equity funding? If so, explain why you did not move forward with that option?
Prior to the capital infusion from Decathlon Capital, all of Redline Steel’s financing had been bootstrapped. We had been able to sustain growth from month to month with the revenues we made, but we had reached a point where we were ready to scale in a big way. As the sole owner of Redline Steel, I have a very specific vision for this company over the next several years and I’m not ready to give up equity just yet— so venture capital and other equity lending was not an option I wanted to pursue, especially since the company is still fairly young.
I also wanted to find a lender who would be a strategic business partner and who could offer more than a simple cash investment. A true financial partner can elevate growth opportunities for you to maximize the rate of return, and you won’t see something like that in a traditional bank loan.
- What were your original goals with the funding from Decathlon Capital?
We went through a very difficult fourth quarter at the end of 2018, where we had scaled the business into a larger building and increased our production. It took a little bit more overhead cash flow than we had anticipated, and we were struggling to keep up with the growth. In Spring 2019, we partnered with Decathlon Capital in order to continue on this upward growth trajectory and expand into the larger building, as well as leverage some assets that we had previously purchased.
In the three years that Redline Steel has been operational, we’ve scaled from a 5,000-square-foot building into the 110,000-square-foot building we are in now, and we’ve produced over 4 million products in that time period. We are on track to have our products in over a million homes by the end of this year. Right now, we are 100-percent direct to consumer with plans to expand into wholesale bulk orders next year. The capital infusion from Decathlon Capital came at a peak time that was necessary to continue this growth pattern.
- Are there any growth numbers you can share as of now (how much you’ve grown since capital infusion, data/numbers)?
Since gaining funding from Decathlon Capital, we have been focused on reworking our original business model and re-creating a foundation to build upon for the next few years. We’ve closed around $40 million in revenues as a business in the last three years, and it took us getting to this point in order to go back and start laying the groundwork to create stable company growth. This time around, we are rebuilding on concrete instead of quicksand, which will make growth more reliable and sustainable.
- In what ways did the funding from Decathlon Capital catalyze your business growth?
The funding from Decathlon Capital put us in a position to sustain our growing business model. We needed capital in order to expand, and partnering with Decathlon was a lot faster and more advantageous than going with a traditional lender. I also liked the fact that they didn’t require us to surrender any equity.
It’s been a necessary year for us to create a sustainable foundation, but next year we’ll be able to really take what we’ve built and scale it to be a lot more profitable because of what we’re putting in place right now.
- If you could tell business leaders/companies seeking funding one thing about revenue-based financing, what would it be?
Entrepreneurs and business owners should explore all of their options when seeking funding. Equity funding isn’t right for all companies, especially smaller companies that have a lot more room for scalability. You need to weigh all your options. Would you rather give up a stake in your company long term for short term cash flow? For me it didn’t make sense.
It was also important for me to find a true partner that could provide not only cash up front, but support for business growth. For entrepreneurs that are just getting started, especially hyper-growth businesses that need cash to continue to scale and grow, revenue-based financing is a great funding model so that you don’t give up equity too soon in your business at a lower price point.
