PE Assessment - Investment in Lead Generation Tech

Lead Generation Technology


Target is an emerging software company in the Mortgage Banking Space.  Headed by two industry veterans who desire to take the industry “lead generation” to the next level.  Their application is anchored in a database application which collects and uses consumer loan data to focus research on developing leads for Mortgage Bankers.  Established in 2018 and self-funded by investments from the two owners, target has reached the stage of BETA proof of concept and is now poised for go to market after a $6M funding round.

They have commitments for two $500,000 investments from Industry participants, one is from a top executive at PRMG, their strategic partner for BETA test.

We assign an overall Competency/Maturity rating of 3 to target.


High-level Review and Recommendations:

  • Worked with target’s accountant to build out forecast for five-year plan and tie-out all historical payment and cap table investments.
  • Performed market segmentation and detailed competitive analysis.
  • During our research of the Traditional Mortgage Bankers space, we were fortunate to have a video interview with a top executive in the traditional bankers’ space.  While our agreement was not to mention his Company or his name, we can report that he is a 20-year veteran of this space who has risen from a Mortgage Banker to a top-level position managing a large geographic area for his company.  
  • Interviewed current and past clients for better understanding of client service and client ROI during beta test period.
  • Our deep-dive technology assessment validated the system flow, IT Architecture and database assumptions and roadmap development.  
  • Reviewed target company products and services and readiness for delivery.
  • Prepared Sources and Uses Statement to provide LoBue client with expected cash flow demand, as well as identifying potential challenges and opportunities.

Selected Detailed Findings and Recommendations:

  • Because target has been developing on a shoestring budget the organization is very immature.  Buildout of the structure and key positions is a post funding imperative.
  • One possible concern is the current management, believing they can do it all.  While they have shown great capacity thus far, they are not adept at scaling a process intensive organization and must recruit the right executive to run support and service operations.
  • It appears that some of the forecasted positions may be overstaffed, while other roles require additional staffing to support GTM and other early manual activities.  
  • Developed forecasted organization charts for the years 2023 and 2025
  • As the company scales, the planned automation of human intervention in the Onboarding and customer service areas will be a critical success factor.
  • Document the current detailed on-boarding process to understand the time required (actual time and elapsed time) to on-board new clients as part of the GTM plan. During our client interviews, the onboarding process was identified as long and challenging.
  • A senior manager, who has relevant experience scaling a process and client service organization will be important to success.
  • A better IT roadmap which is more granular in linking tasks to resources, timing in man-months for each task, and linking same to the monthly financial forecast is important.
  • The proprietary client-facing CRM module appears to be a key product differentiator and should be a priority development item along with strong feedback loops from Bankers. This module will benefit clients and target leaders in understanding activity and reporting key metrics.
  • Addressing the smaller organizations that are Mortgage Brokers may be an extension of the current product with minimal system enhancements.
  • A user council is highly recommended to ensure target stays on the cutting edge of Industry needs/trends.
  • End-to-end technology will be important to ensure excellent service and keeping service and support efficient and cost-effective.
  • Include all reasonable product stream revenue in Forecast Model, including subscriptions, database access for large clients, and LMS in forecast model.  Also consider ancillary services, such as professional services and call center support.  
  • Currently target is providing many more leads at the given level of monthly fee. Review the relationship between pricing structure and the number of leads generated.
  • A full review should be carried out for insurance requirements, specifically cyber and business interruption coverages, for example.
  • Products and Services need to be carefully tracked as the business scales, so the support staff is adequate to insure seamless operations and service delivery.  
  • Sales and Marketing resources in the financial forecast may be overstated, as well as technology after 2023.
  • The current approach of keeping out of Mortgage Industry regulatory and compliance regulations is a very good strategic move.  However, with the ever-changing Consumer protection legislation at both the Federal and State levels it will be important to follow developments carefully. As target grows, the necessary development of company policy to avoid reputational risks and negative social media posts is important.


The initiative resulted in Private Equity Client moving forward with $5M investment in current round.