LLamasoft wins Accelerate Michigan prize, goes for VC funding

Watching an established business like LLamasoft pitch amongst a room full of early stage start-ups is enough to make insiders take notice. To see its executive team that has traditionally disdained the venture capital chase pitch zealously for money from venture capitalists definitely turned some heads.

"Things that made you successful to a point can prevent you from reaching the next level sometimes," says Don Hicks, who co-founded LLamasoft with Toby Brzoznowski. As recently as last summer, Hicks and Brzoznowski defiantly bragged about not taking any investment capital to grow LLamasoft into a $10 million firm. In fact, Hicks half-jokingly called the VC chase a cult.

That was then. Today LLamasoft, a combination software and logistics firm, is working to raise $3 million in seed capital to scale up its business. The firm hopes to continue its torrential growth streak as of late; revenues rose by 80 percent this year and 100 percent last year. It is now aiming to up sales by 50 percent in 2012 as it works to expand its staff of 80 people, mainly based in downtown Ann Arbor.

Hicks believes he and Brzoznowski can keep growing LLamasoft as they currently have by reinvesting their profits into growing the firm. However, that means cash flow can sometimes come in spurts, which makes a 100-person firm much more vulnerable to sharp growing pains than a 10-person start-up.

"Structurally you have to have working capital if you want to keep growing at this rate," Hicks says.

LLamasoft took first place in the services category at this year's Accelerate Michigan competition, along with a $25,000 check. Hicks expects to lock down the remaining $2.975 million in seed capital by the end of this year.

Source: Don Hicks, co-founder of LLamasoft
Writer: Jon Zemke

Read more about Metro Detroit's growing entrepreneurial ecosystem at SEMichiganStartup.com.