Venture capital for Paladin Data Corporation: Why not?

Paladin CEO Mike Williamson explains the company’s funding philosophy 

Every so often, someone asks me why Paladin has never taken venture capital or private equity funding. The question usually comes up after a newer point-of-sale company announces a big funding round. If outside money helps other software companies grow quickly, why not take it? 

My answer is simple: Our customers and employees are the only investors we answer to, and we want to keep it that way. 

Who owns Paladin, and why does ownership matter? 

Dan and Judie Nesmith founded Paladin in 1980 as an independent company with no outside investors. The company has remained independent ever since, and as Dan and Judie approach retirement, we now operate under an employee ownership model. Those choices weren’t made for the sake of marketing. They determine who sits at the table when we make choices about our products, our prices and our support. 

Venture capital, meanwhile, isn’t a gift. It’s an investment, and investors expect a return within a set period of time. That often means pressure to grow as fast as possible, raise prices, lock customers into long contracts or high payment processing fees, or prepare the company for a sale. None of those goals are wrong for every business, but none of them puts an independent retailer’s success first. 

When the people who own Paladin are the same people who answer your support calls, write your software and maintain your supplier integrations, we all have the same goal: your long-term success. Our employees’ ownership stakes grow over time, and retirement options based on that ownership reward long, productive careers. We aren’t building Paladin to flip it. We’re building it to last. 

Why doesn’t Paladin require long-term contracts? 

Paladin users can see our funding philosophy in our contracts. Subscriptions for our products and services run month to month, with no long-term commitments and no cancellation fees. 

That isn’t a risk we take lightly. We do it because we believe in maximizing flexibility for the stores we serve. If we weren’t confident in the quality and reliability of our products and services, we couldn’t work this way. 

Can venture capital replace industry experience? 

Money can hire developers, designers and salespeople. It can’t buy decades of learning what really happens at a hardware store counter, in a lumberyard or behind a pharmacy register. 

Over nearly five decades now, Paladin has built thousands of capabilities based directly on customer feedback and real-world business needs. Many of them solve problems that only show up after years of serving this industry. The same is true of supplier relationships. Electronic ordering, loyalty programs, rebates and invoice processing all depend on integrations that need ongoing development and long-term collaboration with suppliers. Strong supplier relationships take decades to build, not months. 

Paladin’s longevity doesn’t mean we’re afraid of change, either. Our workflows, features and design keep evolving to meet your needs. We just pay for that progress with revenue from customers who find value in our platform – not with dollars borrowed from outside the company or the timeline that comes with them. 

Where does Paladin invest instead of paying outside investors? 

When a company doesn’t send profits to outside investors, it can put them back into the things customers value most. For Paladin, that means products and support. 

Our renowned support team is 100% US-based. It’s available 12-1/2 hours a day on weekdays and 24/7 for store-down emergencies, by phone, email and chat. After every support interaction, we ask clients how likely they are to recommend Paladin, and our running average score is 9 out of 10. In an industry with some infamously bad support options, we work hard to maintain our reputation as support perfectionists. 

In terms of investment in our product lines, ongoing innovation and modern technology have always been our top priorities. We’ve been adding features and refining designs and underlying tech to better serve our customers since day one. Each PaladinPOS™ update brings security or functionality advances that help ensure long-term stability and profitability. PaladinGo™ and PaladinShop™ represent all-new products for Paladin customers that have shattered barriers to e-commerce solutions and mobile operations. Our most exciting new products yet are in development and testing as we speak. They build on our years of experience with analytics and AI and will deliver new opportunities for every store running the Paladin system to take their business success to the next level. 

What should retailers ask a POS vendor about funding and ownership? 

If you’re evaluating a new point-of-sale system, I’d encourage you to ask about more than features and price: 

• Who owns the company, and what do they expect from it? 

• Is the company likely to be sold or merged in the next few years? If so, what happens to your contract, your data, and your support? 

• Do you have to sign a long-term agreement? If so, why? 

• Which capabilities are available today, and which are “planned for the future?” 

• What do your suppliers say about the vendor’s integrations? Are they authorized and certified? 

Why doesn’t Paladin take venture capital? 

Bottom line: We don’t need it, and our customers are better off without it. We’re here to stay, and our job is not only to make sure Paladin succeeds in the long term, but to ensure that our customers share in that success. 

Want to see what an employee-owned POS partner can do for your store? Call 800.725.2346 or contact our team to talk with a Paladin specialist.