INSUBCONTINENT EXCLUSIVE:
fundraising from outside the venture world.Founders looking to raise capital to power their growing companies have more options than ever
Traditional bank loans are an option, of course
But between the two exists a growing world of firms and funds looking to put capital to work in young companies that have growing revenues
and predictable economics.Firms like Clearbanc are rising to meet demand for capital with more risk appetite than a traditional bank looking
for collateral, but less than an early-stage venture firm
Clearbanc offers growth-focused capital to ecommerce and consumer SaaS companies for a flat fee, repaid out of future revenues
Such revenue-based financing is becoming increasingly popular; you could say the category has roots in the sort of venture debt that groups
speaking generally, is attractive to SaaS and ecommerce companies, other types of startups can benefit from alt-capital sources as well
And, some firms that disburse money to growing companies without an explicit equity stake are finding a way to connect capital to
Capital with its innovative SEAL agreement, RevUp Capital, which offers services along with non-equity capital, and Capital, which both
invests and loans using its own proprietary rubric.After all, selling equity in your company to fund sales and marketing costs might not be
the most efficient way to finance growth; if you know you are going to get $3 out from $1 in spend, why sell forever shares to do so?Before
we dig in, there are many players in what we might call the alt-VC space
Lighter Capital came up again and again in emails from founders
Indie.vc has its own model that is pretty neat as well
(As always, email me if you have something to share.)
