Compare Funding Options for Your Startup

LIGHTER CAPITAL WEBINAR © COPYRIGHT 2015
Funding Options
for Growing Technology
Companies
An Insider’s Guide

› Mission: make fundraising
process more efficient utilizing
technology and alternative
structures
› Funded +60 tech companies:
Most active revenue-based
finance lender in the country
› $50K-$1M in growth capital
› Entrepreneur-aligned structure
About Lighter Capital

Lighter Capital: Director since 2014
Investment Banking: Senior Partner at GT
Securities; Focus on emerging technology companies
capital raising and M&A; raised +$50m in combined
equity/debt transactions
Startup: Business Development, Finance + Client
Management roles at various venture and angel-
backed digital media, mobile and music technology
companies
Other: Angel investor in various music technology
companies
MBA - University of Washington
BA – University of Texas
p3
+10 years financing early
stage tech companies, either
as an entrepreneur or investor.
Over $50M raised or invested
Presenter : R. Branden Harper

Macro: Trends + Paths + Tradeoffs
Micro: Company Profile + Goals
Fundraising Tips
Lighter Capital’s Solution
p4
Agenda

Macro: Trends in Funding Landscape
Cost of Entry
Speed of
Innovation
More Startups
Angel/VC
Larger Funds
Larger Checks
Series A is
New B
Additional
Sources of
Capital
Corporate
Venture
Debt +
Crowdfunding
p5

VC Backed Non VC
Revenue$
5m
Series B
Corporate Venture
Established
Ideation
Launch &
Traction
Growth &
Scale
Breakout
Angels / Incubators
/Crowdfunding
Series C
Debt
Equity
Tech Banks
Series A
Bootstrap / Friends &
Family
Revenue-Based
Financing
Blended
Series A
Series B
Traditional Banks
Tech Banks
Series C
Macro: Funding Paths
Angels / Incubators
/Crowdfunding
Angels / Incubators
/Crowdfunding
Family
Family
Revenue-Based
Financing
Tech Banks
p6

Bank / Debt
Revenue-Based
Finance
Venture
Capital
Guarantees &
Controls
Financial Covenants
Sometimes Personal
Guarantees
No Financial Covenants
No Personal Guarantees
Partner in the Business
(Board Seat, Voting
Rights)
Added Value Low / None Medium High
Dilution None / Low None High
Payment
Flexibility
Low:
Fixed Payments
Medium:
Variable Payments
High:
No Payments
Speed 4-8 months 4 weeks
Highly variable. Typical
3-6 months focused
effort
p7
Macro: Equity / Debt Considerations

Stage, Traction & Capital Requirement
› What is the current company stage? Rate of growth?
› How big is your addressable market? Higher/lower than $1B?
› Ready for scale?
• Product-Market fit?
• Revenue / pricing model?
• What does your sales pipeline look like? How long are sales cycle?
› How much capital do you need to get to the next stage?
Team
› Well-rounded and committed team able to handle increased
complexities? Need for key hires?
p8
Micro: Your Company’s Fundraising Profile

› Equity Valuation? What % is worth taking on investment?
› Control Are you the driver? Who makes key decisions?
› Value-add More than just money?
› Risk Tolerance Personal assets?
› Timeframe How long will raising funds take?
› Horizon Exit strategy? Build to exit? Build and hold?
› Culture Is there alignment?
p9
Micro: Your Company’s Fundraising Goals

LIGHTER CAPITAL WEBINAR © COPYRIGHT 2015 p10
Know Your Numbers
› Historical/Projections
› Ability to defend your assumptions: growth, capital requirements
› Pivots, capitalization, customers
Document Your Company
› One-page/Executive Summary/Deck/Product Demo
Activate Your Network
Legal + Accounting
Customer, Vendor, Partner References
Keep Momentum
› Follow up, set target dates to funding, sense of urgency
Fundraising Tips

Up to $1M or 33% of annualized revenue run rate
› No set interest rate
› Matures in 5 years or when cumulative payments equal a set
amount, usually 1.5 – 2.5x principal
› Monthly payments are a fixed percent of revenue, 2-8% range
› Small cash upside participation
Example Loan
› Annual Revenues: $1M
› Principal: $200K
› Maturity: 5 years
› Payment: 5% of monthly revenue
› Repayment: 1.75x principal [$350K]
› Upside Participation: $50K at liquidity event
CumulativePayments
Principal
Loan Maturity
1.5x
to
2.5x
Principal
Revenue-based Financing

Early Growth Stage Technology Companies
Financials:
› Revenue Min: $15k+ / month
› Gross Margin: High (50%+)
› Profitability: Not required, but
clear path to profitability from our funds
› Other Debt: Not too high (unless
convertible debt)
› Customer Base: No major concentration
› Recurring Revenue or Repeat Customers
Management:
› High ownership, full time dedication
Geography:
› HQ in US or Canada
Use of Funds:
› Growth: Sales, marketing, product
p12
Software, SaaS, Digital Media, Tech Services and similar
Lighter Capital’s Investment Criteria

Result: We fund +27% of companies that meet our criteria
Company
snapshot
Create a high level
company overview online
in 10 minutes.
Getting
the details
We will send you a link
to upload and provide financial
statements, customer and
team information followed by
one or two calls with our
underwriting team.
Closing
the deal
We issue a Term Sheet
for review. Once agreed,
you are funded
STEP 1 STEP 2 STEP 3
Lighter Capital’s Funding Process

LIGHTER CAPITAL WEBINAR © COPYRIGHT 2015 14
› SaaS company on Salesforce platform
› 4 rounds of funding, totaling $1M
› No prior outside capital
› Grew 1,995% between 2010-2013
› Recently named #227 on Inc. 500 fastest
growing private companies, and #15 in the
software industry
› SaaS solution for mental health
professionals
› Used $250K for product development,
sales & marketing
› Monthly revenue grew >10X
› Recently raised a $11M equity round
Example Portfolio Companies

Want to Learn More?
Visit Our Website
www.lightercapital.com
Apply Online
www.lightercapital.com/apply
See If You Qualify
www.lightercapital.com/how-it-works/see-if-you-qualify

Compare Funding Options for Your Startup

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

Similaire à Compare Funding Options for Your Startup

Similaire à Compare Funding Options for Your Startup (20)

Dernier

Dernier (16)

Compare Funding Options for Your Startup