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Beyond VC: Capital Raising for
ISVs Without Giving Up Equity
How to fund your growth without losing control
BJ Lackland
John Stewart
CEO, Lighter Capital CEO, Cloudbilt
@bjlackland
@CloudbiltApps
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Safe Harbor Statement*
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forward-looking statements.
*also review your Partner Non-Disclosure Agreement (NDA)
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Today’s Agenda
• The funding landscape – why is it so hard?
• What options are available – Cloudbilt’s experience
• Revenue-based financing – why it works for ISV’s
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• Revenue Based Financing for tech companies
• $50k-$1mm per company
• Technology + Capital = Better for Entrepreneurs
SaaS
21%
SaaS + Service
52%
25%
Tech-enabled services
Digital Media
• 100+ financings across 70+ companies
• Almost 80% are SaaS
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• Apps that empower people to move from Insight to
Action
• Cloudbilt’s MapAnything™ is a native solution that is
part of the Salesforce1 Ready Collection
• Grew AppExchange Product Revenue 4600% from
December 2012 (First Funding) till now.
• 27,000+ User Subscriptions over 500+ Customers
• #227 500 fastest growing US companies
• #15 in the software industry
Funding Story
• 5 rounds totaling $1M, starting in November 2012
• Only outside money raised
• The entrepreneur still owns the majority of the
company
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The funding landscape for ISV’s - why is it so hard?
Cost of Entry
Angels/VC
Other Sources
Speed of
Innovation
Larger Funds
Corporate
Venture
More Startups
Series A is
The New B
Debt + Crowd
funding
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Funding paths for ISV’s
Established
VC Backed
Non VC
Blended
Equity
Debt
Breakout
Revenue$5m
Growth & Scale
Launch & Traction
Incubator / Angels
Ideation
Bootstrap / Friends & Family
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What is Revenue-based financing?
• The best of debt and equity – aligned interests with no dilution
• Essentially a royalty agreement
• Monthly payments = fixed % of revenue
Company revenue
Loan payment
• Fits SaaS
Example Financing
• Up to $1M or 33% of annualized revenue run
rate
• $500K funding
• Payment: 5% of monthly revenue
• Repayment: 1.7x principal ($850K)
• Maturity: 5 years
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Investment Criteria
ISV’s looking to grow:
• Sales and marketing initiatives e.g
Dreamforce!
• Hiring new people
• Product development
• Transitioning from services to product
Financials:
• Recurring Revenue or Repeat Customers
• Revenue Min: $15k+ / month
Management:
• Gross Margin: High (50%+)
• High ownership, full time dedication
• Profitability: Not required, but
clear path to profitability from our funds
Geography:
• Other Debt: Not too high (unless convertible
debt)
• HQ in US
• Customer Base: No major concentration
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Q&A
Meet our Investment Team in
the Partner Zone
Branden Harper, North East
[email protected]
Lighter Capital Resources
Apply Online
www.lightercapital.com/apply
Cloudbilt
Online
www.cloudbilt.com
Jonathan Gagliardoni, East
Funding Calculator
[email protected] www.lightercapital.com/how-it- @Dreamforce
works/see-if-you-qualify
Jon Prentice , California
• Cloud Expo West W827 & W124
[email protected]
Funding Blog
• Cloud Expo North N1028 &
https://
N2009
Rebecca Conner, West
www.lightercapital.com/blog/
[email protected]
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Thank you
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