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The Best Growth Capital Tools from Around the Web

Growth capital tools are an ideal solution when you want to transform complex masses of information into an easy-to-understand chart, summary, or calculation for your business.

Using these tools can be beneficial since they help you make decisions, but finding the right tools is difficult. To help you get started we’ve selected our pick of the best growth capital tools and apps out there. To give you more choice, we’ve included both free and paid options.

Give these top tools a try and let us know which ones you get on with by sharing your favorites on Twitter.

Cash Flow

Runway: A free, visual tool to help you understand, manage and extend your cash runway. (Free)

Float: Get a real-time view of your cash flow and make more confident decisions about the future of your business. ($49/mo)

Equity

Foundrs: Calculate the proposed equity percentage that each founder ought to receive based on time, money, and resources invested into the company. (Free)

Capshare: Issue stock and manage all your equity in one place without getting bogged down in spreadsheets and paperwork.  (Free)

Accounting

Bench: Get a professional bookkeeper at a price you can afford, and powerful financial reporting with zero learning curve.

Pilot: Pilot takes care of your bookkeeping from start to finish so you can focus 100% on making your business succeed.

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Revenue Based Financing for SaaS Companies

At this point I’ve spoken to nearly every revenue based financier in New York, and one theme continues to rear its head, which is that B2B SaaS are the clear favorites of the RBF industry.

If you’re a B2B SaaS company with a regular income stream, you have a very good shot at obtaining Revenue Based Financing. I’d certainly recommend you check out all of the RBF Options we have available on our site, as I think you’ll find you qualify for quite a few.

The reasons for this are fairly obvious:

  • B2B companies have a higher price point and can typically afford to pay for a service for the foreseeable future.
  • SaaS companies inherently have steady revenue streams – thus making the borrower much more solvent in the long-term.

Have other questions we could answer? Feel free to reach out.

Are there topics you’d like us to write about or features you’d like us to build? Request it here.

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Revenue Based Financing Firms and Companies

I get a lot of questions about revenue based lenders, and you can obviously find all of the growth capital options yourself using our web app which will provide you with customized recommendations. However, to make it even easier for everyone who would like to do their own research please refer to the list below of revenue based financiers that we’re aware of. Do you know of any others? We’d love to hear about them! Please just drop the name of the fund / company here.

List of companies / funds that offer Revenue Based Financing:

Next we’ll be covering the question of How to Choose a Revenue Based Financing provider. It’s a super complicated question that we’ll simplify for you.

Have anything else you’d like to see us write about or build? Drop your idea here.

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Who acquires small businesses? i.e. The Official Directory of Bootstrapped-Company Acquirers

Who actually acquires small startups and small businesses? If you’re not a high-growth rocket ship, or perhaps your business doesn’t fit within the corporate strategy of a tech giant like Google, then who out there is truly acquiring normal, healthy businesses that are growing a decent rate?

  • Empire Flippers: We take the friction out of buying and selling online businesses
  • FE International: Sell Your Online Business With a Website Broker You Can Trust
  • Flippa: #1 platform to buy and sell online businesses
  • Respawn Ventures: Respawn Ventures buys, grows, and sells niche tech companies. Our focus lies within B2B SaaS but if we see a project with an opportunity for global reach, we’ll seriously consider giving it a second life.
  • SureSwift Capital: Dream exits for bootstrapped founders. Sell your SaaS business.
  • Tiny Capital: We start, buy, and invest in wonderful internet businesses.

This directory is a living document and we work to update it as often as possible. Please contact the team at Bootstrapp if you would like to submit an organization for consideration — you can simply shoot a quick note to thomas@bootstrapp.co and we will review your submission.

marginalia-waiting

Equity vs. Debt: There’s Less Choice Than You Think

Let’s simplify things.

I’ve worked with tens of founders, many of whom are interested in non-dilutive capital despite the fact that they have zero, or very little actual revenue. So before we dive into the details, let’s make this easier on all of us and eliminate a few options right out the gate:

  • If your company doesn’t generate revenue, you can’t take on debt.
  • If you don’t have a high-growth business, you can’t take on equity financing.
  • Finally, if you want full control and ownership of your company, then don’t take on equity financing.

Put another way, the above three points can also be stated in the affirmative as such:

  • If you have revenue, you have the option between debt and equity.
  • If you are pursuing a low-growth business or a small market, debt is your only option.
  • If you want control and ownership of your company, debt is your best option.

At this point, you ought to understand generally which category your company fits within, and whether or not you even have the option to pursue debt as a method of financing your company. If you are generating a solid amount of revenue (at least $5k/month at a minimum) we’ll dig into the decision-making process in the next post.

And until the next post is published, to save you the time of scouring the internet, I’ve also gathered up the top articles on equity vs. debt and provided the main takeaway from each:

  • An example scenario of two identical companies – one that chooses debt, and one that chooses equity financing, and then shows the financial impact on each, which is a useful in demonstrating how the mechanics of each work.
    Article: Equity vs Debt Capital Funding: Comparing the Costs

    Takeaway: “if you’re looking for a lower cost of capital for startups, venture debt is often the best way to go long-term (as this scenario explained). But, if you’re looking for operational funding to maintain your organization as you scale up or have already utilized debt financing, SaaS equity financing may be the better route for you.” (take this with a grain of salt as it’s a sales pitch).
  • A well-written article that essentially explains the different types of equity and debt funding, along with some pros and cons.
    Article: Debt vs. Equity Financing: Pros And Cons For Entrepreneurs

    Takeaway: “the biggest and most obvious advantage of using debt versus equity is control and ownership.”
  • A bullet point list of attributes for both debt and equity that has a number of great points buried within it.
    Article: Debt vs Equity in the Startup Venture

    Takeaway: “A company must maintain a debt to equity ratio that meets the capital needs of the company while not making the company fiscally vulnerable. An investor will be reluctant to invest in a highly leveraged business (i.e., has lots of debt) because the equity investment is always subordinate in priority of payment to the debt.”
  • A bunch of quotes from various founders on their one-sentence opinions of the two options. The quotes are all over the map and not very helpful.
    Article: Debt vs. Equity, Which is Right for Your Startup?

    Takeaway: None, but it does provide a number of different perspectives on this issue and shows how difficult a decision this can be without access to proper advice and data.
  • The first article that even references the actual decision. Finally! and thank you.
    Article: The Difference Between Debt and Equity Financing

    Takeaway: None. However, this was the first article to at least mention the question of “How to choose between debt and equity financing” – they just didn’t answer their own question, and instead referenced the weighted average cost of capital (WACC) which isn’t relevant for a decision between debt and equity, but instead helps a company compare scenarios where BOTH equity and debt are involved.
  • This article just defines the different types of financing, for the 1 millionth time on the internet, but does provide a good point about tenure.
    Article: Debt Funding Vs Equity Funding For Startups: Pros And Cons

    Takeaway: “In comparing equity fund vs debt funds, tenures are usually longer for equity funds, while debt funds are categorised into short term and long term. Long term debt funds are raised for capital costs which have high-interest rates, and have company assets as collateral. Whereas short term funds are utilised in recurring payments, have lower interest rates and minimal collateral requirements.”

In my next post, we’ll get into the a more nuanced decision-making process for determining the best path forward among all of the financing options available to you – particularly if you’re a high-growth revenue-generating company, which essentially means the world is your oyster.

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You Can Only Pick Two

I have a hypothesis, which is that between the three options of:
1. Keeping equity
2. Reducing / eliminating any negative impact on your cash flow
3. Increasing the velocity of your startup / company

that you can only pick two. I drafted up a diagram to help illustrate the point:

To my mind, you can’t ever get all three of those corners of the triangle to align so perfectly that you are able to accomplish each goal simultaneously.

As an example, if you take out any sort of loan / debt, you obviously have put a dent in the future cashflows of your business, however you get to accelerate the velocity of your firm while keeping equity – landing you on the right side of the triangle.

If you don’t want to impact cash flow, or perhaps you don’t have any cash flow to speak of, yet you want to increase the velocity of your company – then you land yourself at the bottom of the triangle within the equity financing realm of the world. Get your pitch deck ready.

And finally, if you don’t want to – or can’t – reduce your future cash flow, and would also like to keep your equity, then you’ll likely need to simply bootstrap your company: that is, self-fund it.

It’s pretty simple. However, if you see any issues with the above mental model I’d love to hear them. Tweet at me if you have any thoughts: @thomasgrush.

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Director of Venture Strategy

Introducing Bootstrapp

Bootstrapp is building a community of founders interested in bringing more transparency to the early-stage investing + lending market. We believe that the capital markets that serve startups will become increasingly fragmented over time, and that owning the interface – where customer decisions are made – will create the most value for founders, Bootstrapp team members, and society. 

We are a very early-stage startup that is working directly with other founders, non-dilutive financiers, and a small group of advisors 

We are entering a decade which will likely uproot the traditional financial ecosystem – driven by the ability to programmatically manage capital, generate data-driven insights into true impact of investments, and a cultural shift towards equitable access to capital.


Description of the Director of Venture Strategy Role:

  • Implement an early-feedback loop to enable continuous feedback, learning and iteration for Bootstrapp’s products and services
  • Lead the development of a comprehensive go-to-market strategy which includes the ability to remain agile and react to market forces, customer feedback and more. 
  • Create intellectual property, points of view and industry-related content which will help elevate your professional profile
  • Lead the development of the Bootstrapp corporate development strategy by deeply understanding the market opportunity, customer feedback, and product roadmap. 
  • Ensure that the Bootstrapp team is consistently synthesizing market feedback to recommend opportunities for changes or improvements to be included in subsequent releases
  • Foster an atmosphere of innovation and excellent user experience for our customers
  • Support conversations with potential investors, advisors, and/or corporate partners. 
  • Be honest with other team members and partners, have fun, and work on the things that you find the most interesting.

As Director of Venture Strategy, you will benefit from having the following attributes and experience: 

  • A deep interest in value creation and startups. 
  • A desire to learn about prototyping, design, FinTech, and technology-enabled services. 
  • Considerable experience with strategy development, business planning and future-visioning. 
  • Design or product development expertise preferred, but not required.
  • An ability to operate effectively within ambiguity – i.e. being able to understand how to create value as an individual and company, and then drive relentlessly towards it, as you will have full autonomy on how you achieve the goals that we mutually agree on.

To apply, please provide your information here.

Bootstrapp provides equal employment opportunities (EEO) to all employees and applicants for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, age or disability.