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Part of the magic of revenue-based financing is how historical performance and strong, achievable financial projections are ultimately the backbone of how RBI/RBF investment decisions are made.” Coinvestors: Flexible VC terms have not been standardized, which may make the investment harder to syndicate. Lenders sometimes take warrants.
This can be on a subjective or objective basis but it’s basically a deal that we are strongly persuaded by the team, the product and/or the traction that they are heading in a direction that warrants more investment. In these cases we proactively offer to lead their next round of financing. This is the nature of compromise.
We are syndication agnostic – happy to invest alone and equally happy to invest with firms we like to work with. Many of these companies raise less than $3m coming out of TechStars – all of them are subsequently in our zone for the next round financing.
Our investment size may differ slightly from one company to the next, but it tends to be driven entirely by situation-specific factors (needs of the company, syndicate composition, anticipated reserves, etc) … and not based on our belief. We expect that a half to two-thirds will achieve product/market fit and warrant further investment.
One area I''ve noticed a lot more recently are angel investors and seed stage funds trying to grab a little bit extra, whether it''s warrants for leading the round, advisor shares to go along with the investment, or a common stock stake for just being who they are. The other investor could''ve certainly lobbied to get me an allocation.
In fact, an interesting study, infographic or other data sometimes warrants its own pitch. Money and Finance Lists. Global Syndication Partners. This gives them time to interview sources at your company, for example, while still getting the story out right when everyone else does. Offer Up Unique Data. Holiday Lists. Jobs Lists.
“A surge in prices, more than warranted by fundamentals & usually in a particular sector. More than warranted. Of course they built protection into many of their financings that allows them downside protection against IPOs if the price is lower than the price they paid. .” How elegantly stated.
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