Revenue Based Financing Webinar- for Salesforce ISV's

LIGHTER CAPITAL WEBINAR © COPYRIGHT 2015

Revenue-Based Financing

Growth capital designed for Salesforce ISV’s


› Mission: make fundraising

process more efficient utilizing

technology and alternative

structures

› Funded +60 tech companies:

Most active revenue-based

finance lender in the country

› 20% of our clients are

Salesforce ISV’s

› $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

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+10 years financing early

stage tech companies, either

as an entrepreneur or investor.

Over $50M raised or invested

Presenter: R. Branden Harper


Today’s Agenda

What is revenue-based financing & how it

works

Three case studies and funding scenarios

of our Salesforce ISV’s clients

Q&A

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› No financial covenants – Payments depend only on company performance.

› No loss of control – No board seat, no ability to replace management.

› No personal guarantees – Secured only against the assets of the company.

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Revenue-based financing. The best of equity

and debt

1 2 3 4 5 6 7 8 9 10 11 12 13 14

› Aligned interest –Our IRR depends on your performance.

› Advice – Here to help - VC-Light.

Company revenue

Loan payment

LIGHTER CAPITAL WEBINAR © COPYRIGHT 2015 p6

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 1.7 – 2.5x principal

› Monthly payments are a fixed percent of revenue, .75-8% range

› Small cash upside participation

Example Loan

› Annual Revenues: $1.5M

› Principal: $400K

› Maturity: 5 years

› Payment: 5% of monthly revenue

› Repayment: 1.75x principal [$700K]

› Upside Participation: $100K at liquidity event Cu

mu

lative

Pa

ym

en

ts

Prin

cip

al

Loan Maturity

1.7x

to

2.5xPrincipal

Lighter Capital’s RevenueLoanTM


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

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Software, SaaS, Digital Media, Tech Services and similar

Investment Criteria

LIGHTER CAPITAL WEBINAR © COPYRIGHT 2015 p8

Company

snapshotCreate a high level

company overview online

in 10 minutes.

Getting

the detailsWe 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 dealWe issue a Term Sheet

for review. Once agreed,

you are funded

STEP 1 STEP 2 STEP 3

The Funding Process


Bank / DebtRevenue-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

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Funding Option Comparison


Client Case Study

10

› Who: A SaaS company providing mapping

and geo-analytics for Salesforce users.

› Funding: Initial Funding 2012. 5 rounds

totaling $1M. Only outside money raised.

› Use of Funds: Product development,

marketing and expanding the sales team.

Today

› #227 on 2014 Inc. 500 fastest growing

private companies in USA

› #15 in the software industry

› Grew 1,995% between 2010-2013

› The entrepreneur still owns the majority of

the company

“Because of our close working relationship

with the investment team, and how well they

understand Salesforce’s AppExchange

Partners, the initial funding and follow-on

rounds have allowed us to bring in the

capital we need very efficiently.

It’s great to be able to focus on growing my

business rather than on looking for funding.”

John Stewart, CEO Cloudbilt


Client Case Study

11

› Who: CPQ (Configuration Price Quote)

software, native on Salesforce.

› Funding: $200,000 in 2013.

› Use of Funds: Sales & marketing

initiative- Lighter Capital was the first

outside capital they raised

Today

› Raised total of $29.5M Venture Capital

› Most recent Series B funding of $18M

closed in February 2015

› Invested VCs include Salesforce

Ventures, Emergence Capital Partners,

and Shasta Ventures.

“RevenueLoans really suited SteelBrick’s

business model. Back then, our cashflow

was uneven and the revenue structure

helped aligning our incentives- the better we

do, the better they do.

When it comes to funding, look around and

evaluate all the different options and see

what’s best for you.”

Max Rudman, Founder of Steelbrick


Client Case Study

12

› Who: A SaaS company on the Salesforce

platform. Provider of core banking

software for microfinance institutes,

cooperative banks, and credit unions.

› Funding: $150,000 in 2012

› Use of Funds: Key growth hire to double

customer base in 6 months.

Today

› Raised $1 million dollars with VC’s

including EpicVentures, who were

introduced by Lighter Capital

“Securing a Lighter Capital loan was

definitely a lot less draining than raising

venture capital.

We also really like the structure of the loan,

because it helps us control costs. A revenue-

based model is tied to how much money you

make every month. If we have a couple of

months where our numbers are

down, we don’t need to write a big fat check

like you would with a bank loan with fixed

payments. That provides a sense of

comfort.”

Snehal Fulzele, CEO Cloud Lending


We would love to help you reach your Dreamforce goals!

www.lightercapital.com

Apply Online

www.lightercapital.com/apply

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www.lightercapital.com/how-it-works/see-if-you-qualify

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