Finance Your SAAS and Activate Your Receivable
Laveer Growth Capital (Laveer) offers flexible financing solutions for early stage companies. Laveer takes a different approach than the current limited product offering available. Laveer tailors a solution based on need and not fitting a finance product (e.g. convertible note or SAFE) to each company. As an example, Laveer has worked with financing SAAS models and receivables. This allows a company to finance itself by bringing forward future payment streams. This reduces the equity raise required, allows for quicker funding and keeps the founding team focused on executing.
Is a receivable prohibiting your growth?
Many successful companies build receivables as their sales ramp. While this is a sale, the cash remains outstanding. For companies more than two years old and at least $1 million in revenue, trading the receivable for cash is not a problem.
For companies less than two years old with less than $1 million in revenue, it is difficult to unlock the cash from a sale at a time when liquidity is crucial. For a young company there is nothing more frustrating. You made a sale, but remain cash poor and need to fund growth and payroll. The only alternative is to raise equity capital. Equity capital to finance operating cash flow is rich. As every founder recognizes, the time needed to raise can be lengthy and distracting.
Laveer has helped early stage companies unlock their balance sheet. Financing receivables can provide immediate cash to the company, allowing the founding team to focus on execution.
As the company matures, traditional financial players will feel more comfortable financing the company’s receivables. At this point, it is Laveer’s goal to introduce the company to local lending institutions to provide a lower cost of capital on the receivables, reduce the economic and opportunity cost associated with receivables financing, and allow the company to execute and grow.
My SAAS model has limited churn and visibility into future sales. How can I activate this future revenue?
Laveer has encountered recurring sales pipelines that founders struggle to monetize so they raise equity capital to expand growth despite the pot of gold lying in the few months ahead. Good luck getting a bank to finance your SAAS model.
Laveer has a model that sees the company raise the cash today. Laveer then accepts the future revenue based on the payments.
The takeaway
As a young company it is important to understand you can raise capital on more than a convertible note. You have financing options. Understand these options and identify a capital partner that is a fit.
