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| International Expansion

Here’s what you can do now to improve cash flow and liquidity

What should I do now?

You’re not alone.

CEOs and CFOs are all asking the same question.

Covid-19 is challenging every business to operate in a tremendous time of uncertainty.

  • How long will it last? 
  • What will it mean for our working capital and liquidity?
  • Will credit markets seize up?

These are questions no one can answer.

But having said that, there are things you can do to prepare. 

Here are some questions we can answer. Also, here’s how we can help support you with getting funding options on the table during the Covid-19 outbreak.

Rest assured, we will update you as and when we get more information.

 

1. Can I still access funding? Are private debt funds even lending?

 

The good news is the answer is yes. But obviously, it might take a little more time than usual to get answers and secure funding. 

 

2. Should I wait to borrow, or take action now?

 

Given the extra time it will take to secure funding, now more than ever before, we recommend planning ahead and to not leave it to the last minute to seek funding.

 

3. What options do I have available?

 

Private debt funds and in particular venture debt specifically caters to the needs and perceived risks associated with tech companies.

You can use private debt facilities to top-up replace and complement existing finance facilities.

In times of uncertainty, you can use private debt to:

  • Extend your cash runway
  • Enhance liquidity and improve working capital
  • As a cushion to protect your company against potential delays, a strategic pivot, or if you need more cash than initially planned.

 

Elsewhere you can strengthen your business financially by refinancing your existing debt. Because when you refinance your debt you can:

  • Secure more favourable terms
  • Free up cash flow to generate more working capital
  • Free up capital to reinvest into your business
  • Have greater operating flexibility
  • Reduce your cost of capital
  • Get fast access to cash

 

4. What about the cost of capital?

 

The paramount concern of any lender is risk. 

So if you have a solid business plan, and up and until now operate in a market with plenty of room to grow, then you have a good chance of raising the funds you need at a reasonable price.

 

6. Should I even be considering taking on debt during a crisis?

 

The answer to this question depends on an individual business.

If your business model is robust and you operate in a market with plenty of room to grow, then it’s worth getting options on the table.

You could consider taking advantage of low-interest rates and getting capital in place for when the economy and the market recovers.

During this crisis, banks may lose their appetite for risk. Therefore it may take months to secure the money you need.

However, as I’ve mentioned before, many private debt funds take a specific interest in the tech sector and structure loans accordingly.

To get their attention, talk to a specialist private debt fund broker. Due to the amount of transactions sourced, structured and closed, a broker will have good relationships with funds with capital to deploy. 

 

How is Fuse Three operating during the lockdown?

 

Thanks to the tech sector, in particular, SaaS businesses, it’s business as usual for Fuse Three, albeit from a different location.

Of course, we’ve asked all our staff to work from home. Fortunately, we already employ remote workers, so they’re used to it.

Finally, we expect more change over the coming days and months. But like you, we’re an agile company and as such, we’re equipped to carry on supporting you.

We’re in this together.

Private debt versus bank lending for technology businesses

Finding the right debt finance instrument to fuel the growth of your tech company can be stressful. You know there has been an explosion in private debt lending, but how do you navigate your way through the many funds in this complex new market?

Moreover, how can you tell the differences between bank and private debt lending facilities?

In particular, how do you fathom out the differences between debt fund loan structures and reporting requirements?  And the cost of capital?

Then, of course, how can you be sure your chosen private debt fund can deliver on its promises?

If you’re considering raising private debt for your mid-market tech business, in addition to or as an alternative to bank lending, here’s what you need to know.

 

What is private debt?

Private debt is a term given to debt investments not financed by banks or traded in an open market.

You may also hear private debt described as alternative debt, direct lending or private credit.

Typically, the people who run private debt funds have strong backgrounds in commercial banking.

Better still, many focus on niches and have expert knowledge of the markets in which they work.

 

How did private debt come about?

After the 2008 global financial crisis, bank lending to companies shrank because bankers had to repair their battered balance sheets and contend with stringent new regulations.

So alternative financiers, including private debt funds, stepped in to fill the gap.

And fill the gap they did. In a report titled: ‘The Rise of Private Debt as an Institutional Asset Class’ ICG tells us: “In the US, “non-bank debt accounts for 75% of total corporate lending, compared to 10% in the Eurozone and 28% in the UK.”

It added: “Private debt is growing in the UK and Europe as investors realise its strong returns.”

Elsewhere, in its Alternative Lender Deal Tracker Spring 2019 report, Deloitte states: “Surveys show that the private debt asset class as a whole is forecast to hit $1.4 trillion globally by 2023, passing real estate in becoming the third-largest alternative investment asset class after hedge funds and private equity.”

 

What makes private debt attractive to mid-market tech companies?

Private debt makes it easier for mid-market tech company CFOs to raise finance to support a specific need. For example, time sensitive and capital intensive M&A activities.

But that’s not all. Private debt relieves some stress placed on tech company CFOs who need to raise finance during the turbulent global economic and political environment. During these times, banks have little appetite for risk.

 

What are the advantages of raising private debt over bank debt?

First off, private debt funds can provide more flexible loan structures. In direct contrast to bank lending, private debt funds can offer unsecured options. They also consider non-amortisation loans.

Then because many private debt funds focus on sector niches, they can provide less restrictive terms, including less stringent covenant packages.

After that, close access to decision-makers means private debt funds can shorten credit processes and increase the speed of execution.

Unlike bank lending, private debt funds do not restrict your use of funds.

Beyond that, you can use private debt to replace, top-up and complement existing finance facilities.

Most compellingly, private debt allows companies to access more significant loan amounts without diluting equity.

 

For what purpose do high growth tech companies use private debt?

The most common uses of private debt in the mid-market include:

  • M&A finance
  • Refinancing
  • Growth finance
  • The buyout of minority shareholders

 

How can tech companies access the right debt funds?

In its Alternative Lender Deal Tracker Spring 2019 report, Deloitte noted: “The private debt market can be overwhelming, with numerous complex loan options offered to borrowers.”

To find the right private debt fund, and structure the right private debt finance deal consider talking to a specialist private debt finance advisory firm.

It is in a specialist private debt finance advisor’s interests to find and close debt finance deals with minimum strain on your time and resources.

And that’s what really matters.

 

And finally

If you’d like can help you to achieve your business goals, get in touch and we will set up a time to chat.

S-Curve Growth: A 4 step growth strategy for tech companies

To navigate your tech company around the S-Curve to growth, you need one essential ingredient: Money. Did you know that with debt finance as part of your capital structure, not only can you reduce dilution, but also you can maximise available capital?

You see, as the foundation of your growth strategy, debt finance serves as the resource you need to kick start your growth, negotiate inflection points and execute your growth plan.

What is the S-Curve?

Business growth doesn’t follow a linear path. More often than not it follows a curve.

In simplest terms, the S-Curve models how your business will grow over its lifecycle.

Let me explain.

Initially, startup growth is slow. Then, as markets recognise how your products/services solve problems, you can expect rapid growth to ensue.

This rapid growth continues when you scale your business to cope with increased demand while maintaining efficiency.

Later on, as your business matures, internal and external factors such as new entrants to your market may slow your growth and you’ll reach a growth plateau. At this point, the ability to respond to changes quickly is vital.

 

How does debt finance fit into a tech company’s growth strategy?

When you understand the S-Curve, you can strategically plan your finances around it.

Let me show you how this works:

Step one: When you grow your business

You add resources at the same time you accelerate revenues. For example, you take on new staff, move to new premises, or increase your client base by expanding your sales and marketing efforts. The problem is your costs increase in line with your growth.

When you’re burning cash, you can use venture debt to extend your cash runway without diluting the equity of existing investors and founders.

 

Step two: When you scale your business

You aim to move your tech business into profitability by increasing revenue without incurring further significant costs.

Here, debt finance can help you to improve efficiencies by giving you the capital you need to automate processes cost-effectively. Better still, it can be organised quickly.

 

Step three: When your tech business reaches maturity

You’ve reached the top. Now you need to stay there. But growth is slowing, and you see new competitors entering your market.

Debt finance can support M&A activities, global expansion and share buybacks.

 

Step four: Navigating inflection points

By inflection points, I mean when you need to respond to a plateau of growth in the business environment or face a downturn.

Debt finance gives companies the resources required to enter a new growth stage, fund working capital and scaleup existing operations while reaching new markets.

If you have an upcoming capitalisation event debt finance buys you time and gives you a protective ‘financial’ cushion so that you can get back on track before heading into the next round.

 

But you’ve explored debt finance and were turned away before

When banks stopped lending after the financial crisis, alternative private debt funds stepped in to fill the space.

Private debt funds understand tech company business models. What’s more, they align their appetite for lending to that of the borrower’s equity lenders.

As such, private debt funds can tolerate the risk associated with high growth tech business models and react more quickly to opportunities and challenges.

As a result, they offer more flexibility when structuring loans.

 

When to seek debt finance to see you through the S-Curve to growth

 

Impeccable timing, flawless execution and sustainable momentum

are at the cornerstone of the success of the best strategists, innovators, and growth leaders

To seize opportunities and maintain the momentum it is recommended you raise finance before you need it.

Without doubt,  the earlier you raise finance, the better position you’ll be to negotiate and secure the best terms.

 

Where to look for the money?

The private debt fund market is fast growing. To save you time searching the market and comparing different debt deals, talk to a specialist debt advisory and brokerage firm.

This legwork will save you the overall cost of your capital. What could be more important?

 

And finally

If you’d like help with financing the S-Curve, <drop me a line> about debt advisory and brokerage services, and we’ll set up a time to chat.

Your foolproof strategy for securing cross border funding

With demand for tech sector offerings across all sectors growing globally it’s no wonder you want to scale your tech business by international expansion.

But to expand your business internationally, you need money. In particular, you need to fill the gap between investment in growth and resulting profits.

You’re hesitant about turning to your equity provider because you don’t want to dilute your ownership further.

On the contrary, you’re aware that conventional bank debt finance has failed to keep pace with high growth business models like yours.

Fortunately funding your international expansion strategy isn’t as hard as you might think.

In fact, private debt funds have stepped in to offer flexible cross border funding, alongside equity sponsorship.

Let me show you how this works:

Start with a good plan and a business case

Like any lender, private debt funds need to understand your commercial model and your leverageable intangible assets. Also, how you plan for your business to grow and how quickly. And if you’ve planned an exit strategy.

 

Understand the costs associated with financing international expansion

As an illustration, the costs you’re likely to encounter include:

  • Due diligence
  • Legals
  • Protection of IP
  • Insurance
  • Ongoing operations
  • Hiring new staff
  • Sales & marketing
  • Tax

 

Be clear about how you intend to use the capital provided

For example, in addition to accelerating growth with mergers and acquisitions, you can use funds to invest in devices and resources to:

  • Get you in front of new customers
  • Localise your offering
  • Localise your marketing and lead generation
  • Localise your customer support

 

Factors affecting your debt finance deal structure

Naturally, the type of deal you arrange will depend on:

  • How much money you need
  • Your working capital requirements
  • How long you’ll need it
  • What you’ll need it for

 

With this in mind, your options include:

  • Taking debt finance in tranches (or slices): Here you draw down funds in stages. For the lender, it means it can spread risk. For the borrower, this debt arrangement is cost effective and can lead to more availability of funds.
  • Amortised loans: Your loan is paid off in regular, equal instalments. These loans tend to be quick to underwrite and covenant-lite.
  • Non-amortising loans including interest-free and balloon payment loans: Typically used by high growth companies that need to avoid the short term cash flow hit resulting from paying off an amortising loan. Paying off the principal is usually timed to coincide with a future fundraising event or a planned refinance.
  • Revenue-based loans: Most commonly, you’ll see these loans used for projects requiring high upfront investment to secure a future revenue stream.
  • MRR based credit lines: Often used by SaaS businesses with £500k monthly recurring revenue that need working capital. You pay interest on drawn balances. As monthly recurring revenue grows so your credit line availability increases.

 

So it all adds up to this

You have got a business plan, you’ve identified costs, and you’re clear how you’ll use the funds and the type of debt structure most suited to your business.

The next step is to put together a compelling investment memorandum.

Beyond that, you’ll need to have a dialogue with private debt funds so that you can thrash out the core terms of your deal.

Of course, you can do this work yourself. On the other hand, you can hand over your debt arrangement requirements to a third party who can save you time and money by structuring a suitable deal and negotiating it on your behalf.

It’s your call.

 

And finally

If you’d like help securing cross border funding, drop me a line about debt advisory and brokerage services, and we’ll set up a time to chat.

International Expansion – Culturalisation

There’s nothing like learning from those who have gone before you when it comes to international expansion. Talking to someone who has been there and done that provides true perspective on local intricacies, domestic laws and digital behaviours you will uncover. Fuse3 client Oban International do this for a living, so we asked their marketing manager George Ward, to share some wisdom with us on the benefits that true culturalisation can have on your business.

 

Oban International helps clients improve their digital marketing performance in any market on the planet. Their unique LIME network (450 Local In-Market Experts in over 80 countries) provides Oban with significant cultural insights that will increase the effectiveness and efficiency of your international marketing campaigns.

What are the most significant challenges facing companies looking to expand into new markets abroad?

The most significant challenges tend to be logistical; ensuring your company has the operational infrastructure in place to deal with supply chains, different payment methods, deliveries and returns, customer service and support and local tax and legislation requirements.

From a digital perspective, the biggest challenge is knowing what consumers within a new market expect, and how to meet those expectations in a way that feels natural. It’s a matter of getting the cultural nuances right; how consumers work, live and consume. Insights you learn from in-depth research ensures you don’t waste time and money on campaigns that don’t resonate with desired customers.

One area where this can occur is content, a campaign that attracts numerous visitors in one market will not have the same effect in another. Test if it resonates in that market, before promoting it. Directly translating a content campaign into another language, even when completed by an excellent translator, may not create the results you expect.

 

What challenges do companies underestimate and often get wrong?

  • Decent translations take longer and cost more. Find a translator who will provide the localised turn of phrase, not just directly translate.
  • Prospects from different markets will react differently to the same messages. Notice the way each market interacts with your website, advert, content, etc. User behaviour will differ.
  • Payment and delivery expectations vary massively between markets. Some still pay cash on delivery. In others, not providing free delivery is a block to sale.
  • Entering a new market with digital marketing is significantly more cost effective over a physical office move but doesn’t mean international digital marketing spend will be any less. Concentrate budgets on a specific channel and/or region.
  • When specifically looking at SEO and PPC, companies frequently target the wrong keywords. Find out specific terms that market uses, and use ‘hybrid terms’ when appropriate.

 

How do companies know if they are trying to do too much?

If you are seeing poor results from international digital marketing, it is usually because of poor research or a poor digital strategy.

A common problem is attempting to expand into too many new markets at once or trying to use every channel available. Successful companies concentrate on fewer core markets, make an effort to culturalise their marketing, and focus their choice of digital channels.

 

Which international markets require the most effort for culturalisation?

The most difficult countries for English speaking businesses tend to be those that are most culturally different. Two specific examples are markets with:

  1. Non-Latin writing systems
  2. Different search engines, particularly those with no English language documentation

More specifically:

Easy: Western Europe, North America, Australasia, English speaking India

Moderate: South America, English-speaking Africa (languages familiar, in Latin script. Cultural differences, but tend to be using the same tech with plenty of digital expertise)

Hard: Japanese, Middle East/Arabic speaking Africa, Russia, Hindi-speaking India (examples where the language and culture are unfamiliar, but the tech is usually familiar, and there are plenty of digital experts as well as well-developed internet infrastructure)

Harder: Korean, Chinese (language, culture and tech are unfamiliar, but there is well-developed digital expertise available to help)

Hardest: India beyond English/Hindi, Africa beyond European languages and Arabic (lower internet penetration, less developed digital workforce)

 

Which international markets have the best ROI for culturalisation efforts?

Predicting ROI is difficult. Firstly, it depends on the market’s thirst for the product you are selling. It also depends on country-specific factors (e.g. cost of living, disposable income) and economic factors (e.g. exchange rates, international trade restrictions).

International digital marketing is relatively straightforward in countries with high internet penetration, well-developed banking infrastructure and payment systems, Latin writing systems, a well-developed digital workforce and many other factors. But these countries often suffer from crowded marketplaces and fierce competition.

 

What is digital localisation/culturalisation and how do they differ from translation?

Digital localisation is the process of ensuring that your digital media will perform well in the location you’re serving that media. Localisation occurs on a microscale (providing directions to the closest branch) or a macroscale (automatically providing the German version of your website when someone in Germany visits your site).

When it comes to language, localisation goes further than a direct translation. Automatic translation tools are still developing and notorious for making translation errors – often around context. Knowing the differences between how people of different ages, different industries and different upbringings communicate requires a deep current understanding of a language that even native speakers may miss.

Localisation also requires consideration of which platforms are most popular in each market, whether that’s the top search engine for the region, most popular social media networks or common messaging apps. It’s also vital to understand which browsers and devices people are using, to ensure your customers are getting the best experience.

Culturalisation goes even further than localisation. We know that customers buy from people, companies and countries they trust. Therefore, if you want to sell something, you need to know how to build trust with your prospects and customers.  The key to trust is familiarity. One way of building familiarity is to culturalise your marketing so that your messaging, imagery and designs ‘feel right’. What feels ‘right’ depends on the cultural expectations within a market and differs massively between and even within countries. It’s the subtle nuances that make messages feel familiar and expected.

 

If you are looking to expand into new markets, get in touch with Oban International to see how they can help you maximise your digital marketing efforts.

 

 

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International Expansion – Finding the Right People

While international expansion is a big milestone for any company, it can also be a huge drain on resources and can be rather chaotic, by preparing a well thought recruitment plan you can ensure it goes as smoothly as possible. Here are a few pointers to include in your expansion strategy.

 

Keep a light footprint

A great way to ensure long-term ROI is to hold off on a mass recruitment surge from the beginning. Use a blend of short term contract hires, which gives you time to understand the person’s abilities and doesn’t leave you tied into a huge contract should things go pear shaped. Take on a few key local employees as language may be a barrier, so you will need a local who can negotiate and handle local language issues. Don’t underestimate the power of hiring mature candidates who can offer years of experience and act as a supervisor when you can’t be there to ensure productivity levels are optimum.

 

Don’t reinvent the wheel

Don’t waste time and money reinventing the wheel, use partners until you have the revenue to create in-house teams. This could be using a marketing agency to fulfil campaigns, a local call centre to find new customers, a joint venture where you can tap into the partners already established client base and outsourcing accounting to a local firm that will steer you through the tax, legal and employment regulations of your new territory.

 

People Due Diligence

It seems obvious, but this is a step that easily gets put to one side when in the middle of expansion. Do your homework on the temporary Operations Manager, HR Manager or Software engineer – What did past employers think of them? Did they deliver? Are there any hidden skeletons in the closet? When you’re miles away, you can’t afford to not know who you have entrusted to represent your business, so don’t give the keys to the kingdom to a potential maverick.

 

Law & Order

It can take years to fully entrench your company in a new country, and it’ll take even longer to remember the different laws and regulations, which are updated year after year. Leave this part of international expansion to the experts, engage a legal firm that is renowned for this type of work. Government’s don’t take legal or accounting mistakes likely and this is money well spent and a lot less than a nasty fine.

 

Show me the money

Whatever you have calculated for international expansion, double it. It’s easy to assume you have all bases covered, but from office rental, recruiting people, marketing and sales requirements, to legal regulations… your finances will vanish into thin air very quickly.

 

Learn from others

We spoke to Fuse3 Client and CEO & Founder, Nick Smallman at Working Voices Group, who expanded internationally into the US in 2008 followed by Hong Kong in 2010, for some words of wisdom. As a bootstrapped business owner, being careful with funding and maximising it’s value was his number one priority. We asked what would he advise other companies going through this, he said:

 

  • Don’t rush the process, take your time as it’s never going to happen overnight.

  • Build your reputation, collaborate with like minded enterprises that have large networks.

  • Find great people, who is the right fit? Take on mature people who not only offer tremendous insight from years or experience but aren’t afraid to challenge some far-out leadership ideas!

  • Pick the right projects, don’t take them all on unless you’re happy with them and doesn’t compromise your company’s values.

  • Invest in company culture, as a new global company, you need to make time ensuring the people feel connected and part of the bigger picture.

 

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How To Approach International Expansion

Digitalisation has made it quicker and cheaper to have an international footprint, but sometimes you can’t avoid having local presence and understanding to really make the business thrive.

International expansion does not happen overnight. There’s an ocean of preparation ahead.  If you have boot-strapped your business and are used to keeping things lean and mean, this is not always easy to do. One rule of thumb is: whatever you estimate, double the time and double the cost.

 

Do your Homework

Identify your principal market. There is no shortage of desk research tools to help. The new government website great.gov.uk aims to facilitate connections for British companies with international buyers.

It’s a good idea to immerse yourself in the market first, that means living in it, observing consumer behaviour, watching potential competitors, researching and understanding the dynamics of the marketplace. You just have to spend time on the ground – and that doesn’t mean just attending a couple of trade shows, and don’t underestimate the impact on management resources during this phase.

 

What are the requirements?

Every country will have its own administrative checklist to tackle such as visas, trademark checks for infringements, compliance with their legal regulations, contracts, employment opportunities for local staff, tax, accounting, insurance etc… be prepared for a laborious few months ahead of you.

 

Signs your company is ready for international expansion:

Customer Base: You might find that your customer base is pulling you to new territories. In an ideal world revenue generated from them could fund further international expansion.

M&A: Or you’ve entered into discussions for a merger or acquisition with an international company which would provide a nice stepping stone to a new market.

Business Lifecycle Phase – Expansion: Businesses in this stage often see rapid growth in both revenue and cash flow as the blueprint has now been established and you might start to think about capitalising on international expansion.

 

Steps for Successful International Expansion

Steps for international expansion

1 Prepare your Strategy

2 Evaluate & Plan Market Entry Barriers

3 Research Cultural and Regulatory Differences

4 Appoint a strong management Team

5 Create Risk + Governance Structure Fit for Purpose

6 Monitor Progress and Set KPIs

7 Seek the Right type of Funding

 

Financing International Expansion

With the expansion of alternative finance and the rise of private debt debt funds there’s a huge diversity of finance options to businesses who want to scale up internationally. Here are some points you need to consider:

  • What is the cost of financing?
  • What are the Tax structures?
  • What is the new market legal system like?
  • What Government demands are there on local staffing?
  • Is there Financial advice and cross market banking opportunities?
  • What is the right funding mix: Debt? Debt + Equity? Other?

 

Building your international expansion budget needs to include:

  • IP Protection
  • People
  • DD
  • Sales & Marketing
  • Customer success
  • Tax, insurance and indirect costs
  • Travel
  • Legal Costs
  • Ongoing Capital and operations costs

Learn from others:

Twitter’s go-to-market model included two unique strategies, both targeting Japan. First, it created a joint venture with Digital Garage in 2008. Through Digital Garage, Twitter created an entirely different service specifically targeted for the Japanese market. It even started charging for premium services in early 2010, years ahead of any business model in the U.S. 

 

Fuse 3 Clients Go Global

As well as funding UK based tech companies for growth and scaling, we have helped several companies with their international expansion projects, the companies below have all successfully set up in a new market:

SectorCompanyDomicile CountryInternational Market
Adtech/ MartechNear.co IndiaWorldwide expansion
Enterprise SaaSCoyoGermanyWorldwide
EdTechMEl ScienceUKUSA
DigitalOban InternationalUKWorldwide

 

Summary

Scaling overseas requires significant market research, legal preparation, and long-term strategy. One of the most important aspects of making sure everything goes smoothly is thoroughly understanding the particulars of the country you want to expand to:

  • How does this market differ culturally from that of your home country?
  • What adjustments will need to be made in terms of marketing, functionality and user experience?
  • What are this country’s regulatory and legal requirements to do business?
  • Having the right funds to manage international expansion.

 

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Funding Timeline of a Tech Startup

Funding Timeline of a Tech Startup

 

When your company hits new levels of growth and you approach new milestones in your company journey, it’s important to understand the funding options available to you.

Initially the vast majority of funding available will be through equity, an option that can prove to be costly in the long run due to dilution of ownership and control.

 

However as a technology company grows it becomes less and less reliant on expensive and dilutive equity to fund continued growth. Technology companies can make use of IP, recurring revenues and strong product offerings to secure debt funding. Even if the company is pre-profit. Debt is cheaper to service in the long run, allowing you to maintain control over your technology and the company and maximise returns when you come to exit.

Milestones

No two tech companies will have the same growth journey, but there are shared milestones that will be reached by almost all companies.

Achieving these milestones requires significant monetary and also human investment. Developing products, customer acquisition and retention, hiring strong management teams and scaling the business all requires growth funding as a technology business makes its way towards profitability.

Securing Funding

On the equity side there are the initial Angel Investors, Seed rounds and Series A, B, C… etc rounds. Getting cash into the business while sacrificing shares.

On the lesser known debt side however many more options present themselves. Pre-profit technology companies on a strong growth trajectory can access growth funds by unlocking the value of their intellectual property and secure funding against recurring revenues, all without dilution.

This debt is often utilised for the following:

  1. Growth – acquire new customers, product roadmap, enter new regions etc
  2. Acquisition – buy a competitor, partner or technology
  3. Share buy back – buy out early investors before the valuation accelerates
  4. Cash out – take cash off the table to realise some value
  5. Bridge – if you are VC backed, bridge to the next round

 

To find out more about the options available for your business and how we can help get in touch with Russell Lerman, CEO of Fuse3. With hundreds of deals worth of experience Russell has expert knowledge in securing debt funding for technology businesses.

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