Updated: May 21, 2020
Likely none of us have experienced a time of such uncertainty as we are currently seeing. Nevertheless, at Sage Growth Capital we are confident that our economy will emerge, as it always has, from what now appears to be a major recession. We hope, that unlike the financial and housing bubble burst of 2008, this will be ultimately turn out to be an economic blip and not a protracted downturn. We believe that this shared experience can have positive effects, such as causing us all to realign our priorities to better focus on our families, our communities, ourselves and our businesses.
We also believe that now is the right time to be making smart investments in companies that will continue to grow and thrive for the long term even if they aren’t seeing that today. We believe that uncertainty can help create focus and clearer outcomes. We have money to invest and are seeking companies that:
1. Have a recurring revenue stream. We recognize that any type of revenue may have some hiccups over the next few months, but recurring revenue is just that: your customers will continue to pay you for your goods or services. Will people stop buying ice cream? Will people stop drinking beer? Will they stop having babies? Will they stop using software that delivers value? We believe the answer to all these questions is “no”. If your revenue is tied to a recurring use or purchase, reinforced by contracts, or driven by a continuing increase in customers, we’d like to talk with you. Note: for us to consider an investment, you must have had revenues of at least $300,000 over the past 12 months. We’re happy to have a discussion if you aren’t there yet, but have a reasonable expectation that you can reach that within the next year.
2. Have margin. To support a revenue-based investment, you must have a strong and consistent margin greater than 40%. Since revenue-based investments are paid back out of top line revenue, your company must have a margin such that it can give up a portion of its sales and still make the business work.
3. Need capital to support growth. Revenue-based capital is best deployed to generate more business. If you have your business model pretty well figured out and what you need is the capital to implement that model, we may be a fit. Given the uncertain times, it may be appropriate for you to increase your marketing spend. Or you may need to purchase inventory or finance accounts receivable to support growth. We can provide the capital to do that.
The partners at Sage Growth Capital continue to look at deals every day. If you meet the above criteria, we’d like to look at yours! Visit: www.sagegrowthcapital.com/apply-now.
Sage Growth Capital makes revenue-based investments in companies who need growth capital. It is our mission to provide a more flexible funding option to growing companies who do not fit traditional equity or lending models. To learn more about Sage Growth Capital or to apply for funding visit: www.sagegrowthcapital.com.