This may come as a surprise, but investors don’t want to say “No”. They want to say “Yes” or at least “Not Yet.” However, there are several things that will make us say “No” every time. Here's our summary of what not to do to better your odds for successful fundraising with us.
Not showing up. First and foremost, we value our time. We understand that you are busy setting up and running a business, but so are we. Entrepreneurs that are late to a meeting, or are a no show to a meeting, or send another member of their team in their place don’t sit well with us. We are spending our time learning about your business. You should be willing to spend your time too. If you can’t be on time, or even be bothered to show up, it’s a strong indicator that you are not the right fit for us.
Bluffing the answer. It’s ok not to know the answer to every question we ask. We definitely ask a lot - that’s our job, and we like to know the numbers inside and out. We understand that you might not focus on the same things that we do. But, if you don’t know the answer to the question - please just say so. It is much better to say “I don’t know the number off the top of my head, but give me a minute and I’ll pull it up” or “I’ll need to get back to you on that” than making up an answer.
Wrong risk. While revenue-finance often substitutes for equity, there are certainly situations where the business risk requires equity. If you are bleeding cash with no clear path yet to cash flow breakeven, or still figuring out product/market fit, the risk you present is likely more appropriate for equity than revenue-finance. Revenue-finance is typically appropriate to finance revenue growth once you have achieved product-market fit.
Type of Capital | Appropriate Situations |
Bank Loan |
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Revenue-finance |
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Equity |
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Poor financials. We depend upon quality financial information to assess risk and to track our investments. And frankly, we think entrepreneurs need solid, timely financial information to manage their businesses. If you can’t give us financial statements that are based upon a solid accounting system and in a timely manner (i.e. reporting every month), we aren’t going to be able to invest.
If you are an entrepreneur reading this, hopefully this provides you a little more context about our expectations and how we evaluate you and your business to make an investment. We expect mutual respect and honesty versus getting fabricated responses or behaviors that you think will make us happy. Just remember that we also want to make the investment as much as you want to receive it, but we need to find that the information you share with us is consistent and legitimate.
About Sage Growth Capital
Sage Growth Capital makes revenue-financed investments in companies at any stage 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.
About Revenue-Financed Capital
Revenue-financed capital (RFC), also referred to as royalty financing, revenue share or revenue-based financing (RBF), is a non-dilutive form of growth capital where investors receive a percentage of monthly revenues until a set amount has been paid. RFC differs from equity financing as the investor does not obtain ownership of the company and it differs from debt financing as there is no collateral required and payments are variable. RFC is designed to empower entrepreneurs to grow their businesses with non-dilutive capital that aligns with their sales cycles.