Objective:
XYZTech Corp aims to secure venture debt financing to accelerate product development, expand its market reach, and strengthen its competitive position. The objective is to access flexible capital that complements equity funding, allowing for aggressive growth without sacrificing ownership.
First Market Solution:
Rate Discovery
Through First Market’s marketplace, XYZTech Corp accesses highly competitive pricing through market efficiencies and transparency. XYZTech Corp is also able to identify its optimal capital allocation by understanding increases and decreases in loan size and balancing risk levels.
Extended Runway with Equity Preservation:
The extended runway gives XYZTech Corp more time to increase its valuation and operational performance, potentially leading to a more favorable equity financing round in the future. XYZTech Corp preserves equity ownership to ensure that its founders and early investors can retain a larger share of the company’s future value, especially given they believe in the company’s long-term potential.
Complimentary Financing to Equity Rounds:
The combination of venture debt and equity financing allows XYZTech Corp to address various financial needs effectively. Venture debt is being used to cover its short-term working capital requirements, while equity funding supports its long-term growth initiatives.
Future Funding:
With First Market, XYZTech Corp establishes a partner to obtain venture debt for both its current round and its future venture debt raises. This significantly simplifies its approach to time consuming future raises.
Outcome:
XYZTech Corp was able to raise $5 Million in venture debt at a competitive rate. Through First Market, it achieved strategic benefits including financial flexibility, reduced dilution, and a balanced approach to capital raising. Equally, XYZTech Corp prepared itself for efficient future venture debt raises.
