This isn’t your typical term sheet. There is no shareholders agreement, no shotgun clause, no drag along rights, no governance, no board seats, and no equity. Come see what the evolution of fundraising looks like.
Reviews
  • Nick Alt
    Nick AltFounder, VNYL
    Pros: 

    Quickly get a sense of non-equity capital to help scale your company.

    Cons: 

    Can only account for revenue being generated on certain platforms.

    Very valuable anti-dilution tool for founders when you have a business that has the right key indicators to scale.

    Nick Alt has used this product for one year.
  • Pros: 

    Great anti-dilution model for raising capital, allows entrepreneurs to keep equity and focus on their business

    Cons: 

    Best used for marketing spend (FB, Twitter) and May not be the best tool for companies raising for long term R&D only

    Like it a lot, fills a massive need for entrepreneurs that want to scale their e-commerce business without giving away the farm.

    Rajen Ruparell has used this product for one year.
Discussion
If you, or someone you know has ever gone through the process of raising capital, you know that it begins and ends with a term sheet. These pieces of paper contain all of the ways that you are going to relinquish control of your baby, to an investor, looking for guarantees in exchange for money. Sometimes, these pieces of paper are very valuable. If you and your company are working on long term, research heavy, zero to one style problems it's the best thing to do. Trade control and equity, for the funds you need to explore uncertainty. Somewhere along the way, it changed. Too many investors started writing big cheques, and taking big pieces of equity to fund repeatable parts of a business like marketing spend, or inventory purchases. We saw this as an opportunity to create a founder friendly source of capital and fund these repeatable expenses. With the 20-Min Term Sheet, we are making it even easier to get started. Answer a few questions about your business, and Clearbanc will put a term sheet in front of you. This isn’t your typical term sheet. There are no shareholders agreements, no shotgun clauses, no drag along rights, no governance, no board seats. Clearbanc wants to fund the predictable parts of your business with a unique revenue share. This means you get the funds you need to grow, and you keep control. Our automated diligence systems let us underwrite and invest in companies faster than a traditional investor, come see what the evolution of fundraising looks like with our 20-Min Term Sheet. Happy to answer any questions below.
@andrewdsouza Hi, I have a few questions on how this works: What kind of companies do you fund or like to fund? I notice on your website as well as the other comments that you track marketing spend with platform integrations. Apart from obviously being on one of your platform partners, can you tell me about what type of businesses you're looking at, or maybe which ones are better suited for this product (one-time vs subscription)? Also let's be honest: no dilution fundraising? What's the catch here? Are there restrictions on where I can or can not allocate this capital? Interested to hear more. Jeff
@vht Great questions. We are interested in funding any company that is doing over $10k/month in revenue and looking to grow their business. I know this sounds like marketing talk but it's not, most of the companies we see on a daily basis look like e-commerce companies running Shopify, Magento, BigCommerce etc, or many have rolled their own solution and use Stripe or Braintree in the backend. As long as we have enough history to feed our predictive models, we can fund any business with repeatable expenses like sales and marketing. Some of our best companies are direct to consumer products and subscription boxes because those companies need to know their unit economics and return on ad spend (ROAS) When you get funded from Clearbanc, you are given a card loaded with the amount of your advance. If you spend that money on marketing with our preferred vendors: Facebook, Google, Twitter, Snap, Amazon, Pinterest we reduce your effective fee from 12.5% to 6%. You can also pay any business invoice (if the vendor doesn't accept credit card) in any currency and the cost of that is 12.5%. Remember that these aren't interest rates, and this is not a loan. These are flat fees on the capital we invest in your business. Typically businesses take a 5% repayment rate, meaning that every time you get paid, we take 5% until your original amount and our fee is collected. This way we ride the revenue rollercoaster with you and have our own skin in the game so to speak. It's in our best interest to help our portfolio companies grow. We get the "what's the catch" question a lot and really, there isn't one. If you know your unit economics and have levers to pull that will lead to growth, taking an investment from Clearbanc becomes academic. Hope this answers your questions, if not let me know.
Future of growth capital right here.
A product that founders have been waiting for...forever. If you have a steady business and need to scale your marketing, this is worth a try.
Excited about this! The future of funding :)
@aydin_mirzaee thanks! We think so too!
Looks really interesting. 2 questions: 1. How much funding can companies expect from this? 2. What platforms do you work with?
@yitong_zhang great questions. 1. Companies can expect anywhere from $5,000 up to $10,000,000. It all depends on your connected revenue and ad platform data. We compare your company against our models and present several offers. Up to the founder to pick the one that works best for their goals. Once we have given you money once, it becomes easy for us to see how fast you are spending it and starting working on follow-up investment. 2. We have integrations with: Shopify, Stripe, Square, Authorize.net, Braintree, PayPal, App Store, Google Play Store, Cratejoy, Facebook Ads, BigCommerce, Google Adwords and we are constantly adding more each week. Side note, love the work you and your team are doing at Coinbase.