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Alternative Capital Taxonomy Guide
- 1. Alternative Capital: A Taxonomy ™ Village Capital, Zebras Unite, Novel GP A Working Draft
- 2. Alternative Capital Taxonomy Capital Suppliers/Investors Capital Seekers/Businesses ● Growth Profiles* ○ High Growth ○ Category Pioneer ○ Niche ○ Dynamic ○ Livelihood ● Business Model Target ○ Growth ○ Profitability ● Capital Utility ○ Growth ○ Strategic ○ Seasonal ● Capital Sources ● Capital Structures ○ Debt ○ Mezzanine ○ Equity ○ Grants ○ Blend ● Risk / Return Profile ● Exit Structures ● Decision-Making Structures *From the Collaborative for Frontier Finance, The Missing Middles: Segmenting Enterprises to Better Understand Their Financial Needs, 2018
- 3. Capital Suppliers/Investors Capital Sources Family/Friends Employers/Business Networks Crowdfunding Governments Philanthropy Private/Venture Capital funds Banks/Credit Unions
- 4. Capital Suppliers/Investors Debt Mezzanine Equity Asset-BasedLending Leasing TradeFinancing Cash-FlowLending WorkingCapital Unsecured/JuniorLoans SHARE Revenue-BasedInvesting ProfitShare/Demand Dividend RedeemableEquity SAFE ConvertibleNotes Shares Capital Structures* Lower Risk Higher Risk High Risk *From the Collaborative for Frontier Finance, The Missing Middles: Segmenting Enterprises to Better Understand Their Financial Needs, 2018 Grants Grants LoanLossGuarantees Low Risk
- 5. Capital Suppliers/Investors Debt Mezzanine Equity Forgiveness Termpayments(interest, principal,balloon) Refinancing RedeemableEquity Tradesale/M&A IPO MandatoryDividends Exit Structures* Grants MoreGrants Conversiontofor-profit model *Adapted From the FLII Masterclass on Structured Exits (Transform Finance, Candide Group, IDB Lab, Adobe Capital, EcoEnterprises, Acumen Fund), 2019
- 6. Capital Suppliers/Investors Decision-Making Processes* Data-Driven (Capital-as-a-Service) Internal Decision-Making Investment Committees Pitch Competitions Peer Review Crowdfunding *From Village Capital, Capital Evolving: Alternative Investment Strategies to Drive Inclusive Innovation, 2018
- 7. Capital Seekers/Businesses Business Profiles* High Growth: Disruptive business models, large markets, high growth, fast scale, high risk *Adapted from From the Collaborative for Frontier Finance, The Missing Middles: Segmenting Enterprises to Better Understand Their Financial Needs, 2018 Niche: Innovative products & services, niche markets / customer segments, steady to high growth Dynamic: Established industries & sectors, existing products, proven business models, steady growth Livelihood: Opportunity-drive, family-run, highly localized, limited growth Category pioneers: disruptive products & services, new / large markets, variable growth & scale
- 8. Capital Seekers/Businesses Main Street Zebras Silicon Valley Growth Profiles Slower Growth Rapid Growth
- 9. Questions to consider: Categories ● What categories are missing? ● What categories are unclear? ● What categories could be combined? ● What other types of spectrums, beyond risk (Slide 4) or growth (Slide 8), could be used to map structures? ● What other aspects of capital seeking or capital supplying could be useful here?
- 10. Next Steps: Mapping and Matching
- 11. Mapping A User Journey Business Characteristics Growth Profile Business Model Target Capital Utility Growth Strategic Seasonal Capital Characteristics Capital Structures Exit Structures Decision-making Investor Types Capital Sources Risk / Return profile
- 12. Mapping A User Journey Business Characteristics Growth Profile Business Model Target Capital Utility Growth Strategic Seasonal Capital Characteristics Capital Structures Exit Structures Decision-making Investor Types Capital Sources Risk / Return profile
- 13. Mapping A User Journey Business Characteristics Growth Profile Business Model Target Capital Utility Growth Strategic Seasonal Capital Characteristics Capital Structures Exit Structures Decision-making Investor Types Capital Sources Risk / Return profile
- 14. Questions to consider: Mapping ● What categories are relevant to creating an actionable user journey? ● How can categories be appropriately grouped? ● Which growth profiles or business models for a company can map to which capital structures or sources? ● How can classifications on the capital side be mapped to each other? ● What additional information would be helpful to transform this taxonomy into a user journey?
Editor's Notes
- Clunky attempt at trying to capture the many-to-many matching between founders and investors (the two sides of the market), with the lines indicating the multiple options of combinations. Idea is to vault from the taxonomy to user journey in a tool for matching founders with investors, given the different business, funding, and capital characteristics we are surfacing.
- Clunky attempt at trying to capture the many-to-many matching between founders and investors (the two sides of the market), with the lines indicating the multiple options of combinations. Idea is to vault from the taxonomy to user journey in a tool for matching founders with investors, given the different business, funding, and capital characteristics we are surfacing.
- Clunky attempt at trying to capture the many-to-many matching between founders and investors (the two sides of the market), with the lines indicating the multiple options of combinations. Idea is to vault from the taxonomy to user journey in a tool for matching founders with investors, given the different business, funding, and capital characteristics we are surfacing.