Decisions about your company's capital needs and financing options can be overwhelming. Miguel Fernandez, Founder and CEO at Capchase, and Aishwarya Dahanukar, Head of Capital Markets & Risk at Capchase will outline VC and alternative financing options and the pros and cons of all the choices.

1. VC Financing vs Revenue
Financing: What Works When
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Aishwarya
Dahanukar
Head of Capital
Markets & Risks
Capchase
Miguel
Fernandez
Co-founder,
CEO
Capchase

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Nobody enjoys fundraising
15%
30
Meetings to get a
term sheet
Average founding team
stake at exit

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But it’s necessary

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Not all capital is created equal
Cost of Capital Flexibility Uses
Venture
Revenue
financing
Highest cost of
capital
Lowest cost of capital
Debt
VC
Lowest cost of capital
Highest ROI
Most flexible
Inflexible
Unscalable
Least flexible
Initiatives with long
paybacks:
● Engineers
● New product
development
● Entering new
markets
VC money “sinks”:
● Customer
acquisition
● M&A
● Working Capital

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When to use what

7. The average founding team
owns <15% at exit
Dilution is real. Really real.
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SaasCo
● $3m ARR
● Burn - $150k / month
Raises a series A to:
● Increase burn to $500k /
month
● Get 24 months of runway and
get to $15m ARR
With just VC
● $500k * 24  $12m series A
at $80m post money
With RBF
● $6m series A at $80m
● Up to 60% of ARR at any
given time in growth funding
Case study

9. Now we know when to
use which capital
But how much should be raised?
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Enough cash to
ensure not running
out of cash
Idle capital has
no ROI
VS
Idle capital presents a dilemma

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Big lump upfront and
spend - lots of idle
capital
Capital available is put
to work instantly,
generating returns
Minimum $$ are left idle
in the bank
Static vs. programmatic funding

12. ● 250 sample size
● Use alt-financing sources in user
acquisition and cutting burn
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● Capital deployed upfront
● Paying interest every month for all
used and unused capital
● Deployed at stable rate
● Capital deployed programmatically
to cover acquisition spend and
burn
● Recognizes renewals coming in,
change in metrics to adjust capital
deployment to match capital
expenditure evolution
● Every dollar deployed generates
returns from day 1
ROI calculations - Case Study

13. Your growth strategy
isn’t fixed
And your funding strategy should reflect that
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14. When evaluating your funding options, be sure to keep in mind:
1. Financing is dynamic, not fixed: How you fund your business should align
with how you want to grow
2. Growth at all costs is not worth it: Understand the costs of your funding
options and how it affects your long-term growth (dilution, time, etc.)
3. Protect your time: Time spent fundraising is time & focus pulled away from
growing your business
4. Idle capital costs a lot of money: Access the capital that you can
comfortably deploy at any time
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Out Top Takeaways

15. THANK YOU
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