Venture Debt Light: Growth without dilution of equity
No collaterals
Disbursement within 4 weeks
In-depth understanding of innovative business models
No equity kicker and without subordination requirement
Friendsurance
"Startups often get funding from business angels and venture capital funds, but rarely loans - certainly not in times of Corona. In the first quarter of 2020, investments in insurtechs halved worldwide. The fact that we got funding so quickly through creditshelf shows how compelling and solid our business model is."
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The Female Company
"I like the fact that creditshelf checks its investments very carefully at the beginning to see if financing is worthwhile and that I have the freedom to concentrate on building up the company afterwards instead of preparing monthly reports."
Targomo GmbH
"Thanks to the venture debt light loan from creditshelf, we were able to invest more in the further expansion of our sales and marketing team. The unsecured financing therefore came at exactly the right time to further accelerate our growth - thanks to an equally fast and smooth process!"
JOBMATCH.ME
"For us, creditshelf is an absolute added value due to its speed and we were impressed by the uncomplicated processing as well as the competent and very customer-oriented employees. At JOBMATCH.ME, we focused on profitability at a very early stage. This opened up financing opportunities beyond VC without further dilution. The capital now provided by creditshelf allows us to continue sustainable growth while keeping the momentum high, which is super important for us as a digital platform."
Especially for companies between the "start-up" phase, product-market fit and sustainable establishment, it is important to design the right financing mix.
With "Venture Debt Light", we enable tech growth companies to access debt capital at an early stage and offer a suitable supplement to equity financing. In doing so, we avoid dilution of company shares and are independent of the investment climate on the market. Our expertise lies in supporting companies from a seed / early stage or Series A round onwards, in which well-known investors are already involved.
The advantages of Venture Debt light are manifold and can vary depending on the market situation. For example, it can be used to circumvent down rounds, provide quick access to liquidity without valuation issues or avoid dilution at strategically important times. In addition, it may make sense to combine venture debt light with a smaller equity round to further drive the growth of the company. In any case, Venture Debt Light is a valuable financing component for emerging technology companies.
To differentiate: classic Venture Debt that comes with so-called equity kickers (warrants) will usually only delay dilution, not prevent it. Our Venture Debt Light does not dilute participating founders, existing investors or employees incentivised via ESOPs. We structure our Venture Debt Light with fixed, non-floating interest for the term of the loan in order to enable market –independent planning and thus security during our commitment – which in turn is in the interest of all investors, so that sufficient cash flow can be made available for future growth.
Conversely, it is clear that our venture debt light is not an equity round per se, but can be a sensible building block for combination with one - or (also simultaneously) serve to extend the runway, be used as a growth accelerator for e.g. marketing or further market development, or to pave the way for subsequent, more attractive equity rounds.
Even though banks and some fintechs are active in the business field of lending, there are still significant differences in the work processes. With fintechs, the business model – in contrast to the banking sector – is based on the use of technical solutions, with a focus on customer needs and versatile services. In this context, creditshelf's credit platform, for example, bundles all processes from the first non-binding credit request to the risk analysis and the credit arrangement to monitoring during the term. As a rule, this process takes more time at banks, starting with the arrangement of an initial appointment on site, through extensive manual form processing to long decision-making processes. With fintechs, the exchange during the credit process can also be designed interactively on the platform thanks to their software solutions. Risk analysts, corporate client advisors, operations managers and clients can view current work statuses at any time and communicate with each other via messages.
In addition, the system notifies those involved as soon as action is required at any point in the process. Thanks to automated analysis processes during the lending process, the system recognises when discrepancies arise that need to be clarified personally by the employees with the customer. In addition, the API system used at creditshelf can also be coupled with other software solutions for accounting and creditworthiness checks or also integrate services from third-party providers.
Companies usually receive the first information on a credit application within 48 hours. The entire lending process usually takes only a few weeks. To what extent banks can offer such speed and efficiency due to their technology depends on the individual state of digitalisation. In addition, decisions in the banking environment usually go through many levels, which in turn means additional time.
In fintech companies, the technical underpinning and control of all processes are standard and form the basis of the business model. creditshelf also differs from most traditional credit institutions in that it has its own internal scoring system for assessing creditworthiness. In addition to typical criteria such as annual turnover, this also takes into account the size of the company, its form and future potential. Furthermore, creditshelf arranges the granting of unsecured loans, which are rarely granted by banks.
Maximilian Wagner | Partner Manager
Unsecured loans from EUR 100,000 to EUR 5 millionDisbursement within 4 weeksFast, easy and digital loan requestPersonal and binding service
Monthly rate:*
€
Duration:
months
Loan volume:
€
*Example for best credit rating category
Senior Corporate Relationship Manager Scale-Up Finance & Growth
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