附近上门

There are more alternative financing methods now than ever before as founders look for options outside of raising venture capital to grow their companies.

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In recognition of that, , a San Antonio-based firm that offers a non-traditional form of capital and debt for B2B SaaS companies, announced this afternoon that it鈥檚 spinning out its debt fund as its own entity.

Dubbed , the new entity has tapped to serve as its CEO. Since launching its $10 million in January 2018, the fund has done over a dozen deals. Buoyed by that success, Scaleworks decided to break out the fund.

Interestingly, Gallagher (who served as Scaleworks鈥� director of finance) told me the firm is not looking to raise more money for the debt fund at this time and is instead using the money it gets repaid to do more loans.

鈥淢aybe sometime in the near future, we鈥檒l raise another fund,鈥� he said.

Debt vs VC

Debt financing is popular among founders who might have a 鈥渃lear growth path鈥� but who don鈥檛 need 鈥渉uge amounts of money鈥� to work on it, Gallagher told me.

鈥淎 lot of companies find this a great way to grow and keep control while increasing their value,鈥� he added. 鈥淲e don鈥檛 require board seats, don鈥檛 ask them to give up equity, and we don鈥檛 tell them how to run their business.鈥�

Element SaaS Finance lends to companies doing at least $1 million in recurring revenue, with customers and a proven market for their product.

鈥淪aaS companies should have high gross margins. So, burning a little bit of cash to grow is ok,鈥� Gallagher said.

Thus far, the debt fund has completed 16 loans, averaging nearly $1 million. (Some of which have already been repaid.) Loan sizes range from $200,000 to $3 million.

鈥淧eople like the fact we are operators of SaaS companies and speak the same language,鈥� Gallagher said. 鈥淲e understand how their revenues work, what they need and what stage they鈥檙e at.鈥�

Flexibility

Element鈥檚 main product, which is a term loan, can be flexed to be taken in different ways. For example, say a company needs a loan of $1 million but Element agrees to a schedule of drawdowns that works for the company over time. Or a company might only need $275,000 in short-term cash, which they can repay quickly and then use a debt facility as needed.

CEO and co-founder , who got a loan from Scaleworks, said he appreciated the firm鈥檚 flexibility and 鈥渟traightforward terms.鈥�

The fund has also inked a new partnership with a bank in San Antonio, , to provide banking solutions for SaaS companies.

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