Peter Peter - Founder, UserActive

4 Methods for Non-dilutive SaaS Funding

Need more capital to grow your business but don’t want to give up equity? Finding a way to keep as much equity as possible and grow at the same time can be challenging. Here are four different companies that are making this task a lot easier. Fintech companies Capchase, Pipe, Founderpath, and Fundabl all provide options to gain access to funding fast without giving up equity. This way, you can take advantage of new opportunities and scale your SaaS. Here are 4 methods for non-dilutive SaaS Funding.

Fundabl

Fundabl is an Australian-based funding solution with no dilution. They offer founder friendly funding that is fast, easy, and free of debt. If you’d like to hear from one of the co-founders himself, watch this interview with Ethan Singer! Fundabl has a great Runway Calculator which can help you get an idea of how much funding they can offer you before starting the real funding process. Let’s take a look at how their funding works.

How it works

Fundabl focuses on advanced contracts. This way there is no security over intellectual property and no need to provide a personal guarantee in the case of default. They are passionate about providing a frictionless and user-friendly experience for founders so that the process can be as easy and enjoyable as possible. Once you have provided your financials to Fundabl, it takes around 48 hours for Fundabl to give your company a trading limit and provide a portfolio of eligible contacts that you can trade. When the End User receives and pays for their service, Fundabl directly debits that payment from the connected account to pay for the Fundabl service. They deal with the remittance so that you don’t have to, giving you more time to focus on what matters most. Fundabl has seen great success so far and they’re only getting started.

Capchase

Capchase provides businesses with upfront capital once they have recurring revenue. Giving founders access to capital without debt or dilution allows them to forget about fundraising in the traditional sense. This opens the door to turning MRR into ARR and scaling your company to its full potential. Being an international team of founders, the Capchase team understands the value of quickly securing capital for your business. The company was founded in May 2020 and has since made $1.6B available to founders.

How it works

With Capchase Earn, you can leverage your cash and lower your cost of capital. If your business has cash in the bank, it can deposit the capital into a Capchase account. From there, Capchase will offer a loan with a 2% annual cost. The maximum loan amount is equivalent to the total amount of cash in their bank account, plus the startup’s annual revenue.

For example, let’s say your startup has €100,000 in the bank from fundraising. It also has an ARR of €10,000, you could take out a loan of €110,000, which will cost you €2,200 a year. You need to register your account and after integrating your financial systems, you’ll be set up within 24 hours. Next, sync your bank account, accounting software, and subscription management platform. Finally, review and agree to the terms, then you’ll be on your way to receiving your funding.

With Capchase Growth, you can scale investments with maximum returns by using the capital you need, exactly when you need it. Integrate your banking and accounting services, then Capchase will complete a data-driven analysis to determine your Capscore.

They have some great success stories on their website from companies that have used Capchase. Check out the different ways you can use your funding.

Capchase is available in the United States, Canada, United Kingdom, Spain, Denmark, Sweden, The Netherlands, Finland, and Belgium.

Pipe

Pipe was founded in 2020 by founders, for founders. Their team knows the struggles founders face when it comes to deciding how to finance their companies. They aim to allow founders to retain as much ownership as possible with flexible funding. Pipe has many use cases, one of them being SaaS. SaaS companies can turn recurring revenue into upfront capital to be used to invest more heavily in growth.

How it works

Pipe easily integrates with your banking, payment processing, and accounting systems to assess a customer’s key metrics. Using this information, it then rates the business performance and qualifies it for a trading limit. Co-founder Harry Hurst says that “we can work with any company that has a high degree of predictability around their revenue”. Their approval process usually takes 48 hours. Once you have been approved, you can log in to your dashboard and choose which contracts you’d like to trade. Simply finalize the transaction and the funds will be transferred to your bank account instantly.

Pipe is available for companies in the USA and Canada.

FounderPath

FounderPath is often compared to Pipe but has a few more benefits. Whereas Pipe has a 12-month payback period, FounderPath’s payback period is 12-24 months. It also is available for companies worldwide rather than just in Canada and the USA. FounderPath is targeted at bootstrapped SaaS founders who want and need to turn MRR into upfront cash. They also offer a great community on Slack, brimming with successful SaaS founders. In the Slack community, they host monthly webinars and weekly AMAs.

How it works

Founders can connect their bank accounts, customer data, and other information in order to receive a credit score. Using that, FounderPath lends the company the money. With a better credit score, you can get a better rate and cheaper capital. You can receive your funding in as little as 23 hours. The longest period from signup to wire transfer has been 9 days, which is still infinitely faster than the traditional methods of obtaining funding. In as little as a day, you can effortlessly secure upfront capital using your monthly revenue. Founderpath has a debt fund, so it invests directly in companies.

Final Words

In 2022, SaaS founders can forget about traditional fundraising methods. Gone are the days of passing over chunks of equity in exchange for capital. These 4 methods for non-dilutive SaaS funding are excellent options to obtain funding for your SaaS. Imagine that in a week’s time you have the capital to take your business to the next level thanks to one of these amazing companies! Share your experience with us if you’ve worked with Fundabl, Capchase, Pipe, or FounderPath. Finding funding solutions without diluting your equity is another way to help you scale your business, get more users, and grow!

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