In today’s challenging fundraising aura, more startups than ever are turning to alternative financing solutions such as debt.
The Austin-based company recently Founderpath bags $145 million in its own debt and equity financing to help B2B SaaS founders to grow their businesses. Founder Nathan Latka saw firsthand the difficult decision to give up too much of a stake in a startup, So, he’d founded years earlier, an experience that led him to start Founderpath, according to him.
Founderpath has seen more demand than ever in 2022, according to Latka, with the demand shift dramatically in recent months.
Founded in January 2020, the company has invested over $60 million in capital to 130 SaaS founders, according to Latka. The company has invested $50 million in the last 12 months alone, more than half of which has been invested in the last four months.
Exactly how does it work?, Founderpath claims that it allows founders to receive up to 50% of their annual recurring income (ARR) in upfront cash. It asks the companies to link their own subscription system to its own website. “Latka says that once Founderpath has access to a startup’s finances, the organization will receive an invitation “in under 2 to 3 minutes.
Founderpath is aimed at bootstrapped SaaS businesses that earn at least $10,000 in monthly recurring income (MRR), with the typical company profile earning between $1 million and $5 million in ARR.
Founderpath isn’t the first (or last) company to assist SaaS businesses with non-dilutive funding. it competes directly with Pipe, a marketplace that connects businesses with predictable, recurring revenue to investors that was valued at $2 billion last year, and Capchase, which raised $280 million in new debt and equity funding in July of 2021 and has since raised $80 million in equity and secured another $400 million in debt.
Bootstrapped SaaS Founder Friendly Terms
The fintech platform enables SaaS founders to:
- Take up to 50% of their ARR in upfront cash today.
- Connect their stripe (or subscription system) and receive an offer in under 2 minutes.
- Unlock 48 month payback periods.
- Access capital as cheap as a 7% discount rate.
- Maintain 100% control of the company.
Unlike many of Founderpath’s competitors, the company offers 12+ month repayment terms, no prepayment penalties, and no fees or warrants.
Typical terms are $500,000 paid back on a 24 month term at a 7-12% discount rate. There are no other fees and money is wired overnight.
According to founder Nathan Latka the company has “deployed over $50m in capital over the last 12 months to 125 SaaS founders.”
In addition, founders rely on free tools from Founderpath like their Valuation Calculator and close to 1,000 are attending their Founder500 event on September 1-2nd in Austin Texas.
Founderpath is focused on bootstrapped SaaS companies doing at least $10k in MRR, with the typical company profile doing between $1m and $5m in ARR. “We have no interest in doing $5m deals into companies with $10m+ in revenue.
There are better options for those founders. We will help 1,000 founders at an average deal size of $500k. Ultimately we measure success based off one metric: How many SaaS founders can we help hit $10m in revenue and keep 100% control,” said Latka.
Founderpath (https://founderpath.com) was launched in 2020 as a way for bootstrapped SaaS founders to get capital without selling equity. The company integrates with Stripe, Recurly, Chargebee, Chargify, Profitwell, Plaid, and Quickbooks to analyze the strength of a SaaS company. The stronger the company, the more capital founders can take. The team is remote, built by bootstrappers, and funded by bootstrappers. See how much capital you could get by visiting Founderpath.com.