Why raise venture capital when you can raise debt and keep your equity?
That’s the question a whole slew of new financial technology companies are hoping entrepreneurs will ask themselves as they begin to think about collecting outside capital for their businesses. Clearbanc made waves with its “20-Minute Term Sheet” campaign, with a goal of backing 2,000 businesses with $1 billion in non-dilutive capital by the end of 2019. Now, Capital is launching to educate founders about the possibility of debt funding.
Founded by former Draper Fisher Jurvetson (now known as Threshold Ventures) investor Blair Silverberg, Csaba Konkoly and Chris Olivares, Capital is launching today with $5 million from Future Ventures, Greycroft, Wavemaker and others. Additionally, it’s raised from “prominent institutional pools of capital” to invest between $5 million and $50 million in promising companies, determined using “The Capital Machine.”
Capital’s underwriting technology, dubbed The Capital Machine, determines if businesses have the growth potential necessary for an infusion of debt (by analyzing revenue and other financial considerations), then delivers term sheets within 24 hours. The expedited process cuts out the time-consuming elements of pitching venture capitalists, the company says, allowing businesses to go from zero to $5 million — or more — in a matter of hours.
For companies that are’t ready for a debt round, or that don’t meet Capital’s qualification, the company is offering access to a free calculator that determines the cost of a company’s capital based on their fundraising and valuation data.
“We are trying to create a business that is the place that all founders go to start their fundraising process,” Silverberg tells TechCrunch. “We just want entrepreneurs to understand that step one in building a balance sheet is to understand your cost of capital. Step two is you can now use that to compare your financing options. We hope we can make this process simpler and more transparent.”
Capital charges a 5% to 15% flat fee on its capital, investing a maximum of $50 million over time. The company has ambitions of becoming a holistic investment bank of sorts, says Silverberg, ready and willing to advise companies on fundraising possibilities and connect them with VCs for future deals.
Historically, Silverberg explains, venture capital dollars went to risky upstarts poised to disrupt a category. Today, loads of equity funding is funneled into predictable business models that could be funded entirely with non-dilutive capital: “I saw what the venture process was like,” Silverberg said, referencing his stint at DFJ. “Tech companies do not utilize debt … this is extremely expensive for founders.”
There’s a culture surrounding venture capital fundraising in Silicon Valley and beyond. One in which startups seek to become “unicorns,” hoping for stories on this very site to laud their accomplishments — including the loads of venture capital dollars they’ve pulled in. In reality, much of that capital is plowed into things like Facebook and Google to fuel digital ad campaigns, which is not how VC is intended to be used and can result in founders taking a company public with just a few percentage points of ownership.
Solutions like Capital, Clearbanc, Lighter Capital and others should remind entrepreneurs that venture capital isn’t the only route to getting a company off the ground and can be raised in addition to venture debt.
“There’s no excuse for not knowing your cost of capital,” Silverberg adds.
How is the Blockchain Shaping the Digital Marketing Automation Tools?
It is no doubt that most of us are aware of what blockchain is and how it has shaped the future of digital marketing automation. If you are reading this article, then you might be wondering what exactly is the difference between blockchain and digital marketing automation?
What Exactly Is Blockchain? The blockchain is a decentralized ledger system that records transactions between two parties. A block stores information about previous transactions, so each block contains a link to its previous transaction’s record to prevent double-spending.
The users will have their copy of the record on their device so they can keep track of all the changes made in that particular chain by any member of the network.
The Blockchain Is Creating a New World
The blockchain is a new technology. It’s based on the idea of decentralization and peer-to-peer networks, which makes it different from traditional centralized systems. Blockchain technology uses a distributed ledger to store information, making it impossible for a hacker to modify the data stored on the network.
The blockchain can get used in many ways, including cryptocurrencies like Bitcoin or Ethereum. But it also has applications in other industries such as digital marketing automation tools where marketers need fast access to information about their customers or prospects without having to go through an intermediary (like Google Analytics).
Some companies have started using this technology as part of their product offerings by providing users with access to their data through APIs that they can use however they wish (for example: visualizing trends over time).
How Digital Marketing Automation Tools Work
Digital marketing automation tools work by task automation like sending emails, creating landing pages, and tracking the performance of your marketing campaigns. These tools can help you save time and money by automating tasks.
For example, let’s say you want to reach out to more leads on LinkedIn but you don’t have time to send them an email every day. With a digital marketing automation tool like HubSpot or Marketo, you can set up an autoresponder sequence that will send out emails automatically so all you have to do is check-in once in a while and make sure everything’s running smoothly.
Prepare for the Future of the Blockchain Marketing
As technology continues to evolve, the blockchain will play a pivotal role in digital marketing. This is because it offers a secure and reliable platform that marketers can use to communicate with their audience. In addition, it also provides better transparency than traditional marketing methods because of its decentralized nature.
Below are some of the ways that marketers can benefit from using blockchain:
- Security: The blockchain offers greater security than traditional methods of digital marketing since it doesn’t rely on central servers or third parties.
- Efficiency: Using blockchain technology means there’s no need for middlemen or intermediaries when conducting transactions online. This improves efficiency by cutting out unnecessary steps between two parties looking to transact business with one another; this saves both time and money for both parties involved!
Secure Digital Marketing Tool Designed on Blockchain
A digital marketing tool designed on blockchain will be more robust and secure. Blockchain technology is a decentralized, distributed ledger technology that helps in recording transactions between two parties efficiently.
It also ensures that the records cannot be tampered with once they get recorded. This means that if you buy a product from an e-commerce website and pay for it using cryptocurrency (a form of digital currency), then no one can hack into the system and change your transaction record to avoid paying you the money.
In general, blockchain offers marketers several benefits:
- It allows for better data sharing and storage than traditional databases
- It offers enhanced security features because there is no single point of failure
- It can help companies boost productivity by integrating both humans and machines
Blockchain Protocol That Ensures Safety, Security
Don’t worry, you can still use digital advertising. You just need to trust the blockchain protocol that runs it.
Ad-blocking software has made digital advertising ineffective already and will soon make all digital advertising completely ineffective. You see, if you are using ad-blocking software on your computer or mobile device, then you’re not seeing any of the ads being served to people who aren’t using ad blockers.
This means that advertisers must pay for each impression (or view) of their ads, even when those impressions do not get seen by anyone at all!
By adopting a blockchain protocol for their digital advertising campaigns, marketers and publishers can verify which impressions are being seen by humans and prove whether or not they were delivered effectively before paying for them.
It is worth mentioning that the benefits can be multifold as is already visible from the other spaces like the cryptocurrency markets. Numerous traders are gaining from the rising cryptocurrency prices. So, digital markets too must watch out for this technology.
The entire industry benefits because everyone is working together instead of trying to scam each other through fake views on fake websites with fake content created solely for financial gain without any real value-added back into society whatsoever!
Digital Technology Is Changing Everything
You probably already know that digital technology is changing everything. But what you may not realize is that blockchain is one of the biggest and most important digital technologies to come out in years.
Blockchain can be a difficult concept to grasp, but it’s worth learning about because it’s changing the way we do business, marketing, and advertising—even as we speak! The best place to start learning is by understanding what blockchain means. It’s essentially a decentralized database that allows information (such as financial transactions) to be stored on multiple computers rather than in one location. This makes it more secure than traditional databases which are usually stored on just one server or computer system.
As you can see, the blockchain is changing the way we interact with technology. It’s also changing how we experience marketing automation tools, and how they work. The future of digital marketing will be shaped by this new technology, which means marketers need to start exploring how it can be applied to their jobs now.
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