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This is Scaleworks Debt Fund, a revenue based lender to B2B SaaS companies

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Hi, John Gallagher here, I have recently joined Scaleworks as Director of Venture Finance.

As an avid follower of innovation (in all industries) and having worked and studied Finance for the last twenty years, the rise of challengers to the finance and banking industry is met with open arms.

While the world moved to the internet and automated processes, the banking industry took its time to follow. Like all innovation revolutions, there are a large number of new entrants looking to capitalise, with most sticking to one core area.

In lending, there has been a rise of alternative finance for both consumers and corporates, from peer-to-peer lending to those who have raised institutional money to provide innovative products. Scaleworks Venture Finance grew out of need for finance for our own B2B SaaS companies.

Scaleworks Debt Fund

We’re an alternative lender to B2B SaaS companies.

Historically, SaaS companies seeking finance have difficulty in raising money from traditional sources, they have no large assets and have a lack of substantial profits which commercial banks would lend against.

Often, these companies have bootstrapped themselves or raised money from friends and family. This is where venture finance has stepped in with a number of new revenue based lenders, Scaleworks Venture Finance is one. The finance provided aims to allow companies to feed growth and continue to build the value of their company without having to dilute the shareholding of the founders.

We’re operators

Scaleworks Venture Finance was born out the need of Scaleworks’ own companies. Scaleworks found that their own portfolio companies required some debt finance to allow them to grow, however there was no product in existence which we found was what we wanted to use.

So we started the Venture Finance arm of Scaleworks by debuting the debt fund last year.

Scaleworks’ own companies have used the venture finance a number of times and are based in the same office, so we talk to them every day about the different challenges they face and how they overcome them.

Our market is B2B SaaS companies between $1m and $10m in annual recurring revenue. Each company focuses on different areas but all have a subscription model, with monthly and annual recurring revenue, a diverse customer base and has a disciplined management team.

What alternative funding and debt can do for your company

In the coming weeks, we’ll be sharing some learnings, as well as tips and insights on why and how debt can help your company. We’ll also dive into why debt can sometimes be the better option than traditional venture capital.

We plan on exploring many different areas of financing for SaaS companies, so keep a watch out!

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