Connect with us

Startup

Beyond VC: Funding Options for Early-Stage Startups

It’s that time of year when we’re all staring down the end of the December, wondering where the months have gone. This is also the time when a lot of entrepreneurs wrestle with their plans for the next year, asking themselves: Where should I bet big? Are the growth targets right? How am I going to pay for all these

Read more >

The post Beyond VC: Funding Options for Early-Stage Startups appeared first on The Gust Blog.

Avatar

Published

on

It’s that time of year when we’re all staring down the end of the December, wondering where the months have gone. This is also the time when a lot of entrepreneurs wrestle with their plans for the next year, asking themselves: Where should I bet big? Are the growth targets right? How am I going to pay for all these big plans?

As a startup exec, adviser, and investor, I’ve spent a lot of time both asking and grappling with these questions. When it comes to ‘paying’ for company growth, I’ve been fortunate enough to sit on both sides of the venture capital table, so I understand firsthand the strategic benefits of equity financing, such as receiving a capital injection and advisory relationships with mentors. But equity growth capital isn’t always the best fit for early-stage companies, from either the investor or entrepreneur side of the table.

So how do you get capital to scale when your company is beyond the seed stage and has steady growth, but you’re not ready or willing to take on VC?

The good news is that there are more funding options than ever before for growing tech startups and several alternatives to traditional VC sources. Here’s a look at four alternative funding options for early-stage companies, including the main pros and cons of each. But first, I have a suggestion:

Have a plan for how you’re going to use the capital.

Our company has worked with more than 200 startups, and we’ve identified a pattern: successful early-stage companies have specific plans to use the capital before they raise money. Maybe it’s hiring your first salesperson or head of product development, or adding technical capacity. Whatever that next step is, understand your growth goals for the capital you’re about to pursue and put a plan together for how you’re going to use the money to scale.

Revenue-Based Financing

Revenue or royalty-based financing (RBF) is a type of funding in which a company agrees to share a fixed percentage (i.e. royalty rate) of future revenue with an investor in exchange for capital in the form of a loan. The amount of capital is determined by a multiple of monthly revenue (i.e. 3-4x), allowing companies with negative cash flow or limited assets to access growth capital. The total obligation is repaid via monthly payments calculated as a percentage of monthly revenue, increasing in strong-revenue months and decreasing in low-revenue months. While this funding instrument has been around for awhile, it’s only recently that revenue-based financing has become a more common funding option for tech startups.

The pros:

  • Provides early-stage tech companies access to growth capital earlier in their life cycle compared to traditional sources such as banks or venture debt funds.
  • Founder-friendly structure, commonplace to have no equity dilution, no loss of control, no personal guarantees and no financial covenants.
  • Monthly payments are based on a percentage of monthly revenue, resulting in variable payments that fluctuate with the business.
  • In the current tech startup landscape, the cost of capital for RBF tends to be higher than traditional sources, such as a bank loan, line of credit, or A/R factoring.
  • Investment requires repayment on a monthly basis, thus reducing operating cash on a month-to-month basis.
  • Requires monthly revenue and steady growth, making it a tough fit for pre-revenue companies.

More technology companies are turning to funding methods like revenue-based financing to get to the next level, and then they’re able to scale. A great example is MapAnything, a company we worked with based in Charlotte, North Carolina. The company used revenue-based financing to preserve equity while growing their geo productivity platform in Salesforce. Instead of giving up 20-30% of their company to a VC, they used RBF to scale. MapAnything went on to raise a $7M Series A and a $33.1M series B over the past two years, and have grown to 1,500 customers and 150 employees.

Accounts Receivable Financing

Accounts receivable financing, also known as invoice factoring, is an arrangement wherein a company sells their company’s outstanding invoices or receivables at a discount (i.e. 75%-85%) in exchange for an infusion of working capital into the business. As one of the oldest forms of business funding, when used correctly it can be a very useful tool when seeking working capital options for an early stage company.

The pros:

  • Abundance of factoring options, making the process quick and options numerous.
  • Does not require additional collateral or personal guarantees.
  • Business owners retain complete ownership of their company; no equity arrangement.

The cons:

  • Not available to all companies, requires minimum levels of current invoices or receivables.
  • Provides access to working capital, while certainly an option it’s not the best tool to fund long-term growth of company.
  • Contract terms vary across finance companies often include onerous or unclear terms including long contract length, excessive termination penalties, special fees, and all-or-nothing contracts.

With careful research, accounts receivable financing may be an option if you suffer from the classic startup catch–you need capital to complete a project or take on a new customer, but you don’t have a financial history or access to traditional bank loans or other funding options.

Startup Accelerators

Startup accelerators are programs that provide early-stage companies with a mix of financing, mentorship, networking, and education. Accelerators are looking for growth-driven companies that meet specific criteria. The program usually culminates in a public pitch day or demo event aimed at investors. There are thousands of accelerator programs in the US, and many of them are specific to geography, industry, and/or for specific communities.

Danielle D’Agostaro, Managing Partner and COO at Alchemist Accelerator, says: “Building a startup can feel like a lonely endeavor. Joining an accelerator program not only gives you access to other successful founders that have been in your shoes, but also a community of entrepreneurs who knows what it’s like to go through the startup experience. The connections you make can last far beyond the life of the program and you may even end up one or two degrees of separation from well-known alumni.”

The pros:

  • Accelerators provide seed stage investment, and depending on the accelerator program, opportunities for follow-on investments.
  • Introductions to investors during and after the program, along with some validation that your startup has met the accelerator’s quality standards.
  • Focused learning on startup fundamentals (business model, financial models, team, value prop, etc.) and prepping your company for investment.
  • Access to mentors with specific areas of expertise and industry knowledge; in some cases mentors will agree to invest, too.

The cons:

  • Significant time investment and dedication — programs range from 3-6 months, and require participation in multiple ongoing meetings and events, which may interrupt early-stage momentum.
  • Equity exchange — you may need to give up some amount of equity in your company in exchange for the program’s cost and investment, which can have the same ramifications as any other equity-based financing down the line as you grow.
  • Focus and values alignment — you need to make sure the accelerator program aligns with your goals and focus. Example: if the program is focused solely on fundraising, the content, mentors and information will be centered around that topic. If your company isn’t at that stage yet, it may not be the best fit.

Technology-based Economic Development (TBED)

Many states support small technology companies by providing incentives and resources to spur their growth. A resource most early-stage entrepreneurs overlook is Technology-Based Economic Development entities at the local, state, and regional level. These organizations can provide access to capital, tax credits for things like hiring, and expertise and guidance to help early-stage tech companies scale. Most TBEDs are public-private partnerships designed to help technology companies not just to grow, but to stay in their specific region while they grow to fuel job growth and add to the tax base.

“We want you to scale, and we want you to stay in the state,” says Derek Willis of SC Launch, which is part of SCRA, a TBED in South Carolina. The organization provides funding and services to early-stage companies in the state’s life sciences, information technology, and advanced manufacturing sectors.

“Working with a TBED is like a seal of approval, because you’re affiliating with a group that has specific benchmarks and requirements in place,” notes Willis. “This shows potential investors that the company is an investment-grade opportunity, because you’ve already met a relatively high bar.”

The pros:

  • Can provide non-dilutive, low-cost capital when you’re bootstrapping and past the “Friends and Family” stage, but are still pre-revenue or too early-stage to qualify for other types of funding.
  • Demonstrates potential to future investors because your company has met a high bar in terms of qualifications and continued growth.
  • Can provide an excellent source of connections and exposure to potential investors/funders and other entrepreneurs.
  • Can help prepare you for the next stage of investment by funding key early-stage activities such as market validation, user research, and product planning.

The cons:

  • Minimum qualifying criteria are specific.
  • You need to be in a specific state or region to qualify; your company will be required to stay in that area to receive funding or other benefits.
  • The amount of capital available to early-stage startups through TBEDs is generally smaller than other funding vehicles.
  • Lot of pressure on a small amount of money – you’ll need to provide ongoing reporting around market sizing, growth projections, and financials.

It’s worth it to spend a little time online to find if there is a TBED in your state or region.

The Bottom Line

I’ve been on both sides of the table as an investor and a tech startup exec for many years. Raising and managing money is one of the toughest parts of running a startup. Make sure you look at all your funding options as you grow, and be open to alternative funding sources that can help you preserve equity as you scale.

Source: http://blog.gust.com/beyond-vc-funding-options-for-startups/

Startup

FDA approves remdesivir as the first treatment for COVID-19 despite WHO-sponsored study that shows remdesivir FAILED to prevent COVID-19 deaths and did NOT lower mortality rate in a multinational trial

Last week, we wrote about Gilead’s remdesivir (Veklury) after a new study of more than 11,000 people in 30 countries sponsored by the World Health Organization (WHO), found that remdesivir failed to prevent COVID-19 deaths in huge a trial. The study […]

The post FDA approves remdesivir as the first treatment for COVID-19 despite WHO-sponsored study that shows remdesivir FAILED to prevent COVID-19 deaths and did NOT lower mortality rate in a multinational trial appeared first on Tech News | Startups News.

Avatar

Published

on

Last week, we wrote about Gilead’s remdesivir (Veklury) after a new study of more than 11,000 people in 30 countries sponsored by the World Health Organization (WHO), found that remdesivir failed to prevent COVID-19 deaths in huge a trial. The study finds that the antiviral drug remdesivir has little or no effect on mortality for patients hospitalized with COVID-19 and failed to lower the mortality rate in a multinational trial.

Based on their findings, the team of scientists wrote:

“These Remdesivir, Hydroxychloroquine, Lopinavir and Interferon regimens appeared to have little or no effect on hospitalized COVID-19, as indicated by overall mortality, initiation of ventilation and duration of hospital stay.”

Now in a new stunning development, the Food and Drug Administration (FDA) announced today it has “approved the antiviral drug Veklury (remdesivir) for use in adult and pediatric patients 12 years of age and older and weighing at least 40 kilograms (about 88 pounds) for the treatment of COVID-19 requiring hospitalization.”

FDA added that that remdesivir should only be administered in a hospital or in a healthcare setting capable of providing acute care comparable to inpatient hospital care. FDA said that the approval does not include the entire population that had been authorized to use Veklury under an Emergency Use Authorization (EUA) originally issued on May 1, 2020.

“In order to ensure continued access to the pediatric population previously covered under the EUA, the FDA revised the EUA for Veklury to authorize the drug’s use for treatment of suspected or laboratory confirmed COVID-19 in hospitalized pediatric patients weighing 3.5 kg to less than 40 kg or hospitalized pediatric patients less than 12 years of age weighing at least 3.5 kg. Clinical trials assessing the safety and efficacy of Veklury in this pediatric patient population are ongoing,” FDA said in a public release.

“The FDA is committed to expediting the development and availability of COVID-19 treatments during this unprecedented public health emergency,” said FDA Commissioner Stephen M. Hahn, M.D. “Today’s approval is supported by data from multiple clinical trials that the agency has rigorously assessed and represents an important scientific milestone in the COVID-19 pandemic. As part of the FDA’s Coronavirus Treatment Acceleration Program, the agency will to continue to help move new medical products to patients as soon as possible, while at the same time determining whether they are effective and if their benefits outweigh their risks.”

The agency also went on social media to promote the drug. In a Twitter post, FDA said:

“Today, we gave the first FDA approval for a #COVID19 treatment. The drug was approved for adults and children ages 12 and older for the treatment of #COVID19 requiring hospitalization. https://fda.gov/news-events/press-announcements/fda-approves-first-treatment-covid-19”

On April 16, Gilead reported that early trial results from Remdesivir testing showed the drug to be effective in treating coronavirus patients in Chicago hospital. Then on April 23, an independent report from Financial Times, citing documents accidentally published by the World Organization, found that Remdesivir failed in a clinical trial. The report showed that Gilead Sciences’ remdesivir flopped in a Chinese trial aimed at treating coronavirus patients. The study found that Remdesivir did not improve patients’ condition or reduce the coronavirus pathogen in their bloodstream. In June, Gilead said it would make remdesivir at a cost $3,120 per U.S. patient.

Below is the Abstract of the WHO-sponsored study.

BACKGROUND WHO expert groups recommended mortality trials in hospitalized COVID-19 of four re-purposed antiviral drugs. METHODS Study drugs were Remdesivir, Hydroxychloroquine, Lopinavir (fixed-dose combination with Ritonavir) and Interferon-β1a (mainly subcutaneous; initially with Lopinavir, later not). COVID-19 inpatients were randomized equally between whichever study drugs were locally available and open control (up to 5 options: 4 active and local standard-of-care). The intent-to-treat primary analyses are of in-hospital mortality in the 4 pairwise comparisons of each study drug vs its controls (concurrently allocated the same management without that drug, despite availability). Kaplan-Meier 28-day risks are unstratified; log-rank death rate ratios (RRs) are stratified for age and ventilation at entry. RESULTS In 405 hospitals in 30 countries 11,266 adults were randomized, with 2750 allocated Remdesivir, 954 Hydroxychloroquine, 1411 Lopinavir, 651 Interferon plus Lopinavir, 1412 only Interferon, and 4088 no study drug. Compliance was 94-96% midway through treatment, with 2-6% crossover. 1253 deaths were reported (at median day 8, IQR 4-14). Kaplan-Meier 28-day mortality was 12% (39% if already ventilated at randomization, 10% otherwise). Death rate ratios (with 95% CIs and numbers dead/randomized, each drug vs its control) were: Remdesivir RR=0.95 (0.81-1.11, p=0.50; 301/2743 active vs 303/2708 control), Hydroxychloroquine RR=1.19 (0.89-1.59, p=0.23; 104/947 vs 84/906), Lopinavir RR=1.00 (0.79-1.25, p=0.97; 148/1399 vs 146/1372) and Interferon RR=1.16 (0.96-1.39, p=0.11; 243/2050 vs 216/2050). No study drug definitely reduced mortality (in unventilated patients or any other subgroup of entry characteristics), initiation of ventilation or hospitalisation duration.

CONCLUSIONS These Remdesivir, Hydroxychloroquine, Lopinavir and Interferon regimens appeared to have little or no effect on hospitalized COVID-19, as indicated by overall mortality, initiation of ventilation and duration of hospital stay. The mortality findings contain most of the randomized evidence on Remdesivir and Interferon, and are consistent with meta-analyses of mortality in all major trials. (Funding: WHO. Registration: ISRCTN83971151, NCT04315948)


Source: https://techstartups.com/2020/10/22/fda-approves-remdesivir-first-treatment-covid-19-despite-sponsored-study-showed-remdesivir-failed-prevent-covid-19-deaths-not-lower-mortality-rate-mu/

Continue Reading

Startup

Former Chief Science Officer for Pfizer: Coronavirus “pandemic is over” and “there is no science to suggest a second wave should happen.” It’s faked on false-positive COVID-19 tests

In a reversal about what the public health officials and scientists have been telling us for months, Dr. Mike Yeadon, the former Chief Science Officer for the pharmaceutical giant Pfizer says “there is no science to suggest a second wave should happen.” […]

The post Former Chief Science Officer for Pfizer: Coronavirus “pandemic is over” and “there is no science to suggest a second wave should happen.” It’s faked on false-positive COVID-19 tests appeared first on Tech News | Startups News.

Avatar

Published

on

In a reversal about what the public health officials and scientists have been telling us for months, Dr. Mike Yeadon, the former Chief Science Officer for the pharmaceutical giant Pfizer says “there is no science to suggest a second wave should happen.” Dr. Yeadon said that false-positive results from inherently unreliable COVID tests are being used to manufacture a “second wave” based on “new cases.”

With a degree in biochemistry and toxicology and a research-based Ph.D. in respiratory pharmacology, Dr. Mike Yeadonhas spent over 30 years leading new medicines research in some of the world’s largest pharmaceutical companies. He worked for Pfizer for 16 years before in 2011 as Vice President & Chief Scientist for Allergy & Respiratory. Since leaving Pfizer, Dr. Yeadon has founded his own biotech company, Ziarco, which was sold to the world’s biggest drug company, Novartis, in 2017.

In an interview with Julia Hartley-Brewer, Dr. Yeadon said the Government is “using a test with an undeclared false positive rate.” He said that he wants those who have tested positive for coronavirus to be tested again to eliminate the possibility of the test being a false positive.

Even if all positives were to be correct, Dr. Yeadon explained that given the “shape” of all important indicators in a worldwide pandemic, such as hospitalizations, ICU utilization, and deaths, “the pandemic is fundamentally over.”

“Were it not for the test data that you get from the TV all the time, you would rightly conclude that the pandemic was over, as nothing much has happened. Of course people go to the hospital, moving into the autumn flu season…but there is no science to suggest a second wave should happen,”  Yeadon said in the interview.

You can watch the video of his interview below.

Back in September, Dr. Yeadon also co-authored a paper with two of his colleagues. In the paper, which is titled: “How Likely is a Second wave?” they explained:

“It has widely been observed that in all heavily infected countries in Europe and several of the US states likewise, that the shape of the daily deaths vs. time curves is similar to ours in the UK. Many of these curves are not just similar, but almost super imposable.”

Dr. Yeadon and the two scientists also looked at the national weekly mortality data from the UK to see the effect of the COVID-19 pandemic. They used the data of the past four years for comparison purposes and to calculate upper and lower control limits (based on two standard deviations).

Below is how they described their findings:

This shows that in the pandemic peak (April 17th to 30th) more than twice the number of seasonal average deaths occurred, with the number of deaths above the upper control limit from March 27th through to June 12th, totalling 44,895 excess deaths. Since June 26th the number of weekly deaths has now fallen so it is not only below the weekly average but has regularly dropped below the lower control limit, showing that we are now at the lowest number of weekly deaths recorded in many years.

Based on their study, they found that “over the last three months since lockdown measures started easing on the May 10th there has been no increase in weekly deaths. On the contrary, these have continued to fall.

Dr. Yeadon further pointed out that the “novel” COVID-19 contagion is novel only in the sense that it is a new type of coronavirus. But, he said, there are presently four strains which circulate freely throughout the population, most often linked to the common cold.

Yeadon et al added:

“There are at least four well characterised family members (229E, NL63, OC43 and HKU1) which are endemic and cause some of the common colds we experience, especially in winter. They all have striking sequence similarity to the new coronavirus.”

Toward the end of the paper, Dr. Yeadon and the two other scientists also addressed the sudden surge in coronavirus cases and what is happening in terms of second wave concerns in France and Spain. They “contend that the many claims in the media for outbreaks, spikes and second waves are all artefacts of amplified rates of testing.”

“It should be noted that illness, hospitalisations and deaths have not reversed in any clear and sustained manner. Specifically, careful examination of the weekly all-causes mortality data in France is completely clear. Six weeks into an apparent surge of cases, the number of deaths remain completely flat and normal, in all age bands (as of mid-August when this document was written).”

The authors concluded with recent charts of daily cases from the two countries to further support their claim that the second wave is over.

R


Source: https://techstartups.com/2020/10/22/former-chief-science-officer-pfizer-coronavirus-pandemic-no-science-suggest-second-wave-happen-faked-false-positive-covid-19-tests/

Continue Reading

Startup

ZenSports, the mobile peer-to-peer sports betting app, launches support for native cryptocurrency for funding, betting, and trading in ICX

The first time we wrote about ZenSports was back in February of this year. Since then, the crypto-based gaming startup has been getting a lot of attention from tech investors and partnerships. Just last month, closed an additional $1.46 million seed […]

The post ZenSports, the mobile peer-to-peer sports betting app, launches support for native cryptocurrency for funding, betting, and trading in ICX appeared first on Tech News | Startups News.

Avatar

Published

on

The first time we wrote about ZenSports was back in February of this year. Since then, the crypto-based gaming startup has been getting a lot of attention from tech investors and partnerships. Just last month, closed an additional $1.46 million seed funding for its mobile peer-to-peer sports betting marketplace.

Today, ZenSports just announced the launch of funding, betting, and trading in ICX. The ICX is the native coin built on ICON’s blockchain protocol, and which can be used for real-time payments and also as a protocol for connecting the blockchain world. With the launch, ZenSports now includes the native cryptocurrency from ICON’s blockchain protocol, ICX, to its platform for funding, betting, and trading.

Founded in 2016 by Etan Mizrahi-Shalom and Mark Thomas, the San Francisco, California-based ZenSports is a mobile peer-to-peer sports betting marketplace where anyone can create and accept sports bets with anyone else in the world, without the need for a centralized bookmaker. ZenSports is the only native mobile app that offers peer-to-peer sports betting on the App and Play Stores.

Up until now, ZenSports has accepted USD (both fiat and cryptocurrency versions of USD), Bitcoin, and its native SPORTS token (which is also built on ICON’s protocol). With the addition of ICX onto its platform, ZenSports customers can now quickly deposit ICX into their accounts, wager on sports using ICX, and buy/sell/trade ICX within the ZenSports trading exchange. Customers can also withdraw ICX directly from their ZenSports accounts.

ZenSports originally partnered with ICON back in June 2018, when ICON invested in ZenSports’ Pre-Seed round. ZenSports then built and launched its SPORT security token on ICON in December 2018, and built and launched its SPORTS utility token on ICON in July 2019.

According to ZenSports co-founder and CEO Mark Thomas, “ICON has been an amazing partner of ZenSports’ for the past two years. Their blockchain technology is second to none, settlement times for transactions are near-instant, and the fees are extremely low. The community is awesome, and the management team is extremely responsive and helpful whenever we have questions. We’re excited to give back to the ICON community through our launch of ICX funding, betting, and trading within ZenSports.”


Source: https://techstartups.com/2020/10/22/zensports-mobile-peer-peer-sports-betting-app-launches-support-native-cryptocurrency-funding-betting-trading-icx/

Continue Reading
Saas3 mins ago

Saas3 mins ago

Saas3 mins ago

Saas3 mins ago

Saas3 mins ago

Saas3 mins ago

Saas3 mins ago

Saas3 mins ago

Saas3 mins ago

Saas3 mins ago

Press Releases17 mins ago

Hurricane Epsilon Marks 10th Hurricane of the 2020 Hurricane Season

Press Releases17 mins ago

TransAlta Renewables Executes 15-year Contract Extension in Western Australia with BHP Nickel West

Press Releases17 mins ago

Hurricane Epsilon Marks 10th Hurricane of the 2020 Hurricane Season

Press Releases26 mins ago

ROSEN, A LEADING LAW FIRM, Announces Filing of Securities Class Action Lawsuit Against Loop Industries, Inc.; Encourages Investors with Losses in Excess of $100K to Contact Firm – LOOP

Press Releases34 mins ago

Taseko To Release Third Quarter 2020 Results

Press Releases39 mins ago

Revolt Announces Compelling New Social Justice Documentary ‘From Pain to Power: A Revolt Special’ to Premiere on Monday, October 26th

Venture Capital41 mins ago

8common (ASX:8CO) raises $2.25M in extra capital

Venture Capital49 mins ago

Australian government to review domestic payments system regulation

Press Releases1 hour ago

Agape Treatment Center Launches Neuro Program to Improve Success of Addiction Treatment

Saas2 hours ago

25% of You in SF Plan to Go Back to The Office Soon, Apparently

Press Releases2 hours ago

Gulfcoastguys.com explains why vacation rentals are better than hotels – our website will show you the best rentals in Sarasota and Bradenton Florida.

Venture Capital2 hours ago

Bitcoin goes mainstream as institutional ‘wall of money’ begins buying

Press Releases2 hours ago

Publish your press release in Baidu in Chinese

Venture Capital2 hours ago

Wisr Warehouse funding facility upsized to $250 million

Venture Capital2 hours ago

Australian Fintech Parpera secures $800,000 through Equitise campaign

Startup2 hours ago

FDA approves remdesivir as the first treatment for COVID-19 despite WHO-sponsored study that shows remdesivir FAILED to prevent COVID-19 deaths and did NOT lower mortality rate in a multinational trial

Press Releases3 hours ago

Local Debris Drop-Off Service Locations Now Available at Priority Waste

Press Releases3 hours ago

Helix Acquisition Corp. Announces Closing of $115 Million Initial Public Offering, Including the Full Exercise of the Underwriter’s Option to Purchase Additional Shares

Saas3 hours ago

Saas3 hours ago

Saas3 hours ago

Saas3 hours ago

Saas3 hours ago

Saas3 hours ago

Saas3 hours ago

Saas3 hours ago

Saas3 hours ago

Saas3 hours ago

Press Releases4 hours ago

Adams Resources & Energy, Inc. Completes Acquisition Of VEX Pipeline And Related Pipeline Terminal Facilities

Press Releases4 hours ago

Gerber Technology Redefines Mass Production with Launch of Revolutionary, Next-Generation Cutting Room

Trending