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ClearCompany calls SaaS Capital the “just right” partner to grow their SaaS business

.2 x
RETURN ON CAPITAL
$.6 M
COST OF EQUIVALENT EQUITY FUNDING
$.0 million
COMMITTED CAPITAL AVAILABILITY OVER 3 YEARS
$.3 million
TOTAL COST OF CAPITAL OVER 3 YEARS
$.9 million
NET EQUITY VALUE CREATED

“Using SaaS Capital, we significantly extended our runway and self-funded our growth from single- to double-digit [millions in] revenue. We didn’t borrow any more than the business needed, and capital availability grew along with the business. This ‘just-right’ approach enabled us to increase our valuation by over $50 million, all while retaining equity.”

| Andre Lavoie, CEO - ClearCompany

Background and Situation:

In 2013, ClearCompany was ready to expand product functionality and target a broader segment of the HR & Talent Management technology market. CEO and Co-Founder Andre Lavoie and his team started looking for an equity-friendly way to grow the business which was experiencing 50% annual growth and improving unit economics.

ClearCompany had two primary goals:

  1. Maximize runway and grow the business as much as possible before impacting the cap table.
  2. Use debt as a tool to prudently operate the business during the critical phase of growth from single- to double-digit revenue.

“The SaaS Capital team stood out from other lenders because the team understood what we were trying to do and how to structure the capital to facilitate our growth.”

Ultimately, ClearCompany chose SaaS Capital to provide a growth-debt facility that had $3.5 million in initial availability, which expanded to $9.0 million as ClearCompany's revenue grew over the 38-month life of the relationship.

Benefits to the Company:

Over a 38-month period, ClearCompany borrowed a total of $6.6 million based upon the capital availability that increased as the company grew. Andre Lavoie comments:

“We used our line from SaaS Capital to achieve what we called ‘Goldilocks’ mode. We had the business rhythm synced to the point where we would draw down funds every single month to manage cash flow. Based on our growth rate and the availability of the credit line, we always had the cash we needed to continue to grow. It was a 'just right' mechanism for managing the business month-to-month.”

“By using growth debt, we were able to protect the cap table for the ClearCompany team during the period in which the company grew at an incredibly fast rate in a short period of time. It was important for me to be able to do that for the founders and our employees.

 

“No thoughtful SaaS entrepreneur who has worked so hard to create wealth would take venture capital once they are past $3 million in ARR. They would be crazy not to grow their business on debt until they couldn't do it anymore. It just doesn't make financial sense to do it otherwise.”

INDUSTRY: HR TECHNOLOGY   ›   FOUNDED: 2004  ›   FUNDING DURATION: 38 MONTHS  ›   REVENUE GROWTH: 227%  ›   EXIT EVENT: PRIVATE EQUITY RAISE

ClearCompany SaaS Capital Funding

ClearCompany is the leading Talent Management software solution that helps companies identify, hire, and engage more "A Players." Founded in 2004, ClearCompany was recently ranked #427 on Deloitte's 500 Fastest-Growing Companies. With offices in Boston, Fort Collins, CO, and San Francisco, the ClearCompany solution has helped companies hire, engage and retain millions of A Players from over 50 million applicants. Their organic, unified platform delivers better hiring experiences, seamless onboarding, company-wide goal alignment, and performance management, all driven by best practices.

 

﹡A note about calculating the cost of equivalent equity:
The cost equivalent equity is calculated as (Amount Borrowed/Pre Money Value)*(Exit Value).

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