How does Level provide fast and simple financing to startups

Chad Fox, GP, Fox Ventures, talks about how are startups like Level are providing fast and simple financing to startups

Excited about level because it’s been a problem within um my portfolio and the companies that i was advising before i started investing for the last seven years right so i’ve always liked working with alternative lenders for for two reasons one is they can become high margin businesses and the other thing is is if you help them raise debt capital then you’re

De-risking the equity side right so i always knew that if i was going into and investing in a stage seed stage alternative lender if i was able to help them um raise 10 million dollars in debt day one then they would be de-risked but we always came to the same problem is that before those companies kind of found product market fit they were always lending out of

The equity right so before let’s say you know late seed to series a they had these founders had to raise a lot of capital take a lot of early dilution in order to finance the loan book that they came out of and i always thought that this was the craziest thing in the world and so over the last couple years we’ve seen venture debt providers come out and start to

Finance these companies but they still go in at a much later stage once they kind of learn how that company can underwrite the the credit risk and so what level’s doing and why it’s super exciting is because it can come in and one help those day one companies finance their their loan books early because they look at the underlying um the underlying risk kind of

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From an early stage they understand the business and the second thing is is that obviously we know that getting access to that recurring revenue which alone has you know recurring revenue it is a good way to making you know is a good way of financing that business without over dilution and where it kind of exceeds say um an ar r type or mrr type f revenue based

Financing is that the underlying loans actually have security right and so if a good example is if um level is financing um another one of the companies that i’ve invested in called marco that does trade finance marco takes security over the lending that they do and so they can assign that security to level in order to back that kind of revenue-based financing

Product that they’re able to offer them so i’m you know it’s very early for that business but i’m extremely excited about it for a lot of reasons one i can bring them you know eight to ten clients day one two it’s a problem that i’ve been you know unable to solve for um my portfolio for the last you know four years of investing and seven eight years of advising

And so there’s a real need in the market and i think um as a niche business in that space um you know i can easily see them you know deploying in the billions of dollars pretty pretty quickly and so i think it has the it’s reasonable to assume that they will be able to take a trajectory you know similar to the other revenue-based um financing businesses by focusing

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On this specific niche and then you know having the ability to to know go into other products should they wish to do

Transcribed from video
How does Level provide fast and simple financing to startups By Life Self Mastery