In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, and writer, talks with Andrew D'Souza, Co-Founder and CEO of Clearbanc. Clearbanc is an online lender to businesses that helps them gain access to capital through royalty models that serve as alternatives to lending and venture capital. Clearbanc’s business model of lending isn’t one of debt or equity, but specifically one of royalties, which is important in an emerging market for lending options.
Episode Highlights:
● 01:24 – Andrew D'Souza explains Clearbanc.
● 02:29 – How did Clearbanc get started?
● 05:57 – How much of his time has been spent in just fund-rasing alone?
● 08:52 – What does the lending experience look like?
● 11:39 – Their goal is to fund businesses with less bias.
● 14:56 – What do their offers generally look like?
● 14:58 – Which niches seem to be some of the best fits for Clearbanc?
● 15:42 – Which verticals seem to typically meet Clearbanc’s needs?
● 18:35 – How much do they look at the founders themselves before making a decision?
● 24:02 – How does Clearbanc get their message out there?
● 26:04 – What is expansion looking like for Clearbanc?
● 27:40 – How have their risk models that they have built been holding up?
● 30:49 – How much repeat business are they seeing?
● 32:58 – What would he change in his business or industry?
● 34:47 – What have been the biggest challenges he has faced?
● 36:15 – What keeps him excited each day about his work?
3 Key Points
1. Clearbanc helps fund businesses for their online growth by getting a fixed portion of the revenue in return until Clearbanc gets their initial revenue back plus a fixed percentage between 6%-12%.
2. Over 2500 businesses have been globally and Clearbanc has provided over a $1 billion in funding to businesses.
3. Fundraising is typically a three month process that can be 20% of your time.
Tweetable Quotes:
● “We can fund a business to continue to accelerate their online growth.” – Andrew D'Souza
● “Equity capital is designed for high variability, a lot of uncertainty in both the upside and the timing of that upside, and that is why you want an equity partner.” – Andrew D'Souza
● “If you’ve de-risked your business and if you understand your sales and marketing and your inventory terms or your customer break-even points, and your return, equity is a very, very expensive way to fuel that growth.” – Andrew D'Souza
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Peter Merrick
● Linkedin – Andrew D’Souza
● Clearbanc – Website for Clearbanc
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