Michele Romanow is the youngest investor in the TV show “Dragon’s Lair” in the world. She just sold her company and started as an angel investment startup. In the Canadian version of the show, she decided to make another proposal to countless entrepreneurs.
When creating the program, she noticed that almost all start-ups were looking for funding for the same thing: new customers and inventory. Her other proposal, no stocks and no securities, was so eagerly accepted that Michelle decided: I want to accept this big one. “Through Clearco, we hope to provide alternative solutions for start-ups with predictable business models.”
Simultaneously, Clilco More than 2 billion US dollars have been invested in more than 4,600 start-up companies.In less than six years, Clearco has grown into a unicorn-the company.This is interesting because they have multiple rounds of investment from the traditional Venture capital-Investors: A total of about 700 million US dollars. Michele: “Of course, I prefer Clearco instead of Clearco haha, but it was not there yet”.
How exactly does Clearco’s model work? Michele calls it “performance-based funding” or “pay for growth.” What she meant was that the entrepreneur borrowed between US$10,000 and US$10 million from Clearco, and then used a certain percentage of sales to repay the loan every day. It will take a long time to repay the loan in full. So how fast this depends on how much revenue the company generates. No turnover, no repayment obligations.The most important thing is to have a fixed cost About 6%.
By contrast Venture capital-Therefore, investor Clearco will not have any interest in the company. Entrepreneurs keep all their shares. Michele: “We are not a bank that wants collateral, and we are not a venture capital company that wants stocks. Therefore, we see ourselves as a complement to existing tools.”
This model is not very common in the Netherlands: there are only a few suppliers. It is particularly suitable for start-ups with predictable and scalable business models, such as e-commerce and SaaS companies. E-commerce startups know how much (hopefully more than one dollar) sales will be generated in a given time frame when they put a dollar in marketing. SaaS companies have subscription customers, so they generate recurring revenue. Michele: “Venture investment is expensive capital, really suitable for risky projects. Like a business model It’s easy to predict, it’s a shame to mix everything together fair Funding. In addition, it is in our interest that no company will fail, because venture capital companies pay more attention to index returns! “
Listen to Michele Romanow in In money Podcast (34 minutes) and Thomas Mensink (Golden Egg Check).In this episode, she tells how it is Revenue sharing-How the Clearco models work, how they themselves work unicorn-Become a company and how Data science Eliminate bias in investment decisions.Listen to any podcast app (like here Spotify on apple) Or below:
Clearco’s model is data-driven: “The entrepreneur looking for funds connects his or her banking system to our platform and receives a quote within 20 minutes. Terms list. “There is a system under the hood index Look at — such as profit margins, growth rates, and online advertising conversion rates — to determine whether Clearco can invest and how much it can invest.
Clearco’s analysis completely ignores the entrepreneur itself, which is the most important criterion for most VCs. According to Michele, this has also led to more objective investment decisions: “Our portfolio contains eight times more female entrepreneurs and minorities than a typical VC portfolio. We are also more frequently outside of standard entrepreneurial centers such as Silicon Valley. Make investments.”
Isn’t it exciting to let the computer determine which entrepreneurs are getting financing? “Before we knew the number to look for, it also cost us time and money. In order to distinguish signal on noise Check it out. But I think this model is correct now. It is precisely because we have so much data that we can provide benchmarks and data-driven recommendations for our entrepreneurs. “
Clearco recently announced its launch in the Netherlands. They have invested heavily in Dutch start-ups. One of them is Labfresh, known for its waterproof and stain-resistant shirts: “What I really like about them is that they participated in the Dutch version of Dragons’ Den”, Michele said.
Why is the Netherlands the number one market in Europe? Michele: “There are a lot of digital companies, and there are also a lot of outstanding entrepreneurs. We have a lot of stand by Had to come here, including from TechLeap. In all things, this seems to be a logical choice.There is no doubt that we will need something in our model Adjustment, But we have set ourselves a goal of investing 100 million euros in Dutch companies this year. “