Financial services are some of the most powerful and scalable tools that can help entrepreneurs — arguably more than education, mentorship and infrastructure. The nature of entrepreneurship is changing thanks to online channels and marketplaces. Traditional financial institutions are not well-equipped to respond to this change. Banks are not set up to consume and understand vertical-specific data about their customers for underwriting, so they use personal credit as a proxy, which is very weakly correlated with business viability. Equity capital forces small businesses down an unsustainable path. For fast growing businesses that are looking to finance inventory and sales rather than R&D, equity capital is an incredibly expensive way to fund repeatable growth.
Clearbanc’s first product, a revenue share product for e-commerce businesses, is an efficient source of capital for high-growth businesses, which sits between equity and debt from a risk and cost of capital standpoint. It also serves as a wedge product to establish a broader banking relationship with the customer.
Co-Founders Michele Romanow and Andrew D’Souza are building a lasting company we can all be proud of. The kind of company you’re excited to tell your friends and family you’re part of. We invested in Clearbanc because we saw two outstanding founders that were building a product from lived experience. Michele has met with more of her target customers than arguably anyone else in the world, and for every risk we spotted, Michele and Andrew got there first, and executed against it. With track records that demonstrate a commitment to quality customer outcomes and a quality corporate culture, Co-Founders Michele and Andrew are poised to deliver on their vision for the future of SMB marketing.