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Who We Are
The I Would Fund That team provides an important bridge between lenders, growth companies, and the best investment bankers available. Investment banks are typically only interested in very large capital raises. IWFT has developed a partnership with DelMorgan’s Institutional Investment Banking team that makes the better quality of funding through Institutional Investment Banking, which is available to early-stage growth companies who are only looking for 2 to 5 million dollars. IWFT also provides a funding mechanism in partnership with DelMorgan’s team to raise smaller amounts for startup companies.
The IWFT team includes professionals in many disciplines (finance, legal, product development, marketing) who not only help evaluate prospective early-stage companies that want smart funding, but are also available to provide ongoing strategic support and advice.
Retainer Financing 101
Retainer Lender Financing allows early-stage companies to access the superior funding mechanisms that are typically exclusively available to larger companies that are raising fifty million dollars or more for large acquisitions or expansion. It requires three things:
1. A mechanism to find and connect investors, early-stage companies seeking financing, and Investment Bankers.
2. Institutional Investment Banking experts who have a different process — one that makes it worthwhile for them to raise the smaller amounts of funds early-stage companies are typically pursuing.
3. Retainer lenders who are interested in paying the retainer an Institutional Investment Banking firm requires in order to perform all the due diligence, develop the pitch deck, identify the most likely sources of funding, and then travel to personally pitch the funding request and close the transaction.
At its most basic level, retainer finance (also called retainer funding) is the practice where a third party unrelated to the Early-Stage company provides capital to fund an investment banker’s retainer in return for a portion of any financial gain from the growth of the client company.
This type of financing is relatively new but is quickly becoming a mainstream funding solution that helps equalize access to the best professionals. Fortune 500 companies, major universities, and businesses of all sizes have benefited from retainer funding.
The capital provided by monetizing a capital raise may directly pay for some of the costs of furthering the growth of the company, including marketing fees, expert production fees, and hiring expenses. Retainer finance may be used to fund working capital for companies involved in growth. I Would Fund That looks for companies with a solid track record, proven leadership, and a smart growth plan with high potential for growth, typically 10X+.
The IWFT process requires three participants: early-stage clients, retainer lenders, and investment banks.
Clients: Early-Stage companies that need new capital to fund expansion plans, new product/service development, working capital, and marketing.
Retainer Lenders: Accredited Investors who provide the funds necessary to hire the Institutional Investment Banking team at DelMorgan on behalf of the Client. Typical loan is $150,000 for a four- to six-month period. ($50,000 for Startup fund raises.) In return for providing this short-term loan, the Retainer Lender receives 1% per month interest on the outstanding balance of their loan and 2% equity in the company. As soon as the Client is funded, the Retainer Loan Investor receives all their capital back, plus interest, plus the long-term benefit of 2% ownership in the Client company.
Institutional Investment Bankers and Institutional Investment Banks: DelMorgan’s Institutional Investment Bankers perform a thorough analysis of each prospective Client before they become an IWFT “Approved Client” and eligible for the fund-raising process. This analysis includes an examination of the company and leadership’s track record, products and services, business category, competition, intellectual property, opportunities, etc. Only companies DelMorgan is confident have a 10X+ rapid growth potential become “Approved Clients” because DelMorgan must be confident they can secure funding. Only the combination of Retainer plus Funding Fees plus a small equity stake in each funded Client make this a profitable engagement for DelMorgan. If they can’t fund a Client they lose money.
DelMorgan initiates the funding process as soon as each “Approved Client” secures a Retainer Lender to pay the retainer fee. DelMorgan’s small equity stake ensures they retain “skin in the game” and remain available to assist all Client companies with ongoing financial advice and strategic assistance.
IWFT’s Retainer finance model offers a number of valuable benefits to Clients, Retainer Lenders, and DelMorgan’s Institutional Investment Bankers.
• Helps under-capitalized Clients accomplish capital raises by securing a way to pay the retainer expenses
• Reduces the Client company’s risk of settling for less than companies are worth in the capital raise process
• Unlocks liquidity for working capital
• Provides access to “smart funding” by institutional individuals and organizations
• Minimizes the “control” companies often are required to hand over to funders, which frequently happens with “Angel” type investing
• Enables greater access to top Institutional Investment Banking talent
• Access to new asset class—High-Potential Early-Stage companies
• Investments in retainer financings are uncorrelated to capital markets
• Outsized historical returns compared with other asset classes
• Short time to liquidity versus other alternative investments (only 4-6 months)
• Capital is not tied up long term
• The same capital can be reused over and over again to keep building equity stakes in numerous companies, increasing the likelihood of a windfall on a big one
INSTITUTIONAL INVESTMENT BANKERS AND INSTITUTIONAL INVESTMENT BANKS
• Allows institutional investment banks to accept companies who otherwise could not afford their fees
• Provides capital for all capital raise expenses, including travel and due diligence
• Reduces the risk that clients will run out of money during the capital raise process
• Enables bankers to offer more flexible payment arrangements to prospective clients
• Increases Clients’ effectiveness by providing funding for hiring capital raise experts
• Helps achieve capital raises that are more in line with future corporate valuations.
IWOULDFUNDTHAT.COM managing member and broker dealer cannot evaluate the merits of companies without access to privileged information. The company evaluation process generally focuses on the current and future financial assessment of the company as well as documents that are already subject to review.
What makes this different from directly investing in a company?
1. Directly investing in early-stage companies typically ties up your capital long term. With IWFT’s retainer lending, you retain an equity stake in each company but you receive all your capital plus interest back within four to six months.
2. Directly investing increases risk because all your eggs are stuck in one basket. Retainer lending with IWFT allows you to keep your capital. Then you can re-loan those funds over and over again as many times as you like. Retainer Lending offers a unique way to diversify your risk.
3. Directly investing in early-stage companies means YOU have to determine their potential for success, with perhaps limited resources to do so. Retainer lending with IWFT means independent experts vet each company before it is available to retainer lenders. Furthermore, DelMorgan’s experts have a vested interest. If a company they approve doesn’t get funded, they lose money.
Why don't all early-stage companies use Institutional Investment Banking?
No Access: Most early-stage companies don’t have access to funding from Institutional Investment Banking, and investing via Institutional Investment Banking has historically been an exclusive club for attorneys and hedge funds with connections.
Underwriting Challenge: For the rare outsider who knows a high-potential growth company that needs funding, it was impossible to underwrite an investment.
High Minimums: Hedge funds that currently focus on Investment Banked client lending have minimum investments of $500K+, which keeps most investors out.
Large Retainers: Investment banks charge large retainers which keep them out of reach of most early-stage growth companies.
Who is DelMorgan?
Over the last thirty years, DelMorgan has funded over $300 billion for mergers and acquisitions, and capital raises for growing companies looking to expand operations. DelMorgan’s experts provide world-class financial advice and strategic assistance to companies, institutions, governments, and individuals around the world.
What is the risk to the Retainer Lender?
With this program, the primary risk is that DelMorgan will not be able to secure the funding for the early-stage prospect and thus the “retainer lender” won’t be promptly repaid their $150K loan (or $50K in the case of retainer loans for startup companies). Not funding the early-stage or startup company does not mean the money is lost because the retainer lender still has a contract with the early-stage or startup company for the loan and interest will continue to accumulate. However, confidence in the early-stage company’s long term prospects for growth will likely be decreased if capital is not secured.
There are three key factors in the I Would Fund That process that mitigate the risk of not getting funded.
1. The IWFT team makes nothing if they recommend an early-stage prospect that can’t get funded. We put far too much time into the prospect vetting process to recommend anything other than prospects in which we have the highest confidence.
2. DelMorgan makes their money via the funding process. The retainer fee ($150,000 for early-stage companies, $50,000 for startups) doesn’t even cover all their expenses for the development of the presentation and pitch process. DelMorgan will only work with early-stage companies they are confident will get funded. Therefore, no company gets into this program without the vetting and approval of both the IWFT team AND the DelMorgan advisor team.
3. The ideal scenario for IWFT and DelMorgan is for this program to be supported by a small, consistent group of “retainer lenders” whose repeated success encourages them to be serial lenders. It’s much more efficient for IWFT and DelMorgon to work with a loyal and enthusiastic group of repeat lenders than to be continually searching for new lenders.