Ride the Wave: Alternative Financing to VC's in 2023

1448 Northwest Market Street,Seattle WA 98107

07 March, 2023

Description

We’ve all seen the headlines: VCs are slowing their check-writing pace as we head further into the year. And raising money for your startup could get even trickier in 2023, even in the early stages. But investing vets have a pointer or two for entrepreneurs navigating it. First, fundraising efforts are moving forward despite difficult dealmaking conditions and weaker investor sentiment. Private funds have undoubtedly been impacted by global events in 2022. As a result, we can expect continued moderation in funding activity in the first half of 2023 compared to the previous two years. Our expert panel is diving into the tough questions and providing insights into what sources are available to you. Focused on the following: Finding Angel Investors Angel investments are a popular funding choice for many startups. Angel networks have grown significantly in the past five years in the country and have become a vital source of early-stage funding for new-age entrepreneurs. Angel investors are typically high-net-worth individuals who invest their own money into startups that they believe have the potential stock that returns a high multiple ROI in the future. In addition to providing the capital needed to grow a business, angel investors often share their business expertise, valuable mentorship, and industry connections to help the startup succeed. Private and Public Sector Banks and Non-Banks Debt capital is normally one of the primary funding sources for traditional businesses with steady cash flows and which have collateral to provide to the lending institutions. However, given most startups struggle to make meaningful revenue for the initial few years, this is not a convenient option for many startups to avail funds from. Family offices often invest in startups at the early stages of a company's development when there is more risk involved but also more potential for high returns. They are typically drawn to startups with innovative technologies, strong management teams, and the potential for substantial growth. AR financing, or Accounts Receivable financing, is a type of financing that allows startups to use their outstanding invoices as collateral to secure working capital. FDA Federal funds are excess stockpiles that commercial banks and other financial institutions deposit at regional Federal Reserve banks. The funds are then lent to other market participants with inadequate cash to meet lending needs. The loans are unsecured and made at a relatively low-interest rate. Forecast: Will Startup M&A Pick Up In 2023 As Fundraising Tightens Further? While 2022 was relatively average in terms of M&A activity involving startups in the U.S. and dealmakers there’s speculation that we could see that spike materialize in 2023 as the downturn continues. Startups face difficulty securing funding in later stages and have more limited exit options. Meet Our Speakers Kelly Lawton-Abbott is an attorney with Smith Shapourian Mignano PC, a woman- and minority-owned law firm in San Francisco, San Diego, Seattle, and Oakland. Kelly spearheads the Seattle office and represents clients in the tech industry and industry-adjacent service providers. Kelly works with clients on formations, corporate governance and compliance, note and venture financing, employment, commercial and tech transactions, intellectual property, and privacy compliance. Kelly works with various clients from solo entrepreneurs to Fortune 500 companies. The first phase of Bob Wallach’s career was at large consumer products companies including Kraft, Dannon, Nabisco, and Continental Mills in Senior Executive roles where his responsibilities encompassed marketing, sales, strategic planning, and M&A. The second phase of his career was as an entrepreneur CEO where he conceived and ran a successful internet venture. Now in the third phase of his career, Bob is an active angel investor, and he also serves on the Boards of Directors of The Alliance of Angels – the largest angel group in the Northwest, Melt Organic, Lopez Foods, and SunFly. Capital Raised from LP’s (>US$1B) CEO (tech companies) x3 IPOs on NASDAQ x2 M&A x1 Microsoft Product Manager x10 years Software & Hardware Advisor / Consultant As a Co-Founder at Alterna Capital Solutions, Kevin leads new business originations and operations for the Western region of the US. Access to capital and cash flow challenges that SMBs in the lower middle market face are as varied as they are volatile. Alterna Capital Solutions serves this community by providing flexible growth capital solutions through Accounts Receivable Financing (AR) and Asset-Based Lending (AR & Inventory) when traditional financing isn’t available or sufficient. - Commitments/Credit Facilities: $500,000 to $50,000,000 - Collateral: Accounts Receivable and Inventory - Advance Rates o AR: up to 90% o Inventory: up to 75% - Complimentary financing solutions provided by select Partners o Purchase Order o Equipment o Stand-alone Inventory