BridgeUp is an innovative fundraising platform that allows businesses, especially SaaS startups, to get paid upfront by trading
BridgeUp is an innovativefundraising platformthat allows businesses, especially SaaS startups, toget paid upfrontby trading their annual contracts for a marginally lower price compared to their annual revenues, with outside investors.
So, these SaaS companies may use BridgeUp’s cash solution for quick, simple funding without the hassles of traditional fundraising or debt or equity dilution that come with it. We make this exchange possible without jeopardizing or thinning the company’s equity.
As we understand how BridgeUp can help you always have sufficient cash for your operations, let us try and learn how you can manage that cash more effectively.
Now, one of the best-kept secrets in Silicon Valley is that many startups are cash-rich. They have avoided taking on traditional dilutive rounds of financing and raised money in other ways.
For example, a new financing option has emerged for founders: non-dilutive capital, which has grown in popularity over the years. It has become an important funding source for startups, and it doesn’t dilute the ownership of the company.
Some startups have embraced non-dilutive financing products, even while having access to lots of cash. These startups take on non-dilutive, growth capital and use their credit line for initiatives that have immediate ROI, protecting their massive raise from being spent too quickly.
What Exactly is Non-Dilutive Capital?
Non-dilutive capital is a type of financing that does not result in the dilution of ownership stakes. This is in contrast to traditional rounds of financing, which generally involve the sale of equity to venture capitalists or angelinvestorsin exchange for growth capital.
However, the problem with diluting your equity to raise money is that it can often result in the loss of control of your company. In some cases, it can also lead to the dilution of key employee shares.
Plus, many of these startups are either not utilizing their funding properly and are burning through their cash too quickly or are keeping cash as a backup without even using it.
Raising money in other ways can be a challenge, but it’s worth it for the long term health of your business. If you’re able to find investors who are willing to put money into your company without taking ownership, you’re in a good place. You’ll want to make sure that you can still operate efficiently and make the most of the funds you’ve raised.
How to Manage Your Cash More Efficiently with Non-Dilutive Investment
BridgeUphas found a sweet spot in this new financing method. Here are some of the ways in which BridgeUp can help businesses manage their cash flow more efficiently:
1. It is quick. You can get your capital in days, not months. That would help you maintain your cash flow and momentum.
2. It’s easy to use and doesn’t require extensive legal documentation.
4. You won’t have any external pressure to utilize the money in a certain way. You can raise your funds online, spend on what you think is best for your company without any human intervention.
5. There are no deadlines or expiration dates. You simply need to focus on providing high-quality service to your customers. You return to the investors as and when customers make the payment.
5. It’s flexible and customizable according to your business needs.
6. You maintain complete control of your company, end-to-end. If you are able to raise growth capital while owning 100% of the business, why give it up?
7. It’s a fixed rate, without any surprises. If you know what to expect and plan out your cash flow accordingly, it can help manage your business more efficiently.
8. The process is transparent and straightforward. This transparent method offered by BridgeUp can be really helpful in building trust with your investors.
9. Raising that capital does not disrupt your existing business operations. Even your customers do not need to know about it.
So, whether you are an established company or a startup hoping to grow its operations, access to non-dilutive capital can help sustain your business. It allows you the freedom to pursue new opportunities without giving up any of your equity.
But, how do you access that non-dilutive capital?
BridgeUp is one of the few companies that offer non-dilutive growth capital to businesses in India.
BridgeUp is not a shareholder, creditor, or lender in any way. We are a platform facilitating an online marketplace for entrepreneurs to raise capital quickly and easily with transparency by helping them receive the annual value of their monthly or yearly contracts within 48 hours.
Companies on BridgeUp can access upfront, annual cash flows without diluting equity, reducing dividends, or disrupting the company’s business models.
Let us end this by going through some of the obvious benefits of having access to non-dilutive funding:
We are the only positive cash flow business model providing instant access to non-dilutive growth capital in India while having their customers pay monthly as usual. BridgeUp is perfect for companies like SaaS with recurring revenues. But we are not limited to SaaS. Any business or individual with a predictable stream of income is a good candidate for our platform.
8 Advantages of Non-Dilutive Capital
Non-dilutive capital has several advantages over traditional forms of fundraising. Here are some of the benefits:
1. It doesn’t require you to give up any equity or control over your company. When you do not compromise on your equity or control, you can always be the driver of your company’s vision and mission.
2. It can also help you focus on your business and not on fundraising. Raising money is often a full-time job, and it can be distracting from your core mission and vision. When you don’t have to spend so much time knocking on the investors’ doorsteps, you can instead focus on building your product.
3. Non-dilutive capital can also help you preserve your company’s culture and values. Too often, startups lose their identity and culture after raising money from traditional sources. This can often lead to the departure of key employees who do not agree with the new culture.
4. It also helps founders avoid diluting their employees’ shares, especially with top talent whose departure can be detrimental to the future of your company. Your team members deserve to have a sense of ownership and be rewarded for their hard work and dedication, always.
5. Non-dilutive capital can also help you avoid the “golden handcuffs” trap of traditional funds. It is very easy to fall into the infamous rat race, where one round of financing leads to another. Seeking investors becomes an addiction, and before you know it, your company has lost its independence and flexibility.
6. Founders are not required to make certain disclosures, which allows the business to remain private
7. It is not subject to the whims of venture capitalists who can pull out at any time
8. Non-dilutive financingis often faster and does not require the same amount of paperwork and legal fees
Additional funding methods are neither dead nor wrong. It’s just that when businesses need instant capital to continue to run their operations or fund their next round of growth without having to give up any equity or knock the VC doors, non-diluting financing products can be a better fit.
The pandemic has hit SaaS companies hard, with many of them struggling to maintain cash flow and sustain operations. According to a 2020 report by Statista, the SaaS industry saw mixed spending behaviour during the Covid-19 period.