Raising capital can be an excruciating experience, especially in emerging technology sectors like blockchain. Although ICOs and STOs are a part of the broader conversation, they are not a part of this one. Tokenization is a beast of its own, which has little relevance to a broader spectrum of blockchain firms who don’t have it within their business plan to create their own currency. This applies to research and marketing firms as well as technology solutions that simply leverage blockchain to build business and/or consumer tools that can securely do more stuff in an increasingly efficient manner. These firms are making huge waves but have been undervalued in the eyes of investors in recent years thanks to the overwhelming misinterpretation of thinking the cryptocurrency market is an accurate reflection of blockchain as a technology industry. It simply isn’t.
Blockchain founders, including myself, have experienced problems we are trying to solve with blockchain technology in our professional fields. However, when we try and grow our companies with venture capital, we often hit walls with folks who love to talk about the promise of the emerging technology industry, but still consider it “bleeding edge” despite tangible adoption metrics. Sometimes it can be due to lack of product clarity or a week team, but there are plenty of times when the team is strong, the market is clear and maybe the product needs some tweaking but lack of market clarity on the investment side stymies the opportunity.
In all fairness, the job of a venture capitalist is to say no, and I mean that quite literally. However, when traction is gained through say an accelerator or a few actual paying clients and that “No” still keeps coming until that perfect VC moment when you’ll do anything to get that “Yes”, success begins to lose its appeal. That’s just the game we signed up for, but that doesn’t mean it’s our only option.
Fortunately, more creative options are now available. I recently found Metcalfe, a self-proclaimed “Funding for the 99%”, as an alternative to the startup grind. Metcalfe leverages a Structuralized Revenue Purchase to fund marketing budgets for startups, making capital injections for growth marketing quick and painless, all with out any impact on cap tables.
Metcalfe funds you based on your business’s metrics instead of your personal credit score. You pay Metcalf back over time based on an agreed percentage of future sales. They refer to this investment model as a Structuralized Future Revenue Purchase, or SFRP. The company provides financing in the range of $10,000-$500,000, which is typically paid back within 6 months for a 6%-10% fee (12%-20% annualized). Loan decisions can be made in a matter of days.
I asked Founder Mitch Kessler what factors are considered when making loan decisions. “In general, we are assessing a company’s marketing sophistication and their financial health,” says Kessler. “We can cross-pollinate marketing and financial metrics, such as conversation rates, CAC, LTV, AOV, and Revenue forecasts to get a better idea of their potential future revenues aided by marketing, and if they are able to do this themselves or if they will need help from marketers in our network”.
Blockchain Healthcare Review has partnered with Metcalfe to bring more funding options to the blockchain healthcare innovation. In doing so, blockchain solutions now have better access to both the capital and experienced teams in one place by leveraging the Blockchain Healthcare Review business ecosystem for growth hacking and community management. As founder of Blockchain Healthcare Review, I am truly excited to see Metcalfe join our partner network.