Founderpath is a fintech company that helps SaaS founders turn their monthly recurring revenue (MRR) into upfront cash, using cash advances. Their mission is to make funding quick and accessible for SaaS companies by providing funds within 48 hours, without fees, and with the opportunity to make payments over a minimum of 12 months. (Source - August 2022)
About Founderpath
Based in Austin, Texas, Founderpath was founded by Nathan Latka in 2019 to help SaaS companies get funds without selling equity by converting their monthly subscriptions into capital. Founderpath is a growing startup themselves and currently has ten employees.
It was created for SaaS founders seeking to bootstrap their startups. It raised $145 million in debt and equity in 2022. And it had deployed $60 million in capital to 130 SaaS companies as of August, 2022 (Source - August 2022).
Founderpath has invested in companies like Smartercontact, Kommunicate, Jetpack Workflow, and Actionable. Its main focus is to make funding easy for SaaS startups by turning MRR into upfront cash.
Eligibility and Products Offered
Founderpath charges no interest rate. They offer revenue-based financing, predicting how long repayment will take considering past churn rate. (Source - August 2022)
Founderpath’s loan terms and conditions demand that SaaS businesses warrant that they have the right, and capacity to agree to the terms and conditions. Also, SaaS companies must have a positive reputation in the jurisdiction in which they are registered before accessing funds. (Source - August 2022)
Founderpath also offers companies:
- Free reporting for bootstrapped SaaS founders
- Business metrics for SaaS founders to track their revenue growth
- Customer metrics to measure customer success
- Customer hub to track invoices
- Daily valuation to track the company’s growth
How to Apply
Using Founderpath’s Stripe app, applicants can evaluate their eligibility for financing and determine exact financing amounts. To do so, individuals must:
1. Convert MRR into upfront capital
Individuals can decide how large of a loan they would like by selecting certain accounts. Companies with over $65,000 in monthly recurring revenue can qualify 4 times that amount or $260,000 in funding.
2. Evaluate the terms
Individuals can then check out the terms and conditions to see if they align with their goals including the payment timeline and discounts. Typically, discount rates are up to 7%.
3. Check the amount of capital taken and how much available funds are left
Individuals can check their Stripe Dashboard to know how much can be borrowed. The amount of capital a company can borrow is based on how many customers are added to their stripe account.
Capchase vs. Founderpath
In addition to financing using venture debt from Founderpath, founders and startups can work with Capchase. When compared to Founderpath, Capchase’s funding model is designed to remove excess fees that can save clients up to 50% when compared to traditional venture debt providers (Source – June 2022).
It can be helpful to see the differences between Capchase and Founderpath side-by-side. This is especially true for key areas like speed to funding, flexibility, structure & fees, and value add.
Speed
Capchase
48 hours to underwrite (led by a tech-driven & highly responsive underwriting system)
Founderpath
Relatively quick with most deals closing as quickly as 48 hours or as long as 9 days
Flexibility
Capchase
Highly Flexible: No traditional financial covenants on amounts financed
Founderpath
Fairly flexible: No minimum net worth, working capital, current ratio, quick asset ratio, liquidity ratio, or debt-to-equity ratio is required to apply
Structure & Fees
Capchase
Transparent & Simple: No prepayment fees, closing fees, warrants, or hidden fees
Founderpath
May include terms around prepayment, expensive closing process
Value Add
Capchase
A prescriptive funding plan
Founderpath
Discrete funding events
