Leo Lax

@LSPARKGlobal A7. @MitacsCanada - is great but you need to have a plan and have someone prepared to manage the program. @NRC_CNRC IRAP - is still the gold standard and program everyone should be utilizing. #SaaSChats

@LSPARKGlobal A8 The best sources for potential developments in this area are your: 🏦 Banking partners 🤝 Service providers 🧮 Accountants ⚖️ Lawyers I always found consulting fellow CEOs or CFOs was a key source of good insights. #SaaSChats

Q8. How do you stay current on the latest developments in non-dilutive funding? Are there any resources you recommend following? #SaaSChats

@LSPARKGlobal A7 (2/2) While it is not specifically a ‘funding’ round, it provides non-dilutive funds to the company. In some cases the company may offer ‘sweeteners’ to the customer, as incentives, such as early access to new features, pricing discounts, or granting of warrants. #SaaSChats

@LSPARKGlobal A7 (1/2) One approach that is not talked about as often is the ‘customer funded project’. This approach has you engage a customer to help fund solutions that would be of interest to them. In this scenario, the delivery of the solution would be accelerated but funded by them.

Q7. What is one of the lesser known programs you've seen work? #SaaSChats

@LSPARKGlobal A6 The 2 key pieces of info a company should have are: ✅A complete set of financial statements ✅ A 1-2 year forecast/projection of P&L and cashflow #SaaSChats

Q6. What information should companies have before initiating a non-dilutive round of funding in order to best prepare? #SaaSChats

@LSPARKGlobal A5 Pros: Non-dilutive, less costly than a priced round and founders can typically maintain more control over the D2D business. Cons: Repayable, secured against company assets and may have a maturity date, which can impede businesses with low cash flow. #SaaSChats

@LSPARKGlobal A5 (2/2) The Con: In case the company fails to grow, and comes under cash pressure, the non-dilutive investment provider may start applying pressure to be repaid and may influence the direction the company will take during such time. #SaaSChats

@LSPARKGlobal A5 (1/2) The pro: the company receives more money to support its growth objectives and its existing shareholders are not diluted. #SaaSChats

Q5. What are some of the pros and cons of non-dilutive funding? #SaaSChats

A3/2 - The best way to think of a #startup financing journey is: be as proactive as possible. There are strategic pieces that fit well at certain stages, & knowing what the options are, and how the pieces fit in advance helps build a better roadmap with more security #SaaSChats

@LSPARKGlobal A4 Ideally, a non-dilutive investor would be familiar with the biz, market + the opportunity to best support the company’s strategy Most importantly, the company’s management team should establish close relationships w/ the firm + be able to maintain good flow of info both ways

Q4. What should startups look for in a potential non-dilutive investor? #SaaSChats

@laithmshukri @LSPARKGlobal #SaaSChats

Q3. When should you start that conversation? At what stage do you find non-dilutive funding to be the most beneficial? #SaaSChats

@LSPARKGlobal A2/1 - It's unique to every company's business model + financial structure, but specifically for #venturedebt, it's a strategic pool of capital that compliments a VC round and can be drawn upon as the company needs it (mainly for operating or growth expenses) #SaaSChats

@LSPARKGlobal A2 Each case has different processes + due diligence requirements. In many cases, a company reaches out to financial institutions to gauge interest of joining an existing equity round w/ a non-dilutive financing option. (2/2) #SaaSChats

@LSPARKGlobal A2 Non-dilutive funding includes: 💰 Venture debt 💰 Revolving debt 💰 Increased LOC 💰 Debt (1/2) #SaaSChats

Q2. Describe the process for receiving non-dilutive funding. #SaaSChats

A1 - It's critical to align any kind of financing with your business model, growth trajectory, & stakeholder/investor goals. It's different for every company! In general, you want to be aware of things like payment terms, covenants, + longterm overall cost of capital #SaaSChats

@LSPARKGlobal A1 In a post series A round, it can be beneficial to increase the size of the round by including a ‘top-up’ funding in a non-dilutive way, such as Venture Debt, increased line of credit, or straight debt. #SaaSChats

Let's get started 📣 #SaaSChats Q1. When raising capital, how can you leverage alternative forms of investment?

@SeanDelGiallo @LSPARKGlobal @DentonsCanada Thanks for joining us, Sean! #SaaSChats

@LSPARKGlobal .@LSPARKGlobal It’s an honour to join such a fantastic panel for #SaaSChats today! I'm a Senior Associate @DentonsCanada with the firm's Venture Capital and Emerging Growth Companies group. I regularly act for investors, startups and venture-backed tech companies in Canada.

Let’s kick things off! Panelists, we’re so excited to have you as part of this chat today 🙌 Introduce yourselves! Tell our other panelists + our guests a little bit about yourselves before we dive into question one!

@LSPARKGlobal Happy to be here! I'm Leo Lax, Executive Managing Director at L-SPARK. Looking forward to shedding some light on non-dilutive funding + #investment alternatives 💰 #SaaSChats