There’s lots of talk about Venture Capital and Equity as a way to fund growth. But there are also plenty of other, smart, debt based options that can work for small business -- without the need to sacrifice equity and control of your business. In this presentation, co-hosted by Molly Otter from Lighter Capital (www.lightercapital.com) and David Ehrenberg from Early Growth Financial Services (www.earlygrowthfinancialservices.com), you will learn about the different debt options available to growing small businesses, including revenue-based financing, venture debt, MRR lines, merchant cash advances and more options from both traditional and specialist technology banks. For each at debt option you will learn: - What they are and what uses they work best for - What to watch out for - How to figure out which options are right for your business. Whether you are thinking about equity or debt funding to take your business to the next stage, don’t miss this opportunity to consider what debt financing can provide -- and how it might make sense for your growing company.

1. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
Debt funding options
For growing small companies

2. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
Molly Otter
Chief Investment Officer
David Ehrenberg
Chief Executive Officer
About Your Hosts

3. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
› Provide growth capital that’s
good for small business
› Entrepreneur-aligned structure
› $50K-$1M in growth capital
› Funded +60 tech companies
› Average 1.7 deals per company
› Most active revenue-based
finance lender in the country
About Lighter Capital

4. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
“Startups face a huge burden in today’s
economy, often having to choose
between funneling resources toward
creating their goods and services or
managing the often complex
accounting, tax and financial strategy
planning necessary to run a successful
business.”
~ David Ehrenberg,
Founder and CEO
Early Growth Financial Services

5. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
Today’sAgenda
Debt funding – the capital stack
The options – what they are and when to
use them
How to decide & what to watch out for
Q&A
p5

6. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
Higher Cost
Higher Risk
Investment Grade Debt
Common Equity
Mezzanine
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Preferred Equity
Junior/Unsecured Debt
More Secure
Guarantees
Equity
Hybrid
Debt
• Founders
• Venture Capital
• Angels
• Tech banks / Venture
Debt
• Revenue-based
financing
• Traditional banks
Source
The Capital Stack

7. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
Revenue $5m
EstablishedIdeation Launch &
Traction
Growth &
Scale
Breakout
SBA
Revenue-Based
Financing
Traditional
Commercial
Loans
p7
Debt Funding Options by Stage, Size & Cost
Venture Debt
MRR Line
Lines of Credit
Credit Cards
Merchant Cash
Advance
Peer to Peer
Funding
Amount
Convertible Debt
$50K
$500K
$1M
AR Factoring
Cost of Capital High Medium Low

8. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
Funding
Option
Comparison
Merchant Cash
Advance
Bank / Debt
Revenue-Based
Finance
Venture Debt
Guarantees &
Controls
Personal
Guarantees
Financial Covenants
Personal Guarantees
No Financial Covenants
No Personal Guarantees
VC on Board,
Financial Covenants,
Board Observation
Use of Funds Emergency/Payroll Working Capital Growth Capital Growth Capital
Cost of Capital Very High Low Medium High
Credit Analysis Personal Personal/Business Business Business
Term < 6 months
Revolving, Medium,
Long
Long – 5 Years Long
Dilution None None / Low None Medium
Payment
Flexibility
Low: Daily
Fixed Payments
Low:
Fixed Payments
Medium:
Variable Payments
Low:
Fixed Payments
Speed Hours/Days 4-8 months 4 weeks 3-6 months with VC
Added Value None Low / None Medium Low
p8

9. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
1. What your long term goals for the business are?
› Do you plan to run this as a life style business or are you aiming to
be the next unicorn?
2. How much control do you want to maintain?
› Willing to sacrifice equity ownership for equity or other debt?
› Do you want outside advice / help?
3. What is your risk tolerance / appetite?
› Are you comfortable with short term vs. long term loans?
› What is your time horizon for exit or next steps?
4. Are you prepared for outside investors?
4 Key Questions to Ask
Check out this blog for more detail
http://www.saastr.com/achieve-initial-scale-your-7-point-checklist-for-raising-capital/

10. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
1. Get your financial
house in order!
› Does your balance sheet
balance?
› Make sure you know your
numbers and can answer
basic questions about them?
2. Get your legal house in
order
› Are you in good standing?
› Have you paid your taxes?
3. Have a business plan
› Doesn’t need to be 5 years
but at least the next 2 years
The Funding Checklist
4. Have a sales plan
› Key customers, channels
and best way to approach
them
5. Know your industry
metrics
› MRR, CAC, RPU, etc. (the
more you know the better
you look to the lender!)

11. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015 p11
Up to $1M or 33% of annualized revenue run rate
› No set interest rate; depends on company performance
› Matures in 5 years or when cumulative payments equal a set
amount, usually 1.7 – 2.5x principal
› Monthly payments are a fixed percent of revenue; .75-8% range
› Small cash upside participation
Example Loan
› Annual Revenues: $1.5M
› Principal: $400K
› Maturity: 5 years
› Payment: 5% of monthly revenue
› Repayment: 1.75x principal; $700K
› Upside Participation: $100K at liquidity event
CumulativePayments
Principal
Loan Maturity
1.7x
to
2.5x
Principal
Lighter Capital’s RevenueLoanTM

12. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
Early Growth Stage Technology Companies
Financials:
› Revenue Min: $15k+ / month
› Gross Margin: High (50%+)
› Profitability: Not required, but
clear path to profitability from our funds
› Other Debt: Not too high (unless
convertible debt)
› Customer Base: No major concentration
› Recurring Revenue or Repeat Customers
Management:
› High ownership, full time dedication
Geography:
› HQ in US or Canada
Use of Funds:
› Growth: Sales, Marketing, Product
p12
Software, SaaS, Digital Media, Tech Services and similar
Investment Criteria

13. LIGHTER CAPITAL & EARLY GROWTH FINANCIAL SERVICES WEBINAR © COPYRIGHT 2015
Q&A
Visit Our Website
www.lightercapital.com
Apply Online
www.lightercapital.com/apply
See If You Qualify
www.lightercapital.com/how-it-
works/see-if-you-qualify
Visit Our Website
www.egfs.co
Contact Us
415-234-3437
Follow Us
@EarlyGrowthFS