What alternative financing solutions for start-ups and SMEs?

Discover this summary of the workshop run by Fleet and Silvr on the use cases at Supermood.

Fleet ran a workshop on “alternative financing solutions for start-ups and SMEs ”. Martin Leveau (VP Finance at Fleet), Kevin Bourgeois (CEO and co-founder of Supermood) and Clémence Rivoire (Investment Associate at Silvr) were present.

They discussed the evolution of Tech stocks since the beginning of 2022, and alternative self-financing methods (compared to traditional ones). You can find the replay of the webinar here, and a full review of it here.

Fleet: navigate with peace of mind

Martin Leveau represents Fleet: the 100% B2B Device-as-a-Service solution. Fleet rents IT equipment (computers, smartphones and tablets) to all types of companies over a 3-year period. It also provides access to a dashboard – their cockpit – to manage the fleet and unique customer service.

Silvr, Revenue-Based Financing as a growth lever

Clémence Rivoire is an Investment Associate at Silvr – the data-driven solution for repeat-based businesses (DNVBs, Ecommerce businesses, etc.) and those generating recurring revenues (SaaS companies). She and her team are busy meeting entrepreneurs, understanding their needs and situations. She launches an analysis based on over 100 data points. From there, Silvr offers financing within 24 hours ranging from €10K to €10M, and without dilution.

Supermood, the platform for listening to your teams

Kevin Bourgeois is CEO and co-founder of Supermood. This SaaS business allows companies to collect and create internal feedback lists. These opinions are crucial to move the company in the right direction, the one desired by the employees. The SaaS publisher has 45 employees.

Silvr, Supermood and Fleet

Observation: low Tech funding and raises

Macro-observation: revaluation of the sector, disinterest and inflation

The financing system for start-ups and SMEs has experienced a rise and fall. Investments in (French) Tech are indeed falling back to a “more normal” level. After a great start to 2022 with nearly €9.6 billion raised, the market is experiencing a rise in interest rates and a large drop in the valuation of listed Tech companies.

To explain these changes, Kevin Bourgeois points out that there has been a partial (or even total in some cases) withdrawal of VC players who are fleeing “crazy valuations ”. The CEO of Supermood explains that personally, he ”invested in a company last year that was valued at 20 or even 30 times its revenue. Whereas today, to invest in this same company, the market values it at barely 10 times its revenue.

Moreover, the inflationary economic trend directly affects consumers and the B2C sector, but has a domino effect on the Tech world and B2B players: in particular the war in Ukraine, Covid-19, and an economic instability that has become almost constant.

Shortened visibility and runway

The valuation is therefore lower, but the dilution remains similar. It is therefore more expensive to sell capital. In addition, the runway is directly impacted. Basically, if the cash flow of VSEs and SMEs remains comfortable despite cost increases, investment intentions decline. So the shortest runways have less hope of making the business viable than before. Moreover, this new paradigm shows that we should focus less on growth and more on efficiency, with more agile strategies for the next 1,2 or 3 years.

Complementarity of traditional and alternative financing

Dilutive funding sources

Among the traditional and dilutive financings, you’ll find:

  • Venture capital and private equity: even if raising equity is becoming more and more elitist, it is a method that has proven its effectiveness due to the trust that funds and investors place in the companies that are financed.
  • Business angels: “the best way to start and benefit from a quality network.
  • Incubators and accelerators: the investment tickets are quite low, but it is an interesting option to expand your network and benefit from experienced coaching.
  • Crowdfunding (equity): you dilute the orders of magnitude of difficult-to-estimate financing, but in the case of B2C offerings, it helps you to test its Product/Market fit ahead of time.
  • Venture loan: The venture loan finances your capital with fixed interest rates.

Kevin Bourgeois notes that “you can give away 49% of a company – but it still belongs to you”. Moreover, these methods, although they are dilutive, are levers for growth.

“Traditional" non-dilutive sources of financing

  • Bank loans and unsecured, interest-free loans: some banks are more start-up friendly than others. For example, Supermood took out a bank loan with the BNP Île-de-France’s Innovation Center: they did not have to prove that their balance sheet was bigger than what it was. As far as unsecured, interest-free loans are concerned, this is also a good idea when launching a structure via players like Raise.
  • Grants and accommodations: this is a good method for young companies. It can easily bring in amounts of €10K to €30K. And it is quite simple to take advantage of them.
  • Factoring: this was a really convenient way for Supermood to extend their runway from 4 to 6 months. The internalized feedback SaaS business took advantage of this when it was close to its first million euros of ARR.
  • Leasing: a way to avoid tying up too much cash when you start your business. It's a flexible option for getting and disposing of certain types of assets.

More modern alternative financing methods

The growing instability means that you should not “put all your eggs in one basket”. Consequently, two new solutions are available to entrepreneurs...

Silvr's RBF: growth lever for start-ups, SMEs, DNVB, marketplaces, SaaS...

Use RBF with Silvr as leverage for other financing

Who is eligible for Silvr’s solutions?

Silvr transforms future revenues into immediate cash flow for all repeat-based businesses such as e-tailers or DNVBs. If you are a SaaS publisher, your recurring revenue model is also eligible for Silvr's offer. Check here if you are eligible!

How Revenue-Based Financing works

The European leader in Revenue-Based Financing offers recurring financing for digital entrepreneurs. Silvr is synonymous with time savings and accelerated growth for digital entrepreneurs. This plug-and-play solution connects to your accounts and collects all necessary information (banking, payments, billing and Ads) via more than 100 data points. The company receives an offer within 24 hours for financing ranging from €10K to €10M.

RBF as a growth lever

Silvr is anchored as an efficient non-dilutive financing solution. It is not a replacement for the above-mentioned solutions, but rather a complement that can be used as a lever to activate them. For example, through Silvr, companies that have recently raised equity are extending their runway. They therefore don't have to raise more equity in the near future and they are protected from an increase in multiples. Secure your other sources of financing by protecting your cash flow. The agility offered by RBF fits closely into the growth of the client, which can then self-refinance. Then the company can:

  • Better plan its costs,
  • Spend more on Ads campaigns without increasing cash flow,
  • Recruit with this easing in cash flow.

Device-as-a-Service in the economy of use: “renting rather than buying”

It is (also) an all-inclusive plug-and-play solution. Fleet is focused on the economy of use. They no longer invest in a long-term fixed cost, but in a current use that is amortized in its use: “renting rather than buying” to ease cash flow and gain agility.

The Fleet solution, for example, evolves in the subscription economy ecosystem, which makes it possible to be completely relieved of any unforeseen event while enjoying a guaranteed service at all times. It is for these reasons that Supermood chose Fleet.

Several points make Fleet's DaaS advantageous:

  • Simplicity of deployment,
  • Management of its fleet of equipment,
  • Flexibility and time saving due to a premium service,
  • And responsible renewal (even in the case of Fleet).

For Supermood, for example, using Fleet's Device-as-a-Service is an opportunity to focus on growing its business rather than on time-consuming fleet management. In addition, this form of leasing involves no hidden costs.

So, still not convinced by RBF or DaaS? Watch the replay of this webinar to get convinced!

- Published
January 23, 2023
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