Introducing Capital
Today is a very special day as we unveil what we have been working towards in stealth for the past nine months. In many ways, Capital and its mission are an inevitable extension of the lifelong passion that my co-founders and I have had for investing and entrepreneurship. I have been investing in and starting businesses since I was twelve (and my partner Csaba since he was 17). Together with our partner and CTO, Chris, and our growing team, we envision a world where accessing capital is completely transparent for entrepreneurs and allocating capital is more logical for investors.
In 2019, this vision became possible with more than 50% of companies running their core financial systems of record in the cloud. As financial data went digital and accounting systems become automated, the fundraising process has remained in the stone age. As modern-day entrepreneurs, you should be able to prove your investment merit to investors quickly and avoid a centuries-old draconian fundraising process where who you know is often more important than how you are performing. For the entirety of our investment careers, Csaba and I have been asking ourselves these questions:
Why do private investment firms not have R&D budgets?
Why hasn’t capital allocation systematically improved at the pace of Silicon Valley?
When accessing capital is a life or death issue for companies, why are key executives required to take themselves out of commission for 6 months to raise funding without knowing whether they will ultimately be successful?
Today these issues begin to change. We’ve designed Capital to put the power back into the hands of the entrepreneur. And we’ve built it exactly that way. It’s your go-to place to raise capital quickly and have access to powerful insights that remove the information asymmetry that has left companies in the dark for decades. To do this well, we’ve built The Capital Machine, our software system which automates the underwriting process and delivers financing offers from $5-50 million to companies from our balance sheet with record speed.
Through the Capital Machine, we’re delivering funding to companies in larger ticket sizes than what’s historically been available. We’re also arming entrepreneurs with information that allows them to take charge of their financial futures by calculating their current cost of capital, comparing their financing options and choosing the right financing offer for their business. This makes it possible for companies to consider options that have previously been unavailable to them, such as substituting non-dilutive capital for equity in size in order to construct more efficient balance sheets. By providing this level of visibility into private financing transactions, we’re eliminating financial misalignment and powering long-term relationships between companies and their investors.
This is only the beginning. In the coming months, we’ll unveil more tools and insights that bring even greater efficiency to the fundraising process as we help our financing partners build great businesses. What will become clear is that 2019, 90 years after The Great Depression, is a unique moment in financial history due to a confluence of financial and technical trends. This will lead to massive shifts in how capital is raised and allocated. It will also lead to unprecedented transparency, the removal of financial waste and bias and ultimately a more equitable playing field for companies and investors. We are proud to play our part in the reinvention of the world’s largest industry and look forward to sharing Capital with you in the months ahead.