Equity Financing for SaaS

What is equity financing — and how can it help SaaS companies level up their growth?

Equity financing is just that — obtaining capital in exchange for equity in a business. It equips SaaS companies with vital funding to support their growth and can be paired with other funding mechanisms like debt financing for enhanced flexibility and support. These complementary financing solutions ensure that your needs are met through every stage of your organization’s growth cycle. When you partner with River SaaS for debt and equity financing for SaaS companies, you can count on comprehensive financing customized to your unique needs.

Read on to learn more about equity financing for SaaS growth, and click here to explore the requirements for TruWest Fund I, a new equity fund designed for B2B SaaS companies looking to scale.

What is Equity Financing for SaaS Companies?

Equity financing comes through a variety of channels: venture capital sponsorship, angel investors and private equity firms. Investors receive a percentage of the company, with the amount determined by growth stage, level of performance and amount of capital needed.

Equity investors typically require a board seat so they can have a say in the direction of the company and ensure they realize their investment. While this is often accompanied by access to an investor’s valuable knowledge and contacts, success is often influenced by a company’s culture and its founders’ willingness to relinquish some control in exchange for a potentially significant investment.

A benefit to equity financing is that it does not require principal and interest payments. Once equity funds are applied, profits do not have to go toward repaying debt. In the event a business does not succeed, this type of financing typically does not have to be repaid.

How Our Equity Financing for SaaS Leaders Fits In

River SaaS Capital offers equity financing solutions as a complement to its existing SaaS debt financing solutions through TruWest Fund I, a continuum of capital fund for River SaaS Capital’s venture debt portfolio. These investments are made to established borrowers whose capital needs have shifted, making equity a strategic option. With our unique options, you can manage your runway and your equity dilution while enjoying the reliable financing you need to support your growth in every stage.

Want to learn more about the value of a hybrid financing approach with debt and equity financing for SaaS? Download our free Ebook for expert insights.

“We appreciate their flexible structure and ability to invest with us over time.”

Michael Anderson
CEO, Etail Solutions

Contact River SaaS for Strategic Equity Financing for SaaS Growth

Frequently Asked Questions

Who is River SaaS Capital?

River SaaS is a provider of alternative venture financing to early-stage SaaS companies throughout the U.S. Our management team has more than 100 years of combined lending, credit and operations experience. Along with our knowledge of and passion for technology, we have the precise blend of talent to help early-stage technology companies grow their business. Proudly based in Cleveland, Ohio, we offer alternative financing models, entrepreneurship mentoring and a long-term, partnership-based approach.

What types of companies do you fund?

Our financing model is best suited for software and technology-based companies that market their products using the software-as-a-service (SaaS) model. These high-growth, high-margin companies are well-suited to debt financing options, which allow them to preserve equity while still raising working capital.

What is your geographic focus?

We provide financing to U.S. companies only.

What is your due diligence process?

Our process starts out with a comprehensive list of questions that focus on the borrower’s technology and product offering, management team and business plan. We review historical financial statements as well as projections for the next 24 to 36 months, and we analyze the borrower’s current customer contracts to make certain they have subscription-based revenue spread over multiple customers. We then evaluate the sales process and meet with company executives to verify their experience and ability to grow and scale the business.

Is there a minimum or maximum financing amount?

We typically lend between $500K – $1.5M (or around 4x MRR) to qualified new borrowers but have the flexibility to fund up to $5M to established borrowers (via either debt and/or equity).

Do you invest in companies that are not existing borrowers?

Currently, River SaaS Capital provides equity to only established borrowers.

If you feel confident enough to answer: who is River SaaS Capital?, what is equity financing?, and who qualifies for equity financing?, it might be time for us to start supporting your growth.