A startup that has an unconventional method of funding startups just landed its own funding to continue providing needed funds for new businesses.
Founded by two veteran entrepreneurs, Andrew D’Souza and Michelle Romanow, Clearbanc helps entrepreneurs grow their businesses by providing clients a cash advance to do whatever their business needs (operations, marketing, advertising, etc.). Funding ranges from $5000 to $10,000, which is paid back by Clearbanc getting a share of the earnings, along with a 6 percent fee, until the advance is paid off.
Besides providing funds for their client’s business, Clearbanc promises “No equity (in the business), no fundraising, no dilution, no warrants (or) covenants, no board seats, (and) no bullshit.” They also state that they understand the needs and abilities of today’s tech and marketing oriented startups.
“No bank would ever say, ‘we’re going to give you a loan and please go spend it on marketing.’ But we have a lot of confidence in digital channels,” said Romanow, in an interview to The Globe and Mail. “We deeply understand [e-commerce] customer acquistion models.” Romanow and D’Souza were founders of tech startups before launching Clearbanc.
Clearbanc now has more money itself to keep its own growth going. It just landed $70 million in seed and Series A funding from Emergence Capital, 8VC, Founders Fund, Sociaol Captial and others.
Clearbanc can claim a convincing track record at helping to launch startups, with 500 financing completed to date, which translates to $100 million in deals to date.