Clearbanc funds ad spend cheaper than equity to preserve founder ownership
Michele Romanow · 20VC: Clearbanc's Michele Romanow on Why 40% of VC $ Raised Today Goes To Google and Facebook, How To Create A Financing Mechanism For The Repeatable Parts Of Your Business & Why We Need To Stop Celebrating Fundraises · May 10, 2019 · at 9:23
Michele Romanow, co-founder and CEO of Clearbanc, contrasts non-dilutive revenue-share financing for digital ad spend against traditional venture capital equity.
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“We can fund that for way cheaper than equity can, and ultimately that means that founders will be able to keep way more of their companies by the time they go public.”
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More from Michele Romanow
Romanow: 40% of venture capital goes directly to Google and Facebook ads
“40% of venture capital dollars that are raised today end up going straight to Google and Facebook ads.”
Romanow: Scalable growth channels should be funded with debt, not equity
“VC is true risk Capital. This, you know, zero to one risk that we describe. If you are building a crazy piece of AI and need 50 engineers or solving a disease, VC is the perfect fit for you. What I'm saying is, ClearBank, we're like, if you know that channels …”
Romanow: Funding celebrations glorify founders giving up 30% of their companies
“It's actually celebrating founders giving up a piece of their company, often a very large piece, 20 to 30% around, and giving up control of their companies.”
Romanow: Alternative financing will enable founders to retain 50% equity at IPO
“You know, I think we win when five years from now, founders are going public, and they're back to owning half their companies again, and there will be no greater source of pride.”