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Apr 13, 2022 · 24m · top-founders

He Raised $15m to Help Your New Customers Pay for your Expensive SaaS Plans

Baxter Lanius · 12m spoken Nathan Latka · 8m spoken
0:00 / 0:00

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In this interview, Nathan Latka speaks with Baxter Lanius, founder and CEO of Alternative, about how his fintech platform enables B2B SaaS vendors to increase contract values and accelerate sales cycles using flexible installment terms. Lanius details Alternative's $15 million debt and equity structure, automated underwriting via Plaid, and how capital recycling drives high returns.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 39.9% of the talking time here. How this is scored →

Nathan as informed peer 5.9 Guest teaching 2.3 Guest disagreement 1.7 Nathan pushing back 3.7
05100:0010:0020:000:44–5:23 · Nathan as informed peer 5/10 Introducing Baxter Lanius and the Origin of Alternative Latka draws parallels between Alternative's B2B model and consumer BNPL solutions like Affirm and Klarna. Lanius agrees and elaborates on how an embedded API differs from consumer checkout iframes.5:24–9:17 · Nathan as informed peer 4/10 Walkthrough: The Salesforce Payment Terms Example Latka drills into the mechanics of a $10,000 invoice example but gets confused by the $1,600 monthly payments totaling $9,600. Lanius corrects him by explaining the exact monthly installment is $1,666.67.9:18–11:41 · Nathan as informed peer 6/10 Financing the Facility and Growth Forecast Latka breaks down the $15M raise into debt versus equity components and asks about non-utilization fees on the $10M credit line. Lanius declines to share prior month beta revenue before Latka gets him to confirm a $1M monthly run rate goal.11:44–14:44 · Nathan as informed peer 7/10 Founderpath SaaS Valuation Tool Promo Following an ad read, Latka quizzes Lanius on cost of capital and rejects Lanius's claim that he intentionally wanted a lower 80% advance rate. Lanius defends the strategy by explaining the junior tranche structure and personal co-investment.14:44–17:55 · Nathan as informed peer 6/10 Go-To-Market Playbook and Beta Customer Results Latka investigates the friction in asking SMB buyers to link their Plaid bank credentials during a SaaS sales cycle. Lanius responds that buyers are willing to share financial data to unlock financing.17:56–20:32 · Nathan as informed peer 8/10 Target IRR, Capital Recycling, and Long-Term Vision Latka maps out the entire capital recycling equation to explain how a 5% transaction fee produces a 25% portfolio IRR. Lanius concedes Latka's breakdown is spot-on and compliments his understanding.20:33–23:45 · Nathan as informed peer 5/10 Fundraising History, Cap Table, and Engineering Team Latka reviews the founder's initial equity funding, cap table control, engineering head count, and wraps with rapid-fire questions.0:44–5:23 · Guest teaching 2/10 Introducing Baxter Lanius and the Origin of Alternative Latka draws parallels between Alternative's B2B model and consumer BNPL solutions like Affirm and Klarna. Lanius agrees and elaborates on how an embedded API differs from consumer checkout iframes.5:24–9:17 · Guest teaching 4/10 Walkthrough: The Salesforce Payment Terms Example Latka drills into the mechanics of a $10,000 invoice example but gets confused by the $1,600 monthly payments totaling $9,600. Lanius corrects him by explaining the exact monthly installment is $1,666.67.9:18–11:41 · Guest teaching 2/10 Financing the Facility and Growth Forecast Latka breaks down the $15M raise into debt versus equity components and asks about non-utilization fees on the $10M credit line. Lanius declines to share prior month beta revenue before Latka gets him to confirm a $1M monthly run rate goal.11:44–14:44 · Guest teaching 3/10 Founderpath SaaS Valuation Tool Promo Following an ad read, Latka quizzes Lanius on cost of capital and rejects Lanius's claim that he intentionally wanted a lower 80% advance rate. Lanius defends the strategy by explaining the junior tranche structure and personal co-investment.14:44–17:55 · Guest teaching 2/10 Go-To-Market Playbook and Beta Customer Results Latka investigates the friction in asking SMB buyers to link their Plaid bank credentials during a SaaS sales cycle. Lanius responds that buyers are willing to share financial data to unlock financing.17:56–20:32 · Guest teaching 2/10 Target IRR, Capital Recycling, and Long-Term Vision Latka maps out the entire capital recycling equation to explain how a 5% transaction fee produces a 25% portfolio IRR. Lanius concedes Latka's breakdown is spot-on and compliments his understanding.20:33–23:45 · Guest teaching 1/10 Fundraising History, Cap Table, and Engineering Team Latka reviews the founder's initial equity funding, cap table control, engineering head count, and wraps with rapid-fire questions.0:44–5:23 · Guest disagreement 1/10 Introducing Baxter Lanius and the Origin of Alternative Latka draws parallels between Alternative's B2B model and consumer BNPL solutions like Affirm and Klarna. Lanius agrees and elaborates on how an embedded API differs from consumer checkout iframes.5:24–9:17 · Guest disagreement 2/10 Walkthrough: The Salesforce Payment Terms Example Latka drills into the mechanics of a $10,000 invoice example but gets confused by the $1,600 monthly payments totaling $9,600. Lanius corrects him by explaining the exact monthly installment is $1,666.67.9:18–11:41 · Guest disagreement 2/10 Financing the Facility and Growth Forecast Latka breaks down the $15M raise into debt versus equity components and asks about non-utilization fees on the $10M credit line. Lanius declines to share prior month beta revenue before Latka gets him to confirm a $1M monthly run rate goal.11:44–14:44 · Guest disagreement 3/10 Founderpath SaaS Valuation Tool Promo Following an ad read, Latka quizzes Lanius on cost of capital and rejects Lanius's claim that he intentionally wanted a lower 80% advance rate. Lanius defends the strategy by explaining the junior tranche structure and personal co-investment.14:44–17:55 · Guest disagreement 2/10 Go-To-Market Playbook and Beta Customer Results Latka investigates the friction in asking SMB buyers to link their Plaid bank credentials during a SaaS sales cycle. Lanius responds that buyers are willing to share financial data to unlock financing.17:56–20:32 · Guest disagreement 1/10 Target IRR, Capital Recycling, and Long-Term Vision Latka maps out the entire capital recycling equation to explain how a 5% transaction fee produces a 25% portfolio IRR. Lanius concedes Latka's breakdown is spot-on and compliments his understanding.20:33–23:45 · Guest disagreement 1/10 Fundraising History, Cap Table, and Engineering Team Latka reviews the founder's initial equity funding, cap table control, engineering head count, and wraps with rapid-fire questions.0:44–5:23 · Nathan pushing back 2/10 Introducing Baxter Lanius and the Origin of Alternative Latka draws parallels between Alternative's B2B model and consumer BNPL solutions like Affirm and Klarna. Lanius agrees and elaborates on how an embedded API differs from consumer checkout iframes.5:24–9:17 · Nathan pushing back 4/10 Walkthrough: The Salesforce Payment Terms Example Latka drills into the mechanics of a $10,000 invoice example but gets confused by the $1,600 monthly payments totaling $9,600. Lanius corrects him by explaining the exact monthly installment is $1,666.67.9:18–11:41 · Nathan pushing back 4/10 Financing the Facility and Growth Forecast Latka breaks down the $15M raise into debt versus equity components and asks about non-utilization fees on the $10M credit line. Lanius declines to share prior month beta revenue before Latka gets him to confirm a $1M monthly run rate goal.11:44–14:44 · Nathan pushing back 6/10 Founderpath SaaS Valuation Tool Promo Following an ad read, Latka quizzes Lanius on cost of capital and rejects Lanius's claim that he intentionally wanted a lower 80% advance rate. Lanius defends the strategy by explaining the junior tranche structure and personal co-investment.14:44–17:55 · Nathan pushing back 5/10 Go-To-Market Playbook and Beta Customer Results Latka investigates the friction in asking SMB buyers to link their Plaid bank credentials during a SaaS sales cycle. Lanius responds that buyers are willing to share financial data to unlock financing.17:56–20:32 · Nathan pushing back 3/10 Target IRR, Capital Recycling, and Long-Term Vision Latka maps out the entire capital recycling equation to explain how a 5% transaction fee produces a 25% portfolio IRR. Lanius concedes Latka's breakdown is spot-on and compliments his understanding.20:33–23:45 · Nathan pushing back 2/10 Fundraising History, Cap Table, and Engineering Team Latka reviews the founder's initial equity funding, cap table control, engineering head count, and wraps with rapid-fire questions.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 49% · guest 51%0:00 · Nathan 49% · guest 51%3:00 · Nathan 18.8% · guest 81.2%3:00 · Nathan 18.8% · guest 81.2%6:00 · Nathan 34.4% · guest 65.6%6:00 · Nathan 34.4% · guest 65.6%9:00 · Nathan 41.9% · guest 58.1%9:00 · Nathan 41.9% · guest 58.1%12:00 · Nathan 55.4% · guest 44.6%12:00 · Nathan 55.4% · guest 44.6%15:00 · Nathan 20.5% · guest 79.5%15:00 · Nathan 20.5% · guest 79.5%18:00 · Nathan 40.4% · guest 59.6%18:00 · Nathan 40.4% · guest 59.6%21:00 · Nathan 50.9% · guest 49.1%21:00 · Nathan 50.9% · guest 49.1%24:00 · Nathan 95.5% · guest 4.5%24:00 · Nathan 95.5% · guest 4.5%
Sharpest disagreement ▶ 13:26 Defending conservative advance rate structuring

Lanius counters Latka's skeptical claim that founders always want 90%+ leverage, explaining why junior tranches and asset quality de-risking justify an 80% advance rate.

 Hardest push from Nathan ▶ 13:26 Calling out claimed preference for lower leverage

Latka explicitly rejects Lanius's framing, declaring 'I don't believe you' when Lanius claims he intentionally chose an 80% advance rate over 90%.

 Biggest teaching moment ▶ 8:15 Correcting monthly installment math

Lanius corrects Latka's confusion over missing cash in a $10,000 contract by pointing out that the installment is precisely $1,666.67 per month rather than a flat $1,600.

 Nathan holds their own ▶ 19:17 Full breakdown of portfolio IRR and capital velocity

Latka demonstrates deep fintech fluency by synthesizing the entire spread, recycling velocity, and run-rate economics, prompting Lanius to remark that Latka might be smarter than him.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Baxter Lanius and the Origin of Alternative 5212 Latka draws parallels between Alternative's B2B model and consumer BNPL solutions like Affirm and Klarna. Lanius agrees and elaborates on how an embedded API differs from consumer checkout iframes.
Walkthrough: The Salesforce Payment Terms Example 4424 Latka drills into the mechanics of a $10,000 invoice example but gets confused by the $1,600 monthly payments totaling $9,600. Lanius corrects him by explaining the exact monthly installment is $1,666.67.
Financing the Facility and Growth Forecast 6224 Latka breaks down the $15M raise into debt versus equity components and asks about non-utilization fees on the $10M credit line. Lanius declines to share prior month beta revenue before Latka gets him to confirm a $1M monthly run rate goal.
Founderpath SaaS Valuation Tool Promo 7336 Following an ad read, Latka quizzes Lanius on cost of capital and rejects Lanius's claim that he intentionally wanted a lower 80% advance rate. Lanius defends the strategy by explaining the junior tranche structure and personal co-investment.
Go-To-Market Playbook and Beta Customer Results 6225 Latka investigates the friction in asking SMB buyers to link their Plaid bank credentials during a SaaS sales cycle. Lanius responds that buyers are willing to share financial data to unlock financing.
Target IRR, Capital Recycling, and Long-Term Vision 8213 Latka maps out the entire capital recycling equation to explain how a 5% transaction fee produces a 25% portfolio IRR. Lanius concedes Latka's breakdown is spot-on and compliments his understanding.
Fundraising History, Cap Table, and Engineering Team 5112 Latka reviews the founder's initial equity funding, cap table control, engineering head count, and wraps with rapid-fire questions.

Statements from this episode (12)

Opinion
Lanius: 2014-era fintech platforms lacked real product innovation
“At the time, I was pretty unimpressed with the platforms that were founded in that timeline because ultimately many of them were just customer acquisition moats and strategies around websites and podcasts and news, et cetera. And there were not really many com…”
Baxter Lanius Apr 13, 2022 ▶ 1:33
Insight
Lanius: Pay-over-time financing reduces B2B pricing negotiation time by up to 50%
“When you think about pricing negotiations as well as part of the sales cycle, it is a significant portion of the sales cycle, and if you can limit that by 50% or 20% by allowing customers to pay over time, it's also an amazing value add.”
Baxter Lanius Apr 13, 2022 ▶ 5:10
Disclosure
Alternative charges a 5% fee, advancing 95% of SaaS contract value upfront
“Our existing generic plan is, is six months of payment terms. So you would break that 10,000 dollar contract into six payments of about 1600 dollars. And we would front the capital to Salesforce on day one. So Salesforce is ultimately able to basically close t…”
Baxter Lanius Apr 13, 2022 ▶ 5:51
Disclosure
Lanius: Alternative has raised just under $15M in debt and equity
“We've raised just under fifteen million dollars. A portion of that is in the credit facility. And so we fund that transaction through our credit facility.”
Baxter Lanius Apr 13, 2022 ▶ 9:32
Disclosure
Alternative secured a credit facility with zero unused line or upfront fees
“And we ultimately don't have unused fees on our credit facility. So, you know, we have a basically a flat rate associated with deployed capital. There are no upfront unused fees and incremental spend, which I think you see in most obviously typical and traditi…”
Baxter Lanius Apr 13, 2022 ▶ 11:08
Assertion Not checkable as stated
Lanius: Early-Stage Fintech Credit Facilities Typically Cost 10% to 18%
“I mean, it's more like 10 to 18%. Typically advance rates are between 90 and, or 80 and 90% depending on your credit underwriting ability, and there's also a credit box associated with all these transactions.”
Baxter Lanius Apr 13, 2022 ▶ 13:03
Disclosure
Lanius: Alternative Chose an 80% Advance Rate Despite 90% Option
“Our advance rate is actually at 80% for a number of strategic reasons, but yeah, we had the ability to go up to 90%”
Baxter Lanius Apr 13, 2022 ▶ 13:17
Insight
Lanius: Fintechs should not always maximize their available debt leverage
“Taking out, you know, as much leverage as what's available to you is not always the best strategy.”
Baxter Lanius Apr 13, 2022 ▶ 14:06
Disclosure
Lanius personally invested directly in Alternative's junior debt tranche, bypassing equity
“My own personal capital is also in the junior tranche, not through the company.”
Baxter Lanius Apr 13, 2022 ▶ 14:33
Assertion Not checkable as stated
Lanius: Alternative had just over 10 active business customers in early traction
“So we have just over 10.”
Baxter Lanius Apr 13, 2022 ▶ 16:10
Disclosure
Lanius: Alternative's blended debt cost of capital is 10% to 13%
“So the senior is just under 10% blended is to your .10 to 10 to 13.”
Baxter Lanius Apr 13, 2022 ▶ 18:07
Prediction Not checkable as stated
Lanius expects Alternative to earn mid-20s IRR with a 10% net spread
“So we'll be able to earn probably mid, mid, mid twenties. And so our spread on our business is, you know, call it in a conservative manner, about 10%.”
Baxter Lanius Apr 13, 2022 ▶ 18:23
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