Boost&Co Growth Loans Feature 6-12 Months Interest-Only Before Amortization
Lance Mysyrowicz · EP 320: With a $150M War Chest, He Gives SaaS Businesses Friendly Loans · Jun 9, 2016 · at 11:59
Lance Mysyrowicz, founder of debt fund Boost&Co, outlines the typical amortization schedule and loan structure provided to SaaS companies.
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“It's very similar for us, so you may get an interest only period, so six to 12 months of interest only at the beginning, you service the interest, so 10 grand a month on a million bucks for six months, and then it starts you start paying interest and capital every month, and you would pay that over, let's say, three, four years and then the loan is ended because it's been repaid in full.”
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“We are similar pricing, but we are different because we do not rely on companies who have venture capital Already invested in, in, in their cap tables.”
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“We're happy to waive the fee, but it'll have a impact on the interest rate. So the way we think about it is how much IRR or how much profits in general are we going to make on the loan? So if you want zero fees, I'm more than happy to waive it, but it'll be tr…”
Venture Debt Requires Diversification Over Concentration Due to Capped Returns
“I would always prefer to do a smaller deal and have a small risk exposure to all the companies in my portfolio than to concentrate my portfolio into one or two investments. Because, I will never make a 10 X or a hundred X return on a loan.”
Boost&Co Has Deployed Approximately $120M Across 25 Deals
“In my life probably a hundred, but at boost we're up to about 25 deals now and call it about a hundred and twenty million dollars.”
Boost&Co Invested $1.75M in Debt Financing Into SaaS Company IDIO
“We have put in one point two, five million pounds. So about one seventy five million dollars.”
Boost&Co Charges 1-2% Fees, 8-12% Interest, and 10-15% Warrants
“We make our money in three different ways. Fees, interest, and warrant. So fees is, let's say one to two percent of the amounts that we lend. Interest rate is anywhere between eight percent and 12% of the money capital outstanding on the loan and then the warr…”