In the arctic investment climate, with mystical accumulations of VC “dry powder” which some say “will outwait everyone,” alternative fundraising options are revered. Especially when they support the early startup market.
Arc Technologies has strived to provide options, despite the challenging conditions.
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Fundamentally loaning future revenue to high-level startups, Arc allows them to avoid the dilutive capital usually offered by VCs. In an environment where VC investment is not only few and far between but also expensive, companies can continue to grow without a trade-off.
“We’re seeing that either VCs aren’t investing, or startups do not want to raise because valuations are so low,” said Don Muir, Co-Founder, and CEO of Arc Technologies. “And so, while debt has become more expensive, equity has become 10 times more expensive, which makes non-dilutive capital that Arc offers 10 times more attractive.”
Today, January 11, 2023, Arc has launched its Advance Plus product, improving conditions even further for its clients.
“It’s a new structured financial solution for the top 10% of our customers that have longer repayment terms and a period where customers aren’t required to pay us back,” said Muir.
“Our goal is to help the premium segment the (early startup) market, get through this cycle, get to the other side, so they can ultimately raise venture capital when the markets come back at the valuation they want to expect.”
The Advance Plus product introduces a six-month interest-only period that lets early-stage businesses have the flexibility to scale without the pressure of large repayments. The company’s clients have said that it encourages sustainable growth, giving them time to develop toward long-term objectives.
This expands Arc’s dilution-free suite of funding products and builds on top of the Arc Treasury bank account.
“Arc Advance Plus underscores our commitment to solving the biggest challenge early-stage startups face today: access to capital,” he continued. “We have structured this product to reward top-decile startups with frictionless access to longer-term growth capital, so they can weather this challenging economic cycle, drive sustainable growth, and better compete in the current environment.”