RBFN Podcast

We make credit sexy(ish) this week with Mike Luebbers, the Chief Credit Officer of Novel Capital. We brought Mike onto the team at Novel after we worked closely with him as he led the underwriting on the credit facility we raised. We learned so much in that process that he was our first call when we decided it was time to hire a Chief Credit Officer. Mike is a world class credit investor, having been Chief Credit Officer at both Bridge Bank and Lighter Capital. In this conversation, which I pulled from the archives, Mike shares his unique point of view of how to do RBF deals (having done hundreds in his career). Mike also shares some great tips for folks to learn how to do think about alternative capital and RBF investing, how his experience in the tech sector inspired him to leverage tech for efficiency and creativity in underwriting, and the key metrics Mike looks at when thinking about an RBF deal. 

Key Takeaways

[3:03] Mike’s career trajectory from commercial tech banking to RBF. 

[5:30] The difference between the sales and. credit guy. 

[6:05] Mike’s duties as the Chief Credit Officer role at Novel Capital. 

[7:35] How Mike made the shift from bank to fintech startup. 

[9:29] Where Mike sees RBF fitting in the landscape both with customers and companies. 

[12:01] The key factors of predictability of revenue and customer base in determining the appropriate amount of RBF to provide. 

[15:32] How RBF fits with the entrepreneur’s growth goals. 

[19:32] The difference between Merchant Cash Advance and the typical RBF. 

[21:20] The other key metrics Mike looks at when thinking about an RBF deal. What are the bare minimum criteria that he thinks are important? 

[28:08] Deal killers in RBF and when it’s not a “no”, but a “not yet”. 

[29:40] How do you know when to attribute it to luck vs. good underwriting? 

[32:59] Q&A: What role does Mike see RBF playing post-pandemic recovery of non-software small businesses
[41:02] Companies that offer a profit share rather than a revenue share. Indie.vc, Earnest Capital. 

Resources:
RBF Network
Keith’s Twitter

Keith’s Linkedin
Lighter Capital 

Bridge Bank

Guest:

Mike: LinkedIn | Novel Capital 

BJ Lackland brings 25 years of expertise in startup funding, with roles spanning CEO of Lighter Capital, Co-Founder of the Israeli RBF fund IBI Spikes Fund, and as a VC. A pioneer in RBF, BJ has funded over 350 companies since diving into the space in 2012. During his Lighter Capital tenure, he transformed the company from zero revenue to funding over 650 deals. Following his time at Lighter Capital, BJ provided advisory services to RBF providers and initiated two new funds. The first, IBI Spikes Fund, was Israel's inaugural RBF fund, focusing on deals ranging from $1 to $6 million. In September, BJ launched Equal Capital in the US, partnering with the Spikes Fund to offer RBF and term loans to American companies. In this conversation, BJ shares lessons he’s learned building RBF platforms, talks about why it’s a good time to be providing alternative capital in tech, and shares tips for great team building, and how at the end of the day, it’s all about people. 

Key Takeaways

[2:53] How BJ made his way to Equal Capital from being a high school teacher in Taiwan. 

[8:20] Equal Capital’s target company.

[12:04] Building the team at Lighter Capital and helping people grow 

[13:30] Bringing RBF to Israel. 

[17:35] Raising capital for the new funds.

[30:29] The fundamental problem we need to address. 

[34:41] Why it’s a good time to be in the tech lending space. 

[37:12] Taking alternative structures into main street businesses.

[41:18] At the end of the day, it's all about people.

[45:34] Competition and collaboration are good things.

Resources:
RBF Network
Keith’s Twitter

Keith’s Linkedin
Novel Capital

Ulu Ventures 

MatterScale 

Guest:

BJ: Equal Capital | [email protected] | LinkedIn | Twitter | IBI Spikes Fund

Dive into this week's episode with Jonny Price, Wefunder's VP of Fundraising. A pioneering platform facilitating capital from both customers and investors, Wefunder's impact extends to over 1000 founders, including household names like Mercury Bank and Substack, boasting an impressive half a billion dollars raised from a community of over 300,000 investors. We cover lots of ground including Jonny's vision for an inclusive investment landscape that embraces not only VCs, but also retail investors and the everyday middle-class American. 

Key Takeaways

[3:47] Jonny’s role as the VP of Fundraising at Wefunder.

[5:07] Wefunder has funded over 1000 companies now, including Mercury Bank, Substack, and Replit. 

[6:22] Jonny’s vision for every B2C company to allocate part of their round for their customers invest.

[8:57] Why Jonny joined Wefunder in 2018.

[17:00] Wefunder stats.

[20:03] Examples of companies WeFunder funds.

[22:22] Why customers invest in a brand.

[28:15] Alternative capital landscape.

[32:02] Wefunder’s market share.

[38:22] Lessons learned.

[44:50] The current state of the crowdfunding market.

[43:57] Good founders get crushed by bad markets.

[50:58] Wefund’s future.

Resources:
RBF Network
Keith’s Twitter

Keith’s Linkedin
Novel Capital

Kiva 

Founder Secrets Podcasts

Speaker Series

CommunityRound.com 

The Intertwine Group
Wefunder Charter

Mercury Bank

Replit 

Substack

Leah Labs 

Levels

KingsCrowd 

Meow Wolf 

Guest:

Jonny: LinkedIn | Twitter | [email protected] 

In this episode, I'm thrilled to introduce Ruben Alonso, CEO of AltCap, a mission-driven community development financial institution (CDFI) operating across multiple states and based in Kansas City. Ruben has propelled AltCap's growth for 15 years, channeling over $300 million in alternative financing towards underserved communities and often-overlooked entrepreneurs. Noteworthy is Ruben's recent launch of AltCap's RBF loan product, opening new avenues for entrepreneurs. Ruben's unwavering dedication to democratizing capital access is deeply rooted in his family's own immigrant story from Cuba during the late 1950s and early 60s. Join us as Ruben provides valuable insights and firsthand experiences in advancing financial inclusivity and fostering small business triumph. 

Key Takeaways

[2:35] The journey from corporate America, to the Peace Corps, to AltCap.

[4:55] How Ruben’s family roots from Cuba informs his desire to help build other businesses. 

[7:51] How AltCap got started and how it has grown. 

[11:56] What CDFIs are, and how they operate. 

[16:30] Lending is a volume business, and maintaining the impact ethos.

[17:34] How they built and evolved their underwriting models. 

[18:40] The character based lending approach. 

[21:47] The benefits of using Ned’s end-to-end system to originate and manage loans. 

[24:25] Examples of RBF deals they have done and where RBF can be a powerful financing tool. 

[25:25] The KauffmanFoundation provided them a $5.3 million program related investment to launch an RBF loan fund to help prioritize entrepreneurs of color. 

[27:43] The relationship between a funder and borrower. 

[34:17] Lessons learned from building a tax credit program to $250M+. 

[36:03] The psychology of RBF. 

[38:48] Capitalizing AltCap for the future.

[40:29] What entrepreneurs should know about CDFIs. 

[46:11] Ruben’s advice for building an alternative capital platform.

Resources:
RBF Network 

Novel Capital 

Ruby Jean’s Juicery

Guest:

Ruben: LinkedIn | AltCap | Twitter 

I am proud to welcome my friend and one of my favorite people in this community, Kim Folsom, a serial entrepreneur who has founded and grown seven companies and achieved multiple successful exits. Kim is the CEO and founder of Founders First Capital Partners, a revenue-based investment platform focused on empowering diverse-led small businesses with flexible funding for exponential growth. Additionally, Kim established Founders First CDC, a non-profit accelerator dedicated to helping small businesses expand and generate jobs. Kim's visionary leadership and commitment to supporting underserved communities make a significant impact in the business world. In this episode, Kim talks about her background as an entrepreneur, building Founders First, and lessons learned along the way. 

Key Takeaways

[4:20] Founders First products and approach to funding diverse entrepreneurs.

[6:53] The RBF deal that Founders First and Novel did together as a syndicated loan.

[12:44] Why you shouldn’t fear the unknown. 

[13:11] There has been a change in the speed of uptake and understanding in the market and people are more familiar with it, but concrete data about the performance and what is possible is still lacking. 

[16:44] How an asset class becomes institutional.

[20:22] Kim’s experience starting a company as a Black woman in the 1990’s, and how it’s evolved over time and the 7 businesses she built.

[23:03] Funding a company with debt vs equity, and why it matters.

[28:40] Accelerating through partnerships.

[29:09] Kim’s tips for raising capital for RBF. 

[32:40] The art of turning down investors.

[36:10] How did Kim become interested in RBF?

[38:00] Lessons learned from Mr. Wonderful from Shark Tank.

[43:42] What Kim is excited about in the future. 

Resources:
RBF Network

Novel Capital

Speaker Series with Kim 

Guest:

Kim: LinkedIn | Founders First  

OnShore Technology - the company Novel and Founders First jointly funded with RBF

I’m pleased to welcome back Will Stringer, the Founder and CEO of Chisos Capital. Will invests in people — entrepreneurs, creators, athletes - using an Income Share Agreement at the earliest stages of business ideation and formation. Join me as I explore Will's journey, from his experience in the investment space to his innovative work at Chisos, supporting entrepreneurs and revolutionizing the investment landscape. Along the way, Will talks about Chisos' unique investment model, the transformative power of providing individuals with access to unique and durable capital solutions, and how they structure their deals to provide maximize the probability of a successful outcome for everyone. 

Key Takeaways

[2:26] Will’s background in a more traditional investment space. 

[4:08] More about Chisos and how they invest in an individual as a business. 

[4:50] How Will came across the idea of an income share agreement. 

[8:15] Will’s inspiration for Chisos, and allowing an investor to invest in people at the earliest stages, betting on them as individuals. 

[12:29] Chisos allows an investor to provide an individual capital on flexible terms. 

[14:40] Chisos has done 56 deals since May 2020. 

[15:08] How Chisos structures its deals. . 

[16:10] The evolution of Chisos capital stack. 

[19:25] More on capital stack and the evolution to fintech. 

[20:52] How do entrepreneurs find Chisos and how do they source their deals? 

[20:59] Use case: investing in a minor league baseball player..  

[32:03] Will gives a shout out to a company in their portfolio now, apparel company Fox & Robin. 

[33:35] How the income share agreement survives business failure.. 

[36:31] What kind of pushback Will gets from both entrepreneurs and downstream investors when he talks to them out in the market.  

[42:00] The importance of storytelling in raising capital.

[44:47] What is the future for Chisos? 

[48:35] Opening Chisos up to anyone via their INSPIRR platform. 

Resources:
RBF Network

Novel Capital

Will’s Original Episode from December 3 2021 

Guest:

Will: Chisos | LinkedIn | IG 

This week I sit down with Brian Parks, co-founder and CEO of Bigfoot Capital, a leading lender for established B2B software companies. With 15 years of experience as an entrepreneur in early-stage software companies and a background as an investment banker, Brian founded Bigfoot in 2017. He has successfully raised capital from various sources, including angels, VCs, and credit funds, and has deployed capital both as a banker and a non-bank lender. Hear Brian's unique journey, why he decided to launched an alternative path to support B2B software companies that often struggle to secure traditional funding. We also get into the bootstrap origin story of Bigfoot and how he organically built the business. 

Key Takeaways

[8:40] What led to the formation of Bigfoot in 2017. 

[12:44] Who Brian funds at Bigfoot - established businesses.

[14:52] What he means by “established” and thinking of the borrowers as small businesses. 

[17:17] Optionality as an operator. 

[17:19] What is the problem that Bigfoot is fixing in the ecosystem? 

[19:55] Bigfoot’s unique loan structure and being strategic with your capital.

[28:12] Solving the sourcing problem. 

[30:54] Creating an ecosystem of content through the Bigfoot newsletter. 

[31:20] The key lessons Brian learned along the way (so far).

[37:53] Bigfoot’s future as a specialty finance company. 

[40:12] Digging into the fundraising journey and Bigfoot’s lending stack. 

[48:10] Brian’s expectations of broader market adoption by this point. 

Resources:
RBF Network
Our first Speaker Series with Brian - Aug. 27, 2019

Novel Capital

Keith’s Twitter
RBFN Newsletter 

Guest:

Brian: Bigfoot Capital | LinkedIn | Newsletter  

Today, we have a special guest who I believe is on the front edge of a revolution in the Alternative Capital space: David Silverstein, CEO and founder of Ned, a software platform that enables online loan origination and management for RBF and other lenders. With Ned’s revenue-based approach, lenders can scale their operations and more quickly deploy new financial products.

Key Takeaways

[3:00] Dave’s path from politics and tech to alternative finance.

[10:54] How Ned allows lenders to deploy more capital, so that they can scale their impact more quickly.

[18:23] Common challenges across lenders in the alternative capital space today.

[18:50] Marketing matters.

[22:43] How Ned works.

[33:16] Technology’s role in lending.

[34:57] Looking to the future of the lending and technology landscape.

Resources:
RBF Network

Novel Capital

Keith’s twitter (@keithkcvc)

Guest:

Dave: Ned | @Dave_Silver1

In a packed episode, we welcome my friend Jamie Finney, co-founder of Kokopelli Capital and the Greater Colorado Venture Fund, and alternative capital philosopher. He is also one of the alternative capital OGs. Jamie shares his journey from entrepreneur to a capital raising road trip to raising $40 million across two funds to support more funding options for entrepreneurs. He discusses his vision for the future of early stage funding and the Innovative Finance Newsletter, and how including smaller and rural towns in startup funding is critical for the future. Also, Jamie and I recorded an interview back in 2019 that you can find in the show notes. It’s amazing to track his journey from there!

Key Takeaways

[4:21] Jamie talks about what led to him co-founding Kokopelli Capital.

[7:21] Fundraising for the first fund, and the difficulties of hitting up LPs who weren’t familiar with the venture strategy and approach.

[7:39] Securing the backing of the State of Colorado, and what that meant for credibility.

[14:26] Becoming “the alternative capital guy”.

[17:44] Getting entrepreneurs to understand alternative capital deal structures.

[22:10] The Innovative Finance Newsletter project.

[29:00] The importance of simplifying and demystifying things for founders and taking away the dizzying of too many options.

[41:22] Who is currently catching Jamie’s interest in the alternative capital space?

[42:46] Why what you stand for is as important as the money you deploy as an investor.

[51:02] There's just no reason that other financial products don't exist and aren't widely used.

Resources:
RBF Network

Novel Capital

First RBFN interview with Jamie- October 19, 2019

Guest:

Jamie: LinkedIn | Twitter| Innovative Finance Newsletter 

It’s an insightful episode this week while we welcome Tessa Flippin, Founder of Capitalize VC, as she shares her journey from startup founder into the world of alternative capital funding. Tessa describes the unique approach and deal structure of Capitalize VC, which enables her to do more deals than typical VC, and to support diverse founders. Along the way, Tessa shares what it’s like to raise a fund as a black woman, gives practical advice for those looking to get into the world of alternative capital investing and VC, and shares her perspective on why starting a company is more challenging than starting a fund.

Key Takeaways

[4:21] At TechNexus Tessa started investing in seed-stage enterprise technology companies and learning the ropes of being an investor on the other side of the table.

[4:44] The reason Tessa wanted to be a founder was to make an impact, particularly on underserved and diverse communities globally.

[6:02] Tessa talks about working to bring more diverse LPs to the table who haven't invested in alternative capital and venture capital funds before, capitalizing on their involvement, and how that will build generational wealth for diverse investors.

[8:38] Tessa discusses figuring out how to run an alternative capital and venture fund, and how her previous experience helped her. When Tessa decided to launch her own fund, she had the tools and knowledge from TechNexus, which accelerated the process.

[13:00] Why starting a company is harder than starting a fund, from Tessa’s perspective.

[17:01] From her experience as a founder, Tessa instills valuable lessons to the founders she funds at Capitalize VC

[19:50] At Capitalize, they focus on the intersection of e-commerce, infrastructure, and consumer brands, investing in both sides of the e-commerce equation.

[23:04] Tessa talks about the deal structure, including the way they structure their RBF deals, and how they choose between structures.

[28:40] Revenue-Based Financing fills the funding gap and benefits both sides of the equation. 

[38:42] Tessa discusses where they find their deals geographically and the decision to work in markets outside of major tech hubs.

[40:52] Tessa’s mission is to increase access to capital and invest in diverse founders. Here’s what she looks for in a company.

[42:04] How are entrepreneurs doing in this rapidly (and often weirdly) shifting world?

[47:07] Who does Tessa admire both on the FinTech and alternative capital funding side?

[50:04] Tessa gives her prediction for what will happen over the next 3-5 years for founders like those she’s working with today.

[55:02] What are the biggest lies that most founders are typically being fed? 

Resources:
RBF Network

Novel Capital

Twitter: @RBF_Network | Keith Harrington

Guest:

Tessa: LinkedIn | Twitter

Capitalize VC