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Mind the Gap: Backstop Solutions

An Inside Look at Backstop Solution’s journey from industry leading cloud-based productivity suite to acquisition on their terms. Swipe to learn more about the gaps that were filled to help make it all happen.

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About Backstop Solutions

Backstop Solutions provides a vertically focused CRM and operating platform for the institutional investment industry. With its award-winning cloud-based productivity suite Backstop’s global customer base includes leading investment consultants, pension funds, foundations, family offices and hedge funds of all sizes throughout North America. View Backstop Solutions Portfolio Profile >>

The Objective

The Objective

Find capital to fund a combination of liquidity to early investors, organic & acquisition led growth, while maintaining founder control.

To pull off a deal with multiple uses of proceeds, Backstop needed a creative investment partner. Providing software to a long list of the top performing investors, the company had no shortage of contacts to source the capital. However, after searching for a funder that truly understood growth-stage technology companies and offered a broad range of flexible financial options to satisfy their multiple use cases, they chose Vistara. While some early investors desired liquidity, others looked to invest further which led to a total of $20 million in financing including Vistara.

The Gaps Filled

Structure: Term Debt & Acquisition Facility

Use Cases: Expansion & Liquidity

Vistara provided a cost efficient “Rental Equity” structure – a non-amortizing (ie. interest-only) loan not only subordinated to its existing bank lender, but with a significant amount of accrued or “PIK” interest to maximize capital for growth rather than debt service. Vistara also permitted the company to offer liquidity to existing investors, a use of capital that other lenders would not allow for.

Backstop was disciplined and well-funded, allowing Vistara to trust management to deploy some of its capital for what was also an accretive buyback to the benefit of its ongoing investors and founders.

Why Vistara

Terms and a partnership model that served Backstop founders that others couldn’t match

Vistara provided a cost efficient “Rental Equity” structure – a non-amortizing (ie. interest-only) loan not only subordinated to its existing bank lender, but with a significant amount of accrued or “PIK” interest to maximize capital for growth rather than debt service. Vistara also permitted the company to offer liquidity to existing investors, a use of capital that other lenders would not allow for. Backstop was disciplined and well-funded, so Vistara trusted management to deploy some of its capital for what was also an accretive buyback to the benefit of its ongoing investors and founders.

 

Vistara’s creativity and flexibility stood out as we looked at different capital sources to fund our growth plans. They stepped up again as we completed an important acquisition soon into our relationship. Vistara really embodies what it means to be a growth partner, and have proven to bring a lot of value to the table in addition to capital.”

 

– Jim Schuler, CFO Backstop Solutions

The Outcome

Channel partnerships and smart acquisitions drive additional scale leading to a further optimized capital structure and acquisition

Vistara’s initial investment in Backstop led to further capital infusion for an important acquisition, while also establishing valuable partnerships, such as a strategic alliance with Mercer. This enabled asset owners to streamline research and portfolio management workflows. With increased scale, Backstop secured additional financing from its senior bank lender, allowing it to refinance Vistara in early 2021. The low-cost capital facilitated the acquisition of another CRM solutions provider tailored to asset managers’ needs.

By utilizing capital strategically, including Growth Debt from Vistara, Backstop was successully aquired by ION Analytics in December 2021.

Learn more about Backstop Solutions.

Deal Team

Randy Garg
Founder &
Managing Partner
Noah Shipman
Partner

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