Mind the Gap: InvestEdge

The Gaps Filled

Structure: Term Debt & Standby Facility

Use Cases: Expansion & Runway Extension

InvestEdge’s advisors approached a wide variety of growth equity funds, and after educating the co-founders on several alternatives, also included several providers of growth debt in the fundraising process. The primary need related to expanding the company’s product line to meet the evolving needs of its customers.

Vistara was flexible and split its investment into an initial term loan and a portion in a “standby” (also known as a “delayed draw”) structure, to be drawn when needed by the company. Vistara’s non-amortizing loan structure provided them with four years without having to consider principal payments and allowed the company to pursue various products and go-to-market growth initiatives before choosing the optimal time to raise equity or consider selling control of the business.

Why Vistara

Flexible financing, a customized structure and a true partner, not just a lender

Most investors require companies to take their full investment in a single tranche. InvestEdge viewed this as costly and inefficient, and didn’t want to incur the cost of capital until it really needed it. Vistara was flexible and split its investment into an initial term loan and a portion in a “standby” (also known as a “delayed draw”) structure, to be drawn when needed by the company.

Several years into the relationship, InvestEdge approached Vistara for additional funding to further support growth. When most other lenders would require the company to start paying back the loan via amortization payments to “de-risk”, Vistara acted as a true partner and instead saw it as an opportunity to further support the relationship and topped-up and provided the company additional growth capital.

We bootstrapped InvestEdge from an idea to servicing over $1 trillion in assets in 17 years. We considered equity financing but instead chose Vistara as our first external investor. They created tailored solutions to our capital requirements without creating complex equity structures. Their debt funding was exactly what we needed to launch additional products and continue to grow rapidly. We definitely made the right choice to go with Vistara’s growth debt when we did, in the end, these important decisions allowed us and our employee shareholders to own over 95% of the business upon exit – a rare feat and one that delivered a meaningful outcome for ourselves and our team.”

 

– Bob Stewart, CEO & Co-Founder InvestEdge

The Outcome

Founders decide to sell on their own terms

In October 2020 InvestEdge announced that Featheringill Capital had acquired a majority interest in the company, providing founder liquidity and capital for continued investment in the company’s products.

Learn more about Backstop Solutions.