Our Investor Spotlight series features leaders and executives from notable debt and equity investors who have successfully funded companies via Hum’s Intelligent Capital Market. Each Q&A will discuss their investment strategy, how they partner with companies, and why they chose to utilize Hum to personalize their deal flow.
Isaac Bunney is the CRO at RevTek Capital, a leading specialty finance company providing a focused credit solution to emerging, predictable recurring revenue/subscription-based companies across the country.
In this Q&A, we chat with Isaac on all things debt financing and minimizing dilution, and how RevTek leveraged Hum’s Intelligent Capital Market funding platform to secure investment opportunities.
Q: Thanks for taking the time! First, can you tell us a little bit about RevTek Capital and its mission?
A: RevTek’s mission is to help company founders and early investors retain more equity. We believe that if there is a high confidence in the future of the company and they have shown they are able to predictably grow, founders should take as much debt as possible when fundraising to reduce dilution.
Q: Now let’s talk about investment strategy. What types of companies – industry, business model, etc. does RevTek focus on?
A: Typical industries we lend to are SaaS, PaaS, IoT, ‘X’aaS that are looking for growth capital but want to limit the amount of equity they sell. RevTek looks for companies that are growing and have quantifiable historical revenue metrics that show how a capital injection will improve the company over time. They have seen success and want to scale even more. We are fairly industry agnostic but like to see sticky revenue streams and high gross margins.
Q: How were you introduced to Hum and its funding platform, the Intelligent Capital Market?
A: I saw the press release regarding the Series A round Hum had raised and thought I would reach out. We are always looking for more effective ways of finding potential customers who need growth capital in an efficient manner. There has been a need in the industry for better matching of founders and funders, and I was surprised that I had never heard of Hum and its ICM platform. I was incredibly surprised with the amount of quality information they can provide from an investor’s perspective when looking at a potential deal.
Q: Why were you and the team attracted to Hum’s ICM and the real-time company data & insights it can provide to investors? What stood out most about the platform?
A: The thing that stood out most about Hum’s funding platform was the clean and efficient delivery of information that told a story. It’s an easily accessible platform that helps us see information it normally takes a long time to build out after long conversations with a company. Hum knows what we want to see and puts it in a format that makes sense to an investor.
Seeing the trends and understanding where the company is makes our early decision tree process a lot easier than more traditional channels. We look for certain things like gross profit margin, revenue growth, and contract waterfalls. The information we get from the ICM helps to clarify our decision making process a lot faster.
Q: Like Hum, RevTek focuses on non-dilutive financing to help entrepreneurs minimize dilution. Do you feel this financing method will become as common as equity over the next few years?
A: I certainly hope so. More companies should become educated about the benefits of raising debt to minimize dilution and more importantly be able to access it to grow. For too long there have been two financing options – bootstrapping and growing at their current rates or selling equity to accelerate their growth. Why not be able to accelerate growth with minimal dilution? We let companies do both. Traditional balance sheet heavy companies are able to access debt markets with lower growth and future profitability metrics. It makes no sense that a software company with large upfront investments shouldn’t be able to do the same.
Q: RevTek has funded a few companies via Hum’s ICM. Can you talk about what was notable regarding those companies and how they fit RevTek’s investment thesis?
A: These were companies that knew the importance of using debt to help them scale faster without needing to dilute their existing investors and founder(s). There was no education needed, and that speeds up the funding process on all sides. Companies that have raised capital before understand what dilution does. At RevTek, we want to keep more money in more founders and early investor’s pockets.
This testimonial may not represent the experience of all clients and is not indicative of future performance or success.