OVERVIEW
You built it, A.R.I. helps you keep it, by helping with each step along the way.
A.R.I.’s primary business involves making loans to VC-backed companies.
We seek to partner with each borrower through final exit, which typically will entail a 5-10 year relationship encompassing multiple rounds of debt funding.
Target loan size ranges from $3 million to $30 million with maturities of two to five years.
Generally, companies have already received multiple rounds of institutional equity financing and are entering a high growth or expansion stage for which they seek minimally dilutive capital.
VENTURE DEBT USES
• Growth associated with product development or new product offerings, and expansion into new geographies or market segments.
• Optimizing the timing and valuation of the next equity financing round by extending the resources and timeframe of the borrower, enabling key valuation milestones to be met (known as “runway extension” or “bridging”).
• Equipment financing.
• Working capital.
• Venture debt is rarely used to facilitate mergers or acquisitions.
BENEFITS FOR BORROWERS
Venture debt is complementary to venture equity and has many benefits for startups seeking to optimize their capital structure and minimize their funding costs including:
• Minimizes Management Ownership Dilution
• Accelerates Growth & Expansion
• Extends Runway
• Decreases Cost of Capital
• Complements Equity Financing
• Faster to Obtain than Equity
• Flexible Transaction Structures
• No Need to Relinquish Board Seats
• Less Pressure to IPO or Reach “Unicorn” Status
• Enhances Credibility with Institutional Investors
BORROWER ATTRIBUTES
Debt financing is typically provided three to nine months after the most recent equity raise to Series A through Series D companies with the following attributes:
• Annual Recurring Revenue (“ARR”) between $10 million and $100 million with a sound business plan and clear path to sustainable free cash flow.
• Received institutional funding of at least $20 million in previous financing rounds.
• Talented management team with prior experience building successful early-stage companies.
• Entering growth or expansion stage, having already achieved strong product-market fit and a supportive customer base.
• Relevant competitive advantage in a high-growth, recession-resistant, sector that leverages innovation and technology.
• Attractive “Margin of Safety” via organic growth, viable capital structure, ample asset coverage, and strong VC-sponsorship.
FOCUS SECTORS
A.R.I. is industry agnostic in our investment approach. A qualified company can be eligible for venture debt irrespective of the industry sector in which it operates. However, A.R.I. tends to focus on on the following sectors:
• Financial Technology
• Energy Technology
• Real Estate & Property Technology
• Agriculture Technology
• Healthcare Hardware & Services
• Manufacturing & Robotics
• Supply Chain & Logistics
• Defense
• Telecommunications
• Media & Entertainment
• Software