INNOVATORS VS COVID 19
Tap Into Future Recurring Revenues to Fund Your Growth Now, Says Miguel Fernández of Capchase
We talked to Miguel Fernández of Capchase about their financial services and he had the following to say:-
First of all, how are you and your family doing in these COVID-19 times?
Miguel Fernández: Thankfully, everyone is fine, just bored with the social distancing at this point.
Tell us about you, your career, how you founded Capchase.
Miguel Fernández: I’m originally from Madrid, Spain. I studied Mechanical Engineering in Madrid and Energy Engineering in Munich. Then I worked in strategy consulting for a couple of years and, on the side, launched two startups, Wibbou and Heydey, which both failed. After that, I decided that I wanted to work in tech, so I joined a pre-revenue SaaSCo, Geoblink, as the first person in sales. That’s where 3 of the cofounders of Capchase met. I built the sales and customer success teams and then moved to London, UK, to enter the local market and set up the team. I left Geoblink to come to HBS to pursue my MBA at HBS, where I met Przemek, also a cofounder.
During my first year at HBS, we explored many working capital solutions for B2B businesses until we hit the nail in the head with Capchase. It lay at the intersection between the topic we had been researching and pain we had become very familiar with during our time at Geoblink.
We started working on it early in January and got our first in July.
How does Capchase innovate?
Miguel Fernández: We allow SaaS companies to fund their growth without dilution. We do so by upfronting 12 months of any monthly paying customers, so they can reinvest in growth while cutting the burn rate. This is a huge change from the experience of getting a loan from a bank. Instead of fighting with the bankers over weeks to get a line that’s not material, SaaSCos can now access millions of dollars from Capchase in less than a day.
Founders using Capchase raise much fewer rounds and keep a larger part (16% more on average) of their company at an exit event.
How the coronavirus pandemic affects your business, and how are you coping?
Miguel Fernández: It has affected positively because every SaaSCo has been very thoughtful about cutting costs and extending the runway. Capchase helps to cut the burn because SaaSCos can operate as if every single customer paid upfront for a full year of subscription. Therefore, SaaSCos immediately payback all acquisition, implementation, and sales commission costs and reinvest the profit.
Did you have to make difficult choices, and what are the lessons learned?
Miguel Fernández: Every decision in a startup is a trade-off, which team members are needed in the team, which way to develop the product, which geography to focus on, which investors to partner with, etc.
The biggest lesson we learnt – which was the advice provided by fellow founders – was to focus on building the best team and empowering them to make decisions. When decisions are made by the people that are closest to the problem, the magic happens, and the feedback loops are extremely quick. There is no need for the information to go up a hierarchy and down again if there are going to be information leaks. The people in the frontlines feel the problems more than anybody else and therefore are more suited to provide the solutions.
How do you deal with stress and anxiety?
Miguel Fernández: By doing sports and sharing and listening from Luis, Ignacio and Przemek, and other friends starting their own ventures.
Who are your competitors? And how do you plan to stay in the game?
Miguel Fernández: Every financing company out there is a competitor. We stay ahead by innovating in products and designing a process for fundraising that is extremely fast, simple, and transparent.
Your final thoughts?
Miguel Fernández: We started in the middle of the pandemic, so some of the team members have never met each other in person. However, it is very stimulating to see how everyone is united behind a mission and pushing forward to make it happen. What seemed impossible a few months ago (fully remote team) now is a reality, and we have Capchasers of 3 continents.
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