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According to the offering page, the crowdfunding platform is seeking $950,000 at a $15 million valuation. The seed round is a side-by-side offering as the securities are being offered under both Reg CF and Reg D (506c). Investors are receiving a “Crowd Note,” that will convert into preferred shares at a 20% discount following a future priced funding round. The Crowd Note holds a 24-month term at a 4% coupon. Supervest completed a pre-seed round in 2018 for $300,000 at a pre-money valuation of $3 million.
According to the Reg CF offering circular, Supervest lost about $168,000 on $123,000 in its most recent fiscal year.
MCAs are effectively high-interest rate credit products for businesses in need of a loan. The high rate of return is pared with a good degree of risk for the lender. The offering page states that Supervest has provided over $15.5 million in funding to small and medium businesses with total expected payback (RTR) of over $22 million. From December 2020 to January 2021, Supervest reports a 185% increase in MCA funding. Supervest says there is a “limited market currently available for an accredited investor to tap into unless they have a pre-existing relationship with an MCA funder.”
MCAs typically provide credit when more traditional lending firms will not or they are simply too slow to provide a loan. Supervest states that the MCA market is approximately $19.2 billion (as of 2019). Funders are said to be relying more heavily on syndicates to co-fund their deals and this is where Supervest steps in.
Supervest states they are currently partnering with originators targeting areas like: Credit Card Portfolio Acquisition, Movie/Theatrical Productions, Consumer Debt Settlement, and Hard Money Lending.
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