Never let a good opportunity go to waste

May 8, 2023

As we've been wrapping up the last remaining items for the Series B, we've seen palpable demand from so many investors who were forced to be left out. In market conditions that are more favorable, it's normal to just leave the demand as is and prime them for the next round of financing. In times like this though, it's never a bad idea to pad the war chest and prepare for the what ifs that could happen in the coming quarters ahead.

We're seeing regional banks under significant pressure, delinquency rates for consumer credit continuing to tick upwards, and a Federal Reserve that has not shown a willingness to cut rates until they feel we are firmly over the hump when it comes to taming inflation. This paints a complicated picture that will likely lead to things getting worse before they get better.

We are fortunate that we are closing the round when we are, well ahead of the potential challenges the economy and the startup ecosystem will face in Q3/Q4 of this year. At the same time, we should capitalize on the interest in what we're building and raise capital when we can and not when we're forced to. For the first time, we also have the leverage as these funds want us more than we need them. We have a few options available to us but the one we are likely going to use is to raise a convertible note into our Series C that we're not expecting to go out for until well over a year from now. These investors will get a roughly 20% discount on the share price of the Series C, but they are going to be beholden to whatever the Series C is priced at and they won't know what that price will be until we close the round. This type of structure is extremely company friendly and incredibly rare to be able to pull off in normal times, let alone in uncertain times like these. 

To be able to raise additional capital beyond a priced round in this environment is a luxury most don't have and it will do wonders for us as we set out on a path to cleaning up our capital structure from this round and ensuring we all succeed when this company becomes the unicorn I know it can be 🚀