We are a team of operators that know firsthand the challenges founders face. We got our start out of necessity. Originally founded by Scaleworks, a SaaS-focused venture equity operator, who faced the challenge of accessing growth capital to grow their portfolio of SaaS companies.
Traditional banks weren’t an option. Banks didn’t value the SaaS recurring revenue model and wouldn’t let to companies without profit or tangible assets.
So Scaleworks started their own fund to help their companies. It went so well, Element Finance expanded to provide companies of all sizes across the world funding without dilution and warrants.
Revenue-based finance is not new despite recent growth in the SaaS world. Revenue-based Finance values the fact a business has revenue and customers then applies a version of royalty finance to fund a loan.
In three years, we’ve helped our customers grow ARR on average of 38% each year, increasing capital available to founders as they have grown.
"In three years, we’ve helped our customers grow ARR on average of 38% each year, increasing capital available to founders as they have grown."
Our fastest funding was only four days, but our average time to funding is six weeks. So, we will work with your schedule as best we can.
We lend funds from $200k to $10m.
No, we help drive growth, not dilution. We believe warrants are not in the best interest of founders and have never done a loan with a warrant.
We value our founder’s privacy and do not share data about our clients without consent.
We lend based on recurring revenue, not profit. Although burning cash to grow is part of high growth strategies, we like to see this done in a managed way that fits the business's objectives and growth plan.
We are okay with pre-profitability if a company has more than $1m in recurring revenue, a manageable cash burn profile, low churn, and plan for an appropriately sized debt funding that will grow the business over the coming year.
We have no prepayment penalties. However, we do require a notice period after a pre-agreed minimum term length.
Our customers use our growth finance in a variety of ways. The most common use is helping with working capital to invest in upfront growth costs such as sales and markets, team expansions, etc. We support the customer in several other ways, including bolt-on acquisitions, bridge loans for specific needs, refinancing existing debt, market expansion, and shareholder buyouts.
We can lend up to $10M to recurring-revenue-based companies with $1m or more in ARR that have a good plan, a track record for growth, low customer concentration and churn, and a clean balance sheet.
We lend up to 6x MRR and would want our loan to give your company at least 9-12 months of cash flow runway to enable you to grow. If your cash burn profile is much higher and the loan will only give you runway for 2-3 months, then our loans may require you to raise other funds (e.g., equity) to be invested alongside the loan.
Our fixed rate term loans offer interest-only periods, so you can use more of your cash flow to invest in your growth at the beginning of the loan.
Yes. You don’t need to borrow it all up front. You can pull down funds as you need.
A fixed rate term-loan is much more straightforward. Revenue-based finance, from a cash point of view and doesn’t appreciate the time, value of money.
No, we don’t require you to be profitable. As long as you have a good team with a strong strategic path to profitability, we’d like the opportunity to work with you.
“The team at Element were great to work with - They helped us get the funds needed to finance a bolt-on acquisition, increasing our number of products, customers, and revenue.”
“From our first meeting, it was clear that John and his team just get it. Element Finance knows what SaaS companies are looking for and what our unique challenges are. We wanted smart, quick, and efficient directions, and we got it. We’re looking forward to continuing our partnership.”
"Element Finance has been a key part of the growth and success that we've been able to achieve at Karbon. John and the Element team understand how SaaS companies like us operate, they don't try and over-complicate things, and they allow us to focus on the most important stuff without giving up any control."
"Element has been a great partner to AG, investing time and effort to understand our business and deliver unique and innovative financing solutions to help us fund rapid growth. They are responsive, transparent, and collaborative in everything they do. John and his team have been extremely supportive and have provided tremendous contributions as we continue to scale our business."
"Element finance has been a true partner in our growth. They recognized the potential of our solutions and helped us secure funding that is strategically tied to our business model and allowed us to scale."