Growth Equity
For companies that have a demonstrated ability to scale against a sufficiently large identified market opportunity, RAC offers lead-investor growth equity capital and a host of tools and resources to help accelerate company growth.
Company
$4M+ ARR; Demonstrated Market Opportunity and Ability to Scale
For our growth equity investments, RAC looks to back B2B software companies that have demonstrated their go-to-market approach has worked to date, with opportunity for future growth, and for which product-market fit is established. When more proof-points (or time) are needed, we can offer a more measured approach through our growth loans.
Investment
$5-15M+ from RAC; Lead or Follow
RAC’s growth equity investments are true scale-up capital, enabling a company to hire fast and grow quickly. Though a strong foundation for growth has already been built, at this stage, there is the opportunity for refinement and market expansion to come. RAC engages deeply with portfolio companies; leveraging the Growth Advisory Program and other resources seeking to help maximize opportunity and minimize risk.
Growth Lending
Sometimes an equity round isn’t the right tool for the job. RAC’s form of revenue-based financing (RBF) aims to help B2B software companies drive shareholder value by refining their growth engine, expanding market opportunity or further establishing proof-points ahead of, or in instead of, a larger equity round.
Company
$2M+ ARR; Solid Fundamentals
For our Growth Loans, RAC looks to back B2B software companies with strong unit economics, and a demonstrated ability to grow (20%+) on a capital efficient basis. Our RBF loans provide the capital aiming to fuel growth initiatives, without setting a valuation or diluting ownership, control or optionality. After investment, some companies raise growth equity rounds; some prime themselves for an exit and some move back to profitability at an accelerated growth rate or with an expanded addressable market.
Investment
$1-5M+ from RAC; Non-dilutive “Royalty-like” Loan
RAC’s Growth Loans are structured with a capped revenue share, rather than an interest rate, which aligns the performance of our loan to the growth of the company, even in the absence of upfront equity. A 5-year time horizon delays repayment, which can allow a company to invest behind growth initiatives. RAC engages deeply with our lending portfolio, taking a lead investor approach. We leverage resources such as our proprietary RRAS customer acquisition tool, the expertise of our in-house team and access to the extensive knowledge of our Strategic Operating Partners seeking to help our companies achieve their vision.
Growth Loans
Popular Use Cases*
Refine Growth
Engine:
- Hire and ramp initial sales resources
- Launch and prove marketing model
- Demonstrate expansion / upsell potential
Expand Market
Opportunity:
- Develop and launch new products
- Geographic or vertical expansion
- Fund an acquisition, merger or integration
Drive Shareholder
Value:
- Bridge to profitability or exit
- Achieve key growth or revenue milestones
- Accelerate growth prior to exit or financing
We are software specialists, passionate investors and entrepreneurs at heart.
I've frequently heard from prospective capital partners that they will "add value" beyond contributing capital, however, I've generally been disappointed, but the relationship with RAC has over delivered. Most importantly, the folks at RAC have proven to be good people -- kind, experienced, and inclined to do the work.
RAC has been an invaluable partner for Ziflow, providing a unique combination of invaluable resources and strategic guidance every step of the way. We would highly recommend them as a capital partner to any software business, based on our experience with them.
I can’t recommend RAC more highly for other startups, based on the experience we’ve had with them as a capital partner. RAC’s Growth Advisor Program has helped mature our Go-To-Market (GTM) motion, they have questioned and challenged our assumptions, supported our decisions and were also instrumental in helping us close our recent $110M growth equity round.
RAC has been instrumental in the growth and development of FreightWise bringing subject matter expertise, experience, and a commonsense approach to growing a business. RAC has simply been a great partner every step of the way.
We pride ourselves in being a true long-term partner for our companies, involved through multiple investment strategies and stages. We are approachable and human, knowing when to offer active support and when to pull back and observe. Here are some examples of how we’ve worked with our portfolio.
Platform enables a sales person to send video demos that are automatically personalized 'on-the-fly' to buyers’ individual interests and roles. The main point-of-contact at the prospect is empowered to share the demo with other decision-makers in their organization—each of whom also sees individually personalized demos. In this way, the software helps drive 'consensus' within an organization around a buying decision.
Vivi’s classroom engagement solution combines classroom management tools with real-time student feedback to create student-centered learning environments that drive productivity. From screen mirroring and video streaming to classroom communications and emergency broadcast, Vivi delivers all from an easy-to-use app, managed via a web-based administration platform.
Oomnitza offers a highly-integrated, flexible cloud platform that enables organizations to track and manage a range of assets, both traditional and IT-related, from procurement to end-of-life. Their software integrates with popular helpdesk and accounting platforms, device management agents, and retailers to enable time-saving automation while providing a single source of truth for asset details (e.g., ownership, life-cycle stage, etc.)
RAC provides the capital, tools and network designed to help acceleration stage software companies maximize their potential.
We love meeting new software companies, so let's talk.