Sunny Saluja: Why I Joined RAC

I am excited to share that I joined Riverside Acceleration Capital! From the Growth Advisory Program to the RAC Toolkit, RAC is focused on providing flexible growth capital and resources to entrepreneurs building market-leading business-to-business software companies as they grow into the scale-up phase. In this post, I will dive deeper into why I decided to join RAC and why I believe RAC offers a differentiated growth equity model.

Prior to joining RAC, I had the privilege of working alongside founders helping them raise capital as an investment banker and then most recently investing in high-growth, capital-efficient companies at a Boston-based growth equity firm. I had two key learnings along the way (among many others):

1. growth-stage businesses have varying capital needs, so having a firm that can be equally flexible in its investment approach is critical; and,
2. founders have many options for capital, so it is important for capital partners to be a partner both in the boardroom and “in the trenches” with core business-building initiatives.

To elaborate on my first point, growth-stage companies have varying capital needs as they scale. For example, a traditional growth equity investment may not be ideal for an early-stage company that is still in process of establishing product-market fit or does not have a repeatable go-to-market engine. A venture investment is also likely not a fit if the company is not showing exemplary growth from the get-go and operating in a multi-billion-dollar market. Ironically, these styles of investments are often the options available to early-stage companies when sometimes they need something else. Once a company raises equity capital, and likely increases their burn rate in pursuit of high growth expectations, it is hard to step off the “treadmill.” This can result in subsequent rounds of equity financings (which can sometimes be premature) or some sort of suboptimal exit. To say it differently with a sports analogy, equity financings start the shot clock, and there are likely no timeouts left. This does not mean equity financing is bad or should be avoided: it can be a helpful tool for growth once the market opportunity is large enough, go-to-market engine is solidified, and KPIs indicate a strong product-market fit.

This is where RAC’s two-pronged approach, offering both the royalty lending product (growth loans) and the ability to make traditional growth equity investments, can be particularly valuable. The growth loans can help companies scale their business while maintaining optionality and minimizing dilution. And when a company is ready for a more traditional growth equity financing event, RAC is equipped to continue supporting companies. Hence, I believe RAC is positioned as a long-term partner by being able to support companies through both non-dilutive and traditional growth equity investments. Our investment approach aims to serve the needs of our portfolio companies and help fit their goals.

To elaborate on my second point, what excites me about the RAC model is how we can partner with companies through direct engagement, the strategic advisory board, RAC Toolkit, and the reach of the Riverside platform. RAC aims to provide operational support to early and growth-stage companies. Tangible examples include how the Riverside Revenue Acceleration System (RRAS) works elbow-to-elbow with portfolio companies in creating a focused go-to-market strategy and how RAC Recruiting serves as an end-to-end recruiting partner to help portfolio companies from identifying talent gaps to post-placement checks. Zooming out, RAC sits within The Riverside Company, a global investment firm that has made over 1,000 investments across its 30-year history, which allows us to operate entrepreneurially and make high-velocity decisions as a smaller team with the corporate support of a large firm.

Lastly, I believe the most important asset of any company or firm is its people. As admittedly cheesy as it sounds, I was immediately impressed by the Riverside culture, the team’s intellectual curiosity, and the collective approach towards continuous improvement. I am excited to be part of this team and hopefully can contribute to not only sourcing and diligence opportunities but also (equally important in my opinion) the culture and camaraderie.

To learn more about RAC, please check out our website or get in touch via the form below.