Who have you invested in?
- Cotton Bureau
- Fohr Card
- Symmetry Labs
- The Athletic Community
- The Shade Room
How much do you invest?
Our investments scale up based on your revenues and business needs, from $100,000 to $500,000.
What are your terms?
There are two components to our terms: an equity option and profit sharing.
Only if or when you decide to raise additional capital or sell your business do we become shareholders of your company. In short, our investment will remain non-dilutive until you choose otherwise. To break this down:
- If you raise $500,000, or more, in a preferred equity round, our investment converts into preferred shares at the new round's pre-money valuation.
- If you sell, we convert into common shares at the pre-determined percentage.
Should you choose to run your business profitably, you never sell or raise more capital, we have the right to participate in cash distributions on a monthly basis, after month 36 from the time of the initial investment.
The amount of distributions will be based on the greater of Net Revenue or of Net Income.
Two Important Notes
- Cash distributions are capped at 3x max the initial investment, e.g. if you raise $500,000 with a 10% equity option, cash distributions are capped at $1,500,000.
- If you pay back the 3x in 3 years or less, the option is halved, e.g. if you raise $500,000 with a 10% equity option and pay back $1,500,000 in 3 years or less, the equity option becomes 5%.
You can review our terms on Github.
Do you take a board seat?
What is a line of equity?
Once we’ve agreed to terms, e.g. $500,000 with a 10% option, you don’t have to draw down the entire agreed upon amount all at once. You have up to a year as the draw period.
In layman's terms, should you decide to only draw down $250,000, not $500,000, then Indie.vc's equity option adjusts accordingly to 5%, instead of 10%, commensurate with the amount that you choose to draw down.
What types of companies do you invest in?
Tech and tech-enabled. Our community, network and expertise lend best to these types of companies and founders.
How long does your investment process take?
Typically 4-6 weeks.
After our initial conversation, we will provide a strong indication of next steps within 14 days or less.
If there is a fit, we begin due diligence by asking you for your past financials (annually), current year financials (monthly) and pro forma statements for the next 5 years and personal, professional and customer references.
If we decide to proceed further, we'll extend a customized term-sheet.
How are you different than a bank?
Our investment has no maturity dates, financial covenants and we do not take a board seat or require a personal guarantee. We provide layers of support and community that you won't receive from a bank.
And, we actually write checks, unlike banks.
How are you different than a VC?
Our return model anchors on distributions from cashflow, not on rocketship rides. Our interest is in giving founders more control over their company and culture, not less. We focus all of our energy on helping our companies accelerate profitable growth, not on raising their next round of funding.
Can you share some examples of companies who've scaled their businesses through revenue, instead of raising multiple rounds of funding?