Flexible and Highly Customized SaaS Financing Solutions to Meet Your Company’s Specific Needs
Hercules Capital SaaS Finance can provide loans ranging in size from $1.0 million to $100.0 million, with the ability to provide additional tranches of structured debt growth capital such as asset-based lending (“ABL”) to term loan financing solutions or acquisition financing.
Hercules Capital SaaS Finance aims to fill the void in the software and technology lending markets by offering a flexible solution based on MRR or ARR and other applicable metrics for SaaS companies. Given our balance sheet of over $1.7 billion in total assets, we can provide more capital than typically any other capital provider in SaaS financing solutions. We generally make SaaS lending solutions available between 1x to 3x ARR to be drawn as needed. Since we structure SaaS loans based primarily on revenue growth and the available amount of capital is driven off of multiples of MRR or ARR, the total borrowable funds can increase as revenue grows or key metrics improve.Work with us
Hercules Capital SAAS Finance Team
SaaS Finance Team
Steve Kuo Senior Managing Director
Steve leads the Technology Group at Hercules with more than 15 years of operational and structured finance experience. He has led over $800M in capital investments at Hercules and has worked with breakout companies such as Box, Lightspeed, IronPlanet, MachineZone and Trulia. Steve’s been involved with early stage startups with passionate founders and a great concept as well as billion dollar revenue businesses looking to finance their next big market. Prior to Hercules, Steve was a strategic member of Lightcross, a silicon photonics startup, where he led the product management team. Before joining Lightcross, he was a principal at Comdisco Ventures.
Thomas Harris Managing Director
Tom Harris is a Managing Director in Hercules’ Technology Group at our Palo Alto offices, and brings more than 17 years of financing, syndications and technology investment banking experience to the firm. Tom joins Hercules after several years at Silicon Valley Bank, most recently as a Managing Director in the Syndications group, where he led more than $4 billion in syndicated senior and subordinated facilities for leading technology companies. Prior to SVB, he spent 6 years on BofA Merrill Lynch’s Investment Banking team, with more than $22bn of lead software M&A, LBO and IPO transactions completed, and more than $10bn in lead leveraged loan and bond transactions closed. Prior to BofA Merrill Lynch, he spent 8 years in high yield origination and capital markets at TD Securities in New York. Tom holds an MBA with honors from Columbia Business School and a BS in Finance and Economics from the Stern School of Business at NYU.
Catherine Jhung Managing Director, BD
Catherine is a Managing Director of Business Development at Hercules. Before joining Hercules, Catherine spent over 10 years in senior operational roles within startup companies, including sales, business development, research and product management.
At Cleantech Group, Catherine ran the company’s data business, where she lead the product, engineering, research and sales teams. Prior to Cleantech Group, Jhung was the Director of Sales at edo Interactive. Prior to edo Interactive, Catherine spent over five years on the executive team at Equilar, the leading research firm for benchmarking executive and board compensation. There, she built and managed the business development and client services divisions from the ground up, growing the business to over 600 clients.
Catherine received an MBA from the Haas School of Business at UC Berkeley, a bachelor’s in Agricultural Economics and a minor in Computer Information Systems from UC Davis.
Featured Portfolio Companies
Hercules Capital SaaS Finance offers creative and flexible lending products meant to fill the void left by traditional senior lenders. The overall cost of capital is significantly less than equity.
- Generally, post commercialization and proof of concept (Beta) completed
- Monthly recurring revenues (“MRR”) of $500,000 or greater per month with a demonstrated rapidly growing backlog of new customers
- Strong customer revenue retention rates
- Diversified customer base
- Not required to be operating cash flow break-even
- Have a viable financing plan to achieve positive cash flow breakeven with 24-36 months; special exceptions made for companies with rapid growth or other collateral support
- Loan to Values (“LTV”) typically < 50% Enterprise Value
- Backed by venture capital or select private equity firms
Data analytics “Big Data”
Tech enabled services
Hercules Capital SaaS Finance provides growth capital after Series B financing rounds, offering leverage on expensive equity to minimize founders/management team and early stage investors dilution. By using a SaaS capital financing solution, borrowers are generally able extending their company’s runway, delay raising equity and establishing meaningfully higher metrics and valuations prior to needing to raise as they focus on adding significant performance achievements.
Hercules Capital SaaS Finance business model is well suited to accelerate shareholder value and ultimately returns with innovative SaaS financing solutions as modest increases in annual recurring revenue (“ARR”) translate into higher equity values that far outweighs the cost of capital.
Common Uses of Capital
- Scale MRR or ARR
- Grow sales force
- Interim financing in between rounds or growth capital to help drive increase equity value
- Working capital and growth investment
- Liquidity for early venture or angel investors and in select case for founders and/or management