Craig Berman beamed noticeably after completing his board presentation. Berman, CEO of a startup that develops nanotechnology applications for the defense industry, had just closed a $ 20 million equity round. Berman finalized the round at an equity valuation that made the whole board blush.
Only six months earlier, Berman's team faced a daunting technical delay that set the company back three months. With only four months of cash remaining from a previous equity round, the delay would cause Berman's company to burn cash faster and to fall short of an important benchmark.
The prospect of raising additional equity earlier than expected and at a much lower valuation than anticipated was a chilling thought for Berman and his board.
Just as things appeared to be headed downhill, the company's CFO broached the idea of obtaining $ 1.5 million in venture leasing. Roughly $ 600,000 of this financing would be used to finance existing equipment. The balance could be used for upcoming acquisitions of computer workstations, servers, software, and test equipment.
A colleague had introduced Jamal Waitley, the company's CFO, to Jerry Sprole. Sprole heads Connecticut-based, Leasing Technologies International, a leasing firm specializing in equipment financing for venture capital-backed startups and emerging growth companies.
It took Waitley less than a month to get the financing in place. Cash from selling and leasing back existing equipment along with a leasing line to add new equipment allowed Berman's firm to operate three extra months without additional equity.
When the firm finally completed its $ 20 million equity round, the pre-money valuation was at least $ 5 million more than it would have been otherwise. Venture leasing had literally created millions of dollars for Berman's shareholders.
George Parker is a Director and Executive Vice President of Leasing Technologies International, Inc. ('LTI'), responsible for LTI?s marketing and financing efforts. A co-founder of LTI,
Mr. Parker has been involved in secured lending and equipment financing for over twenty years. Mr. Parker is an industry leader, frequent panelist and author of several articles pertaining to equipment financing.
Headquartered in Wilton, CT, LTI is a leasing firm specializing nationally in direct equipment financing and vendor leasing programs for emerging growth and later-stage, venture capital backed companies. More information about LTI is available at: http://www.ltileasing.com.
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