Altvia is a SaaS software provider in Colorado that specializes in cloud-based solutions for alternative asset fund managers, institutional investors, private equity and impact investors. It also happens to be a Bigfoot portfolio company. We’ve been working with Altvia since 2018 to help it scale up its business and overall kick SaaS. How does this look from Altvia’s side? We recently sat down with Ben Hendershot, the company’s COO, to find out. Here’s what he had to say about working with Bigfoot Capital.
How long has Altvia been in business and what got you started?
Ben Hendershot: We’ve been around for about 13 years. We recognized a market problem that hadn’t been solved. Specifically, our Founder was working with a private equity firm on their technology needs and created a solution for them. It was seen by some of their investors and people started asking, “Where can I get this?”
What led you to seek financing?
BH: It was operational in nature, we wanted to invest in growing and expanding our sales and marketing function. It required capital to make it reality.
What brought you to Bigfoot for your financing needs?
BH: A lot of companies don’t want to raise equity capital, because you’re presumably increasing the value of the underlying equity at a faster rate than the cost of borrowing money — so, why give up ownership of an asset that is appreciating at a faster rate than the borrowing cost.When we started working with Bigfoot, we viewed it as a much more attractive option to provide us capital to continue investing in the business without having to give up the ownership of the business. Our Founder still owns a controlling interest in the company.Also, as a small business and especially a software business in today’s day and age, you’re going to run out of traditional bank financing pretty quickly. Bigfoot fills that gap between traditional banks and equity financing. If you’re financially astute and believe in your business, Bigfoot’s financing is less expensive than giving up equity.
What are some of the other benefits of using Bigfoot as opposed to more traditional financing options?
BH: In addition to the gap they’re filling in the capital stack between equity and traditional financing, I’d say it’s the way our payments are calculated, based on our cash flow. This structure gives us payment flexibility on a month-to-month basis that moves in lockstep with our growth.Therefore, we’re going to pay less for months with lower cash inflows and more in a month with increased inflows. How our businesses is doing operationally determines how much we pay them, which is a good solution for a smaller company whose cash flows might be not as predictable.In our instance, because our customers subscribe to our software on an annual basis, it fluctuates. You have different amounts of renewals in different months. That makes the solution that they provide more attractive to a company like us.Another problem they solve on the debt side compared to other firms out there is they have less restrictive covenants, which are the rules of the loan. While they do have some covenants, they are not super restrictive. They’re pretty flexible and reasonable in my estimation.