This revolutionary fund, Upper90, allows you to finance your business without giving equity
It’s a grim thing to see when a tech company founder fails to find the money they need to scale, unless they sacrifice meaningful ownership of their own beloved “baby.” .
It has long stuck in the clutches of Jason Finger and Billy Libby, two tech company founders themselves, who in response created Upper90. This fund, opened in 2018, provides financing to businesses using a model that helps founders and early investors retain greater ownership of their businesses. “We were tired of what we saw happening all around us,” says Finger. “The founders were leaving their companies with heartbreaking ownership to show for their efforts, due to the terms of the investments they made.”
Upper 90 recently raised a second fund of $195.5 million. after an initial payment of $75 million. I spoke with co-founder Finger, whose previous career includes founding Seamless, which, after its merger with GrubHub, was acquired earlier this year for $7.3 billion.
Micah Solomon, customer experience specialist and main contributor, Forbes: Tell me about Upper90: what does it have to offer startups that have been lacking until now?
Jason Finger, Co-Founder and President, superior90: It is a fund created for founders, by founders and business leaders. The problem it solves is this: venture capital funds want to take large stakes and banks are looking for established companies with significant track records. This leaves most entrepreneurs to choose between two extreme options: significantly dilute their equity or experience slow growth. We enable them to avoid having to choose either of these scenarios in a binary fashion by using data to perform predictive modeling in a way that allows us to extend credit to emerging companies.
Solomon: Is this approach inspired by your own journey as an entrepreneur?
Finger: As an entrepreneur, I have always been drawn to creative ways to finance expansion and growth. This can partly be attributed to the fact that I started my first real business during the implosion of the dotcom bubble, which forced us to think about how to optimize our business model for capital efficiency. I think an even older background is also a factor: I grew up in a household affected by bankruptcy, so I have first-hand experience of the difficulty of starting a business and the importance of maximizing gains when they happen.
Solomon: What do you look for when choosing to invest?
Finger: We often find that the best founders (and the loudest cheerleaders) in our portfolio are second- or third-time founders. They are ready to go against the grain and understand what is most important and realistic in a financial partner. In terms of what we’re looking for specifically, it’s an intangible quality that’s hard to define, but we believe “you know it when you see it”. In this, I believe that investing is really no different from hiring: identify strategically thoughtful people with a growth mindset, who want to work on interesting and meaningful challenges that can have a broad impact, and who possess relentless courage. Once we have found this combination, we are thrilled to make the investment and have the opportunity to be part of their story.
Solomon: What is your advice to a founder looking to raise funds for the first time?
Finger: Two things: Find someone with experience to align yourself with who has a deep passion for your business idea and seeing you succeed. And think about the best way to finance your business, right now. If you’re starting a business, is there a way for your customers to fund your business to get started (perhaps by prepaying you)? If you’re building a consumer business, is there a way to test your concept in a very profitable way? Keep in mind that while there is a concept of divorce in a marriage, there is no parallel concept of divorce in a corporate context, so choose your co-founders and early investors very, very carefully. . Then, once you have created an initial product that is gaining traction in the market, find a financial partner who can really add value; it can be strategic value, an ability to provide scale capital, an ability to support you financially in a non-dilutive way, or all of the above. And that’s the premise of Upper90.