Even with all the money floating around the world, it is getting harder for good projects to find scalable funding. VCs still need “moon shots” and commercial banks still need more collateral than most good projects can afford (generally only providing a loan/collateral-value ratio of 80%, at best vs. 500% for AGC (625% more than banks)). But then, most banks don’t take an equity position in the project. They do, however, typically want to be paid back from cash-flow almost immediately.

For example, one of the first VC deals was when American Research & Development (ARD), a publicly-traded venture capital firm provided $70,000 to a team of scientists at MIT. In return, ARD got 70% of Digital Equipment Corporation, which was acquired in June 1998 by Compaq in what was then the largest merger in the history of the computer industry. Compaq itself then went on to merge with HP. In any event, ARD made hundreds of times its investment.

The moral of this story is that Ken Olsen and his team had to give up 70% of the company to raise a small amount of money. Even though they were from the very prestigious MIT, they had no choices. We don't think that's reasonable.

Yes, it easier today when you're a potential “moonshot” but the vast majority of good projects aren’t moonshots, aren’t eligible for commercial-scale bank loans, and aren’t started by already well-known tech stars. For these projects, the journey often ends in a withering death spiral. They don’t garner VC interest and have no cash-flow to support a commercial loan, even if they have the collateral, which they most often do not. And if you get VC funding (kudos to you) you could end up with little of your company at exit — and run the risk of being ejected altogether if things don’t go to plan. Recent examples are Uber and WeWork.

It is this binary dead or alive scenario that we think needs fixing — we provide Affordable Growth Capital to good projects — even the ones that don’t qualify for VC funding or bank loans. With our help, many more great people can now “venture” their ideas into great projects.

And for those people that have alternative capital funding choices, we do our best to make the process both easier and less costly than the competition (and with a 5X benefit to those same people).