Clearbanc

Clearco is a lending firm led by Andrew Curtis[1] that specializes in non-dilutive revenue-share agreements with start-ups. Clearbanc claims to make equity-free investments in businesses within 48 hours based on information provided on the two metrics ad spend and unit economics and calls this ‘The 20-Min Term Sheet’.[2]

It is a Canadian business founded in 2015, and headquartered in Toronto. It partly uses Artificial Intelligence to make decisions on potential investments. As of August 2019, it invested in 791 businesses, has a stated monthly average revenue of $121 million and raised $1 billion.[3][4]

In 2021, Clearbanc rebranded itself Clearco to reflect the goal of long-term partnerships with clients based not only on financing.[5]

Unlike venture capital firms that require stock, Clearco takes a fee on investments up to $10 million. Businesses apply online, and its payback fees range from 6–12.5%.[6]

Business Model

Clearco offers capital from $10,000 up to $10 million to entrepreneurs. The platform uses an AI system to connect to a potential client's payment, ad, and e-commerce platforms to analyze their business's financial health and revenue. The platform then reviews the data and automates the diligence process, effectuating funding decisions within minutes. By only reviewing financial and marketing data, Clearco posits it is "able to remove the bias out of traditional VC funding", translating into more capital being extended to female founders "on their platform over the industry average".[7]

References
  1. Soltys, Douglas. "Clearco CEO Michele Romanow steps down as company cuts almost 30 percent of staff". Betakit. Retrieved 15 January 2023.
  2. Clark, Kate (3 April 2019). "Clearbanc plans to disrupt venture capital with 'The 20-Min Term Sheet'". Techcrunch. Retrieved 1 March 2023.
  3. Clark, Kate. "Investors bet another $50M on Clearbanc's revenue share model". Tech Crunch. Retrieved 4 August 2019.
  4. Lisovetsky, Michael. "Can Facebook Advertising Work for Luxury Brand Startups?". AdAge. Retrieved 4 August 2019.
  5. Mascarenhas, Natasha (20 April 2021). "Clearbanc rebrands its way into a unicorn". Techcrunch. Retrieved 1 March 2023.
  6. Efron, Sarah. "Does this Dragons' Den star's financing startup Clearbanc live up to its lofty promises?". The Globe and Mail. Retrieved 4 August 2019.
  7. Ponce de Leon, Sandra. "Clearbanc Is Using AI To Level The Playing Field In Funding". Forbes. Retrieved 25 August 2019.
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