Traditional banks are falling behind in understanding and valuing digital-first businesses, especially DTC brands. Clearbanc, led by Michele Romanow, offers an alternative funding model that recognizes the true value of intangible assets like customer acquisition strategies and brand loyalty. This funding approach empowers rapidly growing e-commerce companies by providing accessible capital based on their digital strengths.
Key takeaways
Traditional banks struggle to value intangible digital assets like strong customer acquisition strategies and inventory, focusing instead on tangible assets.
Clearbanc provides revenue-based funding for digital businesses (DTC, SaaS) generating at least $10,000/month, charging a flat fee instead of equity.
Digital businesses must prioritize 'owning their customer' to build valuable assets through direct relationships and data, which Clearbanc recognizes.
Clearbanc actively promotes diversity in funding, having funded significantly more women and geographically diverse founders compared to traditional VC.
The Direct-to-Consumer (DTC) market is experiencing an 'incredible time,' making it crucial for businesses to operate as fully digital entities.
In Clearbanc president Michele Romanow's view, regular banks are pretty clueless.
"Banks don't understand digital business," she said on the Glossy Podcast. "They understand if you're a restaurant with a pizza oven, and that if your business goes out of business, they can sell the pizza oven, as it has residual value."
But they're less likely to accurately value inventory or to understand that a strong customer acquisition strategy -- if a DTC company has gotten there -- is a valuable asset in itself.
Founded in 2015, Clearbanc provides funding for widespread companies -- each of which are typically bringing in at least $10,000 in monthly revenue -- for a flat fee. To date, it's invested $1 billion in more than 3,000 brands, including Public Goods, Nectar and Haus.
By the numbers, these companies are more diverse than the ones venture capital typically underwrites.
A year and half into the company's existence, "we had funded eight-times more women than the venture capital industry average, which I'm super proud of," Romanow said. "We've funded founders in all 50 states in America. In comparison, 80% of VC dollars last year went into four states in America: California, New York, Texas and Massachusetts."
The company has invested heavily in DTC -- "right now is an incredible time for the DTC world," Romanow said -- but also on SaaS.
What does this episode say about finance & fundraising?
Traditional banks struggle to value intangible digital assets like strong customer acquisition strategies and inventory, focusing instead on tangible assets.
What does this episode say about dtc strategy?
Clearbanc provides revenue-based funding for digital businesses (DTC, SaaS) generating at least $10,000/month, charging a flat fee instead of equity.
What does this episode say about founder & leadership?
Digital businesses must prioritize 'owning their customer' to build valuable assets through direct relationships and data, which Clearbanc recognizes.
What does this episode say about finance & fundraising?
Clearbanc actively promotes diversity in funding, having funded significantly more women and geographically diverse founders compared to traditional VC.
What does this episode say about finance & fundraising?
The Direct-to-Consumer (DTC) market is experiencing an 'incredible time,' making it crucial for businesses to operate as fully digital entities.
