Acting as advisor to a fast-growing real estate brokerage.
TheRedPin is a technology-enabled real estate brokerage dedicated to Canadian residential properties. The company’s website, digital marketing and online lead generation efforts support an origination platform that enables agents to close 2.5x more deals than the industry average. The brokerage needed more capital to fuel growth, and shareholders were keen to avoid dilution by raising debt but understood that it would be a difficult endeavour – the company’s break-neck growth makes most traditional lenders uncomfortable.
In advance of being formally engaged, we determined only a handful of early-stage venture debt lenders would find this opportunity attractive – and given our entrepreneurial POV, we deemed the opportunity a good fit. Part of our challenge was to shift the shareholders’ mindset from equity to debt, reassure new lenders that the shareholders weren’t pushing an undue amount of risk and to make a compelling case for the predictive power of the brokerage’s lead funnel.
Through our tireless dedication and creative way of framing the loan, today the company is primarily backed by a strong venture capital investor, with significant EV and a diversified receivables portfolio underpinning our position. We negotiated a sub-debt facility behind a $1.5 million working capital line, 3-year term with interest and warrants.
FirePower Capital subsequently invested its own Gap Debt™ in the company.
Rhyno Equity Group
Rhyno is a private equity firm that acquires mid-market manufacturing companies in the GTA. Their partners engaged us to structure the debt component of a buy-out of a kitchen cabinet maker.
CSR Cosmetic Solutions
The owner of CSR had taken over the business out of bankruptcy and successfully grown it for 15+ years and was ready for a well-deserved retirement. A previous sale attempt (by a top-tier accounting firm) was unsuccessful in 2015.