For Entrepreneurs
Is your company ready for its next stage of growth?
We work with entrepreneurs and their companies to identify where additional capital may accelerate a proven business.
Leading Edge looks for companies with real businesses, real customers and identifiable opportunities to grow. It evaluates what a company can already demonstrate and determines whether the Leading Edge structure may be appropriate for that growth opportunity.
What we're interested in
We are interested in companies with demonstrable customer demand, operating history, contracts or recurring revenue, expansion opportunities, new facilities or capacity requirements, technology and product expansion, and other identifiable growth initiatives.
What happens next
- 1.Tell us about the company.
- 2.Understand the growth opportunity.
- 3.Evaluate what the company can already demonstrate.
- 4.Determine whether the Leading Edge structure may be a fit.
- 5.Move into diligence and structuring if appropriate.
The Note, in brief
- A note with a term of five years or less, measured from issue, collateralized one-for-one by U.S. Treasury STRIPS.
- Growth capital advanced to the company in two tranches, the second on a milestone test.
- A 20% warrant at nominal strike. The company's cost of capital is fixed at 10% a year after tax.
- The Project must be a US C corporation at closing. Any state will do — Delaware is convention, not a requirement. An LLC taxed as a partnership or an S corporation would have to convert first.
- The cost is quoted after tax, so the pricing assumes the Project deducts its interest at the corporate rate; a pass-through would also allocate trade or business income to a tax-exempt holder on exercise of the Warrant.
The program sizes every Project the same way: the growth capital is one seventh of the pre-money valuation. At this sizing that is a pre-money of $35,000,000 and a post-money of $40,000,000.