RBF Model_Bigfoot Capital_Open-Source

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1	RBF Model_Bigfoot Capital_Model Overview
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11	Investment Type	Revenue-Based Financing ("RBF").
12		Revenue-Based Financing ("RBF").
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14	What is RBF? Who is it for?	RBF is an alternative investment structure with different mechanics, provisions and return profiles than either equity capital or traditional lending products. It is a growth-oriented financing instrument aligned with top-line growth for companies that either do not have the current growth rates/scale or the Founder desire to attract venture capital and/or lack the assets and meaningful profitability/cash flow to procure traditional debt products (bank) at the time of investment.
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18	Simplified RBF Example	Simplified example of how RBF works: We invest $300k with a 36-month payback term. We require $450k (1.5x of investment) to be paid back over that term based on a % of your monthly cash receipts. Our return is IRR-driven based on the cash receipts we share in over the 36 months (or however long the investment is out). More growth = higher return as we're capturing cash faster. Lower growth = reduced return as we waiting longer for our share.
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22	Model Purpose	This representative model is meant to provide SaaS Founders with a sense for how Bigfoot Capital structures our RBF investments whereby our investment return is realized by sharing in a % of monthly cash receipts. We provide the forecasting schedule, drivers, facility detail, summary results and value capture detail so you can understand RBF.
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25	Model Creator	Brian Parks, Managing Partner
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27	Contact info	bparks@bigfootcap.com
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29	How to Use	File --> make a copy. You'll work with the 'Cash Receipts Forecasting' and 'Drivers' worksheets and see the facility detail and summary results on the 'Facility' and 'Results' worksheets, respectively and the value creation and capture on the 'Company Value Capture from Capital' worksheet (details below). Email me if you have questions/thoughts/want to chat in more detail. If you want to share your model, just email it to me, and we can discuss.
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33	Color Coding	Blue font with yellow highlighting = inputs \| Black, Green or Pink Font = Outputs (calc. from same worksheet, calcs. from different worksheet, change of calc. in row or column).
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35	Cash Receipts Forecasting Worksheet
36	Two ways to forecast (you choose).
37	Forecasting Options	Explanation
38	Option 1 - Forecast Driven:	Enter your historical and monthly cash receipts in Column D. Month 0 (cell C28) pulls from 'Drivers' cell C9, so do not input it here.
39	Option 2 - Growth Rate Driven:	Enter monthly cash receipts growth rates in 'Drivers' cells D13-D15. These pull into 'Cash Receipts Forecasting' cells L29-L64 and produce the projected monthly cash receipts in cells J29-J64.
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41	Drivers Worksheet
42	Input the following drivers. Make sure to read the comments for each cell (there's only 16 of them...)
43	Driver	Explanation
44	Facility Credit Tier:	Select from dropdown. We have not included our credit tier scoring model (working to open source it), but go ahead and rate yourself for now :)
45	Facility Size:	Input the size of the facility you desire. Note, our facilities range from $150,000 to $1.5M, generally representing an MRR multiple of 3-5x. For larger facilities we will tranche in capital in step with your capital plan to reduce your cost.
46	Funding Date:	Input the date of anticipate funding in mm/dd/yyyy format.
47	Facility Term:	This model works best for terms of 24 and 36 months, which are typical for us. You can input either one.
48	Early Payoff Month:	Select from dropdown your chosen month to payoff the facility early and save money via a reduced return cap. Big optionality benefit to facilitate future funding rounds (equity or debt) or a shift in cash management/balance sheet strategy.
49	Facility Return Cap Due by Maturity Date:	Output for overall repayment multiple obligation due by facility maturity date, determined based on credit tier, cash share type (fixed or variable) and length (# months) of facility term.
50	Facility Return Cap Due at Actual Payoff Month:	Output for overall repayment multiple obligation due at actual payoff month (should it occur earlier than maturity), determined based on credit tier, cash share type (fixed or variable) and length (# months) of facility term.
51	Facility Fee:	Output for the one-time facility fee of 1.5% of the total commitment, which is netted out of the first disbursement.
52	Monthly Cash Receipts - Month 0:	Input for your cash receipts from customers for the month prior to the funding month date. Your monthly cash receipts will grow off of this #.
53	Cash Projections Type:	The selection drives the monthly cash receipts used from the 'Cash Receipts Forecasting' and lays them into 'Facility' Column F.
54	Cash Share Type:	Select from dropdown. Fixed share is a fixed % throughout the term. Variable share will scale up over the term (cash flow relief, more complex, can expect higher return cap, modeled in 'Tables' 18-22).
55	Monthly Cash Receipts Growth Rates:	Only used in a Growth Rate Driven Projection type. Input your best guess for monthly growth for each 12 month period.
56	Monthly Cash Receipts Haircut Rates:	The discount we apply to your projections. Higher discount as we get farther out. These are standard for us, so I've protected the range.
57	Fixed Monthly Cash Share Rate:	The % of the prior month's cash receipts you'll share with Bigfoot, typically 5-8%.
58	Variable Monthly Cash Share Rate:	Same monthly cash sharing concept except it scales up over time in the range of 3-10% to provide cash flow relief. Will typically require a higher return cap as we're waiting longer to achieve our return.
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60	Tables Worksheet
61	Output worksheet, so nothing for you to input here. Return Cap, Early Payoff and estimated interest payments/rate tables for both types of cash shares.
62	Return Cap Tables:	Show return caps for various facility terms (or payoff month) for both fixed and variable cash share facilities. These tables pull into 'Drivers' to determine the facility return cap due.
63	Early Payoff Tables:	Show early payoff amounts due at various payoff months for both fixed and variable cash facilities, based off of facility size, credit tier, and resulting periodic return caps.
64	Total Interest Paid Tables:	Calculate the total interest paid for both fixed and variable cash share facilities at various payoff months.
65	Estimated Annual Interest Rate Tables:	Estimates annual interest rate applicable. Please note that you cannot truly apply an interest rate to RBF facilities as they are IRR-driven based on the underlying cash flows.
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67	Facility Worksheet
68	Output worksheet, so nothing for you to input here. Shows the RBF facility on a monthly basis and moves in step with all of the inputs you've provided in 'Cash Receipts Forecasting' and 'Drivers'.
69	Cash Receipts Growth:	Shows projected monthly cash share receipts growth rate as determined by your Forecast Driven or Growth Rate Driven inputs.
70	Cash Receipts Haircut:	Shows the haircut rates that we apply to your monthly cash receipts projections. We are generally looking for companies to grow cash receipts ~2x over three years.
71	Cash Share Rate:	Shows the monthly cash share rate for either a fixed or variable cash share type.
72	Monthly Cash Receipts - Full:	Shows projected monthly gross cash share receipts as determined by your Forecast Driven or Growth Rate Driven inputs.
73	Monthly Cash Receipts - Haircut	Shows projected monthly haircut cash share receipts as determined by your Forecast Driven or Growth Rate Driven inputs and our haircuts. These are the projections we structure off of to provide us both with buffer.
74	Cash Share - Monthly:	Calculates our cash share on a monthly basis. Flexes with payoff month, so once paid off, we no longer share. If paid off early, you'll see a large cash share (payment amount) for that month rather than the standard cash share.
75	Cash Share - Cumulative:	Calculates our cash share on a cumulative basis. Sums up to the return cap due at the maturity month or early payoff month.
76	Return Cap Achieved:	Calculates how much of our return cap we've achieved along the way. With an early payoff, you'll see it jump up to the early payoff month return cap due. Otherwise, it will tick its way up to the return cap due at maturity.
77	IRR Achieved:	Our best guess projected return based on all of the factors in this model. As you can see, we don't achieve a meaningful return until the last few months of the investment and take a lower return when paid off early, which is fair as we are no longer taking risk.
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79	Results Worksheet
80	Output worksheet, so nothing for you to input here. Shows the expected cost for you and the expected return for Bigfoot from the RBF facility.
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82	Company Value Capture from Capital Worksheet
83	Input your customer acquisition metrics to see the LTV and enterprise value you can generate and retain from this RBF facility. Both you and we should only move forward it you are able to create and retain value (that is, the investment is accretive).
84	% for customer acquisition:	Input the % of the facility amount you anticipate using for customer acquisition. E.g., if it's a $300k facility and you input 75%, we're assuming you're investing $225k into customer acquisition.
85	CAC:	Input your fully-loaded CAC.
86	ARPU:	Input ARPU.
87	Customer Lifetime:	Input your assumed customer lifetime for your cohorts.
88	Valuation Multiple:	We have put in 5.0x. You don't necessarily need to change this, but you can.
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90	Disclaimer:
91	This model is an educational tool with drivers and results that are representative in nature. Bigfoot Capital has no obligation to provide financing to recipients of this model, but we're certainly happy to talk with you to evaluate a potential partnership and discuss what it could look like.
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