Unlocking the Secrets of Specialty Finance with Coromandel Capital's Co-Founder and Managing Partner, Rob McGregor
Launched in 2019, Coromandel Capital provides flexible, non-dilutive, growth-oriented asset-based lending solutions to specialty finance, fintech, and technology-enabled businesses with predictable, recurring revenue. One of a handful of non-bank lenders focusing on small-ticket debt capital solutions, Coromandel Capital and its peers, willing to do sub-$20 million financings, are critical players for capital-intensive specialty lenders. The firm's financings typically range between $5 million and $50 million, with a 3-year term.
Co-Founder and Managing Partner Rob McGregor and I discussed a variety of topics, including:
Co-Founder and Managing Partner Rob McGregor and I discussed a variety of topics, including:
- How debt financing empowers startups and other early-stage and growing companies relative to venture capital financing
- The risks of double pledging assets (and explanations), which is timely given the recent collapse of First Brands'
- Using debt as a tool for business growth
- The hidden costs of venture debt
- The untapped potential of specialty finance
- The importance of monitoring in lending relationships
- Growing as a private lender while protecting and preserving capital
- Navigating the crowded and competitive private, non-bank lending industry to build lasting relationships with borrowers and investors
Some of the characteristics that Coromandel seeks out in ideal borrower partners are:
- Balance-sheet intensive businesses (i.e., those originating or acquiring an asset, whether tangible or intangible) that would otherwise finance these assets with equity.
- Have equity raised from Seed to Series B (or similar stages in their lifecycle) that have adequate capitalization to support operational expenses and 'runway', and a portion of this equity can serve as a contribution (otherwise known as "haircut capital", "first loss capital", or "overcollateralization") for Coromandel's credit facility.
- Subject matter experts and/or executives blazing their own trail with deep roots in an industry, a solid track record, and a proven business model.
- Companies participating in sizable markets and doing so in a differentiated manner at attractive customer acquisition costs, as well as firms that may have found an untapped, "greenfield" opportunity to address an underserved (or even unserved) market.
Creators and Guests
Host
Andres Sandate
Husband, 3x Dad, Latinx, SpecFin, FinTech, Private Credit, ATLalts and Asset Backed Pod Host, SEAFA President., Ball Coach, Kansas Jayhawk, B&R in KS, Live in Atlanta
