Clearbanc Fills ClearAngel Fund With $100M To Fuel Companies That May Never Get Venture Capital

Toronto growth capital firm Clearbanc unveiled ClearAngel and intends to lend $100 million from the investment vehicle to support founders who don’t have access to angel investors, an experienced board or adviser network.

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“This took us over a year in the making,” co-founder Michele Romanow told Crunchbase News. “We kept thinking about the long haul and how to automate these experiences so that they were meaningful.”

The program launched with a private beta version, and Clearbanc is working to initially onboard 30 companies per week and work its way up to 100 per week.

Features of the new program for founders include goal-setting and vision board decision-making tools to look ahead four years. It also matches founders to the best agencies, apps, consultants, professional services and investors. Founders can also track their sales goals.

Clearbanc is most known for its ‘20-minute term sheet’ that offers growth capital to e-commerce companies. Last October, Clearbanc told Crunchbase News it intended to lend another $1 billion to direct-to-consumer founders who need capital to pay for inventory expenses over the next year, after lending $1 billion to 3,300 companies in 2019.

Its capital comes from the general partner and limited partner funds raised over the last few years, and because of the nature of the returns, Clearbanc reinvests the capital as it’s repaid.

ClearAngel aims to automate parts of this “value-add” component and not only challenge VCs, but help the 99.5 percent of startups that may never get VC and need alternative financing, co-founder and CEO Andrew D’Souza said in an interview.

“Venture capital is not always the best way to fund most e-commerce and software businesses,” he said. “If you try going to the bank, you don’t have enough assets. VC is hard if you don’t live in Silicon Valley or went to the right schools. We fund businesses so they can fund their inventory and marketing and scale.”

Clearbanc has funded more than 4,000 businesses since it was founded in 2015. The company makes investments between $10,000 and $50,000, and instead of taking equity, takes 2 percent of sales for four years, D’Souza said. When prioritizing investments, Clearbanc looks for companies it can help scale.

“If we think we can help you, you are in,” D’Souza said.

Illustration: Li-Anne Dias