Host Samir Vig and Signature Bank’s Nick Dolik expand on venture debt, alternative financing, and how to decide what funding route is right for your company.
With numerous funding options now available, startups have more flexibility than ever when it comes to raising capital for their company. While the traditional financing routes like venture capital are more active than ever, there is an emergence of more alternative financing options as well.
In this episode of The BARE Ventures Podcast, Samir Vig Interviewed Nick Dolik, Senior Vice President, Venture Banking Group at Signature Bank. Here to introduce what Signature Bank has to offer and details on the alternative financing landscape, Dolik is passionate about being a part of startups.
How Nick Dolik Got Started
Introduced to business at a young age, Nick Dolik comes from a line of entrepreneurs. “I watched my father grow a tech company out of our basement,” he shares. This fueled the leader in him. Upon leaving Michigan to pursue finance, his move to New York opened doors to the offices of Goldman Sachs, one of the top five banks in the country. Transitioning to venture debt and startups, Dolik now lives for providing capital for leaders with startups.
“I want to be helping start-ups with capital for the rest of my life,” Dolik tells The BARE Ventures Podcast.
The Venture Banking Group at Signature Bank
Dolik describes that Signature Bank prioritizes a relationship between themselves and the startup. As a “helpful partner in the ecosystem” that continuously oversees progress, Dolik emphasized the key difference between them and other providers.
“We actually manage our portfolios,” Dolik says.
Although selective, the quality portfolio of startups Dolik states they consider are ones that are VC backed businesses. It is, in fact, key for eligibility.
“We’re not trying to replace VC, we’re actually closely aligned with VC,” Dolik explains. “We compliment them.”
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Alternative Financing Options for Startups
There are great alternatives to term loans and lines of credit. However, it is important to factor in the structure and operation of a startup, as one option may be a better fit than another. To elaborate, certain startups may just be ineligible for specific financing options, such as factoring, based on the way they operate.
Outside of venture capital, Dolik goes over alternative forms of funding including: senior secure lending, revenue based financing, and non-dilutive capital.
Dolik introduces unique points describing what Signature Bank provides startups that are attractive. Signature offers one of the cheapest forms of debt and is very competitive in the market.
The Future of Funding
“Entrepreneurs now realize that they can raise money without giving up 20% of their company every time they raise money,” Dolik emphasizes to begin.
Vig proposes the topic of the horizon of funding, where we’re headed and invites Dolik to give his insight and judgement. Similar to other experts, Dolik is optimistic that the market’s growth will advance, in addition to technology as a whole.
“Covid has really pulled a lot of things forward that were backing and we’re seeing VC dollars going into a lot of these markets,” Dolik says.
What to Keep in Mind
Recognizing the pros and cons of each alternative financing decision is crucial. While pondering over options, consider the cheapest forms of debt first, as giving a portion of a company away is no longer the only route to take.
“There is no one size fits all…” states Vig.
Ultimately, the goal is to sufficiently provide capital through a manageable, realistic plan.
Bringing together founder, operator and investor experience, BARE Ventures as a firm strives for a well-balanced approach to fund management. With an institutional investment background, BARE Ventures focuses on proven traditional methodologies combined with emerging learnings in the ever-changing venture capital landscape.
Learn more at https://www.barevc.com/.