How Viafoura Founder and CEO Jesse Moeinifar used venture debt to position his company for its Series A

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When Jesse Moeinifar founded Viafoura in 2012, he wanted to create an audience engagement platform that would help digital publishers build, manage, and monetize their content, audience, and data in real time. As the only engagement suite of its kind, over the years, Viafoura has added more than 600 media, broadcast, and entertainment brands to its customer list, including the Canadian Broadcasting Corporation, The Philadelphia Enquirer, The Irish Times, and The Weather Network. Today, it powers more than 1.5 billion interactions across 350 million active users.

Like many entrepreneurs, Jesse largely selffunded the business, relying exclusively on angel investments and prepayments from customers. But, wanting to accelerate revenues, in 2016, he began investigating other financing options such as raising venture capital. “Unfortunately, at that point in time we just didn’t have enough traction to attract venture capital interest,” he recalls. “Not only that, having nearly exhausted the angel capital in my network, finding other angel investors would have taken a long time. Plus, I didn’t like the idea of the dilution that additional angel financing would lead to.”

With limited funding options, but anxious to make critical investments in product development, sales, marketing, and customer success, Jesse turned to venture debt. “It was a way to get the cash injection we needed to grow the business and attract more VCs,” he explains. “With the extra runway we’d get from venture debt, we could work on hitting the various milestones necessary to make it easier to secure venture capital in the future.”

While some entrepreneurs are turned off by venture debt’s interest rates, that wasn’t the case for Jesse. “When you actually stop to compare the cost of venture debt to equity, venture debt is significantly lower,” he explains. “Given that, and our confidence in our ability to deliver increased revenue over the next 18 months, it just made sense. Plus, securing venture debt was such a fast and efficient process that we could immediately start investing for growth rather than spend months trying to find additional angel investment without knowing if we’d succeed.”

Finding a flexible partner that values its customers

Jesse looked at several venture debt lenders before deciding to partner with Espresso Capital. “I liked that Espresso is entrepreneurial in nature like we are,” Jesse says. “Plus with Espresso, I felt like I was signing on with a long-term partner, rather than just a shortterm source of financing.”

As a SaaS business, Viafoura’s revenues grow month over month, and customers sometimes prepay their contracts. That meant that Jesse wanted a facility with the flexibility to expand and contract as needed. Espresso was able to deliver that and more. “Espresso really took the time to understand the needs of our company, as well as our product, our people, and our market,” Jesse explains. “We felt that’s how a true partner would behave so we decided to move forward with them.”

That turned out to be the right decision. “Espresso was always very supportive,” Jesse says. “Any time we needed them to be flexible with our model, they were more than happy to because they’d done their homework about our business and felt comfortable doing so.”

Leveraging venture debt to improve the customer experience

Given Viafoura’s focus on their customers, they used the capital they raised from Espresso to develop new products to make the company stickier and more innovative. They also invested in sales resources to close out some of the top-of-the-funnel opportunities they were generating as part of their marketing efforts. Finally, they built out a customer success team to ensure they’d retain the new logos they were signing.

“We knew that a good measure of a strong company is its lack of churn, so we invested in making sure that our customers were not only extremely happy with the product but with our customer service as well,” says Jesse. “We believe in delivering white glove customer service. That’s actually one of the reasons why we went with Espresso. They were able to offer the same level of service back to us.”

Ultimately, Viafoura was able to raise its Series A round, working with an investor that Espresso introduced them to. “Espresso’s relationship with our investor is one of the reasons why we were able to get to a term sheet and funding so quickly” says Jesse. Upon closing their Series A financing, and with the continuing participation of Espresso as a venture debt provider, Viafoura was also able to attract low-cost working capital financing from a bank.

“The Espresso team did a fantastic job. I’d endorse them and use them again any time without hesitation.”

 

“We believe in delivering white glove customer service. That’s actually one of the reasons we went with Espresso. They were able to offer the same level of service back to us.”

Jesse Moeinifar, Founder and CEO, Viafoura

Jesse Moeinifar, Founder and CEO, Viafoura