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:

- 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.