Venture Capital Financing

Are you a highly effective business leader in need of $10 million or more in growth or expansion capital?

Gateway Capital Funding, LLC is prepared to underwrite project-related financing (PRF) that is based on the value of venture capital and does not require:

• The initial transfer of equity ownership (debt-based venture capital);
• The relinquishment of management control; and,
• An eventual realization event (i.e., IPO or sale of the company). The Structure for PRF is centered on Capital Reserve Lending (CRL), a “debt-based funding arrangement” with a borrowing-based mechanism.

Project Due Diligence

PHASE I: Submission of Project Information (i.e., Plans, Forecast, Etc.)

PHASE II: Approval of Cash Budget and Management Plan

PHASE III: Assessment of Private Client’s Final Due Diligence Documentation

Project-Related Financings

Ultimately, project-related financings applying a Capital Reserve Lending (CRL) Protocol are loans to corporate borrowers (qualified prospects) that rely primarily on the project company’s cash flow for loan repayment. If a loan made to a corporate borrower is not paid back in time and in full, the collateral is seized by the lender and does not extend beyond the project’s assets, rights, and interests.

A project owner’s personal property is not at risk. This type of financing is an offshoot of “project finance.”

Typically, a corporate borrower will repay borrowed funds within five to seven years. Our investor is fully aware that loan repayment periods will vary, however, project owners will certainly have to prove out the need for a loan repayment period extending beyond five to seven years.

Project-Related Financing (PRF) is a unique financing mechanism in the marketplace and only applicable to highly-vetted private companies that are: a) directed and guided by an effective chief executive officer capable of leading a strong executive team in accordance to a well-documented management plan; and, b) validated by comprehensive due diligence documentation substantiating the capacity to break-even within twelve to eighteen months.

Client Due Diligence:

Step 1 – Marketing Plan

Marketing Plan: In order to benefit from debt-based venture capital via project-related financing (PRF), a prospect must present a compelling marketing plan that substantiates a corporate financial plan solidifying early break-even and sustainable growth long-term. The Marketing Plan centered on market development must validate a high degree of skill and knowledge relative to the idea, research, industry, strategy, market size, competition, and sales.

Step 2 – Cash Budget

Cash Budget: Prospects must finalize a sixty (60) month line-item forecast of cash inflows and cash outflows. Financial information is used to assess whether the prospects have sufficient cash to meet – debt – service coverage ratio (DSCR) requirement of two (2.0). In project-related financing (PRF), DSCR is the primary measure to determine if prospects are able to sustain debt based on cash flow. Furthermore, GCF can determine if prospects have budgeted sufficient cash for marketing, executive compensation, and other critical facets relative to a private company executing a marketing plan centered on immediate growth.

Step 3 – Executive Information

Executive Information: Prospects must be re-structured as a Newly Formed Delaware C-Corporation. Such Delaware Corp will be under the direction and guidance of an effective CEO. Prospects must provide information validating the experience and track record of the CEO and other key executives. The CEO must formulate a management plan that demonstrates his/her leadership and management capabilities, as well as the role of a newly hired controller approved by Investor.

Step 4 – Organizational Charts

Organizational Chart(s): Further validates the existence of an effective CEO. Prospects’ organizational charts must show the managers and sub-workers who make up an organization. The charts must also show the relationships between managing directors; directors; officers; and various department heads. Organizational charts can be incredibly complicated, and GCF compares the corporate structure to the cash budget to test for organizational completeness and continuity.

Step 5 – External Partner Profiles

External Partner Profiles: Prospects must provide a brief summary of value-added entities providing goods or services to the company. External Partners, including attorneys, accountants, and others, are important to the success of any project, but particularly critical in manufacturing concerns.

Step 6 – Operational Information

Operational Information: Ultimately, a detailed operations plan defines in detail the execution of all value-added activities. An employee handbook is an example of operational information. The employee handbook contains information about company policies and procedures. However, there is no limit to the type of information. For example, a project could have a real estate component where site plans, environmental assessments, and a plethora of other informational requirements would have to be met. This section is ideal for prospects to showcase

their projects by providing compelling information other than the marketing plan.

Step 7 – Legal Information

Legal Information: Prospects must provide impeccable corporate records; tax returns, contracts, and other information that demonstrates legally that the bases are covered. This segment of the due diligence documentation often includes evidence of territorial rights, intellectual property and other aspects of legal importance.

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