The Grenville royalty financing solutions are designed to be applicable to companies operating across the technology and services sectors. We define the technology sector very broadly to include both hardware and software solutions that address many different needs in the marketplace.
Grenville is focused on operating companies in the technology, industrial technology and services sectors. We believe growing companies with strong and highly incentivised management teams in these sectors are particularly well-suited for our form of capital as it provides many of the benefits of equity investments without the need for control that comes with equity investments and the risks and restrictive covenants of debt financing. Grenville does not invest in companies that operate in the industrial, bricks and mortar retail, traditional mining extraction, oil & gas extraction, film and pharmaceutical drug development sectors.
Grenville’s investments are structured on a contractual relationship whereby the investee commits to paying a small portion of future revenues in exchange for the capital we invest. In each case, Grenville seeks to purchase 1 to 4% of the future revenues of a company. The royalty is paid monthly with no additional charges, fee or interest.
Our financing is structured to align our investment with your revenue goals, aligning our growth with yours. The structure of the royalty over the long term is flexible and is established according to your unique business situation.
We also work hand-in-hand with our portfolio companies to collaborate in developing future buydown and buyout strategies to reduce or eliminate the royalty rate over time via mutually beneficial transactions.
Companies within our portfolio have more than $3 million in revenues, gross margins greater than 30%, good growth, and strong, highly incentivised management teams.
Grenville is a later stage investor, typically funding businesses which have been in operation for a minimum of three years. Our unencumbered financing model performs best with a successful management team that has a vested interest in increasing revenue and who stands to gain by this success. We invest in leadership.
Grenville is currently focused on investing in companies based in Canada and the United States.
We currently target initial investments of $1 million or less, with the intent of growing our investment over time. Grenville’s preference is to work with other funders at the time of initial investment so that our investees maintain financial flexibility by having more than one partner at the table.
Grenville has an established network of investors that would be willing to co-invest in companies should the dollar amount required be higher than our current maximum discussed above.
Our royalty model is adaptable and able to accommodate a high degree of seasonality. We tailor our terms to work with the business you are operating. An example would be our ability to establish a rolling average monthly payment, ensuring our royalty structure works seamlessly with your cash flow needs.
Cost, control, simplicity and transparency are all words used to describe how we can help. Grenville’s model aligns with management’s plans for growth and increased cash flow. We want business owners to retain control of the business they have created – our terms speak to that. We do not require any type of exit or sale of your company to realize our returns and benefit only when the owners do.
There are no onerous financial covenants, no Board seats, and there is no dilution of ownership. We offer flexible buydown and buyout alternatives with no mandated principal repayment date, which limits your risk as an owner.
Traditional financing, debt or equity requires collateral to secure the capital. If your company has limited or exhausted traditional collateralized capital alternatives, or is not in favour of personal guarantees, your ability to secure debt financing is materially impaired. Furthermore, debt financing requires payment of principal, whereas our form of capital never requires retirement of the facility. With our form of financing, the cash can remain in the business for growth.
Equity can be complex and expensive for high growth companies. Equity pricing is costly when your business is growing rapidly, notwithstanding that equity providers will command a higher premium, when you factor in the demand for ownership as part of their equation.
Traditional forms of debt or equity, discussed above, may not be available to all companies on commercially attractive terms. Our experience has been that Grenville works as a catalyst for further investment, acting as a “first-step” investor to get the conversation moving towards more favourable terms in negotiating traditional debt or equity alternatives.
None, there is no interest paid. Repayment is in the form of royalties on top-line revenue only.
There are no hidden or ongoing fees, there is only your royalty payment.
There are legal and initial closing fees at the front-end, which are clearly outlined and agreed upon in advance of any transaction. Grenville takes pride in knowing the fees which are levied are substantially lower than the fees associated with traditional alternatives.
There is no repayment of principal required in our royalty agreements, however, there are buydown and buyout options available for you to exercise, at your discretion.
Grenville’s royalty offering is a hybrid structure with features of between mezzanine debt and equity. Like mezzanine debt, it has recurring monthly payments. Like equity, our investment is subordinated to all other existing debts at the time of investment and generates higher returns when the owners generate outsized returns through growth or a sale of the business. With these hybrid features in mind, our structure is priced in between mezzanine debt and equity.
We waste no time getting you the funding you desire. Within a week of our initial conversation we deliver a term sheet for your approval. Once executed, closing can follow within as little as 4 weeks.
It is not until we agree to move forward that legal fees are incurred. These associated fees are outlined in the executed term sheet and are set at a capped amount.
All legal fees are paid upon closing from proceeds of the funding.
We have endeavored to mitigate high legal costs by instituting a standardized legal and closing procedure. It is our aim to make every client’s experience as cost-effective as possible.
Yes, upon request.