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5th Line Capital: Year in Review

Insights

          As the year comes to a close, we feel it important to look back on the events, challenges, and successes of the year to understand, appreciate, and, most importantly, learn from them.

As we look to close the books on the most successful year to date of our firm’s young history and plan for the year to come, we look forward to sharing with you some of our proudest moments, important lessons learned, and goals we've set this year.

Understanding everyone’s busy schedules, we like to keep these short and targeted in showcasing what the past year has brought us, and what we look forward to in the coming year.

A Recap of 2021

          Coming off the year that was 2020, we, like many firms, were unsure of what to expect for the following year. There was still uncertainty for many of the lenders in our network – where to lend and what risks to take, and clients were still very much in the “Rebounding” phase due to the impacts of the pandemic. That said, we were able to have our best year so far. Below are some highlights.

  • More than doubled the size of our team
  • Made our first acquisition in the software space
  • Raised more than $50MM across over 20 transactions

Business Services

          This year we were fortunate enough to bring on several steadfast team members who have proven tremendously valuable to the growth of our business. We expanded our sales team with Wilson Kistler, driving significant growth of our Venture Debt client base, and Peter Bendoris driving Business Development efforts by increasing our brand awareness in the market through his extensive network. These additions have produced our strongest pipeline yet as we head into 2022. 


What We Did in 2021

          Through this year we saw our average Venture Debt client scale from $2.1MM in average capital ask to over $5MM by the beginning of December.

          We launched additional financial services, geared toward the early and growth-stage companies, focused around CFO services, financial operations support, and structuring of Customer Finance programs for SaaS companies looking to offer monthly payment options to their SaaS customers. In expanding our services offering, we have been able to engage a wider pool of companies. Whether a company is ready for funding or has future needs down the road, we are able to develop a stronger, longer-term relationship with our clients from the earliest stage through preparation for exit.


Why Next Year Will be Even Better

          In 2022, our goal is to continue scaling our financial services offering and ramping up our venture debt client base to engage a larger amount of companies that are bigger in size with the purpose of having a more integral role in their financial strategy, support and success. By expanding our services offering to provide Venture Debt advisory, CFO Strategy & Supporting, and Customer Finance programs to early and growth-stage companies, we are able to become a more involved partner in each of our client’s stories.

Investment & Acquisition

          Initially planned for mid-2020, when the pandemic hit, we opted to defer any investment strategy until 2021. As a result, it allowed us to truly rethink our original investment thesis from angel/venture-focused to full software acquisitions in the early-stage “MicroSaaS” space.


Looking for Opportunities

          We structured our investment thesis and target profile for our first acquisition in early Q2 of this year, leading to the close of our first acquisition, Flowify, in later Q3. Having officially launched our investment initiative, we have used the Flowify acquisition to finalize our onboarding and ongoing operational plan to successfully scale future software products we acquire.


Building the Portfolio

          Going into 2022, we have learned a tremendous amount about not only how to run the diligence and onboarding processes but also the MicroSaaS market as a whole and we can clearly see the opportunity in front of us. We aim to acquire several more products over the next 12 months, partnering with co-investors and strategic partners along the way


5th Line: Looking Ahead, 2022 and Beyond

          As we sit down to finalize our goals and our plans for the coming year and beyond, we look at the opportunity in front of us – as a firm. We have an established Venture Debt advisory business, an expanding services offering, and now, a newly launched investment business – under one roof. We are excited to continue to build out the team on both sides of the business, services and investment, and continue to grow as we have done since inception.

As the new year approaches, I am happy to be acquainted with each of our partners and clients. Each of them has in some way, led to our success thus far, and we have no doubt will lead to our continued success in the future. It has been another turbulent but successful year and we look forward to what 2022 has to bring. Happy New Year to everyone and here’s a successful 2022.

James Turner, Founder & CEO
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