- San Antonio-based Scaleworks Associates announced it spun out a division called Element SaaS Finance
San Antonio-based Scaleworks Associates announced it has spun out a two-year-old finance division called Element SaaS Finance, according to Biz Journals. Element will provide an alternative form of debt financing for startups that make subscription-based cloud business software that have generally been unable to receive traditional loans in order to grow their businesses.
The spinoff had originally launched as the Scaleworks Venture Finance Fund back in January 2018.
Through the spinoff, Scaleworks has a goal of creating a company that is able to grow with the firm’s offerings over time and try new things. Plus it would put entrepreneurs in the position to win without having to give up a piece of the company that they worked very hard to build said Element SaaS Finance CEO John Gallagher in a blog.
To launch the spinoff, Element partner with TransPecos Banks to offer flexible solutions — which will benefit cloud-based software companies.
“Since we understand the ebbs and flows of the SaaS world, we can get creative with how we lend based on that experience. Most importantly, we provide this capital in a way that the owners of the company keep control — no personal guarantees, board seats or warrants. They want, and need, straightforward finance to continue growing their businesses,” wrote Gallagher.
So far, Scaleworks venture finance provided 16 loans ranging from $200,000 to $3 million — of which some has already been repaid.
Gallagher has been the head of Scaleworks’ venture finance division since January. And he succeeded former general partner Karl Pichler. The founding partners of Scaleworks including Lew Moorman and Ed Byrne are general partners of the new operation.
