THE PROBLEM: HIGH GROWTH COMPANY FACES CASH SHORTFALL
Local entrepreneurs started a company that creates and develops mobile video games, deriving revenues from in-game purchases. The company initially was funded by angel investors.
Early Stage Dilemma
The company suffered heavy losses in its pre-revenue stage as a result of R&D expenses. Losses continued after the company started generating revenues because of heavy advertising expenses.
Cash Flow Issues
As accounts receivable increased, the company encountered mounting cash flow problems. The founders were faced with a choice: raise additional equity or find an alternative funding source.
THE SOLUTION: FIRST BUSINESS FACTORING PROGRAM
The company decided to utilize the First Business factoring program, preventing further dilution of initial investors.
The First Business factoring facility grew in accordance with the company’s increasing accounts receivable levels.
The First Business factoring facility allowed the company to achieve critical scale with its initial game, resulting in the eventual sale of that game for $35 million!
The company continues to view First Business as a valuable partner. They still utilize the First Business factoring program as they develop new games and position themselves for the next big payday!
"We are so happy to have contributed to this client’s success. At First Business, we serve companies at all stages of their life cycles, from startups to mature turnarounds, and we can develop innovative structures to address their particular needs. We are EXCITED ABOUT THE OPPORTUNITY TO HELP other companies achieve this type of success!”
— Bill Elliott, President, First Business Growth Funding
LEARN HOW FACTORING DRIVES GROWTH
Reach out to First Business Growth Funding for details on how your company can use factoring to propel growth
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