Supervest, a Securities Crowdfunding Platform for Merchant Cash Advance Products, Seeks $950,000 on SeedInvest

Supervest, a securities crowdfunding platform that allows accredited investors to invest in Merchant Cash Advance (MCA) products, is raising growth capital on SeedInvest.

According to the offering page, the crowdfunding platform is seeking $950,000 at a $15 million valuation. The seed round is a side-by-side offering as the securities are being offered under both Reg CF and Reg D (506c). Investors are receiving a “Crowd Note,” that will convert into preferred shares at a 20% discount following a future priced funding round. The Crowd Note holds a 24-month term at a 4% coupon. Supervest completed a pre-seed round in 2018 for $300,000 at a pre-money valuation of $3 million.

According to the Reg CF offering circular, Supervest lost about $168,000 on $123,000 in its most recent fiscal year.

MCAs are effectively high-interest rate credit products for businesses in need of a loan. The high rate of return is pared with a good degree of risk for the lender.  The offering page states that Supervest has provided over $15.5 million in funding to small and medium businesses with total expected payback (RTR) of over $22 million. From December 2020 to January 2021, Supervest reports a 185% increase in MCA funding. Supervest says there is a “limited market currently available for an accredited investor to tap into unless they have a pre-existing relationship with an MCA funder.”

MCAs typically provide credit when more traditional lending firms will not or they are simply too slow to provide a loan. Supervest states that the MCA market is approximately $19.2 billion (as of 2019).  Funders are said to be relying more heavily on syndicates to co-fund their deals and this is where Supervest steps in.

Supervest states they are currently partnering with originators targeting areas like:  Credit Card Portfolio Acquisition, Movie/Theatrical Productions, Consumer Debt Settlement, and Hard Money Lending.