Meet Speedy Lemur. An unusual name for a unique approach by two Minnesotans innovating the model for early stage tech investments. The brainchild of Peter Zugschwert & Kevin Spreng, Speedy Lemur provides between $10,000 – $500,000 of (royalty based) growth capital for app and software developers, online merchants and other owners of revenue generating assets. How does it work? From the website:
“Speedy Lemur will purchase the right to receive a portion of your royalty or other revenue stream. We will set the purchase price based on your capital needs and current and projected revenue.
The portion of the royalty or revenue that we would be entitled to received would be a fixed multiple of the purchase price (1.5x to 5x) or fixed return (10% to 35% IRR).
We typically would be entitled to receive 15% to 90% of the applicable royalty or revenues starting immediately after the purchase. On occasion we will delay commencement of our participation until the first anniversary of the royalty right purchase. You pay only the agreed upon percentage of revenue. If you have no royalties or revenue there is no payment due.
We want you to maintain ownership, grow your business, and build a successful, long-term enterprises with solid revenue streams. For us this means regular and increasing royalty payments.”
Benefits outlined include:
* Payments depend on the royalty or revenue you receive
* Eliminates ownership dilution
* Ends conflict over valuation
* Provides growth capital with flexible repayment terms
* We won’t push for an exit
* No personal liability
* Reduces capital cost through interest deductibility by up to 40%
Mr. Zugschwert has a rich history in the Private Equity industry, including 14 years CFO experience with early stage ventures in the software, hardware, business process outsourcing, web hosting, wind development, and retail industries. Mr. Spreng, entrepreneur and a business lawyer, is a Partner with Robins, Kaplan, Miller & Ciresi. His 20 years of experience spans hundreds of financing/acquisition transactions and he’s worked as in house counsel to a global venture capital firm.
Doing anything new and different requires an open mind, patience and agility. Not wanting to get ahead of themselves on what is sure to be a learning experience, Speedy Lemur Founder Peter Zugschwert noted:
“We are open for business. A few prospects are identified and want to ensure the first deals go well out of the shoot. We don’t want to claim that we are a some large venture, rather an initiative aimed at exploring possibilities.”