Why Founders Are Rejecting Committed Tranches for Flexible Funding

You're a founder, and you know the funding process can be a pain. There's so much paperwork, digging up documents, connecting bank accounts, and finding all the correct passwords. So, when you finally get funding, you need to make sure it's worth the effort.

But here's the thing: many founders look at committed tranche-based funding and think it's a good deal. Tranched or staged capital plans mean you only get a portion of funding at a time, forcing you to wait for the next installment before you can make your next big move. What founders don't realize is that it can lock you into a rigid structure that does not serve you well, especially in the fast-moving world of ecommerce.

Committed Tranche-Based Funding: A Slower, Staged Approach

Tranche-based funding often feels like you're committing to a slow-drip of capital over months. Wayflyer is one of the providers that typically offer this type of funding.

For ecommerce founders, this can be a major problem. When a marketing opportunity or an inventory shortage strikes, you need liquidity immediately. Waiting for a new tranche to hit your account can cost you momentum, put you on the defensive, and even make you miss out on revenue.

It's a one-sided commitment: you've committed to a rigid funding schedule, but the capital isn't committed to you when you need it most. That means you’re forced to commit to your draws when they become available whether you need them at that time,  rather than drawing down from a pool of capital you know is readily available.  It's a relationship that can put the brakes on your growth at the worst possible time.

Upfront Capital Empowers You to Act with Confidence

At Clearco, we believe you should have the power to act with speed and confidence. Our capacity-based model can give you a lump sum of capital upfront, or, you can draw down as much or as little of your approved amount as you need, when you need it.

Think about the confidence this gives you:

• Seize Opportunities: Have an opportunity to get a discount on a bulk inventory order? Or you’ve launched a flash sale that's going better than expected, and you want to pour more money into ads? With upfront access, you have the cash on hand to capitalize on those opportunities immediately, without waiting for the next funding round.
• Avoid Unnecessary Fees: Why pay fees on money you don't need yet? With capacity-based funding, you only draw what's necessary, which means you only pay fees on the capital you actually use. It’s a smarter way to manage your cash flow and keep more of your revenue.

The ability to draw down all your funds at once gives you the flexibility to be proactive, not reactive. It’s a different kind of relationship, one where your capital provider is committed to you, giving you the control to fuel your growth.

Capacity-based funding allows you to draw from a pre-approved amount whenever you need it, not on a pre-set schedule. It's about getting capital on your terms. 

When opportunity strikes, you should not be waiting on installments. Clearco delivers capital upfront so founders can play offense, not defense.