Pure Visibility has been seeking to finance its receivables since its inception. One of the key lessons learned from this experience has been that banks perceive businesses differently based on the banks' internal expertise. Therefore, it's important to search to find the right bank.
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Catherine Juon, co-founder of Pure Visibility, continues our series on Financing Innovation by describing her search to obtain bank financing using Pure Visibility's receivables as collateral. In our previous segment with Catherine, she explained her need to finance the float between when Pure Visbility renders services and actually receives payment.
At the time of the interview, it appeared that Catherine was about to succeed in obtaining bank financing, and we have word that she indeed has. This segment was very informative for how a start up owner perceives banks' decision criteria and how that perception influences their decision making. Highlights include:
- Banks may essentially use the same surface criteria such as funding up to 80% of receivables, but how they perceive businesses depends significantly on their in-house expertise. For instance, Bank of Ann Arbor has a technology industry group making it easier for them to understand technolgy businesses.
- Pure Visbility has sought bank financing since their inception three years ago and spoke with a dozen banks.
- At the outset, Pure Visibility considered whether to go for venture or bank financing.
- Pure Visibility chose to retain control of their firm and grow to the point of becoming bank fundable.