A runway extension gives you more control and flexibility regarding when you are going to raise funds. Thus, it can allow time to realize a higher valuation or to wait for better market conditions in general. If you are already on the way to becoming cash flow positive, a runway extension can help you to reach that goal without the need for raising additional equity.

The best timing to reap these benefits is when you have just raised funds, and thus have a healthy runway, as it is a major driver of the financing conditions you are going to look at. Additionally, we see many clients who deliberately preserve raised equity capital for long term investments and use re:cap to finance all other spending. If you wait too long and your runway becomes too short it can be difficult to get any financing even if you are willing to pay more for it.

The runway extension effect of re:cap’s financing depends on several factors, and thus it is very difficult to give a general answer. In our experience our financing can extend the runway on average by 12 months and in many cases enables you to get profitable without any further equity injection. As part of our suite of financial tools, we allow you to calculate your runway with re:cap to get an indication based on your individual situation.

re:cap financing can be used like a revolving credit line to extend your runway. You decide how much of your total financing limit you want to use to extend your runway. The respective amount of contracts will be traded and you receive their annual value as an instant payout on your account. During the following months you can choose to stay cash flow neutral (i.e. keep using your financing line) by trading the amount of contracts required to offset the payback sum. So every month you can control if you like to increase financing, stay cash neutral or start paying back (given your financing limit is sufficient).

We advise our clients to plan for a certain extension amount and based on this we simulate the expected cash flow effect on your company using our runway extension calculator.

Working with alternative financing may be a new instrument for primarily equity financed companies. In comparison to equity, the biggest difference is that you have to repay the received financing on a monthly basis. In return, you know exactly how much you pay for the financing used and in general have significantly lower cost of capital.

If you maintain a sufficient runway, future trades are always accessible. Thus, you can manage your cash flow by refinancing upcoming repayments with new trades as the capacity of your re:cap financing grows with your revenues. Our suite of financial tools enables you to discover the best timing and source of funds (e.g. new equity round or operating cash flow) and which measures are required to get there.

re:cap is made for all growing companies based in Germany or Netherlands who are already generating recurring revenue. Whether VC-backed or bootstrapped, small or large – our non-dilutive, on-demand financing solution works for you.

Creating an account is fast, easy, and free of charge. As part of the onboarding process, you will get information about your current financing limit and financing conditions. Additionally, we provide you with KPIs and additional insights for free. In short: there is no reason not to sign up!

Need more information? Please visit our general FAQ section here or contact us!