8vdx is the new home for venture debt. The team have sought to revolutionize the way in which founders seek their capital, providing the first tech-enabled venture debt marketplace for startups. At 8vdx the mission is simple; provide founders with, funding from day zero, minimal dilution and flexible repayment terms.
Founding Team
8vdx was founded by Ravi Chachra and Vijay Lavhale. Ravi is a self-confessed serial entrepreneur with a background in deep domain knowledge in credit. In 1999, he co-founded SNAZ, a mobile wallet and universal shopping cart. After the Dot.com bust, he set up a fund to acquire busted convertible bonds off technology companies that could thrive in the future. In 2005 Ravi also co-founded Eight Capital, an Indian focused credit platform, which evolved to include global investments. It was at Eight Capital, that Ravi met his now co-founder Vijay lavhale. Vijay is an accomplished financial professional with substantial experience in investment management. Prior to co-founding 8vdx, he worked for several prominent financial institutions including Eight Capital, J.C. Flowers and Goldman Sachs.
Fintech Startups
The premise behind the idea is to minimize dilution across sectors and geographies. The company has initially focused on startups within the Y-Combinator ecosystem who are required to create a parent company in either the United States, Canada or the Cayman Islands; A process that can prove to be inconvenient at such a critical time, in the life of a startup.
8vdx loans are founder friendly as there is no prerequisite to open captive bank accounts, cash flow sweeps, take personal guarantees of the founders, or force the startup into bankruptcy if the startup is unable to repay. Each loan includes a 0% cash interest (SAFE Instead) and conversion of principal into equity instead of repayment.
Being a marketplace, naturally there are two parts to this equation. For investors the benefits of using 8vdx are the exposure to a combination of debt-like downside protection and equity-like upside.
A win-win scenario has been created for both founder and investor which has seen significant early traction. 8vdx has offered debt to 16 startups amounting to $2.8 million with an aim of increasing this to $75 million within 12 months.
Summary
At Zillionize we concentrate our investments on companies operating within or developing ‘hard technology’. Despite this we are open to all ideas where we can see the founders have put significant early work into proving a unique concept or idea which will be difficult for others to replicate and 8vdx has proven to be no exception to this rule.
Upon face value 8vdx looked very similar to their competitors. However, by distancing themselves from reoccurring revenue funding models they have effectively provided a much more accessible and founder friendly solution to providing startup capital. Whilst 8vdx is currently restricting themselves to the Y-Combinator environment, we feel that the product, coupled with both Ravi’s and Vijay’s experience will allow them to thrive outside of YC.