Finley (YC W21) – Debt capital monitoring and reporting software

Hey HN! We’re Kevin, Jeremy, and Josiah, and we’re in the current YC batch. We’re building Finley (https://www.finleycms.com), software that streamlines the debt capital raise and management process, starting with compliance monitoring and reporting.

Debt capital is basically a corporate loan of over $20 million used to fund operations and growth. That’s a universal business need, so it’s not surprising that debt capital is huge—add up all the venture capital investments in 2020 and you’d still be $70 billion short of debt capital investments over the same period. [1]

Debt capital also comes with rules. Hundreds of pages of them. Here’s an example of a typical credit agreement, which is the type of contract that borrowers and lenders sign when they agree to a loan:

https://www.sec.gov/Archives/edgar/data/1357204/000119312511...

The credit agreement dictates all the conditions that companies have to comply with in order to maintain access to their funding. These conditions are known as covenants. [2] If companies don’t submit the right reports to lenders on a weekly basis that show they’re in compliance, they can lose access to tens of millions of dollars of their loan.

The problem is that borrowers today manage their credit agreement compliance with some combination of email, Word, Excel, head knowledge, and Post-it Notes. Today’s options for managing credit agreements are outmoded, error-prone, and end up costing companies millions in fines and lost access to capital (Fintech founders often unwittingly discover this after starting their lending business, as Stilt (W16) co-founder Rohit Mittal has pointed out. [3]).

Our software helps companies automate their regular reports on debt capital to their lenders. Consistent with Murphy’s law, this seemingly boring task turns out to be quite a difficult technical problem. It starts with encoding the conditions of credit agreements into properties that companies can query their loan data against to monitor and report on in real time. The process of turning unstructured data from credit agreements into structured data is challenging, but tractable, and we’ve been encouraged by the similarities we’ve seen across our credit agreements and excited by what doing this can enable.

Jeremy, our CEO, saw firsthand at Goldman Sachs that keeping track of credit compliance can require a small army of bankers and lawyers. At Ironclad (S15), a contract management startup, our COO Josiah worked on the Collaboration and Negotiation team and helped launch an in-app contract negotiation tool. [4] And as the first engineer at Nova Credit (S16), I saw how existing financial systems can be made much more efficient with modern technologies. [5]

What excites me the most here is the chance to build infrastructure in the capital markets space, which has ramifications far beyond reporting. In the longer-term, we’d love to empower companies to conduct debt capital raises faster and more effectively (the current process of raising debt capital comes with exorbitant legal fees and can take 6+ months).

Today, we’re helping startups manage hundreds of millions in debt capital and, as you might expect, building the plane as we fly it. We’d love your thoughts on our approach, questions about debt capital or fintech infrastructure, and any other feedback you might have.

Thanks!

-- Kevin

[1] See full report here: https://www.mckinsey.com/~/media/mckinsey/industries/private...

[2] https://www.investopedia.com/terms/c/covenant.asp

[3] https://rohitmittal.substack.com/p/a-brief-guide-to-starting...

[4] https://ironcladapp.com/blog/introducing-ironclad-editor/

[5] https://www.novacredit.com/



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andrey azimov by Andrey Azimov