Flow Capital Corp. · CSE:FLOW
Flow Capital — Investor Presentation (November 2022)
29 slides from Flow Capital's investor presentation, November 2022
Slide 1: Corporate Overview
More flexible than bank debt. Less expensive than venture capital For companies that have nailed their value proposition we help them scale their business. Corporate Overview November 2022
Slide 2: Disclaimer
Disclaimer This presentation is confidential and is being provided to you solely for your information and may not be reproduced, in whole or in part, in any form or forwarded or further distributed to any other person. Any forwarding, distribution or reproduction of this presentation in whole or in
Slide 3: Empowering Entrepreneurs Of The Modern Economy
Empowering Entrepreneurs Of The Modern Economy ~$126M CAPITAL DEPLOYED Flow Capital (TSX-V:FW) generates repeatable and recurring revenue and cash flow, with downside 61 protection and equity upside potential. DEALS We offer a robust platform for growth by investing in 16 companies that fuel the gro
Slide 4: Management and Board of Directors
Management and Board of Directors Alex has over twenty-seven years of professional Vernon was founder and Managing Director of Mosaic Venture Partners, an early- experience in Canada and the US in investment banking, stage venture capital fund. Through 26 years in the investment industry, Vernon equ
Slide 5: What Do We Do? We lend money to high growth companies
What Do We Do? We lend money to high growth companies. SaaS CleanTech E-Commerce HealthTech Cyber Security Manufacturing FinTech Blockchain and Cryptocurrency AI & Machine Learning IT Services Flow Capital provides investors with access to a diversified portfolio of high growth, new economy companie
Slide 6: Our Investment Parameters
$1-7 Million PER COMPANY Our Investment Parameters Stage: Use of Funds: High-growth, revenue-generating companies; Growth Annual Revenue greater than $4 million; or Annual Recurring Revenue greater than $2.5 Sponsorship: million (US$) Open to VC-funded and founder-bootstrapped companies Sectors: Pri
Slide 7: High-Growth and Extensive Tech-Exposure in Revenue-Generating Portfolio
High-Growth and Extensive Tech-Exposure in Revenue-Generating Portfolio With Warrant Upside TECH TECH-ENABLED/ECOMMERCE OTHER Publishing Automation HR Software* Tech-Enabled Retail* 5G/Charging Stations Media Production Services Software* Infrastructure Development* Data Management Simulation Softwa
Slide 8: Business model
Business model • We lend money to high growth, revenue generating, often venture sponsored, companies • “Venture Debt” or “Growth Debt” is a $20Bn per year1 market • Is a component of over 40% of Venture Capital deals 1 • Is the fastest growing source of funding to high growth companies1 • Fills the
Slide 9: Why We Focus on High Growth Companies
Why We Focus on High Growth Companies • More Downside Protection Our loans represent a small proportion of the overall enterprise value (<20%) of the investee, and the equity value below us increases disproportionately with growth. • More Exit Alternatives As companies scale, additional alternatives
Slide 10: Why Invest In Flow Capital?
Why Invest In Flow Capital? • Publicly Traded (TSX-V:FW), high disclosure threshold • Proven model, proven team, strong governance and board • Strong Financials: ~$7.1M in revenue1, >$4M in Adj. EBITDA1 and $2.3M in Adj. FCF1 • Strong ROE (over 30%) on every incremental dollar invested • Well capita
Slide 11: Adjusted and normalized figures notes
- Adjusted and normalized as per management estimates. - These figures are not IFRS. - Refer to Risk Factors in Appendix
Slide 12: Summary Snapshot
Summary Snapshot Q3 2022 TRAILING 12 MTH TOTAL ASSETS CASH RECURRING REVENUE1 # OF SHARES $52.9M $9.5M $7.1M 31.4M ACTIVE INVESTMENT TRAILING 12 MTH FREE LONG-TERM DEBT PORTFOLIO2 CASH FLOW1 MARKET CAP @ Nov 28, 2022 $19M $38.9M $2.3M $18.5M TAX LOSSES CARRIED SHAREHOLDERS' EQUITY EQUITY PORTFOLIO2
Slide 13: How to invest in Flow
How to invest in Flow Participate in the Growth of High-Growth Companies PREFERRED SHARE COMMON EQUIT Y • Target Yield: 9.20%, paid quarterly PURE UPSIDE TORQUE • Currency: C$ (and currently at a discount to book value) • Term: 6 Years • Issue Price $3.00 Participate in the upside from our • Limit o
Slide 14: Summary Highlights
Summary Highlights • Publicly Listed (TSX:V) with a high disclosure threshold & quarterly reporting. • Independent Board of Directors with strong focus on Governance. • Management & Board own 26%1 of common equity. • Generating ~$7.1M in Revenue2 , >4M in Adj. EBITDA2 and $2.3M in Adj. Free Cash Flo
Slide 15: Contact Us
Contact Us • Alex Baluta Chief Executive Officer alex@flowcap.com • Gaurav Singh Chief Financial Officer gaurav@flowcap.com • Arin Minasians VP Corporate Development arin@flowcap.com 16
Slide 16: Appendix
Flow Capital Appendix
Slide 17: Types of Investment Structures
3 Types of Investment Structures Generating consistent recurring revenue with multiple sources of additional upside. V E N T U R E D E BT V E N T U R E D E BT REVENUE-LINKED T E R M LOA N B U L L E T LOA N R O YA LT Y LOA N Amortizing Non-Amortizing Non-Amortizing Term Loan Term Loan Royalty Loan 2-
Slide 18: Increasing Momentum in Key Areas
Increasing Momentum in Key Areas Growing Pipeline, Growing Asset Base, and Growing Revenue DEAL PIPELINE FUNNEL DEAL SOURCING BY CHANNELS FY2020 FY’21 YTD’22* 861 Leads 981 807 355 Marketing Qualified Leads 344 278 144 Sales Qualified Leads 152 172 24 Term Sheets 22 8 3 Investments 6 1 Close Rate: 0
Slide 19: Case Study #1
Portfolio Company – Monthly Revenue Case Study #1 Capital to scale high- growth businesses.
Slide 20: Case Study #2
Case Study #2 Capital to scale high-growth businesses. Company LEGEND: Acquired Flow Investment Timeline (32 months) Venture Round Investee Company (Series B) Revenue Flow Investment Buyout ($1.5M) Cumulative Revenue to Flow from Royalty Investment Venture Round (Series A) Flow Investment Return Tra
Slide 21: Portfolio Snapshot: Well Diversified
Portfolio Snapshot: Well Diversified REVENUE-GENERATING PORTFOLIO: TOTAL ASSETS OF C$38.9M (SEP 2022) Recurring Revenue* Investment By Industry Composition* Structure* VC- Sponsored* 1 7 Manufacturing No 15% 6 7 6% 1 Royalty 11 Yes 9 Tech- 13% No 70% Software Enabled 5 40% 68% Retail Yes 8% 60% 2 Ex
Slide 22: Why Do High-Growth Companies Use Debt?
Why Do High-Growth Companies Use Debt ? An excellent fit for high-growth companies in industries such as technology, SaaS, etc. DEFER COST MINIMAL DILUTION REPAYMENT FLEXIBILITY To defer dilutive equity Businesses are typically Venture debt and royalty Royalty debt investments issuance using the roy
Slide 23: Tangible Book Value Attributable to Common Shares
Tangible Book Value Attributable to Common Shares $2.00 $1.50 $1.00 $0.50 $0.00 -$0.50 -$1.00 Q12020 Q22020 Q32020 Q42020 Q12021 Q22021 32021 Q42021 Q12022 Q22022 32022 mmmCash mmm Royalty and Loan Portfolio mam Equity Portfolio mmmPreferred Shares mam Debt ——Book Value/Share ——Avg. Share Price
Slide 24: Meet our Team
Meet our Team Alex Baluta Gaurav Singh CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER Alex has over twenty-seven years of professional experience in Canada Gaurav brings over 15 years of experience including several board and the US in investment banking, equity research, mergers and and executive
Slide 25: Meet our Team
Meet our Team Matthew Gan VICE PRESIDENT Matthew’s prior experiences include investment banking, equity research, and corporate finance. Over his career, he has provided mergers & acquisitions advisory, corporate financial advisory, and capital-raising services for small and large cap enterprises. H
Slide 26: Important: You Must Read The Following Before Continuing
IMPORTANT: YOU MUST READ THE FOLLOWING BEFORE CONTINUING The information contained in this presentation has been prepared by Flow Capital Corp. (the "Company") and contains confidential information pertaining to the business, operations and assets of the Company and its subsidiaries. The information
Slide 27: Cautionary Note Regarding Forward-Looking Information
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION: This presentation contains certain "forward-looking information" and/or "forward-looking statements" within the meaning of applicable securities laws. Such forward-looking information and forward-looking statements are not representative of hist
Slide 28: Statutory Rights of Action
STATUTORY RIGHTS OF ACTION In certain circumstances, purchasers resident in certain provinces of Canada, are provided with a remedy for rescission or damages, or both, in addition to any other right they may have at law, where an offering memorandum and any amendment to it contains a misrepresentati
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