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While plenty of startup brands are being built on the backs of venture capital funding, an increasing number are looking to buck the stereotype of bloated DTC brand in favor of a scrappier path.
One of the most interesting side effects of this is new ways of funding. Clearbanc is one of them. The company, which late last week launched a new product, called “20-minute term sheet,” is now looking to back 2,000 businesses with $1 billion in capital by the end of the year. How Clearbanc pick those companies: It looks at ad spending, marketing and revenue data, and based on that, invests between $10,000 and $10 million in e-commerce companies. Then, it sends the money, and keeps investing. The only catch: Keep the return on ad spend and other unit economics in the green. Clearbanc takes some percentage of a company’s revenue every month.