Takeaways from my recent interview on ATLalts with Mike Shum of Cascade
Fast growing fintech is modernizing how companies access institutional debt
Listen to the interview on ATLalts
Recently on my podcast ATLalts I had the opportunity to interview Mike Shum, Co-Founder and CEO of Cascade. The company is simplifying private institutional debt. Borrowers who work with Cascade can streamline cumbersome and lengthy lending processes and leverage the data platform to streamline the entire deal process for all parties of what is often a very time-consuming and complicated transaction
Price and size are not the primary concerns in debt financing when you are an earlier-stage borrower; factors like leverage and flexibility are arguably more important. If you start originating in size you will get better terms.
Interest rate is just one component of a term sheet; founders should consider other factors like upfront fees and unused capital fees. Calculate your all-in #.
Eligibility criteria and concentration limits are crucial aspects of debt deals that often get overlooked. See point #1.
Accurate and real-time monitoring and compliance are essential for successful debt deals. Once the deal is closed you aren’t done - reporting is critical.
Cascade provides solutions for asset managers in the private credit space as well and and aims to streamline the debt management process for lenders too.
I think everyone agrees the private credit market is growing rapidly and will continue to do so for years to come. Cascade envisions becoming a one-stop shop for managing all aspects of the debt stack and supporting all parties involved (including lawyers, banks, and others who support these deals).
Today the company is focused in the asset-backed loan space but over time it wants to service the entire debt stack for companies (think Carta for debt). Eventually the borrower may want to do forward flow, bring in a bank partner, do an ABS deal (securitization) or a bond offering. Some will pursue a mix and Cascade wants to be at the center of it all in the future.
While Mike’s Co-Founder Kyle Meade unfortunately wasn’t part of the interview, it was cool to hear how they met and the backstory which led them to starting Cascade. I have had the chance to meet two fintechs building platforms to support borrowers accessing the institutional debt market (the other is Finley). I am hoping to be able to continue identifying additional software companies and service providers (and their leadership) who are looking to bring solutions to this multi-trillion dollar market. It will be interesting to see the Cascade platform evolve as the private credit markets continue to grow. Hopefully Cascade and others are able to help more originators organize their data, present their loan tapes more cleanly, and enhance efficiency in getting quality term sheets. Early-stage specfin and fintech lenders without experienced in-house personnel often find it very time consuming to navigate this opaque market. Identifying a partner like Cascade to help you manage your data, organize workflows, and streamline the very complicated debt raise process is a wise move as you look to scale up.