Novel Capital

# Novel Capital: Non-Dilutive Funding for B2B SaaS

High-Level Overview

Novel Capital is a revenue-based financing (RBF) platform that provides non-dilutive capital to B2B SaaS and technology companies.[1][4] The company's mission centers on empowering founders to build the businesses they want without surrendering equity or board control—a direct alternative to traditional venture capital.[3] Novel specializes in serving early-stage and growth-phase software companies with recurring revenue models, offering flexible funding solutions that align with how SaaS businesses actually operate.[1][4]

The firm operates in a critical gap within the startup funding ecosystem. While traditional VC takes 6+ months and demands equity, Novel delivers capital in 30 days or less with repayment terms tied to revenue performance rather than dilution.[2][4] This positioning has resonated with founders who want growth capital without the constraints of institutional investors, making Novel a bridge between bootstrapped operations and venture-backed scaling.

Origin Story

Novel Capital was founded in 2017 by Keith Harrington, a former VC and Kauffman fellow, and Carlos Antequera, the former CEO of education technology company Netchemia (acquired by PeopleAdmin in 2015).[2] The co-founders drew on their dual experience as both entrepreneurs and investors to identify an underserved market: high-potential startups that didn't fit the traditional VC mold.

The company closed its first fund, Novel Growth Partners Fund I, at over $12 million in 2019, fully deploying capital across 50+ portfolio companies by early 2022.[2] A pivotal evolution came in 2022, when Novel shifted from a traditional GP/LP fund structure to a fintech platform model, closing $115 million in equity and debt financing from investors including Community Investment Management, Nueterra Capital, Tenzing.vc, Ulu Ventures, and MatterScale Ventures.[2] This transition enabled the firm to make larger, more frequent revenue-based investments without the constraints of raising discrete funds from limited partners.

Core Differentiators

• Speed: Novel delivers funding in 30 days or less, compared to the 6+ months typical for venture capital.[2][4]

• Non-dilutive structure: Companies access up to $5 million without giving up equity, warrants, or board seats.[4] Repayment is tied to revenue performance, not fixed obligations.

• Flexible repayment terms: Founders choose 3 to 24-month repayment schedules aligned with their cash flow cycles, and only pay interest on capital actually drawn.[4]

• Revenue-aware underwriting: Novel's underwriting model is purpose-built for SaaS and recurring revenue businesses, crediting founders for subscription, services, and transaction-based revenue streams.[4]

• Performance-based scaling: As revenue grows, companies unlock additional funding capacity without higher costs or restrictive terms—the firm rewards success rather than penalizing it.[4]

• Founder-first positioning: Leadership has walked both sides of the business as founders and investors, creating empathy-driven decision-making that contrasts with traditional institutional capital.[3]

Role in the Broader Tech Landscape

Novel Capital sits at the intersection of two major trends reshaping startup finance. First, the democratization of growth capital has accelerated as founders increasingly reject the equity-for-capital bargain that defined early-stage funding for decades. Second, the maturation of SaaS as a business model has created a large cohort of companies with predictable, recurring revenue—exactly the profile that traditional VC struggles to serve efficiently.

The timing is critical. As venture capital has consolidated around mega-rounds and later-stage companies, a funding gap has widened for companies that are too mature for seed rounds but not yet ready for Series A on traditional VC terms. Novel fills this gap by treating recurring revenue as a legitimate underwriting signal, effectively extending the runway for founders to hit growth milestones on their own timeline.[2][4]

Beyond individual transactions, Novel's platform model influences the broader ecosystem by legitimizing revenue-based financing as a mainstream capital source. By moving from a fund structure to a fintech platform, Novel demonstrates that RBF can scale to institutional levels, potentially shifting how the startup community thinks about capital allocation and founder autonomy.

Quick Take & Future Outlook

Novel Capital is well-positioned to capture an expanding market as SaaS companies increasingly seek alternatives to dilutive equity financing. The firm's shift to a platform model in 2022 signals confidence in the RBF thesis and suggests ambitions to become a primary capital source for B2B tech founders rather than a niche alternative.

The key question ahead is whether Novel can maintain its founder-friendly positioning while scaling to institutional scale. As the firm grows its employee base (from 2 founders to 16 by 2022) and deploys larger capital pools, the risk is that operational efficiency and risk management could erode the empathy-driven culture that differentiates it.[2] However, if Novel succeeds in balancing scale with founder focus, it could reshape how growth-stage SaaS companies think about capital—moving from "How much equity do I need to give up?" to "How much revenue can I commit to repay?"