Here are a few simple archetypes of structures, Borrowers such as Credit Funds and Fintechs could design and propose to the Goldfinch community.
While there are many use cases for the Goldfinch ecosystem (see below), there are two universal questions which should be carefully considered prior to approaching the Goldfinch community.
"How will the transaction security which typically can be assigned to a single party in a transaction be perfected, and accessible to investors?"
"Who at the outset of pool close would be the primary delegate acting on the best interest of the other Backers when it comes to managing communications"
There are a multitude of use cases Credit Funds could deploy capital raised through the Goldfinch ecosystem into. The following illustrates just a few:
Raise parri-passu or senior capital into your fund (or fund like) structure to then on-lend
Co-invest into a new prospective borrower via raising new money capital
Co-invest into an exiting borrower via raising new money capital (i.e. fill uncommitted allocation)
Refinance existing investments via sub participate exiting investments at a different cost of capital
Checklist of Features Credit Funds Could Incorporate
The following is a potential "plug and play" structure speaking to the key universal structural considerations.
Checklist of Features Fintechs Could Incorporate
You can learn more about Borrowers and the role they play in the protocol in the Borrowers section of the Protocol Mechanics documentation.
Borrowers are able to raise unitranche loan structure allowing them to pay a single interest rate with all interest and principal payments made into a single portal
Borrowers have the ability to propose any investments based on any terms, and transaction structures to the Goldfinch community
The Goldfinch ecosystem was built to be generalized allowing for many Borrower archetypes that could raise capital through it. Some examples Borrower types include, but are not limited to:
Credit Funds
Fintechs
Below are some articles highlighting past borrowers on the protocol:
Almavest - August 2021
Fund: Almavest
Background: Almavest is a credit fund that provides debt capital to fintech lenders, and carbon reduction project developers globally. In August 2021, Almavest launched a Borrower Pool on the protocol to raise ~$2M. The purpose of this Borrower Pool was to fund a basket of fintech lenders in the Global South.
Process: Over one week, the Almavest team underwent due diligence by the Backers, presenting them with a dataroom, and being on hand to answer questions posed by the Backers. This included a live video Q&A session you can find here.
Once the due diligence period was done, the pool opened on August 31st for funding.
Outcome: The junior portion of the Borrower Pool was filled by 72 Backers, who provided $540,826. The Senior Pool provided an additional $1,622,478 (3x the Backer contribution) to complete the $2,163,304 raise. This entire process was completed in 30 minutes. Below is a screenshot from the Almavest Borrower Pool. You can find the live page here.
Announce Investment to Community
Announce deal to backers with key timelines
Deal Proposed With Terms
Surface NDA, Dataroom, and Summary of Terms Backers are expected to review
Backers start submitting questions
Create a dedicated channel to accept and respond to questions through
Q&A with Backers
Create a curated AMA session
Pool opens for funding
Confirm date you wish to open the pool for Backer funding
Deal funded & finalized
Drawdown capital into wallet, and wire to crypto business account to be converted to fiat ccy
Post final docs up in dataroom for final selected investors
