The moment of brilliance on Dragons’ Den that led Michele Romanow to start Clearbanc

The stars aligned for Michele Romanow, star of Dragons’ Den Canada and serial entrepreneur, for her to found Clearbanc. Maybe the other Dragons saw what she saw, but she was the only Dragon to actually do something about it.

How Michele became the youngest Dragon in the world

She began her career by launching a sustainable coffee shop at university (which is still going today) before launching a business in caviar, an industry she knew nothing about. Then the world slammed into the 2008 financial crisis - puncturing demand for an unnecessary luxury and the business failed. 

She spent the next few years winning with e-commerce startup after startup which landed her a seat as an investor on Canada’s Dragons’ Den. She was the youngest Dragon anywhere in the world… and this is where the seed of Clearbanc was formed.

The moment of brilliance on Dragons’ Den that changed everything

The Dragons see hundreds of pitches over a few weeks which allows them to see trends much clearer than they would in a typical period.

Michele was struck by how common a particular pitch was - ecommerce startups looking for an investment just to spend the money on advertising or inventory, despite their founders knowing that if they put in a certain amount they’ll get X-amount back, often multiples of 2 - 5. Not what equity investing was designed for (high risk, high reward). And not good for the founders to give up big slice of equity.

One day, Michele decided to try something different, live on the show...

“OK, I'm just going to throw this out there. Different deal type. Why don't I give you the same hundred thousand dollars you're looking for? But instead of taking five percent of your company, which I will own forever, I want five percent of your revenue.” 

And Clearbanc was born.

Clearbanc invest money for a % of revenue, not a % of the company

ecommerce companies have very predictable returns on advertising investment (and inventory). Clearbanc invests money in these companies, who then invest it in advertising, and Clearbanc gets paid back their money from these companies’ revenues plus a 6% - 12% fee.

Their decision-making is automatic and based on the numbers. You simply connect your accounts, like Shopify and Xero, and they can give you a decision in 20 minutes on borrowing £10k to £10m.

They back founders and companies who are often overlooked

Because their financing decisions are based purely on their numbers (founders don’t need to meet investors and pitch) they’ve backed 8 times more women than the venture capitalist average.

You don’t need any connections to get financing. You don’t need to have gone to a top university. Or participated in a famous accelerator program.

You just need a performing eCommerce company. 

To hear more of Michele’s unreal story, listen to the podcast here on your favourite podcast player.