Why Revenue-Based Lending Beats Banks for SaaS - Jannis Koehn (Float)

Recurring revenue may look stable on paper, but traditional banks either don't understand it or take ten months to lend against it. Float's Jannis Koehn explains why that gap exists—and how revenue-based financing is filling it for European tech companies that are too early for banks but don't want to dilute equity.

The conversation unpacks the mechanics of revenue-based lending: term loans sized as a percentage of ARR, underwritten on metrics like net retention and churn, and structured as flexible credit facilities rather than lump-sum drawdowns. Koehn contrasts this with venture debt (later-stage, warrant-heavy, slower) and traditional bank loans (cheap but restrictive, often blocked by Basel III capital requirements for loss-making businesses). He also reveals how Float tokenized its mezzanine tranche on-chain to solve a growth constraint when equity markets dried up in 2023.

Key discussion points:

🏦 Why banks can't finance recurring-revenue businesses: regulatory capital requirements make loss-making companies prohibitively expensive to underwrite, even when cash flows are predictable 📊 Revenue quality trumps revenue size: Float assesses net dollar retention, customer concentration, churn, and CAC payback to size credit lines at 30–40% of ARR ⚖️ The equity vs. debt trade-off: equity makes sense for winner-takes-all markets with huge TAMs; debt suits capital-efficient businesses where founders want to retain control and avoid liquidation preferences 🔗 Tokenized private debt as a capital solution: Float issued blockchain-based mezzanine notes through a Swiss bank to reduce its equity requirement from 18% to 5% per loan 🚫 When Float says no: businesses burning more than 50% of MRR per month are "still an equity case," regardless of product quality

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About Jannis Koehn [co-Founder of FLOAT]:Co-founder of FLOAT, a company that provides revenue-based financing to European software businesses as an alternative to traditional bank loans and equity raises. Before founding FLOAT, he ran a different kind of company, an experience that gave him firsthand insight into how banks fund growing software companies. He built FLOAT with a co-founder and has since scaled the business to fund companies across Europe, competing with players like Capchase and re:cap in a market where non-dilutive capital has grown from a niche idea into a category worth billions.About Aulium:Aulium is a video show exploring Innovation and Private Capital, hosted by Thomas Viguier.Connect with us:➡ Aulium on LinkedIn: https://www.linkedin.com/company/aulium➡ Thomas Viguier: https://www.linkedin.com/in/tviguier/