Austin Business Journal – by Christopher Calnan , Staff Writer
Don’t call them venture capitalists. Or even angel investors. But make no mistake: Dan Keelan and Patrick Drew have cold, hard cash to lend to promising startups.
The two veteran entrepreneurs have launched an Austin-based investment firm that provides capital in exchange for a share of revenue rather than the typical equity stake in companies.
Keelan’s and Drew’s Next Step Capital Partners will invest up to $500,000 in Texas-based companies. The duo won’t say exactly how much capital is at their fingertips, but they’re clear about the fact that they’re using a revenue-sharing arrangement designed to give entrepreneurs capital without giving up ownership. The nascent venture, which is neither a venture capital firm nor an angel investor group, plans to make less risky investments that yield solid returns instead of the high risk and high returns generated with the conventional VC approach, Keelan said.
Next Step will offer to take a share of revenue, instead of equity, from promising ventures.
By American-Statesman Staff
Two Austin investors have started a new investment firm that will back early-stage companies in exchange for a share of future revenue.
Next Step Capital Partners will invest in companies seeking between $100,000 to $500,000 to expand sales, launch new products or carry out other growth plans, said founders Dan Keelan and Patrick Drew.
Unlike venture capitalists or angel investors, Next Step will not take an equity stake in the company in exchange for the investment. Keelan said Next Step’s investment horizon is one to three years, and returns will be capped at a negotiated amount.