Introducing The ARC - Agreement for Rolling Capital

A new venture deal construct to catalyze your next raise, with your first raise.

Antler in India

June 19, 2024
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The Indian founder and the ecosystem are evolving rather rapidly. We are seeing an uptick in funding levels across stages compared to last year. Indian entrepreneurs are going after hard, important problem statements from new-age ideas in known markets of Consumer, FinTech, and SaaS to building for emerging themes in AI, Health, Climate, Digital Public Infrastructure, and Web3. The need for a powerful global early-stage capital platform for founders has never been stronger. 

At Antler, we help the world’s premier talent build great technology companies at scale from the earliest stage, enabling them to go from 0 to 1 and setting them on a path to build billion-dollar startups. In India, we have already worked with over 450 individuals and early teams, with a diverse portfolio of 62 startups. 

We exist to support our founders from Day Zero to Greatness. As another step towards that mission, we are now launching the ARC to build a robust support structure for founders in the earliest stages of their journey. It is a first-of-its-kind venture deal construct designed for the Indian founders to deliver flexibility, more capital for execution, and a solid support platform to get to the next stage faster. 

What is ARC? 

The ARC stands for Agreement for Rolling Capital. It is the new standard deal for all startups invested in, via the Antler Residency in India. Through ARC, we commit to investing up to $500K in idea-stage companies, on a rolling basis. The first cheque is a $250K pre-seed investment, the team’s first institutional capital, often purely at a concept stage, without the requirement of a product or traction. Soon after that initial investment, Antler will also commit to investing an additional amount of up to $250K in the next 9 months, matching 50% of the funds raised by the startup from external accredited investors at a new valuation. The goal of ARC is to enable startups to speed from just an idea to $1M+ of capital raise within 9-12 months, and to do so in a founder-friendly construct when it comes to dilution.

How is ARC beneficial for founders?

The fundamental philosophy behind ARC was to design an instrument that enables exceptional founders to raise more capital upfront, allowing them to make rapid progress toward PMF while managing dilution and encouraging effective use of capital. We have seen a strong correlation between increased and faster early-stage capital and the path to Series A. Bringing more helpful parties around the table, the ARC allows founders to capitalize their companies with $1M within the first year. This drives strong momentum and creates the right dynamics for additional capital at the right valuation.

The Math 

Consider an individual or early team that joins the Residency. Existing teams with clarity get weekly hands-on office hours to stress-test venture scalability of the idea, and a decision within 4 weeks. As for solo founders, after finding a co-founder and showcasing a fast execution trajectory, they get an opportunity to pitch to Antler India’s Investment Committee in 8-12 weeks. Upon investment confirmation, Antler India will invest $250K for 9% of the company on a fully diluted basis (at a $2.7M post-money valuation). The founders can exercise the ARC within 9 months of the term sheet signing to raise additional capital. In a typical scenario, founders can raise additional capital of $750K comprising $500K from external investors plus $250K from Antler via ARC at the new valuation, totaling $1M in the first year of the company’s journey. In essence, the ARC is both a catalyst and a force multiplier on your subsequent fundraising efforts.

Some other important details on ARC:

  • ARC can be exercised on a rolling basis for any external capital (excluding friends and family and down-rounds) raised within 9 months. For example, if the founders raise $200K from a micro-VC or a syndicate, Antler will invest an additional $100K via the ARC, taking the total amount raised to $550K. With a cap of $250K, ARC can be exercised more than once within the 9 months. 
  • The first cheque of $250K is dilutive (unlike an MFN construct) when the subsequent capital is raised at the new valuation.
  • We also seek to be flexible in the fundraising instrument used in conjunction with the ARC (CCPS / convertible / SAFE, etc.)
  • In addition to ARC, Antler will seek to support the company in subsequent rounds by retaining its pro-rata obligations. Not only in the Seed and Series A, we have consistently backed our founders by providing ongoing support and participating in their later funding rounds (post Series A) through the $75M Antler India fund plus our $285M Global Continuity Fund (Antler Elevate).

The best platform for launch and scaling 

Antler portfolio companies enjoy the benefits of joining a platform designed to support the founders as they scale to the next round. ARC is another weapon to turbocharge the support we already provide founders. 

  • Antler Forward is a dedicated 12-week boot camp to drive post-investment execution intensity. Portfolio companies participate in Antler Forward to access industry-best advisors, company-specific workshops, and office hours with experts – all designed to accelerate toward early PMF. 
  • Antler Spotlight offers a platform for founders to showcase their companies and connect with hundreds of potential top-tier investors. 
  • We also support portfolio companies with perks totaling $1M+ in potential value. 

With constructs like ARC, Forward, and Spotlight, apart from support from our dedicated portfolio team, as well as a vast global Antler network to tap into from Day Zero, we are backing exceptional Indian founders with not just capital but also a platform that increases the odds of success from Day Zero. 

Globally, over 8,000 founders believe the Residency to be the best platform to launch a startup, whether it be stress-testing venture scalability, validating an idea faster, or completing the founding team. We are looking for solo founders and early teams committed to building game-changing venture scalable startups.

Join Antler to validate your idea, build your team, and access capital to launch and scale your company. Applications are open for early teams throughout the year for rolling intake and for the cohort starting August 2024 for individuals. The last date to apply is 31 July 2024.

Antler in India

Antler invests in India's most extraordinary individuals from Day Zero to Greatness. Join Antler to validate your idea, build your team and access capital to launch and scale your company.

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