Dallas’ Cypress Growth Capital, a royalty-based growth capital investor focused on software and technology-enabled service companies, has made the first investment out of its newest $50 million fund in a local company.
Cypress announced an investment of $2.8 million in non-dilutive growth funding in Dallas-based Vision2 Systems, an online giving platform designed for churches.
It’s a “fast-growing company led by industry veterans,” said Cypress Managing Director Vik Thapar.
The startup’s co-founders, Carl Tierney (CTO) and Paul Baldwin (CEO), both have vast experience in the digital payments space.
Shale Gulbas, a principal at Cypress Growth Capital, told Dallas Innovates two driving factors attracted the investment firm to Vision2: “the leadership team and their commitment to the mission.”
Founders Tierney and Baldwin launched Vision2 about a decade ago to provide ‘effective stewardship’ for churches that mirrored in-person engagement. The overall goal is increasing donations, while at the same time establishing donor trust with a personalized, customizable service.
For churches of any size, Vision2’s technology allows for web, text, or mobile giving, along with integration into management and accounting systems. Vision2 has certified Level 1 PCI compliance.
It’s a much-needed service, especially in light of COVID-19 and the subsequent rise in digital services.
Gulbas says the pandemic further highlighted the need for institutions, like churches, to adopt “a more flexible and modern donation platform.” That’s evermore important as patrons began—and continue to—worship from the safety and comfort of their own homes.
Vision2 will benefit from a broader reach, Cypress says. The capital infusion will be used for sales expansion, as well as enhancements to the customer experience and product.
Cypress’ equity-preserving funding approach
Tierney and Baldwin say they chose the Dallas-based firm because of its appealing, non-dilutive financing approach—and experience in building tech-enabled services companies.
Cypress’ $50 million fund, which was oversubscribed, is Cypress’ fourth royalty fund. But, Gulbas says, the team’s focus and mission have remained the same since the firm’s inception. “To provide flexible, non-dilutive growth capital to growing B2B technology companies both regionally and nationally.”
Cypress Growth Capital offers an alternative to traditional equity and debt financing; a vital option for a company like Vision2 that wants to preserve their equity as they increase in value with growth.
With a royalty-based methodology, Cypress helps to preserve a fast-growing entrepreneur’s equity—and control.
A “patient form of capital”
“Rather than giving up a significant ownership percentage of the business, companies take our capital and in return, pay us back via a fixed monthly percentage of revenue (hence the name ‘royalty’),” Gulbas says. “In short, Cypress offers a solution that allows entrepreneurs to accelerate growth while preserving their equity and control.”
The firm calls it “a flexible, patient form of capital.”
The Cypress team also offers its extensive experience as business operators to portfolio companies. According to Gulbas, that’s what drew many founders to choosing the firm as a trusted capital partner.
Since 2011, Cypress has made 42 investments totaling more than $100 million, typically investing in four to six companies a year. Of that, $30 million has gone to companies based in Texas.
When asked about the team’s plans for the rest of the year, Gulbas says Cypress is always looking to support talented and motivated entrepreneurs in their next stage of growth.
Get on the list.
Dallas Innovates, every day.
Sign up to keep your eye on what’s new and next in Dallas-Fort Worth, every day.