On October 18, JPalmer Collective (JPC), an asset-based lending company committed to funding high-growth, women-led and natural products companies, announced a series of transactions raising $72 million in gross proceeds. The raise will accelerate JPC’s growth trajectory and fund new loans to JPC borrower clients. 

Here we sit down with Jennifer Palmer, CEO and founder of JPalmer Collective, to learn more about the unique capital raise, which had a strategic combination of financing close simultaneously. 

TSL: Congrats on the capital raise! What motivated JPC to pursue this capital raise now, and how did you decide on the mix of financing sources? 

Jennifer Palmer: Thank you! The capital raise will allow us to expand our portfolio and support innovative companies that are poised to make a significant impact in their industries, as well as continue our commitment to making financing more inclusive and meaningful. Any strong growing business should have a good ratio between debt and equity on their balance sheet. We educate our clients and our prospects that equity is the most expensive form of financing, and our lines of credit are meant to empower those companies to grow without diluting themselves unnecessarily. As a business ourselves, we're no different than them. We wanted to bring in more equity to support the senior bank line, and we did, but we didn't want to bring in too much as we didn't want to dilute our shareholders unnecessarily. So, bringing in fresh capital coupled with a mezzanine partner, today, further bolsters our balance sheet and our borrowing ability without dilution. 

How did the decision to bring in external funding align with your long-term vision for the company? 

Our plan is to continue to grow our book and our borrowing power. We plan to start a syndication process to upsize our bank facility by another $80 million, and this is possible due to the capital we brought in through the raise, our flexible debt partners, and then also our plan to keep the profits in the company. As we grow, we can continue to focus on helping other companies grow as well. 

How will the new funds be allocated across your portfolio? Is the main commitment and focus on financing women-lead businesses and companies focused on sustainability? 

We have aggressive expansion goals that are smart and focus on growing our business responsibly. We will continue our commitment to women-funded and women-led companies and those companies that prioritize sustainability and inclusivity. Our goal is to make financing more inclusive. We continue to see it be challenging for women to raise money. Still today, a woman's success rate when raising capital is 2% without a man. With a man in the room, it soars above 20%. So, we keep saying we want change, but we must be intentional about creating it. We see women are searching for investors and at JPalmer Collective, we're serious about helping female-owned and female-led businesses find that money and access the financing that they need in order to grow their business. 

What factors led you to choose Texas Capital Bank and the institutional alternative asset manager? 

This business is all about the people and we have the best clients and employees. So, we also wanted the best team of investors and lenders.We were super selective about who we partnered with, especially when it came to fresh equity. The investors we selected are long-term relationships with people we know and trust. I have always said that debt is like dating and marriage is like equity. With debt, if you don't like your lender,you can part ways through a refinance. But with equity, you are inviting someone into your home, and you have to be selective when choosing your investors because unwinding that relationship, just like a marriage, is expensive, it is emotional, and it's complicated. So, we were highly selectiveabout the investors we brought in. But we were also very selective about the debt side, too. We look at lending as a relationship as well. We have very close relationships with our clients, and I've always had very close relationships with my bankers. Because of that amazing experience, coupled with our unique mission of making financing more inclusive, we had to be very selective when choosing our mezzanine team as well as the senior lender.

Beside Texas Capital Bank’s flexibility and commitment to our vision, I have known Steven Katz, managing director, Commercial Lender Finance Texas Capital Securities, for a long time. He is a friend, a trusted partner and well-known and respected throughout the industry.  He introduced us to Richard Ginn in TCB’s investment banking group and when we stepped back and saw the team we would be working with we knewTexas Capital was the obvious choice.

Were there any challenges during the fundraising process? If so, how did you overcome them?  

We were highly selective in our partner choice. Once we decided on this team, we knew immediately that we made the right decision. We have great synergy with the team and the process with them was incredibly smooth, streamlined and collaborative. That was despite this being a very complicated deal. For anyone who ever has gone through putting in place a senior line of credit, a mezzanine line of credit, or bringing in equity, you can appreciate how much work and time goes into it. This was a unique situation because we were running three processes at the same time and all three tranches of capital closed simultaneously. Having my long-term friend, mentor and advisor, Miriam Cohen, and her team at Loeb and Loeb, made it manageable. But the process wasn't as easy prior to finding our current capital partners. Some have said that this is the hardest market to raise capital in 25 years. During this journey, I often felt like Goldilocks. We talked to a lot of different capital providers since launching, and we had some interesting conversations, but many times our need was either too big or too small, and being in the finance industry, we all know that you also don't want to have too much money on your balance sheet. It may sound counterintuitive outside the industry, but within our industry, we know that this is problematic because you end up paying for money that you're not ready to deploy. I have witnessed other companies in this situation, and they are left feeling pressure from their shareholders, which leads to lending just for growth's sake and not lending on the best opportunities.  

So, we needed a partner that was just right. We are in this for the long haul, and we're looking to continue to grow, but responsibly. It was important to us that we found a flexible solution that is on board with our growth trajectory and our underlying credit profile. That is why Texas Capital Bank was such a perfect choice for us. 

Another difficulty in the process was a lot of the capital providers did not see our vision. They didn't believe that there was enough female-owned and female-led companies out there that could make up 51% of our portfolio. 

But our current capital providers recognize this opportunity. So, in many ways, it's been a challenging process, but it's also been a rewarding process. We now know what our clients face when it comes to raising capital, which makes us better partners, and it also underscores our resiliency.  

Can you share any metrics or success stories from your portfolio that illustrate JPC's impact so far? 

Since founding the company in March 2023, we underwrote more than 100 deals, which totals more than $500 million since inception. We've been selective about the companies we work with. Still, we've deployed more than $100 million across the strategic selection of women-funded consumer companies, primarily in the natural product space. Our returns are 55% more than anticipated, and we have remained committed to keeping our portfolio of at least 51% women-owned, women-led businesses.  

With the additional $72 million in funding, what are some of JPalmer Collective’s goals over the next year? 

The raise will allow us to expand our portfolio and remain diversified. We have several significant deals pending. We also have an aggressive expansion goal that is smart and focused on growing our business. We pride ourselves on offering flexible financing, and we're proof as a lender and now also as a borrower, that flexible lenders do exist. We're really excited that we can now help even more fast-growing companies achieve their business dreams, and we're eager to fuel their success.