Hill Capital offers alternative path to funding

For many startups, securing growth capital is the biggest hurdle. The Kauffman Foundation reports that most entrepreneurs rely on personal and family savings because bank loans and venture capital are hard to obtain, with only 16.5% securing loans from financial institutions at startup.

Hill Capital Corporation aims to bridge that gap, offering funding to revenue-generating companies that don’t fit the mold for venture capital or traditional bank financing.

The Minnesota-based firm partners with founders who want to expand their businesses without giving up control. Hill Capital’s funding model is built around its proprietary Equity Based Note, which blends elements of equity and debt financing. The structure allows the firm to take “equity-like risk” while enabling founders to retain ownership and maintain flexibility in deciding their company’s future.

“Our goal is to give founders optionality,” said Kiley Shanks, a community relations associate with Hill Capital. “We want them to be able to decide if they want to sell, grow, pass the business to the next generation — whatever aligns with their vision.”

A fit for growing, profitable companies
Hill Capital typically works with founder-led businesses that have at least $250,000 in recurring annual revenue and a history of positive cash flow. The firm looks for companies with the potential to grow more than 20% annually and a willingness to leverage its network of advisors.

While industry agnostic, Hill Capital often funds tech and tech-enabled small to mid-sized companies, including those in industrial goods and services, media and healthcare. Investments range from $100,000 to $250,000 initially, with the potential to scale to $1 million as companies grow. Equity stakes are typically under 10%.

Beyond capital: connections and support
In addition to funding, Hill Capital connects portfolio companies with a network of experienced professionals who can assist with strategic growth, financial planning and operational challenges. The firm’s geographic focus covers the Midwest.

For entrepreneurs, the combination of capital and guidance can provide a bridge between bootstrapping and larger-scale financing. “We’re trying to fill a gap that a lot of founders fall into,” Shanks said. “Not every great business is the next unicorn, but that doesn’t mean it can’t scale and create lasting value.”

Hill Capital is now deploying its second fund, totaling $25 million, and welcomes inquiries from growth-minded founders. To learn more about Hill Capital Corporation, connect with them here.

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