Stratos Borrower Profile

Borrow name: Stratos

Stratos empowers founders to achieve their vision through rigorous engagement, strategic guidance, and capital. Stratos has the expertise and a five year track record of advising and financing technology and technology enabled businesses. Stratos’ Founding Partner, Rennick Palley, is a Founding Member of the Goldfinch team so we are in a unique position to work with Goldfinch and capitalize on the unique capabilities this new technology platform has to offer. In his position as a Founding Member of the Goldfinch team, Rennick has helped design the Goldfinch protocol and guide Goldfinch’s lending strategy since the company began operations.

Stratos announced a $20M Borrower Pool on Monday, February 7 2022. Additional information can be found here.

The Stratos dataroom opened on Tuesday, February 8 2022 and can be accessed here. The Pool will open for funding at 8AM PST on Friday, February 11 2022.

Key Highlights:

  • Rennick is a founding team member of Warbler Labs and helped design and set strategy for the Goldfinch protocol;
  • Stratos has never had a late payment, missed payment, or default in 5 years (60 months) of operation;
  • Since inception in 2016, the Stratos Evergreen Structured Credit Fund (“SCF”), our longest running credit focused strategy, has generated gross annualized total returns of 18.95%;
  • Of the 21 companies that Stratos has lent to since inception, each has grown considerably, with multiple unicorns created in partnership with Stratos credit facilities;
  • Stratos has not had a business fail during or after financing since inception in 2016.
  • Stratos is targeting to fund at least $100 million in opportunities on the Goldfinch protocol over the next 2 years, across 4 or more deals per year.

Who we are: Key credit team members and their backgrounds:

  • Rennick Palley | Founding Partner – Prior to founding Stratos in 2016, Rennick held the position of Research Associate at Sanders Capital, a $70 billion global equity manager founded by Lewis Sanders, formerly Chairman & CEO of AllianceBernstein L.P. and Chairman and CEO of Sanford C. Bernstein & Co., Inc. Rennick is also a founding team member of Goldfinch. Rennick holds a B.S. in Applied Mathematics and a B.S. in Mechanical Engineering, both from Southern Methodist University, and a Masters in Quantitative Finance from the Massachusetts Institute of Technology.

  • Jordan Teramo | Partner – Jordan has over 25 years of experience in leveraged capital structure investing and portfolio management. He was most recently the lead portfolio manager for CIFC’s long/short credit funds and a member of the Investment Committee. Prior to CIFC, Jordan launched Anandar Capital where he served as President, Co- Founder and Head of Credit as a spin-out from Magnetar Capital. Jordan was a founding partner of Brigade Capital Management where he spent five years as assets grew from $125 million to $11 billion. Jordan holds a B.S. in Economics from Cornell University.

  • Matt Burns | Senior Credit Analyst – Prior to joining Stratos in May 2021, Matt spent seven years at Goldman Sachs. Matt held the position of Associate in the Private Bank Lending group in Dallas, Texas, and their Alternative Capital Solutions and Restructuring group in New York City. Matt holds a B.S. degree in Applied Economics and Management from Cornell University.

  • Miles Harrell | Partner – Prior to joining Stratos in 2020, Miles served as Portfolio Manager and Director of Equity Research at Brookmont Capital, a top performing US equity manager with nearly $1 billion in assets under management. While at Brookmont, the investment portfolio Miles managed was top decile in its Morningstar Category out of over 50 comparable strategies since its inception in 2015. Miles holds a B.S. in Economics and Finance from Southern Methodist University.

  • Amanda Dragomer | Investor Relations & Chief of Staff – Prior to joining Stratos in March 2021, Amanda was an Analyst at JP Morgan in the Private Bank assisting ultra-high net worth clients across investing, lending, banking, and wealth planning. Amanda holds a degree from the University of Tampa.

  • Kitae Kim | Data Scientist – Prior to joining Stratos in May 2021, Kitae was a data analyst at Iowa Baseball and a research assistant at Lawrence Livermore National Laboratories, where he focused on particle physics research. Kitae holds a degree in Physics and Mathematics from Pacific Union College and a Masters in Statistics from University of Iowa.

What we do: Investment Focus
Stratos’ credit roots are in providing highly structured financing solutions to technology and technology enabled businesses largely in the United States. We pride ourselves in developing and nurturing strong relationships with company founders. Stratos tailors creative financing solutions that help companies grow while providing excellent, consistent returns for our investors with strong downside protection.

What we’ve accomplished: Track Record
Stratos credit has invested over $250 million dollars over the past 4 years across 21 investments. We’ve evaluated over 250 companies in that same time period. The Stratos representative credit fund, our Evergreen Structured Credit Fund (“SCF”), has generated an annualized Gross and Net CASH Return of 16.74% and 12.53%, respectively, since inception in 2016, and a Net CASH Return of 15.44% in 2021.

Additionally, SCF has generated an annualized Gross and Net TOTAL Return of 18.95% and 14.41%, respectively, since inception and a Net TOTAL Return of 18.11% in 2021.

Over our 5+ years of lending to venture backed companies since inception, Stratos has never had a late monthly interest payment, missed payment, or default on any of its loans. Additionally, every company to whom Stratos has provided a credit facility has grown considerably, with multiple companies receiving $1 billion+ valuations after the initial Stratos credit investment.

How we do it: Sourcing Strategy & Investment Process
Our sourcing strategy is primarily driven by introductions from founders that we’ve worked with in prior transactions, as well our strong network of venture capital equity investors who recognize the benefits a Stratos credit facility can provide to their portfolio companies. Following an initial introduction from these sources, Stratos completes extensive due diligence to achieve a complete understanding of the company’s business model and future growth opportunities. Significant time is also spent on transaction structuring to ensure our investors are protected in any potential future downside scenarios. Stratos is unique in that our portfolio companies view us as “value add” partners that create mutual opportunities for additional company growth and equity upside.

What should Backers expect? Ongoing Reporting & Communication
We receive monthly financial and covenant compliance reporting from all of our portfolio companies and Stratos will pass on that reporting to all Backers, to the extent the underlying Stratos loan is collateral for the outstanding Goldfinch loan.

Why is Stratos raising money via Goldfinch?
Stratos is excited to raise capital through Goldfinch because we have been involved in the creation of Goldfinch from when it was just an idea. Our experience raising capital, particularly for emerging markets opportunities (which we have experience in from early in the life of SCF), made us realize that there must be a better way.

When Rennick met Mike and Blake and heard about their plans for Goldfinch, he was immediately intrigued and started to help, as he was familiar with crypto and DeFi as a seed investor in Compound.Finance as well as a number of other well known Web3 projects through Stratos’ Web3 focused investment funds, so he was aware of the potential for a protocol like Goldfinch.

Furthermore, its clear that the DeFi community needs a new source of yield, sourced from real-world borrowers - sustainably high yields without resorting to short-term liquidity mining rewards. Goldfinch is the key piece in giving the community what it wants.

See Rennick’s article explaining his view of Goldfinch and the impact it can make here.

Since the early days, Stratos has planned to use Goldfinch as a source of funding for its credit operations - so we are excited to see that vision coming to life, and help bring great opportunities to the Goldfinch community.

What will Stratos bring to the Goldfinch community? What are your plans for working with Goldfinch over the next year?

  • Stratos is targeting to fund at least $100 million in opportunities on the Goldfinch protocol over the next 2 years, across 4 or more deals per year.
  • Stratos will also opportunistically participate as a Senior Pool Liquidity Provider and / or as a Backer Tranche investor, helping to drive liquidity in to the protocol through its existing fund vehicles.
  • Rennick will continue to assist in his capacity at Warbler Labs, including most importantly helping to cultivate an active community of borrowers and sophisticated lead backers.
  • The Stratos credit team will be active in evaluating Backer Tranches by commenting in the community discussion forums (Discord, Telegram, AMAs, etc.), thereby helping to drive a high standard of underwriting professionalism for the Goldfinch community.

Additional Resources:

Stratos Goldfinch Financing Dataroom:

Stratos Goldfinch Investor Presentation: