Raising money for your startup can be brutally difficult.
Do you give up part of your company in the form of equity? You may find that the valuation of your company that an investor will agree to is far lower than you expected, which means that you’ll be giving away a large percentage of your company.
Or do you get a loan and take on debt which be an albatross around your neck whether or not you’re making any money?
There is an alternative, which may or may not work for you – Revenue Share.
With a revenue share deal, you agree on a timeframe, a cap, and a percentage of your revenue that you’ll use to repay the funder. The advantages are that you don’t give away any shares in your company, and you don’t have to pay anything if you don’t make any revenue in a given month. That’s not to say that you could always easily devote part of your revenues to paying back the funder, but for a growing number of companies, it’s a much easier alternative.
If you can get capital for your company without negotiating the valuation of your company or having an inflexible payment schedule, it might be the easiest money you can get – next to, of course, selling your product or service.
Here are three funders that provide revenue share deals:
Next Step Capital Partners