Introduction to Revenue Capital (Video)

The Funding Black Hole: A Call for Innovation

There is a funding black hole.  It sucks in and destroys the gross majority of startups worldwide.  It may have even frustrated more innovation, economic development and human progress than all of history’s wars, diseases and natural disasters combined.  This “black hole” is the global gap in startup funding. Read more of this post

Exit Junkies: When Equity Stifles Innovation

Startups and venture investors share a problem; “exit dependence.”  Equity investors can’t sustainably invest in startups without exits, because exits are how those investors get paid.  They must be able to sell their equity (i.e. stock) at a higher value through a merger/acquisition or IPO.  No exit, no returns.  There must be a “liquidation event.”  Startup funding is hooked on exits. Read more of this post

Revenue-Based Finance: truly different, but when is it better?

Revenue-Based Finance (RBF) is a model for funding businesses by “selling” a percentage of future revenues.

RBF is unlike debt, which typically is repaid on a strict schedule with fixed payments, and unlike equity, which is a “residual” claim usually only realized (for small, private companies) when a company is sold or wound down.  RBF investments pay off more quickly than equity (good for the investor) but are more inherently flexible than debt, because the payments required float up and down with revenue levels (good for the entrepreneur). Read more of this post