I've been meeting and talking with lots of entrepreneurs about funding needs and getting feedback on RevenueLoan. We're learning that RevenueLoan really helps companies for the following reasons:
- RevenueLoan is different in type. It's neither equity nor debt strictly speaking. This different type of investment is attractive in lots of situations. I've heard from small business owners that the concept is simple and aligns investor and entrepreneur interest better than alternatives.
- RevenueLoan plays nicely into existing cap table and doesn't require dilution of existing shareholders.
- The capital is flexible. Because the money is not tied to specific ratios and doesn't require fixed coupon payments, entrepreneurs can use the capital in the best ways he/she sees fit to grow revenues and the business.
- A number of entrepreneurs use RevenueLoan as an alternative or an addition to traditional lines of credit. RevenueLoans can be good insurance policies on sustaining a growing business through situations that are cash tight.