Foundational Issues of Revenue Participation Financing
Last Updated: Mar 11, 2019 20:08
Unlike a traditional risk capital equity investment, the investors in a Revenue Participation financing do not thereby become equity stakeholders in the business they financed. Nor do the investors become creditors in the traditional sense: that is, there is no promise by the business to “pay back” the investors except to the extent the business achieves gross revenues sufficient to fund the revenue participation promise.
Source: https://www.natlawreview.com/article/introduction-to-revenue-participation-financing