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Revenue Participation Financing: An Introduction

  • Revenue Participation: The Concept

    In a Revenue Participation financing, a business offers the investors a percentage of the business’s future gross revenues in exchange for a capital investment. In its simplest form, the business offers to give the investors y% of future gross revenues until such time as Investor has been paid "x" ...

    Mar 11, 2019 20:07
  • Foundational Issues of Revenue Participation Financing

    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" ...

    Mar 11, 2019 20:08
  • Some Key Contractual Considerations for Revenue Participation Financing

    While a Revenue Participation financing is a substantially different animal than a typical venture capital equity financing involving convertible preferred stock, an investor in a Revenue Participation financing will have several of the same concerns, in terms of monitoring the business and in some ...

    Mar 11, 2019 20:11
  • Revenue Participation: Some Words of Caution

    Revenue Participation financing can be very attractive for investors and businesses alike – when the business fits the Revenue Participation paradigm of relatively predictable (timing and magnitude) high gross margin revenues. Most companies that are good candidates for venture capital investme ...

    Jul 12, 2019 18:53
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