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Should you raise equity venture capital or revenue-based investing VC?

Should you raise equity venture capital or revenue-based investing VC?
< img src=" https://techcrunch.com/wp-content/uploads/2019/08/GettyImages-946391800-e1566406420487.jpg?w=678" > More posts by this factor

The majority of creators who are raising capital look first to standard equity VCs. However should they? Or should they seek to among the brand-new wave of revenue-based investors?

Revenue-based investing (” RBI”) is a new form of VC financing, unique from the favored equity structure most VCs use. RBI normally requires creators to pay back their financiers with a fixed portion of earnings till they have actually finished offering the investor with a repaired return on capital, which they agree upon beforehand.

This guest post was composed byDavid Teten, Venture Partner, HOF Capital. You can follow him at teten.com and @dteten. This is the 5th part of our series on Revenue-based investing VC that touches on:< a href= "https://techcrunch.com/2019/08/19/revenue-based-investing-a-new-option-for-founders-who-care-about-control/" > Revenue-based investing: A brand-new choice for founders who appreciate control< a href=" https://techcrunch.com/2019/08/19/who-are-the-major-revenue-based-investing-vcs/" > Who are the major revenue-based investing VCs? Should your new VC fund usage revenue-based investing

  • ?< a href =" https://techcrunch.com/2019/08/20/why-are-revenue-based-vcs-investing-in-so-many-women-and-underrepresented-founders/" > Why are revenue-based VCs buying numerous women and underrepresented founders?< a href=" https://techcrunch.com/2019/08/21/should-you-raise-equity-venture-capital-or-revenue-based-investing-vc/" > Should you raise equity venture capital or revenue-based investing VC? From the founders’ viewpoint, the advantages of the RBI model are: %%item_read_more_button %%.