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