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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" t ...

    Aug 26, 2017 14:09
  • 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 does the investors become creditors in the traditional sense: that is, there is no promise by the business to "pay back ...

    Aug 26, 2017 14:11
  • 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 ...

    Aug 26, 2017 14:20
  • 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 investment d ...

    Jul 24, 2019 20:38
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