Fundraising
Revenue-Based Financing
A non-dilutive funding structure where investors receive a percentage of monthly revenue until a predetermined multiple is repaid.
Revenue-based financing (RBF) is an alternative to equity financing where investors provide capital in exchange for a percentage of monthly revenue until a multiple of the original investment is repaid. Example: $500K investment with 6% monthly revenue share until $1.5M is repaid (3x multiple). Monthly payments fluctuate with revenue — during slow months, payments are smaller; during strong months, larger. RBF is non-dilutive (no equity given up) but has a higher effective cost than bank debt. It's most suitable for companies with consistent, recurring revenue but who want to avoid equity dilution. Providers include Clearco, Capchase, Pipe, and Lighter Capital. RBF works best for businesses with predictable gross margins and clear revenue visibility.