Example of Revenue Based Financing


One of my favorite TV shows is “Shark Tank”.  One of the guests on the show was Lynnae’s Gourmet Pickles.  One of the many reason why the Sharks shied away from investing was due to the competition.  They were worried about the long term and will I get my money back.  Will there be a liquidation event (company being sold) where they can get their money out and then some.  Revenue Based Financing is right for them.  Revenue Based Financing will grow with them.  They will not have to worry about having the right evaluation for an investor and a liquidation event.  In Revenue-Based Financing it based on current cash flow.  As their cash flow increases, money can be there for them instead of selling off shares of the company and diluting the entrepreneurs ownership.  Barbara pointed out that at their stage they may regret someone taking ownership.  Revenue Based Financing is a vehicle for companies to help them grow as they seek to take on more orders.