If revenue-based financing is new to you, check out our 2-Part Blog Series for more details about the type of funding we're offering.
I’m familiar with private investments, but have not heard of revenue-based financing. What is it?
Revenue-based financing is a form of funding that allows entrepreneurs to benefit from outside investment without giving up ownership in their company. Investments are paid off by a percentage of topline revenue per agreed-upon terms.
What makes this type of financing different from getting a loan at the bank?
Traditional debt financing requires a set repayment schedule. Unlike a bank, Annie Capital’s investment is paid back based on the company’s performance. The investment structure coupled with our coaching commitment results in our successes being interdependent.
What happens if my company under or overperforms?
If sales are expected to be seasonal or revenue trends downward, payments decrease accordingly. If sales are higher than forecasted, the investment is repaid earlier.
How are the terms set? Will I owe Annie Capital as long as my business is open?
The cost of the investment, also known as the repayment cap, and the amount of monthly payments will be determined after our due diligence and before we finalize our loan agreement. The level of risk, stage of the company and existing revenue traction will be considered in those terms.
Once the repayment cap has been paid, the company no longer has a debt to pay to Annie Capital. We’ll cheer you on and champion your ongoing efforts, but all future revenue can be utilized at the company’s discretion.
Stay tuned for the second part of the series!