Revenue-Based Financing-Part 2

We're sharing some of the FAQs about revenue-based financing. Miss Part 1? Check it out! 

What’s the difference between Annie Capital and other sources of capital?

There are various forms of private funding available, including angel funds, venture capital and revenue-based financing. As an entrepreneur, it’s important to be clear about what your goals are for your company; do you aspire to sell, take your company public or grow your business to be a steady source of income for your family? Your end goals will help you filter the right type of financing for your interests.

Most private companies outline their investment preferences to ensure fit and compatibility from the onset of the relationship. Some companies are sector-specific; others prefer to invest in certain stages of company development. Annie Capital invests in majority-women owned companies in North Dakota and South Dakota.

Is due diligence different in revenue-based financing?

Investors each have their form of internal benchmarks, requirements and characteristics that are prioritized in reviewing a potential investment. Annie Capital seeks first to ensure that the founder has the resilience to weather the predictable unpredictability of entrepreneurship and the willingness to be coached. After that, we spend a lot of time analyzing the ability of the company to generate sustainable gross revenue to ensure that our investment is paid back without negatively impacting the company’s ability to stabilize. We’re not interested in taking a company public, which simplifies the due diligence process, but will still spend considerable time ensuring that we understand the company’s DNA.

Can I still sell my company?

If there’s a selling opportunity that is attractive to you, you can definitely sell your company. As a borrower, you would pay back Annie Capital the remaining amount of debt; the debt would not transfer to the new ownership.

More questions? Email us at hello@goannie.com!