Revenue Sharing vs. Equity As An Investment

Revtap is setting out to change the way you invest.  Investing in companies has been done in the same way for hundreds of years (since the fist stock was issued in the Dutch East India Company in 1602!) – through equity.  A company raises capital by selling investors shares in their organization.  Investors buy the shares with the expectation that their investment will rise in value in the form of capital gains, and/or generate capital dividends.

So why hasn’t anyone innovated this model, in over 400 years?

Sure, there are bonds, profit sharing agreements, and other mechanisms to invest in companies.  But until Revtap created the securitized revenue share, nothing that creates a tradable asset that’s tied to company growth.

What Is Revenue Sharing

The revenue sharing model does exactly as its name implies; it provides a proportionate share of the “revenues” of a company based on a formula created by the company as a benefit to investors.  With Revtap, these revenue shares are paid out to investors each month, providing for immediate returns.  But as the company revenues grow, the return investors receive (the yield), increase as well.  For example, revenue shares in company XYZ are bought for $1 yields 10% today. But XYZ grows their revenues by 50% – the yield is now 15%, therefore the share is now worth $1.50. Investors receive DIVIDENDS THAT APPRECIATE, AND THE APPRECIATION IN SHARE VALUE, as company revenues grow.

Why Revenue Sharing vs. Equity?

The value of a share in equity can be highly subjective.   Take for example the current valuation of Amazon (AMZN).  As of the day of writing, December 09, 2022, Amazon’s price-to-earnings valuation is nearly 82.  This means the value of Amazon stock is 82 TIMES its annual earnings, or profits.  Compare this to the broad market, as monitored by the S&P 500 index, which trades currently at 19x.

But revenue sharing also opens investing up to companies before they IPO – the high growth stage that has traditionally been restricted to wealthy (accredited) investors.  Because revenue sharing provides investors returns immediately versus equities where Pre-IPO shares only provide return when a company is sold, Revtap is able for the first time to open these potentially high-return investments to everybody.

Revenue sharing removes the subjective nature of equities, providing real world valuation based on a company’s REVENUES, and their rate of revenue growth.  And because Revtap uses exempt offering regulations through the Securities Act, shares are bought and sold on our marketplace, providing an avenue for investors to capture capital appreciation and exit their position when they desire – just like stock markets.

A revolution in investing is here.  Launching Spring 2023, Revtap will change the way you invest. Forever.


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