With revenue sharing through Revtap, early-stage companies share a portion of their future revenues with investors in exchange for funding, rather than selling equity in the company. This can be a better option for companies for a number of reasons.
One of the key advantages of revenue sharing is that it allows companies to retain ownership and control over their operations. When a company sells equity, it is essentially giving up a portion of its ownership to investors, which can dilute the ownership stakes of the company’s founders and existing shareholders. This can lead to conflicts of interest and can make it more difficult for the company to make strategic decisions.
Additionally, revenue sharing can be a more flexible and scalable form of financing than selling equity. With revenue sharing, the amount of funding that a company receives is tied to its future revenues, which means when revenues slow, payments slow. This can provide companies with the capital they need to grow and expand without having to give up a fixed loan payment.
Revenue sharing can help to align the interests of companies and investors. With equity financing, investors are primarily interested in increasing the value of the company so that they can sell their shares for a profit. With revenue sharing, on the other hand, both the company and investors are incentivized to focus on increasing the company’s revenues, which can lead to more sustainable growth.
Revtap opens up an entirely new avenue for financing. Non-dilutive growth capital for companies, returns for investors that are tied to a company’s success. We do this with a marketplace that opens up this type of investing to retail and institutions both. A public market, open to investors worldwide, where companies access capital without the rigorous process of an IPO.
Overall, revenue sharing through Revtap can be a better option for companies than selling equity because it allows them to retain ownership and control, provides more flexibility and scalability, and aligns the interests of the company and investors.