Investors LOVE dividends. Each period, typically quarterly, investors receive a healthy distribution of earnings – a share of a company’s profits as a reward for being a shareholder. Dividend investing is so popular among some circles that there are investors, and even pension and hedge funds, who will only invest in companies who offer dividends.
This is why Revtap has structured its model with dividends. But our dividends are different – they’re not a share of earnings, they’re a share of a company’s top-line revenues.
Each and every month, a company shares with investors a small percentage of their cash flow for the period, regardless of profitability. This allows investors to truly share in a company’s growth. And that’s the best part: A well-run company that reinvests in its business should, theoretically, generate more revenues and pay bigger dividends, both of which will be reflected in a higher revenue share price. So, in addition to enjoying a rising income, Revtap investors benefit from capital (share) growth as well.
Sometimes dividends are referred to as passive income, investment income, or portfolio income. Whatever you want to call it, dividends represent repeating cash flow to an investor. Once received, the investor can do with that cash as he or she pleases, and often they reinvest it right back into their portfolio, giving them the benefit of compounding.
And the companies on the Revtap platform are often early-stage with high growth potential. This means the faster and stronger a company’s growth, the higher the dividend payout, and potential capital appreciation, to investors. Of course, there’s no such thing as a free lunch. Revenue sharing with early-stage startups is not without risk. Investors should understand the risks and read our investor disclosures. But Revtap accepts only a small number of companies who go through a thorough due diligence process and show a strong potential for revenue growth.
Revenue share dividends give investors a regular source of income, not unlike fixed income where investors get a fixed rate of return keeping money invested for a longer period of time. But the key difference here is fixed; Revtap dividends are designed to be linked to a company’s growth. So while fixed income returns can be eaten away by inflation, revenue share dividends are deflationary since they have the potential to rise over time.
Mind blown? It should be. Our model is the first of its kind. Equity-free Venture Capital for companies, passive income through revenue share dividends with capital appreciation potential for investors.