Business Pitch Dictionary by pitch.dog
Funding instruments & exemptions · Working

Revenue-based financing

Also called: revenue-share financing

ELI5

Repay investors from a share of future revenue.

Used in conversation

“Revenue-based financing fits predictable revenue better than long pre-revenue development.”

Definition

Financing repaid as a percentage of revenue until a defined return or cap is reached.

Here “Revenue-based financing” means: Financing repaid as a percentage of revenue until a defined return or cap is reached.

Pitch context

You will see “Revenue-based financing” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches funding instruments & exemptions.

Why it matters: In funding instruments & exemptions, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Sources & evidence · 5

Direct term-level sources and supporting source families.