Revenue-based financing (RBF) is an alternative funding model where a company receives upfront capital in exchange for a percentage of ongoing gross revenue until a predetermined return multiple is reached. Unlike traditional equity financing, the founder retains full ownership — there is no dilution. Unlike traditional debt, payments flex with actual revenue, so companies pay less during slow months and more during strong ones.
The return multiple (typically 1.3x–2.5x) determines the total amount repaid to the investor. A $100,000 investment at 1.5x means the company repays $150,000 total. The revenue share percentage (typically 3%–10% of gross revenue) determines monthly payment amounts. Minimum monthly payments protect the investor from zero-revenue months, while payment caps can limit the maximum monthly outflow.
Revenue-based financing works best for companies with predictable, recurring revenue (SaaS, subscription businesses, e-commerce) that want growth capital without giving up equity or taking on fixed debt obligations. It is typically used for seed and Series A stage companies generating $10K–$500K in monthly revenue. This generator produces a comprehensive RBF agreement covering investment terms, repayment mechanics, covenants, security interests, and default provisions.
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