Welcome to the Thunder Founder Newsletter Issue #27!
As a founder, you know how challenging it can be to raise capital for your startup. You may have considered traditional options like bootstrapping, angel investors, venture capital, or venture debt. But have you heard of crowdfunded revenue-based financing?
Crowdfunded revenue-based financing is a new way of fundraising that involves raising capital from a large number of investors who receive a share of your future revenue. It is different from equity financing, where you give up ownership and control of your startup. It is also different from donation-based or reward-based crowdfunding, where you do not offer any financial return to your backers.
It is quick to raise, flexible, scalable, and non-dilutive. You can use it to fund your short-term activities that have a clear return on investment, such as marketing, sales, or product development. You can also avoid diluting your ownership and giving up board seats or veto rights to investors.
Of course, crowdfunded revenue-based financing also has some challenges. It may limit your cash flow, as you have to repay your investors from your revenue. It may also require regular reporting and compliance, and reduce the attractiveness for future investors who may prefer equity or debt.
If you are interested in learning more about crowdfunded revenue-based financing and how it can help you grow your startup, join us on June 21st @ 1 PM ET where we've partnered with Justin Renfro to offer a comprehensive guide to Wefunder's new product - Crowd Revenue-Based Financing. Click here to RSVP.
What the Experts Have to Say
Revenue-Based Financing: Definition, How It Works, and Example
Great overview on revenue-based financing with examples to help you think through your potential raise. Read More
Revenue-Based Financing: Debt-as-a-Service, Picks and Shovels, Funding Options
This is a long list of resources and players to know in the space. It is not a read, but a good tool to have. Read More
The Complete Guide to Revenue-Based Finance
For a detailed overview and list of pros and cons, this is an important article to read before raising using crowd revenue-based financing. Read More
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Written by Jason Kirby - https://www.linkedin.com/in/jasonrkirby
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