Revenue-Based Financing
Definition
Revenue-based financing is a form of non-dilutive capital where a company repays an investor as a fixed percentage of its ongoing revenue until it has paid back a set multiple of the amount borrowed, rather than on a fixed monthly schedule.
How it comes up in fundraising
Founders with predictable recurring revenue use revenue-based financing to fund growth spend like marketing or inventory without giving up equity or taking on a rigid debt repayment schedule tied to a set date.
Frequently asked questions
How is revenue-based financing different from venture debt?
Venture debt is a traditional term loan with fixed monthly payments and usually equity warrants attached. Revenue-based financing repayments flex with actual revenue, so a slow month means a smaller payment instead of a missed one.
What kind of company qualifies for revenue-based financing?
Lenders typically want consistent, recurring revenue, such as SaaS subscriptions or e-commerce sales, since the repayment amount depends directly on the top line staying predictable.
Round Funded resources
Put this term to work
Definitions win negotiations only when you are in one. Find the investors who fund your stage and start the conversation.
Browse the investor database