Revenue-based finance has become an important part of the funding ecosystem. In the US and Canada there are more than 25 revenue-based finance funds, which have successfully funded hundreds of fast growing companies. Especially suitable for revenue-based funding are SaaS firms as the funding can be built into the stream of recurring revenues. More and more investors and entrepreneurs draw attention to the model, that has many advantages in terms of flexibility, transparency, simplicity and risk-reward trade-offs for entrepreneurs and investors alike.
In the European ecosystem revenue-based financing is currently emerging. At Round2 we have taken the pioneering role because we see how important a tool the model is for supporting great entrepreneurs and great businesses. Everybody who wants to dig deeper into the role of revenue-based financing in the ecosystem, who is providing it and how it works please check out the powerful 5-part series on revenue-based finance of David Teten: he engages in various comparisons to other financing tools and maybe most importantly discusses why every company faces other needs within its growth process. He states: „Does the traditional VC financing model make sense for all companies? Absolutely not.“
Not the least in times of crisis there is a need to rethink dominant concepts and embrace smart alternative funding solutions which sometimes complement and sometimes replace traditional financing tools which were developed in a pre-digitization era.
If you want to learn more, please have a look at our white paper on revenue-based financing here.