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Who are the Major Revenue-Based Investing VCs?

David Teten

So you’re interested in raising capital from a Revenue-Based Investor VC. A new wave of Revenue-Based Investors (“RBI”) are emerging. For background, see Revenue-Based Investing: A New Option for Founders who Care About Control. Rational burn profile, up to 50% of revenue at close, scaling down. Alternative Capital. “

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Flexible VC, a New Model for Companies Targeting Profitability

David Teten

More and more startups are pursuing Revenue-Based VCs , but “RBI” doesn’t fit everyone. As two fund managers employing Flexible VC, we think it is a healthy addition to the ecosystem and will yield more predictable and stable healthy returns for investors. Flexible VC 101: Equity Meets Revenue Share. Of the Inc.

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What is the Right Burn Rate at a Startup Company?

Both Sides of the Table

So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000. But those of us with longer memories remember that the revenue line can move south very quickly when the market overall turns south. Gross burn is the total amount of money you are spending per month.

Burn Rate 383
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What if you see juicy competitor information?

Berkonomics

A fair example In my former industry, I became an informal centralized source for knowledge about the revenues of each of the many competitors, with a special skill for asking just the right questions to obtain the information. Can you guess what percentage your revenue comes from recurring sources such as maintenance revenues?

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Let’s talk about your banking relationship

Berkonomics

If a business were operating above breakeven and revenues and expenses steady, profits would flow to either the shareholders’ pockets or to working capital and taxes. As loan covenants become closer to being violated or after such an event, bankers have some latitude in deciding how to handle their accounts. The scary exception.

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What Factors Should You Consider When Comparing Franchise Opportunities?

Up and Running

Most franchisors calculate their royalties and marketing fees as a percentage of gross revenue and require franchisees to pay on a monthly basis. Some franchisors charge minimum fees as well, which means that you must pay a certain dollar amount regardless of your franchise’s revenue for the month. Post-termination covenants.

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Unintended Consequences: When SAFE and Convertible Notes Go Awry

Pascal's View

The easiest way to do so is via SAFE notes, due to their simplicity, “available online” documentation, no major covenants established to protect the investors, no governance implications at the board level, etc. All of these items are postponed until the elusive priced equity round. It’s going to be great!”.