Revenue-based Financing for Startups and Small Business

Revenue Royalty Certificate Financing

A fairly old, tried and true financing method for both startups and small businesses needing growth capital is generically referred to as revenue-based financing. It’s also sometimes referred to as revenue participation or revenue sharing funding.  The actual document used is typically called a Revenue Royalty Certificate (RRC) or Revenue Participation Agreement or some combination of the two.

I first learned about revenue based financing from one of the greats among angel investors, Arthur Lipper, who had a particular fondness for the instrument. This was back in 1985. Since then I have used it myself and seen others use it as well to both launch startups and provide growth capital to existing small businesses. Continue reading →