Category: Alternative VC

Revenue-Based Finance interview: February 23rd, 1pm ET


This post is by David from David Teten's blog


 

Keith Harrington of Novel Growth Partners and Founder, RBFNetwork, is hosting an interview with me February 23rd at 1pm ET.  We’ll talk about revenue-based investing and other alternative investment approaches, and my recent work with Jamie Finney and Jonathan Bragdon about the concept of Flexible VC and how and when that approach works.

Register NOW.


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Flexible VCs With Structures Between Equity and Revenue-Based Investing


This post is by David from David Teten's blog


(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. His work on VC and small communities can be found at greatercolorado.vc/blog. )

This essay is part of a series on alternative VC:
I: Revenue-Based Investing: a new option for founders who care about control
II: Who are the major Revenue-Based Investing VCs?
III: Why are Revenue-Based VCs investing in so many women and underrepresented founders?
IV: Should your new VC fund use Revenue-Based Investing?
V: Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC?
VI: Revenue-based financing: The next step for private equity and early-stage investment. This is a summary of: Revenue-Based financing: State of the Industry 2020.
VII: Flexible VC, a New Model for Companies Targeting Profitability

VIII: The Leading Flexible VCs, With Structures Between Equity and Revenue-Based Investing

In our previous essay, we introduced the concept of Flexible VC: structures which allow founders to access immediate risk capital while preserving exit and ownership optionality. We list here all of the active Flexible VCs we have identified, broken into these categories: revenue-based; compensation-based; and blended return streams. Please contact us if you are deploying capital using this strategy.

Revenue-Based Flexible VCs

These investors are paid back primarily based on a percentage of revenues.

Capacity Capital, based in Chattanooga, Tennessee, was launched in 2020 with a primary focus on the Southeast. Jonathan Bragdon, CEO, describes Capacity as “a team of founders-turned-funders making non-dilutive, founder-aligned investments (Read more...)

Flexible VC, a New Model for Companies Targeting Profitability


This post is by David from David Teten's blog


(co-written with Jamie Finney, Founding Partner at Greater Colorado Venture Fund. His work on VC and small communities can be found at greatercolorado.vc/blog. )

This essay is part of a series on alternative VC:
I: Revenue-Based Investing: a new option for founders who care about control
II: Who are the major Revenue-Based Investing VCs?
III: Why are Revenue-Based VCs investing in so many women and underrepresented founders?
IV: Should your new VC fund use Revenue-Based Investing?
V: Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC?
VI: Revenue-based financing: The next step for private equity and early-stage investment. This is a summary of: Revenue-Based financing: State of the Industry 2020.
VII: Flexible VC, a New Model for Companies Targeting Profitability

VIII: The Leading Flexible VCs, With Structures Between Equity and Revenue-Based Investing

Of the Inc. 5000 companies, only 6.5% raised money from VCs and 7.7% raised from angels. Where else can fast-growing companies get funding?

More and more startups are pursuing Revenue-Based VCs, but “RBI” doesn’t fit everyone. A new category of VCs have emerged offering a hybrid between VC and RBI, which we call “Flexible VC”. 

From RBI, Flexible VCs borrow the ability to reap meaningful returns without demanding founders build for an exit. From traditional equity VC, Flexible VC borrows the option to pursue and reap the rewards of an outsized exit. Every Flexible VC structure allows founders to access immediate risk capital while preserving exit, growth (Read more...)