An Introduction to Revenue Participation Financing

Paul Jones, co-chair of Venture Best, the venture capital practice group at Michael Best, has been selected as a regular contributor of OnRamp Labs, the newest blog addition to the Milwaukee Journal Sentinel covering start-ups and other Wisconsin technology news.

Paul’s most recent contributed piece “An Introduction to Revenue Participation Financing” can be found under their Business Tab in the Business Blog section. Click here to view his latest blog.

Here is a short excerpt: “In a Revenue Participation financing a business (let’s call it Newco) offers an investor (Investor) a percentage of Newco’s future gross revenues in exchange for a capital investment. In its simplest form, Newco offers to give Investor y% of future gross revenues until such time as Investor has been paid “x” times the amount of capital invested. So, for example, in exchange for $100,000 of capital, Newco could agree to pay Investor 20% of future gross revenues until Newco has paid Investor 3x the $100,000 capital investment, or $300,000.” Click here to read more of Paul Jones’ OnRamp Labs blog post located under the Business tab of the Milwaukee Journal Sentinel’s website, www.jsonline.com.

 

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