https://investorconnect.org/discussion-topics/when-do-you-use-an-equity-structure-vs-a-revenue-based-funding-structure/ Where Investors Come Together Sun, 15 Jan 2017 13:14:28 +0000 hourly 1 https://wordpress.org/?v=6.0.11 https://investorconnect.org/discussion-topics/when-do-you-use-an-equity-structure-vs-a-revenue-based-funding-structure/#comment-4 Sun, 15 Jan 2017 13:14:28 +0000 https://investorconnect.org/archives/discussion-topics/when-do-you-use-an-equity-structure-vs-a-revenue-based-funding-structure#comment-4 Choosing an equity structure or a revenue-based funding structure for your startup comes down to answering the question “how does the investor get paid back?’ If the plan is to sell the company for a large gain, then an equity structure makes the most sense. If the business will not be sold (e.g. it’s a family business or a lifestyle business) then a revenue-based funding structure makes sense. In some crowdfunding raises, the number of investors can be quite large and can make it difficult to manage the cap table. For those deals, paying the investors their return out of revenue makes the most sense.

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