In equity crowdfunding, investors gain direct ownership in a company by purchasing shares, making them shareholders. This ownership structure typically appeals to professional investors, as it involves a long-term commitment with returns contingent on the company’s growth and eventual exit strategies, such as an acquisition or public offering.
Revenue-sharing crowdfunding on Togetherise differs significantly. Instead of receiving equity, investors are repaid through a percentage of the business’s revenues until a predetermined total repayment amount is met. This model offers:
- Flexibility: Repayments adjust based on business revenue performance, providing businesses with relief during slower periods.
- Mid-term Investment Opportunities: Repayments usually begin within the first months after the offering closes, creating a more predictable timeline for investors.
- Alignment of Interests: Investors’ returns are directly tied to the business’s revenue generation, fostering a performance-based partnership.
This structured and transparent approach enables businesses to retain full ownership while offering investors returns linked to operational success.
