Revenue-Based Financing

Growth capital in exchange for a percentage of future revenue.

Our goal is to provide founder-friendly growth capital for you to grow your business quickly. We do so by trading our capital for a small percentage of your company’s future revenue — matching our returns with your success.

A typical royalty agreement will have the following structure:

Amount:

Up to 50% of annualized run rate. Initial investment of $500K-$1 million; up to $4 million over multiple rounds.

Monthly Payment:

Minimum payment or up to 4% of revenue

Buyout Options:

You control

Control Features:

None

Financial Covenants:

Light

Security:

None

Warrant Coverage:

Light

You could be the right fit if you are:

Operating in high-growth market (e.g. CPG, Renewables, Retail, SaaS, Tech, etc.)
Annual revenues or ARR of greater than $1 million
Operating history greater than 2 years
Close to or at operating profitability
Capital-efficient and growing
Revenue visibility

FAQs

Will my company qualify for funding from Flow Capital?

We encourage all types of companies to apply! Flow invests in companies with strong management teams that have at least $1 million in revenue, strong proven growth, and capital-efficient business models.

Are there companies or sectors that Flow Capital won’t fund?

Our revenue-based financing model is best suited for high-growth, high-margin markets such as tech, SaaS, regulated cannabis, and renewables. Companies that operate in the industrial, brick-and-mortar retail, traditional mining extraction, oil and gas extraction, film, and pharmaceutical drug development sectors will find that there are existing sources of capital that are better suited for their needs.

Where does Flow Capital invest?

We are currently focused on investing in companies based in the United States and Canada, but have invested in our first UK-based company this year.

How much interest can I expect to pay?

None. Repayment is in the form of royalties on top-line revenue only.

What is the cost of the Flow Capital royalty?

Our royalty offering is a hybrid structure with features of mezzanine debt and equity. Like mezzanine debt, it has recurring monthly payments. Like equity, our investment is subordinated to all other existing debts at the time of investment and generates higher returns when the owners generate outsized returns through growth or a sale of the business. With these hybrid features in mind, our structure is priced in between mezzanine debt and equity.

Will you sign an NDA with our company?

Yes, upon request.