Instead of an interest rate, a Revenue Share has an investment multiple. Below are hypothetical investment examples for $1,000 and $10,000 investments. These examples are based on a 1.5x multiple with a 4-year pay back and could result in a targeted 16.4% internal rate of return (IRR).
Returns and IRR are calculated based on Belladina's forecasted revenue and 1.5x multiple.
Returns are not guaranteed and the rate will have substantial changes if actual revenues vary from the forecast or if the business fails.
If the company's revenues are better than expected, payback could happen earlier and lead to a higher IRR. If revenues are lower, then payback will take longer, lowering the IRR, or leave money still owed at maturity of the note.
Every investment also carries risks, including the risk of losing some or all of your money. Vicinity does not predict or project performance, and the performance of any specific investment will vary.
A “rev share” is a debt structure that works like a royalty payment. The business agrees to pay a set percentage of their revenue until the investor is paid back a “multiple” of their investment. For example, a business may agree to pay 5% of their revenues each quarter until investors make 1.5x (the multiple) their original investment. As an investor, you would expect to turn a $2,000 investment into $3,000. The amount of time it takes to pay is dependent on the business’ revenue.
***This info is provided by Belladina's. Vicinity never predicts or projects performance, and has not reviewed or audited this financial forecast.***
Each year represents 12 consecutive months from the beginning of operations.
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