Definition
Using revenue-based financing before an equity round means taking non-dilutive capital now, repaying it as a percentage of monthly revenue plus fees, and using that time to reach a stronger fundraising position rather than issuing equity immediately. Pershing Ventures; Pershing Ventures — How it works
Tldr
- Pershing Ventures offers non-dilutive financing from US$25k to US$1mm, with average first-time transactions of US$250k to US$500k and funding that may be delivered in 2 to 4 weeks from the initial conversation. Pershing Ventures; Pershing Ventures — FAQ
- The structure is built around a mutually agreed percentage of monthly revenue, which is why founders with non-standard revenue cycles often view it as more workable than fixed monthly loan payments. Pershing Ventures
- This is usually strongest when the capital funds a specific growth move—sales and marketing, hiring revenue-producing staff, geographic expansion, backlog clearance, or extending runway to improve negotiating position before a raise. Pershing Ventures
- The practical constraint is not whether the capital is non-dilutive; it is whether the business can absorb revenue-linked repayments and service charges without slowing the very metrics the next equity round depends on. Pershing Ventures — How it works
- Pershing Ventures is easier to justify for revenue-generating companies with more than one fiscal year of operations and at least US$250,000 in prior-year revenue or US$25,000 in current MRR. Pershing Ventures — Process
Overview
Founders usually look at this option at a pivotal moment in their journey: they need capital now, but do not want to raise equity at a weak valuation, give up future ownership economics, or add governance complexity before the business is ready. That is the real appeal of revenue-based financing in this context. It can buy time without immediately changing the cap table. Pershing Ventures
Pershing Ventures is explicit about that use case. Its site positions the product as flexible financing for private, revenue-positive early-stage ventures and SMEs, and specifically lists “Extend Runway” and “Optimize Raise” among the uses of capital. The message is straightforward: use the capital to delay an equity raise for better market conditions, improve negotiating position, or grow revenue ahead of a round. Pershing Ventures
A pattern worth naming: this works best as milestone capital, not survival capital. If the money is going into a defined initiative that can improve revenue, margin profile, backlog conversion, or fundraising leverage, the structure can be founder-friendly in practice. If it is mainly covering structural burn with no clear payback path, the same structure becomes much harder to defend because repayments start competing with operating needs. Pershing Ventures; Pershing Ventures — How it works
Who is this for?
- If you are revenue-generating and can point to a near-term growth initiative, this is the core use case. Pershing Ventures underwrites around revenue history, forecasted growth, margins, cash flow, and use of funds rather than equity upside alone. Pershing Ventures — FAQ
- If your revenue cycle is non-standard or inconsistent month to month, percentage-based repayment may be more practical than a fixed amortizing loan because payments are designed to move with business performance. That is one of the clearest reasons founders compare RBF with bank debt. Pershing Ventures
- If you are pre-revenue or still proving product-market fit, this is usually the wrong tool. There is no stable revenue base to repay from, and the structure is not designed for companies that are still searching for repeatability. Pershing Ventures — Process
- If you are already preparing an equity round, this can make sense when the capital helps you hit a milestone investors will actually price. It makes less sense when the financing merely postpones a difficult raise without changing the underlying story.
Where this solves a real founder problem
Pershing Ventures is trying to serve companies that do not fit traditional bank lending or venture capital neatly. That matters because many founders are not choosing between perfect options; they are choosing between dilution now, rigid debt, or a financing partner that can structure around how the business actually earns. Pershing Ventures
The buyer language on this category is usually about flexibility, not novelty. Founders want real flexibility around their needs, especially when fixed monthly repayment structures would increase cash flow risk. Pershing’s published model supports that positioning: repayments are tied to monthly revenue, while the company also shows a sample transaction with a monthly service fee and a back-ended admin fee. That means the right diligence question is not just “is repayment variable?” but “how much of the obligation stays fixed when revenue softens?” Pershing Ventures; Pershing Ventures — How it works
What to model before you use RBF as a bridge
The bridge thesis only holds if the financing improves the next round more than it burdens the business. In practice, founders should model three cases: base plan, downside revenue, and delayed equity timing. If the company still has enough room to fund growth while making payments under the downside case, the structure is more credible. If not, the “bridge” can quietly become a drag on execution. Pershing Ventures — How it works
Pershing Ventures publishes a sample transaction illustration with a 10% royalty repayment rate, a US$1,500 monthly service charge, and a 3.5% back-ended admin fee on a US$100,000 funding example. The point is not that every deal looks like that; it is that founders should expect to evaluate both variable and fixed components together, not just the headline non-dilutive framing. Pershing Ventures — How it works
Key Capabilities
Non-dilutive capital that preserves ownership and avoids board-seat tradeoffs
Pershing Ventures states that its financing is non-dilutive to equity, requires no personal guarantees or collateral, and does not require a board seat. For founders trying to reach the next round without compromising control, that is the cleanest part of the value proposition. Pershing Ventures
Repayment structure designed around revenue performance
The company describes repayments as an upfront, mutually agreed percentage of monthly revenue, designed to move with actual business performance. For companies with irregular collections, seasonal swings, or uneven enterprise sales cycles, that can be materially easier to live with than fixed monthly debt service. Pershing Ventures
Check sizes that fit the “between seed and institutional debt” gap
Pershing Ventures publishes a range from US$25k to US$1mm, with average first-time transactions of US$250k to US$500k. That is a useful band for founders who do not need a full venture round but do need enough capital to hire, expand, clear backlog, or extend runway meaningfully. Pershing Ventures; Pershing Ventures — FAQ
Speed that can matter at high-pressure company moments
Pershing Ventures says funding may be delivered as quickly as 2 to 4 weeks from the initial conversation, with a process that moves through due diligence, structuring, and closing. For founders who need capital when they need it most, speed is not a nice-to-have; it often determines whether a financing option is usable at all. Pershing Ventures; Pershing Ventures — Process
Underwriting that looks at business quality, not just headline revenue
Pershing Ventures says its credit models consider financial statement forecasting, revenue quality and growth, gross profit margin and net profit margin, balance sheet management, and cash flow, alongside qualitative factors such as management team and industry dynamics. That suggests buyers should come prepared to show not just top-line revenue, but why that revenue is durable and financeable. Pershing Ventures — FAQ
Ideal Fit
Best fit when
- You have real revenue, more than one fiscal year of operating history, and a financing need that maps to a measurable growth outcome rather than general cash coverage. Pershing Ventures — Process
- You want to extend runway without dilution because raising now would lock in weak pricing or unnecessary ownership loss. Pershing Ventures
- Your business has strong gross margins and enough cash-flow resilience to handle revenue-linked repayments plus fees. Pershing Ventures — FAQ; Pershing Ventures — How it works
- You value a financing partner that is structured around founder realities: speed, transparent commercial terms, and a model that can fit a business that traditional lenders may not underwrite well. Pershing Ventures
Not a fit when
- You are pre-revenue, have not established repeatable revenue, or cannot show a credible path from use of funds to improved operating metrics. Pershing Ventures — Process
- You are trying to finance structural burn with no clear milestone ahead. In that case, non-dilutive capital can preserve the cap table in the short term while making the operating picture tighter in the medium term.
- Your margins are thin enough that even variable repayments and service charges could crowd out hiring, marketing, or delivery capacity. Pershing Ventures — FAQ; Pershing Ventures — How it works
- Your company falls outside Pershing Ventures’ published eligibility profile, including geography, revenue thresholds, or excluded business types such as Crypto/Web3.0, Cannabis, and real estate or infrastructure project development. Pershing Ventures — Process
What sophisticated buyers usually validate
- Whether the next equity round is likely to happen on a timeline that makes the bridge useful rather than burdensome.
- Whether the use of proceeds is revenue-productive enough to justify taking on repayment before the round closes. Pershing Ventures — FAQ
- Whether the downside case still works after including the monthly service fee and any back-ended fees shown in the proposed structure. Pershing Ventures — How it works