How to finance the growth of your business?
|BANK FINANCING||Revenue Based Financing||Equity Growth Capital|
|TYPE OF FINANCING||Borrowed capital||Mezzanine financing||Equity capital|
|SCOPE||Determined by balance sheet, security/surety and sector. Availability to startups is limited.||As a guideline: 4 x monthly recurring revenue or 40% of recurring revenue. Ideal for companies that have recurring revenue. If company grows, extra financing can become available quickly.||Determined by business plan. Capital Mills offers rounds of € 500,000 to € 1,500,000.|
|GUARANTEES||Security based on balance sheet. Personal surety and guarantees.||No surety or personal guarantees, but security based on balance sheet (after bank financing)||No surety or personal guarantees, but personal commitment|
by investing, vesting,
good leaver / bad leaver.
|COSTS||6-12% interest, small commission.||Repayment cap of 1.5 to 2.5 x principal (15-25% per year), small commission.||Value of shares sold (at least 5 to 10 x money on invested capital), high initial transaction costs of up to 10% of investment.|
|TIME INVESTMENT FOR MANAGEMENT||Very little||A few days during application, plus small amount of time during completion.||Intensive during fundraising and significant during shareholding.|
|REPAYMENT||Fixed repayment schedule.||Flexible repayment, percentage of revenue.||Agreements on exit point and triggers in future.|
|ESTIMATED COMPLETION TIME||2 months||2 months||3 to 9 months of fundraising|