Fundnel offers a variety of fundraising structure – including equity, convertibles, debt, and revenue sharing – to cater to your needs depending on your type of business, stage of development, and fundraising objectives.

For more information, please take a look at the merits and features of each fundraising model below:

Equity

Merits

  • Receive long-term funding from investors with no fixed time frame to return the principal amount of investment
  • No ongoing interest rate

Features

  • Increase the number of shareholders in exchange for investment
  • Issue voting / information rights to all investors
  • Shares usually carry an entitlement to dividends if and when declared

Convertibles

Merits

  • Ability to price the share at a premium compared to pure stock sale
  • Lower interest rate as compared to pure bonds – a convertible could be a zero-coupon security
  • Flexibility to structure the convertible based on maturity period, conversion premium etc, to achieve desired objectives of business owners

Features

  • Delayed dilution of existing shareholders
  • Interests payments to be made to investors at a pre-determined interval, except for zero-coupon securities
  • Interest will typically be added to the value of convertible bond before conversion

Debt (e.g. bonds, term loans or working capital facilities)

Merits

  • No dilution to existing shareholders

Features

  • Interests payments to be made to investors at a pre-determined interval, typically every six months
  • Principal has to be repaid to investors upon maturity of the bonds
  • Financial covenants may apply

Revenue Sharing

Business owners agree to share a percentage of its gross revenue with investors

Merits

  • No dilution to existing shareholders
  • Flexible payments as a percentage of revenue
  • Flexibility to cap the return to investors to either; a predetermined "investment multiple" on their investment is achieved, or a predefined duration in accordance with its associated terms (e.g. after a certain time frame)

Features

  • A strong admin process is required to track and fulfill pre-determined regular pay-outs
Did this answer your question?