As a registered business on Fundnel, a variety of fundraising options are available to you. Their suitability is dependent on your type of business, stage of company development, and end-goal requirements. Below explains the features and merits of each fundraising model:

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

Convertible Bond

Merits

  • Ability to price the share at a premium compared to pure stock sale
  • Lower interest rate as compared to pure bonds as in some cases, it can be a zero-coupon CB
  • Flexibility to structure the CB 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
  • Interest will typically be added to the value of convertible bond before conversion

Bonds / Debt Structures (incl. Loans)

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 be applicable

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 proportion 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 fulfil pre-determined regular pay-outs
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