Alternative Exit Structures

Increasingly, entrepreneurs are experimenting with deal structures that provide returns to investors without a sale or IPO. These structures often incorporate variable payments to investors based on a measure of the company’s financial performance, such as gross revenue or EBITDA. You may have heard structures like these described as “revenue-based financing,” “revenue share agreements,” “flexible debt,” or “variable payment obligations.” We have also seen structures that contemplate the repurchase of investor stock after an extended period of time