Capital Comparison

Revenue-Based Financing vs. Venture Debt

No warrants. No VC requirement. No fixed repayment schedule.

Venture debt is often marketed as a non-dilutive alternative to equity — but it typically comes with warrants (equity kickers), requires existing venture backing, and has fixed repayment schedules that can strain cash flow. Revenue-based financing is a cleaner, more flexible alternative for companies that qualify.

Side by Side

How They Compare

Feature
Peers & Co (RBF)
Venture Debt
Warrants / Equity Kicker
None
Typically 1–2% of loan
Requires VC Backing
No
Usually yes
Repayment
1–4% of monthly revenue
Fixed monthly payments
Covenants
Zero
Financial maintenance covenants
Personal Guarantee
None
Sometimes required
Equity Dilution
None (no warrants)
Small (warrants)
Available to Bootstrapped Co.
Yes
Rarely
Underwriting Basis
Revenue growth
VC backing + revenue
Flexibility
High
Low — fixed schedule

Decision Guide

Which Is Right for You?

Choose Revenue-Based Financing

If you're bootstrapped, don't want warrants attached to your debt, or need flexible repayment that scales with your revenue, revenue-based financing is the better choice. We don't require VC backing, we don't take warrants, and our repayment flexes with your business.

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When Venture Debt May Be Better

Venture debt can be a good fit for VC-backed companies that want to extend runway between equity rounds without significant dilution. If you already have institutional investors and want a product specifically designed for that ecosystem, venture debt lenders like Silicon Valley Bank (before its collapse) or Hercules Capital may be appropriate.

FAQ

Common Questions

What is venture debt?
Venture debt is a form of debt financing typically available to VC-backed startups. It usually comes with warrants (small equity stakes), fixed repayment schedules, and financial covenants. It's designed to extend runway between equity rounds.
Is revenue-based financing better than venture debt?
For bootstrapped companies or those who want truly non-dilutive capital with flexible repayment, revenue-based financing is typically better. Venture debt requires VC backing, comes with warrants, and has fixed payments. RBF has none of those constraints.
Can I use revenue-based financing if I already have venture debt?
Potentially, depending on your existing debt covenants. We'd review your current capital structure to determine if additional growth capital is feasible. Many companies use multiple forms of non-dilutive capital simultaneously.

The information on this page is for general informational purposes only and does not constitute financial, investment, legal, or tax advice. All financing is subject to underwriting approval and eligibility criteria. Past performance is not indicative of future results. Peers & Company is a merchant bank, not a registered investment advisor. Consult qualified financial and legal advisors before making financing decisions.