Cypress Growth Capital

Royalty-based capital is a revenue participation model that finances a company in return for a share of future revenues. It is the perfect alternative to equity because, in its simplest form, once the amount of money the company owes in royalties in a month exceeds a predetermined threshhold, its payment obligation is extinguished. This outcome is the product of a well thought-out contract, not a loophole. This is why royalty-based capital is also referred to as flexible debt. Flexible debt allows you to use the capital you require without being forced to give up any equity. It's important to remember that these structures come in many variations, ranging from warrants to convertible notes, depending on the business owner's preference. As an additional benefit, borrowing without covenants is also possible, meaning that we do not require business owners to give them board seats or control agreements like any covenant-nonequity investment would. Also, royalty-based capital may adapt to your cash flow because of its flexible payment structure. Monthly payments are equal to a set percentage of top-line income; therefore, the dollar amount varies depending on how well your company performs. This is a great way to retain cash for when you need it without having to repay a fixed amount regardless of your sales.