One of the biggest tasks for any entrepreneur is securing funding. With all the options available, it can be difficult to know which option best suits you and your business. Like most things, one size does not fit all and in the case of entrepreneurs, the options need to be flexible and adaptable to suit your business now and in the future. If you're in the process of exploring funding options, take a look at why revenue sharing with Corl may be your best bet.
Non-dilutive funding is financing where the business does not lose any equity or ownership of the company. In other words, a business receives money and maintains 100% ownership. Types of non-dilutive funding include grants, licensing, royalty financing (e.g. Corl’s revenue sharing), vouchers, and tax credits.
Dilutive funding is any type of fundraising where you give up ownership of your company. Examples of this include selling shares to angel investors and venture capitalists.
Benefits of Non-Dilutive Funding
1. Critical Cash to Support Your Company's Development
Funding is the largest hurdle startup founders face, and oftentimes, founders abandon business growth to focus on securing growth capital. This custom is backward and cripples many early-stage entrepreneurs since they are often bank-blocked and unattractive to VCs or angel investors which lengthens the process.
Non-dilutive funding offers founders a higher chance of receiving funding because the entities providing funding are less worried about equity and generating a big return. Rather, the longevity and sustainability of a business is more attractive. Non-dilutive funding options like revenue sharing are centred around the company's growth which aligns the interests of funders and businesses.
2. Founders Retain Full Company Ownership and Control
The disadvantage of dilutive funding comes with giving up ownership of your company. Once partial ownership is forfeited, your control over the direction and actions of the business can be compromised as well. After helping 100s of companies raise funding Raad Ahmed uses the following equity dilution figures as a general rule of thumb: “seed rounds, expect anywhere from 10% to 25% as a normal range.
For Series A, expect 25% to 50% on average.
For Series B, expect roughly 33%”
These compounding figures place dilution between 68% - 100% after three rounds! Non-dilutive options allow founders to retain full ownership and control, which allows them to stay true to business plans and grow in a manner that benefits them and their business.
Non-Dilutive Funding with Corl
Corl provides non-dilutive funding through revenue sharing, which involves taking a percentage of monthly revenue until a repayment cap is reached. After that, the founder is finished; there are no hidden terms or conditions. With a shared focus on sustainable revenue growth, startup founders can focus on growing their businesses' revenue while maintaining full ownership and control of their company.
With Corl, startups can apply and be pre-approved for Corl funding in under 10 minutes, and funded companies are eligible to receive multiple rounds, no dilution necessary.