Selling a share of revenue is less expensive than selling a share of equity (or ownership). The high cost of raising capital through an equity sale is due to the complex legal agreement. With a straightforward Revenue-Sharing Offer, your business or social enterprise eliminates the legal expenses related to negotiating these terms (among many):
- Pre- and post-money valuation
- Approval, anti-dilution and conversion rights
- Board representation and voting rights
- Staged capital commitments
- Positive and negative covenants
- Redemption and tag-along rights and warranties, etc., etc., etc.
Plus, you stay in control of your enterprise and your financial destiny. In Gender Wealth Strategy, we describe this as “build-to-keep” versus “build-to-flip.” The WIIN Learning Platform supports owners and entrepreneurs aiming to scale their positive impact, build a sustainable, high-impact enterprise, and create enduring social and economic value. That’s a “build-to-keep” strategy and it’s one that will create the lasting impact needed to close the gender wealth gaps women experience around the world.
Still, getting ready for revenue-based growth capital investment requires a commitment of time, money, and people. We designed the Business Impact Accelerator platform to guide you step-by-step through the process of making sure your enterprise is ready for investment and ready to deliver sustainable results for all stakeholders (including investors).
We estimate it will take you and your team anywhere from 2–12 months to work through the relevant sections of Modules 1–5 of Business Impact Accelerator© (depending on the work you’ve already completed and how many hours per week you have available). Modules 1–2 focus on designing and validating a sustainable, profitable, and impact-driven business model. Module 3 focuses on developing a high-quality Sustainable 10X Impact Business Plan and five-year pro forma financial forecast. You will use portions of Modules 4-5 during this time, but these become more relevant after you begin your ten-year journey of sustainable growth, change, and transformation.
Module 6 focuses on completing all of the activities required to pass our Investment Readiness Check, advertise your Revenue Sharing Offer to members of the 10X Impact Forum, and launch a winning 3X-in-10™ Growth Capital Campaign on your funding platform-of-choice.
We estimate it will take you and your team 4–8 hours per week to complete the individual and group activities outlined in Business Impact Accelerator (subject to the same provisions mentioned previously). Review the Quick Start Action Plan to complete Module 1 of Business Impact Accelerator in eight weeks or less.
We estimate you will need to budget $8,500-$10,000 in order to become “investment ready” and meet all legal and regulatory requirements for raising flexible revenue-based capital through one of the crowdfund investment platforms (or funding portals) that accept revenue sharing offers (not all do).
Our budget estimate is broken down into these three areas:
- Books, articles and reference materials: $75–$90 for each team member participating in Business Impact Accelerator (review Key Design Features in the BIA Library for the five books you will need to purchase).
- Verified Check Report from CrowdCheck: $5,000 (this includes due diligence background checks on principals and officers, legal review of governance documents, 3X-in-10™ Revenue Sharing Offer documents, and development/submittal of the SEC Form C disclosure).
- CPA review or audit of financial statements: $2,500–$4,000+ (depending on geographic location and quality of financial records; double this estimate if a formal audit is needed or chosen).
As discussed in Module 3 of Business Impact Accelerator, you will have the option to include capital raising and funding portal costs in your growth capital budget and 3X-in-10™ Revenue Sharing Offer (funding portal costs are not included in the above estimates).
You will need to be transparent with women and HeForShe investors and explain these expenses in your Sustainable 10X Impact Business Plan. However, we think these patient and mission-aligned investors will find this part of the growth capital budget an acceptable price for helping your enterprise to achieve sustainable growth and create enduring social and economic value that positively impacts women.