Both – the entrepreneurs and investors are aligned towards revenues and growing the business. Like debts, revenue-based financing (RBF) is non-dilutive i.e., you don’t lose a stake in your business, you have 100% control over your business without anybody’s interruption. With respect to debts, you have a fixed amount to repay along with some collateral security. So ownership and control is all yours!
In RBF, your monthly payments are directly linked to the revenue performance. The payments will alter with your revenues making your finance a variable cost rather than a fixed cost to your business. Consider the hotel industry, they have maximum business during festivities and their repayments will be higher compared to other days thereby reducing the burden of principal repayment.