Key Messages
- Traditional financing for growth-stage businesses usually requires you to give up significant equity or take on covenant and guarantee requirements.
- Momentus Capital’s Impact Investments team offers businesses and organizations financing options that are more flexible and align with the performance of the business.
- We offer two types of non-dilutive funding: preferred equity and revenue-based financing (mezzanine debt).
At Momentus Capital, our Impact Investments team provides flexible, non-dilutive funding to growth-stage, mission-driven businesses. Unlike traditional equity investors, we prioritize capital solutions that empower entrepreneurs without requiring you to give up ownership or accept restrictive covenants or guarantee requirements.
Whether your company is growing through innovation, market expansion, or even through acquisition, our Impact Investments team offers two unique non-dilutive financing options for growth capital:
- Profit Share Preferred Equity; and
- Revenue Share Mezzanine Debt
At Momentus Capital, we offer you a continuum of capital with comprehensive financial solutions for entrepreneurs, developers, community-based organizations, and partner lenders – supporting you at every stage of your growth.
What is Non-Dilutive Funding?
First, it’s important to define what non-dilutive funding does. It allows you to raise capital without giving up ownership or equity in your company. Unlike traditional loans that require fixed payments regardless of your company’s performance, or venture capital that requires you to give up partial ownership – and with it, some say control over your company – non-dilutive financing is an alternative option that prioritizes impact and aligns with your success. To support your growth, especially if you have a strong community presence, we offer non-dilutive financing options in the form of profit share preferred equity and revenue share mezzanine debt. Each investment option serves differently depending on your business needs.
Profit Share Preferred Equity: Investing in Long-Term Success
Profit share preferred equity differs significantly from traditional equity options. Essentially, instead of gaining a partner that takes an ownership stake in your company, you gain an investor focused on your long-term success.
Instead of relinquishing a larger degree of control, you receive growth capital in return for a percentage of profits and dividend payment. When a pre-determined multiple on the investment is achieved, the shares are redeemed. Additionally, while the investment targets a three-to-five-year holding period there is no fixed term.
To Qualify
Your company must have a minimum revenue of $4 million and have proven profitability.
Ready to Grow Without Adding Debt?
Talk to our Impact Investments team today and explore your options.
Revenue Share Mezzanine Debt: A Flexible Repayment Option
Revenue share mezzanine debt offers a different approach. With this option, you pay a percentage of your company’s revenue, plus a fixed interest payment. This revenue-based option means that when your business is thriving, your repayments are higher, and when things slow down, they are lower. This flexibility makes it distinct from traditional debt which requires you pay fixed monthly or quarterly payments. It is particularly beneficial for your business if you have fluctuating or seasonal cash flow.
Revenue share mezzanine debt has a three-to-five-year term with a set maturity date. This is a crucial difference from our equity product. That provides a clear timeline for both you and us – a set end date – where the principle and any remaining interest/revenue share payments are due. Furthermore, since this option does not allow for business collateral or personal guarantees, it protects both your business assets and your personal assets.
To Qualify
Your company must have a minimum revenue of $4 million and a positive cash balance.
Choosing the Right Non-Dilutive Funding
Selecting the right growth capital option depends on your specific needs and circumstances. While both of our non-dilutive financing options help local businesses like yours grow, the real impact is in keeping wealth within your community.
Profit share preferred equity is an alternative lending option best suited for businesses expecting long-term profitability and stability. It gives you the ability to invest in growth without the burden of fixed debt payments or dilution of ownership.
Revenue share mezzanine debt is ideal if your business has fluctuating cash flow. This revenue-based financing allows your repayments to adjust with revenue, offering you flexibility and peace of mind.
Here’s a quick comparison of the key points you should consider:
| Profit Share Preferred Equity | Revenue Share Mezzanine Debt | |
|---|---|---|
| Ownership | ||
| Ownership |
|
|
| Repayment | ||
| Repayment |
|
|
| Cash flow impact | ||
| Cash flow impact |
|
|
| Term | ||
| Term |
|
|
| Key benefit | ||
| Key benefit |
|
|
| Best for | ||
| Best for |
|
|
At Momentus Capital, we’re committed to investing in local impact and supporting community-centric businesses. Our Impact Investments team offers these alternative financing options to help your business achieve its goals without the constraints of traditional funding.
Every business is unique, and we work with you to find the best solution for your specific needs. Whether that solution is a Community Development loan, an Impact Investment, an SBA loan, or a combination of any of these, we can help.
Additional Resources
Ready to grow without adding debt? Talk to our Impact Investments team today and explore your options.
