Latest / The Series A Show with Fexingo: Early-Stage Funding, Pitch Decks, and Startup Milestones
Why Startups Are Offering Revenue Share Agreements Instead of Equity
In this episode of The Series A Show, Lucas and Luna explore a growing trend in early-stage funding: revenue share agreements (RSAs) — where investors get a percentage of revenue instead of equity or interest. They break down how RSAs differ from SAFEs and convertible notes, using the example of a hypothetical SaaS startup raising $500k with an RSA cap of 2x and a 5% revenue share. They discuss why founders with high margins or recurring revenue are choosing this route, how it aligns incentives, and the potential downsides (including cash flow pressure). Lucas ties in recent market data…
The skinny
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