What is a Revenue Share Security
The GRSS is a new type of capital raise security aimed at addressing some of the issues within the crypto and token economy. It is equally a useful tool for more traditional raises. Revenue Share is not a new concept being commonly used in the music, film, infrastructure, and US Municipal Bond markets.
However, the GRSS is the first time a security has been provided in a standard form as a tradable alternative to tokens, equity or debt. For the crypto community it provides the advantages of no dilution or debt. For the investor it provides a real return outside the appreciation of the Security price.
How it works
In its simplest form the GRSS is secured by a share of the company’s gross revenue. The advantages are that the returns are simple to calculate and verify for the investor. For the issuer the revenue share is typically tax deductible at the top line.
The issuer is not diluted nor is there any debt obligation. If the company is not generating revenue there is no distribution, unlike debt.
For the investor the company must distribute revenue regardless of whether it is profitable or not, like debt. Unlike debt there is no obligation where no revenue is available, nor is there a short term need to repay the principal.
The GRSS can run in perpetuity allowing the management time to focus on the business, rather than managing debt refinancing. Like equity, the investor benefits from the success of the company’s revenue generation. Unlike equity the investor is not reliant on the board to offer dividends.
Example : Company A
Company A seeks to raise $10M for their new expansion. After analysis of the revenue projections and the company’s market sector the agreed terms are:
- Instrument: Negotiable Gross Revenue Share Security
- Capital Raise amount: $10,000,000
- Revenue sharing percentage: 10% gross revenue, paid quarterly
- Assumption first quarter gross revenue is $5,000,000
In the first quarter, the unaudited accounts show a gross revenue of $5,000,000. The Revenue Share is calculated as 10% x $5,000,000 = $500,000. This amount is held in trust, and payable to the investors via an Inspira approved stable coins such as USDT, USDC or other. This cycle continues in perpetuity and revenue share payments continue to be made to Digital Security holders.
*There is no guarantee that any company will achieve their future projections.
The GRSS is a fully tradable Security on the Inspira Security Exchange (ISX) based in Singapore. This allows the GRSS to behave similarly to a listed equity. The value of the GRSS can be easily calculated by monitoring the performance of a company via its gross revenue generation.
As a digital Security, access to the platform is relatively easy with the trading and settlement process rapid and easy to understand.Learn More
When it comes to funding there are two dominant options: equity and debt. In equity-based financing, investors fund a business in exchange for equity shares in the company and normally receive a return through dividends, acquisition, or an IPO. Debt financing is less flexible and impacts your balance sheet.
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