You’re building a company that will become more valuable. You should own more of it when it does.

Rather than selling a permanent part of your company, Debt Equity offers a path for you to earn that ownership back through growth.

How Debt Equity Works

As a founder, equity may be the most valuable thing you own. It represents your share of the upside you’re creating—and your ability to control the future of the company you built. That’s why we think founders should have a path to own more of their company as the business performs. Debt Equity is designed to do exactly that.

Here’s the simple version:

Proven Ventures provides growth capital in exchange for two things:

  • Equity or the right to equity

  • A percentage of future monthly revenue

As your company grows, you make payments to Proven based on a percentage of revenue. Those payments have a defined return cap, typically around 3x our investment.

And here’s the important part: As you pay us back, most of the equity associated with our investment can be earned back by you. So instead of selling a piece of your company today and potentially giving up that ownership forever, Debt Equity gives you a path to reclaim more of it through performance.

Why tie payments to revenue?

Because it keeps us aligned. When revenue grows, payments grow. When revenue slows, payments slow. There isn't a fixed payment disconnected from what's actually happening in your business. That means our job isn't simply to provide capital. Our job is to help you grow stable, predictable revenue.

Proven retains a small piece of equity long term, giving us the opportunity to participate if you build something extraordinarily valuable.

You get growth capital today. We get bought out as the business performs. And you end up owning more of what you built.

Benefits to Co-Investors and Future Investors:

  • For the company, having previously taken on debt equity can mean that it has avoided diluting its equity early on. For new investors, this can mean that their investment has the potential to retain more value, as the company has not been as diluted by prior rounds of financing.

  • Companies that have taken on debt equity often have more stringent financial tracking and management practices to meet the terms of their debt agreements. This can provide venture investors with a clearer understanding of the company’s financial health and projections.

  • If a company has successfully utilized debt equity for growth, it's a positive signal to future investors about the company's viability and management's ability to leverage capital efficiently. It suggests that the company has a clear path to generating revenue and possibly reaching profitability, reducing the risk for additional investors.

Benefits to Founders and Employees:

  • Taking on debt equity can be a strategic move for founders looking to leverage their company's future cash flows for growth without diluting their ownership. It can serve as a testament to their confidence in the company’s business model and its potential to generate sufficient revenue to cover debt obligations and fuel expansion.

  • Utilizing debt equity can offer founders more flexibility in how they manage their company’s finances and growth, with potentially fewer restrictions than those imposed by equity investors. Founders can maintain greater control over their company's direction and decisions, as debt lenders typically do not require a seat on the board or a say in daily operations.

  • Debt equity allows founders to secure necessary capital without giving up as much ownership stake in their company as they might with traditional equity financing. This approach can be especially attractive in early stages when the valuation of the company might be lower, allowing founders to retain more control and benefit from the company's future growth.

Meet:
The Debt Equity Calculator.

This calculator helps focus on the tangible benefits of opting for debt equity as part of your capital raise. By inputting your total investment sought, pre-money valuation, and the investment amount from Proven Ventures, our calculator will reveal:

  • The percentage of the business sold through the financing round.

  • The portion of equity that is redeemable, allowing you insights into future buyback opportunities.

Moreover, assuming a scenario where your company achieves $5,000,000 in annual gross revenue, we extrapolate the potential acquisition price based on current market multiples for SaaS businesses.

This highlights how much more you could earn, beyond your investors, by leveraging the redeemable equity portion of your financing.

Use revenue to YOUR advantage.

Debt Equity and Your Bottom Line

Debt Equity and Your Bottom Line





Results:

  • A woman sitting on a beige armchair in an office or waiting area, smiling and looking to her right. Behind her is a white shelf with potted plants, and in the background, there are windows, a whiteboard, and chairs.

    Retain ownership and control.

  • A woman with blonde hair in a pink blazer and white shirt, sitting on the floor, smiling, with her right hand resting on her cheek. She is wearing black pants and white sneakers with pink laces. There is a green plant on the left side of the image and a plain, light-colored wall in the background.

    Alignment to growth.

  • Portrait of a smiling man with short hair wearing a blue checkered shirt, standing in front of large windows with a cityscape background and houseplants nearby.

    Redemption cap below SaaS multiples.