Many businesses with recurring revenue models, such as SaaS companies or rental property owners, struggle to access capital without giving up equity or taking on high-interest debt. At the same time, investors looking for predictable returns often lack accessible opportunities tied to stable revenue streams. This creates an opportunity to connect businesses and investors through a marketplace for securitizing future recurring revenue.

How It Could Work

One way to bridge this gap is by creating a platform where businesses can sell a portion of their future recurring revenue—like subscription fees or lease payments—to investors in exchange for upfront capital. Businesses would list their revenue streams, specifying terms such as the percentage of revenue sold and duration. Investors could then browse these opportunities, assess risk using platform-provided analytics, and purchase shares of the revenue. The platform would handle revenue verification, contract standardization, and automated payment distribution.

Key beneficiaries could include:

• Businesses: Startups and SMEs with steady revenue but limited financing options.
• Investors: Individuals or institutions seeking passive income tied to predictable cash flows.
• Platform: Could earn fees from transactions, premium analytics, or subscription services.

Comparison with Existing Models

Unlike traditional revenue-based financing (which involves lump-sum repayments) or factoring (which deals with one-time invoices), this approach would allow investors to directly purchase shares of recurring revenue streams. Peer-to-peer lending, another alternative, requires fixed repayments, whereas this model aligns investor returns with actual revenue performance, reducing pressure on businesses during downturns.

Execution Strategies

An MVP could start with a simple marketplace for a single industry, such as SaaS, using manual underwriting and standardized contracts. Over time, automation could streamline revenue verification and risk assessment, enabling expansion into other sectors like real estate or membership services. Early legal consultation would be crucial to ensure compliance with securities regulations.

Potential monetization approaches might include transaction fees, premium analytics subscriptions, or acting as an intermediary that buys revenue at a discount before reselling to investors. Key challenges—like regulatory hurdles and default risk—could be mitigated through diversification, automated tracking, and structured contracts.