Alternative financing options with WE DO GOOD, Brainforest and Goparity

At maze impact, we provide early-stage impact founders with both financial and non-financial support. While we operate with a venture capital model, offering funding in exchange for equity, we also take a hands-on approach. This means working closely with founders to guide them through key growth strategies, helping with fundraising, and making crucial introductions.

The more we work with founders, the more we realize that venture capital alone isn’t enough. Many impact-driven entrepreneurs are looking for more flexible, founder-friendly alternatives that complement venture funding or can stand on their own.

After hearing from many founders about their interest in different funding models, we reached out to key players in our network. They specialize in unique funding mechanisms designed to help impact founders scale their businesses.

Here’s what they shared:

Crowd revenue-based financing with Paul from WE DO GOOD

Paul Boutlier, Head of Investment & Business Development at WE DO GOOD Founded in 2013, WE DO GOOD is a crowdfunding platform that allows startups to raise funds through crowd revenue-based financing (RBF). This model connects businesses with individual investors who provide funding in exchange for a percentage of future revenues. What makes We Do Good’s approach unique is that it brings together a community of investors, allowing startups to raise capital without diluting their equity.

Q: Can you explain how crowd revenue-based financing works and how it differs from traditional lending or equity financing?

Paul: Crowd revenue-based financing allows startups to raise funds from individual investors who receive a percentage of future revenues. Unlike traditional loans, where repayment is fixed, this model adjusts based on the company’s actual revenue. It’s different from equity financing as well, because founders keep full ownership of their company. It’s a flexible, non-dilutive option that can complement other types of funding.

Q: What makes crowd revenue-based financing different from traditional revenue-based financing?

Paul: The main difference is the crowd aspect. Instead of securing funds from a single lender or institution, we involve a large community of individual investors. This not only diversifies risk but also helps businesses build a network of supporters. Additionally, crowd RBF can help increase visibility for the business, as these individual investors often become customers or advocates of the brand.

Q: What are the key benefits of crowd revenue-based financing compared to traditional methods?

Paul: With crowd RBF, the biggest advantages are flexibility in repayment and no dilution of ownership. You can also raise more debt, and thanks to the crowd aspect, you get increased visibility. The individual investors who fund your project can become ambassadors for your brand, sometimes even customers, which adds value beyond just the money.

Q: How is the percentage of revenue repayment determined?

Paul: The repayment percentage varies depending on the amount raised, the business plan, and EBITDA margins. Typically, this percentage falls between 3% and 10%. We also set a minimum turnover threshold, meaning companies don’t have to make payments unless they meet a certain revenue level. There’s also a cap to make sure repayments don’t overwhelm the business.

Q: What advice would you give to founders considering revenue-based financing?

Paul: Start planning early. As soon as you have a solid business model, start thinking about all the different ways to fund it. RBF can work well alongside other sources of funding like strategic equity investors and debt.

Traditional revenue-based financing with Thomas from Brainforest

Thomas Gmeiner, Chief Venture Officer at Brainforest Brainforest, established in 2019, is the world’s first venture platform dedicated to protecting and regenerating forests. Unlike We Do Good, Brainforest’s approach involves traditional revenue-based financing, where companies receive funding from a single investor or group of investors, without involving a crowd. Brainforest focuses on ventures that support forest regeneration and biodiversity and offers a patient capital model, providing startups with the flexibility they need to grow.

Q: How does Brainforest support startups beyond traditional venture capital equity investment?

Thomas: We provide much more than just capital. After investing, we offer hands-on support in areas like communication, sales, fundraising, and design. We also provide patient capital, which is important for nature-based ventures that take time to scale. Plus, our ties to philanthropy allow us to work with less pressure on immediate returns.

Q: How does Brainforest use alternative financing models like revenue-based financing?

Thomas: We’ve been developing new financial instruments like revenue-based financing to meet the specific needs of the forest sector. What makes it appealing is that it lets startups grow without giving up too much equity. Our model gives ventures the flexibility to focus on their long-term impact, without the pressure to exit quickly.

Q: What are the most important factors for a startup to consider before choosing revenue-based financing?

Thomas: Consistent and predictable revenue streams are key. Repayments are tied to revenue, typically between 3% and 8%, so a startup needs to be confident their revenue will cover both operational costs and repayments. That’s why industries like subscription services or consumer packaged goods often do well with this model.

Q: Why do you use traditional revenue-based financing for Brainforest’s ventures?

Thomas: We work with forest-related startups that often require long-term capital to scale their impact. Traditional revenue-based financing allows us to offer patient capital that matches the long-term nature of these projects.

Q: What are the benefits of traditional revenue-based financing for startups in your sector?

Thomas: One major benefit is that startups don’t have to give up equity, allowing founders to retain full control of their company. It’s also more flexible than traditional loans because repayments adjust according to revenue. In sectors like forest regeneration, where revenue might fluctuate seasonally, this model provides the breathing room startups need to grow sustainably.

Q: What kind of growth trajectory or revenue consistency does a startup need to be a good candidate for revenue-based financing?

Thomas: Companies with 20% to 40% annual revenue growth are generally a good fit. These businesses need moderate capital to fund marketing or product expansion, but not at the expense of giving away large chunks of equity. In sectors like forestry, where revenue can be seasonal, RBF is a great option because repayments are tied to the revenue cycle.

Crowdlending for sustainability with Matias from Goparity

Matias Aramburu, Sales Manager at Goparity

Goparity is a crowdlending platform focused on supporting sustainability-driven startups and SMEs. They help companies raise funds in the form of debt by connecting them with individual investors who want to back projects with positive environmental or social impacts.

Q: What stage of growth is most suitable for crowdlending, and why is it not ideal for very early-stage startups?

Matias: Crowdlending works best for businesses that have already gained some traction—typically those at the Series A or B stage. By then, the company is generating revenue and is either close to breaking even or already profitable. Very early-stage startups are too risky for crowdlending, as they often don’t have the revenue consistency needed to attract individual lenders. For them, short term loans for operational ends may be the best option (keeping in mind that having a high equity/total assets ratio can help obtain a lower interest rate). Of course, also equity financing or grants might be a better fit for them.

Q: How does crowdlending differ from normal bank debt for startups and growth-stage companies?

Matias: Crowdlending offers several key advantages over traditional bank debt:

1. Less bureaucracy: Unlike banks, which often have lengthy approval processes, crowdlending is much faster. This is particularly important for growth-stage companies that need quick capital to seize opportunities or scale their operations efficiently.
2. Community-driven funding: With crowdlending, businesses receive smaller investments from many individual lenders, which not only reduces the risk of relying on a single financial institution but also creates a network of supporters who believe in the company’s mission. This can be an added advantage, especially for consumer-facing businesses looking to build brand awareness.
3. Flexible terms: Crowdlending platforms tend to offer more flexible repayment schedules compared to banks, which often impose more rigid terms. This makes crowdlending a better fit for companies that are in growth mode but need adaptable financing options.
4. (very important) No impact on bank loan records: Bank loans are registered with European banking authorities and can affect a company's future borrowing capacity. Crowdlending, however, does not show up on these records, allowing businesses to secure additional financing from banks if needed without negatively affecting their standing.

Q: What types of loans does GoParity offer to companies?

Matias: We offer both short-term loans, which are great for working capital or managing cash flow, and long-term loans for things like capital expenditures or contract refinancing. These products are tailored to meet the specific needs of growing companies.

Choosing the right financing for impactful growth

As we can see, alternative financing models like crowd revenue-based financing, traditional revenue-based financing, and crowdlending provide impact-driven startups with flexible, founder-friendly options that help them scale without giving up too much control. Whether it’s through a community of small investors, strategic patient capital, or individual lenders, these tools give founders the ability to choose what works best for their stage of growth and business model.

If you’re considering alternative financing, it’s essential to understand your cash flow needs and growth plans. Start exploring your options early, build relationships with aligned investors, and ensure that your funding strategy supports both your business goals and your mission.