Innovation in Finance

Funding is a perpetual problem

Many business owners struggle daily with cash flow. When they apply for business loans from financial institutions, they are rejected because they lack a track record, and when they approach venture capital firms, they are rejected because they lack innovation. These are typical cases where managers lose motivation.

Finance is outdated

Until now, it has been thought that businesses were unable to raise funds because of some problem on their side. However, a new perspective is that the financing system itself is too analog and no longer fits the speed and business models of the digital native generation.

The emergence of RBF is a requirement of the times

The recently emerged "Revenue Based Finance" is attracting attention overseas as a digitally-based financing method that differs from bank loans and venture capital investments. The screening criteria are solely "sales forecasts," and no consideration is given to past performance, differentiating factors, or even the qualifications of the management.

Growth of the subscription market

As the era shifts from ownership to sharing, monthly payments are becoming the norm rather than lump-sum payments. Video streaming services and even subscriptions for everyday items have become indispensable in our lives. From a business perspective, this is a recurring business (continuous billing), making it a model that makes it easy to forecast future sales.

Funding even in the red

If you're a recurring business with a steady monthly revenue, you're likely to be able to raise funds through RBF even if you can't get through a bank or VC. RBF is unique in that even a loss-making company can raise funds if they have a cash runway (the time until their working capital runs out). Perhaps it was the financing side, not the companies themselves, that was lacking in innovation.