Thanks, Danie.

Convertible revshare offers unique benefits. For the entrepreneurs:

• Simpler legal structure and, thus, paperwork
• No dilution. Entrepreneurs retain full ownership of the business (no boards of directors, simplified taxes in most jurisdictions, etc.)
• No external pressure to pay dividends or sell the business
• For businesses that want mentoring but don't need capital, this solution is simpler than giving equity or stock options and it aligns mentors with performance

For the mentors (and/or accelerators):

• Easier auditing of the businesses (only revenue needs to be audited and not cost, cost allocation, dividends, loans, etc.)
• Flexibility when distributing the proceeds (for example, revshare could be distributed amongst mentors depending on how active or useful they recently were).
• Faster financial returns
• Simpler taxation

Of course, it is not perfect. Growing a business requires bringing in additional resources (employees, capital, inventory). In turn, that requires sharing money (salaries, vendor fees, royalties, etc.) or sharing equity (partners, investors, etc.). Convertible revshare is just one of the ways of doing it.

Would you agree?