Risk of Investing
Creating a NextSeed Account
Debt Investments on NextSeed
Preferred Equity Investments on NextSeed
SAFE Investments on NextSeed
How a Regulation Crowdfunding Investment Works
How a Regulation D Investment Works
Choosing your Investment
Staying on Top of my Investments
Accredited Investors
Opportunity Zones and Qualified Opportunity Funds

Debt Investment: Term Notes vs. Revenue Sharing Notes

What are the differences between term notes and revenue sharing notes on NextSeed?

Debt Instrument
Return on InvestmentMonthly Payments
Term Note
Annualized Interest Rate

Fixed - Same amount paid per month. Payments required whether or not revenue is generated.

Consistent and predictable payments with set interest rate.

Early repayment: if the business pays back the investment principal in full early, you will receive less total interest than expected over the life of the investment.
Revenue Sharing Note
Set multiple on investment principal. Rate of return depends on how quickly a business makes its payments, and how much is paid each month.
Varied – Amount varies based on the business’s revenue generated each month (determined by a set revenue sharing percentage). Payments only required when revenue is generated. 
If a business does well, the investor will be paid back faster and therefore earn a higher return.  

If a business does not open, no payments are due until maturity.

Early repayment: some investments offer a lower investment multiple if the business pays early.