Your payment depends on how much ofthe total investment pie you took with your principal investment.
Suppose that the total amount a business raisedwas $100,000 and you invested $1,000 -
Your $1,000 investment slice out of
the total $100,000 raised is
$ 100K raised
$ 1K investment
The monthly payment a business owes to its investorsgross revenues.each month depends on its
This means payments to investors are calculated first, before costs are deducted.
Let’s say the business has the following hypothetical revenues:
|Month||Gross Revenues||x Revenue Sharing Percentage (per the investment terms)||Total Payment (all investors)|
|1||$ 0||x 5%||$ 0|
|2||$ 200,000||x 5%||$ 10,000|
|3||$ 300,000||x 5%||$ 15,000|
|4||$ 250,000||x 5%||$ 12,500|
Your monthly payment is your share of the total payment made to investors.
|Month||Total Payment (all investors)||x Your Share Percentage||You’re Paid*|
|1||$ 0||x 1%||$ 0|
|2||$ 10,000||x 1%||$ 100|
|3||$ 15,000||x 1%||$ 150|
|4||$ 12,500||x 1%||$ 125|
*NextSeed charges a 1% administrative fee for each payment a business makes to you.
Payments end when the business pays you back your principal plus the
agreed amount on top, or when the maturity date is up, whichever is earlier.
The investment multiple determines what the total amount a business will pay you. In this case:
|Multiple||x Principal Investment||Your Total Payment|
|2||x $ 1,000||$ 2,000|
So if the investment’s maturity date is in 48 months, but the business pays
you $2,000 by month 40, then payments stop at month 40.
If it’s been 48 months and the business has only paid you $1,500, then the
business contractually owes you $500 at the maturity date or risks default.
There are currently no opportunities to exit or resell NextSeed investments.
After an offering has closed, your investment is committed to the business.