Everyone says revenue-based financing is easy. They're lying. I'm breaking down the brutal reality and how to actually win.
The Reality Nobody Talks About
A lot of the advice on revenue-based financing rests on assumptions that made sense five years ago. The world has moved on.
The first thing to understand is that you should focus on one thing and do it exceptionally well. I've seen this play out across dozens of companies. The pattern is unmistakable.
Many teams spend months on the wrong path before realizing that you need to move fast and break things. Once they make the switch, everything changes.
Why Most Approaches Fail
Many common approaches to revenue-based financing are flawed at the root.
The root cause is usually one of three things:
Copying what big companies do without understanding why they do it. What works for Google doesn't work for a 10-person startup.
Over-engineering the solution when a simple approach would work better. I've seen teams spend six months building something that could have been done in two weeks.
Ignoring the human element. Technology is the easy part. Getting people to actually use it is where the real challenge lives.
The Counterintuitive Truth
In revenue-based financing, the best practitioners often do less, not more.
The lesson: you need to move fast and break things. It sounds simple. It's incredibly hard to execute.
The AI Angle
Any discussion of revenue-based financing in 2026 has to include AI. As someone who's invested in Anthropic, OpenAI, Scale AI, and Hugging Face, I have a front-row seat to how AI is transforming this space.
The short version: AI makes good practitioners better and bad practitioners worse. It's an amplifier, not a replacement.
Some teams use AI to get far more out of revenue-based financing. Others spend heavily on AI that solves the wrong problem. The difference comes down to understanding what you're actually trying to achieve.
This connects to broader themes around investor relations, SAFE agreements, seed funding, pitch deck design, Series A that I've been thinking about a lot lately.
Wrapping Up
I've shared a lot here, and I know it can feel overwhelming. But you don't need to get revenue-based financing right on day one. You just need to get started and keep improving.
Founders who do well at revenue-based financing tend to share one trait: they're relentlessly practical. They don't chase perfection. They chase progress.
That's the mindset I'd encourage you to adopt. Start where you are. Use what you have. Do what you can. And keep pushing forward.
As always, I'm rooting for you.
Frequently Asked Questions
Q:How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.
Q:Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.
Q:What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.