businesses solve networking problems; and Photavia, which creates digital galleries of historical and educational photos. Two more companies, The Biz Connection and Videoscore, are set to join next week, Dinehart says.
MoolaPitch makes money by charging fees for companies that use the website to raise money. The amounts they’re charged vary by the amount of money raised, and the length of the campaign, Dinehart says.
Dinehart says he urges businesses that conduct offerings using MoolaPitch to issue investors what his organization calls “revenue participation notes.” These are essentially loans that get repaid to investors—plus a premium—once companies have managed to grow and start bringing in revenue.
Investors might find this structure more appealing than a traditional equity investment, Dinehart says, because they are more likely to start getting some cash back before the company goes public or is acquired. Plus, it eliminates the need for shareholders and investors to agree on a valuation.
“You don’t have to sit around and decide what the value of that startup is, which is the mountain you have to climb any time you put out an equity issue,” he says.
