The longer duration, lower cost of capital alternative to Novel Capital

What is Novel Capital?

Novel Capital is a US-based revenue-based financing company focused on B2B SaaS and subscription businesses. They advance capital upfront in exchange for a percentage of future monthly revenue, with repayment structured around a repayment cap — typically 1.1x to 1.5x the funded amount. Novel Capital requires a minimum of $350,000 in ARR and a 10% year-over-year growth covenant, meaning your revenue must grow by at least 10% annually while the facility is active.

Novel Capital primarily positions itself as a bridge between equity rounds, targeting VC-backed SaaS companies that need capital to hit their next milestone. Their maximum term is 36 months with an effective interest rate of approximately 21%. The growth covenant is a key differentiator — if your ARR growth slows below 10% YoY, you may be in breach of the agreement.

For bootstrapped founders or companies with stable but moderate growth, Founderpath is the most commonly cited alternative. Founderpath charges no growth covenant, offers terms up to 48 months, effective rates as low as 16%, and funds worldwide rather than US-only. Founderpath also has no repayment cap — you pay a fixed fee set at closing rather than a multiple of the funded amount.