Payments start with revenue. No revenue, no payments. People say revenue starts "immediately" assuming that the royalty-based VC funds a business that already

Payments start with revenue. No revenue, no payments. People say revenue starts "immediately" assuming that the royalty-based VC funds a business that already has some revenue. To your other point, it's not that there is less pressure for revenue, but less pressure for "growth" (ex. hiring, expansion, etc.) at the expense of profitability. VCs often push for premature growth at the expense of profits (so they can inflate the company and sell it as fast as possible), whereas RBF is more in line with rapid profits at the expense of growth - i.e. more organic growth through profits. As for Vinny - in RBF if the venture doesn't earn revenue, no payments go back to the VC. Also, if the venture fails and closes, the VC never gets his/her money back. In contrast if you don't pay Vinny, he breaks your legs. :) Banks too.