[rlucas]

There are lots of ways to get a return. I helped start Lighter Capital (originally "RevenueLoan"), which invests a lump sum that gets repaid as a percentage of revenue (like a royalty). That model, Revenue-Based Financing, is harder to game than dividends (management can and often does make profit "disappear" but rarely has any incentive to make revenue disappear).

You can also have redemption rights or dividends. Depending on tax treatments these can be reasonably lucrative.

Of course, if you tautologically declare that the only payout is from an "exit" then no exit, no returns. But historically speaking "exits" are the exception, not the rule -- yet businesses have been aggregating capital and rewarding investors for centuries.

[mdorazio]

I totally agree, but in cases like Republic with a Crowd Safe, none of those options seem to apply unless I'm missing something. My question was for crowd funded smaller companies that have low potential of an exit - in those cases how is a crowd funding "investor" going to realize a return?

[rlucas]

Very fair critique. The SAFE for all its merits is an exit-centric security.

[leesalminen]

Agreed 100%. Financial instruments are interesting- if you can dream up the structure, there's likely a (legal) way to make it work. After all, it's just a record in a database at this point :).