Revenue Share Agreements

I work for a corporate advisory firm and we are faced with negotiating on behalf of a client. The funder is a big corporate who is looking to get more customers for its services but does not want to take equity risk. Traditionally you would expect the funder to rather structure a debt-investment into the company.

The funder is asking for a revenue share agreement. This is confusing to me. Does anyone know about a revenue share agreement and more importantly how you can model it when making a financial model with a DCF valuation analysis.

I appreciate all the help I can get.

 

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