by Stephen Garner

Menswear custom clothier Knot Standard just received a seven-figure investment from an alternative investment source: revenue-based financing. Knot Standard will use the new capital to expand into new geographic markets, open new showrooms and resources to continue delivering high-touch customer experience.

Knot Standard partnered with revenue-based financing firm Decathlon Capital after realizing that its revenue-funding approach suited the custom menswear brand’s needs when equity did not due to the dilution, misaligned incentives, and unhealthy growth expectations inherent in most equity investment models.

The vast majority of the U.S. economy is populated by companies seeking a path to growth that is more sustainable — relying less on high-profile, equity-diluting venture capital funding and more on the partnerships.

“We actually use equity funding alongside revenue-based financing, and it works for us really well,” said Matt Mueller, founder and president of Knot Standard. “We are funded by a group called Provenance. But since revenue-based financing is not dilutive, it allows us to keep our current equity structure in place without raising another round of equity. It’s preferable to do it this way so that we don’t see more dilution in the company.”

Knot Standard operates showrooms in 10 major U.S. cities, from Los Angeles and San Francisco to Washington D.C. and Knot Standard’s headquarters in New York City.