Royalty Funding - Still the Wave of the Future
Interest in Cryptocurrency Initial Coin Offerings (ICOs) waxes and wanes, but interest in royalty funding (revenue participation) continues steady growth.
Vision Masters are asking: "Why give away equity which may in the future be worth tens or hundreds of millions of dollars, along with the danger of stockholder interference in my affairs if I don't have to?" If you're not paying attention to this alternative asset class, you're not giving your company and yourself full benefit of your innovative talent.
To continue this conversation with you, Arthur Lipper has released several new articles on the RoyaltiesWritings.com website. Refer to the following recent press release for details:
LOS ANGELES, CA: September 5, 2017: Arthur Lipper, well-known Wall Street investment banker and advisor, has released the second in a series of articles about financing with royalties. Lipper created two imaginary characters, Larry and Barry, who make investments and then argue (or agree) about the results. It's an effective way to make complex financial ideas accessible and interesting to everyone.
The article begins:
"Barry: Next time we’ll do it differently. We are really going to regret the deal we did. You mean the terms or the people?
Larry: The terms were too one-sided and the people so arrogant in thinking that they knew better how to maximize profits than we did. I am also sorry we gave them the right to place directors on our Board of Directors.
Barry: The two terms I liked least were the liquidation preferences where they get a big return before the stockholders get anything, in the event of a sale of the company. I also thought the ratchet terribly unfair, which allows them to increase their percentage of ownership, without additional investment, in the event we don't make our numbers.
Larry: They were supposed to help us with introductions leading to business and other good things.
Barry: Nothing really happened after the deal closed, except that we had to change some of the benefits we had as owners."
Read the complete article here; no fees or registration required.
Royalty funding is an area of special interest for Mr. Lipper, whose financial career extends over 50 years; he played a key role in the professional analysis of mutual funds and was the Publisher and Editor-In-Chief of Venture, The Magazine for Business Owners and Entrepreneurs. Further articles in the series, which will be highlighted on the website Royalty Writings will appear regularly, and a complimentary newsletter to Royalties Express, with regular updates, is available on request.
Contact information regarding this press release: Michael North; michaelnorth@pacificroyalties.com.
More information about Arthur Lipper: http://www.pacificroyalties.com/management/.
This series is supported by Pacific Royalties and by Intelliversity.
Other new articles in this series, found at RoyaltiesWritings, include: "15 Questions Investors have about Revenue Royalties" and "Should a Royalty Investor Use Leverage to Increase the Return?"
Taken together and with my earlier blog summary of the benefits of royalties, you'll have a good feeling and rationale for offering royalties rather than equity to prospective investors. For a full and fun read on the subject, check out my eBook on royalties The Road Less Traveled, which you can download for free on the Intelliversity site. You'll find it in the Library along the right side of the site.
For further discussion on royalties, with respect to your particular situation and financing needs, set up a telephone meeting with me by reserving a slot in my calendar.
Key Takeaway: The onus may be on you to insist on a royalty agreement when financing your company. Get clear on why. Also get clear on how to demonstrate for investors why royalties may be a better choice for them as well. Then connect with us by telephone to design a royalty agreement that fits your needs.