A Funding Model You Need to Know – Revenue Royalties

As you may know, Wall Street guru Arthur Lipper is the Chairman of Intelliversity’s Board of Advisor, and for a good reason.

Arthur is both a creative visionary and grounded on earth (which is a balance we want you to achieve for yourself.)  Mr. Lipper has been one of the giants of the financial world for decades. His recommended investment method (Revenue Royalties) is both innovative and practical, which is why I recommend it for many of our followers.

Now you can take a deep dive into Revenue Royalties. Arthur Lipper’s new book, “Revenue Royalties,” is now available, helping you as a business owner learn how to finance your business while retaining control of your equity.

This book is a masterwork, for the first time getting the depth of Arthur’s though out of his head and onto paper so you can access it.

Available only electronically, and exclusively through Amazon, it is comprehensive, written in plain English.

What I like about this book is that it features easy-to-follow sections segmented by roles (business owner, investor, accountant, lawyer etc.) so that each gets just the focused information you need to take advantage of the investment power of royalties.

You can learn more about why and how Revenue Royalties are becoming a new standard financing approach for both investors and company owners, and read sample excerpts from the book, on Amazon.

In brief, let me  summarize the pros and cons of financing your business with this asset class (revenue royalties):

Pro (in favor of) revenue royalties vs selling equity

  1. Non-dilutive:  Retain your equity
  2. Retain control:  Investor is not an owner; need not be on your board
  3. No push to exit:  An exit (sale of the company) is not needed
  4. Aligned incentives:  Investor is incented to help you increase revenue
  5. Minimal fiduciary duty to investors:  You have a duty to repay but no duty to increase stockholder value nor move the company toward a sale

Pro (in favor of) revenue royalties vs borrowing money (debt)

  1.  Repay only as you can (in proportion to revenue)

Con (opposed to) revenue royalties

  1. Difficult to syndicate
  2. Only suitable if there is sufficient margin to support repayment
  3. Makes future sale of equity difficult (unless properly structured)

To get started on this subject, you can get a brief introduction to Revenue Royalties in my own eBook available on this site in our library “The Road Less Travelled – The Story of Revenue Royalties”.

Also, if you want to explore financing of your business using Revenue Royalties, please make an appointment with me on my calendar, available to you on the Connect page of this site.

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Robert Steven Kramarz

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