Create a highly favorable compensation and retirement package for yourself.
Finance other companies in which you hold an interest using this company’s assets as collateral for credit.
Establish the mission, policies and practices of the company without investor or board approval.
Hire whomever you wish and on whatever terms you decide, for whatever reason you may have.
Invest as much money as you decide in research and development.
Change the locations of company facilities.
Sell or discontinue elements of the company without anyone’s approval.
Acquire companies or expand existing operations, even if benefits are not immediate.
Recruit executives on terms you deem to be advantageous.
Decide the appropriate motor vehicles of your choosing to be provided to executives.
Choose executive meeting venues, even if located in resort areas.
Direct the establishment of tax strategies to reduce reported profits.
Make whatever philanthropic contributions you wish.
Determine the level of executive and staff education necessary.
Determine travel and customer entertainment policies and practices.
Disclose the amount of financial and other information about the company as you wish.
Determine the countries and companies with whom you will deal.
Borrow whatever amount of funds, on whatever terms, you deem appropriate.
Decide on the legal and accounting firms to be retained.
All of the above 20 actions can impact the reported profitability and therefore valuation of the company. This is significant as investors only buy stock in companies with a view to selling the stock, hopefully at a profit, and that profit will be influenced by reported profitability. Stock investors require information and elements of control reflected in the ability to elect members of the board of directors, The investor-influenced board of directors may not always favor the positions urged by the controlling shareholders and areas of conflicting interests are likely to arise.
Royalty investors seek and purchase a percentage of defined revenues for an agreed period and are primarily interested in the royalty issuing company’s sustainability and growth of revenues. They are not interested in the reported level of profitability or market valuation of the company. Therefore, remaining the sole decision-maker and being in complete control of the business is worth the company initially accepting the cost of money, especially where there is an issuer’s right of redemption permitting the termination of the royalty, on known terms or on a worst case basis.
We believe that royalties are the better way of both investing in and financing of privately owned companies. Therefore, we urge you to review our website http://arthurlipper.com, and inspect our REX website calculators, starting with http://REX-Basic.com and also read our eBooks and or soft cover versions available from http://Amazon.com for “Off The Top” and “Revenue Royalties”.
© Copyright 2019 British Far East Holdings Ltd. All rights reserved.
Arthur Lipper, Chairman
British Far East Holdings Ltd.
858 793 7100
Blog Management: Viktor Filiba