We are trying to create a FOMO to encourage professional, consulting, law and auditing firms to make the investment of resources necessary in becoming expert in the use of investor-purchased royalties in the financing of projects and companies.
Advising business owners and institutional clients is a competitive business. Those firms first to develop and market an expertise have a competitive advantage, which could be significant.
It is clear to those studying the matter that the owner of an asset, which can be a company, which is expected to increase in value is better served in financing the development of the asset if the terms of financing do not reduce the ownership of the asset.
A royalty being a percentage of defined revenues is not asset ownership related. It is a contractual right to the agreed percentage of defined revenues for an agreed period. It is not related to the profit or loss ascribed to the asset or the valuation of the asset.
The royalty purchaser bases the investment decisions re the attraction of the terms of the contract on a judgment relating to the level and growth of future revenues. Minimum royalty payments can be included as can investor protections and royalty issuer rights of redemptions.
Company owners will benefit from considering the use of royalties in financings and advisors will be advantaged if they can be the advisor bringing the matter to the attention of their client.
Royalties can be used in non-equity-dilutive project and company financings, acquisitions, recruitments, and other funding efforts.
Isn’t FOMO a legitimate concern for those interested in growing their businesses and assisting clients to the utmost?
Arthur Lipper, chairman, British Far East Holdings Ltd.
© Copyright 2018 British Far East Holdings Ltd. All rights reserved.