The answer to “what if” questions reveals both possible solutions to possible problems and a lot about the individual being questioned. The questions below are neither prioritized nor intended to be comprehensive.
What if ……
you were to unexpectedly die?
who would assume the CEO role?
the sales take longer to come and were less than projected?
you lost your key technology staffer and possibly your whole team?
the major customer on which you were counting changed their mind?
there was a change in relevant government regulations?
the revenues projected are no longer achievable?
there is a general economic slowdown or recession?
your building burns down or is otherwise unusable?
the company is under insured in various areas?
there is an employee rebellion?
a competitor indicates a wish to acquire your company?
a company acquiror doesn’t want you as the CEO?
you reach a point of deciding that you are no longer the best CEO?
customers want a reduced pricing of what the company sells?
there are claims that your compensation is excessive?
a key supplier goes out of business?
the projected profit margin is not achievable?
you receive a bid to buy or license your company’s technology?
the company needs more money to survive?
a bank or other credit provider wants your personal guarantee?
you learn of a likely revenue decline, when do you advise investors?
your investors want their money back and wish to end the royalty?
the company finds it difficult to meet its obligations?
revenues and royalty payments are much better than projected?
the company’s intellectual property has been invalidated?
harassment charges are brought against a senior executive?
the company is not able to afford to hire key staff members?
operating expenses are greater than anticipated?
you or others want to hire spouses or relatives?
a competitor reduces their price for similar products?
There are a number of articles posted on the Internet suggesting other “what if” questions which can be asked of entrepreneurs seeking funding. My objective in listing the above questions is not to suggest all of the possible questions. The purpose is to trigger a dialogue through which both the prospective investor and fund seeker can better understand each other and the problems and possible solutions which could confront the company and, as a result, structure appropriately the terms of a royalty.
Arthur Lipper, Chairman
British Far East Holdings Ltd.
chairman@REXRoyalties.com
+1 858 793 7100
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