Revenue royalties, from the perspective of business owners, are a better approach to capital formation because they are non-equity dilutive, which means the investors own no part of the company selling the royalty. The Royalty Agreement requires the payment of a percentage of the company’s defined revenues generated during an agreed period.
Pacific Royalties is a financial education firm based in Honolulu and Del Mar, California.
We conduct research on providing capital for growing companies that generates current income for investors. The company advises those who wish to create investment vehicles that feature revenue royalties as an alternative to debt and equity.
The availability of capital for private companies is the lifeblood of the modern global economy.
Private companies are the hotbed of innovation, employment creation, and economic diversity. Making it easier for emerging companies to secure financing on reasonable terms provides the oxygen that the economy needs to grow — and the enhanced returns sought by sophisticated investors.
But there are many obstacles to raising private capital, both for investors, and for the companies in which they invest. Many companies — and investors — face great challenges in finding the opportunities they need.
And sophisticated investors know that the equity of private companies carries significant risk — they often prefer more predictable, income-based assets.
Can some of these obstacles be removed?
Royalty Finance is one emerging answer to this question, pioneered by one of the most creative minds in modern business, Arthur Lipper. This website explores several developments being offered by Mr. Lipper and his partners.
Update: 4-25-23
Equity and Debt Investments Are Naturally Adversarial
Whereas Revenue Royalties Are CollaborativeInvestments in the equity of companies are based on the principle of profit sharing between those physically working in the company and those who have passively bought a percentage of the ownership of the company. The basic concept is that the greater the profitability of the company the greater its future value will be. For practical purposes, value is measured as the net amount for which the company can be sold….
Arthur Lipper gives a talk to the First Marines,
at Camp Pendleton, California — May, 2022.
Lessons learned through service in the United States Marine Corps,
translated into practical investment advice.
May 1, 2020
In Economically Stressed Times —
How much volatility is enough?
Sophisticated investors may prefer to invest a segment of their investment portfolios in high-yielding revenue royalties, rather than subject themselves to the stock market’s volatility and the challenges of stock picking.
The professional measurement of profit depends on both the amount of time required for a disposition of the acquired asset and the risk of loss accepted by the investor.
The investor’s conundrum is choosing the known risks and benefits of securities speculation, compared to the higher yield and more predictable outcome of revenue growth investing.
January 10, 2020
The Process Of Financing Startups Using Assured Royalties:
The startup company having the ED (extraordinary discovery) which creates great benefit for those using the ED, must prove, produce and distribute the ED, and this requires funding.
The company believing that they have the ED, hereinafter called the Issuer (revenue royalty issuer), will need to identify and convince two different investing groups:
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May 15, 2019
SAN DIEGO, CA; MAY 8, 2019: A new book, “Off the Top,” has been published on Amazon, by two financial services experts, Arthur Lipper and Don Boroian.
This thoughtful work explores the power of investments that generate returns based directly on top-line revenue instead of reported profits or debt — or “off the top.” The book is available for immediate worldwide electronic delivery at http://amzn.to/2JJqTXy
March 8, 2018:
Revenue Royalties
Introduced in China
Stimulating Investment in Large-Scale Chinese
Infrastructure Projects by International Capital Markets
Tianjin, sister city to Beijing and international port for northern China; Tianjin Financial Assets Exchange is located in the Binhai Free Trade Zone.
BEIJING, March 8, 2018: The innovative revenue royalties financial system was recently introduced to capital markets in China at events in Beijing and Tianjin. A press conference and seminar, led by well-known Wall St. financial advisor Arthur Lipper, were co-sponsored by Asia-Pacific Group and the Tianjin Financial Assets Exchange.
Revenue royalties are performance-based capital, which pays investors a simple percentage of gross revenues without incurring equity dilution or debt.
Examples of large infrastructure projects that may benefit from this new approach to financing include the next generation of bridges, tunnels, ports, hospitals, roads, bullet trains, pipelines, agriculture technology, housing, water conservation, satellites, power transmission, wireless data, renewable energy generation, recycling, cultural and sports facilities. These public-private partnerships (PPP) projects will serve 1.3 billion people in China, and the businesses and governments that serve them, each day.