How to Raise Capital But Preserve Your Equity:
Royalty Based Crowdfunding
(Interview With Arthur Lipper)
Victoria Silchenko
By Victoria Silchenko
While some might think that royalty based crowdfunding is a new sheriff in town, the truth is that selling a portion of a future sale (royalty) in return for an investment has been quite popular for many years in the pharmaceutical and oil & gas industries, as well as among artists, writers, movie makers and those who were pitching Friends and Family, aka non-accredited investors.
The main benefit for the investor is that he earns his regular income from gross revenues (not profits) as soon as the sale occurs and for the entrepreneur is that he is not giving up his equity while maintaining 100 per cent of an ownership.
With nowadays technology which keeps simplifying revenue management while making crowdfunding platforms as commodities…I believe royalty based crowdfunding is set to be one of the most popular models in the next two-three years.