Royalty-based venture capital provides growth capital in exchange for a fixed percentage of a company’s monthly gross revenue. The monthly payments adjust as revenue changes. When the sum of the royalty payments reaches a pre-determined multiple of the original investment, the royalty payment obligation ends.
BENEFITS
- No loss of operational control
- No onerous loan covenants
- No fixed or minimum payment
- Royalties are tax deductible
- Royalties do not reduce EBITDA
- Preserves your equity