Providing Startup Financing Solutions Since 2001

Revenue Based Financing

Revenue-Royalty Certificates Increase in Popularity

The practical application of revenue royalty certificates continues to expand.

Recently a small website needed to hire additional programers to work on an important new project that would dramatically improve it. The only obstacle in the way was a lack of cash to pay the hew hires. The founder looked at the traditional sources of capital for such projects but none were applicable. Since the business wasn’t profitable and as with most online ventures lacked collateral, banks wouldn’t touch it. Angel investors were also out of the picture because they would have wanted too much equity.

So what was the solution?

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Secondary Market for Revenue Royalty Agreements

A “stock exchange” for trading in Revenue Royalty Certificates (or Agreements, if you prefer) has been proposed. Such a marketplace would boost the instrument’s popularity significantly. Unfortunately the project appears to have stalled out. For the most up-to-date information do a search on ” Secondary Market for Royalties.” There could be opportunities here for the creation of localized versions.

Here’s an older video on the topic of starting a secondary market for RRCs.

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