Royalty Based Financing is a transaction between investors and intellectual property owners. IP owners agree to transfer a share of their revenues (royalties or other R&D related revenues) to investors against an upfront payment made by investors.
Investors thus purchase a share of the IP owners uncertainties. Cash flows stemming form IP pay back the principal payment made by the investors plus an upside payment depending on the revenues generated by the IP.
This financing method allows sellers (IP owners) and investors to focus on only one factor: revenues level. This solution enables IP owners both to maintain ownership and to get funding without experiencing dilutive effects. Investors are genuinely dedicated to support the growth of the purchased IP revenues since their return is directly proportional to the growth of revenues.
Mentionnée notamment par le Monde Rappel de l’article 42 §7 du Traité More
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Growing market (#3 by recruitments): Defence & National security AI copilots