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Get Your Business Funded: Creative Methods for Getting the Money You Need
book

Get Your Business Funded: Creative Methods for Getting the Money You Need

by Steven D. Strauss
June 2011
Beginner to intermediate
256 pages
5h 19m
English
Wiley
Content preview from Get Your Business Funded: Creative Methods for Getting the Money You Need

Royalty Financing

Royalty financing is a payment now as an advance against future sales. If you help me develop my Xerox machine now, I will share profits with you down the road. When I got the deal to write this book, I entered into a royalty financing arrangement: I would get a lump sum up-front advance payment to write the book now, and it would be offset by future sales and royalties.

So royalty financing is an arrangement whereby the party seeking financing gets an advance against future sales and those future sales then are used to repay the up-front payment.

NeurogesX Enters into Royalty Financing Agreement with Cowen Healthcare Royalty Partners: San Mateo, Calif. NeurogesX, Inc. a biopharmaceutical company, announced today that that it has entered into a royalty financing agreement with Cowen Healthcare. Under the terms of the agreement, Cowen will be entitled to receive up to 100% of all royalties and sales milestones due to NeurogesX. After the debt obligation has been fulfilled, payments will revert back to NeurogesX. At any point NeurogesX can retire the Cowen financing and regain access to 100% of its European royalties.

Source: NeurogesX, Inc.

Royalty financing has been used by big business for many years, most often in the pharmaceutical, mining, and film industries. You have often heard about a big star taking, say, less up front in exchange for a percentage of the film's profits down the road. That is royalty financing.

In recent years, this form of funding has ...

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Publisher Resources

ISBN: 9781118086650Purchase book