Royalty Venture Investments a new way to fund startups
Several months ago I accepted a Board of Directors position at Intelli-Pharma Services, Inc. (IPS). One of the most interesting aspects of IPS is the unique way of funding a startup. Instead of selling stock to investors, who then can only see a return if the company is purchased or has an IPO, they are offering interest in ISI Royalty Venture Investments I, LLC. This LLC will own the right to the IP in the Pharmaceutical market, and the LLC will be paid a royalty (monthly) of 25% of the revenue produced by these products until the investors have received 225% of their investment. The investors will start receiving monthly royalty checks starting in July. If IPS is acquired the investors will receive the full 225% at that time.
IPS, an emerging growth company, is essentially conducting a Series B round of financing to fund its entry into the marketplace.
April 16th, 2008 at 3:15 pm
Very interesting…