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Creating Risk Capital: A Royalty Fund Solution to the Ownership and Financing of Enterprise

by Ian Whalley

Lack of risk capital on suitable terms frustrates entrepreneurial ambition and can limit economic growth. Just as damaging, the search for finance can lead businesses into unsuitable funding arrangements, such as excessive borrowing, which can de-stabilise a company and put its owners at serious risk. Ian Whalley's new book 'Creating Risk Capital' proposes a fresh solution to this problem.

The solution, royalty funding, is grounded in the proven and familiar practice of licensing. It works by businesses paying for invested risk capital through a royalty on the sales revenues that they achieve, rather than saddling themselves with too much debt or having to dilute the ownership and control of the enterprise. This system benefits the enterprise and its owners and rewards investors through contracted royalties, while limiting their risk through the assets they own.

The book explains how royalty funding could be put into in practice for a range of different enterprises and draws some broad conclusions about the impact that royalty funding could have if used to finance business in the future.

'Creating Risk Capital' offers a compelling alternative that complements current financing models and should interest anyone involved in establishing, running or investing in successful enterprises.

Creating Risk Capital (9780857190918) by Ian Whalley is published by Harriman House, RRP £35. It is available directly from the publisher

London Centre for Corporate Governance and Ethics

London Centre for Corporate Governance and Ethics

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