Explain Franchise Capital Management in a Nutshell

Franchise Capital Management+ is a funding approach that provides predictable funding for unpredictable R&D+. Investors place funds into a perpetual investment pool+, a pool of R&D-centric investments managed by a funding agent+, and these funds are used meet operating expenses within the investments. Investors see predictable returns, investments see predictable funds, and the funding agent, acting as middleman, levels out the unpredictability of investment success, through a variety of financial means, to make pedictability happen.

Key novelties in Franchise Capital Management:
  • Use of successes (windfalls+) to fund research
  • Use of derivative investment vehicles+ to 'bring forward' funding from future windfalls
  • Use of funding from windfalls to attract investors into a perpetual investment pool
  • Extraction of a significant ‘tax’ on windfalls to fund increase investment success (via franchise operations+)

For investors
  • We provide predictable capital growth, with occasional (unexpected) bonuses
  • Buying and selling happens during open seasons
  • It’s a mutual fund of research investments; think of it as buying an annuity policy
  • Capital growth is based on the growth rate of the underlying investments
For owners of Intellectual Property+ (research investments)
  • We provide steady funding through to your successful spin-off as an independent firm
  • You stay (and reinvest interim windfalls) until your 2nd major blockbuster+ success
  • Interim windfalls (reinvested) are disbursed when you spin-off as an independent firm
  • You potentially own 30% of the independent firm at spin-off
For Financial Analysts
  • Funds come primarily from perpetual fund investors and interim windfalls (with derivative investment vehicles used to distribute windfalls across time)
  • Funds are used in franchise operations, investment operations, and funding agent expenses
  • Interim windfalls are (partially) pre-paid to investors in the form of interim capital growth
  • Interim windfalls (brought forward) are used for franchise and investment operations
For Franchise Operations
  • Franchise operations must drive interocular+ gains in research productivity (vis-à-vis funding alternatives)
  • Franchise operations funding comes (ultimately) from interim windfalls
  • Numbers of investors and investments grow annually at an accelerated rate

 

Further Reading