Royalty Exchange had a big 2014, with 290 percent revenue growth as the royalty auction platform reached $4.4 million in music, IP and energy-related transactions since launch in 2012. It also closed more than $1 million in funding from its existing investors, and grew to 11 employees.
But hockey stick growth hasn’t happened yet.
Like the years it took for peer-to-peer lending via Lending Club and Prosper to take off, it’s taking Royalty Exchange time to build a marketplace of buyers and sellers for an investment opportunity accessible for the first time ever online. But to speed things up this year, the startup is getting creative: in funding, product development and marketing. Founder and CEO Sean Peace believes he’s finally got the formula in place to take online royalty investing mainstream.
Here’s how he’ll do it:
Counting on the crowd
To keep the company funded until it seeks a series B round, Peace recently re-upped existing investors Idea Fund Partners and Grotech Ventures for $125,000 each (That’s in addition to the $250,000 each contributed last September). To fill out a $550,000 round, he’s also going to the source of all the momentum—the accredited investors on the platform. They’ve invested $200,000 so far, and Peace expects to raise at least another $100,000 from the pool of loyal investors in coming weeks.
“What better way to take advantage of the JOBS Act and crowdfunding momentum than going to people using the platform,” Peace says. “I think it shows the strength of the company we’re building, that people using the platform aren’t only using it to buy royalties but to invest in the people creating it.”
Over the next six months to one year, he hopes to begin the growth that could attract larger pools of capital. He’ll hire two sales people and a paralegal to join the team in its new office in Morrisville.
For more details, read the entire post at ExitEvent.
(Note: ExitEvent is a news partner of WRAL TechWire.)