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Cypress Growth Capital is one of the first and largest providers of royalty financing in the United States. Arthur Fox, a Senior Advisor at Cypress Growth Capital, pioneered royalty financing as a form of venture capital in 1992. Royalty financing provides growth capital in exchange for a fixed percentage of a company's future revenue. The company pays the royalty monthly until its total payments reach a cap, expressed as a multiple of the investment amount. Cypress Growth Capital looks for companies with the following characteristics: $3,000,000 to $20,000,000 in annual revenue; A two year minimum operating history; Provides a technology-enabled business service or software/software-as-a-service; Positive EBITDA; Based in the Southwest United States; and Seeking growth capital up to $5,000,000. According to the Dallas Business Journal, Cypress raised its first fund, worth $30 million, in 2010. Firm founders, Mello and Goodwin, have invested in companies in Texas and Colorado, including five in the Dallas-Fort Worth area. The firm closed (November 2017) its third royalty-based growth capital fund, CGC Royalty Investments III, LP at $42M.
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