Comments on: Should I license my IP, sell a royalty stream, or just produce products?

By: Arthur Lipper

Arthur Lipper — Mon, 07 Jan 2019 00:55:52 +0000

In our patented approach the IP is used to assure contractual compliance of the royalty issuer to pay the agreed percentage of the royalty issuing company’s revenues on receipt of the revenue. The royalty payments are not limited to any particular element of IP and other company assets may also be pledged or transferred to a trustee-like party. The purpose of the segregating the company’s company’s critical assets is so that if the company is reorganized and refinanced the assets will be required and the royalty continued. The pledge or transfer of the critical assets, like the brands and name of the company is only used in the event of a default.

By: John

John — Sun, 06 Jan 2019 05:30:23 +0000

The distinction between licensing – and selling a royalty stream from your licensing your IP seem to have blended a little. Where I think this is headed is derivatives. Please clarify

By: Cricket Lee

Cricket Lee — Wed, 02 Jan 2019 03:39:44 +0000

Dave,
I would assume a company with only a beginning portfolio of proven IP is better off with equity offerings as this kind of financing is more for brand licensing or a completed invention. Correct?

By: Alan

Alan — Tue, 01 Jan 2019 19:48:28 +0000

Enjoyed your articles. Thanks. Happy New Year!

By: Bob Tonen

Bob Tonen — Sun, 30 Dec 2018 17:08:36 +0000

Dear Dave,
An intellectual property right is different than a patent. When you have a patent and you alter one thing, you must file a second patent. Your investor might lose its rights because the second patent is then licensed. An investor can create a contract to cover this contingency, but both parties must be careful that the IP royalties being sold are limited to the original idea. And, an investor can buy the intellectual property rights just to get rid of a competitor if they also include the right to defend and prosecute against others using the patented technology. That could be a primary reason for the investment, not the revenue stream, if allowed by the contract. This subject leaves lots to consider for the inventor and the purchaser of royalties.

I wish you all the best for 2019

By: Dave Berkus

Dave Berkus — Sun, 30 Dec 2018 16:58:33 +0000

In reply to Chick Bornheim.

Chick,
Perhaps you missed my point: Selling royalties involves a third party investor – one who pays to buy the royalty stream instead of investing in stock or loaning the company money. It is different, of course, from a company directly licensing its technology. In that case, the company takes the risk and waits for royalty checks at a later date and over time.
-Dave

By: Chick Bornheim

Chick Bornheim — Sun, 30 Dec 2018 03:19:31 +0000

What is so revolutionary about this advice? It’s basic common sense and obvious.
If a entrepreneur doesn’t already know this, they find a day job and turn the company growth over to someone who does.