IP Financing is a $3 billion dollar market that’s still in its first stages. It’s been widely used in the pharmaceutical and biotech sector, and more and more businesses from other industries are now using their IP assets to take advantage of this funding option.
IP can be collateral or security for debt finance. It can also be used for seeking equity from friends, family, private investors venture capitalists, specialized banks and some times even from regular banks.
IP creates an immediate asset to the balance sheet of your small or mid-sized business. It offers incredible flexibility in making your business attractive to investors or financing institutions, especially if your business doesn’t qualify for traditional business loans or lines of credit.In the last few years, a number of new IP funding options have appeared, including collateralized loans, IP auctions, royalty secularization, as a conduit between investors and IP owners.
All types of IP, including copyrights, trademarks, patents and even trade secrets are used for IP financing. Depending on the loan amount, your IP collateral can include part or all of your IP assets. To qualify for the loan, your IP must be valuable, which is determined by it’s use in the marketplace, either from revenue generating products or services, or royalty revenues from licensing agreements.
You can learn more about IP financing from my interview with IP Metrics, an IP valuation firm. I spoke with the principles, David Drews – President, David Martin – Managing Principal and Fernando Torres – Chief Economist. During this interview we discussed how IP financing works, what you must do to qualify, why many business owners overlook this option, and some key insight on what types of IP are best suited for IP funding. You can visit their website at http://ipmetrics.net/ for more information about the company and its services.
Rand Brenner is an IP professional whose passion is helping inventors, startups, and businesses of all sizes use licensing to turn their IP into income-producing products, services, and technologies. His decades of experience run the gamut from medical devices to food technology to consumer products. He’s licensed some of the biggest Hollywood entertainment blockbusters including the Batman Movies (1 and 2), and the number one kid’s action TV show, the Mighty Morphin Power Rangers. Rand speaks about licensing and is a featured speaker at investment conferences, trade shows, colleges and startup events. He’s a published writer with articles appearing in several prestigious trade magazine including The Licensing Journal, Intellectual Property Magazine, and License India. Rand also mentors at the Cal State Fullerton School of Business and Economics and is a judge for their startup business plan competitions.