SGC vs.Traditional Funding

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License Agreements  

There are significant opportunities for monetization of future revenue streams from licensing of intellectual property (IP). IP funding opportunities are prevalent, for example, in patent licenses, pharma/biotech licenses and royalties, as well as technology licensing. These license agreements are typically long term and have annual license fees and minimum annual royalty fees. As a result, they meet the sum-certain and date-certain payment requirements and if from an investment-grade entity, can benefit from Monetization Financing. When the royalty or license fee stream fluctuates due to its linkage to sales revenue, often a minimum fee can be agreed on to satisfy the minimum payments for Monetization Financing.

Sample Transaction : A private equity firm with various IP holdings, including rights to the name and likeness of a rising star in the golf world, has been approached by many companies looking to license the brand. An investment-grade rated sporting goods company is one of these companies. Rather than just negotiating a deal which pays the license fees and royalty payments over ten years the private equity firm negotiates the inclusion of language that provides for an unconditional promise to pay minimum license and royalty fees on an annual basis. SGC can provide Monetization Financing such that the private equity firm receives the present value of the future minimum license and royalty fees at investment rates, on a non-recourse basis, without any fees, points, or equity, and without having to wait ten years.

Structured Growth Capital, Inc
615 The Pavilion, Jenkintown, PA 19046
Tel 215-885-4795, Fax 484-685-7102
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