Startup Funding Espresso – How To License Your Technology

How To License Your Technology

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Licensing your technology to another company provides another path to commercialization.

Here are some key steps to licensing your technology:

Prepare information about the technology including an introduction, product description, and manufacturing information.

Also document the product benefits, market research, and pricing.

The product information should provide sufficient information to show what the technology can do, how it will perform in various cases, and any limitations.

Make the license information available on your website and key sources of any related technology.

For those interested in using the technology, have the licensee sign a non-disclosure agreement.

The licensee will need to perform a feasibility study to determine if the technology will work for their application and how well it will work.

In this step trade secrets may be disclosed.

Upon completion of the feasibility study, ask the licensee to sign a letter of intent to confirm their interest in pursuing the license. 

Negotiate the final terms of the license agreement based on the use case of the licensee.

This can range from 1% to 10% of the revenue generated.

There are often minimum license fees to consider. 

Other key terms include any exclusivity, geographical coverage limitations, future improvements on the technology, transfer rights, and termination provisions. 

Finally, sign the contract to complete the agreement.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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