Investor Connect Podcast

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

Equity funding is just one source of funding for your startup. There are many others such as licensing.

You may be able to reduce the amount of funding needed to grow your business by licensing your technology to others. 

Instead of building and selling a product, you can license to others who will build and sell a product.

In licensing, you must have a patent to protect your technology and oftentimes a series of supporting tools to help those who license your technology for using it. 

Licensing brings the following benefits:

  • It reduces the amount of capital you need to raise
  • It can generate a substantial return given the costs are low
  • The risk of product failure is shifted to the licensee

The disadvantages are:

  • You don’t control how it is used
  • Your licensee may later compete with you
  • You don’t receive the full revenue as if you had built and sold the product yourself.

Licensees can also bring you new ideas for improvements on the technology.

For applications requiring high capital expenditures for building and selling the product, licensing is a good fit.

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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Direct download: EG_Apr_2020_Startup_Funding_Espresso_--_Licensing.mp3
Category: -- posted at: 12:10pm CDT