FINANCING OPTIONS |
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Financing Options
Few organizations appreciate the full scope of flexibility available to them in terms of their trademarks, patents and other intellectual property. One of the most overlooked areas is the value of IP when used as collateral. Lenders, venture capitalists, investment bankers and other sources of financing are increasingly likely to consider the value of IP independent from the value of other assets on the firm's balance sheet when performing their due diligence.
Securitization
Securitization is a structured finance process that distributes risk by aggregating cash flows from loans, leases, licenses and other assets in a pool, then issuing new securities backed by the pool. Intangible assets can provide the basis for securitization as long as they generate cash flow (e.g., music royalties or brand license royalties). An assessment of the value of the underlying intangible assets and the impact from the competitive environment are key processes necessary to the success of the operation and the avoidance of unpleasant surprises downstream.
Use as Collateral
Like with securitization, intellectual property can be used as collateral in the granting of a loan or other form of financing. Unlike securitization, however, the intangible asset does not need to directly generate cash flow as long as the overall operation generates enough to service the debt. Including your intangible assets as part of the collateral may allow for additional borrowings or allow for better terms. IPmetrics can assist in determining the best course of action and the expected utility of your intangible assets when used in this capacity.
Contact Information
info@ipmetrics.com
12526 High Bluff Drive, Ste 300
San Diego, CA 92130
Tel. (858) 538-1533
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