Introducing a new form of financing ILOs
Initial License Offerings, also known as ILOs, are a revenue-based form of raising money for seed stage and startup stage firms. The ILO is a straightforward intellectual property and distribution rights license that expires, or is exchanged for cash under a buy back, or for exchanged for equity, dependent upon the offering. An ILO is different from equity crowdfunding in that the transaction is not an Investment, but a license sale to buyers that have to demonstrate they can market the underlying product licensed by the ILO to their business and social networks to receive royalties. This can be verified by the ILOCX platform, which qualifies the ILO for royalties.
A company interested in doing an ILO needs to show it has a product, technology or service, which can benefit from exposure to a wider audience. This should be supported by market statistics and projections showing the potential for the product. In addition to, financial forecasts which demonstrate that the more ILO holders, the more value is created in the company. Any company interested in creating an ILO needs to provide the sale parameters for the licensees to review before they purchase.
Qualifiers: What qualifies the ILO buyer to qualify for royalties?
Initial price of ILO
Length of time the license will last
Royalty percentage of net sales that the company will set aside for ILO buyers
Terms of expiration or conversion at the end of the ILO term.