Introducing a new form of financing ILOs
Initial License Offerings, also known as ILOs, are a intellectual property and distribution right licenses that are offered for sale to investors. It’s different from an equity offering in that the transaction is not considered a security, but instead a license. ILO buyers will be required to market the products and services of the company using their business and social networks and in return will receive 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.
ILO holders qualification for royalities
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.