Posts Tagged: "patent financier"

RUSS KRAJEC: The startup company has an exclusive license, so they have full control of the asset, and they have a buyout option that can be exercised at any time. And the buyout cost is reasonable, is predictable, and it’s known ahead of time. So from them, it is purely a matter of financing while the startup company has excruciatingly high cost of capital. Angel or venture money averages 30, 40, 50 percent per year. Our financing is much lower than that, it’s a better use of capital. If at some point in the future, the company may be able to get a bank loan where the cost of capital is much cheaper, and it makes sense to exercise the buyout option. The patent financing is purely an analysis of Net Present Value in these scenarios.

BlueIron’s non-dilutive financing for startups pays all of the patent costs, including filing fees and attorney’s fees, using a conventional commercial “lease-back” arrangement. This model has been gaining traction since its first release in the fall of 2014. After financing professional poker player Phil Gordon’s patent for his new software startup, Chatbox, BlueIron has made investments in startup companies in software, hardware, biotechnology, medical devices, financial services, and agriculture.

It should go without saying that a good team is a necessary ingredient toward building a successful patent operation. Unfortunately, many companies think they can check the “IP team box” once an in-house IP lawyer has been hired, and/or outside prosecution or litigation counsel has been retained. While those are often necessary ingredients for executing on the patent front, they are by no means the only ingredients. More is required, particularly in today’s patent market, which not only requires an understanding of patent prosecution, but a keen understanding of the business, strategic and financial aspects of patents.