Escrow Services – Insurance for Intellectual Property Transactions

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Software, Web Services, Data Services and Fabless Semiconductor ventures are all examples of attractive opportunities for entrepreneurs. They all have low capital requirements for launching because the primary asset is IP or Intellectual Property. True, there is often someone’s personal savings, angel funds or perhaps even VC money needed to launch a company, but for startup companies producing IP it’s largely the human capital of dedicated and smart entrepreneurs that is the largest input factor.

Once your product is ready for market, the challenge of selling even the best IP can often be more difficult than creating it in the first place, particularly if your target customer is a medium to large enterprise. The sales cycle for enterprise B2B software or to get a fabless semiconductor design embedded in a larger SOC or System On a Chip, can be at least six months and often more than one year. Even after your product passes all the technical due diligence, it turns out that one of the main reasons a sale falls through is that it’s difficult for a startup company to convince the decision maker of a large enterprise that your company is viable enough to warrant a strategic relationship. Read more…