This is a 2 day modular course on negotiation skills that will cover the following topics:
1) Financial Terms of an IP License
2) Investment Terms with a Venture Capitalist
Day 1: Negotiating Financial Terms of an IP License
In today’s knowledge-based economy, companies spend millions of dollars in developing new technologies and leveraging on such innovations and intellectual assets by licensing their intellectual property. There is more to a licence than just a single royalty rate. Licensors need to be aware of the myriad types of royalty terms and other key financial terms of an IP licence so as to obtain maximum financial returns for their innovations. This workshop will cover 16 different types of royalty terms, and 28 different types of financial terms that can be employed to maximise (for a licensor) or minimise (for a licensee) the effective royalty being paid. A licensor does not wish to settle for less than the “market” royalty rate, nor does a licensee wish to pay greater than the “market” royalty rate. A licensee needs to be alert to the maximisation strategies that a licensor might employ, and a licensor needs to be alert to the royalty minimization strategies that a licensee might employ.
This one day workshop aims to provide participants with the requisite tools and strategies to effectively structure and negotiate the financial terms of an IP licence. The workshop will address various methodologies and tools to help arrive at what the “market” royalty rate may be, including considering benchmarking methodologies and tools, the 25% rule, and the use of discounted cash flow analysis as a tool to assist setting the “market” royalty rate. With the skills acquired in this workshop, participants will be equipped to structure the financial terms of a licence for maximum returns, and equipped to determine a commercial basis for the royalty rates that they seek.
Day 2: Investment Terms with a Venture Capitalist
The negotiation and structuring of most venture-capital transactions revolves around the need to strike a delicate balance between the concerns of the owners vis-à-vis the venture capitalists. The emphasis of the workshop is upon venture capital transactions and the investment terms upon which a venture capitalist will invest into an IP start up company, whether a biotech, IT, or engineering start up company, or a start up company with other technology.
This workshop will include sections on choosing the start up company commercialisation pathway, being investor ready, and in particular upon the negotiation of financial terms and IP terms with a venture capitalist, as well as negotiating the preferential share rights and the Shareholder Agreement terms that a venture capital investor will typically seek.
At the end of this course, participants would better understand the factors that influence a venture capitalist’s decision to consider an investment in a start-up company, the IP due diligence involved, common pitfalls and remedies. It would also better equip participants with the skills set to effectively negotiate financial terms, IP access terms, preferential rights attached to a venture capitalist’ s shares and Shareholder Agreement rights.
This workshop has been specifically designed for persons that negotiate or may be planning to negotiate with a venture capitalist. It is suitable for the novice, and its advanced strategies will be of benefit to the more experienced professional as well.
