1. Numbers, Numbers, Numbers – The first and foremost rule is numbers: cost, revenues, profits. The numbers and your understanding of them are an important part of the marketability and inherent value of your intellectual property.
2. Be Prepared – The second requirement is an ability to attract licensees. If you are unsuccessful in licensing, it may be a timing issue, but, more than likely, it’s a lack of preparation and a poor presentation that did you in—so be prepared.
3. Companies Don’t License IP; Companies License Money – The third rule is to talk in terms of money, not your IP. This goes back to rule number one: you’ve got to document the numbers. You’ve got to show licensees how the intellectual property makes the money. The more money made, the more valuable the IP is.
4. Find a Partner -The fourth rule is to watch for potential licensing partners—and, by the way, competitors are candidates. If you are currently making your product and licensing is going to be your long-term strategy, keep an eye on your competitors as you learn the market, and understand how they operate.
5. You Have One Shot – Rule number five is to make a fantastic impression on your first shot, because it’s the only one you’ll get. Make sure you’re prepared with your numbers. Be ready to demonstrate how the licensee makes money. Know who your appropriate licensing candidates are, and deliver your presentation with passion.