Leveraging IP for Financing

In addition to leveraging IP to generate income, IP can also be leveraged to access capital or financing.   IP financing is quickly gaining interest in Wall Street and among lending institutions around the world as collateral for asset based loans.  Other sources of financing include auctioning IP assets through auction houses such as IPAuctions.com, IPA GmbH, and Ocean Tomo.  A third option is selling IP through various online exchanges, such as The Dean’s List, Tynax, and Yet2.com.  The securitization of IP (as it’s known in financial circles) is best know in the film and music industries, where some high profile examples included the securitization of  royalty streams from copyrights owned by famous musicians (such as David Bowie). Asset-backed securitization is also well recognized in the field of patents, where the patent can be treated as a commercial asset on the basis of the exclusive legal rights it represents.  The key to successfully leveraging IP financing is the valuation of the IP asset(s), which is a subject that will be addressed in a future issue of Concepts to Cash Flow.

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