Summary of Model
KLW Investments arranges funding using Intellectual Property as collateral. This is an attractive alternative or addition to Venture Capital (equity), Venture Debt and Mezzanine funding. A company receives cash in place of an often undervalued patent portfolio. This process is ideally suited for mezzanine-stage, private equity and venture-backed companies requiring additional, non-dilutive capital for expansion, management buy-out, or acquisition of technology from a third party.
If I license my patent, can the licensee get funding from KLW using the license as collateral?
Yes. If you license your IP, think of KLW as your in house lender who will use the license you issued as collateral for funding. You can offer this even if you have already used your IP as collateral with our funding, because you still own the exclusive use of the IP. This means the licensing rights you issue comes along with a substantive value to that licensee in that they can now get funding to use for their purposes- including paying you.
Do companies/individuals retain ownership of their IP?
No. The IP is used as collateral and the funder has title. Your IP is still yours to use and/or license exclusively, except now you have cash on your balance sheet, in your assets column and in your bank account to build out your product instead of an intangible asset that IP is often classified as.
What type of IP is used as collateral?
Patents, copyrights and trademarks. We are interested in just about everything. Some clients have film libraries and others have mechanical patents.
What criteria do you use in deciding whom to fund?
Most patents in the marketplace are valued solely on their infringement value measured by the settlement value. KLW looks at whether the IP is essential in operating the business and has the capacity to make payments. We also look at the revenue stream the IP protects.
What are a few examples of how companies use the capital?
- Refinance existing debt
- Developing a new line of business
- Bring a product to market
How long does it typically take to structure and complete a deal?
Typically the process will take approximately 2-3 months. Deals can progress more rapidly (or slowly) depending on complexity and deal specific characteristics.
What are the steps/what is the process in structuring and completing a deal?
Two month process with KLW Investments includes:
- Initial discussion to understand the company needs.
- Execution of mutual NDA.
- Complete information question template (KLW together with company).
- Creation of a non-binding term sheet.
- Agreement/execution of term sheet.
- Creation and agreement of contracts along with completion of research.
- Contract execution.
Can I use your cash to fund my infringement litigation?
Yes. Owners of IP can use this type of funding to litigate against larger, better capitalized, violating companies.
Is KLW Investments selling patent portfolios?
Yes. KLW Investments acquires, develops and sells patent and other IP assets from start ups, including distressed situations. We stabilize, enhance and hold IP until the value is at its highest, to get the most for the owner. If you are looking for a quick sale, we can do that as well.