Patent investors can invest in developing and selling patents in a number of ways. The following are some methods by patent investors to capitalize and start companies:
For patent investors, there are different venues to start a company. For those who seriously consider becoming patent investors they must read, study and investigate Internet sources. If the inventor wants to sell or license the invention, a commercial fee-for-service technology transfer organization might prove useful, or he may be able to do it by himself. If potential patent investors have the time, resources and inclination, they can always consider a business degree.
Venture capitalists (VCs) are one route patent investors could take. VC raise capital on a fee for service basis, usually involving some payments to cover their expenses, as well as, a percentage of any funds they raised plus stock and future considerations.
Private partnerships are another way to become patent investors. Private partnerships can provide capital but can also create difficult entanglements and uncertainty which may make it more difficult to transition into a private or public stock company.
Research and Development Agreements is one way to become patent investors. These R & D agreements can provide a source of cash funds to conduct the initial R&D.
Private Placement: of your company's stock, sold to sophisticated investors by the company, or a business banker (for a fee), and based on a business plan with pro forma projections of revenues and a rising corporate valuation, etc.
Taking the Company Public is another way for patent investors to come in. This is done by selling stock to the public. The perceived value of a company may depend on the strength of its technology platform as judged by the number and strength of its filed and issued US and international patents.
Clinical Partnerships is one way of becoming patent investors. Clinical partnerships with corporate partners or with private sophisticated investors may be used to conduct the trials essential for validating a technology, e.g., clinical trials of a diagnostic product. Patents and/or patent applications may be useful as assets to secure these partnerships, e.g., rights in the patents may be transferred to the clinical partners under conditions which guarantee the right of the company to re-acquire the intellectual property from the partners when the trials are successfully completed.
Joint Ventures is another way for patent investors to start a company. This is usually between a start-up and a corporate partner, commonly in a restricted technology project area, with provision for joint project management, usually with pre-set acquisition price by one or both of the partners at some targeted future date, e.g. when a product has been brought to fruition.