Ocean Tomo, a part of J.S. Held, facilitates intellectual property (IP) securitizations by understanding, managing, and liquidating IP assets in exchange for capital to meet strategic business needs.
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We work with our network of institutional investors to structure and execute transactions and consider investments in a wide variety of technology categories. Our experts assist in IP securitization transactions to help accelerate time to cash flow for licensors by offering a lump sum cash payment today rather than fragmented royalty payments spread over several years.
Royalty securitization is the upfront payment of cash by an investor in exchange for full or partial rights to receive future royalty payments from licensees. Transactions can be structured as full or partial sales (with a trailing component), depending on the needs of the seller and characteristics of the royalty stream.
Royalty securitization helps accelerate time to cash flow for licensors by offering a lump sum cash payment today rather than fragmented royalty payments spread over several years. The cash can be used to fund new research projects or corporate initiatives, and offers a form of non-dilutive, non-interest-bearing financing that can be recognized as revenue –helping to improve financial performance.
Securitization of royalty-bearing cash flows is an option for entities owning existing agreements with a credit-worthy counterparty. While royalty monetization has historically been very popular with large firms in the pharmaceutical space, it can also be extended to all industries, as well as start-ups, NPE’s, and other companies with out-licensed technology. The target transaction size depends on the nature of the cash flow stream – Ocean Tomo transactions typically exceed $10 million.
At Ocean Tomo, we work with our network of institutional investors to structure and execute the transaction. We consider investments in a wide variety of technology categories and work to tailor the transaction to meet investment and transaction objectives.