There is no info on industry benchmark. Clear that negotiations will be centered around Upfront payment, Equity (5-10%) and Royalty (0% - 5%). That's what is found in the case studies. However during "exit" phase royalties are not appreciated and these terms are asked to be re-negotiated, which brings problems and $ loss. Can anyone having the above experience or opinion add clarity to the matter?
1- The reason for the first payment fees must be explained!
2- The reason for the royalty!
3- Does the company have a well-studied financial strategic plan?
4- What are the advantages of the customer!
5- The value of the services!
Honestly, the best solution to avoid any financial dispute is to clarify and detail the contract before starting, which guarantees the right of both parties
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Answered 4 months ago
You can put a term in the contract to allow for royalty waiver when proceeding to exit. This term can include either royalty are waived after 5-10 years or they can be waived by paying specific amount of money to the university, for example a term will be like that "Based on founders and investors agreement, the company can offer a royalty waiver for the amount of 10 times last year royalty paid"
Answered 14 days ago