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The amount of royalty that can reasonably expect in a patent license is dependent on a number of factors: 1. Nature of your invention (improvement, stand-alone product or technology platform) 2. Strength of your patent relative to existing patents 3. Scope of freedom to practice your invention (would you infringe existing patents) 4. Status of development (do you have a prototype, finished product) 5. Applicable markets for your invention 6. Technical feasibility and development challenges 7. Competitive landscape In general, the typical range of royalties for just a patent (no equipment, tooling, technical know-how) is 2-10% of gross sales. To get toward the high end, you need a break-through kind of product with strong patent coverage. If you have a strong background and expertise in the field, you may have a reasonable chance at getting VC investors and starting a company. If not, I would look to selling or licensing your patent to a company that is in the business. First, find out the best venture firms for your type of venture. A venture firm that does deal in your type of business (industry sector) and the stage (sounds like early/seed stage) is more likely to be interested in your ideas. Next, try to get a referral from someone. VCs are much more likely to take you seriously if you get referred from someone they know and respect. They get hundreds of business plans and calls and its tough to get their attention if they don't know you. When you get a meeting, be very prepared with a good Powerpoint type presentation and a solid understanding of your market and customer. By a good presentation, I mean well-thought with a logical flow and one that sticks to the key parameters they are interested in - market size, your technology, intellectual property, your busines model, managment team, etc. You need to understand that VCs primarily invest in great management teams and/or exceptional technologists. They are more interested in great people than they are with a technology or business model from someone that doesn't have the backgound and experience to see it through to success. So, if you don't have the background, I strongly recommend you get it before pitching your idea. If you don't want to wait until you acquire the knowledge yourself, you need to recruit it into your team. Good luck.

Source(s)

25 years of product development experience and 4 VC-backed startup companies

by In Science we trust

3 months ago

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