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Advice on upfront payment or advances in licensing agreements

Hi,I`m new to SuN and wanted some advice "upfront money" or "advances on royalities" when
negotiating a licensing agreement. Here is my situation:I`ve
been approached by a
leader in the home textile industry who wants in on the rapidly growing
pet industry, however we have been in discussion
for about a month now and still nothing on paper. Last week I asked
the president of the company if upfront payment or an advance on the
royalites were a possibility and he flat out stated NO. He claimed it
wasn`t common unless you were famous blah blah blah. I informed him
that inital money was needed to further my designs and complete the
30-40 initial product line, didn`t budge and stated they were going to
put a lot of money in manufacturing. However, I`ve been reading on SuN
and this
article made it seem like I was in the right to ask about this:
http://www.startupnation.com/pages/articles/AT_Licens ingAgre
ementKeys.asp What has been your experiences and what do you think of his reaction?
negotiating a licensing agreement. Here is my situation:I`ve
been approached by a
leader in the home textile industry who wants in on the rapidly growing
pet industry, however we have been in discussion
for about a month now and still nothing on paper. Last week I asked
the president of the company if upfront payment or an advance on the
royalites were a possibility and he flat out stated NO. He claimed it
wasn`t common unless you were famous blah blah blah. I informed him
that inital money was needed to further my designs and complete the
30-40 initial product line, didn`t budge and stated they were going to
put a lot of money in manufacturing. However, I`ve been reading on SuN
and this
article made it seem like I was in the right to ask about this:
http://www.startupnation.com/pages/articles/AT_Licens ingAgre
ementKeys.asp What has been your experiences and what do you think of his reaction?
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Comments
I`ll piggyback on his point. I would focus more on the long term royalty stream. I would use the fact that you have 30 - 40 more designs in your bag as leverage. Possibly even to ramp up the % paid based on other successful designs that you have provided them.
Best of success!
pupcentric2007-6-11 10:59:56
But if this company is the only real option, and this is becoming a deal breaker, maybe you could tailor your needed upfront money as an advance against royalties.
If the deal goes south and no other real licencing options, what next?