Introduction

The licensing option may or may not be suitable for your needs. Perhaps your aspirations and view of the market opportunity now dictate that you should ‘go it alone’ and consider starting your own company. It may be that you are in a position to set up a company and licence your technology through it, rather than your host institution. Whatever the circumstance, you will find that your business wants one thing more than any other – cash! The nature and type of financial arrangements that are available to you will be dictated by the purpose for which you require the money and the degree of risk involved for the investor. Investors are not in general of a charitable nature and will require a return on the investment. The more risk involved, the more justification and analyses you will be expected to provide. There are several mechanisms for financing the venture which are all dependent upon the degree of risk.

Short-term or long-term finance options

The time period of the investment is of significance, since all other factors being equal, shorter investments are likely to have a more accurate analysis associated with them. The variability of market conditions makes sales and cost predictions inaccurate beyond two years and thus an assessment of market risk will be necessary.