Intellectual Property Master Class: Aligning Financial Interests

March 8, 2005

The challenge of investing in early-stage, high-technology companies is shaped by the problems of uncertainty, information asymmetry and opportunism. Virtually all important decisions, and potential outcomes, that bear on a company's success remain in the future - with most of the uncertainties affecting the company's success or failure. To align investor and company interests, staged financing and identification of project flexibility points provide a means of addressing these uncertainties. A simple process will be discussed to limit financial exposure and enhance returns by structuring deals around objective-based milestones.