It’s a Demand World- Really??

Everyone is talking about the need for consumer demand to pull the global economy out of the tank. On this there even appears to be political consensus.  The only issues are taxes and government spending. Some want more taxes and more government spending to fund the demand that the unemployed consumers can’t afford. Others want to cut taxes and government spending to leave money in the hands of the remaining employed and encourage them to purchase more things that they don’t need. Is it me, or are the current strategies just a choice of economic suicide by poison or drowning?

As a capitalist I believe in supply and demand, free markets, and rule of law. So if demand isn’t working maybe it’s time to check out the supply source. Is there a demand for better means to supply our markets? You bet- it’s called innovation. And the asset that fuels innovation is intellectual property. So far, it is untouched by the credit markets. More importantly, it is already an existing group of assets.

Innovation is about doing something better. It can be a bucket, a light bulb, a car, solar collector or a shoe.  Or it can be a better way to furnish an existing good or service. Innovation builds the demand for new means to supply the innovation. Intellectual property like patents is a first means to build the structure needed to furnish the new means of supply. The investment in structure is usually a multiple of the existing market. The key is to access secure asset based credit to build the new means.  Let me again suggest- patents. They are an under recognized and non-capitalized resource representing trillions of dollars in assets. We can access this credit reservoir through the sale and lease mechanics of real property. It’s called the sale license-back of intellectual property. This is not phony demand or stupid consumerism. It’s time to stop being crazy and start being innovative. Really.

Sale/License-back; A new source of capital for smaller companies

If you have been following our blog, you will have noticed that for the last several weeks we have been introducing a new transaction type–sale/license-back of intellectual property. We’ve concentrated on the property type more than the transaction, which is really quite familiar in another context.

Everyone is familiar with a sale/lease-back of real estate or equipment or software–a company sells property in return for cash and executes a lease (or for software, a license). The lease gives the company continued use of the property in return for periodic payments of rent.

As a property class, intellectual property is treated a little differently than a tangible asset when it comes to valuation and legal status. However, a sale/license-back of patents, trademarks, or copyrights is really just the sale/lease-back we all understand for a new class of property.

Carthage Intellectual Capital Management has introduced this new business process. We are looking for deals now. If your company has intellectual property and could benefit from new capital, we’re at info@carthageic.com.