My research organisation engages in applied research. Many difficulties exist when negotiating with a potential investor. We cannot guarantee a definite outcome which means that every cent invested could be money down the drain. Secondly, we do not know in advance how many hours, days, weeks or months it will be before we are able to deliver.
The initial investor bares a technological and a commercial risk.
Will we be able to find a solution to a problem, develop a proto-type and will we be able to upscale it? Will the market be prepared to pay a commercially viable selling price?
Early research was very promising on a new product. In discussions with Negotiations World we explored outright sale, setting a royalty or a profit-sharing joint venture. Knowing our ambitions and limits we advertised to the investment community.
A potential investor proposed that in view of the risk he was and of the initial investment he would be making that he should receive a 98.5% share of a Joint Venture. Negotiations World helped us prepare to meet the potential investor and provided ongoing support during the weeks of negotiation, while we and the potential investor examined several alternative investment options and ultimately arrive at a mutually beneficial solution which allowed us to continue research and development without having worry about funding and the investor to receive monthly updates on progress with the option to pull the plug with four months notice.