How are IP-backed loans cheaper than VC money?

This page is an FAQ based on guidance from the Manual of Patent Examining Procedure. It is provided as guidance, with links to the ground truth sources. This is information only: it is not legal advice.

Venture capital is priced to cover the fact that most of their investments fail — so they need outsized returns from the 1 out of 10 that succeed.

That means selling equity at a very high effective cost of capital (which typically averages 50% IRR).

With IP-backed lending, we’re underwriting against the strength of your patents and revenue.

Because we understand the assets and our downside risk is lower, we don’t need “moonshot” returns — making our capital half the cost of VC equity.