IP-Backed Loans
Collateralize Your IP and Grow Your Company without Selling Equity
Non‑dilutive. Fast. Built on the strength of your issued patents.
- Typical savings vs. VC: 40–60% lower cost of capital
- You retain full control — no new board seats
- 30–45 day closing process (not 6–12 months)
- Straightforward terms; debt, not equity
- If your patents are infringed, we can finance the enforcement/recovery
Is This a Fit?
We’re a good fit if you:
- Generate $5-10M+ in annual revenue
- Own quality issued US patents aligned with your products (or infringed by others)
- Want non-dilutive capital to scale without giving up control
- Prefer sustainable growth over forced “hockey-stick” targets
Why CEOs Choose IP-Backed Financing over VC:
- Strategic optionality: Avoid restrictive VC terms and liquidation stacks
- Capital efficiency: 40–60% cheaper than venture equity
- Control preservation: Keep 100% ownership and all board seats
- Growth flexibility: Scale at the pace your operations can support
VC vs. IP‑Backed Financing (At a Glance)
| Venture Capital | BlueIron IP‑Backed Financing | |
|---|---|---|
| Ownership | Give up 20–40% | Keep 100% |
| Control | New board seats, terms, oversight | You retain full control |
| Timeline | 6–12 months to raise | 45-60 days to close |
| Cost of Capital | Priced for 10x fund returns | 40–60% lower effective cost |
| Growth Pressure | Forced “hockey‑stick” | Sustainable, management led |
| Complexity | Liquidation preferences, ratchets, provisions | Straight forward loan terms |
How It Works
- We Give Realistic Expectations
Share basic revenue, patent holdings, and capital needs. We’ll see if you are a fit for IP‑backed financing. - Patent Collateral Evaluation
We assess the strength, relevance, and monetization leverage of your issued patents—either supporting your current product line or indicating credible infringement by others. - Indicative Terms
If it’s a fit, we present non‑binding terms with estimated facility size, pricing, and covenants. - Diligence
Focused review of patents, encumbrances, revenue quality, and enforcement posture. Efficient, time‑boxed. - Funding
Close in 45–60Schedule a quick discussionSchedule a quick discussion days. Capital deploys to growth, working capital, acquisitions, or enforcement.
Example Results: SaaS Company
- $5M ARR financed $20M loan
- Combination of patent enforcement/operating capital.
- Company has 90+ patents in two groups: older patents have Evidence of Use against former competitors, and newer patents with high licensing potential.
- Newer patents licensed to major company in market.
- Over $50M recoverable damages on older, infringed patents.
- Company is bootstrapped, family-owned business – kept 100% ownership.
What We Look For
- Issued utility patents (not just provisionals or pending applications)
- US and foreign jurisdictions (especially EU patents)
- Clear link between your IP and current revenue or credible third‑party infringement (we prefer both revenue AND infringement)
- Solid unit economics and use of proceeds tied to growth
- Clean IP chain of title; minimal encumbrances
FAQs
Is your IP-backed loans essentially venture debt?
It’s asset‑backed lending secured by your patents. We give you credit for the IP which banks (and venture capital) cannot do.
In a lot of ways, it is similar to venture debt in that we focus on your ability to put capital to work and grow revenue. Our diligence will cover many of the same aspects as a venture capital/venture debt firm might perform – with the added diligence on the IP.
How are IP-backed loans cheaper than VC money?
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.
What are typical terms?
Our typical terms are 2-5 year loans, often with a period of interest-only payments.
The interest rate varies based on the risk and your situation, but will be less than half the cost of venture capital.
We may or may not insure the IP-backed loan, but we handle that on our end. You are not responsible for the insurance.
Your terms will be customized for your situation.
Will you take a board seat?
No. You keep your board and decision rights.
What if my patents are being infringed?
We can structure capital for enforcement, including pre‑litigation strategy and litigation finance, where appropriate. When appropriate, we can structure a loan that gets paid off by proceeds from the litigation.
How fast can we close?
Typical close is 45–60 days, subject to diligence.
What if we’re pre‑revenue?
We generally require $5M+ annual revenue or a strong enforcement case. If you are getting close to that number, let’s have a discussion. If you are pre-revenue, let’s wait until you have your first few customers.
Ready to Compare Your Options?
Free assessment — no pitch, no pressure, just an objective comparison of VC vs. IP‑backed financing for your specific situation.
Note: We evaluate 2–3 new transactions per quarter to maintain quality and speed.