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Big Tech IP Owners Team Up to Invest Strategic IP Assets into Startups in Exchange for Equity


SAN FRANCISCO, CA--(Marketwired - August 02, 2017) - AQUA Licensing, a leading patent advisory and transaction firm, has secured agreements with AT&T Corporation (NYSE: T), Entegris Inc. (NASDAQ: ENTG), Rambus Inc. (NASDAQ: RMBS) and Lenovo Group Limited (HKSE: 0992) (ADR: LNVGY) to launch its platform for IP investment for equity today, connecting large incumbent patent holders with high-growth startups. In a milestone for the evolving patent landscape, intellectual property holders, which hold more than 60,000 patents, have signed on to offer their relevant IP in exchange for equity in high-growth startups. Venture-backed companies seeking defensible IP portfolios can access these patents in exchange for equity during a priced investment round for fresh capital.

"Many early-stage startups raise venture capital on the promise of patentable technology, yet when they begin to scale, patent defense becomes a risk and a drag on valuation. Not only do they need patents on their own innovations, but they also need defensive patents for countersuit in the event of a claim," explains Mark McMillan, managing director, AQUA Licensing. "Further, the CEO of a high-growth startup is driven to secure a solid valuation relative to their company's growth opportunity. Securing a defensible IP portfolio in exchange for equity at the time of a venture-backed fundraising can be the cleanest way to accomplish both goals."

"Having recently closed our Series A1 funding round, we are excited about the concept of Strategic IP Investment as a means of filling out our defensive IP portfolio. We think the IP Investor Pool offers an innovative approach for the transfer of developed IP assets to the startups where they will deliver the greatest value. We look forward to working with AQUA as we prepare for our Series B round," said Palaniswamy Rajan, CEO of SoftWear Automation.

Startups are able to use equity priced at venture funding round valuations to purchase IP from incumbent technology companies that become immediate strategic investors. In many cases, selling equity for IP during a VC-led and priced round will give that round a higher valuation because the startup will have a more defensible business immediately after the transaction closes.

Charles Lax, Managing General Partner at GrandBanks Capital, said, "Venture capitalists understand the significant impact that strong patent portfolios can have on exit valuations. It often can take longer to prosecute a patent portfolio than the gestation time a portfolio company may be under our investment tenure. The IP Investor Pool seems to have finally cracked the code on how to efficiently transfer strategic IP assets into startups where they can deliver the highest long-term value and do so when it can create the most value. We look forward to participation in the program with our portfolio companies."

Patent owners are able to convert underutilized IP assets into equity positions in promising startups, participate in VC-led funding rounds, and reduce their patent portfolio maintenance costs by selling off IP. The AQUA IP Investor Pool drives value through enabling the efficient investment of mature patent assets in promising venture-backed startups. There are no costs to participate in the marketplace or up-front commitments to make investments. AQUA works to match startups with IP holders, then the IP holders set the value of their IP. Separately, venture capitalists set the value for the equity in the startup, which then determines what percentage the IP holder will receive in exchange for giving their patents to the startup.

Arlene Hornilla, VP & Chief Intellectual Property Counsel at Entegris, commented, "We're thrilled to have an opportunity to offer Entegris IP assets into startups to accelerate their growth through our participation in the IP Investor Pool."

Stefan Tamme, VP of Worldwide Licensing and Strategy at Rambus, Inc., said, "As a leading creator of intellectual property, Rambus takes pride in contributing to the innovation ecosystem. We aim to give startups an 'IP boost' during initial growth stages, and to foster ongoing partnerships through Strategic IP Investment. We see the IP Investor Pool as a creative approach to enable us to deliver on this objective."

Startups can submit their business plan here: http://aqualicensing.com/ip-investor-pool/

Tech companies can explore participation in the IP Investor Pool by contacting: [email protected]

About the AQUA IP Investor Pool
The AQUA IP Investor Pool connects growing, venture-backed startups with valuable intellectual property from the industry's most established, respected technology firms. Startups submit business plans to the pool as they would to a venture capital investor, at which point the team of patent experts AQUA identify IP assets that will improve the defensive position of the company and contribute to its long-term growth and value potential. When a match is made, the IP is offered to the startup in exchange for equity, rather than cash, as part of their next-round of financing.

About AQUA Licensing, LLC
Based in Silicon Valley, AQUA has a proven track record of assisting companies in gaining the greatest return on investment for their intellectual property assets. AQUA's clients include global technology firms and mid-sized companies seeking to maximize the return on their R&D investments. AQUA's team includes both senior patent attorneys and business development executives from leading U.S. technology firms with deep expertise in IP strategy, protection, enforcement and licensing. More information is available at www.aqualicensing.com.

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