IP-based debt funds are forms of securities, offered to banks and other financial institutions by companies seeking capital in order to get loan. Patents are generally offered as a collateral in security loans but, only cutting-edge technology patents are accepted by lenders while they have an additional opportunity to integrate or invest these novel technologies in other ventures in similar sectors. These funds also allow innovative startups to exploit the commercial value of their IPs in order to secure loans from banks or other financial institutions. IP rights could certainly be exploited as a source of capital, collateralized by the stream of revenues deriving from licensing or royalty agreements, which typically involve portfolios of copyrights or patents. Although these instruments involve high structuring costs, they can be an important component in the funding processes of innovative start-ups.
