Idea Makers and Idea Brokers in High-Technology Entrepreneurship: Fee vs. Equity Compensation for Intellectual Venture Capitalists / Edition 1

by Todd L. Juneau

Overview

Among the most vexing challenges for entrepreneurs is how to avail themselves of the necessary services—intellectual venture capital—without burbaning through their seed money at a rate that makes further borrowing prohibitively expensive. Traditionally, professional firms have charged entrepreneurs a fee for their services, based on billable hours and effort. Yet in the past decade, an alternative model has emerged that obviates the entrepreneurs' conundrum while still satisfying the needs of the service provider.

The alternative is an equity-for-services arrangement, whereby professionals are rewarded for their work with a stake in the new venture, to be redeemed at a later date at an initial public offering (IPO), for example, or when a trust fund matures. Both parties can benefit under such an arrangement. The entrepreneur benefits by being able to afford patent attorneys, public relations consultants, recruiting firms, and all the other knowledge providers crucial to the success of a new venture, and the intellectual venture capitalists have an incentive to work toward the long-term success of the startup. This book outlines the potential risks and rewards of equity compensation, enabling both service providers and entrepreneurs to make informed decisions.

Product Details

ISBN-13:	9781567204568
Publisher:	Bloomsbury Academic
Publication date:	07/30/2003
Edition description:	New Edition
Pages:	224
Product dimensions:	6.00(w) x 9.00(h) x 0.62(d)

About the Author

ELIAS G. CARAYANNIS is Professor of Management Science at the School of Business and Public Management at The George Washington University.

TODD L. JUNEAU is Partner in Nath & Associates, a law firm in Washington, D.C.

Table of Contents

Preface
The Intellectual Venture Capitalist as Concept and Practice
Introduction: Intellectual Venture Capital for Entrepreneurship
Challenges and Opportunities in Working with Start-Ups
Developing Win-Win Relationships: The Equity for Service Model
Insights from Practice: Perspectives of Expert Service Providers
Using the Equity-Based Model: Primer and Cases from Practice
IPR Primer: A Brief Overview of US and International IP Laws
Intangibles Valuation Primer: A Brief Overview
Financial Rules and Regulations Primer: A Brief Overview
IPR from the Entrepreneur's Perspective
Insights or Lessons Learned in Developing Intellectual Venture Capital
Insights from Practice: Case Studies of Equity for Service Deals
Equity for Service Deals: Conclusion s, Insight, and Recommendations
Index