Example 4: Inventor Ivan


Ivan plus Juanita

Ivan is a prolific inventor, with multiple patents under his name and more to come. Ivan doesn’t think too much about the business potential of his patents. He gets satisfaction from coming up with ideas that solve technical problems and receiving the kudos of the research/inventor community for his patents.

One day, he meets Juanita and tells her about his latest invention. Juanita has a decade of experience in business and tells Ivan she thinks this invention could make millions. She waxes eloquently about market segments, potential customers, and pricing, and she talks about all her friends whom she’d recruit to turn this idea into a business.

Ivan instantly and impulsively makes her an offer. For 15% of the company, he’ll license her the rights to the patent. Juanita accepts his offer but prudently asks for this deal to be in writing and to be contingent on some market research she’ll perform.

Three months later, Juanita is satisfied with the market potential. She and Ivan sign the license agreement. During those three months, Juanita has lined up $100,000 in seed capital to turn that idea into a sellable product.


Given that Ivan is not joining the company, his 15% is unrestricted, while Juanita has the typical forty-eight-month schedule to remove the restriction on her shares.



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