I have had a couple of Inventors this year contact me saying company X is ready to sign a licensing agreement, but now I am not sure what to do. Because I really like company Y more and am waiting for them to review my product. Don’t expect companies to put up with you being indecisive when it comes to making a decision on a licensing agreement. You can let the first company know you have other interest in hopes of getting a bidding war going, but in most cases the company will either drop the offer or stick with the current offer and put a time limit on it. Especially, if they were under the assumption that they were exclusive to you.
Some Inventors are stuck in the “Grass is Greener” mode and are always looking for the better deal and end up destroying all the deals and get nothing. There is a fine line between going for what you want and being so greedy no one wants to deal with you.
You need to decide up front what your goal is in a licensing deal and what is the least you will accept and work towards the best goal first. But you need to make sure you are being realistic in your goals. Asking for $100,000 advance on a plastic comb is probably not going to happen.
Update: One of those Inventors contacted me yesterday to say they were disappointed to find out company X withdrew their offer and company Y has passed on their product. So now they are back to square one and the other companies they have available to approach are most likely going to offer much less than the first two and have a significantly smaller distribution network.
Their solution to the problem is to approach company X again and offer to take a much lower royalty and advance in hopes they will have renewed interest.
What would you do and why?
To many Inventors have the grass is greener issue combined with the unrealistic expectations issue. A deadly combination that normally does not end well.
Update: The Inventor contacted me today saying they went back to company X and said they would take a lower royalty rate and advance if they were still interested. He was shocked they declined the offer and they wished him luck with his future ventures.
So now they have no offers on the table and company X and Y were the top of their list of prospects since their market was only a few major players.
What would you do?