F23 — Licensing Economics
What a U.S. Licence Is Worth
This page answersIf PawPals licenses rather than sells, what does the licensor receive?
Assumptions are shared across every financial page — change one, all outputs recalculate.
192–194 — Structure
Licence terms and licensor cash flows
Licence terms
ASSUMPTIONLicensor economics
195 — Comparison
Licence versus outright acquisition
| Dimension | Licence | Acquisition |
|---|---|---|
| Licensor cash today | US$4.0M | Full consideration at close |
| Licensor upside retained | Yes — royalty on licensee performance | No — unless equity rolled |
| Licensor execution risk | Transferred to licensee, minimum guarantee protects downside | Fully transferred |
| Present value of licensor receipts | US$14.8M | Negotiated headline price |
| Acquirer flexibility | Constrained by territory and term | Unconstrained |
| Best suited to | A buyer wanting U.S. rights without acquiring the group | A buyer wanting the technology, data and team permanently |
Sensitivity
Royalty rate × licensee scale
| US$25M | US$50M | US$100M | US$200M | US$400M | |
|---|---|---|---|---|---|
| 2% | US$500K | US$1.0M | US$2.0M | US$4.0M | US$8.0M |
| 4% | US$1.0M | US$2.0M | US$4.0M | US$8.0M | US$16.0M |
| 6% | US$1.5M | US$3.0M | US$6.0M | US$12.0M | US$24.0M |
| 9% | US$2.3M | US$4.5M | US$9.0M | US$18.0M | US$36.0M |
| 12% | US$3.0M | US$6.0M | US$12.0M | US$24.0M | US$48.0M |
Annual royalty at maturity, before any minimum guarantee.
Royalty is modelled on licensee net revenue as defined in the model, not on GMV. Minimum guarantees are treated as a floor, not as additive to royalties.
Investor implication
A licence with a meaningful minimum guarantee converts a speculative U.S. opportunity into a contracted cash stream for the licensor, at the cost of the majority of the upside. The right structure depends entirely on who is better placed to carry U.S. execution risk.
Strategic transaction enquiries
Discuss the U.S. Opportunity