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WHAT IS AN INITIAL LICENCE OFFERING?

An Initial Licence offering (ILO) is a way of raising capital for businesses that can prove they are revenue ready. A number of licences pertaining to a company or product are sold to buyers in an Initial Licence Offering. Buyers validate these licences by partaking in a number of sharing activities. These could be sharing online, on their social platforms, face to face or through referral codes. Buying the ILO gives the owner the right to promote information about the company as well as receive quarterly payouts on a percentage of revenue made by the company.

WIth 10,000 ILOs sold, companies not only get the revenue from these sales but they also get each and every ILO holder promoting them for three years.

An ILO is structured so that thousands can be sold in any one ‘offering’. This generates thousands of interactions from buyers sharing the product they have bought into. Much like any licence based deal, ILOs can bridge gaps worldwide and add untold expansion capabilities as well as raise capital.

BENEFITS & RESPONSIBILITIES

Thousands of licence holders in one product harnesses the ‘people power’ element of start-up success. ILOs are unregulated and flexible with specific licence edits available on most offerings. ILOs create a fairer way for investors to back companies and sit separate to the capital markets. As a fast way of raising funds, ILOs are becoming one of the safest options of our day.

The qualifying action needed to be taken by purchasers puts an ILO in a category of its own when it comes to amplified benefits. This action of sharing and other promotional activities channelled through thousands of ILO buyers taps into the sharing society of today significantly raising awareness as well as sales for the company.

Companies pay out quarterly royalties to their licence holders after the first year of their ILO offering. These royalties are paid into a pool ready to be shared equally with ILO holders and generally make up approx 10% of the company's gross revenue. Initial royalty payments then set the value of existing ILOs which buyers can trade on an ILO Exchange.

The company creating the ILO is responsible for reporting their progress throughout the 3 year period an ILO covers. A percentage of money raised through a company's ILO must be spent in a way that grows the company, through advertising, marketing or similar.

At the end of the 3 year period companies have the option to buy back their ILOs or swap them for shares in the company. They also have the option to offer a second round, the value of which will be defined by royalty pay outs from the first round.

learn more

ILOs are still a very new way to raise capital. As further information and market leaders emerge we aim to keep abreast of the market and share our findings here. Below you’ll find a list of websites relevant to ILOs which hold further information. You can also find our complete breakdown here.

ilo sites

to visit

iloquote.com

ILO Quote estimates a company's ILO listing price and revenue payments.

ILOSALES.COM

An extension of ILO Quote, ILOSales provides a potential market reach and sales numbers.

ILO CX

ILO CX is the first in a network of ILO Exchanges that span several sectors and the globe.