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What is an ILO?
Buying an ILO
Structuring an ILO
Listing an ILO
Initial Licence Offerings (ILOs) are a revenue-based form of raising money for companies who have a product or service that is already in revenues or is ready to start earning revenues.
The ILO is a straightforward distribution rights licence that expires after an agreed period of time or is exchanged for cash under a buy back or for equity dependent on the offering. ILOs are contracts between the company and the ILO buyer.
ILO buyers promote the product to their network of contacts to qualify for royalties. Royalties are split evenly amongst the ILO units and are based on an agreed percentage of gross revenues.
ILO buyers can also obtain a code to make direct sales of the products for commission in some cases.
Companies can issue their ILO round in one go or split it into two or more rounds. Secondary rounds may be at a different price calculated from the value of the royalties paid out in year one.
ILOs can also be bought and sold mid-term on the ILO Contract Exchange. (ILOCX)
A company with an explosive product, technology or service gains approval to list on the ILO Exchange.
The Listing Company isn’t selling shares in the company so ownership in the company stays the same.
The Listing Company is selling a license granting the Licensee the right to market its products or services.
Revenues: The company sells licences which bring in revenue to the Company.
An ILO Buyer (Licensee) purchases a 3-year licence from the Listing Company, who grants the buyer the right to market its products or services.
The Licensee owns the license and:
ILO Licensees have 3 ways to make money:
To qualify for royalties, an ILO Licensee is required to market the Listing Company and its products and contribute to sales and the success of the Company.
Licensees become champions, committed to selling the Listing Company’s service or product and promoting the Company under their terms.
At the end of the first and second year, the Listing Company will pay a royalty to Licensees based on revenues.
Licensee Royalties are calculated based on a percentage of gross revenues.
Each ILO offering states the percentage payable.
Listing Companies must be able to set aside a minimum of 10% of their gross revenues to pay royalties.
Royalties can be paid out monthly, quarterly or yearly depending on the terms of the ILO.
Completing an ILO Program is usually a 3-Year Cycle but ILO Buyers can sell their ILOs on the Exchange at any time.
At any time the ILO Licensee can list the ILO Unit licensed to them on the ILOCX Exchange and sell the Unit at the ILO Unit Market Price set by the ILOCX based on performance and whether the ILO Buyer has qualified the ILO unit.
An ILO is NOT a security because:
An ILO is not equity because:
Email Address: Please enter a valid email address for your account. A password will be sent to this email address which is required to log into your account for the first time. The password can then be changed in your personal dashboard.
Is the licence holder:
Licensee Name: Enter your full name.
Licensee Residential Address: Enter your full residential or contact address.
Licensee Name: Enter the name of the company or entity you wish to be the licence holder.
Licensee Registered Office: Enter the full registered office address for the company or entity.
Name of Authorised Signatory: Enter the name of the person authorised to sign on behalf of the company or entity.
Position of Authorised Signatory: Enter position of signatory within company or entity e.g. Director or Trustee
Select an ILO you feel passionate about.
Select the quantity of ILOs you wish to buy. Sometimes there is a cap on the amount of ILOs from one issuance, but often they are unlimited.
Click on the Buy Now button
We currently use Stripe and Paypal Express to process our payments securely.
Email Your email address, if you have already registered and use the same email address this payment is recorded in your customer account, if you have not registered this email address then a customer account will be created for you at after your payment is received.
Name: Name on the payment card to be used. This may differ from the Licensee name.
Address: Billing address of payment card to be used. This may differ from the Licensee address.
Card Number: Please enter your 12 digit card number.
Expiry Date: Please enter the expiry date of the card MM/YY.
CVC: Please enter the security CVC code on the back of your payment card.
Phone Number: Please enter your phone number so that our payment processor can text you with confirmation of your secure purchase.
You will be sent an email listing the licenceses you have purchased and including a password for your customer account if this is your first purchase (see Buyer's Account Login).
From your account dashboard you can view your recent licence orders, and edit your password and account details.Logging in
Email / Username Your email address, if you have already registered and use the same email address this payment is recorded in your customer account, if you have not registered this email address then a customer account will be created for you at after your payment is received.
Password: Enter your password, if you have forgotten your password click on the Forgotten Password button and a new one will be sent to the email address above.
The company offering the ILO must have a product, technology or service which can be marketed by the ILO holder. This should be what we term “revenue Ready’ if not already in revenue.
This should additionally be supported by market stats to show the potential for the product and financials/forecasts which demonstrate that the more ILO holders promoting the product the more likely the sales will follow and therefore make the whole activity successful.
ILOs work better for those companies who have products ready to bring to market. It is possible to offer an ILO while you are raising awareness for your products but it would be at very low value and other incentives may need to be offered to these early supporters as with some crowdfunding.
In some special cases, we can calculate a longer term for the ILO allowing for a delay in revenues which is offset by increased royalties later, or if your later revenues would be extremely high. Please contact us if you think this may apply to your company.
The price of the ILO is calculated based on the amount of funds you want to raise, the sales price and cost price of your product and your projected revenues. These are all calculated individually using our formula.
There is no limit on how much you can raise with an ILO as long as your projected revenues support the number of ILO units and their cost.
If you ring-fence your product in a separate entity you can keep it separate from your other business and only pay royalties on revenues from that product.
Only one ILO per ring-fenced product can be run at a time, however the ILO units can be issued all at once or in rounds at differing values based on the success of the previous rounds.
A company with two completely different products can run a separate ILO for each product as long as the products are distinct and can be ring-fenced. For example a company might run an ILO on clothing products and a second ILO on toys from a different range.
There is no time limit on each offering however there may be advantages to limiting the offering period. Once you sell all of the units in an ILO however you cannot issue any more.
Purchasers of the ILO units pay using a payment gateway such as Stripe or PayPal. At the moment this goes into the ILOCX pot, less the gateway fees. ILOCX then deducts a commission of 5% and forwards that balance to the Company’s Bank or Paypal account. Banks and Paypal may charge fees for this transfer therefore to save on wiring fees, it might be advisable for the company to wait until a larger balance has been received before drawing down on the ILO monies.
We are currently developing a wallet system so that payments will be made directly into the Companies Wallet, reducing gateway and banking fees and allowing the company more control on drawdown of their funds.
Any unsold units can be kept in your ILO pot and used for a subsequent round. Royalties are paid out equally across all ILO units including those in the pot, therefore the royalties payable on the unsold units stay with the company.
This is calculated automatically on ILOCX based on a number of factors and our proprietary formula.
Each ILO has a set number of units which are available for sale. The number of units is calculated based on the revenue potential of the company. Usually these are offered in one or two rounds however if some units are not sold in these rounds then any unused units could be sold at another time.
Each ILO is individual and can have any expiry date, however we recommend 3 years for ILOs as the optimum term to benefit the buyer and the seller.
The first stage is to apply for an ILO to be listed by filling in some details to start the ball rolling.
Starting with some contact details.
Then some company name.
And now a brief description of the product or service that will be covered by the ILO, this will later be used on your ILO page.
There are a variety of sectors at the top of the ILO page, you can pick one or more of these to include your ILO in for people interested in buying ILOs in a particular sector to see what is available quickly. Your ILO will be listed in the full list below as well in more detail.
Your proposed trading symbol should be short 4 or 5 letters long but still something that relates to either your company or the product / service covered by the ILO. Do not worry if you cannot say it in 5 letters we do accept longer codes as well.
For example : If The Test Corporation ha an ILO to cover the development of little watch sized robot they might have a code like 'TESTC' based on the company name or 'ROBOT' based on the product. or 'TST-C' or 'RBT' or 'TSTRBT'.
We also want some supporting documents uploaded, it is worth getting these ready first.
Then all is ready to send to us so we can review your information and set up your blank page, set you up as a user and once ready send you a link and password to use to get to your Company Dashboard where you can fill in everything you need to create your ILO page and other supporting information.
Click here for a list of all of the licences bought by Order Number and Buyer Name. Click on View to see more details of the Buyer including full name and address, payment method, amount paid and licence number. Click Download to download a copy of the licence.
Social licences are licences that you can assign to influencers who will promote your ILO to a larger audience, or you can use this feature to issue licences as gifts
Social licences are licences that you can assign to influencers who will promote your ILO to a larger audience, or you can use this feature to issue licences as gifts
We require a certain amount of information to produce a licence which you can enter here.
When the information has been entered, click on Save to assign the licences to this person.
You cannot assign more social licences than are available.
The number of social licences is set up in the ILO Numbers section of this dashboard.
The number available are the number od social licences minus the number that have already been assigned.
A list of licences bought showing the Licence Key, the order date and the Buyer name.
This list also shows whether the licence is standard, friends and family or social.
Click Download to download a copy of the licence.
Type in the code you want to use to make the friends and family link for your product hard to guess.
If you want a random selection of numbers and letters click on the Generate link.
Click on Copy to Clipboard to make it easier to get the link to send to your friends.
Remember to save the new code if you have changed it.
Copy and paste this weblink onto your website, blog, etc to guide people to your page.
Click on Copy to Clipboard to make it easier to get the link.
Click here to enter details of the product(s) covered by the ILO such as copyright, trademark, patent information or the full product description. This information is required for the licence.
Click here to see how your information will look in the green sheet.
Once your information in the various green sheet sections is saved, it is sent to us for checking before going live. You can see that information before it goes live inn the preview.
Video and public description to appear at the top of the page.
We have limited it to .png files. This is because one of the logos will sit on top of the video area (if you include a video link) and fopr that use it looks better to have a transparent background.
An informative video or advertisement for the ILO or its product.
What we require is the embed link for the video, this is different than the page url for the video.
Both YouTube and Vimeo make it fairly easy to get the embed code and these instructions will work for both video sharing sites.
This logo is the image file that sits on top of the video area of the page, it can be the same as your main logo or you can use a different file showing the product etc.You can upload a file in the same way as with the Logo or you can click on Use Main Logo to use the same file as the Logo.
The default colour for a video background is black. But if you would like a different colour you can select it here.
You can use a HTML RGB code (starting with a #) if you know the colour you want (sometimes available in image processing software) or you can use the colour selector where you can use a preset colour or the sliders to create your own. Save will copy that colour to the Video background field.
This area is for two or three bullet points showcasing the best features of your ILO.
Click on Add Feature to add a title, description and an icon. Use the Position drop down to choose the order in which the features will appear.
You can edit or delete features then click Save Changes to update the page.
This area is for three or four bullet points showcasing other features of your ILO in more detail and appears right next to the buy now button.
Click on Add Paragraph to add a description. Use the Position drop down to choose the order in which the paragraph will appear.
You can edit or delete paragraphs then click Save Changes to update the page.
This area is for is for entering the numbers that will be used on the page, the lists and tyhe licences themselves.
Select the currency the ILO will be quoted in, this is also the currency the payments for licences will be made in.
Information on price, allocation and royalty for an issue or issues.
More information on issues and entering them is here
The current gross revenue for the company and appears on the page
The amount of money you want to raise with the ILO, this will appear on the page.
The launch price for the licences, this appears on the page.
The percentage of the revenue that will be used to provide dividends.
The first year is a set figure, extra years can be added if the revenue from the product does not start increasing until late in the period of the ILO or if the length of the ILO is longer than 3 years or the percentage of the revenue used for the pot changes over time.
The projected revenue figures for the period of the ILO, these figures will appear on a graph on the page.
The Friends, Launch and years 1 to 3 are set figures, extra years can be added if the revenue from the product does not start increasing until late in the period of the ILO or if the length of the ILO is longer than 3 years.
The price you are expecting the licences to be traded at for use on the graph.
The first two points (friends and launch) are set using the figures above. Years 1 to 3 are here and extra years can be added if the ILO period is greater than 3 years.
How many licences will be set aside for selling to friends and family. The Friends Link is used to assign the sale of a licence to a friend at the friend and family price.
The friend and family price.
The last date a friends link can be used to purchase a licence at the friends and family price.
How many licences will be set aside for assigning for social use. The social licences can be assigned in the Licences section above.
This set of records controls the price of your ILO, how many shares are allocated and when and the royalty (revenue pot percentage) that will be displayed,/p>
It is important that the first Issue has a date set to when you want the ILO to become active and appear on the ILO Exchange.
The Issue record is made up of the date it becomes active, the unit price, the number of units to allocate on this date, and the royalty percentage you will from this date onwards.
To enter a new issue record click on 'New Issue' or the 'Edit' button to change an existing issue record.
Click on the date field and select a date for the record to become active. If there are records with a date before this then this information will be used after this date.
Enter the unit price without a currency symbol.
Enter how many units to allocate at this date. If this record is only to change a value such as unit price or royalty then enter 0 in this field, it is important to enter a figure greater than 0 in the first record.
Enter the percentage royalty you will pay.
Click 'Save' and the issue record will be shown in the ILO Numbers section, You will need to click on 'Save Changes' afterwards to save it to your product's record.
If you want to offer a discount price to reward early buyers you can enter the first issue with a low price and the number of units to allocate and enter another issue record with a later date, say 3 months later, with the full price and 0 in the allocated, the price will then be at the first lower price after the launch until the date of the next issue record.
If you want to change the royalty percentage over time you can put in new issue records to perform this task in the same way as with the price change example above.
To allocate a second issue of licences, enter a new record and fill it in with the number of licences to issue at this date. The total number of licences shown on your page is a sum of all the licences allocated in the issue records.
This area provides highlights in the development of the product/company, these can be either in the future or the past.
The milestones are separated into quarters and displayed in date order on the page.
Click on Mew Milestone to add a milestone. Enter a title for the milestone, the date it is expected or occured, some text about the milestone and select a suitable icon.
You can edit or delete milestones then click Save Changes to update the page.
This area provides the oportunity to include short biographioes of important members involved in the product/company.
Click on New Team member to add a team member. Enter a name, job title, a short biography (optional), an image of the team member or a suitable icon.
We a number of popular web friendly file types for this image.
You can edit or delete team members then click Save Changes to update the page.
This area provides the oportunity to include documents that will explain the product/company or projected financial statements, brochures etc in office or pdf formats.
Click on New Document to add a document. Enter a title, sub title (optional) and upload the document.
PDF, Mirosoft Office files and Presentation files.
You can edit or delete documents then click Save Changes to update the page.
When the file is downloaded it uses the title as the name of the file.
Contact are a necessary part of making the licences valid.
Click on New Contact to add a contact. Enter a name, position, email address, phone number and the role.
You can edit or delete contacts then click Save Changes to update the page.
You need one signatory to be the person who electronically signs the licences.
You can enter the same contact details for more than one role.
Information about the company for use on the page and the licences.
Information we need to transfer money for licences to you.
The name your company is known at at your bank.
Other details or other means of transferring money to you.