Several strategies can be used to commercialize technology. A company or individual can exploit technology in several ways.

1. Commercializing Technology: Six Different Possibilities
Several strategies can be used to commercialize technology. A company or individual can exploit
technology in several ways:
New venture to develop, manufacture and sell products
Buy an existing company with the target technology
Establish a joint venture
License
Form a strategic alliance
Sell IP to a third party
Each commercialization strategy should be carefully considered by companies wishing to profit from a
particular technology.
New Venture
What is a new venture? A new venture is the development of a new product line or a new company in
order to develop, market and sell a technology.
What is the risk? The risks associated with a new venture can be considerable. For example, there are
financial risks associated with the up-front costs of developing a new technology and the time to get a
new product to market. The business risks associated with investing in an unproven technology/product
and the supporting business infrastructure. There are also often regulatory risks associated with the
timing and receipt of regulatory approval.
What is the benefit? While there are several benefits to developing a product in-house, perhaps the
greatest benefit is that, if successful, your company is likely to be the sole beneficiary of all of the profits
relating to the new technology.
Acquire Another Company
What is a technology acquisition? There are a number of ways to source technology; however, in this
instance technology acquisition means purchasing a company or product line in order to acquire a
specific technology. This can occur as an asset or a stock sale.
What is the risk? Buying an existing company or product line can be less risky than a new venture
because, in many cases, significant research and development will have been completed prior to the
acquisition and the target technology will have best tested and proven to a degree. However,
substantial up-front costs are still likely to be required, and the purchaser of the new company or
product line may be exposed to liability accrued by the previous owner.

2. What is the benefit? An acquisition may decrease some of the financial and business risk associated
with the development of a new product. For example, it may shorten the amount of time that it will take
to get a product to market and/or be more cost-effective than internal research and development.
Additionally, depending on the timing of the acquisition, it may eliminate the regulatory risk that could
be associated with a new venture.
Joint Venture
What is a joint venture? A joint venture is a business agreement in which two or more parties agree to
work together in a new company to develop a new product or technology. In a joint venture the venture
partners agree to share the operation and control of the enterprise and the related risks and rewards.
What is the risk? The risk involved in a joint venture is still relatively high, since each of the participants
is essentially embarking on a new venture. However, the presence of partners serves to mitigate the
risks discussed above. Additionally, the choice of partners who may have specific expertise in may
further serve to lessen the risk of the new venture if the skills and resources of the partners are
complementary. Also, aligning and maintaining the alignment of the interests of the venture partners is
very important since differing goals among the venture partners could make the venture difficult to
manage.
What is the benefit? The benefit of the joint venture is that venture partners may be able to leverage
complementary skills and technologies to get a product to market more quickly and successfully than
each partner may have been able to do individually.
Licensing
What is a license? A license is an agreement through which a technology owner, the licensor, allows a
third party, the licensee, to use its technology in exchange for consideration.
What is the risk? The risks associated with licensing are often less than those associated with a new
venture or a joint venture. The resources and investment needed to implement a licensing program are
much less than those needed with either of the previous strategies. Also, depending on the nature of
the licensing program, a degree of risk can and should be transferred to the licensee who, in many
cases, may be the party that ultimately develops and commercializes a product relating to the licensed
technology. One key risk with licensing technology is that companies should be careful about their
treatment of competitors (i.e. avoid enabling competitors, but also be cognizant of all potentially
relevant law including anti-trust law.)
What is the benefit? One benefit of pursuing a licensing program is that a company may be able to
commercialize and generate revenue from a technology that the company has decided not to pursue
internally. In addition, even in cases where a company has decided to develop the licensed technology
itself, a licensing program can act as an additional revenue source and enhance the reputation of the
licensed technology in the market. Further, licensing can enable companies to have foreign affiliates
without incurring substantial financial and legal risk.

3. Strategic Alliance
What is a strategic alliance? Similar to a joint venture is a strategic alliance or collaboration. A strategic
alliance is less formal in nature, alliance partners will generally collaborate in a limited fashion over a
short period of time around a project of a very specific scope.
What is the risk? The risks in a strategic alliance are usually limited to the scope of the alliance.
However, the alliance partners should take care to manage risks contractually.
What is the benefit? Strategic alliances benefit alliance partners by allowing them to contribute
complementary skills to the development or marketing of a technology. For example, two companies
may enter into a strategic alliance whereby one company agrees to market and sell products developed
by another company in exchange for a share of the profits. Similarly, companies may collaborate around
manufacturing competencies or research and development. In each case, the alliance partners are able
to leverage resources that they already possess, thus (i) minimizing its up-front costs and/or (ii) gaining
additional revenues from business infrastructure that is already in place.
Sale of technology
What is a sale of your technology? In certain cases it may be advisable to sell a technology outright. This
can occur as an asset sale or as a stock sale.
What is the risk? The main risk to the technology owner in a stock sale concerns the proper valuation of
the technology and properly determining that the technology is no longer needed by the company.
Additionally the technology owner will want to properly assess its tax liability, if any, in connection with
the sale and other customary risks of sellers in a merger and acquisition transaction.
What is the benefit? Generally a technology sale is most beneficial if the relevant technology is not
needed by the company (i.e company is exiting the business, company is not able to develop the
technology in-house or form meaningful joint ventures or collaborations related to the technology.)