How to check an offer for your company's data before you sign
A number is only part of an offer. Two offers with the same amount can be worth very different amounts once you read what they let the buyer do and when you are paid. Here are the terms to settle first, the signs to walk away from, and the questions to ask.
Seven terms to settle besides the amount
- 1.A real offer or an estimate. An estimate is a range someone produced from a few questions. An offer is one amount, in writing, with the terms attached and a name behind it. Treat anything less as a conversation, not a price.
- 2.Exclusivity. If a buyer asks for sole rights, it should be paid for, and limited by time or by the part of the data it covers. Open-ended exclusivity can stop you from licensing the same data to anyone else.
- 3.How long the license lasts. A trained model keeps what it learned after a license ends. Ask whether the buyer keeps copies, whether it may pass the data on, and what happens to the data when the term is over.
- 4.Who removes personal information, and how. It should be written down who does it, how, and that it happens before the data leaves your control. Ask to review a cleaned sample, and ask for a clause that forbids trying to identify anyone.
- 5.When and how you are paid. Some offers pay in full when the data is delivered, some pay over time, and some pay only as the data is licensed on to others. The last kind can pay often or hardly at all, so ask what is guaranteed.
- 6.What happens if something goes wrong. Look for any right to claw money back: if the data is judged incomplete, if a buyer rejects part of it, or if a right you promised turns out not to be yours. Few offers say this up front, so ask.
- 7.Who pays the person in the middle. Some intermediaries are paid by the buyer, some take a percentage of what you receive, and some charge you a fee. You should know which before you sign, and what is included in it.
Five signs to slow down
- You are pushed to sign before you have read the whole license.
- The buyer wants standing access to your live systems with no end date. An export, or temporary read-only access, is safer.
- No sample of the cleaned data is shown to you before it goes anywhere.
- Nobody will say how personal information is removed, or you are told there is zero risk.
- The buyer wants exclusivity with no time limit and no extra payment for it.
Questions to ask before you sign
- Is this one amount in writing, or a range?
- What exactly am I licensing, and what do you keep?
- May you sell it on or share it with others?
- Who removes private information, when, and can I see a sample first?
- What is guaranteed, and when would I be paid?
- What can you take back, and under what conditions?
Where this fits in a deal
The usual order is a rights check first, then removing personal information, then bringing the data to several AI companies so they can compete, then reading offers like these side by side. The nine steps of a deal show where each of these checks fits. To see what AI companies look at, read about the kinds of company data that can be licensed and the industries we cover.
Questions about offers
How do I know if a number is a real offer?
A real offer names who is making it, states one amount or a clear formula, says what you are licensing and for how long, and comes with the terms. If any of those is missing, it is an estimate.
Is an exclusive license always bad?
No. It can make sense when the buyer pays for it and the exclusivity ends after a set time or covers only part of your data. The trouble is exclusivity with no limit and no extra payment.
Should I take the highest number?
Not on that alone. A higher amount paid over many years, with a long exclusive term and rights to claw money back, can be worth less than a smaller amount paid at delivery. Compare the whole terms.
Can you look at an offer I already have?
Yes. We can tell you what each term means and what to ask. We work through the terms with you, and you make the final call. Nothing is promised in advance, and we do not give legal advice, so ask your own lawyer to read the contract.
Didn't find your question? Ask us directly.
Do you have data to license and no offer yet? Start with a free check.