An Interview with Joseph Rossi, Assistant Vice President for IP Lending Solutions at Aon
In today's business world, intangible assets are becoming increasingly important. As a result, more and more companies are looking for ways to finance their businesses by leveraging their intellectual property (IP). I sat down with Joseph Rossi, Assistant Vice President for IP Lending Solutions at Aon, to learn more about this burgeoning field and how he conducts business development for what he believes to be the next big thing in lending.
IP-backed lending is a type of collateralized lending that uses a company's intellectual property as security for a loan. This can include patents, copyrights, trademarks, and trade secrets. The intellectual property is appraised and then used as collateral for the loan, much like a home or car would be used.
IP-backed loans can be used for various purposes, such as working capital, business expansion, or even acquisition financing. And because the collateral is the IP itself, the loan can be structured flexibly and tailored to the borrower's needs. This type of financing can be particularly helpful for high-growth companies that may not yet be profitable but have strong IP portfolios.
"We have put together a structure in which IP is treated more like a traditional physical asset that is being collateralized for a debt facility and backstopping its value through an insurance wrap," said Rossi.
"Our valuation process coupled with the credit enhancement often gives companies the ability to access higher capital amounts, which is another form of non-dilution beyond the minimal to no warrant dilution we typically see; it extends the runway for them to not have to raise capital for a while or to skip financing rounds altogether and fully commercialize."
Three Essential Business Development Tips for Newbies
Rossi joined Aon last year after being a financial advisor at Merrill Lynch Wealth Management for more than four years. Business development for IP-backed lending was uncharted territory for him when he started at Aon. But he says the following three tips have been instrumental in his success so far:
1. Be Truthful
When you're just starting to get your feet wet in this industry, it's critical to be honest about your knowledge and experience level, Rossi said. Refrain from acting like you know everything because chances are the people you're talking to have been doing this for a lot longer than you have.
"I know that if I'm in a situation where I'm not sure what the answer is, or I'm not sure what to do, I know that I'm going to be truthful in that situation," he said. "The worst-case scenario is me basically saying, 'Look, I don't know what the answer to that question is. And, you know, I'll run it down for you.'"
2. Meet as Many People as Possible
In any new industry, Rossi says it's imperative to meet as many people as possible and get a lay of the land. This will not only help you learn more about the industry, but it will also help you build relationships with key players. And when it comes to business development, relationships are everything.
"In the beginning, I think you have to turn over every rock," he said. "You can't let anything fall through the cracks. You have to try everything until you get to the point where you have the luxury of determining what's is a good use of your time."
3. Take Notes and Read a Lot
When Rossi started in this industry, he took notes on everything and read as much as possible. He still does to this day. And while it may seem like a tedious task, it's helped him immensely in his career.
"I think note-taking is huge," he said. "And I think that reading is huge. I always have a pen in my hand. I always have a notepad. In my free time, I'm always reading, whether it be a business book, a sales book, psychology book or what's going on in the market."
