Licensing agreements generate revenue while minimizing risk and start-up investment costs.

Question

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Licensing agreements allow a company to generate revenue by giving another company the permission to use its intellectual property (such as trademarks, patents, and copyrights) in exchange for royalties. This can be a lower-risk alternative to investing heavily in a new product or service, as the licensee assumes much of the financial and legal risks involved in bringing the product or service to market. Therefore, licensing agreements can generate revenue while minimizing risk and start-up investment costs for the licensor.

Licensing Agreements Generate Revenue While Minimizing Risk and Start-Up Investment