M&A Advisor's Playbook: Introducing Data Licensing During a Business Sale

As an M&A advisor, your primary goal is to maximize client value during a business sale. In today's data-driven economy, a company's data assets can represent significant, often untapped, value. SourceX provides a unique opportunity to monetize this value through data licensing, potentially enhancing the sale outcome without interfering with the core M&A process.

This playbook outlines a practical, step-by-step approach for M&A advisors to introduce data licensing opportunities to their clients.

Step 1: Initial Client Fit Check for Data Licensing Potential

Before discussing anything with SourceX, evaluate if your client's business aligns with SourceX's criteria for licensable data. This initial check is crucial to ensure a productive conversation and to respect your client's time.

Self-Assessment Checklist:

• Is this a US company?
• Does the company have 50 or more full-time employees at its peak (excluding contractors)?
• Does the company have years of operating records?
• Does the company have the clear legal rights to license its data?
• Is there an authorized sponsor within the company who can champion this initiative?

If the answers to these questions are generally 'yes', your client might be a good fit.

Step 2: Educating Your Client and Gaining Approval

Data licensing is often new territory for many companies. Your role as a trusted advisor is to educate them on the potential benefits and how it complements their M&A strategy.

Key Discussion Points with Your Client:

• SourceX's Role: Explain that SourceX is the enterprise data transaction layer for AI, managing data licensing from sourcing and rights review to delivery and payment. Emphasize that SourceX does not train AI models and does not manage data for training purposes.
• Value Proposition: Highlight how licensing proprietary data to AI labs and data buyers can unlock new revenue streams or enhance the company's valuation during a sale. Remind them that the partner reward (your reward) is a share of SourceX's fee and is never deducted from what the company receives.
• Process Overview: Explain that SourceX facilitates the licensing, ensuring data privacy and compliance. Crucially, emphasize that you, as the advisor, never handle the company's data or its contents. SourceX directly engages with the client.
• Scope Approval: Clearly define the scope of data licensing exploration that the client approves. This ensures you only refer opportunities the client is comfortable with.

Crucially, obtain your client's explicit approval to make an introduction to SourceX. This protects your client's interests and maintains your advisory relationship.

Step 3: Making the Introduction to SourceX

Once your client is educated and has given their approval, the introduction process is straightforward.

Introduction Steps:

1. Provide Core Company Information: Submit the basic company details through your SourceX partner dashboard. This should include the company's name, general industry, and the authorized sponsor's contact information (with client permission).
2. Client-Approved Scope: In your referral notes, clearly state the client-approved scope for data licensing exploration. This ensures SourceX understands the boundaries.
3. SourceX Engagement: SourceX will then directly contact your client's authorized sponsor to initiate discussions about their data assets and licensing potential. All communications regarding data specifics, deal terms, and contracts will be directly between SourceX and your client.

Reward Structure for M&A Advisors

As a SourceX partner, you earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals. Rewards are capped at $100,000 cumulative per referred company. Remember, rewards become payable only after the buyer pays and SourceX receives its fee. A lead, meeting, or signed agreement alone does not trigger payment.

Illustrative Example:

Hypothetical Input: Imagine SourceX facilitates a licensing deal for your client. For illustrative purposes, if SourceX's collected fee from a single licensing deal is $X,000, your potential earnings from that deal would be X% of $X,000. These earnings contribute towards the cumulative cap of $100,000 per company.

Your role is to identify and introduce the opportunity, while SourceX handles the complexities of data licensing, allowing you to focus on your core M&A advisory services.

Refer a company · How rewards work