Selling vs licensing company data

A license is not a sale

Licensing company data grants a right to use a copy; it is not, by itself, a sale of the company or of the underlying records.

A sale of a business is a different document. To sell a business officially, you prepare a sales agreement. The SBA says that agreement allows for the purchase of assets or stock of a corporation, and that a lawyer should review it so it is accurate and complete. The SBA describes an outright sale as transferring ownership immediately and receiving payment right away. That is ownership of the business moving to a buyer. A license under this program does not do that. The company keeps the records, keeps using them, and gives one data partner a right to use a de-identified copy for AI research.

The SBA says a valuation of a small business can include intangible assets such as brand presence, intellectual property, customer information, and a projection of future revenue. Customer information can be part of what a buyer of the business expects to receive. It is not part of the licensed copy. Names, emails, phone numbers, customer and staff details, passwords, and legal files stay out. If a buyer of the company wants those details, that is the sale, not the license.

Delaware law says a corporation may sell, lease, or exchange all or substantially all of its property and assets, including its goodwill, when the board decides that is expedient and the holders of a majority of the outstanding stock entitled to vote authorize it. The board may abandon that sale without another stockholder vote, subject to the rights of third parties under a contract. That statute is about a Delaware corporation selling, leasing, or exchanging assets. It is not a definition of a data license. Use it when someone calls a license an asset sale. Ask your lawyer if a particular contract is large enough to be treated as that kind of sale. The label on the cover is not the test.

Keep the words apart in the conversation with your board. "We sold the data" is the wrong sentence for this license. "We licensed a de-identified copy and we still own the records" is the sentence the terms support. If the agreement in front of you assigns the records, transfers title, or names a purchase price for the asset itself, it is not this license. Stop and read it with your lawyer before anyone signs.

What the company keeps

You keep ownership of your data, and full use of it in your business. Personal details are removed before anything leaves. The categories that stay out are names, emails and phone numbers, customer and staff details, passwords and legal files.

"You keep ownership" means the company can still run on the records. The systems stay yours. Staff keep using them. A buyer of the company, later, is buying a company that still has those records, plus a promise that the same records were not licensed to anyone else. That is a narrower promise than "we deleted everything" and a wider promise than "we still have a free hand to license the files again."

The copy is de-identified. Personal details are removed before anything leaves your company. You can hold back anything else too. You approve each system before anything is shared. You can hold back a system. Holding a system back can change the offer. It does not change the rule that names, emails, phone numbers, and legal files are out.

The four boxes in full are in company data license agreement terms. The list of what moves and what stays is in what is shared and never shared.

What an exclusive license rules out

This license is exclusive because you agree not to license the same records to anyone else. It is not a non-exclusive pass you can stack with a second buyer of the same files.

Exclusivity here is a promise about the records in the license, not a promise about the whole company. You can still sell the company. You can still run it. You can still shut it down. You cannot sign a second license of those same records. If another firm asks for the same mail, the same tickets, and the same documents, the answer is no for as long as this agreement says so.

The right you give is to one data partner, for AI research, worldwide and permanent, on a de-identified copy. "Permanent" is about that partner's right to use the copy. It is not a sale of the company. US copyright law says ownership of a copyright, or of any exclusive right under a copyright, is distinct from ownership of any material object the work is embodied in. Transfer of that object, including the copy in which the work is first fixed, does not by itself convey any rights in the copyrighted work. Without an agreement, a transfer of the copyright or of an exclusive right does not convey property rights in the material object. If the paper uses "assignment" or "we sell you the data," that is a different deal. Ask your lawyer to mark the verb before you sign.

Do not describe a hypothetical non-exclusive product as this one. Other marketplaces may say their license can go to more than one buyer. That sentence is theirs. It is not the sentence in these terms. Read the agreement you are actually offered. The word "exclusive" on a website and the word "exclusive" in a signature block need to match.

Selling the records instead

Selling the records, as opposed to licensing a copy, is the path where the buyer takes the asset the contract names. To sell a business officially, you prepare a sales agreement. The SBA says that agreement allows for the purchase of assets or stock of a corporation, and that a lawyer should review it so it is accurate and complete. If the contract is a purchase of assets, the buyer is paying for those assets. If the contract is a purchase of stock, the buyer is paying for the company, and the records move because the company moves.

The SBA describes an outright sale as transferring ownership immediately and receiving payment right away. An outright sale is immediate. A license is not. You still have the records the morning after you sign the license. You may not have them, in the same way, the morning after you sign an asset purchase agreement that lists them. Read the asset list. Customer lists, code, and "all data" are different lines. A line that says "all data" can sweep in files this license would have kept back.

Delaware law says a dissolved corporation continues for three years to settle and close its business, dispose of and convey its property, discharge its liabilities, and distribute remaining assets to stockholders. It does not continue for the business the corporation was organized to run. Dissolution is a third path. A dissolved Delaware corporation can still convey property while it winds up. That conveyance is not automatic, and it is not a license. If you are closing, decide whether any sale of assets is still open before you assume the records have already moved. A license signed while you still control the tools is available only until the tools are gone.

The comparison is the structure, not a named buyer of records. A purchase agreement transfers what it lists. This license grants use of a de-identified copy and leaves ownership with you. If you want the purchase, use a purchase agreement and your lawyer. If you want the license, use the license. Do not sign a purchase agreement because someone called it a license in an email.

If you later sell the company

You agree not to license the same records to anyone else. A buyer who later looks at the company will ask about that promise. Ask your lawyer what the sale documents should say. That is not a statement that a statute forces a particular disclosure form. It is what diligence looks like when an exclusive license already exists.

Put the license in the data room with the other contracts. The buyer will want the scope: which systems, which years, whether the copy is de-identified, and whether you can still use the records. You can. The terms say you keep ownership and full use in the business. The buyer is not stepping into a company that signed away its own operations. The buyer is stepping into a company that promised not to license those records again.

If the buyer wants the records exclusively for themselves, and the license already gave that exclusive right to the data partner, the two promises conflict. Say so before you sign the license, or before you sign the sale, whichever document is still open. Do not hope the conflict stays quiet. A purchase agreement that says the seller has not licensed the data, when the seller has, is a problem your lawyer should see before closing.

The sale of the company, as its own decision, is in exit options for founders. How that sale sits next to an acqui-hire and a license is in asset sale vs acqui-hire.

How to choose

Choose the document that matches what you are willing to give up. There is no third option that is "best" in the abstract.

• Choose a sale of the business when a buyer wants the whole company, or the assets the purchase agreement lists, and you are ready to transfer them.
• Choose this license when you want cash for a de-identified copy, you want to keep ownership, and you are either still operating or shutting down without selling those records.

The license costs the company $0. The fit decision is a yes or no within 3 days. Those are terms of this program. They are not a claim about every license in the market. Another buyer's price, exclusivity, and deletion rules can be different. Read them.

Up to $150K · $0 cost · 3 days

What to ask before you sign, whoever the buyer is: read questions to ask before licensing company data. For the wider path, read how to sell company data to AI companies. Other exits are in compare exit options for a company.

Related

• Compare

  Exit options compared: sell, broker, shut down, or license records.

• How to sell company data

  How to sell or license company data to AI companies, and which route fits.

• Asset sale, acqui-hire, or license

  Asset sale, acqui-hire, and a data license compared for a company that is winding down.

• Acquire.com vs Acquisition.com

  How the Acquire.com marketplace differs from Acquisition.com.

• SimpleClosure, Starcycle, and Sunset

  Three startup shutdown services, on price, scope, and whether they touch data.

• License terms

  The four license terms: what you give, keep, agree, and sign.

• What's shared

  Which records can be licensed, which details never leave, and what you approve.

• Selling a company

  How to sell a failed startup, and the options when a company cannot be sold as a whole.

Sources

1. U.S. Small Business Administration. Close or sell your business.
2. Delaware Code. Title 8, § 271. Sale, lease or exchange of assets.
3. U.S. Copyright Office. Copyright Law of the United States, § 202.