For advisors
Monetizing portfolio company data
You run operating portfolio companies. A later sale is still a real path. Ownership of the equity does not make the firm the signer. The portfolio company signs and keeps using its systems. The license is exclusive, so a later sale should see it in exit diligence. Each operating company is its own enquiry.
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| Fact | Detail |
|---|---|
| Who signs | The portfolio company signs. Owning the equity does not put a holdco signature on the license. |
| Operating use | The company keeps using its systems. An operating company can license a copy without shutting down. |
| Exit diligence | Exclusivity belongs in exit diligence. A sale process you run later should see the license. |
| One company | One enquiry per operating company. An operating subsidiary is its own enquiry, not a stack of shut startups. |
| Introduction | There is no referral fee for a portfolio operations team. |
What private equity teams are deciding
You run operating companies. A later sale is still a real path. The question is whether an operating company can license a copy of its records without a shutdown, and what that promise does to a later sale. The portfolio company signs. A holdco signature does not follow from owning the equity. The company keeps using its systems. Each operating company is its own enquiry.
Your role on a private equity team, and who signs
Name the operating company and the officer who can sign for it. Put the exclusive license in the diligence file with the other commercial contracts, so a buyer does not meet it for the first time at signing. Send that company's records, one company at a time, not the firm's internal mail. If a company is not closing, it can still ask while it operates. If a subsidiary was sold, the buyer of that subsidiary is a different signer. Ownership of the equity is not authority over the records.
The company signs an NDA and the licensing agreement directly with the data partner, not with Vetrix. We tell the company the data partner's name before anyone signs.
What to tell a client
Does the holdco sign?
No. The portfolio company signs. Owning the equity does not put the holdco on the signature block.
Must the company shut down first?
No. An operating company can license a copy and keep using its systems.
Why does a future buyer care?
The license is exclusive. It belongs in the diligence file before a sale process starts.
An operating company can ask without shutting down. Read can an operating company license its data?. If the company was already bought, read license company data after an acquisition.
Checklist
| Check |
|---|
| Name the operating company, not only the holdco. |
| Name who signs for that operating company. |
| Put the exclusive license in the diligence file. |
| Use the still-operating situation if the company is not closing. |
| Submit a separate enquiry for each company. |
When a different role fits
If the company is a venture wind-down and the fund is only a shareholder watching a close, that is an investor question. A later sale of an operating company is this question. The operating company is the applicant, and it keeps running.
For the company's side of this, read can an operating company license its data?.
If that is your job instead, read portfolio company wind-down for VCs.
If you are a broker whose listing found no buyer, read options for a business that didn't sell.
For the wider job, read how to sell company data to AI companies. Other roles are under company data licensing for advisors.
Read how company data licensing works for the steps. For the four license terms, read the company data license agreement, in plain English.
Related
- For advisors
Company data licensing for founders, finance leaders, investors, and advisors.
- How to sell company data
How to sell or license company data to AI companies, and which route fits.
- Investors
Portfolio-company wind-downs for VCs. The company signs, not the fund.
- Still operating
Licensing records without selling or closing.
- How it works
The six steps from a short enquiry to payment, and how to stop.
- License terms
The four license terms: what you give, keep, agree, and sign.
Questions about data licensing for private equity
Does the holdco sign, or the portfolio company?
The portfolio company signs. A holdco signature is not assumed, even when the firm owns the equity. Name the operating company that runs the systems, and name the officer of that company. Ownership of shares is not the same thing as authority to license the records. If a subsidiary was sold, the buyer of that subsidiary is a different signer. Ask the company's lawyer which entity holds the right.
Can an operating company license data without a wind-down?
Yes. The company keeps using its systems. An operating company can license a copy without shutting down. It keeps ownership and full use of the data in the business. Nothing that identifies customers or staff is shared. Current management of that company signs. You do not need a shutdown plan in order to ask. Use the still-operating situation when the company is not closing.
Why does exit diligence care about this license?
Because the license is exclusive. A sale process you run later should see it in exit diligence, in the company's own documents, before a buyer asks what was promised to a data partner. The operating company is the licensor, not the firm. Put the agreement in the data-room index with the other commercial contracts. A buyer of the equity should not meet this term for the first time at signing.
Is an operating portfolio the same job as a VC wind-down?
No. A venture investor's question is a portfolio company that is winding down, and the fund does not sign. Your question is an operating company that keeps running. The license belongs in exit diligence because a later sale is still a live path. One enquiry per operating company. There is no referral fee for a portfolio operations team. Do not send the firm's internal files.
Sources
- Vetrix Labs. Vetrix Data Licensing.