This week Real Digital has announced that it has received substantial funding from the private equity arm of Lloyds Bank. This is well beyond a standard term loan or overdraft – for one thing the print business does not bank with Lloyds. This is private equity backing a growing tech business, not a printer investing in another German litho press. At one time the investment in a Heidelberg (for example) was considered straightforward to support for a funder. The asset rarely lost value and was easy to move on. The investment decision was simple. This is no longer the case. The future demand for any litho press is hard to determine and machines may hang around like a guest overstaying his welcome at a house party. Funders are more cautious. This is encouraging manufacturers to look at different ways of financing the presses they make to keep the factory running. The 2 tonne lump of iron and electronics can no longer be considered the print boss’s pension. If not the hardware assets, then what? The premises, if owned, have been used as a security and then as a pensionable asset. However, the modern business needs to be looking at technology and innovative products that it has developed. These will have value well beyond the duration of a press and, if in the right area, can provide the security needed to underwrite an investment. We are not privy to the funding between the Croydon company and its financiers, but what it has developed is key to the investment. But there is no doubt what it has developed has value and has been protected, just as Precision Printing sold on the single product workflow software it had developed. Printers should think this way more often. Many come up with a breakthrough and do not protect what seems an innocuous development. They should. If the idea of printing four-colour on the front of a record sleeve and mono on the back could be worthy of a patent in the 1960s, many more developments in print can be ringfenced via a patent and become the sort of asset that looks after its assignee well into their autumn years.
If you want to get ahead get a patent
This week Real Digital has announced that it has received substantial funding from the private equity arm of Lloyds Bank. This is well beyond a standard term loan or overdraft – for one thing the print business does not bank with Lloyds. This is private equity backing a growing tech business, not a printer investing in another German litho press.
At one time the investment in a Heidelberg (for example) was considered straightforward to support for a funder. The asset rarely lost value and was easy to move on. The investment decision was simple. This is no longer the case. The future demand for any litho press is hard to determine and machines may hang around like a guest overstaying his welcome at a house party. Funders are more cautious. This is encouraging manufacturers to look at different ways of financing the presses they make to keep the factory running. The 2 tonne lump of iron and electronics can no longer be considered the print boss’s pension.
If not the hardware assets, then what? The premises, if owned, have been used as a security and then as a pensionable asset. However, the modern business needs to be looking at technology and innovative products that it has developed. These will have value well beyond the duration of a press and, if in the right area, can provide the security needed to underwrite an investment. We are not privy to the funding between the Croydon company and its financiers, but what it has developed is key to the investment. But there is no doubt what it has developed has value and has been protected, just as Precision Printing sold on the single product workflow software it had developed. Printers should think this way more often. Many come up with a breakthrough and do not protect what seems an innocuous development. They should. If the idea of printing four-colour on the front of a record sleeve and mono on the back could be worthy of a patent in the 1960s, many more developments in print can be ringfenced via a patent and become the sort of asset that looks after its assignee well into their autumn years.
Gareth Ward
Explore more...