Startup Fundamentals – Business Models, Customer Validation & Market Strategies Practice Test

The concept that refers to providing rights to use proprietary technology to drive revenue is technology licensing. This practice involves an agreement where one party (the licensor) allows another party (the licensee) to use, modify, or sell a particular technology or product in exchange for payment, typically in the form of royalties.

In this scenario, the focus is on how proprietary technology can generate income by allowing others to leverage that technology for their own business purposes. Licensing can be particularly advantageous for companies that have developed innovative technologies but may not have the resources or desire to commercialize them fully on their own. By licensing technology, businesses can tap into new markets, gain additional revenue streams, and enhance their overall market presence while still maintaining ownership of their intellectual property.

Other concepts like technology transfer, while related and important in the context of moving technology from one entity to another (often within the realm of research institutions to commercial ventures), do not specifically encapsulate the revenue-driving aspect as directly as licensing does. Intellectual property rights refer to the legal rights that protect creations of the mind but do not alone encompass the transactional nature of generating revenue from the use of that IP. Franchising usually pertains to a different business model involving the replication of entire business systems, which