What a first offer leaves out

If an AI data buyer sends your firm an offer, that buyer wrote it. The price, the length of the license, the exclusivity and the payment dates were all chosen to suit the buyer. That is normal in any negotiation. It means the first offer is a starting point.

This is general information, not legal or financial advice. Your counsel reviews every license.

Why first offers run low

The buyer sets the price. The buyer also knows what comparable firms accepted. You usually know neither the range nor what other firms signed.

Most sellers have no second bid and no one on their side. With one offer on the table, the only comparison is the buyer’s own number. Sellers who do not know the market tend to undersell.

What actually sets the price

Buyers and their partner programs describe the same handful of factors. None of this is guaranteed, and each buyer weighs them differently.

• Office headcount, meaning the people at desks.
• Years of project history.
• How many systems hold the records.
• How structured and complete the records are.
• How unusual the records are.

Published buyer ranges we have seen start around $100,000 and run into the low millions for large or unusual datasets. Where a firm lands depends on a review of its records.

Terms that matter as much as the price

A high number with poor terms can be worth less than a lower number with good ones. These are the terms to read first.

Exclusivity. Some buyers ask for exclusivity, for example a set period against their competitors, or perpetual exclusivity. It limits what you can do with your own records, so it should be priced separately or limited in scope and time.

License length and scope. Perpetual, irrevocable licenses that allow sublicensing and derivative works are common. Know what you are giving up, and ask whether it can be narrowed.

Liability cap and indemnity. A buyer’s standard terms can make the seller liable for claims that arise from the data. One set of published terms caps that liability at three times the fees. Check what you are promising about ownership and about your client contracts.

Payment timing. Payment often follows a review or acceptance period after delivery. Get the dates in writing.

Deletion of raw files. Ask when the buyer deletes your raw data after processing, so you know how long copies exist.

What stays out. Federal work and personal data should be excluded in the license itself, and project drawings only with the owner’s consent.

Your own copy. Keep a cleaned copy of what you license, so you can use it yourself.

Participation. If a buyer resells your records or builds products from them, it is reasonable to ask for a share.

Why a second and third bid change the result

A second bid gives you a comparison. A third tells you what the range looks like. Buyers know this, and offers tend to improve when they know others are being considered.

Compare terms, not only price. Two offers at the same number can differ widely in exclusivity, liability and payment timing.

One caution. If exclusivity is involved, one dataset goes to one buyer at a time. So sequence the conversations and do not broadcast your records to every buyer at once. Agree on the order, and on what you may disclose, before you start.

Checklist before you sign

Have each of these answered in writing:

• ☐ I have at least one other offer, or a clear reason not to seek one.
• ☐ Exclusivity is priced separately, or limited in scope and time.
• ☐ I know the license length, and whether sublicensing and derivative works are allowed.
• ☐ The liability cap and indemnity are reviewed by my counsel.
• ☐ I have checked what I am promising about ownership and client contracts.
• ☐ Payment dates and the acceptance period are written down.
• ☐ The buyer has stated when raw files are deleted.
• ☐ Federal work and personal data are excluded, and project drawings need the owner’s consent.
• ☐ I keep a cleaned copy for my own use.
• ☐ I have asked about a share if the buyer resells or builds products from my records.

How Archeon works

Archeon represents your firm in licensing its records. Our fee is stated in writing before any buyer sees your firm, and it is paid only when your firm is paid. You pay nothing upfront.

This article is general information, not legal or financial advice. Your counsel reviews every license before you sign.