What are the advantages of escrow agreements for software developers and vendors?

By establishing an escrow arrangement, you can address the concerns of prospective buyers and end-users without exposing yourself to the risks inherent in distributing source code and other proprietary materials.

Even under non-disclosure obligations, the proliferation of source code and other proprietary materials to end-users makes it difficult or impossible to ensure against eventual disclosure to competitors or loss of trade secrets.

By using an escrow arrangement you can make your software more marketable and can use escrow as a selling point to prospective customers.

Having an escrow arrangement already in place eliminates a barrier to purchasing your software and reduces the need for negotiation over source code rights that can delay or de-rail the sales process.