IP Valuation

Quantifying the intangible

The case for valuing your patent portfolio

Unlocking the value of a firm’s IP assets provides growth opportunities by articulating the specific economic opportunity tied to patents, trade secrets and brand & trademarks. The valuation analysis serves as the basis for securing licensing fees and royalties, as well as for obtaining venture capital & venture debt financing.

Building a case for value means not only placing a dollar value on the asset, but developing a strategic narrative to support the number. This is crucial and serves multiple purposes including:

  • Strategically linking IP, product and revenue: tying the patent’s explicit ability to drive direct economic benefits (cash flows) is fundamentally necessary to the valuation analysis, but also provides valuable data that allows you to make strategic decisions related to prioritization and funding of projects/products

  • Rationalizing the IP portfolio: identifying the value allows you to make decisions against creating, maintaining, defending and opportunistically exploiting the individual patents and families, such that the calculation of resulting cash flows is greater than the cost to pursue each and all

  • Building an argument for investment: valuation and its accompanying strategic narrative allows you to present a strong case as to your growth trajectory, securing larger IP-backed venture capital & debt financing

Intangible Assets rule the market

The force of IP has become indisputable. A full 90% of the S&P 500’s value is comprised of intangible assets.

According to PitchBook data, patent-seeking companies accounted for 79% of VC exit value but only 21% of VC exit count.

Identifying and determining the value of the patents that firms have the economic right to protect and exclusively bring to market is our wheelhouse.

Source: PitchBook 2023 Analyst Note: Introducing PitchBook Patent Research

Our process

We identify amongst a myriad factors (nature & scope of the patents; ability to produce revenue and profitable cash flows; market size; apportioned value specific to patent) the economic value attributed to the patent/portfolio while applying an industry-specific understanding of market dynamics.

Our outcomes

We partner with clients to quantify the value of their IP in order to:

  1. Raise debt & equity financing

  2. Conduct M&A transactions

  3. Identify strategic acquisition candidates

  4. Accompany an IP Strategy assessment