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Do Investors Care About IP Anymore? When IP Is a Consideration in Devising Investment Strategies

It's been two decades since Intellectual Property (IP) and its development became a defining element in investment strategies for parties on both sides of the negotiation table. In the late 1990's, investors wanted their dot-com startup companies to have patents, as it would help the company appear innovative. Even after the dot-coms went bust, investors regarded IP as upside protection; meaning, if the company went under, the IP portion of the portfolio could keep the deal from being a complete loss. Investors, like Venture Capitalists (VCs), who got burned by multiple failed investment efforts, turned their interest towards start-up companies with a strong balance sheet versus those with no revenue potential. For example, if pre-investment research showed that the start-up had a Freedom to Operate (FTO), then IP became a more important consideration on an investor's check list.

(Full ipCG Blog Article)

POSTED BY John Cronin AT 12:20 P.M. Nov 20, 2018

TAGS: John Cronin | Regulation and Legislation | Strategy | Trade Secrets | Valuation | Mergers and Acquisitions | Licensing | Patent Sales

Challenges and Opportunities in Personal Goodwill Valuation from an IP Perspective

How can tax accountants, wealth managers, M&A brokers, and business owners extract the most value from personal goodwill? Tax court decisions (Bross Trucking, Inc., T.C. Memo. 2014-107, and Estate of Adell, T.C. Memo. 2014-155) have demonstrated that sale of personal goodwill as a distinct asset, separate from corporate goodwill, can provide significant tax advantages for individuals. However, the decisions also illustrate the need for a robust set of justification for the value of personal goodwill in order to withstand challenges.

(Full ipCG Blog Article)

POSTED BY Seth Cronin AT 12:26 P.M. Jul 25, 2018

TAGS: Trade Secrets | Valuation | Banking | Mergers and Acquisitions | Seth Cronin

Summary of ipCG’s 13th Annual Thought Leadership Conference

On Thursday May 11th, ipCapital Group held its 13th Annual Thought Leadership Conference, bringing together innovation and intellectual property (IP) leaders from around the world in the picturesque Essex Resort & Spa in Northwest Vermont. This year’s conference theme was Effective Innovation - Transforming Ideas into High-Value IP.

(Full ipCG Blog Article)

POSTED BY ipCG Team AT 8:45 A.M. May 31, 2017

TAGS: ipCG Team | IAM | Innovation | John Cronin | Strategy | Trade Secrets | Valuation

Adam Bulakowski, Principal Partner, is the author of "The VC’s playbook: Diligence essentials for technology-based IP"

In this whitepaper, Adam discusses how VC investments can improve monetization options and mitigate risk when diligence considers IP assets from a holistic business perspective, beyond the traditional legal opinions.

(Full ipCG Blog Article)

POSTED BY ipCG Team AT 12:38 P.M. March 24, 2017

TAGS: Adam Bulakowski | ipCG Team | Disruption | Process | Strategy | Valuation

Protecting Your Intellectual Property Protects Your Customers

Verizon was recently informed by Yahoo, a company they inked a $4.8 billion purchase of back in July, that in 2014, Yahoo's servers were hacked and over 500 million Yahoo user accounts loaded with personal data were stolen. Now, various reports in the news are suggesting Verizon is going to ask for a $1 billion reduction in the price of the deal. It is in a business's own best interest to handle this data as it would any other intellectual property, i.e., as a very valuable asset.

(Full ipCG Blog Article)

POSTED BY Charles E. Root Jr. MS. AT 9:59 A.M. November 14, 2016

TAGS: Case Study | Valuation | Charles E. Root Jr. MS. | Data Security | Mergers and Acquisitions | Blockchain

Acquisition of Yahoo: What Verizon will Gain Without the Patents

Intellectual property is big part of a company's valuation, so it is with some interest here at ipCapital Group that we look at any large corporate sale. Such events help us to fine-tune our own equations and provide mountains of useful data for creating such valuations for our clients. So when Verizon buys Yahoo for $4.8 Billion dollars and that doesn't include their patent portfolio, it's interesting to take a look at what they are getting.

(Full ipCG Blog Article)

POSTED BY Charles E. Root Jr. MS. AT 4:18 P.M. August 8, 2016

TAGS: Valuation | Charles E. Root Jr. MS. | Mergers and Acquisitions

Adam Bulakowski, Principal Partner, is the Author of "Valuation of Public Equities, Including Alphabet, Amazon, Apple: Capital Market Pricing of Opaque Intangible Assets"

In this whitepaper, Adam connects market value to innovation-related growth potential, a practice that requires diligence beyond traditional analysis, particularly on knowledge intensive businesses.

(Full ipCG Blog Article)

POSTED BY ipCG Team AT 8:07 P.M. August 01, 2016

TAGS: Adam Bulakowski | ipCG Team | Metrics | Valuation

Yahoo Sale Highlights the Need for a Thoughtful IP Valuation

Since Yahoo launched the sale of its core business and patent portfolio in February, questions have been raised regarding the value of non-operating assets. With estimates ranging from $1B to $4B for the patents alone, many are left to wonder how to value a portfolio of roughly 6,000 patents encompassing a wide variety of technologies.

(Full ipCG Blog Article)

POSTED BY Adam Bulakowski and Seth Cronin AT 4:27 P.M. Apr 18, 2016

TAGS: Adam Bulakowski | Strategy | Valuation | Seth Cronin

Part II: Rembrandts for Sale

In our October 15th blog post Don't Forget About the "Rembrandt in the Attic"?, we discussed how a failure to think strategically about IP may have been a overlooked factor in the financial collapse of Digital Domain Media Group (DDMG). DDMG as debtor in possession has now sought court approval to sell the 3D patents along with the company’s remaining assets. The assets will be auctioned in separate groups, with the six granted 3D patents and two applications sold as one group. For any parties considering making a bid for the 3D patents, one essential question must be asked: how much are these patents worth?

(Full IP Blog Article)

POSTED BY Nancy Edwards Cronin and Nathan Doudera AT 9:10 A.M. Nov 19, 2012

TAGS: Entertainment | Nathan Doudera | Nancy Edwards Cronin | Valuation | Licensing | Patent Sales

What is your IP and technology worth?

Over the past year, ipCapital Group has seen a dramatic increase in requests to value IP portfolios. The engagements range from advising on high-profile deals to supporting capital raises for small, private companies who have few assets other than IP. We continue to use these experiences and lessons as feedback to our methodology, which is critical as the landscape evolves. In our latest video, we highlight a few of those lessons.

(Full ipCG Blog Article)

POSTED BY Adam Bulakowski AT 11:15 A.M. Oct 24, 2012

TAGS: Adam Bulakowski | IAM | Process | Strategy | Valuation

It's Football Season. Time to Go Long?

In February, Alcatel Lucent (ALU) initiated a corporate restructuring that included plans to license almost 9,000 U.S. patents. The license project was recently cancelled, because the assets have generated no cash over the past seven months. So, what’s next? Maybe an auction? If the quality and strength of these patents matches or exceeds competitor portfolios, then maybe now is the right time to establish a long equity position.

(Full IP Blog Article)

POSTED BY Betsy Nesbitt AT 3:24 P.M. September 25, 2012

TAGS: Betsy Nesbitt | Strategy | Valuation

IP's Impact on Investor ROI

As a follow-up to the recent M&A post, this article examines common IP-related drivers of ROI, from the perspective of an investor, such as a private equity firm.

(Full IP Blog Article)

POSTED BY Adam Bulakowski AT 8:04 A.M. Jun 13, 2012

TAGS: Adam Bulakowski | Commercialization | Strategy | Valuation | Mergers and Acquisitions

IP’s Role in Improving M&A Success

Inorganic growth strategies through M&A don’t always account for the potential of intangible assets. M&A teams that consider IP and other intangible assets both before and after a deal can improve success with more accurate pricing and more efficient value extraction.

(Full IP Blog Article)

POSTED BY Adam Bulakowski AT 8:35 A.M. Jun 7, 2012

TAGS: Adam Bulakowski | Commercialization | Strategy | Valuation | Mergers and Acquisitions

IP Valuations: When an IP Decision Includes a Real Option

Making the decision to invest in patented technology requires a manager to map and evaluate a series of decisions and uncertainties. Real options pricing can enhance IP valuations in situations where key assumptions regarding market, financial, and technology variables are identified and estimated with reasonable accuracy. When coupled with the income and other valuation approaches, such as comparable market transactions, options thinking can guide financial and strategic decision making.

(Full IP Blog Article)

POSTED BY Adam Bulakowski and Betsy Nesbitt AT 8:09 A.M. May 25, 2012

TAGS: Adam Bulakowski | Betsy Nesbitt | Valuation

Do Investors Understand the Value of your Patents?

Last week, Microsoft paid $1.06B to purchase and license about 1,100 AOL patents. Putting the issues of purchase premium and strategy aside for another discussion, this transaction presents an interesting case on IP value expectations and communications.

(Full IP Blog Article)

POSTED BY Adam Bulakowski AT 8:20 A.M. Apr 17, 2012

TAGS: Adam Bulakowski | Valuation

IP Valuation Case Study: Non-Durable Consumer Products & IP Acquisitions

Companies buy and sell intellectual property (IP), including patented technology, in all industries, ranging from high-tech products like semiconductors to relatively lower-tech products like non-durable consumer goods. Businesses can take advantage of these often fast-moving opportunities if they have the appropriate IP valuation tools. These tools are particularly important when market and technology uncertainties are highand managers need to model different market scenarios.

(Full IP Blog Article)

POSTED BY Betsy Nesbitt AT 8:11 A.M. Mar 13, 2012

TAGS: Betsy Nesbitt | Case Study | Valuation

IP Valuation Case Study: IT Industry

Over the past two years, ipCG completed several IP valuations in the IT industry. In most cases, our clients contracted the models for external purposes - to estimate IP value for M&A negotiations. However, work products generated significant internal benefits as well. We share this case study with you to demonstrate the many strategic and managerial insights that can be gleaned from thoughtful IP valuations.

(Full ipCG Blog Article)

POSTED BY Adam Bulakowski and Betsy Nesbitt AT 8:45 A.M. Jan 13, 2012

TAGS: Adam Bulakowski | Betsy Nesbitt | Case Study | Valuation

IP Valuation: Is the "25% Rule" Still Relevant?

The 25% rule is a rule of thumb used to estimate royalty rates for intellectual property (IP) licensing transactions by approximating the risk/reward relationship between a licensee and licensor. A licensee only pays a portion of profits to the licensor, because of the additional costs and uncertainties that it incurs to convert the technology in to revenue.

(Full ipCG Blog Article)

POSTED BY Adam Bulakowski and Betsy Nesbitt AT 10:10 A.M. Jan 5, 2012

TAGS: Adam Bulakowski | Betsy Nesbitt | Valuation | Licensing

How to Adjust a Target's Valuation for Risk

Risk factoring is critical to developing valuation models that work. By investing the time needed to develop thorough and effective risk adjusted valuation models, you significantly increase the potential that you will actually achieve the projected return on investment for your technology acquisition and make better, more informed business decisions.

(Full ipCG Blog Article)

POSTED BY Rachael Schwartz AT 4:45 P.M. JUNE 27, 2011

TAGS: Commercialization | Outside Publication | Rachael Schwartz | Valuation

Know What to Pay: Evaluate the Market Value of an Acquisition through Comparables

Comparables are vital to determining what the market would likely pay for a company, technology, or Intellectual Property (IP) asset. While the market value is not necessarily what the asset is worth to your company, it gives you an idea of what competitors may be willing to pay and can provide insight that will inform your bidding strategy.

(Full ipCG Blog Article)

POSTED BY Rachael Schwartz AT 12:45 P.M. JUNE 1, 2011

TAGS: Commercialization | Outside Publication | Process | Rachael Schwartz | Valuation

A Triangulation Approach to Valuation Delivers the "Right" Price

A Triangulation Approach to valuation looks at value in three ways: 1) modeling the value that the technology and IP provides for your company's intended use; 2) reviewing, risk-adjusting and use-adjusting the target's valuation, and 3) understanding market comparables.

(Full ipCG Blog Article)

POSTED BY Rachael Schwartz AT 1:00 P.M. MAY 26, 2011

TAGS: Commercialization | Outside Publication | Process | Rachael Schwartz | Valuation

Measuring, Managing, and Communicating Intangible Asset Value

Intellectual property (IP), such as a patent portfolio, is a critical intangible asset for innovative companies. However, IP presents management and communication challenges because few companies catalog their IP strategically or link its development to value creation, i.e. increased revenues or decreased costs.

(Full ipCG Blog Article)

POSTED BY Adam Bulakowski AT 3:00 P.M. JANUARY 18, 2010

TAGS: Adam Bulakowski | Commercialization | Process | Valuation

Is it worth $20M or $200M? A case study on (un)realistic IP licensing value expectations

IP valuation is complicated by a host of factors, such as accessing market comparables, determining IP risk, handicapping potential licensees, and calculating the uncertain economic benefits to be generated by IP assets. While many sources enumerate methods of IP valuation, few provide real-life applications or guidelines.

(Full ipCG Blog Article)

POSTED BY Adam Bulakowski AT 4:00 P.M. SEPTEMBER 4, 2009

TAGS: Adam Bulakowski | Commercialization | Strategy | Valuation | Licensing

IP Valuation

A valuation of a company's patent portfolio or of a specific group of patents is important in helping the company to determine the value of its portfolio in a licensing transaction or in the sale of the company. It is important for companies to understand the drivers of value within their portfolios and to understand the strengths and weaknesses of the portfolios.

(Full ipCG Blog Article)

POSTED BY Rachael Schwartz AT 6:53 P.M. JUNE 9, 2009

TAGS: Rachael Schwartz | Valuation | Licensing

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