Innovation capabilities, from understanding customers to commercializing new products, determine financial success for nearly all firms in today's economy. By building a capability to manage IP, a firm maximizes the potential for a lasting return on innovation.
POSTED BY Adam Bulakowski AT 4:12 P.M. July 6, 2015TAGS: Adam Bulakowski | Commercialization | Innovation | Invention | Strategy
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.
POSTED BY Adam Bulakowski AT 8:04 A.M. Jun 13, 2012TAGS: Adam Bulakowski | Commercialization | Strategy | Valuation | Mergers and Acquisitions
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.
POSTED BY Adam Bulakowski AT 8:35 A.M. Jun 7, 2012TAGS: Adam Bulakowski | Commercialization | Strategy | Valuation | Mergers and Acquisitions
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.
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.
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.
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.
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.