Information-hub/IP Valuations/The reasons and benefits for valuing IP
The reasons and benefits for valuing IP
If you want to use your IP asset as collateral to obtain finance and funding, you stand a greater chance of success if your asset can be valued separately from your business.
Before investing in you or your business, investors and venture capitalists need to know the value of your IP. A proper valuation helps to win over such investors etc, who tend to look for maximal return and minimal risk. In addition, if you're considering a joint venture, strategic alliance, merger or acquisition, a credible IP valuation will assist in understanding how much value the IP asset of all parties contribute towards the partnership.
Licensing, IP sales or franchising
Having a thorough understanding of your IP asset before you enter into negotiations will help you make more informed decisions on the terms and conditions of the agreement, for example in terms of a licensing agreement, knowing the value of your IP asset will assist you in determining a fair royalty rate.
Knowing the value of your IP asset can influence what strategy to employ if your asset is infringed upon. With a credible IP valuation, you will be better placed to decide whether to pursue the court route, opt for alternative dispute resolution or to consider licensing or selling the asset to the infringing party. IP valuation also plays an important role in calculating damages.
Accountancy and taxation purposes
Businesses are legally required to report on their assets, including their intangible assets. A credible valuation is therefore essential in situations of accountancy and tax planning. For example, a credible IP valuation will assist in the underwriting of the IP asset in consideration to a shareholding within a business.