Intangible assets valuation: more than a financial question

Intangible assets valuation: more than a financial question

To estimate intangible assets, more than financial techniques, it is necessary to adopt a strategic and transversal approach.

While the valuation of companies necessarily goes beyond financial analysis to be relevant, this is even more true in the case of technological or innovative intangible assets estimate, namely patents, softwares or know-how. This can also be applied to trademarks and designs, where you consider the commercial strategy rather than the technical dimension.

Is it possible to estimate the value of a patent on an invention without considering the technique used, or its relevance to a given market? Without considering how this patent protects the final products actually commercialized? Without being interested in the existence or not of a market? Without questioning the profitability of the business model that will be implemented?

In our opinion, no, it is not.

All of this must be carefully considered before arriving at as realistic a valuation as possible. We cannot be content with a single legal analysis, or assume that the proposed business plan is necessarily the one that will be realized.

At each assessment, we put ourselves in the shoes of a potential investor, a person who is not necessarily an expert in the field, to adopt as much as possible a pragmatic, credible and realistic approach.

So yes, sometimes we have to explain to an inventor that he may not become a billionaire … That’s the risk of the job!

But how worthwhile  would be an advice or an estimate that would support an unrealistic vision? It is not our role, let alone our mission as an evaluator, which must take into account the risks according to the context established at a given moment. And the more an invention is in its early stage, the greater the risk. We prefer to be sometimes more pessimistic and let the inventor go down the path of success, knowing that we will have alerted him to the risks we have identified. On him to raise one by one these threats to shatter our assumptions!

We are therefore committed to delivering a valuation report that is a strategic tool. The inventor is then able to appreciate what risk will have what kind of impact on the value of his invention. And that cannot be done when considering only the financial aspects. Everything must be reviewed. This report also makes it possible to implement short-term corrective actions that will foster a better valuation in the future.

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