financial valuation
Know-how &
trade secrets
Know-how, whether technical, commercial, or organizational, is a specific asset not always separable from goodwill. It is the same for trade secrets. The absence of Industrial Property (IP) rights related to those assets usually results in a capital, tax, accounting, or legal treatment that differs from conventional IP rights. Know-how is often an essential part of the business value or is strongly related to other related IP rights such as patents.
They are sometimes the subject of licensing or technology transfer agreements, which require determining the financial conditions of those transactions.
Methods of know-how financial valuation generally consist in the following :
— Method based on the reconstitution costs
— Prospectivist methods based on future earnings.
It is rare to have access to comparable market data.
These financial valuations require a rigorous and delicate analysis.
Finantis Value focuses on understanding:
— the nature of the know-how,
— its specificities,
— its original, transmissible, and strategic role for the company,
— its ability to generate revenue and profits.
This kind of valuation is facilitated if there are contractual or transactional elements to quantify revenue streams, either internally (direct commercial operations) or externally (know-how licensing agreements, technology transfer agreements).
At the end of our mission, we draw up a detailed report stating the nature of the studied know-how, their characteristics, their mode of exploitation, our recommendations to optimize their protection or their value, and of course our quantified conclusions.
