Patent (or IP title) valuation « à la carte ».

La valorisation d'un brevet a la carte-BRANDON VALORISATION-conseils en innovation et valorisation financière Paris France
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Publié le 30 April 2021

DID YOU KNOW?

 

The valorization and then the contribution of a patent to the capital of your company can be done in more than one round, according to the needs and development of your business.

 

Depending on the stage of the patent application or the patent you hold, different options are available to adapt the financial valuation of this asset to your needs.

 

To optimize the valuation strategy of a patent contributed to the capital of your company, note that the contribution can be total or partial.

 

Indeed, depending on the development needs of your company, it is possible to make successive contributions of your patent to the capital of a company. It is the same for its valuation, if the patent is held by the company.

The reason behind this strategic choice is the need to preserve the balance between business objectives in terms of growth and the level of capitalization (or valuation), with a view to raising funds or welcoming new public or private investors.

 

 

Why make successive contributions?

 

Several reasons can lead a business owner to choose such a valuation strategy with successive contributions for his invention. A filing of a patent application (or patent families) in several countries but around the same technology (patent of improvement) may be one of these reasons.

 

A progressive contribution also enables the company to spread the procedures over several years during which the project develops and new growth opportunities are detected. In this case, the company valuation will go higher and higher.

 

In addition, each new patent has a value that reinforces the position of the holder during negotiations with a potential partner or investor. This strategy makes it possible to preserve its majority participation in the company thanks to a new contribution, thereby limiting the risk of dilution.

 

Note that this kind of procedure is only justifiable in the case of a specific growth strategy that would be put in place. So do not hesitate to contact the Brandon Group which can assess the interest of such a strategy for your business and support you in your project, about both industrial property and valuation concerns.

 

Each of the many missions we realized for start-ups, SMEs and research laboratories enables us to innovate in this profession, which counts a small number of trained experts and very few firms combining the 2 areas of expertise: intellectual property and economic and financial valuation of intangible assets.

 

It is because our consultants are driven by the constant desire to meet the concerns of our clients that our methods have evolved. We now offer solutions that meet the expectations of our clients and, in some cases, we anticipate needs not yet expressed.

 

The valuation of a company, and more particularly of a start-up, cannot and should not be solely based on books which do not represent its real value. The value of these companies should take into account the prospective elements of exploitation of your innovations.

 

Our long experience shows that, when valued objectively, intangible assets these companies hold generally constitute their true value. But we still need to use a rigorous valuation method which takes into account:

 

  • the intellectual property;
  • the market;
  • the resources and capacities;
  • the business model;
  • the operation.

 


A concrete example:

The founder of a start-up specialized in electronics approached Brandon Valorisation to do the valuation of his patent portfolio, which was widely extended internationally.

After the founder, who is also inventor of the technology, had presented his business model, we recommended him to proceed step-by-step for the financial valuation of his patent he held in his own.

We asked Brandon IP to validate the quality of the patent, and then, as a first step, we determined the value of the European part of the patent and made a contribution of this patent to the capital of the start-up.

One year later, the company started to operate the patented technology and we valued the American patent. The valuation was much more significant because there was now a turnover and new market prospects, which was not the case before.

This second stage enables the start-up to set up an important fundraising, thus providing the company resources needed for its development.

Thanks to this strategy of successive contributions, the shareholders remained with a majority interest despite two fundraisings.

 


Some reasons to choose the Brandon Group to support you in your strategy:

 

  • the quality and relevance of the patent are assessed by an expert engineer and patent attorney. It is the advantage of our partnership with Brandon IP, Patent & Trademark Attorneys.
  • our method includes an operating forecast over several years and takes into account research and development spending, but also the patent fees;
  • For more than 15 years now, we have been carrying out financial valuation studies of intellectual property titles which, validated by experts, demonstrate with arguments the real value of these start-ups and innovative companies

 

Thanks to the involvement, the rigor and the experience of our consultants, our financial valuation studies are self-sufficient and well documented. They also engage the responsibility of our firm. We are proud today to be able to tell our client that 100% of our studies, analysed by different contribution auditors or other financial analysts, have been validated without any modification that could have reduced their value.

 

The Brandon Group pursues and develops its leading position in the strategic support for innovative start-ups and SMEs in their economic and financial valuation.

 

 

To know more about our financial valuation studies of intangible assets.

 

Need advice about your development measures and to optimize the exploitation of your innovations? Please consult our dedicated page “Strategy consulting”.

 

To speak directly with one of our consultants and ask all your questions:

CONTACT US!

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