How to select a method for valuing early stage technologies


On June 1 and 2, Mike Pellegrino gave a group of high-level, early-stage IP managers the benefit of his experience in choosing the proper valuation method. He offered time-saving, mistake-avoiding “Valuation Method Cheat Sheet.”

Business Purpose or Asset Type               Recommended Valuation Method

Technology License                                       Royalty rate/profit split determination

Capital Formation                                           Integrated DCF and real option model

Technology Acquisition                               Integrated DCF and real option model

Divesting Technology                                    Integrated DCF and real option model

Open Innovation Partnering                       Royalty rate/profit split determination

Co-development of New Technology       Royalty rate/profit split determination

Patent Valuation                                               Integrated DCF and real option model

Copyright Valuation                                        Integrated DCF and real option  model    

                                                                                   or cost approach for weak copyrights  

Trademark Valuation                                      Integrated DCF and real option model

Trade Secret Valuation                                   Lower of Integrated DCF and real option

                                                                                   model or cost approach                      

Software Valuation                                           Lower of Integrated DCF and real option

                                                                                   model or cost approach  

Continuing with the valuing early stage technologies Management Roundtable seminar taught by Mike Pellegrino, next time BVR looks at:  What constitutes credible due diligence?


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