Managing an intellectual property valuation assignment has a natural flow to it. It begins with the sales process (which varies by company) and concludes with the delivery and support of any valuation report. Author Michael Pellegrino discusses the general procedure and stages that a valuation practitioner may wish to follow while completing an intellectual property (IP) value in BVR’s evergreen product.
Preparing the Project:
The goal of project preparation in the Intellectual Property valuation process is to outline project expectations and prepare the team to execute the valuation engagement. The first job in project preparation should be to have a project launch meeting, bringing together all team members who will work on the attention to discuss it in depth. The project launch meeting is a crucial aspect of the valuation engagement since it may assist define the tone and direction for the rest of the process.
Due Diligence from the Start:
When the valuation analyst acquires a decent grasp of the intellectual property to evaluate, the portion of the engagement process is known as first due diligence. It’s a customer-facing activity to perform first due diligence. The valuation analyst meets with the customer to analyze the IP and gain practical knowledge of the IP under consideration, including IP rights, IP development expenses, target markets for the IP, competitive landscape for the IP and projected economic expectations for the
Analysis of Intellectual Property:
After an IP value analyst has a good understanding of the intellectual property, they have to know how it fits into the larger market. This is what the market analysis portion of the IP value engagement is for. Importantly, a valuation analyst cannot undertake market analysis unless he or she has a thorough grasp of the intellectual property in question. A market study aims to compare a particular IP asset to competing alternatives in the market. Without a thorough understanding of the IP, the valuation analyst would be unable to do this research successfully.
Modeling for Valuation:
After a valuation analyst has a thorough understanding of the legal status and market for intellectual property (i.e., qualitative measurements), he or she must combine all of these factors into a valuation model (i.e., the quantitative measures). In an IP value engagement, the value modeling serves this purpose. A valuation analyst cannot begin valuation modeling until he or she has a thorough grasp of the IP under consideration and the market in which it is deployed. One goal of value modeling is to compare the revenue potential of a specific IP asset to competing alternatives in the market. Without initially knowing the potential demand and accompanying pricing, the valuation analyst would not do this research correctly.
After an IP value analyst has a good understanding of the intellectual property, they have to know how it fits into the larger market. This is what the market analysis portion of the IP value engagement is for. Importantly, a valuation analyst cannot undertake market analysis unless he or she has a thorough grasp of the intellectual property in question. One goal of a market study, for example, is to compare a particular IP asset to competing alternatives in the market. Without a thorough grasp of the IP, the valuation analyst would be unable to do this research successfully.
Reporting on Valuation:
In an Intellectual Property valuation engagement, the writing of the valuation report is the final important step. The value analyst combines all due diligence, intellectual property analysis, market research, and valuation modeling into single, coherent work output.
The level of project support varies depending on the engagement. Some clients may never contact again since the valuation report served a specific function and project assistance is no longer. Other clients may demand continuous aid, such as the valuation analyst’s availability to answer queries, testify in court procedures, and so on. While it might be difficult to determine the scope and depth of such project assistance at first, valuation analysts frequently handle post-project service hourly or as part of a support level included in the original contract description.