70% of assets are lost opportunity value for contractual obligations+ opportunities for protecting and defending Intellectual Property
IFRS accounting rules IAS38A number of companies do for patent costs
Jim McColl warns firms are undervalued in M&As
We can actually find that anywhere in a business, not just confined to patents
Thats all about making moneyDirty word?Is for some....Typified if you look at patents.
At Metis Partners we break down a business model into 10 areas of value and Intangible assets
Patents – are for inventions that are easily/readily reversed engineered, or degree of obviousness.TrademarksRegistered designs – Look and feel of a product. DistinctivenessTrade Secrets – Choose to retain the IP within the businessCan you keep it a secret?Confidentiality, contractual obligations come into playUsually technical specifications, recipes etc. Think IRN BRU
Org knowledge is.....know how committed to paperHow to make it or software source codeIf its written down....need to protect it viaNDAsConfidentialityin contractsCopyrightTyre co example
Preferential termsBarriers to competitorsLicence inLicence outHow do you exit these relationships...begin with the end/exit in mind.KPIs/performanceLicence agreementsSales agreementsSupply agreements
Traditionally how compnaies are valued. Buying the order book. More valuable for recurring revenues (B2B) than 1-offHow well embedded/dependent are the customersIndicators......Measured by how readily available is alternativesContracts and special terms. Do you co-create, JVs, collaborateDiscuss CaledyneLow revenues
Its the glue that binds all the other stuff together.Its usually why Key (technical) people are contractually built into M&A dealsMDs are kept on in acquisitions..because they know everything...its also why they are asked to leave....cos they know everythingIn larger organisations with a high degree of processes they will have quality systemsKPIs, 6 sigma, lean, continuous improvement, which drives know how to be captured and variances eliminated.We have sold Know-how. Compnay valued the Know-how more than the patents. Figured they could get round the patents anyway.Saw more value in learning from the mistakes others made.Usually find negative know valuableExperienceLessons learnedBlind alleys
Brand and Reputation is one of the most valuable but most intangible of assets because its externally recognised.Its best indicated by customer loyalty - repeat businessCustomer advocacyBrand is not a logoBrand is your promise...what are your promising and do you deliver on that promiseHow do you behave when things go wrong....things do.....BP vs Rolls RoyceIts all down to value perception as well.Schreiber, Hygena, MFI...same company, same stuffDiscuss selling brands and value to others....MFI, Land Of Leather.Not just about BIG brands...think about the brand called you......
1. Creations of the mind© Metis Partners 2011
2. Creations of the mind© Metis Partners 2011