Michael D. Moberly, Principal, Founder, kpstrat
Business leadership is obliged to attach importance to recognizing, in most (business) transactions, a parties’ (proprietary) intangible assets and IP (intellectual property) and the various competitive advantages + value each produces, along with the enabling knowhow, will be in play.
- Knowing this, every transaction should be developed, structured, and executed accordingly.
Not surprisingly though, for various and some obvious reasons, not-insignificant percentages of business (seemingly routine) transactions, even for SME’s (small, medium enterprises), based upon my reading + conversations, though they appear postured as (a.) high stakes, winner-take-all, and (b.) conducted @ keyboard speeds, variously disappoint insofar as ‘recognizing the complete portrait’ (operational familiarity with) all the business things intangible in play and therefore relevant to achieving a desired (projected) outcome.
How, why, and when a party considers a particular transactions’ risks and due diligence relative to a desired outcome, i.e., legitimately acquiring (buying) targeted intangibles, is, in my judgement, the key to achieving that outcome.
- To do so, leadership’s appreciation for business things intangible is obliged to reach well beyond conventional business valuation processes.
Safeguarding (preserving) and monitoring the (a.) value, (b.) revenue generation capacity and potential, (c.) competitive advantages, and (d.) mitigating risks to the sought after intangibles, pre and post transaction, unfortunately and not-infrequently, are variously overlooked and/or discounted as to their relevance to achieving a desired (projected) outcome.
Not recognizing or dismissing the intangibles in play for each transaction is attributable to various maladies, one being the time honored, but mistaken assumption that conventionally issued IP ala patents (automatically) serve as real time sword and shield (asset specific) deterrents + safeguards…based on my many years of experience in these matters, which I urge re-consideration.
First, there are various forms-contexts of intangible assets, i.e., intellectual, structural, and relationship capital underlying – embedded in all IP which I am familiar.
- And, IP’s proprietary content is seldom (if ever) sufficiently – wholly safeguarded from access or acquisition by competitive advantage adversaries merely by the issuance of a patent or employee non-disclosure or non-compete agreement, irrespective of how ‘bullet proof’ either are touted or presumed.