Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog – Business Intangible Asset Strategies and Risk Mitigator
There should be little debate that various forms – categories of proprietarily developed-held-applied intangible assets, including IP (intellectual property) are routinely the foundational preludes to lucrative – competitive – sustainable businesses.
Either can, through prudent stewardship, oversight, and management, materialize – be leveraged – exploited to underpin a business’s valuation, revenue generation capability-capacity, competitive advantage as well as inspire attractive (business) operating cultures.
Business leaders, management teams, boards, and investors, however, who conventionally consider either business thing intangible as subjective or imprecise ‘service costs’, (dismissing their contributory roles and value adds) are respectfully, out-of-step with present day business economic – operation realities, i.e.,
- increasing percentages of businesses, irrespective of sector, are irreversibly, intangible asset intensive, dependent, and reliant.
- 70+% of most businesses, their valuation, revenue generation capability-capacity, competitive advantage, and future wealth creation lie in – emerge directly from…
- applying the right intangible assets, in the right way, at the right time, in the right place, at the right cost.
- consistently monitoring same relative to their respective contributory -materiality – functionality (life) cycle.
The relevance of these scenarios becomes all-the-more evident when business leaders, et al, wish to attract private investment. That’s because investors now routinely factor, among other things, the attributes + sustainability of business things intangible, e.g., proprietarily developed + held…
- intellectual (knowledge, knowhow) capital, structural (process, procedure) capital, and relationship (association) capital as
- invest (don’t invest) preludes, differentiators, and assurances to-for ROI (return on investment) with probability of fewer, if any, challenges.
Howery’s Survey of Investor Attitudes on IP Protection (several years ago) asserted that business’s which lack an effective intangible asset – IP strategy (ala stewardship, oversight, management, safeguards, and risk mitigation, etc.) can have a detrimental effect on business performance.
In today’s increasingly knowledge-knowhow specific operating environment demands, wherein, business investment valuation, sustainability, and ROI prognosis are intertwined, i.e.,
- investors and financial analysts are more consistently – methodically assigning credence (due diligence) to a business’s underlying – foundational intangible assets and IP, for their invest – don’t invest decisions.
One in four respondents to the Howery Survey (referenced here) stated they have opted out of opportunities to invest due to a business’s inadequate approach to their IP (and by extension, their ‘mission essential’ intangible assets).
A large percentage of respondents to this Howery Survey, reported…
- it is no longer sufficient for their investment decision-making, that a target business merely holds issued IP.
- it must also have discernable safeguards and risk mitigation practices in place, to sustain the ‘mission essential’ intangible assets valuation, i.e., do-able strategies to commercialize – exploit the assets for revenue generation capability, and competitive advantage for the duration of the round of investment.
Another takeaway…in conjunction with the findings of this Howery Survey, is that business leaders, management teams, and boards who presume conventional IP enforcements, associated with a patent, trademark, copyright, or trade secret are sufficient (standing alone) to attract – secure investors, are finding that perspective is likely to fall short for the foreseeable future…
- because it no longer reflects today’s increasingly aggressive, predatorial, and winner-take-all business development – transaction environment,
Inclusive strategies + consistent practices to effectively safeguard ‘mission essential’ assets and integrate same with plans for utilizing – exploiting those assets is essential.
(Adapted by Michael D. Moberly from the work of Howery, Simon, Arnold & White’s Survey Of Investor Attitudes on IP Protection);
The ‘Business Intangible Asset Blog’ is experientially-researched, written, and produced by Michael D. Moberly, to provide perspectives, insights, and additional and sometimes alternative perspectives to readers, ala business leaders, management teams, boards, and investors, etc., to aid in identifying, distinguishing, assessing, valuing, safeguarding, and lucratively – competitively utilizing -applying their ‘mission essential’ intangible assets.
Readers are-encouraged to review and comment on this, and other posts wherein arrays of issues related to business things intangible are authentically and practically conveyed.