Reputation literally constitutes the overwhelming bulk of most company’s intangible assets which today can account for 65+% of their value, sources of revenue, sustainability, and foundations for future growth, expansion, and wealth creation.
It’s critical today that due diligence be much more than a confirmatory review of the presence, absence, and/or position of a target’s intangible assets or merely provide decision makers with subjective, snap-shot-in-time estimates.
Company culture and reputation are positively linked intangible assets that (1.) add value through differentiation and competitive advantages.
Patents are widely presumed, naively so, to be the strongest form of IP protection. But, in today’s hyper-competitive, predatorial, and winner-take-all global business environment, that presumed strength is routinely undermined.
A key to successful venture capital initiatives is balancing attention to given to putting in place experienced management teams with ensuring control, use, ownership, and value of the invested IP and intangible assets is sustainable.
With such significant percentages of deal-transaction value lying in a targets’ intangible assets, due diligence must be much more than cursory or confirmatory review of the presence, absence, and/or position of particular assets, i.e., intangibles or intellectual property!