Putting Price Tags On Business’s Intangible Assets II…

Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog – A Business Intangible Asset Strategist & Risk Mitigator

A business economic – operation reality…most – more businesses today, and for the foreseeable-future…

  • are intangible asset intensive, dependent, and reliant.
  • 70-80+% of business’s valuation, competitiveness, revenue generation capability, and sustainability lie in – emerge directly from intangible (non-physical) assets.

Business leaders, management teams, boards, and investors are (fiduciarily) obliged to consider with any buy-sell-license transaction, there will be ‘mission essential’ intangible assets in play.

As described in the previous post, the (Google – HTC) transaction likely included provisions that focused on the

  • about-to-be acquired + transferred forms/applications of largely intellectual and structural capital, i.e., knowledge – knowhow, developed by a ‘group’ of HTC employees.
  • which is to-be-applied to Google’s mobile (smartphone) division.
  • with the ‘efficiencies – competitiveness features and value-adds’ to be derived from those intangibles relative to transaction valuation and negotiations.

Rick Osterloh, Google’s hardware chief during this transaction, pointed out that “these future – fellow Google employees (being purchased from HTC and integrated in Googles’ smartphone division) are amazing, and we’re excited to see what we can do together, as one team.”

kpstrat is variously experienced in the movement – transfer (buy, sell, license) of business things intangible, particularly-intangible assets originating in and consisting of various forms – contexts – applications of intellectual, structural, and relationship capital with the intent those ‘people held assets’ converge as components to specific (business) operating culture and project.

Experientially, whenever externally developed – held intangible assets are sought, they are frequently being pursued – intended for rapid convergence as ‘mission essential’ for the acquiring party and a particular project. Whenever externally developed – held intangible assets are sought, they are frequently pursued – intended for rapid convergence in-to as ‘mission essential’ for the acquiring party and a particular project.

Not-infrequently, such transactions + outcomes are dependent on effective translation – application of particular-business things intangible, but come with various challenges and/or risks…

  • many-of-which can be revealable – unravel-able – mitigate-able in-advance if intangible asset specific due diligence is undertaken in pre + post transaction contexts.

Doing this can, in addition to producing other benefits, reduce ‘asset buyers’ vulnerability-probability-criticality to costly, time consuming, momentum stifling, and reputation risk exposures, via legal challenges and/or entanglements, should they materialize.

Whenever ‘mission essential’ intangible assets are in play (in a transaction, or otherwise) I encourage, as a (fiduciary) obligation, proffers – negotiations include ‘intangible asset specific due diligence’.

Effective + specific intangible asset due diligence can reveal, unravel, and preferably describe ways – options to mitigate potential challenges – risks, and thereby reasonably ensure a smoother + more lucrative transaction + transition of the intangible assets to their new home and business culture and new purpose.

Too, conducting due diligence in this manner – for this purpose can also provide parties – investors with relevant rationality + validity to the valuation (price tag) of intangible asset dominant transactions.

The ‘Business Intangible Asset Blog’ is experientiallyresearched, written, and produced by Michael D. Moberly, to provide readers with perspectives and nuanced insights to distinguish, value, and safeguard business things intangible   designated as mission essential. 

Readers are-encouraged to review and comment on this, and other posts, @ Business Intangible Asset Blog’.


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