Venture Capital Investments in Intangible Assets…

Michael D. Moberly, Principal, Founder, kpstrat 

When investing in early stage business innovation there are obligations to recognize and differentiate the various layers of asymmetric risks to any – all presumably proprietary intangible assets. Especially the assets upon which ROI is dependent. Conventionally issued IP (intellectual property). is no longer serve as standalone deterrents or risk mitigators. Those assets’ further development and exploitation should have their respective risks mitigated to all reasonable extent.

Unarguably, today’s and the futures’ intangible asset intensive and dependent innovations which organically emerge embedded with various forms and contexts of intellectual, structural, and relationship capital, should influence VC’s, insofar as,

  • affecting how, when, why, and which innovations and investment prospects draw their attention and consideration.
  • shifting away from characterizing investing in intangible asset dominant innovations as merely another risk of doing business which may be mitigated through conventional issuance of IP.

It is indeed much more….

VC prospects for achieving ROtI (return-on-their-investment) should no longer be premised or singularly reliant on innovation being conventionally issued as IP,

Rather and also, on upfront safeguards and risk mitigation initiatives undertaken, in place, and effectively applied in advance. These intangibles represent an investments’ foundation, and each is obliged to be distinguished – assessed relative to its contributory role to producing + delivering (a.) sustainable value, competitiveness, and revenue generating capacity, etc.

Risk(s) to business things intangible today, is obliged to be recognized (for investment purposes) as not mere probabilities (of-for occurrence and materialization), rather as inevitabilities. That is, intangible assets and their unique – particular risk machinations, left un-recognized, un-distinguished, and un-checked relative to investing in them or their exploitation capabilities and capacities, can, and likely will sequentially and wholly (1.) stifle innovation momentum, (2.) undermine investor exit strategies, (3.) erode projected returns, and (4.) significantly and perhaps irrevocably, devalue the invested intangible assets.

Conveying dismissiveness toward these operational realities manifests as risk!

For specifics on these and other mission essential subjects, I respectfully encourage readers to review blogpost categories you deem relevant and posted @ ‘Business Intangible Asset Blog’ and review the various booklets I have published by clicking on ‘shop’.

Respectfully written for horizonally intelligent leadership.


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