In previous postings, I reported on the efforts of the UK Intellectual Property Office to foster the utilization of IP as a financial asset. In 2013 I posted an item
on their report on Banking on IP? The role of intellectual property and intangible assets in facilitating business finance
. Last year, there was this posting
on their Banking on IP: An Active Response
. Last month there was this announcement
of a webinar by the UK IPO's Chief Economist Tony Clayton. (Tony's slides
and talking points
are available online.)
I am now very excited to let you know that they have taken the next step with the publication of an IP Finance Toolkit
. As the press release
notes, the toolkit includes:
• templates and guidance to help businesses accurately identify and describe their IP assets in a way that prepares them for finance applications and supports the decision making of a potential lender
• guidance on developing an effective IP strategy, commercialisation of IP and effective due diligence processes
• improved guidance on finance options for IP rich businesses
• a glossary of accepted definitions to be used when describing and valuing IP
This framework was developed involving business and financial professionals to help close the gap between lenders and borrowers. The toolkit is an easy to understand guide to using IP in debt financing. It includes a basic primer on IP, on valuation methods and financing concepts and options.
Especially useful is the Valuation Checklist that helps guide the conversation between companies and potential lenders. It does not present a formulaic approach to arriving at a quantitative valuation. Rather it poses a series of in-depth questions to help both sides better understand the role of and the importance of the IP to the business. In that sense it is also useful as a stand-alone guide for a business to better manage its IP.
Tony Clayton and the UK IPO team are to be congratulated on producing such a useful tool. It will certainly help British companies. I hope the toolkit gets wide attention on this side of the Pond as well.
(Cross posted from The Intangible Economy