Identifying, valuing IP and measuring their contribution to business value is challenging. Intellectual properties or IP can be the most valuable assets owned by a business. The Provisors’ Distributors and Manufacturers Affinity Group of San Diego is hosting a panel discussion featuring Nevium Principal Brian Buss titled “The Value of Intellectual Property in a Business.” The speakers will provide advice for IP buyers and sellers related to the identification of key IP assets, how to construct and explain the IP narrative to prospective buyers and disclose common fallacies about IP value. The panel discussion will also include techniques to improve the value of IP and a discussion on the impact of IP on business value.
The affinity group panel will held at 4pm on March 9, 2017 at Barney & Barney in San Diego. Provisors members can register to attend through the Provisors website: www.provisors.com
Accurately valuing IP requires the attention of a thorough and skillful valuation expert. At Nevium, we bring a combination of valuation expertise, market knowledge and our ability to communicate and educate to our IP valuation assignments. Projects requiring valuing IP by Nevium are supported by facts, research and accepted analytical methodologies; yet able to be read and understood by any of the different audiences who use our analysis.
ProVisors is a community of professionals who serve their clients as trusted advisors and share the highest standards of integrity, performance and accountability. ProVisors promotes and enables relationship building, information sharing and collaboration among its members for the benefit of their clients and one another (and you).
ProVisors members are senior-level trusted advisors who establish meaningful relationships with each other by participating in ProVisors group meetings, casual small-group gatherings (troikas), educational forums and virtual communications, resulting in a high-level of trust within the community. Members are committed to one another to generate multi-disciplinary solutions not readily available elsewhere for their clients. As a result, many clients of members recognize ProVisors as the access-point to skilled and dependable professionals to meet their business and personal needs.
A trusted advisor is a professional who uniquely occupies a position of trust with clients. They regularly turn to him/her for guidance on business and personal matters, both within and outside of the professional’s discipline. Thus, the trusted advisor exercises substantial influence over his/her clients’ affairs; enjoys long-term client relationships; and regularly introduces clients to other professionals to help them achieve specific goals.
Strategic Alternatives Evaluation for RFID Technology
A leading innovator of RFID solutions for the pharmaceutical and healthcare industries was approached by its largest distributor with a buy-out offer. Though the distributor accounted for over 50% of revenue at the time, the company was developing new technologies with broader market applications, accumulating proprietary data, and building lasting relationships that could mean substantial revenue and earnings growth in the near future. Nevium was retained to evaluate the company’s strategic options and provide valuation calculations under different scenarios to assist owners and investors in deciding to accept or reject the acquisition offer.
Through market research, business forecasting and use of Nevium’s IP valuation apportionment model, Nevium was able to identify and quantify several opportunities for MEPS to leverage its IP into substantial earnings growth. Based on its analysis, Nevium recommended that the company reject the acquisition offer and continue to develop their technologies, products, brand awareness and customer relationships. Since Nevium’s analysis, the company has been able to exceed its projections, enter new markets and increase its earnings.
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The Value Examiner, a professional development journal for the consulting disciplines, published a special issue focused on brand value. Nevium’s Brian Buss authored the chapter “Brand Valuations: Identifying the Opportunity and Challenges”. This “Special Issue” of The Value Examiner focuses on high profile aspects of the valuation world. A comprehensive discussion related to the importance of valuing a brand, and conversely, the devaluation of a brand. Buss’ article explores the concept that brands are widely accepted as valuable assets for businesses large and small. These assets are typically the most significant intangible assets recognized in acquisition accounting and a valuable brand reflects the difference between better-than-average and lower-than-average product prices and profit margins.
Please click here to read the article
Join Nevium’s Doug Bania along with other legal and business music professionals for a SXSW panel session related to the Blurred Lines damage calculations.
The Blurred Lines copyright infringement ruling, which Robin Thicke and Pharell Williams have vowed to appeal, provides a window into how valuation experts work with legal counsel to put a number on it for their mutual clients and the perils of having such questions go to a jury for verdict. This expert panel comprised of a litigator, CPA, an IP professional and a transactional attorney will speak with firsthand experience of damage calculations in the Blurred Lines case and comment on other legal actions that followed, including those against Ed Sheeran (“Photograph”), Led Zeppelin (“Stairway to Heaven”) and Beyoncé (‘Lemonade”) to bring clarity to what otherwise might merely seem to be blurred lines.
March 10-19 in Austin, Texas for SXSW 2017 – South By Southwest dedicates itself to helping creative people achieve their goals. Founded in 1987 in Austin, Texas, SXSW is best known for its conference and festivals that celebrate the convergence of the interactive, film, and music industries. The event, an essential destination for global professionals, features sessions, showcases, screenings, exhibitions, and a variety of networking opportunities. SXSW proves that the most unexpected discoveries happen when diverse topics and people come together.
Many businesses are bought and sold for the sole purpose of obtaining the company’s history, reputation and other brand-oriented intellectual properties, but in many transactions there is a disconnect between the buyer and seller regarding what assets are to be included in the brand bundle. Brand extension and licensing offers brand owners the opportunity to access new markets and increase their financial performance but carries the risk of brand dilution and added costs. Therefore, brand valuation related due diligence should be a key component of brand-based transactions.
From our experience advising and managing brand transactions, when performing due diligence related to a brand acquisition or preparing for the sale of a brand-oriented company, the ability to identify and/or promote the important factors that are driving the brand’s value leads to better transaction outcomes for both the buyer and seller. A clear understanding of the components of brand valuation leads to clear communication during the negotiation process and fewer post-transaction disputes.
Therefore, we have adopted a typical brand valuation due diligence checklist to focus on brand-based transactions. Brand-based transactions can be business or business unit acquisitions, trademark and brand asset licensing, and brand extension opportunities. We hope utilizing this check list will enable more successful brand transactions.
Brand Valuation Due Diligence Checklist
Company & Financial Information
- Historical income statements, balance sheets and cash flow statements for the relevant business units for the past five (5) years
- Most recently completed business plans, budgets and/or projected financial and operating results for the relevant business units (including projections for each key source of revenue, including licensing or royalty income streams)
- What proportion of the Company’s revenues is derived from products or services using proprietary trademarks or trade names?
- Timeline of relevant events (company origin, key contracts, license and other major agreements, acquisitions, etc.)
- Copies of any 3rd party analysis or valuations of the Company
- List and description of primary responsibilities for the key employees at the Company
Intellectual Property Assets
- Description of Company’s licensing strategies
- Copy, or summary description, of all technology or intellectual property licensing agreements between the Company and any other businesses
- Are there any inter-company charges for use of intellectual properties?
- List all IP registrations for patents, trademarks and copyrights; in all countries, including provisional and non-provisional
- Description of any, process and/or production know-how and trade secrets
- List all Domain names and websites, and description of e-commerce activities
- Brief description of key customer and supplier relationships
- Copies of prior analysis, if any: internal analysis and/or 3rd party reviews; and/or valuation or analysis of the Company’s intellectual property assets
- Discussion and data related to historical costs incurred to create the Subject Assets
Industry & Market
- Discussion of major competitors, and/or comparable companies, covering areas such as: product line description, estimated revenues or market share, relative strengths and weaknesses, known expansion plans or acquisitions, what companies might be potential new entrants into this space, etc.
- Copies of independent market or industry research relevant to this particular space, covering such areas as: historical performance, performance forecasts, descriptions of industry trends, etc.
Marketing, Advertising & Promotion
- Description of ongoing promotional programs, including marketing and advertising campaigns
- Promotional strategy and budget for product sales
- Capital raising or fundraising strategies
- Review of distribution channels employed – past and present
Internet and Social Media
- Access to the company’s website analytics software, (often, but not always, Google Analytics).
- If access is not immediately available, relevant analytic data related to website visits, time visitors remain on the site and number of page views per unique visitor, etc.
- List of domain names, registrar details and proof of ownership
- Website platform details and any work-for-hire contracts
- List of social media accounts and username and password login details
Each transaction opportunity is unique and this list may not include all of the items a potential buyer, seller, licensor or licensee will need to consider in a specific transaction.
To obtain a PDF copy of this checklist, please click here.
For an article related to Brand Valuation, please click here.
To learn more about brand due diligence and the analytical steps we recommend before executing brand-related transactions contact Brian or Doug at Nevium at 858 255 4361.
For 2016 the University of New Hampshire School of Law was recently ranked #5 for Intellectual Property Law by U.S. News and World Report
Recently, Brian and Doug were invited to present and participate in a panel discussion to the students and faculty at UNH on Brand Valuation. During the session, Nevium’s principals discussed how different definitions of “Brand” and the use of different valuation methodologies can impact valuation results. The presentation covered challenges encountered when defining what exactly is included in “Brand Assets” when advising clients involved in transactions or litigation, and key elements of conducting a brand valuation analysis.
Both Brian and Doug are available to discuss brand valuation concepts and challenges at 858 255 4361.