IP Valuation

Quantifying the commercial and legal worth of your intangible assets to secure funding, structure joint ventures, and drive transactions.

Intellectual Property Valuation Models

Intellectual property (IP) has legal recognition and protection thanks to India's intellectual property laws. Other intangible assets have recognition under commercial and contract law, but the small group of assets specifically involves IP.

Quantifying the monetary value of your IP portfolios is crucial for mergers, acquisitions, venture funding rounds, and establishing royalty fee schedules. Excelon IP assists clients in applying structured, internationally recognized mathematical models. Once we evaluate the IP assets, we determine which methodology matches your corporate objectives.

Cost Method

The cost approach is based on the economic belief that informed buyers will not pay any more for a product than they would for the cost of producing a similar product that has the same level of utility.

Generally, the cost approach is perfect for the analysis of intellectual properties that have not yet been developed commercially, or that could be re-created quickly. It reflects the direct cost a company could avoid by purchasing, rather than replicating, a similar research and development effort.

Key Indicators for Cost Method

Suitable for pre-commercialized patents, software codebases under early development, or utility-driven databases where historical R&D costs represent the primary baseline of value.

Market Method

This method depends on the market price comparability or on comparable royalty rates.

Market Price Comparability: The value of an IP asset is determined directly on the basis of transaction prices of closely comparable IP assets in the same industry.
Comparable Royalty Rate: This requires construction of a business plan around an IP asset, analyzing transaction records to determine the royalty rates paid by others in similar market sectors.

The market method is highly objective and can provide a realistic analysis of value based on your right’s worth as perceived by both owners and their consumers. It is extremely useful for establishing high, low, and average royalty brackets during licensing negotiations.

Income Method

This method values the IP asset on the basis of the net revenue it is expected to generate in the future.

It considers both the future cash flow streams that a right may generate during its economic life, and the cost of maintaining, prosecuting, and commercializing that asset. Risk rates and financial inflation factors are discounted into the equation to calculate the Net Present Value (NPV) of the asset.

Comprehensive Audit Approach

Our analysts scrutinize your entire IP portfolio and corporate assets to choose and execute the ideal valuation mix, providing you with audit-ready documentation for financial regulators and investment banking partners.

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