There are an untold variety of asset monetisation options. Outright sale of patents, sale and license-back, traditional patent and know-how licences and spin-outs are a few examples of methods to unlock untapped portfolio value and return high-margin income.
The upside opportunity from identifying high-value patents for licensing or sale can dwarf the millions in cost savings that firms routinely achieve in this process. At a minimum, a single patent sale – even at a depressed price – routinely returns far more than the cost of obtaining and maintaining the family over its life. Exploring other monetisation opportunities identified in a portfolio pruning effort can dramatically increase those returns.
- Start with a plan. Consider the positive returns (in both actual savings and potential revenue) that will result from a well-designed portfolio pruning exercise.
- Do not under-invest in the exercise. Mistakes are easy if ad hoc or emotion-based decisions drive the process.
- Consider many perspectives. In addition to the high-level perspectives described above, companies routinely draw on 40 to 50 analytics perspectives and complement those with additional expert assistance before taking final actions.
- Remember that portfolio pruning can both clear dead weight and bring cash and other returns on past R&D and patent investments.
- Lastly, do not avoid the process through risk aversion or (conversely) overestimate the resulting revenues. Portfolio pruning and potential asset monetisation are straightforward processes to evaluate a firm’s historical investments, reduce waste, optimise carrying costs and identify potential upside value.
Story first appeared in IAM Magazine