When discussing Intellectual Property (IP) you often hear “What is my intellectual property worth?” This query is especially common among those in the tech, software, and pharmaceutical sectors. As businesses grow and evolve, questions about finances and IP naturally arise, given their intrinsic connection. Understanding the value of your IP is crucial for equity and capital investments and resolving disputes over IP ownership and value.

The Challenge of Valuing IP

Valuing IP can be challenging due to the lack of clear benchmarks compared to tangible assets. Historically, obtaining bank lending against IP has been difficult, limited to companies with reliable and repeatable income streams. For a long time, Silicon Valley Bank was the only UK bank considering IP as an asset. However, it ceased operations in March 2023, marking a significant setback for IP-based lending.

This lack of mainstream funding has been a hurdle for one of the UK’s significant opportunities. Fortunately, the landscape is changing.

The Evolving Landscape of IP Lending

While established companies with mainstream products have benefited from lending against royalty streams, tech companies and startups have faced challenges in securing bank lending. The primary reason is that IP often doesn’t appear on balance sheets, and many banks lack an understanding of its value. Lenders are more familiar with tangible assets that can be easily recovered and sold, unlike IP.

Enter Sollomon Valuation Software

Inngot’s Sollomon valuation software has been a game-changer for early-stage tech businesses and those with significant IP assets. Developed and refined over the past decade, this tool is now utilised by NatWest and HSBC to facilitate lending against IP assets.

Sollomon evaluates all IP within a business, considering factors such as market size and overseas opportunities. It uses extensive data sets to determine the existing and potential market value of the IP, and also analyses a business’ cash flow forecast to gauge its trajectory.

How National Business Register Can Help

At National Business Register, we work closely with our clients to ensure their IP portfolios receive maximum valuation. We provide strategic, cost-effective, and commercial suggestions to enhance both the business and its IP.

This marks an exciting new era in bank lending, with NatWest and HSBC leading the way in adopting Sollomon and supporting IP-rich businesses. Tech-rich businesses are now highly investable, and we are thrilled that intangible assets are finally receiving the credit and value they deserve within the commercial setting.

Protect and Value Your IP

Understanding and protecting your IP can significantly impact your business’s financial health and growth prospects. If you wish to know more about how to protect and value your business’s IP, please contact us at National Business Register. You can email us at info@nbrg.co.uk or call us on 0800 069 9090.

Let’s work together to secure and maximize the value of your intellectual property, paving the way for a prosperous future for your business.