A pre-revenue company (TechCo) had developed potentially game-changing technology, but was struggling to gain traction with sophisticated investors. Our tech and enterprise valuation specialists were commissioned to provide an independent opinion on the commercial utility of the technology and the intrinsic value of the IP and enterprise.

The first step was a full-spectrum evaluation of the technology and supporting IP; consisting of:

• Quantifying the performance gap between the client’s technology and the industry standard (using third-party testing of the prototype). In an industry where technology had change little in two decades, our performance profile showed a big step-up across measures of performance, safety and cost.

• TechCo’s invention was protected in key jurisdictions by a portfolio of ten patent families. Working with a patent attorney, the team mapped product features providing performance benefits to specific patent claims. It turned out that TechCo had an extremely effective patent strategy with all key features being protected by granted patents.

• Potential investors had previously regarded TechCo’s financial forecasts with suspicion. However, findings from the tech benchmarking, the IP assessment and validation of cost and pricing assumptions enabled the valuation team to gain confidence in the forecasts and to estimate the risk associated with market penetration scenarios. In order to provide an opinion on the value of the patent portfolio and TechCo’s enterprise value, all of this information was captured in a discounted cash flow model.

Whilst in-depth technical, legal and financial analysis was fundamental to the credibility of the valuation, it was the commercial coherence of the report which enabled TechCo to secure funding.