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Venture Capital-Free Accelerated Monetization of Non-Core IP: A Case Study of an Innovation Company

By Robert Block and Nir Kossovsky
September 01, 2005

Monetizing non-core IP is rational, practical, and increasingly common. The IP literature is now rich with examples of accelerated monetization of cash-generating IP through the transfer of assets and risks, usually assisted through some form of structured finance. The literature is even richer with countless examples of painstakingly slow monetizations of non-cash-generating IP usually through joint ventures or venture capital-backed transactions. We describe a case in which non-core IP was monetized rapidly after which the bulk of the reward potential remained in the hands of the original IP owners. We suggest that when non-core IP is generated consequent to market demand in the course of the Parent's operations, and merely happens to reside outside the Parent's core business, a rapidly structured Parent-financed spin off can create accelerated financial and strategic benefits.

Time Value Spectrum of IP Monetization

Cash-Generating Assets

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