Leveraging IP to Raise Funding and Improve Your Valuations in a Bear Market_1 pptx

Leveraging IP to Raise
Funding and Improve
Your Valuations in a
Bear Market
by John Cronin, CEO
ipCapital Group, Inc.

.
April 15th , 2001
Leveraging IP to Raise
Funding and Improve
Your Valuations in a
Bear Market
by John Cronin, CEO
ipCapital Group, Inc.

.
April 15th , 2001
© 2001, ipCapital Group, Inc. All Rights Reserved. 2
www.ipcapitalgroup.com
Agenda
Agenda
Today’s Environment
Challenges
Lets discuss IP and leveraging
Protected Innovation
SM
Case Studies
Actions Your Can Take
© 2001, ipCapital Group, Inc. All Rights Reserved. 3
www.ipcapitalgroup.com

Today’s Environment
Today’s Environment
© 2001, ipCapital Group, Inc. All Rights Reserved. 4
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End of the Bull Market
End of the Bull Market
Nasdaq Composite Index, 1974 - date
Nasdaq Composite Index, 1974 - date
© 2001, ipCapital Group, Inc. All Rights Reserved. 5
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VC Funding is Dropping
VC Funding is Dropping
PWC MoneyTree™, February 6, 2001
© 2001, ipCapital Group, Inc. All Rights Reserved. 6
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Internet Investors are Shying Away
Internet Investors are Shying Away
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Dollars in Million
s
Q1

96
Q2
96
Q3
96
Q4
96
Q1
97
Q2
97
Q3
97
Q4
97
Q1
98
Q2
98
Q3
98
Q4
98
Q1
99
Q2
99
Q3
99
Q4

99
Q1
00
Q2
00
Q3
00
Q4
00
Internet-Related Venture Capital Investments
1996 - 2000
PWC MoneyTree™, February 6, 2001
© 2001, ipCapital Group, Inc. All Rights Reserved. 7
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New Expectations are Emerging
New Expectations are Emerging
"We are moving into the stage of the cycle when
growth is strong, inflationary pressures build
up and interest rates rise. Investors prefer the
security of profits today to the promise of
profits in the future."
Owain Evans,
global strategist at Merrill Lynch
© 2001, ipCapital Group, Inc. All Rights Reserved. 8
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Knowledge will Drive Future
Economic Growth
Knowledge will Drive Future
Economic Growth
“Intellectual property rights is an area of law and

business management which is enjoying a recent
explosion in significance. Many governments and
businesses believe that knowledge will
increasingly drive economic performance in the
industrialized countries.”
Ruth Soetendorp, Director,
Centre for Intellectual Property Policy and
Management, Bournemouth University
© 2001, ipCapital Group, Inc. All Rights Reserved. 9
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VCs are Recognizing the Value of IP
VCs are Recognizing the Value of IP
“The venture capital arena is quite savvy to the
importance of an intellectual property portfolio.”
Lance D. Reich,
partner Bockhop & Reich, LLP
© 2001, ipCapital Group, Inc. All Rights Reserved. 10
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IP is Becoming a Strategic Issue
IP is Becoming a Strategic Issue
“Intellectual property management has become a
new corporate strategy issue. A patent strategy
can help Wall Street see a company’s true
competitive prospects and earnings potential.”
Kevin G. Rivette & David Kline,
authors Rembrandts in the Attic
© 2001, ipCapital Group, Inc. All Rights Reserved. 11
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Companies are Taking Action to
Manage Their IP

Companies are Taking Action to
Manage Their IP
“The new economy barters, trades, and produces
one integral asset more than any other:
intellectual property. Today, nothing is more
valuable than an individual's ideas. And companies
are taking steps to capture and preserve any and
all innovation born within them.”
Gregory J. Pleshaw – Fast Company
© 2001, ipCapital Group, Inc. All Rights Reserved. 12
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0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999
U.S. Patents Issued, 1963 - 1999
U.S. Patents Issued, 1963 - 1999
U.S. PTO
The Number of Patents has Jumped
The Number of Patents has Jumped
© 2001, ipCapital Group, Inc. All Rights Reserved. 13
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The Entrepeneur Needs More Than

a Good Idea
The Entrepeneur Needs More Than
a Good Idea
Entrepreneurs needs to bring more to the
table than just the idea, early proofs, and the
team. They must “own the right” of their
technologies to compete with others who
understand this
Entrepreneurs must use IP to leverage their
business and their plan, and to create the
upside and downside protection to the
investors
© 2001, ipCapital Group, Inc. All Rights Reserved. 14
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Challenges
Challenges
© 2001, ipCapital Group, Inc. All Rights Reserved. 15
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Value Creation—
Inventory at Source
Value Extraction
Convert to capital
Human Capital
Experience
Know-how
Skills
Creativity
Leveraging Human Capital
Tools to Direct the Inventive
Mind

Tools and Services to
Create The Value
Human Capital
Experience
Know-how
Skills
Creativity
Leveraging Human Capital
Tools to Direct the Inventive
Mind
Tools and Services to
Create The Value
Intellectual Assets
Programs Methodologies
Inventions Documents
Processes Drawings
Databases Designs
Intellectual Assets
Programs Methodologies
Inventions Documents
Processes Drawings
Databases Designs
Intellectual Property
Patents
Enabled Publications
Copyrights
Trademarks
Trade secrets
New Economy Companies are Built on
Intellectual Capital

New Economy Companies are Built on
Intellectual Capital
© 2001, ipCapital Group, Inc. All Rights Reserved. 16
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Challenges of the New Economy
Challenges of the New Economy
Time is your enemy in…
Loss of Human and Intellectual Capital
Processing your Innovations
Realization of Asset Potential
Conversion of Assets to Capital
Intellectual Property is Capital
SM
The market for a solution is huge – every company of significance
today is concerned about the loss of human capital and the
management of intellectual assets.
© 2001, ipCapital Group, Inc. All Rights Reserved. 17
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Alignment of Functions Needed in Business
Alignment of Functions Needed in Business
Challenges of the New Economy
Challenges of the New Economy
Aligned
Companies
New Economy
Companies
Most
Companies
Market
Business

IP
Legal
Inventors
Market
Business
IP
Legal
G
A
P
G
A
P
Inventors
Business
Market
IP
Legal
Inventors
© 2001, ipCapital Group, Inc. All Rights Reserved. 18
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Alignment of Strategies, IP Should Lead Business
Alignment of Strategies, IP Should Lead Business
I
P
IP
B
u
s
i

n
e
s
s
I
P
Aligned
Companies
New Economy
Companies
Most
Companies
B
u
s
i
n
e
s
s
B
u
s
i
n
e
s
s
Challenges of the New Economy
Challenges of the New Economy

© 2001, ipCapital Group, Inc. All Rights Reserved. 19
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Let’s Discuss IP and Leveraging
Let’s Discuss IP and Leveraging
© 2001, ipCapital Group, Inc. All Rights Reserved. 20
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What is IP?
What is IP?
Key Hidden Rights
Trade Secrets – Coca-Cola Formula – forever
“Exclusitory” Rights – Stops others if enforced
Patents – Protects idea or concept – 20 yrs
Copy Rights – Protects the form (not the idea) – 50 yrs
Trade Name – Protects the name or logo – 75 yrs
Blocking Rights – Stops others from patenting
Publications, make, use or offer for sale
Documented Enabled Ideas
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Ideas to Reality
Ideas to Reality