How to Increase Your Company’s Value Through Intellectual Property

Intellectual Property plays a crucial role in business growth. It drives financial value, attracts and reassures investors, helps to secure financing, and provides a competitive edge. In conversation with Stephen Robertson, Founder and CEO of Metis, the global intellectual property firm, Ryan Rieches discusses the often-hidden value of IP, why business leaders should take it seriously, and the steps business leaders can take to identify, protect, and leverage their IP assets effectively.

They key insights include the following:

  • IP contributes significantly to a company’s valuation: Analysts and investors often consider a company’s software, patents, trademarks, brand and reputation when assessing its value.
  • Strong IP creates a competitive barrier: Well-protected IP creates a competitive “moat” around the business, building a stronger value proposition for customers and greater appeal for investors, thereby justifying higher valuations.
  • IP as a strategy for growth: A well-developed IP strategy can help businesses to scale, improve profitability, and increase market share.
  • Fundraising power: IP can play a crucial role in fundraising. Lenders and equity investors look for strong IP assets as indicators of a company’s potential for growth and sustainable, repeatable, revenue generation.
  • Adapt for market changes: The business environment is dynamic. Companies need to continuously monitor and adapt their IP strategy to new markets, customer behaviors, and technological advancements, to maintain and enhance their brand and competitive edge.
  • Start early: Sellers often undervalue their IP at the point of sale. Owners typically undervalue their IP based on their track record to date, whereas buyers value IP based on future revenues and growth it will underpin. Recognition and protection of IP should start early in a business’s lifecycle.


Episode Transcript

[This is an edited version of the transcript. Listen to the full interview by clicking the player above.]

Ryan: Today’s guest is Stephen Robertson, CEO and Founder of Metis Partners, a global intellectual property valuation firm. Their vision is to help business leaders and companies discover the value of their IP assets and gain the financial recognition of those assets.

Today, we’re going to explore how three things interconnect and converge to drive business growth. They are business strategy, brand development, and intellectual property.

At a high level, we’re going to discuss how IP is defined, how it contributes to a company’s asset value, and how it can be monetized to enhance a company’s revenue and value. Specifically, we’re going to get into and discuss the role of IP in attracting investors, securing financing, and gaining a competitive edge in the market.

Stephen, welcome to Expert Opinion.

Stephen: Great to be here, Ryan. Thank you.

Ryan: Most people don’t realize the value that intellectual property has. For example, 90% of the S&P 500’s asset value is based upon intangible assets. And that’s been growing virtually every year. Why don’t we begin with talking about just that? How is IP associated to intangible assets and what constitutes intellectual property, and why it’s so important for businesses today?

Stephen: I started the business 21 years ago now in Scotland in the UK, but until that time I didn’t really know a great deal about IP and intangibles despite training as an accountant at Deloitte, despite working in banking and providing finance for management buyouts and buy ins and high growth companies.

It wasn’t until I actually went to work for an entrepreneur who’d made an investment in the company, which became really messy. He was spending money, he didn’t really know what he was spending money on, and he came to me for advice. When I got into the meat and bones of it, it wasn’t IP rich company but they had patents and they had trade secrets, but the investor had no idea how tangible value was being created out of all the money that he was spending…the whole situation was a mess. And we did a ton of diligence and what we quickly found out was actually IP can be complex and if you don’t do your diligence, you can get your fingers burnt.

After that experience, the defining moment was I then went to work for London Stock Exchange and I was helping public companies just after they had IPO’d.

They needed help trying to understand how to manage analysts and brokers and manage the City. That was a new experience for the C-Suite. And so I started to understand, well, what do these guys do? And you had analysts talking about, oh, you should buy this company’s stock because they’ve got really sticky software, they’ve got hugely valuable, highly differentiated patents. They’ve got this fantastic brand that they built a great reputation around, and these were all reasons that they gave for buying the company’s stock and reasons that were driving the PE ratios and the valuations.

When I was at Deloitte, I don’t remember any of this stuff in the balance sheet. When I was at the bank, I don’t remember any of this stuff being important in the banking relationship or as collateral, but I did recognize that patents and trademarks were relevant in a small company.

And so it was a real eye-opener because at that point I thought IP was just stuff that could trip you up. Then I realized – wait a minute, this IP stuff can actually drive the valuation of businesses and can get investors excited about your company.

What became clear as I’d studied to do diligence was actually it can be complex. There’s lots of different taxonomies, accounting taxonomies and about what constitutes IP and intangibles and marketing related assets and technology related assets and artistic related, all this stuff. But you and I probably just understand it as things like software and patents and brands and key processes and critical data and trade secrets.

One of the first things I did, I created our own methodology or “metatology” as I called it. That was me creating my own brand straight away to differentiate what we did and make some of our processes and some of the things that we did quite memorable for our clients and for those that we were marketing to.

Ryan: How important is it to put a value on it? You mentioned the balance sheet. In the US, we don’t put IP or brand on the balance sheet, but in some countries they actually do that, right? I remember in our past conversation you mentioned the hidden value of intellectual property.

Stephen: I look at IP as the other balance sheet you didn’t know you had. There’s value there, but you don’t know. It’s not market value. You don’t understand how to value, and the accounting rules don’t let you put market value on it. There are lots of businesses who put IP in the balance sheet but at cost, and you can do that. But, as you rightly pointed out, the one asset you can’t put on your balance sheet is your own brand. You’re not allowed to do that under the accounting rules because it’s hard to measure the costs of building a brand or growing a brand and developing a brand.

As a result, most companies don’t put IP in their balance sheet. They don’t really think about it. But ultimately what we try to help business owners understand is – look, unless you start recognizing this stuff and measuring it, your business is always going to be undervalued and you’re always going to be leaving dollars in the deal table, because ultimately it’s the stuff your business can’t do without. It’s the stuff that drives the growth of your business. It’s the stuff that makes your business scalable.

Most business owners only think about IP on the exit, and by that point it’s too late. At that point, the buyer knows what he wants to buy and, typically, the buyer never buys what the seller’s selling. He sees the value in the business that he can monetize, that he can leverage within his business model. And buyers are buying a business based on what the future that they can build with the IP that’s wrapped up in the business model. But as the business owner at that point typically is only looking at the history of the business to define the IP…the seller’s looking backward and the buyer’s looking forward. We said, hey, we want to be able to help business owners recognize that by putting a value in the IP, or at least recognizing IP, then it may help them make better business decisions and may help them accelerate growth and build a stronger competitive moat around their business.

Ryan: Looking at both audiences and how they value and how they look at IP – you don’t have to give away your secret sauce, but can you kind of give us a high level review of how you do put a financial value on IP?

Stephen: First of all, we would sit down with the business owner and ask him about what differentiates your business, the key drivers, the USPs. And then we try to identify where the narrative that they give us may constitute IP or could create IP around it….identify the IP, check if it’s well-developed, check if it’s well protected or not. And then we start to analyze how those IP assets actually relate to the revenues or the margins that the business is generating.

First, we need to establish what IP assets the company owns and is using to drive growth, and that may also be using it to drive profitability as well as growth in market share. And then, maybe the simplest way to put it is the valuation approach that most people trust is forming the view, if this company didn’t own this IP and it had to license an equivalent IP from somebody else, what would that other party charge you for it? And that’s called the principle of Relief from Royalty.

The easiest way to look at it – if you didn’t own it and you had to license it, just like a franchise, for example, where you’re licensing in a brand, you’re licensing in key processes, you’re licensing in a McDonald’s franchise or whatever it may be, you’re licensing in all the investment they’ve made in building the brand.

There’s a business plan and a model and a template that you’ll get, and that’s all IP. And you pay some upfront money and you pay then an ongoing royalty to the owner of that IP in order to allow you to exploit their IP and make money from it.

The principles are the same. We try to establish what similar IP you’ve got in your business, what shape it’s in, whether it’s any good, it may not be as good as McDonald’s and then you may not be ready to franchise it yet, but maybe you’ve got the stuff but it’s in the heads of individuals and it’s not well protected. Or maybe you haven’t got it trademarked or patented. It’s valuable to you, but it could be more valuable and therefore the value of it will go up. That’s what we do.

Ryan: Great overview. If those practices and those brand components are all finely tuned and ready to deliver, it can provide an implied promise of consistency and quality, right? The customer knows what they’re going to get because those expectations have been set and the company’s able to deliver upon them. All right. Good.

Stephen: Typically, whether it’s a B2B or a B2C business, the brand is usually one of the key components and usually one of the first assets that people think about.

We’ve got a game we play when we’re doing training sessions or presentations where we show brand logos but we take away the names so all they see is the color and the shape of the symbol. And then we ask them to guess the brand. And you know what? We give them 12 and I would say about 60 to 70% of the people get most of them. Some get all of them.

What we’re trying to establish is how important that brand can be in creating that first impression. And as you recognize that, then you start to form a view in your head about what you think that brand means to you.

And maybe you don’t know that much about it, but it is recognizable. We as consumers think about brands quite personally and in business it’s the same. And so the brand is usually the first and the most distinctive IP asset that we tackle when we’re trying to get companies to understand IP just as brand is absolutely crucial to your business.

Ryan: Now also, just switching gears a little bit, you can also use the IP valuation when doing fundraising, right? Maybe you can share a little bit around that perspective.

Stephen: When it comes to IP and why it’s important, it’s important internally to the business because you’ve got an audience who needs to understand it because you want them to help you protect that IP. You certainly don’t want your staff stealing your IP, and you certainly don’t want them perhaps giving away in relationships and conversations with joint ventures and partners and others because they didn’t recognize that this stuff was really important and needed to be locked down and protected.

Then there’s the external recognition of IP because, ultimately, when you’re talking to funders they want to understand the key components that differentiate your business and are going to help your business grow. And from a lender’s point of view, the lender wants to know if have strong, well-protected, repeatable IP assets that mean that you’re going to have repeatable revenues that ultimately will allow you to pay back the interest and the capital and the debt that you borrowed.

And when it comes to equity investors, they want to see the same profile of IP assets and they want to see a strong competitive moat around your business built on IP because they want to see that driving growth in your business and helping you acquire more market share and potentially increase the margins and the EBITDA of the business.

I can think of one venture debt lender came to us and said, “Hey, Stephen, we’d like you to do some valuation diligence work on this company we’re going to lend money to. They’ve got some great patents in technology, they’ve established a strong presence in the market and we’re really excited about them.” And I said, “Okay, sure. We’ll take a look at it.” And this was a British company that was expanding internationally. And so we did some initial work, went back to the lender and we said, “Look, it’s an interesting business, great technology, but their IP is not great from a bank and lending point of view.” And they were like, “Well, what do you mean?” And I said, “Well, actually the IP they’ve got now is not the IP that they will need to support the growth in the next three to five years.” And they were like, “Oh gee, right, okay. Well can you explain that?”

I explained that as they expanded internationally, they needed to set up an international manufacturing operation, which means that they would have to transfer a key know-how and some trade secrets around some of their key manufacturing processes and their differentiation. Secondly, they had to share that with new employees that they didn’t know in a new country that they didn’t know a great deal about. And they were then going to have to build a brand and a reputation internationally. We were trying to explain to the bank that the IP that they thought was super exciting now and gave them confidence in lending the money now is not the IP that the company would need in the future to drive the growth, the increase in revenues that the bank was funding through their venture debt program.

But ultimately we got them comfortable that the company recognized that the IP strategy would change and that the portfolio of assets that they needed both now and in the future may change and evolve and that they needed to protect those assets.

Ryan: A lot of people think valuing IP is only important for large companies, but we both know that’s not true. In fact, it’s probably really beneficial to benchmark your IP to understand where you’re at and then be able to put that IP strategy in place. And in a previous conversation you shared with me that you have developed a model that allows you to put a value on company’s IP for a really reasonable fee, I think under $1,000, right? Maybe you can share a little bit more about that.

Stephen: Let’s be clear. It’s not a valuation, but it’s a scorecard. It’s kind of like a FICO score for your IP. We created it basically to help companies come to terms with IP for the first time. They weren’t sure what they had, they hadn’t really assessed the quality or the level of protection around that or the risk around a certain IP that they had. And they wanted to understand if they had any IP? What shape it’s in and could it be important?

And so we developed the scorecards around five IP asset classes that we thought were going to be important to every business. That’s patents, software, brands, trade secrets and data. And in any business, we’ll score and we’ll have IP in some shape or form in at least one or two of those categories.

Our scorecard is about helping companies recognize they’ve got these assets, getting a benchmark to help them rate the quality of the assets and understand where there’s risk. And we give them a score and usually they might score well in a couple of areas and they’re excited about that and they maybe want to tell people. They want to tell their investors and they maybe want to tell their lenders and maybe talk to their customers about it.

The next question will be, well, how do we get better? Because these are risks in the business that we want to overcome. And if we can mitigate those risks around IP, that can usually help us increase the valuation of the business as a result.

Let me give you one example. We were working with a digital marketing business who they built software to help them run mobile campaigns, digital campaigns through mobile devices. And they built this really valuable database of customer numbers, what devices that they had so that they could customize how the marketing messages were delivered to those customers depending on what device they had that they have an Apple smartphone or a Samsung or maybe some simple phone that it wasn’t a smartphone at all. They’d been investing heavily in how to manage these campaigns, measure the effectiveness of the campaigns, track the data, track the open rates.

The guy who was the owner of this business had been using third party developers to develop the software. When we started talking to him about IP, a light bulb went on. He’s said, ‘wait a minute, this software is absolutely critical to this business because it allows us to scale and grow and it makes us super-efficient’. He suddenly realized that they are assets, but they’re actually assets that could be at risk, because he was using third party developers who he didn’t know what security they had around their use of the data or the code that they were developing.

And so it really got him thinking about risk and opportunity, but also value. It was a real eye-opener. And the IP scorecard did that. He didn’t get a valuation, he just got a scorecard that said, hey, you’re great in brand, you’ve got registered trademarks, you’ve built a reputation, you’re ticking a lot of the boxes that demonstrate a strong brand, but in software and data, you’re not scoring well. And there are risks and vulnerabilities that you need to fix in order to make these assets more valuable.

And you can learn from that and build that into your business model.

Ryan: Yeah. I think that’s a good example that maybe something that you can’t put a patent or a trademark around. You can trademark the name, but you can’t necessarily patent that process, but yet it still can create by value for the business as well. Stephen, I imagine people can go to your website to find this information,, is that correct?

Stephen: Yeah. You’ll find everything in the Metis Partners website, including the IP 100, which is our scorecard, and it’s the FICO score for IP as it has been called. That’s a great way for small and large companies actually, who maybe they’re maybe not ready for an IP valuation, but they’re curious about IP. Maybe they see some of their competitors growing faster than them. Maybe they see their competitors using smart language in their marketing collateral that makes them highly differentiated. And they’re saying, wait a minute. How do we get to grips with the IP and our business? How do we build a narrative about the strength and the differentiating factors of our IP? How do we build that into our business model, into our marketing collateral? How do we build that into our brand story as well?

Yeah. And remember, when it comes to IP, IP isn’t a quick fix. It’s a journey that you go on because you can have IP, but if it’s not well protected, it’s not going to help you develop that roadmap for success that you’re looking for.

The IP score is a good way to start because sometimes when it comes to IP, the CFO maybe doesn’t quite get it and he sees it as an expense, the CMO sees it as potentially something that can be important to branding and marketing, the CTO sees IP is actually more important, but it’s a cost because it’s money we spend in R&D and development. The IP score is a great way to get everybody on the same page straight away.

Ryan: Okay. Stephen, we’re almost out of time here, but let me summarize. What I’ve heard here is that there’s a lot of benefits to IP, more than what meets the eye. And you dig pretty deep in uncovering both benchmarking and also evaluating where we’re at, but also looking ahead to what the future strategy and the plan is in order to make the most out of that. And so IP, clearly, it can increase the value of the business. It can help you further clarify your brand’s value proposition. It can help you grow the business and protect your market share. And it can also help you in securing financing at a variety of different levels. A lot of benefits. As you mentioned earlier, some companies do this on a regular basis, some just don’t know where to start. Maybe a closing thought from you, if you could offer one piece of advice to a business leader who’s early in the process of developing or valuing their IP, what advice would you give them?

Stephen: For most business owners or entrepreneurs, I would say think about trying to understand what’s critical and valuable in your business. It could be patents and software, but it could be data. It could be material science or knowledge or know-how that you have. Understand what’s critical and valuable, protect it, and then try to build it into your competitive moat as a competitive differentiator. And then build it into your business model. Because if you can bake that IP into your business model, write it down, protect it, be able to teach it to others within your organization, but keeping it protected, then that will make it scalable and it will help you grow.

And as you do that, that’s going to allow you to be able to have a stronger narrative for lenders and investors. Investors want to know what returns you’re going to give them, and the way you’re going to give them higher returns is if you’ve got a product or a service that’s backed by IP, that means you can grow fast, grab market share, hopefully at higher profit.

And to do that, you’ve got to be managing your IP well. You’ve got to be able to scale it up so investors are going to be interested in it. Lenders are going to be interested because as you said right at the outset, the days of businesses relying on physical assets as the key assets and the key drivers for growth, those days are mostly behind us now. And what COVID taught us is that businesses need to pivot. The channels you need to reach customers are changing, and the way customers pay for things and access goods and services is changing as well. And so you don’t want to be stuck with the limitations of the real estate and the physical plant machinery. The most successful companies are nimble, and they’ve got strong IP. They’re building more IP, they’re using it to differentiate, they’re using it to charge higher prices, achieve higher margins, and secure more growth.

And you don’t have to be a big company with huge financial resources to do that. Small companies can do it. Learn the basics, get your IP score, protect what you’ve got, and then build it and bake it into your model, and you see the benefits. And then once you’re doing that, you’re able to communicate that externally. And once you’ve got a confident narrative about the strength of your IP, you’d be surprised the number of people who sit up and take notice and listen to you that you’ve got these key differentiators that you’re nurturing and growing as you grow the business.

Ryan: Stephen, thank you for sharing these valuable insights. Love your passion for what you do and sharing your decades of experience in this category.

Stephen: Yeah. Listen, Ryan, thank you so much for having me. There was so much I wanted to say, but we just ran out of time because the whole exit scenario is something that I think a lot of companies just miss the opportunity.

Ryan: Thank you. Well, that concludes our show for the day. This is Ryan Rieches, and you’ve been listening to another edition of Expert Opinion. It’s a branding business forum where thought leaders share their point of view. And if you’d like to listen to past shows or read our blog series, just visit And until our next show, grow your business by living your brand promise.

Stephen Robertson is the CEO and Founder of Metis Partners. You can contact him by email: