Unicorns and Intellectual Property Rights

Fresh and interesting article posted on IPWatchdog.com about the valuation of intellectual property as a strategic business asset in the hands of Unicorns, a startup with a valuation exceeding $1 billion.

Happy reading! 

 "It seems that not a day goes by without a commentary about Unicorns, a Silicon Valley-coined term used to describe a startup (pre-exit) with a valuation exceeding $1 billion. The number of Unicorns, the vast majority of which are US software companies, has recently crossed the 150 mark, according to the TechCrunch Unicorn leaderboard. Topping the US Unicorn list are high flyers like Uber at $51 billion and Airbnb at $25.5 billion, followed by companies that are mostly concentrated in three industries: Consumer Internet, E-commerce and Software.
Unicorns have captured the attention of investors, analysts and other market observers who are trying to understand the factors driving the formidable valuations commanded by these mythical ventures and, in some cases, bet on their future, or even announce their sudden demise.
Since we at Foresight Valuation Group specialize in analyzing the valuation of intellectual property (IP) as a strategic business asset on the one hand, and the valuations of startups on the other hand, we took upon ourselves to look into the most recent list of Unicorns and try to understand the patent position of these companies, and how it may be correlated with valuation.
The Data Sample: Over 65% Are Software Companies
We did not conduct a complete analysis of the Unicorns and their portfolios, limiting our analysis to a quick patent count of issued and pending US patents. Our data collection was based on the following criteria:
  • We focused only on the US Unicorns, as identified by the TechCrunch Unicorn Leaderboard Country designation, to neutralize any country-specific effects;
    • Of the 151 current Unicorns, 95 were listed under a US designation.
  • Using the Innography patent analytics platform we determined the number of active US patent assets (issued and pending) that were assigned to the Unicorn (or known subsidiaries) according to the Innography database;
    • Patent assets held under the name of inventors or not yet having been assigned to the corporate entity, were not included in this analysis.
  • The patent count only includes those patent assets that have been published, and therefore may not represent the full number of US patent assets owned by any Unicorn due to the 18 month delay in publication.
  • For consistency of data, Foresight relied upon the Valuation, Funding, and Market designations given to the Unicorns by CrunchBase and published by TechCrunch.
An initial overview of the dataset of current US Unicorns revealed a sample consisting of over 65% software companies (across the Advertising, Software, Consumer Internet, E-commerce, Enterprise SaaS and Security categories):"
 For the full article, please see: http://www.ipwatchdog.com/2015/11/03/the-naked-truth-30-of-us-unicorns-have-no-patents/id=62842/

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