A HI-TECH venture has launched a new online tool that helps companies to put a value on their intellectual property.

The Sollomon service has been built and tested by Inngot, based at Technium Digital in Swansea.

Its innovative product has been created to help businesses derive an impartial value indication for their IP and other intellectual assets, should they wish to sell them, licence them or use them to raise funding.

When the Gowers Review of Intellectual Property was published in 2006, it highlighted that as much as 80% of quoted companies’ value lay in their intangible assets.

According to Inngot’s chief executive, Martin Brassell, the UK knowledge economy will struggle to fulfil its potential unless new ways can be found to leverage the value locked up in innovative companies’ IP.

He said: “All banks and finance providers need security for their lending, especially during this period of economic uncertainty.

“If businesses are to get the growth funding they need, new ways have to be found to unlock the security value in the IP that underpins their products and services.

“By defining intellectual assets, providing a consistent starting point for valuation and establishing a market place, we believe we’ve made IP-based lending significantly easier to achieve.”

The Sollomon IP value indicator works in tandem with Inngot’s registration system for intellectual assets, launched in 2009.

It has been developed with specialist input from leading business advisers Grant Thornton UK.

Mr Brassell said: “Until you record your ownership of an intellectual asset it can be argued that it doesn’t exist – and you certainly can’t leverage any external value unless until it is properly described.

“We think companies should be out there on the front foot utilising every asset they have, rather than leaving their knowledge and capabilities undiscovered, under-utilised and unvalued.”

The Sollomon service has been launched at £195 plus VAT.

Like most other valuation methods, it starts from the past, current and projected cash flows associated with a business’s products and services.

It builds on the well-established “relief from royalty” method, with a number of important added features to improve accuracy, including the use of “scorecards” for a company’s IP and for its markets, both of which are driven directly from the Inngot registration process.

The value indication is incorporated into a Sollomon certificate that shows all the relevant data used to calculate it, together with the royalty and discount rates used. Every certificate also comes with a code, which the business can share with any prospective investor/funder and authorise them to take a look at the value indication on the Inngot database.

Partner for valuations at Grant Thornton UK, Mike Thornton, commented: “We were interested in working with Inngot because we know that many businesses are considering ways to derive greater financial benefit from their intangible assets.

“While a value indication of this nature cannot replicate indiv- idual expert analysis, it represents a significant advance on other online methods available. At the very least, it provides a consistent starting point for discussions.”

Inngot has received assistance from a Single Investment Fund grant from the Welsh Assembly Government and commercial investment from Finance Wales.

Businesses are already benefiting from the Sollomon system. Lynette Swift, owner of Swift Connect, found the process of benefit when raising funding recently to further develop and market her unified communications technology, called Conexall.

She said: “The valuation from Sollomon allowed us to build up a better picture of the value built up in the business and helped raise the amount of money we were seeking, and were offered, from £200,000 to £400,000-500,000.”

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