As the Economist noted last summer, private sector intellectual property (IP) investment might have passed $1 trillion last year, and it is a third of US private non-residential investment now compared to a fifth in the 1980s.
Following on Stian Westlake’s work, Colin Mayer’s book, Prosperity, finds: “Forty years ago, 80% of the market value of US corporations was attributable to tangible assets—plant, machinery, and buildings—as against intangibles—licenses, patents, and research and development. Today, intangibles account for 85% of the market value of US corporations.”
And the figure is higher for successful startups. A joint European Investment Fund and Invest Europe study, The VC factor: Data driven insights about VC-backed start-ups in Europe, looked at VC-backed firms according to their four-year growth rates across five metrics – assets, revenue, staff size, intangibles and operating costs. Startup growth can be sorted in five profiles – laggards, commoners, all-rounders, visionaries and superstars – and while “laggards dwindle, commoners grow mildly, all-rounders record considerable progress across all indicators, visionaries’ intangibles skyrocket and, finally, superstars’ growth is astronomical on all fronts”.
As capital markets and accountants adjust to where the value in companies lie (reporting rules only really identifies goodwill as a key intangible) so there are fantastic opportunities for those who explore this area.
One that does, is the world’s largest reinsurer’s corporate venturing unit, Munich Re Ventures, which has just co-led a consortium investing $34m in the series B round of At-Bay, a US-based startup that tailors insurance products for companies based on their technology systems and vulnerabilities.
Jacqueline LeSage Krause, head of Munich Re Ventures, will be co-chair of the GCV Symposium on 3-4 June and bringing this perspective to bear on the vision for the innovation capital community in the 2020s and beyond.
Also, thank you very much to our special guest, Danish Hamid, partner at law firm DLA Piper, for the insights this week on our FIRRMA and the new role of CFIUS with respect to foreign investments in the US webinar hosted by Kaloyan Andonov from GCV Analytics.
Please find a pdf version of the slide deck used in the webinar as well as the video recording by clicking on the following links:
Video: https://mawsonia.box.com/shared/static/za6njly315lb1wy70tybhm4czxn0nsne.mp4
Slides: https://mawsonia.box.com/shared/static/nfgh87dguxrzxmy0kqz866p90mvzaljp.pdf
Stay tuned for our next webinar in March.
Sign up for our upcoming GCV Symposium in London to meet your peers.
