How to Use This Tool
This estimator helps assess the potential economic value of an intellectual property asset using a discounted cash flow approach. It is intended for educational and strategic planning purposes only.
- Select the type of IP you're evaluating.
- Enter the estimated market size in USD.
- Input your expected market share percentage.
- Provide a revenue growth rate for the IP over its lifespan.
- Set the expected useful life of the IP in years.
- Enter a discount rate (e.g., cost of capital or risk-adjusted return).
This is a simplified model and does not account for legal, licensing, or enforcement risks.
Valuation Methodology
The valuation uses a basic Discounted Cash Flow (DCF) method to estimate present value:
- Annual revenue = Market Size × Market Share (%)
- Total revenue stream = Annual revenue × Lifespan × Growth factor
- Present value = Total revenue stream / (1 + Discount Rate)^Lifespan
This approach gives a rough estimate and should be refined by professional appraisers or financial analysts when needed.
