{"id":298096,"date":"2025-06-17T00:57:49","date_gmt":"2025-06-17T00:57:49","guid":{"rendered":"https:\/\/peraltafinancing.com\/angel-investor\/aanz-june-expert-session-with-kate-wilson-investors-and-intellectual-property\/"},"modified":"2025-06-17T00:57:49","modified_gmt":"2025-06-17T00:57:49","slug":"aanz-june-expert-session-with-kate-wilson-investors-and-intellectual-property","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=298096","title":{"rendered":"AANZ June Expert Session with Kate Wilson | Investors and Intellectual Property"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<h3>This podcast link and summary are from Kate Wilson\u2019s Expert Session held online in June 2024.<br \/><b>Podcast: <a href=\"https:\/\/notebooklm.google.com\/notebook\/baa43f39-70fc-4f6e-8ec2-cde551542ea6\/audio\">Link<\/a><br \/>Beyond the Balance Sheet: Why Intangibles Drive Over 90% of Business Value and How Founders Can Leverage Them for Competitive Advantage and Growth<\/b><\/h3>\n<p><b>Executive Summary<\/b><\/p>\n<p><span style=\"font-weight: 400;\">In today\u2019s economy, intangible assets and intellectual property (IP) represent the vast majority\u2014over 90%\u2014of a business\u2019s actual value, a fact often overlooked, particularly by New Zealand companies. This session, led by patent attorney Kate Wilson of James and Wells for the Angel Association, demystifies these critical assets, positioning them not merely as legal constructs but as fundamental business drivers for competitive advantage and accelerated growth. The discussion highlights how intangible assets are managed can either multiply or erode investment value, underscoring their significance for founders and investors alike. By adopting a strategic framework centred on \u201cCompetitive Intelligence,\u201d \u201cCompetitive Edge,\u201d and \u201cCollaboration\u201d \u2013 the \u201cThree Cs\u201d \u2013 businesses can identify, protect, and leverage their intangible assets, significantly enhancing their market position, attracting investment, and paving the way for successful liquidity events. This article outlines the core insights from the session, providing a roadmap for business leaders to strategically work their IP and intangible assets to thrive in a competitive landscape.<\/span><\/p>\n<h3><b>The Dominance of Intangible Assets in Modern Business<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The foundational insight from the session is startling yet crucial: over 90% of a business\u2019s value resides in its intangible assets, or intellectual property (IP). This figure is derived by comparing a business\u2019s sale price against its book value, which typically accounts only for tangible assets. This percentage is even higher for early-stage companies, especially those seeking angel investment, as they usually possess minimal physical plant or machinery, relying instead on \u201cgood ideas and good people.\u201d Despite this overwhelming contribution to value, many New Zealand businesses, in the expert\u2019s opinion, often lack a comprehensive understanding of IP.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The treatment of these assets directly impacts a business\u2019s trajectory. Well-managed intangible assets and IP can readily multiply a company\u2019s value, while neglect can lead to its rapid loss. This presents both a significant risk and a profound opportunity for investors: safeguarding investments requires founders to implement robust systems and protections for their intangible assets, which, when properly leveraged, can enable substantial scaling and competitive edge.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">IP and intangible assets are not merely legal checkboxes but integral business tools. They demand active management and integration into business strategy to maintain a competitive edge, rather than being passively stored away.<\/span><\/p>\n<h3><b>Addressing Investor Challenges Through IP Clarity<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Investors, often \u201ctime poor\u201d and \u201copportunity rich,\u201d require efficient methods to triage potential investments. Due diligence, frequently described as \u201cpainful,\u201d can be streamlined when founders present their IP clearly and align it with business relevance. A common challenge is that founders, passionate about their technology, may not effectively communicate its business implications. The session emphasised that understanding an investment target\u2019s \u201ccore IP\u201d is paramount, and this clarity often stems from founders themselves grasping and presenting their intangible assets in a business-centric manner.<\/span><\/p>\n<h3><b>The \u201cThree Cs\u201d Framework for Strategic IP Management<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The expert\u2019s approach to working with intangible assets is encapsulated in the \u201cThree Cs\u201d framework: Competitive Intelligence, Competitive Edge, and Collaboration. This structured methodology provides a clear path for businesses to understand, leverage, and maximise the value of their intangible assets.<\/span><\/p>\n<h4><b>1. Competitive Intelligence (CI): Knowing Your Landscape<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">Competitive intelligence involves thoroughly understanding \u201cwho and what is out there\u201d in the market. It goes beyond typical market research, encompassing several critical components:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Beyond Academic Research:<\/b><span style=\"font-weight: 400;\"> Researchers often conduct literature reviews, which may not provide the comprehensive market or competitive insights needed for business strategy. Investors should probe founders on the depth and sources of their research, questioning broad statements about market potential.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>On-Ground Feedback:<\/b><span style=\"font-weight: 400;\"> Direct engagement with potential users or industry experts can reveal practical realities that academic research might miss, identifying product relevance and possible limitations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>IP Searching<\/b><span style=\"font-weight: 400;\"> offers unique foresight, indicating what products or technologies are about to enter the market or have previously failed. IP searches also provide insights into \u201cFreedom to Operate\u201d (FTO) and identify potential collaborators or competitors based on patent activity.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Barriers to Entry:<\/b><span style=\"font-weight: 400;\"> Understanding non-IP related hurdles, such as regulatory approvals in sectors like MedTech or AgriTech, is crucial for a complete competitive picture.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Competitor and Market Insights:<\/b><span style=\"font-weight: 400;\"> IP searches can reveal who holds significant patent portfolios, indicating market leaders or potential partners. Analysing competitive tensions can illuminate strategic positioning, as demonstrated by an example where a client\u2019s invention could create a bidding war between two dominant global competitors.<\/span><\/li>\n<\/ul>\n<p><b>Practical Takeaway:<\/b><span style=\"font-weight: 400;\"> As an investor, ask founders: \u201cWhat research have you done and where have you done it?\u201d If unsatisfied with the depth beyond academic papers, consider independent IP and market research.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A compelling case study showcased a New Zealand animal healthcare business that, despite a small R&amp;D budget compared to giants like Pfizer and Bayer, leveraged monthly competitive intelligence (including patent and trademark searching). They built a significant IP portfolio by designing around competitors\u2019 rights and focusing on innovative delivery methods rather than new active compounds. This strategic approach led to their acquisition by Bayer International in 2011, with intangibles constituting most of the purchase value.<\/span><\/p>\n<h4><b>2. Competitive Edge (CE): Defining Your Advantage<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">Once the competitive landscape is understood, the next step is identifying what gives the business its distinct \u201ccompetitive edge\u201d. This advantage can be internal (e.g., efficient processes, cost-effectiveness) or external (e.g., a superior product enabling better margins). The expert categorised intangible assets contributing to competitive edge into four \u201cbuckets\u201d:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reputation (Brand):<\/b><span style=\"font-weight: 400;\"> While often the most valuable intangible asset (e.g., Apple\u2019s brand valued at half a trillion dollars), early-stage businesses must build it. Brand considerations include distinctiveness (avoiding descriptive names), consistency (internal and external alignment), and underpinning sound internal systems. Registered trademarks offer stronger protection than relying solely on accumulated reputation. A client example highlighted the costly challenge of rebranding for international expansion due to an initially descriptive and non-distinctive trademark.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Operations:<\/b><span style=\"font-weight: 400;\"> This \u201ctrickiest\u201d bucket encompasses internal systems such as information, processes, templates, policies, employees, customer lists, and data. These \u201cI stuff\u201d elements provide competitive advantages like cost efficiency, quality, responsiveness, or creativity. Protection methods include robust agreements (with employees, suppliers, partners), copyright on documentation, confidentiality for sensitive information, and strong knowledge management and security systems. A strong organisational culture also underpins operational effectiveness and innovation, ensuring employee retention and a favourable external perception.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Technology:<\/b><span style=\"font-weight: 400;\"> This refers to a best-performing product or process, whether a gadget, a software-as-a-service, or an internal production method. Technology can be protected through:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Trade Secrets:<\/b><span style=\"font-weight: 400;\"> Effective when technology is difficult to reverse-engineer (e.g., a process within a factory) and supported by strict internal practices and agreements. However, scaling can be challenging if it relies solely on trade secrets.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Patents:<\/b><span style=\"font-weight: 400;\"> Ideal when technology is novel, inventive, and more easily reverse-engineered (e.g., physical products). While costly, patents facilitate easier scaling. Software patents are complex; sometimes, a \u201cdeterrent patent application\u201d can buy time for market traction and data gathering, even if its ultimate enforceability is uncertain. Patentable aspects include product features, processes, certain software applications (with specific criteria), medical treatments, and \u201csweet spots,\u201d optimal ranges or combinations that offer commercial advantage. Another animal health company successfully leveraged competitive intelligence to identify white space, build an IP portfolio, and ultimately be acquired by a major agricultural company.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Design:<\/b><span style=\"font-weight: 400;\"> Protecting the aesthetic or shape of a product can provide a market edge, especially when integrated into a multi-pronged IP strategy alongside patents and trade secrets. Design registrations are typically used to protect a product\u2019s look internationally.<\/span><\/li>\n<\/ul>\n<h4><b>3. Collaboration: Scaling for Success<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">The final \u201cC\u201d focuses on scaling through strategic partnerships, which is essential for New Zealand businesses aiming for international growth. Collaboration involves identifying parties that can provide capabilities a small business lacks, such as greater research capacity (e.g., clinical trials), manufacturing facilities, distribution networks, brand association, or complementary technology.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Crucially, strong, protected IP\u2014derived from a clear competitive edge identified through intelligence\u2014becomes a powerful leverage point in negotiations with potential collaborators or acquirers. The competitive tensions example shows that exclusive rights to a protected invention can incite a bidding war among larger entities.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Effective collaboration necessitates \u201ctight agreements\u201d to manage interactions and protect IP. A compelling example involved a small private individual\u2019s veterinary product business that Pfizer acquired by strategically protecting its disruptive design, manufacturing know-how (trade secret), distinctive trademark, functional patents, and ensuring compliance with regulatory barriers (GMP, ISO, certifications). This successful exit demonstrated a comprehensive approach to structuring and protecting all IP areas.<\/span><\/p>\n<h3><b>Conclusion: A Strategic Imperative for Founders<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The strategic management of intangible assets and IP is no longer optional but a fundamental necessity for business success and attracting investment. Founders must move beyond viewing IP solely as a legal formality and instead embrace it as a dynamic business asset. By diligently applying the \u201cThree Cs\u201d formula\u2014conducting thorough Competitive Intelligence, identifying and safeguarding their Competitive Edge across brand, operations, technology, and design, and strategically engaging in Collaboration\u2014companies can:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Gain Deep Market Insight:<\/b><span style=\"font-weight: 400;\"> Understand competitors, market gaps, and regulatory hurdles.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Fortify Competitive Position:<\/b><span style=\"font-weight: 400;\"> Differentiate offerings and create barriers to entry.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>De-Risk and Attract Investment:<\/b><span style=\"font-weight: 400;\"> Provide clarity and confidence to potential investors, demonstrating a robust and protected value proposition.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Facilitate Scaled Growth and Exit:<\/b><span style=\"font-weight: 400;\"> Position the business for strategic partnerships or lucrative acquisitions.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Ultimately, the ability of founders to understand, protect, and strategically \u201cwork\u201d their intangible assets is the decisive factor in unlocking the vast majority of their business\u2019s value, transforming potential into tangible success.<\/span><\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>This podcast link and summary are from Kate Wilson\u2019s Expert Session held online in June 2024.Podcast: LinkBeyond the Balance Sheet: Why Intangibles Drive Over 90% of Business Value and How Founders Can Leverage Them for Competitive Advantage and Growth Executive Summary In today\u2019s economy, intangible assets and intellectual property (IP) represent the vast majority\u2014over 90%\u2014of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":298097,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12034],"tags":[14754,4687,20644,11223,6128,5797,14928,14050,4220],"dealstore":[],"offerexpiration":[],"class_list":["post-298096","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-angel-investor","tag-aanz","tag-expert","tag-intellectual","tag-investors","tag-june","tag-kate","tag-property","tag-session","tag-wilson"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - 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