Intellectual Ventures creates and acquires intellectual property, which it then seeks to monetize through non-exclusive licensing. In early 2009, as an increasing number of companies were trying to position themselves as leading intermediaries in the market for intellectual property, IV was looking for the best business model to become such a leading intermediary. Its model was predicated on making it easy for small inventors to monetize their inventions and IP (by selling it to IV) and then using its scale and aggregate IP portfolio to extract revenues from potential licensees (usually technology companies).
Evaluate Nathan Myhrvold's stated vision for Intellectual Ventures, including motivation for founding the company; business and monetization models; and his aversion to being viewed as a "patent troll". Does this vision fit with Intellectual Venture's actions?
What are the challenges in the IV business model, and do you recommend any changes? Consider the following topics:
The VC model looks for a return of 8-10x on invested capital over ten years. What would be required in terms of number of licensees, average revenue per license, and breakeven for IV to return 10x its investors' capital?
What is your confidence that this is a viable business in the long run?
See the SCPD Resource Page for general information on assignment submission, team building, expectations, and getting help. See the SCPD Grading Page for evaluation procedures for daily written assignments.