Nearly every business activity (particularly those involving IP assets) is motivated by a desire to obtain an acceptable financial profit (i.e., "return") on the expenses invested in that activity. This desire can be quantified, and is often referred to as a Return on Investment (or ROI).

Yet every such business activity is also accompanied by one or more risks that, if realized, will financially impact the costs of the activity and/or the return from that activity. These risks or probabilities can be quantified as a percentage. The impact of each risk can be expressed as a risk-adjusted return value.

By comparing risk-adjusted return values for different scenarios and/or intellectual assets, your company can determine which scenarios and IP assets to pursue.

Although an analysis of other metrics, such as break-even time and free cash flow, is sometimes critical, they are tightly correlated with risk-adjusted return, and can be easily determined from the same fundamentals used to assess it.

Given that costs, returns, and risks can all be quantified, and their approximate timing estimated, relying on your input and our deep legal, technical, and business background, we can determine a range of Risk-Adjusted REturn on Investment values, which we refer to as RARE values, as well as risk-adjusted Net Present Values, for the implementation of each of your mission-critical IP assets. Comparing these values to ROI thresholds for the corresponding development stage of the innovation can provide a reasonable foundation for you to decide whether to continue or cease investing in that innovation. With your input, we periodically update each innovation's RARE valuation so that you can easily decide which path optimizes your investment in that IP asset.

For more information, check out our free guide, "Empowering Intellectual Property – Step 6 – Enhance".

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