A Conversation on IP Valuation as a Driver for Decision Making

Featuring Gary Raichart, Managing Director, Strategic Value Advisory, Kroll

When companies talk about “unlocking the value of IP,” Gary Raichart hears a literal question: how much is this actually worth, and to whom. As a Managing Director in Kroll’s Strategic Value Advisory practice, he spends his time valuing patents, trade secrets, brands, platforms, and the business plans wrapped around them.

Kroll itself is a broad financial and risk advisory firm, covering investigations, cybersecurity, disputes, valuation, expert testimony, investment banking, and more. Gary’s group sits where market research, finance, and intellectual property meet. His team runs surveys, builds models, and helps clients turn ideas into numbers that boards, regulators, and courts can live with. “I really love ideas,” he says. “I like helping companies understand what their ideas are worth and helping them make better decisions with that information.”

The Value of Ideas

Gary came to IP valuation through applied mathematics. After studying mathematical and computational science, then management science and engineering at Stanford, he joined a group called Applied Decision Analysis within Standard & Poor’s. His mandate was to use decision analysis and quantitative research to help companies design products that win market share, understand which features customers truly value, and test alternative strategies under different market conditions.

Over time, as the Applied Decision Analysis group moved into Duff & Phelps and later into Kroll, the same toolkit started getting applied to IP questions. Instead of only asking which product concept would perform better, clients wanted to know things like how much a patented feature contributes to willingness to pay, how trademark confusion might affect demand and brand value, what a patent portfolio might justify in a transaction or licensing deal, whether a defensive position was strong enough for planned market moves, or how much dilution was appropriate in a fundraising round driven by intangible assets.

“What hooked me,” Gary says, “was the chance to work with new ideas all the time and help people make concrete decisions around them.”

Why IP Valuation Matters Now

Policy debates have pushed IP valuation into the spotlight. Recent patent tax proposals prompted a wave of calls from some of Gary’s clients, who wanted to know what such a regime would mean and whether automated tools could carry the load.

Gary understands the appeal of automation. Real estate assessors rely on extensive comparable data sets, public records, and standardized characteristics. With that kind of information, a model can generate ranges that humans refine. But “for IP, that structure is much weaker,” he notes. “Transactions are less transparent, assets are more unique, and context matters a lot more.”

There are AI- based tools and portfolio ranking systems that try to assign values or scores across large IP sets. Gary sees real utility in those tools as a way to flag assets that may warrant closer review, identify clusters of related technology, compare strength indicators across portfolios, prioritize potential licensing candidates, and reveal anomalies worth deeper investigation. The results can help point toward the right questions, but don’t replace the hard work of understanding how a particular asset interacts with products, markets, and strategy. “You can get high level direction from automation,” he says, “but defensible numbers still take real analysis.”

When to Measure, When to Build

Moments when a more formal view of value becomes important include: raising a significant funding round, negotiating a sale of the company or a business unit, structuring a major licensing or joint development agreement, entering markets with dense competitor IP landscapes, and preparing for or responding to major disputes. Stories from two of Gary’s clients illustrate the stakes.

In one case, a company engaged Kroll to understand whether its IP spend matched its risk profile. Gary’s team concluded that the company was materially under-invested given competitor rights and the markets it wanted to enter. The company chose not to increase protection. Over the following years it faced costly litigation that could have been mitigated by a stronger defensive position.

In another case, a rapidly growing company with promising technology had little sense of what its IP could justify in fundraising. After a detailed valuation, Gary’s team concluded that the company’s value had risen roughly tenfold over six months as its IP and traction developed. That analysis supported a higher valuation in the next round, preserved more equity for the founders, and gave investors clearer insight into the drivers of future value.

Founders often ask whether it is too early to think about IP valuation. Gary draws a distinction between protecting IP and formally pricing it. Protection, in his view, is nearly always worth considering early, whereas valuation sometimes can wait. In very fast moving markets, where product lifecycles are short and teams are capital starved, he often recommends focusing resources on development and initial traction, with valuation reserved for key milestones.

Turning Uncertainty into Decisions

Behind these outcomes is a set of frameworks that Gary’s team uses to make IP valuation systematic rather than mysterious, and the first step is to identify the purpose. “You need to know why you are valuing the IP before you decide how,” Gary says. A strategic valuation for an internal decision will focus on investment value to the current owner. A valuation for tax, financial reporting, or litigation will be constrained by fair value or fair market value standards and by the expectations of auditors, courts, or agencies.

From there, the team moves beyond any single method and may blend several ways of understanding value. They look at income-based models to see how specific assets drive future cash flows, and compare those results with market benchmarks drawn from similar deals and licenses. They may also examine what it would realistically cost to recreate or replace the underlying technology, then layer in survey-based insights that capture how users or customers actually perceive the asset. Finally, they may run scenario and sensitivity analyses to test how the valuation holds up under different assumptions, building a more grounded and durable picture of worth.

For early stage or uncertain technology, Gary often uses a real options style view. Instead of treating the future as a single forecast, his team maps decision points: extra testing, regulatory approvals, scale up investments, product integrations, or partnership milestones. At each point, they step back and ask a set of practical questions: how much capital is required to move forward, how much uncertainty the next action will reduce, and how much potential value it will create or preserve. They also consider what happens if the company cannot reach that next milestone and whether it makes more sense to transact now or continue investing.

By modeling these stages explicitly, they help companies decide not just how much the IP might be worth in the abstract, but which path through those stages best fits their resources and goals.

Choosing Between Patents and Trade Secrets

A recurring theme in Gary’s work is the tradeoff between patent protection and secrecy. In some industries, speed of change makes patents less attractive. By the time a patent issues, the core technology may already be moving toward replacement.

In other situations, detectability is the problem. If an innovation sits inside an algorithm, process, or model that competitors can copy without visible traces, disclosure through a patent may expose design details without offering practical enforceability.

When weighing patent and trade secret strategies, Gary’s team looks not only at whether infringement can be detected with reasonable effort but also at how quickly the technology is likely to evolve. They consider how important disclosure might be for attracting partners or investors, and they pair that with an assessment of whether enforcement realistically fits the company’s risk tolerance and culture. They also evaluate how any protection choice will interact with long-term product plans, ensuring the strategy supports where the business is headed rather than only where it stands today.

The same lens applies across patents, trade secrets, and trademarks, even if the specific valuation tools differ. Relief from royalty methods, for instance, can appear in both patent and trademark work, although benchmarks and contract landscapes differ.

Aligning IP Strategy with Business Strategy

For Gary, the single most important principle is alignment between IP strategy and business strategy. An aggressive enforcement program makes little sense for a company that wants collaborative industry relationships, while a purely defensive strategy may fall short for a company that hopes to build a licensing business or create bargaining power for major partnerships.

At a portfolio level, alignment appears in decisions about which product lines receive particular protection, where to file or maintain rights geographically, how much to invest in defensive patents versus offensive tools, which brands deserve the broadest coverage and policing, and when to prune low-value assets to free budget. Because pruning is often emotionally difficult, and teams worry about appearing weak or making a mistake, Gary encourages clients to adopt a structured review process that brings together IP, business, and R&D stakeholders and relies on clear, agreed-upon criteria.

At the asset level, the central question is whether a right serves a clear role in that broader strategy or simply adds cost. This kind of system helps teams explain why an asset is being maintained or dropped, whether because technology has shifted, markets have moved, or the company no longer operates in a region. Abandonment, framed in this way, becomes a sign of disciplined stewardship rather than retreat.

Bridging the Gap Between IP and the Business

Many of Gary’s observations return to a simple gap: business leaders often view IP as a cost, while IP teams may lack a deep view of how the company creates value. Gary has seen progress over the last decade as markets have rewarded IP rich companies and leadership teams have become more curious about intangible assets. Still, communication can lag.

Gary’s practical advice for IP teams is straightforward: spend time with the business: learn how revenue flows, where margins arise, which customer segments matter most, and how products are positioned. These fundamental understandings make it easier to explain how specific patents, trademarks, and trade secrets protect or enhance those value streams.

Gary’s team sometimes formalizes this in ROI-style analyses for internal audiences, mapping investment in IP functions to value contributions such as risk reduction, pricing power, or deal leverage. Even when the answer is expressed as ranges rather than single numbers, the process itself often reveals opportunities to sharpen strategy and redeploy budget.

Beyond client work, Gary invests in ecosystem building. Through the California IP Alliance, which he helped start, he supports initiatives that increase collaboration across the IP community and expand education, including K–12 programs that introduce students to intellectual property concepts earlier. The goal is not simply to produce more IP professionals, but to help future founders, engineers, investors, and policymakers recognize how IP shapes innovation, careers, and outcomes long before they face their first licensing negotiation or patent challenge.

Valuation as a Tool for Better Choices

In the end, Gary describes IP valuation as a demanding but practical craft, blending math with market insight and requiring a tolerance of uncertainty. Done well, IP valuation helps companies choose where to invest, when to partner, how to raise capital, and which risks to accept. The work is rarely simple or fully automated, and that is precisely why it can be so useful.