09 / August 2011

Pellegrino dismisses the VC method in early-stage company valuations

Posted in: Intellectual Property News Written by: Randy
Categories: intellectual property
Tags: best practices commercializing IP early stage IP investing in IP IP valuation research IP value comparables & research patent value

Winding up a long discussion on LinkedIn regarding valuation of an early-stage company, Mike Pellegrino listed why he feels the VC method doesn't work, including these key failings. The VC method…

* Relies on relative valuation methods, with invalid assumptions and survivorship biases; * Presumes an income perpetuity, which is inappropriate for early-stage companies; * Trends toward greater values, and is subject to bubbles.

The new edition of Mike Pellgrino’s best selling book on IP Valuation will be available here.

Categories