IP Valuation Calculator

It is one of the standard income-approach methods used in IP valuation: the value of owning IP outright is estimated as the present value of the royalty payments you would otherwise have had to pay a third party to license it, applied to the revenue the IP actually generates. It is widely used because it only requires a royalty rate and a revenue stream, both of which are often more readily estimable than the alternative income-approach inputs like a full excess-earnings breakdown.

Both should come from comparable market data specific to your situation — royalty rates from licensing databases or comparable deals in the same industry, and the discount rate from the risk profile of the specific IP and the business relying on it — not from a generic default. This calculator does not supply or verify any specific rate; treat the defaults shown as illustrative placeholders only, and consult comparable transaction data or a qualified IP valuation professional for a rate you can rely on.

Portfolio Value is calculated entirely from the projected revenue stream, royalty rate, growth rate, discount rate, and remaining useful life — it represents the value of the royalty relief on that revenue, independent of how many separate legal assets happen to generate it. The Number of Patents/Trademarks input is used only afterward, to divide that same total into a Per Patent/TM Value for reference.

A higher Discount Rate lowers Portfolio Value, because each future year's projected royalty savings is worth less in today's dollars the more heavily it is discounted — this is standard present-value math, not specific to IP. A higher discount rate typically reflects greater perceived risk in the underlying revenue projection, so riskier or less certain IP-generated revenue streams should generally use a higher rate and will show a correspondingly lower valuation.