While Intellectual Property (IP) is an asset for any business, leveraging it to access finance is strategically important for growth and development. This is more so in respect of women entrepreneurs in a country like Bangladesh where IP can be weighed as useful collateral for accessing bank finance. Women business leaders and experts made this observation at a panel discussion on 'Women Entrepreneurship and IP in Bangladesh: Challenges and Way Forward' held in Dhaka this week. Speakers at the event opined that as financing is always a barrier to women entrepreneurs in the country, the legal provision to use IP as collateral for bank financing can be a solution to access to finance. This obviously will encourage entrepreneurs to go for new innovations and product diversifications.
Leveraging intellectual property (IP) is pivotal in propelling product innovation. By strategically utilising IP strategies, businesses can amplify innovation, fortify market presence, and secure their inventive endeavours. The strategic use of intellectual property can play a crucial role in sustaining business growth. By leveraging IP rights effectively, a company can gain competitive advantage, protect its innovations, and create new revenue streams. What is more important, IP rights can be used to secure financing, either by pledging or transferring rights to cash flows derived from these assets. Alternatively, a company's intellectual property can provide an indicator of a firm's value for financing decisions. The valuation of any type of asset, including IP asset, helps its owner to decide the most cost-effective way in which that asset may be used, protected, insured, sold, leveraged or exchanged in the market place. The need for monetary valuations becomes particularly relevant when they are used as financial tools by IP holders and as investment assets by financial institutions and venture capitalists. The potential of IP assets as a way of securing finance is thus a matter of great importance among investors, particularly if supported by reliable and innovative valuation methodologies.
Highlighting the merits of IP in accessing finance, some intricate issues were also discussed in the aforementioned meeting. Of these, valuation appears to be the most complex one. Valuation of IP is a challenge, speakers said, as it requires strategic guidelines to do so. Making a valuation of a trademark or a patent varies as different companies value their respective IP differently. Proper valuation of intellectual property is, therefore, important because little knowledge about IP and even less experience in valuing and understanding the nature of IP can be seen as key obstacles to accessing finance. It is here that suggestions were made for building a supporting ecosystem by financial institutions so that women entrepreneurs can access the financial and legal advice in case of using the IP for collateral.
To ensure that the potential of IP is well recognised for accessing finance, it is imperative for the stakeholders-women entrepreneurs and financial institutions---to be well conversant with the rules governing IP regulations and procedures.
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