Leveraging Intellectual Property For Growth, Investment and Competitive Advantage

What if the biggest driver of your company’s success isn’t listed on your balance sheet?

What if the real secret to long-term growth, higher valuation and competitive advantage lies not in your financial statements, but in the ideas and innovations your company owns?

For many finance leaders, intellectual property (IP) is an afterthought—something handled by legal teams, glanced at during mergers and acquisitions (M&A) or filed away and forgotten.

But in today’s knowledge-driven economy, IP isn’t just a legal formality, it’s a core asset that can make or break a company’s future.

In a recent episode of The CFO Show, guest Erin-Michael Gill—Founder and Managing Director of M&A advisory firm Genaesis, LLC—pulled back the curtain on why finance leaders should be paying closer attention to IP.

Erin-Michael currently serves as the chairman of a federal advisory committee on intellectual property and trade. With experience spanning three US presidential administrations and having advised over $1.2 billion in M&A deals and capital formation investments, he has a reputation as one of the world’s leading IP strategists.  

During this episode, Erin-Michael shared compelling insights on how CFOs can leverage IP to drive value, attract investment and build a lasting competitive advantage.

“You’ve got to make sure that your IP is actually protecting the thing that’s going to grow your business,” he said.

Keep reading as we unpack what else he had to say.

Understanding IP Beyond Legal Terms

Many companies view IP as a legal necessity—something to check off a compliance list, much like insurance. But Erin-Michael argues that IP should be deeply intertwined with corporate strategy.

“IP is supposed to be protecting the thing that generates and creates value for your business,” he explains. When managed strategically, it becomes a critical driver of competitive advantage, allowing companies to build economic advantages and make smarter business decisions.

For early-stage companies, a strong patent portfolio provides external validation that an innovation is truly unique and non-obvious. This, in turn, makes it easier to attract investment. But for established businesses, IP also plays several crucial roles in product protection, ecosystem sustainability and even direct revenue generation through licensing.

But IP is just the start of the intangible assets CFOs often overlook.

Beyond IP: Overlooked Intangible Assets

Despite their value, many CFOs fail to recognize the full scope of their company’s intangible assets. And that goes beyond IP, including things like:

• Brand value and trademarks: The strength of a company’s brand can significantly impact its ability to command higher prices.
• Customer contracts and relationships: Long-term contracts, particularly in industries like government contracting, create predictable revenue streams that enhance valuation.
• Company culture and employee knowledge: Strong internal knowledge bases and culture-driven differentiation can be valuable assets when positioning a company for sale or investment.

Companies don’t always realize what they have until they take a step back and evaluate the hidden assets driving their margins and competitive advantage.

So, how should CFOs look at IP and other intangible assets to create an effective overall IP strategy?

The 4 Pillars of an Effective IP Strategy

Getting the most out of your IP and intangible assets starts with an effective IP strategy, Erin-Michael says. This will help inform your corporate strategy as a whole.

Start by considering these four pillars around what intellectual property does:

1. Driving Valuation

A well-structured IP portfolio signals differentiation and technological leadership, making companies more attractive to investors. It also provides downside protection, ensuring that the underlying IP can still hold significant value even if a company’s go-to-market strategy fails.

“God forbid your strategy doesn't work, but [if it doesn’t] this underlying asset is going to have value for the investors that could be sold separately,” Erin-Michael says.

2. Protecting Products

IP safeguards a company’s innovations, preventing competitors or contract manufacturers from copying proprietary technology. This is especially critical in industries where manufacturing may take place in regions with varying levels of IP enforcement.

“You want to make sure that a particular invention, whatever it is—that set of things that makes it unique—are unable to be infringed or copied by, say, your contract manufacturer,” Erin-Michael says.

3. Sustaining an Ecosystem

Companies that operate in complex industries (semiconductor manufacturers, for instance) may rely on cross-licensing agreements to sustain innovation ecosystems. A strong IP portfolio allows companies to enter favorable licensing agreements, ensuring their ability to operate and compete, even with much larger companies.

“If you have the foundational assets that other companies are going to find valuable, that sustains an ecosystem and enables your company to succeed,” Erin-Michael says.

4. Generating Direct Revenue

In some cases, companies create IP not just to protect products, but to generate revenue through licensing agreements. A prime example is when firms develop breakthrough technologies that are then adopted by larger industry players, leading to lucrative licensing deals.

“Having a whole business strategy wrapped around licensing technology, whatever it is, without necessarily manufacturing the products yourselves is definitely a way to go,” Erin-Michael says. “The other side of it are people that simply acquire assets and look to monetize them.”

The CFO’s Role in IP Strategy

CFOs are uniquely positioned to ensure IP is integrated into overall corporate strategy. Instead of treating IP as a standalone legal expense, finance leaders can:

Benchmark Against Competitors

Make sure someone is researching whether competitors are filing patents and how they are protecting their innovations.

“Do our competitors have intellectual property? Have they filed trademarks? Do they have patents, and what do they have?” Erin-Michael says all companies should be asking.

Align IP With Business Goals

Ensure that patents, trademarks and copyrights are covering the actual value drivers of the business.

“That's, in some respects, the simplest thing in the world—does your IP match the thing that you're selling?” Erin-Michael says. “So, if you're sophisticated and you've got a whole technology innovation program where you've got inventors and engineers and they're filing patents all day long, what they're filing patents on could in many cases be completely disconnected from what actually gets commercialized.”

Communicate IP Value To Investors

Instead of reporting patent filing numbers, frame IP in terms of competitive advantage, revenue protection and margin sustainability.

“It's like, ‘Look at this contracted revenue that's going out over this long period of time.’ That doesn't show up on my balance sheet, obviously, but it is confidence, it is risk reduction,” Erin-Michael says. And those added factors might push a company’s valuation from a 4x EBITDA multiple to a 10-12x multiple, for example.  

Practical Steps for Reevaluating IP Strategy

For finance leaders looking to start building an IP strategy, Erin-Michael suggests four simple steps:

1. Consider the Competition: Are they filing patents? What is their IP strategy? Understanding how others in your industry approach IP is a great starting point.

2. Conduct an Internal Audit: Identify which aspects of your business provide differentiation and check if they are adequately protected.

3. Engage With Legal and Strategy Teams: Collaborate with specialists to ensure that IP is being managed proactively, not reactively.

4. Communicate To Stakeholders: When discussing IP with executives and investors, ensure that it is framed in terms of business growth and risk mitigation.

Final Thoughts

Intellectual property is no longer just a legal function—it’s a strategic financial asset.

By taking an active role in understanding and managing IP, CFOs can drive stronger valuations, create sustainable competitive advantages and protect their company’s most valuable innovations.

As Erin-Michael puts it: “If you tie your IP strategy to your profitability, who you are as a company, and your core valuation growth drivers, every other part of that conversation goes easily.”

So, if you’re a CFO, don’t you think it’s time to rethink the role of IP and intangible assets in your long-term business strategy?

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