Commercialization of Innovative Technologies (Bringing Good Ideas to the Marketplace) || Paying for and Controlling Ideas

✍ Scribed by Touhill, C. Joseph; Touhill, Gregory J.; O'riordan, Thomas A.

• Publisher: John Wiley & Sons, Inc.
• Year: 2010
• Tongue: English
• Weight: 491 KB
• Edition: 1
• Category: Article
• ISBN: 047023007X
• DOI: 10.1002/9780470925362.ch7

✦ Synopsis

When it comes to defining equity, ownership, and control, core members of the innovation team and their advisors can agree only generally as to what these terms mean. Even then they have their own perspectives. The inventorshnovators want to maintain creative control; they really don't want anybody messing with their babies. To the investor, control means financial control through majority ownership. The technologist sees control in terms of managing how the technology is developed, applied, and improved, whereas the entrepreneur means managerial control over the entire enterprise. So how do these varied perspectives relate to how we pay for and control innovative ideas?

There are a number of concepts that we have to bear in mind when answering this question. First, an innovative idea is intellectual property. Second, intellectual property is a valuable asset. Third, equity is the money value of an asset. Thus, to own and control an innovative idea, one has to pay to establish equity. So the fact is that the investor and the entrepreneur have got it right from a legal and practical standpoint. Thus, if we acquire a majority position in the ownership of intellectual property or a company's stock (either privately held or publicly traded), we have acquired both equity and control. Hence, this chapter is written primarily from the Commercialization of Innovative Technologies: Bringing Good Ideas to the Marketplace,